Weekly Market Report: Major equity indices rise as bank and IT stocks gain; Tata Motors, Hindalco Industries, Ashok Leyland and M&M in news

Major stock indices ended higher during the week on positive global stocks, strong buying by foreign institutional investors (FIIs) and strengthening rupee. The Sensex and the Nifty 50 index hit 52-week highs on Friday. The Sensex advanced 1.39% to 61,795.04 and the Nifty 50 index jumped 1.28% to 18,349.70.

Broader markets underperformed benchmark indices. The BSE Midcap index fell 0.71% to settle 25,465.20. The BSE Smallcap index fell 0.42% to 28,985.06.

During the week, FIIs were net buyers for Rs 6,329.6 crore in the cash segment, while DIIs were net sellers for Rs 2,255.9 crore.

For the week, top gainers among Nifty sectoral indices were PSU Bank [6.46%], IT [3.13%], Financial Services [2.19%], Bank [2.13%] and Metal [1.95%]. Top losers were Pharma [-3.03%] and Auto [-1.74%].

Indian rupee appreciated by Rs 1.01 to 80.79 against the US dollar on Friday.

Company News

Tata Motors: The passenger and commercial vehicle maker has posted net loss of Rs 944.6 crore for the quarter ended September FY23, compared to a loss of Rs 4,441 crore in same period last year. Revenue from operations grew 30% YoY to Rs 79,611 crore during the quarter and EBITDA increased by 35.4% to Rs 5,572 crore compared to same period last year. Jaguar Land Rover’s revenue at 5.3 billion pound grew by 36% YoY for the quarter. Tata Motors to delist its American Depositary shares from The New York Stock Exchange.

Hindalco Industries: The company reported a 35.5% YoY fall in consolidated net profit for the September quarter to Rs 2,205 crore. Sequentially, the consolidated net profit declined 46% from Rs 4,119 crore. Consolidated revenue from operations rose nearly 18% YoY to Rs 56,176 crore. The higher revenue was on the back of higher volumes and better realisations. Sequentially, the revenue was marginally down 3 percent from Rs 58,018 crore. Novelis, the company’s subsidiary, delivered robust results driven by a recovery in automotive and aerospace segments and better pricing. The company had a consolidated debt of 42,063 crore in the reported quarter, down 14 percent from the debt it had of Rs 48,011 crore at the end of the September 2021 quarter.

Ashok Leyland: The company has reported a profit after tax of Rs 199 crore for the second quarter ended September 30, helped by strong sales. It had posted a net loss of Rs 83 crore in the September 2021 quarter. Revenues during the period under review stood at Rs 8,266 crore compared to Rs 4,458 crore a year ago. The company’s domestic MHCV (medium and heavy commercial vehicles) volume rose to 25,475 units in the second quarter against 11,988 units in the year-ago period, it said. Its light commercial vehicle (LCV) sales volume increased by 28% to 17,040 units against 13,328 units in the same period last fiscal. Export volumes of MHCV and LCV for the reported quarter surged 25% to 2,780 units as against 2,227 units a year earlier.

Mahindra & Mahindra (M&M): The automaker reported a 46% YoY jump in its standalone profit after tax (PAT) at Rs 2,090 crore in the September quarter of the current fiscal. The company’s quarterly revenue rose 57% YoY to Rs 20,839 crore. EBITDA recorded an increase of 50% YoY to Rs 2,496 crore in Q2FY23. The total number of vehicles sold during the quarter shot up by 75% on a YoY basis to 1,74,098. M&M’s operating margin declined from 12.47% in the year-ago period to 11.98% in Q2. The company said it recorded the highest-ever quarterly revenue in auto and farm segments.

Oil India: The state-owned company posted a net Profit of Rs 1896.2 crore in Q2FY23, down 32.4% from Rs 2,805.2 crore in the preceding quarter. Revenue fell 22.7% to Rs 8,258.7 crore in Q2FY23 from Rs 10,681.4 crore in Q1FY23. EBITDA plunged 44.7% to Rs 2,703.2 crore in Q2FY23 compared to Rs 4,890.2 crore in the first quarter of the current fiscal. EBITDA margin was down to 32.7% in the reported quarter from 45.8% in the preceding quarter.

Eicher Motors: The makers of Royal Enfield registered a 76% year-on-year growth in profit at Rs 657 crore for the quarter ended September FY23 backed by strong operating as well as top line performance. Revenue from operations at Rs 3,519 crore for the quarter grew by 56.4% and EBITDA increased by 75% to Rs 821.4 crore compared to year-ago period. Margin expanded to 23.3% from 20.9% in the same period. Royal Enfield sold 2.03 lakh motorcycles in September FY23 quarter, an increase of 64.7% YoY.

Apollo Hospitals Enterprises: The healthcare services provider reported a 20% year-on-year decline in profit at Rs 212.8 crore for the quarter ended September FY23 impacted by weak operating performance, and higher purchases of stock-in-trade. Revenue from operations grew by 14.4% to Rs 4,251 crore compared to year-ago period. EBITDA for the quarter at Rs 565.4 crore declined by 8% and margin fell by 330 bps YoY to 13.3% for the September FY23 quarter.

Adani Green Energy: The company recorded a 49% year-on-year increase in consolidated profit at Rs 149 crore for Q2FY23 led by lower cost of materials sold and finance cost. Revenue from operations increased by 19.5% to Rs 1,686 crore and EBITDA grew by 9% to Rs 966 crore compared to same period last year, but the EBITDA margin fell 550 bps YoY to 57.3% in Q2.

Adani Power: The company has entered into a Memorandum of Understanding to sell its 100% equity stake in subsidiary, Support Properties (SPPL) to AdaniConnex. The transaction value is Rs 1,556.5 crore. ACX is a 50:50 joint venture between promoter group company Adani Enterprises, and EdgeConneX.

Jindal Steel & Power: The company has posted a 92.3% year-on-year decline in consolidated profit at Rs 200 crore for the quarter ended September FY23, impacted by weak operating performance and a decline in top line. Revenue from operations fell 0.7% YoY to Rs 13,521.4 crore in Q2FY23. EBITDA tanked 58% to Rs 1,931.4 crore and margin contracted by 1,950 bps to 14.3% compared to year-ago period. JSPL has prepaid its entire overseas long term debt.

Axis Bank: The government-backed Specified Undertaking of the Unit Trust of India (SUUTI) plans to sell 4.65 crore shares representing 1.55% stake in Axis Bank, as per a regulatory filing. With the sale, the government would completely exit the private sector lender. The government, at the current market price, is expected to realise about Rs 4,000 crore from the share sale.

Adani Ports and Special Economic Zone Ltd (APSEZ): The company said that it has acquired 49.38% stake in Indian Oiltanking Ltd — developer and operator of liquid storage facilities — for Rs 1,050 crore. APSEZ will also acquire an additional 10% equity stake in IOT Utkal Energy Services Ltd, which is a 71.57% subsidiary of Indiain Oiltanking Ltd.

Coal India: The coal mining company posted a 106% year-on-year increase in consolidated profit at Rs 6,044 crore for the quarter ended September FY23, supported by healthy top line, higher other income, and strong operating performance. Revenue from operations jumped 28% YoY to Rs 29,838 crore for the quarter with raw coal production rising 10.6% YoY to 139.2 million tonnes, and raw coal off take increasing 4.8% to 154.53 million tonnes.

One 97 Communications (Paytm): The company reported a net loss of Rs 571.5 crore for the July-September 2022 period, widening from Rs 473.5 crore in the same period last year. Its revenue from operations jumped 76% in the September-quarter to Rs 1,914 crore, mainly on account of a surge in growth of loan disbursals. Revenue from the financial services business grew 293% year-on-year to Rs 349 crore. Loan disbursement surged to Rs 7313 crore in the reported quarter.

Bharat Petroleum Corp: The company reported a net loss of Rs 338.49 crore in the quarter ended September 2022. It had posted a net profit of Rs 3149.28 crore in the year-ago period. The second quarter net loss narrowed sharply from a loss of Rs 6,147.94 crore in the preceding quarter. Consolidated revenue from operations stood at Rs 1,28,355.72 crore in Q2FY23 up from Rs 1,01,938. 72 crore in the same quarter last year. The company’s average Gross Refining Margin (GRM) for H1FY23 stood at $22.30 per barrel compared to $ 5.23 per barrel in H1FY22.

Jubilant FoodWorks: The company reported 9.8% YoY jump in its consolidated Q2 profit at Rs 131.5 crore, while revenue from operations jumped 16.6% YoY to Rs 1,3014.8 crore. Its standalone EBITDA margin declined 170 bps YoY to 24.3% in Q2. Jubilant opened 76 new Domino’s stores taking the network strength for Domino’s in India to 1,701 stores. It entered 22 new cities during the quarter to expand its reach to 371 cities across India.

Global Markets

Wall Street ended higher as investors’ sentiments were boosted by the latest inflation data and fuelled hopes that the US central bank could slow down its aggressive pace of interest rate hikes. For the week, the Dow gained 4.15%, the S&P 500 surged 5.90% and the Nasdaq soared 8.10%.

The US CPI inflation rate eased to 7.7% in October, triggering a rally in global equity markets. Core inflation, which excludes food and energy price from the basket, fell to 6.3% from a 40-year high of 6.6% in September.

The Chinese markets rose modestly and trailed other global markets as market sentiments were dampened by worries over slower economic growth. The Shanghai Composite index rose 0.54%, CSI 300 index gained 0.565 and the Hang Seng zoomed 7.21% during the week.

China’s producer price index fell 1.3% in October on an annualized basis after rising 0.9% in September. China’s consumer price index rose 2.1% in October compared to a year ago, easing after climbing 2.8% in September. Exports fell 0.3% in October, while the country’s imports declined 0.7%.

Japanese equity markets rose over the week as the latest US inflation data triggered a rally across global equity markets. The Nikkei 225 index gained 3.9% and the broader Topix index rose 3.3%.