Morning Update for 21 May 2021

Indices at previous closing

Nifty50: 14,906 ▼ -124 (-0.8%)
Sensex: 49,564 ▼ -337 (-0.6%)
Nifty Bank: 33,334 ▼ -350 (-1.0%)

In the news

Havells delivers strong Q4 performance

• Consumer electrical goods maker Havells posted a consolidated net profit of ₹302 crore, up 71% year-on-year. The company managed to sustain its growth momentum of Q3, and achieved its highest quarterly sales in Q4.
• Revenue for the March quarter grew over 50% to ₹3,331 crore, on the back of strong sales in segments such as switchgear, cables and electrical consumer durables. However, the management said that it has seen a deceleration in growth from the second week of April due to the second wave. The stock closed flat yesterday but has gained over 17% so far in 2021.

Relaxo’s Q4 benefits from low base 

• The low base of 2020 strengthened Relaxo’s Q4 revenues, which rose 38% YoY to ₹748 crore. Its net profit rose 97% to ₹102 crore, buoyed by superior product mix and lower selling and admin expenses.  
• The footwear company’s stock surged over 7% yesterday and hit its lifetime high of ₹1,085. The stock has risen over 25% so far this year.

Zee returns to profits in Q4

• Zee Entertainment reported a net profit of ₹275 crore for Q4FY21 due to a significant reduction in operating and promotional expenses. It had reported a loss of ₹766 crore in the same quarter last year.
• Meanwhile, operating revenue increased barely 1% year-on-year to ₹1,966 crore and was impacted by a dip in theatrical revenues due to the pandemic. However, recovery in the advertising environment enabled a 9% growth in ad revenues. The stock closed 0.6% lower yesterday and has declined over 16% this year.

Bumpy road ahead for auto sector

• As the worse-than-expected second wave derails the recovery momentum of the automobile sector, rating agency ICRA has downgraded the growth outlook for major auto segments by 2–6%. 
• It now expects two-wheelers to grow at 10–12%, passenger vehicles at 17–20%, commercial vehicles at 21–24% and tractors at 1–4% for FY22. Further, these numbers could be worse if the recovery is prolonged, or if there is a third wave. Despite this uncertainty, the Nifty Auto index has gained 6% so far this month.

Sectoral indices (20 May)

Global markets (at 8:00 am)

Fact of the day

A pizza with one of its slices removed was the inspiration for Japan's Toru Iwatani to create the Pacman character. 

Source: TIME

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Investments 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.