Domestic equity barometers ended with decent gains on Tuesday, rising for the third straight session. The barometer index, the S&P BSE Sensex, rose 112.77 points or 0.28% at 40,544.37. The Nifty 50 index added 23.75 points or 0.20% at 11,896.80.
The Sensex rose 2.05% and the Nifty climbed 1.85% in three consecutive sessions.
In the broader market, the BSE Mid-Cap index rose 0.47% and the BSE Small-Cap index gained 0.30% on Tuesday. Both these indices outperformed the Sensex.
The market breadth was almost even. On the BSE, 1373 shares rose and 1316 shares fell. A total of 160 shares were unchanged.
Prime Minister Narendra Modi will address the nation at 6 pm today, 20 October 2020.
India's active cases have fallen below 8 lakh after six weeks and continue to decline further. Health Ministry said 22 States and Union Territories have less than 20,000 active cases. Only 3 are reporting more than 50,000 active caseload.
India reported 7,48,538 active cases of COVID-19 infection and 1,15,197 deaths while 67,33,328 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 4,03,44,310 with 11,17,539 deaths, according to data from Johns Hopkins University.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.932% as compared with 5.940% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.49, compared with its close of 73.37 during the previous trading session.
In the commodities market, Brent crude for December 2020 settlement rose 5 cents at $42.67 a barrel. The contract fell 31 cents, or 0.72% to settle at $42.62 a barrel in the previous trading session.
The US Dow Jones future were currently up 202 points, indicating a positive start to equities on Wall Street today.
Shares in Europe and Asia were mixed on Tuesday as the stalemate over the fresh US fiscal stimulus continued on weigh on investor sentiment. Concurrently, record daily coronavirus infections in Europe ignited concerns about more severe lockdowns in the region.
China's latest one-year and five-year loan prime rates (LPRs) were left unchanged on Tuesday. At present, the one-year LPR sits at 3.85% while the five-year rate is at 4.65%
The US stock market finished session mostly lower on Monday, 19 October 2020, as risk sentiments undermined due to opposition to a sizable pandemic aid package hardened in the Republican-controlled US Senate.
President Donald Trump, who is trailing far behind his challenger Joe Biden in the polls, has proposed a $1.8 trillion package and indicated he would go higher, while Democrats in the House of Representatives have approved a $2.2 trillion measure. However, Senate Majority Leader Mitch McConnell has repeatedly signaled he would not support a massive package.
A National Association of Home Builders survey released on Monday showed record optimism in the industry but investors were nonetheless focused on the dwindling time Congress and White House have to agree on a spending package to boost the coronavirus-ravaged US economy.
Buzzing Indian Index:
The Nifty IT index rose 1.41% to 21,694.35. The index fell 4.89% in the past four sessions.
Mindtree (up 5.66%), HCL Technologies (up 4.19%), Tech Mahindra (up 3.05%), Infosys (up 1.02%), Wipro (up 1.02%), TCS (up 0.99%) and Mphasis (up 0.94%) jumped.
The Nifty Realty index rose 3.94% to 226.95. The index has added 8.28% in three sessions.
Oberoi Realty (up 19.99%), Brigade Enterprise (up 7.31%), Peninsula Land (up 4.86%), HDIL (up 4.65%), Godrej Properties (up 3.73%), D B Realty (up 3.09%), Mahindra Lifespace Developers (up 2.86%), Sobha (up 2.57%) and Anant Raj (up 1.55%) advanced.
Sunteck Realty added 0.79%. The real estate company said it entered into an agreement to acquire approximately 50-acre land parcel in Vasind (Thane district). The project will offer approximately 2.6 million square feet. Envisaged as a one of the large residential development under 'Sunteck World' brand in Thane District, the project will have a revenue potential of Rs 1,250 crore spanning over next 4-5 years.
Earnings in Focus:
Hindustan Unilever (HUL) lost 0.31%. The net profit of the FMCG major rose 8.71% to Rs 2009 crore on 16.15% rise in net sales to Rs 11,276 crore in Q2 September 2020 over Q2 September 2019. Profit before tax (PBT) rose 15.2% to Rs 2,661 crore in Q2 FY21 over Q2 FY20. EBITDA rose 17% to Rs 2869 crore during the period under review. EBITDA margin improved by 30 basis points year on year.
The FMCG major said that growth in the quarter was competitive and profitable with reported turnover growth of 16% and domestic consumer growth (excluding the impact of merger of GSK CH and acquisition of VWash) of 3%. HUL said that 70% of its business is gaining penetration. Health, Hygiene and Nutrition, forming c.80% of the portfolio, grew in double digits.
Britannia Industries tumbled 5.89%. The FMCG company posted a 23% rise in consolidated net profit to Rs 498.13 crore in Q2 September 2020 from Rs 404.22 crore reported in Q2 September 2019. Consolidated revenue from operations stood at Rs 3,419.11 crore in Q2 September 2020, rising 12% from Rs 3,048.84 recorded in Q2 September 2019.
Commenting on the performance, Varun Berry, MD said, "In this quarter, we got our full range of products to the market, focussed on efficiency in distribution, followed continuous replenishment system of distribution, improved the health of our distributors and inched closer to normalcy in advertisement & promotions. All the adjacent businesses too delivered a healthy profitable growth.
On the cost front, we witnessed moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest."
HDFC Life Insurance Company rose 0.04%. The company reported 6.1% rise in consolidated net profit to Rs 327.83 crore on 89.6% increase in total income to Rs 16,426.03 crore in Q2 FY21 over Q2 FY20. Net premium income during the second quarter rose by 34.9% to Rs 10056.71 crore as against Rs 7456.87 crore in the same period last year.
Commenting on the H1FY21 performance, Vibha Padalkar, MD & CEO said "Our market share in terms of Individual WRP has increased by 235 basis points from 15.2% to 17.5%. Our focus remains on our long term strategy of building a sustainable and profitable business and adding value to all key stakeholders. On the back of the improved economic momentum, we are optimistic about being able to sustain our performance across key metrics for the year."
ACC rose 1.03%. The cement major's consolidated net profit rose 20.26% to Rs 363.85 crore on 0.26% increase in net sales to Rs 3537.31 crore in Q3 September 2020 over Q3 September 2019. Cement sales volumes rose by 0.78% to 6.49 million tonnes in Q3 September 2020 compared with 6.44 million tonnes in Q3 September 2019.
Operating EBITDA increased 20.47% to Rs 671 crore in Q3 September 2020 over Q3 September 2019. Operating EBITDA margin rose by 328 basis points to 19.4% in Q3 September 2020 compared with 16.1% in Q3 September 2019, supported by efficiency and cost reduction.
In its outlook, ACC said: "The company believes that our country's economic recovery is underway and the economy will bounce back strongly in the next few quarters. The Government's thrust on infrastructure development, increased spending through measures aimed at reviving the rural economy and a sharper focus on the affordable housing segment is expected to drive strong resurgence of cement demand and bring growth opportunities for the cement sector going forward."
Tata Metaliks added 1.91% after company's net profit soared 250.57% to Rs 82 crore on 1.6% rise in net sales to Rs 519.63 crore in Q2 September 2020 over Q2 September 2019.
L&T Technology Services (LTTS) slipped 0.20%. LTTS' consolidated net profit slipped 19.4% to Rs 166.30 crore on 6.3% decrease in net sales to Rs 1,313.80 crore in Q2 September 2020 over Q2 September 2019. Meanwhile, the board has declared an interim dividend of Rs 7.50 per equity share. The record date is 27 October 2020.
Granules India added 0.05%. The pharma company reported 70.8% jump in consolidated net profit to Rs 164 crore on a 22.7% rise in income from operations to Rs 858 crore in Q2 FY21 over Q2 FY20. Operating profit surged 78.6% to Rs 256 crore in Q2 September 2020 from Rs 144 crore in Q2 September 2019. Operating profit margin was at 29.9% as on 30 September 2020 as against 20.5% as on 30 September 2019.
Stocks in Spotlight:
HDFC Bank rose 1.73%. Global rating agency Standard and Poor's has said that HDFC Bank has sufficient financial headroom to withstand downside risks from tough operating conditions in India. “HDFC Bank's result for the first half of 2020-21 (the financial year that will end on March 31, 2021) are resilient and in line with our expectations,” S&P said in a statement. S&P's rating for HDFC Bank is BBB-/Stable/A-3. The report did not constitute a rating action, S&P said.
Cadila Healthcare rose 1.30% after the drug major received final approval from the US drug regulator to market solifenacin succinate tablets. The drug is a symptomatic treatment of urge incontinence and/or increased urinary frequency and urgency as may occur in patients with overactive bladder syndrome.
Strides Pharma Science gained 0.92%. The company's subsidiary, Strides Pharma Global, Singapore, has received approval for ethacrynic acid tablets USP, 25 mg from the United States Food & Drug Administration (USFDA). The product is a generic version of Edecrin tablets, 25 mg, of Bausch Health Americas, Inc.
Ethacrynic acid is in a class of medications called diuretics ('water pills'). It is used to treat edema (excess fluid held in body tissues) in adults and children caused by medical problems such as cancer, heart, kidney, or liver disease. According to IQVIA MAT August 2020 data, the US market for ethacrynic acid tablets USP, 25 mg is approximately $14 million.
Mangalore Refinery & Petrochemicals (MRPL) rose 2.68%. The company's board yesterday approved the acquisition of 1,24,66,53,746 equity shares of ONGC Mangalore Petrochemicals (OMPL) from ONGC, an existing shareholder of OMPL. Such acquisition is subject to customary consents and approvals, MRPL said. MRPL held 51.0017% of the paid-up equity of OMPL, which has been increased to 99.9998% pursuant to the acquisition of equity shares from ONGC, it said.
Bank of Baroda fell 4.01%. The state-run bank on Monday (19 October) said that its capital raising committee will meet on 23 October 2020 to consider raising funds through issue of debt instruments.
Zensar Technologies rose 2.75% after the company said it has divested its non-core third-party maintenance (TPM) business to Service Express for a consideration of $10 million. The deal is in line with Zensar's commitment to focus on and invest in its core businesses which comprised 96% of its revenues as on Q1FY21.