Sensex, Nifty extend losses for 3rd day

The Sensex and the Nifty ended with minor losses on Friday, mirroring negative global cues. The Nifty closed below its crucial 11,100 mark after hovering around that level for most part of the session.

As per the provisional closing data, the barometer index, the S&P BSE Sensex dropped 70.06 points or 0.19% at 37,666.56. The Nifty 50 index fell 11.95 points or 0.11% at 11,090.20.

In the broader market, the S&P BSE Mid-Cap index gained 0.4% while the S&P BSE Small-Cap index rose 0.9%.

The market breadth was weak. On the BSE, 1060 shares rose and 1496 shares fell. A total of 166 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 1,73,03,253 with 6,73,284 deaths. India reported 5,45,318 active cases of COVID-19 infection and 35,747 deaths while 10,57,805 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Results Today:

UPL (up 2.55%) and Tata Motors (down 0.18%) are two Nifty companies that will announce their quarterly earnings today.

Godrej Agrovet (up 1.36%), Jagran Prakashan (down 0.13%), Motilal Oswal Financial Services (down 0.32%), NELCO (down 0.1%), Tata Chemicals (down 1.27%), Tata Metaliks (up 0.58%), Thyrocare Technologies (up 2.5%) and Va Tech Wabag (down 1.5%) are some of the companies that will announce their quarterly results today.

Earnings Impact:

State Bank of India jumped 2.49% after the bank's net profit surged 81.2% to Rs 4189.34 crore on 5.4% rise in total income to Rs 74,457.86 crore in Q1 FY21 over Q1 FY20. Exceptional items for quarter ended 30 June 2020 represent profit of Rs 1,539.73 crore on sale of certain portion of investment in bank's subsidiary SBI Life lnsurance Company. The bank's provisions and contingencies increased by 36.1% to Rs 12,501.30 crore in Q1 FY21 from Rs 9,182.94 crore in Q1FY20. Of this, the provision for non performing assets declined by 19.1% YoY to Rs 9,420.46 crore in the June quarter. Provision Coverage Ratio as on 30 June 2020 was 86.32%. During Q1 FY21, SBI made an additional provision of Rs 1836 crore on account of Covid related accounts. The provision of Rs 3008 Crore is held by the bank on Covid related accounts as on 30 June 2020. This additional provision made by the bank is more than requirement as per the RBl guideline dated 17 April 2020.

Reliance Industries (RIL) fell 1.93%. The company reported a 31% jump in consolidated net profit to Rs 13,248 crore in Q1 June 2020 compared with Rs 10,141 crore in the corresponding period of last year. Consolidated total income for the quarter stood at Rs 95,626 crore, down 42.11% compared with Rs 165,199 crore year-on-year (Y-o-Y). The decline in revenue was primarily due to fall in O2C revenues, led by sharp decline of 57.6% in average Brent crude price. Retail business also witnessed 17% decline in revenues due to lockdown and restrictions in store operations. Overall decline in revenue was partially offset by increase in revenue of Digital services business with strong subscriber addition and significant improvement in ARPU.

Reliance Jio Infocomm's net profit surged 182.8% to Rs 2,520 crore on 33.7% increase in operating revenue to Rs 16,557 crore in Q1 FY21 over Q1 FY20. EBITDA jumped 55.4% to 7,281 crore during the period under review. EBITDA margin expanded 613 bps to 44% during the period under review. ARPU during the quarter of Rs 140.3 per subscriber per month. Total wireless data traffic during the quarter of Rs 1,420 crore GB (30.2% YoY growth) with strong customer engagement and best-in-class network performance.

Cholamandalam Investment and Finance Company declined 5.25%. Its consolidated net profit surged 36.8% to Rs 431.30 crore on 3.9% rise in total income to Rs 2,125.61 crore in Q1 June 2020 over Q1 June 2019. Consolidated profit before tax (PBT) soared 20.1% to Rs 581.98 crore in Q1 June 2020 as against Rs 484.65 crore in Q1 June 2019. Current tax expense for the quarter fell 5.5% at Rs 177.08 crore as against Rs 187.32 crore in Q1 June 2019. Net Income Margin (NIM) rose 4% to Rs 983 crore in Q1 FY2021 as against Rs 943 crore in Q1 FY2020. The capital adequacy ratio (CAR) of the company as on 30 June 2020 was at 20.42% (as per Ind AS) as against the regulatory requirement of 15%.

Tata Communications hit an upper circuit of 5% at Rs 759.80 after consolidated net profit surged 245.40% to Rs 258.58 crore on 5.6% increase in net sales to Rs 4,402.94 crore in Q1 June 2020 over Q1 June 2019. Consolidated EBITDA soared 26.2% to Rs 1,042 crore in Q1 FY21 over Q1 FY20. EBITDA margin grew 390 bps to 23.7% in Q1 FY20, on the back of strong profitable growth in data business and focus on cost efficiencies. CAPEX for the quarter stood at Rs 372 crore as compared to Rs 342 crore in Q4 FY20, recording an increase of 8.77% Q-o-Q (quarter-on-quarter).

Torrent Pharmaceuticals jumped 9.37% to Rs 2,665.25 after the company reported a 48.6% jump in consolidated net profit to Rs 321 crore on 0.88% rise in total income to Rs 2,060 crore in Q1 June 2020 over Q1 June 2019. Consolidated EBITDA was up 19% year on year to Rs 664 crore in Q1 June 2020 over Q1 June 2019. Torrent Pharma's R&D spends in Q1 June 2020 were at Rs 108 crore (5% of revenue from operations), declining 21% from Rs 136 crore (7% of revenue from operations) in Q1 June 2019.

Westlife Development gained 2.06%. The company reported a consolidated net loss of Rs 57.56 crore in Q1 FY20 as compared to a net profit of Rs 6.44 crore in Q1 FY20. Total Revenues declined 75.4% on a year-on-year (YoY) basis to Rs 93.89 crore in the June quarter. The company reported a negative operating EBITDA of Rs 57.68 crore with a negative operating EBITDA margin of 61.4% in Q1 June 2020. It had reported a operating EBITDA of Rs 32.63 crore with a operating EBITDA margin of 8.5% in Q1 June 2019. The Quick Service Restaurants operator recorded a pre-tax loss of Rs 76.82 crore in Q1 FY21 as compared to a pre-tax profit of Rs 8.51 crore in Q1 FY20.

GMR Infrastructure fell 2.25% after the infra firm reported consolidated net loss of Rs 1,126.82 crore in Q4 March 2020, lower than net loss of Rs 2,341.24 crore in Q4 March 2019. Consolidated net sales rose 3.6% to Rs 1,947.90 crore in Q4 March 2020 over Q4 March 2019. Pre-tax loss stood at Rs 1,297.24 crore in Q4 March 2020 as against pre-tax loss of Rs 2,345.95 crore in Q4 March 2019. EBITDA soared 104.68% to Rs 655 crore in Q4 FY20 as against Rs 320 crore in Q4 FY19.

UCO Bank fell 1.27% after the government owned lender reported a net profit of Rs 21.46 crore in Q1 FY21 as against a net loss of Rs 601.45 crore in Q1 FY20. The bank's provisions and contingencies declined 34.5% to Rs 1,180.37 crore in Q1 FY21 from Rs 1,802.89 crore in Q1FY20. Of this, the provision for non performing assets shrunk 58.9% YoY to Rs 564.78 crore in the June quarter. During Q1 FY21, UCO Bank made an additional provision of Rs 43.88 crore on account of COVID-19 related accounts. The bank held a total provision of Rs 57.15 crore w.r.t. COVID-19 related accounts as on 31 March 2020.

Zydus Wellness surged 3.02% after the company's consolidated net profit rose 10.9% to Rs 89.2 crore on 13.4% decline in revenue from operations to Rs 537.4 crore in Q1 FY21 over Q1 FY20. EBITDA rose marginally by 0.3% on a year-on-year basis to Rs 122.3 crore during the quarter. Profit before tax grew by 4.1% to Rs 83.1 crore in Q1 June 2020 over Q1 June 2019. The company wrote back taxes to the tune of 6.05 crore during the quarter.

Essel Propack jumped 13.66% to Rs 233.35 after the company's consolidated net profit rose 13.3% to Rs 44.45 crore on a 17.7% increase in net sales to Rs 741.49 crore in Q1 FY21 over Q1 FY20. The company recorded an exceptional item of Rs 16.07 crore for the quarter ended 30 June 2020, which represents impairment of assets and other associated costs on account of scaling down the business of one of its overseas operating units. EBITDA increased by 35% to Rs 146.6 crore in Q1 June 2020 from Rs 108.6 crore in Q1 June 2019. EBITDA margin stood at 19.8% as on 30 June 2020 as against 17.2% as 30 June 2019. Profit before tax in Q1 FY21 stood at Rs 61.49 crore, up by 11.1% from Rs 55.33 crore in Q1 FY20. Current tax expense declined 11.1% on a year-on-year (YoY) basis to Rs 13.66 crore during the quarter.

Deepak Fertilisers & Petrochemcials jumped 9.66% after the company reported a consolidated net profit of Rs 121.14 crore in Q1 June 2020 as against Rs 10.7 crore posted in Q1 June 2019. Consolidated revenue from operations jumped 23.16% to Rs 1382.08 crore in Q1 June 2020 from Rs 1122 crore in Q1 June 2019.

Global Markets:

European markets were mixed while Asian markets ended mildly lower following a record contraction in US gross domestic in the second quarter.

Investors cautiously await the outcome of Euro Zone GDP figures. In France, the statistics office said GDP fell by 13.8% in the second quarter of the year. On Thursday, the German statistics office announced the German economy contracted by 10.1% in the second quarter.

China's official manufacturing Purchasing Managers' Index for July came in above expectations on Friday. The manufacturing PMI for July was at 51.1 from June's 50.9, according to the country's National Bureau of Statistics.

Japan's industrial output snapped four months of decline in June. Official data released on Friday showed factory output increased 2.7% in June from the previous month when it hit its lowest level since March 2009 during the financial crisis.

US stock futures rose after some of the biggest tech stocks Facebook, Amazon, Alphabet and Apple reported quarterly results that beat expectations. Apple also announced a 4-for-1 stock split.

The S&P 500 and Dow closed lower on Thursday after data painted a worrying economic picture on a crucial day for corporate earnings reports. The Nasdaq eked out a positive finish as investors braced for a litany of quarterly results from behemoths of the technology and e-commerce world.

A first reading on US gross domestic product data for the second quarter confirmed the pandemic pummeled the economy. US GDP collapsed at a 32.9% annualized rate during the second quarter, following a 5% slump in the first quarter. The US economy shrank by its sharpest contraction since the second world war. More depressing signs emerged of the coronavirus pandemic's heavy toll on the country's economy. The record-setting quarterly fall in economic growth came as another 1.43 million Americans filed for unemployment benefits last week.

Investors also worried about the expiration of enhanced employment benefits on Friday as US Congress was no closer to a deal on Thursday to extend or replace the extra $600-per-week in payments to tens of millions thrown out of work by the coronavirus.

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