Bears crawl back

Nifty50: 17,877 ▼ 126 (-0.7%)
Sensex: 59,934 ▼ 412 (-0.6%)

Hey there, folks!

Whenever the markets close in the red, investors are reminded of the importance of trimming losses and making a timely exit. Just like the Greek hairdresser who set a Guinness World Record for the fastest haircut with a trimmer in just 47 seconds!

• Benchmark indices slipped from a five-month peak to close lower amid mixed global cues.
• In all, 39 of the Nifty50 stocks closed in the red. 
• Investors await the UK retail sales and Eurozone inflation data to be released on Friday.

Among the Nifty sectoral indices, Auto (+0.7%) and Metal (+0.1%) were the only gainers, while Media (-2.1%) and IT (-1.4%) were the top losers.

What’s trending

⭐ Balaji Amines commissions new plant

BALAMINES (NSE): 3,735 ▲ 54 (+1.4%)

Specialty chemicals maker Balaji Amines has commissioned the first phase of its greenfield project. The plant will be ready to start commercial production by the end of September. As per reports, the company will have an estimated annual production capacity of 15,000 tons.

⭐ HFCL secures two orders

HFCL (NSE): 79 ▲ 0.05 (+0.06%)

Telecom equipment maker HFCL has secured two advance purchase orders from Bharat Sanchar Nigam Ltd (BSNL) and RailTel Corporation of India Ltd (RailTel). The total value of the orders is ₹447 crore. The BSNL order involves the end-to-end maintenance of the broadband network gateway, while the RailTel order is for setting up an IP-based video surveillance system.

⭐ MTAR bags new contract

MTARTECH (NSE): 1,679 ▲ 66 (+4.0%)

Shares of defence engineering and manufacturing firm MTAR Technologies surged after the company secured a new order worth ₹540 crore. The order is in the clean energy segment including nuclear power. The value of the new order is more than the company’s FY22 annual revenue of ₹322 crore.

⭐ Fitch lowers India’s GDP forecast

Global ratings agency Fitch has cut its India’s GDP growth forecast for FY23 to 7% from 7.8%. The agency expects India’s economy to slow down due to elevated inflation, tighter monetary policy and weak global conditions. The agency further said that the Reserve Bank of India could raise the key interest rate to 5.9% before the end of the year.

In Focus

Pharma cos under the weather

The Indian pharma sector seems to be in bad health in 2022. The Nifty Pharma index is down nearly 12% so far this year. But why is the pharma sector under the weather? Let’s take a closer look.

The US market is the most important market for Indian pharma companies, contributing about one-third of total revenues. In the US, Indian pharma companies mainly sell generic products, which have very low margins. 

However, in recent months, the US market has been witnessing pricing challenges caused by excess competition and oversupply of medicines because of aggressive stockpiling during the pandemic period. This has ultimately dented the profitability and margins of generics makers.

In addition, being a pharma manufacturing and export hub, India saw high raw material price inflation and supply chain disruption, further impacting the margins of pharma companies.

In the domestic markets, the government recently updated its national list of essential medicines (NLEM) and added 34 new drugs, including some top-selling medications having annual sales of over ₹300 crore. The drugs under the NLEM list are subject to price control. Experts believe this could potentially take some value away from the Indian pharmaceutical market.

Nevertheless, there is a silver lining. Rising healthcare spending after the pandemic in India and the world could provide some cushioning to pharma stocks in the years ahead.

IPO corner

The IPO of precision engineering products maker Harsha Engineers International continued to receive strong response. On Day 2, the public issue was subscribed 10.3 times. While the portion for retail investors was subscribed 9.1 times, the non-institutional investors’ portion was subscribed 24.9 times. Click here to apply for the IPO on Upstox. 

Meanwhile, Tamilnad Mercantile Bank made a subdued debut on the markets. Shares of the lender listed at a discount of 3% against their issue price. 

Good to know

What is FMA?

First-mover advantage (FMA) is an advantage gained by a company that first introduces a product or service to the market. It helps the company establish a strong brand recognition before other entrants to the market. The FMA involves gaining a significant chunk of the initial market. It speeds up brand recognition and customer loyalty as there are few competitors.   

Click here to join us on Telegram for trading and investment-related videos, daily market updates, details on upcoming IPOs and more.