2nd November 2020 Highlights: Markets end up, Q2 results corner, auto sales continue to climb, & more.
-2nd November 2020-
Sensex 39,757.58 ▲ 0.36%
Nifty 11,669.15 ▲ 0.23%
The markets ended up in the green today up by around 0.3%. HDFC, HDFC Bank, and ICICI Bank were the main drivers behind today’s rise.
The Nifty50 witnessed a battle between the heavyweights today. On the one hand, Reliance Industries (-8.6%) put pressure on the index, while on the other hand, banks kept the index above water. The advance: decline ratio was nearly even, as 23 stocks advanced, 26 stocks fell and one remained unchanged. The day’s top gainers were IndusInd Bank (+6.4%), ICICI Bank (+6.0%) and Axis Bank (+5.9%). Meanwhile, Reliance Industries (-8.6%), Divis Labs (-2.7%) and Eicher Motors (-2.5%) were the top losers.
Top Gainers (Nifty)
Top Losers (Nifty)
Here are the top stories of the day.
Q2: HDFC, NTPC, ICICI Bank
Housing Development Corporation Ltd.
The net profit of HDFC was reported at Rs 2,870.12 crores. This is a 27.5% decline from the same quarter last year.
The company said its net profit numbers are not directly comparable due to dividend income and profit on the sale of investments.
The figure stood at Rs 323 crores in the July to September quarter this year compared to Rs 2,701 crores in the same period last year.
Net interest income (NII) increased 21% to Rs 3,647 crores.
Individual loan approvals rose 9% and disbursements were at 95% levels of the previous year.
The gross non-performing loans stood at Rs 8,511 crores as on September 30, 2020. This is equivalent to 1.81% of the loan portfolio.
The shares ended 6.1% higher at Rs 2,040.8 per share. Results were declared about an hour before the markets closed.
NTPC
The company's net profit rose 7.43% to Rs 3,504 crores. NTPC reported exceptional gains of Rs 560.43 crores during the quarter.
The total revenue rose around 10% to Rs 26,023.33 crores.
Buyback:
NTPC's board approved a buyback proposal of up to 19.78 crore shares at Rs 115 per share. November 13 has been fixed as the record date.
The shares of the company ended 1.83% higher at Rs 89.2 per share. Results were declared after market hours.
ICICI Bank
The net profit of the bank rose to Rs 4,251 crores from Rs 654.96 crores in the same quarter last year.
Net interest income (NII) rose 16% to Rs 9,366 crore.
Asset Quality:
-Gross non-performing assets (NPA) at 5.17% vs 6.37%
-Net NPA at 1% vs 1.6%
The shares of the bank ended 6.3% higher at Rs 417.45 per share. Results were declared over the weekend.
What is NII?
NII is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors.
Reliance sees a sell-off post Q2 results
Shares of Reliance Industries saw a major sell-off and fell 8.6% today. The company announced Q2 results on Friday after market hours. Its consolidated revenues fell 24% over the same period last year to ₹1.16 lakh crore, better than street estimates of ₹1.11 lakh crore. Its net profit fell 6.6% year-on-year to ₹10,602 crore. The company’s performance was impacted by a decline in the refining margin and a weak retail business (due to the lockdown), but was supported by the growing digital business. While the results are better than street estimates, the stock saw selling pressure as most of the positives seem to be factored in. The stock has outperformed the market indices since the start of this fiscal till the end of last week, rising ~86% versus the Nifty50, which gained ~35%.
ICICI surges as profit rises multi-fold
In general, banks have been able to deliver strong results in the September quarter this year. ICICI Bank announced a steep rise in its net income to ₹4,251 crore as compared to ₹655 crore in the same period last year. Its asset quality improved with gross non-performing assets for Q2FY21 at 5.17% versus 6.37% last year. The company mentioned that after lockdown restrictions were eased, it is witnessing a month-on-month increase in disbursement of retail products. In fact, mortgage, auto and rural portfolio disbursements have either reached or surpassed pre-Covid levels. The stock was among the top Nifty50 gainers today and rose by 6.0%.
Auto Sales in Oct Touching New Highs
Auto-sales have recovered the slump suffered during the March & April 2020 lockdowns.
October saw many manufacturers see new highs as the festive season is a popular period for vehicular purchases in India.
Hero Motocorp sales in October rose by 35% when compared to the same month in the previous year.
TVS sales in October were 22% higher than the same month in the previous year.
Similarly, Bajaj Auto also saw its sales climb by 18% in October. This is actually the highest sales Bajaj has ever had in a month.
Commercial vehicle maker Ashok Leyland also witnessed an overall 1% jump in October on the back of light commercial vehicles. Medium and heavy commercial vehicle sales were still down though.
Maruti Suzuki saw its sales climb by 19% in October this year compared to the same month from the previous year.
CV sales zoom in October
Domestic volumes for two-wheelers and passenger vehicles grew at a fast clip this October thanks to the festive season. However, what was most surprising was the recovery seen in the commercial vehicle (CV) sales, especially in the medium and heavy vehicles (M&HCV) segment. In October, Ashok Leyland’s domestic sales for this segment grew by 13% year-on-year, while for Eicher Motors (Volvo-Eicher) sales rose by ~25% in the same period. This trend is backed by the recovery in the index of industrial production (IIP) numbers from the extreme lows of April 2020 and a sharp rise in the manufacturing PMI to 58.9. Ashok Leyland was a top gainer in the auto pack as it rose 3.9%. However, Eicher Motors (which also makes Royal Enfield motorcycles) was down 2.5%, mainly due to a 7% year-on-year decline in domestic two-wheeler sales. Meanwhile, Maruti (-1.2%) and Bajaj Auto (-1.3%) fell, while Hero Moto (+1.3%) gained.
India’s Manufacturing PMI Touches Decade High in Oct
India’s factory activity expanded at its fastest pace in over 10 years.
There has been a big recovery in demand for goods after the country emerged from the lockdowns. The Nikkei Manufacturing Purchasing Managers’ Index rose to 58.9% in October. The previous all-time high was touched back in May 2010.
Word of the Day: Expense Ratio
It is the fees charged by mutual funds companies for managing your investments. It includes fund managers' fees, marketing fees, etc.
The returns you see are after the expense ratio has already been deducted.
You do not need to pay the expense ratio separately.
Closing bell
While there was a tug-of-war in the large-caps (mainly Reliance vs. banks), the Nifty Smallcap index fell 1.55%. And such movements usually go unnoticed. Meanwhile, the Nifty Midcap has been moving sideways for over two months now, suggesting a lack of direction. Having said that, the October manufacturing PMI stood at 58.9, the highest in over a decade. And this is reflected in the Q2 results of several companies. However, at this point, investors would be looking for sustenance of this positive trend.
Daily Change: 1-Day Change
Long Term: 20-Year Returns
Returns are in INR for Sensex & Nifty and in USD for Dow Jones & Nasdaq.
Post a Comment
Post a Comment