The key equity indices ended with limited losses on Thursday. After hitting the day's low at 18,048, the Nifty 50 index staged a decent recovery and closed above the 18,150 mark. Bank stocks outperformed, as they witnessed some buying interest after declining in the past two session. Rising inflationary pressures and their consequent impacts on corporate earnings and margins dented the investor sentiment.

As per provisional closing data, the barometer index, the S&P BSE Sensex, dropped 336.46 points or 0.55% to 60,923.50. The Nifty 50 index lost 88.50 points or 0.48% to 18,178.10.

In the broader market, the S&P BSE Mid-Cap index slipped 0.38%. The S&P BSE Small-Cap index shed 0.69%.

The market breadth was almost even. On the BSE, 1610 shares rose and 1676 shares fell. A total of 140 shares were unchanged.

Buzzing Index:

The Nifty Bank index rose 1.30% to 40,030.20. The index had declined by 0.42% in two sessions.

Kotak Mahindra Bank (up 6.37%), RBL Bank (up 4.23%), Punjab National Bank (up 3.94%), Federal Bank (up 2.71%), IDFC First Bank (up 2.16%), AU Small Finance Bank (up 1.98%), ICICI Bank (up 1.29%), SBI (up 0.61%), Axis Bank (up 0.37%) and HDFC (up 0.15%) advanced while, IndusInd Bank declined 1.44%.

Stocks in Spotlight:

Asian Paints tumbled 5.35% to Rs 2999. The company posted a 28.2% decline in consolidated net profit to Rs 595.96 crore in Q2 FY22 as compared to Rs 830.37 crore posted in Q2 FY21.

The paint maker's revenue from operations increased by 32.6% to Rs 7,096 crore in Q2 FY22 from Rs 5350.23 crore posted in Q2 FY21.

Amit Syngle, MD & CEO of Asian Paints said, “The domestic decorative business continued to move ahead on its high growth trajectory with an unprecedented 34% volume growth in the quarter and a strong compounded growth rates over the last two years. The Industrial Coatings business also registered strong double-digit revenue growth led by robust demand for protective coatings and uptick in the automotive sector.

The Home Improvement business continued to scale up in a significant manner registering its highest quarterly revenues, aided by strong alignment with the projects business. Performance in the International Business was a mixed bag with good growth in the South Asian markets while markets in Middle East & Africa were sluggish with challenges around COVID and forex availability.

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.”

We have taken a series of price increases and would look at further price increase to mitigate the impact of this persistently high inflation and are confident that we should be able to turn this around strongly in the coming quarter.”

Following the earnings announcement by Asian Paints, shares of five paint makers edged lower in trade.

Berger Paints (down 6.03%), Asahi Songwon Colors (down 1.56%), Indigo Paints (down 1.11%), Shalimar Paints (down 1.02%) and AkzoNobel India (down 1.04%) declined.

Shoppers Stop hit an upper circuit of 20% at Rs 326.15. The company reported net loss of Rs 3.58 crore in Q2 September 2021, lower than net loss of Rs 97.70 crore in Q2 September 2020. Net sales surged 116.20% to Rs 642.07 crore in Q2 September 2021 over Q2 September 2020.

The company said it witnessed strong recovery in demand after the second wave across the formats, with sales moving swiftly close to pre-pandemic levels in August and September. All the stores are now fully operational, with overall store operation days at 87% for the quarter.

Syngene International fell 1.79% to Rs 595.60. The company's consolidated net profit (after exceptional items) dropped 20.68% to Rs 66.70 crore on a 17.43% surge in revenue from operations to Rs 610.20 crore in Q2 FY22 over Q1 FY21.

Tejas Networks slipped 3.73% at Rs 450. The company posted a 19.2% drop in consolidated net profit to Rs 3.66 crore in Q2 FY22 as compared to a net profit of Rs 4.53 crore posted in Q2 FY21. Revenue from operations increased by 57% to Rs 172.78 crore in Q2 FY22 over Q2 FY21. The profit before stood at Rs 3.33 crore in Q2 FY22, 26.5% lower than Rs 4.53 crore in Q2 FY22 over Q2 FY21. Profitability was impacted after total expenses spiked 52.7% to Rs 173.62 crore in Q2 FY22 over Q2 FY21.

Supreme Petrochem dropped 5.69% to Rs 691.75. The company's standalone net profit jumped 47.49% to Rs 127.07 crore on a 71.56% surge in total income from operations (net) to Rs 1,190.76 crore in Q2 FY22 over Q2 FY21.

Tata Steel Long Products skid 4.71% to Rs 869.50. The company's net profit declined by 59.36% to Rs 134.77 crore in Q2 FY22 from Rs 331.60 crore in Q1 FY22. Revenue from operations in the second quarter fell by 2.98% to Rs 1,637.37 from Rs 1,687.64 reported in the first quarter of the financial year 2021-22.

Just Dial slipped 1.78% to Rs 867.15. The company's consolidated net profit fell 30.48% to Rs 32.91 crore on 6.89% decline in net sales to Rs 155.98 crore in Q2 September 2021 over Q2 September 2020.

Deferred revenue stood at Rs 334.2 crore, up 8.7% QoQ and up 19.6% YoY. Total traffic (unique visitors) for the quarter stood at 149.5 million, up 14.5% YoY and 20.5% QoQ. Total active listings stood at 31 million as on 30 September 2021, an increase of 3.3% YoY and 1.3% QoQ.

Havells India slumped 8.30% at Rs 1,289.90. The company's standalone net profit declined 7.18% to Rs 301.56 crore on 31.38% rise in net sales to Rs 3221.03 crore in Q2 September 2021 over Q2 September 2020.

The company reported healthy growth across business verticals. It added that increase in commodity cost remained unabated with severe escalation in a rather short period. Price increase have been staggered creating a lag affect on margins. However, we maintain a positive outlook on demand growth which could support margin as well, the company said.

Jindal Stainless (Hisar) (JSHL) added 3.55% to Rs 325.15. JSHL has commissioned 26,000 tonnes per annum (TPA) capacity Precision Strip Mill as part of the first phase of its latest brownfield expansion plan at its state-of-the-art specialty products division (SPD).

PNB Housing Finance hit a lower circuit of 5% at Rs 520.60. The company said that its board will on 2 November 2021 consider plans to raise funds via issuance of non-convertible debentures on private placement basis aggregating up to Rs 2,000 crore in tranches.

Global Markets:

European stocks fell across the board while Asian stocks ended mixed on Thursday, 21 October 2021 as concerns about the Chinese property sector returned to the fore, while investors also monitored a slew of corporate earnings.

Evergrande said on Wednesday it had scrapped a deal to sell a 50.1% stake in Evergrande Property Services Group Ltd to Hopson Development Holdings Ltd as the smaller rival had not met the prerequisite to make a general offer.

In US, the Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, attributed the slowdown to supply chain disruptions, labor shortages, and uncertainty around the Delta variant of COVID-19. The Fed also said employment increased at a modest to moderate rate in recent weeks, as demand for workers was high, but labor growth was dampened by a low supply of workers.

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