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5 feb (5)

Market extends winning run to fifth day.

Benchmark indices advanced for fifth trading session on Friday, following RBI’s decision to keep repo rates unchanged. The Nifty closed below the crucial 15,000 mark after scaling that level in intraday trade.

As per the provisional closing data, the Sensex added 117.34 points or 0.23% to 50,731.63. The Nifty 50 gained 28.60 points or 0.19% to 14,924.25.

The Sensex hit record high of 51,073.27 while the Nifty hit record high of 15,014.65 in early trade.

The broader market witnessed profit booking. The S&P BSE Mid-Cap index fell 0.93% while the S&P BSE Small-Cap index was down 0.28%.

The market breadth was negative. On the BSE, 1332 shares rose and 1644 shares fell. A total of 152 shares were unchanged.

RBI MPC Outcome:

The meeting of the six-member Monetary Policy Committee headed by RBI Governor Shaktikanta Das concluded this morning. The committee has kept the interest rates unchanged, maintaining repo rate at 4% and the reverse repo rate at 3.35%.

The MPC decided to continue with an accommodative stance of monetary policy as long as necessary, at least through the current financial year and into next year to revive growth on a durable basis and mitigate the impact of Covid-19, Das said.

Inflation has been better than what was expected in December meeting and eased below tolerance level of 6%. The RBI projected GDP growth of 10.5% in FY22 for India while projection for CPI-based inflation was revised to 5.2% for Q4FY21.

The RBI had last revised its policy rate on 22 May 2020 to perk up demand by cutting interest rate to a historic low. The latest Economic Survey said that there are expectations of a rebound of the economy with a 11% growth in the next fiscal.

New Listing:

Shares of Stove Kraft were trading at Rs 439.30 at 15:29 IST on the BSE, at a premium of 14.1% over the initial public offer price of Rs 385. The stock was listed at Rs 467, at a premium of 21.30% to the initial public offer (IPO) price. So far, the stock hit a high of Rs 495.55 and low of Rs 435.05. On the BSE, 9.58 lakh shares were traded on the counter so far. The IPO of Stove Kraft was subscribed 18.03 times. The issue opened for subscription on Monday (25 January 2021) and closed on Thursday (28 January 2021).

Earnings Impact:

Mahindra & Mahindra (M&M) fell 0.08%. M&M reported 40% jump in net profit to Rs 530.86 crore on a 16% rise in revenues to Rs 14,056.54 crore in Q3 FY21 over Q3 FY20. The company recorded an exceptional expense of Rs 1213.98 crores for the quarter ended 31 December 2020, which represents impairment provisions for certain long-term assets and other exposures. Profit before tax in Q3 December 2020 stood at Rs 1025.30 crore, up by 31.1% from Rs 782.08 crore in Q3 December 2019. M&M sold 1,15,272 vehicles in the domestic market in Q3 FY21, which is lower by 7% as compared to 1,23,353 vehicles sold in Q3 FY20. The automaker’s tractor sales improved by 20% YoY to 97,420 units in the third quarter on the back of a robust rural story. M&M expects strong demand to continue.

Hero MotoCorp fell 0.42%. The company’s consolidated net profit jumped 13.7% to Rs 1,029.17 crore on a 38.9% rise in net sales at Rs 9,827.05 crore in Q3 December 2020 over Q3 December 2019. Consolidated profit before tax (PBT) surged 30.6% to Rs 1,363.92 crore in Q3 December 2020 as against Rs 1,044.44 crore in Q3 December 2019. On a standalone basis, volumes of the company stood at 18.45 lakh units sold in Q3 FY21, registering a growth of 19.7% Y-o-Y (year-on-year). Profit After Tax (PAT) grew 23.2% to Rs 1,084 crore and net revenue from operations rose 39.7% to Rs 9,776 crore in Q3 FY21 over Q3 FY20. Earnings Before Interest, Tax, Depreciation, & Amortization (EBITDA) for the quarter stood at Rs 1,414 crore, reflecting 14.5% EBITDA margin and a growth of 36.1%.

Trent was up nearly 3% after the company’s consolidated net profit jumped 30.2% to Rs 64.03 crore on a 13.6% rise in net sales at Rs 853.63 crore in Q3 December 2020 over Q3 December 2019. Profit before tax (PBT) fell 4.5% to Rs 89.70 crore in Q3 December 2020 as against Rs 93.89 crore in Q3 December 2019. Westside revenues in Q3 were 78% as compared to the corresponding previous period (Like to Like of negative 26%). Nevertheless, Trent said the trajectory of revenues has continued to improve month to month with encouraging trends. For instance, in Jan 2021 (end of season sale month), traction for full price merchandise was consistent with the levels witnessed in the previous year in both quantity and value terms.

Godrej Agrovet fell 4.53%. On a consolidated basis, Godrej Agrovet’s net profit jumped 33.1% to Rs 68.09 crore on 14.4% decline in net sales at Rs 1,523.44 crore in Q3 December 2020 over Q3 December 2019. Profit before tax (PBT) soared 32.6% to Rs 90.11 crore in Q3 December 2020 as against Rs 67.98 crore in Q3 December 2019. Current tax expense for the quarter rose 6.4% to Rs 19.16 crore as against Rs 18.01 crore in Q3 December 2019. EBITDA grew 11.6% to Rs 122.70 crore in Q3 FY21 from Rs 109.90 crore in Q3 FY20. Consolidated EBITDA margin improved to 8.2% in Q3 FY21 as against 6.1% in Q3 FY20.

Honeywell Automation India slipped 1.45%. The auto ancillary company reported 3.6% rise in net profit to Rs 149.89 crore on a 3% decline in net sales to Rs 874.16 crore in Q3 FY21 over Q3 FY20. Total expenditure declined 3.6% to Rs 686.61 crore while interest expense was down 27.9% to Rs 1.32 crore in the third quarter as compared to the same period last year. Profit before tax in Q3 December 2020 stood at Rs 202.01 crore, up by 3.9% from Rs 194.44 crore in Q3 December 2019. Tax expense during the quarter decreased by 1.2% year-on-year (Y-o-Y) to Rs 48.88 crore.

Cadila Healthcare fell 0.73%. The drug company reported a 41% rise in consolidated net profit to Rs 527.2 crore on a 6.2% rise in net sales to Rs 3,753.70 crore in Q3 FY21 over Q3 FY20. EBIDTA during the quarter improved by 16% year-on-year (YoY) to Rs 807 crore. Profit before tax in Q3 December 2020 stood at Rs 627.2 crore, up by 37.2% from Rs 457.1 crore in Q3 December 2019. US formulations business registered revenues of Rs 1,603 crore during the quarter. The company filed 10 additional ANDAs with the USFDA taking the cumulative number of filings to 410 and received 9 new product approvals (including 4 tentative approvals) from the USFDA.

Dalmia Bharat fell 1.78%. The cement maker reported a net profit of Rs 182 crore in Q3 FY21, up 658.33% against net profit of Rs 24 crore in Q3 FY20. Net sales during the quarter increased 18.2% year-on-year (YoY) to Rs 2857 crore. Sales volume rose by 13.7% to 5.80 million tonnes in Q3 FY21 from 5.10 million tonnes in Q3 FY20. EBITDA rose 51.2% to Rs 691 crore in Q3 FY21 from Rs 457 crore in Q3 FY20. EBITDA per tonne improved 32.4% to Rs 1,172 in Q3 December 2020 from Rs 885 in Q3 December 2019.

Tata Power fell 2.68%. On a consolidated basis, the power utility company reported 28.4% rise in net profit to Rs 248.21 crore on 7.5% increase in net sales to Rs 7597.91 crore in Q3 FY21 over Q3 FY20. The company’s improved profitability was mainly due to better performance in Mundra, steady operational performance across all businesses and interest cost savings on account of debt reduction. Consolidated EBITDA was up 1% at Rs 1,997 crore in Q3 FY21 as compared to Rs 1,970 crore in Q3 FY20. Profit before tax in Q3 December 2020 stood at Rs 421.09 crore, up by 20.4% from Rs 349.74 crore in Q3 December 2019.

Gillette India fell 2.93%. The company’s standalone net profit jumped 15.2% to Rs 81.90 crore on a 13.3% increase in net sales at Rs 520.42 crore in Q2 December 2020 over Q2 December 2019. Gillette India (GIL) delivered strong sales on account of its superior strategy, robust product portfolio, strong retail execution and market recovery. Profit after Tax (PAT) grew due to its focus on productivity and savings. Standalone profit before tax (PBT) soared 37% to Rs 123.22 crore in Q2 December 2020 as against Rs 89.92 crore in Q2 December 2019.

Global Markets:

Shares in Europe and Asia rose on Friday. Investors look to vaccine rollouts for hopes of normalization following the COVID-19 pandemic. The EU’s drug regulator said on Thursday that it was assessing data on therapeutic antibody treatments for some outpatients from U.S. drug makers, Regeneron and Eli Lilly.

U.S. stocks jumped on Thursday, extending the rally into a fourth straight day as investors assessed a new batch of corporate earnings and solid economic data. The S&P 500 and Nasdaq posted record closing highs.

On the stimulus front, Democrats are moving forward with President Joe Biden’s $1.9 trillion COVID-19 relief proposal. Republicans have countered with a more modest $618 billion package, which includes new stimulus checks of $1,000 per person.

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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