Paint stocks slump, Infosys secures global deal & more

NIFTY50: 20,192 ▲ 89 (+0.4%)
SENSEX: 67,838 ▲ 319 (+0.4%)

• Benchmark indices edged higher, with NIFTY50 crossing 20,100
• In all, 28 of the NIFTY50 stocks closed in the green
• India’s wholesale price inflation fell further by 0.52% YoY in August after a 1.36% drop in July.

Among the NIFTY sectoral indices, Auto (+1.5%) and IT (+0.9%) were the top gainers, while Oil & Gas (-0.7%) and FMCG (-0.4%) were the top losers.

What’s trending

⭐Paint makers slump as crude trades at 10-month high 

Stocks of major paint companies including Asian Paints, Berger Paints and Kansai Nerolac Paints have fallen by 1-3% in the last two trading sessions. This fall comes amid a surge in global crude oil prices with Brent crude trading around $94 per barrel. Several raw materials used in the paint industry are petroleum-based. Hence, rising oil prices could increase input costs for paint companies. 

⭐Infosys secures global deal 

The IT major has signed a new agreement with a global company to enhance digital experience using  Infosys platforms and AI solutions. Total size of this deal is estimated at $1.5 billion over a 15 year period, which is subject to both parties entering into a final master agreement. Further, the company also said it will consider an interim dividend along with its second quarter results. Infosys shares closed at ₹1,512 apiece, up 0.3%.  

⭐ Mishra Dhatu gains on robust outlook

Shares of Mishra Dhatu Nigam rose 2.4% today after upbeat management commentary. The PSU metal company has already booked orders worth ₹600 crore in the ongoing fiscal and is targeting revenue of ₹1,200 crore. Meanwhile, the company is expecting a 30% revenue contribution from the space segment, and there could be incremental revenue of ₹300 crore from newly commissioned facilities. 

⭐ Shakti Pumps jumps on new order win 

Shares of Shakti Pumps closed 10% higher today after it secured a new work order worth ₹293 crore. This order comes from the Department of Agriculture, Uttar Pradesh, to supply, install and commission solar water pumping systems. The project is to be completed within 90 days.

In Focus

Hospital stocks rise on robust outlook  

India’s leading hospital chain operators seem to be in the pink of health. Shares of Apollo Hospitals, KIMS and Narayana Hrudayalaya have risen 2-7% so far this month. This rise comes as the healthcare sector stands on the brink of a potential re-rating from leading rating agencies. What is the reason behind this robust outlook towards the sector? Let's find out. 

Steady improvement in key metrics 

Hospital chains in India are showing steady improvement in key operational metrics such as higher occupancy rates and increased average revenue per occupied bed (ARPOB). For instance, Apollo Hospitals reported a bed occupancy rate of 62% in Q1 FY24, a rise of 2% YoY. Meanwhile, its ARPOB grew by 11% to ₹57,760 during the same period. 

According to a recent report by ICRA, the hospital industry could see strong occupancy at 60-65% in the ongoing fiscal year. Meanwhile, the industry ARPOB could rise by 5-7% owing to annual price revisions by hospitals to offset cost inflation. In addition, organised players are gaining market share amid evolving patient preference towards large hospitals. Besides, increased health insurance penetration could aid occupancy rate. 

Hospitals expanding capacity  

Furthermore, hospital operators are making capital investments to expand their capacity. For instance, Narayana Hrudayalaya plans to increase its capacity to 11,363 beds in FY24 from 8,240 beds in FY23. Moreover, large hospitals are exploring inorganic growth opportunities, including merger and acquisitions of smaller hospitals chains, which could add additional beds and increase business revenue. 

Other key factors

Medical tourism is on the rise in India as the country offers excellent medical services at lower costs. As per reports, medical tourism is projected to surge to $13 billion by 2026. Further, the higher penetration of health insurance and increased healthcare awareness, especially after the Covid pandemic, is expected to benefit hospital operators. 

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