Daily Market Update Jan 5th

unnamed Daily Market Update Jan 5th

It looks like good tidings for steel companies as steel product prices have been hiked by up to Rs.2400/tonne. However, steel companies have indicated that this may just be the first phase and actual price hikes could even go as high as Rs.6000/tonne in some cases. HRC prices have been increased by around Rs.1500/tonne while the price of rebars is up by Rs.2400/tonne. Apart from the fact that input costs have gone up sharply in the last few months, steel companies also have an upper hand as there is likely to be a shortage of long products in the market. Even global steel prices have moved up sharply.

Bajaj Auto reported an 11% spike in YOY sales numbers for the month of Dec-20 at 372,532 units. One of the big differences in the Bajaj Auto business model has been its consistent focus on exports of two-wheelers and that appears to be really paying off. Consider the numbers for example. For the month of Dec-20, Bajaj Auto reported 9% lower domestic sales of two wheelers at 139,606 units. However, that was more than compensated by the 27% spurt in export sales at 232,926 units. For Bajaj Auto, global sales have really come as a saving grace in a tough month. In terms of domestic sales, Bajaj ranks fourth in two-wheelers behind Hero Motocorp, Honda and TVS Motors. However, this is more than compensated by its strong export franchise at 63% of total sales across Asia, Africa and Latin America.

Fintech start-up, CRED, has raised $81 million funding from investors like DST Global, Sequoia Capital, Ribbit Capital, Tiger Global, Sofina and Coatue. This round of funding assigns a valuation of $806 million to the company just a stone’s throw from being classified as a full-fledged unicorn. Till date, CRED has raised $228 million in four rounds of funding. CRED plans to expand its product and service portfolio with the latest round of funds available. CRED rewards credit card users for making timely bill payments by offering them a plethora of benefits. CRED currently has 5.9 million registered users on its platform.

Larsen & Toubro has just secured a large engineering order from a JV of HPCL, which is estimated to be worth almost Rs.5,000 crore. HPCL Rajasthan Refinery is a JV between HPCL and the Rajasthan state government. The contract is for setting up a PFCC unit with a capacity of 2.9 MMTPA at Barmer. L&T is already executing 3 projects on behalf of the HPCL plant in Visakhapatnam. Hydrocarbons have been one of the areas of specialization for L&T EPC business and it has dominated that business for last 25 years. The contract was awarded through an international competitive bidding process on turnkey basis.

There was good news from the manufacturing sector as the PMI bounced back marginally to 56.4 in Dec-20. While the PMI was positive on production, inventory piling and purchases; it lagged on job creation as most companies were cutting jobs as part of their cost rationalization exercise. The PMI at over 50 indicates expansion in manufacturing but unlike in November, there was also momentum build-up in December. Fresh export orders for Indian companies rose to the highest level in the last four months. The PMI number also hinted at input prices growing at the fastest pace in the last two years.

With an emergency usage approval or EUA from the DCGI, Hyderabad based Bharat Biotech is planning to produce 700 million doses of Covaxin by December 2021. Bharat Biotech now has around 20 million doses and plans to scale up across four of its facilities. Unlike the other vaccine candidates, Bharat Biotech is yet to release the efficacy data which would happen after it completes Phase-3 trials by March 2021. DCGI has also permitted Bharat Biotech to conduct trials on children above the age of 12. While there has been criticism about granting EUA to Bharat Biotech without Phase-3 trial completion, chairman Krishna Ella confirmed that trials were being conducted in multiple countries. Covaxin was developed by Bharat Biotech in collaboration with National Institute of Virology, Pune and ICMR.

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