NIFTY50: 19,434 ▲ 6 (+0.03%)
SENSEX: 65,401 ▲ 79 (+0.12%)
Namaste, friends!
In case you were looking for some Monday motivation, we’ve got you covered. An astronaut from the UAE shared stunning images of the Himalayas, which he clicked on his way to the International Space Station. This bird’s eye view of the mountain peaks from space is truly breathtaking. Meanwhile, the markets didn’t scale any peaks today and closed flat. More on that later.
- Benchmark indices recoup early losses to close flat
- In all, 31 of the NIFTY50 stocks closed in the red
- India’s wholesale inflation dropped by 1.3% YoY in July 2023
Among the NIFTY sectoral indices, Media (+0.8%) and IT (+0.6%) were the top gainers, while Metal (-2.1%) and PSU Bank (-0.7%) were the top losers.
| Top gainers | Today's change |
| Divi’s Lab | 3,744 ▲ 65 (+1.7%) |
| Infosys | 1,392 ▲ 21 (+1.5%) |
| LTIMindtree | 5,182 ▲ 74 (+1.2%) |
| Top losers | Today's change |
| Adani Enterprises | 2,446 ▼ 92 (-3.6%) |
| JSW Steel | 798 ▼ 22 (-2.7%) |
| Hindalco | 448 ▼ 10 (-2.3%) |
What’s trending
⭐ Adani stocks slip after Ports auditor resigns
Shares of Adani Ports were down by 2% after Deloitte Haskins and Sells resigned as the statutory auditor of the company, citing differences of opinion. The port business arm of Adani Group has appointed MSKA & Associates as its new auditor. Meanwhile, Adani Enterprises was down by 3.6%, and Adani Transmission was down by 2.8%. Other Adani Group stocks also declined in the range of 1-2%.
⭐ Divi’s Lab posts weak Q1 results
Divi’s Lab reported a 49% YoY fall in net profit for Q1FY24 to ₹356 crore. Further, revenue from operations dropped over 21% YoY to ₹1,778 crore. The company, which manufactures active pharmaceutical ingredients (APIs), attributed the weak performance to fluctuations in raw material prices. Meanwhile, the pharma major’s shares were up by 1.7% today as management gave upbeat growth prospects for upcoming years.
⭐ PVR Inox soars on blockbuster weekend
PVR Inox shares were up by 4.7% after the multiplex chain reported its highest-ever daily and weekend box-office collections. Over the weekend of 11-13 August, the multiplex chain admitted 3.6 lakh guests and earned box office revenue of more than ₹100 crore. In May 2023, PVR and INOX merged, forming a mega multiplex chain consisting of 1,708 screens across 115 cities.
⭐ IRB Infrastructure toll revenue grows
IRB Infrastructure Developers (IRB) reported that its revenue from toll collection grew by 14% year-on-year (YoY) to ₹365 crore in July 2023 from ₹320 crore in the same month last year. Out of 12 tolls, the Mumbai-Pune Expressway in Maharashtra contributed the largest share of ₹13.4 crore to the total revenue collection. However, IRB shares were down by 0.1%.
In Focus
No highs for alcohol makers this fiscal
Domestic liquor companies are facing multiple headwinds in the ongoing fiscal year, from rising input costs to hikes in excise duty. In FY23, the alcohol industry witnessed a handsome recovery from the pandemic lows with total sales of 385 million cases of Indian-made foreign liquor (IMFL), up 14% compared to previous year. However, this upbeat growth seems to be short lived amid multiple challenges. Let’s take a closer look.
High raw material cost
The industry is facing substantially higher input costs, owing to the increase in prices of key raw materials like glass, extra neutral alcohol (ENA) and barley. ENA and glass typically account for nearly 65% of raw material costs for alcoholic beverage makers.
Moreover, the recent decision by the government to tighten rice supply has also rattled the alcohol industry, as rice is one of the key raw materials used in ethanol production. Liquor makers have to lobby hard for increasing prices as the industry is tightly regulated as liquor prices are decided by state governments.
Higher taxation in key states
Another big blow to the industry is taxation. Recently Karnataka, which accounts for roughly 20% of India’s liquor market, hiked excise duty by 20%. As alcohol beverages do not come under the GST regime, they are taxed differently in different states.
Experts believe this increase in excise duty could lead to consumers downgrading to cheaper products, impacting the industry’s volume growth. As a result, companies could see lower earnings and profitability in upcoming quarters.
Consequences of these challenges are already reflecting in quarterly results of companies. Sector leader United Breweries reported a 6.7% YoY drop in revenue in Q1FY24, and its shares have declined nearly 10% so far in 2023. Meanwhile, shares of another liquor maker GM Breweries have dropped 7%.
Will liquor stocks manage to overcome the inflation hangover to end FY24 in high spirits? Only time will tell.
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