Nifty50: 16,049 ▲ 110 (+0.6%)
Sensex: 53,760 ▲ 344 (+0.6%)
Howdy, folks!
Markets were up for the first time this week! If they'd gone down again today, we'd surely have hired that expensive professional cuddler from the UK, who charges 75 pounds for an hour-long hug!
- Benchmark indices end a volatile week on a positive note amid weak global cues.
- In all, 35 of the Nifty50 stocks closed in the green.
- Crude oil prices rise on expectations of a less aggressive rate hike by the US Fed. More on that below.
Among the Nifty sectoral indices, Auto (+2.0%) and FMCG (+1.4%) saw the most gains, while Metal (-0.8%) and PSU Bank (-0.4%) were the top losers.
| Top gainers | Today's change |
| Tata Consumer | 790 ▲ 25 (+3.2%) |
| TITAN | 2,188 ▲ 61 (+2.8%) |
| HUL | 2,570 ▲ 72 (+2.8%) |
| Top losers | Today's change |
| TATA Steel | 884 ▼ 23 (-2.6%) |
| Power Grid | 209 ▼ 5.6 (-2.6%) |
| HCL Tech | 882 ▼ 20 (-2.2%) |
What’s trending
⭐ Airtel approves preferential allotment to Google 👍
BHARTIARTL (NSE): 651 ▲ 9.9 (+1.5%)
Shares of Bharti Airtel rose over 2% intraday after it announced the allotment of 7.11 crore shares to Google on a preferential basis. The issue price is ₹734 per share, which is at a premium of 12.7% over Friday’s closing price. After the issue, Google will hold about 1.2% of the total post-issue equity shares of the company.
⭐ Tata Elxsi rises on robust Q1 ✏️
TATAELXSI (NSE): 8,050 ▲ 250 (+3.2%)
Tata Elxsi rose 3% as the design-led tech services provider reported a 63% year-on-year jump in net profit to ₹184.7 crore in Q1 FY23. This was supported by a 30% rise in revenues to ₹725.8 crore in the same period. The company said the growth was mainly volume-led, with traction across divisions, verticals and key markets.
⭐ Tata Steel Long posts huge loss 🔩
TATASTLLP (NSE): 579 ▼ 25.4 (-4.2%)
Tata Steel Long Products closed 4% lower after weak Q1 results. The Tata Steel subsidiary reported a ₹331 crore loss mainly on account of higher expenses. The company had posted a ₹331 crore profit in the same period a year ago. However, the company's revenues rose 25%% to ₹2,154 crore in the period.
⭐ Crude rises amid lower rate hike prospects
Crude oil prices rose in the morning trade today amid prospects of a less aggressive rate hike by the US Federal Reserve. The market is expecting a 75 basis-point hike as compared to the previous opinion of a 100 basis-point hike. The Fed meeting is scheduled to take place later this month on 26-27 July. Crude oil prices have corrected in the recent weeks due to concerns about the demand recovery.
⭐ China’s growth dips to two-year low 📉
China recorded its weakest growth rate in more than two years at 0.4% in the June quarter, missing street estimates. The weak growth comes on the back of recent Covid lockdowns and a subdued market, with slow economic activity affecting several industries. However, industrial production rose 3.9% year-on-year in June. Retail sales were up 3.1%, while urban unemployment reduced marginally to 5.5%.
In Focus
ACC’s profits crumble, but what lies ahead?
Shares of the cement major traded in the red on Friday, after it announced its quarterly results. But why were investors disappointed? Let's break it down.
Let's begin with some positives. The company reported a 15% year-on-year (YoY) rise in its net sales to ₹4,393 crore in Q2 of 2022 (the company follows a Jan-Dec financial year). And this was not only because of price hikes. The company said cement sales volumes were 10.5% higher in the quarter YoY. Notably, ready-mix concrete volumes were 44% higher.
But here's where the positives end. The company's net profit fell 60% YoY to ₹227 crore despite solid volume growth. The bottomline was impacted mainly by rising fuel costs, which shot up by 58% to ₹1,311 crore in the quarter. This brought the company's EBITDA margin down sharply to 9.7% from 22.8%!
While investors were disappointed, the company is positive about demand in the coming months. It said that a normal monsoon is expected to be a positive for the rural economy. Besides this, it believes that construction activity in the housing, infrastructure and industrial spaces is expected to be robust.
It is also optimistic about demand for warehousing space, led by a spurt in e-commerce and retail segments. Interestingly, a 13-14% growth is expected in the demand for office spaces in 2022 alone.
In all, the future prospects look strong, but nothing’s ever concrete in these volatile times!
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Good to know
What is EBITDA margin?
The EBITDA margin measures a company's profitability at the operating level. EBITDA (or Earnings before Interest, Tax, Depreciation, and Amortisation) is a company's earnings from its core businesses and excludes the deduction of interest on loans or taxes. The EBITDA margin is obtained by dividing a company's EBITDA by the total revenue. It can help investors compare the operating performance of companies in the same sector, regardless of their size. However, it has its negatives. For instance, it fails to reflect the true performance of a debt-ridden company, as it doesn't take interest payments into account.
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