Sun Pharma tumbles, JSP acquires Monnet Power & more

Nifty50: 18,609 ▲ 48 (+0.2%)
Sensex: 62,570 ▲ 160 (+0.2%)

Namaste, friends!

The football world cup has been hailed as the cup of “upsets” with many big footballing nations (Germany and Spain) bowing out. In fact, the FIFA chief has said that there are “no more small teams and no more big teams”. Well, a similar trend is playing out in the Indian stock markets. Small or retail investors have played a big role in the markets. In fact, retail participation was at a 15-year high in 2022. 

• The markets closed higher, shrugging off the intraday volatility.
• Out of the Nifty50 universe, 27 stocks posted gains. 
• Indian markets showed resilience, on the back of a rise in financial stocks, despite subdued international indices. 

Among the Nifty sectoral indices, PSU Bank (+3.8%) and Bank Nifty (+1.1%) were the top gainers, while Pharma (-1.1%) and Realty (-0.7%) were the top losers.

What’s trending

⭐ Sun Pharma tumbles on import alert

SUNPHARMA (NSE): 979 ▼ 38 (-3.7%)

Sun Pharma slipped over 4% intraday after the US-FDA issued import alerts on the company's Halol facility at Gujarat. An import alert means that all future shipments of products manufactured at the Halol facility could be restrained from entering the US market until the facility becomes compliant. This facility accounts for 3% of the total revenue. Meanwhile, the company has maintained its revenue guidance for the current fiscal. 

⭐ Greaves Cotton to unveil new EVs

GREAVESCOT (NSE): 143 ▲ 2.2 (+1.6%)

Greaves Cotton, which runs the e-mobility business under Greaves Electric Mobility, will showcase five new products in the upcoming Auto Expo in January 2023. These new products will include electric 2 & 3 wheelers in both passenger and cargo segments. In the September quarter, the company achieved its highest ever Q2 sales of 33,000 units. 

⭐ Massive expansion plan by Kalyan Jewellers

KALYANKJIL (NSE): 107 ▼ 2.1 (-1.9%)

The jewellery retailer will expand its retail footprint by over 30% in 2023. It plans to launch 52 showrooms over 52 weeks, primarily in non-South markets. This huge expansion will be mainly driven through its franchisee model.  It means the showroom would be operated by the company, but not owned by it. This would make the entire process capital efficient. The company also expects the move to be returned on capital accretive. 

⭐ JSP acquires Monnet Power

JINDALSTEL (NSE): 559 ▼ 1.2 (-0.2%)

As per reports, Jindal Steel and Power (JSP) has acquired Odisha-based Monnet Power for ₹410 crore through the NCLT route. The management of JSP said that the company has acquired power assets of 1,050 MW. JSP will infuse fresh investment and make the plant operational within a year. Once it commences operations, the new power plant will source coal from JSP mines and will supply power to JSP’s existing steel plant in Angul.   

In Focus

Poultry stocks fly

Shares of poultry sector companies such as Venky’s (India) and SKM Egg Products witnessed a sharp rise of 5% and 12%, respectively today. The rise was supported by high volumes. Recently, a significant increase was observed in the price of eggs in the international market. Wondering why this is happening and what role India plays. Here is the complete breakdown: 

The prices of eggs in the US market have increased by 170% to $4.2 per dozen since the beginning of 2022. A similar situation is seen in the UK market. A worst-ever outbreak of bird flu in these markets has led to shortage of eggs and hence the jump in egg prices. Interestingly, major supermarket chains in the UK have placed a buying limit on eggs.

Meanwhile, the demand for eggs saw a significant spike because of the FIFA World Cup in Qatar and ahead of the festive season in western countries.   

The widening gap between demand and supply is playing out well for India. India, being one of the top  producers of eggs globally, is gaining market share in the egg export market. Due to the ongoing FIFA world cup, gulf countries like Qatar, Oman and the UAE are turning to India to bridge the gap. 

Traditionally, Turkey and Ukraine were key exporters of eggs to gulf countries. However, the war in Ukraine and higher production cost in Turkey has shifted the buyer’s attention to India. Tamil Nadu’s Namakkal district saw a 2x increase in the exports to the gulf nations. 

The current scenario seems to favour domestic poultry product makers. On the flip side, the strong demand is also straining the supply of poultry feed viz. maize and soybean, which is driving up the production costs.

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Good to know

What is RoCE?

The return on capital employed (RoCE) is a key metric used to analyse the profitability and capital efficiency of a company. It is calculated by dividing net operating profit (EBIT) by capital employed. The RoCE helps in determining which company spends its money more efficiently to generate healthy returns. The RoCE is an essential statistic for an investor, while making investment choices.

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