Nykaa Q3 profit drops, Retail inflation rises & more

Nifty50: 17,770 ▼ 85 (-0.4%)
Sensex: 60,431 ▼ 250 (-0.4%)

Hello friend!

From today, Indian women’s cricket will never be the same again. 

One of the biggest money spinners of all time – IPL – has entered the women’s cricket arena. And today is auction day.

India’s swashbuckling opener Smriti Mandhana broke bank early as she became the first pick in the Women’s Premier League auction history, being bought by the Royal Challengers Bangalore for a whopping ₹3.40 crore

Smriti was followed by all-rounder Deepti Sharma who was bought by UP Warriorz for  ₹2.6 crore.

Keeping the staggering numbers aside, it definitely is a watershed moment for the Indian eves. And an inspiring success story for all the young girls out there who want to break the glass ceiling and pick up bat and ball. 

On that note, let's get you updates from markets that got clean-bowled today. Read on to know why.

• The markets closed in the red amid weak global cues.
• Of the Nifty50 pack, 34 stocks declined.
• Meanwhile, retail inflation stood at 6.52% in January. More on that later.

All the Nifty sectoral indices closed lower except FMCG (0.04%). PSU Bank (-2.52%) and Media (-2.45%) were the top losers.

What’s trending

⭐ Nykaa Q3 profit declines 

The beauty-to-fashion ecommerce platform’s (-2.6%) net profit declined 68% YoY to ₹9 crore in the December quarter. The company’s expenses (36% YoY) rose sharply, denting the profits. 

⭐ Info Edge tanks on Q3 loss 

Shares of the pure play internet company (-9.4%) declined after it reported a net loss of ₹116 crore. This was because the company wrote-off its ₹276 crore investment in 4B Network. Concerns around uncertainty of the funding environment for 4B Network prompted the write-off.

⭐ Balkrishna Industries skids  

Shares of the tyre manufacturer (-11.4%) declined after its net profit declined 70% YoY to ₹100 crore in the December quarter. High inventory costs and weak volumes dented the company’s performance. 

⭐ India’s retail inflation rises 

The retail inflation rate rose to 6.52% in January 2023 compared to 5.72% in December 2022. This is above the RBI’s target of 6%. The increase can be attributed to the rise in food prices.

In Focus

Cementing gains?

After a tough 2022, cement companies seem to be regaining their footing. Cement stocks – UltraTech, Shree Cement, Ramco Cement and Dalmia Bharat – are up in the range of 1% to 10% this month. 

Let’s see why.  

1. GST cut 

India’s finance minister has indicated that the industry’s demand to reduce the 28% GST (goods and services tax) on cement will be looked into. In fact, the GST council will meet on 18 February to decide on trimming the GST on cement. The reduction of GST levied on cement could be a big positive for the cement industry as it would boost their margins or profitability.  

2. Strong demand 

The budget was heavily focused on pumping money into the infra sector to sustain the economic growth. The government increased its infra outlay by 33% to ₹10 lakh crore. Similarly, ₹2.4 lakh crore has been allocated for rail infra. The government also increased allocation for affordable housing by 66% to ₹79,000 crore. All these projects are expected to fuel the demand for cement.  

3. Improving sentiments

It’s not just the government, but the private sector could also invest in infrastructure. A recent RBI survey revealed that the consumer sentiment is improving. The future expectation index, which is a barometer of how people feel about the next one-year, was at a two-year high. This improvement in consumer mood could push private companies to increase their capacity or infrastructure. 

4. Realty boom

Despite the rise in interest rates, the house bookings continue to remain robust. Realtors like Godrej Properties, DLF, Macrotech Developers and Sobha posted double-digit growth in new sales bookings. This signals robust demand for real estate, according to experts. Again, one of the biggest beneficiaries of this would be the cement companies. 

5. Commodities correction 

The higher input costs dented cement companies’ margins in 2022. However, with the commodities correcting, cement companies’ profitability could improve. The management of UltraTech highlighted that the energy and raw materials costs were flat sequentially in the December quarter. In fact, the coal prices have been declining due to weaker demand from China and Europe. ICYDK, coal is used as a source of energy for production of cement.  

With multiple factors in their favour, cement companies have been receiving traction from investors. 

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