Closing Bell: Sensex, Nifty end lower; eyes on Union Budget

Indian benchmark indices ended marginally lower in the volatile session on July 22. At close, the Sensex was down 79.43 points or 0.10 percent at 80,525.22, and the Nifty was down 21.60 points or 0.09 percent at 24,509.30.

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.

A small-bodied candle has formed on the daily chart following a bearish engulfing pattern, suggesting a pause before the next movement. The Relative Strength Index (14) has entered a bearish crossover and is exiting the overbought zone.

The 24550 level is likely to act as an immediate hurdle for Nifty. A move above 24550 might induce a meaningful rally in the Nifty, while support is placed at 24480. A decisive fall below 24480 might induce selling pressure in the market.

The markets began the week on a subdued note and ended nearly unchanged, reflecting caution ahead of the Union Budget. The Nifty index opened lower and fluctuated within a range before closing at the 24,509.25 level. Initially, weak global cues and pressure on index heavyweights like Reliance and Kotak Bank following their earnings reports weighed on sentiment. However, the strength in banking major HDFC Bank, in reaction to its results, and continued buoyancy in IT heavyweight Infosys Ltd offset the negativity. Sector-wise, auto, metal, and pharma edged higher, while realty and IT were among the top losers.

With all eyes on the Union Budget, volatility is expected to remain high on Tuesday. We thus maintain a cautious stance and recommend a hedged approach. Traders should seek buying opportunities in low-beta counters, especially in the defensive sectors, and remain selective in other areas.

Nifty closed lower for the second consecutive session on July 22 as traders reduced commitments ahead of the Union Budget on July 23 and investors parsed through corporate results. At close, Nifty was down 0.09% or 21.7 points at 24509.3. Cash market volumes on the NSE fell 9.4%. Broad market indices ended in the positive even as the advance decline ratio recovered to 1.30:1.

Asian markets fell Monday as Joe Biden's decision to drop out of the US presidential race fuelled fresh uncertainty about its impact on Asian economies and currencies. European shares rose on Monday, recovering from steep losses in the previous session, while investors assessed the positive implications of President Joe Biden's exit from the U.S. presidential election race on Europe.

Nifty formed a doji like pattern on July 22 after recovering well from early morning weakness, though ending marginally in the negative. The Union Budget presentation on July 23 will likely create enough intra day volatility on that day. Nifty could face resistance at 24661 and later at 24801 in the near term while 24141 could provide support on falls.

The conservative economic growth forecast for FY25, presented in the economic survey, has introduced some spikes in volatility ahead of the budget. Further, the below-estimated Q1 results from certain index heavyweights like RIL added to apprehensions of a slowdown in earnings growth in FY25.

Although the budget is anticipated to be favourable, investors will closely monitor whether it continues to tickle traction, given high valuations and the risk of a downgrade in earnings.

The oversold condition coupled with a bullish divergence in the RSI saved the Index from a steep fall. Mixed market activity was seen where the Mid and Smallcaps soared higher while the Index stayed in a well-maintained range to end the session at 24,509.25 with a marginal loss of 21.65 points.

Auto and Pharma sectors advanced over 1% to become outperformers of the day while Realty was the major laggard followed by IT.

Considering the Union Budget outcome, wild swings can be expected on both sides where 24,200 will be considered as immediate support while the higher side seems to be capped at 24,800.

Indian rupee ended flat at 83.66 per dollar on Monday versus Friday's close of 83.66.

Indian benchmark indices ended marginally lower in the volatile session on July 22.

At close, the Sensex was down 79.43 points or 0.10 percent at 80,525.22, and the Nifty was down 21.60 points or 0.09 percent at 24,509.30. About 1953 shares advanced, 1575 shares declined, and 116 shares unchanged.

Biggest Nifty losers included Wipro, Kotak Mahindra Bank, Reliance Industries, ITC and SBI Life Insurance, while gainers were Grasim Industries, HDFC Bank, Dr Reddy's Labs, Tata Consumer and Infosys.

On the sectoral front, auto, capital goods, healthcare, metal and power indices went up 1 percent each, while selling was seen in the media, bank, IT, realty and FMCG.

The BSE midcap index added 1.3 percent and the smallcap index rose 0.8 percent.

#1 Company remains top pick

#2 In-line quarter; strong outlook

#3 O2C delivers well in a challenging environment

#4 Reported net debt moderates to Rs 1.12 trillion; capex increased to Rs 28,800 crore

#5 Jio’s EBITDA of Rs 13,900 crore increased 2 percent QoQ, 2 percent below estimate

#6 Retail adjusted EBITDA of Rs 5,450 crore grew 11 percent YoY

#7 Overall margin rose 20 bps YoY; operational trends remained strong

#1 Earnings call focussed on start of investment cycle in refining & chemicals after 5-year Hiatus

#2 We were encouraged by strong earnings quality

#3 Q1 integrated margin of USD 9.4/bbl better than estimate and above mid-cycle

#4 Company’s net debt at remains at multi-year low

#5 Current OCF run rate should support USD 2 bn in annual investments

#1 Higher volumes (+7 percent), lower costs (-4 percent) & higher RMC sales offset lower YoY realisations (-6 percent)

#2 EBITDA was 6 percent ahead of estimate on higher volumes/RMC sales

#3 Key call highlights include costs that should come down by >Rs 300/t over 3 years

#4 Earlier guidance for cost was Rs 200-300/t

#5 Q1 was impacted by higher marketing spends – world cup

#6 July prices are lower vs Q1 average by nearly 1.5 percent, any hikes will likely happen only post monsoon

#7 Company expects FY25 industry growth at 7-8 percent, own growth in double digits

#8 Investment in India cements is a financial investment for now

#1 Overall revenue growth was strong at 21 percent YoY, 2 percent ahead of estimate

#2 Domestic wires and cables growth remained strong

#3 EPC revenue contribution likely to remain elevated

#4 Pick-up In wires growth should aid in recouping margin

#1 Growth/asset quality trends both disappointed in Q1; outlook uncertain

#2 Asset quality deteriorates for third consecutive quarter

#3 FY25 guidance of nearly 23-24 percent disbursement growth looks difficult to achieve

#4 Given pressure on both growth & asset quality, cut FY25-27 EPS by 2-4 percent

#1 Q1 results saw sharp decline in RoA on the back of lower NII & an uptick in credit costs

#2 Loan growth remained strong on the back of a punchy growth in corporate credit

#3 Deposits declined sequentially thanks to the muted growth in CASA deposits

#4 The impact of the RBI restrictions was not visible on loan growth

#5 The bank did see a slowdown in customer acquisition

#1 Company delivered a weak Q1 - 1 percent QoQ decline vs TCS/Infosys delivering +2-3 percent QoQ

#2 Q2 guidance at -1 percent to +1 percent QoQ CC will disappoint in the context of raised expectations

#3 Company’s growth differential vs peers stays, & so will valuation differential

Indian Rupee traded in a narrow range today. Mixed to weak domestic markets put downside on the Rupee. However, weak tone in the US Dollar and a decline in crude oil prices cushioned the downside. US Dollar fell as US President Joe Biden withdrew from US Presidential race. However, Asian currencies fell as China cut 1-year and 5-year PLR by 10 bps.

We expect Rupee to trade with a slight negative bias on weak tone in the global markets and overall strength in the US Dollar. Weak Asian currencies and a weak Yuan may also support the Dollar. However, weakness in crude oil prices and FII inflows may support the Rupee at lower levels.

Any intervention by the RBI may also support the Rupee. Investors may take cues from India’s Union Budget. USDINR spot price is expected to trade in a range of Rs 83.20 to Rs 84.20.

#1 Q1FY25 earnings & EBIDTA missed, but balance sheet outperformed

#2 Net debt & capex intensity declined

#3 While energy & telecom should see rebound in coming quarters

#4 Company’s pivot in retail to focus on margin amid tepid domestic demand stands out

#5 Q4FY24 EPS was 4.5 percent below estimate, due to higher impact from gasoline margin decline

#6 Reported net debt declined USD 0.6 billion

#7 Capex intensity was below OCF at USD 3.7 bn/quarter versus 2-year average quarterly run rate of USD 4.5 billion

#1 Revenue up 9% YoY to Rs 1420 crore

#2 Supply Chain revenue Rs1340 crore, up 11% y/y

#3 Enterprise revenue Rs81.3 crore, up 0.2% y/y

#4 Total costs Rs1430 crore, up 10% y/y

#5 Operating expense Rs1210 crore, up 11% y/y

#6 Staff costs Rs102 crore, up 2.9% y/y

#1 Net loss at Rs13.5 cr vs loss of Rs19.5 cr (YoY)

#2 Revenue up 3.3% at Rs364 cr vs Rs352.3 cr (YoY)

#3 EBITDA at Rs42.5 cr vs Rs19.3 cr (YoY)

#4 Margin at 11.7% vs 5.5% (YoY)

Foreign investors have invested across all sectors in the first half of July, except for the power sector, where they have been net sellers since the second half of April.

FIIs sold around Rs 891 crore in the power sector during the first half of July, following selling worth Rs 2,500 crore in June, Rs 3,042 crore in May, and Rs 834 crore in the second half of April.

Analysts report that FIIs are reducing their investments in the power sector due to profit booking after a strong rally over the past year. Power stocks have surged, with many penny stocks becoming multibaggers.

Since July 2023, narratives of power shortages, capacity addition, and sector reforms have boosted valuations. The weakest monsoon in 122 years increased demand and power prices from July to October 2023, further driving stock values.

Meanwhile, FIIs resumed buying in metals and mining sectors, investing Rs 1969 crore after selling in May and June.

FIIs also invested heavily in the capital goods sector with Rs 3612 crore, Rs 2993 crore in auto, Rs 2765 crore in IT, and Rs 2378 crore in healthcare in the first half of the month.

#1 Profit rises 10.2% to Rs 260.2 crore Vs Rs 236 crore, YoY

#2 Revenue increases 5.7% to Rs 1,550.2 crore Vs Rs 1,466.4 crore, YoY

#1 Q1FY25 saw slight NIM uptick; muted loan growth outlook stays

#2 Another QoQ NIM uptick; watch out for impact of higher PSL requirements from Q2FY25

#3 Build in 12 percent/17 percent loan/deposit CAGR over FY24-27, which brings down LDR to 92 percent for FY27

#4 From a near-term perspective, watch out for impact on bank’s RoA

#1 Q1 EBITDA came in-line with estimate as weaker refining was offset by better marketing

#2 Refining margin should remain rangebound in near-term on elevated capacity adds

#3 Marketing margin have narrowed on crude strength

#4 Company offers healthy integrated margin versus peers on superior refining margin capture

#1 Q1 revenue below, margin in-line with estimates

#2 Discretionary demand showing early signs of a recovery

#3 Q2FY25 guidance weaker than expectations

#4 Robust execution on margin continues despite weak growth

#1 Q1 was a material miss against VA consensus

#2 Miss driven by lower-than forecast estimate across Jio, retail, and oil-to-chemicals

#3 Continue to see downside to consensus EPS

#4 Follow through on capex discipline & FCF improvement would be positive

#5 But likely consensus EPS cuts a drag

#1 Q1 standalone EBITDA fell 12 percent YoY on lower blended realisations

#2 Q1 Standalone EBITDA came lower though costs were lower & volumes higher

#3 Performance of the US operations worsened QoQ

#4 Management indicated India spreads should improve despite soft steel prices on lower coking coal

#5 India steel prices have fallen with regional prices (still a premium to import parity)

#6 Investors may also be concerned with transfer of under-construction slurry pipeline to JSW Infra

#1 Profit surges 81.7% to Rs 584.5 crore Vs Rs 321.6 crore, YoY

#2 Revenue jumps 54.4% to Rs 1,405.2 crore Vs Rs 910 crore, YoY

#1 Profit spikes 48.7% to Rs 580.4 crore Vs Rs 390.4 crore, YoY

#2 Gross premium written grows 19.8% to Rs 7,931 crore Vs Rs 6,622.1 crore, YoY

#3 Combined ratio at 102.3% Vs 103.8%, YoY

#1 Profit increases 14.8% to Rs 397.7 crore Vs Rs 346.3 crore, YoY

#2 Revenue rises 28.7% to Rs 926.8 crore Vs Rs 720.3 crore, YoY

#1 Profit zooms 41% to Rs 332.3 crore Vs Rs 235.7 crore, YoY

#2 Revenue increases 42.6% to Rs 505 crore Vs Rs 354.2 crore, YoY

#1 Company’s domestic W&C volume/revenue grew by 10 percent/16 percent in Q1

#2 Domestic W&C volume/revenue saw decent growth in context of a strong base

#3 EBITDA missed due to adverse geography/channel mix and extreme RM volatility

#4 As adverse externalities appear to be behind, company expecting an uptick in sales going forward

#5 Even as margin could recover sequentially, they are unlikely to replicate FY24 performance

#6 See downside risks to street’s margin forecasts; cut EPS forecast by 1-3 percent

#1 Profit declines 11.5% to Rs 81.2 crore Vs Rs 91.7 crore, YoY

#2 Revenue rises 14% to Rs 1,103.4 crore Vs Rs 967.3 crore, YoY

The company has received a Letter of Acceptance from the Uttarakhand Urban Sector Development Agency for the Development of Water Supply and Sewerage System in Vikas Nagar, Dehradun. The order value is Rs 535.19 crore, with EMS holding a 95% share along with another joint venture partner for an 18-year operation and maintenance (O&M) period.

ONGC Videsh signed a definitive Sale Purchase Agreement (SPA) to acquire 0.615% participating interest in the offshore Azeri Chirag Gunashli (ACG) oil field in Azerbaijan from Equinor.

Additionally, it will acquire 0.737% shares of the Baku Tbilisi Ceyhan (BTC) pipeline company through its subsidiary ONGC BTC. The acquisitions, totaling up to USD 60 million, are expected to complete in the coming months.

Total volume, including surface and air express, stood at 1,00,000 tonnes in June 2024, marking a marginal MoM decline of 3% and a YoY decline of 2%. The company reported a 1% improvement in yield compared to the previous month, driven by a better product mix.

#1 Profit zooms 199.6% to Rs 262.9 crore Vs Rs 87.8 crore, YoY

#2 Revenue falls 7.6% to Rs 7,173 crore Vs Rs 7,767.1 crore, YoY

Exide Industries, Carborundum Universal, Bemco Hydraulics, Chembond Chemicals, DHP India, Divgi Torqtransfer Systems, Happy Forgings, Indian Metals & Ferro Alloys, Swelect Energy Systems, Swelect Energy Systems, Taparia Tools, Voltamp Transformers, Xpro India

#1 Q1 PAT beat estimate by 10 percent (higher cap gains) & consensus by nearly 20 percent

#2 Raise forecasts and price target; expect consensus to Rise

#3 Stock's YTD outperformance should continue given market share gains, better combined ratio

#4 Company likely boost to accounting earnings from IFRS transition in FY26

#1 Profit surges 84% to Rs 534.2 crore Vs Rs 290.4 crore, YoY

#2 Revenue declines 1.7% to Rs 2,879.5 crore Vs Rs 2,927.9 crore, YoY

Dodla Dairy on July 22 reported a strong growth in the firm’s first quarter results. The company’s net profit jumped 86.24 percent to Rs 65 crore in the three-month period ended June 30, compared to Rs 34.98 crore reported in the same period of the previous financial year, the company said in an exchange filing.

The company had reported a net profit of Rs 46.8 crore in the March quarter, the filing showed.

Stock Market LIVE Updates | JK Cement shares rise 3.5% as Q1 profit jumps 66.9%

#1 Profit jumps 66.9% to Rs 184.8 crore Vs Rs 110.7 crore, YoY

#2 Revenue rises 1.6% to Rs 2,807.6 crore Vs Rs 2,762.6 crore, YoY

The market experienced increased volatility with the union budget scheduled for tomorrow. After opening in the red, the market is traded on a lackluster note on Monday.

Looking ahead, we believe the Nifty may find support near the 24350 levels, a move below these levels, the profit-taking phase could drive it towards the 23800 - 24000 in the eventful week. For above range, Nifty can see resistance 24585 - 24650.

Overall, the broader market is expected to remain under pressure due to ample opportunities for profit booking. Going into the Budget the market will be trading cautiously, but If the Budget delivers on expectations, aggressive retail buying can lift the market to new highs.

#1 Cigarette business has headroom to grow

#2 Expect stronger pace of growth in non-tobacco portfolio

#3 Expect non-cigarette EBIT to be 35-40% versus 20% in 10 years

#4 Factor 11% EPS CAGR over FY25-FY27e

#5 Value FMCG business at 45x and cigarette business at 20x 1-year forward P/E

#6 Key catalysts: Demerger of FMCG business, rational cigarette taxation

#1 Profit jumps 29% to Rs 372 crore Vs Rs 288 crore, YoY

#2 Net interest income increases 20% to Rs 1,700 crore Vs Rs 1,422 crore, YoY

#3 Net interest margin improves to 5.67% Vs 5.53%, YoY

#4 Gross NPA ratio rises to 2.69% Vs 2.65%. QoQ

#5 Net NPA ratio flat at 0.74% Vs 0.74%, QoQ

At a time when retail inflows into mutual funds through SIPs are hitting new highs on a monthly basis, Sebi chairperson Madhabi Puri Buch has cautioned distributors against mis-selling or false advertising. The first female chief of the Securities and Exchange Board of India (Sebi) said that she strongly believes that the interests of the customers should always come first. READ MORE

The frontline indices are at risk of imminent 5-10 percent correction, while small- and mid-cap counters are likely to see bigger drawdowns. Domestic brokerage Emkay Global initiated a "key avoids" list as it takes a cautious stance towards the stretched valuations. As Nifty valuations are stretched and a positive budget is priced in, the lack of favourable triggers will lead to a sell-off, said Emkay. READ MORE

#1 Profit plunges 64.3% to Rs 867 crore Vs Rs 2,428 crore, YoY

#2 Revenue rises 1.7% to Rs 42,943 crore Vs Rs 42,213 crore, YoY

#3 EBITDA declines 21.8% to Rs 5,510 crore Vs Rs 7,046 crore, YoY

#4 Margin dips 390 bps to 12.8% Vs 16.7%, YoY

#1 Profit grows 21.1% to Rs 26.8 crore Vs Rs 22.1 crore, YoY

#2 Revenue increases 11.9% to Rs 165.4 crore Vs Rs 147.8 crore, YoY

#1 EBITDA declined 9 percent QoQ, in-line with estimate

#2 While O2C & Jio were in-line, retail missed on soft growth while upstream beat

#3 Jio should see strong growth on the back of the tariff hike

#4 Outlook on O2C profitability remains subdued in CY24

#5 Capex rose QoQ but remains below the FY24 run rate & net debt moderated

India’s second-largest private commercial port operator acquired the Under Development Slurry Pipeline Project from JSW Utkal Steel, a wholly-owned subsidiary of JSW Steel, for Rs 1,700 crore.

#1 Profit zooms 76.1% to Rs 121.9 crore Vs Rs 69.3 crore, YoY

#2 Revenue jumps 28.4% to Rs 1,573.5 crore Vs Rs 1,225.1 crore, YoY

The Government of India announced the up-gradation of IRCTC from 'Schedule B' to 'Schedule A' category, Central Public Sector Enterprises (CPSE).

Tata Consultancy Services has expanded its partnership with Rolls-Royce to advance its sustainable initiatives. This collaboration involves research into hydrogen fuel system technology, continuing to prove hydrogen could be a zero-carbon aviation fuel of the future.

#1 Profit sinks 47.2% to Rs 77.5 crore Vs Rs 146.8 crore, QoQ

#2 Revenue grows 17.8% to Rs 1,562.8 crore Vs Rs 1,326.9 crore, QoQ

Following an audit in April 2024, the US Food and Drug Administration (US FDA) classified Jubilant Draximage Inc's radiopharmaceutical manufacturing facility in Montreal, Canada, as Voluntary Action Indicated.

The Central Government has extended the term of office for Shanti Lal Jain as MD & CEO of Indian Bank from September 1, 2024, to December 31, 2024.

Paytm shares fell over 2 percent on July 22 after the fintech reported a weak result for the quarter ended June 2024 (Q1FY25). One 97 Communications, which runs Paytm, reported that its net loss widened two-and half times on-year to Rs 839 crore.

The Vijay Shekhar Sharma-led fintech firm's revenue from operations declined 36 percent on-year to Rs 1,502 crore in Q1FY25 as the company continues to cope with the impact of RBI curbs shutting the payments bank business. Read More