Reality bites

Nifty50: 18,696 ▼ 116 (-0.6%)
Sensex: 62,868 ▼ 415 (-0.6%)

Hola, people!

Well, it was not meant to be. After being in the green for eight consecutive days, gravity finally caught up with Indian markets. But, don’t let today’s performance dampen your weekend spirits. The good news — nothing lasts forever. So live it up, laugh it off. Monday is another day!

• Benchmark indices snapped their 8-day winning streak, closed lower on weak global cues. 
• In all, 31 of the Nifty50 stocks closed in the red.
• Meanwhile, the rupee closed lower at 81.31 per dollar against the previous close of 81.21.

Among the Nifty sectoral indices, Media (+1.2%) and Realty (+0.9%) were the top winners, while Auto (-1.1%) and Financial Services (-0.6%) were the top losers.

What’s trending

⭐ Tax cut gives ‘wind’ to energy stocks

ONGC (NSE): 140 ▲ 0.7 (+0.5%), OIL (NSE): 207 ▲ 0.6 (+0.2%)

Shares of energy companies stayed in the spotlight today after the Finance Ministry reduced windfall tax payable by these companies. The windfall tax on crude production has been revised downward to ₹4,900 per tonne from the existing ₹10,200 per tonne. Meanwhile, the tax on the export of diesel was reduced to ₹8/litre from ₹10.5/litre. The new tax rates come into effect from 2 December. Windfall tax is a one-off tax levied on companies deemed to have made unusually high profits in recent times due to favourable market conditions. The revision in taxes comes after a fall in crude oil prices globally. 

⭐ Godrej Properties goes shopping 

GODREJPROP (NSE): 1,330 ▲ 3.7 (+0.2%)

Real Estate developer, Godrej Properties acquired a new land parcel of 18.6 acres in Mumbai’s Kandivali suburb. The project has a developable potential of 3.7 million square feet and an estimated revenue potential of ₹7,000 crores. This is the 8th project added by the company in FY23 with a combined future booking value of ₹16,500 crores, surpassing its full-year new project guidance of 15,000 crores.

⭐ New orders makes Talbros Components zoom

TALBROAUTO (NSE): 491 ▲ 28 (+6.0%)

Shares of Talbros Automotive Components surged over 6% intraday. The jump comes as the company announced that it bagged new multi-year orders worth ₹420 crore. The order also included a supply contract from a leading original equipment maker for electric vehicles worth ₹160 crore. This is among the  new orders received from both domestic and foreign customers across its business segments and joint ventures.

⭐ Fake Telegram groups under SEBI’s lens

Messages on Telegram groups promising spectacular returns have come under the regulator’s lens. Market regulator SEBI has asked mutual funds to regularly monitor social media platforms and take action against entities misusing names of mutual funds to lure investors. SEBI has written to industry body Association of Mutual Funds in India in this regard.

In Focus

Cement stocks get stronger

Shares of leading cement manufacturers like UltraTech Cement, Ambuja Cements, and Shree Cement have risen in the range of 5-7% in the last one month. Meanwhile, mid-tier cement firms like Dalmia Bharat, JK Lakshmi Cement have also shown similar traction, rising by 13% & 28% respectively. What’s driving this surge? Keep reading to find out. 

During the September quarter, a sharp rise in pet coke prices (by-product of crude oil) and higher freight costs weighed on the financials of most cement companies. As a result, most cement companies reported decline in profitability. Also, low construction activity during the monsoon season kept cement demand under check.  

However, in the past few months, prices of petcoke (a key raw material for cement industry) have fallen by nearly 30% from its peak. Meanwhile, there is considerable pick-up in construction activities (post monsoon). Market experts believe these factors could benefit the cement industry in the upcoming quarters. 

Besides this, cement demand could continue to remain on the higher side in the second half of FY23. This is because public spending on infrastructure and housing projects could accelerate further ahead of the 2024 general election. To keep up with demand, companies like UltraTech Cement and Ambuja Cements have already announced capacity expansion plans.  

All in all, cement companies could end the year on high note, overshadowing past woes.

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Good to know

What is value investing?

Value investing is a long-term investment strategy used by investors to seek out stocks that are trading for less than their intrinsic or book value. Just like online shoppers keep tabs on their favourite items and buy them when they go on sale, value investors track down stocks they think are being undervalued by the stock market. Investors analyse and use various metrics to find the right valuation of the stock. They believe the market overreacts to good and bad news that result in stock price movements disproportionate to the company’s long-term fundamentals. This offers them an opportunity to buy stocks at a discounted rate.

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