▲ Nifty: 11,930 (+0.28%) ▲ Sensex: 40,685 (+0.31%)
The markets opened the day with a gap-up and continued to trade in a narrow range until the close of day. Auto sector stocks were in the driver’s seat today with gains seen in Maruti (4.2%), M&M (3.3%) and Bajaj Auto (2.7%). Among the sectoral indices, Nifty Auto (2.9%) and Nifty Media (0.6%) were top gainers, whereas Nifty Realty (-1.0%) and Nifty Pharma (-0.3%) lost some ground.
Here are the top stories of the day.
SBI Cards slumps after bad loans hurt profits
Credit card giant SBI Cards is among the companies that have been hit hard due to the pandemic. The company’s bad debts in Q2 have risen by a whopping 162% over the same period last year. Meanwhile, revenue growth stands at a meagre 5%. Thus, the impact of loan defaults is severe and profits are down by 46%. The stock fell 5.5% today and 8.2% during the week. The company’s gross NPAs (non-performing assets)—which help gauge the asset quality—have risen to 4.29% (versus 2.33% in Q2 last year). This figure would be even higher, at 7.4%, without factoring in the Supreme Court order regarding NPAs.
Crompton Greaves rallies on upbeat results
Crompton Greaves, India’s market leader in fans, grew its Q2 revenues by 12.8% year-on-year. Electrical appliances account for ~75% of the company’s revenues. The growth comes from a strong 23% growth in revenues from fans and a 32% jump in revenues from appliances. The company said that cost optimisation measures helped in expanding the margin to 15.8% (against 12% in Q2 last year). The stock rose 5.4%. Other consumer durable stocks, such as Orient Electric (5.9%) and TTK Prestige (3.6%), also saw investor interest, especially in light of the ongoing festive season when sales of consumer durables tend to rise.
Biocon’s Q2 net profit drops on higher R&D costs
Biopharmaceuticals major Biocon reported a 22% drop in its consolidated net profits against Q2 last year due to higher R&D expenses. However, the company witnessed revenue growth in its key businesses—generics (8%), biosimilars (11%) and research services (12%). This resulted in a total revenue growth of 10% to ₹1,760 for the June-September quarter over the same period last year. The stock fell 2.7%% today and 6.8% during the week. The company expects its generics business, especially the new products launched in the US, to drive growth going forward. Further, the company plans to commercialise Remdesivir (treatment for Covid-19) in India.
Closing bell
This week, the benchmark indices were range-bound. While this doesn’t give any clarity on direction, it indicates a pause in the uptrend that started from the last week of September. The markets are witnessing a loss of momentum, which is normally followed by sharp movements on either side.