▼ Nifty: 12,690 (-0.46%) ▼ Sensex: 43,357 (-0.54%)
After rising nearly 9.5% over eight consecutive trading sessions, the markets took a pause today. The Nifty50 traded in the red throughout the day, and the range-bound movement suggested that markets were struggling for direction. Even the Atmanirbhar 3.0 measures failed to trigger any particular movement. Among the top gainers were HUL (+3.3%), Grasim (+2.7%) and Shree Cement (+2.7%), while SBI (-3.0%), Kotak Mahindra Bank (-2.8%) and Coal India (-2.6%) were the top losers.
Here are the top stories of the day.
Aurobindo Pharma gains on healthy Q2
In Q2, Aurobindo Pharma’s consolidated net revenues grew by nearly 16% year-on-year to ₹6,483 crore and net profits rose 26% to ₹806 crore. Both of these numbers were higher than street estimates. The highlight was its antiretrovirals (ARV) business, where revenues more than doubled to ₹503 crore. The business now contributes nearly 8% of total sales (as compared 4% earlier). Q2 operating margins expanded to 22.1% as compared to 20.8% in the same quarter last year. The stock was up 3.6% today and has gained nearly 9% this month.
Spicejet’s losses narrow, but challenges remain
The low-cost carrier reported net loss of ₹105 crore in Q2, significantly lower than net losses of ₹600 crore in Q1 and ₹461 crore in Q2 last year. The company benefited from foreign exchange gains to the tune of ₹170 crore with the restatement of lease liability, without which the losses would have been higher. The stock was up 6.3% intraday and ended the day 1.9% higher. Developments such as the increase in flight capacity from 60% t0 70% and improved prospects of air travel with a Covid vaccine in sight bode well for the airline industry. However, Spicejet has its own challenges. Its auditors have raised fresh doubts about the company’s ability to continue as a going concern. Further, rising crude oil prices lead to increase in aviation fuel costs, which doesn’t augur well for airlines.
Fragrance maker SH Kelkar sees spurt in volumes
Mumbai-based fragrance and flavour manufacturer SH Kelkar Ltd reported consolidated revenues of ₹352 crore in Q2, 27% higher than the same period last year. It’s operating profit nearly doubled to ₹77 crore and net profit jumped 3.5 times to ₹54 crore. The improvement in profitability was backed by strong revenue growth, a better product mix and stable raw material prices. The company, which supplies products to major FMCG players, believes that the festive season should help to strengthen demand and sustain the growth momentum. Further, the company mentioned that it doesn’t have any capex expansion plans at the moment. Shares of the smallcap company were up 15% today, coupled with a nearly 13-fold surge in volumes on the BSE. The stock is up nearly 23% this month.
Closing bell
After a spectacular rally in large-cap stocks over the last two weeks, the market seems to be gradually turning its attention to smallcap and midcap stocks. The indices that represent these stocks were up today in an overall weak market. In this month, the Nifty Smallcap 100 (+3.0%) and Nifty Midcap 100 (+6.5%) have underperformed the Nifty50 (+9.0%). But they are now catching up. Tomorrow, the market opening will depend mainly on the inflation numbers, which will be announced later today. The IIP numbers (for September), which will also be announced today may not have that big an impact as these would have already been factored in by the markets following the Q2 results of manufacturing firms.
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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.