Daily Market Update May 5

Untitled 5 Daily Market Update May 5

Previous Day Market

Sensex closed at 48,253.51 down by 465.01 points

Nifty closed at 14,496.50 down by 137.65 points

Adani Ports and SEZ reported 288% growth in net profit at Rs.1,288 crore for the Mar-21 quarter. Total revenues were up 24% at Rs.3,608 crore. The company now has a 41% market share of port volumes in India and this could expand further after the recent takeover of Krishnapatnam, Gangavaram and Dighi ports. Meanwhile, Adani SEZ may abandon its project in Myanmar if it is found to violate US sanctions. Karan Adani added that the company had positioned itself as a full-service logistics solutions provider.

Maruti Suzuki is likely to halve its production capacity as a surge of coronavirus infections had led to many of its retail outlets shutting down. This was necessitated by the lockdown announced in certain states. Maruti hopes to operate at 50% to 60% of its full capacity. Most of the auto companies are facing a demand crunch on the one hand and also supply chain constraints on the other hand. Other auto players like Hero Moto, Mahindra & Mahindra may also shut operations. Chip availability is another big issue.

SAIL touched a market cap of Rs.50,000 crore after the recent 80% rally in the stock on the strength of robust demand for steel from China and better price realizations. These catapults SAIL to 78th position in the overall market cap rankings. It had recently scaled a 9-year high price of Rs.135, post which the stock gave up some of its gains. SAIL has been focusing on building steel volumes, cost and operating efficiencies, optimum levels of production, inventory level cuts, and the deleveraging of its balance sheet.

Tata Chemicals stock fell by as much as 8% to Rs.721.85 after posting tepid operational performance. Its EBITDA margins had contracted by 610 basis points to 10.7%. Margins were also impacted by factors like lower sales realization despite higher volumes. The top-line growth of Tata Steel has been predominantly driven by the growth in specialty products. There was also a one-off write-down in its US operations and a one-off hit in the UK too. However, stronger soda ash prices were expected to ease margin pressures.

India will permit mobile carriers to carry out 5G trials with select equipment makers like Ericsson, Nokia, and Samsung. Interestingly, Chinese telecom companies like ZTE and Huawei were kept out of the list. Major carriers like Reliance Jio, Bharti Airtel, and Vodafone Idea will conduct trials along with MTNL in urban, rural, and semi-urban areas. Chinese telecom and network companies had been flagged by the US administration as being risky for data security and also in protecting the integrity of information and data.

RBL Bank reported a 34% fall in net profits at Rs.75.3 crore for the Mar-21 quarter. This fall was largely on account of lower NII and higher provisioning for loan losses. The quarterly provisions were up 27.5% at Rs.766 crore. Net interest margin or NIM was marginally lower by 2 bps at 4.17%. Gross NPAs expanded by 250 basis points to 4.34% in the Mar-21 quarter. RBI’s total deposit base grew by 26% and CASA deposits made up 36% of its total deposit base. Net advances, however, grew by just about 1%, YoY.

Bajaj Auto clocked global sales of 348,000 units in Apr-21 out of which a majority of 2.21 lakh units were exported. Bajaj accounted for 60% of the overall two-wheeler and three-wheeler exports from India during the previous financial year. In FY21, its export income stood at Rs.12,687 crore. In the last decade, Bajaj exported a total of 1.8 crore vehicles resulting in inflows of $14 billion in foreign exchange. Bajaj Auto’s product portfolio encompasses entry-level, middle-level as well as premium-level segments.

The one-month dollar forward premium recently touched its highest level in almost 20 years. This was triggered by massive dollar inflows towards the Power Grid INVIT IPO. This is a signal of strengthening the US dollar as a consequence of rate hikes expected in the US. The 1-year forward premium touched Rs.4.00, the highest level since August 2016. The PowerGrid INVIT IPO attracted total subscriptions of $2.78 billion. Traders observe that the spike in forwarding premiums recently had made the spot markets highly illiquid.

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%name Daily Market Update May 5

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