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Benchmark equity indices ended nearly flat in a volatile week as gains in auto and consumer durable were offset by losses in banking stocks. For the week, the Sensex declined 0.10% to close at 61,112.44, while the Nifty 50 index inched up 0.02% to close at 18,069. The BSE Midcap index jumped 1.41% to 25,851.86. The BSE Smallcap index gained 1.27% to 29,283.87.
Top gainers among Nifty sectoral indices were Consumer Durables [2.07%], Auto [1.19%], Energy [0.89%], FMCG [0.78%], and Healthcare [0.44%]. Top losers were Private Bank [-1.86%], Bank [-1.32%], Financial Services [-0.72%], Media [-0.42%], and PSU Bank [-0.34%].
During the week, FIIs were net buyers for Rs 5527.8 crore, while DIIs were net sellers for Rs 2735.2 crore in cash segment.
Indian rupee closed at 81.80 against the US dollar on Friday.
Company News
HDFC Bank and Housing Development Finance Corporation (HDFC): Shares of HDFC twins tumbled by over 5% on Friday amid news reports that the merged HDFC entity could see $150-200 million in outflows. Various reports said that MSCI plans to include HDFC Bank in the large-cap segment of MSCI Global Standard Indexes with an adjustment factor of 0.5, causing concerns of potential outflows of $150-200 million instead of expected inflows.
Adani Enterprises: The company said its consolidated revenue up 26.06% YoY at Rs 31,346.05 crore in Q4FY23. Consolidated net profit rose 137.41% YoY to Rs 722.48 crore in Q4FY23. Ebitda jumped 184.14% YoY to Rs 3,587.07 crore in Q4FY23. The board recommended a dividend of Rs 1.20 per share for the fiscal 2023 and approved the reappointment of Gautam Adani as executive chairman for five years, effective December 1, 2023.
Hero MotoCorp: The two-wheeler manufacturer said its consolidated revenue was up 12.51% at Rs 8,434.28 crore in Q4FY23 and volumes rose 7% in the same period. Consolidated net profit rose 31.7% YoY to Rs 805.12 crore in Q4FY23. Ebitda climbed 31.34% YoY to Rs 1,124.2 crore in Q4FY23. The board recommended a final dividend of Rs 35 per share for the fiscal 2023.
Housing Development Finance Corporation (HDFC): The mortgage lender posted about 20% year-on-year (YoY) growth in standalone net profit for the quarter ended March 2023 at Rs 4,425.50 crore. Total revenue from operations increased by 35.6% YoY to Rs 16,679.43 crore. The net interest income (NII) for the quarter ended March 2023 stood at Rs 5,321 crore compared to Rs 4,601 crore in the previous year, registering a growth of 16%. The company’s board has approved an interim dividend of Rs 44 per share for FY23.
Bharat Forge: The company’s standalone net profit declined 6.66% YoY to Rs 244.52 crore in Q4FY23 as against Rs 261.96 crore reported in Q4FY22. Its revenue from operations jumped 19.31% YoY to Rs 1,997.28 crore during the reported quarter. Profit before exceptional items and tax rose marginally to Rs 356.19 crore in the fourth quarter of FY23 from Rs 352.38 crore posted in Q4 FY22. Exceptional loss stood at Rs 40.84 crore in Q4FY23. Exceptional items were allocated to expenses related to the Voluntary Retirement Scheme (VRS) and employee separation costs for certain overseas subsidiaries. Ebitda in Q4 FY23 stood at Rs 487.9 crore, registering a growth of 13% YoY.
Tata Steel: The Tata Group steel company has recorded 84% year-on-year decline in consolidated profit at Rs 1,566.2 crore for the quarter ended March FY23, impacted by weak operating performance and lower topline. Revenue from operations declined 9.2% to Rs 62,961.5 crore compared to the year-ago period. On the operating front, Ebitda plunged 52% YoY to Rs 7,219.2 crore with the margin falling 1,022 bps to 11.46% for the quarter, but overall numbers above analysts’ estimates. The board announced a dividend of Rs 3.6 per share for FY23.
Titan: The company, which owns Tanishq brand, has recorded a 49.5% year-on-year growth in standalone profit at Rs 734 crore for the quarter ended March FY23, supported by topline and operating income. Standalone revenue from operations grew by 33.4% YoY to Rs 9,704 crore for the quarter with its jewellery business growing 33% to Rs 8,631 crore and the watches segment showing 40% growth to Rs 871 crore. The board has recommended a dividend of Rs 10 per share, to be paid on or after the seventh day from the conclusion of the 39th annual general meeting.
Tata Power Company: The power generation and distribution company has recorded a massive 48.5% on-year growth in consolidated profit at Rs 939 crore for March FY23 quarter on a low base and higher other income. Revenue from operations grew by 4.1% year-on-year to Rs 12,454 crore in Q4FY23, supported by its transmission and distribution business. Ebitda rose 3.2% YoY to Rs 1,927.71 crore in the quarter under review. The board has approved a dividend of Rs 2 per share for the year ended March 31, 2023.
Tata Chemicals: The Tata Group company clocked 61.87% YoY growth in consolidated profit at Rs 709 crore for the March FY23 quarter, driven by healthy operating performance and strong growth in topline. Consolidated revenue at Rs 4,407 crore for the quarter has grown 26.6% over the year-ago period. The board approved a dividend of Rs 17.50 a piece for the fiscal 2023.
Adani Ports and Special Economic Zone (APSEZ): The company said that it has entered into share purchase agreement (SPA) with Solar Energy Limited for divestment of 100% stake of Coastal International Terminals for total consideration of $30 million. Solar Energy will pay the said amount to the APSEZ within 3 business days on completing all the necessary compliance by the APSEZ. On receipt of the total transaction value, APSEZ shall transfer the equity to the Solar Energy and its exit will be completed.
Meanwhile, the company handled 32.3 MMT of total cargo in April 2023, implying a YoY growth of 12.8%. The growth in cargo volumes was supported by dry cargo volumes increase of 9% (iron ore 64%, non-coking coal 22%, and coastal coal 67%) and container volume increase of 13.6%.
Dabur India: The FMCG major said its consolidated net profit rose 2.25% to Rs 300.83 crore on 6.35% increase in revenue from operations to Rs 2,677.80 crore in Q4FY23 over Q4FY22. Dabur said that the strong execution of the power brand strategy coupled with distribution footprint enhancement helped the company to report a steady performance during the fourth quarter and the full year. The company’s board has recommended a final dividend of Rs 2.70 per share for the financial year 2022-23. On a full year basis, the firm’s consolidated net profit stood at Rs 1,707.15 crore in FY23, up 1.84% as against Rs 1739.22 crore posted in FY22. Revenue grew by 5.89% year on year to Rs 11,529.89 in financial year ended March 2023.
Separately, Dabur India said The Investment Board of Nepal (IBN) has approved an additional investment of Nepalese rupees Rs 969 crore (approximately Rs 608 crore) in Dabur Nepal, a subsidiary company of Dabur India in Nepal. This investment will enable Dabur Nepal to expand and grow its business by way of capacity expansion, product diversification, upgradation of plant facility etc., over the next 4 to 5 years.
Adani Wilmar (AWL): The company’s consolidated net profit slumped 60.05% to Rs 93.61 crore in Q4FY23 as against Rs 234.29 crore in Q4FY22. Revenue from operations stood at Rs 13,872.64 crore in Q4 FY23, down 7% from Rs 14,917.26 crore in the corresponding quarter last fiscal. Ebitda fell 16% to Rs 359 crore in Q4FY23 as against Rs 426 crore in same quarter last year. Volumes improved by 15% to 1.49 million metric tonnes (MMT) in Q4 FY23 as compared with 1.29 MMT reported in Q4 FY22.
Adani Total Gas: The company said its net profit was up 21% YoY at Rs 98 crore in Q4FY23 as against Rs 81 crore in the year-ago period. Revenue was up 10.2% YoY at Rs 1,114.8 crore as against Rs 1,012 crore in the year-ago period. Ebitda jumped 48.8% YoY to Rs 195.2 crore as against Rs 131.2 crore in the year-ago period.
Ambuja Cements: The company has reported a standalone profit of Rs 502.4 crore for the quarter ended March 2023, a 1.6% growth YoY, helped by strong sales and other income. Revenue grew by 8.4% year-on-year to Rs 4,256.3 crore, with sales volumes increasing by 8% YoY to 8.1 million tonnes. Ebitda stood at Rs 788.3 crore in Q4FY23, down 0.6% YoY, with margin falling 170 bps to 18.5%. The board recommended a final dividend of Rs 2.50 per share for the fiscal 2023.
MRF: The tyre maker’s consolidated net profit zoomed 106.2% to Rs 340.67 crore in Q4FY23 as against Rs 165.21 crore in Q4FY22. Revenue from operations stood at Rs 5,841.72 crore in Q4FY23, a growth of 10.12% from Rs 5,304.82 crore posted in the year-ago period. MRF’s operating margin improved to 9.14% in Q4 FY23 as compared to 4.34% posted in Q4 FY22. Meanwhile, the company’s board has recommended a final dividend of Rs 169 per share for the financial year ended 31 March 2023.
Varun Beverages: The bottling company said its consolidated net profit surged 61.8% to Rs 438.57 crore in Q1CY23 and revenue from operations rose 37.7% YoY to Rs 3,892.98 crore in the reported quarter. The increase in profit after tax was driven by high growth in revenue from operations, improvement in margins, and transition to a lower tax rate in India. During Q1CY23, total sales volumes grew by 24.7% YoY to 224.1 million cases from 179.7 million cases in Q1CY22, driven by strong demand across regions in India. Ebitda stood at Rs 798.04 crore, recording a growth of 50.3% YoY, while Ebitda margins improved by 172 bps to 20.5% in Q1CY23.
Bharti Airtel: The Indian telecom firm along with Dialog Axiata Plc and Axiata Group Berhad has signed a binding term sheet to combine operations of Bharti Airtel Lanka, the company’s wholly owned subsidiary, with Dialog. The deal will see Bharti Airtel acquire a stake in Dialog, representing the fair value of Airtel Lanka. Discussions with respect to the proposed transaction are ongoing between the parties and also with the relevant regulatory authorities.
Federal Bank: The private bank’s standalone net profit surged 67% YoY to Rs 902.61 crore in Q4FY23 and total income rose 38.2% YoY to Rs 4,120.03 in Q4FY23. Net interest income stood at Rs 1,909 crore in Q4FY23, up 25.2% over Rs 1,525 crore in the same quarter last year. Net interest margin improved to 3.31% in Q4 FY23 from 3.16% in Q4FY22. Provisions and contingencies jumped 55.05% to Rs 116.66 crore in Q4 FY23 from Rs 75.24 crore in Q4 FY22. Gross NPA ratio stood at 2.36% and net NPA ratio was at 0.69%.
Economy News
India’s gross Goods and Services Tax (GST) revenue collection increased to touch Rs 1.87 lakh crore in April 2023, the highest monthly collection since the implementation of the indirect tax system in July 2017. The previous record for highest GST collection was set in April 2022, with Rs 1.68 lakh crore. In contrast, the GST collection for March 2023 was Rs 1.60 lakh crore.
Meanwhile, the government data showed that the output of India’s eight infrastructure sectors grew 3.6% in March 2023, the slowest pace in five months. Core sector output had expanded at 4.3% in March 2022. For the full year FY23, the eight infrastructure sectors grew at 7.6%, down from 10.4% recorded in FY22.
Further, the S&P Global India Manufacturing Purchasing Managers’ Index (PMI) increased to 57.2 in April, from 56.4 in March. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 62.0 in April, from 57.8 in March .
Global Markets
The US markets declined during the week after the Fed raised interest rates to tame inflation and concerns over the need to increase the US debt ceiling as well as two regional banks — PacWest Bancorp and Western Alliance Bancorp — plunged. For the week, the S&P 500 fell 0.79%, the Dow tanked 1.24%, and the Nasdaq lost 0.07%.
The US central bank hiked interest rates by 25 basis points to 5.15%, effective from 4 May 2023, to curb inflation. Now, the federal funds rate range is 5%-5.25%, the highest since August 2007. The Federal Open Market Committee cited moderate economic activity, low unemployment, and elevated inflation as reasons for the hike. However, Federal Reserve Chair Jerome Powell announced a “significant change” in policy, stating that the US Fed is no longer expecting additional interest rate increases, but decisions will be based on incoming data in the future.
On the economic front, the US Department of Labor showed that the number of job openings shrank for a third consecutive month in March, declining to 9.59 million from 9.97 million. In other news, non-farm payrolls report showed the economy added 253,000 new jobs in April compared to 165,000 jobs in March. Average hourly earnings increased 0.5% month-over-month, compared with 0.3% MoM in March.
Japan’s stock markets rose during the truncated week due to the Golden Week national holidays. The Nikkei 225 index advanced 1%, and the broader Topix index gained 0.9%. Japan’s central bank decided to maintain its ultra-easy monetary policy stance for the time being. The yen strengthened over the full week to around JPY 134.1 against the US dollar, from JPY 136.3 as the Japanese currency was supported by safe-haven demand amid recession fears in the US.
Chinese markets ended mixed after a holiday-shortened week as weak manufacturing data dampened sentiment. The Shanghai Stock Exchange index gained 0.34%, the CSI 300 fell 0.3% and the Hang Seng rose 0.78%.
China’s official manufacturing purchasing managers’ index (PMI) fell to 49.2 in April from 51.9 in March, marking a return to contraction for the first time since December after Beijing abandoned its zero-COVID policy. The non-manufacturing PMI also softened in April but remained above 50, indicating expansion of the sector.