The June quarter numbers of the country's largest listed healthcare services provider, Apollo Hospitals Enterprise (Apollo), were in line with Street estimates on the operational front. Net profit estimates, however, missed expectations due to higher interest and tax outgo. The revenue performance of the core hospital segment was robust, registering a 13 per cent increase over the year-ago quarter.
The Reserve Bank is expected to go for another rate hike of 0.40 per cent at the scheduled review of the monetary policy next week, a foreign brokerage said on Friday. The central bank's rate setting panel will follow it up with a 0.35 per cent hike in rates at the next review in August, or make it into a 0.50 per cent hike next week and a 0.25 per cent increase in August, to make the total quantum of rate hikes at 0.75 per cent, the report by Bofa Securities said. On May 4, the Reserve Bank of India (RBI) hiked rates by 0.40 per cent, and Governor Shaktikanta Das has already called a rate hike at the forthcoming review as a "no brainer" given the pressure to maintain its core mandate of inflation in the targeted band of under 6 per cent.
Notwithstanding expectations of a pick-up in construction activity during a seasonally strong January-March quarter (fourth quarter) of 2022-23 (FY23), analysts are cautiously optimistic about the building material sector - encompassing paints, pipes, wood panels, tiles, metals, and cement - as volatile input costs, coupled with fears of a global slowdown, are making demand projections uncertain. Against this backdrop, analysts suggest investors stay selective and pick stocks of companies with stronger brand recall, expanding distribution network, diversified product profile, healthier balance sheet, and sustainable cash flow. "The government's various proposals under Budget 2023-24 (FY24) may lead to the building material segment growing between 8 per cent and 12 per cent for the next five years.
The launch of internet-enabled Jio Bharat phones at an "attractive pricing" will enable Jio to gain market share at the lower end segment and signals a reduced probability of tariff hike in the near term, brokerages tracking the sector said. Jio on Monday launched internet-enabled Jio Bharat phones at Rs 999, packing in a cheaper monthly plan of Rs 123 for unlimited voice calls and 14 GB data. The new offering aims to accelerate the '2G Mukt Bharat' vision, as India still has 250 million mobile subscribers trapped in the 2G era with feature phones.
'IT companies do not have a large presence there either in terms of market and team. So, the impact of the war will be minimal. But West Asia is an emerging economy.'
Brokers have requested for a three-month extension from the Securities and Exchange Board of India (Sebi) for the validation of Know Your Client (KYC) records. In a letter to Sebi, industry body -- Association of National Exchanges Members of India (Anmi) -- has cited various issues and concerns raised by its members that have hampered the smooth completion of the validation process within the stipulated timeline. The Sebi circular had given KYC Registration Agencies (KRAs) a timeline of 180 days, ending on April 30, 2023, to validate client KYCs.
RIL's standalone net profit rose one per cent quarter-on-quarter
The decline of over 5 per cent in PB Fintech's shares (the parent company of PolicyBazaar) in the past two days presents an opportunity for long-term investors to consider buying the stock, suggest analysts. By comparison, the benchmark S&P BSE Sensex has remained flat during the same period with a negligible gain of 40 points, or 0.06 per cent. Analysts believe that the recent selling is "overdone", as the company behind the online insurance portal remains committed to achieving profitability, and the potential threat from the government's online insurance portal, Bima Sugam, might be embellished.
Notwithstanding the fact that the country's pharmaceutical (pharma) pricing regulator has allowed a 12 per cent price increase for medicines listed under the National List of Essential Medicines (NLEM) in 2023, analysts and industry insiders predict that the overall domestic pharma industry will only witness a price hike of 5-6 per cent. This is attributed to higher competitive intensity in the market. Krishnakumar V, executive director and chief operating officer (CEO) of Eris Lifesciences, a domestic-focused pharma company, noted that the NLEM segment experienced growth suppression of around 150 basis points due to price reductions during the January to July period this year.
Analysts seem to be generally pessimistic about Bharat Heavy Electricals (BHEL). Out of 15 brokerages with recommendations since May this year, two have 'buy' while five have 'sell' and eight have 'underweight'/'reduce'/'underperform'/'hold' recommendations. The average target price of the public sector undertaking (PSU) is Rs 61. However, the stock has been consistently hitting new highs, which indicates that there is some kind of valuation mismatch.
Stocks of gold jewellery retailers have been able to retain their sheen in 2023 despite volatile gold prices. Kalyan Jewellers, Titan, PC Jewellers, Thangamayil Jewellery, and Tribhovandas Bhimji Zaveri (TBZ) have rallied 21-72 per cent so far since April as compared to a 13 per cent gain in the benchmark Sensex index. The rally gained steam on the back of gold's 6 per cen
The sharp rally in the broader markets has propelled India's market capitalisation (m-cap) to a new high. The combined m-cap of all BSE-listed firms rose to Rs 291.9 trillion in intraday trade on Thursday before settling lower at Rs 290.9 trillion. The previous record was on December 14, 2022, at Rs 291.3 trillion.
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10 non-bank and non-finance stocks from the BSE500 Index universe that offer an optimal blend of low valuation, reasonably robust revenue and earnings growth in recent quarters, a strong balance sheet, and most importantly, positive cash flow from their operations.
Notwithstanding the risk involved, analysts are upbeat on micro-cap investing as India remains in a firm bull market. Moreover, these stocks are available at relatively cheaper valuations compared to large, mid and small caps, assuring alpha returns. With a market-capitalisation (market-cap) of up to Rs 10,000 crore, micro-cap stocks are outside the purview of Nifty 500 stocks, and are ranked from 501 to 750 in the market-cap ladder.
American brokerage firm Morgan Stanley on Thursday sharply cut its India FY23 real GDP growth estimate to 7.9 per cent, mainly due to the impact of the Russia-Ukraine conflict on oil prices. Analysts at the brokerage also raised their inflation forecast to 6 per cent - the upper end of the tolerance band for the RBI - and flagged stagflation risks because of the ongoing events. "We believe that the ongoing geopolitical tensions exacerbate external risks and impart a stagflationary impulse to the economy," they said. It can be noted that stagflation involves a stagnancy in output or growth, coupled with high inflation.
State Bank of India's earnings growth may turn lacklustre in the near-term, warn analysts. This, they said, could be due to margin compression and likely lower fee income over the next one year. "While the cost of deposits is repricing sharply across the system, there will be relatively lower yield expansion going ahead as most of the back-book has been repriced and there is a high competitive pressure on yields.
Indian equity markets have a limited upside potential in the near-term as they negotiate the ensuing cyclical slowdown, wrote analysts at Nomura in a recent coauthored report led by Saion Mukherjee, their managing director and head of equity research for India. He, however, believes that the foundations are in place for sustainable growth over the medium-to-long term, and hence suggests a 'buy on dips' strategy to equity investors. As an investment strategy, Nomura prefers domestic-oriented sectors and companies over exporters, and prefers stocks that provide valuation comfort. Industrials and banks are their overweight sectors, while IT services and consumer discretionary are their underweight sectors.
Domestic-focused agricultural chemical (agrochem) companies could face near-term headwinds, given the worries on the El Nio effect on monsoons, higher inventory, and pressure on margins. Some of these were reflected in the October-December quarter (third quarter, or Q3) results of companies and may impact them in the current quarter (fourth quarter, or Q4) as well. Nuvama Research pointed out that the sector witnessed mixed performance during the quarter as global agrochem and domestic fertiliser companies maintained growth momentum, while adverse agronomical conditions and excess channel inventory weighed on domestic market volume offtake.
Indian equity markets had a good run in the first half of calendar year 2023 (CY23), with the S&P BSE Sensex and the National Stock Exchange Nifty50 hitting fresh 52-week highs. While the Sensex scaled up to a peak 64,718, the Nifty50 hit Mt 19,189. As the markets now prepare to enter the second half (H2) of CY23, all eyes are on global central banks, especially the US Federal Reserve, as to when they will pause and pivot as regards their interest-rate cycle.
Hyderabad police on Thursday arrested two senior executives of scam-hit Karvy Stock Broking Pvt Ltd for allegedly involving in diverting funds raised from banks by pledging clients' securities as collaterals. According to a police press release, Rajiv Ranjan Singh, chief executive officer and G. Krishna Hari chief financial officer of Karvy were arrested basing on a complaint by IndusInd bank.
The excise duty cuts on diesel and petrol will cost Rs 45,000 crore and lead to a 0.3 percentage point widening on the Centre's fiscal deficit, a foreign brokerage said on Thursday. Going by the overall consumption, the costs of the surprise move - which came after months of concerns over high payouts at filling stations - for the entire fiscal will come at Rs 1 lakh crore or 0.45 per cent of GDP, economists at Japanese brokerage Nomura said in a report. For the remaining months of the ongoing FY22, the cost will come at Rs 45,000 crore, which leads to an upward review of the fiscal deficit target.
The Securities and Exchange Board of India (Sebi) is considering a proposal to allow mutual funds (MFs) to charge a fee based on their performance, said Ananta Barua, whole-time member of the markets regulator. He said the proposal is being reviewed by a working group formed to look into cost structures. "One working group has been set up which is going to review... One of the suggestions is that if any scheme or fund is performing well above the benchmark, it (fee) can be linked to its performance.
10 stocks which are most popular with brokerages right now and are expected to deliver maximum upside over the next 12 months.
With inflation down, the government's twin deficits are largely under control.
Life insurance companies reported a 17 per cent year-on-year (YoY) drop in new business premium (NBP) in February as state-owned Life Insurance Corporation of India's premiums contracted 32 per cent during this period on account of a drop in its group single premium segment. According to data released by the Life Insurance Council, the industry earned an NBP of Rs 22,847.65 crore in February - a drop of 17 per cent from the same period a year ago.
After a record run in FY2022, when the brokerage industry is set to report over 30 per cent topline growth at around Rs 28,000 crore, the industry is set for a tepid growth next fiscal even though the outlook is stable, says a rating agency report. The market has been on a song since June 2020 when the first wave of the pandemic ebbed and since then it has had record run with the stock indices more than doubling since the Covid-19 mayhem in March 2020 and scaled new life-time highs since then. The market frenzy was also visible in the massive number of new investors coming to the equity market, as exemplified in the more than trebling of the demat accounts since April 2020.
The two-wheeler sector has been underperforming its peers on the volumes front for over five quarters now. Even in the March quarter, Bajaj Auto and Hero MotoCorp posted a 17-24 per cent YoY decline in volumes, the sharpest in the listed auto universe. The ongoing impact of frequent price hikes, all-time high fuel prices, and muted rural sentiment has led to the lacklustre showing by two-wheeler makers. What has aggravated the situation for two-wheeler companies, which get almost all their sales from the internal combustion engine or ICE-based units, is the traction for electric two-wheelers (EV).
Despite a firm improvement in the operational metrics of new-age companies during the January-March quarter (Q4FY23), analysts remain cautiously optimistic about their outlook. This is because the shares of these firms are still not risk free, as per analysts, given the companies are yet to make profits. Kranthi Bathini, director-equity strategy at WealthMills Securities says that while the sentiment around these stocks, which includes Paytm and Zomato, has turned positive, it remains to be seen how soon these firms turn profitable and improve margins.
The Securities and Exchange Board of India (Sebi) is working on a new payment system for the secondary market, which could prevent brokers from accessing their client funds. It will be on the lines of the Application Supported by Blocked Amount (ASBA) process used for subscribing to initial public offerings (IPOs), where funds move out of an investor's bank account only after the trade is confirmed. Sebi chairperson Madhabi Puri Buch on Wednesday said that despite the challenges, the new system would be ready in a few months.
Over the past three trading sessions, the stock of Cummins India has gained about nine per cent on strong January-March quarter (Q4) results and good near-term prospects. Its Q4 performance was led by a healthy 29 per cent revenue growth over the year ago quarter. This was largely on the back of a 33 per cent jump in domestic revenues while exports witnessed a growth of 17 per cent.
Logistics services provider Delhivery posted a mixed set of results during the March quarter of the previous financial year (Q4 of FY23). While its operating profit was marginally in the green, its net losses widened as compared to the year-ago quarter. Overall revenues, which were in line with estimates, fell 10 per cent year-on-year (YoY).
'Like all long-term bull markets, the Indian stock market will continue to climb the proverbial wall of worry.'
With the merger between HDFC Bank and HDFC Ltd complete, analysts said the next key monitorable for the Street would be successful resolution of merger-related hiccups, including employee-related churn and roll out of complete banking services across branches. At the bourses, they expect the stock to perform in-line with the benchmark indices in the near-term. "There's usually an initial period of consolidation after a merger as the entities work towards integration.
Gold burnished its image as the go-to asset class during turbulent times. However, investors seemed to have missed the bus. Net inflows into gold exchange-traded funds (ETFs) plunged to a four-year low of Rs 653 crore in 2022-23 (FY23), even as gold emerged as the top-performing asset class.
After new-age tech companies reported better-than-expected June quarter (Q1FY23) results, analysts said it will be a long road to recovery for their respective businesses and the stock prices. Moreover, brokerages differ on whether it is the right time to own these stocks. The common thread, however, that runs across most brokerages is Zomato, where they suggest buying the stock with the one-year target price ranging between Rs 60 - 115, translating into an upside of around 9 - 109 per cent from the current levels. The company's gross order value (GOV) of food delivery jumped 10 per cent quarter-on-quarter (QoQ) and 42 per cent year-on-year (YoY) in Q1, aided largely by growth in volume, and mild growth in average order value (AOV) at 1-2 per cent. The company also broke even on an adjusted Ebitda basis during the quarter.
The Monetary Policy Committee (MPC) may go for a hike of up to 0.25 per cent in the reverse repo rate at which the RBI absorbs excess liquidity and leave the repo rate at which it lends, to narrow the policy rate corridor, a British brokerage said on Thursday. "Growth concerns amid spread of the Omicron variant and relatively benign inflation out-turns provide the RBI with enough room to maintain its growth-supportive monetary policies," analysts at Barclays said, ahead of the resolution announcement next week. The RBI will hike the reverse repo rate by 0.20-0.25 per cent, given its liquidity management actions, it said.
Titan posted better than expected revenue growth in the March quarter of the financial year 2022-23 (Q4FY23), powered by strong demand trends in the jewellery and watch segment. Standalone jewellery sales for the firm were up 24 per cent year-on-year (YoY) on a slightly lower base and aided by like-to-like growth of 19 per cent. The company highlighted that new buyer growth was at 15 per cent while average ticket size was up 8 per cent.
This is the Mukesh Ambani-led company's second entry into the dairy segment and it will directly compete with Amul and Mother Dairy.
Striking a different note from its peers, US brokerage Bank of America Securities has maintained that the Reserve Bank will leave rates unchanged next week, recognising growth-focused and capex-driven fiscal expansion, which though poses huge price pressure and interest rate risks later. The RBI's rate setting panel Monetary Policy Committee (MPC) will begin its deliberations next Monday and announce the policy moves on Wednesday (February 9) in the backdrop of a massive spike in bond yields post the Budget. Almost all major central banks are in the process of hiking rates to tame inflation.
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