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Dalal Street closed lower during the week as investors’ optimism was dented due to a slew of negative global cues such as higher interest rate, elevated inflation, rising Treasury yields, and mounting tensions in the Middle East due to Israel-Hamas conflict. The Sensex plummeted 2.47% to 63,782.80 and the Nifty 50 index plunged 2.53% to end at 19,047.25.
In broader markets, the BSE Midcap index fell 2.41% to 31,112.51 and the BSE Smallcap index tumbled 3.43% to end at 36,888.03.
Top losers among Nifty sectoral indices were Media [-5.34%], Metal [-3.85%], Realty [-2.92%], IT [-2.76%], and Pharma [-2.19%]. All Nifty sectoral indices closed in the red.
For the week, FIIs were net sellers for Rs 13,187 crore and DIIs were net buyers for Rs 11,553.30 crore in the cash segment.
The Indian rupee closed at 83.24 against the US dollar on Friday. Meanwhile, WTI Crude price was at $85.54 per barrel, while Brent Crude stood at $90.48 per barrel.
Company News
Maruti Suzuki India (MSI): The company’s standalone net profit surged 80.28% to Rs 3,716.5 crore in Q2FY24 from Rs 2,061.5 crore recorded in Q2FY23. The rise in the net profit was attributed to softening of commodity prices, cost reduction efforts and higher non-operating income. Net sales grew by 24.49% YoY to Rs 35,535.1 crore during the quarter under review. The company sold a total of 552,055 units in Q2FY24, up 6.7% from 517,395 vehicles sold in the same period a year ago. The auto major’s sales in the domestic market stood at 482,731 units (up 6.28% YoY) and export market was at Rs 69,324 units (up 9.7% YoY) during the period under review.
Reliance Industries Limited (RIL): The company’s telecom arm, Reliance Jio Infocomm, announced the rollout of its JioSpaceFiber satellite broadband service during the India Mobile Congress event. The satellite broadband aims to extend high-speed internet access to previously untapped regions in India. Jio will collaborate with Luxembourg-based satellite communications company SES to tap into the latest medium earth orbit (MEO) satellite technology.
Reliance Industries is nearing a cash-and-stock deal to buy Walt Disney Co’s India operations, Bloomberg reported citing people familiar with the matter. Disney may sell a controlling stake in its Disney Star business valued at around $10 billion. Reliance views the assets at between $7 billion and $8 billion. The said acquisition is likely to be announced as early as next month.
ICICI Bank: The private sector lender has recorded a 35.8% YoY growth in standalone profit at Rs 10,261 crore for the quarter ended September FY24. Net interest income for the quarter under review was at Rs 18,308 crore, up 23.8% YoY. Net interest margin rose 22 bps YoY to 4.53%. Total income for the quarter increased 31% on year to Rs 40,697 crore. Net NPA ratio was 0.43%, lower than 0.61% a year ago.
Asian Paints: The company reported a 53.3% YoY rise in consolidated net profit for the quarter ended September 2023 to Rs 1,232.4 crore from Rs 803.8 crore in the year-ago period. Consolidated revenue from operations remained nearly flat as it rose 0.2% to Rs 8,478.6 crore in Q2FY24. EBDIT increased by 39.8% YoY to Rs 1,716.2 crore in Q2FY24 from Rs 1,227.7 crore in Q2FY23. The board has recommended an interim dividend of Rs 5.15 per share and the record date has been fixed as November 3. The dividend will be paid to eligible shareholders on or after November 13, 2023.
Kotak Mahindra Bank: The private sector lender has recorded a 24% YoY growth in standalone profit at Rs 3,191 crore for the quarter ended September FY24. Net interest income grew 23.5% YoY to Rs 6,297 crore, while Net interest margin (NIM) was 5.22% in the September quarter. Operating profit grew 29% YoY to Rs 4,610 crore in Q2FY24. Net non-performing assets ratio as of September end was 0.37% in Q2FY24, compared to 0.55% in Q2FY23. The current account savings account (CASA) ratio as of September end stood at 48.3%.
Axis Bank: The private sector lender reported a net profit of Rs 5,863 crore in Q2FY24, up 10% from Rs 5,329.8 crore in the corresponding quarter of last year. Net interest income (NII) in Q2FY24 rose 18.9% to Rs 12,314.56 crore from Rs 10,360.26 crore, in the year-ago period. Net interest margin (NIM) during the reported quarter stood at 4.11%, up 15 basis points YoY. Gross NPA ratio was at 1.73%, down by 23 basis points from 1.96% in Q1FY24. Net NPA was at 0.36%, down by 5 basis points QoQ.
Dr Reddy’s Laboratories: The company’s consolidated net profit rose 33% YoY to Rs 1,480 crore in the July-September period. Revenue from operations in the second quarter of current fiscal increased 9% YoY to Rs 6,880 crore. Its Ebitda stood at Rs 2,181 crore in the September quarter, up 13% YoY. Ebitda margins in the reported quarter stood at 31.7%. Segment-wise, revenue from the global generics business jumped 9% year-on-year to Rs 6,110 crore, primarily driven by North America and Europe. The US sales were at Rs 3,170 crore, up 13% YoY. India sales stood at Rs 1,190 crore, up 3% YoY due to pricing and new launches.
Bajaj Finserv: The company’s consolidated net profit surged 23.89% YoY to Rs 1,928.96 crore in Q2FY24 and 25.09% YoY increase in total income to Rs 26,022.66 crore. Gross NPA stood at 0.91% in Q2FY24 as against 1.17% in the year-ago period. Net NPA was at 0.31% in Q2FY24 as against 0.44% in the year-ago period. Assets under management (AUM) in Q2FY24 was at Rs 290,264 crore compared with Rs 218,366 crore in the year-ago period.
ACC: The cement manufacturer said that its consolidated revenue was up 11% at Rs 4,434.7 crore in Q2FY24. Its Ebitda rose 33.53 times year-on-year to Rs 549.3 crore in Q2FY23. Ebitda margin stood at 12.39% in Q2FY24 as against 0.41% in Q2FY23. Consolidated net profit was Rs 387.9 crore in Q2FY24 as against a net loss of Rs 87.3 crore in Q2FY23. Power and fuel costs declined 33% YoY to Rs 886.6 crore.
Tech Mahindra: The IT services company registered a consolidated profit of Rs 494 crore for the quarter ended September 2023, down by nearly 29% QoQ. Consolidated revenue for the quarter stood at Rs 12,864 crore, down fell by 2.2% compared to the previous quarter of the current financial year. Further, the board has approved the merger of three of the company’s wholly owned subsidiaries with itself. Perigord Premedia India, Perigord Data Solutions India, and Tech Mahindra Cerium will be incorporated under the rearrangement scheme.
SBI Life Insurance: The company’s net profit rose marginally to Rs 380 crore in the quarter ended September 2023, compared with Rs 377 crore in the year-ago period. Net premium income during the second quarter increased 22% year-on-year (YoY) to Rs 20,050 crore as against Rs 16,477 crore in the corresponding quarter of previous year. Gross Written Premium (GWP) rose 21% to Rs 33,730 crore, mainly due to 28% growth in single premium and 17% growth in renewal premium. Value of New Business (VoNB) stood at Rs 2,360 crore in the first half with 12% growth.
Indus Towers: The company posted a net profit of Rs 1,295 crore in Q2FY24, 49% rise from Rs 872 crore reported in the year-ago period. The company’s revenue in Q2FY24 dropped 10% YoY to Rs 7,133 crore from Rs 7,967 crore in Q2FY23. The consolidated EBIDTA stood at Rs 3,456 crore in the quarter under review, up 23% from Rs 2,812 crore in the corresponding period of the previous fiscal. As of September 30, 2023, the company operated a total of 2.04 lakh towers, an increase of 16,000 towers compared to 1.88 lakh towers operated in the year-ago period.
Jubilant Foodworks: The food services company has reported a 39.5% YoY decline in standalone net profit at Rs 72.1 crore for the quarter ended September FY24 from Rs 119.2 crore in the year-ago period. Its standalone revenue from operations grew by 4.5% to Rs 1,344.8 crore in Q2FY24 from Rs 1286.8 crore in the corresponding period last fiscal. EBITDA stood at Rs 280.7 crore in the quarter under review as against Rs 312.5 crore in the year-ago period. It opened 60 new stores in India, taking the total store count to 1,949 across all brands.
One 97 Communications (Paytm): The fintech major has narrowed its losses to Rs 290 crore in Q2FY24, compared with Rs 571 crore in the year-ago period. Revenue from operations during the quarter under review jumped 32% YoY to Rs 2,518.6 crore as against Rs 1,914 crore in the year-ago period. The gross merchandise value (GMV) from the payments segment surged 41% YoY to Rs 4.5 lakh crore. The merchant paying subscriptions for devices reached 92 lakh at the end of the September quarter. In the loan distribution business, revenue from financial services and others increased 64% YoY to Rs 571 crore.
Vodafone Idea: The telecom company said that its consolidated net loss widened to Rs 8,738 crore in Q2FY24 as against a loss of Rs 7,595 crore in Q2FY23. Revenue from operations inched up by 0.9% to Rs 10,716 crore in Q2FY24, compared with Rs 10,615 crore in the same quarter of last year. ARPU (average revenue per user) for the quarter under review was at Rs 142, compared with Rs 139 in the previous quarter. Its Ebitda for the quarter grew by 3% quarter-on-quarter (QoQ) to Rs 4,280 crore from Rs 4,160 crore in Q1FY24. As of September 30, 2023, the company’s total gross debt which includes interest accrued but not due stood at Rs 2.12 lakh crore.
Global Markets
Major stock indices in the US closed lower as investors were worried over higher interest rate and rising US Treasury yields amid mixed corporate earnings. For the week, the Dow Jones Industrial Average fell 2.1%, the S&P 500 tumbled 2.5%, and the Nasdaq lost 2.6%.
On the economic front, the US gross domestic product expanded at an annualized pace of 4.9% in the third quarter, helped by strong consumer spending. The GDP growth in the second quarter was 2.1%. The core personal consumption expenditures (PCE) price index, the Federal Reserve’s key metric for inflation, increased 0.3% month-on-month in September as against 0.1% in August. The core PCE slipped to 3.7% year-n-year in September from 3.8% in August.
Meanwhile, the yield on 10-year US Treasury note crossed the 5% threshold on Monday, but eased and traded around 4.8% at the end of the week.
Japan’s stock markets fell during the week, with the Nikkei 225 index falling 0.86% and the broader Topix index slipping 0.04%. The yield of the 10-year Japanese government bond increased to 0.87%, nearing the central bank’s upper threshold of 1%. The Japanese Yen depreciated past the 150 level to the US dollar during the week, but recouped some losses to close at 149.595 against the US dollar.
On the economic front, Tokyo’s core inflation rate, an important indicator of nationwide price trends, accelerated to 2.7% in October. Japan’s consumer price index rose to 3.3% in October from 2.8% in September. Separately, the au Jibun Bank of Japan Composite PMI fell to 49.9 in October from 52.1 in September due to subdued activity in the manufacturing sector.
Benchmark indices in the Chinese markets ended higher after data showed industrial profits expanded and stimulus measures from the Chinese government boosted investors’ sentiments. The Shanghai Composite index gained 1.16%, the CSI 300 rose and the Hang Seng index jumped 1.32%.
Profits at industrial firms in China increased by 11.9% in September from the year-ago period, but fell from 17.2% rise in August. China’s government approved the issuance of RMB 1 trillion in sovereign debt and its also approved a plan to raise the fiscal deficit ratio for 2023 to about 3.8% of the country’s GDP, up from the 3% limit set in March.