Bulls riding high

Nifty50: 17,944 ▲ 119 (+0.6%)
Sensex: 60,260 ▲ 417 (+0.7%)

Greetings, people!

A lot of us are reluctant to let go of bad investments even though the markets give us evidence to the contrary. Well, a man in Nagpur exemplified this in real life as he refused to get off his scooter even when it was being towed away for a parking violation!

• The Sensex crossed the 60,000 mark for the first time since April 2022, even as the Nifty inched towards the 18,000 mark.
• In all, 33 of the Nifty50 stocks closed in the green.
• Investors await the release of minutes from the US Federal Reserve’s policy meeting held on 27 July. 

Among the Nifty sectoral indices, PSU Bank (+2.2%) and Media (+1.4%) were the top gainers, while Auto (-0.4%) was the sole loser.

What’s trending

⭐ Airtel pays 5G dues in advance

BHARTIARTL (NSE): 723 ▲ 19 (+2.7%)

Telecom major Bharti Airtel has paid ₹8,312 crore to the Department of Telecom (DoT) for the 5G spectrum it recently acquired. The company has paid spectrum dues for four years in advance. The telco said that this payment, combined with the moratorium on spectrum dues and AGR-related payments for four years, will free up future cash flows. It further said that this upfront payment will allow the company to single-mindedly concentrate on the 5G roll out.

⭐ Techno Electric bags large order

TECHNOE (NSE): 296 ▲ 16 (+5.9%)

Shares of power infrastructure company Techno Electric surged 12% intraday after the company announced it had secured new orders worth ₹1,455 crore from Rajasthan Rajya Vidyut Utpadan Nigam (RVUNL). Of these, orders worth ₹666 crore came from the Kota unit of RVUNL, and orders worth ₹789 crore came from the Jhalawar unit. Last week, it had received new orders for transmission worth ₹680 crore.

⭐ Bitter pill for Bajaj Hindusthan Sugar

BAJAJHIND (NSE): 8.9 ▼ 1.2 (-11.8%)

The State Bank of India (SBI) has filed an insolvency petition against Bajaj Hindusthan Sugar with the National Company Law Tribunal (NCLT) to recover its dues. The sugar manufacturer reportedly owes ₹4,800 crore to banks including SBI, Punjab National Bank, Indian Bank and Central Bank of India. Last month, SEBI had imposed a penalty of ₹10 lakh on Bajaj Hindusthan Sugar for not disclosing closure orders for some of its distilleries and the penalty imposed by the Pollution Control Board.

⭐ Rupee gains as FII inflows pick up

The Indian rupee rose by 28 paise to 79.53 against the US dollar on Wednesday. After the extended weekend break, the rupee opened stronger mainly due to the inflow of foreign funds. Foreign investors have continued to invest in Indian equities and have pumped in ₹22,452 crore in the first two weeks of August. Further, a fall in global crude oil prices and easing inflation have boosted investor sentiments.

⭐ Walmart posts strong numbers in Q2

US retail giant Walmart reported a 20.4% year-on-year (YoY) rise in its net profit at $5 billion for the June quarter. Meanwhile, its revenue rose by 8.4% YoY to $153 billion. The jump in profit is partly attributed to an asset sale in Brazil. Its global advertising business rose nearly 30% in Q2, led by  Flipkart advertising and US ad sales, while its international sales rose 5.7% to $24 billion.

In Focus

Dairy stocks rise as milk prices simmer

The dairy stocks were in the spotlight after major milk brands Amul and Mother Dairy hiked milk prices by ₹2 per litre. In response, shares of dairy companies such as Hatsun Agro, Dodla Dairy and Heritage Foods were up by 2-4% on Wednesday. 

India’s largest dairy producer, Amul has hiked prices for the second time in five months. Meanwhile, other industry players have introduced price hikes of 5-8% in the first half of 2022. The dairy industry attributes these price hikes to the multiple challenges it is facing. What are these? Let’s explore.    

In recent months, the cost of milk production has gone up significantly. For instance, cattle feed costs have increased by 20% YoY. Meanwhile, rise in prices of energy, logistics and packaging has led to higher input costs for dairy companies. 

Most recently, the management of Dodla Dairy said the rise in procurement costs and fuel prices kept the profitability under check in the June quarter. The company’s EBITDA margin declined by 3.7% YoY during the same period, despite a 40% YoY rise in operating revenue supported by demand revival.

Wednesday’s positive move in dairy stocks comes as investors anticipate more price hikes in the upcoming quarters to pass on high input cost to consumers. But will frequent price hikes help improve the industry’s prospects? That’s a question to ponder over a glass of milk, maybe.

IPO corner

The IPO of electronic components maker Syrma SGS witnessed strong investor interest. On Day 3, the public issue was subscribed more than 2 times. While the retail portion was subscribed 2.6 times, the quota for non-institutional investors was subscribed 3.5 times.

Click here to apply for the IPO on Upstox.

Good to know

What is cut-off price?

The cut-off price is the price at which IPO shares are issued to applicants. It is fixed within the price band, based on demand. Many investors who are unable to decide the best price to bid at for an IPO, tend to select the cut-off price option. This indicates their willingness to apply for a particular IPO at any price within the price band. It also increases their chances of getting an allotment.

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