The market turned range bound in early afternoon trade. At 12:23 IST, the barometer index, the S&P BSE Sensex, was up 678.16 points or 2.16% at 32,049.28. The Nifty 50 index was up 205.60 points or 2.24% at 9,402.15. Prime Minister Narendra Modi's Rs 20 lakh crore stimulus package to revive the coronavirus-hit economy boosted domestic investor sentiment.
In the broader market, the S&P BSE Mid-Cap index added 1.54% while the S&P BSE Small-Cap index gained 1.81%.
The market breadth was strong. On the BSE, 1545 shares rose and 552 shares fell. A total of 154 shares were unchanged. In the Nifty 50 index, 44 shares advanced while 6 stocks declined.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, fell 0.09% to 38.1675. The Nifty April 2020 futures were trading at 9,422, a premium of 19.85 points compared with the spot at 9,402.15.
On the options front, the Nifty option chain for 28 May 2020 expiry showed maximum call open interest (OI) of 20.43 lakh contracts at the 10,000 strike price. Maximum put OI of 25.80 lakh contracts was seen at 9,000 strike price.
Special Economic Package:
Prime Minister Narendra Modi in his address to the nation on Tuesday (12 May) announced a special economic relief package in light of the ongoing situation due to the COVID-19 outbreak. He said the economic measures earlier announced by the government to tackle the COVID-19 pandemic, steps taken by the Reserve Bank of India (RBI), and this latest package will come up to a total of Rs 20 lakh crore, nearly 10% of India's gross domestic product (GDP). The package will focus on land, labour, liquidity and laws.
PM Modi also said Lockdown 4.0 will be a new one, with new rules. It will be implemented based on suggestions from the states and details of the same will be announced before May 18.
Economic Data:
India's industrial output contracted to 16.7% in March against a growth of 4.5% in February, as per the Index of Industrial Production (IIP) data released by the government on May 12. The manufacturing sector contracted 20.6% in March, against a growth of 3.2% a month ago. Mining showed no movement in March while electricity production contracted 6.8% against a growth of 8.1% in February.
India's retail inflation rate in April eased to 5.84%, according to data released by the Ministry of Statistics and Programme Implementation on May 12. Retail inflation was at 5.91% in March. Food prices remained unchanged at 8.76% in April.
Buzzing Index:
The Nifty Pharma index slipped 0.88% to 9,164.85, extending losses for third day. The index has lost 1.91% in three sessions.
Aurobindo Pharma (down 2.79%), Sun Pharmaceutical Industries (down 2.32%), Wockhardt (down 2%), Divi's Laboratories (down 1.53%), Abbott India (down 0.41%), Lupin (down 0.31%), IPCA Laboratories (down 0.1%) and Alkem Laboratories (down 0.03%) declined.
Earnings Impact:
Bandhan Bank surged 7.63% to Rs 251.08. The bank on Tuesday (12 May) said its net profit fell 20.5% to Rs 517.28 crore on 50.7% rise in total income to Rs 3,346.47 crore in Q4 March 2020 over Q4 March 2019. Net interest income (NII) for the quarter grew by 33.57% to Rs 1,680 crore as against Rs 1,258 crore in the corresponding quarter of the previous year. The result was announced at the fag end of trading session today (12 May 2020).
Provisions and contingencies surged 439.78% to Rs 827.36 crore in Q4 March 2020 from Rs 153.27 crore in Q4 March 2019. During the quarter the bank has taken COVID-19 related provision amounting to Rs 690 crore.
The bank's gross non-performing assets (NPAs) stood at Rs 992.77 crore as on 31 March 2020 as against Rs 1181.96 crore as on 31 December 2019 and Rs 819.55 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 1.48% as on 31 March 2020 as against 1.93% as on 31 December 2019 and 2.04% as on 31 March 2019. The ratio of net NPAs to net advances stood at 0.58% as on 31 March 2020 as against 0.81% as on 31 December 2019 and 0.58% as on 31 March 2019.
Total deposits increased 32.04% to Rs 57,802 crore as on 31 March 2020 as compared to Rs 43,232 crore as on 31 March 2019 and 3.96% against Rs 54,908 crore as on 31 December 2019. CASA grew 19.36% year-on-year (YoY). CASA ratio stood at 36.84% (excluding GRUH deposits 37.70%) against 34.31% quarter on quarter (QoQ).
Total advances (on book + off book) grew by 60.46% to Rs 71,846 crore as on 31 March 2020 against Rs 44,776 crore as on 31 March 2019 and 9.76% against Rs 65456 crore as on 31 December 2019.
Nestle India fell 3.42% to Rs 16865.55. The FMCG major's net profit rose 13.5% to Rs 525.43 crore on a 10.8% rise in net sales to Rs 3305.78 crore in Q1 March 2020 over Q1 March 2019.
The net profit was boosted by lower tax rates. Tax expenses declined 24.1% to Rs 184.96 crore in Q1 March 2020 from Rs 243.84 crore posted in Q1 March 2019. Profit before tax (PBT) grew 0.5% to Rs 703.85 crore in Q1 March 2020 over Q1 March 2019. Nestle said total sales increased by 10.8% while domestic sales increased by 10.7% driven by volume & mix in Q1 March 2020 over Q1 March 2019. Meanwhile, export surged by 12.9% year on year.
Sequent Scientific fell 0.25% to Rs 81 after consolidated net profit dropped 1.52% to Rs 16.86 crore on 6.72% increase in net sales to Rs 300.08 crore in Q4 March 2020 over Q4 March 2019.
Animal health industry is classified as an essential sector. Hence, the company said that its business was largely unimpacted due to the COVID-19 crisis. Only sales worth Rs 8.3 crore could not be recognized due to transportation related challenges in the initial period of lockdown. The Q4 earnings was made post trading hours yesterday, 12 May 2020.
Consolidated profit before tax jumped 11.71% to Rs 24.13 crore in Q4 March 2020 as against Rs 21.60 crore in Q4 March 2019. EBITDA soared 27% to Rs 51.10 crore in Q4 March 2020 from Rs 40.20 crore in Q4 March 2019. EBITDA margin improved 17% in Q4 March 2020 from 14.3% in Q4 March 2019.
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