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Sensex trades higher, Nifty above 16,900; HUL, Titan & Wipro top gainers

Photo: Hemant Mishra/Mint (Hemant Mishra/Mint)
Photo: Hemant Mishra/Mint (Hemant Mishra/Mint)

Summary

  • Indian share markets trade higher with the BSE Sensex up by 254 points, while the Nifty is trading higher by 66 points

Asian stock markets are mixed today as investors grappled with fears Russia will invade Ukraine and fretted about US monetary tightening.

The Hang Seng is down 0.7% while the Shanghai Composite gained 0.4%. The Nikkei fell 0.6%.

In US stock markets, Wall Street indices closed lower on Monday, though recovering from a sharp sell-off, as US plans to close its Kyiv embassy in Ukraine sent simmering geopolitical tensions to a boil.

The Dow Jones fell 0.5% while the tech heavy Nasdaq Composite ended flat.

Back home, Indian share markets opened on a positive note, following the trend on SGX Nifty.

After two days of falls which saw the Sensex wipe around 2,500 points, benchmark indices opened higher today bucking global cues.

Market participants are tracking shares of CRISIL, Enkei Wheels (India), and Advance Syntex as these companies will announce their December quarter results today.

The BSE Sensex is trading up by 254 points. Meanwhile, the NSE Nifty is trading higher by 66 points.

HUL and Wipro are among the top gainers today. Tata Steel, on the other hand, is among the top losers today.

The BSE Mid Cap index is up 0.2% while the BSE Small Cap is trading lower by 0.5%.

Sectoral indices are trading mixed with stocks in the FMCG sector and IT sector witnessing buying interest.

Power stocks and metal stocks, on the other hand, are trading in red.

Shares of Godrej Consumer and Tanla Platforms hit their 52-week highs today.

The rupee is trading at 75.60 against the US$.

Gold prices are trading up by 0.7% at 50,252 per 10 grams.

Meanwhile, silver prices are trading up by 0.5% at 64,550 per kg.

Crude oil prices fell today as investors took profits from the previous day's rally to seven-year highs and as global stock markets slumped.

In news from the automobile sector, Eicher Motors is among the top buzzing stocks today.

Eicher Motors on Monday declared a consolidated net profit of 4.6 bn for the third quarter ended December 2021, a decline of 14% compared to 5.3 bn it reported a year ago.

On a sequential basis though, the profit saw a 22% growth from 3.7 bn reported in the September 2021 quarter.

Consolidated revenues for the company increased by a mere 2% to 28.8 bn compared to 28.3 bn recorded in the same period of last year. Sequentially, revenues saw a 28% growth.

The profit for the manufacturer of Royal Enfield declined YoY due to raw material inflation, decline in volumes and the ongoing semiconductor shortage.

On the other hand, revenues improved due to higher ASPs (average selling price) due to better product mix and price hikes implemented.

Here’s Siddhartha Lal, MD of the company, on the performance:

Continuing global shortage of semiconductor chips and the onset of the third wave of the Covid-19 pandemic, posed a challenge to the industry at large during the third quarter.

We are working towards creating an alternative vendor ecosystem to mitigate the impact of the shortage on the supply front. Our performance continues to remain resilient despite challenges.

Royal Enfield continued to witness strong traction in its international markets where is sold 17,036 units during the quarter, a growth of 57% compared to 10,833 units sold during the same period last year.

During the quarter, Eicher commenced operations at its CKD (completely knocked down) facility in Thailand. This facility will cater to the growing demand in the region, and also become the hub for the rest of Southeast Asia.

With this, the company now has three local CKD units - in Argentina and Colombia in Latin America, and in Thailand.

The company is hopeful that supply chain constraints will gradually ease out over the next two quarters and production will stabilize over time.

Eicher Motors share price is currently trading up by 0.3%.

Speaking of Eicher Motors, note that Siddhartha Lal is credited with turning around Eicher Motors’ fortunes through his razor-sharp focus on building the Royal Enfield brand and striking a joint venture deal with Swedish truck and bus maker Volvo.

When Siddhartha Lal entered the family business in the year 2000, Eicher's management was examining a sale or shutdown of the Royal Enfield business.

This was because at that time, Royal Enfield's motorcycle sales totaled 2,000 units per month.

From 2,000 units in the year 2000, Royal Enfield sells 70,000 units a month on an average at present.

 

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The sales for few months in the past year were impacted due to the impact of nationwide lockdown. Moving on to latest developments from the initial public offer (IPO) space, a day after insurance giant LIC filed its draft red herring prospectus (DRHP), the company has commenced formal roadshows with big-ticket global investors, seeking their participation in India’s largest IPO.

Reportedly, Capital Group, Aberdeen Asset Management, California University Endowment, Abu Dhabi Investment Authority (ADIA) and Singapore's GIC are among the funds that participated in Monday's investor roadshows.

Some Canadian pension funds were also participants which attended virtually due to Covid-19 curbs.

The government is aiming to raise up to 750 bn through the LIC IPO, which is also seen as crucial to India’s divestment target to meet fiscal deficit goals.

The government will sell 5% in the public issue and around 316 m shares will be on offer.

The IPO is fully an OFS which means that the proceeds will go fully towards the government and help it reach its disinvestment target.

It remains to be seen how the upcoming IPO of LIC pans out. We will keep you updated on the latest developments from this space, stay tuned.

Meanwhile, do check out the video below, recorded by Co-head of Research at Equitymaster Tanushree Banerjee on how you should evaluate the LIC IPO.

Insurance is not an easy sector for investors to figure out. The financial statements are full of jargon. And in fact they don't resemble financials of any other sector.

You can watch the video here: How to Evaluate the LIC IPO. 

This article is syndicated from Equitymaster.com

 

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