Ajit Mishra, VP - Research, Religare Broking:
Markets continued to trade buoyant and ended with gains of over a percent. Positive global cues combined with budget-led buoyancy triggered a gap-up start and the benchmark gradually inched higher as the day progressed.
Consequently, Nifty settled around the day’s high to close at 17,780 levels. Among the sectors, banking and financials were in the focus from the beginning, closely followed by media, healthcare and IT. In line with the move, the market breadth was also inclined strongly on the advancing side.
Markets are currently riding high on the back of optimism post the Union Budget. Besides, global recovery and favourable earnings are also adding to the positivity. Amid all, one shouldn’t forget that the Nifty index is still in a trading range and 18,000-18,300 would continue to act as a hurdle.
We feel participants should focus on identifying the sectors/themes which are trading in sync with the index. Among the sectors, banking and financials have the potential to outshine others.
Rupak De, Senior Technical Analyst at LKP Securities:
Indian equity remained strong during the last trading session as Nifty moved to its 61.8% retracement level of the previous fall.
Going forward, Nifty needs to sustain above 17775-17800 to witness further rally toward 18000 and higher over the short term. On the lower end support seen at 17700, below which the index may consolidate over the near term.
Ruchit Jain, Lead Research, 5paisa.com:
Post the recovery on the Budget day, Nifty started the day with a gap up above 17700. The index kept the momentum intact throughout the session and ended around its highest point to end tad below 17800 with gains of over a percent.
The indices kept the momentum intact after the budget day as the sentiment remained positive and the global markets too continued the up move. Technically, Nifty has retraced 61.8 percent of the recent corrective phase which is placed at 17700-17800.
Although this is a resistance zone, the index maintained its positive structure for most part of the day around this zone which is a positive sign and hence, we could see a continuation of the up move.
If the markets sustain above 17800, then the index could approach 18000-18050 zone in the near term. The Banking space, as expected, is showing outperformance and is leading the momentum on the higher side. Hence, we continue with our optimistic stance on the index and continue with our advice to trade with a positive bias and look for buying opportunities in intraday declines. The immediate support for Nifty is now placed in the range of 17675-17600.
Vinod Nair, Head of Research at Geojit Financial Services:
The domestic market continued its bull ride tracking budget cues and positive sentiments from global markets. Most sectors remained green while banking and finance stocks contributed most to the gain.
Global markets added its gain as strong earnings numbers helped investors to digest geopolitical worries. Besides corporate numbers, investors are also awaiting the outcome of OPEC+meeting and Eurozone inflation numbers for January.
Market Close:
Benchmark indices ended higher for the third straight session on February 2 with Nifty comfortably closing above 17,700.
At close, the Sensex was up 695.76 points or 1.18% at 59,558.33, and the Nifty was up 203.20 points or 1.16% at 17,780. About 2243 shares have advanced, 1038 shares declined, and 90 shares are unchanged.
IndusInd Bank, Bajaj Finserv, HCL Technologies, Bajaj Finance and HDFC Life were the top Nifty gainers, while losers included Tech Mahindra, Britannia Industries, UltraTech Cement, Hero MotoCorp and Nestle India.
All the sectoral indices ended in the green with bank, realty, pharma, FMCG, IT and PSU Bank indices up 1-3 percent. BSE midcap and smallcap indices rose 1-1.5 percent.
S&P Global Ratings downgrades Future Retail to 'SD' after default
S&P Global Ratings on Wednesday downgraded Future Retail Ltd’s long-term issuer credit rating from 'CCC-' to 'SD' after the company failed to repay the principal on its debt.
Future Retail Ltd failed to make the principal payments due on its restructured domestic bank borrowings on December 31, 2021. The 30-day review period (grace period to pay) allowed by the Reserve Bank of India (RBI) has ended, S&P said in a statement.
Arun Agarwal, Deputy Vice President - Fundamental Research, Kotak Securities:
Wholesale sales volume reported by auto companies were under pressure in January 2021. Passenger vehicle segment remained impacted from chip shortage issue. However, the consumer sentiments in the domestic passenger vehicle is strong and we expect swift recovery post resolution of chip shortage situation.
The domestic two wheeler companies reported sharp volume decline (over January 2021) possibly on account of delayed harvesting impacting rural cash flows, channel destocking and rising ownership cost.
Tractor segment too reported sharp yoy volume decline in January 2022 due to unseasonal rains and channel destocking. Medium and Heavy Commercial Vehicle segment continued volume recovery supported by pick-up in economic activity.
The Budget highlighted Government’s focus on developing electric vehicle ecosystem including EV charging station, push for EV’s in public transport and battery swapping policy.
JPMorgan view on IOC
Research house JPMorgan has maintained buy call and raised the target price to Rs 160 from Rs 147 per share.
It was a strong underlying quarter ex-excise-driven inventory loss and it is well positioned for a refining recovery.
The strong operating cash flows allows company to pursue growth aggressively, said JPMorgan.
Indian Oil Corporation was quoting at Rs 124.30, up Rs 2.55, or 2.09 percent on the BSE.
Balrampur Chini Mills Q3
Balrampur Chini Mills has reported December quarter net profit at Rs 64.1 crore versus Rs 26.9 crore and revenue was up 13.1% at Rs 1,212.3 crore versus Rs 1,072.3 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was at Rs 99.8 crore versus Rs 36.4 crore and margin at 8.2% versus 3.4%, YoY.
Balrampur Chini Mills was quoting at Rs 414.00, down Rs 11.25, or 2.65 percent on the BSE.
Ricky Kirpalani, Lead Sponsor, First Water Capital Fund (AIF)
The increase in infra spend for the year has risen from Rs 5.54 lakh crore to Rs 7.5 lakh crore. This is a huge number and an increase of 35.4%. Of course, it is likely to include catch-up spend from the prior years that was not deployed due to the pandemic.
One of the highlights was the Rs 60,000 crore allocation for providing tap water to 3.8 crore households. 20% of this will be spent on pipes, benefiting the steel pipe sector.
The national highway is to be expanded by 25,000km. This will be a positive for road-laying EPCs. Also, 4 new multi-modal logistic parks are to be kicked off, as well as 400 new express trains and 100 new cargo terminals to be built in the next 3 years. While design and execution are equally important, all these pushes should benefit the overall infra sectors such as steel, cement, pipes EPC and India in general.
Somany Ceramics Q3 earnings:
Somany Ceramics has posted 10.7 percent jump in its Q3 net profit at Rs 34.2 crore versus Rs 30.9 crore and revenue was up 18.8% at Rs 585.2 crore versus Rs 492.5 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was down 4 percent at Rs 60.6 crore versus Rs 63.1 crore and margin was at 10.4% versus 12.8%, YoY
Somany Ceramics was quoting at Rs 887.05, up Rs 9.25, or 1.05 percent.
Market at 3 PM
Benchmark indices extended the gains and trading at day's high level with Nifty near 17,800 level.
The Sensex was up 650.43 points or 1.10% at 59513, and the Nifty was up 192 points or 1.09% at 17768.80. About 2171 shares have advanced, 979 shares declined, and 84 shares are unchanged.
Buzzing:
Shares of Jubilant FoodWorks fell more than 3 percent after the company’s Q3 earnings largely disappointed investors.
The QSR major reported a same-store sales growth of 7.5 percent, which was below analysts’ estimate of 8-10 percent.
The consolidated net profit of the company rose 7.5 percent on-year to Rs 133.2 crore but missed analysts’ estimate of Rs 150 crore.
The fast-food company’s operating margins also failed to impress as they expanded 40 basis points on-year to 26.6 percent.
Raheel Shah, Director, BDR Group of Companies:
The overall focus of the Union Budget seemed to be aimed at achieving inclusive development and productivity enhancement by providing stimuli to sectors which are fundamentally critical for the growth.
From medical industry perspective, strengthening of healthcare infrastructure, speedy vaccination program implementation and nationwide resilient response to current wave of COVID19 pandemic found prominent citations. It is prudent to note that the country’s proactive focus on vaccination has enabled India today to emerge strong during the ongoing pandemic.
What was a stand-out is the recognition of pandemic infused mental stress. The launch of National Tele Mental Health program will be instrumental in addressing the post effects of COVID by enabling quality mental healthcare counselling and care services in the country.
Additionally, an open platform for the National Digital Health Ecosystem will not only make the healthcare system more universal but also enable the industry stakeholders especially insurance players to gain prudence from accessibility to data from digit registries.
Noteably, 2 lakh Anganwadis are to be upgraded for improving child health thereby, securing larger base of the population which is yet to be vaccinated.
Meghmani Organics Q3
Net profit was up 22.4% at Rs 68.4 crore against Rs 55.9 crore (YoY). Revenue jumped 43% at Rs 640.3 crore against Rs 447.7 crore (YoY). EBITDA was down 13.4% at Rs 78.4 crore against Rs 90.5 crore (YoY). EBITDA margin at 12.2% against 20.2% (YoY).
Shalby Q3
Net Profit rose 19.4% at Rs 12.9 crore against Rs 10.8 crore (YoY). Revenue was down 10.6% at Rs 162.4 crore against Rs 181.6 crore (YoY). EBITDA slipped 3.7% at Rs 28.3 crore against Rs 29.4 crore (YoY). EBITDA margin at 17.4% against 16.2% (YoY).
Domestic two-wheeler sales dip 21% in January; recovery likely in coming months:
The domestic two-wheeler sales witnessed 21 per cent year-on-year decline in January, even as the segment registered a 14 per cent sequential growth in domestic wholesale volumes, according to credit ratings agency ICRA. The numbers are based on the data released by six major original equipment manufacturers (OEMs), ICRA said in a statement on Wednesday.
The low year-on-year sales volume in January, highlights the adverse impact of price hikes, fuel inflation, and Omicron-related concerns on consumer sentiments, said Rohan Kanwar Gupta, Vice President and Sector Head – Corporate Ratings, ICRA Limited.
VRL Logistics Q3:
Net profit jumped 52.2% at Rs 60.5 crore against Rs 39.7 crore (YoY). Revenue was up 20.4% at Rs 678.4 crore against Rs 573.4 crore (YoY). EBITDA gained 30.6% at Rs 129 crore against Rs 99 crore (YoY). EBITDA margin at 19% against 17.5% (YoY).
Jubilant Foodworks Q3
Net profit at Rs 133.2 crore. Revenue at Rs 1,210.8 crore. EBITDA at Rs 319.2 crore. EBITDA margin at 26.3%. Board approves stock split, to issue 5 equity shares for every 1 held.
European Markets Updates
Sandhar Technologies Q3:
Net profit went down 55.4% at Rs 13 crore against Rs 29.2 crore (YoY). Revenue was up 3.1% at Rs 611.7 crore against Rs 593.1 crore (YoY). EBITDA slipped 23.7% at Rs 52.3 crore against Rs 68.5 crore (YoY). EBITDA margin at 8.5% against 11.5% (YoY).
Market update at 2 PM
Sensex is up 595.23 points or 1.01% at 59457.80, and the Nifty jumped 175.50 points or 1% at 17752.30. IndusInd Bank, Bajaj Finserv, HCL Tech, Bajaj Finance and Kotak Mahindra Bank are the top gainers while Tech Mahindra, IndusInd Bank, HDFC Bank and HDFC are the most active stocks.
Among the sectors, realty, financials, healthcare and IT are up over a percent each while the midcap and smallcap indices are also trading in the green.
HDFC Q3 earnings
Housing Development Finance Corporation (HDFC) has reported 11.4 percent jump in its Q3 net profit at Rs 3,260.7 crore versus Rs 2,925.8 crore and net interest income (NII) was up 7% at Rs 4,284 crore versus Rs 4,005 crore, YoY.
Housing Development Finance Corporation was quoting at Rs 2,604.65, up Rs 40.55, or 1.58 percent.
BSE Healthcare index added 1 percent supported by the Dishman Carbogen Amcis, Dr. Lal PathLabs, Venus Remedies
Nomura
Foreign research house Nomura has maintained buy call on Exide Industries and cut target to Rs 216 per share.
The Q3 results were below estimate. The Li-ion investment announced under PLI, with valuations look attractive.
The company maintained single-digit auto replacement growth estimate for FY22-24. In the industrials segment, the company maintained 7% growth estimate for FY23/24.
Exide Industries was quoting at Rs 175.15, up Rs 0.10, or 0.06 percent on the BSE.
Dhanuka Agritech Q3
Dhanuka Agritech has reported 6.3 percent jump in its Q3 net profit at Rs 42.5 crore versus Rs 40 crore and revenue was up 20.7% at Rs 356.9 crore against Rs 295.7 crore, YoY
The company announced an interim dividend of Rs 8 per share.
Dhanuka Agritech was quoting at Rs 782.55, up Rs 27.65, or 3.66 percent on the BSE.
Sharad Mittal, Chief Executive Officer, Motilal Oswal Real Estate:
Budget is a "non-populist growth oriented budget". Focus is on growing the economy through investment rather than consumption.
Budget has seen a renewed focus on affordable housing with an allocation of Rs 48000 Cr in PMAY. There has also been a focus on transparency and ease of doing business through digitization of land records and streamlining the single window platform for environmental clearance. Data centres and energy storage systems getting infrastructure status will help boost financing of this segment.
However, there have not been many measures to boost real estate demand like increase in deduction in interest on housing loans from a tax perspective, etc.
Market at 1 PM
Benchmark indices holding on the gains with Nifty trading above 17000 led by the pharma, IT and banking names.
The Sensex was up 574.24 points or 0.98% at 59436.81, and the Nifty was up 167.70 points or 0.95% at 17744.50. About 2162 shares have advanced, 941 shares declined, and 78 shares are unchanged.
BSE Midcap index gained 1 percent supported by Vodafone Idea, Union Bank of India, Oracle Financial Services Software
Geojit view on Mold-Tek Packaging
Mold-Tek Packaging entry into IBM to cater to new segments in Pharma & cosmetics has significantly improved its long term outlook.
Further ramp-up of volumes from new plants (Mysore & Vizag) and strong clients addition in FMCG seg ment is expected to maintain the current earning momentum.
Considering strong earnings outlook of 31% CAGR over FY21-24E, we value Mold-Tek Packaging at 22x on FY24E. We maintain accumulate with a target price of Rs 827.
Mold-Tek Packaging was quoting at Rs 762.00, up Rs 20.30, or 2.74 percent on the BSE.
Morgan Stanley keeps equal-weight rating on Oberoi Realty:
Morgan Stanley has maintained equal-weight rating on Oberoi Realty with a target at Rs 893 per share.
The company is benefiting from strong revival in Mumbai residential demand.
The company’s balance sheet remains strong
Oberoi Realty was quoting at Rs 945.15, down Rs 23.20, or 2.40 percent on the BSE.
Zydus Wellness Q3 results
Zydus Wellness has reported net profit was at Rs 23 crore agaisnt Rs 1.7 crore and revenue was up 1.7% at Rs 388.1 cror against Rs 381.6 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was down 35.2% at Rs 32.2 crore versus Rs 49.7 crore and margin was at 8.3% versus 13%, YoY.
Zydus Wellness was quoting at Rs 1,737.70, down Rs 2.85, or 0.16 percent on the BSE.
BSE SmallCap index rose 1.5 percent led by the Spandana Sphoorty Financial, Nahar Polyfilms, Dredging Corporation Of India
Market at 12 PM
Market extended the gains and trading at day's high with Nifty above 17750.
The Sensex was up 665.33 points or 1.13% at 59527.90, and the Nifty was up 187.70 points or 1.07% at 17764.50. About 2200 shares have advanced, 875 shares declined, and 75 shares are unchanged.
Sunil Chordia, Chairman & Managing Director of Rajratan Global Wire:
The Union Budget did a phenomenal job of promoting long term growth. The increased outlay on capital expenditure with an investment on the infrastructural sector of Rs. 7.5 lakh crores will substantially boost the economy.
The extension of National highways by 25,000 kms along with an outlay spending of Rs. 48,000 crores on PMAY in the budget is a very pragmatic step taken by the Government.
There has been a huge emphasis on pro-digitization within the budget, especially in the education, rural, banking and agricultural sectors. This will prove to be a catalyst for a better future for our country.
HCL Technologies appoints Masayuki Nakayama as country head for Japan:
HCL Technologies has appointed Masayuki Nakayama as country head of HCL Technologies in Japan. He will be responsible for driving growth in the Japanese market and for supporting clients with their business transformation.
HCL Technologies was quoting at Rs 1,160.55, up Rs 27.95, or 2.47 percent on the BSE
Follow our LIVE blog for the latest updates on the new Omicron variant of COVID-19 and its impact
Gaurav Garg, Head of Research, Capitalvia Global Research:
Traders would be encouraged by Chief Economic Adviser V Anantha Nageswaran's prediction that India will become a $ 5 trillion economy by FY26 or the next year, based on continuous growth of 8-9 percent. He went on to say that the country's gross domestic product (GDP) had already surpassed $3 trillion in monetary terms.
Provisional statistics from the commerce ministry revealed that the country's exports increased by 23.69 percent to $34.06 billion in January, owing to strong performances in the engineering, petroleum, and gems and jewellery industries, despite the trade deficit widening to $17.94 billion for the month.
Exxon's solid financial results drove the energy index to a multi-year high, sending US markets higher on Tuesday. Following the surge in Wall Street indices, Japan's stock market is trading in the green on Wednesday.
Our research suggests that the levels of 17400 may act as important support levels & 17725 may act as a resistance level in the market. If the market sustained above the levels of 17600, we can expect the market to trade in the range of 17400-17800.
India Ratings upgrades Jindal Stainless' long-term issuer rating to AA-
India Ratings and Research (Ind-Ra) has upgraded the long-term issuer rating assigned to Jindal Stainless (JSL) to ‘IND AA-’ with a stable outlook, while resolving the Rating Watch Evolving (RWE).
The agency had previously assigned ‘IND A+/RWE’ rating to JSL’s long-term credit facilities.
Jindal Stainless was quoting at Rs 210.40, up Rs 3.50, or 1.69 percent on the BSE.
Maruti Suzuki India's January production:
Maruti Suzuki India's total production in January at 1,61,383 units against 1,60,975 in January 2021.
Maruti Suzuki India was quoting at Rs 8,534.15, down Rs 23.35, or 0.27 percent.
Deepak Chandnani, Executive Chairman Designate, Worldline South Asia & Middle East:
We continue to witness government’s mega push towards digitalisation across all key sectors including health, education, fintech, startup, payments among others in this budget announcement.
The proposal to launch Central Bank Digital Currency and introducing 75 Digital Banking Units that will be set up in 75 districts of the country by Scheduled Commercial Banks will bring more users under the digital ambit, especially in the rural pockets.
The continuation of financial support announced in the previous budget for digital payments is a big positive as it will continue to deepen the adoption of digital payments across the country and promote use of economical and user-friendly platforms.
BSE Realty index rose 1 percent led by the Brigade Enterprises, Godrej Properties, Macrotech Developers
Brokerages say Budget 2022 good for growth, bad for equity valuations
Brokerage firms termed the Union Budget for 2022-23 presented by Finance Minister Nirmala Sitharaman on February 1 as positive for long-term growth of the economy but negative for equity valuations in the near term. The Budget estimated a 35 percent jump in capital expenditure spending for 2022-23 to Rs. 7.5 lakh crore from the budget estimates of 2021-22 and a 10 percent rise from the revised budget estimates for last year.
“This Budget captures the transition from a time of pandemic to one that cautiously pulls back support, and then seeks to transition the economy to a stable and potentially higher growth path,” said brokerage firm Edelweiss Securities in a note.
Market update at 11 AM: Sensex is up 486.27 points or 0.83% at 59348.84, and the Nifty jumped 142.30 points or 0.81% at 17719.10.
Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life Insurance
With the great emphasis on the capital spending this Budget has turned out to be a growth oriented Budget, with substantial increase in capital expenditure from Rs. 5.5 lakh crore in FY22 to Rs 7.50 lakh crore in FY23. This has been achieved while lowering the fiscal deficit target from 6.9% in FY 22 to 6.4% in FY23. Although the deficit for FY23 is a higher than the market expectations thereby causing the yields to move up, we believe this will have a positive impact on the economy and growth. While many aspects have been covered in the budget, the emphasis has been on promoting the domestic manufacturing, digital and start up economy.
Production linked incentive schemes which has been a good success continued to receive more allocations, and MSME segment continues to get fillip with the extension of ECLGS scheme for one more year. Introduction of digital rupee, and taxation of virtual assets will help channelize the domestic savings for productive use.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
The bold capex-led growth oriented Budget augurs well for the market. 8 to 8.5% GDP growth for FY23 is credible and the consequent growth in corporate earnings can be impressive. Capital goods, cement and steel stand to benefit from the big push in capex.
A new growth cycle on the back of the massive capex has the potential to crowd-in private investment leading to acceleration in the nascent credit growth. Banks and NBFCs stand to gain from this.
Now that the budget is behind us the market is likely to react more to global cues. The correction and the recent rally were, in fact, reaction to global market cues. FIIs sharply trimming their selling to just Rs 22 crore helped the Budget rally. But FIIs are likely to sell the rallies again since they consider Indian valuations excessive.
NCLT nod for merger of L&T Hydrocarbon with L&T
National Company Law Tribunal, Mumbai Bench (NCLT) has approved the scheme of arrangement for amalgamation of L&T Hydrocarbon Engineering with Larsen & Toubro of amalgamation.
Larsen & Toubro was quoting at Rs 1,990.10, down Rs 1.05, or 0.05 percent.
Nifty PSU Bank index gained 1 percent supported by the Indian Bank, Canara Bank, J&K Bank
Alembic Pharma gets tentative USFDA nod for Fesoterodine Fumarate Tablets
Alembic Pharmaceuticals has received tentative approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Fesoterodine Fumarate ExtendedRelease Tablets, 4 mg and 8 mg, company said in its press release.
Fesoterodine Fumarate ExtendedRelease Tablets are indicated for the treatment of overactive bladder (OAB) in adults with symptoms of urge urinary incontinence, urgency, and frequency. It may not be indicated for certain other uses due to unexpired exclusivities for the RLD for such uses, it added.
Alembic Pharmaceuticals was quoting at Rs 770.85, up Rs 8.70, or 1.14 percent on the BSE.
