Daily Market Highlights JUN 07

morning main Daily Market Highlights JUN 07

Previous Day Market

Sensex closed at 52,100.05 down by 132.38 points
Nifty closed at 15,670.25 down by 20.10 points

There is good news on the paddy procurement front in Kharif output for 2020-21. For the previous Kharif season 2020-21, the paddy procurement stood at a record high of 805.21 LMT, sharply better than the 773.45 LMT recorded in Kharif 2019-20. Nearly 88% of this paddy procurement was done in the Kharif season and the balance 12% in Rabi season. A total MSP value of Rs.1.52 trillion has benefited a huge 1.19 crore farmers, despite farm agitations. Wheat procurement was at record highs of 413 LMT in 2020-21.

Even as the dispute over the sale of DHFL goes to the Supreme Court, the company has reported net profits of Rs.96.75 crore for Q4-FY21. This is in sharp contrast to a net loss of Rs.-7,507 crore in Q4-FY20. For FY21, Dewan Housing reported a net loss of Rs.15,051 crore. Total revenues for FY21 stood at Rs.8,803 crore. Kapil Wadhawan, who is currently under investigation for money laundering, has just put up a bid better than the final bid of Piramal Enterprises; which was already accepted by Committee of Creditors.

India could be a surprise beneficiary of the G-7 decision to impose global minimum 15% corporate tax to prevent offshoring of profits. It is estimated that more than 70% of US companies use these methods to lower tax with the help of tax havens like Ireland, Luxembourg and Cayman Islands. Additionally, the pact will also ensure that businesses pay taxes in the countries where they operate. India, with its higher tax base, stands to benefit from this pact. It may also make India’s concessional tax scheme more attractive.

FPIs infused Rs.7,968 crore into Indian equities in the first week of June, marking a turnaround from the bouts of selling by FPIs since the last week of March. Total net FPI outflows stood at Rs.9,659 crore in April and Rs.2,954 crore in May. FPIs have changed their approach to Indian markets after the sharp fall in the Coronavirus cases and progress on the vaccination front. In the first week of June, FPIs infused Rs.7,968 crore into Indian equities. Flows could improve as restrictions are eased and growth gets back to normal.

There was a bit of disappointment in May as the GST collections dipped to an 8-month low of Rs.102,000 crore. This was largely on account of the disruption of economic activity on account of the COVID-2.0. This is in contrast to the record level of Rs.141,000 crore touched in April 2021. However, May 2021 collections are still 65% better on yoy basis, although that may not be too credible due to the base effect. The e-way bill generation data indicates that GST collections could dip below Rs.1 trillion in the month of Jun-21.

It looks like potential investors are a lot more delighted about the narrowing of losses at Paytm, which is planning India’s largest IPO by end of 2021. Paytm net loss narrowed to Rs.1,704 crore for FY21. This is sharply better than the net loss of Rs.2,943 crore in FY20. However, Paytm FY21 revenues fell by nearly 10% to Rs.3,186 crore in FY21. Even as digital plays like Paytm have benefited from the pandemic, they still need a credible answer to the issue of cash-burn. Paytm IPO size is likely to be around Rs.22,000 crore.

A total of 7 out of the top-10 most valuable companies on the Nifty 50, added Rs.1,15,899 crore in market cap during the week ended 05-Jun. In a week when the Sensex gained 677 points, RIL was the big story of the week. In terms of weekly market cap accretion, Reliance added Rs.60,669 crore, Bajaj Finance Rs.23,178 crore, HDFC Rs.14,522 crore, SBI Rs.10,308 crore, Hindustan Unilever Rs.4,429 crore and Kotak Bank Rs.2,002 crore. IT major Infosys lost Rs.8,351 crore after the SEBI order. TCS and ICICI Bank were flat.

IndiGo Airlines reported another quarter of worsening losses. Net loss for the quarter stood at Rs.-1,147 crore for the Mar-21 quarter compared to Rs.-871 crore in Mar-20 quarter. IndiGo was hit by higher fuel costs and empty seats due to COVID-2.0. Revenues from operations for the Mar-21 quarter were down 25% at Rs.6,223 crore. FY21 revenues were lower by nearly 60% yoy. IndiGo saw a fuel cost spike of 67% in Q4 even as passenger ticketing revenues fell by 30%. RASK/CASK spread remained in negative zone.

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