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Benchmark indices ended higher for the fourth straight week on sustained buying by institutional investors, but gains were capped due to selling pressure across sectors on Friday. For the week, the BSE Sensex advanced 0.94% to 66,684.26 and the Nifty 50 index gained 0.92% to 19,745.
In broader markets, the BSE Midcap index gained 0.52% to 29,547.28. The BSE Smallcap index added 1.32% to close at 34,146.66.
Top gainers among Nifty sectoral indices on a weekly basis were PSU Bank [3.96%], Media [2.94%], Private Bank [2.75%], Pharma [2.35%], Energy [2.02%]. Top losers were IT [-3.47%], Realty [-0.69%], Metal [-0.42%], and Consumer Durables [-0.36%].
During the week, FIIs were net buyers for Rs 4726.4 crore and DIIs were net sellers for Rs 2290.1 crore in the cash segment.
Indian rupee gained 4 paise to 81.95 against the US dollar on Friday.
Company News
Reliance Industries (RIL): The conglomerate reported a drop of 11% YoY in its consolidated net profit for the quarter ended June 2023 to Rs 16,011 crore. The consolidated revenue declined 5.3% YoY to Rs 2.11 lakh crore. The board has recommended dividend payout of Rs 9 a share, subject to approval of the shareholders.
The drop in revenue was primarily due to weak performance of the oil-to-chemicals (O2C) business. Revenue from this segment, which constituted 63% of RIL’s topline in the reporting quarter, plunged nearly 18% YoY to Rs 1.33 lakh crore. The consolidated revenue of the retail business increased about 20% YoY to Rs 69,962 crore, and the digital services revenue grew nearly 13% YoY to Rs 32,077 crore.
In other news, Reliance Industries’ shares settled at Rs 2,580 per share in the pre-open session on Thursday, and listed at Rs 2,617 per share after the special pre-open session. During a pre-open call auction session, the market price of Jio Financial Services (JFSL) shares was determined to be Rs 261.85 per share on the National Stock Exchange (NSE). This was a result of the demerger of Reliance Industries and Jio Financial Services.
HDFC Bank: The private lender’s net profit rose 29.97% to Rs 11,951.77 crore on 39.12% jump in total income to Rs 57,816.67 crore in Q1FY24 over Q1FY23. The ratio of net NPAs to net advances stood at 0.30% as on 30 June 2023 as against 0.35% as on 30 June 2022. Net interest income for the quarter ended June 2023 grew by 21.1% to 23,599 crore from 19,481 crore for the quarter ended June 2022. Total advances as of 30 June 2023 were 16,15,672 crore, an increase of 15.8% over 30 June 2022. Total deposits showed a healthy growth and were at 19,13,096 crore as of 30 June 2023, an increase of 19.2% over 30 June 2022. The bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.9% as on 30 June 2023 as against 18.1% as on 30 June 2022.
Infosys: The IT major said its net profit (after minority interest) grew 10.9% YoY to Rs 5,945 crore for the June quarter compared with Rs 5,360 crore in the same quarter last year. Net sales rose 10% YoY to Rs 37,933 crore from Rs 34,470 crore in the corresponding quarter last year. Revenue came in at $4,617 million in dollar terms, with the IT firm clocking 1% sequential (up 4.2% YoY) sales growth in constant current (CC) terms. Large deal wins came in at $2.3 billion. The IT firm has revised downward its FY24 CC revenue guidance to 1-3.5% compared with 4-7% suggested earlier. It has maintained its Ebit margin guidance at 20-22%.
Tata Motors: Shares of the company rose 1.4% on Wednesday after Tata Sons said that it will build a 40GW battery cell gigafactory in the United Kingdom. The investment of over £4 billion (Rs 42,480.9 crore) will be utilised to deliver electric mobility and renewable energy storage solutions for customers in the UK and Europe. JLR and Tata Motors will be the primary customers, with supplies commencing from 2026, as per the company’s press release.
Hindustan Unilever (HUL): The FMCG major registered a 6.1% year-on-year growth in revenue at Rs 15,148 crore and 8% YoY growth in profit at Rs 2,472 crore for quarter ended June FY24 over the year-ago period, as the company registered growth in all its key segments. EBITDA grew by 8.4% to Rs 3,521 crore with margin expansion of 50 bps at 23.2% compared to year-ago period. The underlying volume growth stood at 3% for the quarter.
UltraTech Cement: The cement major’s consolidated net profit increased 6.59% to Rs 1,688.45 crore on 16.97% jump in revenue from operations to Rs 17,737.10 crore in Q1 FY24 over Q1 FY23. Profit before interest, depreciation and tax (PBIDT) rose marginally to Rs 3,223 crore in Q1 FY24 as against Rs 3,204 crore in Q1 FY23. The company achieved capacity utilisation of 89% in the reported quarter as against 83% during Q1 FY23. The total consolidated sales volume for Q1 FY23 stood at 29.96 million tons, recording a growth of 20% YoY. The company has commissioned cement capacity of 4.3 MTPA in Q1 FY24, taking total grey cement capacity of the firm to 131.25 MTPA in India.
Larsen & Toubro (L&T): The company announced that L&T Construction has secured a ‘mega’ order for its Heavy Civil Infrastructure Business. The conglomerate said that the National High-Speed Rail Corporation (NHSRCL) has formally awarded the mandate to construct the 135.45 km stretch MAHSR – C3 package which is part of the prestigious Mumbai Ahmedabad High-Speed Rail Project to L&T’s Heavy Civil Infrastructure business. Upon completion, the high-speed rail will operate at a speed of 320 Kmph, covering the entire distance in approximately 2 hours with limited stops and in 3 hours with all stops.
HDFC Life Insurance Co.: The company reported a 15.4% year-on-year (YoY) rise in net profit for the quarter ended June at Rs 415 crore. Revenue up 250% at Rs 23,243 crore in Q1FY24 from Rs 6,637 crore in the year-ago period. Net premium income for the quarter increased 16.6% YoY to Rs 11479 crore. The value of new business (VNB) was up 18% YoY at Rs 610 crore in the reported quarter as against Rs 518 crore in the year-ago period. The market share of the life insurer was 16.4%, compared to 15.8% last year. The assets under management (AUM) crossed the Rs 2.5 lakh crore mark as of June 30.
JSW Steel: The company reported a 179% year-on-year (YoY) rise in consolidated net profit at Rs 2,338 crore in Q1 FY24 on the back of higher sales and lower raw material cost. Net profit was Rs 838 crore in the year-ago period. Consolidated revenue from operations was at Rs 42,213 crore, higher by 10.83% as sales increased. Steel sales in Q1 FY24 stood at 5.71 million tonnes (mt), higher by 27 per cent YoY. JSW Steel’s capacity utilisation at Indian operations was at 92 per cent compared to 96 per cent in Q4 FY23 due to maintenance shutdowns.
Ashok Leyland: The company reported a net profit of Rs 576 crore in Q1 FY24, up by more than eight times as compared with a PAT of Rs 68 crore in the same period last year. Revenue for the quarter stood at Rs 8,189 crore as against Rs 7,223 crore in Q1 FY23, up 13.4% YoY. Ebitda increased by 157% to Rs 821 crore in Q1 FY24 from Rs 320 crore in Q1 FY23. Ashok Leyland said that it continued to witness strong demand for the modular AVTR range of trucks.
IndusInd Bank: The private sector lender has registered a 32.5% year-on-year rise in standalone profit at Rs 2,123.6 crore for the quarter ended June FY24 as provisions and contingencies dropped 20.7% YoY to Rs 991.6 crore. Net interest income grew by 18% YoY to Rs 4,867.1 crore for the quarter, with net interest margin expanding to 4.29% from 4.21% in the same period. Its net NPA stood at 0.58% in the reported quarter as against 0.59% in the preceding quarter.
ICICI Prudential Life Insurance: The company has reported a 33% year-on-year rise in its standalone net profit at Rs 207 crore in Q1FY24 as against a profit of Rs 156 crore in the year-ago period. Its net premium income increased marginally year over year (YoY) by 2% to Rs 7,020 crore in the reported quarter from Rs 6,884 crore. In an exchange filing, the company stated that the Value of New Business (VNB), which represents the current value of future profits, was Rs 438 crore for Q1-FY2024 with a VNB margin of 30.0%.
ICICI Securities: The stock broking firm’s consolidated net profit declined 1.01% to Rs 270.84 crore in Q1 FY24 as against Rs 273.59 crore in Q1 FY23. Total revenue from operations jumped 17.7% to Rs 934.31 crore in Q1 FY24 from Rs 793.55 crore posted in the same quarter last year. Brokerage income increased from Rs 342.89 crore in Q1 FY24 to Rs 303.38 crore in Q1 FY23, an increase of 13.0%. This was primarily due to increase in retail equity & derivative volumes. Total clients stood at about 84,000 and the brokerage firm added approximately 6,000 clients during the quarter.
Hindustan Zinc: The company’s consolidated net profit tumbled 36.48% to Rs 1,964 crore in Q1 FY24 from Rs 3,092 crore recorded in Q1 FY23. Revenue from operations during the quarter was Rs 7,282 crore, down 22.4% YoY on account of lower zinc & lead LME and lower lead volumes. Ebitda for the quarter was at Rs 3,359 crore, registering a decline of 36.4% YoY. The company’s first quarter mined metal production stood at 257 kt, an increase of 2.1% YoY on account of higher ore production largely at Rampura Agucha & Kayad mines supported by improved mined metal grades and better mill recovery.
Global Markets
Most benchmark equity indices in the US markets closed higher for the week as sentiments improved over softening inflation and upbeat earnings from banks. For the week, the S&P 500 index gained 0.69%, the Dow Jones Industrial Average jumped 2.08%, and the Nasdaq fell 0.57%.
US retail sales rose less than expected in June. Retail sales increased 0.2% in June, and May’s retail sales was revised higher to 0.5% from 0.3% as previously reported, according to data released by the Commerce Department.
Meanwhile, US Treasury Secretary, Janet Yellen, told Bloomberg TV that she does not expect a recession in the US due to labor market’s resilience and slowing inflation.
Japan’s stock markets registered mixed performance for the week, ahead of the Bank of Japan’s monetary policy meeting next week. The Nikkei 225 index fell 0.3% and the Topix index gained 1%.
Japan’s core consumer price index rose 3.3% year-on-year, which was in line with expectations and a slight uptick from the prior month’s 3.2% increase. However, the latest inflation reading remained well above the BoJ’s 2% target. Further, Japan recorded a trade surplus of 43.05 billion yen ($308.5 million) in June 2023. This was a sharp reversal from the 1.38 trillion yen deficit recorded in May, and the 1.37 trillion yen registered in June 2022.
Meanwhile, the yield on the 10-year Japanese government bond rose slightly to 0.48% from 0.47% at the end of the preceding week. The Japanese yen weakened to around JPY 141.82 against the US dollar, from about JPY 138.76, the prior week.
Chinese markets declined during the week after investors’ optimism was dented due to lower-than-expected economic growth. The Shanghai Stock Exchange Composite index tumbled 2.16%, the CSI 300 tanked 1.98%, and the Hang Seng index fell 1.74%.
On the economic front, the latest economic data pointed out that the country’s gross domestic product, on a yearly basis, expanded 6.3% in the second quarter, which was below expectations. The GDP recorded in the first quarter was 4.5% YoY. On a quarterly basis, the economy grew 0.8%, down from the first quarter’s 2.2% expansion. Unemployment remained steady at 5.2% in June, but youth unemployment jumped to a record 21.3%. Further, unemployment remained steady at 5.2% in June, but youth unemployment jumped to a record 21.3%.