A stockbroker holds a calculator as he monitors stock price information on his computer screen. (Photographer Matthew Lloyd/Bloomberg)
A stockbroker holds a calculator as he monitors stock price information on his computer screen. (Photographer Matthew Lloyd/Bloomberg)

Sensex, Nifty Gain; Realty Stocks Surge

Closing Bell: Sensex, Nifty Gain; Realty Stocks Surge

India’s stock benchmarks held on to gains amid a slew of quarterly corporate earnings.

The S&P BSE Sensex gained 0.69% to 52,950.63 and NSE Nifty 50 Index edged 0.77% higher to 15,885.15.

Both measures completed a second week of losses on Friday as lackluster quarterly earnings weighed on sentiment. Reliance Industries Ltd. contributed the most to the index gain, increasing 1.8%. Shree Cement Ltd. had the largest increase, rising 3.6%.

The broader markets outperformed the larger peers with both the S&P BSE Midcap and the S&P BSE SmallCap adding over 1%.

All the 19 sectoral indices compiled by the BSE Ltd. gained with S&P BSE Realty climbing nearly 5%.

The market breadth was skewed in favour of bulls. About 2,183 stocks advanced, 1,154 declined and 165 remained unchanged on the BSE

Torrent Power Shares Up Most In 7 Weeks, Call Options Quadruple

Shares of Torrent Power Ltd. gained 3.01%, the most in eight weeks, to Rs 468.90 apiece. Trading in the company’s call options was quadruple the average. Trading volume was double the average for this time of the day.

Torrent Power announced post market hours on Friday that it had signed an agreement with Lightsource India Ltd. and Lightsource Renewable Energy (India) Ltd to acquire a 50 MW solar plant situated in Maharashtra for an enterprise value of Rs 317 crore.

Out of the 13 analysts tracking the company, 7 maintained ‘buy’, 4 maintained ‘hold’ and 2 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 3.3% Shares of Torrent Power added 50.9% in 2021 so far. The company will report its June quarter earnings on August 6, Friday.

Emami Q1 Net Income Below Analyst Estimate

Emami Ltd reported net income for the June quarter that missed the average analyst estimate.

First Quarter Results

  • Net income at Rs. 77.79 crore vs estimate of Rs 93.36 crore (Bloomberg Consensus).

  • Revenue at Rs 660.95 crore vs estimate of Rs 643 crore.

  • Total Expenses at Rs 491.24 crore vs Rs 567.96 crore (QoQ).

  • Other income at Rs 10.72 crore vs Rs 46.50 crore (QoQ).

Out of the 34 analysts tracking the company, 28 maintained ‘buy’, 5 maintained ‘hold’ and 1 analyst maintained ‘sell’ recommendations. Shares of Emami gained 34% in 2021 so far.

Varun Beverages Advances On June Quarter Beat

Shares of Varun Beverages Ltd. gained 6.04% to Rs 807.80 apiece after reporting net income for the June quarter that beat average analyst estimates

Q2FY22 Results (Consolidated)

  • Net income at Rs 308.16 crore vs estimate of Rs 237 crore (Bloomberg Consensus)

  • Revenue at Rs 2,483 crore vs estimate of Rs 2,213 crore

  • Total expenses at Rs 2,087.8 crore vs Rs 2,080.9 crore QoQ

  • Dividend per share Rs 2.50

Commentary and Context

  • Rajesh Chawla named Chief Financial Officer from Aug. 2.

  • Company says resurgence of Covid pandemic caused "significant disturbance" and led to slowdown in economic activity and business operations of company in May.

  • Company says it saw a faster recovery in demand, as lockdowns and curbs started easing from June.

Out of the 17 analysts tracking the company, 14 maintained ‘buy’ and 3 maintained ‘hold’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 2.2%. Shares of Varun Beverages climbed 29.2% in 2021 so far compared to 5.94% gains for NSE Nifty FMCG Index.

Birla Offers To Give Up Vodafone Idea Stake Amid Worsening Financials

Also Read: Birla Offers To Give Up Vodafone Idea Stake Amid Worsening Financials

Nifty Realty Index Biggest Single-Day Gain Since Feb 1

India real estate stocks jumped, led by Oberoi Realty, on improving demand for property deals in Mumbai city and surrounding areas.

  • Oberoi Realty, which has majority of its housing projects in Mumbai, climbed as much as 12%, most since May 17.

  • Prestige Estates +7.9%, Sobha +6.8%, Brigade Enterprises +5.2%

  • Areas covered under Mumbai’s municipal corporation reported registration of deals for 9,037 units in July, more than triple the number of registrations from a year ago and up 15% from June, according to data released by real estate consultancy Knight Frank India last week.

    • Registrations for July were also 57% higher compared to the same month in pre-pandemic period of 2019, according to the Knight Frank report.

  • S&P BSE Realty Index has risen as much as 5.57%, heading for its highest close since Nov. 2010.

Mid-Market Update: Nifty, Sensex Hold Gains; Realty Shares In Demand

India’s stock benchmarks held on to some of the early gains led by realty stocks.

The S&P BSE Sensex rose 0.65% to 52,924.75 while NSE Nifty 50 Index gained by a similar magnitude to 15,877.05. Both the indices were up nearly 0.6% in opening trade.

The broader markets outperformed the larger peers with the S&P BSE Midcap adding 0.93% and S&P BSE Smallcap rising 1.12%

Barring S&P BSE Power, all the other 18 sectoral indices compiled by BSE Ltd. rose led by the S&P BSE Realty Index, up nearly 5%.

The market breadth was skewed in favour of bulls. About 2,227 stocks advanced, 989 declined and 165 remained unchanged on the BSE.

Ind Swift Labs Tanks After Slump Sale

Shares of Ind-Swift Laboratories Ltd. shed 14.04% to Rs 97.35 apiece on the NSE after it announced a slump sale of the Active Pharmaceuticals Ingredients (API) business of the company on a going concern basis to PI Industries Ltd. at an agreed enterprise value of Rs 1,530 crore post market hours on Friday.

In an exchange filing, Ind-Swift said the sale of the API Business is expected to be completed by October this year. Ind-Swift said it sold the business to raise funds and make the company debt-free. It said it will utilise the surplus funds for strategic acquisitions and investments.

The revenue of the API unit was Rs 856.58 crore for FY21, which constituted 100% of the company's consolidated revenue. The net worth of the business was pegged at Rs 299 crore as of March 31, 2021.

PI Industries shares soared as much as 9.15% to Rs 3,218 apiece. Of the 31 analysts tracking the company, 23 have a ‘buy’ rating, four suggest a ‘hold’ and four recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus price targets implies a downside of 13.8%.

HDFC Shares Gain As Q1 Net Profit Beats Estimates

Shares of Housing Development Finance Corporation Ltd gained 1.88% to Rs 2,487 apiece after reporting net profit for June quarter that beat the average analyst estimates.

June Quarter Results (Standalone)

  • Net Profit at Rs 3,000.67 crore vs estimate of Rs 2,605 crore (Bloomberg Consensus)

  • NII at Rs 4,147 crore vs estimate of Rs 5,763 crore

  • Gross NPA at 2.24% vs 1.98% QoQ

HDFC says profit for June quarter not comparable to last year due to one off items.

  • Profit on sale of investments was lower at Rs 263 crore, compared with Rs 1,241 crore a year ago.

  • Dividend income in Q1 was at Rs 16 crore, compared with Rs 298 crore a year ago.

  • Charge for employee stock options in Q1 was Rs 146 crore, compared with Rs 1 crore last year.

  • Effective tax rate applicable this year was 23.1%, compared with 15.4% last year.

Source: HDFC Press Release

Out of the 41 analysts tracking the company, 37 maintained ‘buy’ and 4 maintained ‘hold’ recommendations. The overall consensus price of analysts tracked by Bloomberg hinted at an upside of 24.4%. Shares of HDFC have shed 3% in 2021 so far.

Also Read: HDFC Q1 Results: Net Profit Falls Marginally On One-Off Items, Higher Provisions

India’s Manufacturing PMI Returns To Expansion In July

  • Manufacturing PMI at 55.3 in July 2021 from 48.1 in June.

  • Manufacturing PMI records the strongest rate of growth in three months.

  • Operating conditions in India improved during July.

  • Output, new orders, exports, quantity of purchases and input stocks all returned to positive territory.

  • Marginal increase in employment ended 15-month sequence of job shedding.

  • Several companies absorbed additional cost burdens to boost sales.

  • Factory orders rose amid reports of improved demand and easing of local Covid curbs.

  • Strengthening international demand contributed to the uptick in total order books.

  • New export orders expanded markedly in July.

  • Manufacturers hired extra workers in tandem with sales growth and rising production needs.

  • Raw material scarcity remained a key factor causing longer delivery times among suppliers.

Source: IHS Markit

Also Read: India’s Manufacturing PMI Returns To Expansion Zone In July

IRCTC Hits A New Record High After Announcing Stock Split Plan

Shares of Indian Railway Catering and Tourism Corporation (IRCTC) gained 6.88% to Rs 2,491.70 apiece, a new record high.

The rise came after the company informed the exchanges post market hours on Friday that it would recommend the proposal for sub-division of equity shares of face value of Rs 10 each during the board of directors meeting scheduled to be held on August 12.

All 9 analysts tracking the company maintained ‘buy’ recommendations. The overall consensus price of analysts tracked by Bloomberg hinted at a downside of 0.7%. The relative strength index of the stock is 73.24 implying that it may be in overbought territory. Shares of IRCTC added 71.2% in 2021 so far.

Man Industries Jumps 10% On Rs 200 Crore Order Win

Shares of Man Industries Ltd. gained 10.44% to Rs 147.10 apiece after it informed the exchanges of a Rs 200 crore order win today.

The carbon steel line pipes maker said that the order win reflected the robust business environment and showcased the trust customers had in the company’s technological and executional capabilities.

The relative strength index of the stock is at 75.45, implying that it may be in overbought territory. Shares of Man Industries have added 69% in 2021 so far as compared to 11.6% for S&P BSE Sensex Index.

Britannia Gains Over 3% After Q1 Beat

Shares of Britannia Industries Ltd. gained 3.46% to Rs 3,542 apiece after the company reported revenue above estimates in the June quarter post market hours on Friday.

Key Highlights from Q1FY22 (Consolidated, QoQ)

  • Revenue up 8.7% at Rs 3,403.46 crore Vs Rs 3,130.75 crore (Bloomberg estimate: Rs 3,171.1 crore)

  • Profit up 6.9% at Rs 389.55 crore Vs Rs 364.32 crore (estimate: Rs 412.1 crore)

  • Ebitda up 9.6% at Rs 553.78 crore Vs Rs 505.39 crore (estimate: Rs 545.4 crore)

  • Margin at 16.3% Vs 16.1% (estimate: 17.2%)

Out of the 43 analysts tracking the company, 25 maintained ‘buy’, 10 maintained ‘hold’ and 8 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 9.4%. Shares of Britannia have remained almost unchanged in 2021 so far.

Auto Stocks Gain On July Sales

Shares of automakers advanced after easing local restrictions in July revived the sale of passenger cars and motorcyles.

Maruti Suzuki India Ltd. climbed as much as 1.9% after the nation’s largest carmaker by vehicle deliveries reported a more than 50% on-year jump in total sales. Bajaj Auto Ltd. posted an almost 40% surge in motorcycle sales.

Also Read: July Auto Sales Live: Maruti Suzuki, Tata Motors Sales Rise As Demand Recovery Continues

Tejas Networks Jumps After Large Trades

Tejas Networks climbs as much as 5.7% to its highest level since Nov. 2018, after about 7.5 million shares change hands on NSE, according to data compiled by Bloomberg.

  • Second best performer on S&P BSE Telecom Index

  • Extends gain to 8th day

  • Stock advanced 345% in the past 52 weeks; Sensex gained 40%

  • 14-day RSI at 88.214; NOTE: RSI above 70 may indicate the stock is overbought

  • Buyers, sellers not immediately known

IDFC Bank Slips More Than 6% After Q1 Loss

Also Read: IDFC First Bank Q1: Brokerages Point To Weaker Asset Quality

Opening Bell: Sensex, Nifty Climb Amid Positive Regional Trade

Indian equity benchmarks started the week on a strong note amid positive Asia trading.

The S&P BSE Sensex climbed as much as 0.7% to 52,956.39 while the NSE Nifty 50 index too rose by a similar magnitude to 15,876.90. Reliance Industries Ltd. contributed the most to the index gain, increasing 0.9%. Britannia Industries Ltd. had the largest increase, rising 3%.

Both measures completed a second week of losses on Friday as lackluster quarterly earnings weighed on sentiment.

The broader market too kept up pace with their larger peers. The &P BSE MidCap gained 0.8% while the S&P BSE SmallCap advanced nearly 1%. All of the 19 sector indices compiled by the BSE Ltd. advanced led by a gauge of real estate companies.

India’s quarterly earnings season has been tepid so far, with 19 of the 30 Nifty companies that have reported missing analyst estimates. Mortgage lender Housing Development Finance Corp. is scheduled to announce results in the day.

Rupee Bonds May Gain On Boost From July GST Pickup

Rupee bond traders may take rise in goods and services tax collections for July as a positive cue. The rupee may continue trading in a range as traders weigh manufacturing PMI data to assess India’s economic recovery strength.

  • USD/INR rises 0.2% to 74.4175 on Friday

    • Implied opening from forwards suggest spot may start trading around 74.41

  • 10-year yields little changed at 6.2% on Friday

  • India gross GST collections at Rs 1.16 lakh crore in the July 2021: PIB

    • Up from Rs 92,850 crore collected in June, and 33% higher than the same month last year

Also Read: Inflation Angst Spreads to India Bonds as RBI Downplays Risk

Policybazaar Owner PB Fintech Seeks Approval For Rs 6,018 Crore IPO

PB Fintech Ltd., the owner of online insurance platform Policybazaar has sought approval from the markets regulator Sebi for an up to Rs 6,018-crore ($809 million) initial public offering, according to a public notice in the Financial Express newspaper Monday.

  • IPO includes Rs 3,750 crore via new shares, while shareholder and investors will sell shares worth Rs 2,268 crore

  • Existing shareholders SVF Python II plans to sell as much as Rs 1,875 crore worth of shares in an offer-for-sale as part of the IPO

  • Company planning a pre-IPO placement of Rs 750 crore of shares; new share sale will be lower if the pre-IPO sale happens

  • Kotak Mahindra Capital, Morgan Stanley India, Citigroup, ICICI Securities, IIFL Securities and Jefferies will manage the sale

Also Read: Fino Payments, Cartrade Tech to Hit Capital Market Amid IPO Boom

SGX Climbs Amid Buoyant Asia Trade

Most Asian stocks rose with U.S. equity futures Monday as some of the concerns over China’s regulatory crackdown eased and progress on a U.S. infrastructure spending plan aided sentiment.

Equities jumped in Japan and Australia, where Afterpay Ltd. surged after digital-payments platform Square Inc. agreed to buy the buy-now, pay-later company. Futures on the S&P 500 and Nasdaq 100 climbed, with a $550 billion infrastructure package getting closer to passage in the Senate this week.

India's SGX Nifty 50 Index futures for Aug. delivery rose 0.8% to 15,895.50, while MSCI Asia Pacific Index +0.6%. The NSE Nifty 50 Index fell 0.1% Friday to 15,763.05.

Hong Kong and China posted modest drops. Beijing is pushing ahead with a crackdown on everything from technology to private education and property, leading the U.S. Securities and Exchange Commission to halt initial public offerings of Chinese firms pending better risk disclosures. Its Chinese counterpart called for more communication to find a resolution.

Crude oil retreated as traders assessed the demand outlook and an uptick in tensions between Iran and the U.S. after an attack on an Israel-linked oil tanker. Bitcoin slipped back below $40,000.

Back home, UPL, BHEL, Britannia, Bandhan Bank, NTPC, Cholamandalam, Shriram Transport, Lodha, Equitas Small, Blue Dart, IDFC First, Finolex Industries may react as the companies reported quarterly results after the market closed Friday.

HDFC, PNB, RBL Bank, Emami, Castrol are among the companies scheduled to report earnings Monday. Titan, Tata Metaliks, Carborundum, Wockhardt are holding their annual shareholders’ meeting. Foreign investors sold net Rs 183 crore of stocks on July 29, according to NSDL website.

Also Read: All You Need To Know Going Into Trade On August 2

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