Realty stocks gain, auto retail sales rise & more

NIFTY50: 19,497 ▲ 98 (+0.5%)
SENSEX: 65,785 ▲ 339 (+0.5%)

Namaste, friends!

Ever since Twitter launched, we’ve been hooked to the social networking platform for all our updates, from the latest news to what’s new with friends and family. Now, its arch-rival Meta (formerly known as Facebook) has launched a new app via Instagram called “Threads” which captured the total twitterverse as their #1 “trending” topic today. While we wait and watch for the tapestry of tales forming from all these unravelling threads, let’s move on to the markets as they returned to their winning ways today after a brief pause yesterday.

• Markets resumed upward trend, with the NIFTY crossing 19,500 intraday for the first time 
• In all, 32 of the NIFTY50 stocks closed in the green
• Realty stocks gained on robust Q1 business updates. More on this later

Among the NIFTY sectoral indices, Realty (+2.2%) and Oil & Gas (+1.8%) were the top gainers, while IT (-0.1%) saw marginal losses.

What’s trending

⭐ Realty stocks gain post Q1 business update

Domestic real estate firms witnessed a strong traction today with Mumbai-based Ajmera Realty gaining 5.5%, while Bengaluru-headquartered Puravankara rose over 12% intraday. This comes after Puravankara reported highest ever sales of ₹1,126 crore, up 119% YoY, while Ajmera Realty sales value stood at ₹225 crore, rising 60% compared to last quarter. Meanwhile, the NIFTY Realty index rose 2.2% and was the top sectoral gainer.

⭐ Auto retail sales rise in June

Domestic automobile retail sales rose by 10% in June YoY to 18.6 lakh units, according to data released by the Federation of Automobile Dealers Associations. This growth was driven by increased sales volumes across various segments, including passenger vehicles (4.7%), two-wheelers (6.7%) and three-wheelers (75.4%). Meanwhile, NIFTY Auto closed in green, up 1.1%

⭐ RPP Infraprojects jumps after bagging new orders

Shares of RPP infraprojects soared by almost 13% to ₹64 today after the construction company bagged new orders collectively worth ₹289 crore for multiple road and water projects in Tamil Nadu. The contracted work is scheduled to be completed at multiple sites within 12-16 months. On June 30, the company's order book stood at ₹3,240 crore.

⭐ DCB Bank soars as Tata AMC to raise stake

Shares of DCB Bank soared by almost 6% to ₹129 after Tata AMC (asset management company) received the RBI’s approval to increase its stake by 7.5% in DCB Bank via Tata Mutual Fund schemes. The approval is valid for a period of one year from the intimation of the RBI letter dated 5 July. The Mumbai-based bank’s net profit for FY23 was ₹466 crore, a 62% increase from ₹288 crore in the previous year. 

In Focus

FMCG companies could see robust FY24

FMCG stocks are in the spotlight. So far in July 2023, FMCG majors ITC and Hindustan Unilever have hit their 52-week highs and gained more than 4% each. Meanwhile, the NIFTY FMCG index rose more than 3%. This comes after Crisil Ratings gave an upbeat FY24 growth forecast for the sector. Let’s take a closer look.

Rural demand expected to recover 

As per the Crisil report, the FMCG sector could see revenue growth of nearly 9% in the ongoing fiscal aided by a recovery in rural demand. In the past few quarters, demand for FMCG products in rural regions has remained subdued. However, moderation in inflation, a healthy hike in minimum support prices (MSP) and the forecast of a near-normal monsoon could lead to a gradual recovery in rural demand in coming quarters. 

Urban demand to remain stable 

Meanwhile, demand in the urban region, which constitutes about 65% of the total market, is expected to remain stable despite the high base effect. At the same time, rising disposable income and expansion of e-commerce channels like 10-minute grocery delivery could drive urban demand.  

Factors driving growth

Further, jump in FMCG revenues is expected to be volume-led growth, which predominantly will come from rural demand. Category-wise food and beverages and personal care segments will continue to see traction and are expected to grow in high-single digits.    

Having said that, the report also cautioned that a sharp rise in prices of key raw materials like crude oil and agri-based commodities could have adverse impact on FY24 growth.  

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