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Indian indices declined as investors’ sentiments were affected negatively due to recessionary fears, heavy selling in state-owned banking stocks and a report by US-based Hindenburg Research LLC accusing Adani Group of market manipulation and accounting fraud. For the week, the Sensex tanked 2.18% to 59,330.90 and the Nifty 50 index lost 2.4% to 17,604.35. The BSE Midcap index plunged 2.74% to 24,338.84, while the BSE Smallcap index slumped 3.64% to 27,623.85.
Top losers among Nifty sectoral indices during the week, PSU Bank [-9.66%], Energy [-7.52%], Oil & Gas [-7.44%], Metal [-6.11%], Bank [-5.09%]. Top gainers were Auto [3.14%], FMCG [1.34%] and IT [0.8%].
During the week, Indian rupee fell 40 paise against the US dollar to close at 81.52 per dollar on January 27 against its January 20 closing of 81.12.
WTI Crude stood at $79.68 a barrel and Brent Crude was at $86.66 per barrel.
During the week, FIIs were net sellers for Rs 9,352.2 crore and DIIs were net buyers for Rs 7,210.6 crore in the cash segment. Until 27 January 2023, FIIs sold for Rs 29,232.29 crore and the DIIs bought for Rs 23,392.91 crore during the month.
Company News
Tata Motors: The automaker said its consolidated profit for the quarter stood at Rs 2,958 crore against loss of Rs 1,516 crore in same period last year. Revenue from operations at Rs 88,489 crore for the quarter grew by 22.5% over corresponding period last fiscal, with better realisation at JLR as well as standalone businesses. EBITDA was at Rs 9,853 crore rising 33% YoY, with margin expansion of 90 bps YoY at 11.1% for the quarter. The company remains cautiously optimistic on the demand situation despite global uncertainties.
Maruti Suzuki India (MSI): The auto major’s standalone net profit surged 132.5% YoY to Rs 2,351.3 crore, while its net sales rose 25.52% YoY to Rs 27,849.2 crore in Q3FY23. Its EBIT soared 131% to Rs 2,123 crore in Q3FY23 from Rs 919 crore in Q3FY22. Maruti Suzuki India sold a total of 465,911 vehicles during the quarter. Sales in the domestic market were 403,929 units and exports were 61,982 units. Pending customer orders stood at about 363,000 vehicles at the end of this quarter out of which about 119,000 orders were for newly launched models, the company said in an exchange filing.
Adani Group: Shares of nine companies of Adani Group continued to witness sharp selling pressure for second trading session after US-based Hindenburg Research LLC said it shorted Adani Group companies due to “brazen” market manipulation and accounting fraud. Shares fell between 5% to 20% in the nine companies on Friday.
In an exchange filing made, Jatin Jalundhwala, Group Head – Legal, Adani, said that the maliciously mischievous, unresearched report published by Hindenburg Research on 24 Jan 2023 has adversely affected the Adani Group, our shareholders and investors. The volatility in Indian stock markets created by the report is of great concern.
Adani Enterprises: The company launch its follow-on public offer of Rs 20,000 crore on January 27 (Friday). The closing date will be January 31, with a price band of Rs 3,112-3,276 per share. The company had raised about Rs 6,000 crore from anchor investors. The company had received Rs 2,992.4 crore from anchor investors ahead of the FPO and the remaining amount will be payable by anchor investors later in one or more subsequent calls.
Housing Development Finance Corp (HDFC): The company plans to raise at least 30 billion rupees ($370.5 million) through the sale of bonds maturing in 10 years, Reuters reported citing three merchant bankers. The issue will also have a greenshoe option to retain an additional 20 billion rupees and will close for subscription later this week. The bonds are rated AAA by CRISIL and will have a put option at the end of the third year.
Axis Bank: The private sector lender has reported a massive 62% year-on-year increase in Q3FY23 profit at Rs 5,853 crore, led by healthy other income and net interest income. Net interest income rose 32% to Rs 11,459 crore for the quarter under review versus Rs 10,360 crore in the year ago period. Net interest margins expanded to 4.34% at the end of the December quarter against 3.77% a year ago. The total loan book expanded 15% to Rs 7.62 lakh crore, while total deposits for the bank climbed 10% on-year to reach Rs 8.48 lakh crore. Gross non-performing loan ratio improved to 2.38% against 3.17% a year ago. Net non-performing ratio stood at 0.47% versus 0.91% last year.
Bajaj Auto: The two-wheeler manufacturer’s consolidated net profit rose 3.01% YoY to Rs 1,472.70 crore on 3.29% YoY increase in total revenue from operations to Rs 9,318.54 crore in Q3FY23. The rise was attributed to robust double-digit sales growth in the domestic business offsetting the drop in exports arising from the challenging market context. EBITDA grew 29% year on year to Rs 1,777 crore in Q3FY23.
Dr Reddy’s Laboratories: The pharma company clocked a massive 77% year-on-year growth in consolidated profit at Rs 1,247 crore for quarter ended December FY23, driven by strong US business. Consolidated revenue from operations stood at Rs 6,770 crore for the quarter, up 27.3% over the corresponding period in the last fiscal. Its US business rose 64%, domestic business grew 10% and emerging markets witnessed 14% growth YoY. EBITDA jumped 55% YoY to Rs 1,966 crore and margins improved by 500 bps to 29% during the reported quarter.
DLF: The real estate developer has registered a 37% year-on-year growth in consolidated profit at Rs 519 crore for quarter ended December FY23. It had an exceptional loss of Rs 224.4 crore in Q3FY22. Revenue from operations fell 3.5% to Rs 1,495 crore for the quarter compared to same period last fiscal. Sales bookings rose 34% YoY to Rs 2,507 crore. EBITDA fell by 8.5% YoY to Rs 477.2 crore and margin declined by 170 bps YoY to 31.9% for the quarter under review.
Pidilite Industries: The adhesives manufacturer has reported a 14.3% year-on-year decline in consolidated profit at Rs 307.7 crore for quarter ended December FY23, impacted by a lower operating margin. Revenue grew by 5.2% to Rs 2,998 crore compared to the year-ago period with C&B business growing at 7%. In Q3FY22, it registered robust growth as a result of trade increasing inventory stocking because of substantial price increases in the quarter. Overall numbers missed analysts’ expectations.
TVS Motor Company: The two-and-three-wheeler manufacturer has registered a 22% year-on-year growth in standalone profit at Rs 352.8 crore for December FY23 quarter despite higher input costs. Revenue from operations grew by 14.7% to Rs 6,545 crore compared to the year-ago period, with volume rising 0.09%to 8.79 lakh YoY. Operating profit at Rs 659 crore increased by 16% with a margin expansion of 10 bps at 10.1%compared to the same period last year. The board members have declared an interim dividend of Rs 5 per share.
United Spirits: The company said that its consolidated net profit declined by 27% to Rs 214 crore in the third quarter ended December 2022. The company had reported a net profit of Rs 295 crore in the October-December quarter of last fiscal. Total income declined to Rs 6,631 crore for the period under review as against Rs 8,917 crore in the year-ago period, United Spirits said in a regulatory filing.
HDFC Asset Management Company (AMC): The company reported 2.68% YoY rise in net profit to Rs 369.40 crore and 4.25% YoY rise in total income to Rs 662.93 crore in Q3FY23. Operating profit for the quarter ended December 2022 was Rs 397.4 crore as compared to Rs 398.9 crore for the quarter ended December 2021. The AMC had a quarterly average assets under management of Rs 4,44,800 crore as of December 2022 compared to Rs 4,47,100 crore as of December 2021 and its market share was 11% in QAAUM of the mutual fund industry. The ratio of equity oriented AUM and non-equity oriented closing AUM was 55:45, compared to the industry ratio of 50:50 as on 31 December 2022.
Cipla: The company said its consolidated revenue rose 6% to Rs 5,810 crore in Q3FY23 from Rs 5,479 crore in Q3FY22. The company’s net profit increased 10% to Rs 801 crore in the quarter under review from Rs 729 crore in the year-ago period. EBITDA was up 12% YoY to Rs 1,408 crore in Q3FY23 and the EBITDA margins were 24.2% in the reported quarter as against 22.9% in the year-ago period.
Indian Bank: The public sector lender posted a net profit of Rs 1,395.8 crore in Q3FY23 as against Rs 689.7 crore in Q3FY22. NII was up 25.1% to Rs 5,499.12 crore in Q3FY23 from Rs 4,395.1 crore in Q3FY22. The lender said its gross NPA stood at 6.5% in the quarter under review as against 7.3% in the preceding quarter. Net NPA improved to 1% in Q3FY23 from 1.5% in the prior quarter.
SBI Cards and Payment Services: The company said its revenue from operations was up 6.37% QoQ at Rs 3,507.12 crore. Its profit after tax fell 3% QoQ to Rs 509.46 crore. EBITDA rose 8.9% QoQ to Rs 1,040.61 core, while EBITDA margin stood at 29.67% in the reported quarter as against 28.98% in the preceding quarter.
Tata Coffee: The company’s consolidated net profit declined 39.85% to Rs 26.63 crore in the quarter ended December 2022 as against Rs 44.27 crore during the quarter ended December 2021. Revenue climbed 19.26% to Rs 746.66 crore in the quarter ended December 2022 as against Rs 626.07 crore during the quarter ended December 2021.
Canara Bank: The lender reported a standalone net profit of Rs 2,882 crore in Q3FY23, up 91.88% from Rs 1,502 crore in the same period last year. Total income rose by 23.01% YoY to Rs 26,217 crore during the reported quarter. Net interest income increased by 23.81% to Rs 8,600 crore in Q3FY23 from Rs 6,946 crore in Q3FY22. Net interest margin in Q3FY23 was 3.05% as against 2.83% in Q3FY22. Net NPA ratio was 1.96% at the end of December 2022 as against 2.86% in the year-ago period.
IDBI Bank: The lender posted a 60% growth in net profit to Rs 927 crore in the third quarter ended on December 31, 2022, on lower provisioning and better interest income. The bank’s net interest income (NII) improved by 23 per cent during the third quarter of current fiscal to Rs 2,925 crore, as against Rs 2,383 crore in the same period last fiscal. Gross non-performing asset (NPA) ratio improved to 13.82% in Q3FY23 as against 21.68% in the year-ago period.
Dixon Technologies: The Electronics manufacturing company’s shares tanked 19.09% after the company cut its FY23 revenue guidance to Rs 12,200 crore ‐Rs 12,700 crore from Rs 15,000 crore following a weak October-December quarter. The company’s revenue from operations fell 22 percent year-on-year to Rs 2,405 crore while its net profit grew 13 percent to Rs 52 crore. Operating margins improved from 3.4 percent to 4.7 percent. On the segmental front, Consumer Electronics revenue declined by 39% YoY, Lighting Products revenue plunged by 39% YoY and Mobile & EMS Division revenue contracted by 3% YoY.
Global Markets
The US markets ended higher as a host of economic data and outlook from corporate America indicated softening demand and raised hopes of a slower interest rate hike ahead of next week’s Federal Reserve monetary policy meeting. For the week, the Dow jumped 1.80%, the S&P 500 surged 2.46% and the Nasdaq soared 4.32%.
The US Commerce Department said that the country’s economy (GDP) grew at 2.9% annualized rate in the fourth quarter compared to a growth of 3.2% in the third quarter of 2022. The Fed’s preferred inflation gauge, the core (less food and energy) personal consumption expenditures (PCE) price index rose 4.4% over the year ended in December which was below its 5.4% peak in February 2022. Consumer spending also decreased 0.2% in December as Americans were not willing to pay higher prices for goods and services.
Meanwhile, the US business activity contracted for the seventh straight month as S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, showed a reading of 46.6 in January 2023 compared with a reading of 45 in December 2022. A reading of less than 50 indicates contraction in the sector.
Japanese stock markets rose during the week, with the Nikkei 225 index rising 3.12% and the broader Topix index climbing 2.9%. The rise was due to positive sentiments as the US economy expanded and Japan’s core consumer price inflation rose at a slower pace of 4.3% year on year in January 2023.
Stock markets in mainland China were closed for the Lunar New Year holiday and the markets will reopen on January 30. However, the Hong Kong stock exchange resumed trading on Thursday, and the benchmark Hang Seng index gained 2.96% during the truncated week.