Benchmark indices sharply pared gains and traded near the flat line with minor profits in afternoon trade. At 13:25 IST, the barometer index, the S&P BSE Sensex, was up 22.37 points or 0.07% at 30,694.89. The Nifty 50 index rose 13.45 points or 0.15% at 9,052.45.
The broader market traded higher. The S&P BSE Mid-Cap index rose 1.04% while the S&P BSE Small-Cap index gained 0.41%.
The market breadth was positive. On the BSE, 1160 shares rose and 990 shares fell. A total of 178 shares were unchanged. In the Nifty 50 index, 34 shares advanced while 16 stocks declined.
Gainers & Losers:
JSW Steel (up 6.01%), UltraTech Cement (up 5.42%), Eicher Motors (up 4.59%), Titan Industries (up 4.3%) and IndusInd Bank (up 3.38%) were top gainers in Nifty 50 index.
Bharti Airtel (down 4.9%), Bajaj Finserv (down 2.68%), TCS (down 2.2%), Bajaj Finance (down 1.65%) and Zee Entertainment (down 1.26%) were top losers in Nifty 50 index.
Q4 Results Today:
Torrent Pharmaceuticals (down 0.42%), Deepak Nitrite (up 1.72%), Max Financial Services (up 1.03%), Blue Dart (up 1.99%), Coromandel International (up 0.6%), Praj Industries (up 1.79%), V.I.P Industries (up 0.8%) and Wonderla Holidays (down 0.67%) are some of the companies that will announce their quarterly results today.
Earnings Impact:
HDFC was down 1.4% after the housing finance major's standalone net profit declined 22% to Rs 2232.53 on 3.41% rise in total income to Rs 11,981.66 crore in Q4 March 2020 over Q4 March 2019. Dividend income slumped to Rs 2.08 crore in Q4 FY20 from Rs 536.88 crore in Q4 FY19. With dividend distribution tax being abolished, some of the subsidiary company did not pay interim dividend," the firm said. Profit on sale of investment was Rs 2 crore in Q4 FY20 as against Rs 321 crore in Q4 FY19. Fair value changes charged to the statement of profit and loss - largely on account of the fall in the stock markets, was Rs 428 crore in Q4 FY20, higher than Rs 167 crore in the previous year.
On the asset quality front, the gross non-performing loans as at 31 March 2020 stood at Rs 8,908 crore. This is equivalent to 1.99% of the loan portfolio. Increase in provisioning, including impact for COVID-19, was Rs 1,274 crore in Q4 FY20, higher than Rs 398 crore in the previous year.
Inclusive of fees and income from assigned loans, the Net Interest Income (NII) for the quarter ended 31 March 2020 stood at Rs 3,780 crore compared to Rs 3,238 crore in the previous year, representing a growth of 17%. The board of HDFC approved a dividend of Rs 21 per share for the year ended March 2020.
Avenue Supermarts tumbled 4.94% to Rs 2283.95. The company said its overall revenue during the month of March 2020 grew by just 11% over March 2019 due to the lockdown effect of the last 9 days of March this year. The trend rapidly deteriorated in April during which more than half of its stores remaining closed for operations or operating for extremely restricted hours. The company's net profit jumped 41.61% to Rs 271 crore on 23.6% increase in to Rs 6,256 crore in Q4 March 2020 over Q4 March 2019. Consolidated EBITDA rose 12.1% to Rs 417 crore in Q4 FY20 from Rs 372 crore in Q4 FY19. EBITDA margin stood at 6.7% in Q4 March 2020, lower than 7.4% in Q4 March 2019.
The company said, "Significantly large EBITDA declines are to be expected due to lower sales, lower gross margins, higher cost of operations on account of hardship allowance to front line staff during lockdown and higher personal hygiene/store sanitation costs," it added.
IDFC First Bank jumped 5.57% to Rs 19 after the bank reported a net profit of Rs 71.54 crore in Q4 March 2020 as against net loss of Rs 218.03 crore reported in Q4 March 2019. Total income rose 13.8% to Rs 4439.63 crore in Q4 March 2020 from Rs 3902.11 crore reported in Q4 March 2019. The result was announced after market hours on 22 March 2020.
The bank posted reported a strong growth in core earnings. Net Interest Income (NII) grew by 40% to Rs 1,563 crore in Q4 March 2020 from Rs 1,113 crore in Q4 March 2019. Net interest margin improved to 4.24% in Q4 March 2020 from 3.03% in Q4 March 2019. On asset quality front, the bank's gross non-performing assets (NPAs) stood at Rs 2279.56 crore as on 31 March 2020 as against Rs 2511.36 crore as on 31 December 2019 and Rs 2136.04 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 2.6% as on 31 March 2020 as against 2.83% as on 31 December 2019 and 2.43% as on 31 March 2019.
GMM Pfaudler slumped 7.49% to Rs 3601.20. The firm's net profit declined 13% to Rs 11.60 crore on 5.28% decline in net sales to Rs 131.78 crore in Q4 March 2020 over Q4 March 2019. EBITDA improved 14% to Rs 22.5 crore in Q4 FY20 from Rs 19.8 crore in Q4 FY19. EBITDA margin stood at 17% in Q4 FY20, higher than 14% in Q4 FY19. "COVID-19 began impacting our normal business operations on 14th March 2020 by affecting our supply chain and our ability to ship ready equipment to our customers, our production eventually shut down completely on March 23rd, 2020. All in all, additional revenue that could have been recognized in the last quarter in a normal business environment is estimated to be Rs 300 million", the company said in a statement.
Global Markets:
European markets opened higher while Asian stocks continued trading higher on Tuesday as investors looked to a re-opening world economy.
Japanese shares led gains after the Japanese Prime Minister Shinzo Abe on Monday announced the lifting of the state of emergency for the entire nation, as the coronavirus outbreak there eases. As per reports, Abe has said that he would work to increase the government's stimulus packages to more than 200 trillion yen ($1.9 trillion), or about 40% of Japan's annual output.
Investor sentiment received a boost after American biotech firm Novavax said Monday it started the first human study of its experimental coronavirus vaccine. The firm said it expects initial results on safety and immune responses in July.
In Hong Kong, investors are moving on from last week's sharp losses. On Friday, the Hang Seng reportedly had its worst day in nearly five years after Beijing moved to pass a controversial national security law, a blow to the financial hub's autonomy. China's foreign ministry commissioner in Hong Kong, Xie Fang, moved to reassure rattled investors on Monday evening. The legislation won't affect freedoms of speech, press, publication and assembly, Xie said, according to state-run news agency reports. He reportedly added that the controversial legislation will protect the law-based operation of international businesses in Hong Kong.
In economic news, Singapore cut its 2020 economic forecasts for the third time this year. The Singapore economy is now expected to shrink by between 4.0% and 7.0% this year, according to the country's Ministry of Trade and Industry.
In US, markets were closed on Monday for Memorial Day.
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