Weekly Market Report: Dalal street ends higher on strong FII inflows; Adani Group, Hero MotoCorp and Airtel in news

Major Indian stock indices closed higher during the week aided by positive global cues and strong buying by foreign institutional investors. The Sensex advanced 1.65% to 60,950.36 and the Nifty 50 index gained 1.86% to 18,117.15. The BSE Midcap index rose 2.39% to 25,647.07, while the BSE Smallcap index rose 1.46% to 29,107.24.

During the week, FIIs were net buyers for Rs 10,338.60 crore in the cash segment, while DIIs were net sellers for Rs 4,496 crore.

Top gainers among Nifty sectoral indices were Metal [7.49%], Pharma [2.87%], PSU Bank [2.72%], Media [2.2%], Realty [1.58%]. All sectoral indices on the NSE as well as BSE closed in the green.

Indian rupee strengthened by 44 paise on Friday and ended the week at 82.43 against the US dollar.

Company News

Adani Group

Adani Enterprises: The company recorded a 122% YoY growth in consolidated net profit at Rs 432.3 crore for the quarter ended September FY23, aided by strong operating performance. Revenue for the quarter increased by 189% YoY to Rs 38,175 crore and EBIDTA rose by 69% to Rs 2,136 crore on account of strong performance by its airport business.

Adani Ports and Special Economic Zone: The company’s consolidated profit jumped by 65.5% YoY to Rs 1,738 crore for the quarter ended September FY23, supported by top line, operating income and lower tax cost. Revenue surged 33% YoY to Rs 5,211 crore for the quarter. Cargo for the quarter stood at 86.6 MMT, a 15% YoY growth. The company’s quarterly cargo volume rose 15% on year to 86.6 million tonnes.

Adani Transmission: The company said that its net profit was down 24.36% YoY to Rs 206.17 crore in Q2FY23 as against Rs 272.57 crore in the year-ago period. Revenue soared 32.6% to Rs 3,251.48 crore in Q2FY23 as against Rs 2,451.44 crore in the year-ago period. EBITDA increased 34.7% YoY to Rs 1,163.8 crore. The company’s board has granted in-principle approval for issuance of non-convertible debentures worth up to Rs 1,500 crore.

Adani Total Gas: The company said its consolidated revenue from operations was up 7% at Rs 1,190.3 crore in Q2FY23 as against Rs 1,110.2 crore in Q1FY23. Ebitda was up 3.5% QoQ at Rs 226.21 crore in Q2FY23. Consolidated net profit rose 15.64% QoQ to Rs 160 crore in the quarter under review.

Adani Wilmar: The company said its consolidated net profit fell to Rs 48.7 crore in Q2FY23 from Rs 182 crore in the year-ago period. Revenue from operations was up 4% YoY to Rs 14,150 crore as against Rs 13,558 crore. Total expenses rose to Rs 14,149.6 as compared to Rs 13,354 crore in the corresponding quarter of the previous fiscal. Adani Wilmar said it recorded 9% volume growth driven by robust growth in Food and FMCG.

Other Companies

Hero MotoCorp: The two-wheeler company recorded a standalone net profit of Rs 716 crore for the quarter ended September FY23, down 10% YoY. Revenue stood at Rs 9,075 crore for the quarter, an increase of 7.35% compared to year-ago period. The company sold 14.28 lakh units for the quarter, compared to 14.38 lakh units sold in corresponding period last fiscal.

Bharti Airtel: The telecom operator posted a 89% year-on-year rise in consolidated net profit for second quarter ended September 2022 to Rs 2,145 crore, amid improved average realisation per subscriber. The total revenue rose 22% YoY to Rs 34,527 crore during the reported quarter, according to a statement. Average Revenue Per User (ARPU) for the quarter stood at Rs 190 compared with Rs 153 in Q2FY22 on the back of the continued focus on quality customers, feature phone to smartphone upgradation and data monetisation, Airtel said in a statement.

Vodafone Idea: The telecom operator posted a loss of Rs 7,595.5 crore for the quarter ended September FY23, compared to a loss of Rs 7,296.7 crore in previous quarter. Operating loss rose to 1,558.2 crore in the reported quarter from Rs 1,475.9 crore. Gross revenue for the quarter was at Rs 10,614.6 crore, an increase of 2% QoQ. Average revenue per user (ARPU) improved to Rs 131, up 2.3 per cent quarter-on-quarter from Rs 128 in Q1 of FY23.

HDFC: The mortgage lender said its consolidated net profit increased by 24% to Rs 7,043 crore in the September 2022 quarter. It had reported a Rs 5,670 crore net profit in the year-ago period, according to its regulatory filing. Its total income on a consolidated basis rose to Rs 43,927 crore in the reoorted quarter from Rs 38,603 crore a year ago. The net interest income (NII) stood at Rs 4,639 crore in the second quarter compared to Rs 4,110 crore in the sam period last fiscal. Net interest margin stood at 3.4% at the end of the September quarter. The Gross NPA was at 1.59% at the end of second quarter compared to 1.785 in the preceding quarter.

Reliance Retail: The company is in talks to buy a 49% stake in Naturals Salon & Spa, according to a report by The Economic Times. With this probable acquisition, the company will directly compete with Hindustan Unilever’s Lakme and other brands like Geetanjali. Naturals Salon has about 700 outlets in India.

Larsen & Toubro (L&T): The company reported a 26% rise in consolidated net Profit After Tax (PAT) at Rs 2,819.20 crore for the quarter ended September aided by higher revenue from operations. The company had posted a consolidated net PAT of Rs 2,231.33 crore in the year-ago period, L&T said in a regulatory filing. The consolidated revenue from operations increased by 22.9% to Rs 42,762.61 crore from Rs 34,772.90 crore in the July-September quarter a year ago. The company recorded orders worth Rs 51,914 crore at the group level during the July-September period, a growth of 23% YoY. The consolidated order book of the group was at Rs 372,381 crore as of September-end.

Aditya Birla Fashion: The clothing retailer said its consolidated revenue jumped 50% to Rs 3,074.61 crore in Q2FY23 as against Rs 2,054.34 crore in Q2FY22. The consolidated net profit surged more than five-fold to Rs 29.42 crore in Q2FY23 from Rs 5.09 crore in Q2FY22. Ebitda rose 27% YoY to Rs 396.71 crore from Rs 315.53 crore in the year-ago period.

GAIL India: The state-owned company said its consolidated revenue from operations rose 78% YoY to Rs 38,728.86 crore in Q2FY23 from Rs 21,781.87 crore in the year-ago period. Its net profit fell about 55% to Rs 1,304.61 in Q2FY23 from Rs 2,872.62 in Q2FY22. Ebitda stood at Rs 1,903.79 crore in the quarter under review as against Rs 3,621.62 crore in the year-ago period.

Tech Mahindra: The IT services company reported a 4% decline in consolidated profit after tax at Rs 1,285 crore in the September quarter. The company had reported a net profit of Rs 1,339 crore in the year-ago period. The company’s overall revenue rose 20.7% to Rs 13,129 crore in the second quarter of the current fiscal. In the same period a year ago, it stood at Rs 10,881 crore. It won new contracts worth $716 million for the September quarter as against $750 million in the year-ago period. The company has declared a special dividend of Rs 18 per share.

Sun Pharmaceuticals: The drugmaker said its consolidated revenue was up 14% at Rs 10,952 crore in Q2FY23 from Rs 9,626 crore in the year-ago period. Net profit rose 11% to Rs 2,262 crore in the reported quarter as against Rs 2,047 crore in the year-ago period. EBITDA rose 18% to Rs 3,198 crore in Q2FY23 from Rs 2,706 crore in the same period last year. EBITDA margin stood at 29.2% as against 28.1% in the year-ago period.

Cipla: The pharma company said its consolidated revenue rose 6% to Rs 5,829 crore in Q2FY23 from Rs 5,520 crore in the same quarter last fiscal. Its consolidated net profit was up 11% YoY to Rs 789 crore in Q2FY23 from Rs 711 crore in Q2FY22. EBITDA increased 6% to Rs 1,302 crore in Q2FY23 from Rs 1,226 crore in Q2FY22.

Hindustan Petroleum Corp (HPCL): The oil refiner posted a consolidated net loss of at Rs 2,475.7 crore in Q2FY23 compared to Rs 8,557.12 crore in Q1FY23. Revenue fell 6% to Rs 1.13 lakh crore in Q2FY23 from Rs 1.21 lakh crore in the preceding quarter.

Tata Steel: The company reported an 87% YoY decline in consolidated PAT at Rs 1,514 crore and revenue remained almost flat at Rs 59,878 crore. T V Narendran, chief executive officer and managing director, Tata Steel, said, concerns about slowdown in key economies, persisting geopolitical issues, coupled with seasonal factors, led to a volatile operating environment. Sequentially, revenues were down 5.6 per cent and net profit by 80.49 per cent. Gross debt in the September quarter stood at Rs 87,516 crore compared with Rs 82,597 crore in the June quarter.

Punjab National Bank (PNB): The state-owned lender reported a 62.8% drop in standalone net profit to Rs 411.3 crore for the quarter ended September 2022. It had posted a net profit of Rs 1,105.2 crore in the year-ago period. The bank’s net interest income (NII) grew by 30.2% to Rs 8,271 crore in the quarter under review from Rs 6,352.8 crore in the same period a year ago. Its total income increased to Rs 23,001.26 crore in the reported quarter as against Rs 21,262.32 in the period a year ago. The lender’s interest income also rose to Rs 20,154 crore from Rs 17,980 crore in the same quarter a year ago. Its net NPA declined to 3.80% in the quarter ended September 2022 as against 5.49% a year ago.

LIC Housing Finance: The housing finance company clocked a 23% YoY growth in standalone profit at Rs 305 crore for the quarter ended September FY23. Revenue from operations for the quarter grew by 8% to Rs 5,085 crore compared to the year-ago period. Net interest income (NII) declined by 0.8% to Rs 1,163 crore in the reporting quarter from Rs 1,173 crore a year ago. Its net interest margin also moderated to 1.8% in Q2FY23 from 2% a year ago.

Economy News

In economic news, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) stood at 55.3 in October, up from 55.1 in September. India Services PMI rose from September’s six-month low of 54.3 to 55.1 in October. Meanwhile, the S&P Global India Composite PMI Output Index rose to 55.5 in October from 55.1 in September as activity in both manufacturing and services remained strong.

India’s gross GST revenue collected in the month of October 2022 was Rs 1,51,718. The revenue in October 2022 is the second highest monthly collection since April 2022 and it is the second time the gross GST collection has crossed Rs. 1.5 lakh crore mark.

Global Markets

The US markets declined during the week as the Fed’s FOMC increased interest rates by another 75 basis points to tame higher inflation as well as due to disappointing results from technology companies such as Meta Platforms, Amazon and Microsoft. For the week, the Dow fell 1.39%, the S&P 500 slumped 3.34% and the Nasdaq plummeted 5.65%.

Federal Reserve Chairman Jerome Powell said that the ultimate level of interest rates will be higher than previously expected. Meanwhile, the US central bank and the Bank of England in separate statements said that it was premature to think about pausing as part of the fight against inflation. Separately, the Labor Department report showed that 261,000 jobs were added to nonfarm payrolls, above consensus estimates. Besides, the unemployment rate rose to 3.7% from 3.5% in September.

Japanese stock market ended positive for the week, with the Nikkei 225 index gaining 0.35% and the broader Topix index rising 0.86% on positive sentiments as Japan’s services sector expanded in October. The final au Jibun Bank Japan Services purchasing managers’ index (PMI) rose to a seasonally adjusted 53.2 in October from the prior month’s 52.2. The Japanese yen weakened to about JPY 148.0 against the US dollar, from about 147.5 the previous week.

China’s stock markets ended higher at the end of the week after reports surfaced that the country is likely to relax its zero-tolerance approach to the coronavirus. The Shanghai Composite index surged 5.3%, the CSI 300 index soared 6.4% and the Hang Seng jumped 8.73%.

The official manufacturing Purchasing Managers’ Index reading stood at 49.2 in October 2022, compared with 50.1 in September 2022. China’s official non-manufacturing PMI came in at 48.7 in October, compared with a reading of 50.6 in September.