NIFTY50: 19,465 ▲ 30 (+0.1%)
SENSEX: 65,539 ▲ 137 (+0.2%)
Hello, friends!
After the latest moonshot, India is now aiming for the sun! The Indian Space Research Organisation (ISRO) is planning to launch a new spacecraft, Aditya-L1, which will be India's first space-based observatory to study the Sun. Talk about a hot topic! In more sunny news, the markets ended in the green. More on that later.
- Benchmark indices closed marginally higher, boosted by last-hour buying
- In all, 24 of the NIFTY50 stocks closed in the green
- The Eurozone economy grew by 0.6% YoY in the second quarter of 2023
Among the NIFTY sectoral indices, Media (+1.2%) and Realty (+1.1%) were the top gainers, while Metal (-0.9%) and Financial Services (-0.3%) were the top losers.
| Top gainers | Today's change |
| Apollo Hospitals | 4,946 ▲ 125 (+2.6%) |
| UltraTech Cement | 8,245 ▲ 190 (+2.3%) |
| NTPC | 217 ▲ 4.5 (+2.1%) |
| Top losers | Today's change |
| Tata Steel | 115 ▼ 2.2 (-1.9%) |
| Adani Ports | 774 ▼ 12 (-1.5%) |
| Hindalco | 444 ▼ 6.4 (-1.5%) |
What’s trending
⭐ NIFTY IT gains as Infosys and HCL Tech secure new deals
Infosys has bagged a €1.5-billion ($1.6 billion) deal from Liberty Global to build and scale connectivity platforms for the digital communications firm. The deal is for a five-year period that can be extended up to eight years. Infosys shares were up by 1.7%. Meanwhile, HCL Tech announced that it has been re-selected by Cricket Australia (CA), the national governing body for cricket, for the next phase of its digital transformation. HCL Tech shares were up by almost 0.4%. The NIFTY IT sectoral index gained over 0.6%.
⭐ Shipbuilders’ stocks rallies amid positive results
Shares of major shipbuilders’ stocks, including Mazagon Dock, Cochin Shipyard, Garden Reach Shipbuilders rose in the range of 3% to 17%. This comes amid strong June quarter earnings. For instance, Garden Reach Shipbuilders reported its best-ever net profit of ₹77 crore, up 54%. Meanwhile, net profit for Mazagon Dock and Cochin Shipyard surged 32% and 123% YoY. In addition, shipping firms are in the race to win ₹ 40,000 crore order to build submarines in India.
⭐ Hindustan Copper posts mixed Q1 results, shares slip
Shares of Hindustan Copper were down by 6% after the company posted mixed Q1 results. Its net profit fell by 17.5% year-on-year (YoY) at ₹47 crore for Q1FY24. However, revenue was up by 7% YoY to ₹384.7 crore from ₹359 crore. The state-owned company attributes the mixed performance to volatility in copper prices owing to weak global demand and the movement in US dollar rates.
⭐ Tejas Networks rises on bagging new order
Tejas Networks shares were up by 3.7% after it received an order worth ₹7,492 crore from TCS for the supply and maintenance of radio access network equipment for BSNL’s pan-India 4G/5G network. This contract will span over approximately 100,000 sites and will be completed during calendar years 2023 and 2024. For the June quarter, the company’s consolidated net loss widened to ₹26.3 crore from ₹11.5 crore in the previous quarter.
In Focus
Q1 report card: Hits and misses
With the quarterly earnings season drawing to a close, let’s take a look at the winners and losers of the first quarter. The earnings for Q1FY24 were diverse across different sectors. Banking and Auto sectors continued on a growth path and reported robust numbers. On the flipside, the IT and Metals sector witnessed earnings slowdown. Here is the Q1FY24 scorecard for top sectors.
Robust earnings power banks
Q1FY24 was great for banking sectors with most lenders reporting growth in revenue and profitability. These profits were driven by higher lending rates along with robust demand for new retail loans and sustained dip in provisions for bad loans. As a result, the combined net profit of 12 state-owned banks rose 127% YoY to ₹34,774 crore for the quarter ended June 2023.
Leading the pack was State Bank of India which reported 178% YoY rise in revenue to ₹16,884 crore, followed by HDFC Bank. Meanwhile, NIFTY BANK is up over 2.1% so far in 2023.
Strong domestic sales support automakers
Similar to the banking sector, the Auto sector also reported steady earnings during the June quarter supported by strong domestic sales. Most automakers increased prices across categories, which improved margins on a yearly basis. Meanwhile, a sustained drop in prices of raw materials also boosted profitability.
Tata Motors returned to profitability during the quarter with a consolidated net profit of ₹3,301 crore, compared to a loss of ₹898 crore in the same quarter of last year. Meanwhile, Maruti Suzuki’s net profit was up 145% to ₹2,485 crore supported by a 6.4% YoY growth in sales volume and new launches. On a year-to-date basis, NIFTY AUTO index is up over 22%.
IT sector witnesses a slowdown
A slowdown in the US and European markets impacted revenues of major IT companies, with TCS reporting flat growth in revenue on a sequential basis. Meanwhile, its net profit was down nearly 3% impacted by weak topline and surge in employee costs.
Other IT majors like Infosys, HCL Tech and Wipro also reported net profit declines in the range of 3% to 11%, compared to the previous quarter. Nonetheless, the NIFTY IT index is up over 9% so far in 2023.
Metals sector sees a meltdown
Earnings for most metal companies were a mixed bag with Hindalco and Tata Steel reporting muted numbers. Both companies reported 40% and 93% slump in net profit on an yearly basis because of moderation in prices of key commodities and weakness in business performance of overseas subsidiaries.
On the other hand, JSW Steel reported nearly 190% YoY rise in net profit aided by better export realisations and higher steel consumption in the domestic market. On a year-to-date basis, NIFTY METAL index is down by 3.5%.
On the whole Q1FY24 had more hits than misses. But it remains to be seen whether companies will stay on the growth track for the rest of the fiscal year.
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