Nifty 12,987 ▲128 (+1.00%)
Sensex 44,259 ▲431 (+0.98%)
After a decline of about 1.5% in benchmark indices yesterday, the markets bowled a googly today by rising nearly 1%. Being a monthly derivative expiry day, volatility was high. At the start of the day, most sectoral indices were in the red but all of them turned green by the close of day. The Nifty Metal index (+3.8%) gained the most support from JSW Steel (+7.0%), Tata Steel (+5.2%) and Hindalco (+3.0%). Auto majors Eicher Motors (-1.5%) and Maruti (-0.7%) were among the top losers, ahead of the November sales volume releases expected next week.
Here are the top stories of the day.
Laurus Labs acquires stake in biotech firm Richcore
- Pharma company Laurus Labs is set to acquire a 72% stake in Richcore Lifesciences for about ₹250 crore and mark its entry into the biotechnology segment. Laurus will fund the acquisition through internal accruals. For FY20, Richcore had a revenues of ₹41 crore.
- Laurus currently has three core revenue streams—active pharmaceutical ingredients, formulations and synthesis. The management believes that the Richcore acquisition will not only help to diversify the revenue base but also give a fast-track entry into high growth biotech space, which otherwise could take 6-7 years.
- Share of Laurus Labs gained 2.2% today. The stock has been a massive outperformer since March 2020 lows. It has gained over 300% this financial year owing to strong financial performance.
Astral Poly enters water-tank business
- PVC pipe maker Astral Poly has announced its entry into plastic water-storage tanks business. The company mentioned that the market opportunity for this product is ₹5,000 crore and is expected to reach ₹8,700 crore by FY22, as per industry reports.
- About 70% of the plastic water-storage tank market is dominated by unorganised players, and Astral plans to leverage its brand and its strong network of dealers and distributors to gain a foothold.
- The stock rose by 2.6% today and closed at its lifetime high.
- Shares of other PVC pipe makers such as Finolex Industries, Jain Irrigation and Prince Pipes rose in the range of 1-5%. Rising crude oil prices augur well for PVC pipe makers in the medium term. The increase in crude oil prices triggers a rise in raw material prices (PVC) and will eventually lead to a price hike in PVC pipe prices.
- Performance of large PVC pipes stocks (based on market cap): Astral Poly (+3.2%), Supreme Industries (-2.6%), Finolex Industries (+1.4%), Prince Pipes (+2.4%) and Jain Irrigation (+4.8%).
Action in sugar sector continues
- The shares of sugar companies were in action recently after the Food Ministry approved loans to the tune of ₹12,500 crore to add ethanol production capacities.
- The action in the sector continues, as the industry players are expected to meet the Food Ministry today. It is believed that the discussion could revolve around sugar export policy (which is a pending matter) and the minimum support price (MSP) for sugar.
- Investor interest was high ahead of the meeting as top sugar stocks rose in the range of 3-10%, coupled with above average volumes.
- Performance of large sugar stocks (based on market cap): EID Parry (+2.7%), Balrampur Chini (+4.6%), Shree Renuka Sugars (+3.0%), Triveni Engineering (+4.0%) and Bannari Amman Sugar (+5.2%).
Closing bell
India’s Q2 GDP numbers will be announced tomorrow, and the market expects a contraction of around 8.2%. It will be the second consecutive quarter of contraction (after a 23.9% slump in Q1). Whether it will be construed as a recession phase or a sharp recovery from historic lows, the market will decide. Meanwhile, European indices are trading in the red and US markets will be closed for the Thanksgiving holiday.
Good to know
What is a limit order?
A limit order is an order where the trader defines the price at which the order should be executed. Contrary to this, in a market order the trade is executed at the current market price.
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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.