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SGX Nifty Trades 1.5% Higher, India's Q4 GDP Numbers and Takeaways, March Quarter Results, and Top Cues in Focus Today
Mon, 1 Jun Pre-Open | Monish Vora, TM Team

Indian share markets ended on a positive note on Friday.

It was the third day benchmark indices edged higher tracking mixed cues from global markets as sentiments were cautious on account of geo-political tensions between US-China.

At the closing bell on Friday, the BSE Sensex stood higher by 224 points (up 0.7%) and the NSE Nifty closed higher by 90 points (up 1%).

The BSE Mid Cap index ended the day up by 1.9%, while the BSE Small Cap index ended up by 1.1%.

On the sectoral front, gains were largely seen in the realty sector, oil & gas sector and FMCG sector, while IT stocks witnessed selling pressure.

SGX Nifty is currently trading up by 149 points, or 1.57% higher at 9,663 levels. Indian share markets are headed for a positive start today following the positive trend on SGX Nifty.

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India's Q4 GDP: Key Numbers and Takeaways

The government on Friday released gross domestic product (GDP) numbers for the January-March quarter. Here are some key numbers and takeaways from the same...

  • India's economy grew at 3.1% in January-March quarter (Q4FY20). The GDP growth has exceeded most estimates made by various rating agencies.
  • Government sees FY20 GDP growth at 4.2% year-on-year (YoY).
  • In gross value added (GVA) terms, India's economy grew 3% in Q4FY20 versus 4.5% in Q3FY20.
  • Given the unprecedented conditions arising from coronavirus pandemic and a prolonged slowdown, the government revised higher its budget deficit for the last fiscal year to 3.8% from an earlier 3.3%.
  • The growth rate of eight core industries for April 2020 fell by 38.1%, compared to a fall of 9% in March 2020.
  • The output of electricity fell by 22.8%, while the output of cement fell by 86%, steel by 84%, fertiliser by 4.5%, refinery by 24.2%, crude oil by 6.4%, and coal by 15.5% in April 2020.
  • Construction output in India fell by 38.10% in April 2020 over the same month in the previous year.
  • This is the second consecutive contraction in the key economic indicator and marks the worst performance by the key infrastructure areas going back to 2005.
  • The agriculture sector grew at 5.9% in Q4, compared to 1.6% in the same quarter a year ago.
  • It was stated that though a normal rainfall is expected in the current fiscal, its possibility to offset the disruption caused by coronavirus pandemic on the agriculture sector is less.
  • The Ministry of Commerce & Industry said that in view of nationwide lockdown during April 2020 due to COVID-19 pandemic, various industries viz. Coal, Cement, Steel, Natural Gas, Refinery, Crude Oil, etc. experienced substantial loss of production.

Note that the Indian economy was grappling with its own issues and COVID-19 has made matters worse.

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The industry was facing demand problems, due to which business houses were reluctant to undertake capex plans. Unemployment was at its peak and exports were consistently down for several months.

India's GDP growth has been on a consistent decline after peaking out at 7.9% in Q4 of FY18 to 4.7% in Q3 of FY20, as can be seen in the chart below:

Declining GDP Growth for India

The numbers are expected to have fallen further due to Covid 19.

Interestingly, there's a silver lining in all this. India can become an outsourcing hub. The global slowdown will mean that countries like the US, will be looking out for low-cost outsourcing destinations like India.

Further, a lot of global buyers have already shifted to India to source ceramics, home appliances, fashion, and lifestyle goods.

Meanwhile, as per the reports, around a thousand foreign manufacturers want to relocate their production to India, a country they see as an alternative to China.

Here's an excerpt from one of the articles Tanushree Banerjee wrote on the Indian economic recovery:

  • It's also a fact that India's importance in the global supply chain has never looked better. PM Modi himself referred to that.

    Therefore, utilising the stimulus package to tighten India's presence in the global supply chain will be the fastest way to move up the Swoosh index. Any delay or disregard would cost India dearly.

    True that Apple, Samsung and several smartphone manufacturers are already considering an expansion of their Indian capacities.

    But the land, labour, liquidity, and legal reforms cannot remain on paper if the Make in India dreams are to be realised.

    I expect to gather more cues about India's prospects on the Swoosh index over coming months.

Watch this space as Tanushree tracks these Rebirth of India megatrends closely.

March Quarter Results: TVS Motor Company and CEAT

From the automobile sector, TVS Motor Company reported a 43.3% decline in its consolidated net profit to Rs 818.5 million for Q4FY20.

The two-wheeler major's total income declined 16.9% to Rs 41.3 billion.

The company reported profit before tax of Rs 1,148.3 million as compared to Rs 2,171.9 million during Q4FY19.

The company reported total sales of 32.63 lakh units in 2019-20 as against 39.14 lakh units in 2018-19.

During the fourth quarter, the company's overall two-wheeler and three-wheeler sales, including exports, stood at 6.33 lakh units as compared with 9.07 lakh units registered in the quarter ended March 2019.

In a regulatory filing, the company said that it had successfully transitioned to BS-VI and almost 85% of the vehicles it dispatched during the quarter were BS VI products.

In other news, CEAT reported an improved standalone operating performance during the March quarter despite subdued demand amid Covid-19 outbreak.

Ceat reported a 19.6% decline in its consolidated net profit at Rs 517.2 million for Q4FY20, as against a net profit of Rs 643.2 million in the year ago period.

The company's revenue from operations declined to Rs 15.7 billion during the quarter under review.

For the financial year FY19-20, revenue declined to Rs 67.8 billion as against Rs 69.8 billion in 2018-19.

On consolidated basis, the company's EBITDA for FY20 was Rs 7.4 billion, up 12% compared to previous fiscal, while EBITDA margin expanded by 340 bps YoY to 12.9%.

Buying interest is also seen as the company on May 27 said that it has partially resumed operation at various plants in Mumbai.

To know more about the company, you can read Ceat's latest result analysis on our website.

Google Eyeing Stake in Vodafone Idea?

Vodafone Idea share price will be in focus today. The stock of the company witnessed huge buying on Friday last week after it was reported that Google Inc. is considering picking a stake of about 5% in the company.

Vodafone Idea on Friday however clarified that it constantly evaluates various opportunities but there is no proposal before the board of the firm as yet.

It said that currently, there is no proposal as reported and the company will comply with Sebi Listing Regulations and duly keep the stock exchanges informed of all the price-sensitive information.

The telecom joint venture of Vodafone Group Plc and the Aditya Birla Group is also in talks with private equity firms for potential investments.

According to the average price of the Vodafone Idea stock in the past two weeks, a 5% stake sale could fetch the company around US$ 101.5 million.

The stock has lost more than 57% in the past 12 months. An eventual deal could happen at a significant premium to the recent stock price, the reports noted.

Google's interest in Vodafone Idea comes at a time of financial stress on the company amid cheap mobile tariffs and strong competition that intensified with the entry of Reliance Jio Infocomm in September 2016.

An investment in Vodafone Idea will pit the US internet giant in a battle against the Facebook-Jio combine for the world's fastest-growing mobile market.

Note that, Facebook last month announced a US$ 5.7 billion investment in Vodafone Idea's rival Jio Platforms, which houses the digital assets of Reliance Industries Ltd.

So far, telecom and internet firms were independently trying to woo the Indian data user base, but the Jio-Facebook deal has paved the way for larger possibilities.

How this pans out going forward remains to be seen. Meanwhile, we will keep you updated on developments from this space.

Pharma Stocks Witness Huge Buying

In news from the pharma sector, pharma companies witnessed huge buying interest last week amid expectation of strong demand scenario from both domestic and export market.

Shares of Dr Reddy's Laboratories, Aurobindo Pharma, Biocon, Aarti Drugs and Glenmark Pharma surged in the range of 3-5% on Friday.

Cadila Healthcare witnessed buying as the company's formulations manufacturing facility located at Baddi has received an Establishment Inspection Report (EIR).

The EIR report stated that the classification of the facility is 'No Action Indicated (NAI)'.

The USFDA had conducted an inspection at the facility from 2 to 9 March 2020. The audit had ended with nil observations.

Dr. Reddy's Laboratories also received the EIR from the US Food and Drug Administration (USFDA), for its Integrated Product Development Organization (IPDO) at Medchal-Malkajgiri, Telangana.

This indicates the closure of the audit and the inspection classification of this facility is determined as No Action Indicated (NAI).

Speaking of pharma sector, in December 2019, Tanushree Banerjee had predicted that pharma could be the sector to see a big rebound in 2020.

And rightly so, most pharma companies have re-emerged as the safer bets for investors in the ongoing market turmoil. Last month, the Indian rupee touched a new record low of Rs 76.92 against the US dollar. Most pharma companies generate their revenues through exports. Hence, a depreciating rupee is a positive development for them.

As per Tanushree, in a post Covid-19 world, healthcare expenditures globally will see a big rejig.

Tanushree has her eyes on an exciting tech stock. The company in question is developing its medical division. It's focusing on telemedicine, which Tanushree believes will be a huge growth driver in a post Corona world.

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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Stock Market Updates

IRCON INTERNATIONAL Share Price Up by 11%; BSE CAPITAL GOODS Index Up 1.7% (Today's Market)

Jul 6, 2020 03:32 PM

IRCON INTERNATIONAL share price is trading up by 11% and its current market price is Rs 102. The BSE CAPITAL GOODS is up by 1.7%. The top gainers in the BSE CAPITAL GOODS Index are IRCON INTERNATIONAL (up 11.3%) and HINDUSTAN AERONAUTICS (up 10.1%). The top losers are V GUARD INDUSTRIES (down 0.2%) and GRAPHITE INDIA (down 0.5%).

PROCTER & GAMBLE HEALTH Share Price Up by 5%; BSE HEALTHCARE Index Down 0.2% (Today's Market)

Jul 6, 2020 03:32 PM

PROCTER & GAMBLE HEALTH share price is trading up by 5% and its current market price is Rs 4,311. The BSE HEALTHCARE is down by 0.2%. The top gainers in the BSE HEALTHCARE Index are PROCTER & GAMBLE HEALTH (up 5.1%) and DISHMAN CARBOGEN AMCIS LTD (up 7.9%). The top losers are GRANULES INDIA and STRIDES PHARMA SCIENCE (down 0.3%).

ASHOK LEYLAND Share Price Up by 5%; BSE AUTO Index Up 2.9% (Today's Market)

Jul 6, 2020 03:32 PM

ASHOK LEYLAND share price is trading up by 5% and its current market price is Rs 52. The BSE AUTO is up by 2.9%. The top gainers in the BSE AUTO Index are ASHOK LEYLAND (up 5.5%) and M&M (up 7.7%). The top losers is BAJAJ AUTO (down 1.2%).

GODREJ AGROVET LTD Share Price Up by 14%; BSE 500 Index Up 1.2% (Today's Market)

Jul 6, 2020 03:26 PM

GODREJ AGROVET LTD share price is trading up by 14% and its current market price is Rs 493. The BSE 500 is up by 1.2%. The top gainers in the BSE 500 Index are GODREJ AGROVET LTD (up 13.8%) and HINDUSTAN AERONAUTICS (up 11.4%). The top losers are AJANTA PHARMA and STRIDES PHARMA SCIENCE .

BHARAT ELECTRONICS Share Price Up by 6%; BSE CAPITAL GOODS Index Up 1.8% (Today's Market)

Jul 6, 2020 03:24 PM

BHARAT ELECTRONICS share price is trading up by 6% and its current market price is Rs 104. The BSE CAPITAL GOODS is up by 1.8%. The top gainers in the BSE CAPITAL GOODS Index are BHARAT ELECTRONICS (up 5.6%) and HINDUSTAN AERONAUTICS (up 11.4%). The top losers are GRAPHITE INDIA (down 0.3%) and CARBORUNDUM UNIVERSAL (down 0.7%).

Sensex Surges 450 Points; HDFC Bank & IndusInd Bank Top Gainers (Today's Market)

Jul 6, 2020 12:30 pm

The BSE Sensex is trading up by 468 points, while the NSE Nifty is trading up by 160 points.

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Jul 6, 2020 03:33 PM