Breakout Monday

Nifty50: 16,661 ▲ 308 (1.8%)
Sensex: 55,925 ▲ 1041 (1.9%)

Hello, matey

With the markets being so upbeat, it is easy to forget that today is Monday. Clapping along to this happy start of the week is ShareChat, Indian social media and networking app, which reportedly raised $300 million from Google. 

And if you are not a fan of the baarish season that brings along muddy puddles or cancelled trains, you might want to change your mind. The weather office has predicted a normal monsoon this year. This not only means relief from the scorching heat, but also a possible drop in food inflation. 

• The markets extended their gains for the third straight session on positive global cues. Nifty50 also broke out of a consolidation phase seen in May. 
• In all, 45 of the Nifty50 stocks closed in the green.
• Market sentiments are upbeat ahead of the first quarter (Jan-March 2022), GDP data announcement on Tuesday.

All of the Nifty sectoral indices closed on a positive note with Realty (+4.0%) and IT (+3.8%) witnessing highest gains.

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What’s trending

⭐ Double delight for PSU banks 😎
Public sector banks doubled their net profit in FY22, as per reports. The total net profit of the 12 major state-owned banks jumped by a whopping 110% year-on-year (YoY) to about ₹66,500 crore. Clean-up of bad loans and economies of scale achieved after merging several banks helped improve the performance. Meanwhile, the Nifty PSU Bank index is up 3% compared to a 4% decline in the Nifty50, so far in 2022.

⭐ Timken gets a profit boost 🚀
Shares of bearings maker Timken India rose 14% intraday, after the company reported strong Q4 results. Its profit increased over 128% to ₹121 crore on the back of strong operational performance. Meanwhile, revenue jumped by nearly 40% to ₹667 crore. The company serves automotive, automation and renewable energy sectors which have shown improvement in performance in the recent quarters. 

⭐ Shriram Properties rallies to top floor 🏠
Shares of the South-India based realtor soared 13% intraday as its revenues shot up 91% sequentially to ₹205 crore and profit jumped nearly five-fold to ₹64 crore. The performance was driven by income from its properties in Kolkata, Visakhapatnam and Bengaluru. It was also able to improve profitability by cutting down debt (utilising IPO money) and thereby lowering interest costs. The company has a strong launch pipeline with 17 potential projects in FY23. 

⭐Crude boils 🛢

Crude oil prices hit an 11-week high as the EU nations are expected to come to an agreement on banning Russian oil imports. Brent crude prices have topped $120 per barrel, set for the sixth consecutive monthly gain. Global supply disruptions and a decline in US stocks are also fueling the spike in oil prices. 

⭐Steel exports cool off 🔧

India’s steel exports in April declined by 22% YoY. This was due to a slow down in key markets and competitive prices. This comes on the back of a 25% YoY growth in FY22. Meanwhile, the Nifty Metal index is down nearly 17% so far this month.

In Focus

M&M zooms ahead on UV sales 🚙

Auto major Mahindra & Mahindra (+4.9%) was the top gainer in the Nifty 50 pack on Monday. Investor interest was high as its standalone business (auto and tractors) reported a five-fold rise in profits to ₹1,292 crore. Profits were aided by a 43% year-on-year rise in the number of vehicles sold. 

The company consolidated its position in the market as the top SUV maker by revenue with a nearly 18% market share in the March quarter. Similarly, it was also the leader in the tractors segment with a 40% market share, up 1.8% in FY22. 

The management was upbeat about the business prospects with over 170,000 open bookings, with nearly 45% of them for its highly successful XUV700 model. Improvement in semiconductor supplies and pent-up demand are expected to boost sales.  

The company also announced a dividend of ₹11.55 per share, up 32% from last year. M&M’s shares have outperformed the Nifty Auto index and are up by over 20% this year (Nifty Auto index has risen by 5%).

IPO corner

Despite the sharp rebound in the markets, Ethos struggled on its debut. Shares of the luxury watch retailer listed on NSE today at a discount of 6% against the issue price. After hitting the stock exchanges, shares continued to tumble and closed around 9% lower. 

Meanwhile, leading B2B digital payment solutions player PayMate has filed its draft papers with market regulator SEBI for a ₹1,500 crore IPO.

Good to know

What are dividends?

Placing trust in a company can literally be rewarding. And dividends are rewards that a company distributes among its shareholders from the profits it earns. However, not all companies pay dividends. Some companies may choose to reinvest their profits into the business or use them for acquisitions. At times, companies may also preserve cash if they foresee difficult times ahead.

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