Sensex Ends 336 Points Lower, Nifty Falls Below 18,200; Asian Paints Tanks 5%
Closing

Sensex Ends 336 Points Lower, Nifty Falls Below 18,200; Asian Paints Tanks 5%

Indian share markets witnessed volatile trading activity throughout the day today and ended lower.

Benchmark indices recovered some lost ground after sliding 700 points but still ended lower dragged by Reliance Industries and Infosys.

At the closing bell, the BSE Sensex stood lower by 336 points (down 0.6%).

Meanwhile, the NSE Nifty closed lower by 89 points (down 0.5%).

Kotak Mahindra Bank and Tata Motors were among the top gainers today.

Asian Paints and Hindalco, on the other hand, were among the top losers today.

The SGX Nifty was trading at 18,242, down by 75 points, at the time of writing.

The BSE Mid Cap index and the BSE Small Cap index ended down by 0.4% and 0.7%, respectively.

Sectoral indices ended on a negative note with stocks in the IT sector, metal sector and telecom sector witnessing most of the selling pressure.

Banking and finance stocks, on the other hand, witnessed buying interest.

Shares of Union Bank and Rail Vikas Nigam hit their respective 52-week highs today.

Asian stock markets ended on a mixed note today as investors weighed more positive earnings against ongoing concerns about inflation and central bank tapering.

The Hang Seng ended down by 0.5%, while the Shanghai Composite ended up by 0.2%. The Nikkei ended down by 1.9% in today's session.

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US stock futures are trading on a negative note today with the Dow Futures trading down by 92 points.

The rupee is trading at 74.86 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.2% at Rs 47,586 per 10 grams.

Speaking of the stock markets, India's #1 trader, Vijay Bhambwani, talks about India's fuel crisis and why it may ease off soon, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

In news from the paints sector, Asian Paints was among the top buzzing stocks today.

Asian Paints shares fell nearly 6% today after the company reported a 28% year on year (YoY) decline in consolidated net profit for the quarter ended September to Rs 6 bn, which was sharply below analysts' estimate.

The paint manufacturer's consolidated revenues in the quarter grew by 32.6% YoY to Rs 71 bn.

The decline in the company's bottomline was largely due to a sharp spike in expenses during the quarter. Asian Paints' total expenses jumped 49% YoY to Rs 64.2 bn led by a 73% rise in the cost of raw materials.

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The decline in bottomline came despite a 25% YoY fall in tax expenses and 67% jump in other income during the reported quarter.

Amit Syngle, MD and CEO at Asian Paints in a press statement said,

  • Steep inflation seen in raw material prices, since the beginning of this calendar year, has been phenomenal and has impacted gross margins across all businesses in the quarter.

    The company will look at further price increases going ahead to mitigate the impact of 'this persistently high inflation'.

He also said the company is confident of turning around the situation in the coming quarter.

The impact of the surge in input cost was felt in the company's operating performance as consolidated operating profit sank 28.5% YoY to Rs 9 bn. The country's largest paint maker saw its consolidated operating margins shrink 1,080 basis points YoY to 12.8%.

The company's board also approved an interim dividend of Rs 3.65 per share at its meeting held earlier today.

Asian Paints share price ended the day down by 4.9% on the BSE.

Moving on to news from the retailing sector...

Shoppers Stop Rallies 20% After Upbeat Quarter Two Results

Shares of Shoppers Stop zoomed as much as 20% on the BSE today after the company reported a strong set of numbers in September 2021 quarter.

The retail chain reported narrowing of its consolidated net loss to Rs 3.68 crore for the September quarter, helped by a comeback in sales. The company had posted a net loss of Rs 977 m in the July-September period a year ago.

Revenue from operations rose over two-fold to Rs 6.4 bn from Rs 3 bn in the same quarter of the previous fiscal.

Shoppers Stop MD & CEO Venu Nair said,

  • The demand postponement triggered by the second wave of the pandemic witnessed a strong comeback in quarter two.

    The festive sales have been extremely reassuring as the company has recovered more than 100% sales in the east, followed by north. During the July-September quarter, sales from omni-channel grew by 103%.

Shares of Shoppers Stop have soared as much as 35% in the last one month, whereas the counter has zoomed over 85% in the last one year.

Shoppers Stop share price ended the day up by 20% on the BSE.

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Speaking of the current stock market scenario, note that the BSE smallcap index has surged around 180% since the crash in March 2020.

Despite the index being up more than 1.8 times, Richa Agarwal, lead Smallcap Analyst at Equitymaster, believes smallcap stocks are set for a massive up move in 2021 and beyond.

Here's why...

The Smallcap to Sensex ratio, a metric referred to get a sense of relative valuations, currently stands at 0.48 times. To be sure, this is higher than a median of 0.43 times.

And yet, it's the lowest of all the peaks in the smallcaps so far. In the last cycle which peaked in January 2018, when the ratio touched 0.49, the peak was still 9 months away.

Here's what Richa wrote in a recent edition of Profit Hunter...

  • When it comes to buying smallcap stocks, especially at this point in the rebound rally, you will need a bottom up approach, and a long term horizon.

    In fact, if you don't have the stomach to withstand a 20%-30% kind of corrections and volatility, this space may not be for you at all. And you should stop reading right here.

As per Richa, smallcaps are a great opportunity to make some big returns. But you need to stay disciplined when it comes to allocating money. And you need to be sharp when picking the right stocks.

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


Sensex Falls Over 500 Points, Dow Futures Down by 105 Points
12:30 pm

Sensex Falls Over 500 Points, Dow Futures Down by 105 Points

Share markets in India are presently trading on a negative note.

The BSE Sensex is trading down by 555 points, down 0.9%, at 60,704 levels.

Meanwhile, the NSE Nifty is trading down by 146 points.

Kotak Mahindra Bank and Grasim Industries are among the top gainers today. Reliance and Dr Reddy's Lab are among the top losers today.

The BSE Mid Cap index is trading down by 0.7%.

The BSE Small Cap index is trading up by 0.5%.

On the sectoral front, stocks from the software sector are witnessing most of the selling pressure.

On the other hand, stocks from the power sector are witnessing most of the buying interest.

US stock futures are trading lower today, indicating a negative opening for Wall Street.

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Nasdaq Futures are trading down by 61 points (down 0.4%) while Dow Futures are trading down by 105 points (down 0.3%).

The rupee is trading at 74.78 against the US$.

Gold prices are trading up by 0.1% at Rs 47,459 per 10 grams.

Gold prices in India were trading higher in Indian markets today following a positive trend seen in international spot prices as soft dollar made the metal cheaper for buyers holding other currencies.

To know more about gold, check out our article on how to invest in gold here: How to Invest in Gold?

Moving on to stock-specific news...

Among the buzzing stocks today is Tata Communications.

Shares of Tata Communications rose over 3% in an otherwise weak market today after the company's net profit jumped 10.6% year on year (YoY) to Rs 4.3 bn for the September 2021 quarter.

However, the company's net revenue was down 5.2% YoY at Rs 41.7 bn.

Sequentially, the company's revenue grew 1.7% while profit came in higher by 43.7% on account of a gradual recovery across both data and voice segments.

Commenting on the results, AS Lakshminarayanan, managing director and chief executive of Tata Communications, said,

  • Delivering a sequential growth on a quarter-on-quarter basis after three-quarters of decline is a positive indicator which we will continue to build on.

    The second quarter was marked by recovery with favourable underlying trends as economic activities normalise.

The company's EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter stood at Rs 11.1 bn due to employee expenses and a reversal of provisioning for doubtful debts due to better collection efforts.

The company said its net debt at the end of the quarter stood at Rs 77.6 bn, down by Rs 2.4 bn sequentially and Rs 8.7 bn compared to the corresponding period last year, on the back of a better working capital mix and improvement in operating profit.

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This came despite a dividend payout of Rs 4 bn during the quarter.

How the company performs in the next quarter remains to be seen. Meanwhile, stay tuned for more updates from this space.

At the time of writing, Tata Communication shares were trading up by 4.1% on the BSE.

Speaking of the stock markets, Brijesh Bhatia, Research Analyst at Fast Profits Report shares his view on housing finance stocks, in his latest video for Fast Profits Daily.

Moving on to news from the food & tobacco sector...

Jubilant FoodWorks Net profit rises 58% YoY, Beats Estimate

Jubilant FoodWorks reported a 58% YoY rise in net profit at 1.2 bn for the September 2021 quarter, which was above analysts' expectations.

The company reported a 36.6% YoY growth in revenue to Rs 11 bn, which was also above the Street's estimate.

During the quarter, the company saw a 43% jump in cost of raw material. The growth in input costs was significantly higher than the growth in revenues.

Jubilant Food said that it undertook a one-time loss of Rs 12.5 m to support its employees affected by the Covid-19 pandemic during the quarter. The same one-time cost was Rs 56 m in the previous quarter.

The company reported a 33% year-on-year increase in operating profit at Rs 2.9 bn in the reported quarter. However, the operating margin fell 67 basis points YoY to 26% on account of higher input costs.

We will keep you posted on more updates from this space. Stay tuned.

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Speaking of stocks, here's a pattern that if you see, you must sell your position. After all, exits are more important than entries.

In the chart below, we can see the head and shoulder pattern - the stock goes up, makes a high, falls a little bit, goes up to a higher high, does not make a higher low, rallies again, fails to make a new high, and then starts to break down.

This usually happens in a situation where a stock or index has typically been in a bull trend for a while. Spotting this correctly can help you save money.

If you're interested in trading and want to know how you can use this pattern, you can read about it in one of the editions of Profit Hunter here: It's When You Sell that Counts

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


Sensex Rises 200 Points, Nifty Tops 18,350; Sun Pharma and ONGC Top Gainers
09:30 am

Sensex Rises 200 Points, Nifty Tops 18,350; Sun Pharma and ONGC Top Gainers

Asian share markets are mixed today as rising US bond yields worried investors, although overnight gains on Wall Street provided some support.

The Hang Seng and the Nikkei are trading lower by 0.2% and 0.4%, respectively. The Shanghai Composite is trading higher by 0.5%.

In US stock markets, Wall Street indices ended higher on Wednesday as investors eyed better than expected third-quarter earnings from US companies.

The Dow Jones Industrial Average gained 0.4% while the Nasdaq declined 0.1%.

Back home, Indian share markets have opened in green, following the trend on SGX Nifty.

Market participants will track shares of Asian Paints, JSW Steel, Biocon, Container Corporation, and Mphasis as these companies are set to report their September quarter numbers today.

The BSE Sensex is trading up by 202 points. Meanwhile, the NSE Nifty is trading higher by 70 points.

Sun Pharma is among the top gainers today. Bharti Airtel and HCL Tech, on the other hand, are among the top losers today.

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The BSE Mid Cap index has opened up by 0.7%. The BSE Small Cap index is trading higher by 0.8%.

Barring consumer durable stocks, all sectoral indices are trading in green with stocks in the power sector and realty sector witnessing most of the buying.

Shares of Inox Wind and Shoppers Stop hit their 52-week high today.

The rupee is trading at 74.83 against the US$.

Gold prices are trading up by 0.1% at Rs 47,539 per 10 grams.

Crude oil prices rose today to extend gains from the previous session as US crude and fuel inventories tightened further, with supplies of gasoline hitting a two-year low, pointing to strong demand.

Speaking of the stock markets, Brijesh Bhatia, Research Analyst at Fast Profits Report talks about how to be cautious while trading banking stocks, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

In news from the telecom sector, Vodafone Idea is among the top buzzing stocks today.

Vodafone Idea on Wednesday said its board has approved exercise of option of deferment of company's spectrum auction instalments for a period of four years.

The telecom operator informed this in an exchange filing.

Vodafone also said that other options offered in the said notification by DoT will be considered by the Board of Directors within the stipulated timeframe.

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In line with the bold reforms announced for the telecom sector, the government had recently written to telcos, including Bharti Airtel, Vodafone Idea and Reliance Jio, asking them to convey by 29 October if they would be opting for four-year dues moratorium.

It had also given 90-day time to the operators to indicate if they want to opt for converting the interest amount pertaining to the moratorium period into equity.

Along with this option, the audited financial statements of the immediately preceding financial year (2020-21) may be submitted.

The government has offered the option to defer payment of the spectrum auction instalments due up to four years, with immediate effect, excluding the instalments due for spectrum auction 2021.

Last month, Bharti Airtel Chairman Sunil Mittal said the company will opt for payment moratorium offered in the telecom relief package and redirect the cashflow to aggressively build networks.

Vodafone Idea share price has opened the day down by 0.2%.

Moving on to news from the insurance sector, Bandhan Financial Holdings has offered to buy out Future group's stake and acquire a controlling interest in Future Generali India Life Insurance Company.

This company was formed by a three-way joint venture between the Future Group, Industrial Investment Trust (IIT) and Generali, an Italian insurance and asset management giant.

Bandhan Financial Holdings is a holding company of Bandhan Bank.

It is willing to pay a control premium to buy Future Group's 34% and another 17% stake in the unlisted company. Generali owns 49% in the JV while IIT holds 17%.

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According to the agreement between the shareholders of the company, Generali will have a say in any such transaction.

Bandhan has made it clear that it would go for the deal only if it gets a majority vote. Generali also has the option to raise its stake with the Indian law now permitting an overseas partner to hold up to 74% in local insurance ventures.

As per reports, if this deal goes through, it would be a win-win for the Bandhan Group, which has cash for big-ticket investment and a distribution network to sell third-party products.

In August 2020, Bandhan Financial Holdings pared its stake in Bandhan Bank to 40% from 61% for a sum of Rs 106 bn. The holding company is expected to use part of the sum it received for the proposed insurance foray.

Last year, Bandhan had also shown interest in getting a controlling stake in Reliance Nippon Life Insurance.

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

Speaking of the insurance sector, have a look at the chart below which shows the investment assets of non-life insurers and life insurers over the past 10 years:

Investment Assets of Non-Life Insurers 11x That of Life Insurers

As per Tanushree Banerjee, Co-Head of Research at Equitymaster, the above chart is enough proof of how big an earning opportunity is the zero-cost float to the non-life insurers. Their investment assets under management is nearly 11 times that of life insurers.

Back in April 2021, 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.


SGX Nifty Up 39 Points, Telecom Companies' Subscriber Data, Jubilant FoodWorks Quarterly Results, and Buzzing Stocks Today
Pre-Open

Telecom Companies

Indian share markets witnessed heavy selling during the second-half yesterday and ended lower.

Benchmark indices extended losses yesterday as consumer durable, realty and metal stocks bled.

The yield on 10-year benchmark government bond rose to its highest level in one-and-a-half years as a relentless rise in crude oil prices and worries of inflation, led to a speculation that RBI will tighten its monetary policy soon.

At the closing bell yesterday, the BSE Sensex stood lower by 456 points (down 0.7%).

Meanwhile, the NSE Nifty closed lower by 152 points (down 0.8%).

Bharti Airtel and SBI were among the top gainers.

Titan and Hindalco, on the other hand, were among the top losers.

Broader markets, too, came under pressure. The BSE Mid Cap index and the BSE Small Cap index plunged 1.9% and 2.3%, respectively.

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Barring telecom stocks, all sectoral indices ended in red with stocks in the metal sector, and consumer durables sector witnessing most of the selling.

Shares of SBI and L&T Infotech hit their respective 52-week highs.

At 8:00 am today, the SGX Nifty was trading up by 39 points, or 0.2% higher at 18,359 levels. Indian share markets are headed for a positive opening today following the positive trend on SGX Nifty.

Gold prices for the latest contract on MCX were trading up by 0.2% at Rs 47,380 per 10 grams at the time of closing stock market hours yesterday.

Speaking of the stock markets, Brijesh Bhatia, Research Analyst at Fast Profits Report talks about how to be cautious while trading banking stocks, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

Top Stocks in Focus Today

Among the buzzing stocks today will be Adani group stocks.

Adani group will invest over US$50-70 bn in renewable energy value chain over the next decade.

The group firms have committed 70% of planned capex until 2030 to the energy transition, the group's billionaire chairman Gautam Adani said on Tuesday.

Adani said he made a plea for equitable and pragmatic policies in the battle against climate change and recommended setting practical goals and agendas.

He added that hydrogen is a game-changer and the group's green energy portfolio will expand to become one of the world's largest green hydrogen producers.

Banking sector stocks will also be in focus today.

Non-performing assets (NPAs) of banks are likely to rise to 8-9% in the financial year 2022 from 7.5% as of March 2021, driven by defaults in the retail and small business segment.

However, this rise of 50-150 basis points (100bps = 1%) would be still lower than the peak of 11.2% in March 2018 and 9.1% in March 2019 as the corporate sector continues to be resilient.

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According to a report by Crisil, Covid relief measures like the restructuring dispensation and the emergency credit line guarantee scheme (ECLGS) will help limit the rise. With around 2% of bank credit expected under restructuring by the end of this fiscal, stressed assets comprising gross NPAs and loan book under restructuring, should touch 10-11%.

The rating agency's senior director Krishnan Sitharaman said,

  • The retail and MSME segments, which together form about 40% of bank credit, are expected to see higher accretion of NPAs and stressed assets this time around. Stressed assets in these segments are seen rising to 4-5% from 3% last fiscal and 17-18% from around 14%, respectively, by this fiscal end.

    The numbers would have trended even higher but for write-offs, primarily in the unsecured segment.

According to Crisil, the retail segment, which had a relatively stable run over the past decade, has been singed by the pandemic with salaried and self-employed borrowers alike facing significant income challenges and higher medical expenses, especially in the second wave.

IRCTC Shares Plunge After Hitting Market Cap of Rs 1 tn

Indian Railway Catering and Tourism Corporation (IRCTC) shares fell over 15% on the exchanges yesterday as investors booked profits on their gains.

The company's shares had hit a record high of Rs 6,384.1 on Tuesday. The stock's market cap also surged to hit the milestone of Rs 1 tn.

However, in the last hour of trading on Tuesday, the stock tumbled 21.7% from the day's peak to Rs 4,995.8. It closed at Rs 5,454.9, down more than 7% and at a market cap of Rs 858.1 bn.

Shares of IRCTC have surged about 338% in 2021 so far amid rising interest for internet companies in India. Since listing a little over two years ago, the stock has soared 1,860% over its IPO price.

IRCTC is in a pure monopoly business as it is the only authorized firm to provide online tickets and catering services to the Indian railways.

This along with its robust financials as well as a debt-free status had made it a favorite among all kinds of investors. IRCTC had entered the primary markets by listing in October 2019 and its stock has delivered stellar return to its shareholders since then.

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Jubilant FoodWorks' Earnings Beat Estimates

Jubilant FoodWorks on Wednesday, reported a 58% year-on-year (YoY) rise in net profit to Rs 1.2 bn for the quarter ended September.

The company reported a 36.6% YoY growth in topline to Rs 11 bn.

Both, the topline and bottomline figures were above market expectations.

During the quarter, the company saw a 43% jump in cost of raw material to Rs 2.3 bn. The growth in input costs was significantly higher than the growth in revenues.

The operator of fast-food chain Domino's said that it undertook one-time loss of Rs 12.5 m to support its employees affected by the Covid-19 pandemic during the quarter.

In the previous quarter too, it had booked one-time cost of Rs 56 m.

The company's same-store-sales growth came in at 26.3% for the July-Sept quarter as against expectations of over 30%.

Shares of the company fell yesterday in a broad-based selloff after reporting its earnings.

Telcom Service Providers Lose Subscribers in August

An increase in entry-level prepaid tariffs in July led to a fall in subscriber additions in the month of August, according to telecom data released on Wednesday.

As per telecom regulatory authority of India (TRAI), telecom companies lost more than one lakh subscribers (1.13 lakh) in August against the addition of 6 million subscribers in July.

Telecom operator Vodafone Idea lost 8.3 lakh subscribers in August as against the loss of 14.3 subscribers in July.

While Reliance Jio added 6.5 lakh subscribers against the addition of 6.5 m subscribers in July, Bharti Airtel added 1.4 lakh subscribers against the addition of 1.9 m subscribers in July, the data showed.

We will keep you posted on more updates from this space. Stay tuned.

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