Result season starts, Musk creates a Twitter war | Weekly market wrap up | 17 Apr
- What to expect from the markets
- Market Outlook
- Stock Recommendation
- Key Results
- Quick Bites
- IPO Corner
- Sustainability Corner
While India looks at an impending power crisis, Sri Lanka plans to close its financial markets next week; Elon Musk sets his eyes on Twitter. The billionaire acquired a 9% stake in the microblogging website looking to cage the bird. The much-awaited result season has started with TCS, Infy and HDFC posting their Q4 results. Let us see how the markets responded.
Nifty snapped its two-week winning streak closed the week with a 1.74% loss ending at 17,475 declining 332 pts while BSE Sensex ended the week at 58,338. Bank Nifty declined 0.76% during the week, ending at 37,463.
The top gainers and losers of the week were:
Nifty IT was the biggest sectoral laggard dragging down the benchmark indices with it (at -4.23%). This was closely followed by Nifty Realty at -2.03% and Nifty Auto at -1.91%.
📊What to Expect from the Markets
-Mr. Abhishek Jain, Research Head, Arihant Capital
India’s stock benchmarks declined to the lowest closing level since March 31. On the sectoral front, most of the indices closed on a weaker note and Information Technology stocks led the decline in the week.
The IT sector continues to lead the fall on soft commentary by TCS. The commentary of Infosys was also weak and it may alleviate selling pressure in IT companies further. Infosys has guided for softer margins going forward. We continue to maintain a cautious stance on midcap IT companies which are trading at the higher end of their valuations range. We continue to maintain a cautious stance on Indian IT companies and maintain an “AVOID” recommendation on the sector.
In the near term, the overall result and commentary of management will drive the stock prices of the companies.
📈Market Outlook
–Mr. Ratnesh Goyal, Senior Research Analyst
Nifty
On the daily chart of Nifty, it is taking resistance of upper channel line and on the weekly front now the index is at the support levels of short term moving averages. Together we conclude that the market may consolidate with some pressure arising from higher level. The result session has started and the market may move accordingly. Now it has to cross the 17,650 level to see a bounce towards 17,800 and 18,000 levels, while on the downside support if it crosses below 17,420 then it can test 17,280 and 17,100 levels.
Bank Nifty
On the daily chart of Bank Nifty, it is trading near the upward gap area. On the weekly chart the index has formed a “Doji” candle formation. We conclude that Bank Nifty may also consolidate and buy-on dip strategy needs to be followed. This week Bank Nifty futures closed at 37,576 levels. In the coming trading session if it holds below 37,200 then weakness could take it to 36,800 and 36,500 whereas minor resistance on the upside is capped around 38,100-38,500 levels.
💰Stock Recommendation
From the Fundamental Desk
-Mr. Abhishek Jain, Research Head, Arihant Capital
Tata Power announced that would be selling its stake in its renewable business to a consortium led by Blackrock & Mubdala. This would lead to investment in renewable energy. We have been positive about the stock. We believe that on Monday, one can book partial profits in Tata Power and switch to NTPC which has a similar renewable portfolio.
HDFC Bank numbers may look weak due to lower “other income” but we believe HDFC bank can be a good buy on corrections. It can be a good buy at ₹1,350-1,400 levels for the portfolio.
📝Key Results
HDFC Bank Q4 Results
Profit jumps 23% YoY to ₹10,055 crores, Net Interest Income rises 10%. Net Interest Margin is 4% on total assets. Gross NPA as a % of total advances stood at 1.17%. Total provisions stood at 182% of gross NPAs.
Infosys Q4 Results
Infosys reported a consolidated net profit of ₹5,686 crores for Q4’22, up 12% YoY. Revenue up by 23% over Q4’21 to ₹32,276 crores. The company has recommended a final dividend of ₹16 per equity share. Infosys plans to move its business out of Russia and pursue alternate options.
TCS Q4 Results
TCS recorded a 7.4% jump in its consolidated net profit of ₹9,926 crores for Q4’22 from Q4’21. Revenue from operations recorded an increase of 16% to ₹50,591 crores. The board has recommended a final dividend of ₹22 per equity share. TCS also records n amazing order book of $11.3 Billion.
Other Results
- Anand Rathi Wealth’s net profit rose 256.66% year on year to ₹34.56 crore for the quarter ended March 2022.
- Nestle has declared an interim dividend of₹25 for the year 2022.
- Tata Motors Group’s global wholesales in the Q4’22, including JLR, stood at 3,34,884 – a rise of 2%, as compared to Q4’21.
Watch out for these results in the upcoming week
🔎Quick Bites
Global
- Elon Musk has launched a hostile takeover by offering to buy Twitter for $43 billion at $54.2 per share an 18% premium to the closing price of TWTR on April 13. Twitter looking at “Poison Pill” defence mechanism.
- CPI Inflation in the US, rose by 8.5% in Mar’22 from Mar’21 – the highest YoY increase since 1981.
- CPI Inflation in the UK increased to 7.0% in Mar’22 from Mar’21 – its highest since March 1992.
- Sri Lankan economy crumbles: Colombo has reached out to Delhi for $3 billion in bridge finance. Sri Lanka stock exchange to halt for five days from April 18.
Economy
- Covid cases are on the rise, Delhi reported 299 cases on April 13, which is a 118% jump in 2 days.
- Stock markets remained closed on 14,15 Apr.
- Government surpasses the FY22 asset sale goal with ₹97,000 crore raise.
- India’s trade deficit in March’22 rose to USD 18.51 billion against USD 13.64 billion in Mar’21 due to petrol imports. Exports during the month increased 19.76% YoY to USD 42.22 billion.
- India’s foreign exchange reserves have dropped for the fifth straight week.
- Index of Industrial Production (IIP), rose to 1.7% in February from 1.5% in January.
- Retail inflation increased to 6.95% in March from 6.07% in Feb.
- World Bank has lowered its growth estimate for India to 8% from 8.7% for FY22-23.
- Inflation may exceed 7% till Sept, sharp MSP hike can worsen the food price shock.
Energy and Infrastructure
- Coal India meets its capex target for FY22 and reaches ₹14,834 crores.
- Man Infra has received a contract worth ₹937.89 crores from Bharat Mumbai Container Terminal.
- Sobha sales bookings increased by 23% YoY to ₹3,870.2 crores during FY’22.
- SPML Infra has secured several arbitration awards worth ₹712 crores from different clients in India.
- Vedanta calls for corporatisation of defence PSUs.
- Petronet may look at building the 4th LNG import terminal.
- RITES-Power Mech JV bags ₹499 crore work order from Bangalore Metro.
Industry
- Jindal Stainless (Hisar)’s total sales volume was at 7 lakh metric tons in FY22, a 22% hike from FY21.
- JSW Utkal Steel has received environmental clearance for setting up a greenfield Integrated Steel Plant (ISP) in Odisha.
- Thermax has secured an order of ₹522 crores for utility boilers and associated systems for a grass root refinery and petrochemical complex in Rajasthan.
- Ultratech Cement wins bid for Diggaon Limestone Block with 530 million tonnes of limestone.
- UltraTech Cement’s subsidiary in UAE invests $101 million to increase its stake in RAK Cement Co. to 29%.
- Tata Steel Mining completes the acquisition of Rohit Ferro Tech for ₹617 crores.
- Tata Steel completes the buyout of SAIL’s equity stake(50%) in S&T Mining. S&T Mining is now a wholly-owned subsidiary of Tata Steel.
IT and Telecommunications
- TCS, Infosys declare the result and receive a tepid response.
- TRAI recommends reducing the spectrum auction price of 5G airwaves in the 3300-3670 MHz band by 36%.
- Motherson Group is in advanced talks to acquire auto parts maker Marelli.
- Tata to offer non-Tata brands on its super app- Neu.
- OIL India faces a cyber-attack and intelligence agencies investigate.
- HCL expands partnership with digital banking firm Avaloq for financial services.
Automobile
- M&M hiked the prices of its vehicles by 2.5%. This would mean an increase of ₹10,000 to ₹63,000 on the ex-showroom prices.
- Fire accident at Maruti Suzuki’s R&D center in Rohtak. “It will not affect the production operations,” says Maruti.
- TVS Motor is all set to acquire a minority stake in Roppen Transportation Services.
- The mandatory airbag proposal may hurt Maruti sales.
Banking and Finance
- Aditya Birla Capital’s overall lending book grew 10% YoY to approximately ₹66,900 crores in Mar’22.
- RBI imposed a penalty of ₹93 lakh on Axis Bank and ₹90 lakh on IDBI for non-compliance with certain regulatory directions.
- Societe Generale, a European financial services group, has acquired a 1.18% stake in Bandhan Bank via open market transactions.
- Godrej Industries announced the launch of its financial services subsidiary ‘Godrej Capital’ to integrate NBFC and Housing Finance arms.
- Indian Bank to sell its entire equity stake of 4% in India SME Asset Reconstruction Company (ISARC).
- KKR &Co to buy a 9.9% stake in Shriram General Insurance co.
- Kotak Mahindra Bank-backed Phoenix ARC is in talks to acquire VVF (India) Ltd.
- HDFC to raise ₹50,000 crores via bonds.
- IDBI seeks to increase MD and CEO salaries 10-fold.
- UBI declares IL&FS Tamil Nadu Power Company as fraud for diversion of funds.
- Fino Payments to acquire a 12.9% stake in fintech company Paysprint.
Other
- DGCA has banned 90 SpiceJet pilots from operating Boeing 737 Max aircraft over improper training.
- HDFC moved NCLT against SITI networks claiming a default of ₹296 crores.
- Future Enterprises defaults on ₹1.22 crore interest payment for NCDs.
- BOI refers Future Retail to NCLT.
- A consortium of Hindustan Aeronautics and L&T to make 5 PSLVs for ISRO.
- Board of White Organic Retail approves allotment of 2.18 cr bonus equity shares.
- SAIL accuses Jaypee co. of irregularities at cement JV.
- Zomato starts a severe food quality policy.
- SEC approves a two-dose regimen of the Zydus’ Covid-19 vaccine.
- RIL considering a possible bid for Walgreen’s Boots chain.
🚀IPO Corner
- Hariom Pipe Industries listed on NSE at a premium of 44% and closed the day at ₹231 – an increase of 50.98% over its issue price.
- Senco Gold has filed a DRHP with SEBI to raise around ₹525 crores through an IPO.
- Veranda Learning is listed at an 8.76% discount on NSE and a 14.6% premium on BSE over its issue price (₹137).
- FEMA amendment clears the deck for 20% FDI in LIC.
- IPO bound LIC to cross-sell policies using its housing finance arm.
🔌Sustainability Corner
- Hero Electric and ElectricPe collaborate to expand access to charging infrastructure across India.
- Automakers to reap $20B from EVs by fiscal 2026 according to Crisil. EVs will make up 5% of passenger vehicle sales vs 0.7%. Battery-powered three-wheelers up to 28% of rickshaw sales vs 4.7%.
- EV retail sales witness over 3x growth in FY22 in India, surpassing 4 lakh units in FY’22
- India to see 48k more EV chargers with an investment of ₹14,000 crores in 3-4 years: Icra.
- TVS Srichakra to launch tyres specially designed for EVs offering low rolling resistance.
- A group led by BlackRock Real Assets will invest ₹4,000 crores for a 10.53% stake in Tata Power’s renewable energy unit.
- ₹5,911 crores were approved for the Rashtriya Gram Swaraj Abhiyan (RGSA) for rural local bodies to achieve sustainable development goals.
- BPCL, IPIOL sign MOU for developing renewable energy plant in Odisa.
- BPCL will invest around ₹200 crores in the current financial year to set up 100 fast electric vehicle charging corridors.
- GreenForest to invest ₹4,000 crores in Tata Power Renewable Energy.
- Japanese carmakers are taking the middle path in their electrification journey in India, with powerful hybrids flagging off the ‘green race’ for Honda, Suzuki and Toyota.
- NHPC to develop a green hydrogen project in Himachal Pradesh.
- Olectra launches heavy-duty electric truck trials.
- SJVN, BHEL and REMC Limited to develop renewable energy projects for the Indian Railways.
- Himachal Pradesh’s Chamba administration to produce hydrogen fuel.
- Tata’s hydrogen bus gets the nod for roadworthiness trials.
- SBI to explore business potential in EV charging space.
- BASF India receives a tax demand of ₹19 crores.
- Mahindra Lifespaces launches India’s first net-zero energy homes in Bengaluru.
That’s all for now folks! See you next week!
