PremiumThe Asian market had a mixed day today with Nikkei, Sensex, and Nifty ending in green, but Chinese indices closed the week flat. Europe had a cautious start with investors assessing the repercussions of a report of a shrink in the economy in the month of July.
Indian benchmark indices finished the week strongly after remaining flat in the morning. The indices closed in the green for the sixth day in a row. The Sensex gained 390 points and finished at 56,072, whereas the Nifty crossed the 15,700 mark and finished with a gain of 114 points.
The banking stocks had a field day with HDFC twins and Axis gaining 2% each. Ultratech surged 5% with its strong quarterly report. IT and pharma/healthcare stock lagged throughout the day. Infosys shed 1.5% in today's session.
Asian markets witnessed a mixed day. Chinese benchmark indices closed almost flat on Friday as COVID-19 flare-ups and property-sector risks raised worries about growth prospects. The Shanghai Composite Index lost 0.1% to 3,269.97, while the Hang Seng index rose 0.2% to 20,609.14.
Tokyo stocks reversed earlier losses and ended higher on Friday, as confidence in sound business performances expanded ahead of corporate earnings season in Japan. The benchmark Nikkei 225 index ended up 0.40% at 27,914.
The rupee remained volatile but the RBI governor said that it has zero tolerance for volatile and bumpy movements in the rupee and will continue to engage with the foreign exchange market.
European shares started on a steady note on Friday in the aftermath interest rate hike by the ECB on Thursday and a report suggesting that economic activity in the eurozone plummeted with a big fall in manufacturing and inflation having an impact on consumer spending.
Prabhudas Lilladher: Ultratech remains our top pick in the space due to highly efficient operations and strong capacity growth. We have Accumulate rating with TP of ₹7,180, EV/EBITDA of 15x FY24e.
Reliance Securities: UTCEM reported numbers which were better than our estimates. The company has been witnessing better-than-industry growth over the years, which is expected to sustain going forward as well owing to the huge capacity addition plan by FY23 (19.5mnT). Further, OCF generation has been quite healthy in recent years, mainly supported by steady realization and operating efficiencies, which have already enabled the company to deleverage its balance sheet meaningfully. We currently have a BUY rating on the stock
India will have a battery storage potential of 600-gigawatt hour (GWh) by 2030, and demand for electric vehicles, stationary storage and consumer electronics will mainly drive the adoption of battery storage, a Niti Aayog report said.
The report further said a coherent regulatory framework incentivising all stakeholders to participate in the recycling process will help in the development of a battery recycling ecosystem in the country.
Russian-backed separatists in a breakaway region of eastern Ukraine have blocked access to the search engine Google, their leader said on Friday, citing what he calls "disinformation".
In a message posted on his Telegram channel, Denis Pushilin, head of the self-proclaimed Donetsk People's Republic (DPR), accused Google of promoting "violence against all Russians" and said that its "handlers from the U.S. government" were to blame.
Foreign funds are showing signs of a return to Indian equities as recent declines in oil prices and the dollar bring some reprieve for emerging markets. Overseas investors have bought a net $1 billion of local stocks in the first three days of this week. (Full Report)
The Supreme Court on Friday allowed the Centre to continue with the security cover for industrialist Mukesh Ambani and his family members in Mumbai.
A bench comprising Chief Justice N V Ramana and Justices Krishna Murari and Hima Kohli allowed the appeal of the Central government challenging the Tripura High Court’s direction on a PIL.
A vacation bench, on June 29, had stayed the orders of the Tripura High Court on a PIL challenging the grant of security cover to the industrialist and his family members in Mumbai.
The Reserve Bank of India will continue to engage with the foreign exchange market and ensure that the rupee finds its level in line with its fundamentals, said Governor Shaktikanta Das.
Speaking at the Bank of Baroda's Annual Banking Conference in Mumbai on Friday, the Governor reiterated the central bank does not have any particular level of the rupee in mind, but it would like to ensure its orderly evolution and have zero tolerance for volatile and bumpy movements.
Ahead of quarterly results for the quarter ended June 2022, Yes Bank shares have been giving upside movement since early morning deals. Yes Bank shares today opened with upside gap and hit intraday high of ₹15 per share, logging around 5% rise from its Thursday's close of ₹14.30 apiece on NSE. (Full Report)
Aditya Birla group company UltraTech Cement on Friday reported a 7% year-on-year (YoY) plunge in net profit at ₹1,582 crore for the June quarter compared with ₹1,700 crore in the same quarter last year. Shares of UltraTech Cement were trading 5% higher today.
Tata Consumer Products (TCP) on Friday announced new launches in its packaged foods portfolio with additions such as plant-based meats as well as packaged nuts and dried fruits, the company said. The company has launched plant-based meat products under the ‘Tata Simply Better’ brand name and extended its Tata Sampann brand to add nuts and dry fruits.
The move to add plant-based meats is in line with the company’s focus on accelerating innovation and expanding its total addressable market.
India's sugar production in 2022/23 could fall 1.4% from the current season as mills are likely to divert more cane for ethanol production, a leading trade body said on Friday.
The country could produce 35.5 million tonnes of sugar in the new season starting from Oct. 1, compared to 36 million tonnes in the current season, the Indian Sugar Mills Association (ISMA) said in a statement.
In the next season, 4.5 milion tonnes of cane is likely to be diverted for ethanol production compared to 3.4 million tonnes in this year, the trade body said.
HDFC Asset Management Company (AMC) Ltd on Friday informed in an exchange filing that its Chief Investment Officer (CIO) Prashant Jain, after 19 years, has decided to move on and has tendered his resignation to the company.
Therefore, the Board, on the recommendation of Nomination & Remuneration Committee, at its meeting held on July 22, 2022, has approved the appointment of Chirag Setalvad as Head - Equities and Shobhit Mehrotra as Head-Fixed income. (Full Report)
“The firms should operate under the licenses granted to them. If they are doing anything beyond that then they should seek our permission. Without permission if they are engaging in activities for which they have no license, then it is not acceptable," Das said at Bank of Baroda’s annual banking conference.
Das said RBI cannot allow risk to build up in the system and added that within the next few weeks, it will release the much-awaited digital lending norms. According to Das, the central bank wants to support innovation and, at the same time, wants the entire ecosystem to grow in an orderly and regulated manner. (Full Report)
Germany’s economy is shrinking for the first time this year as inflation squeezes businesses and households and the war in Ukraine destroys confidence.
A gauge of private-sector activity by S&P Global dropped to the lowest in 25 months in July, falling more than economists had expected and dipping below the threshold that separates expansion from contraction.
Expectations about the future turned negative for the first time since the pandemic began as domestic and foreign demand declined. The figures reinforce predictions that Europe’s biggest economy is heading into a recession in the second half of 2022.
JSW Energy reported strong 1QFY23 results with 135% YoY profit growth, on the back of higher revenues. During the June quarter, its total revenue increased by 68% year-on-year (YoY) to ₹3,115 crore from ₹1,860 crore in first quarter of FY22. The consolidated net worth and consolidated net debt as on June 30, 2022 were ₹16,638 crore and ₹7,720 crore respectively. Renewable Energy (RE) capacity ramp-up is on track. (Full Report)
Mitul Shah, Head of Research, Reliance Securities:
“We expect CEAT’s consolidated revenue to grow in double-digit in FY23E, mainly due to regular price hikes in addition to volume growth. We expect a strong volume traction in FY23-FY24 on the back of production ease for OEMs and likely revival in replacement demand. We expect the higher export contribution at favourable exchange rate and price hikes to benefit the company on the revenue and margin front, and hence we increase the revenue and EBITDA estimates by 12%/10% and 15%/16% for FY23E/FY24E. In view of the strong products basket, regular price hikes, healthy export potential and increasing margin territory, we maintain BUY on CEAT with a revised Target Price of Rs1,635 (vs. Rs1,250 earlier), valuing the stock at an unrevised P/E multiple of 12.5x."
Bharti Airtel Chairman Sunil Mittal has said that the company will be at the forefront of bringing 5G connectivity to India with a powerful network to support the country's digital-first economy. The comments from Mittal assume significance as the countdown for 5G spectrum auctions has begun.
A total 72 GHz (gigahertz) of radiowaves worth at least ₹4.3 lakh crore will be put on the block during the auction, scheduled to begin on July 26.
Bharat Electronics Ltd is a key beneficiary of the indigenisation drive in the defence sector. In the June quarter (Q1FY23) earnings call held on Thursday, the company said it has been asked to submit a roadmap for indigenising the components it imports from Russia and Ukraine. (Full Report)
IT company Coforge on Friday posted 21.1% increase in consolidated profit after tax at ₹149.7 crore in the first quarter ended June 30, 2022. The company had registered a profit of ₹123.6 crore in the same period a year ago. The gross revenue of Coforge increased by 25.2% to ₹1,829.4 crore during the reported quarter, from ₹1,461.6 crore in the June quarter last year.
Most IT stocks are in red with Infosys down 2%.
Tokyo stocks reversed earlier losses and ended higher on Friday, as confidence on sound business performances expanded ahead of corporate earnings season in Japan.
The benchmark Nikkei 225 index ended up 0.40%, or 111.66 points, at 27,914.66, while the broader Topix index gained 0.28%, or 5.38 points, to 1,955.97.
The closure of a few coal-fired power plants within a 300 km radius of Delhi last year helped reduce pollution levels, the government has said. In November last year, India had temporarily shut down six of the 11 thermal power plants (TPPs) within a 300 km radius of Delhi in view of hazardous air quality in Delhi-NCR. The directions were extended till December 15 as the air quality remained in the adverse range.
Cyient Ltd: HOLD - Target Price: 830
Revenue inline, margins under stress; Healthy Outlook Continues
ICICI Securities: BUY - Target Price: 575
Near-term Headwinds Exist; Focus Remains on Gaining Market Share!
Tata Group's steel manufacturing arm, Tata Steel's record date for the proposed stock split in the ratio of 1:10 has been fixed next week on Friday, July 29, 2022 for the purpose of determining the eligibility of Shareholders for the purpose of sub-division of its equity shares or stock split, the company informed earlier this month. The stock will start trading ex-split. (Full Report)
India's central bank has zero tolerance for volatile and bumpy movements in the rupee and will continue to engage with the foreign exchange market to ensure the rupee finds its level, its chief Shaktikanta Das said on Friday.
Das said the Reserve Bank of India has no specific level on the rupee in mind and since there is a genuine shortage of dollars in the market, the central bank has been supplying dollars.
Das was speaking at a banking conclave organised by the Bank of Baroda.
In the wake of the Russia-Ukraine war, the Council has adopted new measures intended to tighten existing economic sanctions targeting Russia, perfect their implementation and strengthen their effectiveness.
According to the council of EU, today's "maintenance and alignment" package introduces a new prohibition to purchase, import, or transfer, directly or indirectly, gold, if it originates in Russia and it has been exported from Russia into the EU or to any third country after. This prohibition also covers jewellery.
After climbing to its new 52-week highs on successive Wednesday and Thursday sessions, ITC shares have retraced from its recent highs and quoting below ₹300 apiece levels. Shares of ITC has been in uptrend since last week of February 2022. According to stock market experts, ITC shares are still in uptrend and today's fall should be seen as minor profit booking as the stock had been rallying for last two sessions. (Full Report)
New airline Akasa Air on Friday said it will launch commercial flight operations on August 7 by operating its first service on the Mumbai-Ahmedabad route using Boeing 737 Max aircraft.
In a statement, the carrier said it has opened ticket sales on 28 weekly flights it will be operating on the Mumbai-Ahmedabad route from August 7, as well as on 28 weekly flights it will operating on the Bengaluru-Kochi route from August 13.
The carrier will launch commercial operations with two 737 Max aircraft. Boeing has delivered one Max plane and the second one's delivery is scheduled to take place later this month.
Gold prices today fall despite European Central Bank (ECB) raised interest rates by 50 bps on Thursday. Spot gold price today is quoting $1713 per ounce, around 0.25 per cent lower from its Thursday close whereas the yellow metal price on Multi Commodity Exchange (MCX) is quoting ₹50,361 per 10 gm, ₹14 lower from its Thursday close.
The rupee depreciated 7 paise to 79.92 against the US dollar in opening trade on Friday tracking the strength of the dollar in the overseas market and firm crude oil prices.
At the interbank foreign exchange, the rupee opened at 79.90 against the US dollar, then fell to 79.92 against the greenback, registering a decline of 7 paise over the last close.
Aditi Patil - Research Associate at Prabhudas Lilladher:
Miss in revenue, muted TCV, healthy margin performance
Miss in revenue Mphasis reported gross revenue of $436 Mn, 2% QoQ CC (Ple: 3%). Direct business grew 2.4% QoQ CC, while DXC continued to decline (-4.4% QoQ CC).
Growth was led by Technology, Media & Telecom (2.2% QoQ USD), Logistics and Transportation (2.6% QoQ USD) and Others (7.2% QoQ USD). BCM grew 0.7% QoQ USD and Insurance declined by 6.1% QoQ.
Beat in margins: EBIT margin came at 15.3%, +10bps QoQ (Ple: 15%,). Adjusted for M&A charges, operating margin stood at 15.8%, -10bps QoQ.
Offshore revenue mix increased to 58.3% by 30 bps QoQ, Offshore utilization excluding trainees decreased by 300bps QoQ to 74%.
Soft growth in TCV: New TCV wins of USD 302 mn, -13% QoQ, -40.2% YoY in Direct business. 80% of wins were in new gen services
Total billable headcount grew 3.2% QoQ with net addition of 941 employees (vs avg net addition of 1129 per quarter in FY22).
Mphasis (CMP: 2260) is currently trading at 25x/21x on FY23/24 earnings of INR 90/105 with Revenue/EPS CAGR of 15%/17% over FY22-24E
Hindustan Zinc Ltd reported a slightly better than expected performance for the quarter ending June primarily helped by rising Zinc prices and better sales volumes.
Net profit for the quarter was at ₹3,092 Crore, up 55.9% y-o-y and 5.6% sequentially. This was slightly higher than Bloomberg consensus estimates of ₹3029 Crore. (Full Report)
Crossing the 21,000-mark for the second day, India on Friday logged 21,880 new Covid-19 cases, according to Union Health Ministry updated data. Additionally, the country reported 60 deaths in the last 24 hours, the Health Ministry data noted. India's active cases on Friday stood at 1,49,482, the Union Health Ministry data revealed. (Full Report)
A big number of retail investors scan portfolio of ace investors to find out value picks. They compare the performance of their stocks and the return given by the key benchmark indices in recent sessions. For such retail investors of the Indian stock market, looking at Rakesh Jhunjhunwala's portfolio stocks might be beneficial. A good number of Rakesh Jhunjhunwala stocks have generated alpha return in last one month. (Full Report)
IT companies have chalked out plans to prevent the 'Great Resignation' and retain their talents. The major IT players are taking steps such as mid-term hikes, promotions, bonuses, etc to avert the attrition crisis. (Full Report)
The public offer of food service platform Zomato Limited was listed on BSE and NSE on 23rd July 2021. That means one-year lock-in for promoters, employees, and others will end next week. With this one-year lock-in of around 613 crore Zomato shares, which is to the tune of 78% of the total paid-up capital of the company, stock market analysts have cautioned a sell-off risk in the stock calling it an idea 'sell on rise' stock in short to medium term. (Full Report)
"Considering certain uncertain factors, USDINR Spot (CMP: 79.94) is expected to remain in the bullish territory for some more time as the FOMC Policy is around the corner which may push the US Dollar Index higher. A possible uptrend towards 81.00 levels is very much possible in a monthly time frame. We may see some in-between strengths in the Rupee due to dollar selling by the RBI which would try its best to intervene. The overall bias in USDINR Spot is towards the upside."
The overall demand for airwaves will be higher compared to previous auctions. Analysts tracking the sector said. “Telcos may look at 700MHz more closely. It is the primary sub-GHz band for 5G globally. Incumbents may also bid more aggressively for spectrum in 3.3GHz and 26GHz to crowd out the Adani Group. This suggests overall demand to range $13-20 billion, which is higher than the demand seen in previous auctions," said analysts at Jeffries Equity Research in a note dated 20 July. (Full Report)
Reliance Industries, JSW Steel, Bandhan Bank, Ultratech, and Coforge will be in focus as they declare their June quarter earnings today. (Read More)
Union ministry for transport and highways has served notices to CEOs and MDs of two-wheeler electric scooter manufacturers whose scooters have caught fire, and further action would be taken after their replies are received, said union minister Nitin Gadkari. (Full Report)
The continuation of the uptrend in the equity market has added more than ₹9.76 lakh crore in wealth to investors' kitty in five days. The benchmark BSE Sensex surged about 2,265.8 points during this period. (Full Report)
The euro rose against the U.S. dollar in a choppy session on Thursday, after the European Central Bank (ECB) delivered a 50 basis points rate hike to tame inflation in its first rate increase since 2011. The ECB raised its benchmark deposit rate to 0%, breaking its own guidance for a 25 basis points move as it joined global peers in jacking up borrowing costs.
Asian stocks pushed higher Friday as a jump in Chinese technology shares lifted sentiment, easing some disappointment over mixed earnings. Asian share index added less than 0.5%, with Japan, Hong Kong and China in the green.
China reported 1,011 new coronavirus cases for July 21, of which 175 were symptomatic and 836 were asymptomatic, the National Health Commission said on Friday. That compared with 943 new cases a day earlier - 200 symptomatic and 743 asymptomatic infections, which China counts separately.
India has firmed up a plan to import around 76 million tonnes (mt) of coal to help plug a fossil fuel shortfall at its power plants in the current financial year. This in turn may result in an increase in electricity tariffs by 50-80 paise per unit depending on the distance of the power stations from sea ports, according to two government officials aware of the development. (Full Report)
Droupadi Murmu has been elected as the 15th president of India, becoming the first tribal politician to occupy the top constitutional post in the world’s largest democracy. Murmu, who belongs to Prime Minister Narendra Modi’s ruling coalition, defeated the opposition nominee and former finance minister Yashwant Sinha.
The rupee recovered from its all-time low of 80.06 to close 20 paise higher at 79.85 against the US dollar on Thursday following overall weakness in crude oil prices and fresh foreign fund inflows. A recovery in domestic equities and weakness of the greenback overseas further helped the domestic currency, forex traders said.
Asian Development Bank (ADB) on Thursday trimmed India's economic growth forecast for the current fiscal year to 7.2% from 7.5 per cent as pandemic and war impact is weighing down alongside inflationary pressures. India, however, will continue to surpass China which is expected to grow by 4 per cent in 2022 as against the earlier estimate of 5%. In 2023 also, China is expected to grow by 4.8%.
il headed for a third weekly drop, the longest run of declines this year, on concerns over weaker US gasoline demand and a global slowdown. West Texas Intermediate edged higher toward $97 a barrel, but the benchmark remains about 1% lower this week.
The S&P 500 rose 39.05 points to 3,998.95. The latest gains extended the benchmark index's winning streak to a third day. The Dow rose 162.06 points to 32,036.90, while the Nasdaq added 161.96 points at 12,059.61. The major indexes are all on pace for a weekly gain.
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