Ujjivan Small Finance Bank ventures into supply chain finance
Ujjivan Small Finance Bank today announced its collaboration with fintech partner, Desiderata Impact Ventures Private Limited (Progcap) for end-to-end digitized invoice-based financing services and repayments for loan applications received from Micro, Small and Medium Enterprise (MSME) units seeking small tenor working capital for their businesses.
Sandeep Bagla, CEO, TRUST AMC on RBI Policy
In the upcoming credit policy, RBI has a tough task at hand, navigating between galloping commodity prices, which raise inflationary expectations – and the unpredictable impact of the lockdowns on employment, production and the general welfare in the real economy. Easy liquidity conditions and low policy rates have not led to widespread growth in credit offtake which is languishing at multi-year lows.
In case of an uncertain economic outlook, a central banker is likely to err on the side of caution by continued easy liquidity and policy rates lower than normal to stimulate the economy. It is expected to be a no change policy, with continued economy friendly soft interest rate bias. The market should continue to have faith in RBI’s ability to contain inflation credibly for the policy to succeed. We, at TRUST MF, recommend fixed-income investments in structured high-quality bond portfolios up to 3-year maturity in the current interest rate scenario.
Market Watch: Ruchit Jain, Angel Broking
– Buy Piramal Enterprises with a stop loss of Rs 1,765 and a target of Rs 1,880.
– Buy West Coast Paper with a stop loss of Rs 223 and a target of Rs 242.
Narayana Health’s Viren Shetty expects third wave to be less severe than second wave
Narayana Health posted Q4FY21 earnings. The company has clocked in a record-high profit, and margins have improved significantly to 17 percent. However, the management commentary remains quite cautious on near-term recovery. Viren Shetty, Executive Director and Group COO, Narayana Health, discussed the performance. “We are working with a large number of corporates, buying huge numbers of ventilators and oxygen generators, while maintaining a huge stock of medicines and PPEs to prepare for any eventuality,” he said. “We were still in the process of procuring a large number of ventilators and oxygen generators when the second wave of COVID-19 hit us. So now, we are not taking any chances,” he shared. Read here.
The Phoenix Mills | The company and Singapore’s sovereign wealth fund GIC announced the execution of definitive documents to form a strategic investment platform, to develop, own and operate retail‐led, mixed‐use developments in India. Earlier in December 2020, PML had announced signing of a non‐binding term sheet with GIC for formation of this retail‐led, mixed‐use platform.
Motilal Oswal on Auto sector
The Auto industry was impacted by COVID infections peaking in May 2021, leading to localized lockdowns and affecting consumer buying sentiment. Current valuations largely factor in a sustained recovery (our base case), leaving a limited margin of safety for any negative surprises. We prefer 4Ws over 2Ws as PVs are the least impacted segment currently and offers a stable competitive environment. We expect the CV cycle recovery to slowdown in the near term. We prefer companies with: a) higher visibility in terms of demand recovery, b) a strong competitive positioning, c) margin drivers, and d) balance sheet strength. Maruti Suzuki India and Mahindra & Mahindra are our top OEM picks. Among the Auto Component stocks, we prefer Endurance Technologies. We prefer Tata Motors as a play on global PVs.
Prefer midcaps over largecaps; see upside in metals, positive on pharma & autos: Ambit’s Dhiraj Agarwal
“This bull market is here to stay. It is not a demand supercycle, which is why many people tend to get a bit bearish saying that the demand is not as strong as 2003-07 period,” Dhiraj Agarwal, co-head equities, Ambit Capital, told CNBC-TV18. However, he added that the Indian market is expected to remain rangebound with an upward bias. Midcaps will have more steam over the next one-two years in terms of re-rating. Top sectoral bets at this point of time would be metals, pharmaceuticals and automobiles,” Agarwal said. He continues to remain positive on metals, pharmaceuticals and autos. According to him, there is more upside for metal stocks. He believes that the lack of capacity addition in the past few years will keep prices higher, which will aid metal companies. More here
Gujarat Gas shares rally over 6% on strong Q4 results
The share price of Gujarat Gas rallied over 6 percent on Wednesday after the company reported strong earnings for the fourth quarter of fiscal 2021. The City Gas Distribution (CGD) company posted a consolidated profit of Rs 350.86 crore in Q4FY21, registering a growth of 40.1 percent over Rs 250.46 crore reported in the year-ago period. The company’s revenue jumped 28.2 percent to Rs 3,489.31 crore from Rs 2,722.17 crore, YoY. The company’s average gas sales volume for the quarter was at 12.13 mmscmd, up by 22 percent compared to corresponding quarter previous year. More here
Market Watch: Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
The Index has started on a soft note this morning. It has had a good rally up and perhaps there could be marginal profit booking and offloading of positions. However, the trend continues to remain positive and we should be heading to 15900-16000 as the next potential target. Since there is good support at 15300, every dip or intraday correction can be utilized to accumulate long positions.
Gold rate today: Yellow metal rises above Rs 49,500 per 10 grams
Gold prices in India traded flat with a positive bias on the Multi Commodity Exchange (MCX) Wednesday following a muted trend in the international spot prices amid mixed cues, analysts said. Gold futures for August delivery rose 0.27 percent to Rs 49,557 per 10 grams as against the previous close of Rs 49,425 and the opening price of Rs 49,311 on the MCX. Silver futures traded 0.11 percent lower at Rs 72,167 per kg. The prices opened at Rs 72,000 as compared to the previous close of Rs 72,248 per kg. “Strong US manufacturing data and higher US Treasury yields dented the demand for safe-haven asset gold. However, concerns over inflation is limiting the downside for the yellow metal prices,” said Ajay Kedia, Sirector, Kedia Advisory. More here
ITC shares fall over 2% after Q4 results
The share price of ITC fell over 2 percent after the company posted a 1.3 percent decline in standalone net profit for the quarter ended March 2021 at Rs 3,748.4 crore as compared to Rs 3,797 crore in the year-ago quarter. Standalone revenue from operations during Q4FY21 grew by 22.6 percent to Rs 13,294.7 crore from Rs 10,842.2 crore, YoY. At the operating level, EBITDA rose by 7.4 percent to Rs 4,473 crore from Rs 4,163.5 crore, while EBITDA margin contracted 480 bps to 33.6 percent from 38.4 percent, YoY. During the quarter, the cigarette business, which contributed 41 percent to total business, registered 14.2 percent YoY growth at Rs 5,859.6 crore while FMCG (others) business revenue grew by 15.8 percent to Rs 3,687.5 crore.
What RBI’s recent clarification on cryptocurrencies means for investors
The Reserve Bank of India (RBI) has recently clarified that banks and other entities cannot cite its 2018 order on virtual currencies as it has been set aside by the Supreme Court of India in 2020. It, however, said the lenders must follow other routine due diligence measures. The clarification comes as a relief for crypto investors who have been dealing with a lot of confusion and uncertainty in India. The general public misconception has been that holding or dealing with cryptocurrencies in any way is illegal in India. Earlier, several banks had issued orders to their customers, asking them not to invest in cryptocurrencies, citing the 2018 order by the central bank. However, the RBI has clarified that as of now there is no ban on cryptocurrencies, and thus individuals holding or trading in cryptocurrencies and crypto businesses enabling this do not violate any policy. More here
Muthoot Finance Q4FY21 earnings: Street expects strong quarterly numbers
Muthoot Finance will be reporting its Q4FY21 numbers. The street is anticipating a strong quarter from the company. Going into the results over the last one week, the stock is up 3.5 percent. The assets under management (AUM) growth is expected to be at 4 percent on a quarter-on-quarter (QoQ) basis, net interest margins (NIMs) are expected to remain stable or improve sequentially, asset quality is expected to remain stable. One should watch out for a housing finance subsidiary as its performance will be a key factor. CNBC-TV18’s poll suggests net interest income (NII) growth of 20.3 percent on a year-on-year (YoY) basis and about 7.3 percent on a QoQ basis. More here
Here’s why Goldman Sachs has downgraded L&T Infotech to ‘sell’
Goldman Sachs has downgraded L&T Infotech to ‘sell’ from ‘neutral’, with a target price of Rs 3,217. That means a 17 percent downside from the current levels. The revenue growth is expected to settle down in the low teen levels over FY23-FY24 estimates. EBIT margins are expected to fall to 118 basis points in FY22 on account of the tight labour market. Watch the video for more details.
Market Watch: Deven Choksey, KRChoksey
On Gujarat Gas
Conviction remains high, so valuation is expensive in case of Adani Gas. It is expanding into the newer circles at a rapid pace. As a result of which we are likely to see larger amount of growth on the volume side in this particular company. I must say valuations are relatively stretched at this point of time.
Structurally this industry is likely to see better days ahead. So at corrections, these stocks will be meaningful buys. Stock prices have already moved up in anticipation of this positive development.
Morning market quote from VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services
“The steady decline in fresh Covid cases and rising recovery rates indicate that India is succeeding in bending the Covid curve. This has paved the way for progressive unlocking and consequently unlock- trade is happening in the broader market. The outperformance of the mid and small-cap indices this year is impressive: Midcap and small-cap indices are up by 23.54% and 29.91% respectively YTD while Nifty is up only by 11.39 % YTD. With such outperformance valuations in the broader market too is becoming a concern. With no short-term risks to the market, consolidation is likely in the near term with a stock-specific action in response to the news. Since markets are over-bought and over-valued investors should exercise caution even when the markets are exhibiting surprising resilience”
Opening Bell; Sensex opens lower, Nifty around 15,500; ITC down 2.5%
Indian indices opened lower on Wednesday dragged by losses in heavyweights HDFC, ICICI Bank, ITC, and Infosys. ITC fell over 2 percent after the company’s Q4 results missed analyst estimates. Meanwhile, India’s manufacturing PMI fell to an 8-month low in May also weighed on the sentiment. At 9:18 am, the Sensex was down 141 points at 51,759 while the Nifty lost 34 points at 15,540. On the Nifty50 index, JSW Steel, Tata steel, Adani Ports, ONGc, Hindalco were the top gainers while ITC, Tech Mahindra, Wipro, HDFC and Kotak Bank led the losses. Broader markets, however, outperformed with Nifty midcap and Nifty smallcap indcies up around half a percent each.
Oil prices rise on OPEC+ discipline, strong demand outlook
Oil prices rose on Wednesday after OPEC and its allies stuck to their plan to cautiously return oil supply in June and July while expecting fuel demand to rebound strongly during the U.S. summer. U.S. West Texas Intermediate (WTI) crude futures rose 32 cents, or 0.5%, to $68.05 at 0201 GMT, extending a 2.1% gain following the Memorial Day holiday in the United States on Monday. Prices rose to their highest since October 2018. Brent crude futures climbed 37 cents, or 0.5%, to $70.62 a barrel, after jumping 1.3% overnight, when it hit its highest since March 8. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC+, agreed on Tuesday to keep to their
Global equities break record as U.S. stocks waver after manufacturing data
Global equities set both an intraday high and record close on Tuesday as investors weighed the latest U.S. economic data for signs of a rebound and rising inflation, while Wall Street’s main indexes wavered before ending little changed. Energy shares were among the best performing during the session as the OPEC+ alliance agreed to hike output in July and gave a bullish forecast. U.S. crude futures rose to their highest in more than two years. The dollar ended little changed, while Treasures, gold and bitcoin slipped. Financial shares countered declines in healthcare. Emerging market stocks rose 1.06%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.87% higher, while Japan’s Nikkei lost 0.16%.