Sensex ends 370 pts lower, Nifty down 100; IT, Media, Realty, Metal drag

Market benchmark indices declined around 0.6% on Wednesday, extending their previous day's fall, as investors continued to book profits. The indices were dragged down by IT, Bank and Metal counters and a weak trend in the US equities.

The 30-share BSE Sensex fell 370 points to close at 61,560. The NSE Nifty dipped 104 points to close at 18,181. Thirteen of the 15 broad Nifty sectoral indices ended lower in today's session.

Among the Sensex firms, Kotak Bank, Asian Paints, HCL Technologies, Infosys, and Tata Consultancy Services were the major laggards. IndusInd Bank, ITC and Bharti Airtel were among the gainers.

Most of the sectoral indices registered losses with Media, Realty, IT, Metal, and Bank topping the list of laggards. FMCG and Auto ended in the green with minor gains.

Asian shares were subdued on Wednesday and the dollar hovered around a five-week peak as investors remained risk averse, with the U.S. debt ceiling talks and a mixed set of economic data weighing on sentiment.

Japan's Nikkei share average closed above the key psychological 30,000 level for the first time since September 2021 on Wednesday, buoyed by a weaker yen and momentum from a strong domestic earnings season. The Nikkei ended the day up 0.84% at 30,093.59.

China stocks fell on Wednesday, extending losses from the previous session following disappointing economic data for April, prompting some economists to downgrade the country's growth forecasts. Hong Kong stocks also fell on Wednesday.

China's blue-chip CSI300 Index closed down 0.5%, while the Shanghai Composite Index lost 0.2%. Hong Kong's benchmark Hang Seng Index slumped 2.1%, while the China Enterprises Index dropped 2.3%.

European shares slipped as concerns about whether the United States can avoid a debt default, as well as a slew of downbeat corporate updates weighed on sentiment.

London's FTSE 100 slipped for a second session as the London Stock Exchange Group (LSEG) slid after an investor consortium sold shares in the market operator while Experian slumped 5% following its lacklustre annual forecast.

Investments in India’s hospitality industry are likely to surpass $2.3 billion over the next two to five years, according to a report by real estate consulting firm CBRE South Asia.

The report, titled ‘Indian Hospitality Sector: On a Comeback Trail’ released on Wednesday highlights the positive outlook for the sector, driven by a successful vaccination program, reopening of borders, removal of travel restrictions, sustained economic growth.

According to the report, the recovery path for the hospitality sector is becoming clearer, with more than $400 million in investment expected during 2020-23. It also predicts the addition of approximately 12,000 rooms in 2023, with numbers expected to grow at a compound annual growth rate (CAGR) of around 3.3% by 2025. (Read More)

Food service company Jubilant FoodWorks posted a net profit of ₹47.5 crore in the fourth quarter of FY23, registering a 59% drop from ₹116 crore in the corresponding quarter of last year.

The operator of Domino's chain in India reported revenue of ₹1,252.3 crore in Q4FY23, a growth of 8.2% as compared to ₹1,157.8 crore, YoY.

In Domino’s, the Dine-in and Delivery channel registered 11.5% and 5.7% growth, respectively. The LFL (like-for-like) growth came in at -0.6%. (Read More)

Zydus Wellness Ltd on Wednesday reported a 9 per cent rise in consolidated net profit at ₹145.33 crore in the fourth quarter ended March 31, 2023.

The company had posted a consolidated net profit of ₹133.3 crore in the year-ago period, Zydus Wellness said in a regulatory filing.

Consolidated total revenue from operations stood at ₹712.98 crore during the quarter under review as compared to ₹639.78 crore in the year-ago period, it added.

Total expenses during the quarter stood at ₹580.23 crore, up from ₹510.34 crore in the year-ago period.

For the fiscal ended March 31, 2023 consolidated net profit was at ₹310.37 crore as compared to ₹308.87 crore in the previous year. (PTI)

Indian yoghurt maker Epigamia, backed by French dairy giant Danone, has shelved plans to sell its inflation-hit business and is now looking to expand to new markets, its CEO said in an interview.

Founded in 2015 and backed also by Belgian investor Verlinvest, Epigamia is a small Indian startup which became popular in urban centres by marketing flavoured Greek yoghurt and fruit-based drinks to health conscious customers.

But the company has been operating mostly in the red - its struggles a striking example of how surging costs are biting small consumer goods startups in India.

Epigamia's decision to not proceed with a sale comes as many startups, which rode a valuation boom in recent years, focus on profits amid a funding crunch and increased investor scrutiny. (Reuters)

Private sector life insurance major, HDFC Life has announced highest ever bonus to the tune of ₹3,660 crore on participating policy plans. A total of 23.14 lakh policyholders are eligible for this bonus.

As per the statement, from the total bonuses, about ₹2,696 crore will be payable to policies in this financial year, as a bonus on maturing policies or as cash bonuses.

Meanwhile, the rest of the bonus amount will be payable in the future upon policy cessation by way of maturity, death claim, or surrender payouts. (Read More)

IKEA India joins hands with HDFC Bank by launching a hassle-free and convenient consumer financing option for all its customers. The partnership aims to give customers a convenient and cost-effective method to buy their favourite home furnishing products.

Commenting on the collaboration, Elena Pogosova, Country Commercial Manager, IKEA India said, "We are extremely delighted to partner with HDFC Bank to provide an easy financing option for our customers. We understand that buying furniture can be a significant investment, and our aim is to make it affordable and accessible to everyone. This collaboration is a step in the direction of achieving our goal of making the better everyday life for many people." (Read More)

Renewable energy solution provider Suzlon on Wednesday announced that it has secured a ‘significant’ order from Vibrant Energy for a 99 MW wind power project.

The project entails the installation of 33 wind turbine generators (WTGs) from Suzlon’s latest 3 MW series, featuring the innovative hybrid lattice tubular (HLT) tower. The project is likely to be commissioned by FY25.

“Suzlon Group has received an order from Vibrant Energy for 33 wind turbine generators featuring its new 3 MW (each) series with a Hybrid Lattice Tubular tower for a 99 MW wind power project which is expected to be commissioned by FY25," the company said in a statement. (Read More)

Adani Ports and Special Economic Zone Ltd (APSEZ), the port and logistics division of Adani Group, on Wednesday said it handled its highest-ever rail cargo of over 120 million metric tonnes (MMT) in FY23. This was a 22% increase from 98.61 MMT in the previous year, according to an exchange filing.

Adani Ports generated around ₹14,000 crore in revenue from rail cargo for the Indian Railways in FY23. (Read More)

Gaurav Jani - Research Analyst, Prabhudas Lilladher Pvt Ltd on Bank of Baroda (BOB IN): Rating: BUY | CMP: Rs187 | TP: Rs235

Q4FY23 Result Update - Stronger asset quality; ECL impact not material

Quick Pointers:

§ Core PPoP beat by 8%, given better TWO recovery and fee income.

§ GNPA fell by 74bps QoQ due to lower slippages; ECL impact may be softer.

BoB witnessed a healthy quarter as core PPoP at ~Rs80bn beat PLe by 8.4% largely led by better fees and TWO recovery, while asset quality was stronger as GNPA declined by 74bps QoQ to 3.8% due to lower net slippages. Exposure to the stressed airline is Rs13bn against which bank carries provision of Rs5bn while collateral cover totals to Rs10bn. ECL impact could be 1-1.5% of loans and bank would like to keep credit costs under 1% including ECL effect. Bank expects loan growth of 13-14% in FY24E and retail share could improve. Momentum in unsecured loans should continue given its low share (2%). NIM for FY23 was 3.3% and while we factor a 12bps decline in FY24 margins, there is scope for an upgrade as 1) retail share could increase 2) MCLR share is higher at 50% and 3) fixed rate loans would reprice upwards in FY24E. Valuation at 0.9x is attractive; maintaining multiple at 1.2x we roll forward to Mar’25 and raise TP from Rs220 to Rs235. Retain ‘BUY’.

Avishek Datta - Research Analyst, Prabhudas Lilladher Pvt Ltd on Indian Oil Corporation (IOCL IN): Rating: BUY | CMP: Rs87 | TP: Rs125

Q4FY23 Result Update - Marketing environment improves outlook

Quick Pointers:

§ Blended marketing margins turn positive at Rs7/ltr for Q1FY24E (Rs3/ltr in Q4)

§ Geopolitical uncertainty to keep refining product spreads healthy

We change our FY24/25E earnings by 20%26% to factor in actual FY23 numbers. IOCL reported better than expected Q4 results with standalone EBITDA of Rs153.4bn (+327%QoQ; PLe ₹92.5bn) and PAT of Rs100.6bn (PLe Rs41.8bn), due to higher than expected GRMs at USD15.2/bbl (Q3: USD12.9; PLe USD9.6). Earnings surprise came despite Q4 refining inventory loss of Rs43.8bn.

We believe OMCs are well placed to benefit from improving marketing margins and healthy refining profitability. We maintain ‘’BUY” with a PT of Rs125 based on EV/EBITDA of 5.5x FY24E (7x earlier) as earnings environment stabilizes. Retain Buy

The real money gaming industry has surpassed the education sector to emerge as the most violative in advertising, according to a recent report by the Advertising Standards Council of India (ASCI). The report revealed that 92% of gaming advertisements reviewed during FY23 were not compliant with real-money gaming guidelines, failed to alert consumers to financial loss and addiction risks. Moreover, only half of the ads were voluntarily modified after being called out, making the sector the least compliant.

In its annual complaints report for financial year 2022-23, ASCI said that it reviewed 7,928 advertisements across various mediums, including print, digital, and television, marking a twofold increase in scrutiny over the past two years. (Read More)

Oil fell for a second day as traders weighed the outlook for demand in China and a US industry report pointed to a build in stockpiles, with crude joining a broad move lower among commodities including copper.

West Texas Intermediate dropped toward $70 a barrel after losing 0.4% on Tuesday. Some banks cut forecasts for China’s growth this year after weak April data, although the International Energy Agency remains upbeat on the Asian nation’s demand prospects following the end of Covid curbs.

The industry-funded American Petroleum Institute reported nationwide crude inventories rose by 3.7 million barrels last week, as stockpiles built at the key hub at Cushing, Oklahoma, according to people familiar with the figures. Still, the breakdown also showed countrywide gasoline and distillate holdings fell. (Bloomberg)

SEBI gets extension of time till August 14 to complete its probe into the Adani-Hindenburg episode. SC also directs the copies of the report submitted by the Justice Sapre panel will be given to the parties in the meantime to enable them assist in further deliberations. Next hearing in July.

According to Knight Frank’s latest issue of the ‘The Wealth Report 2023’, India’s ultra-high-net-worth individuals (UHNWI) with net worth over US$ 30 Million is estimated to rise by 58.4%in the next five years from 12,069 in 2022 to 19,119 individuals in 2027. India’s billionaire population is expected to go up from 161 individuals in 2022 to 195 individuals in 2027. The Indian high-net-worth-individual (HNI) population, with asset value of US$ 1 Mn and more, which was recorded at 797,714 persons in 2022 will also rise to 1.65 million recording an impressive 107% in a five–year period.

Key Highlights:

Global UHNWI population decline by 3.8% in 2022 after 9.3% record growth in 2021

By 2027 India to have an estimated 1.6 mn HNIs and 195 Billionaires

US$ 175,000 entry point for India’s 1% wealthy club

The Middle East was the regional stand-out with the number of UHNWIs growing by 16.9%

Jindal Steel & Power Ltd (JSPL) registered quarter-on-quarter growth in volume and realization for Q4FY23, however, an expansion at the Ebitda (earnings before interest, tax, depreciation and amortization) level remained elusive due to one-time costs and elevated commodity prices. JSPL’s shares fell more than 3% in Wednesday’s morning trade on the National Stock Exchange (NSE).

Going ahead, multiple factors are expected to bolster margin performance. Notably, the recent drop in coking coal costs should prove beneficial for JSPL’s margin. Analysts at JM Financial Institutional Securities highlighted that forthcoming mining clearances should also enhance the margin trajectory. “The company’s coal security is expected to improve post commencement of coal blocks - Utkal C, Utkal B1, B2 and Gare Palma IV/6," added the broking firm in a report on 16 May. (Read More)

Shoonya by Finvasia announced that it's going to start offering AI-based predictions and signals for individual stocks. The company said that it is India’s first trading platform to offer this service. The company has an exclusive partnership with I Know First (IKF), a financial technology firm specialising in providing AI-powered stock market predictions. The technology will predict the movements of up to 1500 Indian scrips and identify investment opportunities on a daily basis. Shoonya has introduced a 30-day free trial for its customers, after which it will be available for ₹999 per month.

Toyota Kirloskar Motor has initiated a third shift at its Karnataka-based plant to enhance production capacity by around 30 per cent, as it looks to cut down waiting periods on some of its popular models like Innova Crysta and Fortuner.

The automaker has commenced a third shift from the first week of May in its Plant 1 in Bidadi on the outskirts of Bengaluru to ramp up the manufacturing capacity.

The company has invested over ₹90 crore to upgrade the existing infrastructure at the facility and added around 1,500 workforce for the third shift at the plant.

"We have commenced a third shift at the plant which produces models like Innova Crysta, Innova Hycross and Fortuner. These products have been quite successful and there is quite a long waiting period. We are trying to minimise the impact for the customers," TKM Senior Vice President and Chief Communication Officer Sudeep S Dalvi told PTI in an interaction. (PTI)