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Dull Start to the Week; Britannia Industries Up 5%
Mon, 7 Aug Closing

Indian share markets continued to trade range bound in the afternoon session to finish marginally lower. At the closing bell, the BSE Sensex closed lower by 52 points and the NSE Nifty finished down 9 points. The S&P BSE Mid Cap finished up by 1.1% while & S&P BSE Small Cap finished up by 1.2%.

Gains were largely seen in PSU stocks, energy stocks, and realty stocks. Pharma stocks and software stocks finished in red.

Tata Steel share price hit its 52-week high and finished the day up by 4.3% ahead of the company's quarterly results. As per the street estimates, Tata steel is expected to see strong earnings on year-on-year basis but the sequentially numbers may be weak.

Sale of investment in Tata Motors will aid profitability during the quarter. The company sold stake in Tata Motors at a price of Rs 453 per share to Tata Sons and that will realise income to the tune of Rs 37 billion.

Asian stock markets finished higher today with shares in China leading the region. The Shanghai Composite is up 0.53% while Japan's Nikkei 225 is up 0.52% and Hong Kong's Hang Seng is up 0.46%. European markets are mixed today. The CAC 40 is up 0.20% while the FTSE 100 gains 0.15%. The DAX is off 0.21%.

The rupee was trading at Rs 63.73 against the US$ in the afternoon session. Oil prices were trading at US$ 48.87 at the time of writing.

Britannia Industries is planning to set up its largest plant in a food park at Ranjangaon in Maharashtra. The park would have the largest biscuits manufacturing plant with six lines, along with cake and risk.

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The proposed JV plant with Greek company Chipita would be also be located there and it would on stream from June 2018. The company was also planning to set up a diary project at the food park with a capacity of seven lakh litres per day.

Meanwhile, Britannia reported marginal fall of 1.41% in its net profit at Rs 2.16 billion for the quarter under review as compared to Rs 2.19 billion for the same quarter in the previous year. However, total income of the company increased by 6.21% at Rs 23.75 billion for Q1FY18 as compared Rs 22.36 billion for the corresponding quarter previous year.

Britannia Industries, one of the India's biggest brands of the country, has a market share of over 33%. The company is expanding its customer base by launching new products and renovating existing ones.

Patanjali Disrupts FMCG Pecking Order

Patanjali seems to have disrupted FMCG business. It has challenged the FMCG titans using an age-old tradition - Ayurveda - as its USP. And a yoga guru as its brand ambassador.

The share of Indian households that use the Patanjali brand is estimated at 38%. That's huge for a company barely a decade and a half old. Especially if you consider Patanjali's competition.

In 2016-17, the company posted revenues of more than Rs 100 billion. It has surged past behemoths such as ITC, Nestle India, Britannia Industries, and Dabur to become the second largest pure play FMCG company, second only to HUL.

Britannia share price finished the trading day up by almost 5% on the BSE.

In news from economic sector, after one month of the implementation of Goods and Services Tax (GST), the collections from customs duty and Integrated-GST (IGST) from imports has almost doubled to Rs 300 billion in July. The July collections compare to indirect tax collection of over Rs 160 billion of the same month of 2016.

As per an article in The Economic Times, the revenue collected include those on account of customs duty, IGST from imports, Countervailing Duty (CVD), special addition duty (SAD) and cess collection on imported items. GST, which subsumed more than a dozen central and state levies like excise duty, service tax and VAT, was implemented from July 1.

However, the tax revenues which will come on account of Central GST (CGST) and State GST (SGST) will be known only after domestic manufacturers, dealers and traders file their tax returns. Besides, over 7.13 million excise, service tax and VAT payers have migrated to the GSTN portal with 1.3 million fresh registrations.

Eros International share price surged 4.5% after it was reported that the company is in talks with Apple Inc. to sell its entire content library of films and music for around US$1 billion. A deal may also include their digital OTT platform, Eros Now, billed as the Netflix of Bollywood.

Parallel discussions with rival media and technology majors Amazon and Netflix have also gathered momentum. The company's planning to embark on a mega restructuring exercise that is likely to result in a reverse merger of its parent Eros International Plc into its locally listed subsidiary Eros International Media by the end of this financial year to create a single listed firm.

In news from engineering sector, L&T share price finished the trading day in green up 0.2% after the company bagged Rs 10.5 billion contract for electrification of 781-km rail track from Indian Railways. This is the first engineering, procurement and construction (EPC) contract of the Indian Railways under its Mission Electrification.

The contract has been awarded for electrification in two sections -- the Delhi-Sarai Rohilla-Rewari and Alwar- Bandikui-Jaipur-Phulera-Ajmer section (353-route-km at a cost of Rs 5.94 billion) and the Roha-Verna section of Konkan Railway (428-route-km at a cost of Rs 4.56 billion).

And here's a note from Profit Hunter:

Tata Steel Ltd is the top gainer in the Nifty 50 Index today. Let's have a look at its chart.

Last time we reviewed this stock, it was trading at the important resistance level of Rs 500. The stock has reversed down from this level many times. The level is also a 78.6% retracement level of the previous decline from Rs 575 to Rs 200.

The stock broke this level in May and rallied 20% from there. It encountered another resistance at Rs 570, which was the horizontal resistance level (red line on the chart).

But today, the stock broke above this level with strong volumes to trade at a new 52-week high on expectations of positive quarterly results.

Will the quarterly results add to the rally? Let's wait and watch.

Tata Steel at New 52-Week High
Tata Steel at New 52-Week High

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Feb 16, 2018 (Close)