Morning Update for 13 April 2021

Indices at previous closing

Nifty50: 14,310 ▼ -524 (-3.5%)
Sensex: 47,883 ▼ -1,707 (-3.4%)
Nifty Bank: 30,792 ▼ -1,656 (-5.1%)

In the news

TCS reports growth in Q4

• The country’s largest IT services company reported growth for the third consecutive quarter. At ₹43,705 crore, its revenue rose 4% QoQ, beating street estimates of ₹43,551 crore. Meanwhile, net profit rose 6% in QoQ to ₹9,246 crore, almost in line with the estimate of ₹9,276 crore.
• The improvement in performance comes on account of continued spending on digital services during the pandemic and deal wins. Meanwhile, the stock was down 2.1% but has risen about 13% so far this year. 

CPI inflation rises, IIP contracts

• Retail inflation in March rose to 5.5% led by rising fuel, transportation and food prices. The number was higher than the street expectation of 5.4%. 
• The double-whammy came when the index of industrial production (IIP) for February 2021 contracted by 3.6% versus an expected contraction of 3.0%. This suggests that Covid-related restrictions and regional lockdowns have started impacting the overall demand and growth in the country. 

Lockdown fears trigger selling in PSU Banks

• The Nifty PSU Bank index (-9.2%) was the hardest hit during the sell-off on Monday. Its constituents like Indian Bank and Canara Bank and Punjab National Bank were down by over 10%. 
• This fall in the stock prices comes primarily due to fears that regional lockdowns could in turn hurt the fragile asset quality and loan-growth prospects of the state-owned lenders. 

M&M predicts slow tractor growth in FY22

• As per the company’s management, M&M’s tractor segment, which grew at nearly 20% in FY21, is expected to grow in single digits for FY22. The higher base of FY21 and cyclicality in the tractor industry could lead to the relatively slower growth. 
• However, the company is optimistic about growth in the farm-machinery business, which currently contributes less than 10% of total farm equipment sales. Shares of M&M fell 5.1% yesterday amid a weak market.

Evets of the week

Tuesday: Core CPI (US)
Wednesday: Crude oil inventories (US), Holiday (India)
Thursday: Retail sales, initial jobless claims (US)

Sectoral indices (9 April)

Global markets (at 8:15 am)

The Kissan brand (known for ketchup and jams) was owned by United Breweries (UB) from 1950 to 1993 before it was acquired by HUL.
Source: Kissan

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Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.