Market recap for 27 January 2021

Nifty50: 13,967 ▼ 271 (-1.9%)

 Sensex: 47,409 ▼ 937 (-1.9%)

The markets opened in the red and kept sliding down all the way till the closing bell. Losses were seen in 38 of the Nifty50 stocks. 

Among the sectoral indices, Nifty FMCG was the only sector to close in the green with gains of 0.3%. Meanwhile, the Nifty Bank (-2.9%) and Nifty Metal (-2.5%) indices were the top losers today. 

Here are the top stories of the day. 

HUL’s Q3 profit falls short of expectations

• FMCG major Hindustan Unilever reported a 20% YoY growth in Q3 sales to ₹11,682 crore and a 19% growth in net profit to ₹1,921 crore. The profit was lower than street expectations of ₹2,052 crore.
• The growth was driven by a 19% rise in the foods and refreshment business, which accounts for nearly one-third of the total sales. The in-home consumption trend helped push up the sales. The stock ended almost flat with a 0.1% rise. 

Marico's Q3 boosted by foods portfolio

• The maker of ‘Parachute’ oil reported a 16.3% YoY growth in revenue to ₹2,122 crore in Q3. Net profit, too, saw an uptick of about 13% to ₹312 crore during the same period. 
• The growth was supported by an 18% YoY rise in domestic business, within which the ‘foods’ portfolio surged 74% by value. The company expects rural demand and expectations of a growth-oriented budget to continue driving the growth trend. Today, the stock gained 0.9% in an otherwise weak market.

Jyothy Labs’ Q3 earnings rises on strong rural demand

• The Mumbai-based FMCG company’s consolidated revenue increased 13.2% YoY to ₹476 crore, while net profits rose 18% to ₹53 crore in Q3. 
• A 21% YoY growth in the dishwashing segment (Pril & Exo brands) aided revenue growth. Further, the company is witnessing strong rural demand and improving urban consumption trends. Nonetheless, the stock lost 4.1% today.

Excise duty hike hurts Chennai Petroleum in Q3

• Oil-refining company Chennai Petroleum reported a consolidated net loss of ₹556 crore for Q3 versus a profit of ₹290 crore during the same period last year. Revenue from operations was down 4% YoY to ₹11,458 crore. 
• Profits were impacted by a spike in excise duty, which nearly doubled to ₹5,578 crore in Q3 versus last year. The company has not mentioned reasons for the spike in excise duty. Meanwhile, its shares fell sharply and declined 19.9% coupled with heavy volumes. Indian Oil, which owns a nearly 52% stake in Chennai Petroleum, was also down 2.0% today.

Closing bell

After the decline seen in the last four trading sessions, the Nifty50 has lost all the gains registered in January so far. Today, the cues from the global equity markets were also negative. Typically, a falling market could impact the IPO pipeline. Public issues face a double whammy in weak markets due to lower investor interest and lower peer valuation, which affects the issue price. The next major event for the markets is the Union Budget on Monday, and the run-up to the Budget does not look encouraging.

Good to know

What is dividend?
Dividend refers to the portion of profits a company distributes to its shareholders on a per-share basis. Suppose that you own 10 shares of a company. If the company announces a dividend of ₹5 per share, you get ₹50.

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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.