The domestic equity benchmarks surged on Monday, extending gains for the sixth trading session. The rally was broad based with banks, financials and IT stocks at the fore.
The barometer index, the S&P BSE Sensex, rallied 704.37 points or 1.68% at 42,597.43. The Nifty 50 index spurted 197.50 points or 1.61% at 12,461.05. Both the indices have risen over 7% in six consecutive sessions and attained record closing levels today.
The Sensex hit a record high of 42,645.33 while the Nifty hit a record high of 12,474.05 in intraday today, following strong global cues as investors reacted to Democrat Joe Biden's victory in the U.S. presidential race.
ICICI Bank (up 4.42%), HDFC Bank (up 2.53%), Infosys (up 2.05%) and Reliance Industries (up 1.05%) were major index movers.
The broader market lagged the benchmark indices. The BSE Mid-Cap index rose 1.01% and the BSE Small-Cap index gained 0.57%.
Buyers outpaced sellers. On the BSE, 1,485 shares rose and 1,206 shares fell. A total of 191 shares were unchanged.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 5,04,02,558 with 12,56,254 deaths. India reported 5,09,673 active cases of COVID-19 infection and 1,26,611 deaths while 79,17,373 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
US Election 2020:
Democrat Joe Biden defeated incumbent Donald Trump in the U.S. presidential race to become president elect. Kamala Harris will become the first female, Black and Indian-origin vice-president of the United States. Biden and Kamala will be sworn in to their new offices on 20 January 2021, taking over from incumbent Republicans Donald Trump and Mike Pence.
Bihar Exit Polls:
The third and final phase of Bihar election ended on 7 November 2020. The results will be declared on 10 November 2020. The market will closely watch results as exit polls reportedly indicated that the Tejashwi Yadav-led Mahagathbandhan could get a majority in the Bihar election with maximum 191 seats, while the Chief Minister Nitish Kumar-led National Democratic Alliance (NDA) may get maximum 91 seats. The majority mark is 122. Most of the exit polls predicted RJD to again emerge as the single largest party.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 5.878% as compared with 5.871% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.15, compared with its close of 74.08 during the previous trading session.
In the commodities market, Brent crude for January 2021 settlement rose 81 cents at $40.26 a barrel. The contract fell $1.48, or 3.62% to settle at $39.45 a barrel in the previous trading session.
Foreign Markets:
The US Dow Jones futures were up 400 points, indicating a strong opening in the US market today.
Shares in Europe and Asia rose across the board on Monday after Democrat Joe Biden defeated incumbent U.S. President Donald Trump following a cliff-hanger vote count after Tuesday's election.
Addressing cheering supporters in Wilmington, Biden reportedly said: "I pledge to be a president who seeks not to divide, but to unify; who doesn't see red states and blue states, only sees the United States."
US stocks ended almost unchanged on Friday as Democratic challenger Joe Biden edged closer to victory in the presidential election, while the monthly jobs report underscored the hurdles still facing the economy.
The Labor Department on Friday said the U.S. economy added 638,000 jobs in October from a revised 672,000 jobs in September. The Labor Department also said the unemployment rate dropped to 6.9% in October from 7.9% in September.
Buzzing Indian Segments:
The Nifty Financial Service index rose 2.05% to 13,158.25.
HDFC AMC (up 5.37%), Mahindra & Mahindra Financial Services (up 3.92%), Power Finance Corporation (up 2.93%), Bajaj Finance (up 2.36%) and ICICI Lombard General Insurance Company (up 1.51%) advanced.
Earnings Impact:
Divis Laboratories jumped 5.73% after the drug major reported a 45.6% jump in consolidated net profit to Rs 519.59 crore on a 21% increase in net sales to Rs 1,749.30 crore in Q2 FY21 over Q2 FY20. Profit before tax in Q2 September 2020 stood at Rs 693.49 crore, up by 42.1% from Rs 487.87 crore in Q2 September 2019. With respect to its capex programs, Divis Labs said: "We have capitalized assets of Rs 615 crore during the quarter and the total capitalization done during the half-year amounted to Rs 830 crore. We expect to complete the ongoing capex programs by end of the financial year. Apart from the existing capex programs, the company is taking up a new capex for an aggregate amount of Rs 400 crore for meeting new business opportunities in the custom synthesis projects; and needed to be completed on fast track."
Cipla fell 3.46%. The drug major reported 41.2% jump in consolidated net profit to Rs 665.43 crore on 16.6% increase in net sales to Rs 4,972.58 crore in Q2 FY21 over Q2 FY20. EBITDA rose by 29% to Rs 1,177 crore in the second quarter from Rs 909 in the same period last year. EBITDA margin was at 23.4% in Q2 FY21 as compared to 20.7% in Q2 FY20. Profit before tax in Q2 September 2020 stood at Rs 925.65 crore, up by 35.9% from Rs 680.99 crore in Q2 September 2019. Cipla's India business revenue grew by 17% YoY with strong growth across the three businesses. The company's prescription business grew 14% YoY basis supported by continued traction in the COVID-19 portfolio, chronic therapies and modest recovery in the hospital portfolio which offset subdued demand in the acute business.
ITC slipped 0.66%. The conglomerate posted a 20% fall in standalone net profit to Rs 3232.40 crore in Q2 September 2020 from Rs 4023 crore reported in Q2 September 2019. Net sales fell 3.81% to Rs 11,098.24 crore in Q2 September 2020 over Q2 September 2019. Profit before tax (PBT) declined 11% to Rs 4,274.32 crore during the period under review. EBITDA fell by 11% year on year to Rs 4,061 crore in Q2 September 2020 from Rs 4,562 crore in Q2 September 2019. ITC said "The operating environment remained extremely challenging during the quarter with the unabated increase in daily Covid cases prompting several states to impose localised lockdowns. This impacted the recovery momentum, particularly in the months of July'20 and August'20, and posed significant challenges to sales operations. The situation continues to improve with the progressive easing of restrictions from September 2020.
Ipca Laboratories dropped 3.08%. The drug maker reported 38.3% jump in consolidated net profit to Rs 266.70 crore on a 6% rise in net sales to Rs 1,361.10 crore in Q2 FY21 over Q2 FY20. Profit before tax in Q2 September 2020 stood at Rs 319.29 crore, up by 41.6% from Rs 225.43 crore in Q2 September 2020. Current tax expenses during the quarter increased 59.3% year-on-year (Y-o-Y) to Rs 53.33 crore. On the segmental front, revenue from the formulations business increased by 2% to Rs 899.86 crore while the revenue from the APIs business jumped by 21% to Rs 381.03 crore in Q2 September 2020 over Q2 September 2019. EBITDA rose by 29% to Rs 358.14 crore in Q2 FY21 from Rs 278.37 crore in Q2 FY20. EBITDA margin was at 27.28% as on 30 September 2020 as against 22.69% as on 30 September 2019.
Tata Consumer Products gained 1.12% after the company reported a 33% rise in consolidated net profit to Rs 257.06 crore on 18.5% increase in net sales to Rs 2,781.34 crore in Q2 FY21 over Q2 FY20. EBITDA in Q2 September 2020 improved by 26.8% to Rs 402 crore from Rs 317 crore in Q2 September 2019. EBITDA margin was at 14.4% as on 30 September 2020 as against 13.5% as on 30 September 2019. Tata Consumer said that the increase in EBITDA was due to higher revenue and effective management of discretionary costs, despite unprecedented tea inflation in India.
Bharat Electronics rose 0.54% after consolidated net profit jumped 18.1% to Rs 395.96 crore on 19% increase in net sales to Rs 3,168.36 crore in Q2 September 2020 over Q2 September 2019. Profit before tax (PBT) surged 19.2% to Rs 557.79 crore in Q2 September 2020 as against Rs 467.80 crore in Q2 September 2019. The order book position of the company as on 1 October 2020 stood at Rs 52,148 crore. The company said its financial results for the current half year has been impacted by the lockdown on account of COVID-19.
Glenmark Pharmaceuticals fell 5.89% after the drug maker's consolidated net profit slipped 8.4% to Rs 233.99 crore on 5.2% increase in net sales to Rs 2,908.12 crore in Q2 September 2020 over Q2 September 2019. Consolidated profit before tax (PBT) fell 2.3% to Rs 339.38 crore in Q2 September 2020 as against Rs 347.30 crore in Q2 September 2019. Consolidated EBITDA (excluding other income) was at Rs 569.92 crore for the quarter ended 30 September 2020 as against Rs 450.40 crore in the previous corresponding quarter last year, registering an increase of 26.54% Y-o-Y (year-on-year). Forex loss to the extent of Rs 17.11 crore was recorded in other expenditure during Q2 FY21. During the period under review, India business grew by 17.22% to Rs 1050.69 crore, Europe business grew by 11.59% to Rs 318.12 crore, Africa, Asia and CIS Region (ROW) business grew by 9.11% to Rs 380.58 crore, API business grew by 19.11% to Rs 321.33 crore.
CreditAccess Grameen jumped 7% after the company said its collection efficiency improved to 89% in October 2020 from 74% in June 2020. The microfinance lender reported 21.5% drop in consolidated net profit to Rs 79.2 crore on a 32.2% rise in total income to Rs 340.5 crore in Q2 FY21 over Q2 FY20. Net Interest Income (NII) rose by 31.6% to Rs 330.9 crore in Q2 FY21 from Rs 251.4 crore in Q2 FY20. Gross loan portfolio grew by 41.5% YoY from Rs 7,905 crore to Rs 11,183 crore. Borrowers grew by 47.0% YoY from 26.4 lakh to 38.8 lakh. The company's impairment of financial instruments surged 220.5% to Rs 90.2 crore in Q2 September 2020 from Rs 28.1 crore in Q2 September 2019. The total standard asset provisioning (excluding GNPA) was Rs 369.8 crore (3.40% of loan portfolio).
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