Sensex ends 4-day losing streak, adds 345 pts; Nifty reclaims 16K; autos zoom

Key share indices, Sensex and Nifty, rebounded on Friday, after four days of losses, led by strong buying support in auto and FMCG stocks. The 30-stock Sensex ended at 53,760.78, up 344 points. HUL, Titan and Maruti surged over 2.5% each, while Power Grid, Tata STeel and HCL Tech ended with cuts of more than 2.%.

The broader Nifty 50 index ended at 16,049.20, up110.55 points higher. Tata Consumer, Titan and Airtel led the pack. Tata Steel, HCL Tech and Wipro lagged.

Earlier, the index started the day in the positive and then moved in the narrow range around noon. However, good buying support in FMCG and auto stocks helped the indices clock decent gains. Midcap and smallcap stocks also gave an impressive performance. The Indian rupee, meanwhile, recovered 8 paise to close at 79.91 against the US dollar.

Mitul Shah, Head Of Research at Reliance Securities said,"Inflationary pressure is a major concern and fears of a recession is looming. India's CPI inflation stayed above 7% in June, while the U.S recorded a 41-year-high inflation at 9.1%. Major central banks around the world are likely to consider a steep hike in interest rates in order to tackle elevated price levels. Additionally, recent data suggested that consumer sentiment across the globe continues to be low. India's depreciating rupee, widening trade deficit, selling pressure from FIIs and volatility in global crude prices are augmenting the economic and financial impediments. The RBI is attempting to diversify sources of forex funding, mitigate volatility in the forex market and contain global spill-overs in order to prevent the devaluation of rupee, and boost foreign inflows. We expect strong economic rebound, normalized commodity prices, inflation within targeted range and better visibility in 2HFY23, which would transform. We expect FII inflows to return by end of 1HFY23, while the DII investments would continue in FY23. Sectors like Automobile, Capital goods, Consumer would be in focus in FY23."

HFCL has forayed into telecom equipment for the 5G spectrum, Indian Railways and metro rail. The equipment will be supplied to domestic as well as European and US companies, which are expected to increase export revenue from INR 350 cr in FY22 to INR 1,500 cr in FY24

· Diversification in some new verticals is expected to improve business opportunities for HFCL and de-risk the overall business model

· Over the period of FY22-25E, the management is expecting revenue/ EBITDA/ net profit to grow at a CAGR of 20.0%/ 21.7%/ 30.4% to INR 8,167 cr/ INR 1,172 cr / INR 695 cr respectively

· FY18-22: The company maintained consistency in performance in a turbulent period

· The Company has state-of-the-art Optical Fiber and Optical Fiber Cable manufacturing facilities at Hyderabad, Optical Fiber Cable manufacturing plant in Goa and in its subsidiary i.e., HTL Ltd at Chennai along with FRP Rod manufacturing facility in its subsidiary at Hosur. It also has a telecom equipment manufacturing facility at Solan

Bharti Airtel trialed its first 5G private network at Bosch Automotive Electronics India Pvt Ltd (RBAI) facility in Bengaluru utilizing trial spectrum, where it has implemented two industrial grade use cases for quality improvement and operational efficiency at the plant.

Airtel’s on-premise 5G Captive Private Network was built over the trial 5G spectrum allocated by the Department of Telecom (DoT).

European shares opened higher Friday after a mixed session in Asia following a report that China’s economy contracted by 2.6% in the last quarter due to virus shutdowns that kept businesses closed and people at home. Germany's DAX gained 1.5% to 12,706.96 while the CAC 40 in Paris added 0.6% to 5,950.63. Britain's FTSE 100 advanced 0.9% to 7,104.57.

Emphasising on the importance of capital spending amid global uncertainty, Finance Minister Nirmala Sitharaman on Friday said that India's long-term growth prospects were embedded in public capex programmes. Speaking at the 3rd G20 Finance Ministers and Central Bank Governors Meeting hosted by Indonesia in Bali, Sitharaman outlined that evidence-based policy making was vital for resilient economic systems.

Mindtree Ltd just reported its sixth consecutive quarter of more than 5% revenue growth in constant currency and closed the June quarter with its highest-ever total contract value (TCV) of deals which stood at $570 million. Mindtree, owned by Larsen and Toubro Ltd (L&T), is in the process of being merged with L&T Infotech (LTI) to form a separate entity ‘LTIMindtree’ which is poised to become India’s sixth largest IT services firm by revenue and fifth in terms of market capitalization. In an interview, Debashis Chatterjee, chief executive officer and managing director, Mindtree, talks about the demand environment, integration process, and hiring plans. (Full iterview here)

Stocks were mixed in Asia on Friday as soaring inflation and a series of interest rate hikes around the world continued to fan recession fears, while a big miss on Chinese growth added to anxiety about the world's biggest economies.

ikkei 225 ended 0.5% higher, Hang Seng Index slipped 2.2% and Shanghai - Composite: closed 1.6% lower.

Have you ever seen any famous investor make a fortune by investing in largecaps?

Outperformance in the stock market is achieved by investing in small and mid-cap companies.

To reiterate the point, HDFC Bank was a nobody in the banking world in the 1990s. Hero MotoCorp in 1990s, was an unknown brand. Titan was just another push by the Tatas in the jewellery segment which was dominated by small jewellers. (Read to kow more)

The Indian rupee hit a record low on Friday, continuing its downward spiral, as a weak outlook for global growth prompted investors to dump riskier assets, although easing crude prices limited the unit's fall.

The partially convertible rupee was trading at 79.90/91 to the dollar versus Thursday's close of 79.8750. Earlier it touched 79.9525, touching an all-time low for the fifth consecutive session.

The Income Tax Department has searched engineering and construction company Power Mech Projects (PMPL) covering around 20 of its premises.

The group is found to have claimed artificially inflated deduction under special provisions in respect of certain incomes, by resorting to suppression of expenses and over-appropriation of revenue to the unit eligible for such deduction, sources said. (ANI)

L&T Infotech: Maintains robust operating performance

Overall, the performance was robust across operating parameters. While revenue came inline, EBIT margin was above estimates. Demand environment continues to remain robust for the company; though few clients have become cautious about evolving macroeconomic situation. Offshore and onsite employee attrition has started to moderate and that should ease pressure on margin. We expect it to be among the growth leaders in the Tier 2 IT companies led by its capabilities across verticals and service lines and should be able to maintain net margin of 14‐15% for FY23. We maintain BUY on the stock with revised target price of ₹4,960/share at revised multiple of 27x on FY24E EPS.

ACC: Revenue in‐line; Energy cost dents margin

ACC Ltd reported weak numbers with EBITDA margin declining to 9.5% (14% YSEC est.) in Q2CY22. While, in-line volumes & 3% y/y NSR growth resulted in Rs44.7bn revenues (+15% y/y). In Feb-22, ACC commissioned Tikaria 1.6MTPA GU and others on commissioning would take total capacity to ~39MTPA by H1CY23E. Recent addition & upcoming capacity in central market will accelerate the volume growth to +8% CAGR over CY22-23E. For H1CY22, operating cost/te increased by +17% y/y due to unprecedented power cost/te surge by +39% y/y to Rs1,483, declined EBITDA/te to Rs669 (41% y/y). Therefore, the EBITDA/te for CY22E likely decline further to Rs678 (earlier est. Rs845) as imported coal prices sustaining +US$350/te & pet‐coke to US$240/te. ACC scaling up its green-power share and alternative fuel usage to improve operating efficiency. Currently stock trades at 15/9x of EV/EBITDA on CY22/23E. Therefore, recommend ADD with TP of Rs2,385 (earlier Rs2400) at 10x EV/EBITDA on CY23E.

Kotak Mahindra Bank has announced the completion of its technical integration with the new income tax e-filing portal, a move the bank said makes it one of the first private banks to be fully integrated with the new portal.

The bank said in a statement that Kotak Mahindra Bank customers - individuals as well as corporates - can now pay their direct taxes through the e-pay tax tab on the portal using Kotak net banking or by visiting a branch. This will make the tax payment process simple, instant and convenient for its customers, it said.

Federal Bank net interest income or NII, the difference between interest earned and interest expended, rose 13% to ₹1,604.5 crore in the June quarter as compared to ₹1,418 crore a year ago.

Industry leaders and experts will unveil a white paper on the status of electric vehicle (EV) adoption in India at EVConIndia 2022 conference this month.

The EVConIndia 2022 is being organised by the world’s first sector-specific professional networking platform Blue Circle in Gurugram on July 29, a statement said.

The white paper on the current status of the EV industry and opportunity it offers will also be unveiled during the event, it added.