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The Sensex ended with minor losses, while the Nifty finished nearly flat during a volatile week as the RBI increased repo rate by 25 bps to 6.5%. For the week, the Sensex fell 0.26% to 60,682.70, while the Nifty 50 index inched up 0.01% to 17,856.50.
Broader market outperformed headline indices. The BSE Midcap index rose 1.78% to 24,890.44. The BSE Smallcap index rose 1.42% to 28,263.05.
Top gainers among Nifty sectoral indices were Realty [2.19%], Media [1.95%], Pharma [1.17%], Financial Services [0.93%] and IT [0.89%]. Top losers were Metal [-2.17%], Energy [-1.38%], FMCG [-1.19%], Auto [-1.07%] and Oil & Gas [-0.72%].
FIIs were net sellers for Rs 3201.6 crore in the cash segment on a weekly basis, while DIIs were net buyers for Rs 2287.6 crore. During the calendar year 2023, FIIs have been net sellers for Rs 46878.9 crore and DIIs have been net buyers for Rs 39,864.9 crore.
Indian rupee ended at 82.50 against the US dollar on Friday (February 10, 2023).
Company News
Adani Group Companies
Adani Group: Norway’s $1.35 trillion sovereign wealth fund said on Thursday that it has in recent weeks divested virtually all its remaining shares in companies belonging to India’s Adani group, Reuters reported. At the end of 2022, the Norwegian fund held shares in Adani Green Energy worth $52.7 million, a stake in Adani Total Gas worth $83.6 million and ownership in Adani Ports & Special Economic Zone worth $63.4 million. Meanwhile, Adani stocks ended in the red after MSCI Inc said it was reviewing the number of shares linked to the group that were freely tradable in public markets.
Adani Group promoters have posted amounts to prepay a $1.1 billion facility ahead of its maturity in September 2024. About 16.8 crore shares in Adani Ports, 2.75 crore shares in Adani Green and 1.17 crore shares in Adani Transmission will be released as part of this repayment. Pledge removed in light of “recent market volatility and in continuation of the promoters’ commitment to reduce the overall promoter leverage.
Adani Group plans to prepay a $500 million loan due next month to a group of banks as the Indian conglomerate looks to bolster its finances following a short seller attack, Bloomberg reported. Global banks such as Barclays Plc, Standard Chartered Plc and Deutsche Bank AG are among banks that lent Adani $4.5 billion to finance the purchase of Holcim Ltd. cement assets last year and a portion of that loan is due March 9.
Adani Wilmar: The company said its net profit was up 16.5% at Rs 246.2 crore in Q3FY23 as against Rs 211.4 crore in Q3FY22. Its revenue was up 7.4% at Rs 15,438.1 crore as against Rs 14,370.9 crore. Its EBITDA was up 20.2% YoY at Rs 605.3 crore as against Rs 503.6 crore in the year-ago period. Its margin stood at 3.9% in the reported quarter as against 3.5% in the year-ago period.
Adani Ports: The company’s revenue rose 18% YoY to Rs 4,786.2 crore in Q3FY23 as against Rs 4,072 crore in Q3FY22. Its net profit fell 16% to Rs 1,315.5 crore in Q3FY23 as against Rs 1,567 crore in Q3FY22. EBITDA rose marginally by 4% to Rs 2,707.5 crore in the reported quarter from Rs 2,591.8 crore in the same period last year.
Adani Total Gas: The company reported a 13% increase in net profit of Rs 148 crore in October-December 2022 quarter as against Rs 132 crore net profit in the same period a year back. Revenue from operations rose to Rs 1,186 crore in the reported quarter as against Rs 932 crore in the yar-ago period. Further, CNG sales climbed 15% to 116 million standard cubic metres, while piped natural gas (PNG) sales dropped 23% to 70 mmscm.
Ambuja Cements: The company reported a consolidated net profit of Rs 488 crore for the three months ended December 2022. The profit was higher by 13%, compared with Rs 431 crore in the same quarter last year. Revenue from operations rose 4% to Rs 8,036 crore for the third quarter as against Rs 7,710 crore in the corresponding quarter of last year. The company’s EBITDA fell 6% YoY to Rs 1,138 crore during the quarter under review. EBITDA margins fell to 14.6%, compared with 16.2% a year ago. The company reported volume growth of 7% quarter-on-quarter at 13.7 MTPA, supported by an increase in blended cement (clinker factor reduced from 60.1% to 59.5%), better route planning and higher operational synergies with its subsidiary, ACC.
Adani Green Energy: The renewable energy arm of the Adani Group has registered a 110% YoY increase in consolidated profit at Rs 103 crore for the December FY23 quarter despite weak operating performance and exceptional loss, supported by other income and strong topline. Revenue for the quarter at Rs 1,973 crore increased by 41% YoY, while EBITDA fell 18.2% YoY to Rs 853 crore with the margin declining 3,127 bps to 43.23% for the same period.
Adani Power: The company reported 96% decline in consolidated net profit at Rs 8.77 crore for December quarter 2022-23 due to higher expenses. The profit was Rs 218.49 crore in the year-ago period. Total income rose to Rs 8,290.21 crore from Rs 5,593.58 crore in the same period a year ago. Total expenses jumped to Rs 8,078.31 crore in the quarter from Rs 5,389.24 crore. During the quarter, the company and its subsidiaries achieved an average Plant Load Factor (PLF or capacity utilisation) of 42.1% and power sale volume of 11.8 Billion Units (BU), as compared to PLF of 41% and power sale volume of 10.6 BU in Q3 FY22.
Other Companies
Reliance Industries Limited (RIL) and Ashok Leyland: Both the companies have unveiled India’s first Hydrogen Internal Combustion Engine (H2ICE) powered Heavy Duty truck. The vehicle was flagged off by Prime Minister Narendra Modi today in Bangalore at the India Energy Week. The Ashok Leyland H2ICE heavyduty truck range (1935Tonne) is powered by Hydrogen, a renewable and clean energy source, maintaining overall architecture similar to a conventional dieselbased combustion engine thus helping quicker migration to cleaner energy sources at relatively lower cost.
In other news, Reliance Industries and UK-based BP are nearing start of production from their giant MJ deep-water project in the KG-D6 block, which will significantly boost gas output from the prized east coast asset. The MJ field will come on stream this quarter, said Sashi Mukundan, Regional President and Head of Country, India, BP Group, at India Energy Week here. Reliance and BP are spending about $5 billion on further developing KG-D6 through three different projects, aimed at rejuvenating gas production from the offshore asset.
Mahindra and Mahindra (M&M): The automaker said that its standalone net profit stood at Rs 1,528 crore crore during the third quarter ended December 2022, up 14% from Rs 1,335 crore year-on-year. Its revenue from operations rose 41% YoY to Rs 21,654 crore in the October-December 2022 as compared to Rs 15,349 crore in the same quarter of the last year. Its total expenses rose to Rs 19,737 crore as against Rs 14,245 crore a year-ago. The company said that its auto and farm business achieved highest ever volumes in the third quarter of FY23 and farm market share during the quarter under review stood at 41%, up 160 bps from previous year.
Separately, M&M has signed an MoU with Telangana Government to expand its existing manufacturing facilities at Zaheerabad plant. The company will invest approximately Rs 1,000 cr over 8 years for the proposed expansion. Expansion will include three- and four-wheeler EV making.
Shree Cement: The company’s consolidated net profit tumbled 44% to Rs 276.77 crore in Q3FY23 as against Rs 491.99 crore posted in Q3FY22. Revenue from operations rose by 15% YoY to Rs 4,068.79 crore in the quarter ended December 2022. Total expenses increased 26.78% YoY to Rs 3,845.82 crore in Q3FY23. Its EBITDA fell 7% YoY to Rs 869 crore in Q3FY23 compared to Rs 936 crore in the same quarter of the previous year. The company’s board declared an interim dividend of Rs 45 per share for the year 2022-23.
Tata Consultancy Services (TCS): The company has announced an expansion of its long-standing partnership with Phoenix Group, UK’s largest long-term savings and retirement provider, through a contract valued at over £600 million. As part of the deal, TCS will digitally transform Phoenix’s ReAssure business, including its administration services, using the BaNCS-based platform. Under the agreement, TCS’s Diligenta will manage customer administration and servicing of ReAssure’s 3 million policies. Diligenta is TCS’s regulated subsidiary in the UK on behalf of the Phoenix Group.
Hero MotoCorp: The two-wheeler major has recorded a 3.6% YoY increase in standalone profit at Rs 711 crore for the quarter ended December FY23. Revenue was at Rs 8,031 crore in the reported quarter, up by 1.9% from the year-ago period. EBITDA fell by 3.7% YoY to Rs 924 crore with the margin declining 70 bps for the quarter. The company announced an interim dividend of Rs 65 per share.
Hindalco Industries: The company reported a consolidated net profit for the December quarter at Rs 1,362 crore, down 63% YoY. It had reported a net profit of Rs 3,675 crore in the corresponding quarter of last year. Its revenue from operations was Rs 53,151 crore, up 6% YoY as against Rs 50,272 crore in the year-ago period, helped by higher volumes. The reported a 48% drop in operating profit at Rs 3,930 crore. “We are seeing core industries worldwide being buffeted by macro-economic and inflationary cost pressures, yet we delivered a strong operational performance with higher volumes across India business segments,” said Satish Pai, Hindalco Managing Director.
Bharti Airtel: The telecom operator has reported a 26% decline sequentially in consolidated profit at Rs 1,588 crore for the three-month period ended December FY23, impacted by licence fee provision. Revenue from operations for the quarter grew by 3.7% QoQ to Rs 35,804 crore, with average revenue per user climbing by Rs 3 to Rs 193 for the quarter. On the operating front, EBITDA increased by nearly 5% QoQ to Rs 18,453 crore with a margin expansion of 101 bps for the same period.
Paytm: Chinese tech giant Alibaba has sold its entire stake of 3.4% equity Paytm in a block deal on Friday, reported news agency ANI. With this, Alibaba does not hold any stake in Paytm. The Chinese multinational in January had sold around 3.1% of 6.26% equity in Paytm. Shares of Paytm tanked 7.85% on Friday, though it made a weekly gain of 23.93%.
IRCTC: The PSU’s standalone net profit was up 22.3% to Rs 255.5 crore in Q3FY23 as against Rs 208.8 crore in Q3FY22. Standalone revenue jumped 69.9% to Rs 918.1 crore in Q3FY23 as against Rs 540.2 crore in Q3FY22. EBITDA increased 16.7% to Rs 325.8 crore in Q3FY23 as against Rs 279.2 crore in Q3FY22. The company’s board approved an interim dividend of Rs 3.50 per share
Aditya Birla Fashion: The company said its consolidated revenue was up 20% at Rs 3589 crore in Q3FY23 as against Rs 2987 crore in Q3FY22. Its net profit plunged 94% to Rs 11.21 crore in the reported quarter as against Rs 196.8 crore in the year-ago period. EBITDA fell 25% to Rs 435.63 crore in the reported quarter compared with Rs 582.11 crore in the corresponding quarter last year.
Life Insurance Corporation of India (LIC): The life insurer has reported a standalone profit after tax (PAT) of Rs 8,334.2 crore for the quarter ended December FY23, rising multi-fold times compared to a PAT of Rs 234.91 crore in the same quarter last year on the back of strong growth. Net premium income for the quarter stood at Rs 1.11 lakh crore increasing by 14.5% over a year-ago period and new business premium climbed 11% YoY to Rs 9,725 crore for the quarter. Assets under management (AUM) increased to Rs 44.34 trillion as on December 31, 2022, compared with Rs 40.12 trillion in the year-ago period.
Zomato: The food delivery company has posted a consolidated net loss of Rs 346.6 crore for the December FY23 quarter, widening from a net loss of Rs 63.2 crore in the year-ago period due to higher expenses. Consolidated revenue rose 75.2% YoY to Rs 1,948.2 crore for the quarter, while at the operating level, the EBITDA loss of Rs 366.2 crore for the quarter narrowed compared to the EBITDA loss of Rs 488.8 crore in the corresponding period last fiscal.
Larsen & Toubro (L&T): The infrastructure behemoth said the Ministry of Defence has signed a contract with L&T for the procurement of 41 indigenous modular bridges, worth over Rs 2,585 crore, for the Corps of Engineers of Indian Army. A modular bridge is fabricated in modules that can be installed quickly in the field.
Tata Steel: The company posted a consolidated loss of Rs 2,502 crore for the quarter ended December FY23, against a profit of Rs 9,598 crore in the year-ago period, impacted by a sharp drop in realisations and margin in Europe. Revenue for the quarter fell 6.1% YoY to Rs 57,083.6 crore. On the operating front, EBITDA plunged 74.5% YoY to Rs 4,048 crore and the margin dropped 1,906 bps to 7.09% for the quarter.
LIC Housing Finance: The housing finance company has recorded a profit of Rs 480 crore for the quarter ended December FY23, down by 37.4 percent compared to the year-ago period, impacted by impairment on financial instruments. Net interest income grew by 10.4 percent YoY to Rs 1,605.9 crore for the quarter.
Economy News
The three-day monetary policy meeting concluded on 8 February 2023. The Reserve Bank of India (RBI) raised the key policy repo rate by 25 basis points to 6.5% . Further, the standing deposit facility (SDF) rate stands adjusted at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate to 6.75%.
Four members of the six-member monetary policy committee (MPC) decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the upper limit target of 6% going forward and also supporting growth. With this, the central bank aims to achieve the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.
Real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% and Q4 at 5.8%, and risks broadly balanced.
Meanwhile, inflation is projected to be at 6.5% in FY23, with 5.7% in Q4. CPI inflation is projected at 5.3% for FY24, with 5% in Q1FY24, 5.4% in Q2FY24, 5.4% in Q3FY24 and 5.6% in Q4FY23, provided there is normal monsoon in India during the next fiscal.
Global Markets
The US markets ended lower while Treasury Yields rose after the Federal Reserve chair Jereome Powell said that the US central bank would continue to increase interest rates to tame inflation. For the week, the S&P dropped 1.11%, the Dow slipped 0.17%, the Nasdaq lost 2.41%.
Japan’s stock markets rose during the week, with the Nikkei 225 index rising 0.59% and the broader Topix index climbing 0.85%. The yen strengthened to about JPY 130.5 against the U.S. dollar, from around JPY 131.2 at the end of the previous week. Meanwhile, according to Nikkei news agency, the Japanese government plans to appoint Kazuo Ueda, an economist and former member of the BoJ Board, as the central bank’s next governor. Japan’s wholesale prices rose 9.5% in January from the previous year, slightly lower than the revised figure of 10.5% recorded in December 2022.
Chinese stocks fell as the spy balloon controversy stirred up tensions with the US and also due to mixed economic data. The Shanghai Stock Exchange index fell 0.08% and the CSI 300 index dropped 0.85%, and the Hang Seng tumbled 2.17%.
On the economic front, China’s consumer prices rose 2.1% in January compared to 1.8% a year ago, the government data said. Producer prices index fell 0.8%, suggesting manufacturers struggled to pass on costs to consumers. Rating agency Fitch revised its forecast for China’s economic growth in 2023 to 5% from 4.1% earlier as economic activity is recovering faster than expected after Beijing ended the “zero-COVID” policy.