The benchmark indices hovered near day's low as IT scrips continue to pull the market lower. Investors booked profits following a 3-day continuous rally. The Nifty traded tad below 17,650 mark.
The barometer index, the S&P BSE Sensex, dropped 478.09 points or 0.80% at 59,080.24. The Nifty 50 index lost 135.30 points or 0.76% at 17,644.70.
Housing Development Finance Corporation (HDFC) (down 3.20%), Infosys (down 2%) and Reliance Industries (RIL) (down 0.87%) dragged the market.
Broader markets suffer minor losses. The S&P BSE Mid-Cap index fell 0.42%. The S&P BSE Small-Cap index fell 0.01%.
Buyers outnumbered the sellers. On the BSE, 1,778 shares rose and 1,507 shares fell. A total of 96 shares were unchanged.
Among Nifty50 scrips, ITC (up 0.67%) and Titan Company (up 0.54%) are expected to announce their quarterly results today.
Economy:
IHS Markit India Services PMI came at 51.5 in January 2022 lower than 55.5 posted in December 2021. The headline figure pointed to the slowest rate of expansion in the current six month sequence of growth. The upturn was reportedly stymied by the intensification of the pandemic, the reintroduction of restrictions and inflationary pressures.
Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit said, The escalation of the pandemic and reintroduction of curfews had a detrimental impact on growth across the service sector. Both new business and output rose at slight rates that were the weakest in six months. Concerns about how long the current wave of COVID-19 will last dampened business confidence and caused job shedding. Firms were also alarmed about price pressures. On this front, the latest PMI results brought worrying news as input prices increased at the sharpest rate in over a decade. Charges rose at a faster pace as some firms continued to transfer additional cost burdens to consumers, but the rate of inflation here was moderate as the vast majority of monitored companies left their fees unchanged since December. Private sector growth was sustained at the start of the year but, with the slowdown seen in services mirrored by manufacturing, there were weaker expansions in aggregate sales and output.
Gainers & Losers:
Hero MotoCorp (up 3.50%), Bajaj Auto (up 2.80%), Maruti Suzuki India (up 2.12%), Axis Bank (up 0.89%) and Tata Steel (up 0.59%) were major gainers in Nifty 50 index.
Housing Development Finance Corporation (HDFC) (down 3.20%), SBI Life Insurance Company (down 2.74%), Oil & Natural Gas Corporation (ONGC) (down 2.51%), Grasim Industries (down 1.91%) and Larsen & Toubro (L&T) (down 1.81%) were major losers in Nifty 50 index.
Stocks in Spotlight:
Varun Beverages (VBL) fell 1.47%. On a consolidated basis, the company reported a net profit of Rs 16.49 crore in Q4 December 2021 as against net loss of Rs 19.73 crore in Q4 December 2020. Net sales rose 30.31% to Rs 1,734.33 crore in Q4 December 2021 over Q4 December 2020, primarily on account of strong volume growth. Total sales volumes were up by 28.5% YoY at 112.0 million cases in Q4 CY 2021. Pre-tax profit stood at Rs 41.85 crore in Q4 December 2021 as against pre-tax loss of Rs 18.86 crore in Q4 December 2020. EBITDA increased 20.5% to Rs 207.57 crore in Q4 CY 2021 from Rs 172.23 crore. Despite being a seasonally weak quarter, the company reported a positive PAT led by improvement in profitability of international operations and lower financing cost. Finance cost in Q4 CY 2021 declined by 39.8% owing to lower average cost of borrowing.
Welspun Enterprises tumbled 6.98%. The company's consolidated net profit slumped 66.6% to Rs 12.94 crore on a 42.9% fall in net sales to Rs 241.58 crore in Q3 FY22 over Q3 FY21. Consolidated EBITDA dropped 32.1% to Rs 56.6 crore in Q3 FY22 as against Rs 83.3 crore in Q3 FY21. EBITDA margin improved to 19.9% in Q3 December 2021 from 17.9% in Q3 December 2020. Profit margin stood at 5.4% in Q3 December 2021 from 9.2% in Q3 December 2020.
IIFL Wealth Management jumped 3.26%. The company's consolidated net profit rose 58.52% to Rs 152.94 crore on 22.53% increase in total income to Rs 570.62 crore in Q3 December 2021 over Q3 December 2020. On a consolidated basis, profit before tax rose 54.67% to Rs 197.87 crore in Q3 December 2021 over Q3 December 2020. Annual Recurring Revenues stood at Rs 245 crore, up 10% Q-o-Q and 59% Y-o-Y. Total AUM is up 2.4% Q-o-Q and up 31.1% Y-o-Y at Rs 2,62,780 crore. Total expenses rose 10.36% year-on-year to Rs 372.74 crore in Q3 December 2021. Employee expenses jumped 56.90% to Rs 168.57 crore during the period under review. From FY 23 onwards, the company expects the overall employee cost to stabilize around 32-33% of total revenues.
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