HDFC reports robust numbers, tech stocks tumble & more

Nifty50: 18,052 ▼ 30 (-0.1%)
Sensex: 60,836 ▼ 69 (-0.1%)

Hey there, people!

With only days remaining for the FIFA World Cup to begin, fans are brimming with excitement. But some fans in Kerala have taken their love for the game, in particular for one player, to another level. They have installed a 30-foot cut-out of Argentinian football star Lionel Messi in the middle of a river in Kozhikode.

• Benchmark indices closed lower for the second straight day, amid weak global cues.
• In all, 25 of the Nifty50 stocks closed in the red.
• On Wednesday, the US Fed raised interest rates by 0.75% for the fourth consecutive time.

Among the Nifty sectoral indices, PSU Bank (+2.5%) and Realty (+0.5%) saw gains, while IT (-1.1%) and Auto (-0.4%) were the top losers.

What’s trending

⭐ HDFC reports robust numbers

HDFC (NSE): 2,479 ▼ 29 (-1.1%)

Housing Development Finance Corporation (HDFC) reported a nearly 18% year-on-year (YoY) rise in its net profit to ₹4,454 crore. Meanwhile, its revenue from operations rose 23% YoY to ₹15,027 crore. The net interest income rose 13% YoY to ₹4,639 crore. The company’s assets under management (AUM) stood at ₹6.9 lakh crore, compared to ₹5.9 lakh crore in the previous year. Individual loans comprised 81% of the AUM.

⭐ Tech stocks tumble

TECHM (NSE): 1,053 ▼ 28 (-2.6%), INFY (NSE): 1,530 ▼ 22 (-1.4%)

Shares of leading IT stocks witnessed an intraday fall. Leading the pack was Tech Mahindra and Infosys reacting to last night's fall of over 3% in tech-heavy Nasdaq index. In addition, a below-par future revenue guidance by US-based IT firm Cognizant had its cascading impact on Indian tech stocks as well. Cognizant’s deal bookings declined by 2% YoY, and it also trimmed its revenue guidance for the third straight quarter.

⭐ M&M Finance shares rally

M&MFIN (NSE): 218 ▲ 25 (+13.0%)

Shares of M&M Finance were upbeat despite the company reporting poor numbers in Q2 results. The non-banking financial company reported a fall of 55% YoY in its net profit at ₹492 crore. However, total income surged by 3% YoY to ₹3,029 crore. The management said it witnessed significant reversal of impairment provisions due to improvement in asset quality, which had fallen during Q1 FY22 during the second wave of the pandemic.

⭐ Sugar stocks turn sweeter

EIDPARRY (NSE): 643 ▲ 31 (+5.1%), BALRAMCHIN (NSE): 338 ▲ 2.6 (+0.7%)

Major sugar stocks were in focus today after the government increased prices of ethanol used for blending with petrol. Price of ethanol extracted from sugarcane juice was raised to ₹65.60 per litre from ₹63.45 per litre. At present, 10% ethanol is blended in petrol but the government is planning to double this quantity by FY24, in order to cut crude oil imports. 

In Focus

CV industry in the fast lane

As per a new industry report, commercial vehicles (CV) sales in India are expected to grow at 14-19% in the coming years. As per estimates, sales could touch nearly 1 million units by FY24. For reference, FY22 sales stood at 7,16,566 units. What are the key factors behind this upbeat perspective? Let's find out.

Demand for CVs is expected to remain elevated due to strong economic revival as well as better availability of financing options. In addition, the industry is expected to see high replacement demand. 

Most fleet operators had deferred the purchase of new vehicles in light of the pandemic. This resulted in a higher number of older vehicles on the roads, which typically have lower fuel efficiency and negatively impact profitability. However, higher fuel costs might push CV owners to replace older vehicles with more fuel-efficient vehicles. 

Besides this, growing demand for fleets from the e-commerce sector as well as favourable rural demand could also aid CV sales in the coming years, according to the report.

The monthly sales of leading CV makers also echo similar sentiments. In the medium and heavy commercial vehicles (MHCV) category, Tata Motors reported 29% YoY rise in sales in October 2022. Meanwhile, Ashok Leyland reported 56% YoY growth.   

A high double-digit growth is positive for the overall industry. Having said that, rising interest rates and  inflationary pressures might slow down economic growth, which could adversely impact the industry. 

IPO Corner

IPO of snacks and sweets maker Bikaji Foods was subscribed 60% on Day 1 with the retail subscription at 110%. Meanwhile, the IPO of hospital chain-operator Global Health received an overall subscription of 26% on Day 1. Lastly, the IPO of NBFC Fusion Micro Finance was subscribed 29% on Day 2. 

Good to know

What is a hedge fund?

A hedge fund is an investment pool that is managed using a range of strategies to get higher-than-market returns. The fund tries to hedge the risk against market volatility by employing alternative investment approaches, which are often riskier than traditional approaches. In general, hedge funds require a high minimum investment or net worth.

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