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PremiumKey Indian indices slumped after opening in the green on Thursday, giving up crucial levels. Sensex closed at 60,923 after hitting a low of 60,489 today amid a sharp sell-off. Nifty settled at 18,178. Nifty IT, metal and realty were the biggest laggards. In Asia, indices ended mixed as investors weighed corporate earnings
Benchmark equity indices closed lower for the third day in a row. Sensex closed as 60,923.50, down 336. Intraday it hit a low of 60,489 points. Nifty settled at 18,178, down 0.5%, after hitting a low of 18,048. The broad market was weak with midcaps and smallcaps ending in the red. Bank and financials were the outperformed among sectors, while metals, IT and realty were the big losers.
Asian Paints, RIL, Infosys and TCS were the prominent laggards today. On Sensex, 11 stocks rose today while 19 declined.
The state-run engineering firm has completed the renovation and modernization of the 3x60 MW Baira Siul Hydro Power Station located at Chamba, in Himachal Pradesh.
The company has successfully completed Renovation & Modernization and commissioned the third and final unit of the 3x60 MW Baira Siul Hydro Power Station in Chamba district of Himachal Pradesh.
Bank Nifty has seen decrease in Open Interest of -5.03% with increase in price of 0.64% indicating Short Covering.
Nifty has seen a decrease in Open Interest of -9.55% with a marginal decrease in price of -0.21% indicating Long Unwinding.
Option data indicates a probable trading range of Bank Nifty for the day between 39,000 to 40,000 & that for NIfty at 18,000 to 18,400.
BANK NIFTY Strategy: CALL Spread
View: Moderately Bullish.
Rationale: Traders could initiate this spread strategy to make modest returns with limited risk and reward. The spread suggested consists of buying one lot of 39,600 strike CALL Option and simultaneously selling one lot of 40,100 strike CALL Option.
IDBI Bank on Thursday reported a 75% jump in net profit to ₹567 crore for the quarter ended September. However, the total income fell 10% to ₹5,000.64 crore during the quarter, compared to ₹5,569.35 crore in the year-ago period
The Indian economy is likely to have grown 7.7% in the September quarter as half of 14 high-frequency indicators recovered to their pre-pandemic level during the second quarter of FY22, rating agency ICRA said on Thursday.
Aditi Nayar, chief economist at Icra Ltd, said the economic recovery widened in Q2 of FY22 as the crisis wrought by the second wave of Covid-19 abated, with a larger number of sectors bettering their pre-covid performance, relative to the position in Q1 of FY22. (Read more)
Asian markets were mixed Thursday as investors weighed more positive earnings against ongoing concerns about inflation and central bank tapering.
Hong Kong - Hang Seng Index closed 0.5% lower. Japan's Nikkei 225 ended down 1.9%. The Shanghai - Composite closed 0.2% higher.
Net profit rose 102.71% to ₹263.67 crore in the quarter ended September 2021 as against ₹130.07 crore a year ago. Total operating income rose 11.84% to ₹3207.28 crore.
Nestle India (NEST) reported in-line performance for Q3CY21 versus our estimates. However, clear signs of pressure have been noted on Gross Margins owing to inflationary RM. Reported Revenue grew 10% yoy at Rs. 3,865Cr ~1% above our estimate of Rs. 3,824Cr. Domestic sales reported 10.1% growth driven by ~7%/3% volume/price/mix led growth as per our estimates.
Exports which formed ~4.6% of revenues reported an 1.3% growth yoy. EBITDA of Rs. 952Cr (our estimate Rs. 926Cr) was up 6% yoy. However, EBITDA Margin at 24.6% was lower yoy/qoq on the back of 240bps drag on Gross Margin due to increase in fuel prices (packaging costs and transport costs), wheat, coffee and edible oil. Gross Margins stood at 55.5% (lower vs our estimate of 56.4%). Sequentially too GM contracted by 133bps owing to RM headwinds.
Management indicated RM headwinds are persisting across agri and non-agri products. Pressure on Operating Profitability due to Gross Margin drag drove recurring PAT to grow at 5.2% yoy at Rs. 617Cr (our estimate of Rs. 586Cr). As per management commentary, key products like Toddler range, Nescafe Classic, Milkmaid, KITKAT, MILKYBAR and MUNCH posted strong double-digit growth, while Maggi Noodles and Masala-ae-magic maintained strong momentum
despite high base. Sauces posted muted growth (decline in home consumption, high base and increase in competitive activity). OOH consumption is recovering with opening of restaurants, hotels and malls. Organized trade resurged growing in mid-twenties and ecommerce posted strong acceleration. Sanand factory (ninth plant for Nestle) was commercialized in Q3CY21.
However, in light of emerging RM headwinds (packaging material, wheat, edible oil, coffee) and to bake in modest Q3 we cut our Revenue/EBITDA/PAT estimates for CY21-23E by 1-5%. Maintain HOLD with unchanged TP of Rs. 18,600 as at CMP the risk-reward is unfavourable even as the long term growth trajectory appears fair (40+ projects in pipeline)
Asian Paints' consol net profit came in at ₹6 billion in the September quarter versus ₹8.3 billion a year ago. Consol revenue from operations rose to ₹70.96 billion versus ₹53.50 billion.
Union Power Secretary Alok Kumar on Thursday stressed on the need to have strategic fuel reserves to insulate the nation from supply shocks for at least a month, in the backdrop of the ongoing coal shortage at power plants in the country.
Addressing the South Asia Power Summit ‘Moving Towards Sustainable Energy Security’, organised by the Confederation of Indian Industry (CII), Kumar said the higher price of coal, especially imported, was the main reason for this coal crisis in the country. (PTI)
Indian Oil Corp, the country's top refiner, is operating its plants at an average 90% of total capacity and hopes to achieve full operating rate soon, Reuters reported quoting chairman S M Vaidya.
IOC joins other Asian refiners in ramping up output to meet an uptick in demand across Asia, Europe and the United States.
Shares of Shoppers Stop zoomed nearly 20% after the company's narrowing consolidated net loss narrowed to ₹3.68 crore in the September quarter.
Tata Steel Ltd.’s dollar bonds climbed by the most in 18 months after S&P Global Ratings returned the company to investment-grade status after 14 years.
The ratings firm lifted Tata Steel’s credit score for a third-consecutive time this year on Thursday. S&P raised the Mumbai-based steelmaker’s rating two levels to BBB- from BB, citing its expectation that Tata Steel’s largest shareholder Tata Sons will likely provide extraordinary financial support if required in times of financial stress. (Bloomberg)
ACC reported a decent performance on a consolidated basis with Revenue/EBITDA/APAT growth of 6%/6%/24% respectively YoY. Healthy operating performance during the quarter was primarily on account of higher volumes, superior realizations, and stringent monitoring of cost drivers under
project PARVAT.
The company recorded a healthy EBITDA margin of 19%, which was slightly below our expectation of 19.7%, primarily owing to the elevated input costs. The volume for the quarter stood at 6.6 million tonnes per annum (mntpa), up 1% YoY. While Blended EBITDA per tonne improved by 5% on a YoY basis to ₹1,084 ( ₹1,033/tonne, Q3CY20), blended realization/tonne came in at ₹5,706 against ₹5,442, up 4.9% YoY. Cost/tonne was higher by 4.8% YoY at ₹4,622 against ₹4,409 as input costs remained elevated owing to higher power/fuel cost ( up 24%) on a YoY basis.
We believe ACC is well-positioned in its key markets with better pricing and volume growth even though we foresee input costs to remain elevated in the near future. Furthermore, with its sharp focus on cost optimization measures under project PARVAT, we expect the company to register Revenue/EBITDA/APAT CAGR of 8%/13%/14% from CY21-CY23E driven by volume CAGR of 7% and consistent realization improvement of 1% each over CY21E-23E. The stock is currently trading at 9x its CY22E EV/EBITDA. We value ACC at 12x its CY22E EV/EBITDA to arrive at a TP of ₹2,710/share, implying an upside of 21% from the CMP.
Oil prices fell on Thursday as some investors scooped up profits from the recent rally, though solid demand in the United States and a switch to fuel oil from coal and gas amid surging prices capped losses.
Brent crude futures fell 54 cents, or 0.6%, to $85.28 a barrel, while US West Texas Intermediate (WTI) crude futures for December dropped 33 cents, or 0.4%, to $83.09 a barrel.
“Havells India Ltd (HIL) is a leading player in electrical consumer goods in India. During the 2QFY22, Havells India reported results were below our expectation on the bottom-line front. Top-line grew by ~32% to Rs3,238cr on the back of a) demand recovery, b) low base and c) pricing actions. However,PAT de-grew by ~7% yoy to Rs302cr due to increase in raw material cost. Considering the cost in near term and 2QFY22 Result, thus we have neutral rating on the stock."
The Reserve Bank of India on Wednesday fined Paytm Payments Bank Ltd (PBBL) ₹1 crore for submitting information that did not reflect the factual position in its application for a final Certificate of Authorization (CoA).
A central bank press statement said that the offence comes under the Payment and Settlement Systems Act, 2007 (PSS Act). (Full report)
India on Thursday crossed the much-awaited 1 billion mark in covid-19 vaccinations, with Uttar Pradesh, followed by Maharashtra, West Bengal, Gujarat and Madhya Pradesh being the top five states administering the highest number of doses. According to the Union health ministry, about 75% people above 18 years have been vaccinated with the first dose and over 31% population has been completely vaccinated with both doses.
Jubilant Foodworks(JFL) is a food service company engaged in retail sales of food through two strong international brands, Domino’s Pizza and Dunkin’ Donuts addressing different food market segments. During 2QFY22, JFL has reported strong sales growth (~37% yoy) and Profit grew by ~58%. Going forward, we expect JFL to report a healthy top-line and bottom-line mainly due to new product launches, store addition ( currently store is 1,435) and strong brand. Hence, we are positive on stock with a buy rating.
The company reported a 10% decline in its consolidated net profit to ₹223 crore for the quarter ended September. Its total income during July-September 2021 fell to ₹3,134.46 crore as against ₹3,508.91 crore in the year-ago period, LTFH said in a regulatory filing.
Hindustan Unilever's performance was in-line with our and street expectations on key performance metrics. Reported sales grew by 11% at Rs. 12,724Cr with underlying domestic consumer sales growth (USG) of 11% on the back of a 4% UVG (our estimate 5%). Health, Hygiene and Nutrition portfolio contributing 85% of revenues reported healthy 7% YoY growth while Out of Home consumption 3% of revenue (OOH) and Discretionary categories 12% of revenue categories saw a strong recovery on the back of improved mobility and expanding vaccination coverage. Beauty and Personal Care revenues grew 10% YoY driven by skincare, color cosmetics and hair care segment. EBITDA of Rs. 3,132Cr was 1.4% above our estimate of Rs. 3,089 with EBITDA Margins at 24.6% (24.6% our estimate) down 46bps YoY on account of140bps Gross Margin contraction to 50% (our estimate 51.1%) partially offset by 31bps/41/bps/24bps savings in Staff costs/A&P spends/Other Expenses respectively. Recurring PAT at Rs. 2,187Cr was up 9% YoY (our estimate Rs. 2,171Cr).
HUVRs Q2 performance displayed strength of its diverse product portfolio with improving trajectory across the discretionary product categories. Management indicated rural growth to soften going forward as indicated by Nielsen data while Urban demand to display a strong recovery from being subdued for over two years now. Opportunity in driving penetration in the Nutrition (HFD) segment remains. However, to factor in the drag on Gross Margins owing to persistent RM headwinds, w cut our FY22/23/24E Revenue/EBITDA/PAT estimates between 1-5%. Maintain BUY with revised TP of Rs. 2,900 (earlier Rs. 3,110) valuing the stock at 56x FY24E EPS.
Rallis India Ltd reported subdued Q2 performance, which impacted investor sentiments too. The stock has corrected more than 10% since Monday. The impact on performance was largely led by the erratic monsoon season. The uneven and delayed pickup of monsoon meant that the company’s performance came weak with major heat being felt by the seeds business. The seeds business declined by 65% year on year. (Read more)
India logged 18,454 new coronavirus infections, taking the total tally of cases to 34,127,450 while the active cases declined to 1,78,831, the lowest since March 2020, according to the Union Health Ministry data updated on Thursday.
The death toll climbed to 4,52,811 with 160 fresh fatalities.
Meanwhile, the cumulative vaccine doses administered in the country surpassed the 100-crore milestone today.
The consumer electrical goods maker on Wednesday reported a 7.34% decline in its consolidated net profit to ₹302.39 crore for the quarter ended September, compared to ₹326.36 crore in the year-ago quarter. Its revenue from operations rose 31.65% to ₹3,238.04 crore.
The company has announced the resignation of Dayapatra Nevatia from the position of executive director and chief operating officer. His last working day will be 3 January.
Overall, the revenue and margin performance in the quarter was ahead of expectation. Demand environment continues to remain robust in all the operating segments of the company. Well placed to meet its FY22 growth guidance of 19‐20% in USD terms. We expect revenue to grow at CAGR of 17.5% over FY22E‐FY24E with average EBIT margin of 18%. Trades at stretched valuation of PE of 40.6x on FY24E EPS. We maintain ADD on the stock with revised target price of ₹5,251/share.
The Tata Communications Ltd stock rose around 3% in early trade on Thursday reacting to its September quarter earnings. The earnings were a mixed bag with revenues growing lower than expected, but cost optimisation measures and one-time gain aided operating margins.
"The index is very close to its support level of 18200. If we need to bounce, this should be the level from where it could happen. Else, the Nifty would enter into a consolidation phase for a couple of days before a direction sets in. Until we do not break 18200, the focus should be on looking for avenues to buy this market."
Fuel prices hit fresh all-time highs on Thursday following a surge in global crude oil rates. In the national capital, petrol and diesel rates soared 35 paise to cost ₹106.54 and ₹95.27 per litre respectively, according to Indian Oil Corporation.
In Mumbai, a litre of petrol now costs ₹ 112.44, and diesel is sold at ₹ 103.26. Petrol prices in Chennai breached the ₹ 103 per litre mark and is currently sold at ₹ 103.26 per litre. In Kolkata, a litre of petrol now costs ₹107.12, and diesel is sold at ₹98 per litre
