Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services:
Domestic equities recoiled after witnessing strong rally last week. Nifty traded in a range in the absence of any positive trigger and closed with loss of 88 points (-0.5%) at 16,631 levels. Broader market too ended in negative territory with Nifty Smallcap 100 down 0.6% while Nifty Midcap 100 ending flat. Except for Metals and IT, all others sectors ended in red. India VIX surged by 6.2% at 17.68 levels.
Global markets were mixed on the back of weak results given by Snap Inc. and cautiousness ahead of FED meet and US GDP data during the week.
Domestic equities saw a pause in rally after markets reacted to the mixed set of results by Index heavyweights that came over the weekend. ~18 more Nifty companies are scheduled to declare their 1QFY23 results during the week which would keep the market busy. On the global front, US Fed meeting and US Q2 GDP data would be key events to watch out for. Overall positive momentum would continue with bouts of volatility on the back of ongoing action packed earning season, fluctuation in FIIs flows and global events.
Prashanth Tapse, Vice President (Research), Mehta Equities:
Key benchmark indices lost momentum after 6-days of winning streak on weakness in select Asian peers and caution ahead of the US Federal Reserve's rate meeting on Wednesday.
Nifty stumbled 0.65% and volatile currency can also be blamed for it with the USD/INR hovering around 79.73. The street suspects that the Federal Reserve will be hiking rates again on 27th July by another 75bps. Also, commanding attention will also be US Q2 GDP to be released on July 28th. Technically speaking, the bulls can do a victory lap only if Nifty closes above its 200-DMA at 17045. On the downside, the line in the sand is at Nifty’s support at 16551 mark.
Kunal Shah, Senior Technical Analyst at LKP Securities:
The Bank Nifty index ended on a flat note after a stupendous rally in the past week. The Bank Nifty index remains in a buy-on dip mode with immediate support at 36,200-36,000 levels.
The immediate resistance on the upside is placed at 37,000 and if breached will see a further rally towards 37,300-37,500 levels.
Vinod Nair, Head of Research at Geojit Financial Services:
Fears of global economic slowdown along with the reaction to a slew of major quarterly earnings dictated the trend in the domestic market. Recession fears are casting a shadow over the global markets as US and Euro business activity contracted unexpectedly owing to the downturn in manufacturing and service sectors.
The major market driver this week will be the Fed’s policy decision on Wednesday, where it is expected to hike rates by 75bps.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
For the last three sessions, the Nifty was trading near upper end of a rising channel. The index was inching higher along with the upper channel line as it is an upward sloping channel. However, the Nifty is now parting from that upper channel line on the downside.
Consequently, it has posted a negative daily close after six consecutive positive sessions. Thus the index seems to have stepped into a short term consolidation.
The hourly momentum indicator developed a negative divergence, which is also suggesting the same. Structurally, the index can witness a brief consolidation in the range of 16480-16750 in the coming sessions.
Kunal Shah, Senior Technical Analyst at LKP Securities:
The Nifty index after a 600 points rally witnessed profit booking at higher levels. The index will likely consolidate in the range of 16,400-16,800 ahead of the US FED meet. The trend remains on the upside and one should keep a buy-on-dip approach.
S Ranganathan, Head of Research at LKP securities:
Markets opened lower on the back of weak global cues but recovered during the day in a volatile session as the street took stock of few big earnings over the weekend.
Financials was a pocket of interest with Corporate India de-leveraging and a buoyant year last fiscal for several Metal companies.
High provision coverage by several large state owned banks with sharp focus on written-off accounts seem to provide comfort to the street for the current fiscal.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Bulls finally lost steam after surging ahead for the last six consecutive sessions as investors booked profit in automobile, oil & gas, and telecom stocks, even though gains in metals and select capital goods stocks capped losses.
Investors traded with caution ahead of the Federal Reserve meet on Wednesday, where it is expected a 75 bps rate hike could be in the offing.
Technically, on daily charts, the Nifty has formed a small Doji candle which indicates indecisiveness between the bulls and bears. For traders, 16600 would be the key level to watch out for and below the same, the index could slip till 16500-16475 levels. On the flip side, a fresh uptrend rally is possible only after the 16700 breakout and above the same, the index could rally up to 16780-16850.
Market Close
Benchmark indices ended lower in the volatile session on July 25 with Nifty below 16,700.
At Close, the Sensex was down 306.01 points or 0.55% at 55,766.22, and the Nifty was down 88.50 points or 0.53% at 16,631. About 1465 shares have advanced, 1878 shares declined, and 168 shares are unchanged.
M&M, Reliance Industries, Maruti Suzuki, Eicher Motors and ONGC were among the top Nifty losers, while gainers included Tata Steel, IndusInd Bank, Coal India, Hindalco Industries and Apollo Hospitals.
A mixed trend was seen on the sectoral front with Metal index rose 1.5 percent, while Auto index slipped nearly 2 percent.
BSE midcap and smallcap index ended on flat note.
Rupee Close:
Indian rupee ended 12 paise higher at 79.73 per dollar against Friday's close of 79.85.
CRISIL Q1 Results:
The company has reported 35.8 percent jumped in its Q1 net profit at Rs 136.9 crore versus Rs 100.8 crore and revenue was up 26.5% at Rs 668.5 crore versus Rs 528.5 crore, YoY.
CRISIL was quoting at Rs 3,270.90, down Rs 25.75, or 0.78 percent on the BSE.
Geojit View on Havells India
Havells India's revenue growth remained healthy supported by pick-up in construction activities, revival in consumer sentiments, and market share gains. Though the sharp fall in raw materials is positive in the long term, but we may see some moderation in demand as well as decline in margins.
Considering the likely impact on margins and premium valuation, we value Havells at a P/E of 42x (10 year avg.) on FY24E and downgrade to SELL from BUY with a target price of Rs 1,104.
Buzzing
Bharat Electronics has signed a Rs 250 crore contract with Ministry of Defence. It will supply nine integrated ASW complex (IAC) MOD 'C' systems. IAC MOD 'C' is an integrated anti-submarine warfare (ASW) system for all surface ships of the Indian Navy.
CLSA View on Reliance Industries:
Brokerage house CLSA has kept buy rating on the stock with a target at Rs 2,950 per share.
It was a record quarter with strong profit growth but below forecast. The telecom & retail EBITDA only a tad below & business momentum remains strong.
CLSA feels that it is one of best earnings growth stories in India’s large cap space, reported CNBC-TV18.
CLSA View On JSW Steel
Brokerage firm CLSA has maintained sell rating on JSW Steel with a target at Rs 500 per share
Earnings before interest, tax, depreciation and amortization (EBITDA) was below expectations due to several one-off provisions, however company did not provide guidance for realisations or iron ore costs, reported CNBC-TV18
Oil Prices Update:
Oil prices were relatively steady on Monday as the market balanced supply fears with expectations that rise in U.S. interest rates would weaken fuel demand.
Brent crude futures for September settlement rose 27 cents, or 0.26%, to $103.47 a barrel by 0909 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 8 cents, or 0.08%, to $94.78 a barrel.
Market at 3 PM
Benchmark indices erased most of the intraday losses but still trading marginally lower.
The Sensex was down 204.13 points or 0.36% at 55868.10, and the Nifty was down 62.50 points or 0.37% at 16657. About 1380 shares have advanced, 1812 shares declined, and 153 shares are unchanged.
Mahindra CIE Automotive Q2 profit jumps 39%
Mahindra CIE Automotive clocked nearly 39% year-on-year growth in consolidated profit at Rs 188.85 crore for the quarter ended June 2022, backed by revenue and other income. Revenue grew by 32.5% to Rs 2,707.2 crore for the quarter.
Vodafone Idea to raise Rs 436 crore
Vodafone Idea board has approved issuance of 42.76 crore warrants (each convertible into one equity share), to promoter Euro Pacific Securities, at an issue price of Rs 10.20 per warrant. The fund raising through this warrants issuance is Rs. 436.21 crore on a preferential basis.
Vodafone Idea Limited was quoting at Rs 8.91, down Rs 0.02, or 0.22 percent on the BSE.
BSE Metal index added over 1 percent supported by the Jindal Steel, Tata Steel, APL Apollo
Dhruv Consultancy Services gets Letter of Acceptance
Dhruv Consultancy Services has received the Letter of Acceptance (LOA) for the project management consultancy services for upgradation of new NH 216E in Andhra Pradesh. The company has bagged this contract in association with KAIUS Consulting. Project management consultancy services fees for the said project will be Rs 5.88 crore and the contract period will be of 96 months.
Dhruv Consultancy Services was quoting at Rs 50.30, up Rs 0.45, or 0.90 percent on the BSE.
UBS View On UltraTech Cement
Brokerage house UBS has maintained buy rating on UltraTech Cement with a target at Rs 8,145 per share.
The outlook on demand growth remains positive, while management guided for pricing pressure in Q2.
The cost environment continues to remain challenging, reported CNBC-TV18
European Markets Updates
Solar Industries Q1
: Net profit jumped 74.6 % at Rs 170.2 crore against Rs 97.5 crore (YoY). Revenue rose 95.8 % at Rs 1615.6 crore against Rs 825.2 crore (YoY). EBITDA was up 61.9 % at Rs 283 crore against Rs 175 crore (YoY). Margin at 17.5% against 21.2%(YoY). The stock was trading at Rs 2,832.45, up Rs 16.35, or 0.58 percent on BSE. It has touched an intraday high of Rs 2,925 and an intraday low of Rs 2,818.
HDFC Securities partners with Equitas Small Finance Bank for demat and trading services
Larsen & Toubro Q1 preview
Engineering giant Larsen & Toubro Ltd (L&T) is likely to report a year-on-year growth of 55 percent in its consolidated profit after tax (PAT), while its consolidated revenues are expected to grow of 20.4 percent for the first quarter ended June 2022.
According to a poll of brokerages accessed by Moneycontrol.com, the Mumbai-based company is forecast to achieve a consolidated PAT of Rs 1,816 crore as compared to a PAT of Rs 1,174 crore it registered during the same period last year. Its profit during the previous quarter stood at Rs 3,621 crore.
The revenue for the quarter is seen at Rs 35,012 crore, compared to Rs 29,335 crore recorded during the last year period. The company had recorded consolidated revenue of Rs 52,851 crore during the previous quarter.
Lakshmi Machine Works Q1: Net profit at Rs 72.6 crore against loss of Rs 9.6 crore (YoY). Revenue at Rs 982.6 crore against Rs 457.6 crore (YoY). EBITDA at Rs 85.7 crore against Rs 7.2 crore (YoY). EBITDA margin at 8.7% against 1.6% (YoY).
Another quarter of pain ahead for FMCG, indicate biggies HUL, ITC
Non-durables companies such as Hindustan Unilever Ltd (HUL) and ITC Ltd expect inflation to disrupt business for another quarter unless the monsoon revives the rural economy and spurs consumption. Top executives of both companies recently indicated that while the prices of some inputs have eased in June, those of several others remained elevated and were even at 10-year highs.
“There are some early signs of moderation but the situation is dynamic and we need to monitor it,” ITC chairman and managing director Sanjiv Puri said while addressing a virtual press conference last week after announcing the results for the first quarter.
Puri indicated that the trajectory of cost increases is difficult to predict given the supply-side challenges and green inflation as agri-commodities are being diverted for biofuel. Read more
Market update at 2 PM: Sensex is down 334.33 points or 0.60% at 55737.90, and the Nifty shed 104 points or 0.62% at 16615.50.
Jefferies View on Reliance Industries:
Research house Jefferies has maintained buy rating on the stock with a target at Rs 2,960 per share.
EBITDA missed the estimate by 1 percent on weaker than expected refining, while retail growth aided by the favourable base.
The margin was disappointed on higher network operating costs.
The regulatory overhang has receded in O2C and see firm margin in FY23, reported CNBC-TV18.
Sterlite Technologies Q1 Earnings:
Sterlite Technologies has reported net loss at Rs 20 crore in Q1FY23 versus Rs loss of Rs 23 crore in Q4FY22. Its revenue was down at Rs 1,575 crore versus Rs 1,582 crore, QoQ.
Supreme Industries Q1 Earnings:
Supreme Industries has posted 25.7 percent jump in its consolidated net profit 25.7% at Rs 213.8 crore versus Rs 170.2 crore and revenue was up 64.4% at Rs 2,206 crore versus Rs 1,342 crore, YoY, reported CNBC-TV18.
Supreme Industries was quoting at Rs 1,861.15, down Rs 33.75, or 1.78 percent.
Buzzing
Sharda Cropchem’s Q1FY23 consolidated net profit declined 32.2% at Rs 29.7 crore against Rs 43.7 crore and revenue was up 32.4% at Rs 824.5 crore versus Rs 622.7 crore, YoY, reported CNBC-TV18.
Sharda Cropchem was quoting at Rs 602.30, down Rs 90.80, or 13.10 percent.
Finolex Industries Q1 profit falls 32%
Finolex Industries reported a 32% year-on-year fall in consolidated profit at Rs 99.22 crore in the quarter ended June 2022, impacted by weak operating performance. Revenue grew by 23.2 percent to Rs 1,189.8 crore during the same period with PVC pipes & fittings volume growing 29% and PVC resin volume rising 25% YoY.
EBITDA at Rs 126 crore fell by 40% and margin halved to 11 percent from 22 percent on year-on-year basis, hit by falling PVC prices. The board has appointed Ajit Venkataraman as Chief Executive Officer (CEO) Finolex.
Central Bank Of India Q1:
Central Bank Of India has posted 14% jump in its Q1FY23 net profit at Rs 234.7 crore versus Rs 205.5 crore and Net Interest Income (NII) was up 0.7% at Rs 2,142.1 crore versus Rs 2,127.1 crore, YoY.
Central Bank of India was quoting at Rs 18.05, down Rs 0.45, or 2.43 percent on the BSE.
Orient Electric Q1 Earnings.
Orient Electric has posted net profit at Rs 18.9 crore versus Rs 5 crore and revenue was up 47.2% at Rs 621.6 crore versus Rs 422.3 crore, YoY.
Orient Electric Limited was quoting at Rs 289.80, up Rs 2.95, or 1.03 percent.
Jefferies View On Kotak Mahindra Bank
Foreign research house Jefferies has maintained buy rating on Kotak Mahindra Bank with a target at Rs 2,470 per share.
The Q1 profit was below estimates due to higher MTM on bonds. The bank could fund loan growth with limited deposits. However, growth & clarity on succession are the key, reported CNBC-TV18.
Market at 1 PM
Benchmark indices were trading near the day's low with Nifty around 16600.
The Sensex was down 403.39 points or 0.72% at 55668.84, and the Nifty was down 122.50 points or 0.73% at 16597. About 1238 shares have advanced, 1898 shares declined, and 151 shares are unchanged.
Canara Bank Q1
Canara Bank has reported 71.7 percent rise in Q1FY23 net profit at Rs 2,022 crore against Rs 1,177.4 crore and Net Interest Income (NII) was up 10.2% at Rs 6,784 crore versus Rs 6,159.3 crore, YoY.
More than 100 stocks touched their 52-week highs on the BSE. Click to get a complete list of stocks:
Morgan Stanley View on Infosys
Morgan Stanley also has an overweight call on the stock with target at Rs 1,535 per share.
It is of the view that growth performance was solid but margin came in significantly below estimates. Raised revenue guidance is comforting but not enough to offset weak margin outlook. The brokerage firm expects the stock to be under pressure in the short term.
JPMorgan View on Reliance Industries:
Broking house JPMorgan has maintained overweight rating on the stock with a target at Rs 3,170 per share.
The strong operating EBITDA across businesses with O2C leading the way.
JPMorgan feels that FY23 should be a strong year for earnings, reported CNBC-TV18.
Buzzing
Shares of HFCL, which makes telecom equipment and optical fiber cables, slumped over 7 percent after the company reported disappointing earnings for the quarter ended June 30, 2022.
HFCL said its profits tanked 42 percent year-on-year (YoY) while revenue fell 13 percent for the quarter ended June 30, 2022. Ebitda margins were also lower by 345 basis points at 12.37 percent. All numbers contracted sequentially as well.
“Revenue and consequently profitability during the quarter got impacted due to spill over of service billing followed by non-availability of required infrastructure from the customer end and also continued shortage of semiconductors,” said Mahendra Nahata, Managing Director, HFCL.
Tata Steel Q1 Preview
India’s largest steel producer Tata Steel Limited (Tata Steel) is expected to report a year-on-year decline of 19-32 percent in its consolidated profit after tax (PAT) on July 25, when it will declare its results for the quarter ended June 2022. On a sequential basis, the decline in profit is likely to be more pronounced at 26 – 38 percent.
The revenues are likely to grow 9-16 percent over the same period a year ago. On a sequential basis however, the revenues are seen decreasing by 11-16 percent.
According to a poll of brokerages that Moneycontrol had access to, including Motilal Oswal Financial Services, Kotak Institutional Equities and ICICI Securities, the Tata Group company is expected to report a PAT of Rs 6,000 – 7,200 crore on consolidated revenues of Rs 59,300 – 61,700 crore.
Tata Steel had registered a PAT of Rs 8,907 crore during the corresponding period last year when it had achieved consolidated revenues of Rs 53,372 crore. Read More
Market at 12 PM
Benchmark indices were trading lower with Nifty around 16600.
The Sensex was down 364.63 points or 0.65% at 55707.60, and the Nifty was down 110.40 points or 0.66% at 16609.10. About 1216 shares have advanced, 1864 shares declined, and 167 shares are unchanged.
Axis Bank Q1 Preview
Axis Bank is expected to report strong growth in its net profit as well as topline aided by improvement in asset quality and a conducive environment for credit offtake in the economy.
The private sector bank is likely to report a 66.6 percent year-on-year (YoY) rise in net profit to Rs 3,597.7 crore for the quarter ended June, according to an average of estimates from eight brokerages polled by Moneycontrol.
The lender will report its June quarter earnings on July 25. Read More
Intellect Design arm bags order from Mineral Development Bank
Intellect Global Consumer Banking (iGCB), the consumer banking arm of Intellect Design Arena Limited, announced that Mineral Development Bank has chosen iGCB’s Intellect Digital Core to transform its banking solutions.
Intellect Design Arena was quoting at Rs 692.60, up Rs 2.80, or 0.41 percent on the BSE.