MARKET CLOSING UPDATE
The benchmark indices ended lower on Friday, dragged by banks, auto and financial stocks. The Nifty managed to close above 17,100 mark, falling sharply from an intraday high of 17,373.50. The NSE's India VIX, a gauge of market's expectation of volatility over the near term, skid 1.75% to 20.6950. Weak global cues, ongoing Russia-Ukraine conflict, fears of monetary policy tightening and rising crude oil prices worried investors. Banks and auto stocks were under pressure.
As per provisional closing data, the barometer index, the S&P BSE Sensex, fell 76.71 points or 0.13% at 57,200.23. The Nifty 50 index slipped 8.20 points or 0.05% at 17,101.95.
In the broader market, the S&P BSE Mid-Cap index rose 1.02% while the S&P BSE Small-Cap index gained 1.07%.
The market breadth was positive. On the BSE, 1,994 shares rose and 1,365 shares fell. A total of 99 shares were unchanged.
The Budget session of Parliament is set to commence on 31 January 2022 and will conclude on 8 April 2022. The government will present the Budget for fiscal 2022-23 on 1 February 2022. The Economic Survey is likely to be tabled on 31 January 2022 after the president's address.
On the political front, developments in the upcoming assembly polls in Uttar Pradesh, Uttarakhand, Goa, Punjab, and Manipur will be closely watched. Polls in all the five states will be held between 10 February 2022 and 7 March 2022 in seven phases. The counting of votes and the result will be declared on 10 March 2022.
Primary Market:
The initial public offer (IPO) of Adani Wilmar received bids for over 12.73 crore shares as against 12.25 crore shares on offer, according to stock exchange data at 15:30 IST on Friday, (28 January 2022). The issue was subscribed 1.04 times.
The issue opened for bidding on 27 January 2022 and it will close on 31 January 2022. The price band of the IPO is fixed at Rs 218-230. An investor can bid for a minimum of 65 equity shares and in multiples thereof. The IPO comprises a fresh issue of upto Rs 3,600 crore (including an anchor portions of 4,08,65,217 equity shares).
Buzzing Index:
The Nifty Pharma index rose 1.25% to 13,008.90. The index lost 1.87% in the past trading session.
Laurus Labs (up 7.96%), Strides Pharma Science (up 5.36%), Granules India (up 3.20%), Cadila Healthcare (up 3.19%) and Glenmark Pharmaceuticals (up 2.49%) were the top gainers in the Pharma segment.
Dr Reddy's Laboratories lost 0.83%. The drug maker reported a consolidated net profit of Rs 706.50 crore in Q3 December 2021, steeply higher than 19.80 crore in Q3 December 2020. On a consolidated basis, the company's revenue from operations rose 7.91% to Rs 5319.70 crore in in Q3 December 2021 over Q3 December 2020. Profit before tax soared 242% year-on-year to Rs 970.90 crore in Q3 December 2021. During the quarter, EBITDA was reported at Rs 1265.90 crore (up 6.82% Y-o-Y). The EBITDA margin stood 23.8% in Q3 December 2021 higher than 24% in Q3 December 2020 and 27% in Q2 September 2021. Research and Development (R&D) expenses rose 1% to Rs 415.90 crore. The company reported impairment charge of Rs 4.70 crore in Q3 FY22 compared with Rs 600 crore charge in Q3 FY21 taken on intangibles pertaining to certain products. Other operating income stood at Rs 24 crore in Q3 FY22 compared to Rs 12.8 crore in Q3 FY21. Net Finance income stood at Rs 28.9 crore in Q3 FY22 compared to Rs 49.3 crore in Q3 FY21.
Stocks in Spotlight:
Coforge soared 7.26%. The company's consolidated net profit increased by 25.2% to Rs 183.7 crore on a 5.7% rise in revenue to Rs 1,658.1 crore in Q3 FY22 over Q2 FY22. As compared to Q3 FY21, the company's net profit and revenue are higher by 50.7% and 39.3%, respectively. Adjusted EBITDA in the third quarter was Rs 322.6 crore, up 10.4% Q-o-Q (quarter-on-quarter) and up 50.4% Y-o-Y (year-on-year). Adjusted EBITDA margin for the quarter expanded to 19.5%. In dollar terms, the company's revenue for the quarter was $221.6 million, up 4.2% Q-o-Q and up 37.8% Y-o-Y. Total order book executable over the next 12 months at $701 million. Order intake was $247 million while 13 new clients were added during the quarter. Headcount in Q3 FY22 increased by 1,344 to 22,130 while the attrition was 16.3%.
Bharat Heavy Electricals (BHEL) declined 2.02%. The PSU company posted a standalone net profit of Rs 14.26 crore in Q3 FY22 as compared to a standalone net loss of Rs 230.99 crore registered in Q3 FY21. Standalone net sales grew by 17% to Rs 4,918 crore in Q3 FY22 from Rs 4,203 crore posted in Q3 FY21. BHEL posted a profit before tax of Rs 20.24 crore in Q3 FY22 as against a pre-tax loss of Rs 292.88 crore registered in the same quarter last year. BHEL reported a positive EBITDA of Rs 180 crore in Q3 FY22 as against a negative EBITDA of Rs 94 crore in Q3 FY21. The PSU enterprise said it achieved break-even at profit before tax level for Q3 FY21-22, mainly contributed by focus on provision withdrawal and strict budgetary control on expenses.
RBL Bank fell 2.81%. The firm's reported 6% rise in net profit to Rs 156 crore on a 11% increase in net interest income to Rs 1,010 crore in Q3 FY22 over Q3 FY21. Total income during the quarter rose by 3% Y-o-Y to Rs 2,664 crore. Net interest margin (NIM) for Q3 FY22 improved by 15 bps Y-o-Y to 4.34%. Operating profit, however, declined by 21% to Rs 631 crore in the third quarter from Rs 801 crore reported in the same period last year. Provisions (other than tax) in Q3 FY22 amounted to Rs 424 crore, which is lower by 30% as compared to Rs 606 crore recorded in Q3 FY21. Provision coverage ratio was 78.6% in Q3 FY22 as against 86.4% in Q3 FY21. The net non-performing assets aggregated to Rs 1,076 crore as at 31 December 2021 as against Rs 1,200 crore as at 30 September 2021 and Rs 402 crore as at 31 December 2020.
Bharti Airtel rose 1.39%. The telecom operator on Friday announced that Google will invest $1 billion in the company as part of its India Digitization Fund. Google and Bharti Airtel will partner on a long-term, multi-year agreement to accelerate the growth of India's digital ecosystem. As part of the partnership, Google will commit to equity investment as well as a corpus for potential commercial agreements, to be identified and agreed on mutually agreeable terms over the course of the next five years.
Google will make an equity investment of $700 million for a 1.28% stake in Bharti Airtel at a price of Rs 734 per share. Meanwhile, $300 million will go towards implementing commercial agreements, which will include investments in scaling Airtel's offerings that covers a range of devices to consumers via innovative affordability programs as well as other offerings aimed at accelerating access and digital inclusion across India's digital ecosystem. The deal will be subject to necessary regulatory approvals. Both organizations are committed to working towards building an open technology ecosystem that serves customers and businesses with innovative digital services, and have agreed to jointly explore and invest across a wide spectrum of areas to create digital solutions that uniquely serve India's requirements.
LIC Housing Finance surged 11.48%. The housing finance company's Q3 FY22 PAT stood at Rs 767.33 crore as against Rs 727.04 crore for Q3 FY21, a growth of 6% year-on-year. Q3 FY22 revenue from operations Rs 5,054 crore as against Rs 4907 crore, a growth of 3% Y-o-Y. Outstanding loan portfolio rose 11% to Rs 2,43,412 crore as against Rs 2,20,197 crore. Individual loan portfolio Rs 2,29,321 crore as against Rs 2,04,444 crore, a growth of 12%. The Q3 FY22 total disbursements stood at Rs 17,770 crore as against Rs 16,857 crore, up by 5%. Net Interest Income stood at Rs 1,455 crore, as against Rs 1,281 crore, growth of 14% Y-o-Y. Net Interest Margins were at 2.42% for Q3 FY22 as against 2.36% for Q3 FY21.
Kotak Mahindra Bank gained 0.65%. The private sector bank's net profit increased by 15% to Rs 2131.36 crore in Q3 FY22 from Rs 1,853.54 crore in Q3 FY21. The bank's total income in the third quarter rose by 4% Y-o-Y to Rs 8,260.48 crore. The bank's operating profit before provisions and contingencies for the quarter declined by 7.1% year on year to Rs 2,701 crore. Net interest income (NII) grew by nearly 12% year on year to Rs 4,334 crore in Q3 FY22 from Rs 3,876 crore posted in Q3 FY21. Net interest margin (NIM) for Q3 FY22 improved to 4.62% in Q3 FY22. As of 31 December 2021, COVID related provisions stood at Rs 1,000 crore. In accordance with COVID and MSME resolution frameworks announced by RBI, the bank had standard restructured fund-based outstanding of Rs 1,364 core (0.54% of advances) as of 31 December 2021.
Deepak Fertilisers & Petrochemicals Corporation was locked in an upper circuit of 5% at Rs 542.25. The company posted a 103% jump in consolidated net profit to Rs 180.61 crore in Q3 FY22 from Rs 88.95 crore registered in Q3 FY21. Revenue from operations increased 35.1% year on year to Rs 1,955.7 crore in Q3 FY22 from Rs 1,447.1 crore posted in the same period last year. Consolidated profit before tax stood at Rs 267.09 crore in Q3 FY22, rising 105% from Rs 130 crore posted in Q3 FY21.
Global Markets:
European markets fell across the board while Asian stocks ended mixed on Friday as global stocks closed out a week of extreme volatility following the U.S. Federal Reserve's monetary policy meeting.
Markets have whipsawed throughout the week as investors reacted to the Fed's indication on Wednesday that it could soon raise interest rates for the first time in more than three years, and to rising geopolitical tensions between Russia and the West over Ukraine.
The US economy expanded by 5.7% in 2021. It was the strongest calendar-year growth since a 7.2% surge in 1984 after a previous recession. The economy ended the year by growing at a solid 6.9% annual pace from October through December, the Commerce Department reported Thursday.
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