Key domestic indices ended the volatile trading session with modest gains on Friday. The market sentiment was upbeat amid positive global cues. The Nifty pared gains after hitting a record high of 12,311.20 in early afternoon trade.
The barometer BSE S&P Sensex rose 147.37 points or 0.36% to 41,599.72. The Nifty 50 index gained 40.90 points or 0.33% to 12,256.80.
In the broader market, the BSE Mid-Cap index rose 0.40% and the BSE Small-Cap index rose 0.42%. Both these indices outperformed the Sensex.
The market breadth was positive. On the BSE, 1442 shares rose and 1128 shares fell. A total of 159 shares were unchanged.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 6.588%, compared with 6.524% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 70.94, compared with its close of 71.2150 during the previous trading session.
In the commodities market, Brent crude for March 2020 settlement fell 15 cents to $65.52 a barrel. The contract fell 7 cents or 0.11% to settle at $65.37 a barrel during the previous trading session.
Foreign Market:
Shares in Europe and Asia edged higher on Friday, following the easing of US-Iran tensions, and after US stocks shot to record highs.
In US, stocks swept to record highs once again on Thursday as investors focused on progress on the trade pact with China due to be signed next week and amid an easing of concerns about war in the Middle East.
China's Vice Premier Liu He, the head of the country's negotiating team in trade talks with the United States, will sign a "Phase 1" deal in Washington, DC, next week, the commerce ministry said on Thursday. Liu will visit the US capital from January 13 to 15, said Gao Feng, a spokesman at the commerce ministry.
In economic data, the number of Americans who applied for unemployment benefits fell in early 2020 for the fourth week in a row, putting new jobless claims back near the lowest level in about 50 years. Initial jobless claims declined by 9,000 to 214,000 in the seven days ended 4 Jan 2020.
India Q3 Earnings:
IT major Infosys rose 1.47% to Rs 738.25. The company after market hours on Friday announced its Q3 results. On a consolidated basis, net profit rose 10.9% to Rs 4,457 crore on 2% increase in revenues to Rs 23,092 crore in Q3 December 2019 over Q2 September 2019. The Q3 numbers are as per International Financial Reporting Standards (IFRS).
Operating profit rose 3.1% to Rs 5,064 crore in Q3 December 2019 over Q2 September 2019. Operating margin was 21.9% in Q3 December 2019 as against 21.7% in Q2 September 2019.
The company increased FY20 revenue guidance. The revised guidance is 10.0%-10.5% in constant currency higher than 9-10% estimated earlier. It maintained FY20 operating margin guidance range of 21%-23%.
Q3 results further underscore that we remain steadfast in our journey of sustained client relevance and deepening engagement with them, as they partner with us in navigating their next in the digital transformation era, said Salil Parekh, CEO and MD. For us, this has translated into double digit growth year-to-date, leading to an increase in revenue guidance, accompanied by expanding operating margins.
Overall performance during the quarter was satisfactory on multiple counts -broad-based growth, steady increase in client metrics and healthy large deal wins, said Pravin Rao, COO. Large deal wins continue to be robust with growth of 56% so far this year. We had a further reduction in attrition, demonstrating the results of our continued efforts towards strengthening employee engagement and value proposition.
Operating margins improved further during the quarter driven by relentless cost optimization and operating leverage, said Nilanjan Roy, CFO. Cash generation was extremely strong with cumulative free cash flow crossing $1.5 bn. Return on Equity increased further to 25.9% driven by margin expansion and increased shareholder payouts.
Meanwhile, Infosys announced conclusion of the independent investigation into allegations contained in the anonymous whistleblower complaints disclosed earlier. The Audit Committee determined that the allegations are substantially without merit. It concluded that no restatement of previously announced financial statements or other published financial information is warranted.
GTPL Hathway rose 1.66% after the company announced robust Q3 earnings. On consolidated basis, the company reported a 78.2% jump in net profit to Rs 33.06 crore on a 114.3% jump in net sales to Rs 673.97 crore in Q3 December 2019 over Q3 December 2018.
Emami Paper was locked in an upper circuit of 10% at Rs 89.5 after the company announced a stellar Q3 December 2019 result. On standalone basis, net profit jumped 222.9% to Rs 18.50 crore on a 7.4% rise in net sales to Rs 400.08 crore in Q3 December 2019 over Q3 December 2019.
Buzzing Segment:
Shares of most Tata Group companies advanced after the Supreme Court (SC) on Friday stayed NCLAT order reinstating Cyrus Mistry as executive chairman of Tata Sons.
SC on Friday, 10 January 2020, stayed the National Company Law Appellate Tribunal (NCLAT) decision to restore Cyrus Mistry as executive chairman of the Tata Group. SC noted that it looked at the judicial attitude with which the NCLAT made the 18 December order and found that it is sorely lacking.
SC asked Mistry and Shapoorji Pallonji group including Sterling Investment and Cyrus Investment to file a reply to the Tata group's appeal in four weeks.
NCLAT on 18 December 2019 ruled in favour of Cyrus Mistry on petition challenging his removal as Chairman of Tata Sons. The tribunal restored Mistry as the Executive Chairman of Tata Group, holding the appointment of N Chandrasekaran as executive chairman illegal.
Tata Global Beverages (up 3.9%), Rallis India (up 3.38%), Tata Chemicals (up 2.45%), Tata Power (up 1.99%), Tata Coffee (up 1.86%), Tata Steel Long (up 1.78%), Tinplate Company of India (up 0.56%) and Voltas (up 0.35%) advanced.
Tata Steel rose 0.73%. The steel major announced its operational update for Q3 December 2019 before market hours today, 10 January 2020. Tata Steel India's production volume rose 1.83% to 4.46 million tons in Q3 December 2019 as against 4.38 million in Q3 December 2018. Production in Europe surged 6.84% to 2.5 million tons in same period. Sales Volume showed a significant improvement on YoY basis. Tata Steel India's sales jumped 24.42% to 4.84 million tonne in Q3 December 2019. Sales in Europe declined 1.7% to 2.31 million tons on the back of overall slowdown and seasonal weakness.
Tata Motors rose 2.27% after Jaguar Land Rover (JLR) reported retail sales of 52,814 vehicles for December 2019, up 1.3% over the previous year.
Stocks in Spotlight:
Yes Bank fell 5.29% to Rs 44.80. The bank announced after trading hours that it has received the resignation of Uttam Prakash Agarwal, an independent director and chairman of the audit committee of the board of the bank. In his resignation letter, Agarwal has made certain observations on the bank's governance and the same shall be duly examined by the board.
The bank clarified that it was reviewing the 'fit and proper' status of Agarwal as directed by the Reserve Bank of India. In this respect, the bank had obtained legal opinions from eminent jurists. These opinions were to be considered by the nomination and remuneration committee of the board/the board of the bank in their meetings scheduled for today, 10 January 2020. However, prior to the commencement of the proceedings of these meetings, the bank received the resignation of Agarwal.
In a separate announcement after trading hours, Yes Bank said that its board approved raising upto Rs 10,000 crore, in one or more tranches, through Qualified Institutions Placement (QIP)/ Global Depository Receipts (GDRs)/ American Depository Receipts (ADRs)/ Foreign Currency Convertible Bonds (FCCBs)/ or any other methods on private placement basis.
Edelweiss Financial Services slumped 9.56% at Rs 106 after the media reported that the Enforcement Directorate (ED) has summoned Edelweiss Group chairman Rashesh Shah in Rs 2,000 crore forex scam.
According to media reports, Edelweiss Group founder and chairman Rashesh Shah was summoned by the Enforcement Directorate on Friday in connection with a Rs 2,000 crore forex scam. Shah's benami firms are under scanner the federal probe agency. The ED has busted the Rs 2,000 crore forex smuggling racket, reports added.
Delta Corp rose 2.76% after the company said its subsidiary received a license for operating a casino at the Marriot Hotel in Nepal. The operations of the casino are expected to commence soon, the company said in a statement after market hours yesterday, 9 January 2019.
Sterlite Technologies (STL) rose 2.29%. Sterlite Global Venture (Mauritius) a wholly owned subsidiary of STL, has entered into definitive agreements to acquire 12.8% stake (on issued and outstanding basis) in ASOCS, a vRAN technology company based out of Israel.
KNR Constructions rose 9.39% after the company announced that it will sell its entire equity stake in a toll road BOT asset of special purpose vehicle (SPV), KNR Walayar Tollways (KWTPL), to Singapore-based Cube Highways and Infrastructure III. KNR Constructions holds 100% equity in the SPV.
The enterprise value of the assets for this transaction is Rs 529.27 crore excluding claims receivable from National Highway Authority of India (NHAI) and other governmental instrumentalities, which would be passed through to the company as and when realized, it added.
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