Nifty50: 17,929 ▲ 158 (+0.8%)
Sensex: 61,032 ▲ 600 (+0.9%)
Dear reader,
This piece of news can take your breath away.
For years now, Delhi has been battling hard to ditch a badge of dis-honour-The title of being India’s most polluted city. And guess what. It has finally managed to do so.
Hold your breath (kinda literally!) as we tell you which Indian metro has the most toxic air these days. It's our very own- Aamchi Mumbai.
India’s financial capital has been ranked as the most polluted city in India and the second most polluted city globally (!) in the week from January 29 to February 8, according to the Swiss air tracking index IQAir.
A city once known for its year-round fresh sea breeze is now choking on dust and smoke!
Thankfully, markets gave us a much-needed breather after yesterday’s rout. Let's get started.
- The markets snapped two-day losing streak.
- Of the Nifty50 universe, 30 stocks gained.
- The wholesale inflation rate declined to a two-year low. More on that later.
Among the Nifty sectoral indices, PSU Bank (+1.0%) and FMCG (+1.0%) were the top gainers, while Realty (-1.8%) and Auto (-0.3%) were the top losers.
| Top gainers | Today's change |
| UPL | 760 ▲ 26 (+3.6%) |
| ITC | 385 ▲ 11 (+3.1 %) |
| RIL | 2,380 ▲ 56 (+2.4%) |
| Top losers | Today's change |
| Apollo Hospitals | 4,252 ▼ 106 (-2.4%) |
| Eicher Motors | 3,180 ▼ 72 (-2.2%) |
| SBI Life | 1,160 ▼ 18 (-1.5%) |
What’s trending
⭐ Adani Enterprises zooms
Shares of Adani Group’s flagship company (+1.8%) rose after it reported a net profit of ₹820 crore. It had suffered a loss of ₹12 crore in the same quarter last year. The management has said it will focus on reducing debt and will look at strategic opportunities to expand and grow.
⭐ Eicher Motors speeds like a bullet
In the December quarter, the maker of Royal Enfield (-2.2%) posted a net profit of ₹741 crore, a growth of 62% YoY. This was supported by a 29% rise in the revenue to ₹3,721 crore. The company sold 219,898 Royal Enfield motorcycles in the quarter, up 31% YoY.
⭐ Bharat Forge shares decline
Shares of the forging company (-1.9%) declined after it reported a fall of 14% YoY in its net profit to ₹337 crore. The management said that its overseas operations posted a loss of ₹62 crore at an EBITDA (operating) level due to ramp up related issues of its new Al forgings capacities in Germany and the US.
⭐ HAL targets double digit growth
India’s largest aerospace defence manufacturer (+0.9%) aims to achieve double digit growth from 2024, according to reports. This comes at a time when the company has a robust order book of ₹90,000 crore.
⭐ WPI at a 2-year low
India’s wholesale inflation rate eased to a two-year low of 4.73% in January 2023 from 4.95% in December. This bodes well for the corporate earnings as it signals a fall in input or raw material costs, according to experts.
In Focus
Hotels on post-pandemic honeymoon
After pandemic-triggered restrictions were lifted completely, revenge travel became the buzzword in 2022. Consequently, the hospitality industry, which was reeling under the impact of the lockdowns, witnessed a surge in check-ins. Will this uptrend continue in 2023 too? Let’s see.
Have money, will travel
More and more people are travelling now that the pandemic is behind us. And hotel occupancy levels are gradually inching towards pre-pandemic levels. In the December quarter, Indian Hotels’ domestic occupancy rate (percentage of occupied rooms) stood at 71% compared to 70% in Q3FY19 (pre-pandemic period). Similarly, Lemon Tree’s occupancy was around 68% in Q3FY23 (compared to ~73% in Q3FY19).
Corporate travel
Beside leisure trips, business travel is also showing signs of revival. Chalet Hotels, which has a strong presence in metropolitan regions through Novotel, Marriott and Four Points, reported its highest ever revenue in Q3FY23. This, the management attributed to strong domestic business travel and the rebound of MICE (meetings, incentives, conference and exhibitions) segment.
Mega events are coming to India
The increasing demand for hotel rooms is expected to continue this year too. The comeback of the big fat Indian weddings, the G20 summit and the Men’s ICC Cricket World Cup is expected to fuel demand for rooms. As a part of the G20 event, India will host over 200 meetings across 56 locations (including tourist destinations like Rajasthan, Goa and J&K). Taking advantage of this, the Indian government is also positioning India as a major tourism destination.
Higher profitability
All three segments (leisure, business and events) driving demand has enabled the hotels to increase room rates. Indian Hotels’ domestic average room rates (ARR) rose to ₹10,737 in Q3FY23 from ₹8,471 in Q3FY19.
Hotels are also benefiting from the cost-cutting measures implemented during the pandemic. Then, the hotel industry had adopted an asset light model. This means the focus shifted to managing hotels instead of leasing or owning them. Hotels had also implemented cost saving measures like automated check-ins, multi-tasking workforce and controlled electricity and water costs. All of that is paying off now.
However, while the hospitality industry looks poised to ride high on the wave of rising demand and improving profitability, high inflation and interest rates could play spoilsport.
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What is average room rate?
The average room rate or ARR measures how much revenue was generated for each room sold or booked. To calculate ARR: divide the total revenue by the rooms booked in a given period. This metric helps investors to understand whether a hotel is able to maximise its revenue.
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