Daily Market Highlights MAY 26

Untitled 5 Daily Market Highlights MAY 26

Previous Day Market

Nifty closed at 15,208.45 up by 10.75 points

Sensex closed at 50,637.53 down by 14.37 points

This seems to be another bumper year for wheat procurement. The ongoing Rabi season has seen a 13% increase in wheat procurement at 390 LMT compared to 344 LMT last year. Wheat procurement has happened in most of the northern states like UP, MP, Rajasthan, Delhi, and Jammu. According to data put out by the Ministry of Food and Consumer Affairs, over 4 million farmers have benefited from wheat procurement. Paddy procurement this year has been 8.57% higher at 772.92 LMT over the previous year.

RBI governor, along with his senior team, met with the CEOs of private sector banks to discuss ways and means to implement the easing of economic pain in the midst of COVID 2.0. The RBI has been trying to work with the banks on how to ease the EMI burden on these borrowers during this stressful period and also how to ensure credit flow to priority segments like MSMEs to keep the job scene robust. Earlier, the RBI met with PSU banks, and demand was for another round of restructuring in terms of asset classification.

The Visakhapatnam refinery of Hindustan Petroleum witnessed a huge fire break-out and the exact damage to the plant is yet to be assessed. There was a sense of panic after dense fumes and flames were seen rising from the refinery. It is reported that most people were evacuated from the spot and HPCL has not reported any human casualty. The fire erupted in the crude distillation unit in the HPCL old terminal and the fire has been brought under control. HPCL confirmed that refinery operations were totally normal.

We are beginning to see big consolidation in the e-pharmacy space. Unicorn PharmEasy has acquired Medlife in one of the biggest deals in the space, although the amount was not disclosed. All Medlife customers will transpose into PharmEasy customers. The combined entity will serve nearly 20 lakh customers each month. Medlife customers would be seamlessly ported to the PharmEasy platform. PharmEasy will onboard Medlife retail partners too. The deal is estimated to value Medlife at $250 million.

Alkem Laboratories reported a 30.11% growth in net profits at Rs.249 crore for the Mar-21 quarter. Total revenues from operations were up 6.98% at Rs.2,192 crore in the Mar-21 quarter. Alkem reported 17% growth in India sales while the foreign sales were more muted at around 8.5% on a YoY basis. Revenues for the full fiscal year FY21 stood at Rs.8,865 crore, representing a YoY growth of 6.24%. Alkem also reported R&D at 6% of sales for the full year and a 400 bps rise in operating margins at 40% for FY21.

The Indian government is reportedly preparing a stimulus package for sectors affected by COVID 2.0. The idea is to support an economy struggling with localized lockdowns and a virtual cessation of most economic activity. The finance ministry may specifically look to bolster sectors like tourism, aviation, and hospitality; which have been among the worst hit. Already, economists have downgraded India’s estimated growth for FY22 by 150 to 250 basis points due to COVID 2.0. A stimulus will be a boost to consumer sentiments.

Two major Indian paint companies, Asian Paints and Berger Paints, hit lifetime highs on expectations of strong volume growth quarterbacked by a major shift in volumes from the unorganized sector to the organized sector. Both the stocks have surged by 15% in the last 1 month compared to just 6% for the BSE Sensex. The Indian paint industry has been able to pass on most of the input cost spike to the end customers due to the pricing power that they command. Both are moving towards total home solutions.

BPCL may sell part of its stake in Petronet LNG and Indraprastha Gas to shed its promoter status tag so that the new owner does not have to worry about making open offers for these gas companies. Currently, BPCL holds 12.5% in Petronet LNG and 22.5% in IGL. Government plans to sell its entire 52.98% stake in BPCL, although the indicative prices are yet to be decided. If BPCL sells part of its stake in these two entities, it can circumvent the open offer stipulation. This has been discussed at DIPAM but a decision is pending.

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