Benchmarks end with strong gains; IT stocks advance

The key equity indices ended with strong gains on Thursday. The Nifty closed above the 15,900 mark. IT shares were in demand.

As per provisional closing data, the barometer index, the S&P BSE Sensex, advanced 254.80 points or 0.48% to 53,158.85. The Nifty 50 index added 70.25 points or 0.44% to 15,924.20.

The Nifty hit a record high of 15,952.35 and the Sensex hit a record high of 53,266.12 in mid afternoon trade.

The broader market, however, underperformed the benchmark indices. The S&P BSE Mid-Cap index gained 0.31%. The S&P BSE Small-Cap index added 0.43%.

Buyers outpaced sellers. On the BSE, 1665 shares rose and 1569 shares fell. A total of 132 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 18,83,65,518 with 40,58,233 deaths. India reported 4,32,041 active cases of COVID-19 infection and 4,11,989 deaths while 3,01,43,850 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India has reported 41,806 new COVID-19 cases, 39,130 recoveries and 581 deaths in the last 24 hours, the bulletin released by the Union health ministry on Thursday stated. Active caseload stands at 4,32,041 and the virus death toll at 4,11,989 at present.

Buzzing Index:

The Nifty IT index rose 1.30% to 29,720. The index has added 4.50% in two sessions.

HCL Tech (up 5.11%), Larsen & Toubro Infotech (up 4.24%), Tech Mahindra (up 2.89%), MindTree (up 1.07%), Coforge (up 0.84%) and Mphasis (up 0.31%) advanced.

Oracle Financial Services Software (down 0.18%) and TCS (down 0.37%) declined.

Among the mid-cap IT stocks, Happiest Minds Technologies (up 13.73%), Zensar Technologies (up 4.63%), Firstsource Solutions (up 4.34%), Tata Elxsi (up 3.24%), Persistent Systems (up 2.05%) and NIIT (up 0.87%) edged higher.

Wipro (up 2.90%) will announce its quarterly result today.

Infosys rose 0.13% to Rs 1579. The IT major's consolidated net profit grew 2.3% to Rs 5,195 crore on 6% increase in revenue to Rs 27,896 crore in Q1 June 2021 over Q4 March 2021. On a year-on-year basis, net profit rose 22.7% and revenue increased 17.9% in Q1 June 2021.

Operating profit stood at Rs 6,603 crore in Q1 June 2021, rising 2.5% quarter-on-quarter (Q-o-Q) and increasing 23.1% year-on-year (Y-o-Y). Operating margin for the quarter was robust at 23.7%, an increase of 1% YoY and decline of 0.8% QoQ. Free Cash Flows (FCF) grew by 15.2% YoY to Rs 6,363 crore in Q1 FY22.

Revenues in constant currency (CC) terms grew by 16.9% YoY and 4.8% quarter-on-quarter (QoQ). Large deal flows remained strong with total contract value (TCV) of $2.6 billion in Q1 FY22. The company had 1,659 active clients as of 30 June 2021, compared with 1,626 as on 31 March 2021 and 1,458 as on 30 June 2020.

L&T Technology Services (LTTS) surged 19.24% to Rs 3470.05. The IT firm reported a 11.11% rise in consolidated net profit to Rs 217 crore in Q1 June 2021 over Rs 195.30 crore in Q4 March 2021. Consolidated revenue from operations grew 5.40% to Rs 1,518.40 crore in Q1 June 2021 from Rs 1,440.50 crore in Q4 March 2021.

During the quarter, LTTS won six deals with total contract value (TCV) of $10 million plus, which includes two $25 million plus deals. Revenues from digital and leading-edge technologies stood at 54% during the quarter. At the end of the first quarter, the patents portfolio of LTTS stood at 719, out of which 531 are co-authored with its customers and the rest are filed by LTTS. At the end of Q1 FY22, LTTS' employee strength stood at 16,972.

Stocks in Spotlight:

5Paisa Capital hit a lower circuit of 5% to Rs 522.65. The stock broker posted a 156.23% jump in consolidated net profit to Rs 7.20 crore on 44% rise in total income to Rs 60.91 crore in Q1 FY22 over Q1 FY21. The company's net profit grew by 23% and total income rose 22% in Q1 FY22 over Q4 FY21. The company said it on-boarded more than 2,78,000 new clients during the quarter, taking the total number of registered customers to 16.3 lakhs.

Tinplate Company of India jumped 4.21% to Rs 248.85. The company posted a net profit of Rs 68.62 crore in Q1 FY22 compared with net loss of Rs 6.90 crore registered in Q1 FY21. Revenue from operations increased 128.42% to Rs 803.90 crore in Q1 FY22 compared with Rs 351.94 crore in Q1 FY21. Net profit surged 22.19% and net sales rose 15.70% in Q1 FY22 over Q4 FY22.

Hatsun Agro Product declined 1.19% to Rs 984.50. The company's standalone net profit rose 3.96% to Rs 58.33 crore on 20.75% increase in net sales to Rs 1,544.71 crore in Q1 June 2021 over Q1 June 2020.

The company's board has approved the proposal for raising of funds, through private placement of equity shares by way of Qualified Institutional Placement (QIP), not exceeding Rs 700 crore. It also approved increasing the borrowing limit to Rs 1,800 crore from the existing Rs 1,500 crore, subject to the approval of the members at their ensuing Annual General Meeting (AGM).

Dodla Dairy slipped 2.46% to Rs 605.50. On a consolidated basis, Dodla Dairy reported net profit of Rs 9.58 crore in Q4 FY21 compared with net loss of Rs 1.94 crore in Q4 FY20. Revenue from operations rose 0.58% to Rs 530.49 crore in Q4 FY21 as against Rs 527.42 crore in Q4 FY20.

SeQuent Scientific spurted 7.21% to Rs 287.10. The animal-based pharmaceutical major announced the European Union Good Manufacturing Practices (EUGMP) approval of its tablets dosage manufacturing line in Turkey. The approval was further complimented by the successful renewal of EUGMP license for 8 other manufacturing lines for various dosage forms.

Marico gained 0.13% to Rs 533.55. The company announced a strategic investment in Apcos Naturals with an acquisition of 60% equity stake for an undisclosed consideration. Apcos Naturals is into beauty & personal care segment under the brand name Just Herbs and is a full stack Direct to Consumer Ayurvedic beauty brand. The firm recorded a turnover of Rs 17.5 crore in FY2020-21.

Rattanindia Enterprises was locked in an upper circuit of 5% at Rs 50.30 after the company witnessed massive jump in electric bikes sales. The company said that it saw another round of massive electrifying sales with its electric bikes getting sold out within minutes of opening online sales. Previously Revolt had opened sales on 18 June with the company having to close the booking in 2 hours. This time the bookings were closed out within minutes of launching sales on Revolt website.

Spandana Sphoorty Financial rose 1.44% to Rs 699.50. The company said that CRISIL Ratings has assigned its 'CRISIL A/Stable' rating to the long-term bank facility of the company worth Rs 3500 crore.

Separately, Spandana Sphoorty said that its board will meet on Saturday, 17 July 2021, to consider and approve, the issue and offer of non-convertible debentures on a private placement basis.

Rossari Biotech added 0.91% to Rs 1175.65. The company said that ICRA had assigned a rating of '[ICRA]AA- (Stable)' on the fund-based working capital facilities and unallocated limit of the company cumulatively worth Rs 156.39 crore. The ratings agency has assigned '[ICRA]A1+' rating on the non-fund based limit of the company worth Rs 23.61 crore.

RBL Bank fell 1.83% to Rs 214.80. The Reserve Bank of India (RBI) imposed restrictions yesterday on Mastercard Asia/Pacific (Mastercard) from on-boarding new domestic customers (debit, credit or prepaid) onto its card network from 22 July 2021.

RBL Bank currently issues credit cards on the Mastercard network only. The debit and prepaid cards issued by the bank are already enabled on other payment networks in addition to the Mastercard network. As of date RBL Bank has approximately 3 million credit card customers and is the fifth largest credit card issuer in the country with approximately 5% market share.

Separately, RBL Bank has entered into an agreement with Visa Worldwide ("Visa") yesterday to issue credit cards enabled on the Visa payment network. RBL Bank expects to start issuance of credit cards on the Visa payment network post the technology integration which is expected to take 8 to 10 weeks.

In the interim, RBL said its current run rate of approximately 100,000 new credit card issuances per month could potentially be impacted till such time that there is clarity from the regulator on issuing new credit cards on the Mastercard network or till the technical integration with Visa is complete.

Global Markets:

European shares declined while Asian stocks ended higher on Thursday.

China's GDP rose 7.9% year-on-year in the second quarter, official data showed Thursday. Meanwhile, the country's retail sales in June jumped 12.1% from a year earlier, data from the National Bureau of Statistics showed. Chinese industrial output rose 8.3% year-on-year in June.

China's central bank partially rolled over maturing medium-term loans on Thursday, the same day when a cut in the banks' reserve requirements takes effect.

The People's Bank of China (PBOC) said in a statement it was keeping the rate on 100 billion yuan ($15.46 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions steady at 2.95% from previous operations.

US stocks closed flat on Wednesday after U.S. Federal Reserve Chair Jerome Powell soothed investor angst by saying a recent inflation spike will fade, helping lift the S&P 500 to a fresh intraday record.

Federal Reserve Chairman Jerome Powell said the central bank will maintain its easy monetary policies. Powell said in his semiannual testimony before the House Committee on Financial Services Wednesday that the central bank can wait before it starts to ease its bond purchases despite surging inflation readings. The Fed chair said he still expects inflation to moderate.

"At our June meeting, the Committee discussed the economy's progress toward our goals since we adopted our asset purchase guidance last December. While reaching the standard of 'substantial further progress' is still a ways off, participants expect that progress will continue," Powell said.

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