Friday party at D-Street

Nifty50: 17,854 ▲ 243 (+1.3%)
Sensex: 60,841 ▲ 909 (+1.5%)

Hi there!

The foundation of so many friendships and even rishte- password sharing on Netflix is finally coming to an end. 

Stung by losses, the streaming giant has started rolling out curbs, first in some countries of South America and will be followed by the rest of the world (and probably India) soon. 

But that’s not all. Netflix’s password crackdown comes with an array of, well, bizarre rules, to say the least. 

Sample this, the subscriber will have to have a device “check in” at least once a month on the home network. If travelling, subscribers can get a code for a week’s access. If the account gets blocked when it shouldn’t, the subscriber will have to contact Netflix directly. 

Phew! doesn’t it sound like a lot when other streaming services are just a Google search away?

Also, here’s what’s ironic. Netflix’s tweet from 2017 that says “love is sharing a password” has gone viral now. (Social media has no ‘chill’, we say!) 

While you scramble to figure out if your Netflix account is ‘owned’ or ‘borrowed’, let's get you some market updates. Here we go!

• The markets rebounded sharply amid positive global cues.
• Of the Nifty50 universe, 36 stocks closed in the green. 
• The finance minister said that the budget impact will continue to hold the markets high.

Among the Nifty sectoral indices, PSU Bank (+3.0%) and Financial Services (+2.3%) were the top gainers, while Pharma (-0.9%) and Oil & Gas (-0.8%) were the top losers.

What’s trending

⭐ SBI’s showstopper

India’s largest public sector bank (+3.3%) reported its highest ever quarterly net profit of ₹14,205 crore, up 68% YoY in Q3FY23. This was driven by a drop in provisioning for bad loans and a rise in net interest income. 

⭐ Divis Lab Q3 profit dives

In the December quarter, the pharma company’s (-12.0%) net profit tanked 65% YoY to ₹307 crore. The management said that the material consumption stood at 43% of sales revenue due to change in product mix. Meanwhile, the revenue also plunged 27% to ₹1,822 crore. 

⭐Titan shines amid rising gold prices

Shares of the jewellery maker (6.5%) rose as the gold prices traded at record levels. This comes at a time when the demand is expected to remain robust, supported by the wedding season.    

⭐ Ashok Leyland expects margin expansion 

The management of the commercial vehicle maker (+1.2%) said that it expects the profitability to improve further in the fourth quarter. This would be aided by better realisation (revenue per vehicle) and cheaper raw materials.

⭐ Teamlease rises on buyback offer 

Shares of the employment services company (+3.5%) rose after it announced a ₹100 crore buyback. The share price for the buyback would be ₹3,050, which is a premium of 30% as compared to today’s closing price. 

In Focus

Bank stocks decline: A case of smoke without fire?

Bank stocks have been facing the heat after the Hindenberg report on Adani companies came out. The Nifty Bank index has fallen around 3% over exposure to Adani companies. 

Should investors be concerned? Let’s take a look at how much Adani Group companies owe the Indian banking sector and what could be the overall impact. 

The Big Picture

First, let’s set the context. Top five Adani-owned companies – Adani Power, Adani Green, Adani Ports, Adani Enterprises and Adani Transmission – have been borrowing money to invest in the business and fuel growth. 

Indian banks have collectively lent ₹81,200 crore to  Adani Group’s top five companies. This is about 39% of the company’s total debt, according to experts. This figure might look big in isolation but consider this - it accounts for only 0.5% of the total loans given by India’s banks. 

If we break it down further, loans given to Adani Group companies account for only 0.7% of total loans given by state-owned banks. For private banks, loans to the Adani Group adds up to 0.3% of their total loan book. 

Loans backed by collateral 

In fact, these loans have also been backed by cash generating assets like power and airports. The management of State Bank of India, which reportedly has an exposure of ₹27,000 crore to Adani Group companies, said that they do not expect repayment to be a challenge. India’s largest lender added that the exposure to Adani Group companies is well within the Reserve Bank of India’s framework. 

Banks are well-capitalised  

Most importantly, the Indian banks are well capitalised as their asset quality continues to improve. Banks’ net non-performing assets (bad loans after provisioning) have hit a ten-year low of 1.3% of the loan book. 

Taking all these factors into account, experts believe that banks’ exposure to Adani companies is at a manageable level. 

Powerful buying made simple!

Markets often see sharp price movements triggered by positive news or technical patterns. In such situations, you may want to double down on certain high-conviction trades. However, having limited capital could be an obstacle in leveraging such opportunities. With Margin Trading Facility (MTF) on Upstox, you can increase your trading capacity instantly. Click here to know more about MTF.

Benefits of MTF:

🔹Get 2X leverage on equity delivery orders

🔹Applicable 375+ NSE stocks

🔹Borrow up to ₹25,00,000 at a time

🔹Hold stocks bought via MTF for up to 365 days.

Learn with Upstox

What is the net interest margin?

Net interest margin (NIM) reflects the profitability of a bank or lender. It is calculated by dividing the net interest income (difference between the interest earned and interest paid) by the interest-earning assets such as loans and bonds. For banks and financial institutions, it’s important to have a positive net interest margin. This is an important metric which reveals how effectively they are using the money they have borrowed. 

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