▲ Nifty: 11,908 (+0.80%) ▲ Sensex: 40,616 (+0.88%)
The Nifty50 was on a roller-coaster ride today. After opening in the green, the country’s flagship index saw a knee-jerk fall of ~160 points. However, the markets recovered lost ground quickly. The rise was fueled by a recovery in banks (primarily after the SBI results) and the buying interest in Reliance Industries. Among the sectoral indices, the Nifty Pharma (+2.1%) and Nifty IT (+1.7%) indices gained, whereas the Nifty Realty (-1.8%) and Nifty Metal (-0.3%) indices ended in the red. Meanwhile, the USD/INR gained nearly 0.5% amid uncertainty over the US election outcome.
Here are the top stories of the day.
SBI posts results better than estimates
SBI reported a 52% year-on-year rise in its Q2 net profit to ₹4,574 crore, which was higher than street estimates of around ₹3,600 crore. The sharp rise in profit was the result of higher net interest income and lower provisioning in the quarter. The gross non-performing asset ratio reduced from to 5.28% in Q2FY21 to 7.19% during the same period last year, suggesting an improvement in asset quality. The bank mentioned that loan disbursements to retail borrowers is nearly back to pre-Covid levels. Shares of SBI, which were trading in the red before the results, recovered later and ended the day with a gain of 0.3%.
PVR firms up despite weak results
PVR reported a net loss of ₹184 crore in Q2 as compared to a net profit of ₹48 crore a year ago. Of course, the results are not comparable with that of last year because the company’s core exhibition business had nearly zero revenues due to lockdown restrictions. Further, the company had to pay fixed costs (e.g. employee expenses and finance costs). However, there are signs of change. Nearly 70% (over 575 out of 831) screens have received permission to reopen, albeit at 50% capacity. Second, the company has negotiated a complete rent waiver for the lockdown period at nearly 60% of its cinemas and reduced rent/revenue share after opening. It is also in similar discussions with other property owners for the remaining cinemas. Investor confidence seems to have revived after these developments as the stock was up nearly 8% intraday, and closed the day with gains of 0.9%. PVR’s competitor Inox Leisure, which will declare its results tomorrow, also gained 1.8%.
Gland Pharma IPO to hit D-Street
Hyderabad-based Gland Pharma Ltd will go public on 9 November (Monday). In FY20, the company, which manufactures medical injectables, earned around 65% of its revenue from the US and around 18% from India. The issue is priced at ₹1,490 to ₹1,500 per equity share. The total issue size is approx. ₹6,480 crore, which includes a fresh issue of about ₹1,250 crore, and an offer for sale from its promoters, namely China-based Fosun Pharma Industrial Pte Ltd and Indian company Gland Celsus Chemicals Pvt Ltd. This will be the twelfth IPO of 2020. Of the 11 IPOs so far, 9 have given positive returns.
Closing bell
India’s services PMI expanded (i.e. reading above 50) for the first time since March 2020. This suggests a pick-up in the country’s services sector. Meanwhile, in the US, it seems that the outcome of the presidential election could get dragged especially after President Trump disputed the counting of votes.
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