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PremiumIndian indices wiped off gains on Friday, shedding over 900 points from day's high, as bears took control of the Dalal Street in the the last hour of the trading session, in a week that was hit by high volatility. Major heavyweights Maruti, Wipro, TechM, Reliance, SBI, L&T, and Infosys dragged the indices down, while Axis Bank tumbled over 6.4%. The indices started the session strongly after tracking gains in the global markets on the back of upbeat tech earnings in the US. However, the indices soon turned volatile before closing in the red as investors booked profits. In Asia, shares rose in South Korea, Hong Kong, Shanghai, and Australia on Friday. Market in Japan was closed for a holiday.
Indian indices collapsed in the last hour of the session on Friday, despite global markets registering gains on positive earnings posted by the US tech firms.
The Sensex slipped 460.19 points, or 0.8%, to close at 57,060.87, while Nifty50 lost 142.50 points to end at 17,102.55. Sectorally, all the sectors were in the red with energy, power, oil & gas stocks suffering the most.
On the 30-stock index, the most gains were made by Kotak Bank, HDFC Bank, and Sun Pharma, among others, while Axis Bank, Power Grid, SBI, and Wipro were among the biggest losers.
On Nifty50, HDFC Life, Tata Consumer, and Kotak Bank made the most gains, while Axis Bank, Coal India, Adani Ports, and Wipro were among the biggest laggards.
Global brokerage JPMorgan has upgraded Indian Hotels' rating to overweight from Neutral with improved business travel momentum and favorable demand-supply signaling potential upcycle.
The share price of private sector lender Axis Bank slumped by around 6 per cent on Friday, a day after the company announced its financial results for the quarter ended March 2022.
At the BSE, the share of Axis Bank was trading 5.59 per cent lower at ₹736.35 at 2.05 pm. The scrip slumped to a low of ₹734.10 in the intra-day.
Axis Bank's share tumbled despite the general rally in the market. The benchmark Sensex of the BSE was trading 255.82 points or 0.44 per cent higher at 57,776.88 points. Axis Bank was the biggest Sensex loser.
On Thursday, Axis Bank reported a net profit of ₹4,117.8 crore for the quarter ended March 2022, which is 54 per cent higher when compared with ₹2,677 crore recorded in the corresponding period of the previous year.
Life Insurance Corp. (LIC) will list on stock exchanges 17 May, Department of Investment and Public Asset Management (DIPAM) Secretary said Friday, according to media reports.
Tata Group's steel manufacturing arm, Tata Steel is set to consider a stock split proposal next week on Tuesday, May 3, 2022. Additionally, the company's board of directors will also look into dividend recommendations for the financial year FY22. The meeting will be held to consider the firm's financial results for the quarter and year ended March 31, 2022.
Gold rose on Friday as worrying U.S. economic data rekindled some interest in the safe-haven metal, but bullion was likely to log its first monthly drop since January on bets for aggressive interest rate hikes by the Federal Reserve.
Spot gold was up 0.6% at $1,905.67 per ounce, as of 0546 GMT, but had lost about 1.6% so far this month. U.S. gold futures were up 0.9% at $1,908.10.
The disappointing U.S. GDP number could take some pressure off the Fed to tighten quite as aggressively as it has hinted, a rhetoric that has pressured gold in recent weeks, said Ilya Spivak, a currency strategist at DailyFX.
Being a market leader with market share in all the segments and various initiatives (capex, product differentiation, product plus solution approach ) undertaken by the company, Deepak Fertilisers and Petrochemicals Corporations (DFPCL) is getting itself future ready to ride on India’s growth story, highlighted brokerage Anand Rathi.
Vedanta Ltd said it will pay ₹11,710 crore as dividend to shareholders in line with its robust performance on profitability and cash flows. This will also help the Vedanta group in deleveraging, in line with latest capital allocation policy, the company said Thursday.
Pan-India focused cement manufacturer Ambuja Cements Ltd. reported better-than-anticipated operating performance in the March-ended quarter, thanks to its cost savings efforts. Standalone Ebitda at ₹7,900 crore in Q1CY22, fell 19% on a year-on-year (y-o-y) basis, but was 16% ahead of consensus estimates. Ebitda is short for earnings before interest, tax, depreciation and amortization. The company follows a January to December accounting year.
Automakers are expected to have a good start to FY23 which is evident from analysts’ expectations of growth in April 2022 volumes. True, the low base of last year aids in volume growth. But the segments are poised for recovery.
Stocks in Europe rose Friday as China’s pledge to ramp up stimulus buoyed optimism and strong earnings continued to roll in.
The Stoxx Europe 600 Index gained almost 1%, helped by the region’s exporters for whom Chinese raw-material demand is key. Miners and technology firms led gains. U.S. equity futures pared losses sparked by post-earnings slumps in Amazon.com Inc. and Apple Inc. in extended U.S. trading on concerns about the outlooks for both tech giants.
The busy earnings season has also helped restore confidence after a turbulent start to the year, tempering April’s losses for European equities. The main regional benchmark is set for a 1.2% drop in the month. Novo Nordisk A/S climbed after raising its 2022 profit forecast.
India will provide support for companies looking to invest in semiconductor manufacturing, Prime Minister Narendra Modi said on Friday, as the South Asian nation sets its sights on becoming a key player in the global supply chain for chips.
Even as more firms and countries seek to ensure access to the chips at the core of critical technologies such as 5G, and others of the future, the bulk of the world's chip output is limited to places such as Taiwan and the United States.
"We have shown that India means business, now it is over to you," Modi told the country's first semiconductor conference in the southern tech hub of Bengaluru, reiterating his government's support for the industry.
The Indian semiconductor market, worth $15 billion in 2020, is estimated to reach $63 billion by 2026, the government says.
A $10-billion plan to attract semiconductor and display makers has drawn applications from companies such as a joint venture between Indian conglomerate Vedanta and Taiwan's Foxconn, and Singapore's IGSS Ventures.
Food prices, particularly edible oils and some grains, have risen more than India’s monetary authorities had expected, according to a dovish member of its rate-setting committee.
“On the overall inflation, there was an expectation that energy prices in general would be affected," Shashanka Bhide, an external member on the central bank’s Monetary Policy Committee and an agricultural economist, said in an interview on Wednesday. “But in case of food, it has been a little bit of a surprise."
India’s headline inflation surged more than anticipated to near 7% in March, stoked by higher prices of food items such as edible oils, cereals and vegetables. While the spillover from Russia’s invasion of Ukraine is fanning fertilizer, food and fuel price shocks globally, the South Asian nation -- the world’s biggest importer of palm, soybean and sunflower oils -- faces a further spike in consumer prices from Indonesia’s surprise decision to ban exports of cooking oils.
Asian shares were set for their best day in six weeks on Friday led by Chinese tech stocks after reports of a possible resolution to the Sino-U.S. audit dispute, giving investors much needed respite from worries of a global economic slowdown.
Still, a key regional share index was set for its worst month in nine as the Ukraine war and expectations for aggressive U.S. rate hikes in coming months have added to the anxieties, propelling the safe-haven dollar to near 20-year peaks.
Hong Kong listed tech stocks rose as much as 10% on Friday as trading resumed after the lunchtime pause. Ecommerce players JD.com and Alibaba each rose as much as 15% and Meituan gained around 12%.
All three are listed in both the U.S. and Hong Kong bourses. They and their peers' stock prices had been affected by U.S. moves to delist Chinese companies because Beijing restricted the U.S. audit regulator's access to their audit documents.
Reports on Friday that a resolution to the dispute was in sight had driven the sharp gains, said Steven Leung executive director of institutional sales at brokerage UOB Kay Hian in Hong Kong.
The gains from Chinese index heavyweights sent MSCI's broadest index of Asia-Pacific shares outside Japan 1.9% higher, which would be its best day since March 17.
ACEM’s total capacity to reach 40MTPA (+24% of current capacity), post newly announced expansion along with the ongoing 1.5MTPA expansion at Ropar, Punjab. As Ropar expansion is expected to commence by CY23E end and with the current lack of utilization headroom, we trimme our volume growth to +8/4% y/y (previously +9/7% y/y) led revenue correction by 1/5% in CY22/23E. While, due to the elevated fuel & diesel price, we lowered our EBITDA/PAT estimate by 25/28% for CY22E and for 15/18% CY23E. The ongoing & recent announced capacity addition would outlay CAPEX of Rs38.1bn, which will be funded by internal accruals. We valued ACEM on SOTP based valuation with standalone entity valued at 14x EV/EBITDA and ACEM’s stake in ACC at 10x EV/EBITDA on CY23E by adding Rs107.6bn net cash, we arrived at TP of Rs391 (earlier Rs420) with ADD rating (earlier BUY).
Shares of Axis Bank tumbled over 5% in Friday's session to ₹739 apiece on the BSE a day after the company reported a 54% jump in its standalone net profit for the March quarter at ₹4,118 crore on the back of higher income and lower provisions.
Country's largest life insurer Life Insurance Corporation of India's (LIC) three-day initial public offering (IPO) will open for public subscription next week on Wednesday, May 4 and conclude on May 9. The price band of LIC IPO has been set at ₹902-949 per share.
Continued retail outlet expansion driving market share gains in CSD coupled with success in categories like dairy and energy drinks should remain key growth drivers. We believe the company is a good compounding story for the long‐term with a growth potential in the mid‐teens coupled with stable margins and return ratios. We maintain our ADD rating for now and would expect further re‐rating once the company delivers on its aggressive growth plans on the markets acquired in South and West India in the next couple of years and we get more clarity on organic/inorganic expansion plans.
Wipro Ltd is the last among tier-1 Indian IT services companies to declare its fourth-quarter earnings. The earnings of its larger peers Tata Consultancy Services Ltd (TCS), Infosys Ltd, and HCL Technologies Ltd were below Street expectations and reflected supply-side pressures that dragged margins. All eyes are on Wipro now to see whether it will follow its peers or buck the trend.
VNB margin has inched lower on YoY basis for the quarter on account of SBIL choosing not to remain margin neutral during re-pricing: The calculated VNB margin in 4QFY22 is 26.9%, which is 77 bps lower than the calculated VNB margin in 4QFY21. The VNB margin has been flattish to lower on YoY basis despite an apparent improvement in product mix. This is because when SBI Life re-priced products in August, the re-pricing was not fully margin neutral, especially for the non-par savings product basket.
Management averred that VNB margin should expand going forward due to rising share of Non-Par Guaranteed business, Deferred Annuities and Protection.
The sequential de-growth in APE was mainly on account of the third wave of Covid19, from which SBIL has already bounced back: Total APE was down 10% QoQ to ₹41.2bn in 4QFY22. This was primarily due to the third wave of Covid-19 impacting sales in January and February. We think the third wave might have impacted SBIL more than peers since a greater proportion its, generally mass market, customers would be dependent on human mobility. Growth has recovered in March and trends are encouraging.
We maintain ‘BUY’ rating on SBIL with a revised price target of ₹1580: We value SBIL at 3.4x FY23 P/EV for an FY23E/24E RoEV profile of 19.8/20.1%.
Stocks were mostly higher in Asia on Friday after a rally on Wall Street led by technology companies.
US futures and oil prices were mixed as investors await signals on Chinese economic policy from a meeting of the ruling Communist Party's powerful Politburo.
The Shanghai Composite index gained 0.3% to 2,983.11 while Hong Kong's Hang Seng index slipped 0.4% to 20,203.97.
Tokyo was closed for a holiday, the first of several in Japan's coming “Golden Week".
In Seoul, the Kospi added 0.6% to 2,683.61, while Australia's S&P/ASX 200 advanced 0.8% to 7,415.50.
The price of US benchmark crude oil fell 5 cents to $105.31 per barrel. It jumped $3.34 to 105.36 per barrel on Thursday.
Brent crude, the basis for pricing international oils, gained 22 cents to $107.48.
The rupee witnessed a range-bound trading in early trade on Friday as the strength of the dollar in the overseas market and elevated crude oil prices offset the support of positive domestic equities.
At the interbank foreign exchange, the rupee opened at 76.62 against the American dollar and moved in a narrow range. It touched an early high of 76.53 and a low of 76.63 in initial deals.
On Thursday, the rupee declined by 4 paise to settle at 76.61 against the US currency.
Traders said gains in domestic equities and fresh foreign fund inflows helped the rupee restrict losses.
Meanwhile, global oil benchmark Brent crude futures rose 0.01 per cent to USD 107.60 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.14 per cent to 103.48 as the indication of an aggressive tightening by the US Fed and geopolitical uncertainties pushed investors to the safety of the greenback.
Rating: BUY | CMP: Rs4,309 | TP: Rs4,915
Persistent delivered consistently strong (9%+ QoQ) revenue growth since past four quarters. We believe it will continue to deliver industry leading growth and model 33.5% YoY USD growth in FY23E given – 1) strong TTM ACV of $943.1mn with book-to-bill at 1.23x, 2) incremental revenue contribution (~11%) from acquisitions, 3) opportunity to capture higher share of fast growing cloud services market led by strengthened hyperscalar partnerships due to Data Glove and Media Agility acquisitions and expansion of Payments BU (SCI acquisition). Flattish QoQ EBIT margins in Q4, dip in LTM attrition (-30bps QoQ) and aspiration to maintain EBIT margins at FY22 levels (~14%) is impressive. We believe margins can be maintained (13.8% in FY23E) aided by tailwinds from revenue growth leverage, pyramid optimization, improvement in margin profile of one of the IP deal, improved pricing and currency depreciation.
Our EPS estimates remain largely unchanged. We arrive at DCF based target price of Rs. 4915 (earlier Rs. 5160) with implied target multiple of 38x (earlier: 40x) factoring increase in risk free rate to 7.2% (earlier 6.8%). Persistent is currently trading at 37x/33x earnings multiple on FY23/24 EPS of INR 116/131 respectively with Revenue/EPS CAGR of 24%/23% over FY22-24. Maintain Buy.
Rating: BUY | CMP: Rs780 | TP: Rs940
Axis bank earnings were mixed as operating income missed estimates by 4% due to weaker margins although PAT was a beat at Rs41.2bn (PLe: Rs39.8bn) driven by lower provisions (due to stronger recoveries). Loan growth was a tad higher led by retail, however the management was a bit cautious on credit growth in FY23E owing to a tougher global environment. The likelihood of reaching the guided RoE of ~16% seems lower in the medium term as margin recovery could be protracted and opex may remain elevated. However, balance sheet strength and improving asset quality provide some cushion. Valuation discount to ICICIBC might widen to 20-25% (currently 16%) unless NIM improves. With RoE of 14.2% in FY24E, we maintain multiple for AXSB at 2.3x FY24E ABV though cut TP from Rs975 to Rs940. Maintain BUY.
Rating: HOLD | CMP: Rs383 | TP: Rs400
Ambuja Cement (ACEM) started the new calendar year with better than expected earnings. EBITDA fell 19% YoY to Rs7.9bn, above our/consensus estimates (CE) by 10%/16%. Higher clinker sales volume and lower other expenses drove the beat. While, we maintain our estimates as elevated other expenses in H2, a usual trend, would keep margins under check.
ACEM delivered material turnaround in earnings over last couple of years. The major contributors to this turnaround were multifold increase in volumes under MSA, optimisation of fixed costs and reduction in specific energy consumption. On the incremental basis, we don’t see meaningful scope for further cost reduction. Theme of capacity expansion would get delayed due to likely exit of parent. As the valuations have surged to rich territory with EV/EBITDA of 14x and EV/t of USD170/t, we downgrade rating on stock to Hold with TP of Rs400 with EV/EBITDA of 14.5x CY23e.
Rating: ACCUMULATE | CMP: Rs3,834 | TP: Rs4,120
Bajaj Auto’s 4QFY22 EBITDA margin surprised positively at 17.1% (+190bps QoQ, PLe: 14.9%) driven by 1) deferral of raw material cost (RM cost at 71.9% of sales vs 74.7% QoQ), 2) positive impact of price increase, 3) improved USD realization in exports and 4) favorable sales mix. Deferred RM cost will cause an impact of 3.5-4% in 1QFY23, against which ~1.5% price hike taken in Apr22.
We remain positive on BJAUT’s growth prospects as (1) domestic 2W volumes are expected to grow in near-term led by marriage season, opening up of colleges and offices (however genuine demand needs to be monitored post Jun-22), (2) exports demand will likely remain steady and (3) 3W volumes (+28% in FY22) to pick-up momentum post opening up of the economy and increasing CNG demand. Considering near-term risks like commodity cost inflation and chip shortage, we trim our margin estimates by 90/60bps for FY23/24. Maintain ‘ACCUMULATE’, with a revised TP of ₹4,120 at 17x FY24E EPS (earlier 16x) on improving domestic outlook for 2Ws and 3Ws, along with increasing volumes of EVs.
Gold and silver rates today edged higher in Indian markets, tracking a pullback in global rates after the precious metals fell to two-month lows. On MCX, gold futures were up 0.58% to ₹51,560 per 10 gram but are still down down about ₹2,000 from April 18 highs. Silver futures today rose 0.5% to ₹64,915 per kg.
Gold prices edged higher on Friday as lower U.S Treasury yields outweighed pressure from an elevated dollar, but bullion was still headed for its biggest monthly drop since September on fears of aggressive interest rate hikes by the Federal Reserve.
Spot gold was up 0.1% at $1,897.01 per ounce, as of 0054 GMT. U.S. gold futures rose 0.4% to $1,898.10.
Oil is poised to eke out a fifth monthly advance after another tumultuous period of trading that saw prices whipsawed by the fallout of Russia’s war in Ukraine and the resurgence of Covid-19 in China.
West Texas Intermediate futures fluctuated near $105 a barrel on Friday and are almost 5% higher in April. The war has entered its third month despite diplomatic efforts for a cease-fire, and the European Union appears to be making gradual progress toward a ban on Russia crude imports.
China’s virus outbreak has added another source of volatility to the market. The nation has extended mass testing to more cities, with lockdowns leading to swelling oil stockpiles and putting the world’s biggest crude importer on track for the largest hit to demand since the early days of the pandemic.
The prices of petrol and diesel have remained unchanged for the last 23 days on Friday, 29 April. Petrol and diesel prices were last hiked by 80 paise a litre each on 6 April,Wednesday, taking the total increase in rates in 16 days to ₹10 per litre.
Automobile manufacturer, Maruti Suzuki is set to announce its financial performance for the quarter and year ended March 31, 2022 (Q4FY22), today. Ahead of the earnings, on Thursday, Maruti shares witnessed positive sentiment from investors on stock exchanges.
Biocon Ltd on Thursday reported a 4 per cent decline in consolidated net profit to ₹283.9 crore in the fourth quarter ended on March 31, 2022.
The company, which posted a consolidated net profit of ₹296.4 crore in the same quarter previous fiscal, has appointed former HSBC India Chairperson Naina Lal Kidwai as an independent director, Biocon Ltd said in a regulatory filing.
Cryptocurrency prices today were mixed with Bitcoin trading above the $39,000 mark. The world's largest and most popular cryptocurrency rose 0.6% to $39,704. The global crypto market’s value today gained nearly a per cent in the past 24 hours to $1.92 trillion, according to pricing from CoinGecko.
Axis Bank on Thursday reported a 49.77 per cent jump in its consolidated net profit for the March quarter to ₹4,434 crore on a consolidated basis, helped by a steep reduction in money set aside for bad debts.
On a standalone basis, the third-largest private sector lender reported a 54 per cent jump in its post-tax net at ₹4,118 crore. For the fiscal year 2021-22, it reported a 98 per cent jump in its post-tax profit at ₹13,025 crore.
Amazon reported its first quarterly loss since 2015 on Thursday, its money-making juggernaut stalled by a slowdown in pandemic-induced online shopping and a huge write-down of its investment in an electric-vehicle startup.
The Seattle-based e-commerce giant's stock fell 9% in after-hours trading.
Amazon reported a loss of $3.84 billion, or $7.56 a share, for the first three months of the year. A year ago, it reported a profit of $8.1 billion, or $15.79 a share, for the first quarter. Wall Street analysts expected a profit of $8.35 a share in the latest quarter, according to FactSet.
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