Key domestic barometers tumbled on Thursday, dragged by selling in private lenders. Negative global cues spoiled investors sentiment. Trading was volatile as the July 2020 F&O contracts expired today, 30 July 2020.
The barometer index, the S&P BSE Sensex dropped 335.06 points or 0.88% at 37,736.07. The Nifty 50 index lost 100.70 points or 0.90% at 11,102.15. The Nifty declined about 1.8% in two sessions.
In the broader market, the BSE Mid-Cap index fell 0.38% and the BSE Small-Cap index declined 0.43%.
The market breadth was weak. On the BSE, 1061 shares rose and 1585 shares fell. A total of 166 shares were unchanged.
Total COVID-19 confirmed cases worldwide stood at 17,039,160 with 667,218 deaths. India reported 5,28,242 active cases of COVID-19 infection and 34,968 deaths while 10,20,582 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
The Ministry of Home Affairs (MHA) on 29 July 2020 issued new guidelines for opening up of more activities in areas outside containment zones, as a part of Unlock 3.0, which will come into effect from 1 August. The Centre directed the states governments to allow/prohibit activities outside containment zones after proper assessment of the situation. As per the guidelines, yoga institutes and gymnasiums will be allowed to open from 5 August 2020. Schools, colleges and coaching institutions will remain closed till 31 August 2020.
Market regulator Sebi on Wednesday gave relaxation of one month till 15 September 2020 to listed companies for submitting their June quarter results amid coronavirus pandemic.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.824% as compared with 5.835% 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 74.845, compared with its close of 74.80 during the previous trading session.
In the commodities market, Brent crude for September 2020 settlement fell 61 cents at $43.14 a barrel. The contract rose 53 cents, or 1.23% to settle at $43.75 a barrel in the previous trading session.
US Dow Jones futures were down 216 points, indicating a weak opening in the US stocks later today.
European markets fell across the board while Asian ended mixed on Thursday. A spike in coronavirus infections in Asia weighed on investor sentiment.
On the economic data front, Japanese retail sales for June declined 1.2% as compared to a year ago, according to a preliminary report by the country's Ministry of Economy, Trade and Industry.
In US, stocks finished higher Wednesday after the US Fed policy outcome. Fed Chair Powell reiterated his promise to provide support until the threat of the coronavirus to the US economy has passed.
In a statement at the end of its policy-making meeting Wednesday, the Fed acknowledged that the economy has rebounded from the depths of March and April, when nearly all states closed down nonessential businesses. But it said the ongoing coronavirus pandemic will weigh heavily on economic activity, employment and inflation." The Fed announced no new policies in its statement. The central bank said it will also continue to buy about $120 billion in Treasury and mortgage bonds each month, which are intended to inject cash into financial markets and spur borrowing and spending.
Meanwhile, US President Donald Trump said that his administration and Democrats in Congress were still "far apart" on a new coronavirus relief Bill. Senate Republican leaders on Monday rolled out a $1 trillion package of proposals, which Democrats rejected as inadequate.
In US economic data, the trade deficit in goods dropped to $70.6 billion in June, a 6.1% decline in June from the previous month. The index of pending home sales soared 16.6% last month, helped by low borrowing rates, as compared with May, the National Association of Realtors reported Wednesday.
Indian Stocks in Spotlight:
Index heavyweight Reliance Industries rose 0.61% to Rs 2108.65 ahead of its Q1 results today.
HDFC Bank (down 1.38%), ICICI Bank (down 1.68%) and Axis Bank (down 3.41%) declined.
HDFC tumbled 3.64%. The housing finance major fell 1.50% to Rs 1851.10 after net profit fell 4.7% to Rs 3051.52 crore in Q1 June 2020 from Rs 3203.10 crore in Q1 June 2019. Net interest income (NII) rose 10% to Rs 3392 crore in Q1 June 2020 from Rs 3079 crore in Q1 June 2019. The NII numbers, however, are not comparable with each other owing to the higher liquidity levels and equity investments made in the recent period. Net interest margin (NIM) stood at 3.1% as on 30 June 2020 as compared to 3.3% as on 30 June 2019. Total tax expense fell 29% YoY to Rs 555.31 crore in the June quarter. Profit before tax in Q1 FY21 stood at Rs 3606.83 crore, down by 9.5% from Rs 3985.11 crore in Q1 FY20. After adjusting dividend, profit on sale of investments, net gains on de-recognition of assigned loans, provisioning and the impact of negative carry on account of higher liquidity, the adjusted profit before tax for the quarter ended 30 June 2020 is Rs 3,265 crore compared to Rs 2,684 crore in the previous year, reflecting a growth of 22%.
Bharti Airtel fell 2.38%. The telecom major reported a consolidated net loss of Rs 15,933 crore in the June quarter as against net loss of Rs 2,866 reported in the same period last year. Total revenues increased by 15.4% year-on-year (YoY) to Rs 23,939 crore during the quarter. EBITDA jumped 25.3% to Rs 10,639 crore in Q1 FY21 from Rs 8,493 crore in Q1 FY20. EBITDA margin stood at 44.4% as on 30 June 2020 as against 41% as on 30 June 2019.
With respect to the mobile services-India business, the company said its average revenue per user (ARPU) rose 21.3% to Rs 157 in Q1 FY21 from Rs 129 in Q1 FY20. The company's total customer base increased by 4% to 41.9 crore customers in Q1 June 2020 from 40.3 crore customers in Q1 June 2019.
The company recorded a net exceptional charge of Rs 11,745.7 crore during the quarter ended 30 June 2020, comprising of a charge on account of incremental provision and interest on license fee and spectrum usage charges of Rs 10,744.4 crore and a net charge pertaining to re-assessment of levies of Rs 1,001.3 crore.
TVS Motor Company rose 0.44%. The auto maker's consolidated net loss of Rs 182.79 crore in Q1 June 2020 compared with net profit of Rs 151.24 crore in Q1 June 2019. Consolidated net sales slumped 61.3% to Rs 1,939.65 crore in Q1 June 2020 compared with Rs 5,018.34 crore in Q1 June 2019. Consolidated pre-tax loss stood at Rs 240.87 crore in Q1 June 2020 compared with pre-tax profit of Rs 231.53 crore in Q1 June 2019. The result was announced post trading hours yesterday, 29 July 2020.
Ajanta Pharma rose 1.52% after its consolidated net profit jumped 28.90% to Rs 147.76 crore on 9.19% increase in net sales to Rs 668.20 crore in Q1 June 2020 over Q1 June 2019. EBITDA grew 33% to Rs 223 crore in Q1 June 2020 as against Rs 168 crore in Q1 June 2019. EBITDA stood at 33% of revenue. Total export sales jumped 19% to Rs 483 crore during the quarter. During the quarter, India sales stood at Rs 174 crore in Q1 June 2020 over Rs 194 crore, registering a 10% fall Y-o-Y (year-on-year). As per IQVIA MAT June 2020 data,the firm posted a healthy growth of 10% in cardiology (segment growth of 12%), 5% in ophthalmology (segment growth of 3%), 10% in pain management (segment growth of 5%) and a decline of 3% in dermatology (segment growth of 5%).
Navin Fluorine International fell 1.86%. On a consolidated basis, the speciality chemicals maker's net profit jumped 33.7% to Rs 52.96 crore on 14.5% drop in net sales to Rs 214.95 crore in Q1 June 2020 over Q1 June 2019. Consolidated operating EBITDA skid 12% to Rs 53.80 crore in Q1 FY21 as against Rs 61.10 crore in Q1 FY20. Operating EBITDA margin stood at 25% in Q1 FY21 compared with 24.3% in Q1 FY20. Due to COVID-19 and nationwide lockdown announced by the Government, Navine Fluorine International had temporarily suspended manufacturing operations at its facilities. Therefore, the performance of Q1 FY21 do not represent normal quarter/operations and is not strictly comparable with previous periods.
GMM Pfaudler rose 0.48% after the company reported 8.5% rise in consolidated net profit to Rs 19.19 crore on 2.8% increase in net sales to Rs 154.43 crore in Q1 June 2020 over Q1 June 2019. EBITDA remained flat at Rs 27.5 crore during the quarter. EBITDA margin fell to 17.8% as on 30 June 2020 from 18.4% as on 30 June 2019. Profit before tax in Q1 FY21 stood at Rs 23.07 crore, down by 4% from Rs 24.04 crore in Q1 FY20. Current tax expense declined 12% to Rs 5.07 crore in Q1 FY21 over Q1 FY20.
Mastek jumped 5.11% after consolidated net profit surged 19.61% to Rs 46.58 crore on 14.67% increase in net sales to Rs 386.06 crore in Q1 June 2020 over Q4 March 2020. The company reported one-time exceptional loss of Rs 17.55 crore in Q4 March 2020, which included material provisions for doubtful debts on certain revenue contracts (Mastek India and US); write back of contingent consideration (Mastek US); and legal and professional costs (UK and India) relating to the business combination consummated in Q4 March 2020. Consolidated total EBITDA rose 12% to Rs 84.80 crore in Q1 FY21 as against Rs 75.7 crore in Q4 FY20. Total EBITDA margin stood at 21.1% in Q1 FY21 compared with 21.4% in Q4 FY20. The Q1 result was declared after market hours yesterday, 29 July 2020.
Sagar Cement surged 6.64% after consolidated net profit jumped 22% to Rs 36 crore on 23.3% decline in net sales to Rs 264.12 crore in Q1 June 2020 over Q1 June 2019. Sales volume skid 32% to 5,55,312 MT in Q1 FY21 as against 8,20,155 MT in Q1 FY20, due to suspension of operations due to nationwide lockdown. Consolidated operating EBITDA jumped 11% to Rs 87.01 crore in Q1 FY21 as against Rs 78.62 crore in Q1 FY20. Operating EBITDA margin improved to 33% in Q1 FY21 compared with 23% in Q1 FY20.
Dabur India rose 0.55%. The FMCG firm's consolidated net profit slipped 5.88% to Rs 341.78 crore on 12.90% drop in revenue from operations to Rs 1,979.98 crore in Q1 June 2020 over Q1 June 2019. Dabur continued to gain market share across all key categories like chyawanprash, toothpaste and packaged juices & nectars, during the quarter.
The slowdown in economic activity and supply chain disruptions in view of the unprecedented lockdown announced by the government to arrest the spread of COVID-19 pandemic continued to impact the business in Q1 June 2020. As the restrictions were subsequently eased, Dabur India quickly scaled up operations to reach near normal levels in May and June 2020.
LT Foods surged 15.95%. The basmati rice firm reported 84.6% jump in consolidated net profit to Rs 78.84 crore on 24% rise in net sales to Rs 1,215.43 crore in Q1 June 2020 over Q1 June 2019. Profit before tax in Q1 FY21 stood at Rs 109.29 crore, up by 60.1% from Rs 68.25 crore in Q1 FY20. Total tax expense increased 16.7% to Rs 26.64 crore in the June quarter as compared to the same period last year.
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