Market Recap for 03 March 2021

 

Nifty 15,245 ▲ 326 (+2.1%) Sensex 51,444  ▲ 1,147 (+2.2%)

The markets opened with a gap-up today, and after some initial weakness, steadily rose to close about 2.2% higher. With today’s gain, both the Nifty50 and Sensex have fully recouped the losses made on Friday. In all, 43 of the Nifty50 stocks advanced today. Except for the Nifty Auto index (-0.6%), all sectoral indices closed in the green today, with the Nifty Metal (+3.3%) and Nifty PSU Bank (+3.1) posting the strongest gains. Top gainers (Nifty50) Tata Steel ▲ 5.3% Bajaj Finserv ▲ 4.9% Reliance ▲ 4.8% Top losers (Nifty50) Hero MotoCorp ▼ 1.5% Maruti ▼ 1.1% Bajaj Auto ▼ 1.1% Here are the top stories of the day. Sugar shares gain on rising global prices Shares of sugar manufacturing companies such as Bajaj Hindusthan (+20.0%) and Dwarikesh Sugar (+10.0%), Shree Renuka (+9.6%) and Triveni Engineering (+4.3%) were upbeat today. Globally, sugar prices have risen nearly 30% in the last six months due to supply concerns from Brazil, the world’s largest sugar producer. Further, the firmness in sugar prices is accentuated by expectations of lower than anticipated surplus stocks in India, which is the second-largest producer. Any rise in exports from India will further reduce inventory and could trigger a price rise in domestic markets. Forging stocks up on spurt in US truck sales A three-fold YoY increase in sales of heavy trucks in the US led to a surge in stocks of Indian forging companies such as MM Forgings (+7.3%), Ramkrishna Forgings (6.0%), and GNA Axles (+0.5%). These companies derive 53%, 40% and 35% of their revenues from exports, respectively. In 2020, March, April and May had a severe negative sales impact due to Covid. Thus, the low-base effect could play a part. Reports suggest that sales of heavy trucks will be in the range of 2.5-2.8 lakh units in 2021, about 4-8% higher than earlier estimates. RPP Infra surges on big-ticket orders RPP The Chennai-based construction company today announced four order wins totalling up to ₹1,000 crore. After the news broke, the stock jumped about 12% intraday before closing 4.9% higher. All four orders are in the state of Tamil Nadu and are a mix of water resource and highway development projects. With the new order wins, RPP’s outstanding order book stands at ₹3,200 crore, more than 5 times its FY20 revenues. MTAR Tech IPO oversubscribed on Day 1 The initial public offer (IPO) of MTAR Technologies was oversubscribed by 3.7 times on the first day of the issue. The Hyderabad-based precision engineering company manufactures equipment for the defence, aerospace and nuclear energy sectors. The IPO is open for bids till 5 March 2021 at a price band of ₹574-575 per share. You can apply for it here. Closing bell The markets zoomed past last week’s high and shrugged off the negativity created by the spike in the US treasury bond yields. The rise in the markets was also supported by positive cues from the Asian and European markets. While the situation looks hunky-dory, traders must continue to watch out for any adverse movement in the US treasury yields and prices of major commodities such as copper, as these could affect overall investor sentiments. Good to know What is active fund management? Active fund management is an investment approach that purposely shifts funds either between asset classes (stocks, bonds, etc.), sectors (sector rotation), or between individual securities (security selection) in order to seek superior returns.

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Morning Update 22nd February 2021

Previous closing (19 February 2021)

Nifty50: 14,981 ▼137 (-0.9%)

Sensex: 50,889 ▼434 (-0.8%)

Nifty Bank: 35,841 ▼ 745 (-2.0%)

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In the news

Jubilant gets larger slice of Domino’s pie

• The master franchisee of Domino’s Pizza (DP) in India will now buy a 32.81% stake in the American chain’s Eurasia business. This extends Jubilant Foodworks’ (JF) footprint as a franchisee holder into Turkey, Russia, Azerbaijan and Georgia.   
• The acquisition, pegged at 24.8 million pounds, will give JF access to a total of 771 stores, comprising dine-in, delivery and takeaway outlets. Last week, JF’s stock gained over 5%, in a weak market, and closed at its lifetime high. 

 

Maruti to capitalise on CNG demand 

• Soaring fuel prices have accelerated the demand for vehicles running on compressed natural gas (CNG). That’s a trend that the country’s largest carmaker aims to tap into. The company expects to sell 1.55 lakh CNG-powered vehicles this fiscal, a 50% YoY growth.  
• As per Maruti, the cost to run a CNG vehicle comes to ₹1.5/km versus about ₹4/km for petrol/diesel-powered vehicles. In addition to lower running costs, the increasing penetration of CNG filling stations in the country has also helped boost the alternative fuel. The shares of Maruti Suzuki lost 3.2% last week.   

 

Marico upbeat about demand revival

• After a relatively positive Q3, the maker of Parachute oil is optimistic about demand revival and growth in rural markets to drive business going forward. In fact, it aims to deliver mid-teen growth in volumes in the upcoming quarters.  
• However, the FMCG major expects a transient pressure on margins owing to rise in raw material costs. It expects to clock up to ₹500 crore (from around ₹350 crore expected in FY21) from its health and immunity foods segment in FY22 where it has launched several new products recently. The stock gained about 3.2% last week. 

 

FPIs continue buying spree om

• Foreign portfolio investors (FPIs) pumped in a total of ₹24,204 crore into the Indian equity markets in February so far. The figure for January was ₹19,473 crore.  
• As per reports, the buying spree is on account of high growth expectations from India in 2021, coupled with a positive Q3 results season and a pro-growth Budget. Emerging markets such as India are likely to continue receiving foreign investments as long as global central banks maintain their accommodative stance in order to revive their economies. 

 

Events of the week

• Wednesday: New home sales, Crude oil inventories (US)
• Thursday: Initial jobless claims, Pending home sales (US)
• Friday: GDP (India)

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Sectoral indices (Previous closing)

Top gainers	Top losers
NA	Nifty PSU Bank ▼ 4.7%
NA	Nifty Auto ▼2.6%

Global markets (at 8:30 am today)

Indices	Today's movement
Nikkei 225 (Japan)	▲ 0.7%
Hang Seng (Hong Kong)	▲ 0.2%
SSE Composite (China)	▲ 0.0%
Dow Jones (US) (19 Feb)	▲ 0.0%

Fact of the day

Tata Airlines–founded by J. R. D. Tata–was India’s first air service flight. It was rechristened Air India in 1946 and nationalised in 1953.
Source: Economic times

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Disclosures and Disclaimer

Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice. Investors should consult their investment advisor 

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Indian Railway Finance Corporation - RailTel IPO

 After the Indian Railway Finance Corporation, we have another railway-related company about to get listed - Railtel Corporation of India. The government wholly owns it and it is an information and communications technology ("ICT") infrastructure provider that falls under the Ministry of Railways' administrative control.

The RailTel IPO is available for subscription from 16th to 18th February 2021 & you can apply for this by clicking - invest.upstox.com/ipo/

Here's more information on RailTel to make an informed decision:

RailTel was set up to modernise telecom systems for the railways by creating an optic fiber-based broadband network along railway tracks. As of 30th June 2020, its optic fiber network covers over 55,000 route kilometres and covers 5,677 railway stations across India.

In FY20, the company generated about 25% of its revenues, or ₹283 crores, from projects with the Indian Railways. The company claims to be net-worth-positive since inception. It is valued at ₹1,369.3 crores in FY20. Its operations are funded entirely by internal accruals since Fiscal 2013 and the company is debt-free. Its financials have steadily risen too. Revenues from operations have grown at a CAGR of 7.4% during FY18-20, with the company clocking ₹1,128 crores in the last fiscal. In FY20, RailTel reported a net profit margin of 13%. For reference, margins for Reliance Jio Infocomm Limited and Tata Communications Limited stood at 10% and 4%, respectively.

Price band: ₹93-₹94

Lot size: 155 equity shares

Issue date: 16 - 18 February 2021

Allotment date: 23 February

You can learn how to apply for an IPO by clicking here

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Morning-update-for-15-february-2021

 Previous closing (12 February 2021)

Nifty50: 15,163 ▼10 (-0.0%)

Sensex: 51,544 ▲ 12 (+0.0%)

Nifty Bank: 36,108 ▲356 (+1.0%)

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In the news

ONGC's posts a weak Q3

• While crude oil prices are rising at the moment, they are still lower than what they were in Q3 of last fiscal. For ONGC, the per-unit realization for crude oil and gas were 25% and 45% lower on YoY basis, respectively. 
• Its standalone profit was down 67% YoY to ₹1,378 crore and revenues stood at ₹17,024 crore, down 28%. Last week, its shares fell 0.6%. However, they are up nearly 10% this month. 

 

IRFC announces strong quarter plus dividend

• The recently listed Indian Railway Finance Corporation emerged strong in Q3, reporting a 15% YoY growth in net profit to ₹1,046 crore. Its revenue from operations at ₹3,932 crore rose 8% during the same period.
• After a tepid listing, the company has declared a dividend of ₹1.05 per share. The share still trades below its issue price of ₹26, and closed flat on Friday.

 

Sunteck sees improved demand in Q3

• The Mumbai-based realty developer posted revenues of ₹205 crore up 20% YoY. However, the company’s net profit contracted 12% to ₹22 crore during the same period. Sequentially, however, net profit rose 59%. 
• The company saw improved demand across completed and new projects in Q3. The stock closed 1.8% lower on Friday, but has gained nearly 186% this month.  

 

Inflation and IIP show improvement

• The retail inflation eased to 4.06% in January versus 4.59% in December, mainly due to moderation in food inflation. The street had forecasted 4.45% for January. 
• Meanwhile, the IIP, which indicates industrial activity in the economy, rose 1% in December (versus a contraction of 2.1% in November). The numbers are higher than the street’s forecast of a 0.2% decline. The improvement was driven mainly by growth in manufacturing and electricity.

Events of the week

• Monday: Wholesale Inflation (India)
• Wednesday: Retail sales (US)
• Thursday: Crude oil inventories, Initial jobless claims (US)

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Sectoral indices (Previous closing)

Top gainers	Top losers
Nifty Bank ▲ 1.0%	Nifty Metal ▼ 1.7%
Nifty Fin Serv ▲ 0.9%	Nifty FMCG ▼1.5%

Global markets (at 8:30 am today)

Indices	Today's movement
Nikkei 225 (Japan)	▲ 1.1%
Hang Seng (Hong Kong) (11 Feb)	▲ 0.4%
SSE Composite (China) (10 Feb)	▲ 1.4%
Dow Jones (US) (11 Feb)	▲ 0.0%

Fact of the day

Nokia was once famous as a manufacturer of toilet paper and car tyres.

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Mutual Fund Types

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Market Recap for 21 January 2021

 

Nifty 14,590 ▼ 54 (-0.3%) Sensex 49,624 ▼ 167 (-0.3%)

The Sensex crossed the 50,000 milestone, leading to some early cheer. However, profit booking spooked the party in the last hour of the day. The market breadth turned negative, with 33 of the Nifty50 stocks closing in the red. Every major sectoral index closed in the red, with the Nifty PSU Bank (-3.2%) and Nifty Realty (-2.5%) indices losing the most. Top gainers (Nifty50) Tata Motors ▲ 6.3% Bajaj Finance ▲ 2.6% Reliance ▲ 2.5% Top losers (Nifty50) ONGC ▼ 3.3%     Tata Steel     ▼ 2.9% Coal India ▼ 2.6% Here are the top stories of the day. Bajaj Auto scoots ahead on record revenues Shares of Bajaj Auto surged as high as 4.5% intraday as it reported its highest-ever revenues and profits. Its revenues from operations grew 17% YoY to ₹8,909 crore and consolidated net profit jumped 30% YoY to ₹1,716 crore. The strong performance was driven by high operating leverage and a better product mix. The stock witnessed some profit booking in line with the fall in the broader market and ended the day with gains of 1.6%. Decorative paints boost profits for Asian Paints Q3 profits for the country’s largest paint maker shot up 62% YoY to ₹1,265 crore for Q3, much higher than street estimates of ₹971 crore. Further, the company’s revenues grew 25% to ₹6,788 crore. It witnessed a strong demand recovery across business segments. Shares of Asian Paints rose 1.5% today, as did shares of decorative paint makers such as Berger Paints (+1.6%) and Kansai Nerolac (+3.1%). Akzo Nobel (known for the Dulux brand) was an exception as it fell 1.2%.The decorative paints segment is gaining attention due to a positive response for the Indigo Paints IPO. Click here to apply. Kajaria Ceramics gains on demand from smaller cities The rise in demand for tiles from smaller cities helped Kajaria Ceramics to post a 11% YoY growth in sales volumes. Even revenues from operations clocked a 13% YoY rise to ₹838 crore. Tighter cost controls helped boost margins and led to a 93% YoY rise in net profit to ₹118 crore. The stock gained 1.2% today, along with shares of other ceramic makers, such as HSIL (+6.3%), Somany Ceramics (+5.0%) and Cera Sanitaryware (+1.6%). Consumer durables stocks in demand In its Q3 results, Havells reported revenue growth of 46% YoY in electrical consumer durables. Further, its subsidiary Lloyd, which primarily makes AC and fridges, posted revenue growth of 70% YoY. Havells was able to gain share from the unorganised sector and also benefited from import prohibitions. The strong growth rates reported by Havells triggered buying in shares of peers such as Vguard (+9.2%) Crompton Greaves (+7.9%), Whirlpool (+6.0%), Polycab (+6.1%) and Voltas (+5.0%). Closing bell After a flying start and creating history with #SensexAt50k, the markets witnessed sharp profit booking, which could make traders nervous. Technically, the market seems to be losing momentum. Tomorrow, Reliance Industries is expected to announce its Q3 results and the street is expecting a nearly 3% YoY decline in consolidated net profit. As we have mentioned earlier, volatility would be the order of this month and traders must be prepared for it. Good to know What are NPAs? If interest is not received for 3 months, a loan turns into a non-performing asset (NPA), also referred to as gross NPA. A high gross NPA ratio means that the bank’s asset quality is in bad shape. Banks set aside (provide for) funds for some loans going bad. The net NPA is that portion of bad loans that has not been provided for in the books. If you haven't already, open your Upstox account to get IPO-ready today! Click here to sign up.

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