Sensex, Nifty Register Weekly Gains Led By Banks, IT, Metals; RIL Drags

The Bombay Stock Exchange (BSE) building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Register Weekly Gains Led By Banks, IT, Metals; RIL Drags

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Indian equity benchmarks closed higher for the week, boosted by a rally in banks, metals and technology shares. Reliance Industries was the top loser after unveiling plans for a renewable energy business.

The S&P BSE Sensex climbed 0.4% to 52,925.04, making a weekly advance of 1.1%. The NSE Nifty 50 Index gained by a similar magnitude. Thirteen of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a measure of metal companies.

Reliance Industries said at Thursday’s shareholder meeting that it plans to spend as much as Rs 75,000 crore ($10.1 billion) on a renewable energy business. The stock fell 2.3%, taking its slide this week to 5.4%. The decision may weigh on the share price until there’s clarity on potential returns, analysts at JM Financial wrote in a note. [Read more here]

Sensex, Nifty Register Weekly Gains Led By Banks, IT, Metals; RIL Drags

"An improved prospects of loan recovery along with better outlook of credit growth led banking stocks to rebound", according to Binod Modi, Head Strategy at Reliance Securities.

Meanwhile, he said the sharp rise in crude price with Brent surpassing $75/barrel and recent weakness in rupee have emerged as key overhangs for the market.

"Notwithstanding some adverse impact on economic activities in 1QFY22E, a sharp pickup in capital expenditures in current fiscal is still on the cards. Hence, earnings recovery in FY22E remains promising."

Godfrey Phillips India Surges After Profit Nearly Doubles

Godfrey Phillips India rises the most in more than a year after the cigarette maker reported a profit for the March quarter that was nearly double that from a year earlier, with lower spending on advertising among the reasons.

  • Shares rise as much as 14.3%; most since April 2020

  • Trading vol. 28.6x 3-month full-day avg.; set for fifth day of gains

  • For March quarter, the company reported profit of Rs 95.43 crore versus Rs 48.26 crore a year earlier and Rs 114 crore in the immediate prior quarter, according to its earnings statement released Friday

    • Revenue rose 22% YoY to Rs 822 crore while advertising costs declined 41% YoY to Rs 23.27 crore

    • The company also announced dividend payout of Rs 24/share for fiscal year ended March

Allcargo Logistics Jumps The Most In Over A Year

Shares of Allcargo Logistics Ltd. gained as much as 14.22% as the company posted strong fourth-quarter results.

The Mumbai-based logistics firm reported a revenue of Rs 3,349.31 crore for the quarter ended March 2021, up 79% from the year-ago period. Net profit was also up 3.19% at Rs. 53.71 crore.

ICICI Securities upgraded its rating on the stock to ‘buy’ and also raised its target price to Rs 189 from Rs 131. It cited the turnaround of Gati Ltd, the express courier firm that Allcargo Logistics acquired in 2020, as rationale for its change. “The management appears to be on the right track in Gati to deliver through divestment of non-core assets and bring about operational improvements to increase ‘express’ segment Ebitda to 12% in the next 3-5 quarters,” it said in a note dated June 24.

Of the eight analysts tracking the stock, five have a ‘buy’ rating, two suggest a ‘hold’ and one recommend a ‘sell’, according to Bloomberg data.

Indraprastha Gas Delivers A Mixed Bag

Indraprastha Gas reported net income for the fourth quarter that missed the average analyst estimate.

  • Net income Rs 331 crore, +31% YoY, estimate Rs 364 crore (Bloomberg Consensus)

  • Revenue Rs 1,710 crore, estimate Rs 1,560 crore

  • Total costs Rs 1,300 crore, -7.1% YoY

  • Other income Rs 27.98 crore, -10% YoY

  • Ebitda Rs 492 crore, +31% YoY, estimate Rs 529 crore

  • Dividend per share Rs 3.60

Kenneth Andrade On Valuing Metals And Other Investment Themes

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