Shares trade with modest losses

Key benchmarks continued to trade with minor cuts in morning trade amid negative global cues due to rising coronavirus cases and ongoing US-China tensions. At 10:27 IST, the barometer index, the S&P BSE Sensex, was down 200.83 points or 0.53% at 37,939.64. The Nifty 50 index lost 77.80 points or 0.69% at 11,137.65.

In the broader market, the S&P BSE Mid-Cap index shed 0.69% while the S&P BSE Small-Cap index skid 0.42%.

The market breadth was negative. On the BSE, 749 shares rose and 1332 shares fell. A total of 92 shares were unchanged.

Earnings today:

Asian Paints (down 1.84%), ITC (down 0.37%), Zee Entertainment Enterprises (down 3.14%), Ambuja Cements (up 0.53%), Atul (up 0.59%), JSW Steel (down 1.07%), among others, will announce their quarterly earnings today.

Buzzing Index:

The Nifty Pharma index was up 0.02% to 10,324.15, bucking weak market trend. The index added 1.67% in three sessions.

Sun Pharma (up 2.90%) and Cadila Healthcare (up 0.38%) advanced while Divi's Labs (down 1.27%), Cipla (down 1.11%), Aurobindo Pharma (down 0.90%) and Lupin (down 0.82%) declined.

Stocks in Spotlight:

Biocon fell 1.10% to Rs 425.55. The bio-pharma company's consolidated net profit fell 28% to Rs 149 crore on a 15% rise in revenue from operations to Rs 1671 crore in Q1 FY21 over Q1 FY20. EBITDA margin was at 26% as on 30 June 2020 as against 31% as on 30 June 2019.

Income from generics business increased 16% YoY to Rs 599 crore while that of the biosimilars business jumped 19% YoY to Rs 692 crore in Q1 June 2020. However, the income from research services remained flat at Rs 422 crore during the quarter due to slowdown of operations impacted by the COVID-19 crisis. R&D expenses rose 35% to Rs 107 crore in Q1 June 2020 over Q1 June 2019.

AU Small Finance Bank (AU SFB) hit an upper circuit of 5% at Rs 794.55 after the bank's net profit rose 5.5% to Rs 200.81 crore on 20.7% rise in total income to Rs 1409.91 crore in Q1 June 2020 over Q1 June 2019. The profitability was boosted by lower current tax expenses as they declined nearly 8% YoY during the quarter.

The AU SFB's profit after tax (excluding gains on partial divestment of Aavas Financiers) grew by 48% year on year (YoY) to Rs 177 crore in Q1 June 2020. Net interest income (NII) grew 30% Y-o-Y (year-on-year) to Rs 516 crore during Q1 June 2020 from Rs 396 crore in Q1 June 2019. Net interest margin remained stable at 5% in Q1 June 2020 similar to Q1 June 2019.

The bank's provisions and contingencies soared 475% to Rs 181.25 crore in Q1 June 2020 over Rs 31.51 crore in Q1 June 2019. During the quarter, provision include additional provision of Rs 140 crore for potential impact of COVID-19 in addition to Rs 138 crore COVID-19 provision created in last quarter. The bank now carries Rs 278 crore of COVID-19 related provisions which constitutes 1% of its total gross advances and 10% of complete moratorium book.

On the asset quality front, the ratio of gross NPAs to gross advances stood at 1.69% as on 30 June 2020 as against 1.68% as on 31 March 2020 and 2.08% as on 30 June 2019. The ratio of net NPAs to net advances stood at 0.62% Q1 FY21 as against 0.81% in Q4 FY20 and 1.25% in Q1 FY20.

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