▲ Nifty: 12,461 (+1.61%) ▲ Sensex: 42,597 (+1.68%)
The optimism following the US elections was visible across the markets today, as global equity markets, key commodities (bullion and oil) and the US dollar saw gains. Further, the Nifty50 crossed its lifetime high that it scaled in January 2020. Of the key sectoral indices, the Nifty IT and Nifty Pharma managed to rise above previous highs. Among individual stocks, Divi’s Labs (+5.4%), Bharti Airtel (+5.1%) and IndusInd Bank (+4.9%) were the top Nifty gainers, while Cipla (-3.0%), Adani Ports (-1.2%) and Maruti (-0.6%) were the top losers.
Here are the top stories of the day.
Glenmark tumbles despite rise in operating profits
Today, investors chose to book profits in Glenmark Pharmaceuticals following its Q2 results. The stock, which rose 7.8% last week, dropped 5.9% today. In Q2, its consolidated revenues grew by nearly 5% on a year-on-year basis to ₹2,952 crore. The company’s sales growth was driven by a 17% jump in revenues from the India market, which contributes 35% of total revenues. The company’s net profit was down by 8.5% due to forex losses. However, its operating profit grew by 26.5%, supported by a reduction in costs.
Auto dealers see flat-to-declining sales in November
As per a survey by the Federation of Automobile Dealers Association (FADA), nearly 67% of the automobile dealers in India expect November sales growth to decline or at best to remain flat as compared with November last year. In October 2020, vehicle registrations across the country declined by 24% YoY. This is in stark contrast with manufacturer-level sales, which grew rapidly. However, the year-on-year comparison is likely skewed due to the fact that last year both Diwali and Navratri fell in October, boosting sales above normal levels. Thus, the actual scenario will be clear only after Diwali. FADA has sounded caution to manufacturers and dealers to keep a check on inventory levels (which are highest in this fiscal), as demand may drop after the festive season. Today, the shares of auto companies followed the overall upward market trend, as Eicher Motors (+2.5%), Tata Motors (+1.4%) and Escorts (+5.6%) witnessed gains.
Elgi Equipments sees volume spike after impressive Q2
Elgi Equipments, which manufactures air compressors, posted an improved Q2 performance after lockdown restrictions were eased and industrial activity picked up pace. Consolidated revenues in Q2 grew 8% YoY, mainly driven by a 12% growth in air-compressor sales. The company’s net profit nearly tripled to ₹33.2 crore because of lower other expenses during the quarter. The Coimbatore-based company expects the business momentum to continue in Q3, especially in the India market. The stock rose 11.5% today coupled with a spike in volumes (18x on BSE), indicating a strong buying interest.
Closing bell
The anxiety over the outcome of US elections is finally over. Some changes will be announced by the Biden administration at the outset (e.g. increase in H-1B visas), which will get quickly factored in the relevant stocks and sectors. The Nifty50 has witnessed gap-up openings continuously over the last three trading sessions and has sustained at higher levels. It would be important to watch the inflation numbers, which will be declared this Thursday. They have been rising in recent months, and any further increase could be a cause of concern ahead of RBI’s policy meeting, expected in the first week of December 2020.
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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.