Benchmarks trade higher; pharma shares bounce

The domestic equity benchmarks continued to trade with decent gains in morning trade. The Nifty was trading above the 11,300 mark. At 10:25 IST, the barometer index, the S&P BSE Sensex, was up 121.25 points or 0.32% at 38,431.74. The Nifty 50 index added 29.95 points or 0.27% at 11,330.40.

In the broader market, the S&P BSE Mid-Cap index rose 0.30% while the S&P BSE Small-Cap index gained 0.59%.

The market breadth was positive. On the BSE, 1207 shares rose and 959 shares fell. A total of 121 shares were unchanged.

Buzzing Index:

The Nifty Pharma index rose 2.42% to 11,755.15. The index fell 3.9% in the past three sessions.

Among the index constituents, Lupin (up 7.50%), Cipla (up 2.80%), Cadila Healthcare (up 2.64%), Sun Pharma (up 2.46%), Torrent Pharma (up 2.11%) and Biocon (up 1.72%) were the top index gainers.

Earnings Today:

Among Nifty stocks, Hindalco (up 0.74%) and NTPC (up 0.11%) will announce their quarterly earnings today.

Among other stocks, Berger Paints (up 0.44%), Bodal Chemicals (up 0.45%), Dilip Buildcon (down 0.01%), Glenmark (up 3.95%), IIFL Wealth (down 1.72%), Indian Bank (up 0.47%), MRF (down 0.86%), Nesco (up 0.83%), United Breweries (down 0.42%), Voltas (down 0.32%) and VRL Logistics (up 0.98%) will announce their quarterly earnings today.

Earnings Impact:

Hero MotoCorp fell 1.34% to Rs 2773.45. The two-wheeler major's standalone net profit slumped 92% to Rs 61.31 crore on a 63% decline in net sales to Rs 2971.54 crore in Q1 FY21 over Q1 FY20.

The company sold 5.65 lakh units in Q1 June 2020, which were lower by 69.3% as compared to 18.42 lakh units sold in Q1 June 2019. EBITDA margin was at 3.6% as on 30 June 2020 as compared to 14.4% as on 30 June 2019.

Niranjan Gupta, chief financial officer (CFO), Hero MotoCorp, said, "We are already seeing green shoots, and expect them to sustain and get stronger as we move towards the festive season. Our July month sales were more than 95% of pre-covid sales and we do see positive trend moving forward."

Eicher Motors slipped 2.04% to Rs 21,229.90 on BSE after the company posted a consolidated net loss of Rs 55.18 crore in Q1 June 2020 as compared to a consolidated net profit of Rs 451.77 crore in Q1 June 2019. Net sales for Q1 FY21 stood at Rs 809.16 crore, falling 65.7% from Rs 2361.24 crore reported in the same period last year.

Eicher's Royal Enfield sold 58,383 motorcycles in Q1 June 2020, a decline of 68% from 181,966 motorcycles sold over the same period last year. The company sold 2,129 units of commercial vehicles in Q1 June 2020 as compared to 13,331 units sold in the corresponding quarter last year.

Vinod K. Dasari, CEO, Royal Enfield said, "From a business point of view the initial consumer sentiment over the last two months has been very encouraging. Demand from semi-urban and rural towns have picked up well, and our network of studio stores across the country have been able to cater to this demand. There is pent up demand and we are optimistic about stronger recovery once supply chain stabilizes."

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