Daily Market Highlights MAY 21

Untitled 5 Daily Market Highlights MAY 21

Previous Day Market

Sensex closed at 49,564.86 down by 337.78 points

Nifty closed at 14,906.05 down by 124.10 points

HPCL Q4 turned to a net profit of Rs.3,018 crore on the strength of inventory gains and an improvement in refining margins. HPCL had reported a small loss in the Mar-20 quarter. The company turned around in the quarter on GRM of $8.11/bbl compared to negative GRM in the Mar-20 quarter. Inventory translation gains are booked when the raw material is revalued at the market price of crude. HPCL made an inventory gain of Rs.4,608 crore in the Mar-21 quarter compared to an inventory loss of Rs 4,113 crore in the Mar-20 quarter.

With the resurgence of COVID taking its toll on the Indian economy, the government decided to extend the deadline to file income tax returns for FY21 for individuals from 31-Jul to 30-Sep. This decision was taken based on various representations received from stakeholders and from business associations. Even the ITR deadline for companies has been extended by a month till 30-Nov. The government also extended the deadline for employers to issue Form-16 till 15-Jul. The CBDT will be launching its new filing portal shortly.

After a robust response to the institutional quote on Wednesday, there was a tepid retail response to the Axis bank OFS on Thursday. Against the allocated 5.8 million shares for a retail quote, bids were only received for 1.66 million shares, implying a subscription rate of just 28% of the retail quote. However, this should not pose a problem as the unsubscribed portion of the OFS will be allotted to non-retail investors. SUUTI managed to sell a 1.95% stake in Axis Bank, bringing down the government stake in Axis Bank to 1.5%.

The government sharply cut down subsidy on sugar exports from Rs.6,000 per tonne to Rs.4,000 per tonne with immediate effect due to the sharply higher global prices of sugar. For the Sugar year (Oct-Sep) of 2020-21, the government had promised a subsidy of Rs.6,000 per tonne to facilitate exports. Sugar mills were mandated to export 6 MT of sugar with 5.7 MT already contracted. However, the reduced subsidy will only be applicable for export agreements on or after 20-May. This is likely to have a neutral impact overall.

Mindtree has signed a deal to acquire NxT Digital Business, the cloud-based platform of L&T, for Rs.198 crore. This inorganic acquisition will enhance Mindtree’s footprint in the cloud-based IOT arena and the area of artificial intelligence. NxT Digital was a start-up that was incubated within L&T in FY19 and had revenues of Rs.37 crore in FY21. The whole idea of NxT Digital was to leverage the in-depth domain expertise of L&T. The acquisition of NxT Digital by Mindtree will ensure better fitment and synergies in IT.

Fitch Ratings upgraded the outlook on JSW Steel rating to positive from negative. JSW Steel has seen a sharp improvement in its business outlook with the sharp spike in the demand for steel as well as robust steel prices, both in India and abroad. The outlook revision was largely based on the estimate that JSW will also see a sharp fall in its leverage levels. This would, of course, be the leverage that excludes the impact of the Bhushan Power & Steel acquisition. EBITDA is expected to rise with 5MT capacity added.

NCLT directed lenders of bankrupt Dewan Housing to consider the offer made by former promoter Kapil Wadhawan. Interestingly, after bankrupting DHFL, Wadhawan wants to fully settle the mortgage lender’s dues to the tune of Rs.91,000 crore, if control was returned to him. The COC will meet in the next 10 days to consider the proposal. This is rather surprising as the COC and RBI have already approved the bid by Piramal Group to buy DHFL from NCLT. Wadhawan is also facing serious charges of money laundering.

Bosch Q4 PAT grew six-fold to Rs.483 crore in the Mar-21 quarter, on exceptional losses in the Mar-20 quarter. Total revenues of Bosch were up 43.8% YoY at Rs.3,216 crore in the Mar-21 quarter. The growth was triggered by the automotive segment getting a boost from festive buying and pent-up demand. In the Mar-20 quarter, Bosch wrote off Rs.297 crore as provisioning for restructuring costs and to enable a bigger focus on the EV line. Net profit margins for Mar-21 stood at 15.02%. Bosch declared dividends of Rs.115/share.

                 World Market Indices

%name Daily Market Highlights MAY 21

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