Key equity barometers were trading with modest losses in early afternoon trade. Sentiment was fragile as investors braced themselves for the U.S. presidential election on Tuesday. A strength in ICICI Bank supported the indices while the weakness in Reliance Industries (RIL) dragged.
At 12:20 IST, the barometer index, the S&P BSE Sensex, was down 145.98 points or 0.37% at 39,468.09. The Nifty 50 index fell 43.90 point or 0.38% to 11,598.50.
In the broader market, the S&P BSE Mid-Cap index rose 0.09% while the S&P BSE Small-Cap index fell 0.66%.
The market breadth was negative. On the BSE, 975 shares rose and 1,377 shares fell. A total of 156 shares were unchanged.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 2.82% to 25.4525. The Nifty October 2020 futures were trading at 11,621, at a discount of 5.65 points compared with the spot at 11,626.65.
The Nifty option chain for 26 November 2020 expiry showed maximum Call OI of 16.44 lakh contracts at the 12,000 strike price. Maximum Put OI of 23.45 lakh contracts was seen at 11,000 strike price.
Economy:
The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose to 58.9 in October, from 56.8 in September. The data pointed to the strongest improvement in the health of the sector in over a decade. Growth was led by the intermediate goods category, but there were also robust expansions in the consumer and investment goods sub-sectors.
Meanwhile, the Goods and Services Tax (GST) collections in October stood at over Rs 1.05 lakh crore, crossing for the first time Rs 1 lakh crore mark since February this year. The gross GST revenue collected in the month of October 2020 is Rs 1,05,155 crore, showing an increase of 10% over Rs 95,379 crore in October 2019. The GST revenues for October 2020 consists of CGST of Rs 19,193 crore, SGST Rs 25,411 crore, IGST Rs 53,540 crore (including Rs 23,375 crore collected on import of goods) and Cess Rs 8,011 crore (including Rs 932 crore collected on import of goods). The total number of GSTR-3B Returns filed for the month of October upto 31 October 2020 is 80 lakh.
Coronavirus Update:
Total COVID-19 confirmed cases worldwide stood at 4,65,09,232 with 12,00,361 deaths. India reported 5,61,908 active cases of COVID-19 infection and 1,22,607 deaths while 75,44,798 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Buzzing Index:
The Nifty PSU Bank index advanced 3% to 1,298.30. The index lost 4.48% in the past five trading sessions to 1,260.50 yesterday from 1,319.65 on 23 October 2020.
Bank of Baroda (up 6.12%), Punjab National Bank (up 4.30%), State Bank of India (up 2.85%), UCO Bank (up 2.59%) and Indian Bank (up 2.42%) were top losers in FMCG segment.
Stocks in Spotlight:
ICICI Bank jumped 5.08% after the private bank reported a 549% jump in net profit to Rs 4,251.33 crore on 3.9% rise in total income to Rs 23,650.77 crore in Q2 September 2020 over Q2 September 2019. The bank's core operating profit (profit before provisions and tax, excluding treasury income) increased by 18% year-on-year (Y-o-Y) to Rs 7,719 crore in Q2 September 2020 from Rs 6,533 crore Q2 September 2019.
Profit before tax in Q2 September 2020 stood at Rs 5,265 crore, up by 20.6% from Rs 4,367.23 crore in Q2 September 2019. Tax expense during the quarter fell by 72.67% to Rs 1,014 crore in Q2 September 2020 over Q2 September 2019. The bank's provisions and contingencies increased by 19.5% to Rs 2,996.27 crore in Q2 FY21 from Rs 2,506.87 crore in Q2 FY20. This includes provision of Rs 497 crore made on a prudent basis on loans aggregating to Rs 1,410 crore that were not classified as non-performing pursuant to the Supreme Court's interim order. As of 30 September 2020, the bank held COVID-19 related provision of Rs 8,772 crore.
Reliance Industries (RIL) tumbled 7.03%. On a consolidated basis, RIL's net profit fell 15.05% to Rs 9,567 crore on 25.50% decline in net sales to Rs 111,236 crore in Q2 September 2020 over Q2 September 2019. The Group's operations and revenue during the quarter were impacted due to COVID-19, RIL said in a statement.
On a standalone basis, Reliance Jio Infocomm posted 187% year-on-year (YoY) growth in net profit at Rs 2,844 crore in Q2 September 2020. On a quarter-on-quarter (QoQ) basis, the profit figure grew by 12.86%. The telco had posted a Rs 2,520 crore profit in Q1 June 2020. Revenue from operations increased 33% YoY and 5.6% QoQ to Rs 17,481 crore. ARPU during the quarter was at Rs 145 per subscriber per month as against Rs 140.3 per subscriber per month in Q1 June 2020.
On a consolidated basis, Reliance Retail's revenue from operations for Q2 FY21 increased by 29.7% QoQ to Rs 36,566 crore, and at the same level as the last year despite restricted store operations and lower footfalls. The retail arm's net profit for Q2 September 2020 was at Rs 973 crore, higher by 125.8% QoQ.
O2C-Petrochemicals' segment revenue increased by 17.8% quarter on quarter (QoQ) to Rs 29,665 crore with higher prices across product portfolio and higher volumes.
O2C Refining & Marketing segment's revenue for Q2 FY21 increased by 33.3% quarter on quarter basis to Rs 62,154 crore primarily due to higher crude oil price. RIL earned $5.70 per barrel on turning every barrel of crude oil into fuel in the second quarter of the current fiscal as compared to a gross refining margin (GRM) of $6.30 per barrel in the previous quarter.
Revenue from the Oil And Gas (Exploration & Production) business for Q2 FY21 declined by 29.8% QoQ to Rs 355 crore primarily due to lower price realisation and decline in production. Revenue from the Media business for Q2 FY21 rose by 31.5% QoQ as COVID-linked impact on ad-revenues receded over the quarter.
IndusInd Bank jumped 6.92% to Rs 626.15. The bank reported 53.2% decline in net profit to Rs 647.04 crore on 1.6% fall in total income to Rs 8,731.05 crore in Q2 FY21 over Q2 FY20.
The bank's provisions and contingencies increased by 166.3% to Rs 1,964.44 crore in Q2 FY21 from Rs 737.71 crore in Q2 FY20. "The extent to which COVID-19 pandemic will impact the bank's operations and financial results is dependent on the future developments, which are highly uncertain. In view of the same, the bank has made incremental regulatory, floating, counter cyclical and or contingent provisions amounting to Rs 952 crore during the quarter ended 30 September 2020, taking the total amount of such provisions to Rs 2,155 crore as of 30 September 2020, IndusInd Bank said.
As of 30 September 2020, the bank's advances in special mention accounts (SMA)/overdue categories, where the moratorium/deferment was extended aggregated to Rs 17,617.22 crore (8.75% of total advances). The bank has made a provision of Rs 430 crore on the same.
The ratio of gross NPAs to gross advances stood at 2.21% as on 30 September 2020 as against 2.53% as on 30 June 2020 and 2.19% as on 30 September 2019. The ratio of net NPAs to net advances stood at 0.52% as on 30 September 2020 as against 0.86% as on 30 June 2020 and 1.12% as on 30 September 2019.
While the bank's total deposits rose 10.2% to Rs 2,28,279.27 crore, total advances increased 2.1% to Rs 2,01,246.83 crore in Q2 September 2020 over Q2 September 2019.
UPL shed 0.78% to Rs 449.30. The company posted a 166% jump in consolidated net profit to Rs 537 crore in Q2 September 2020 from Rs 202 crore in Q2 September 2019. Consolidated revenue from operations came at Rs 8,939 crore in Q2 September 2020, 14.35% higher than Rs 7,817 crore in the same quarter last year.
In India, UPL saw robust growth in key products including pre-emergent herbicides and sustainable solutions. Despite the COVID-19 lock down, India continued to deliver record collections.
Rest of the World growth is attributed to the strengthening of the company's B2C model in China with higher focus on value brands. Additionally, new product launches in Vietnam and other SE Asian countries yielded positive results. Normalisation of weather patterns contributed to the strong performance in South Africa, Australia and New Zealand.
UPL maintained its guidance of 6-8% growth in revenue and 10-12% in EBITDA. The growth will be driven by a focus on differentiated solutions as well as new product launches. Price increases in local currencies and cost savings will support margins.
Relaxo Footwears fell 0.14%. The footwear maker posted a 6.5% rise in net profit to Rs 75.10 crore in Q2 September 2020 from Rs 70.54 crore recorded in Q2 September 2019. The company's net sales fell 7.4% to Rs 575.87 crore in Q2 September 2020 over Q2 September 2019.
EBITDA grew by 21% year on year to Rs 127 crore in Q2 September 2020. Relaxo Footwears' EBITDA margins improved to 22% in Q2 September 2020 from 16.8% in Q2 September 2019, mainly due to saving in raw material cost and special focus on administrative expenses.
Coal India (CIL) gained 0.79%. On a provisional basis, the company's coal production jumped 18.7% to 46.8 million tonnes (MT) in October 2020 from 39.5 million tonnes (MT) in October 2019. CIL's coal offtake in October 2020 stood at 50.5 million tonnes (MT), recording a 25% growth from 40.4 million tonnes (MT) in October 2019.
Grasim Industries rose 0.96%. The company said it entered into a definitive agreement with Lubrizol Advanced Materials to manufacture and supply chlorinated polyvinyl chloride (CPVC) resin in India. The special type of polymer material that is widely used in hot and cold water pipes, will be manufactured at Chlor-alkali unit of Grasim located at Vilayat to take advantage of captive chlorine integration.
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