Sensex, Nifty Register Weekly Loss As Most Results Miss Estimates
Catch all live updates on share prices, index moves, corporate announcements and more from Indian stock markets today.
Closing Bell
India's stock benchmarks ended higher capping their weekly losses as the quarterly earnings were off to a disappointing start.
The S&P BSE Sensex advanced 0.26% to 52,975.80, taking its weekly decline to 0.3%. While NSE Nifty 50 Index gained by a similar magnitude to 15,856.05 today, it lost 0.4% for the week. Nine of the 19 sector indexes compiled by BSE Ltd. rose, led by a gauge of real estate stocks.
The S&P BSE Auto index, down 2.20% and S&P BSE Bankex, down 1.65% were the biggest laggards of the week.
The market breadth slightly skewed in favour of the bears. About 1,574 stocks advanced, 1,673 declined and 122 stocks remained unchanged on the BSE.
In earnings, 9 of the 11 Nifty companies that have announced results so far fell short of analysts’ estimates. Reliance Industries Ltd., the nation’s largest company by market capitalization, is due to give results today.
JSW Steel Q1 Net Profit Beats Estimates
JSW Steel reported net income for the first quarter that beat the average analyst estimate.
FIRST QUARTER RESULTS
Net income Rs 5,900 crore vs. estimate Rs 4,850 crore
Revenue Rs 28,900 crore vs. estimate Rs 28,492 crore
Total costs Rs 20,800 crore, +66% YoY
Other income Rs 198 crore, +50% YoY
Oper Ebitda Rs 10,274 crore, estimate Rs 9,159 crore
Ebitda margin 35.5%
COMMENTARY AND CONTEXT
Net debt to Ebitda 1.89X
Says spent Rs 2,690 crore on capex in 1Q against total planned capex spend of Rs 18,240 crore for FY22
To invest Rs 750 crore in JSW Paints in tranches
To invest Rs 445 crore in renewable SPV
Federal Bank Rises Post June Quarter Numbers
Shares of Federal Bank Ltd. gained 3.20% to Rs 86.95 apiece on the back of April-June quarter numbers.
Net profit at Rs 367 crore vs Rs 401 crore
Net NPA at Rs 1.23% vs 1.19% QoQ
Gross NPA at 3.5% vs 3.4% QoQ
NII at Rs 1414 crore vs Rs 1296 crore
Total Income at Rs 4005.86 crore vs Rs 3932.52 crore
Provisions at Rs 64,183 crore vs Rs 39,462 crore
Out of the 38 analysts tracked the private lender, 35 maintained ‘buy’, 2 maintained ‘hold’ and 1 analyst maintained ‘sell’ recommendation. The overall consensus price of analysts tracked by Bloomberg hinted at an upside of 21.3%.
Shares of Federal Bank gained 27.70% in 2021 so far as compared to 10.86% rise in S&P BSE Bankex Index over the same period.
Bharti Airtel Bucks The Trend In Telecom Shares
Bajaj Auto, Bharti Airtel, ICICI Bank in Focus: Options Watch
Bharti Airtel options volume 4.6x the 20-day average, with 93,797 calls changing hands vs 49,259 puts
Stock up 1.4%, volume 3.1x the 20-day average for this time of day
ICICI Bank options volume 2.5x the average, with 57,625 calls vs 26,824 puts
Stock up 2.4%, volume 0.9x the average
Bajaj Auto options volume 2.5x the average, with 26,998 calls vs 8,368 puts
Stock up 0.1%, volume 1x the average
UltraTech Cement options volume 2.5x the average, with 40,922 calls vs 16,426 puts
Stock up 0.7%, volume 1.5x the average
Hindustan Unilever options volume 2.2x the average, with 34,820 calls vs 14,024 puts
Stock down 0.5%, volume 0.9x the average
Nifty 50 options volume 0.5x the average, with 4.65 million calls vs 4.16 million puts; gauge up 0.3%
Cost of hedging as measured by the 90/110, one-month skew ranks in the 6th percentile over the past year
Nifty Bank index options volume 0.4x the average, with 7.44 million calls vs 6.81 million puts; gauge up 0.6%
90/110, one-month skew in the 44th percentile
India VIX Index down 1.9%
Source: Bloomberg
Market Check: Sensex, Nifty Hold Steady Gains; Europe Opens Higher
India's stock benchmarks steadied after fluctuating between gains and losses in early trading as investors await earnings from index heavyweight Reliance Industries Ltd. later in the day.
The S&P BSE Sensex added 0.28% to 52,985.11, and NSE Nifty 50 Index posted gains of similar magnitude to 15,861.40, as on 12:45 PM.
The broader markets traded with small gains as well. The S&P BSE MidCap up nearly 0.1% while the S&P BSE SmallCap gained nearly 0.2%. Thirteen of the 19 sectoral indices posted gains, S&P BSE Realty adding over 1% gains with S&P BSE Power Index shedding 0.64%.
The market breadth was neither skewed in bulls nor bears’ favour. About 1,529 stocks advanced, 1,591 declined and 118 remained unchanged on the BSE.
Schaeffler India's Stock Hits New Record High
Shares of Schaffler India Ltd. gained over 7% to Rs 6,258.55 after reporting 181% rise in net sales in the April-June quarter on Wednesday. Since the quarterly earnings, the shares have risen nearly 12%.
Revenue from operations at Rs 1,232.89 crore vs Rs 438.88 crore YoY
Net profit at Rs 128.13 crore vs Rs 42.47 crore YoY
Total expenses at Rs 1075.19 crore vs Rs 509.51 crore YoY
EBITDA at Rs 220.02 crore vs Rs 5.81 crore YoY
Earnings per share has risen to Rs 41 vs Rs 13.60 YoY
Shares of Schaeffler India gained nearly 35% in 2021 so far and nearly 68% in the past 52 weeks. Out of the 10 analysts tracking the ball and bearing manufacturer, 8 maintained ‘buy’ and 2 maintained ‘hold’ recommendations. The overall consensus price target of analysts tracked by Bloomberg implied an upside of 3.1%.
Brokerage View
Edelweiss
Recommends ‘buy’ with a 12-month price target of Rs 7,720.
Strong showing in the June quarter driven by automotive tech sales, improved exports.
Steady focus on localization, rising content per vehicle and thrust on technological innovation to drive growth going forward.
Key wins in CV and tractor segment for clutch and transmission solutions augured well for the growth prospects.
Demand to remain robust driven by offerings in e-mobility.
Company well-positioned as a play on mobility with rising localization.
JM Financial
Recommends ‘buy’ with a 12-month price target of Rs 7,200.
Resilience in non-mobility segments, exports aided earnings growth.
Better sales mix and cost recovery to continue to support margins.
Domestic and global order wins likely to sustain sales growth.
Believe that the growth trajectory is likely to accelerate for CY20-23/
Growth momentum witnessed in the June quarter is sustainable.
HUL Slips After Dissapointing Q1 Performance
Jubliant FoodWorks Jumps Nearly 6%
Shares of Jubilant Foodworks Ltd gained 6% to a fresh record high of Rs 3635.63 apiece after registering strong sales recovery in the June quarter.
In the last 5 days, the stock has risen 16%.
Trading volume was 1.54 million shares, six times the 20-day average for this time of the day. The relative strength index on the company was above 70, indicating that it may be overbought.
Jubilant Foodworks trades at 97 times its estimated earnings per share for the coming year.
Out of 32 analysts tracking the company, 23 maintained ‘buy’, 5 maintained ‘hold’ and 4 maintained ‘sell’ recommendations. The overall consensus price target of analysts tracked by Bloomberg implied a downside of 9%
ICICI Lombard Slip Post Q1 Numbers
Shares of ICICI Lombard General Insurance Co. Ltd. shed 4.12% to Rs 1480.55 apiece after it reported a 62% fall in net income in the April-June quarter
The non-life insurer witnessed adverse impact due to the second wave of Covid infections with higher payout impacting profitability.
Key Highlights
Revenues up 3% to Rs 2,705.77 crore Vs 2,616.22 crore
Post tax net profit of Rs 151.63 crore Vs Rs 345.68 crore
Ebitda at Rs 32.97 crore Vs 781.88 crore
Margins at 1.2% Vs 29.9%
EPS at Rs 3.34 Vs Rs 7.61
Gross written premiums at Rs 3,807.56 crore Vs Rs 3,559.87 crore
Solvency ratio at 2.76x Vs 2.90x
Out of the 24 analysts tracking the company, 16 maintained ‘buy’, 4 maintained ‘hold’ and 4 maintained ‘sell’ recommendation. The overall consensus price target of analysts tracked by Bloomberg implied an upside of 3.9%.
“ICICI Lombard disappointed expectations as claims of health insurance spiked abnormally, resulting in an all-time high loss ratio of 91%,” Krishnan ASV, analyst at Mumbai-based HDFC Securities Ltd., says in a note. Brokerage has rated the company a “reduce” with price target Rs 1,250, given the rich valuations and uncertainties ahead.
Brokerage View
Jefferies
Recommends ‘buy’ with a target price of Rs 1,780.
Sharp rise in Covid claims impacted profitability and lifted the combined ratio.
Expect normalcy for the company in second half of the fiscal as daily covid cases continue to decline.
Growth in auto insurance business faces challenges from higher competition and lack of price hikes.
Merger with Bharti Axa slightly behind expectations.
Edelweiss
Recommends ‘buy’ with a 12-month price target of Rs 1,840.
Views the impact of Covid on profitability as a one-off event.
Fully expect the loss ratio to normalise going forward
Enthusiasm in the long-term compounding thesis remains intact.
Growth in motor insurance business muted as sales were affected due to local lockdowns.
Believe that ICICI Lombard can grow at 20% for the next 20 years.
High float levels, scale-led pricing, technology investments are key moats
ICICI Securities
Recommends ‘hold’ with a target price of Rs 1,530.
Delay in cyclical recovery is impacting the insurance industry.
Higher health claims in the quarter adversely affected profitability.
Lower non-Covid health claims and lower motor claims encouraging.
Structural under-penetration remains a long-term investment thesis.
Key Risks:
Weakness in fresh motor demand
Absence of motor third party price hike for the second consecutive year.
Continued competitive pricing in the motor own-damage
Uncertainty over the extent and duration of Covid impact
Telecom Shares Drop After SC Dismisses Plea On Dues
A two-judge panel of India’s Supreme Court rejected petitions by telecom companies seeking a reassessment of how much they owe the government.
The firms owe the government $14 billion in combined payments.
Persistent Systems Hits Record High
Shares of Persistent Systems Ltd gained as much 8.9% to Rs 3,080.85 apiece after it reported 10% rise in net profit and revenue in April-June quarter.
Revenue up 10% at Rs 1,229.9 crore Vs Rs 1,113.30 crore
Net profit up 10% at Rs 151.20 crore Vs Rs 137.70 crore
Ebitda up 7% at Rs 201.50 crore Vs Rs 188.20 crore
Margin at 16.4% Vs 16.9%
Order booking for the quarter was at $244.8 million in Total Contract Value and at $188.83 million in Annual Contract Value
Out of the 31 analysts tracking the technology services company, 14 maintained ‘buy’, 7 maintained ‘hold’ and 7 maintained ‘sell’ recommendations. The overall consensus price target of the analysts tracked by Bloomberg implied a downside of 18.1%
South Indian Bank Slip Post Q1 Numbers
Shares of South Indian Bank Ltd. shed 5.74% to Rs 11.50 apiece after reporting a 87% decline in net profit in the April-June quarter.
Asset quality worsened in Q1 while provisions increased as the second wave of covid infections adversely impacted the numbers.
NII down 8% at Rs 542 crore Vs Rs 586.89 crore (YoY)
Net profit down 87% at Rs 10.31 crore Vs Rs 81.65 crore (YoY)
GNPA at 8.02% Vs 6.97% (QoQ)
NNPA at 5.05% Vs 4.71% (QoQ)
Provisions up 21% at Rs 497.97 crore Vs Rs 412.29 crore (QoQ)
Covid related provisions at Rs 84.22 crore
Out of the 8 analysts tracking the company, 3 maintained ‘buy’, 3 maintained ‘hold’ and 2 analysts maintained ‘sell’ recommendations. The overall consensus price target of analysts tracked by Bloomberg hinted as a downside of 5.1%.
Zomato Lists At More Than 51% Premium On Stock Market Debut
Shares of Zomato Ltd. started trading at a premium on market debut after its initial public offering saw robust investor interest.
The stock of the online food delivery platform listed at Rs 115 apiece on the National Stock Exchange, a 51.3% premium to its issue price of Rs 76. The stock saw an intraday high of Rs 138.85 thereafter, which takes its valuation over $14.4 billion.
Mahindra Lifespace Jumps To 13-Year High
Mahindra Lifespace Developers climbs as much as 18.7% to its highest level since Jan. 2008 after co. plans to consider free share issue on July 28.
Best performer on S&P BSE 500, S&P BSE REALTY indexes
Extends gain to 2nd day
Trading volume >3.7x three-month full-day average
Stock advanced 218% in the past 52 weeks; Sensex gained 40%
Mphasis Hits Record High On Q1 Performance
Shares of Mphasis Ltd. jumped as much as 12.3% to its record high, as the IT services company posted a healthy rise in revenue and net profit.
Revenue jumped 5.9% sequentially to Rs 2,690.8 crore while net profit jumped by 7% to Rs 339.6 crore. The company’s Ebitda grew by 5% to Rs 427 crore. Its margin, however, declined to 15.9% from 16.1% in the previous quarter.
Brokerage Motilal Oswal maintained its ‘buy’ rating on the stock, while Dolat Capital said it continues to remain cautiously optimistic on the stock, with a current rating of ‘reduce’ and a target price of Rs 1,910.
Shares of Mphasis rose as much as 12.3%, the most in eight months, to a record high of Rs 2,692.35 apiece. Of the 33 analysts tracking the company, 25 have a ‘buy’ rating, five suggest a ‘hold’ and three recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus price targets implies a downside of 19.5%.
Opening Bell
Indian equity benchmarks opened higher, in line with regional peers, as U.S. markets edged toward an all-time hihgh on earnings optimism despite mixed economic data.
The S&P BSE gained as much as 0.3% to 53,008.53, while the NSE Nifty 50 index rose by a similar magnitude to 15,876.45.
The broader market slightly outperformed their larger peers. The S&P BSE MidCap and the S&P BSE SmallCap climbed 0.6% each. Seventeen of the 19 sector indexes compiled by BSE Ltd. climbed, led by a gauge of metal companies.
The market breadth was skewed firmly in favour of the bulls. About 1,772 stocks advanced, 622 declined and 76 remained unchanged on the BSE.
In earnings, 9 of the 11 Nifty companies that have announced results so far fell short of analysts’ estimates. Reliance Industries Ltd., the nation’s largest company by market capitalisation, is due to give results today.
Rupee Bond Traders To Await Rs 26,000 Crore Debt Auction
Indian bond traders will be looking forward to a Rs 26,000 crore ($3.5b) debt auction Friday that that will include the new benchmark 10-year note. Markets will weigh the Reserve Bank of India’s plans for a “phased introduction” of a central bank digital currency.
10-year yields rose 1bps to 6.2% on Thursday and is down 2bps on the week
USD/INR fell 0.2% to 74.4675 on Thursday
Implied opening from forwards suggest spot may start trading around 74.46
Global Funds sell net Rs 248 crore of India stocks Thursday: NSE
They sold Rs 889 crore of sovereign bonds under limits available to foreign investors, and added Rs 27 crore of corporate debt
State-run banks bought Rs 1,790 crore of sovereign bonds on July 22: CCIL data. Foreign banks sold Rs 879 crore of bonds
Source: Bloomberg
Zomato To Make Stock Market Debut Today
For every share that Zomato Ltd. offered in its initial public offering, the food delivery company received demand for more than 40. A stellar subscription number by all counts. Yet, it masks the below-trend response from wealthy investors. Something that could cap the listing premium for India’s first unicorn to go public.
Zomato’s Rs 9,375-crore share sale garnered subscription for shares worth more than Rs 2.09 lakh crore by the time it closed on Friday. The portion earmarked for non-institutions, including high-new-worth investors, portfolio managers and alternate investment funds, was subscribed nearly 35 times.
Click here to read the full report.
SGX Nifty Signal Modest Start For India Stocks
Asian stocks were steady Friday and U.S. equity futures climbed after earnings optimism helped Wall Street edge toward an all-time high despite mixed economic data.
South Korean shares rose but Hong Kong and China dipped. Japan is shut for a holiday. U.S. contracts were up after the S&P 500’s biggest three-day advance since April took it nearer a new peak. Technology firms like Microsoft Corp. rallied and cyclicals lagged. Twitter Inc. jumped on an upbeat outlook and the Nasdaq 100 reached a record.
India's SGX Nifty 50 Index futures for July delivery climbed 0.1% to 15,826.50, while MSCI Asia Pacific Index fell 0.3%. The NSE Nifty 50 Index added 1.2% Thursday to 15,824.05.
Global stocks are on course for a modest weekly gain, bolstered by generally robust corporate profits and stimulus support. Elsewhere, oil held most of a three-day increase amid expectations of tightening supplies as demand recovers. Bitcoin traded just above $32,000.
Back home, Biocon, Persistent Systems, South Indian Bank, Mphasis, ICICI Lombard may react as the companies reported quarterly results after the market closed Thursday. Reliance, JSW Steel, Federal Bank, Ambuja Cements, Crompton are among the companies scheduled to report earnings Friday. JSW Steel, Apollo Tyres, Balkrishna, Biocon, Crompton among companies holding their annual shareholders’ meeting.
Zomato to debut after IPO. Foreign investors sold net Rs 2,780 crore of stocks on July 20, according to NSDL website.