Morning update for 28 January 2021

Indices at 10:00 am

        Nifty50 13,845 ▼ 121 (-0.8%)

          Sensex 47,057 ▼ 352 (-0.7%)

          Nifty Bank 29,942 ▼ 342 (-1.1%)

In the news

Axis Bank’s Q3 earnings miss estimates

• The private lender reported a 36% YoY decline in profit to ₹1,117 crore, significantly missing the street’s estimate of ₹2,356.4 crore. Its stock has been in correction mode since last week, but saw fresh buying today and was up 0.9%. 
• The drop in performance was the effect of higher provisions of around ₹1,050 crore. Meanwhile, its net interest income grew 14% YoY to ₹7,373 crore. The bank has seen a sharp improvement in the net NPA, which stood at 0.74% versus 2.09% last year. 

Hero Moto to enter Mexican market

• Two-wheeler major Hero MotoCorp has entered into a distribution agreement with Grupo Salinas in Mexico to commence operations in the Mexican market. 
• In the first phase, Hero will launch nine products, including motorcycles and scooters. The company targets rapid expansion in the country over the next three years. Shares of Hero MotoCorp we're trading 1.2% higher today.

Bank of Baroda improves asset quality

• India’s second-largest public sector lender reported a consolidated net profit of ₹1,159 crore in Q3 versus a loss of ₹1,219 crore in the same period last year. Its net interest income rose nearly 11% YoY to ₹8,508 crore.
• Its net NPA stood at 2.39% in Q3 versus 4.05% last year, indicating an improvement in asset quality. While the results are encouraging, the stock witnessed selling pressure and was down 6.1% today. It has gained close to 50% in Q3 and is up about 15% in January, so far.

PVR to raise ₹800 cr via QIP

• Shares of multiplex major PVR (+1.8%) were upbeat today after it announced plans to raise funds from institutional investors via QIP. Reports suggest that it plans to raise ₹800 crore. The floor price of ₹1,495.93 per share is a 0.7% premium to Wednesday's closing price.
• While the going is tough for multiplexes, PVR has shown resilience with its second capital-raise in the last six months. It raised ₹300 crore via rights issue in July 2020.

Events this week

• Thursday: January derivative expiry (India), Fed interest rate decision, initial jobless claims (US)
• Friday: GDP growth, fiscal deficit (India), pending home sales (US)

Sectoral indices

Fact of the day

Bayer commercialized Heroin as a cough and cold remedy in 1890s. It was later banned by FDA in 1924.
Source: Forbes

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