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Benchmark indices closed lower amid weak global cues, tepid quarterly earnings and the Fed raising interest rates by 25 bps. For the week, the Sensex slipped 0.79% to 66,160.20 and the the Nifty 50 index declined 0.5% to close at 19,646.05.
In contrast , the broader markets outperformed headline indices. The BSE Midcap index rallied 2.07% to 30,159.82 and the BSE Smallcap index added 1.18% to close at 34,548.46.
Top gainers among nifty sectoral indices were Realty [5.01%], Pharma [4.82%], Healthcare index [4.36%], Media [3.45%], Metal [3.08%]. Top losers were FMCG [-1.37%], IT [-1.27%], Private Bank [-1.02%], and Auto [-0.34%].
For the week, FIIs were net seller for Rs 3,074.7 crore, while DIIs were net buyers for Rs 5,233.9 crore in the cash segment.
Indian rupee fell by 3 paise to 82.25 against the US dollar on Friday.
Company News
Reliance Industries (RIL): The company’s financial arm, Jio Financial Services, and BlackRock have signed joint venture pacts to foray into the asset management sector. The 50:50 joint venture, Jio BlackRock, will deliver tech-enabled access to affordable investment solutions. Both parties will initially invest $150 million (Rs 1230.19 crore) each in the joint venture.
Bajaj Finance: The NBFC reported a 32.4% YoY rise in consolidated net profit for the quarter ended June to Rs 3,437 crore. Its total revenue from operations grew nearly 35% YoY to Rs 12,498 crore. Net interest income for the reported quarter increased by 26% YoY to Rs 8,398 crore. The number of new loans booked during the quarter grew sharply by 34% YoY to 99.4 lakhs. The assets under management (AUM) as of June 30, stood at Rs 2.70 lakh crore, up 32% from the year-ago period. Shares of Bajaj Finance dropped 2.28% on Wednesday.
Tata Motors: The automaker’s consolidated net profit stood at Rs 3,203 crore in Q1FY24 as against a loss of Rs 5,007 crore in the year-ago period. The rise in profit was attributed to improved margin of its passenger vehicle (PV) business and strong sales at its luxury car unit, Jaguar Land Rover (JLR). Its consolidated revenue from operations increased 42% YoY to Rs 1.02 lakh crore in the quarter under review. Ebidta surged to Rs 13,218 crore in Q1FY24 from Rs 2,413 crore in Q1FY23.
Further, Tata Motors said that its board has approved the NCLT scheme of arrangement for cancellation of ‘A’ Ordinary Shares or DVR shares. It will cancel DVR shares and issue ordinary shares. The DVR shareholders will receive 7 ordinary shares for every 10 DVR shares held. The shareholding of the promoter and promoter group will decline by 3.16% post-DVR swap.
Larsen and Toubro (L&T): L&T reported a consolidated net profit of Rs 2,493 crore for the quarter ended June 2023, up 46.5% from Rs 1,702.07 crore in the same quarter last year. Its revenue from operations for the quarter stood at Rs 47,882 crore, registering a growth of 33.6% from Rs 35,853 crore a year ago.
in other news, the conglomerate has agreed to buy back 3.33 crore shares, equal to 2.4% equity capital, at a maximum price of Rs 3,000 per share, aggregating up to Rs 10,000 crore. The company has made an additional investment of up to Rs 506 crore in its unit, L&T Energy Green Tech. The conglomerate also inked a pact to acquire the entire 40% shareholding held by Sapura Nautical Power in the joint venture L&T Sapura Offshore.
Axis Bank: The private sector lender has recorded a profit lower than analysts’ estimates at Rs 5,797.1 crore for the quarter ended June FY24, up 40.5% YoY as against Rs 4125 crore in the year-ago period. The bank registered a sharp spike in provisions, driven by a surge in other income and pre-provision operating profit. Net interest income grew by 27.4% YoY to Rs 11,959 crore from Rs 9384 crore. Its net interest margin expanded 50 bps YoY to 4.1% and net NPA stood at 0.41% in the reported quarter compared with 0.39% in the preceding quarter. The lender’s net advances was up 22% year-on-year to Rs 8.58 lakh crore.
Indian Oil Corporation (IOC): The oil marketing company reported a standalone net profit of Rs 13,750.44 crore in Q1FY24 as against a net loss of Rs 1,992.53 crore recorded in Q1FY23. Revenue from operations (excluding excise duty) declined 11.92% to Rs 1,97,526.57 crore in the quarter ended June 2023 from Rs 2,24,249.22 crore posted in Q1FY23. Domestic sales rose by 1.45% to 23.305 million metric tons (MMT), while export sales dropped 34.21% to 1.102 MMT in Q1FY24 over Q1FY23. Average gross refining margin (GRM) for the reported period is $8.34 per bbl as compared to $31.81 per bbl registered in the year-ago period.
Asian Paints: The company has reported a 52% year-on-year rise in consolidated net profit at Rs 1,574.84 crore in the first quarter ended June 2023, as against Rs 1,036.03 crore in the corresponding quarter last year. The company’s consolidated revenue from operations during Q1FY24 rose 6.6% to Rs 9,182.31 crore from Rs 8,606.94 crore in the year-ago period. Ebitda increased 28.1% to Rs 2,121.2 crore from Rs 1.566 crore in the year-ago quarter.
Bajaj Auto: The two-wheeler manufacturer posted a 42% rise in profit after tax (PAT) at Rs 1,665 crore in the quarter ended June 30, 2023, as against Rs 1,173 crore registered in the year-ago period. Its revenue from operations jumped 29% to Rs 10,310 crore in the June quarter, compared with Rs 8,005 crore in the same quarter of last year. Its Ebitda for the quarter under review was up 51% year over year at Rs 1,954 crore, while margins of 19% were up 280 basis points. The rise in net profit was attributed to favourable product mix, healthy volumes and an increase in the average selling price (ASP) of motorcycles.
Nestle India: The FMCG major on Thursday reported a net profit of Rs 698.34 crore for the quarter ended June 2023, up 37% YoY over Rs 510.24 crore reported by the company in the corresponding quarter of the previous financial year. Total sales for the reported quarter rose 15% YoY to Rs 4,619.5 and domestic sales grew by 14.6% YoY. Nestle, which follows a January-December financial year, reported a 6.5% contribution in its quarterly sales from its e-commerce vertical with sustained growth momentum.
Bajaj Finserv: The company reported a 48.4% year-on-year (YoY) rise in consolidated net profit for the quarter ended June 2023 to Rs 1,942.63 crore. Its revenue from operations rose nearly 47% YoY to Rs 23,280 crore. All subsidiaries of the company registered strong performance that helped push Bajaj Finserv’s profit to an all-time high.
Shriram Finance: The company reported a 26.6% jump in its consolidated net profits for the April-June 2023 quarter at Rs 1712.19 crore, the company said. The company had posted a consolidated net profit of Rs 1,351.62 crore during the corresponding quarter of last year. The consolidated total income during the quarter under review grew to Rs 8,292.53 crore from Rs 7,138.25 crore registered a year ago. Its net interest income for the reported quarter increased to Rs 4,576.61 crore from Rs 4,044.42 crore registered in the same period of last year. As on June 30, 2023, the total assets under management stood at Rs 1.93 lakh crore, the company said.
Shree Cement: The company’s consolidated net profit increased by 105% YoY to Rs 572.3 crore in Q1FY24 from Rs 279.50 crore in Q1FY23. Consolidated revenue from operations rose by 15% YoY to Rs 5,064.83 crore in the first quarter of FY24. Ebitda was up 18% to Rs 944.92 crore in Q1FY24 as against Rs 800.82 crore in the year-ago period. The board has approved raising up to Rs 1,000 crore via NCDs in one or more tranches on private placement basis.
Suzlon Energy: Shares of the company tumbled 5% after the company’s consolidated net profit tanked 95.85% to Rs 100.90 crore in Q1FY24 compared with Rs 2,433.33 crore posted in Q1FY23. Revenue from operations declined 2.18% YoY to Rs 1,347.52 crore in the quarter ended 30 June 2023. During the quarter, EBITDA stood at Rs 207 crore as against Rs 185 crore posted in corresponding quarter last year. Net debt stood at Rs 1,223 crore as on 30 June 2023 as against Rs 1,180 as of 31 March 2023.
ITC: The conglomerate announced that its board has approved the demerger of its hotels business and this is expected to unlock value for 30 lakh shareholders. “After due consideration, the board accorded its in-principle approval to the demerger of hotels business under a scheme of arrangement, with the company holding a stake of about 40% in the new entity and the balance shareholding of about 60% to be held directly by the company’s shareholders proportionate to their shareholding in the company,” ITC said. Shares fell 3.89% to Rs 471.35 apiece.
HDFC AMC: The asset manager reported a net profit of Rs 477.5 crore in Q1FY24, up 52% from Rs 314.2 crore in the year-ago period. Total income was up 37.47% YoY to Rs 732.57 crore in Q1FY24. Operating profit for the quarter ended 30 June 2023 was Rs 4,133 crore as compared to Rs 3737 crore for the quarter ended 30 June 2022. Its QAAUM (quarterly average assets under management) stood at Rs 4,85,700 crore at the end of June 2023 compared to Rs 1,45,300 crore in the year-ago period.
Canara Bank: The public sector lender has reported a net profit of Rs 3,534.8 crore for the quarter ended June 2023, witnessing a sharp 74.8% jump from Rs 2,022 crore in the same quarter last year. Its net interest income (NII) in Q1FY24 increased 27.7% to Rs 8,665.7 crore as compared to Rs 6,784.7 crore on a yearly basis. Net Interest Margin (NIM) during the quarter under review was at 3.05% as against 3.07% in the previous quarter. Net NPA ratio fell 16 bps to 1.57% from 1.73%, sequentially. The bank’s total domestic deposit at the end of March 2023 increased 4.9% to Rs 11,04,506 crore from Rs 10,52,907 crore, YoY. Its global deposits rose 6.5% YoY to Rs 11,92,470 crore.
TVS Motor: The two-wheeler maker’s standalone net profit surged 45.9% to Rs 467.67 crore on 20.12% rise in revenue from operations to Rs 7,217.91 crore in Q1FY24 over Q1FY23. The company posted an Ebitda of Rs 764 crore in Q1FY24, up 27% from Rs 599 crore in Q1FY23. The overall two-wheeler and three-wheeler sales grew by 5% YoY to 9.53 lakh units in the quarter ended June 2023.
Indus Towers: The company registered a rise of 182% in consolidated net profit at Rs 1,348 crore in Q1FY24, from Rs 477 crore in the corresponding period last year. The growth was driven by higher tenancies and record tower additions during the quarter under review. The company’s revenue from operations during the first quarter of current fiscal stood at Rs 7,075 crore, up almost 3%, compared to Rs 6,897 crore in the year-ago period. Ebitda jumped 30.6% to Rs 5,341.2 crore in the June quarter from Rs 4,089.2 crore in the corresponding period in the previous fiscal.
Indian Hotels: The country’s largest hospitality posted a profit of Rs 222 crore for June FY24 quarter, growing 31% YoY, with 17% on-year growth in revenue at Rs 1,516 crore. The company or one of its subsidiaries will purchase 100% equity in Pamodzi Hotels PLC, a listed company in Zambia, from Tata International Singapore PTE Ltd. It will buy 90% of Tata’s stake while acquiring the remaining 10% through the delisting process in Zambia.
Dr Reddy’s Laboratories: The pharma major has registered an 18% YoY increase in consolidated profit to Rs 1,402.5 crore for June FY24 quarter despite a drop in operating margin. Revenue from operations grew by 29% YoY to Rs 6,738.4 crore with double-digit healthy growth in North America (up 79% YoY), Europe (up 22%) and Emerging Markets (up 28%).
Global Markets
The US markets closed higher as investors hoped that the Fed may be nearing end of rate hike cycle amid softening inflation and strong US GDP growth. For the week, the Nasdaq ended 2.02% higher, the S&P 500 index gained 1.01% and the Dow Jones Industrial Average rose 0.66%.
The US Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 5.25%-5.5%, as expected, marking the 11th hike in the central bank’s recent 12 policy meetings. In other news, the Fed’s preferred inflation gauge, the core personal consumption expenditures (core PCE) price index had risen 0.2% in June, down from 0.3% in May. The annual core PCE price index stood at 4.1% in June 2023 as against a reading of 4.6% in May 2023. The Commerce Department reported that the US economy had expanded at a year-over-year pace of 2.4% in the quarter, which was above both the previous quarter’s growth rate of 2% and consensus expectations of around 1.8%. Durable goods orders jumped 4.7% in June, while personal spending rose 0.5%.
Japan’s stock market ended higher, with the Nikkei 225 index up 1.41% and the broader Topix index gaining 1.26%.
In economic news, Bank of Japan (BOJ) kept its short-term interest rate target unchanged at -0.1% on Friday and also announced that it would increase flexibility around its yield curve control (YCC) target. The central bank said it will allow 10-year JGB yields to fluctuate between -0.5% and +0.5% as against zero percent target level earlier. The BOJ raised the upper limit for the fixed rate operations and said it will offer to buy 10-year Japanese government bonds (JGB) at 1.0% in fixed-rate operations, instead of the previous rate of 0.5%.
The yield on the 10-year Japanese government bond (JGB) rose to 0.55%, from 0.48% at the end of the previous week. The yen strengthened to around JPY 139.8 against the US dollar from the prior week’s JPY 141.8. Separately, Japan’s manufacturing activity extended declines in July, as the au Jibun Bank flash Japan manufacturing purchasing managers’ index (PMI) fell to 49.4 in July from 49.8 in June.
Chinese equities closed significantly higher for the week after Beijing hinted at more stimulus to support slowing economic growth. The Shanghai Stock Exchange index gained 3.42%, the CSI 300 soared 4.47% and the Hang Seng index surged 4.41%. Meanwhile, profits at industrial firms declined 8.3% in June from a year earlier, as against a 12.6% YoY drop recorded in May, according to China’s statistics agency.