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Benchmark stock indices ended in the green during the budget week as investors and Corporate India welcomed the Union Budget 2023-24 tabled by Finance Minister Nirmala Sitharaman.
Investors’ confidence was boosted after the central government announced a slew of measures to increase capital expenditure spending and also provide relief to highest taxpayers, along with aiming to bring down fiscal deficit to below 4.5% of GDP by FY2025-26.
For the week, the Sensex jumped 2.55% to at 60,841.88. The Nifty 50 index advanced 1.42% to 17,854.05. The BSE Midcap index rose 0.45% to 24,448.01 and the BSE Smallcap index gained 0.86% to 27,862.68.
Top gainers among Nifty sectoral indices were FMCG [3.49%], Bank [2.86%], IT [2.79%], Private Bank [2.74%], Financial Services [2.31%]. Top losers were Oil & Gas [-9.24%], Metal [7.63%], Energy [-6.34%], Pharma [-2.59%] and Media [-0.69%].
During the week, FIIs sold for Rs 14445 crore in the cash segment, while DIIs bought for Rs 14,184.5 crore.
Indian rupee settle at 81.83 against the US dollar on Friday (Feb 3, 2023) compared with 81.52 on preceding week (Jan 27, 2023).
Company News
Adani Group: Adani Enterprises shares tanked as the company called off its Rs 20,000 crore FPO after American short seller, Hindenburg Research, accused the company of using tax havens and flagged debt concerns in a report. The National Stock Exchange (NSE) has put Adani Enterprises, Adani Ports & SEZ and Ambuja Cements under additional surveillance measure (ASM) framework effective 3 February 2023.
Bajaj Finance: The NBFC registered a 40% YoY growth in consolidated net profit at Rs 2,973 crore for the December FY23 quarter. Loan losses and provisions fell 20% YoY to Rs 841 crore. Net interest income increased 24% YoY to Rs 7,435 crore and assets under management (AUM) grew by 27% to Rs 2.3 lakh crore. New loans booked in the December 2022 quarter rose 5% YoY to 7.84 million. Customer franchise stood at 66.05 million, a 19% YoY growth. The company recorded its highest-ever quarterly increase in its customer franchise by 3.14 million during the quarter.
Bajaj Finserv: The financial services company reported a consolidated net profit of Rs 1,782 crore in Q3FY23, up 42% from Rs 1,256 crore Q3FY22. Total income during the quarter rose 23% to Rs 21,755 crore as compared to Rs 17,620 crore a year ago. Segment wise, income from interest rose 26% to Rs 10,430 crore during the third quarter as against Rs 8,266 crore in the previous year period. Among the subsidiaries, Bajaj Finance recorded highest ever quarterly consolidated PAT of Rs 2,973 crore, up 40% YoY, while Bajaj Allianz General Insurance Company witnessed its profit declining 9% to Rs 278 crore.
Housing Development Finance Corporation Ltd (HDFC): The NBFC reported a 13% rise in its net profit for the third quarter of FY23 at Rs 3,691 crore as compared to Rs 3,260 crore in the year-ago quarter. Meanwhile, its revenue from operations rose 29% year-on-year (YoY) to Rs 15,230 crore as against Rs 11,783 crore. The net interest income for the reported quarter stood at Rs 4,840 crore compared to Rs 4,284 crore in the year-ago period, up 13%. As at December 31, 2022, the assets under management (AUM) stood at Rs 7,01,485 crore as against Rs 6,18,917 crore in the same period last fiscal. Meanwhile, the company said that individual loans comprise 82% of the AUM.
Larsen & Toubro (L&T): The infrastructure behemoth has reported a robust 24% year-on-year growth in consolidated profit at Rs 2,553 crore. Consolidated revenues at Rs 46,390 crore for the quarter grew by 17% YoY aided by improved execution in the infrastructure projects segment and continued growth momentum in the IT&TS portfolio. The company received orders worth Rs 60,710 crore during the quarter, a 21% YoY growth, taking the total order book to Rs 3.86 lakh crore as of December FY23.
Vedanta: The company reported a 42.3% YoY fall in consolidated profit at Rs 3,091 crore for the December quarter. Revenue from operations was at Rs 34,102 crore growing by 0.01% from the year-ago period. The company has approved plans to source 91 MW hybrid renewable power aluminium, copper, oil & gas operations, and 600 MW solar power for aluminium operations. Its EBITDA for the December quarter stood at Rs 7,100 crore with EBITDA margin of 24%. The company also announced 4th interim dividend of Rs 12.5/share.
NTPC: The company reported a 5.4% YoY rise in standalone net profit for the quarter ended December 2022 to Rs 4,476.25 crore. Its revenue from operations rose 37% YoY to Rs 41,410.50 crore. EBITDA rose 36% YoY to Rs 13,239 crore. The board has also approved an interim dividend of Rs 4.25 a share for the current financial year.
Bank of Baroda: Shares of the state-owned lender rose 6.2% after it reported a standalone net profit of Rs 3,853 crore for the third quarter ended December 2022 (Q3 FY23), up by over 75% from the year ago quarter of Rs 2,197 crore. Its net interest income (NII) grew over 26% to Rs 10,818 crore as compared to Rs 8,552 crore year-on-year (YoY). Net Interest Margin (NIM) stands at 3.37% in the October-December period, increase of 24 basis points YoY for the quarter. Its net NPA stood at 0.99% as against 1.16% QoQ.
Divi’s Labs: The company said its net profit slumped 66% to Rs 306.8 crore in Q3FY23 from Rs 902.2 crore in Q3FY22. The revenue also fell 31.5% to Rs 1707.7 crore in Q3FY23 from Rs 2493.3 crore in Q3FY22. Its EBITDA tanked 62.8% to Rs 408.2 crore in the reported quarter as against Rs 1098 crore in the year-ago period. Shares plunged 11.71% on Friday.
TVS Motor Company: The company’s wholly-owned subsidiary, TVS Motor (Singapore), has entered into an agreement to acquire shares of ION Mobility to support in electric two-wheeler markets of Singapore and Indonesia. TVS will subscribe 3,144,198 series AA shares of ION Mobility with aggregate investment of $95,00,000. The proposed investment is expected to be completed within 30 days. It will enable the company to drive the premium electric ecosystem in South-east Asia.
IDFC: The company said on Wednesday that it is investing Rs 2,200 crore in IDFC First Bank to increase its stake in the bank to 40% from 36.38% currently. This will provide growth capital to IDFC First Bank, the company said. Further, the IDFC board has declared a special interim dividend of Rs 11 per share, due to which the Government of India, the largest shareholder in IDFC, would receive a payout of Rs 287 crore. Further, IDFC and IDFC Financial Holding have begun the process of merger with IDFC First Bank.
Tata Steel: The company has acquired 26,97,674 equity shares of Tata Steel Utilities and Infrastructure Services (TSUISL), a wholly-owned subsidiary of the company at a premium of Rs 205 per share on rights basis, for an amount aggregating to Rs 58 crore. These funds shall be utilized by TSUISL to invest in its step-down subsidiary, Tata Steel Special Economic Zone (TSSEZ) to assist TSSEZ in partial repayment of its existing loans.
Ashok Leyland: The truck maker reported a net profit of Rs 361.34 crore in Q3FY23 compared with a net loss of Rs 5.76 crore in Q3FY22. Net sales jumped 63.3% to Rs 8,984.95 crore in Q3FY23 as against Rs 5,503.64 crore in Q3FY22. EBITDA surged 255% to Rs 797 crore in Q3FY23 as against Rs 224 crore in Q3FY22 and margin stood at 8.8% in Q3FY23 as compared with 4% in Q3FY22. Ashok Leyland’s domestic MHCV volume stood at 28221 units, grwoing by 69% over the same period last year. The company has achieved a MHCV market share of 33% in Q3FY23.
Indian Oil Corp Ltd (IOCL): The oil marketing company reported a net profit of Rs 448 crore in Q3FY23 as against a loss of Rs 272 crore in Q2FY23. Its revenue stood at Rs 2.04 lakh crore as against 2.07 lakh crore in the preceding quarter. The company’s EBITDA stood at Rs 3,594 crore in the reported quarter as against Rs 1961 crore in the quarter ended September 2023.
Sun Pharmaceutical Industries: The drugmaker posted a net profit of Rs 2,166 crore in Q3FY23, up 5.2% from Rs 2058.8 crore in Q3FY22. The revenue rose 14% to Rs 11,241 crore in Q3FY23 from Rs 9,863 crore in Q3FY22. Its EBITDA rose 15.3% to Rs 3,004 crore from Rs 2,606.3 crore in the year-ago period.
Gas Authority of India Ltd (GAIL): The company posted a 92% year-on-year decline in standalone net profit at Rs 245 crore for the quarter ended December 2022. Its net profit stood at Rs 3,287 crore in the year-ago period. On a sequential basis, net profit was down 84% from Rs 1,537 crore. Revenue from operations increased 37.2% YoY to Rs 35,380 crore. At EBIT level, Natural Gas Marketing posted a loss of Rs 86 crore, petrochemicals registered loss of Rs 348 crore and LPG & Liquid Hydrocarbons posted a loss of Rs 29 crore.
Titan Ltd: The company said its profit fell 4% to Rs 951 crore for the three months ended December. It was Rs 987 crore in the corresponding quarter of last year. Sales during the reported quarter rose 11% to Rs 10,444 crore, compared with Rs 9,381 crore in the same quarter last year. In the jewellery business, total income saw 11% growth at Rs 9,518 crore. The India business, meanwhile, rose 9% in the same period, backed by healthy consumer demand during the festive season. EBIT for the segment came in at Rs 1,236 crore, with 13% EBIT margin. A total of 22 stores (excluding Caratlane) were added during the quarter, taking the total jewellery store count to 510 spread across 247 cities.
Tata Consumer Products (TCPL): The FMCG company has recorded a 26% year-on-year growth in consolidated profit at Rs 364.4 crore for quarter ended December FY23 despite weak operating margin, led by tax write-back, exceptional income and higher other income. Revenue for the quarter grew by 8.3% YoY to Rs 3,475 crore. However, EBITDA fell 1.7% to Rs 454 crore and margin declined by 130 bps to 13.1 percent for the quarter. Its Indian market business rose 7.72% to Rs 2,165.34 crore as against Rs 2,010.04 crore in the year-ago period. Its international business contributed a revenue of Rs 929.93 crore, up 3.71% from Rs 896.62 crore earlier.
Britannia Industries: The company has reported a 156% year-on-year growth in consolidated profit at Rs 932.4 crore for December FY23 quarter led by strong operating performance and exceptional income of Rs 359 crore. Revenue from operations at Rs 4,197 crore grew by 17.4% over a year-ago period. EBITDA jumped 51.5% to Rs 817.6 crore for the quarter YoY.
Jubilant FoodWorks: The company recorded a 36% fall in net profit at Rs 88 crore for the three months ended December 2022 as against Rs 137 crore in the same period last fiscal. The operator of Domino’s food chain in India, saw a 10% YoY growth in revenue from operations to Rs 1,316 crore. The company’s EBITDA stood at Rs 290 crore, while margins declined 457 basis points to 22%. The performance during the quarter was mainly impacted due to high input and raw material costs. During the quarter, the company opened 64 new stores in India, resulting in a network of 1,814 stores across all brands.
Coal India: The coal mining company registered a consolidated net profit of Rs 7,719 crore for the three months ended December 2022. The profit was up 69% compared with Rs 4,556 crore posted in the year-ago period. Its consolidated revenue grew by 24% YoY to Rs 35,169 crore for the quarter under review. The realisation per tonne of coal was Rs 5,046 under the auction segment, in Q3FY23 against Rs 1,947 per tonne for the comparable quarter in FY22. The jump was Rs 3,099 per tonne or 159%.
Indian Hotels Company (IHCL): The company reported a profit of Rs 404 crore for quarter three of this fiscal year, up by 321% YoY. The hospitality chain reported revenue from operations of Rs 1,686 crore, an increase of 52% YoY. The company said EBITDA was up 90% YoY to Rs 655 crore. It had achieved a free cash flow of Rs 766 crore for nine months ended December 31. The company said the demand outlook for the sector in 2023 remains robust on the back of sporting events, global events like the ongoing G20, and recovery of inbound and corporate travel.
Power Grid Corporation of India: The state-owned company reported a 10.5% YoY rise in standalone net profit to Rs 3,701.72 crore. Revenue from operations grew 7.4% on-year to Rs 10,746.40 crore. The board has declared an interim dividend of Rs 5 per share for the current financial year. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose nearly 8% on-year to Rs 9,380 crore, and operating margin improved 40 basis points to 87.28%.
UPL: The company reported 16% year-on-year (YoY) rise in consolidated net profit for the quarter ended December 2022 at Rs 1,087 crore. Revenue from operations increased 21% on-year to Rs 13,679 crore. Growth in revenue continued to be led by marginal increase in volumes, higher realizations, and favourable exchange rate. Realisations increased 13% on-year, while volumes grew a marginal 1%. The company saw continued growth momentum in the crop protection business in the quarter, along with robust growth in Advanta Seeds at 31% YoY. EBITDA rose 14% YoY to Rs 3,035 crore, but operating margin contracted 141 basis points to 22.2%.
Punjab National Bank (PNB): The state-owned bank reported a net profit of Rs 628.9 crore in Q3FY23, down 44.2% from Rs 1,126.8 crore in Q3FY22. Its net interest income (NII) was up 17.6% at Rs 9,179.4 crore in the reported quarter as against Rs 7,803.2 crore in the corresponding quarter last fiscal. The lender’s net NPA stood at 3.30% in the quarter under review as against 3.80% in the preceding quarter.
Tech Mahindra: The IT services company registered a 0.9% sequential growth in consolidated profit at Rs 1,297 crore for quarter ended December FY23. Revenue rose 4.6% QoQ to Rs 13,735 crore and in dollar terms revenue grew by 1.8% QoQ to $1,668 million. Deal wins stood at $795 million for the quarter.
Bharat Petroleum Corp (BPCL): The state-owned oil retailer registered a standalone profit of Rs 1,960 crore for December FY23 quarter against a loss of Rs 304.2 crore in the previous quarter, with strong operating performance amid a fall in oil prices. Revenue grew by nearly 4% sequentially to Rs 1.19 lakh crore.
Dabur India: The FMCG company reported a 5.4% YoY decline in its consolidated net profit at Rs 476 crore for the quarter ended December, compared to Rs 503 crore the same period last year. The company’s revenue from operations grew 3.4% to Rs 3,043 crore in the reported quarter. Input cost pressure saw consolidated operating profit decline nearly 3% YoY to Rs 610 crore, and operating margin contracted a sharp 130 basis points to 20%. Dabur’s homecare business registered 18% growth, while its ayurvedic OTC business grew a sharp 17% in Q3, and the digestives category reported 12% growth.
Economy News
Finance minister Nirmala Sitharaman tabled the Economic Survey 2023 in the Parliament on Tuesday (31 January 2023). Indian Government expects the country’s economy will be the fastest growing major economy in the world with a GDP growth forecast of 7% in FY23 and 6-6.8% in FY24. According to the Economic Survey, challenges to rupee depreciation is likely to continue and the Fed is expected to further hike interest rates to tame inflation.
Moreover, Finance Minister Nirmala Sitharaman presented the Budget 2023 on Wednesday (1 February 2023). This was the final full-fledged budget of the Narendra Modi-led government before the general election next year. Sitharaman said fiscal deficit for FY24 is estimated at 5.9%. Fiscal deficit for FY23 is revised to 6.4% of GDP. Gross borrowings for FY24 is set at Rs 15.4 lakh crore.
The government is increasing capital investment outlay by 33% to Rs 10 lakh crore, which would be 3.3% of GDP. This is highest ever capital outlay by India. The government announced capital outlay of Rs 2.40 lakh crore for railways, an increase of nine-times over FY14.
For more details and to have a look at key numbers of Union Budget 2023-2024, click here
Meanwhile, the S&P Global India Composite PMI Output Index fell from December 2022’s high of 59.4 to 57.5 in January 2023. The S&P Global India services Purchasing Managers’ Index (PMI) fell to 57.2 in January 2023 as compared to 58.5 in December 2022.
The International Monetary Fund (IMF) has retained its GDP growth forecasts for India for FY23 and FY24 at 6.8% and 6.1%, respectively. India’s economic growth is expected to rebound to 6.8% in FY25, the IMF said in an update to its World Economic Outlook report.
Global Markets
The US markets ended higher as encouraging signals from the Federal Reserve, strong economic data and fourth-quarter earnings boosted investor optimism. The Nasdaq jumped 3.31%, S&P 500 index rose 1.62% and the Dow slipped 0.15.
The US central bank on Wednesday raised its policy rate by 25 basis points to the 4.50%-4.75% range, and said that borrowing costs will continue to increase.
The Labor Department reported that employers added 517,000 non-farm jobs in January 2023. The unemployment rate slipped to 3.4%, its lowest level since 1969. Weekly jobless claims dropped 3,000 to 1,83,000, its lowest in nine months. Continuing claims decreased 11,000 to 1.655 million. The Institute for Supply Management reported that its index of non-manufacturing activity jumped to 55.2 from 49.2 in December, indicating expansion in the sector. The Labor Department’s Employment Cost Index (ECI) rose 1.0% in the fourth quarter of 2022.
In Europe, the Bank of England raised interest rates by half a percentage point Thursday as it sought to tame double-digit inflation that is fuelling a cost-of-living crisis, public-sector strikes and fears of recession. The bank’s monetary policy committee voted 7-2 to push its key rate to 4%.
Chinese markets fell during the week as investors booked some profits and were cautious about the country’s economic growth. The broader Shanghai Composite index slipped 0.04% and the CSI 300 index fell 0.95%, while the Hang Seng index tanked 4.53%
China’s official Manufacturing Purchasing Managers’ Index (PMI) rose to 50.1 in January from December’s 47.0. The Non-Manufacturing PMI rose to a better-than-expected 54.4 from 41.6, reaching its highest reading since June. The Caixin manufacturing Purchasing Managers’ index for January stood at 49.2 compared with December’s reading of 49.
Meanwhile, the IMF raised its annual growth forecast for China as the country’s economy recovers after Beijing scrapped its Zero-Covid policy. The IMF estimated that China’s economy would grow 5.2% this year, up from its October projection of 4.4%, and kept its estimate for 2024 at 4.5%.
Japan’s stock markets ended with mixed performance for the week, with the Nikkei 225 Index rising 0.46% while the broader Topix index falling 0.63%. The country’s central bank reiterated its commitment to ultra-loose monetary policy.
On the economic data front, Japan’s industrial production fell 0.1% month on month in December 2022, a smaller-than-expected decline, while annualized retail sales growth of 3.8%, helped by recovery in consumption after the pandemic. The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index held steady at 48.9, below the 50-point mark indicating contraction.