Shares end with decent gains ahead of AGR hearing

Key domestic equity benchmarks ended with decent gains after a volatile session on Monday. The key indices sharply came off the day's high as profit booking emerged at higher levels. Global stock markets were upbeat after US President Donald Trump signed executive actions extending financial relief to Americans hit by the coronavirus pandemic. Meanwhile, the hearing the adjusted gross revenue (AGR) case is currently underway in the Supreme Court.

As per provisional closing data, the barometer index, the S&P BSE Sensex, was rose 141.51 points or 0.37% at 38,182.08. The Nifty 50 index added 61.75 points or 0.55% at 11,275.80.

In the broader market, the S&P BSE Mid-Cap index gained 1.42% while the S&P BSE Small-Cap index rose 1.47%.

Buyers outnumbered sellers. On the BSE, 1763 shares rose and 996 shares fell. A total of 172 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 397.32 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 438.62 crore in the Indian equity market on 7 August, provisional data showed

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 19,862,599 with 731,349 deaths. India reported 6,34,945 active cases of COVID-19 infection and 44,386 deaths while 15,35,743 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

Prime Minister Narendra Modi on Sunday launched a Rs 1 lakh crore Agriculture Infrastructure Fund to support community farming assets across the country and said this would enhance India's ability to compete globally in the agriculture sector. The farm infrastructure will enable farmers get higher value for their produce as they will be able to store and sell at better prices as per market conditions, reduce wastage and increase processing and value addition. PM also released Rs 17,000 crore to nearly 8.5 crore farmers under the sixth installment of the PM-Kisan scheme.

AGR Case Hearing:

The Supreme Court (SC) has begun hearing the adjusted gross revenue (AGR) case at 15:00 IST today, 10 August. The apex court on 20 July reserved its order on permitting telecom companies to make staggered payments over 15 years. Both Vodafone Idea (up 2.49%) and Bharti Airtel (down 0.12%) requested for a 15-year window to clear the dues, while Tata Teleservices (up 5.80%) has sought 7-10 years.

The Supreme Court is reportedly also examining whether the insolvency proceedings of bankrupt telcos Reliance Communications (RCom), Aircel and Videocon Telecom are bonafide. At the previous hearing, it had directed the Department of Telecommunications (DoT) to submit details of the insolvency proceedings of the bankrupt telcos before today's hearing.

Buzzing Segment :

Shares of eight defence companies rose by 3% to 10% after defence minister Rajnath Singh on Sunday announced import ban on 101 defence items. Dynamatic Technologies (up 10%), Hindustan Aeronautics (up 9.51%), Bharat Electronics (up 9.02%), Astra Microwave Products (up 5.02%), Bharat Dynamics (up 4.65%), Bharat Forge (up 3.81%), Premier Explosives (up 4.04%) and BEML (up 3.74%) were top gainers in defence segment.

The defence ministry has decided to put 101 items put on embargo to boost indigenisation of defence production. The embargo on imports is planned to be progressively implemented between 2020 and 2024. The deadline has been set for December 2025. The list of 101 embargoed items comprises some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs), radars and many other items.

Earnings Today:

Among the Nifty stocks, Power Grid Corporation of India (up 0.65%), Shree Cement (up 2.28%) and Titan Company (up 1.63%) will announce their quarterly earnings today.

Among the other stocks, Akzo Nobel (down 0.53%), Bank of Baroda (up 0.10%), HEG (up 0.71%), KEC International (down 0.49%), Meghmani Organics (down 6.13%) and V-Mart Retail (up 0.77%) will announce their quarterly earnings today.

Earnings Impact:

Cipla jumped 9.13% to Rs 795.15 after the company's net profit rose 21% to Rs 578 crore on 9% increase in total revenue from operations to Rs 4,346 crore in Q1 FY21 over Q1 FY20.

EBITDA margin stood at 24.1% as 30 June 2020 as against 22.7% as 30 June 2019. Cipla said that it has achieved zero net debt position led by strong collections and improved EBITDA.

India business grew by 16% YoY with strong growth across the three businesses. Overall South African business continued the strong growth momentum to deliver growth of 17% on a YoY basis in local currency; private business continues to outpace the market. The US business reported $135 million led by Albuterol ramp-up; 14% QoQ growth.

Divi's Laboratories surged 11.89% to Rs 3115.40 after the company's consolidated net profit jumped 81% to Rs 492 crore on a 47% increase in total income to Rs 1748 crore in Q1 FY21 over Q1 FY20. The company has been able to have near normal operations during the quarter and there was minimal impact due to COVID-19 pandemic.

The company further said that while a significant part of the ongoing capex programs has been completed during the last financial year, due to the COVID-19 pandemic, there has been delay in implementing the balance part of the capex programs taken up by the company due to non-availability of workmen of some contractors implementing the projects. It expects to complete the capex programs by second half of the financial year.

REC gained 2.22% to Rs 108.10 after the consolidated net profit rose 22.29% to Rs 1,845.30 crore on 20.44% rise in total income to Rs 8,450.36 crore in Q1 June 2020 over Q1 June 2019.

Meanwhile, the board of directors of REC approved the proposal of raising of funds through issue of unsecured/secured non-convertible bonds/debentures through Private Placement, upto an amount of Rs 85,000 crore, in one or more tranches, subject to approval of shareholders in this regard in the ensuing Annual General Meeting.

Birla Corporation tumbled 7.51% to Rs 604 after consolidated net profit tanked 53.2% to Rs 65.77 crore on 35.1% decline in net sales to Rs 1,221.97 crore in Q1 June 2020 over Q1 June 2019.

Revenue for the quarter declined as sales by volume dropped 33.9% to 2.4 million tons (mt). EBITDA slumped 37% to Rs 252 crore in June 2020 as against Rs 402 crore in June 2019 amid severe disruptions in key markets and manufacturing centres due to the Covid-19 pandemic.

"With the arrival of monsoons, cement prices have started to weaken in key markets from the end of June. Timely arrival of monsoons, however, augurs well for recovery of India's economy. While demand during rest of the year will be a function of how the lockdowns in various regions of the country pan out from time to time, expectations of gradual easing of lockdown in urban areas and resurgence in infrastructure activities with migrant workers returning to construction sites are indicative that the worst may be over for the industry. The company remains cautiously optimistic about a gradual return to normalcy over the next few months", the company said in a statement.

Affle India hit an upper circuit of 10% at Rs 2025.95 after the company's consolidated net profit jumped 42.3% to Rs 18.77 crore on 20% increase in net sales to Rs 89.77 crore in Q1 June 2020 over Q1 June 2019. EBITDA margin remained unchanged at 25% in Q1 June 2020.

The firm said that the growth has been broad-based coming from both cost per converted user (CPCU) business and non-CPCU business. The CPCU business continued its positive momentum delivering a total of 1.7 crore of converted users in Q1 FY21.

IPCA Laboratories surged 6.97% to Rs 2091.95. The company's net profit surged to Rs 445.68 crore in Q1 June 2020 from Rs 129.43 crore in Q1 June 2019. Net total income increased by 41% YoY to Rs 1,546.49 crore during the quarter.

Global Markets:

Most markets in Europe and Asia edged higher on Monday. Investors shrugged off concerns over rising tensions between the United States and China. Japanese and Singaporean markets are closed for public holidays.

Investors continued to monitor the US fiscal stimulus after talks between the White House and Democrat lawmakers broke down.

In US, the S&P 500 retreated from a near six-month high in choppy trading on Friday with data showing a sharp slowdown in US employment growth, while US-China tensions escalated with President Donald Trump's move to ban WeChat and TikTok.

US President Donald Trump signed two executive orders banning WeChat, owned by Chinese tech giant Tencent, and TikTok in 45 days' time while announcing sanctions on 11 Chinese and Hong Kong officials.

Trump signed a series of executive orders to extend unemployment benefits after talks with Congress broke down. The orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis.

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