Closing Bell: Nifty below 24,150, Sensex down 582 pts after RBI keep rates unchanged

Indian benchmark indices ended lower in the highly volatile session on August 8 with Nifty below 24,150. At close, the Sensex was down 581.79 points or 0.73 percent at 78,886.22, and the Nifty was down 180.50 points or 0.74 percent at 24,117.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices for all the global market action.

Markets struggled to maintain Wednesday's recovery, ending over half a percent lower due to weak global cues. After an initial dip, the Nifty showed volatile movements, ultimately closing near the day's low at 24,117. Sectors like IT, metals, and energy were the hardest hit. However, the broader indices outperformed slightly, posting only minor losses.

The ongoing global uncertainty is making market participants cautious, and short-term relief seems unlikely. The Nifty is encountering resistance around the 24,350 mark, and a decisive break below 23,900 could lead to a further decline. Traders are advised to adjust their positions with a hedged strategy to navigate the current volatility.

The domestic market reversed its earlier gains as the RBI's decision to hold its current policy with a caution to revise upward the CPI and moderate the growth forecast for Q1. Meanwhile the global market is focusing on US job data and the probability for deeper slowdown has raised concerns that the US economy is heading for a recession, forcing the federal reserve to cut rates faster than initially expected.

Amid extreme volatility on either sides, Nifty50 settled the weekly expiry day on a weak foot at 24,117 with a loss of 180.50 points. Among the sectors, Pharma was the best performer while IT and Metal corrected the most.

With a marginal loss of over 0.30% Mid and Smallcaps outperformed the Frontline Index.

The Index is oscillating in a wide range where the downside seems to be protected at 23,965 (near 50DMA) while the higher side is capped at 24,330 (bearish gap zone) and a breakout on either side is a must for a clear picture.

Indian rupee ended flat at 83.96 per dollar on Thursday versus Wednesday's close of 83.95.

Indian benchmark indices ended lower in the highly volatile session on August 8 with Nifty below 24,100.

At close, the Sensex was down 581.79 points or 0.73 percent at 78,886.22, and the Nifty was down 180.50 points or 0.74 percent at 24,117.00. About 1702 shares advanced, 1679 shares declined, and 84 shares unchanged.

LTIMindtree, Grasim Industries, Asian Paints, Power Grid Corp and Infosys were among major losers on the Nifty, while gainers included HDFC Life, Tata Motors, SBI Life Insurance, HDFC Bank and Cipla.

On the sectoral front, except pharma, healthcare and media, all other indices ended in the red with metal, realty, oil & gas, information technology down 1-2 percent.

BSE Midcap index was down 0.4 percent and Smallcap index ended flat.

The company board of directors in its meeting scheduled to be held on Tuesday, 13th August 2024, will consider the proposal for raising of funds through Securitization of assets and stake sale in its wholly owned subsidiary i.e., SJVN Green Energy Limited.

#1 Q1 EBITDA was 7 percent below estimates with a 19 percent revenue miss

#2 Powergen segment sales declined 8 percent YoY with the impact of the CPCB IV + transition

#3 FY24-27E EPS CAGR is just 18 percent, as factor in margin weakness ahead

If the market regulator goes ahead with its proposals on index-derivatives, BSE may discontinue its Bankex product, according to Jefferies, which has therefore cut its earnings per share (EPS) estimates for FY26/27 by 10 percent.

In its latest report on the exchange, the brokerage's analysts have retained their hold rating on the stock and have cut their price target to Rs 2,850 (at an implied P/E of 24x June 26E) from the earlier Rs 3,000.

Jefferies wrote that they "remain watchful on the final impact on volumes of continuing products post the new norms". Read More

Even though the stance is unchanged, we think it is a neutral hold. The downgrade to Q1 GDP (from 7.3% to 7.1%) due to weak high frequency data was a surprise to us, since the RBI has so far been raising its growth forecasts, so it is acknowledging softer numbers incrementally. On inflation, the near-term upward revision has been offset by downward revision to Q4, implying the food price shock is seen as transitory. Our estimates show that the RBI’s upward revision to Q2 CPI (from 3.8% to 4.4%) may not materialise, since food prices are already reversing in August, so inflation may surprise lower relative to the RBI’s near-term forecast. We expect the RBI to begin its easing cycle from October with a 25bp cut, as both inflation and growth surprise on the downside. Past evidence suggests the RBI does not offer any forward guidance ahead of its monetary policy pivots. We expect 75bp worth of cumulative easing in this cycle to a terminal repo rate of 5.75% by March 2025.

A partnership with renowned American headwear brand New Era Cap sent shares of Metro Brands sharply higher on August 8, marking the shoe brand's foray into the athleisure segment.

New Era Cap makes caps for major US sports leagues, and is backed by the National Football League, Major League Baseball and the National Basketball Association.

The partnership will enhance New Era's retail presence in India and support Metro Brands' (MBL) expansion in the athleisure market. Under the agreement, MBL will have exclusive rights to distribute and sell New Era products, including headwear, apparel, and accessories, through retail stores and online platforms. Additionally, New Era products will be available in upcoming Foot Locker stores in India.

The RBI’s Monetary Policy Committee's decision met market expectations, with no changes to policy rates or the policy stance and overall policy announcement was largely uneventful.

On the growth front, the RBI has maintained its forecast at 7.2% reflecting confidence in the economy’s growth trajectory.

Regarding CPI, RBI takes solace in the favorable monsoon and a decline in core CPI. However, the persistent rise in food prices, a significant driver of CPI, remains a concern which also impacts household inflation expectations.

In the banking sector, the RBI has noted discomfort with the rapid growth in personal loans, particularly credit cards, which pose macro-prudential risks. Overall, the RBI appears confident in the current growth dynamics but remains focused on achieving its 4% inflation target. Given these considerations, it is unlikely that the RBI will adjust policy rates in the near future.

#1 Net Profit Down 34.7% At Rs 224 Cr Vs  Rs 343 Cr (YoY)

#2 Revenue Down 27% At Rs 4,074 Cr Vs Rs 5,571.6 Cr (YoY)

#3 EBITDA Down 48% At Rs 182 Cr Vs Rs 349 Cr (YoY)

#4 Margin At 4.5% Vs 6.3% (YoY)

Indian Rupee traded in a narrow range after the RBI kept repo rate unchanged at 6.5% and maintained policy stance, in line with market expectations. Weak domestic markets, surge in crude oil prices and FII outflows weighed on the Rupee. However, a decline in the US Dollar index prevented the Rupee from declining sharply.

We expect rupee to trade with a negative bias on selling pressure from foreign investors and weak domestic markets. Ongoing geopolitical tensions in the Middle East may also pressurise the Rupee.

However, weak Dollar may support the Rupee at lower levels. Any intervention by RBI may also support the Rupee. Traders may take cues from weekly unemployment claims data from the US. USDINR spot price is expected to trade in a range of Rs 83.75 to Rs 84.20.

#1 Company launched its Curvv.Ev on August 7, 2024

#2 Believe Tata Curvv breaks all key barriers for EV adoption

#3 Brings price parity between EV & ICE

#4 It significantly reduces range anxiety, offers real-world range of 350-400 Km

#1 Q1 revenue was a miss while EBITDA margin ahead of estimate

#2 While India business volumes were strong, GAUM business performance remains weak

#3 Entry into pet care: GCPL to invest Rs 500 crore primarily in opex, sales & marketing over five years

QIB – 1.13x

NII – 1.06x

Retail – 1.60x

Employee – 5.18x

Vipul Organics announced the development of a refined grade of organic intermediate for manufacturing specialty chemical to be finally used for the Automobile Industry.

The supply chain solutions provider has secured a new business contract from JCB in India for managing their in-plant warehousing and logistics operations at the Vadodara facility in Gujarat for three years.

#1 Net income falls 3 percent to $151 million

#2 Net income excluding special items jumps 32 percent to $204 million

#3 Adjusted EBITDA grows 19 percent to $500 million

#4 Rolled product shipments at 951 kilotonnes increase 8 percent

#5 Adjusted EBITDA per tonne shipped grows 10 percent to $525

#1 Profit tanks 23.9 percent to Rs 302 crore Vs Rs 396.9 crore, YoY

#2 Revenue grows 1.4 percent to Rs 6,334.8 crore Vs Rs 6,244.6 crore, YoY

The public offer of Unicommerce eSolutions witnessed strong traction from investors and was subscribed 47.67 times on its final day of bidding (August 8), led by retail investors and non-institutional bidders.

Non-institutional investors took the lead, buying 110.76 times the portion set aside for them, and retail investors took the second position, picking 80.85 times the allotted quota. Qualified institutional buyers showed a rather tepid interest, subscribing just 7.51 times the reserved portion.

The software products provider opened its public issue on August 6, targeting to mobilise Rs 276.57 crore via an offer-for-sale. The price band for the offer has been fixed at Rs 102-108 per share.

The issue was subscribed 12.23 times at the end of the second day of bidding on August 7, the subscription data available with the exchanges showed.

#1 Profit tanks 23.9 percent to Rs 302 crore Vs Rs 396.9 crore, YoY

#2 Revenue grows 1.4 percent to Rs 6,334.8 crore Vs Rs 6,244.6 crore, YoY

#1 Profit jumps 72.5 percent to Rs 24.9 crore Vs Rs 14.4 crore, YoY

#2 Revenue increases 6.2 percent to Rs 432 crore Vs Rs 406.8 crore, YoY

#3 Tax cost falls to Rs 21.9 crore Vs Rs 31.09 crore, YoY

#1 Profit plunges 32.7 percent to Rs 45.6 crore Vs Rs 67.7 crore, YoY

#2 Revenue declines 17 percent to Rs 384.7 crore Vs Rs 463.7 crore, YoY

The continued pause in the policy rate and sticking with the stance of withdrawal of accommodation was expected given the RBI Governor’s earlier statements.

There is no pressing need for any action on the policy rate as the yields on 10 year paper have already softened by almost 20bps owing to the index linked flows.

There is still volatility in food prices and risk of food inflation that will keep the CPI elevated above 4% in FY25. So, we should expect a continued pause till Q4 unless we have a lowering of weightage of food in the index being adopted in the interim.

A very important announcement has been on delegated payments in UPI. This will be game changing as far as base expansion for digital payment adoption and financial inclusion is concerned.

New Era Cap, the New York-based brand revolutionizing headwear

in sports fashion, today announced the signing of a long-term licensing agreement with Metro Brands .

This partnership will expand the retail presence of New Era in India and deepen MBL’s retail expansion in the athleisure market.

#1 Profit declines 26.9 percent to Rs 20.1 crore Vs Rs 27.5 crore, YoY

#2 Revenue grows 19.5 percent to Rs 268 crore Vs Rs 224.2 crore, YoY

Eicher Motors, Life Insurance Corporation of India, ABB India, Oil India, Biocon, Alembic Pharmaceuticals, Astral, Astrazeneca Pharma, Bajel Projects, Gujarat State Petronet, IRCON International, Minda Corporation, MRF, Page Industries, Rail Vikas Nigam, Steel Authority of India, Sobha, Unichem Laboratories, and Va Tech Wabag will release their quarterly earnings on August 8.

#1 Expanding TAM to sustain strong growth

#2 Q1 ahead; focus on affordable premiumization

#3 Scale-up in E4W components keep growth visibility high

#4 Stock trading at 42.3x FY26 EPS, which believe is attractive given strong 24 percent FY24-27 EPS CAGR

#1 Better mix (mirabegron launch in US, traction in existing US products) led EBITDA margins beat in Q1

#2 Lower R&D-led EBITDA margin beat in Q1

#3 Good line-up of opportunities in FY25-26

#4 Timely approval and execution will be critical to sustain US sales momentum

GRM Overseas expands its Global Presence through Partnership with Solariz Invest in Morocco.

This collaboration represents a pivotal moment in GRM's global expansion efforts, as it introduces its flagship basmati rice brand ‘Tanoush’ to Moroccan consumers via Solariz Invest’s wide-reaching distribution network.

#1 Q1 results weaker than consensus

#2 US and India businesses improve but negative surprises in UK and Africa

#3 Muted outlook as capacity additions outpace demand growth

#4 Upside risks from solar/EV and any capacity disruptions

#1 Buoyant outlook

#2 Raise EBITDA margin by 51 bps/35 bps/31 bps for FY25/26/27

#3 Domestic demand strong, with exports bottoming out

#4 Demand agnostic to price increase led by CPCB IV+

#5 Stock remains expensive & trades at 44x/37x FY26F/27F EPS

The Board of Directors has appointed S Sankarasubramanian as Managing Director and Chief Executive Officer (CEO) of Coromandel International, effective August 7. S Sankarasubramanian was previously the Executive Director – Nutrient Business.

#1 Company launched its Curvv.Ev on August 7, 2024

#2 Believe Tata Curvv breaks all key barriers for EV adoption

#3 Brings price parity between EV & ICE

#4 It significantly reduces range anxiety, offers real-world range of 350-400 Km

Even though the stance is unchanged, we think it is a neutral hold. The downgrade to Q1 GDP (from 7.3% to 7.1%) due to weak high frequency data was a surprise to us, since the RBI has so far been raising its growth forecasts, so it is acknowledging softer numbers incrementally. On inflation, the near-term upward revision has been offset by downward revision to Q4, implying the food price shock is seen as transitory. Our estimates show that the RBI’s upward revision to Q2 CPI (from 3.8% to 4.4%) may not materialise, since food prices are already reversing in August, so inflation may surprise lower relative to the RBI’s near-term forecast. We expect the RBI to begin its easing cycle from October with a 25bp cut, as both inflation and growth surprise on the downside. Past evidence suggests the RBI does not offer any forward guidance ahead of its monetary policy pivots. We expect 75bp worth of cumulative easing in this cycle to a terminal repo rate of 5.75% by March 2025.

#1 Alert: Timolol Maleate Ophthalmic Soln Is Used For Eye Treatment

#1 Net Profit at Rs 66 Cr Vs Rs 33 Cr (YoY)

#2 Revenue Up 84% At Rs 348 Cr Vs Rs 189.3 Cr (YoY)

#3 EBITDA Up 91% At Rs 131.7 Cr Vs Rs 69 Cr (YoY)

#4 Margin At 38% Vs 36.5% (YoY)

V Arun Roy has resigned as Chairman and Non-Executive Non-Independent Director on the board of the company, following the withdrawal of nomination by Tamilnadu Industrial Development Corporation (TIDCO).

Anish T Mathew has resigned as Chief Financial Officer, effective October 31, 2024, due to personal reasons. The Board has approved the appointment of Deepak Jagdish Pareek as Deputy Chief Financial Officer of the company, with immediate effect.

Amidst the global volatility in financial and divergent Central Banker actions, RBI remained calm and decided to maintain status quo on rates and continue with “withdrawal of accommodation stance” with 4:2 vote.

Growth and Inflation targets were unchanged. RBI has not taken active measure on liquidity front and intend to continue with VRRR auction to suck out surplus liquidity.

We continue to expect change of stance and monetary easing in H2 FY 2025, market reaction has been muted and the 10 year is expected to trade in the range of 6.75%-6.95%.

The recent RBI policy announcement was largely uneventful, with the central bank keeping policy rates unchanged and continuing the withdrawal of accommodation as expected. The focus remains on tackling inflation, with no concerns about growth, and there are no indications of rate cuts in the near term.

Consequently, the market will now turn its attention back to global cues. Although there are signs of a temporary bottom in the global market, Nifty, and Banknifty, there is still a risk of fresh selling pressure at higher levels.

Technically, Nifty is forming a bottom around the 50-DMA of 24,000, with important hurdles at 24,350, 24,525, and 24,700.

#1 Missed estimate due to margin miss in India

#2 India organic volume growth at 8 percent however stands out across peer-set

#3 Focus on launches continue & GCPL has now forayed into rapidly growing pet care

#4 Like the excessive focus on growth

Dhariwalcorp Ltd made a strong debut on the NSE SME exchange on August 8, with shares listing at Rs 150 -- a premium of 41.5 percent over the issue price of Rs 106. The IPO was open for bidding during August 1-5.

The Dhariwalcorp IPO was a book-built issue, raising a total of Rs 25.15 crore by issuing 23.72 lakh fresh shares. The price band for the shares was set in the band of Rs 102-106 per share. Investors needed to commit to a minimum lot size of 1,200 shares, amounting to an investment of Rs 1.27 lakh. For High Net-Worth Individuals (HNIs), the minimum investment was set at 2 lots (2,400 shares), totalling Rs 2.54 lakh. Read More

#1 Posted double-digit UVG yet again - for 3 consecutive quarters now

#2 Rural growth outpaced that in urban

#3 B2B UVG in Q1 (+18 percent) outpaced that in B2C (+8 percent), led by exports

#4 Gross margin rose to 53.8 percent (+480 bps YoY)

#5 Raise FY25-27 EPS by +4 percent & estimate FY24-27e EPS CAGR at +18 percent