In the red zone

Nifty50: 18,269 ▼ 145 (-0.7%)
Sensex: 61,337 ▼ 461 (-0.7%)

Namaste, friends!

Investors across the world would be looking for some respite during the e weekend. After all, the sentiments in the stock market have been quite gloomy this week as the US Fed vowed to control inflation. However, there is the final clash of the 2022 FIFA World Cup on Sunday to look forward to! Messi’s Argentina will take on the defending champions France in an adrenaline-fueled match.

• The markets closed in the red amid weakness in the international indices. 
• Out of the Nifty50 stocks, 45 ended in the red.
• In the absence of any major domestic data release in the next week, Indian traders would track global markets for directional cues.

All Nifty sectoral indices closed in the red with PSU Bank (-2.9%) and Realty (-1.5%) being the top losers.

What’s trending

⭐ Windfall tax slashed by 65%

ONGC (NSE): 147 ▼ 0.3 (-0.2%), OIL (NSE): 214 ▲ 1.2 (+0.5%)

There’s some relief for the local oil exploration companies. The windfall profit tax on domestically produced crude oil and aviation turbine fuel has been slashed 65%. The cut comes amidst an over 7% decline in crude oil prices in December. Windfall profit tax is an extra levy imposed on a company that benefits from something it was not responsible for i.e. windfall. The government revises the tax every 2 weeks.

⭐ Your dream home could get expensive!

DLF (NSE): 393 ▼ 6.7 (-1.6%), LODHA (NSE): 1,040 ▼ 7.2 (-0.6%)

Planning to buy a property soon? Then, be prepared for a price shocker. As per an industry report, the price of houses is set to rise by 6-10% in this fiscal across the top 6 Indian cities. The prices could rise another 3-5% in the next financial year. The main trigger is a sharp jump in the cost of raw materials, labour, and land. This also means it's ‘kaching’ time for the big realtors who have been long battling with the unsold inventory.

⭐ Deepak Fertilisers to demerge its business

DEEPAKFERT (NSE): 821 ▲ 9.3 (+1.1%)

Shares of Deepak Fertilisers rose over 6%, intraday, as the company announced the demerger of its mining chemicals and fertilisers businesses. The move is in line with the strategic shift from commodity to specialty businesses. The restructuring is not only expected to unlock growth potential but also will simplify the corporate structure and strengthen the distribution network.

⭐ Textile exports face tough time 

TRIDENT (NSE): 36 ▼ 0.2 (-0.6%), ARVIND (NSE): 95.9 ▼ 1.4 (-1.4%)

India’s textile and apparel industry is facing the heat as consumers across US and Europe have cut their expenditures on clothes following a surge in inflation. Textile exports, which account for 22% of the $200 billion industry, have fallen for the fifth consecutive month. In November, exports saw a fall of 15% year-on-year.

In Focus

Share of EVs in auto sales to zoom

As per a new industry report, nearly 15-20% of the new vehicles sold in India will be electric by 2026. This figure stands at a mere 2% currently. What will be the triggers for this jump? Let’s explore.

Broadly, three key reasons could drive the strong preference for EVs. Subsidies by the government on the purchase of a new EV, lower cost of running and finally customer readiness to adopt newer technology. It is expected that in 2026, nearly 4-5 million EVs will be sold. This will make up to around 15-20% of the new vehicles sold. 

The highest penetration is expected in two and three-wheeler segments where EVs would account for nearly 15-22% of the total vehicle sales. Factors such as easy availability of home/commercial charging and early adoption by delivery and fleet logistics could help in charging this growth. 

Similarly, the four-wheeler and commercial vehicle segments could see 5-10% share in new vehicle sales. Particularly, in the commercial vehicle segment, buses could see 5-8% penetration during the period, primarily depending on new orders and pace of fleet addition by state transport corporations. 

While the demand side peps up, various automobile companies too are investing in building up production capacities for EVs. For example, Tata Motors plans to invest ₹15,000 crore in the EV segment over the next five years. Similarly, SUV maker Mahindra & Mahindra has lined a capex of ₹10,000 crore over a period of 7-8 years.

Interestingly, as per the report, by 2030 40% of all the new vehicles sold could be electric! 

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Good to know

What is Demerger?

Simply put, a demerger is when business is broken into one or more components to operate independently or to sell off. A company may undergo this restructuring for various reasons viz. greater strategic focus on individual units, value unlocking by partial/full sale of stake or simply for proper valuation in cases where the units are in different industries. 

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