Home run for realty stocks

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Nifty50: 15,885 +122 (+0.7%)
Sensex: 52,950 +363 (+0.6%)

After a gap-up opening, markets continued to inch higher. 37 of the Nifty50 stocks closed in green. 

All the Nifty sectoral indices ended positively with Realty (+4.7%) and Auto (+1.3%) being the top gainers for the day. 

Top gainers Today's change
Titan ▲ 3.5%
Shree Cement ▲ 3.5%
BPCL ▲ 3.0%


Top losers Today's change
UPL ▼ 2.2%
Tata Steel ▼ 1.4%
Bajaj Finserv ▼ 0.6%

Here are the top stories of the day.

HDFC’s profit declines marginally

In the June quarter, India’s largest mortgage lender’s net profit dropped by 1.6% year-on-year to ₹3,001 crore, missing the street estimates of 9% growth in the bottom line. The increase in employee expenses and taxes impacted the profit. However, net interest income rose by 22% YoY to ₹4,147 crore. The net interest margin also improved to 3.7% in Q1FY22 from 3.1% in the same period last year. 

The lender witnessed strong growth of 181% in the individual loans category. According to the management, the home loan segment also continues to remain strong and disbursements have picked up with the regional unlocking. Meanwhile, the company’s gross non-performing assets rose to 2.2% in June 2021 from 1.8% in June 2020. Shares of HDFC were up 0.8% on Monday. 

Realty stocks surge

The shares of top real estate developers including DLF (+3.9%), Macrotech (+8.3%) and Oberoi Realty (+10.6%) rose on Monday, pushing Nifty Realty to multi-year highs.Nifty Realty index rose 4.7% today. 

As per experts, the realty index has shown a strong breakout from a decade long consolidation and expect the sector to outperform going ahead. Meanwhile, major real estate developers believe that the sector is undergoing a paradigm shift wherein very few developers have the financial stability and advantage to undertake large projects. 

Passenger vehicle sales up on pent-up demand

India’s leading car manufacturer, Maruti Suzuki, recorded 37% growth year-on-year in July 2021. The company got a notable push from its utility vehicle segment which includes Ertiga, Brezza, and S-cross. Another homegrown car manufacturer, Tata Motors too recorded a solid  growth of 101% compared to last year. 

Reports suggest that the passenger vehicles category, in general, saw a 47% boost in the month of July on the back of pent up demand and last year's low base. Meanwhile, shares of Maruti () and Tata Motors were upbeat today. 

Closing bell

While still in a broader range, the market rose today. The rise was supported by favorable cues from the Asian and European equity indices. Meanwhile, India’s manufacturing PMI for July stood at 55.3, beating the street estimate of 50.5 and much higher than 48.1 recorded in June. Strong PMI numbers indicate expansion of manufacturing activity in the country. Further, investor sentiments are upbeat, and it is evident from the slew of IPOs that will be up for grabs this week. 

Good to know

What is street estimate?
Street estimate refers to the average of analyst forecasts regarding a company’s revenue, profit or any other metric. These estimates are specifically used for a company’s financial results. A comparison between actual results and estimates helps traders and investors to see whether a company has outperformed or underperformed against market expectations. An outperformance is generally handsomely rewarded with increase in share price. Similarly, shares of a company fall when it fails to meet the street’s expectations.

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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.