Have the markets switched on the festive mode because Nifty and Sensex have been on a record-breaking run clocking gains on every trading session this week?
🎆 Festivities add cheer to Indian equity markets
Markets saw a sharp recovery in truncated week closing with gains literally every day of the week. Benchmark indices finally ended the week with sharp gains boosted by strong numbers by IT companies largely driven by Infosys, and Wipro. Nifty closed the week with 2.48% gains at 18,338, up 444 points, and Sensex at 61,305.95, up 1247 points or 2.08%.
Among the stocks, Tata Motors was the star performer of the week, gaining 29.9% in just 4 trading sessions to ₹497.6 followed by ITC which gained 10.7%, and Adani Ports 9.85%. TCS was among the top losers, with its stock price dropping 8.24% this week.
For the next week, action is to be seen in metals, cement, and financials. HDFC bank has posted decent numbers both on profitability and asset quality front. We believe this would cloud other stocks in the banking sector with positivity. On the metal’s side, sentiment has been boosted by strong global prices and the results of Alcoa. Cement action to be seen with Ultratech and ACC numbers. Realizations and volume growth to be key deliverables for both companies. As we mentioned last week, the biggest concern for the market could be power supply, which has been hampered by coal shortage as there has been a further dip in coal inventories.
Stocks to watch out for: Private banks like ICICI, Indusind, and Heritage Foods to be on the radar next week. With the economy back to normalcy, demand for dairy & dairy added products should bounce back.
📈 FY22 second quarter results this week
- Infosys’ net profit for the July to September quarter stood at ₹5,421 crores, 11.9% increase year-on-year and 4.4% quarter-on-quarter. Revenues were up 20.5% y-o-y, at ₹ 29,602 crores (up 6.1% q-o-q).
- Wipro’s net profit for Q2FY22 stood at ₹2,930.6 crores, up 19% you while the profit was down 9.6% compared to previous quarter. Consolidated revenue grew 30% to ₹19,667.4 crores y-o-y, and up 7.7% sequentially.
- HCL Tech’s Q2FY22 net profit grows 4% y-o-y to ₹3,259 crores, clocking a marginal 1.7% sequential rise. Revenue from operations stood at ₹20,655 crores, increasing by 11% y-o-y and 3.5% q-o-q. The Noida-headquartered company declared an interim dividend of ₹10 per equity share for FY2021-22.
- HDFC Bank Q2FY22 numbers beats street estimates. Net profit grew 17.6% y-o-y to ₹8,834 crore, and 14.3% sequentially, buoyed by strong loan growth. Its net interest income rose 12.1% y-o-y YoY to ₹17,684.40. Bank’s core net interest margin was at 4.1%.
- Aided by covid recovery and a low base, Avenue Supermarkets records 110% jump in its consolidated net profit y-o-y at ₹417.8 crore for Q2FY22 and a 46.8% y-o-y increase in revenues at ₹7,789 crores. The company’s PAT margin stood at 5.8% in Q2FY22 as compared to 4% in Q2FY21.
- Mindtree Q2FY22 profit stood at ₹398.9 crore up and revenue rose to ₹2,586.2 crore, up 16.2% and 12.8% q-o-q, respectively. Its revenues clocked a 34.1% y-o-y growth. The Bengaluru-based IT services company also approved an interim dividend of ₹10 per share
- Delta Corp’s net loss for September quarter stood at ₹22.6 crore, as compared with ₹54.9 crore during the corresponding quarter a year ago.
Among major earnings to be announced this week are from Reliance Industries Limited, Hindustan Unilever Ltd, Hindustan Zinc, UltraTech Cement, ACC, Asian Paints, IDBI, Bank of Maharashtra, South Indian Bank, and Federal Bank.
📺 Quick bites
- India’s merchandise trade deficit at 14-year high, widening to $22.6 billion in September 2021. The rise was mainly on the back of rising crude oil prices and gold imports. Imports rose to $56.39 billion from $30.52 billion last year. Exports, meanwhile, rose 22.76% year-on-year at $33.79 billion, slower than 45.17% growth in August.
- India’s WPI inflation maintains double-digit figure but eases to 10.66% in September, compared to 11.39% in August, on the back of moderating food prices.
- The Index of Industrial Production (IIP) of India, which tracks manufacturing activity of the country, rose 11.9% y-o-y for the month of August as compared to 11.5% in July.
- Petrol and diesel prices have been hiked for the fourth consecutive day on Sunday. Petrol prices reached its highest-ever level in Delhi of ₹105.84 a litre while diesel was at ₹94.22. Interestingly, petrol now costs 33% more than the price at which aviation turbine fuel (ATF) is sold to airlines. In Mumbai, petrol touched ₹111.77 while diesel was at ₹102.52.
- Coal shortage and strong demand for electricity continue to put power generation companies under pressure. Three out of four power plants in the country have less than a week’s coal in stock amid rising demand. While India is pushing for renewable energy, the truth is that till date the country’s 135 coal-fired power plants supply over 70% of India’s electricity.
- Just a few days after Tata Sons announced the acquisition of Air India, Rakesh Jhunjhunwala backed Akasa Airline has received a no objection certificate (NOC) from the Indian Government and will seek a license from the Directorate General of Civil Aviation (DGCA). The company will have former Jet Airways Chief Executive Officer Vinay Dube as the CEO for the airline.
- Ujjivan Small Finance Bank’s total deposits were up 31% y-o-y at ₹14,090 crore in 2QFY2022.
- Power Grid’s board has given approval for the incorporation of a wholly owned subsidiary to undertake the telecommunications and digital technology business of Power Grid.
- TVS Motors’ production of the BMW Motorrad’s 310cc series of motorcycles has crossed 1 lakh units.
- Adani Group has taken over the operation, management and development of the international airport in Thiruvananthapuram.
- The Maharashtra government issued guidelines to reopen auditoriums and cinema halls from October 22. Cinemas to rejoice, but will people be comfortable hitting back to cinemas?
- PM Narendra Modi today launched The Indian Space Association (ISpA) in the presence of members from ISRO, Airtel, OneWeb, Nelco, L&T and others.
🚀 IPO Corner
- SEBI has given its approval for Nykaa’s ₹4,000 crore-IPO.
- One Mobikwik Systems, a leading mobile wallet (MobiKwik Wallet) and Buy Now Pay Later (BNPL) player in India, gets SEBI’s approval for its ₹1,900 crore IPO. The IPOs will comprise fresh issue of ₹1,500 crore and ₹400 crores Offer-for-Sale (OFS) by existing shareholders.
- SJS Enterprises, a leading player in the Indian decorative aesthetics industry, plans 800 crore IPO, which will essentially be an OFS of ₹688 crore by Evergraph Holdings and ₹112 crore by KA Joseph.
- Skanray Technologies had filed DRHP in June and finally received SEBI’s approval for its IPO. Its IPO will comprise fresh issue of equity shares, aggregating up to ₹400 crore, and OFS of up to 1,41,06,347 equity shares by promoters and existing shareholders.
- Other companies that have received approvals include Policy Bazar, Fino Payments Bank, Sapphire Food India, Go Fashion, and PayTM
- Aditya Birla Sun Life AMC made a muted market debut on Monday at ₹715, a marginal gain of 0.42% from the issue price. The stock settled at ₹698, registering a decline of 1.96% on the listing day.
🔌EV and Sustainability Corner
- On the occasion of Dussehra festival, Tata Power has installed a fast-charging station, in association with Gogte Urja,on the premises of Fairfield at Marriott Hotel, Kakati village on Bangalore-Pune NH4 highway to enhance green mobility and reduce carbon footprint.
- Tata Motors is in advanced stages to raise $1 billion through the stock sale of its electric vehicle unit, a media report mentioned on Friday. Also, many brokerage houses upgraded Tata Motors’ price target to between ₹400-450.
- Tata Power Solar Systems Limited (Tata Power Solar), a wholly-owned subsidiary of Tata Power, secures orders worth ₹538 crores from Energy Efficiency Services Limited (EESL) to build 100 MW of Distributed Ground Mounted Solar projects.
- Lucas TVS, part of the TVS Group and a leading automotive component maker, is planning to roll out their electric vehicle (EV) charging stations according to Arvind Balaji, managing director of Lucas TVS.
- Power Grid gets board’s approval for setting up of electric vehicle charging station in Navi Mumbai at an estimated cost of ₹14.23 crore.
- Reliance Industries betting big on renewable energy. It announced the acquisition of REC Solar Holdings for an Enterprise Value of $771 million and purchase of 40% stake in Sterling & Wilson Solar. Meanwhile, on Tuesday Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of Reliance Industries Ltd, was also a strategic lead investor in NexWafe’s $45 million Series C financing round with an investment of $29 million in phase one. The investment by Reliance will accelerate product and technology development for the German company, including completion of the commercial development of NexWafe’s solar photovoltaic products on prototype lines in Freiburg.
- Anticipating an increased demand for biogas for aviation when the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) emission norms will kick-in, in 2027, Indian Oil Corporation (IOC) has decided to put up a ‘demo plant’ within the next two years to convert ethanol into a biogas that would be used to run aircraft. The ‘alcohol-to-jet’ (ATJ) fuel plant will also use up its refiner’s grey hydrogen to produce the ethanol.
- According to a global study, India is the most cost-effective country for generating rooftop solar energy at USD 66 per megawatt-hour, while the cost in China is marginally higher at USD 68 per megawatt-hour.