Barometers ended a lackluster session with tiny gains on Friday. Gains in banks, FMCG and auto stocks were negated by losses in IT and pharma counters. The Nifty managed to close near its crucial 11,200 mark.
As per the provisional closing data, the barometer index, the S&P BSE Sensex gained 15.12 points or 0.04% at 38,040.57. The Nifty 50 index rose 15.8 points or 0.14% at 11,215.70.
Shares in the broader market were in demand. The S&P BSE Mid-Cap index gained 1.44% while the S&P BSE Small-Cap index advanced 0.78%.
The market breadth was strong. On the BSE, 1666 shares rose and 1039 shares fell. A total of 148 shares were unchanged.
Foreign portfolio investors (FPIs) bought shares worth Rs 637.43 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 468 crore in the Indian equity market on 6 August 2020, provisional data showed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 1,91,01,222 with 7,15,013 deaths. India reported 6,07,384 active cases of COVID-19 infection and 41,585 deaths while 13,78,105 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
The consumer confidence fell to a record low level in July 2020. Sentiment had been steadily falling since the government imposed lockdown in late March and collapsed further in July to reach 53.8, the Reserve Bank of India said in a report on Thursday. The index is well below the 100 mark, which represents the dividing line between pessimism and optimism.
Results Today:
Cipla was down 0.82% ahead of its quarterly earnings today.
Abbott India (up 0.36%), Bata India (down 0.46%), Amara Raja Batteries (down 0.42%), CONCOR (down 0.41%), Siemens (down 0.71%) and The Ramco Cements (up 0.47%) will also announce their quarterly results today.
Earnings Impact:
HPCL fell 1.30%. The company's standalone net profit soared 247% to Rs 2,813.83 crore on 47% drop in net sales to Rs 37,498.23 crore in Q1 June 2020 over Q1 June 2019. Average gross refining margin during the quarter ended 30 June 2020 was at $0.04 per bbl (barrel of oil) as against $0.75 per bbl during 30 June 2019. The COVID-19 pandemic is globally inflicting high economic and human costs causing slowdown of economic activity. With regards to HPCL, it did have impact on the sales in April and May 2020, although substantial recovery was seen in June 2020. Being essential commodity, there have been no major disruption in refining operations including in supply chain, even during the lockdown period. The PSU OMC stated that the impact assessment of pandemic is a continuing process given the uncertainties associated with its nature and duration.
Lupin dropped 5.90% after its consolidated net profit tumbled 96.5% to Rs 106.9 crore on a 9.1% decline in sales to Rs 3,468.6 crore in Q1 FY21 over Q1 FY20. In the first quarter, the formulations business revenue was at Rs 3,059.6 crore (down 11.7% YoY) while the API business revenue came in at Rs 409 crore (up 17.2% YoY). EBITDA fell 34.7% to Rs 531.4 crore in Q1 June 2020 from Rs 813.4 crore in Q1 June 2019. EBITDA margin was at 15.3% as on 30 June 2020 as against 21.3% as on 30 June 2019. Lupin's Global API sales for Q1 FY21 were Rs 409 crore, compared to sales of Rs 328.60 crore during Q4 FY20 and up 17% compared to sales of Rs 348.90 crore during Q1 FY20; accounting for 12% of Lupin's global sales.
Mahindra & Mahindra (M&M) fell 1.43% after the company reported 97% drop in net profit to Rs 68 crore in Q1 June 2020 from Rs 2260 crore in Q1 June 2019. Revenues during the quarter declined 56% year-on-year (YoY) to Rs 5,589 crore. Profit before tax stood at Rs 49 crore in Q1 FY21, down by 96% from Rs 1,371 crore in Q1 FY20. The results include the combined earnings of M&M and Mahindra Vehicle Manufacturers (MVML), which is a manufacturing unit of M&M. While the total vehicle sales were down by 78% to 27,565 units, tractor sales fell 22% to 64,140 units in Q1 June 2020 over Q1 June 2019. Total exports (vehicles and tractors) during the June quarter tumbled 72% YoY to, 3,109 units. M&M said that the timely relaxation of the lockdown for the agricultural sector along with positive rural sentiment led to good sales numbers for tractors during the quarter despite the supply chain issues, showing a positive growth rates in May and June 2020.
Mahanagar Gas fell 1.59% to Rs 968.05 after the city gas provider's net profit declined 73.42% to Rs 45.25 crore on a 65.45% fall in net revenue from operations to Rs 261.75 crore in Q1 FY21 over Q1 FY20. EBIDTA decreased by 71.11% to Rs 79.99 crore in Q1 June 2020 from Rs 276.83 crore in Q1 June 2019. EBIDTA margin was at 30.56% as on 30 June 2020 as against 36.55% as on 30 June 2019. CNG sales volumes contracted by 77.81% to 43.70 SCM Million in Q1 FY21 from 196.95 SCM Million in Q1 FY20. PNG sales volumes declined by 21.22% to 57.59 SCM Million in Q1 June 2020 from 73.11 SCM Million in Q1 June 2019. Consequently, MGL's total volumes as on 30 June 2020 were at 101.30 SCM Million, down by 62.49% from 270.06 SCM Million as on 30 June 2019.
Pidilite Industries rallied 3.3%. The company reported 90.86% drop in consolidated net profit to Rs 26.78 crore on 56.32% fall in total income to Rs 898.31 crore in Q1 June 2020 over Q1 June 2019. Consolidated EBITDA before non-operating income in Q1 June 2020 stood at Rs 67 crore, registering a decline of 85% over the same quarter last year. Consolidated profit before tax stood came at Rs 31.67 crore in Q1 June 2020, significantly lower than Rs 438.81 crore posted in the same period last year. Pidilite said Q1 performance was significantly impacted by continued lockdowns due to the pandemic. On an overall basis, the company had a near complete closure in April 2020 with recovery from May 2020 onwards (broadly 50% of outlets being open) and June (saw broadly 80% of outlets open). The company assured recovery has continued in July.
Adani Enterprises rose 3.93%. The company's consolidated net loss stood at Rs 148.65 crore in Q1 June 2020 compared with net profit of Rs 498.67 crore in Q1 June 2019. Consolidated net sales tanked 50.1% to Rs 5,265.19 crore in Q1 June 2020 as against Rs 10,561.37 crore in Q1 June 2019. Volumes across the segments were impacted owing to lower power demand and logistics issues due to COVID-19 pandemic. EBIDTA for the quarter dropped 66.40% to Rs 301 crore in Q1 FY21 from Rs 896 crore in Q1 FY20. With continued lockdown and restrictions during this quarter, Adani Enterprises' volumes across business segments have been affected. The company resumed its operations following government guidelines. The operational performance of the businesses continue to recover in phased manner towards pre COVID-19 level.
Vodafone Idea jumped 7.15%. The telco reported a consolidated net loss of Rs 25,460 crore in Q1 FY21, higher than net loss of Rs 4,873.90 crore in Q1 FY20. Gross revenue in Q1 June 2020 stood at Rs 10,659.30 crore, down by 5.4% from Rs 11,269.90 crore in Q1 June 2019. Average revenue per user (ARPU) blended rose 5.6% to Rs 114 in Q1 June 2020 from Rs 108 in Q1 June 2019. Sequentially, however, ARPU declined 5.8% from Rs 121 in Q4 March 2020. The company's total data subscribers decreased 5.3% to 13.57 crore customers in Q1 June 2020 from 14.33 crore customers in Q1 June 2019. The teleco recorded an exceptional expense of Rs 19,923.20 crore during the first quarter. Of the total sum, Rs 19,440.50 crore is for license fees and SUC (spectrum usage charges) on AGR (adjusted gross revenues) and Rs 123 crore is for one-time spectrum charge (including interest). Vodafone Idea's independent auditor's review report highlighted the company's material uncertainty on going concern.
JK Tyre & Industries fell 2.38%. The tyre manufacturer reported a consolidated net loss of Rs 198.85 crore in Q1 FY21 compared with net profit of Rs 16.91 crore in Q1 FY20. Revenue from operations fell 56.1% to Rs 1,130.80 crore in Q1 June 2020 from Rs 2,575.39 crore in Q1 June 2019. India business revenue were at Rs 1,067.39 crore (down 52.8% Y-o-Y) while the revenue from the Mexico business was at Rs 84.48 crore (down 75.1% Y-o-Y) in the first quarter. The company recorded an exceptional expenditure of Rs 32.91 crore during the quarter. Of this, Rs 31.78 crore is on account of unfavourable foreign exchange fluctuation and Rs 1.13 crore is due to VRS.
Global Markets:
European markets were trading lower while most Asian stocks declined on Friday. The Dow Jones 30 Futures were trading 152 points lower, indicating a weak opening in US markets today.
In US, shares on Wall Street shrugged off a sluggish start and closed higher on Thursday, with the Nasdaq ending the session above 11,000 for the first time as investors hoped for a new fiscal stimulus package.
Investors remain hopeful that lawmakers can strike a deal on a fresh round of coronavirus relief for those Americans out of work, while both Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi said they remained optimistic on an agreement.
Meanwhile, investors took heart after the number of Americans filing for jobless benefits for the week ended Aug. 1 fell to a three-week low of 1.186 million, a decline of 249,000 from the previous week's reading of 1.435 million. The number of people receiving traditional jobless benefits through the states, known as continuing claims, dropped by a seasonally adjusted 844,000 to 16.1 million in the week ended July 25.
US President Donald Trump said on Thursday it was possible the United States would have a coronavirus vaccine before the November election, a far more optimistic forecast than timing put forth by White House health experts.
Meanwhile, signs of growing China-U.S. tensions were evident as Secretary of State Mike Pompeo reportedly asked American companies to consider withholding their apps from phones made by China's Huawei Technologies. Those comments come as the U.S. has threatened to ban China-owned entertainment applications TikTok unless Microsoft Corp. can strike a deal to buy all or part of the company from ByteDance.
President Donald Trump issued executive orders on Thursday regarding the ban on transactions with WeChat and TikTok in 45 days. The move sent shares of Tencent (which owns WeChat) tumble by 7% in Hong Kong market on Friday.
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