Closing Bell: Nifty near 21,500, Sensex down 802 pts; PSU banks shine

Net profit up 10.6% at Rs 1,378.9 crore versus Rs 1,247 crore and revenue up 6.6% at Rs 7,214.8 crore versus Rs 6,770 crore, YoY.

The Nifty opened on a positive note however it was unable to carry on the positive momentum. It witnessed selling pressure and closed in the negative down ~215 points. On the daily charts we can observe that the Nifty has faced resistance around the 21750 mark which coincides with the 61.82% fibonacci retracement level of the fall from 22124 – 21137. The Nifty has failed to cross that level and thus ending the counter trend rally.

The hourly and the daily momentum indicator are having a negative crossover which is a sell signal. Thus, both price and momentum indicator is suggesting towards weakness. Considering the upcoming budget during the week the Nifty is likely to consolidate within the range 21200 – 22000 from short term perspective and a decisive close beyond this range is likely to result into trending moves in that direction.

Bank Nifty managed to survive the day without much price damage as it close the day marginally in the red down 75 points. Structurally the bank Nifty seems to be consolidating and we expect it to resume its pullback towards 46000 from short term perspective.

Selling intensified towards the fag end as investors further slashed their positions in key stocks ahead of the Budget while weakness in several Asian indices also contributed to the overall fall. With just one day left for the Budget, investors want to play it safe although there would not be any big-bang announcement by the government in this budget. Focus would rather shift to US Fed policy but indications are that it may maintain status quo on interest rates, which could unsettle investors further.

Markets failed to capitalize on Monday’s advance and shed nearly a percent. After the initial uptick, Nifty traded volatile in the first half however a sharp cut in select heavyweights in the final hour pushed the index lower. Eventually, it settled closer to the day’s low at 21,528.80 levels. Most sectors traded in tandem with the move wherein energy and FMCG were among the top losers. Meanwhile, the broader indices traded mixed wherein the smallcap index managed to make a new high and ended marginally higher.

The recent price action shows indecisiveness among the participants despite the favorable global cues and we feel the prevailing tone may continue. Meanwhile, traders should focus on stock selection and maintain positions on both sides.

Investors exhibited a reversal in strategy, adopting a cautious approach in anticipation of the upcoming FOMC meeting and interim budget amid persistent concerns regarding elevated valuations and escalating tensions in the Middle East. Further, the trend weakened in EMs as liquidation order for a major Chinese real estate firm dampened the sentiment. The US Fed is anticipated to maintain a rate pause, close attention will be paid to any hints regarding a potential rate cut in the month of May.

The BankNifty index has encountered persistent resistance around the 45500 level over the last two days. To initiate a sustained upward movement towards 46000, the index needs to convincingly break through this resistance, which coincides with the highest open interest on the call side. The immediate support on the downside is situated at 45000, and a breach below this level could intensify selling pressure, leading to a decline towards 44700-44500 levels.

Nifty exhibited volatility throughout the day, with a prevailing bearish trend. The daily chart indicates the formation of a dark cloud cover, implying a bearish outlook in the near term. Support is situated at 21500 on the lower end. A significant decline below this level could potentially initiate a correction in the market. Conversely, sustained trades above 21500 might lead to an upward movement in the market.

As indicated yesterday, the Index performed on expected lines, making a Dark Cloud Cover candlestick pattern which is bearish evidently seen as the resistance level of 21,750 was served well with bears ruling throughout the day. The Index aggravated its losses to settle at 21,522.10 with a loss of 215.50 points. While PSU Banking continued to outperform; and on the flip side, profit-booking correction dragged the Energy segment lower.

Midcap index experienced selling pressure but outperformed the Nifty while Smallcap segment ended in the green. We believe majority of the damage is done with, forming a right shoulder of an Inverted Head & Shoulder formation. On the downside, a level of 21,460 will act as support while 21,680 will be immediate resistance.

Indian rupee ended flat at 83.11 per dollar versus previous close of 83.13.

Benchmark indices ended lower in the volatile session on January 30 with Nifty around 21,500.

At close, the Sensex was down 801.67 points or 1.11 percent at 71,139.90, and the Nifty was down 215.50 points or 0.99 percent at 21,522.10. About 1897 shares advanced, 1333 shares declined, and 68 shares unchanged.

Top losers on the Nifty were Bajaj Finance, Titan Company, UltraTech Cement, NTPC and Bajaj Finserv, while gainers were Tata Motors, BPCL, Grasim Industries, Eicher Motors and Adani Enterprises.

Among sectors, except realty and PSU Bank, all other indices ended in the red with capital goods, FMCG, pharma and power down 0.5-1 percent.

BSE Midcap index shed 0.5 percent and Smallcap index ended on a flat note.

-Buy call, target Rs 8,800 per share
-In-line operational Q3 results, asset quality marginally deteriorates
-Strong AUM growth across segments except rural B2C
-PpOP growth remained robust
-Credit costs increase despite decline in PCR
-Stress remained high in unsecured segments
-Despite slight hiccups, performance well within guided range

-Buy call, target cut to Rs 520 per share
-Company chairman had highlighted possibility of consolidation in near-term cigarette volume
-Consolidation in near-term cigarette volumes exactly played out as highlighted by company
-In Q3FY24, cigarette EBIT growth was up 2%, slowest YoY in several quarters
-FMCG growth remained in high single digit, although margin expansion continued
-Agri & paperboard earnings contracted YoY
-Trim EPS by 2-3%

-Neutral call, target raised to Rs 170 per share
-Q3 was 26%/25% higher than estimate/ consensus
-Surprise largely driven by profitability in its petchem & LPG segments
-Gas trading biz delivered EBITDA of Rs 2,070 crore for quarter
-Company has beaten its full year guidance of gas trading biz EBITDA within 9 months
-GAIL has largely reversed collapse in quarterly profits it suffered last year
-Will drive re-rating of the stock

Net profit down 57.8% at Rs 38.6 crore versus Rs 91.5 crore and revenue down 16.5% at Rs 966.4 crore versus Rs 1,158 crore, YoY.

-Equal-weight call, target Rs 533 per share
-Q3 saw weak topline, good margins
-Demand improvement in core business continues to be delayed
-General trade situation hurting business growth trends

Indian Rupee gained on Tuesday on softening of US Dollar and a decline in crude oil prices from higher levels. However, weak domestic markets capped sharp gains. US Dollar eased slightly today on rise in risk appetite in global markets.

We expect Rupee to trade with a slight negative bias on month end Dollar demand from importers and concerns over geopolitical tensions in the Middle East and the Red Sea. Any recovery in US Dollar or crude oil prices may also weigh on Rupee. However, rise in risk appetite in global markets may support Rupee at lower levels. Traders may take cues from US consumer confidence and JOLTS job openings data. Investors may remain cautious ahead of US FOMC meeting and India’s Budget later this week. USDINR spot price is expected to trade in a range of Rs 82.90 to Rs 83.40.

-Buy call, target Rs 8,900 per share
-Q3 earnings missed estimates due to lower fees & higher credit costs
-Cut EPS estimates by 3-5% for FY24-26 to factor in lower loan growth & lower fees
-MD Rajeev Jain clarified he will continue to actively engaged in shaping strategy for BAF

-Hold call, target Rs 480 per share
-Revenue, EBITDA & earnings growth for Q3 below expectations as cigarette base catches up
-Agri and paperboard pulled down growth
-Modest overall growth & taxation overhang on cigarettes to limit upside

-Overweight call, target Rs 600 per share
-Standalone PAT behind estimate, with dynamics similar to those of IOCL/HPCL
-Reported refining margins for quarter beat model
-Implies marketing margin fell sharply QoQ
-BPCL has reported a small inventory loss in marketing
-Inventory loss only partially explains the miss
-Company typically traded at higher than peer P/E due to its specific E&P upside
-That has currently eroded, could return should development at Mozambique restart

Adani Total Gas clocked in a net profit of Rs 176.6 crore in Q3, up 2.3 percent on quarter while revenue grew 5.5 percent to Rs 1.156.10 crore.

EBITDA margin eroded slightly to 25 percent in Q3 from 25.5 percent recorded in the previous quarter.

Dwarikesh Sugar clocked in a net profit of RS 10 crore in Q3, up nearly 5 percent on year despite a 18.4 percent decline in its revenue to Rs 313 crore.

Despite the weak topline, operational performance still improved as EBITDA margin expanded to 8.3 percent in Q3, up from 6.9 percent recorded in the year ago period.

Gillette clocked in a net profit of Rs 103.90 crore for the December quarter, reflecting a nearly 40 percent on year surge from the base period's Rs 74.50 crore.

The topline also grew, albeit, marginally by 3.4 percent on year to Rs 639.50 crore. Regardless, the operational performance improved as EBITDA margin expanded to 24.4 percent in October-December from 20.4 percent in the year ago period.

Wheels India recorded a net profit of Rs 10.10 crore in Q3, down 16 percent from Rs 12 crore clocked in the year ago period. However, revenue rose 12.3 percent on year to Rs 1,210.40 crore.

Operating margins also expanded 5 percent in Q3 as against 4.2 percent in the same quarter a year ago.

Shanthi Gears recorded a net profit of Rs 17.4 crore in Q3, down 0.6 percent from Rs 17.5 crore clocked in the year ago period. However, revenue rose 9.5 percent on year to Rs 125.50 crore.

Operating margins also eroded to 18.6 percent in Q3 as against 20.1 percent in the same quarter a year ago.

Sensex Today | Nifty PSU Bank index rose 1.5 percent supported by UCO Bank, Bank of India, Indian Bank:

Net profit at Rs 27 crore versus Rs 8 crore and revenue up 12% at Rs 733 crore versus Rs 655 crore, YoY.

Net profit up 16.8% at Rs 83 crore versus Rs 71.1 crore and revenue up 14.7% at Rs 1,218.7 crore versus Rs 1,062.4 crore, YoY.

Sensex Today | Market at 2 PM:

The Sensex was down 377.85 points or 0.53 percent at 71,563.72, and the Nifty was down 73.10 points or 0.34 percent at 21,664.50. About 1864 shares advanced, 1343 shares declined, and 66 shares unchanged. 

Net profit at Rs 30.2 crore against Rs 5.3 crore and revenue at Rs 520.7 crore against Rs 126.5 crore, YoY.

Net profit at Rs 108.7 crore against Rs 11 crore and revenue up 10% at Rs 685.3 crore against Rs 623.6 crore, YoY.

Gold prices were in a tight range on Tuesday as traders awaited the U.S. central bank's decision on key policy rates and remarks from Chair Jerome Powell.

Spot gold held its ground at $2,034.67 per ounce and

U.S. gold futures rose 0.4% to $2,033.50.

Oil prices gained on Tuesday following a more than 1% drop the previous session as escalating geopolitical tensions in major producing region the Middle East fuelled supply concerns.

Brent crude futures rose 7 cents, or 0.07%, to $82.46 a barrel by 0734 GMT. U.S. West Texas Intermediate crude was up 15 cents, or 0.31%, at $76.93 a barrel.

-Underperform call, target Rs 150 per share
-EBITDA missed estimate on miss in transmission & trading
-Petchem turned profitable on operating leverage & cheap feedstock
-Stock trades at >+ 2SD over LT forward EBITDA making risk reward unfavorable

-Buy call, target Rs 9,400 per share
-Q3 saw profit of Rs 3,600 crore, +22% YoY tad ahead of estimate
-Strong AUM growth of 35% & better NIMs aided 29% rise in NII
-Asset quality disappointed due to slippage in personal loans
-Embargo on Emicard stays & BAF may submit revised standards to RBI in Q4

Drugmaker Dr Reddy's Laboratories is expected to report marginal on-year growth in its revenue and a low double-digit increase in net profit for the October-December quarter. The pharmaceutical company is slated to release its third quarter (Q3) earnings on January 30.

The drugmaker is expected to report a net profit of around Rs 1,383 crore, up 12 percent from Rs 1,237.90 crore recorded in the same quarter of the previous fiscal year, according to an average of estimates of nine brokerages. Read More

Analysts expect Larsen & Toubro to report a healthy Q3 on the back of robust order inflows and lowering of debt.

According to an estimate of four brokerages, the net profit of the diversified conglomerate is expected to jump over 30 percent year-on-year (YoY) to Rs 3,324.3 crore. Revenue is expected to grow 20 percent YoY to Rs 55,720 crore in October-December 2023 on the strength of a strong order book. Read More

Reliance Industries' subsidiary Reliance Jio has added 34.47 lakh users in November 2023, against 31.59 lakh users addition in previous month. In November, the wireless broadband service provider has 455.82 million subscribers.

The telecom operator has added 17.47 lakh subscribers in November last year, against 3.5 lakh users addition in previous month. The company has 255.07 million subscribers as of November 2023.

Consolidated net profit at Rs 49.6 crore against loss of Rs 80 crore and revenue was up 20% at Rs 1,037 crore versus Rs 865 crore, YoY.

Net profit up 28.1% at Rs 217.6 crore versus Rs 169.9 crore and revenue up 1.9% at Rs 4,013 crore versus Rs 3,938.9 crore, YoY.

-Overweight call, target Rs 491 per share
-Company sees Q3 topline miss led by cigarettes and agri business
-Hotels reported better revenue versus estimates
-EBIT for cigarette business was below estimate while FMCG was ahead

Sensex Today | BSE FMCG Index down 0.3 percent dragged by Dodla Dairy, ITC, Heritage Foods:

Restaurant Brands Asia has posted consolidated net loss at Rs 36.2 crore for quarter ended December FY24, narrowing from loss of Rs 50.4 crore in corresponding period of last fiscal, backed by strong operating numbers. Revenue from operations grew by 14.8% YoY to Rs 604.2 crore for the quarter.

Net loss at Rs 42 crore against loss of Rs 51.1 crore and revenue down 20% at Rs 2.4 crore versus Rs 3.0 crore, YoY.

Net profit up 5 percent at Rs 41 crore versus Rs 39 crore and revenue down 10.8 percent at Rs 247 crore versus Rs 277 crore, YoY.

Consolidated net profit up 21 percent at Rs 2,158 crore versus Rs 1,782 crore and revenue up 34 percent at Rs 29,038 crore versus Rs 21,755 crore, YoY.

Net loss at Rs 38.2 crore versus profit of Rs 8.3 crore and revenue down 36% at Rs 352 crore versus Rs 549.4 crore, YoY.

Mahindra Logistics has registered consolidated net loss at Rs 16.4 crore for quarter ended December FY24, against profit at Rs 1.67 crore in same period last fiscal, impacted by weak operating numbers. Revenue from operations grew by 5% on-year to Rs 1,397.2 crore for the quarter. The company has received approval from Investment Committee of the Board of Directors for investment of up to Rs 50 crore in subsidiary MLL Express Services.

Net Profit jumped 97.4 percent at Rs 15 crore versus Rs 7.6 crore and revenue up 26.6 percent at Rs 253.7 crore versus Rs 200.4 crore, YoY.

-Underperform call, target Rs 415 per share
-Q3 EBITDA beat driven by better refining while marketing was broadly in-line
-Profitability is tracking much ahead of normative levels in Q4FY24
-Profitability raises possibility of a retail price cut
-Potential equity infusion by government at a discount to CMP could be a near-term overhang
-Raise FY24 PAT 11%, but keep FY25/26E unchanged

Nippon Life India Asset Management has registered net profit at Rs 264.7 crore for quarter ended December FY24, rising 33.3% over a year-ago period, partly supported by higher other income and topline. Revenue from operations grew by 18.7% year-on-year to Rs 392.3 crore for the quarter.

Net profit up 41 percent at Rs 18 crore versus Rs 13 crore and revenue down 17 percent at Rs 98 crore versus Rs 118 crore, YoY.

Aditya Birla Sun Life AMC has reported a 26% on-year growth in consolidated net profit at Rs 209.3 crore for October-December period of FY24, aided by higher other income. Revenue from operations increased by 8.7% YoY to Rs 341.5 crore for the quarter.

Nuvoco Vistas Corporation has registered net profit at Rs 31 crore for quarter ended December FY24, against net loss at Rs 75.3 crore in corresponding period of last fiscal. The lower input cost, power & fuel cost, and freight & forwarding charges boosted bottomline. Revenue from operations fell 7% to Rs 2,421 crore during the same period.

-Neutral call, target Rs 455 per share
-Sharply lower-than-anticipated margins on lower domestic gas allocation
-Lower APM allocation to be made up by CBG over medium term

Sensex Today | BSE Smallcap index up 0.8 percent supported by Tata Investment Corporation,  Shakti Pumps, HP Adhesives:

-Sell call, target Rs 11.5 per share
-Q3 below estimates
-Q3 revenues flat QoQ (2.5% below estimate, with ARPUs up 2.1% QoQ to Rs 145 (0.7% below estimate)
-EBITDA (up 1.6% QoQ, 40.8% margin, up 80 bps QoQ) was 3.8% below estimate
-Net losses were aided by exceptional gains & in-line
-Will look for commentary on fundraising exercise

Stock Market LIVE Updates | Muthoot Microfin soars 11% on Q3 net profit surge

Shares of Muthoot Microfin soared 11 percent in the opening trade on January 30, a day after the company posted a sharp surge in net profit for the December quarter.

The lender's net profit for the October-December period more than doubled to Rs 124.60 crore from the year-ago period.

Net interest income (NII) surged 53.07 percent to Rs 343.07 crore and total income jumped 52.61 percent to Rs 584.83 crore.

Karnataka Bank and Northern Arc Capital, the diversified NBFCs & financial services platform, have entered into a MOU. This partnership to enable the bank to offer customer-centric financial solutions to retail borrowers.

Net profit rose 9.8% at Rs 10.1 crore versus Rs 9.2 crore and revenue up 7.1% at Rs 164.2 crore versus Rs 153.3 crore, YoY.

Net profit up 10.3% at Rs 155.3 crore versus Rs 140.8 crore and revenue up 4.8% at Rs 1,257 crore versus Rs 1,199 crore, QoQ.

Sensex Today | BSE Auto index up 0.3 percent led by Bosch, Tata Motors, Hero MotoCorp:

Nelcast has recorded a 378.5 percent on-year growth in consolidated net profit at Rs 25.53 crore for the quarter ended December FY24, supported by exceptional gain of Rs 17.3 crore. Consolidated revenue from operations grew by 2% to Rs 320.3 crore compared to year-ago period.

Sensex Today | Market at 12 PM

The Sensex was down 137.89 points or 0.19 percent at 71,803.68, and the Nifty was down 7.20 points or 0.03 percent at 21,730.40. About 1877 shares advanced, 1287 shares declined, and 63 shares unchanged. 

EPACK listing was below our expectations due to market sentiments. We continue to remain positive on the company business model. We believe EPACK Durables gives investors an opportunity to invest in an original design manufacturer of room air conditioners serving clientele like Blue Star, Daikin, Voltas, and Havells.

EPACK holds a strategic long standing relationship position in the growing Indian Refrigeration and Air conditioning (RAC) industry and also extended relationships provide opportunities for cross-selling.

Given the company's strong foothold in both (RAC) and Small Domestic Appliances (SDA) segments, coupled with its technological edge, positions it favourably to capitalize on the expected growth in the Indian manufacturing landscape.

Hence, considering all the factors, we recommend investors to “HOLD” with a long-term perspective only. Post listing, cmp Rs 215 we also recommend to “Accumulate” more in dips and look to hold with Stop Loss below Rs 200 target Rs 250-320 in medium to long term.