It’s showtime for multiplexes in Delhi

Nifty50: 15,824 ▼-31 (-0.2%)
Sensex: 52,852 ▼-123 (-0.2%)

Markets had a subdued opening and traded in a narrow range throughout the day. The market breadth was weak as 30 of the Nifty50 stocks closed in the red. 

Among the Nifty sectoral indices, Metal (+0.6%) and Pharma (+0.3%) were the top gainers, whereas Realty (-0.9%) and PSU Banks (-0.8%) were the top losers. 

Here are the top stories of the day.

Kotak Bank posts strong Q1 profit

• The bank’s standalone net profit rose by 32% year-on-year to ₹1,642 crore in the June quarter. The rise in net interest income, other income and a decline in provisioning for bad loans boosted the profit.
• The net interest income rose by 6% YoY to ₹3,942 crore, while the net interest margin stood at 4.6%. However, the lender’s gross NPA stood at 3.5% in June 2021 higher than 2.7% in June 2020, indicating deterioration in asset quality. Shares of Kotak Mahindra Bank were up around 1% today.

Partial relief for multiplexes

• Cinema halls in Delhi reopened today at 50% capacity, but there is still no clarity on when the cinema halls in Maharashtra will reopen. Mumbai and Delhi are major revenue generators for the Hindi film industry. 
• Some big Bollywood and Hollywood movies are expected to hit the theatres in August, especially around the Independence Day weekend. This is expected to bring some relief to multiplex chains. Shares of PVR and Inox Leisure surged 7% intraday but gave up most of their early gains and closed 1% and 2% higher, respectively. 

GNA Axles reports profitable Q1

• Punjab-based automotive axle-shaft maker reported a profit of ₹29 crore in Q1 as compared to a loss of ₹6 crore in the same period last year. The sharp turnaround was on the back of a 304% year-on-year growth in revenue to ₹328 crore. 
• Nearly 50% of the company’s sales come from exports to the US and Europe. Both these markets are showing strong recovery in truck sales as compared to last year, which augurs well for the company. Shares of GNA were up 5.2% today in a weak broader market.  

Closing bell

In terms of the market direction and its movement, nothing has changed from the previous session. Today’s movement of the Nifty50 indicates consolidation, which the markets have been under since the start of June. Later this week, the US Fed will announce its interest rate decision. While the street doesn’t expect any change in the rates, Fed’s commentary would be keenly watched. In the meantime, result-based stock-specific movements will continue in the Indian markets. 

Good to know

What is net interest margin?
Net interest margin (NIM) is a ratio used to measure the profitability of a bank or lender. It is calculated by dividing the net interest income (difference between the interest earned and interest paid) by the average interest-earning assets including loans and bonds. For banks and financial institutions, it’s important to have a positive net interest margin. It reflects how effectively they are using the money they have borrowed in the form of deposits or any other debt instrument. 

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