Morning Update for 12 May 2021

Indices at previous closing

Nifty50: 14,850 ▼ -91 (-0.6%)
Sensex: 49,161 ▼ -340 (-0.6%)
Nifty Bank: 32,872 ▼ -270 (-0.8%)

In the news

M&M expects lower volumes in Q1

• The utility-vehicle and tractor maker said its sales volume for the Q1FY22 is estimated to be 15-20% lower than the previous quarter, owing to the second wave of Covid. The company said its revenue and profitability will also be impacted along with the fall in volumes. 
• The company has cited regional lockdowns, disruption in supply of industrial oxygen and shortage of semiconductors as the key challenges leading to decline volumes. Yesterday, the stock was down about 1% in a weak market.

KPTL posts robust quarter

• The Mumbai-based power and transmission company reported a 16% YoY improvement in its consolidated Q4 revenue, which stood at ₹4,086 crore. The growth was supported by strong execution in its transmission and distribution, building and factories, and water & urban infra verticals. 
• Meanwhile, profit after tax grew nearly 14x to ₹187 crore. The company pared its debt by 33% YoY and has a current order book of ₹27,900 crore is nearly over 2x its FY21 revenues. The stock declined 0.8% yesterday but is up 17% in 2021.

HSIL’s Q4 profits zoom 10x

• Shares of packaging products and sanitaryware maker were locked in their 20% upper circuit yesterday. The company’s Q4FY21 profits zoomed to ₹33 crore from ₹3 crore in Q4 of the last fiscal. Meanwhile, revenue rose 37% YoY to ₹633 crore. 
• Revenues from the building products business grew rapidly at 60% YoY. In general, profitability improved due to a better product mix and higher plant capacity utilisation. The stock has gained nearly 75% so far this year.

Andhra Paper reports decline in profit 

• The Hyderabad-based paper products manufacturer reported revenue from operations of ₹362 crore, up about 30% YoY. Meanwhile, profit declined 65% to ₹32 crore on account of higher raw material costs.
• Despite the weaker result, the company has declared a dividend of ₹5 per share. This translates to a dividend yield to 2% as of Tuesday’s closing. The stock rose 3% yesterday, and has risen 11% since the start of 2021. 

Events/data releases of the week

• Wednesday: Retail Inflation, IIP (India), Crude oil inventories (US)
• Thursday: Holiday (India), Initial jobless claims (US)
• Friday: WPI Inflation (India), Retail sales (US)

Sectoral indices (11 May)

Global markets (at 8:15 am)

Fact of the day
The Japanese Shiba Inu dog popularised by the Dogecoin is real. Its name is Kabosu.
Source: Market Watch

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Investments 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.