Nifty Ends At Record High For A Second Day Led By Reliance; Sensex Logs Best Two-Week Gains Since February
India stocks rose, with the benchmark index clocking their best two-week gain since February, on investors’ optimism that businesses will reopen in key states and expected stimulus from the government will boost the pandemic-hit economy.
The S&P BSE Sensex climbed 0.6% to 51,422.88, taking its weekly gain to 1.7%. The measure had climbed 3.7% in the week before. The NSE Nifty 50 Index advanced by a similar magnitude to close at a fresh record of 15,435.65, after surpassing its previous high on Thursday.
A steady decline in new coronavirus cases has led state governments to consider gradually lifting localised lockdowns, that hurt sectors including auto, finance, consumer durables, tourism and aviation. The government is said to plan a stimulus package focused on these industries along with small- and medium-sized companies.
Rally In Quality 'Good And Clean' Stocks Just Started: Ambit
Equity markets, unlike investors, are always forward-looking, said Manish Jain.
According to the fund manager at Ambit Asset Management, one of the key reasons why the indices have not corrected despite the second wave is that financial and human impact needs to be differentiated.
“Unlike the first wave, the state governments have been smart about the lockdown and in that respect logistics and production has not completely broken down. Hence, the overall economic impact on the economy and growth is going to be limited. Moreover, with a V-shaped recovery still in the offing and prospects of a double-digit growth still look bright for FY22, We do believe that rally in quality Good and Clean stocks has just started,” Jain wrote in an email.
Given the limited impact on overall economy and growth, we do believe that this rally in quality stocks in equity markets is here to stay. Overall shift will happen from Medium and Small enterprises to market leaders and hence even more of a reason to invest in quality names and market leaders. We do believe that financials, consumer discretionary names and chemicals are some of the sectors that should do well in the short to medium term.Manish Jain, Fund Manager, Ambit Asset Management
IPCA Labs Plunges After Q4 Miss
Shares of the drugmaker plunged as much as 9.4% after it reported net income for the fourth quarter that missed the average analyst estimate.
- Net income Rs 161 crore, +87% YoY, estimate Rs 210 crore
- Revenue Rs 1,110 crore, +3.7% YoY, estimate Rs 1,286 crore
- Company’s revenue from formulations business rose 8% YoY to Rs 770 crore; revenue from India formulations was flat YoY at Rs 430 crore
- API revenue declined 6% YoY to Rs 260 crore
- Total costs Rs 940 crore, -3.4% YoY
- Other income Rs 19.92 crore, +45% YoY
- Ebitda Rs 236 crore, estimate Rs 303 crore
M&M Reports Q4 Net Profit Of Rs 48.44 Crore
Mahindra & Mahindra reported a fourth-quarter profit that met analysts estimates.
- Profit before exceptional item down 43% to Rs 1,002 crore vs profit before the exceptional item of Rs 1,745 crore (Bloomberg estimate: Rs 1,094 crore)
- Profit after exceptional item down 69% to Rs 163 crore vs profit after exceptional item of Rs 531 crore
- Ebitda down 18% to Rs 1,960 crore Vs Rs 2,386 crore (estimate: Rs 1,865 crore)
- Ebitda margin at 14.7% Vs 17% (estimate: 14.6%)
- Revenue Rs 13,338 crore, down 5% QoQ, estimate Rs 12,795 crore
- Total costs Rs 12,377 crore, +43% QoQ
- Other income Rs 130 crore
- Dividend per share Rs 8.75
COMMENTARY AND CONTEXT
- Had exceptional loss of Rs 887 crore in 4Q
- Q4 exceptional loss on asset impairment, provision
- Operating cash generated for FY21 up 119% at Rs 10,020 crore
- Capital allocation actions resulted in a significant decline in exceptional losses
- Says supply constraints limit production and sales
- Approves merger of Mahindra Engineering with itself.
- Shareholders to get 480 Mahindra shares for every 10,000 held.
Canara Bank Approves Up To Rs 9,000 Crore Fund Raising Plan
Canara Bank plans to raise as much as Rs 2,500 crore by selling shares to institutional investors during the year to March 31, according to a statement to stock exchange.
- The Indian state-run lender also plans to raise as much as Rs 4,000 crore via AT1 bonds and up to Rs 2,500 crore selling Tier 2 bonds
- The bank’s board approved the capital raising plan Friday