Mindtree profits up 88%, Likhitha Infra IPO lists 14% gains, and more.

15th October 2020’s Highlights: Markets down in red, Mindtree profits up 88%, Likhitha Infra IPO lists 14% gains and more.

-15th October 2020-

Sensex 39,728.41 ▼ -2.61%

Nifty 11,680.35 ▼ -2.43%

The markets ended down by around 2.5% today after rising for 10 consecutive trading days. This seems to have been triggered by global sentiments - Asian and European markets gave poor signals. The exact reason for all these markets suffering may be Europe restarting lockdowns, US expectations of stimulus, and/or also profit booking.

After the initial cheer led by the strong Q2 result of Infosys, the Indian markets succumbed to broad-based selling. Profit booking in IT stocks led the markets down in the first half, and as the day progressed, selling in banking shares hammered the indices further. A steep fall in index heavyweights Reliance Industries (-3.6%), HDFC Bank (-3.5%) and Infosys (-2%) was enough to demolish any hopes of an intraday revival in the markets. In all, 47 of the Nifty50 stocks ended in the negative, indicating an extremely weak investor sentiment.

Top Gainers (Nifty)

Asian Paints - Rs 2090.45 ▲ 0.92% 

JSW Steel - Rs 291.40 ▲ 0.26%

Hero MotoCorp - Rs 3314.30 ▲ 0.11%

Coal India - Rs 110.60 ▲ 0.05%

Top Losers (Nifty)

Bajaj Finance - Rs 3213.70 ▼ 4.68%

Tech Mahindra - Rs 812.40 ▼ 4.29%

IndusInd Bank - Rs 598.20 ▼ 3.94%

ICICI Bank - Rs 390.90 ▼ 3.91%

SBI - Rs 192.85 ▼ 3.60%

Here are the top stories of the day.

Q2 Results: Mindtree Posts 88% Rise in Net Profit

Mindtree’s net profit rose to Rs 253.7 crore for the July to September quarter. It is up by 87.9% when compared to the same quarter from the previous year.

Revenue rose 0.6% to Rs 1,926 crore during the same time frame.

Mindtree declared an interim dividend of Rs 7.5 per share. The record date is October 27, 2020, and the payment will be done on or before November 11, 2020.

The shares of the company fell 8.19% to Rs 1,424.85 per share. Results were declared after market hours.

What is the record date?

The record date in the context of dividends is the cut-off date to determine which shareholders will get the dividend. A dividend is given to investors who hold the shares as of the record date.

IT stocks tumble after Infy Q2 results 

The Q2 results of Infosys, India’s second-largest IT services provider, beat street expectations with a sequential revenue growth of 4.0% on constant currency terms. The management also revised the FY21 revenue growth outlook upward to 2–3% (compared to 0–2% earlier). What’s more, the stock even touched a new lifetime-high in the morning but then, ironically, lost all the gains made this week. It seems investors chose to book profits in the stock, which has gained nearly 50% since the start of Q2. Profit booking was also seen in other large-cap IT stocks such as TCS (-2.6%) and Wipro (-2.5%), and midcaps like Mindtree (-7.3%) and Coforge (-4%).  

Investors seeking safety in FMCG stocks

Today, while the Nifty50 index fell by 2.43%, the Nifty FMCG index fared relatively better and fell by only 1%. Among individual stocks, Dabur ended flat while the selling intensity was significantly lower in Marico (-0.1%), HUL (-0.6%) and Nestle (-0.6%). The recent Q2 update from Marico indicates a partial revival in the consumer sentiment. The company mentioned that the rural market continued to perform better than the urban market, likely supported by government relief packages, a relatively lower impact of the pandemic, and strength in the agricultural sector. As restrictions are relaxed in most areas, the distribution network has bounced back to near pre-Covid levels. Other FMCG companies and packaged food companies also saw similar improvements in their core categories, with the increase in stay-at-home consumption.

Rane Brake Lining surges on strong results & buyback

Auto components manufacturer, Rane Brake Lining has reported a 54.7% YoY growth in net profit in Q2, owing to improved operating margins and a one-time price hike. The company has also declared a buyback at ₹825, over 20% higher than the current market price. The stock rose 6.3% today on these favourable developments. Further, the company, in its earnings release, mentioned that it saw a pickup in demand, and OEM production levels have gained momentum anticipating festive sales. Further, the company is also cautiously optimistic about the sustenance of the demand after the festive season. This is significant for the auto sector, given that the company supplies its products to most major auto manufacturers, across the two-wheeler, passenger car and commercial vehicle segments.

Lakshmi Vilas Bank Approves Rights Issue

The bank's board has approved a rights issue for Rs 500 crores. No other details regarding the issue were revealed today.

Last week, the bank had received a non-binding offer from the Clix Group for a merger.

The shares of the bank ended 1.66% lower at Rs 17.8 per share.

Likhitha Infra IPO Lists on Exchange

The stocks of Likhitha Infrastructure listed on the exchanges today.

Its issue price was Rs 120 per share. On the last day of its subscription, it was oversubscribed by 8.43 times.

At the end of the day, the stock price of Likhitha Infra was Rs 136.60 per share - up by around 14% from its issue price.

Exports Rise for the First Time in 7 Months

Merchandise exports registered a 6% growth in September.

The rise in exports was driven mostly by petroleum products, engineering goods, readymade garments, and pharmaceuticals.

Exports rose to $27.6 billion, while imports contracted 19.6% to $30.3 billion.

The trade deficit is at $2.7 billion vs $6.77 billion in August.

What is a trade deficit?

A trade deficit occurs when a country's imports exceed its exports. It is neither entirely good nor bad. A trade deficit is considered to be ‘good’ under certain conditions as it is a sign of a strong economy - it means the country is exporting heavily.

Closing bell

The markets witnessed a decisive downward movement today, and there are several indicators suggesting that investors are wary. For one, all sectoral indices closed in the red, while the India VIX was up 9%. Further, mutual fund net inflows have been negative over the past three months, and inflation numbers are higher than expectations. Mix all these ingredients and you get a perfect recipe for 'caution’. 

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🔀  USD-INR Rate: Rs 73.38/USD ▲ 0.11%

Dow Jones: 28,514.00 ▼ 0.58% - Oct 14

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HAPPY INVESTING!

SEE YOU TOMORROW