Q2 results corner, Covaxin enters phase 3 trails, & more.

23rd October 2020 Highlights: Markets end green, Q2 results corner, Covaxin enters phase 3 trails, & more.

-23rd October 2020-

Sensex 40,685.50 ▲ 0.31%

Nifty 11,930.35 ▲ 0.28%

The markets ended in the green today - up by about 0.30%. The markets opened the day with a gap-up and continued to trade in a narrow range until the close of day. Auto sector stocks were in the driver’s seat today with gains seen in Maruti (4.2%), M&M (3.3%) and Bajaj Auto (2.7%). Among the sectoral indices, Nifty Auto (2.9%) and Nifty Media (0.6%) were top gainers, whereas Nifty Realty (-1.0%) and Nifty Pharma (-0.3%) lost some ground.

Automobile sector and financial sector stocks lifted the index up today as Maruti Suzuki and M&M both climbed more than 3%.

Top Gainers (Nifty)

Maruti Suzuki  Rs 7103.25 ▲ 4.28%

M&M Rs 625.15 ▲ 3.44%

Tata Steel Rs 423.35 ▲ 3.27%

Power Grid Rs 170.15 ▲ 3.06%

Tata Motors Rs 137.00 ▲ 2.66%

Top Losers (Nifty)

UltraTech Cement Rs 4504.55  ▼ 2.38%

Shree Cement Rs 20521.15  ▼ 2.24%

GAIL Rs 87.25  ▼ 1.69%

HUL Rs 2144.05 ▼ 1.62%

HCL Tech Rs 852.45  ▼ 1.59%

Here are the top stories of the day.

Q2: Tech Mahindra, Yes Bank, JSW Steel, Biocon

Tech Mahindra

Tech Mahindra's net profit fell 5.2% to Rs 1,064.6 crores in the July to September quarter. This is compared to a consolidated net profit of Rs 1,123.90 crores for the same quarter last year.

Revenue increased 3.32% to Rs 9,371.80 crores during the same period.

The company's dollar revenue fell 1.7% to $1,265.40 million.

However, there was a 4.8% increase when compared with the previous quarter.

A special dividend of Rs 15 per share was also declared.

Results were declared after markets closed today. The shares of the company ended 1.29% higher at Rs 848.25 per share.

What is meant by a special dividend?

A special dividend is a non-recurring and one-time dividend given by the company to its shareholders in a financial year.

Yes Bank

Yes Bank posted a net profit of Rs 129.37 crores in the July to September quarter. The bank had posted a net loss of Rs 600.08 crores in the same quarter last year.

In the April to June quarter, the bank's net profit stood at Rs 45.44 crores.

Gross non-performing assets (NPA) was reported at 16.9% as against 17.3% in the previous quarter. Net NPA was reported at 4.71% versus 4.96% in the previous quarter.

Net interest income fell 9.7% to Rs 1,973 crores from the corresponding quarter last year.

Shares of the bank ended 4.72% higher at Rs 13.3 per share. The results were declared after markets closed today.

What are GNPA and NNPA?

Gross NPA is the total of all assets that are classified as non-performing as per RBI guidelines.

Net NPA is the total of all non-performing assets minus the provision left aside. Provisions are the amount a bank sets aside from its profits to cover for losses that a bank may or has incurred.

So, net NPA is the amount we get after adjusting GNPA with provisions.

JSW Steel

The net profit of the company fell 37.7% to Rs 1,593 crores in the July to September quarter.

Total revenue increased by 9.63% to Rs 19,264 crores.

Saleable steel sales rose 49% from the April to June quarter to 4.15 million tonnes.

The shares of the company ended 1.31% lower at Rs 321.25 per share today. Results were declared after the markets closed.

Biocon

Net profits of the company fell 23.01% to Rs 174.3 crores in the July to September quarter.

The total revenue rose 9.6% to Rs 1,760 crores.

Segmental Revenue:

Generics: Up 8.3% to Rs 598.8 crores

Biosimilars: Up 11.3% to Rs 676.1 crores

Research services: Up 11.8% to Rs 519.6 crores

Results were declared yesterday after market hours. The shares of the company ended 2.9% lower at Rs 417.2 per share.

Flipkart to Acquire a 7.8% stake in Aditya Birla Fashion

Aditya Birla Fashion and Retail Ltd. will raise Rs 1,500 crores from Flipkart's acquisition.

For this purpose, the board of Aditya Birla Fashion approved the issue of around 7.31 crore shares on a preferential basis to Flipkart. The capital will be raised at Rs 205 per share.

The announcement was made during market hours today. The shares of Aditya Birla Fashion ended 7.46% higher at Rs 164.95 per share.

SBI Cards slumps after bad loans hurt profits.

Credit card giant SBI Cards is among the companies that have been hit hard due to the pandemic. The company’s bad debts in Q2 have risen by a whopping 162% over the same period last year. Meanwhile, revenue growth stands at a meagre 5%. Thus, the impact of loan defaults is severe and profits are down by 46%. The stock fell 5.5% today and 8.2% during the week. The company’s gross NPAs (non-performing assets)—which help gauge the asset quality—have risen to 4.29% (versus 2.33% in Q2 last year). This figure would be even higher, at 7.4%, without factoring in the Supreme Court order regarding NPAs. 

Crompton Greaves rallies on upbeat results

Crompton Greaves, India’s market leader in fans, grew its Q2 revenues by 12.8% year-on-year. Electrical appliances account for ~75% of the company’s revenues. The growth comes from a strong 23% growth in revenues from fans and a 32% jump in revenues from appliances. The company said that cost optimisation measures helped in expanding the margin to 15.8% (against 12% in Q2 last year). The stock rose 5.4%. Other consumer durable stocks, such as Orient Electric (5.9%) and TTK Prestige (3.6%), also saw investor interest, especially in light of the ongoing festive season when sales of consumer durables tend to rise.

Biocon’s Q2 net profit drops on higher R&D costs

Biopharmaceuticals major Biocon reported a 22% drop in its consolidated net profits against Q2 last year due to higher R&D expenses. However, the company witnessed revenue growth in its key businesses—generics (8%), biosimilars (11%) and research services (12%). This resulted in a total revenue growth of 10% to ₹1,760 for the June-September quarter over the same period last year. The stock fell 2.7%% today and 6.8% during the week. The company expects its generics business, especially the new products launched in the US, to drive growth going forward. Further, the company plans to commercialise Remdesivir (treatment for Covid-19) in India.

India Developed Vaccine Moved to Phase 3

Covaxin - the vaccine developed by the Indian company Bharat Biotech has been cleared for phase 3 trials.

This vaccine had entered phase 1 and 2 trials in July this year.

In this 3rd phase, the vaccine will be given to over 26,000 volunteers across 25 centres in India.

This is in addition to all other vaccine trials already being conducted in India.

Other vaccines whose trials are also being conducted in India are AstraZeneca’s vaccine (Oxford University vaccine), Zydus Cadila’s vaccine, and the Russian vaccine Sputnik-V.

Closing bell

This week, the benchmark indices were range-bound. While this doesn’t give any clarity on direction, it clearly indicates a pause in the uptrend that started from the last week of September. The markets are witnessing a loss of momentum, which is normally followed by sharp movements on either side.

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Daily Change: 1-Day Change

🥇 Gold:  Rs 51,027  ▲ 0.32% at 6 PM

🥈 Silver:  Rs 63,029 ▲ 0.88% at 6 PM

🔀  USD-INR: Rs 73.62/USD ▲ 0.12%

Dow Jones:  28,363.66 ▲ 0.54% - Oct 22

Nasdaq:  11,506.01 ▲ 0.19% - Oct 22

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Long Term: 20-Year Returns

Sensex:  12.85%

Nifty:  12.43%

Dow Jones:  5.20%

Nasdaq:  6.17%

HAPPY INVESTING!

SEE YOU TOMORROW