KEY HIGHLIGHTS
Closing Bell: A Weekly Loss
Indian equity markets ended a week of consolidation with losses, as benchmark indices continued to face pressure at higher levels.
The S&P BSE Sensex ended 1.13% lower at 37,877 while the NSE Nifty 50 index ended 1% lower at 11,181. Both benchmarks recovered marginally from the day's low.
Auto and PSU Banks were the top laggards in today's session with both the indices ending lower by 2.5% each.
The top three laggards on the Nifty 50 index were Auto stocks, namely Eicher Motors (down 7.1%), Tata Motors (Down 4.8%) and M&M (Down 3.3%). The Auto index snapped an eight-day gaining streak.
The Nifty Bank index to fell over 2% in today's trading session.
FMCG and Media indices were the other sectoral indices, declining over 1% each.
Broader markets too fell in tandem with the benchmark indices. The midcap index ended 0.9% lower while the smallcap index ended with losses of 1.2%
India Volatility Index ended 5.8% higher, snapping an eight-day losing streak to end above the mark of 20 at 21.77.
Market breadth was in favour of the laggards. 1,130 stocks on the NSE ended with losses while 710 posted gains.
For the week, the Nifty ended with losses of 0.3% while the Sensex posted losses of 0.4%.
Decoding The Markets This Week
Bond Auction Update
- Government bond auction for one security partially devolves on primary dealers
- Auction of 5.77% GS 2030 sees devolvement of Rs 4,638 crore on primary dealers
- Of the Rs 18,000 crore up in 2030 bonds up for auction, bids for Rs 13,362 crore accepted at a cut-off yield of 5.96%.
- Other three securities up for auction fully sold.
Source: RBI
Buzzing Stock: Bajaj Electricals
- Third best performer on the Nifty Smallcap index
- Gains as much as 8.4% to Rs 473.5
- Biggest single-day gain in two months
- Trades at the highest level since July 2019
- Has gained in three out of the last four trading sessions
- Up 10% in the last four trading sessions
- Today's volumes are 25% higher than its 20-day average
- Stock nearing overbought territory with Relative Strength Index (RSI) at 67
- Has gained 82% from its 52-week low of Rs 260 on April 3, 2020
- Six out of the 13 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 1.8%
Earnings Reaction: NTPC Q1FY21
- Revenue down 3.1% to Rs 23,453 crore
- Net profit down 5.1% to Rs 2,470.2 crore
- Ebitda up 20% to Rs 7,745.1 crore
- Ebitda margin at 33% from 26.7%
- Exceptional loss of Rs 803 crore due to rebate given to discoms under the Atmanirbhar Bharat scheme
- Other income up 74% to Rs 567.5 crore
- Core generation segment revenue down 2.4% to Rs 22,958.8 crore
- One thermal unit of 660 MW at Khargone went commercial this quarter
- Coal PLF at 58.2% from 73.9%
- Gross generation down 12% to 60.19 billion units
- All numbers are standalone and compared on a year-on-year basis
Shares ended 1.3% higher at Rs 88.40.
Active Stock Options
- Reliance Industries' 2,200 Call: Premium down 11% to Rs 46. The contract has added 1,036 shares in Open Interest.
- Larsen & Toubro's 1,000 Call: Premium down 3.1% to Rs 26.4. The contract has shed 796 shares in Open Interest.
- Lupin's 1,000 Call: Premium up 211.8% to Rs 38.3. The contract has shed 280 shares in Open Interest.
Ashok Leyland Is The Only Gainer On The Nifty Auto Index
Markets At 2:30 P.M.
- Benchmark indices fall to the day's low
- Nifty down 1.46% to 11,135
- Sensex down 1.5% to 37,744
- Nifty Bank down 2.9% to 21,560
- Nifty Midcap index down 1.4%
- Nifty Smallcap index down 1.8%
- India Volatility Index up 8.2% to 22.25
- All sectoral indices give up gains
- Nifty PSU Bank is the top sectoral laggard; down 3%
- Nifty Auto, Nifty Media index fall over 2% each
- Nifty FMCG, Nifty Realty fall over 1% each
- Coal India is the top Nifty gainer; up 3.5%
- Eicher Motors is the top Nifty laggard; down 7%
- 590 stocks on the NSE trade with gains while 1,228 decline
Earnings Reaction: Indian Bank Q1FY21
- Net Interest Income more than doubles to Rs 3,874 crore
- Net profit flat at Rs 369.3 crore
- Gross NPA at 10.9% from 6.87% last quarter
- Net NPA at 3.76% from 3.13% last quarter
- Provisions up 28% from the last quarter to Rs 1,829.9 crore
Shares fell as much as 5% to Rs 60.3, post the announcement. The stock is down for the third straight day.
Earnings Reaction: Hindalco Q1FY21
- Revenue down 26.2% to Rs 7,420 crore
- Net loss of Rs 40 crore from net profit of Rs 23 crore
- Ebitda down 20.2% to Rs 573 crore
- Ebitda margin at 7.7% from 7.1%
- Novellis revenue down 9% to Rs 18,407 crore
- Aluminium business revenue down 19% to Rs 4,436 crore
- Copper business revenue down 34% to Rs 3,031 crore
- Cash and cash equivalents of $1.7 billion in Novelis and Rs 8,717 crore for the India busines
- Net Debt-Ebitda at 3.83x from 2.61x in March 2020
- Impact of subdued domestic market offset by higher exports
- Better operational efficiencies, lower input costs led to a substantial reduction in cost of production
- Aluminium Metal sales down 5% to 303 KT
Shares ended 0.8% higher, after gaining as much as 3.2% at Rs 184.95. The stock ended at the highest level in six months.
Money Market Update
The rupee ended marginally lower in today's session, capping a rangebound week.
The currency ended at 74.90 against the U.S. Dollar as compared to Thursday's close of 74.84. It was the third straight day of declines for the currency.
Six other currencies managed to outperform the rupee in today's trading session.
On a weekly basis, the rupee was little changed and the fifth best performing currency in Asia.
Yield on the 10-year government bond ended at 5.911% as compared to Thursday's close of 5.866%.
Metal Index Set For Third Straight Weekly Advance
Earnings Reaction: Voltas Q1FY21
- Revenue down 51.1% to Rs 1,297 crore
- Net profit down 50.8% to Rs 81.2 crore
- Ebitda down 77.1% to Rs 66.8 crore
- Ebitda margin down to 5.1% from 11%
- Unitary Cooling Products revenue down 60% to Rs 707 crore
- Electro-Mechanical Projects and Services revenue down 37% to Rs 518 crore
- Engineering Products and Services revenue down 36% to Rs 48 crore
- All numbers are standalone and compared on a year-on-year basis
Shares fell as much as 2.4% to Rs 603.55, post the announcement.
Earnings Reaction: Ramco Cements Q1FY21
- Revenue down 25% to Rs 1,041.8 crore
- Net profit down 43% Rs 109.6 crore
- Ebitda down 28% to Rs 260 crore
- Ebitda margin at 25% from 26%
- Transportation and handling costs down 28% to Rs 201.8 crore
- Power and fuel costs down 43% to Rs 151.1 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares gave up gains to fall as much as 1.2% to Rs 694.25, post the announcement.
Earnings Reaction: Nesco Q1FY21
- Revenue down 11% to Rs 69.3 crore
- Net profit up 35% to Rs 51.3 crore
- Ebitda up 2% to Rs 49.6 crore
- Ebitda margin at 71.6% from 62.3%
- Higher other income aids net profit
- Other income up to Rs 22 crore from Rs 1.3 crore
- Lower other expenses, employee expenses and costs aid margin expansion
- Nesco I.T. Park revenue up 88% to Rs 65.1 crore
- Bombay Exhibition Centre revenue down 66% to Rs 9.3 crore
- Indabrator revenue down down 71% to Rs 2.25 crore
- Nesco Foods revenue down 77% to Rs 1.9 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares ended 4.85% higher, cooling off from gains of as much as 12.7% at Rs 517.8.
European Markets Open Lower
Benchmark indices in Europe have begun trade on a negative note after U.K. said that arrivals from France and Netherlands must quarantie.
The Stoxx 600 opened 0.7% lower but remains on course for a second weekly advance.
Travel & Leisure stocks along with oil stocks are the top laggards while telecom and chemical companies are outperforming.
Asian markets have had a subdued close while futures on the Dow Jones continue to remain little changed.
Brent Crude trades little changed at $44.91 per barrel while Gold is having a volatile session, down 0.3% at $1,948/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 down 0.4% at 3,328
- DAX down 0.3% at 12,958
- CAC down 0.66% at 5,008
- FTSE 100 down 0.5% at 6,152
- IBEX 35 down 0.65% at 7,202
How Are The Sectoral Indices Faring
Buzzing Stock: JSPL
- Trades at the highest level since September 2018
- Gains as much as 3.4% to Rs 220.4
- Has gained in eight out of the last ten sessions
- Up 18% in the last ten trading sessions
- Today's volumes are 17% lower than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 82
- Has more than quadrupled from its 52-week low of Rs 62 on April 3, 2020
- 17 out of the 19 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 15.9%
July WPI Remains Negative
India's wholesale prices remained negative in July, falling more than economists expected.
Wholesale prices in July fell 0.58%. Estimates of 19 economists ranged from a decline of 1.5% to a rise of 5.4%.
Primary article prices rose 0.63% compared to the previous year.
Fuel, power and lighting prices declined 9.84% compared to last year.
Manufactured product prices rose 0.51% year-on-year.
Wholesale food prices rose 4.08% as compared to the previous year.
Earnings Reaction: 3M India Q1FY21
- Revenue down 57% to Rs 346.2 crore
- Net loss of Rs 42.5 crore from net profit of Rs 90.1 crore
- Ebitda loss of Rs 48.4 crore from Ebitda gain of Rs 148.5 crore
- Safety and Industrials business revenue down 57% to Rs 132.5 crore
- Transportation & Electronics business revenue down 70% to Rs 84 crore
- Healthcare business revenue down 41% to Rs 77 crore
- Consumer business revenue down 37% to Rs 49 crore
- Outlook for the remainder of the financial year is uncertain.
- In the process of executing investments in the range of Rs 65 crore
- Standalone cash balance improved by about 9% to Rs 665.7 crore
Shares fell as much as 5% - the most in four months to Rs 20,800.
Markets At Noon
- Benchmark indices continue to consolidate
- Nifty up 0.3% at 11,337
- Sensex up 0.34% at 38,443
- Nifty Bank unchanged at 22,188
- Nifty Midcap index down 0.46%
- Nifty Smallcap index down 0.5%
- India Volatility Index down 4.4% to Rs 19.66
- Nifty Pharma remains the top sectoral gainer; up 2%
- Nifty Metal and Nifty Realty are the other major sectoral gainers; up 0.7% each
- Nifty Auto is the top sectoral laggard; down 1%
- Cipla remains the top Nifty gainer; up 2%
- Eicher Motors extendes losses as the top Nifty laggard; down 4%
- 1,066 stocks on the NSE trade with gains while 704 decline
Buzzing Stock: Ashoka Buildcon
- Second best performer on the Nifty Smallcap index
- Gains as much as 7.5% to Rs 69.4
- Trades at the highest level in five months
- Gains in nine out of the last 10 trading sessions
- Up 38% in the last 10 trading sessions
- Today's volumes are more than triple its 20-day average
- Entering overbought territory with Relative Strength Index (RSI) at 70
- Has nearly doubled from its 52-week low of Rs 37 on April 3, 2020
- Approaching its 200-Day Moving Average of 76.9
- 22 out of the 23 analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 58%
Nifty Pharma Snaps Three-Day Losing Streak
Earnings Reaction: Balkrishna Industries Q1FY21
- Revenue down 21.4% to Rs 942.6 crore
- Net profit down 25.6% to Rs 131.6 crore
- Ebitda down 10.3% to Rs 240.5 crore
- Ebitda margin at 25.5% from 22.4%
- Declared an interim dividend of Rs 3 per share
- Total sales volume of 38,096 MT
- Demand strong in agriculture segment
- Non-agriculture segment segment is moving slow
- Confident of achieveing similar sales volumes in FY21 as in FY20
- Confident to withstand the near-term challenges to emerge stronger with a higher global market share
Shares fell as much as 5.3% - the most in three months to Rs 1,311.5.
Earnings Reaction: Redington India Q1FY21
- Revenue down 8% to Rs 10,697 crore
- Net profit down 10% to Rs 99 crore
- Ebitda down 8% to Rs 205.6 crore
- Ebitda margin flat at 1.9%
- India business revenue down 17% to Rs 3,446 crore
- Overseas business revenue down 4% to Rs 7,251 crore
- Working capital days down to 12 from 57 in Q1FY20
- Cash on books for India business at Rs 1,404 crore
- Arena business had strong double-digit revenue growth and triple-digit Ebitda
- Contribution from top 5 vendors at 57% from 60% in Q1FY20
Shares ended 16.3% higher - the most since May 2009 at Rs 109.4, the highest level in five months.
Buzzing Stock: Lupin
- Top gainer on the Nifty Pharma index
- Gains as much as 9% to Rs 1,014
- Trades at the highest level since November 2017
- Snaps three-day losing streak
- Today's volumes are quadruple its 20-day average
- Remains above 50-Day Moving Average for fourth straight day
- Has doubled from its 52-week low of Rs 504 on March 13, 2020
- 18 out of the 46 analysts tracking the stock have a buy recommendation; 14 sell calls
- The stock trades 13.4% above its 12-month consensus price target of Rs 872.4, implying a negative return potential
Earnings Reaction: Bharat Rasayan Q1FY21
- Revenue down 20.5% to Rs 281.7 crore
- Net profit up 12% to Rs 46.7 crore
- Ebitda down 7.5% to Rs 65.5 crore
- Ebitda margin at 23.3% from 20%
- Lower raw material costs improve margins
- All numbers are standalone and compared on a year-on-year basis
Shares fell as much as 7.9% - the most in five months to Rs 9,776. The stock is down for the fourth straight day.
Markets At 10:10 A.M.
- Benchmark indices trade with steady gains
- Nifty up 0.44% at 11,350
- Sensex up 0.5% at 38,500
- Nifty Bank down 0.2% at 22,163
- Nifty Midcap index up 0.5%
- Nifty Smallcap index up 0.4%
- India Volatility Index down 4.2% to 19.7
- Nifty Pharma snaps three-day losing streak; up 2% and is the top sectoral gainer
- Nifty Auto is the top sectoral laggard; down 0.6%
- Nifty FMCG, I.T. and Media index up 0.5% each
- Cipla is the top Nifty gainer; up 2.5%
- Eicher Motors is the top Nifty laggard; down 2.5%
- 1,038 stocks on the NSE trade with gains while 651 decline
Money Market Update
The rupee remains little changed, as has been the case over the last two weeks.
The currency opened at 74.8475 against the U.S. Dollar as compared to Thursday's close of 74.8450.
Yield on the 10-year bond opened for trade at 5.931% as compared to Thursday's close of 5.866%. Yields are rising after July's retail inflation print.
Retail inflation in July came in near the 7% mark, decreasing the likelihood of further rate cuts.
Within the bond markets today, traders will look forward to the bond auction worth Rs 30,000 crore after a shorter-tenor note saw poor demand in last week's sale.
We may also get details about the RBI's dividend payout to the government after its board meeting today.
Buzzing Stock: Blue Star
- Top gainer on the Nifty Smallcap index
- Gains as much as 8.5% to Rs 562
- Biggest single-day gain in four months
- Trades at the highest level in four months
- Has gained in seven out of the last 10 trading sessions
- Today's volumes are more tha 30 times higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 75
- Above its 100-Day Moving Average of 499.8 for the fifth straight session
- Has gained 37% from its 52-week low of Rs 409 on March 24, 2020
- 12 out of the 26 analysts tracking the stock have a buy recommendation; 6 sell calls
- The stock trades 8.7% higher than its 12-month consensus price target of Rs 509.5, implying a negative return potential
Coronavirus India Updates
- India reports 64,553 new cases in the last 24 hours
- Total confirmed cases now at 24,61,190
- Active cases at 6,61,595
- Patients cured / discharged / migrated at 17,51,555
- Death toll rises to 48,040
- 1,007 deaths reported in the last 24 hours
- 55,573 recoveries reported in the last 24 hours
Earnings Reaction: Eicher Motors Q1FY21
- Revenue down 65.6% to Rs 818.2 crore
- Net loss of Rs 55.2 crore from net profit of Rs 451.8 crore
- Ebitda down 99.4% to Rs 3.8 crore
- Ebitda margin at 0.5% from 25.8%
Management Commentary:
- Bookings nearly back to pre-Covid levels
- Getting good response in demand from tier-2 and tier-3 cities
- Have nearly 40,000 pending bookings and supply is a huge challenge
- See strong offttake in trucks
- Capacity utilisation at facilities remains 25%
- Not pent-up demand; continue to see high inquiries
Brokerages Bullish
- Credit Suisse: Outperform rating maintained; price target raised to Rs 25,180 from Rs 22,280
- Morgan Stanley: Overweight rating maintained; price target of Rs 21,073
- Antique: Buy rating maintained; price target raised to Rs 23,463 from Rs 18,427
Shares ended 7% lower - the most in three months at Rs 20,144.
Earnings Reaction: City Union Bank Q1FY21
- Net Interest Income up 5% to Rs 437 crore
- Net profit down 17% to Rs 154 crore
- Gross NPA at 3.9% from 4.09% last quarter
- Net NPA at 2.11% from 2.29% last quarter
- Provisions down 65% quarter-on-quarter to Rs 157 crore
- Additional Ad-hoc provisions worth Rs 100 crore for Covid-19
- Total Covid-19 provisions currently at Rs 202 crore
- Provision Coverage Ratio at 68%
Shares gained as much as 6.55% to Rs 124.45 and have snapped a four-day losing streak.
Opening Bell: A Steady Start
Indian markets look poised to post gains for the week, after opening with gains for the final trading day of the week.
The S&P BSE Sensex opened 0.3% higher at 38,432 while the NSE Nifty 50 index gained 0.47% at the start of trade to open at 11,353.
As of closing on Thursday, both Sensex and Nifty are up 0.7% on a weekly basis.
Among the sectoral indices, the media index has opened 0.9% higher while the Pharma index has opened with gains of 0.6% after three straight days of decline.
Broader markets are moving in tandem with the benchmarks. The midcap index has gained 0.5% while the smallcap index is up 0.6% at the start of trade.
Market breadth was in favour of the gainers. 1,125 stocks on the NSE opened with gains while 371 opened with losses.
Latest On The Coronavirus
- Global cases cross 20.7 million
- Death toll rises to 7.53 lakh
- Jakarta extends social distancing rules to August 27
- 103 new cases reported in South Korea as against 56 on THursday
- New Zealand now has 48 active cases, including 18 who tested positive during the 14-day quarantine for anyone returning to the country from overseas
- Peru says nearly 50,000 may have died from the virus, double the official number
- 7,371 new cases in Mexico; overall cases cross 5 lakh
- 60,091 new cases reported in Brazil, the most in two weeks
- U.K. eases lockdown, imposes 14-day quarantine period
- Overall cases in the U.S. rise 1.1%
How Did The Fund Flows Fare On Thursday
Key Stocks In Focus
- Hero MotoCorp: Says that sales in the month of July were more than 95% of their pre-Covid sales and that they expect the green shoots to sustain and get stronger towards the festive season.
- Eicher Motors: Bookings are back to pre-pandemic levels. Royal Enfield CEO Vinod Dasari said that they are getting good demand response from tier-2 and tier-3 cities and that supply has become a huge challenge with over 40,000 pending bookings.
- BPCL: Bottomline for the June quarter was boosted by inventory gains of over Rs 550 crore. Gross Refining Margins managed to stay in the positive.
- Tata Steel: Net loss was wider than consensus estimates due to lower domestic realisations and compressions of European spreads. The company's adjusted Ebitda was the lowest in 18 quarters. The standalone business however, reported a net profit, contrary to Bloomberg consensus estimates of a net loss.
- Shriram Transport Finance: Net profit was impacted owing to higher provisions and impairment of assets. Asset quality as seen deterioration on a year-on-year, as well as a sequential basis.
- Balkrishna Industries: Says that it is confident of FY21 volumes being at similar levels of FY20, despite low production and sales in the month of April. Results were marginally below estimates while lower raw material costs aided margin expansion.
- Dishman Carbogen Amcis: Announced investment of 90 million euros for two expansion projects in Switzerland and France. In Switzerland, the project will be initiated in 2021 with construction of a new API manufacturing facility at its Hunzenschwil site. In France, a new, state-of-the-art facility dedicated to custom development and manufacturing of parenteral drug products will be made. Capex to be funded by a mix of debt and cash accruals.
- Nifty Earnings Today: Hindalco, NTPC
- Non-Nifty Earnings Today: Berger Paints, Bodal Chemicals, Dilip Buildcon, Glenmark, IIFL Wealth, Indian Bank, MRF, Nesco, United Breweries, Voltas, VRL Logistics
To know more about earnings reported after market hours, key brokerage updates and other trading cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
A Week Of Consolidation
Good Morning!
India's benchmark indices ended flat for the second straight day, while broader markets continued to outperform.
The Nifty and Sensex have risen 0.7% so far this week. Domestic investors remained net sellers for the ninth straight day. So far this month, they have pulled out more than Rs 5,700 crore from the equity market.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,323 as of 7:50 a.m. on Friday.
The street will watch out BPCL, Eicher Motors, Hero MotoCorp and Tata Steel, besides non-Nifty 50 companies like Prestige Estates, Trent, Bharat Rasayan, Shriram Transport Finance and Endurance Technologies that announced their quarterly earnings late on Thursday.
Two Nifty 50 companies Hindalco and NTPC are scheduled to announce their financials on Friday. Also, non-Nifty companies such as Berger Paints, Dilip Buildcon, Glenmark, Indian Bank, MRF, Sun TV, Voltas and United Breweries will declare their quarterly figures.
Asian Markets are drifting lower on the final trading day of the week. Benchmarks in South Korea and Hong Kong are declining, while those in Japan and China are fluctuating.
Futures on the Dow Jones are trading higher by 42 points. The index ended 0.3% lower on Thursday.
West Texas Intermediate crude was little changed at $42.27 per barrel. Gold, too, remained flat at $1,952/Oz.
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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