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15 jan (5)

Nifty ends below 14,450 mark; IT shares tumble.

The domestic equity market corrected sharply on Friday, led by broader selling pressure. IT, pharma and PSU banks declined sharply. Rising coronavirus cases across US, Europe and China weighed on investors’ sentiment.

As per provisional closing data, the barometer index, the S&P BSE Sensex, dropped 549.49 points or 1.11% to 49,034.67. The Nifty 50 index lost 161.90 points or 1.11% at 14,433.70.

In the broader market, the S&P BSE Mid-Cap index fell 1.18%. The S&P BSE Small-Cap index skid 0.97%.

Sellers outpaced buyers. On the BSE, 1088 shares rose and 1936 shares fell. A total of 139 shares were unchanged.


The government said that over 545 lakh tonnes of Paddy have been procured during the ongoing Kharif Marketing Season. This is an increase of 26.48% against the last year corresponding purchase of around 431 lakh tonnes. Agriculture Ministry said, government continues to procure Kharif crops at its Minimum Support Price from farmers as per its existing MSP Schemes. The Ministry said, more than 73 lakh paddy farmers have been benefited from current Kharif Marketing Season Procurement Operations with MSP value of over one lakh three thousand crore rupees.

Earnings Today:

Hathway Cable & Datacom (up 0.73%), L&T Finance Holdings (down 2.57%), Shoppers Stop (down 1.72%) will announce Q3 earnings today.

Banking sector major HDFC Bank (down 0.32%) will announce Q3 earnings on Saturday (16 January 2021). Apollo Pipes (down 0.99%) and IRB InvIT Fund (up 0.36%) will also announce their quarterly earnings tomorrow.

Buzzing Index:

The Nifty IT index fell 2.24% to 26,362.80. The index has fallen 2.38% in two sessions.

Tech Mahindra (down 3.92%), Wipro (down 3.66%), Coforge (down 3.65%), MindTree (down 2.73%), Info Edge India (down 2.6%), Infosys (down 2.08%), Mphasis (down 1.86%) and TCS (down 0.62%) tumbled.

Earnings Impact:

HCL Technologies slipped 3.67% at Rs 990. The IT firm’s consolidated net profit rose 31.1% to Rs 3,982 crore on 6.4% rise in revenue from operations to Rs 19,302 crore in Q3 December 2020 over Q3 December 2019.

Sequentially, consolidated net profit rose 26.7% and revenue increased 3.80% in Q3 FY21 over Q2 FY21. EBITDA grew 9.9% to Rs 5,443 crore in Q3 FY21 over Q2 FY21. EBITDA margin improved to 28.2% in Q3 FY21 from 26.6% in Q2 FY21.

The company’s revenue in constant currency grew 3.5% QoQ and rose 1.1% year-on-year (YoY). The company expects QoQ revenue to grow between 2% to 3% in constant currency for Q4 FY21, including DWS contribution. EBIT is expected to be between 21% and 21.5% for FY2021.

Tata Steel Long Products hit an upper circuit of 20% to Rs 859.85. The long steel maker reported a consolidated net profit of Rs 304.40 crore in Q3 FY21 compared with net loss of Rs 112.19 crore in Q3 FY20. Net sales during the quarter jumped 36.5% year-on-year (YoY) to Rs 1364.17 crore.

Den Network rose 2.23% to Rs 68.80 after the cable distribution company posted 238.8% jump in consolidated net profit to Rs 65.57 crore on a 7.6% rise in net sales to Rs 342.18 crore in Q3 December 2020 over Q3 December 2019.

Consolidated EBITDA grew by 12% year on year to Rs 65 crore in Q3 December 2020 from Rs 58 crore in Q3 December 2019. EBITDA margin slightly improved to 19% in Q3 December 2020 from 18% in Q3 December 2019.

On the operational front, subscription revenue was at Rs 201 crore (down 3% YoY), Placement/Marketing income was at Rs 106 crore (up 22% YoY) and Activation revenue came in at Rs 28 crore (up 58% YoY ) in the third quarter.

HFCL fell 4.36% to Rs 31.80 after consolidated net profit jumped 86.7% to Rs 85.11 crore on 49.7% increase in net sales to Rs 1,277.48 crore in Q3 December 2020 over Q3 December 2019.

PVR added 2.58% to Rs 1472. The multiplex chain operator reported a consolidated net loss of Rs 49.2 crore in Q3 December 2020 as compared to a consolidated net profit of Rs 36.3 crore registered in Q3 December 2019. Consolidated revenue from operations slipped 95% to Rs 45.4 crore in Q3 FY21 from Rs 915.7 crore in Q3 FY20.

Stocks in Spotlight:

Bharti Airtel added 4.06% to Rs 603.75. Global index provider MSCI on Thursday said it will take a decision on increasing the weightage of Bharti Airtel at upcoming index review in February.

GAIL (India) declined 2.36% to 139.30. The board of GAIL (India) approved a proposal to buyback upto 6,97,56,641 equity shares (1.55% equity) at Rs 150 each for an aggregate consideration not exceeding Rs 1046.35 crore.

Trident rose 2.16% to Rs 14.69 after the company said it secured a patent for ‘Fabric and Method of Manufacturing Fabric’ by European Patent office. It further said that the present invention comprises a method of producing a fabric by subjecting the fabric to a special treatment, thereby obtaining increased air space in the resultant fabric.

Bharat Dynamics (BDL) shed 1.38% to Rs 343.10. BDL and Thales have signed a Teaming Agreement to work in partnership on the STARStreak Air Defence system with the support of both the Governments of India and the United Kingdom.

Larsen & Toubro Infotech (LTI) fell 2.72% to Rs 4266.75. LTI plans to expand its multi-year, global alliance with IBM to help businesses transform their operations through open hybrid cloud adoption. With the proposed center, LTI will help their clients migrate and modernize core business applications leveraging IBM’s open hybrid cloud platform built on Red Hat OpenShift.

Global Markets:

European shares declined while Asian shares ended mixed on Friday as a re-emergence of COVID-19 cases in China pulled back the positive sentiment generated by U.S. President-elect Joe Biden’s $1.9 trillion stimulus plan.

China reported the most daily cases of COVID-19 in more than 10 months on Friday, as local governments and factory owners began in offering incentives to the country’s millions of migrant workers not to return to their home provinces for the Lunar New Year holidays in February.

Shares of Chinese smartphone maker Xiaomi plunged in Friday after U.S. President Donald Trump’s administration placed the firm on a blacklist of alleged Chinese military companies.

US President-elect Joe Biden unveiled a $1.9 trillion coronavirus plan Thursday to end a crisis of deep human suffering by speeding up vaccines and pumping out financial help to those struggling with the pandemic’s prolonged economic fallout.

Biden proposed $1,400 checks for most Americans, which on top of $600 provided in the most recent COVID-19 bill would bring the total to the $2,000 that Biden has called for. It would also extend a temporary boost in unemployment benefits and a moratorium on evictions and foreclosures through September.

In US, stocks fell slightly on Thursday, with tech shares declining the most. Donald Trump became the first president in U.S. history to be impeached twice when the House voted 232-197 on Wednesday to charge him with inciting riots at the Capitol.

Meanwhile, U.S. Federal Reserve Chair Jerome Powell said an interest rate hike is coming no time soon and pushed back against suggestions that the central bank might start tapering its bond purchases any time soon.

Investment & trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.

CapitalStars Investment Adviser: SEBI Registration Number: INA000001647.

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