The equity barometers snapped a four-day losing streak and ended with modest gains on Monday. Positive global cues lifted sentiment. Banks stocks supported the upmove while IT, auto and realty shares dragged. The Nifty managed to close above the 18,100 mark after hitting an intraday low of 17,968.50 in morning trade.
The barometer index, the S&P BSE Sensex, gained 145.43 points or 0.24% at 60,967.05. The Nifty 50 index rose 10.50 points or 0.06% at 18,125.40. It fell 1.96% in the past four sessions.
ICICI Bank (up 10.80%), Axis Bank (up 3.45%) and State Bank of India (up 0.68%) were major index movers. Bajaj Finserv (down 3.04%), Bajaj Auto (down 2.73%) and HCL Technologies (down 2.36%) were major drags.
The broader indices tumbled. The BSE Mid-Cap index slipped 1.65% and the BSE Small-Cap index skid 1.76%.
The market breadth was weak. On the BSE, 1,043 shares rose and 2,312 shares fell. A total of 175 shares were unchanged.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 0.37% to 17.61.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.351% as compared with 6.364% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 75.0850, compared with its close of 74.9050 during the previous trading session.
MCX Gold futures for 3 December 2021 settlement rose 0.45% to Rs 48,012.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, rose 0.12% to 93.76.
In the commodities market, Brent crude for December 2021 settlement rose 56 cents at $86.09 a barrel. The contract rose 92 cents, or 1.09% to settle at $85.53 a barrel in the previous trading session.
Foreign Markets:
Most shares in Europe and Asia advanced on Monday, 25 October 2021, as investors continued to monitor corporate earnings, COVID-19 and the inflation picture.
The US Federal Reserve Chair Jerome Powell said the U.S. central bank was on track to begin reducing its purchases of assets. Meanwhile, US IHS Markit's survey of senior business executives in service-oriented companies rebounded to a three-month high of 58.2 from 54.9 in September. A similar survey of manufacturers slipped to 59.2 from 60.7. Any reading over 50 signals improving conditions.
Earnings Impact:
Tech Mahindra rose 0.42%. The IT services company reported 25.8% increase in consolidated net profit to Rs 1338.70 crore on 16.1% rise in revenue from operations to Rs 10881.30 crore in Q2 September 2021 over Q2 September 2020.
During the quarter, profit before tax rose 34.7% to Rs 1898.10 crore. EBITDA rose 17.2% to 1995.20 crore in Q2 September 2021 over Q2 September 2020. EBITDA margin 18.3% in Q2 September 2021 as against 18.4% in Q1 June 2021 and 18.2% in Q2 September 2020.
Tech Mahindra's consolidated net profit fell 1.1% and revenue from operations rose 6.7% in Q2 September 2021 over Q1 June 2021.
In dollar terms, revenue stood at $1472.60 million, up 6.4% quarter-on-quarter (QoQ) and 16.4% year-on-year (YoY). Revenue growth was reported at 7.2% QoQ in constant currency terms. The board has proposed a special dividend of Rs 15 per share.
ICICI Bank surged 10.80% after the private sector lender reported a 29.6% rise in standalone net profit to Rs 5,510.95 crore on a 10% rise in total income to Rs 26,030 crore in Q2 FY22 over Q2 FY21. Net interest income (NII), the difference between interest earned and interest expenses, surged by 25% year-on-year to Rs 11,690 crore in Q2 FY22 from Rs 9,366 crore registered in Q2 FY21. The net interest margin (NIM) improved to 4% in quarter ended 30 September 2021 from 3.89% reported in the quarter ended 30 June 2021. Provisions (excluding provision for tax) reduced by 9% year-on-year to Rs 2,714 crore in Q2 FY22 from Rs 2,995 crore posted in Q2 FY21.
ICICI Bank surpassed Hindustan Unilever (HUL) to become India's fifth largest company by market capitalisation (m-cap).
Multi Commodity Exchange of India (MCX) tumbled 6.8% after the commodity exchange reported a 44% fall in consolidated net profit to Rs 32.66 crore in Q2 FY22 from Rs 58.55 crore posted in Q2 FY21. Revenue from operations declined by 30% year on year to Rs 83.19 crore during the quarter. EBITDA fell by 40% to Rs 49.88 crore in Q2 FY22 from Rs 83.52 crore in Q2 F2Y21. For the quarter ended 30 September 2021, the EBITDA margin was 50%. Profit before tax in the second quarter stood at Rs 42.70 crore, down by 45% from Rs 78.23 crore in Q2 FY21.
Coforge slumped 6.58%. The IT company reported an 18.7% rise in consolidated net profit to Rs 146.7 crore in Q2 FY22 from Rs 123.6 crore in Q1 FY22. Gross revenues increased by 7.4% QoQ to Rs 1,569.4 crore during the quarter. In dollar terms, the company's revenue in Q2 FY22 was $212.8 million (up 6.5% QoQ and 37.4% YoY). EBITDA in the second quarter improved by 23.9% to Rs 292.3 crore from Rs 235.9 crore reported in the first quarter of the financial year 2021-22. EBITDA margin was at 18.6% as on 30 September 2021 as against 16.1% as on 30 June 2021.
Colgate-Palmolive (India) fell 2.01%. The company reported a 1.8% fall in net profit to Rs 269.2 crore in Q2 FY22 from Rs 274.2 crore in Q2 FY21. The company recorded net sales growth of 5.2% over the same quarter of previous year aggregating to Rs 1,344 crore for the quarter ended 30 September 2021. Total expenses rose by 8% YoY to Rs 998.05 crore, due to higher advertising expenses (upp 12.7% YoY) and other expenses (up 3.7% YoY). However, raw material costs during the period under review fell by 3.5% YoY.
Tatva Chintan Pharma Chem jumped 8.75% after the company reported an 811% jump in consolidated net profit to Rs 32.4 crore on a 105.8% rise in revenue from operations to Rs 123.6 crore in Q2 FY22 over Q2 FY21. On a sequential basis, the company posted a 40% rise in net profit on a 15.7% increase in revenue from operations to Rs 1,236.15 crore in Q2 FY22 over Q1 FY22. Profit before tax jumped nearly 46% quarter on quarter and 527% year on year to Rs 35.4 crore in Q2 FY22.
The Ramco Cements fell 1.94%. The company recorded a consolidated net profit of Rs 515.84 crore in Q2 FY22, which is significantly higher as compared with a net profit of Rs 243.52 crore in Q2 FY21. Total income increased by 18.6% YoY to Rs 1510.33 crore during the quarter. Total expenses rose by 32.3% to Rs 1,231.60 crore in Q2 FY22 over Q2 FY21, due to sharp increases in raw material costs (up 18.1% YoY), transportation & handling charges (up 38.9% YoY), power & fuel costs (up 57.1%) and other expenditures (up 30.7% YoY).
Huhtamaki India dropped 7.7% after the company's standalone net loss stood at Rs 21.84 crore in Q3 September 2021 as against Rs 36.88 crore in Q3 September 2020. Total revenue from operations declined 2.50% to Rs 668.73 crore in Q3 September 2021 over Rs 685.90 crore in Q3 September 2020. Pre-tax loss was at Rs 28.71 crore in Q3 September 2021 as against a pre-tax profit of Rs 49.61 crore in Q3 September 2020.
Stocks in Spotlight:
Asian Paints fell 2.2%. The media reported that a whistle blower flagged off related party transactions (RPTs) carried out by the promoters of Asian Paints. The whistle-blower informed Securities and Exchange Board of India (SEBI) that money to buy a company called Paladin Paints and Chemicals (PPC) went from Asian Paints but its promoters Ashwin Dani and son Malav now control it in their personal capacity. SEBI has reportedly sought further details from the whistle-blower.
Following the allegation, Asian Paints clarified to the bourses on 24 October 2021, that the company had entered into a technical consultancy agreement with Jayram Nadkarni (ex-employee of the company) and Paladin Paints and Chemicals during the financial year 2005-2006. Pursuant to this agreement, an upfront consultancy charge of Rs 1.20 crore and a monthly consultancy of Rs 12 lakh for a period of 21 months amounting to Rs 2.52 crore was paid to him for providing necessary technical consultancy, technology knowledge package and process for manufacturing of resins to the company with respect to the products governed by the agreement. As he was an ex-employee, he provided this technical service exclusively to the company. There was no related party relationship existing at this point of time.
SBI Cards and Payment Services rose 0.10%. The company said its board will meet on 28 October 2021 to consider issuing non-convertible debentures (NCDs) worth Rs 2,000 crore in one or more tranches. The board will also consider Q2 results.
Bayer CropScience fell 0.19%. The meeting of the company's board is scheduled on Monday, 1 November 2021, to consider declaration of special dividend for the financial year 2021-22 and to fix the record date for the said purpose. The board will also consider Q2 results.
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