Up, up and ….

Nifty50: 18,512 ▲ 28 (+0.15%)
Sensex: 62,293 ▲ 20 (+0.03%)

Hey there, people!

Got a second to read this? Well, while you are reading, Apple just made ₹1.5 lakh and Microsoft earned ₹1.1 lakh. Yeah and that is how much they earn every second of every day. If you find that demotivating, take heart by looking at the indices. They are reaching new highs every day. Have you started investing yet?

• Sensex continued its upward streak, and touched a fresh all-time high at 62,293 as compared to Thursday’s close of 62,272.
• The benchmark indices witnessed volatility amid mixed global cues.
• In all, 28 of the Nifty50 stocks closed in the green.

Among the Nifty sectoral indices, Media (+2.5%) and Realty (+1.1%) were the top winners, while FMCG (-0.3%) and Financial Services (-0.3%) were the top losers.

What’s trending

⭐ Chennai Petroleum, IOC sign JV agreement

CHENNPETRO (NSE): 201 ▲ 2.4 (+1.2%), IOC (NSE): 73 ▲ 1.2 (+1.7%)

Chennai Petroleum Corporation (CPCL), Indian Oil Corporation Limited (IOCL) and seed equity partners have signed a joint venture agreement. The agreement is for the upcoming 9 million tonne per annum refinery and petrochemicals project in Tami Nadu. The cost of the project is ₹31,580 crore. Indian Oil and CPCL will together hold 50% of equity stake (25% each) and the remaining 50% stake would be held by financial and strategic investors.

⭐ Allcargo to buy stake in German firm

ALLCARGO (NSE): 467 ▲ 3.4 (+0.7%)

The Belgium subsidiary of Allcargo Logistics will acquire a 75% stake in Germany-based Fair Trade GmbH Schiffahrt, Handel und Logistik for €12 million. Allcargo said that the ocean freight  services provider had a turnover of nearly €44 million in 2021. Through this acquisition, Allcargo aims to expand full container load and less than container load business.

⭐ Hotel industry poised for growth

LEMONTREE (NSE): 93 ▲ 3.2 (+3.5%), INDHOTEL (NSE): 321 ▲ 3.8 (+1.2%)

The Indian hotel industry’s revenue is expected to grow by 23% in this fiscal compared to the pre-pandemic levels, according to CRISIL. The growth will be supported by a strong recovery in business travel and continued traction in leisure travel. Also, higher average room rates and occupancy could boost the sector’s profitability. The credit rating agency expects the industry’s profitability to improve to around 34% in FY23 from 24% in the pre-pandemic period.

⭐ China imposes lockdown as cases rise

China has imposed a series of fresh lockdowns. This comes after China witnessed the highest number of new daily cases since the virus was first detected in 2019. The government reported 31,444 new locally transmitted Covid cases on Wednesday. To combat the rising cases, the government has tightened the restrictions in various cities, including Beijing, Shanghai and Guangzhou, and has also ordered mass testing.

In Focus

CVs to remain in top gear

India’s commercial vehicle (CV) makers could continue to be in the fast lane. According to a report by a ratings agency, the industry’s volume could grow by 20%-22% in FY23. Another report estimates that the overall  CV volumes could reach one million units by FY24. 

So, what are the reasons for these upbeat growth projections? Let’s find out.

To start with, the truck and bus makers reported total sales of 716,566 units in FY22 – a volume growth of 26% year-on-year (YoY). This strong recovery after the pandemic was led by a rebound in economic activities. As per CareEdge Ratings, the CV industry can attain similar growth  in the current fiscal year supported by pickup in economic activities.

Besides this, robust growth in the end-user industries like e-commerce and infrastructure as well as pent-up demand for replacement of older vehicles could also accelerate the CV makers’ growth in FY22.

The replacement demand has remained muted in the past few years. One of the major reasons was subdued economic activities triggered by the pandemic-led lockdowns. However, higher fleet utilisation levels and elevated fuel rates could spur the replacement of older CVs. Simply put, older vehicles consume more fuel compared to newer ones and hence companies would be willing to buy new CVs. 

Having said that, the industry is also witnessing challenges such as rising fuel and commodity prices as well as high-interest rates.  

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Good to know

What is divestment?

Divestment is the process through which a company sells its subsidiaries, business divisions or a stake. Divestment is the opposite of investment and is usually done when that business division is not performing up to expectations. In some cases, however, a company may be forced to sell assets as the result of legal or regulatory action.

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