Sensex ends above 56,000, Nifty 16,700; UltraTech shines

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)