Morning Update :-The Nifty saw big gains from ONGC, SBI Life Insurance, Adani Enterprises, HDFC Bank, and Sun Pharma, while Cipla, Dr Reddy’s Labs, Bajaj Auto, BPCL, and ITC fell.
Sensex – Rise +387 Points at 71,087
Nifty 50 – Rise +120 Points at 21,473
Indian Market
FII AND DII
| FII Sold | 2,144.06 Cr |
| DII Bought | 3,474.89 Cr |
Indian Market News
- Asian markets trade higher; Kospi and Hang Seng up 1% each.
- Oil prices rise 1% following the Houthis’ raid on a petroleum tanker in the Red Sea.
- The RBI enables LIC to acquire up to a 9.99% stake in HDFC Bank.
- The dollar is stable in a cautious start to busy data, Fed week.
- The US economy increased at a fairly solid 3.3% pace last quarter, indicating sustained strength.
- Evergrande, a Chinese real estate business, has been ordered to close by a Hong Kong court.
- Weak Intel prediction pulls the S&P 500, ending streak of record highs.
- Nomura predicts the Fed to decrease interest rates by 100 basis points in 2024.
- Yes Bank’s Q3 net profit jumps 349.7% to Rs 231.6 crore.
- Adani Power’s Q3 profit climbs over 300-fold YoY to Rs 2,738 crore.
- Utkarsh Small Finance Bank’s Q3 profit rises 24% to Rs 116 crore.
- Adani Green has completed funding of the reserves for the USD 750 million Holdco Bond.
- Macrotech Developers’ Q3 earnings rose 25% at Rs 505 crore.
- KFin Technologies reports a 25% increase in Q3 profit at Rs 67 crore.
Global Markets updates
GIFT Nifty
Trends in the GIFT Nifty, which gained 79.50 points, or 0.37 percent, suggest that the wider index in India is off to a robust start. Around 21,619.50 was the trading range for the Nifty futures.
US Markets
Friday marked the end of the S&P 500’s five-session run of record highs. Intel (INTC.O) opened a new tab and fell following a dismal revenue projection, while U.S. economic data indicated that inflation was beginning to moderate.
Despite the fact that the Nasdaq and S&P 500 finished the day with lower values, all three major indexes saw their third consecutive weekly increase and their twelfth consecutive weekly advance.
The S&P 500 finished the session at 4,890.97 points, down 0.07 percent. While the Dow Jones Industrial Average increased 0.16 percent to 38,109.43 points, the Nasdaq fell 0.36 percent to 15,455.36 points.
The Dow gained 0.65 percent, the Nasdaq increased 0.94 percent, and the S&P 500 added 1.06 percent for the week.
Asian Markets
Ahead of many GDP and inflation statistics that are expected to be released from the area this week, Asian markets were primarily trading higher on Monday. The Kospi index increased by 1%, while the Nikkei in Japan had a gain of 0.8 percent
Oil prices
On Monday, oil prices surged by 1% due to worries about gasoline availability following a missile strike on a petroleum ship operated by Trafigura in the Red Sea. Additionally, Russian exports of refined products are expected to decline as multiple refineries are undergoing repairs following drone attacks.
By 2341 GMT, Brent crude futures had risen 83 cents to $84.38 per barrel, from a session high of $84.80. A barrel of US West Texas Intermediate oil now costs $78.79, up 78 cents.
US dollar
Ahead of this week’s Federal Reserve policy meeting, investors evaluated U.S. economic data, which helped to keep the dollar steady. At the same time, growing geopolitical concerns in the Middle East moderated risk sentiment.
The dollar index, which compares the value of the US dollar to six competitors, rose 0.01% to 103.55 on Monday. This is in line with a 2% rise in January as traders reduce their bets on significant and early reductions in US interest rates.
News Updates
December saw a modest increase in US prices with declining inflation.
Expectations that the Federal Reserve will begin reducing interest rates this year were strengthened by the slight increase in US prices in December, which kept the annual increase in inflation below 3 percent for a third consecutive month.
The Commerce Department’s report on Friday also shows that consumer spending surged at the end of 2023 as Americans splurged on goods and services over the holidays, casting doubt on when the expected rate decrease will occur.
Following a 0.1 percent decline in November, the personal consumption expenditures (PCE) price index climbed by 0.2 percent last month, according to the Bureau of Economic Analysis of the Commerce Department. The price of food grew by 0.1%, while the price of energy items increased by 0.3%.
Key rates remain unchanged by the ECB
On Thursday, the European Central Bank maintained its rate of interest rate freeze, despite a decline in inflation, indicating that rate cuts were not yet warranted.
The European Central Bank’s benchmark deposit rate hit a record high of four percent after a historic series of hikes to control prices that skyrocketed following Russia’s war in Ukraine. This is the third straight pause since October.
Though the delay was widely anticipated, investors’ focus has switched to when the ECB would begin reducing rates as a result of the eurozone economy faltering and inflation gradually declining.
Reiterating its belief that rates at current levels “maintained for a sufficiently long duration, will make a substantial contribution” to getting inflation back to the two percent objective, the ECB’s governing council released a statement.
The US economy expanded last quarter at an unexpectedly robust 3.3% rate.
Despite high interest rates and price levels that have disappointed many consumers, Americans continued to show a willingness to spend freely, and the US economy grew at an unexpectedly fast 3.3 percent annual pace from October through December.
According to a Commerce Department report released on Thursday, the economy’s overall output of goods and services experienced a slowdown in gross domestic product growth from the previous quarter’s explosive growth rate of 4.9 percent. Nonetheless, the most recent data demonstrated the surprisingly resilient nature of the largest economy in the world, with GDP growing at an annual rate of 2 percent or more for the sixth consecutive quarter. The majority of last quarter’s growth was driven by consumers.
The economy expanded by 2.5 percent overall in 2023, up from 1.9 percent in 2022.
RBI permits LIC to purchase a maximum of 9.99% of HDFC Bank.
The largest private lender in the nation, HDFC Bank, informed stock exchanges on January 25 that the Reserve Bank of India has approved Life Insurance Corp. of India’s acquisition of up to 9.99 percent of the bank.
In an exchange statement, HDFC Bank stated, “LIC has been advised by RBI to acquire the aforesaid major shareholding in the Bank within a period of one year, i.e. by January 24, 2025.” “Further, LIC must ensure that the aggregate holding in the Bank does not exceed 9.99 percent of the paid-up share capital or voting rights of the Bank at all times,” stated HDFC Bank.
As of December 31, LIC’s shareholding structure indicates that it owned 5.19 percent of the bank.
In accordance with the bank’s exchange announcement, the RBI notified the LIC of the decision in a letter dated January 25, whereby the LIC may purchase a cumulative holding of up to 9.99 percent of HDFC Bank Limited’s paid-up share capital or voting rights.
Stocks in news
Adani Power: Supported by strong topline and operating figures, the Adani Group company reported a more than 300-fold increase in consolidated net profit to Rs 2,738 crore for the quarter ended December FY24, up from Rs 8.8 crore in the same period last year. To Rs 12,991.4 crore, the total revenue from operations increased by 67.3 percent on an annual basis.
SBI Cards and Payment Services: Higher impairment on financial instruments contributed to the credit card issuing company’s 7.8% year-over-year profit growth of Rs 549 crore for the October–December FY24 quarter. In comparison to the same period last year, revenue from operations increased 31.8 percent during the quarter to Rs 4,622 crore.
Tata Technologies: For the quarter that concluded in December of FY24, the multinational provider of engineering services saw a 14.7 percent increase in consolidated profit year over year to Rs 170.22 crore. In addition, operating revenue increased by 14.7 percent to Rs 1,289.5 crore over the same time last year.
Vedanta: Despite strong operating results, the mining company reported an 18.3% year-over-year fall in profit at Rs 2,013 crore for the third quarter of FY24. Part of the reason for this decline was financing costs. In Q3FY23, it saw an extraordinary gain of Rs 903 crore. For the quarter, revenue from operations increased by 4.2 percent year over year to Rs 35,541 crore.
SJVN: Through Gujarat Urja Vikas Nigam’s eReverse Auction, the company was able to secure the full quoted capacity of a 100 MW solar power plant (GUVNL).
DLF: The bond holder (Standard Chartered Bank, Singapore Branch, DB International (Asia), Singapore, and Deutsche Investments India) and the real estate major have reached an agreement. According to the terms of the arrangement, the corporation would buy the bonds and take over the bondholder’s rights for a negotiated value of Rs 825 crore. The corporation wants to purchase all rights and interests in a 29-acre parcel of land (referred to as “identified land”), either directly or through its affiliates, with the potential for up to 7.5 million square feet of development when due procedure has been followed. Twenty-five acres of the indicated land are included in the mortgaged land.
HDFC Bank: Life Insurance Corporation of India has been granted permission by the Reserve Bank of India (RBI) to purchase up to 9.99 percent of HDFC Bank. The RBI has advised LIC to purchase the aforementioned majority stake in HDFC Bank by January 24, 2025, or within a year.
Mahindra Logistics: The provider of logistics solutions has announced the construction of a new 3 lakh square foot warehouse in addition to launching a 1 lakh square foot expansion to its current multi-client warehouse in Nashik. As a result, the business increased the total area of its warehouse in Nashik, Maharashtra, to 5 lakh square feet. By the end of Q3-2024, the new plant is expected to be operational.
One 97 Communications: Marshall Wace Investment Strategies (Eureka Fund), a hedge fund run by London-based Marshall Wace LLP, has acquired 40,89,360 equity shares in the Paytm operator at an average price of Rs 753.75 per share, for a total value of Rs 308.2 crore. Nevertheless, BNP Paribas Arbitrage, a foreign portfolio investor, paid Rs 317.45 crore for 42,11,613 equity shares in Paytm at the same price.
Indian Energy Exchange: During the October–December fiscal year of FY24, the energy exchange reported a consolidated net profit growth of 18.9% year over year to Rs 91.8 crore, accompanied by robust operating numbers growth. Comparing the same period last year to this one, the consolidated revenue from operations for the quarter climbed by 15% to Rs 115.3 crore.
Indiabulls Housing Finance: Plutus Wealth Management LLP purchased 50 lakh equity shares, or a 1% ownership, in Indiabulls Housing Finance at an average price of Rs 195.74 per share. Surbhi Investments and Trading Company, on the other hand, sold 43,72,900 shares of the business for an average of Rs 195.88 each.
PNB Housing financing: Asia Opportunities V (Mauritius) has purchased 2,56,50,006 equity shares at an average price of Rs 821 per share, totaling Rs 2,106 crore. This represents 9.88 percent of paid-up equity in the housing financing firm. Investment Opportunities V Pte Limited, a foreign portfolio investor, left the company, nonetheless, by selling the same amount of shares for the same price.
AU Small Finance Bank: A large increase in provisions for bad loans contributed to the small finance bank’s 4% year-over-year drop in net profit, which came to Rs 375 crore for the quarter that ended in December of FY24. Pre-provision operating profit increased by 18% to Rs 657 crore during the quarter, while other income increased by 52.5 percent YoY to Rs 449.7 crore. Net interest income increased by 15% year over year to Rs 1,325 crore. With the net NPA increasing 8 bps to 0.68 percent for the quarter and the gross NPA increasing 7 bps QoQ to 1.98 percent, the asset quality declined.
Olectra Greentech: During the October–December fiscal year of FY24, the maker of electrical buses and composite polymer insulators reported a 77.2 percent year-over-year increase in consolidated net profit, coming in at Rs 27.1 crore. Comparing the quarter’s consolidated revenue from operations to the same time in the previous fiscal year, it climbed by 33.4 percent to Rs 342.1 crore.
APL Apollo Tubes: The producer of structural steel tubes reported a 2.2 percent year-over-year decrease in net profit for the October–December quarter of FY24, totaling Rs 165.5 crore. The company’s operating revenue dropped by 3.5 percent to Rs 4,177.8 crore during the same period. EBITDA jumped 2.5 percent during the quarter to Rs 279.6 crore, while EBITDA per tonne increased 2.7 percent year over year to Rs 4,631.
Macrotech Developers: On the strength of strong topline and operating figures, real estate developer Lodha reported a consolidated net profit of Rs 503.3 crore for the quarter ended December FY24, up 24.4 percent from the same period the previous year. However, the company was negatively impacted by an extraordinary loss of Rs 104.9 crore. Pre-sales rose 12% YoY to Rs 3,410 crore, but collection fell 3% to Rs 2,590 crore during the quarter. As a result, revenue from operations increased by 65.2% to Rs 2,930.6 crore.
Jubilant Pharmova: For a total estimated revenue of about $139.43 million, Jubilant Pharma, Singapore (JPL), a subsidiary, intends to sell its whole 25.8% ownership in Sofie Biosciences Inc., USA. Of this, $113.63 million is anticipated to be collected following the merger, and the remaining $25.8 million may be obtained after meeting specific future milestones. JPL intends to use these cash for capital expenditures, leverage reduction, and other business needs.
Yes Bank: Supported by a steep decline in provisions for bad loans, the private sector lender reported a huge 349 percent year-over-year gain in net profit at Rs 231 crore for the October–December quarter of FY24. For the quarter, net interest income increased by 2.3 percent to Rs 2,017 crore. With net non-performing assets (NPA) at 0.9 percent and gross non-performing assets (NPA) staying constant at 2 percent from the previous quarter, asset quality was steady. The business transfer agreement between Yes Securities (India) and Yes Bank to transfer their merchant and investment banking operations was authorised by the board. The move will take effect on January 1, 2024.
KFin Technologies: With robust operating performance, the financial services platform reported a 25.2 percent year-over-year increase in consolidated net profit at Rs 66.8 crore for the quarter that ended in December of FY24. During the quarter, revenue from operations increased to Rs 218.7 crore, an increase of 16.3% year over year. In comparison to the same period last year, EBITDA for the quarter climbed by 21.3 percent to Rs 97.9 crore, while margin increased by 190 basis points to 44.8 percent.
Cyient: Due to weak topline growth and a greater exceptional loss, the engineering and technology solutions company saw a 17.4% sequential fall in consolidated profit for the third quarter of FY24, coming in at Rs 147.2 crore. In comparison to the prior year, revenue from operations increased by 2.4 percent during the quarter to Rs 1,821.4 crore.
Zen Technologies: The company’s excellent topline and operating results helped it post a 100.2 percent quarter-over-quarter improvement in consolidated profit at Rs 30.6 crore for the quarter that ended in December of FY24. In comparison to the previous quarter, revenue from operations increased by 50% to Rs 99.5 crore during this quarter. The board has approved the raising of up to Rs 1,000 crore through placement issues at eligible institutions.
IFB Industries: For the quarter ending in December of FY24, the maker of fine blanked components recorded a consolidated net profit of Rs 17.5 crore, up from a net loss of Rs 1.14 crore during the same time in the previous fiscal year. Operating revenue for the quarter increased to Rs 1,160.8 crore, a 16.2% year-over-year increase.
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