Sensex, Nifty Log Second Day Of Gains As Outlook Improves

BSE building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Log Second Day Of Gains As Outlook Improves

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Indian shares rose, helped by gains in banks, realty and metal stocks, after economic reports week showed a recovery in business activities amid the slowing pace of coronavirus cases in the country.

The S&P BSE Sensex added 0.75% to 52,880, while the NSE Nifty 50 Index advanced by the same magnitude at 15,834.35. All but one of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of consumer discretionary companies.

Sensex, Nifty Log Second Day Of Gains As Outlook Improves

There was visible traction in overall economic activities in June, Binod Modi, head of strategy at Reliance Securities, wrote in a note. He expects earnings for the first quarter of fiscal year 2022, which will start later this week, to be promising despite the second wave of Covid-19.

Also read: The Race to Become the Vanguard of India’s Stock Market Is On

Paytm Readying $2.2 Billion IPO Plan For July 12 Investor Vote

India’s Paytm will seek shareholders’ approval next week for an initial public offering with an initial fundraising target of Rs 16,000 crore ($2.2 billion), according to people familiar with the plan, setting in motion the process for the country’s largest ever debut.

If green-lit, the digital payments startup will have the option of raising that target to as much as roughly $2.6 billion, per regulatory guidelines.

To read the full Bloomberg report, click here.

Tourism-Linked Stocks Rise as Curbs on Traveling Eased

Mahindra Holidays leads a rally in shares of tourism-linked companies as states in India continue to ease rules on peoples’ movements as the pace of new Covid-19 cases decelerates.

  • Mahindra Holidays rises as much as 10.7%, most since May 26

  • Trading vol. > 7.1x 3-mos. full-day avg; set for second day of gains

  • Provider of ticket-booking services Easy Trip Planners rises by 10% daily limit

  • India Tourism Development Corp rises as much as 2.5%

  • Hotel stocks also gain, with Chalet Hotels trading up 6.6%; Lords Ishwar Hotels +4%, Lemon Tree Hotels +1.3%

  • NOTE: India reported addition of 39,796 new virus cases in 24 hours through Monday morning; the caseload more than halved from about 100,000 cases at start of June

Godrej Consumer Sees Strong Double-Digit Q1 Sales Growth

Godrej Consumer likely clocked “high teens” sales growth in its India business in the first quarter to June 30, helped by strong volume growth and calibrated price increases, according to a statement to stock exchanges.

  • In India, company witnessed strong double-digit sales growth in home care and personal care categories

  • Indonesia sales growth seen flat on constant currency basis

  • It exects sales growth in Latin America and SAARC businesses to remain strong in constant currency terms

  • Godrej Africa, USA and Middle East expects 1Q constant currency sales growth of “upwards of the fifties”

CCL Products Gains as Supply Issues Seen Resolved

CCL Products India rises most in more than a year as the maker of instant coffee is seen overcoming logistical challenges locally as well as to support exports.

  • Shares rise as much as 12.7%, most since March 2020

  • Trading vol. > 8.8x 3-mos. full-day avg; set for second day of gains

  • CCL faced logistical issues in its supply chain in India as well as for markets including Russia, which also led to under-utilization of capacity in fiscal year 2021, Abhishek Navalgund, an analyst with Nirmal Bang Equities said via phone

  • The company is resolving the issues, and exports are seen to pick up meaningfully as highlighted by trade data for April-May, when CCL Products’ instant-coffee exports rose by about 55%, he says

  • “We reiterate that underlying demand for instant coffee has not been affected due to Covid-19. In fact, at-home coffee consumption has increased during the pandemic,” Navalgund wrote in a note dated June 29

  • CCL also expanded small-packs capacity by >3x and commissioning is expected to be completed in 1H of FY22, the note says

  • “Higher volume from small packs would mean better realization and we expect majority of its impact in FY23.”

  • Analyst has a buy rating on CCL Products and target price of Rs 480

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