▼ Nifty: 11,729 (-1.34%) ▼ Sensex: 39,922 (-1.48%)
Globally, equity markets are under pressure as the second wave of Covid infections spreads across Europe and the USA. The Indian markets also faced the heat, and volatility was high ahead of the monthly derivative expiry tomorrow. All sectoral indices ended the day in the red, with the worst being the Nifty Bank index, which lost 2.1%. Among the major stocks, HDFC (-3.5%), Indusind Bank (-3.1%) and ICICI Bank (-3.1) were the top index losers. However, the selling was not only restricted to banks, as 41 of the Nifty50 stocks ended negatively.
Here are the top stories of the day.
Bharti Airtel dials up Q2 revenues
It would be an understatement to say that Bharti Airtel, one of India’s leading telecom operators, has underperformed as compared to the Nifty50 this fiscal. The telco has gained just 2% versus the Nifty50, which has risen 36%. However, the company’s Q2 results have brought some cheer to its investors. The company reported consolidated revenues of ₹25,785 crore, (up 22% over the same period last year) and its net loss has significantly narrowed to ₹763 crore as compared to ₹23,045 crore last year. The strong rise in revenues is a result of a ~27% rise in its mobile average revenue per user (ARPU) to ₹162, the highest in the past three years. Recently, Sunil Mittal, the company’s chairman, hinted that ARPUs are expected to rise to ₹200 (23% higher than the current rate) towards the end of this fiscal stating that current rates are not sustainable. Today, the stock was the top gainer in the Nifty50, and closed 3.3% higher.
JLR boosts Q2 for Tata Motors
Tata Motors’ consolidated revenues for Q2 were down 18.2% on a year-on-year basis to ₹53,530 crore. Its net loss widened to ₹307 crore (versus ₹187 crore last year). However, what keeps investors excited is the strong sequential recovery in the performance of Jaguar Land Rover (JLR), which accounts for ~80% of Tata Motors’ revenues. The luxury carmaker showed a sharp 53% sequential jump in volumes after demand revived in key markets such as China and the UK with the reopening of its global dealer network. Despite risks of the second wave of Covid infections in certain countries, the company expects gradual recovery in demand in the coming months. In the domestic market, Tata Motors’ passenger segment is seeing traction as sales volumes for the quarter were up 73% as compared to the same period last year. While the commercial vehicle segment is still lagging behind (volumes down 56% from last year), the company is hopeful of a full recovery in this segment because of overall economic improvement. Today, the stock gained 5.6% intraday but witnessed selling in an overall weak market and closed with a loss of 0.6%. During this fiscal, the stock has gained close to 90%.
TV18 posts bumper profit
TV18 Broadcast Ltd reported a 150% year-on-year jump in its consolidated net profit even as its revenues declined by 10%. The company’s operating margin expanded sharply to 16.2% (versus 9.3% last year) due to improved cost control. Reduction in operational costs, marketing expenses and employee costs have led to a 17% drop in overall costs as compared to last year. The company sees favourable trends in both viewership and monetisation, heading into the festive season. In an otherwise weak market, the stock was up 0.5% for the day.
Closing bell
While there may be contrasting views over the GDP growth in this fiscal, the market may gradually start looking at what would happen in the next fiscal. The Finance Minister expects India to be one of the fastest-growing large economies in the coming financial year. That said, in the near term, the second wave of Covid infections could spook the markets. Although today’s decline in the Nifty50 looks decisive, it is still within the trading range created on 15 October, when the Nifty50 fell by over 2.4%.
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