UltraTech Cement's new plant, PSU bank stocks zoom & more

Nifty50: 18,307 ▼ 36 (-0.2%)
Sensex: 61,663 ▼ 87 (-0.1%)

Howdy, people!

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• Benchmark indices recouped from early losses but closed lower for the second straight day.
• In all, 35 of the Nifty50 stocks closed in the red.
• Japan’s core consumer inflation rose to 3.7% in October, the highest level since 1991.

Among the Nifty sectoral indices, PSU Bank (+1.5%) and Realty (+0.1%) saw gains, while Auto (-1.1%) and Oil and Gas (-0.7%) were the top losers.

What’s trending

⭐ UltraTech Cement commissions new plant

ULTRACEMCO (NSE): 6,815 ▼ 56 (-0.8%)

The cement maker has started operations at its third Birla White Wall Care Putty plant in Rajasthan. The plant has a capacity of 4 lakh metric tonnes (LMT) per annum. The total cost of this project was ₹187 crore. The company now has a Wall Care Putty capacity of 13 LMT per annum, making it one of the largest producers in the country. The company's two existing plants are situated in Rajasthan and in Madhya Pradesh.

⭐ Federal Bank, JCB India join hands

FEDERALBNK (NSE): 132 ▼ 2.3 (-1.7%)

Federal Bank has tied up with JCB India to finance potential buyers of heavy construction equipment and strengthen its loan portfolio. The bank said it has signed a memorandum of understanding with JCB India, a leading manufacturer of earthmoving and construction equipment. This deal will boost the financing options for JCB’s customers in India. JCB’s customers can also avail loans from the lender at competitive interest rates.

⭐ Ahluwalia Contracts wins multiple orders

AHLUCONT (NSE): 431 ▼ 8 (-1.8%)

Construction firm Ahluwalia Contracts has bagged multiple orders from government agencies. The company was awarded a ₹462 crore contract to upgrade Chandigarh railway station. It also won an order from MMRDA worth ₹68 crore related to the Mumbai metro project. The overall order inflow of the company in FY23 stands at ₹3,644 crore.

⭐ PSU bank stocks zoom

UNIONBANK (NSE): 73 ▲ 3.6 (+5.2%), MAHABANK (NSE): 25.2 ▲ 2.1 (+9.3%)

Shares of public sector banks were in the spotlight on Friday defying the market trend. Meanwhile, the Nifty PSU Bank index was top gainer rising as much as 2.4% intraday after the government raised the maximum tenure of key managerial positions of public sector banks to 10 years. The move is expected to help state-owned banks to attract top talent and retain them.

In Focus

Pizza-burger cos. fume as inflation bites

Pizza bill taking a huge bite out of your wallet? Well, it’s not just you. Pizza-burger chains are feeling the pinch too and this is one ‘big bite’ they are not too happy about. 

The key players in the QSR industry have hiked prices to the tune of 10-12% recently to combat high input prices. On account of the price hikes, the customers, reportedly, have become more selective and have cut back on the items they order.

The impact of the price hike is apparent in the slowing down in same-store sales growth. Jubilant Foodworks same-store sales growth dropped from 28% in the June quarter to 8% in the September quarter. The slowing same-store sales growth was seen even in other QSR chains such as Devyani International (franchisee of KFC) where the decline was sharp from 63% to 13%. 

QSR operators have also taken a leaf out of the FMCG playbook. They have introduced entry-level price points to target more consumers and manage slowing growth. For example, Pizza Hut introduced a new Pizza range starting from ₹79 (as opposed to ₹200 earlier). This has helped bridge a key value gap. 

Meanwhile, the stock performance of major QSR chains has been a mixed bag in calendar year 2022 — Jubilant Foodworks (23%), Devyani (10%) and Westlife (34%). 

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Good to know

What is downtrading?

Downtrading is referred to as a practice when a consumer switches from expensive brands to cheaper alternatives. This is done to conserve cash. This usually leads to a drop in volumes for FMCG companies. Customers may opt  for smaller packs of the same brand or for a more affordable brand in the same product category.

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