Market recap for 10 February 2021

Nifty50: 15,106 ▼2 (-0.0%)

Sensex: 51,309 ▼19 (-0.0%)

The Indian markets witnessed a see-saw session today. Strong buying in the last hour of the day helped the markets to recover the lost ground and close flat. 

Among the Nifty sectoral indices, Realty (1.6%) and Auto (0.9%) were the top gainers, while Bank (-0.7%) and Financial Services (-0.2%) were the top losers today.

Here are the top stories of the day. 

Hindalco posts record quarterly earnings

• For Q3, the Aditya Birla Group-owned aluminium producer reported a 76% surge in net profit at ₹1,877 crore, double the street estimates of ₹983 crore. Meanwhile, revenue rose 20% to ₹34,958 crore versus the expected ₹19,671 crore. 
• The growth came on account of the strong performance of the India aluminium business and Novelis, Hindalco’s North American subsidiary. Further, the company stated higher volumes, a better product mix and lower input costs as factors for the healthy quarter. Its shares have risen 23% this month.

Page Industries’ Q3 rises on strong product demand

• The exclusive licensee of Jockey and Speedo registered a 77% YoY growth in net profit at ₹153 crore, beating street estimates of ₹124 crore. Its revenues rose 17% YoY to ₹927 crore. 
• The all-time high revenue and profits were driven by demand from all product categories and sales channels. The company has repaid outstanding borrowings and stands debt-free. Its stock rose 5.2% today and has gained over 17% so far this month. 

Varroc Engineering posts weak quarter 

• The automotive components manufacturer posted revenue from operations of ₹3,493 crore, 24% up year-on-year. However, the company posted a loss of ₹29 crore versus profits of ₹29 posted during the same period last year.
• The company states that the losses are a result of tax impairment of ₹107 crore related to its Czech subsidiary. However, the company is upbeat about its businesses on account of recovery in two-wheelers and passenger vehicles. The stock was down 7.5% today.

MGL dives despite neutral results

• The Mumbai-based gas distributor reported a 17% YoY rise in net profit of ₹217 crore for Q3. Total volumes dropped 9% YoY. However, lower gas costs helped improve profitability.
• Although the earnings beat the estimated ₹197 crore, the stock closed 1.2% lower today. That said, it has gained about 9% this month. 

Closing bell

The markets have closed nearly at the same level over the last three days. These are signs of indecision. However, such a tug-of-war between the bulls and the bears at this juncture (lifetime-high levels) could create uneasiness for directional traders. A breakout on either side will give directional cues for the index.

Meanwhile, the street expects the retail inflation for January to soften to 4.45% (from 4.59% in December). Whether it will continue to remain lower for February is a question, given that the fuel prices are on the rise.

Good to know

What is short selling?
Short selling or shorting is the process of selling a stock or instrument (even without owning it) and buying it back when its price drops. The difference between the selling price and the buying price becomes your profit. In case the price rises after shorting, it will result in a loss.

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Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.