Closing Bell: Sensex ends 136 points lower, Nifty below 11,650; auto, banks decline
Indian shares ended lower on Friday dragged by losses in banks, FMCG and auto sectors. The sentiment was further weighed by a decline in world stocks as jitters over a rising global COVID-19 infection rate and next week’s U.S. presidential election.
The Sensex ended 136 points lower at 39,614 while the Nifty 28 points to settle at 11,642. Both indices ended around 2.5 percent lower for the week.
Meanwhile, broader markets were mixed during the day. The Nifty Midcap index rose 0.5 percent while the Smallcap index fell 0.5 percent.
On the Nifty50 index, Adani Ports, BPCL, Coal India, NTPC and Sun Pharma were the top gainers while Bharti Airtel, Hero Moto, Maruti, Eicher Motor and Bajaj Finance led the losses.
Among sectors, the Nifty Auto fell the most, down over 1 percent while the Nifty Bank and Nifty FMCG were down 0.8 percent each. Meanwhile, the Nfity Metal rose 1.5 percent while Nifty IT and Nifty Pharma were also in the green.
Crude Updates: Global oil prices edged up on Friday, but are on track for a second monthly fall on growing concerns that the rise in COVID-19 cases in Europe and the United States could hurt fuel consumption.
Bitcoin surges 5% to $13,600 led by ECB stimulus announcement
On Thursday, Bitcoin (BTC) price surged from $12,920 to $13,600 in four hours after the European Central Bank (ECB) said it might seek a new stimulus package in December. Also, optimistic job data from the US was another reason for the 5 percent rally in the BTC price, said CoinTelegraph.
Over the last month, the BTC prices went up by almost 30 percent on the back of Paypal’s recent move to allow its customers buy and sell certain cryptocurrencies, and rising institutional interest.
Last week, BTC prices continued to rally despite the negative macro factors– a steep decline in the US stock market and the rising number of COVID-19 cases in the country as well as in Europe. Read more
Mahindra Life Q2: Net loss at Rs 13.5 crore against profit of Rs 15.7 crore (YoY). Revenue was down 90.5 percent at Rs 30.8 crore against Rs 324.5 crore (YoY). EBITDA loss at Rs 17.9 crore against Rs 14.3 crore (YoY). (Source: Moneycontrol)
Karur Vysya Bank Q2FY21 | Net profit rose 81.5 percent to Rs 114.9 crore from Rs 63.3 crore while net interest income (NII) increased 0.9 percent to Rs 601.5 crore from Rs 596.3 crore, YoY. Gross NPA were at 7.9 percent against 8.3 percent and net NPA at 3 percent as against 3.4 percent, QoQ. Provisions were at Rs 284.7 crore versus Rs 337.6 crore QoQ and versus Rs 365.2 crore YoY.
Indian Oil Corporation Q2FY21 | Net profit jumped to Rs 6,227.3 crore as against Rs 1,910.8 crore while revenue rose 32.1 percent to Rs 85,610.4 crore from Rs 64,801 crore, QoQ. EBITDA increased 74.3 percent to Rs 9,607 crore as against Rs 5,512.3 crore and EBITDA margin stood at 11.2 percent as against 8.5 percent, QoQ.
Sharp divergences seen across sectors in 2020; only 21 Nifty stocks positive YTD
2020 has been a year of unpredictability and volatility. In a report, brokerage house Motilal Oswal noted that the defining feature of equity market performance in 2020, so far, has been the sharp divergences across sectors.
“This has had material implication for alpha creation in CY20. At the same time, it has led to the creation of a new set of leaders for the market,” the brokerage stated.
Currently, the Nifty is down around 3 percent YTD. The Nifty plunged 38 percent from its all-time highs in January to lows of 7,610 in March due to the COVID-19 pandemic. Since then, it has recovered almost all of its losses.
Even though the Nifty has recovered to pre-COVID levels, only 21 out of 50 companies have gained on a year-to-date basis. Click here to read more
Jaikishan Parmar – Sr. Equity Research Analyst, Angel Broking: CanFin Homes reported a healthy set of numbers for Q2FY21. The loan book grew at 6% YoY and remained stable sequentially. NII growth was robust at 32% YoY, primarily led by a lower cost of funds. NIM jumped 29bps to 3.89% QoQ, which is one of the best NIM compared to the last many quarters. The incremental cost of funds is 6.54%. Pre-provision profit increased by 36%, and PAT jumped by 32%. Asset quality continues to remain stable. Total covid provisions on the balance sheet currently stand at Rs 86 crore, which adequate to absorb the next 3 quarter slippages as per management.
We have a positive view on Can Fin Homes considering stable asset quality, reduced competition from HFCs and the ability to raise funds at a competitive rate would help to report superior RoE.
Should investors buy, sell or hold Maruti Suzuki after Q2 earnings?
India’s largest passenger car manufacturer Maruti Suzuki reported a one percent rise in September quarter standalone net profit at Rs 1,371.6 crore from Rs 1,358.6 crore in the year-ago period. In Q1FY21, the company had posted a loss of Rs 249.4 crore.
Revenue from operations increased 10.34 percent to Rs 18,755 crore from Rs 16,997 crore, YoY. Maruti sold 3.93 lakh units in July-September quarter 2020, registering a 413 percent growth over the previous quarter and 16 percent over the year-ago period.
Higher sales volume, lower sales promotion expenses, lower operating expenses and cost reduction efforts supported the operating profit, but increase in commodity prices and adverse foreign exchange movement limited growth, Maruti said in its BSE filing. Click here to read more
Motilal Oswal on Maruti Suzuki: Maruti Suzuki’s Q2FY21 operating performance was impacted by higher non-RM cost, which diluted the benefits of lower discounts and operating leverage. Deferred demand seems to be the main demand driver and hence demand evolution is a key monitorable. Based on good Navratas and Dussehra demand, Diwali and the Nov–Dec’20 period are expected to be good. It maintain FY21/FY22 EPS and buy, with target price of Rs 7,850.
Castrol India shares jump 8% on strong operating profit
Shares of Castrol India gained over 8 percent after the company announced its September quarter results. The company’s operating profits for the quarter rose 18 percent to Rs 266.70 crore on the back of higher sales and lower costs. Net profit was also up 8.6 percent YoY at Rs 204.60 crore.
It reported a 4 percent rise in top-line sales for the quarter at Rs 883.10 crore. Operating profit margins also jumped 360 bps to 30.20 percent on the back of favorable working capital-related costs.
The board of directors of the company also declared an interim dividend of Rs 2.5 per share. The record date is 6 November 2020 and the dividend would be paid on 26 November 2020. Click here to read more
Blue Dart shares rally 16% as co posts three-fold jump in profit for Sept quarter
The share price of Blue Dart Express rallied on Friday after the company reported a three-fold jump in its profit to Rs 41.39 crore for the quarter ended September 30.
The stock gained as much as 16 percent to Rs 3,767.20 per share on the NSE. At 11:10 am, the shares traded 10.2 percent higher at Rs 3,580.40.
The company had posted a profit of Rs 14 crore for the same quarter last year.
Revenue from operations also rose 8 percent to Rs 864 crore as compared to Rs 800 crore in the year-ago period.
The operating profit also went up three-fold to Rs 97 crore while margins (OPM) jumped to 11 percent from 3 percent last year on the back of favourable growth in sales revenue and cost control. Read more
TVS Motor stock surges 7% as earnings beat estimates; Should you buy, sell or hold?
Shares of TVS Motor Company rose over 7 percent on Friday after the auto firm’s results beat analysts’ estimates in the September quarter. The firm reported a rise of 6 percent in sales in Q2 at Rs 5,254 crore and the operating profit was also up 19.51 percent at Rs 528 crore. However, the firm posted a 29.37 percent decline in consolidated net profit at Rs 181.41 crore for the quarter under review. The company had posted a net profit of Rs 256.88 crore in the July-September period of the previous fiscal. Despite COVID-19 challenges, the company strengthened its supply chain during the second quarter of the current fiscal, it added. The production and sales improved consistently from July onwards, the company said. More here
Could benefit from the PLI scheme, says Laurus Labs
The Department of Pharmaceuticals has relaxed rules in the production linked incentives (PLI) scheme for Active Pharmaceutical Ingredients (APIs), drug intermediaries and medical devices. Satyanarayana Chava, Founder and CEO at Laurus Labs believes the company has some products where they could get some benefit out of this scheme. Laurus Labs came out with a strong set of earnings in the second quarter. Margins come in at a multi-quarter high. While discussing the quarterly numbers he said, “The growth came from all three divisions and that is the trend we expect to continue.” More here
HPCL board to consider share buyback on November 4; stock surges 5%
Shares of Hindustan Petroleum Corporation (HPCL) rose over 5 percent on Friday after the firm said that the board will consider share buyback on November 4. A board is scheduled to meet on November 4 for the approval of the September quarter and half-yearly financial results. “We now wish to inform you that in the aforesaid Board Meeting, the Board will also consider a proposal to Buy-Back the fully Paid Equity Shares of the face value of Rs.10/- each of the Company,” the company said in a BSE filing.
ICICI Bank Q2 earnings: Here’s what to expect
ICICI Bank will reports its quarterly earnings on Saturday, and the street is expecting good numbers from the bank. In the quarter gone by, ICICI Bank raised Rs 15,000 crore of capital as well as it sold stake in ICICI Securities for over Rs 310 crore. Both these should provide cushion to the balance sheet. The net interest margin is expected to remain stable sequentially; last quarter it was at 3.69 percent. PhillipCap brokerage is estimating a slippage of Rs 2,000 crore for the September quarter. Moratorium details, restructuring and collection efficiency will be watched for closely. To know more, watch the video.
Second half of FY21 to be stronger than first half, says Zensar Tech
Zensar Technologies reported a mixed set of numbers for the September quarter. Revenue declined for the fourth consecutive quarter but margins improved. “Our pipeline, our wins are pretty good and we do hope that H2 will be far better on revenue and we will maintain our margin profile in H2 as well,” Sandeep Kishore, MD & CEO, Zensar Technologies said in an interview with CNBC-TV18. He said that revenue decline was marginal and that the business was stabilizing. Some softness in one of the top five accounts caused revenue decline, he said. Excluding that, revenues grew 2.8 percent sequentially in the top 20 accounts, he added. More here
IndusInd Bank Q2FY21 earnings: Net interest margins could be under pressure
IndusInd Bank will post its Q2FY21 results today. The street is anticipating lowest net interest income (NII) growth in last six quarters. The bank has raised about Rs 3,290 crore this quarter, which should cushion the balance sheet. Deposit growth of 8 percent quarter-on-quarter (QoQ) is perhaps the best in last six quarters. It shows that customers are coming back, and are more confident about the bank’s prospects. However loan growth remains muted. Provisions may remain elevated due to moratorium loans. Net interest margin (NIM) could be under pressure. Watch for more details.
Technical View | Yesterday’s low of 11,600 has become crucial support for the market. If we break that, a wave of shorts might get triggered and we could see a slide till 11,400 levels. The upside resistance is at 11,900-11,950. Until we do not get past that, the bias will be on the sell side, says Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
Buzzing | Vodafone Idea shares gain 6% after Q2 loss narrows
Shares of Vodafone Idea Ltd (Vi) gained over 6 percent in the early trade of Friday after the company reported its September quarter earnings. The stock gained as much as 6.44 percent to intraday high of Rs 8.92 on the BSE.
The company’s net loss in Q2FY21 narrowed to Rs 7,218.2 crore from Rs 50,897.9 crore in the same quarter of the previous fiscal. Total income declined by about 3 percent to Rs 10,830.5 crore during the reported quarter, from Rs 11,146.4 crore in the corresponding period of 2019-20. Average revenue per user (ARPU) increased to Rs 119 from Rs 107 in Q2FY20 and Rs 114 in Q1FY21.
Shriram Transport Finance Q2 net profit down 11% to Rs 685 cr
Shriram Transport Finance Co Ltd (STFC) on Thursday reported a 10.5 percent decline in net profit at Rs 684.56 crore in July-September quarter of 2020-21. The non-banking finance company had posted a net profit of Rs 765.05 crore in the same quarter of 2019-20. Total income rose 4.68 percent to Rs 4,351.26 crore during the quarter under review from Rs 4,156.92 crore in the same period a year ago, STFC said in a regulatory filing. However, net interest income fell 1.67 percent to Rs 2,021.86 crore from Rs 2,056.11 crore in the year-ago quarter. More here
Canara Bank posts Q2 net profit of Rs 444 crore
State-run Canara Bank on Thursday reported a 28 percent dip in profit after tax at Rs 444 crore for the quarter ended September on higher provisions. The bank amalgamated Syndicate Bank with itself effective April 1, 2020. The amalgamated entity had posted a standalone profit after tax of Rs 616 crore in the same quarter of the previous fiscal. The pre-amalgamation standalone profit in September 2019 quarter stood at Rs 364.92 crore. Canara Bank’s Managing Director and CEO L V Prabhakar said the bank made advanced provision for Dewan Housing Finance (DHFL), which it has declared as fraud, and also Rs 125 crore floating provision during the quarter. More here
Opening Bell: Sensex opens flat, Nifty holds 11,650; HDFC top loser
Indian indices opened on a flat note on Friday as losses in index heavyweights Infosys, HDFC, ICICI Bank, HDFC Bank and HUL were capped by gains in RIL, TCS and L&T. At 9:18 am, the Sensex was trading 26 points lower at 39,723 while the Nifty fell 3 points at 11,668. Broader markets outperformed benchmarks with Nifty Midcap and Nifty Smallcap up 0.6 percent and 0.7 percent, respectively. Among sectors, Nifty Realty rose over 1 percent and Nifty IT, Nifty Metal and Nifty Pharma were also in the green while Nifty Bank and Nifty Fin Services dragged.
