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Detailed review of the post market session of the day.

Sensex rally 639 pts, Nifty closes above 15,800; IT, metal shares spurt

22-Jul-21 16:32 Hrs IST

The equity benchmark indices ended with robust gains on Thursday. The Nifty managed to close above the crucial 15,800 mark. All sectoral indices on the NSE ended in the green. IT and metal shares rallied. Bargain hunting emerged after the Sensex and the Nifty corrected over 1.8% in the past three sessions.

The barometer index, the S&P BSE Sensex, soared 638.70 points or 1.22% at 52,837.21. The Nifty 50 index added 191.95 points or 1.23% at 15,824.05.

Bajaj Finance (up 4.21%), Infosys (up 2.61%), ICICI Bank (up 2.15%) and Reliance Industries (up 1.31%) boosted the indices.

In the broader market, the BSE Mid-Cap index rose 1.49% and the BSE Small-Cap index gained 1.52%.

The market breadth was strong. On the BSE, 2,184 shares rose and 1,065 shares fell. A total of 138 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 19,20,08,050 with 41,27,109 deaths. India reported 4,09,394 active cases of COVID-19 infection and 4,18,987 deaths while 3,04,29,339 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Single day rise of 41,383 COVID-19 infections, 507 fatalities push India's tally of cases to 3,12,57,720, death toll to 4,18,987, says heath ministry.

Economy:

The Asian Development Bank (ADB) has downgraded India's economic growth forecast for the current financial year to 10% on Tuesday, from 11% projected earlier this year, mainly on account of the adverse impact of the coronavirus pandemic.

India's GDP growth recovered to 1.6% in the last quarter of fiscal year ended March 2021, narrowing contraction in the whole fiscal year from 8% estimated in April to a revised 7.3%, the multilateral funding agency said in the Asian Development Outlook (ADO) Supplement.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.138% as compared with 6.119% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.46, compared with its close of 74.6125 during the previous trading session.

MCX Gold futures for 5 August 2021 settlement fell 0.38% to Rs 47,390.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.04% to 92.79.

In the commodities market, Brent crude for September 2021 settlement rose 61 cents at $72.84 a barrel. The contract rose $2.88, or 4.15% to settle at $72.23 a barrel in the previous trading session.

Foreign Markets:

Shares in Europe and Asia advanced on Thursday after solid company earnings boosted Wall Street, easing concerns about peak economic growth and coronavirus flareups. Markets in Japan were closed on Thursday for a holiday.

Investors in Europe are awaiting the latest monetary policy announcement from the European Central Bank on Thursday.

Wall Street stocks posted their second straight daily gain on Wednesday, with robust corporate earnings and renewed optimism about the U.S. economic recovery fueling a risk-on rally.

Stocks in Spotlight:

Bharti Airtel climbed 3.93% after the telecom major announced new postpaid plans for corporate and retail customers. The firm announced new corporate postpaid plan, whereby customers can pay Rs 299 for 30 GB, Rs 349 for 40 GB, Rs 399 for 60 GB, Rs 499 for 100 GB and Rs 1,599 for 500 GB with unlimited calling facility.

For its new retail postpaid plans, customers can pay Rs 399 for 40 GB (1 connection), Rs 499 for 75 GB (1 connection), Rs 999 for 210 GB (3 connections), Rs 1,599 for unlimited data + IR pack (2 connections) and Rs 299 for 30 GB (1 connection) with unlimited calling facility.

The company has discontinued its 749 Family Postpaid Plan for new customers and will now offer 999 as the only Family Postpaid Plan with enhanced data benefits. Now, customers can add a connection to any Airtel Postpaid plan at just Rs 299/SIM and get 30 GB additional data (10 GB earlier), unlimited calling and Thanks benefits, the press filing added.

Hindustan Zinc fell 1.80%. The metal miner reported 46% rise in net profit to Rs 1,983 crore on 64% rise in revenue from operations to Rs 6,378 crore in Q1 FY22 over Q1 FY21. Increase in net profit was mainly driven by recovery in metal prices and higher volumes. Sequentially, the company's net profit has declined by 20%.

Revenue from operations was led by higher metal & silver volumes, higher zinc, lead & silver prices. Zinc sales volume increased 15% YoY and lead by 9% YoY in line with higher production and robust demand. Sequentially, revenue was down 5%, primarily driven by lower zinc, lead and silver volumes, lower metal premium, partly offset by higher zinc & lead LME prices and rupee depreciation.

Hindustan Unilever (HUL) fell 2.27%. The FMCG major reported 10% rise in standalone net profit to Rs 2,061 crore on 13% increase in sales to Rs 11,730 crore in Q1 FY22 over Q1 FY21. HUL recorded a domestic consumer growth of 12% and a underlying volume growth of 9% in June quarter 2021. Performance was broad based with all three divisions growing competitively and in double-digits during the period under review.

Bajaj Auto declined 1.32%. The company's standalone net profit doubled to Rs 1,061 crore in Q1 FY22 from Rs 528 crore in Q1 FY21. Revenue from operations jumped 139.9% YoY to Rs 7,386 crore during the quarter. As compared to Q4 FY21, the company's net profit and revenue from operations have declined 20.3% and 14.1%, respectively. EBITDA was at Rs 1,153 crore in Q1 FY22 as against Rs 441 crore in Q1 FY21 and Rs 1,558 crore in Q4 FY21. EBITDA margin was at 15.6% as on 30 June 2021 compared with 14.3 as on 30 June 2020. EBITDA margin was at 18.1% as on 31 March 2021. Bajaj Auto said that the decline in EBITDA margin was due lower revenue from operations which resulted in loss on spread of fixed costs by approximately 160 bps and increase in cost of raw-material, net of increase in prices, resulted in lower EBITDA margin by approximately 220 bps. Higher raw material costs were, however, partially off-set from higher US$ realization and improved mix. As on 30th June 2021, surplus cash and cash equivalents stood at Rs 19,097 crore as against Rs 17,689 crore as on 31 March 2021.

Ultratech Cement rose 0.49%. The cement maker reported 114% rise in consolidated net profit to Rs 1,703 crore in Q1 FY22 from Rs 794 crore in Q1 FY21. Revenues (net of taxes) rose by 54% YoY to Rs 11,698 crore during the quarter. EBITDA increased by 49% to Rs 3,512 crore in Q1 FY22 from Rs 2,357 crore in Q1 FY21. EBITDA margin was at 30% as on 30 June 2021 as against 31% as on 30 June 2020. Profit before tax in Q1 FY22 stood at Rs 2,526 crore, up by 93% from Rs 1,311 crore in Q1 FY21. Production costs during the quarter increased 11% YoY, mainly on account of higher fuel prices. The company continues to maintain a tight control on costs and cash flow with focus on operational efficiencies. This has enabled UltraTech to achieve an effective capacity utilization of 73% during the quarter as against 46% in Q1 FY21.

Gland Pharma soared 8.98% after the company's net profit jumped 11.81% to Rs 350.65 crore on 30.50% increase in revenue from operations to Rs 1,153.90 crore in Q1 June 2021 (Q1 FY22) over Q1 June 2020 (Q1 FY21). The growth in revenue was contributed from a mix of launch of new products and volume growth in existing products. The key markets, US, Canada, Europe and Australia registered a growth of 16% and accounted for 61% of the revenue during Q1 FY22. This performance is driven by growth of key products like Micafungin, Enoxaparin, Heparin, Dexmedetomidine and new product launches. Profit before tax surged 12.34% to Rs 471.84 crore in Q1 FY22 as against Rs 420 crore in Q1 FY21.

Havells India advanced 4.35% after the company's standalone net profit surged 269.9% to Rs 234.30 crore on 75.7% increase in net sales to Rs 2,598.20 crore in Q1 FY22 over Q1 FY21. As compared to Q4 FY21, the company's net profit and net sales have declined by 22.5% and 22%, respectively. Profit before tax in Q1 FY22 stood at Rs 314.77 crore, up by 266.2% from Rs 85.95 crore in Q1 FY21. EBIDTA improved by 169% to Rs 353 crore in Q1 FY22 compared with Rs 131 crore in Q1 FY21. EBIDTA margin was at 13.6% as on 30 June 2021 as against 8.8% as on 30 June 2020.

CRISIL jumped 4.57%. The credit rating agency recorded 51.9% increase in net profit to Rs 100.8 crore on 12% rise in income from operations to Rs 528.51 crore in Q2 June 2021 over Q2 June 2020. The board of CRISIL has approved the payment of interim dividend of Rs 8 per equity share for the financial year ending 31 December 2021, which will be paid on 18 August 2021.