As per provisional closing data, the barometer index, the S&P BSE Sensex, fell 37.38 points or 0.10% at 38,369.63. The Nifty 50 index lost 14.10 points or 0.12% at 11,308.40.
In the broader market, the S&P BSE Mid-Cap index slipped 0.26% while the S&P BSE Small-Cap index shed 0.02%.
The market breadth favoured the buyers. On the BSE, 1514 shares rose and 1209 shares fell. A total of 150 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 20,292,486 with 741,380 deaths. India reported 6,43,948 active cases of COVID-19 infection and 46,091 deaths while 16,39,599 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
India's industrial output fell for the fourth straight month, led by weakness across most segments except consumer non-durable goods. The Index of Industrial Production contracted by 16.6% in June over last year, compared to a revised contraction of 34% in May and a record 57.6 per cent slide in April. In the April-June 2020 quarter, the index contracted by 35.9%.
India CPI numbers for July are due to be announced today. The domestic consumer prices in India increased 6.09% year-on-year (YoY) in June of 2020, compared with 6.27% in May 2020. The retail inflation in June had surpassed the Reserve Bank of India's (RBI) upper limit of 6%. The government has mandated the Indian central bank to keep inflation within the range of 4% with a margin of 2% on either side.
Earnings Today:
Aarti Industries (down 1.15%), Ashok Leyland (up 3.45%), Aster DM Healthcare (up 1.66%), Aurobindo Pharma (down 0.95%), Cummins India (up 0.17%), Thermax (up 1.41%), Graphite India (down 1.19%), Gulf Oil (up 3.70%), Kalpataru Power (up 1.15%), Natco Pharma (down 1.85%), MAS Financial (up 2.53%) and Tata Power (up 2.02%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Bharat Forge jumped 5.92% at Rs 437.40. The company reported a consolidated net loss of Rs 127.32 crore in Q1 June 2020 as against net profit of Rs 171.92 crore posted in Q1 June 2019. EBITDA margin declined to 1% in Q1 June 2020 from 17.8% in Q1 June 2019.
Revenue from operations for Q1 June 2020 stood at Rs 1154.21 crore, tumbling 50% from Rs 2327.85 crore in the same period last year. The company clarified that a drop in revenue was due to the shutdown of manufacturing operations in the month of April and May on account of the lockdown imposed by the government to control the spread of the pandemic.
B.N. Kalyani, Chairman & Managing Director said, "Looking ahead in to demand for the coming quarter, we are witnessing marginal improvement in demand across both domestic & export markets. We expect our domestic revenues to be flat as compared to Q2 FY20 while the exports will be lower than levels witnessed in Q2 FY20. The sustainability in the recovery in underlying demand is a key factor to track in the coming months."
Adani Ports and Special Economic Zone (APSEZ) rose 1.87% to Rs 341.10 after the company said that there had been been a steady increase in cargo throughput across Ports from July 2020.
"During the month of July 2020, APSEZ handled cargo volume of 18.30 MMT, a growth of 6% on year on year basis and 31% over June 2020. This trend gives us confidence that worst is behind us and going forward cargo volume in FY21 is expected to stabilize", APSEZ further said.
However, the company delivered a weak set of numbers for the April-June quarter as lockdown measures announced by the government during the quarter to tame the spread of COVID-19 resulted in lower import and export, impacting cargo throughput in first quarter of FY21.
APSEZ reported 26% decline in consolidated net profit to Rs 758 crore on a 18% fall in revenue to Rs 2,293 crore in Q1 FY21 over Q1 FY20. Cargo volumes fell 27% to 41.41 MMT (million metric tonne) in Q1 June 2020 compared to 56.75 MMT in Q1 June 2019.
EBITDA margin was at 63% as on 30 June 2020 as against 66% as on 30 June 2019. The company also recorded a forex loss of Rs 37 crore in the first quarter as against as a forex loss of Rs 3 crore in the same period last year.
Sundram Fasteners added 5.05% to Rs 444. The TVS Group company reported a consolidated net loss of Rs 26.70 crore in Q1 June 2020 as against a net profit of Rs 95.52 crore in Q1 June 2019. Net sales tumbled 68.1% year-on-year (YoY) to Rs 362.76 crore in the first quarter. Earnings before depreciation and taxes (EBDT) for the quarter ended 30 June 2020 slumped 93.2% to Rs 12.35 crore from Rs 182.87 crore during the same period in the previous year.
Metropolis Healthcare rose 0.84% to Rs 1613. The medical diagnostics company's consolidated net profit slumped 89.3% to Rs 2.88 crore on 29.6% drop in net sales to Rs 143.13 crore in Q1 June 2020 over Q1 June 2019.
Metropolis said it conducted 2.65 million tests from 1.37 million patient visits. Cost rationalization program initiated in April 2020 to reduce fixed costs by 9%, semi-variable cost by 12% and variable cost by 21%. Goal for second quarter is to scale up Non-COVID 19 tests and subsequent revenues.
In June 2020, the company achieved 100% revenues (including COVID-19 testing) compared to June 2019. With improving Non-COVID 19 revenues and cost rationalization measures we have achieved near normal EBITDA margin of 25.2% for June 2020.
Separately, Metropolis Healthcare has received the approval to acquire balance equity stake of 35% in Metropolis Histoxpert Digital Services for a total cash consideration of Rs 32,648. The company also approved the acquisition of balance equity stake of 49% in Raj Metropolis Healthcare for a total cash consideration of Rs 82.33 lakh. Both the acquisitions are expected to complete within 3 months, the company said in the BSE filing.
Central Bank of India gained 0.28% to Rs 18.20 after the bank's net profit rose 14.41% to Rs 135 crore on a 3.60% increase in total income to Rs 6727 crore in Q1 June 2020 over Q1 June 2019. Net Interest Margin (NIM) was at 3.08% as on 30 June 2020 as against 2.62% as on 30 June 2019.
The bank's provisions and contingencies fell 5.81% to Rs 974 crore in Q1 June 2020 from Rs 1034 crore in Q1 June 2019. "Bank has made provision of Rs 161.75 crore during the quarter in accounts where moratorium due to COVID-19 pandemic was extended. The total provision of Rs 305 crore is held by the Bank as on 30 June 2020," Central Bank of India said in a statement.
On the asset quality front, the ratio of gross NPAs to gross advances stood at 18.10% as on 30 June 2020 as against 18.92% as on 31 March 2020 and 19.93% as on 30 June 2019. The ratio of net NPAs to net advances stood at 6.76% in Q1 FY21 as against 7.63% in Q4 FY20 and 7.98% in Q1 FY20.
Global Markets:
Most markets in Europe and Asia advanced on Wednesday. The Dow Jones Futures 30 were trading 255 points higher, indicating a positive opening in US markets today.
The UK economy contracted by 20.4% in the second quarter of 2020, compared to the previous three months, as coronavirus-induced lockdowns hammered activity, according to preliminary figures released Wednesday.
US stocks stumbled in late trade Tuesday, giving up early gains to end lower as a selloff in tech shares continued. Investors continued to assess the outlook for the US economy amid a decline in the number of new coronavirus cases recorded and a lack of progress toward additional coronavirus aid from Washington.
Enthusiasm around Russia's COVID-19 vaccine efforts faded throughout the day amid international skepticism about whether the vaccine was effective and safe, with doubts cast on the approach on testing.
The most important factor that surprised investors and caught some off guard was a sharp rise in Treasury yields. The yield on the 10-year Treasury note reportedly rose 7 basis points to 0.64% as investors shunned safe-haven assets.
That triggered a wave of gold selling and consequently, gold retreated on Tuesday from record territory and posted its steepest daily dollar slide in more than seven years, with December futures tumbling 4.6% to settle at $1,946.30 an ounce.
The jump in yields was driven by plans of the US Treasury to sell a record amount of sovereign debt this week.
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