Weekly Market Analysis: Nifty, Sensex close higher; Tata Steel, M&M and Zomato in focus

Benchmark stock indices and broader markets closed higher for the week as energy stocks and IT shares rose. For the week, Nifty index closed 1.04% higher at 18102.75, while Sensex rose 1.03% to close at 60686.69.

On Friday, Nifty and Sensex had the biggest one day gain since November 1, as Nifty and Sensex jumped 1.28% each.

BSE SmallCap index gained 1.15% for the week to close at 29232.53 and BSE MidCap rose 1.45% to 26368.78. 

Among sectoral indices, the gainers were BSE Oil & Gas (3.9%), BSE Capital Goods (3.8%), BSE Telecom (3.7%), Nifty IT (2.8%), Nifty Energy (2.65%). The losers were BSE Bankex (-4.9%), BSE Finance (-2.5%), Nifty Bank (-2.1%), BSE Metal (-2.0%), BSE FMCG (-2%), BSE Realty (-1.4%), Nifty Pharma (-1.2%). 

Company News

Tata Steel: The company reported a 661.3% year-on-year jump in consolidated net profit to Rs. 11,918.11 crore in Q2FY22 from Rs 1565 crore in the corresponding quarter last year. Revenue from operations rose 55% to Rs 60,282 crore in Q2FY22 compared with Rs 38,939 crore in the year-ago period. The board has also approved the issuance of one fully paid-up equity share of Tata Steel of face value Rs 10 each for every 15 equity shares of Tata Steel BSL of face value Rs 2.

Adani Group: The group plans to invest $70 billion in the next 10 years to become the world’s largest renewable energy company and produce the cheapest hydrogen on the planet. Adani Green Energy is aiming at 45 gigawatts of renewable energy production capacity by 2030 and will invest $20 billion to develop a 2 GW per year solar manufacturing capacity by 2022-23. Adani Transmission is looking to increase the share of renewable power procurement from the current 3% to 30% by FY2023 and to 70% by FY2030.

Zomato: The food delivery company registered a consolidated net loss of Rs 434.9 crore in Q2FY22, compared with a net loss of Rs 229.8 crore in the same period last fiscal. Consolidated operating revenue rose to Rs 1024.2 crore in the quarter from Rs 426 crore in the year-ago period. The rise in losses were attributed to higher costs related to branding and marketing, customer acquisition, delivery and fuel prices.

Britannia: The biscuit manufacturer posted a 22.9% YoY fall in its consolidated net profit to Rs 384.22 crore in Q2FY22. Its operating revenue rose 5.5% YoY to Rs 3607.4 crore. The company’s raw material cost for the quarter rose over 8%  YoY to Rs. 1,914.7 crore.

Vodafone Idea: The telecom operator reported a consolidated net loss of Rs 7132.3 crore in Q2FY22, compared with a net loss of Rs 7218.5 crore in the same period of last year. Revenue from operations fell to Rs 9406.4 crore in Q2FY22 from Rs 10791.2 crore in the year-ago period. Mobile average revenue per user stood at Rs 109, a rise of 4.8% quarter-on-quarter.

Mahindra & Mahindra: The SUV maker registered a jump in its standalone profit after tax (PAT) at Rs 1,432 crore in Q2FY22, from a standalone PAT of Rs 162 crore in the same period last year. The higher profit was due to robust sales and stronger export volumes. Revenue rose 15% to Rs 13,305 crore from Rs 11,590 crore in the year-ago period.

Divi’s Labs: The drugmaker’s consolidated net profit rose 16.7% to Rs 606.46 crore in Q2FY22 from Rs 519.59 crore in Q2FY21 on the back of robust sales. Its consolidated total income during July-September 2021 stood at Rs 2,006.62 crore, compared with Rs 1,762.94 crore in the year-ago period.

Nykaa: The company had a blockbuster stock market debut as the company’s shares doubled from its issue price and closed at Rs 2205.8 per equity share. The shares got listed at Rs 2,001 apiece, a 77.8% premium to its IPO price of Rs 1,125.

Economy News

India’s retail inflation rate, which is measured by Consumer Price Index (CPI), increased to 4.48% in October, as against 4.35% in September 2021 and 7.61% in October 2020. The rise was attributed to increase in food prices along with fuel and commodity prices. The food inflation rate rose to 0.85% in October from 0.68% in the previous month.

Industrial output grew 3.1% in September, a seven-month low, as the impact of low base effect waned. Industrial output had recorded a growth of 12% in August and 1% in September 2020, according to data released by India’s statistical agency. Mining sector increased 8.6% year-on-year, manufacturing gained 2.7% and electricity rose 0.9%.

Global Markets

Major US stock indices fell as investors’ concerns over rising inflation weighed on the markets. The consumer price index jumped 0.9% in October and the year-over-year CPI increased to 6.2%, the highest since December 1990. Rising energy prices was the main reason for higher inflation. But, supply chain issues and higher consumer demand added to the higher inflation rate. 

In addition, excluding the volatile energy and food segments, inflation rose 0.6%, which was also more than expected. For the week, the Dow dropped 0.6%, the S&P 500 slipped 0.3% and the Nasdaq fell was 0.7%.

In the Asian markets, Chinese stock market indices closed higher for the week as investors speculated that the Chinese government would announce measure to ease the indebted realty sector. However, defaults in the realty sector continued to weigh on investor sentiments. The CSI 300 rose 0.95% and Shanghai Composite increased 1.36%.

China released data on producer price index (PPI) which accelerated to 13.5% year-on-year in October, beating analyst forecast.

Japanese markets ended higher on Friday as tech stocks gained, but, for the week the indices closed nearly flat. For the week, Nikkei inched down 0.01% and Topix was down 0.04%.