Benchmark indices registered gains for the third consecutive day. The Sensex and the Nifty settled at record closing high. The Nifty ended above the 16,250 level. However, midcap and smallcap indices underperformed.
The barometer index, the S&P BSE Sensex, was up 546.41 points or 1.02% to end at 54,369.77. The Sensex scaled an all-time high of 54,465.91 in intraday trade today.
The Nifty 50 index gained 128.05 points or 0.79% at 16,258.80. The Nifty 50 index scaled an all-time high of 16,290.20 in intraday trade today.
The broader market underperformed the frontliners with the BSE Mid Cap falling 1.05% and the BSE Small Cap declining 1.06%.
The market breadth, indicating the overall health of the market, was negative. On the BSE, 1086 shares rose and 2176 shares fell. A total of 110 shares were unchanged.
Among the sectoral indices on the BSE, the S&P BSE Bankex (up 2.60%) and the S&P BSE Finance index (up 2.13%) outperformed the S&P BSE Sensex. Meanwhile, the S&P BSE Telecom index (down 2.25%), the S&P BSE Realty index (down 1.69%) and the S&P BSE Consumer Durables index (down 1.39%) underperformed the S&P BSE Sensex.
Economy:
The Reserve Bank of India (RBI) is set to begin its three-day meet to decide key monetary policy rates on Wednesday. The central bank will announce its bi-monthly monetary policy review on Friday, at the end of the meeting.
Meanwhile, IHS Markit India Services PMI came at 45.4 in July 2021. The index was in contraction territory for the third month in a row. However, the index rose from 41.2 posted in June. Panel members that reported lower output cited subdued demand conditions amid the COVID-19 crisis.
Commenting on the latest survey results, Pollyanna De Lima, economics associate director at IHS Markit said, "The current COVID-19 environment continued to weigh on the performance of the service sector that is so crucial to the Indian economy. July data was somewhat disappointing, with incoming new business and output falling solidly over the month, but there was at least a slowdown in rates of contraction. Uncertainty over when the pandemic will end, as well as concerns about inflationary pressures and financial troubles, dampened business confidence in July."
"Service providers were pessimistic towards the outlook for business activity for the first time in a year. Downbeat assessments and ongoing declines in new work caused another round of job shedding in the service sector. The subdued performance of services more than offset a rebound across manufacturing, causing further contractions in private sector sales, output and employment. Rates of reduction eased noticeably from June, however."
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.197% as compared with 6.2% 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 74.1950, compared with its close of 74.2850 during the previous trading session.
MCX Gold futures for 5 August 2021 settlement rose 0.69% to Rs 48,147.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.01% to 92.09.
In the commodities market, Brent crude for October 2021 settlement fell 19 cents at $72.22 a barrel. The contract fell 48 cents, or 0.66% to settle at $72.41 a barrel in the previous trading session.
Foreign Markets:
European markets rallied across the board on Wednesday as strong U.S. corporate earnings boosted global sentiment.
Asian stocks mostly advanced on Wednesday, a private survey showed accelerating Chinese services activity growth in July. The Caixin/Markit services Purchasing Managers' Index for July came in at 54.9 on Wednesday, up from June's reading of 50.3.
U.S. stocks moved higher on Tuesday and the S&P 500 set a new record high as broad market strength outweighed the travel names held back by COVID-19 fears.
Earnings Impact:
Titan Company fell 2.14%. On a standalone basis, the company's net profit stood at Rs 61 crore in Q1 FY22 as compared to a net loss of Rs 270 crore in Q1 FY21. Revenue from operations surged 122.22% to Rs 2,780 crore in Q1 FY22 from Rs 1,251 crore in Q1 FY21. The revenue grew by 122% (excluding bullion sale) in Q1 FY22 as compared to Q1 FY21, primarily driven by base effect of zero sales in April 2020 last year. Most of the sales of May month were lost in both the years. The sales in June 2021 were marginally ahead of sales in June 2020 despite lower store operational days. Total income for the quarter stood at Rs 3,314 crore, including bullion sale of Rs 424 crore, registering a growth of 74% as compared to Q1 FY21's total income of Rs 1,901 crore, which included a bullion sale of Rs 601 crore. The Jewellery division gained good traction in new customers and the mix in total buyers has reached the pre-pandemic levels. It has recorded an income of Rs 2,467 crore for the quarter as compared to Rs 1,182 crore in the same period last year (excluding bullion sale in both the years). The Watches and Wearables business recorded an income of Rs 292 crore in the quarter against Rs 75 crore in the same period previous year. The Eyewear business recorded an income of Rs 67 crore in the quarter as against Rs 30 crore same period last year. The other segments of Titan Company comprising of Indian dress wear and accessories recorded an income of Rs 14 crore this quarter as compared to Rs 4 crore in the quarter of the previous year.
Bosch added 1.87% to Rs 15,518.85 after the company's consolidated net profit stood at Rs 259.76 crore in Q1 FY22 as compared to a net loss of Rs 120.83 crore in Q1 FY21. Consolidated revenue from operations soared 146.43% to Rs 2,443.53 crore in Q1 FY22 from Rs 991.54 crore in Q1 FY21. The increase is due to lower base and recovery in sales as the lockdown restrictions eased across states in the country in June 2021. Pre-tax profit was at Rs 335.31 crore in Q1 FY22 as against a pre-tax loss of Rs 200.90 crore in Q1 FY21.
State Bank of India (SBI) jumped 2.37% to Rs 457.05 after the bank's standalone net profit rose by 55.3% to Rs 6,504 crore in Q1 FY22 from Rs 4,189.34 crore in Q1 FY21. Total income during the quarter rose by 3.9% YoY to Rs 77,367.17 crore. Net interest income (NII) increased by 3.74% to Rs 27,638 crore in Q1 FY22 from Rs 26,642 crore in Q1 FY21. Domestic net interest margin (NIM) was at 3.15% as on 30 June 2021 as against 3.24% as on 30 June 2020. Operating profit was at Rs 18,975 crore in Q1 FY22, up by 5.06% from Rs 18,061 crore in Q1 FY21. Provisions (other than tax) and contingencies declined by 19.6% YoY to Rs 10,051.96 crore in the first quarter, of which provision for non-performing assets aggregated to Rs 5,029.79 crore (down 46.6% YoY). On the asset quality front, the bank reported fresh slippages of Rs 15,666 crore in Q1 FY22, as compared with Rs 21,934 crore in Q4 FY21 and Rs 3,637 crore in Q1 FY21. Slippage ratio for Q1 FY22 was at 2.47%, as against 0.60% as at the end of Q1FY21.
Adani Enterprises fell 0.94%. The company's consolidated net profit stood at Rs 265.60 crore in Q1 FY22 as compared to a net loss of Rs 65.67 crore in Q1 FY21. Consolidated revenue from operations soared 138.90% to Rs 12,578.77 crore in Q1 FY22 from Rs 5,265.19 crore in Q1 FY21. Pre-tax profit was at Rs 379.54 crore in Q1 FY22 as against a pre-tax loss of Rs 137.54 crore in Q1 FY21. During the quarter, consolidated EBIDTA surged 215% Y-o-Y (year-on-year) to Rs 948 crore due to increase in revenue and better margins across all operating segments.
Tata Consumer Products declined 1.11%. The FMCG company's consolidated net profit dropped 38.15% to Rs 240.65 crore on a 10.85% rise in revenue from operations to Rs 3,008.46 crore in Q1 FY22 over Q1 FY21. For the quarter, revenue from operations increased by 10.85% (10% in constant currency) as compared to corresponding quarter of the previous year, mainly driven by growth of 28% in India beverages (including NourishCo) and 20% in India Foods. International business reported lower revenue as previous year benefitting from COVID-19 induced pantry stocking. Consolidated profit before tax skid 32.65% to Rs 336.36 crore in Q1 FY22 as against Rs 499.49 crore in Q1 FY21.
IIFL Wealth Management jumped nearly 15% after the company's consolidated net profit surged 42% YoY to Rs 119 crore in Q1 FY22 from Rs 83 crore in Q1 FY21. Revenue from operations rose by 43% to Rs 283 crore in Q1 FY22 from Rs 199 crore in Q1 FY21. Annual recurring revenue was at Rs 192 crore (up 51% YoY) and transactional / brokerage income was at Rs 91 crore (up 28% YoY) in the first quarter. Sequentially, the company's net profit has increased by 16% from Rs 103 crore while revenue from operations have risen by 7% from Rs 266 crore in Q4 FY21. Profit before tax in Q1 FY22 stood at Rs 151 crore, up by 38% from Rs 109 crore in Q1 FY21. Total assets under management (AUM) grew 15% QoQ to Rs 2.82 trillion.
Bajaj Healthcare dropped 4.3%. The company reported 25.7% rise in net profit to Rs 19.21 crore on a 32.8% increase in revenue from operations to Rs 185.68 crore in Q1 FY22 over Q1 FY21. On the segmental front, Bulk Drugs revenue was Rs 135.28 crore (up 7.6% Y-o-Y) while that from Formulations was Rs 50.40 crore (up 3.56x Y-o-Y) in the first quarter. Total expenses during the quarter increased by 32.3% Y-o-Y to Rs 159.11 crore, due to higher raw material costs (up 48.7% Y-o-Y), higher employee expenses (up 20.7% Y-o-Y) and higher other expenses (up 26% Y-o-Y).
Kalpataru Power declined 0.92%. On a consolidated basis, the company's net profit soared 178.57% to Rs 78 crore on a 37.51% jump in revenue from operations to Rs 3,204 crore in Q1 June 2021 (Q1 FY22) over Q1 June 2020 (Q1 FY21). Consolidated profit before tax surged 135.18% to Rs 127 crore in Q1 FY22 as against Rs 54 crore in Q1 FY21. EBITDA grew 10% Y-o-Y (year-on-year) to Rs 297 crore with margins at 9.3%. The EBITDA margin remained low as compared to last year due to divestment of T&D SPVs, as well on account of increase in commodity prices, COVID-19 related expenses and higher logistics cost. Consolidated order book stood at Rs 29,313 crore as on 30 June 2020 (L1 of Rs 5,050 crore). The order inflows were at Rs 5,524 crore till date in FY22 driven by T&D, B&F, Urban Infra and Water business.
Dhampur Sugar Mills lost 4.6% after the company's consolidated net profit slid 20.47% to Rs 43.58 crore on a 19.85% decline in total revenue from operations to Rs 883.70 crore in Q1 FY22 over Q1 FY21. Consolidated profit before tax dropped 16.73% to Rs 59.90 crore in Q1 FY22 as against Rs 71.94 crore in Q1 FY21. Meanwhile, Dhampur Sugar Mills approved the expansion of sugar units capacity by 1,500 Tonnes Crushing per Day (TCD) each at Asmoli unit from 9,000 TCD (90% existing capacity utilisation) to 10,500 TCD for a total investment of Rs 20 crore and Meerganj unit from 5,000 TCD (92% existing capacity utilisation) to 6,500 TCD for total investment of Rs 12.45 crore. With the proposed expansion, the total capacity of Dhampur Sugar Mills will stand augmented from 45,500 TCD to 48,500 TCD.
Prataap Snacks rose 2.53% after the company reported a lower consolidated net loss of Rs 1.59 crore in Q1 FY22 as compared to a net loss of Rs 5.96 crore posted in Q1 FY21. Net sales increased by 43.1% to Rs 278.2 crore in Q1 FY22 from Rs 194.45 crore in Q1 FY21. The company reduced its pre-tax loss to Rs 2.17 crore in Q1 FY22 from Rs 7.54 crore recorded in Q1 FY21. Meanwhile, the company's operating EBITDA increased by 34.5% year on year to Rs 11.08 crore in Q1 FY22.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 19,95,70,445 with 42,46,242 deaths. India reported 4,10,353 active cases of COVID-19 infection and 4,25,757 deaths while 3,09,33,022 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
With 42,625 people testing positive for the coronavirus infection in a day, India's total tally of COVID-19 cases rose to 3,17,69,132 and the active caseload increased to 4,10,353. The death toll climbed to 4,25,757 with 562 fatalities. The number of active cases increased to 4,10,353 and accounted for 1.29% of the total infections, while the national COVID-19 recovery rate rose to 97.37%.
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