Charged up

Nifty50: 17,659 ▲ 124 (+0.7%)
Sensex: 59,332 ▲ 515 (+0.8%)

Hey, there!

Are you a fan of Red Hot Chilli Peppers? No. We are not talking about the rock band, but in a more literal sense. You might want to sit with a glass of cold water before you read further. A man in the US recently broke the world record for eating the most number of ghost peppers in a minute! The man ate 17 Bhut Jolokia chilli peppers in 60 seconds.

• Markets closed on a strong note with the Nifty50 ending on a four-month high. 
• In all, 29 of the Nifty50 stocks closed in the green.
• Investors await India’s inflation data, which will be released on Friday.

Among the Nifty sectoral indices, PSU Bank (+2.3%) and IT (+1.7%) were the top gainers, whereas Media (-0.9%) and FMCG (-0.8%) were the top losers.

What’s trending

⭐ Vedanta’s big expansion plan

VEDL (NSE): 256 ▼ 0.3 (-0.1%)

The management of the mining company has said that it has planned a capex expenditure of $3 billion (₹23,859 crore) over the next two years. Also, it aims to achieve the $100 billion revenue target by 2030. This comes at a time when Vedanta continues to diversify its business across the natural resources space.

⭐ Page reports stellar profit growth

PAGEIND (NSE): 49,320 ▲ 932 (+1.9%)

Page Industries, the licensee of the Jockey brand of innerwear in India, announced strong quarterly results. The company’s Q1 net profit rose nearly 1,800% YoY to ₹207 crore. Revenue from operations rose 167% to ₹1,341 crore in the same period.

⭐ Airline stocks take off

INDIGO (NSE): 2,020 ▼ 18 (-0.9%), SPICEJET (NSE): 46 ▲ 1.3 (+3.0%)

Shares of airlines like Spicejet and Indigo were upbeat after the government lifted the cap on ticket prices from August 31. The cap was imposed two years ago at the start of the pandemic. Once the fare cap is removed, airlines will be free to price their tickets starting 1 September 2022. This move is expected to give a boost to the airline industry ahead of the upcoming festive season.

⭐ Bata India strides ahead

BATAINDIA (NSE): 1,912▲ 30 (+1.6%)

Footwear manufacturer Bata India reported robust growth in its June quarter result. The company achieved its highest-ever quarterly sales of ₹943 crore, a rise of 253% YoY. Meanwhile, its consolidated net profit rose to ₹119 crore against a loss of ₹69.5 crore last year. The company attributed higher sales growth to improved footfall across retail outlets, new product launches and marketing investments.

⭐ Apparel retailers to see strong growth

MANYAVAR (NSE): 1,213 ▲ 20 (+1.6%), ABFRL (NSE): 291 ▲ 14 (+5.0%)

In FY23, apparel retailers are likely to witness 21-23% revenue growth, as per a Crisil Research report. The growth will be driven by robust same-store sales, launch of new stores and high contribution from online platforms.. The report states that the operating margin will improve to about 8% year-on-year (YoY) from about 6% at present. It also says that capex by apparel retailers is set to rise over 30% YoY this fiscal on the back of improved demand.  

In Focus

Gas stocks on fire

Shares of city gas-distribution (CGD) companies like Indraprastha Gas and Mahanagar Gas were on fire today. Their stock prices jumped by 5 to 8% after the oil ministry decided to increase the allocation of domestically produced gas to these gas distributors. But, what does this mean with the gas companies? Let’s take a closer look.

In May, under the gas price pooling policy, the government had directed state-run GAIL to import liquefied natural gas (LNG) amid a sharp rise in demand and limited availability of domestically produced gas. Thus, GAIL was supplying the imported gas to CGD companies at a pooled (or uniform) price of $10.5 per MMBtu (metric million British thermal unit). This pooled price was much higher than the domestic price of $6.1 per MMBtu, leading to high procurement cost for gas distributors.

The Russia-Ukraine conflict has squeezed Russian gas supplies, thereby driving the international gas prices higher. As a result, there was frequent fluctuation in the price of imported gas, leading to periodic price hikes of CNG and piped natural gas in the domestic market.

However, on Wednesday, the government increased the supply of domestically produced gas to CGD companies effective from 16 August. The domestic supply will help meet 94% of the demand for CNG in the country. Currently, about 83% of the demand is met by domestic gas and the rest is met through imports. This is expected to bring down CNG and piped natural gas prices. 

The move will lower the overall procurement cost for CGD companies. Also, domestic supply of gas will keep a check on frequent price hikes, leading to improved volumes and moderation in margins. In addition, a reduction in CNG prices could give much needed relief to households.

IPO corner

After a gap of more than two months, the IPO buzz seems to be reginiting. Electronic system design and manufacturing (ESDM) company Syrma SGS is launching its IPO tomorrow. The price band for the ₹840 crore IPO is between ₹209 and ₹220 per share.

Click here to pre-apply for this IPO on Upstox.  

Good to know

What is CAGR?

The compound annual growth rate (CAGR) measures growth achieved each year during a given period. For example, assume that you have invested ₹1,000 in a mutual fund for a period of three years, and at the end of the third year, the value of your investment grew to ₹1,500. In total, your investment has generated a return of 50% over the three years. By calculating the CAGR, you can determine the returns you have earned per year. The CAGR is calculated using this formula: CAGR = [(EV/BV)^1/n −1]×100, where EV stands for ending value, BV stands for beginning value, and n stands for the number of years. Using this formula, the CAGR in the above example works out to 14.47%. You can even calculate the CAGR easily using this calculator on the Upstox website.

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