▲ Nifty: 11,662 (+1.38%) ▲ Sensex: 39,574 (+1.54%)
Today, the markets were able to sustain the morning gains all the way to the closing bell. Even as index heavyweight Reliance Industries saw some profit booking after a flying start, a steady rise in IT and auto majors helped maintain the upward momentum. TCS (+1.4%), Infosys (+1.3%), Bajaj Auto, (+3.6%), Hero Moto (+2.8%) and Maruti (+2.3%) saw healthy gains. With today’s rise, the Nifty50 has gained for five consecutive sessions.
Here are the top stories of the day.
Titan’s revenues back to normal in the 'new normal’
Titan’s jewellery business (its largest revenue segment) seems to have recovered to pre-Covid levels. The Tata-owned brand’s Q2 revenue stands at 98% of the revenue in the same period last year (excluding raw gold sales). Walk-ins in the stores have risen, while conversion rates and the average ticket size are also higher. In the quarter ended 30 September, the company has boosted its cash flow by selling excess gold worth ₹390 crore from its inventory. Meanwhile, the recovery of the company’s watch business has been relatively slower (sales are at 55% of last year’s levels), possibly due to reduced demand in the WFH scenario. However, the recovery rate was higher at ~70% in September, and could improve further as we enter the festive season. Titan’s shares gained 4.5% today.
Diagnostics lab stocks hit record highs
Diagnostics service providers are on a record-breaking streak in the pandemic-hit economy on expectations of strong Q2 earnings. Metropolis posted its highest-ever quarterly revenue. Even its non-Covid testing business has recovered to around 85% of last year’s levels. The company expects margins to improve with higher revenues. Similar growth trends were seen in Thyrocare, which is creating additional facilities with Covid testing in Bangalore and Kolkata to meet the increased demand. The company’s Q2 revenue has increased by 37% YoY and 171% on a QoQ basis. More impressive, though, was the 20% rise in its stock price. The shares of Dr. Lal Pathlabs also grew by 10.8%, while Metropolis rose by a comparatively modest 2.8%.
Bajaj Finance shares drop as new loans decline
As Indian consumers turn cautious about spending, Bajaj Finance, the country’s largest consumer products lender, is feeling the pinch. In Q2, the company’s new loans nearly halved to 36 lakh from 65 lakh in the same period last year. A similar drop was seen in the lender’s new customer acquisition. It seems that the decline in business performance is steeper than market expectations, especially considering the strong performance of financial institutions such as HDFC Bank and HDFC. The shares of Bajaj Finance were down 4% today. That said, the company has shown resilience by accelerating its provisioning for Covid-19 to strengthen its balance sheet.
Closing bell
As mentioned yesterday, we saw stock-specific activity as the results season kicks in. In the days ahead, we may see a divergence in the movement of Indian markets as compared to international markets.
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