Tesla Unplugged? Net Income Drops 24% | Indian Stock Market Weekly Update 22 April
EV giant finds high costs too steep a hill to climb
You would expect that in periods of high crude oil prices, green industry companies like electric vehicle manufacturers would do well, right? Well, apparently, high costs of raw materials, commodities, logistics and warranty costs were a big shocker for Tesla, arguably the biggest electric car manufacturer.
As per the results posted by Tesla, its net income had dropped 24%, free cash flows dropped 84% and net cash from operating activities dropped 37% on a YoY basis in the January-March quarter. As a result, the EV manufacturer saw its share price fall by 11.4% in the last week.
As we go deeper into the ultimate litmus test for companies, i.e. the result season, where do you think other companies would end up?
🧾In this Article
– Mr. Abhishek Jain, Head of Research at Arihant Capital
Indian benchmarks ended the day flat as advances in IT and consumer goods stocks were offset by larger declines in realty, metals, and automobile stocks.
Nifty ended 204 points down at the 17,624 level. Sensex was down by 1.28% and stood at 59,655 and Nifty Bank was down by 0.03% at 42,118.
The market is expected to react positively to strong numbers of Reliance and ICICI Bank. We are advising investors to add KRBL at current levels.
In the last week, foreign portfolio investors (FPIs) made net investments of ₹2,612 crore in the Indian markets. On the other hand, domestic institutional investors (DIIs) made net investments worth ₹3,026 crore. In the same period, yields on India’s 10-year bonds fell from 7.229% to 7.185%.
This week, the January-March quarter results seemed to be the major factor affecting major broad market indices abroad. The Nasdaq Composite fell by 0.3%, the S&P 500 fell by 0.09% and the Dow Jones Industrial Average fell by 0.36%. However, this week, CBOE Volatility Index (CVIX), the fear gauge for American markets, fell to the lowest level since late 2021.
📈Market Outlook
–Mr. Ratnesh Goyal, Senior Research Analyst, Arihant Capital.
Nifty
If we look at the daily chart of Nifty, we see a series of “Narrow” range body formations. On the weekly chart, we see that Nifty is still holding the upper line of the falling channel.
If we analyze both charts, it indicates that now we can see some consolidation and some supply from the higher levels.
If Nifty starts trading above the 17,700 level, then it can touch the 17,850-18,000 level. On the downside, support is 17,550, and if it starts to trade below then it can test the level of 17,350 and 17,200 levels.
Bank Nifty
If we look at the daily chart of Bank Nifty, we see a series of “Narrow” range body formations. On the weekly chart, we see it is still trading above its short-term moving averages.
If we analyze both charts it indicates that bank nifty is still looking stronger than Nifty.
In the coming week if it trades above 42,350 then it can touch 42,500 and 42,650 levels. However, downside support comes at 42,050, and below that, we can see 41,850 and 41,700 levels.
💰Stock Picks
– Ms. Kavita Jain, Sr Research Analyst, and Learning Head, Arihant Capital
🔎Quick Bites
Economy
- Wholesale inflation in India dropped to 1.34% in March, the lowest since October 2020.
Result Calendar for 24th – 29th April 2023
| 24th April | |||
| Bank Of Maharashtra | IndusInd Bank Ltd. | Century Textiles & Industries Ltd. | Mahindra Logistics Ltd. |
| Persistent Systems Ltd. | Tata Teleservices (Maharashtra) Ltd. | — | — |
| 25th April | |||
| AU Small Finance Bank Ltd. | Bajaj Auto Ltd. | Rallis India Ltd. | Mahindra Lifespace Ltd. |
| VST Industries Ltd. | Dalmia Bharat Ltd. | Nestle India Ltd. | HDFC AMC Ltd. |
| Mahindra Holidays India Ltd. | Mahindra CIE Automotive Ltd. | Tata Consumer Products Ltd. | Lloyds Metals & Energy Ltd. |
| Nippon Life India AMC Ltd | — | — | — |
| 26th April | |||
| Maruti Suzuki India Ltd. | Voltas Ltd. | Supreme Petrochem Ltd. | Bajaj Finance Ltd. |
| Poonawalla Fincorp Ltd. | IIFL Finance Ltd. | Can Fin Homes Ltd. | Tanla Platforms Ltd. |
| KPIT Technologies Ltd. | Oracle Financial Services Ltd. | L&T Technology Services Ltd. | Syngene International Ltd. |
| Indus Towers Ltd. | Shoppers Stop Ltd. | HDFC Life Insurance Co Ltd. | SBI Life Ltd. |
| 27th April | |||
| Axis Bank Ltd. | ACC Ltd. | Bajaj Holdings & Investment Ltd. | Bajaj Finserv Ltd. |
| LTIMindtree Ltd. | Wipro Ltd. | Mphasis Ltd. | Coforge Ltd. |
| Tech Mahindra Ltd. | Hindustan Unilever Ltd. | Laurus Labs Ltd. | Trent Ltd. |
| Aditya Birla Sun Life AMC Ltd. | — | — | — |
| 28th April | |||
| CSB Bank Ltd. | Atul Ltd. | Ultratech Cement Ltd. | L&T Finance Holdings Ltd. |
| Mahindra & Mahindra Fin Ltd. | Supreme Industries Ltd. | Star Health Allied Insurance Ltd. | — |
| 29th April | |||
| Kotak Mahindra Bank Ltd. | IDFC First Bank Ltd. | — | — |
Banking, Financial Services and Insurance
- HDFC Bank’s operating expenses were up 32% in Q4 of FY 2022-23 on a YoY basis on account of branch expansion and a rise in employee benefit expenses.
- AU Small Finance Bank received approval from RBI to deal in foreign exchange.
- IndusInd Bank has signed a $100 million loan agreement with Japan Bank for International Cooperation to provide credit to Japanese original equipment manufacturers in India.
- LIC bought 1.68 crore shares of Infosys in the March quarter.
- On 22nd April, ICICI Bank will decide whether to raise funds via debt securities.
- ICICI Lombard General Insurance reported a 12.18% increase in total income and a 36.04% increase in profit after tax.
- CRISIL reported a 20% increase in consolidated revenues and a 19.8% increase in net profit in the March quarter on a YoY basis.
IT
- HCL Technologies has reported that in FY 2022-23 its revenue grew by 13.87% and net profit grew by 5.38% on a YoY basis.
Oil
- Windfall gains tax on crude oil has been reintroduced at a rate of ₹6,400 per tonne after its removal just 2 weeks ago.
- While consumption of petroleum products rose 10.2%, domestic crude oil fell by 1.7% in 2022-23.
Power
- Experts believe El Nino might affect wind power generation in India.
- India is expected to add another 14.65 GW of power generation capacity through coal-powered plants.
Automobile
- Passenger vehicle exports from India rose 15% in FY 2022-23 with Maruti Suzuki exporting the highest number of vehicles.
- VRL Logistics ordered 1,560 trucks from Ashok Leyland.
- Schaeffler India, the auto component maker, reported an 8% YoY growth in revenue and a 5.9% growth in net profit in the March quarter.
- Maruti Suzuki launched an upgraded version of Super Carry, its light commercial vehicle.
- Volkswagen expects 30% of its sales in India to come from electric vehicles by 2030.
Pharma
- Zydus Lifesciences has secured the final approval from USFDA to manufacture and market its generic anti-inflammatory drug, Roflumilast.
- GSK plc is looking to buy Canada’s Bellus Health, a Canadian drug development company.
- Marksans Pharma announced that it had acquired a manufacturing site from Tevapharm India.
- Fortis Healthcare will acquire Medeor Hospital, a hospital in Gurugram, for ₹225 crore.
Airlines
- In March, air traffic in India was the highest in 3 years and the market shares were as follows:
- IndiGo – 56.8%
- Tata Group – 25.3%
- GoFirst – 6.9%
- SpiceJet – 6.4%
- Akasa Air – 3.3%
- The GMR Group will be working with ADP, its French partner, to upgrade the retail experience at its airports worldwide.
Mining
- Vedant has pledged an additional 2.44% of Hindustan Zinc shares, taking its pledged stake to 91.35%.
- NMDC is exploring lithium reserves in Australia and hopes to start mining within 2 years.
🏢IPO Corner
- Mankind Pharma has fixed its IPO issue price band at ₹1,026 to ₹1,080 per share and it will open for subscription on 25th April and close on 27th April.
- Avalon Technologies got listed on NSE at exactly the issue price of ₹436 per share.
🏗️Corporate Actions
| Bonus | ||
| Company | Ratio | Ex-Date |
| Nettlinx | 1:1 | 24-Apr-2023 |
| Achyut Healthcare | 1:2 | 25-Apr-2023 |
| Split | ||
| Company | Ratio | Ex-Date |
| Goyal Aluminums | 1:10 | 25-Apr-2023 |
| Jost’s Engineering Company | 2:5 | 28-Apr-2023 |
| Sera Investments & Finance India | 1:5 | 28-Apr-2023 |
| Dividend for next week | |||
| Company | Type of dividend | Dividend per share | Ex-Date |
| Vesuvius India | Final | ₹8.25 | 26-Apr-2023 |
| ABB India | Dividend | ₹5.50 | 27-Apr-2023 |
| HCL Technologies | Interim | ₹18 | 28-Apr-2023 |
| Jindal Stainless | Special | ₹1 | 28-Apr-2023 |
| KSB | Final | ₹15 | 28-Apr-2023 |
| Sanofi India | Final | ₹194 | 28-Apr-2023 |
| Sanofi India | Special | ₹183 | 28-Apr-2023 |
🪜Others
- SEBI wants greater autonomy to boost technological innovation and is discussing revamping the SEBI Act with the finance ministry.
- Tata Communications reported a 9.85% increase in revenue and a 42.93% drop in net profits in FY 2022-23 in comparison to FY 2021-22.
- Tata Coffee reported a 20.59% increase in revenue and a 30.6% increase in net profit in FY 2022-23 in comparison to FY 2021-22.
- TV18 Broadcast reported an 86.21% drop in net profit and a 6.98% increase in net sales in FY 2022-23 in comparison to FY 2021-22.
- Jubilant Ingrevia adds around 60,000 MT manufacturing capacity by commissioning a new acetic anhydride plant in Gujarat.
- Coca-Cola has acquired a 15% stake in Jubilant FoodWorks’ associate company, Hashtag Loyalty.
- NBCC secured an order worth ₹208 crore involving project management consultancy service to design roads and remodel sewage systems for PWD Puducherry.
- Zomato has announced that the Blinkit stores that were closed due to wage protests have now been reopened.
- The government approved the National Quantum Mission for developing quantum computing, quantum communication and quantum sensing with an outlay of ₹6,003.65 crore over 8 years.
- The semiconductor joint venture between Vedanta and Foxconn expects to generate revenue from FY 2026-27.
- The Adani group has paid back $3 billion of its debt, lowered its promoter group pledges and settled bonds with three domestic mutual funds in the March quarter.
- CRISIL expects postpaid users to make up 12% of the mobile user base in FY 2023-24, up from 8% now.
- The Indian railways reported a roughly 20% increase in revenue in FY 2022-23 on a YoY basis.
🔌Sustainability Corner
- Sterling and Wilson Renewable Energy reported a 57.86% decline in revenue and more than doubled its net losses in FY 2022-23 in comparison to FY 2021-22.
- The Vida V1, Hero MotoCorp‘s first electric scooter, is now available for purchase on Flipkart, making it the first established Indian e-scooter to be sold on an e-commerce platform.
- Tata Power has collaborated with the Coimbatore municipal corporation to establish 20 electric vehicle charging stations in the city known for textiles. This move will bring the total number of EV charging stations established by Tata Power in Tamil Nadu to 116.
- The aviation minister stated that India plans to make 121 airports carbon-neutral by 2025.
- As of April, the waiting time for the Mahindra XUV400 EV in the country is around 4 months.
- Coventry University has announced a plan to enhance the skills of 1,200 Jaguar Land Rover engineers in the field of electric vehicles. The university will provide a new course that will offer training on various aspects, including specifying components, verification and validation, and integrating high-voltage parts.
📬Also Read: Sustainable Investing in India: ESG Investments
