Market Recap for 3 May 2021

Nifty50: 14,634 ▲ 3 (+0.0%)
Sensex: 48,718 ▼ 63 (-0.1%)

In line with major Asian indices, the Indian markets opened weak and traded in the negative nearly all day. However, buying in the last hour helped the markets close nearly flat, with 29 of the Nifty50 stocks closing in the green.

Among the sectoral indices, Nifty Metal (+2.1%) rallied the most, followed by Nifty FMCG (+1.1%). Meanwhile, Nifty Media (-1.3%) and Nifty Bank (-0.9%) fell the most.

Here are the top stories of the day.  

Marico’s profits grow despite cost pressures

• The Mumbai-based FMCG major’s Q4 revenue from operations grew 34% YoY to ₹2,012 crore, with profits (excluding one-off items) rising by 17% to ₹238 crore. 
• The growth is a result of the low base of Q4FY20 and a 134% growth in the company’s foods portfolio. Meanwhile, categories such as Parachute Rigids grew 29% and Value Added Hair Oils grew 22% by volume. However, margins were impacted due to the steep rise in input costs. The stock hit a new lifetime high of ₹454 and closed 8.2% higher today. 

Varun Beverages surges on strong quarter

• The Pepsico franchisee reported net sales worth ₹2,241 crore in the March quarter, up 33.7% YoY. Meanwhile, profit after tax surged 127% to ₹137 crore. 
• The growth in profit comes on account of higher revenue, improvement in margins and higher profitability from international operations. Further, the company reduced its finance costs by 33.4% to ₹58 crore due to repayment of debt and lower average cost of borrowing. The stock closed 5.6% higher today.

Natco Pharma rises on Covid-drug approval

• The Hyderabad-based pharma company announced that it has received emergency-use approval for its Baricitinib tablets. The drug is used in combination with Remdesivir for the treatment of COVID-19.
• The company is ready to launch the product this week and will make the product available to patients across India. The stock was up 3.1% today and rose about 9% in April.

Sugar stocks soar on rising prices  

• Shares of top sugar companies gained in the range of 10-20% today. The surge comes on the back of lower outputs in major producers such as Brazil and Thailand, which would keep sugar prices firm. Reports suggest that domestic sugar prices have increased 7-8% in the last month. 
• Further, the government’s 20% ethanol-blending target and ethanol-capacity additions by sugar companies is likely to drive revenue growth. Top sugar companies—EID Parry (+17.1%), Balrampur Chini (+14.6%) and Triveni Engg (+15.6%)—saw strong buying interest today.

Closing bell

The Nifty50’s closing (a mere 0.02% gain) suggests that today’s performance was flat. However, it is critical to analyse today’s intraday movement. Several major index stocks opened on a weak note but either recovered lost ground or closed in the green. Such buying indicates investor interest at lower levels.

Further, the manufacturing PMI for April came in at 55.5, well above street estimates of 51.6. This suggests that even though the broader sentiment may be subdued due to the second wave, corporates are optimistic about the business outlook.

Good to know

What is market depth?
Market depth is an indication of the supply and demand for instruments such as stocks and futures, or at what price traders are willing to buy and sell. The greater the quantity of those orders, the more liquid the asset is considered to be. It also gives an overview of the levels where most orders are placed. 

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Disclosures and Disclaimer

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.