Market Recap for 28 May 2021

Nifty50: 15,435 ▲ +97 (+0.6%)
Sensex: 51,422 ▲ +307 (+0.6%)

After a gap-up opening, the markets sustained positive momentum throughout the day. The Nifty50 closed the week at a new lifetime high. Despite the higher closing, the market breadth was almost evenly split, with 27 of the Nifty50 stocks closing in the green.

Among the sectoral indices, the Nifty PSU Bank (+0.6%) and Nifty Financial Services (+0.3%) were the top gainers, while Nifty Pharma (-1.1%) receded the most today.

Here are the top stories of the day.

Consumer electronics biz boosts Dixon’s Q4

• The electronics contract manufacturer reported a strong Q4, mainly due to a 200% YoY surge in revenue from its consumer electronics division. This translated to a 146% surge in its Q4 revenue, which stood at ₹2,110 crore. 
• Profit for the quarter rose 60% to ₹44 crore, and felt pressure from rising raw material costs and higher taxes. The stock closed flat today but has declined about 5% so far in May.

UCO Bank’s profit jumps manifold

• State-owned UCO Bank’s Q4 net profit jumped five-fold to ₹80 crore on account of strong treasury gains. For FY21, it made a profit of ₹167 crore. It is back in the black after five straight years of losses. 
• For Q4, the net interest income increased 12.6% YoY to ₹1,412 crore. Asset quality has improved sharply too, as the bank’s gross NPA dropped to 9.5% from 16.7% a year back. It plans to raise up to ₹3,000 crores in FY22. Its shares rose 2,6% today and have gained nearly 23% so far this month.

Metropolis reports strong business recovery

• The Mumbai-based diagnostics chain reported a 42% growth in Q4 revenues. As per the company, the growth was driven by a recovery in non-Covid business and a jump in Covid business due to the second wave. At ₹292 crore, it recorded its highest-ever quarterly revenue. 
• Profits jumped nearly 300% to ₹61 crore. However, profits of the previous Q4 were impacted by an exceptional charge of ₹17 crore. Going forward, the company has plans to widen its service network from 2,555 centres in FY21 to 4,355 centres in FY24. Its shares rose 8.1% today.

Redington hits lifetime high on strong Q4

• Shares of the IT-based supply chain solutions provider were locked in their 20% upper circuit after the company declared over 154% rise in profit to ₹302 crore. Consolidated revenue from operations rose 23% YoY. 
• The overall performance was boosted by the India business wherein revenues and profits rose by 45% and over 900%, respectively. The stock hit its new high of ₹219.7 today, and has gained 23% so far in May.

Closing bell

The mood in the market is optimistic and it is showing in the Nifty50. The benchmark index closed at a record high for yet another day. However, the factors contributing to today’s rise are skewed toward one stock, namely Reliance Industries which rose 6%. The street is bullish about its profitability in the petrochemical business. Meanwhile, profit booking was seen in the smallcap stocks. The Nifty Smallcap 100 index fell by 0.7%, notwithstanding the general bullish mood. Next week could be eventful for two reasons. Many parts of the country will lift lockdown restrictions and there’s a long list of data releases lined up.

Good to know

What are exceptional items?
An exceptional item is a substantial gain or loss for a company that is typically one-off in nature. It is related to the company’s business, case in point the sale of the Numaligarh Refinery, which gave BPCL an additional profit of ₹9,876 crore. To know more, watch the video here 👇

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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.