Morning update for 1 February 2021

Indices at 9:30 am

        Nifty50 13,722 ▲ 87 (+0.6%)

          Sensex 46,635 ▲ 349 (+0.7%)

          Nifty Bank 31,120 ▲ 555 (+1.8%)

In the news

ICICI’s Q3 profits beat street estimates

• India’s second-largest private bank by market capitalisation reported a profit of ₹4,939 crore in Q3, a 19% YoY growth. Analysts had estimated Q3 profits at ₹4,242 crore. The growth—driven by a rise in retail loan demand—comes despite the bank raising bad loan provisions by 31% to ₹2,741 crore.
• Its gross NPA ratio dropped from 5.1% to 4.3%, while net NPAs dropped from 1% to 0.6% on a sequential basis. The stock was trading 4.6% higher today. 

IDFC First improves asset quality

• For Q3, IDFC First Bank reported a net profit of ₹130 crore, versus a loss of ₹1,639 crore in Q3 last year and a profit of ₹101 crore in Q2 this fiscal. 
• The bank’s asset quality improved as net NPAs dropped to 0.3% from 1.2% in Q3 of last year. Recently, the bank launched a credit card with rates as low as 9% per annum. The stock has gained nearly 27% in January and is down 5.4% today. 

Cloud adoption boosts Tech Mahindra’s Q3  

• Although revenues were flat at ₹9,647 crore, Tech Mahindra’s net profit rose 14.3% YoY to ₹1,310 crore in Q3. On a constant currency basis, revenue grew 2.8% QoQ. 
• The Pune-based IT services company bagged deals totalling to $455 million in Q3. It expects increasing adoption of cloud technologies and artificial intelligence-based solutions to drive business growth in the coming quarters. Further, the company plans to reduce its BPO business headcount by 5,000 this fiscal by automating operations. Shares of the company were down 3.4% today.

JK Lakshmi Cement's Q3 soars on volume growth

• A rise in volumes and improved efficiency helped the cement maker post a consolidated net profit of ₹118 crore in Q3, a 132.9% YoY growth. Revenue for the quarter rose 16.8% YoY to ₹1,259 crore. 
• After a 32% rise in Q3, the stock witnessed some profit booking in January and was down nearly 6%. It is trading 1.0% lower today.

Silver spikes on retail buying interest

• Silver prices spiked as high as 6% today on the buzz that retail traders on Reddit forums have now turned their attention to commodities, especially on silver. 
• Recently, their trading activity fueled strong rallies in heavily shorted US-based stocks such as GameStop and AMC Entertainment.

Events this week

• Monday: Union Budget 2021, Manufacturing PMI (India)
• Wednesday: Services PMI (India), cCrude oil inventories (US)
• Thursday: Initial jobless claims (US)
• Friday: RBI interest rate decision (India)

Sectoral indices

Fact of the day

Besides humans and apes, koalas are the only animals with fingerprints.
Source: Live Science

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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.