Page gives inner comfort, Piramal gets stumped & more

Nifty50: 16,352 ▲ 182 (1.1%)
Sensex: 54,884 ▲ 632 (1.1%)

TGIF, people!

After the ‘dynamite’ performance of the markets, we don’t think we need ‘permission to dance’! This is timely as the K-pop band BTS is set to meet US President Joe Biden. 

And as the music gets us going, we’d like to congratulate author Geetanjali Shree for winning the International Booker Prize for her Hindi novel, Tomb of Sand. This is the first time an Indian language literary work has received the prestigious award. 

On this happy note, check out more market-related stories, while we hit ‘play’ on the new Stranger Things season. See you on the other side 😛

• Markets closed the week on a high note, logging gains for the second straight session amid a positive global trend.
• In all, 35 of the Nifty50 stocks closed in the green.
• Asian stocks rose in line with an overnight surge on Wall Street on a more upbeat retail earnings outlook in the US.

Among the Nifty sectoral indices, IT (+2.5) and Media (+2.4%) saw the most gains, while Oil and Gas (-1.0%) and Metal (-0.06%) were the top losers.

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What’s trending

⭐ Page gives inner comfort 😌

Page Industries, the licensee of the Jockey brand of innerwear in India, was up 7% after its results were announced. The apparel manufacturer's Q4 net profit rose 65% YoY to ₹190 crore. Revenue from operations rose 26% to ₹1,111 crore in the same period on the back of a 9% jump in volumes.

⭐ Piramal gets stumped 😮

Piramal Enterprises’ stock tanked 10% despite returning to profits. The company reported a Q4 net profit of ₹151 crore compared to a loss of ₹510 crore in the year-ago quarter. Meanwhile, revenue grew 22% year-on-year (YoY) to ₹4,163 crore due to a rise in the pharma segment sales. However, the company's financial services segment witnessed a loss of ₹321 crore on account of high provisioning.  

⭐ ZEEL loses zeal 😒
Zee Entertainment (ZEEL) reported a 34% YoY fall in its Q4 net profit to ₹181 crore. Profit was impacted due to higher operational and advertisement costs. Meanwhile, revenue from operations rose by 18% YoY to ₹2,322 crore, on higher other sales.

⭐Realty bite for Oberoi 🏠

Shares of Oberoi Realty fell -2.1% today after the company posted a 19% YoY decline in its Q4 net profit to ₹232 crore. However, revenue for the quarter rose 5.2% to ₹843 crore compared to a year ago. The property developer plans to raise ₹3,500 crore by issuing non-convertible debentures worth ₹1,500 crore equity shares worth ₹2,000 crore. 

⭐ Oil simmers 🛢

Global crude oil prices continue to remain around their two-month high amid concerns of a European ban on Russian oil imports. Further, the upcoming summer driving season in the US is expected to drive up demand. Brent crude was trading around $117.3 a barrel on Friday, up nearly 4% this week.

⭐Inflation hits the sachet  📈 

Thanks to rising inflation, FMCG companies face the challenge of maintaining profitability on low-cost sachets. Packs in the price points of ₹1, ₹2, and ₹5 are key to market penetration. However, the reduction of grammage in these packs to achieve profitability could reduce the value for money that consumers derive from them. 

In Focus

End of the great Indian electronic sales?

One would imagine that the pent-up demand due to lockdowns, and the deadly heatwave, would drive up sales of refrigerators and ACs. But so far that's not been the case, and the prospects, at least in the near-term, look troubling. 

Many consumer goods companies have started cutting down production by nearly 10% amid a downfall in demand across products like televisions, washing machines and refrigerators. But why so?

Let's take Whirlpool, for example. The company witnessed a 35% year-on-year decline in its Q4 net profits. One of the reasons for the decline was the rising commodity inflation. However, the company explained that to offset the high input prices, it increased prices of its products. This led to a "soft industry demand" in the quarter. The company also said that inflation headwinds are expected to continue.

According to a news report, these companies have raised prices by about 9-15% in the last one year to mitigate the loss from the substantial increase in components and logistics costs. And this is not all. 

According to industry body, Consumer Electronics and Appliances Manufacturers Association (CEAMA) a depreciating rupee is making imports of parts costlier. It expects further price increases of 3-5% in the weeks ahead. 

Meanwhile, consumers are also cutting down their discretionary spending amid a rise in food inflation. Further, the rise in bank interest rates is affecting the demand. 

The combined impact of above factors can also be seen in stock prices of listed consumer electronic companies like Dixon Technologies, Voltas, and Amber Enterprises, which are down in the range of 18% to 36% year to date.

Nevertheless, the industry could get some relief from the government’s recent relaxation of steel import duties. Additionally, a revival in demand could be expected in the second half of 2022 amid the festive season.

IPO corner

With the markets continuing to recover, Paradeep Phosphates made a decent debut on the exchanges on Friday. Shares of the fertiliser maker listed on the NSE at a premium of around 5%. This public issue was subscribed around 1.7 times on the final day.

Good to know

What is arbitrage?

When shopping online, do you price compare the same product on multiple ecommerce sites to find the best deal? Arbitrage is something similar. It is the process of cashing in on profits by buying and selling of assets at the same time but on different platforms, exchanges, or locations. The amount or quantity of the assets bought from one platform and sold on another, should be the same. Also, the pay-off on the trade should be large enough to cover the transaction cost. 

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