The domestic equity benchmarks tumbled on Monday, dragged by Reliance Industries and IT pivotals. Pharma stocks bucked the weak market trend. The barometer index, the S&P BSE Sensex, tumbled 530.95 points or 1.09% to 48,347.59. The Nifty 50 index lost 133 points or 0.93% to 14,238.90.
In the broader market, the BSE Mid-Cap index fell 1.14% and the BSE Small-Cap index slipped 1.15%.
Sellers outpaced buyers. On the BSE, 932 shares rose and 2040 shares fell. A total of 158 shares were unchanged.
Trading was volatile ahead of monthly derivatives expiry on Thursday and the upcoming Union Budget. Meanwhile, the slow pace of the COVID-19 vaccine rollout coupled with sparring by the US lawmakers over President Joe Biden's proposed $1.9 trillion COVID-19 relief plan worried investors as they imposed significant risks to the global economic recovery from the pandemic.
The domestic equity market will remain shut on Tuesday, 26 January 2021, on account of Republic Day.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 9,91,95,630 with 21,29,418 deaths. India reported 1,84,182 active cases of COVID-19 infection and 1,53,470 deaths while 1,03,30,084 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Reports suggest Tata Group's healthcare venture is said to have started initial discussions with Moderna Inc for a partnership to launch its COVID-19 vaccine in India. Tata Medical & Diagnostics could team up with the India's Council of Scientific and Industrial Research to carry out clinical trials of Moderna's vaccine candidate in India.
India-China Stand-off:
The media reported that the Indian and the Chinese troops had brawled again on their contested border, leaving injuries on both sides. The incident happened last week at the Naku La pass in Sikkim state.
India and China on Sunday reportedly held the ninth round of senior commanders' talks in a fresh bid to resolve the military standoff at eastern Ladakh.
As per reports, India has insisted on setting in motion at the earliest the process of disengagement and de-escalation of troops by the two countries to restore peace and tranquility in border areas.
The last round of talks between the military commanders was held in November last year while senior diplomats of the two countries met on 18 December under the framework of the Working Mechanism for Coordination and Consultation (WMCC) in border areas.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 5.954% as compared with 5.939% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 72.94, compared with its close of 72.9750 during the previous trading session.
In the commodities market, Brent crude for March 2021 settlement rose 32 cents at $55.73 a barrel. The contract fell 69 cents, or 1.23% to settle at $55.41 a barrel in the previous trading session.
Foreign Markets:
European stocks declined while most Asian markets advanced on Monday as investors around the world track developments on the coronavirus pandemic, and plans for U.S. stimulus measures.
Amid the pandemic, China surpassed the U.S. as the world's largest recipient of foreign direct investment, according to a report released Sunday from the United Nations Conference on Trade and Development. China brought in $163 billion in inflows last year, compared to $134 billion attracted by the U.S., according to the report.
Developments around COVID-19 are likely to be watched by investors, as the world races to adapt against the mutating coronavirus which has produced a number of potentially more infectious variants.
In US, stocks finished mixed on Friday - the S&P 500 and Dow finished in the red while the Nasdaq Composite closed at a record high. The Dow and S&P 500 ended modestly lower on Friday, dragged down by losses in blue-chip technology stalwarts Intel and IBM following their quarterly results.
Buzzing Index:
The Nifty Pharma index rose 1.71% to 12,756.75. The index declined 2.63% in the past two sessions.
Cipla (up 3.8%), Alkem Laboratories (up 2.8%), Cadila Healthcare (up 1.85%), Sun Pharmaceutical Industries (up 1.61%), Divi's Laboratories (up 1.05%) and Dr. Reddy's Laboratories (up 0.86%) jumped.
Aurobindo Pharma surged 7.87%. According to media reports, the company has qualified for financial support under the production linked incentive (PLI) scheme. The PLI scheme aims at the promotion of manufacturing of critical key starting materials (KSM)/drug intermediates and APIs in the country.
Lupin rose 0.21% after the drug major received US drug regulator's approval for Sevelamer Carbonate tablets, a generic equivalent of Renvele tablets, 800 mg, of Genzyme Corporation. The drug is indicated for the control of serum phosphorus in adults and children 6 years of age and older with chronic kidney disease on dialysis.
Earnings impact:
Kotak Mahindra Bank fell 1.97%. The private lender reported a 16.14% rise in net profit to Rs 1853.54 crore in Q3 December 2020 from Rs 1595.90 crore in Q3 December 2019. The bank's total income rose to Rs 8,124.92 crore in Q3 December 2020 from Rs 8,077.03 crore in Q3 December 2019.
Operating profit increased by 81.1% to Rs 3083.34 crore in Q3 December 2020 from Rs 2388.07 crore in Q3 December 2019. Net interest income grew by nearly 17% to Rs 4007 crore in Q3 December 2020 from Rs 3430 crore in Q3 December 2019. Net Interest Margin (NIM) for Q3 December 2020 was at 4.51%. CASA ratio as of 31 December 2020 stood at 58.9% compared to 53.7% as at 31 December 2019.
On the asset quality side, the ratio of gross NPAs to gross advances stood at 2.26% as on 31 December 2020 as against 2.55% as on 30 September 2020 and 2.46% as on 31 December 2019. The ratio of net NPAs to net advances stood at 0.5% as on 31 December 2020 as against 0.64% as on 30 September 2020 and 0.89% as on 31 December 2019. Had the bank classified the borrowers more than 90 days overdue on 31 December 2020 as NPA, GNPA would be 3.27% and NNPA would be 1.24%.
Provisions and contingencies spiked nearly 35% to Rs 599 crore in the third quarter as against Rs 444 crore in the same period last year.
Reliance Industries (RIL) tumbled 5.36% to Rs 1939.70. On a consolidated basis, RIL reported 12.5% rise in net profit to Rs 13,101 crore on 23.12% decline in net sales to Rs 117,860 crore in Q3 December 2020 (Q3 FY21) over Q3 December 2019 (Q3 FY20). The net revenue increased 5.95% sequentially primarily due to higher price realizations and higher volumes in O2C segment, higher ARPU and FTTH expansion in digital services business.
Outstanding debt as on 31 December 2020 was Rs 257,413 crore ($35.2 billion). Cash and cash equivalents as on 31 December 2020 were at Rs 220,524 crore ($30.2 billion). Balance capital commitment receivables (on account of rights issue) are in excess of quarter-end net debt levels.
Jio Platforms (JPL) reported net profit of Rs 3,489 crore in Q3 FY21, a rise of 15.5% over Rs 3,020 crore in Q2 September 2020 (Q2 FY21). Revenue from operations rose 5.3% quarter-on-quarter (QoQ) to Rs 19,475 crore in Q3 FY21. Total customer base as on 31 December 2020 stood at 410.8 million, net addition of 5.2 million customers. Average revenue per user (ARPU) during the quarter of Rs 151 per subscriber per month as against Rs 145 per subscriber per month in the trailing quarter.
Reliance Retail's value of sales and services for Q3 FY21 decreased by 8% QoQ to Rs 37,845 crore while EBITDA for Q3 FY21 increased by 54% QoQ to a record Rs 3,087 crore, with underlying operating margin at 7%. Overall footfalls remained at similar levels to last quarter but still lower than pre-COVID levels. Overall revenue was further affected by the transfer out of the fuel retailing business to the RIL-BP JV and the decision to convert Reliance Market stores to fulfilment centers to enable city expansion of new commerce.
Oil to Chemicals (O2C) segment revenues for Q3 FY21 increased by 10% QoQ to Rs 83,838 crore primarily on account of higher volumes mainly in transportation fuels, PTA and polyester supported by improved product realization across polymers, intermediates and polyester.
Oil and Gas (Exploration & Production) Business revenues for Q3 FY21 increased by 21.4% QoQ to Rs 431 crore primarily due to higher commodity price realization and incremental production from R-Cluster.
The revenues of the Media Business recovered fully from the pandemic impact in Q3 FY21, rising sharply by 34% QoQ to Rs 1,422 crore. Festive season buoyancy and sustained elevation in media consumption largely eliminated the COVID-linked drag on ad-spending. Revenue of the primary business of broadcast and digital media (i.e ex-film production) grew 35% QoQ and 1% YoY, as a result of sustained viewership and faster than expected recovery in Ad revenues.
UltraTech Cement fell 3.04% after the company reported 122.8% surge in consolidated net profit to Rs 1584.58 crore on 17.4% increase in net sales to Rs 12,254.12 crore in Q3 December 2019. EBITDA jumped 57% to Rs 3362 crore in Q3 December 2020 from Rs 2147 crore recorded in Q3 December 2019. EBITDA margin improved by 700 basis points to 28% in Q3 December 2020 from Rs 21% in Q3 December 2019.
The cement major's consolidated cement sale volume grew by 14% year on year to 23.88 million tonne in Q3 December 2020 from 20.9 million tonne registered in Q3 December 2019. The cement manufacturer said it continues to focus on debt reduction. Its consolidated net debt reduced to 0.84x in Q3 December 2020 from 1.87x in Q3 December 2019.
JSW Steel rose 1.84%. The steel major's consolidated net profit jumped nearly 13 times to Rs 2681 crore in Q3 December 2020 from Rs 211 crore in Q3 December 2019. Revenue from operations grew by 21% to Rs 21,859 crore in Q3 December 2020 from Rs 18,055 crore in Q3 December 2019.
JSW said that steel industry witnessed sharp demand recovery driven by restocking and higher demand from automotive, machinery, construction and infrastructure sectors aided by increased government spending. The company improved its average capacity utilization level to 91% in Q3 December 2020 from 86% in Q2 September 2020.
JSW Steel's saleable steel sales declined by 5% quarter on quarter to 3.95 million tonnes in Q3 December 2020. Domestic sales volume stood at 3.48 million tonnes, increasing 16% quarter on quarter and 13% year on year. The company said it calibrated its export volumes to 12% of total sales at 0.47 million tonnes.
HDFC Life Insurance Company slipped 1.05%. The life insurer's consolidated net profit rose by 4.9% to Rs 263.44 crore on a 81.4% jump in total income to Rs 21,128.63 crore in Q3 FY21 over Q3 FY20.
While the company's net premium income improved by 20.8% to Rs 9,488.84 crore, net income from investments increased by 3.1 times to Rs 11,594.24 crore in Q3 December 2020 over Q3 December 2019.
Value of New Business remained flat at Rs 1,408 crore in the nine months ended in December 2020 (9M FY21) from Rs 1,407 crore in the nine months ended in December 2019 (9M FY20). New business margin stood at 25.6% in 9M FY21 as compared to 26.6% in 9M FY20. The company's operating expense ratio fell to 12.1% in 9M FY21 from 13.7% in 9M FY20.
Stocks in Spotlight:
Larsen & Toubro shed 0.12%, ahead of its Q3 earnings today.
Grasim Industries jumped 6.44% after the company's board approved a foray into the paints business with an initial capital expenditure of Rs 5,000 crore over the next three years.
Atul rose 0.56% after the chemical maker said its board will consider share buyback on Friday, 29 January 2021. The company will announce its Q3 December 2020 results on the same day.
Tata Motors fell 3.58%. The car major will hike prices of its passenger vehicle range, effective 22 January 2021. Rising input costs and material costs of steel, precious metals and semiconductors have compelled the company to pass on a part of the cost to customers.
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