KEY HIGHLIGHTS
Closing Bell: Back To Square One
Indian equity markets reversed most of Tuesday's gains ending near the lowest point of the day, dragged lower by heavyweight Reliance Industries (down 4%).
The S&P BSE Sensex ended 1.1% lower at 38,071 while the Nifty ended above the 11,200 mark, down 0.86% at 11,202. Both benchmark indices are back to being flat for the week.
Among sectoral indices, the auto index was the major laggard, ending 1.2% lower. The I.T. index snapped a three-day gaining streak, ending 0.9% lower.
The Pharma index outperformed in today's trade, led by gains in Dr. Reddy's Laboratories (up 6.3%). The index ended 3.1% higher.
The PSU Bank index was the other sectoral gainer, ending 1.5% higher but off the day's high.
Broader markets were mixed in today's session. The Nifty Midcap index ended 0.5% higher while the smallcap index ended little changed.
Market breadth ended in favour of the gainers. 1,000 stocks on the NSE ended with gains while 800 declined.
How Did The Sectoral Indices Fare
Auto Index Is The Top Sectoral Laggard
Earnings Reaction: SpiceJet Q4FY20
- Reports fourth quarter loss wider than estimates
- Net loss of Rs 807 crore from net profit of Rs 56.28 crore
- Revenue at Rs 2,860 crore as compared to estimate of Rs 2,830 crore
- Load factor in the fourth quarter at 90%
- Ebitdar loss of Rs 90.9 crore this quarter
- Forex loss of Rs 484 crore and higher other income of Rs 193.5 crore due to gain recognised on collection of claim for grounding of Boeing 737 Max aircraft
Shares are off the day's high, currently trading 0.8% higher at Rs 48.35, post the announcement.
Active Stock Options
- Reliance Industries 2,200 Call: Premium down 86.7% to Rs 3. The contract has shed 3.5 lakh shares in Open Interest.
- Bajaj Finance's 3,300 Call: Premium up 59.1% to Rs 39.1. The contract has shed 4.42 lakh shares in Open Interest.
- State Bank of India's 195 Call: Premium down 22.6% to Rs 1.2. The contract has shed 12.3 lakh shares in Open Interest.
Earnings Reaction: Manappuram Finance Q1FY21
- Revenue up 27% to Rs 1,512.5 crore
- Net Interest Income up 18.1% to Rs 892 crore
- Net profit up 39% to Rs 368 crore
- Ebitda up 31% to Rs 1,099.5 crore
- Ebitda margin at 72.7% from 70.8%
- Gold loan segment revenue up 29% to Rs 1,250.3 crore
- Microfinance revenue up 16% to Rs 266.1 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares recovered from the day's low to end little changed at Rs 181.95. The stock ended lower for the second straight day.
Earnings Reaction: Carborundum Universal Q1FY21
- Revenue down 32% to Rs 449.6 crore
- Net profit down 63% to Rs 19.7 crore
- Ebitda down 50% to Rs 43.4 crore
- Ebitda margin at 9.7% from 13.2%
- Abrasives segment revenue down 49% to Rs 131.4 crore
- Ceramics segment revenue down 35% to Rs 107.6 crore
- Electrominerals segment revenue down 21% to Rs 209.6 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares are off the day's low, after falling as much as 3.1% to Rs 232.7. The stock currently trades little changed.
Markets At 2:30 P.M.
- Benchmark indices fall to the day's low
- Nifty down 0.75% at 11,216
- Sensex down 1% at 38,116
- Nifty Bank up 0.23% at 22,156
- Nifty Midcap index up 0.8%
- Nifty Smallcap index up 0.65%
- India Volatility Index up 3.1% to 24.38
- Nifty Auto and Nifty I.T. index down 1% each
- Nifty Pharma is the top sectoral gainer; up 3%
- Nifty PSU Bank off the day's high; up 2%
- Dr Reddy's is the top Nifty gainer; up 6.2% post Q1 earnings
- Reliance Industries is the top Nifty laggard; down 3.5%
- 1,030 stocks on the NSE trade with gains while 753 decline
Earnings Reaction: Maruti Suzuki India Q1FY21
- Revenue down 79% to Rs 4,110.6 crore
- Net loss of Rs 249.4 crore from net profit of Rs 1,435.5 crore
- Ebitda loss of Rs 863.4 crore from ebitda gain of Rs 2,047.8 crore
- Other income up 73% to Rs 1,318.4 crore
- Sold a total of 76,599 vehicles during the quarter
- Losses partially offset by lower operating expenses and higher fair- gain on the invested surplus
- Raw material costs at 79.6% of revenue from 73.7%
- Covid-19 related disruptions led to lower volumes
Shares snapped a two-day gaining streak to end 1.55% lower at Rs 6,185.
Money Market Update
The rupee ended with modest gains but little changed in today's session, after trading in a narrow range.
The currency ended at 74.80 against the U.S. Dollar as compared to Tuesday's close of 74.83.
Five other currencies managed to outperform the rupee in today's trading session.
Yield on the 10-year government bond ended at 5.835% as compared to Tuesday's close of 5.85%.
Earnings Reaction: Dr Reddy's Laboratories
- Revenue up 15% to Rs 4,426.5 crore
- Net profit down 12% to Rs 594.6 crore
- Ebitda up 51% to Rs 1,121.3 crore
- Ebitda margin at 25.3% from 19.2%
- API revenue up 70% to Rs 1,009 crore
- Global generics revenue up 6% to Rs 3,057 crore
- Proprietary products revenue down 80% to Rs 5.6 crore
Shares ended as the top gainer on the Nifty 50 index, up 6.2% at Rs 4,302.
Former RBI Deputy Governor Viral Acharya On His RBI Stint
Earnings Reaction: Colgate Palmolive Q1FY21
- Revenue down 4% to Rs 1,040.6 crore
- Net profit up 17% to Rs 198.1 crore
- Ebitda up 3% to Rs 308 crore
- Ebitda margin at 29.6% from 27.6%
- Advertising expenses down 25% to Rs 113.9 crore
- Lower advertising expenses contribute to margin expansion
- Toothpaste business delivered positive sales growth during the quarter
- Gross margins at 65.9%
Shares surged to the day's high, gaining as much as 3.8% to Rs 1,444.5, post the announcement. The stock is up for the third straight day.
Buzzing Stock: Adani Gas
- Gains as much as 10.1% to Rs 160.9
- Biggest single-day gain in over five months
- Up for the second straight day
- Snapped a two-day losing streak on Monday
- Today's volumes are quadruple its 20-day average
- Takes support and bounces from its 50-Day Moving average at 142
- Has doubled from its 52-week low of Rs 76.6 on March 25, 2020
- Both analysts tracking the stock have a buy recommendation
- The stock trades 17.4% higher than its 12-month consensus price target of Rs 130, implying a negative return potential
European Markets Open Flat
Benchmark indices in Europe opened flat, remaining in a narrow trading range through the week ahead of the Fed meet outcome later tonight.
The Stoxx 600 opened little changed with sectors trading mixed. Retail and banks are gaining while media and technology shares are declining.
Asian markets have ended mixed while futures on the Dow Jones are trading little changed.
Brent crude trades 0.4% higher at $43.41 per barrel. Gold is little changed at $1,957.6/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 unchanged at 3,303
- DAX down 0.1% at 12,822
- CAC up 0.5% at 4,954
- FTSE 100 up 0.2% at 6,140
- IBEX 35 little changed at 7,251
How Are The Sectoral Indices Faring
Buzzing Stock: Sequent Scientific
- Trades at the highest level since September 2017
- Gains as much as 4% to Rs 120.25
- Up for the second straight day
- Has gained in four out of the last five trading sessions
- Up over 15% in the last five trading sessions
- Today's volumes are 36% higher than its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 73
- Has more than double from its 52-week low of Rs 51.7 on March 19, 2020
Earnings Reaction: RBL Bank
- Net Interest Income up 27.5% to Rs 1,041.3 crore
- Net profit down 47.5% to Rs 141 crore
- Provisions at Rs 500.2 crore from Rs 196.7 crore
- Gross NPA at 3.45% from 3.62% last quarter
- Net NPA at 1.65% from 2.05% last quarter
- Provisions for Covid-19 at Rs 240 crore this quarter
- Total provisions for Covid-19 at Rs 350 crore
- Majority of Covid-19 provisions towards credit card portfolio
- Moratorium down to 13.7% of loan book from 33% last quarter
- Collections in microfinance book was at 77% in July, as compared to the whole book being under moratorium in April.
- All numbers are standalone and compared on a year-on-year basis
Shares are off the day's low, after falling as much as 4.3% to Rs 174.
Stock Reaction: HT Media
The Board of Directors at a meeting held today have approved investment in Mosaic Media Ventures. The company is in the business of media and publishing, events along with database and customs research.
HT Media will invest up to Rs 6 crore post working capital adjustment and revenue linked milestone payment up to Rs 1 crore on a deferred basis.
The company will acquire 100% of paid-up share capital of Mosaic held by NWS Digital Asia and News Corporation, subject to finalisation of definitive agreements, the exchange filing said.
Shares gained as much as 5% to Rs 12.6, post the announcement.
Markets At Noon
- Benchmark indices pare losses, trade little changed
- Nifty unchanged at 11,297
- Sensex down 0.2% at 38,424
- Nifty Bank up 0.9% to 22,295
- Nifty Midcap Index up 1.2%
- Nifty Smallcap Index up 1%
- India Volatility Index up 2.2% to 24.2
- Nifty I.T. snaps three-day gaining streak; down 0.9%
- Nifty PSU Bank extends gains; up 2.6%
- Nifty Metal, Nifty Pharma, Nifty Realty gain over 1% each
- IndusInd Bank remains the top Nifty gainer; up 4.2%
- HCL Technologies is the top Nifty laggard; down 2%
- 1,188 stocks on the NSE trade with gains while 556 decline
Nifty I.T. Snaps Three Day Gaining Streak
Earnings Reaction: Castrol India
- Revenue down 52.8% to Rs 490.6 crore
- Net profit down 64.2% to Rs 65.4 crore
- Ebitda down 66.5% to Rs 95.3 crore
- Ebitda margins at 19.4% from 27.3%
- Generated net cash of Rs 302 crore from operations in H1CY20, which is 85% of H1CY19 levels.
- All numbers are standalone and compared on a year-on-year basis
Shares gained as much as 5.2% to Rs 118.9. The stock is up for the second straight day.
F&O Snapshot: Active Options Contracts
- Nifty July futures add 12% and 8.64 lakh shares in Open Interest.
- Nifty Bank July futures add 26% and 2.72 lakh shares in Open Interest.
Nifty: July 30 Expiry
- 11,300 Call: Premium down 18% to Rs 59.3. The contract has added 25.1 lakh shares in Open Interest.
- 11,200 Put: Premium down 13.4% to Rs 27.4. The contract has added 6.7 lakh shares in Open Interest.
- 11,400 Call: Premium down 25% to Rs 22.7. The contract has added 15.5 lakh shares in Open Interest.
Nifty Bank: July 30 Expiry
- 22,500 Call: Premium up 2.6% to Rs 144. The contract has added 3.4 lakh shares in Open Interest.
- 22,000 Put: Premium down 41% to Rs 111.25. The contract has added 4.55 lakh shares in Open Interest.
- 21,500 Put: Premium down 49% to Rs 30.6. The contract has added 2.32 lakh shares in Open Interest.
Earnings Reaction: Nestle India
- Revenue up 1.7% to Rs 3,050 crore
- Ebitda up 4.9% to Rs 747 crore
- Ebitda margin at 24.5% from 23.7%
- Net profit up 11.2% to Rs 487 crore
- Earnings were below Bloomberg consensus estimates
- Domestic sales up 2.6% to Rs 2,908 crore
- Domestic sales form 95% of total revenue
- E-commerce contributes 3.6% to domestic sales
- Exports down 8.8% to Rs 134 crore
- All numbers are standalone and compared on a year-on-year basis
Brokerage firm CLSA has downgraded the stock to sell from underperform and has also cut its price target to Rs 16,000 from Rs 16,500, citing expensive valuations and disappointing performance in the quarter.
Shares fell as much as 2.9% to Rs 16,600, down for the second straight day. The stock is the top laggard on the Nifty 50 index.
Buzzing Stock: Deepak Nitrite
- Trades at an all-time high
- Gains as much as 4.6% to Rs 644.4
- Up for the seventh straight day
- Longest winning streak since August 2017
- Has gained 23% in the last seven trading sessions
- Today's volumes are 38% higher than its 20-day average
- The stock trades in overbought territory with Relative Strength Index (RSI) at 77
- Has gained over two and a half times from its 52-week low of Rs 257 on August 23, 2019
- All six analysts tracking the stock have a buy recommendation
- The stock trades 3.6% above its 12-month consensus price target of Rs 611, implying a negative return potential
Stock Reaction: Future Group Companies
The future group companies have sought more time in reporting their quarterly results due to Covid-19 related lockdowns. The press release said that the company's corporate office is not operative as it falls under the containment zone.
Both Future Retail Ltd. and Future Enterprises Ltd. have sought time to release their results for the quarter ended March 31, 2020 by August 31, 2020 and for the quarter ended June 30, 2020 by September 15, 2020, as per their respective exchange filings.
Future Retail is locked in an upper circuit of 5% for the third straight day. Future Enterprises is locked in a 5% upper circuit for the seventh straight day and is gaining for the eighth straight day.
All Stocks In The PSU Bank Index Gain
Earnings Reaction: NIIT Technologies (Coforge)
- Revenue up 9.8% to Rs 1,057 crore
- Net profit down 8.8% to Rs 79.9 crore
- Ebitda up 22.4% to Rs 169.5 crore
- Ebitda margin at 16% from 14%
- Revenue from Europe, Middle East & Africa up 13% to Rs 382.5 crore. De-growth on a sequential basis.
- Revenue from Asia Pacific down 18% to Rs 85.6 crore. Flat on a sequential basis.
- Revenue from India doubles to Rs 93.2 crore. Up 32% on a sequential basis.
- Higher employee expenses and exceptional loss of Rs 18 crore impact profit
- Order intake of $186 million with three significant deals
- Revenue impacted sequentially due to sharp decline in travel and transport vertical
- Order book for next 12 months up 18% to $465 million
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 7.2% to Rs 1,894. The stock is now trading at a five-month high.
Coronavirus India Update
- Total cases in India cross the 15 lakh mark
- 48,513 new cases reported in the last 24 hours
- Total confirmed cases now at 15,31,669
- Active cases now at 5,09,447
- Patients cured / discharged / migrated at 9,88,029
- Death toll rises to 34,193
- 768 deaths reported in the last 24 hours
- 35,286 patients recovered in the last 24 hours
Earnings Reaction: Quess Corp
- Revenue flat at Rs 2,409.4 crore
- Net profit down 28% to Rs 33.8 crore
- Ebitda down 12% to Rs 129.6 crore
- Ebitda margin at 5.4% from 6.2%
- Higher employee costs impact margins
- Exceptional gain of Rs 25 crore due to fair gain on acquisition in Terrier Security Services
- Reduced net debt by Rs 100 crore to Rs 354 crore
- Added 200 new customers this quarter
- All numbers are consolidated and compared on a year-on-year basis
Shares are trading at the day's low, falling as much as 3.1% to Rs 336.7.
Markets At 10:10 A.M.
- Benchmark indices fluctuate between gains and losses
- Nifty down 0.2% at 11,280
- Sensex down 0.3% at 38,382
- Nifty Bank up 0.2% at 22,155
- Nifty Midcap index up 0.9%
- Nifty Smallcap index up 0.8%
- India Volatility Index up 1.6% to 24
- Nifty Metal and PSU Bank index gain over 1% each
- Nifty Auto, I.T. trade with negative bias
- IndusInd Bank is the top Nifty gainer; up 3.8%
- BPCL is the top Nifty laggard; down 1.7%
- 1,052 stocks on the NSE trade with gains while 594 decline
Money Market Update
The rupee opened flat in today's trading session after ending little changed over the last three sessions.
The currency opened at 74.82 against the U.S. Dollar as compared to Tuesday's close of 74.84.
The ramping up of forex purchases by the Reserve Bank of India will limit the currency's gains, according to Bloomberg Economics.
Yield on the 10-year government bond opened at 5.844% as compared to Tuesday's close of 5.85%.
Within the bond markets, focus today will be on the treasury bill auction worth Rs 35,000 crore.
The government is retiring the current benchmark 10-year debt just two months after it was issued, as compared to 12 months for earlier offerings.
Stock Reaction: Sun Pharma
The drugmaker's wholly-owned subsidiary Taro has acquired Canada-base Aquinox Pharmaceuticals by way of purchase of the company's outstanding share.
The acquisition will be done for a cash consideration of $8.2 million.
Aquinox carries out the business of research and development of pharmaceutical products for the purpose of their commercialisation, the company said in an exchange filing.
The said acquisition does not require any regulatory approval.
Shares gained as much as 1.85% to Rs 491.5, post the announcement.
Buzzing Stock: Westlife Development
- Top performing stock on the Nifty 500 index
- Gains as much as 9.8% to Rs 384.8
- Biggest single-day gain in four months
- Trades at the highest level in four months
- Up for the second straight day
- Snapped a four-day losing streak on Monday
- Has gained 13% in the last two trading sessions
- Today's volumes are nearly 50 times higher than its 20-day average
- Breaks above 200-Day Moving Average of 351
- Remains 27% below its 52-week high of Rs 499.4 on February 4, 2020
- Seven out of the eight analysts tracking the stock have a buy recommendation
- The stock trades 1.4% above its 12-month consensus price target of Rs 370.8, implying a negative return potential
Earnings Reaction: IndusInd Bank
- Net Interest Income up 16.4% to Rs 3,309.2 crore
- Net profit down 67.8% to Rs 460.6 crore
- Provisions at Rs 2,258.9 crore from Rs 430.6 crore
- Gross NPA at 2.53% from 2.45% last quarter
- Net NPA at 0.86% from 0.91% last quarter
- Made additional floating provisions worth Rs 500 crore during the quarter with regards to Covid-19
- Recognised a fraud of Rs 960 crore and has fully provided for the same
- Moratorium numbers down to 16% of loan book as against 50% in April
- All numbers are standalone and compared on a year-on-year basis
IndusInd Bank's Capital Raise:
- To raise Rs 3,288 crore through a preferential issue
- To issue fully paid up 6.275 crore equity shares at a price of Rs 524 per share
- Investors include Route One Fund, Route One Offshore Master Fund, ICICI Prudential, Tata Investment Corporation among others
- Promoters to participate in the capital raise as well
Brokerage firm CLSA maintained its buy rating on the stock and raised its price target to Rs 665 from Rs 600.
Shares gained as much as 7.2% to Rs 564.75, the highest level in four months.
Earnings Reaction: Tata Coffee
- Revenue up 26% to Rs 587.6 crore
- Net profit up 77% to Rs 61.6 crore
- Ebitda up 40% to Rs 110.7 crore
- Ebitda margin at 18.8% from 16.9%
- Strong operating performance from Eight' Clock Coffee, driven by higher volumes
- Pricing pressure on instant coffee business due to lower short-term demand
- Out-of-home channels impacted across the globe but focus on operating efficiencies
- Higher plantation revenues up 16% to Rs 107 crore
- Growth seen in Vietnam operations on a quarter-on-quarter basis
- Instant Coffee exports from India remain healthy
- Green Bean sales during the quarter were the highest ever
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 16.2% - the most since November 2012 to Rs 96.8. The stock trades at the highest level in nearly six months.
Opening Bell: In Consolidation Mode
Indian equity markets opened flat but with a negative bias, despite futures suggesting otherwise.
The S&P BSE Sensex opened 0.17% lower at 38,427 while the NSE Nifty 50 index opened at 11,276, down 0.2%.
Sectoral indices too have opened flat. The FMCG and I.T. index are seeing losses of nearly 0.5% while the Pharma index has gained 0.5% at the start of trade.
Broader markets have opened higher. The midcap index is up 0.3% while the smallcap index is gaining 0.5%.
Market breadth was in favour of the gainers. 895 stocks on the NSE opened with gains while 486 traded with losses.
Latest On The Coronavirus
- Global cases cross 16.6 million
- Death toll rises to 6.58 lakh
- China reports 101 new cases - 98 of them being local infections
- South Korea reports 48 new cases
- Australia's Queensland to close borders to visitors from Sydney, starting Saturday
- Sydney declared a virus hotspot by the state
- Expectations for a safe and effective vaccine are 'reasonable,' according to Anthony Fauci - the top U.S. infectious disease expert
- Trump says warnings on Anti-Malarial drug were political
- 164 new deaths reported in Texas, toll rises to 5,877
- New cases in California at the lowest in three weeks
Top Reads On Bloombergquint.com
How Did The Fund Flows Fare On Tuesday
Key Stocks In Focus
- IndusInd Bank: Higher provisions impacted the lender's profitability in the June quarter. It also recognised a fraud for which it has fully provided for. CLSA has maintained its buy rating on the stock and has raised its price target to Rs 665 from Rs 600. IndusInd Bank's board has also approved a preferential issue of nearly 3,300 crore rupees.
- RBL Bank: Profit saw a decline owing to higher provisions. The lender also reported improvement in its asset quality compared to the previous quarter. JPMorgan remains underweight on the stock but has raised its price target to 150 rupees from 120.
- Nestle India: Earnings were below Bloomberg consensus expectations. Growth in the domestic markets - which forms 95% of the company's revenue was subdued while that in exports was negative compared to last year.
- Yes Bank: Numbers are not comparable as the bank underwent restructuring. MD & CEO Prashant Kumar said that the bank has seen more repayments than disbursements this quarter and that the bank will use the FPO proceeds for retail and MSME lending.
- Hexaware Technologies: Reported a double-digit growth in its Dollar revenue as compared to the previous quarter. Profits however were flat owing to higher employee expenses.
- Future Retail: Group companies seek extension for filing results due to continuous lockdown. Future Retail & Future enterprises to file earnings by August 31 for the March quarter. To submit June quarter results by September 15, 2020. Corporate office in Mumbai falls under a containment zone and isn't operative since the lockdown.
- Mindspace Business Parks REIT: IPO subscribed 1.21 times on Day 2. Institutional subscription at 0.83 times. Retail subscription at 1.65 times. Institutional category doesn’t include anchor portion.
- Nifty Earnings Today: Bharti Airtel, Dr Reddy's Laboratories, Maruti Suzuki
- Non-Nifty Earnings Today: TVS Motor, InterGlobe Aviation, GSK Pharma, Manappuram Finance, Union Bank of India, Carborundum Universal, CEAT, Colgate-Palmolive, Rail Vikas Nigam, GMM Pfaudler
For all that you need to know going into trade, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Gains Likely To Extend?
Good Morning!
Indian equity markets ended near the day's high in Tuesday's session, reversing Monday's losses. The S&P BSE Sensex and NSE Nifty 50 ended with gains of more than 1% each.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.42 at 11,331 as of 8:05 a.m. on Wednesday.
Stocks like IndusInd Bank, RBL Bank, Yes Bank, Nestle India and Hexaware Technologies, among others, will remain in focus as they reported their quarterly results after market hours on Tuesday.
Three Nifty 50 companies — Maruti Suzuki India, Dr. Reddy's Laboratories and Bharti Airtel — are set to report their first-quarter results on Wednesday. Among the non-Nifty 50 names are TVS Motor, InterGlobe Aviation, Manappuram Finance and Union Bank of India, among others.
Asian markets are struggling for direction in mid-week trade. Markets in Japan, Hong Kong and China are declining, while those in South Korea edged higher.
The U.S. dollar steadied after a slump, while West Texas Intermediate crude was little changed at $41.06 per barrel.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
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