Sensex Opens 440 Points Higher; Nestle India and ACC Among Top Stocks in Focus

Tue, 20 Apr 09:30 am

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Asian stock markets are trading on a mixed note today as investors await the release of China's latest benchmark lending rate.

The Nikkei is trading down by 1.8% while the Hang Seng is up 0.1%. The Shanghai Composite is trading higher by 0.3%.

In US stock markets, Wall Street indices closed lower on Monday as investors awaited guidance from first-quarter earnings to justify high valuations.

The Dow Jones Industrial Average fell 123 points, or about 0.4%. The S&P 500 and Nasdaq also fell 0.5% and 0.9%, respectively.

Back home, Indian share markets have opened on a positive note, following the trend on SGX Nifty.

Market participants are tracking Nestle share price as the company is scheduled to announce its quarterly results today.

The BSE Sensex is trading up by 440 points. Meanwhile, the NSE Nifty is trading higher by 133 points.

Dr. Reddy's Laboratories and Grasim are among the top gainers today. HCL Technologies, on the other hand, is among the top losers today.

Both, the BSE Mid Cap index and the BSE Small Cap index have opened up by 1.5%.

Sectoral indices are trading on a positive note with stocks in the auto sector and power sector witnessing buying interest.

Shares of Wipro and Cadila Healthcare hit their 52-week highs today.

The rupee is trading at 74.61 against the US$.

Gold prices are trading down by 0.2% at Rs 47,261 per 10 grams.

Speaking of stock markets, in one of his latest videos, Rahul Shah discusses whether another big crash is likely and the ideal strategy to counter it.

With the coronavirus rearing its head again and looking much more lethal than before, is the risk of a big crash back on the table? What should be one's strategy should this be the case?

Rahul answers these questions in the video below. Tune in to find out more:

Moving on to news from the cement sector...

ACC is among the top buzzing stocks today.

Cement major ACC has reported a strong set of numbers for the first quarter of the calendar year 2021 (CY21).

In its latest quarterly results, the company posted a 74.2% year-on-year (YoY) surge in its consolidated net profit at Rs 5.6 billion for the March quarter (Q1CY21).

The rise in profits was backed by a strong topline and better-than-expected operating performance.

Consolidated revenue during the quarter grew by 22.7% YoY to Rs 42.1 bn as compared to Rs 34.3 bn in the year-ago period (Q1CY20).

At the operating level, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) spiked 46.8% to Rs 8.6 bn, while the operating margin expanded 330 basis points (bps) YoY to 20.4%.

ACC follows January-December as its financial year.

ACC said cement sales volume increased to 7.97 million tonnes in Q1CY21, registering a 21.5% growth compared to 6.56 million tonnes in March quarter last year.

Ready-mix concrete sales volume declined to 0.83 million cubic metres during the quarter, from 0.93 million cubic metres in the corresponding period.

The company said the operating EBIT jumped 67.1% YoY to Rs 7.1 bn and margin climbed 450 bps to 17% in Q1CY21 driven by capex-led strong cost actions and higher growth in premium products.

The company delivered its highest-ever revenue and operating EBIT in this quarter. Furthermore, cost efficiency project 'Parvat' is on track and has helped in managing some continuing cost headwinds.

The management of the company commented that ACC has demonstrated strong resilience which has been reflected in performance this quarter.

Managing Director and CEO Sridhar Balakrishnan went on to add, "We aim to continue driving the four stated strategic priorities: Performance, growth, innovation and sustainability. With the government's increased spending and its strong focus on infrastructure development, we maintain a cautious yet positive outlook for overall cement demand in the coming months.

We will keep you posted on all the developments from this space. Stay tuned.

In news from the IPO space...

India's second largest private lender ICIC Bank is making its biggest hiring push in investment banking and institutional equities in four years, as the lender anticipates a rise in companies going public in the Indian markets.

The Mumbai-based firm plans to add five mid-to-senior level hires in each of the two units, which currently have 130 bankers in total.

The development comes as India is joining the global initial public offering (IPO) frenzy thanks to ample liquidity in the financial market with foreign investors and even retail buyers looking for new avenues to park money in.

Note that so far in 2021, nearly US$ 3 bn has been raised through IPOs in India. This is the best start to the year since 2018, according to data compiled by a leading financial daily.

The above amount could even surpass 2020's US$ 4.6 bn haul as companies such as Zomato Pvt., Policybazaar, and Nykaa E-Retail Pvt. are set to go public in Mumbai as soon as this year.

How this development pans out remains to be seen. Meanwhile, we will keep you updated on all the news from this space.

In news from the power sector...

The power sector in India is witnessing a steady uptick in demand with average peak demand till date in April 2021 is up 4% (two-year CAGR) versus 6% growth in March 2021.

This is seen largely due to fresh restrictions related to the second wave of Covid-19 infections.

During Q4FY21, generation (ex-renewables) stood at 5% at two-year compounded annual growth rate (CAGR).

On a YoY basis, generation grew 9% due to a lower base on account of Covid-19-induced lockdowns in March 2020.

How these numbers pan out in the coming months remains to be seen. Stay tuned for all the updates from this space.

Speaking of the power sector, it is interesting to note that the power exchanged in India is about 4.5% of the overall power production, as can be seen in the chart below:

As per Tanushree Banerjee, Co-Head of Research at Equitymaster, India's power sector is currently in transition. It is driven by increasing reliance on short-term contracts and electricity spot markets.

This transition to the short-term market is happening due to quickly evolving industry dynamics.

Tanushree believes the Indian power sector will see a surge in spot power volumes due to certain factors.

In August 2020, Tanushree recommended a high-quality stock from this space. Subscribers can read the report here (requires subscription).

And if you are not a StockSelect subscriber, here's where you can sign up.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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