Nifty50: 15,812 ▲+119 (+0.7%)
Sensex: 52,769 ▲+397 (+0.7%)
After a gap-up opening markets steadily inched up and closed near the day’s high. The market breadth was healthy, with 34 of the Nifty50 stocks closing in the green.
Among the Nifty sectoral indices, Financial Services (+1.4%) and Bank (+1.3%) were the top gainers, whereas Media (-0.5%) and IT (-0.3%) were the top losers.
| Top gainers | Today's change |
| ICICI Bank | ▲ 2.7% |
| Grasim Industries | ▲ 2.6% |
| HDFC | ▲ 2.6% |
| Top losers | Today's change |
| Adani Ports | ▼ 1.9% |
| Dr Reddy's | ▼ 0.9% |
| HCL Tech | ▼ 0.9% |
Here are the top stories of the day.
Mindtree posts strong Q1 growth
- IT services major Mindtree reported an 8.6% quarter-on-quarter (QoQ) growth in its June quarter revenues to ₹2,292 crore. Similarly, its net profit rose 8.2% QoQ to ₹343 crore.
- In terms of client segments, revenue from the travel and transport segment grew the fastest at 13.1%. The company’s order book rose 34% QoQ and stood at about ₹3,750 crore, its highest ever. Meanwhile, employee attrition rose to 13.7% in Q1 compared to 12.1% seen in the March quarter. Shares of Mindtree were up 0.3%, but the results came after market hours.
FDC launches oral suspension of Covid drug
- Pharma company FDC has launched India’s first oral suspension of Favipiravir, which is used in the treatment of mild to moderate cases of Covid. The company said that two doses of this oral suspension are equivalent to 9 tablets of Favipiravir.
- This will make the treatment hassle-free for patients, as it will reduce the frequency of dosage. The launch comes at a time when daily cases are on a rise globally. Shares of FDC closed 1.3% higher today and have gained 7.3% so far this month.
HFCL’s Q1 profit surges four-fold
- The telecom infrastructure and equipment maker’s Q1 net profit soared four-fold on a year-on-year basis to ₹91 crore. The sharp jump in profit was mainly due to a 72% rise in revenue from operations to ₹1,207 crore.
- The company said that out of the pledge on around 43% of the promoter holding, 33.5% has been released, This brings the overall promoter pledge to a more comfortable level of 9.5%. Despite the strong results, shares of HFCL were down 3.1% today but have gained over 200% so far this fiscal.
Pennar Group bags multiple orders
- The value-added engineering products company has said that it has received orders worth ₹571 crore across various business verticals. The company’s US-based subsidiary has booked orders worth ₹223 crore.
- The new orders are almost equivalent to the current order book of ₹593 crore (as on March 2021). After the announcement of new orders, the company’s stock rose 11% today.
Closing bell
The markets rose steadily today and took the high inflation numbers in their stride. Most international indices were also trading positively, and thus provided favourable cues. Today’s rise was largely driven by stocks in the banking and financial services sector. Generally, the rise in this sector is a comforting factor for markets for two reasons. First, their weightage in the index is high, which pushes up the benchmarks. Second, it signals that ‘all is well’ with the economy, since this sector is the most sensitive to any challenges in the economy.
Good to know
What is a promoter pledge?
When an owner or promoter of a company takes a loan against his own shares as collateral, it is called promoter pledging. A promoter may pledge his shares for personal financial needs or to fund new investments. While pledging of shares is a common practice, the problem arises when the stock price falls and the bank asks the promoter to pledge more shares or repay a certain portion of the loan. If the promoter is unable to cover the shortfall, the bank may sell the shares, leading to a further fall in the stock price. This may trigger selling from other investors as well, which can turn into a vicious cycle, especially if the company is fundamentally weak.
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Investment in securities markets is 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.