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CAPITALSTARS PRESENT WEDNESDAY MARKET NEWS : 20 JANUARY 2021

20 jan (6)

Sensex rallies 393 pts ahead of Joe Biden’s inauguration.

The benchmark indices advanced for the second trading session on Wednesday, tracking positive global cues. The Nifty reclaimed 14,600 mark. Global shares were buoyant ahead of Joe Biden’s inauguration as US president. Washington gets set to try for another massive round of stimulus for the economy.
As per the provisional closing data, the S&P BSE Sensex, surged 393.83 points or 0.8% at 49,792.73. The Nifty 50 index soared 123.55 points or 0.85% at 14,644.95.

The Sensex hit a record high of 49,874.42 while the Nifty hit a record high of 14,666.45 in late trade today.

The broader market ended with strong gains. The S&P BSE Mid-Cap index rose 1.08% while the S&P BSE Small-Cap index added 0.58%.

Buyers outnumbered sellers. On the BSE, 1,587 shares rose and 1,426 shares fell. A total of 162 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 257.55 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 199.30 crore in the Indian equity market on 19 January 2021, provisional data showed.

Economy:

The Reserve Bank of India (RBI) on Tuesday identified SBI (up 1.09%), ICICI Bank (up 0.92%) and HDFC Bank (down 0.84%) as Domestic Systemically Important Banks (D-SIBs), under the same bucketing structure as in the 2018 list of D-SIBs. The additional Common Equity Tier 1 (CET1) requirement for D-SIBs was phased-in from April 1, 2016 and became fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer. The Reserve Bank had issued the Framework for dealing with Domestic Systemically Important Banks (D-SIBs) on July 22, 2014. The D-SIB framework requires the Reserve Bank to disclose the names of banks designated as D-SIBs starting from 2015 and place these banks in appropriate buckets depending upon their Systemic Importance Scores (SISs).

Primary Market:

The initial public offer (IPO) of Indian Railway Finance Corporation (IRFC) received bids for 381.74 crore shares as against 124.75 crore shares on offer, according to the stock exchange data at 15:15 IST. The issue was subscribed 3.06 times.

The issue opened for subscription on 18 January and it will close on today (20 January). The price band for the IPO is set at Rs 25-26 per share. An investor can bid for minimum of 575 equity shares and in multiples thereof. The stock will list on 2 February 2021 on bourses.

The IPO consists of fresh issue of up to 118.80 crore equity shares and an offer of sale of up to 59.40 crore equity shares by the Government of India. Post issue, the government shareholding in the company will fall to 86.4%. The company proposes to utilize the net proceeds from the offer for augmenting equity capital base to meet future capital requirements arising out of growth in business.

Results Today:

Bajaj Finance (up 0.39%) and Bajaj Finserv (up 0.12%) will announce their quarterly result today.

Havells India (down 0.43%), Phillips Carbon Black (up 1.36%), Sagar Cements (down 0.26%), GMM Pfaudler (up 3%), Agro Tech Foods (up 1.72%), Syngene International (up 1.94%) and VST Industries (up 1.18%) will also announce Q3 results today.

Earnings Impact:

Federal Bank was up 2.39%. The private lender reported 8.29% decline in net profit to Rs 404.10 crore on 5.43% rise in total income to Rs 3,941.36 crore in Q3 FY21 over Q3 FY20. Profit before tax in Q3 FY21 stood at Rs 542.28 crore, down by 6.98% from Rs 582.96 crore in Q3 FY20. Tax expense declined by 2.91% year-on-year (YoY) to Rs 138.18 crore. Operating profit increased by 29.45% to Rs 962.90 crore in Q3 December 2020 from Rs 743.82 crore in Q3 December 2019.

Hindustan Zinc fell 1.27%. The company reported 35.80% jump in net profit to Rs 2,200 crore on a 27.86% increase in revenue from operations to Rs 5,915 crore in Q3 FY21 over Q3 FY20. The company said that the increase in revenue was led by higher metal volumes, higher zinc & silver prices and rupee depreciation partly offset by lower lead prices. Zinc volumes increased by 6% year-on-year (YoY) and lead by 30% YoY in line with higher production and robust demand. EBITDA for the quarter soared to Rs 3,314 crore, up 45% YoY and 12% sequentially on account of higher revenue and well managed operating costs.

Larsen & Toubro Infotech (LTI) fell 0.07%. The IT company’s consolidated net profit increased by 13.7% to Rs 519.3 crore in Q3 FY21 from Rs 456.8 crore in Q2 FY21. Revenue during the quarter rose by 5.1% to Rs 3,152.8 crore in Q3 December 2020 from Rs 2,998.4 crore in Q2 September 2020. In dollar terms, the company’s increased 5.8% on a quarter-on-quarter (QoQ) basis to $427.8 million. Sequential constant currency revenue growth was 5.3% in the quarter ended December 2020. EBIT rose 9.1% to Rs 650.2 crore in Q3 December 2020 from Rs 595.7 crore in Q2 September 2020. EBIT margin was at 20.6% as on 31 December 2020 as against 19.9% as on 30 September 2020.

Tata Steel BSL added 0.91% to Rs 44.15 crore after the company reported a consolidated net profit of Rs 913.19 crore in Q3 FY21 compared with net loss of Rs 501.50 crore in Q3 FY20. Net sales during the quarter rose 16.1% year-on-year (YoY) to Rs 5,501.20 crore. Total expenditure dropped 10.6% to Rs 4,256.75 crore while the interest outgo declined by 14.5% to Rs 360.93 crore in Q3 December 2020 over Q3 December 2019.

TV18 Broadcast fell 1.74%. TV18 Broadcast’s consolidated net profit surged 83.9% to Rs 377.20 crore on 4.5% decrease in net sales to Rs 1,360.95 crore in Q3 December 2020 over Q3 December 2019. Profit received a boost from improved performance, lower finance costs & tax reversals. Consolidated profit before tax (PBT) jumped 21.6% to Rs 293.66 crore in Q3 December 2020 as against Rs 241.47 crore in Q3 December 2019. Tax rebate for the quarter stood at Rs 102.41 crore as against a tax expenditure of Rs 36.31 crore in Q3 December 2019. Consolidated operating EBITDA grew 14% to Rs 321 crore in Q3 December 2020 over Rs 281 crore in Q3 December 2019. Operating EBITDA margin improved to 23.6% in Q3 FY21 as against 19.7% in Q3 FY20.

Skipper fell 1.81%. The company reported 147.3% jump in consolidated net profit to Rs 11.45 crore on 52.97% surge in total income to Rs 460.82 crore in Q3 December 2020 over Q3 December 2019.

Global Markets:

European stocks were trading higher on Wednesday, ahead of the inauguration of President-elect Joe Biden.

Most Asian indices closed higher on Wednesday as investors reacted to the release of China’s latest benchmark lending rate. The moves in Chinese stocks came as the one-year prime rate (LPR) and five-year LPR in China were both left unchanged at 3.85% and 4.65%, respectively.

US stocks climbed on Tuesday as investors digested results from the new earnings season as well as signals for another big stimulus and faster pace of vaccine distribution ahead.

Janet Yellen, President-elect Joe Biden’s designated nominee for Treasury Secretary and a former chair of the Federal Reserve, appeared before the Senate Finance Committee on Tuesday. Yellen called for the federal government to enact a large stimulus to help the economy.

Biden, set to be inaugurated on Wednesday, unveiled his $1.9 trillion plan for economic relief last week as the country tries to get a handle on the COVID-19 pandemic.



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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