Stock Market Today: Sensex, Nifty Decline For Second Day As Auto, FMCG Stocks Drag; FPIs Remain Net Seller

Overseas investors in Indian equities remained net sellers for the fourth day in a row on Tuesday.

Foreign portfolio investors offloaded equities worth Rs 2,559.96 crore, according to data from the National Stock Exchange.

On the other hand, domestic institutional investors mopped up stocks worth Rs 639.82 crore for the 12th day in a row.

Foreign institutions net bought Rs 14,398.8 crore worth of Indian equities in December, but have remained net sellers of Rs 47,455.37 crore worth of Indian stocks so far in 2023.

The yield on the 10-year bond closed flat at 7.31% on Tuesday.

Source: Bloomberg

The local currency strengthened by 4 paise against the greenback on Tuesday to 82.70 at close. It closed 82.74 on Monday.

Source: Bloomberg

The Indian benchmark indices declined in trade on Tuesday after opening with slim gains amid volatility.

A gauge of Asian stocks pared gains, still trimming its losses from the biggest two-day drop in four months. European stocks, on the other hand, advanced and the U.S. equity futures fluctuated as investors looked out for the Federal Reserve Chair Jerome Powell's commentary later this evening, that may shape the central bank’s rate path.

Stoxx Europe 600 was modestly higher as energy stocks outperformed. S&P 500 and Nasdaq 100 contracts were about 0.1% lower.

Adani group company stocks, on the other hand, reversed lossed and all most of them were trading higher with the exception of Adani Transmission Ltd., Adani Green Energy Ltd., Adani Power Ltd. and Adani Total Gas Ltd.

The S&P BSE Sensex closed down 221 points or 0.37% at 60,286.04 while the NSE Nifty 50 was 43 points or 0.24% lower at 17,721.50.

Adani Enterprises Ltd., Dr. Reddy's Laboratories Ltd., Adani Ports And SEZ Ltd., Kotak Mahindra Bank Ltd. and IndusInd Bank Ltd. were the top gainers in the gauge.

Whereas, Tata Steel Ltd., Hindalco Industries Ltd., ITC Ltd., Hero MotoCorp Ltd. and Sun Pharmaceutical Industries Ltd. and Infosys Ltd. and were the top losers amongst the NSE Nifty 50 constituents.

The broader market indices were mixed; S&P BSE MidCap was up 0.02%, whereas S&P BSE SmallCap was lower by 0.16%.

Fourteen out of the 19 sectors compiled by BSE declined, while the only five advanced in trade.

The market breadth was skewed in favour of the bears. About 1,588 rose, 1,902 declined and 157 remained unchanged on the BSE.

Shares of Century Plyboards declined 1.86% to Rs 502 apiece in trade on Tuesday after the company reported net income for the third quarter that missed the average analyst estimate.

• Net income down 16% YoY to 813.6 crore estimate (Bloomberg Estimate: 944.3 crore)

• Revenue up 3.4% YoY to Rs 877 crore (Bloomberg Estimate: Rs 874 crore)

• Total costs Rs 774 crore, up 8.1% YoY

Source: BSE Filing

• Revenue up 20% at Rs 3589 crore Vs Rs 2987 crore

• Net profit down 94% to Rs 11.21 crore Vs Rs 196.8 crore

• EBITDA down 25% to Rs 435.63 crore Vs Rs 582.11 crore

• Margins at 12.1% Vs 19.5%

Source: BSE Filing

• Fitch believes that loans to all Adani group entities generally account for 0.8%-1.2% of total lending for Fitch-rated Indian banks

• Exposure to Adani group is insufficient in itself to present substantial risk to the banks’ standalone credit profile

• Public banks could face a risk in the form to pressure to provide refinancing for Adani entities if foreign banks scale back their exposure

Source: Fitch Ratings

• PVR has fixed February 17 as the record date for determining INOX holders that will get the company’s shares as part of the merger.

Source: Exchange filing

• Revenue rose 18% to Rs 4,786.2 crore Vs Rs 4,072 crore [BBG Estimate: Rs 4,811.7 crore]

• Net Profit fell 16% to Rs 1,315.5 crore vs Rs 1,567 crore [BBG Estimate: Rs 1,501.6 crore]

• EBITDA rose 4% to Rs 2,707.5 crore Vs Rs 2,591.8 crore [BBG Estimate: Rs 2,927.8 crore]

• EBITDA margin stood at 56.6% Vs 63.6% [BBG Estimate: 60.8%]

Source: Exchange filing

The Indian benchmark indices declined in trade on Tuesday after opening with slim gains amid volatility.

Stocks in Asia advanced along with the U.S. and European equity futures. The dollar slid ahead of commentary from Federal Reserve Chair Jerome Powell later on Tuesday that may shape views on the central bank’s rate path.

Some of the strongest gains Tuesday were in tech stocks listed in Hong Kong. Baidu Inc. surged as much as 18% after affirming it will launch a ChatGPT-like bot in March.

Adani group company stocks, on the other hand, reversed losses and all 10 of them were trading higher with the exception of Adani Power Ltd. and Adani Total Gas Ltd.

As of 12:48 p.m., the S&P BSE Sensex was down 332 points or 0.55% at 60,174.61 while the NSE Nifty 50 was 78 points or 0.44% lower at 17,686.20.

Adani Enterprises Ltd., Adani Ports And SEZ Ltd., Dr. Reddy's Laboratories Ltd., Kotak Mahindra Bank Ltd. and Bajaj Finance Ltd. were the top gainers in the gauge.

Whereas, Tata Steel Ltd., Hindalco Industries Ltd., ITC Ltd., Hero MotoCorp Ltd. and Sun Pharmaceutical Industries Ltd. and Infosys Ltd. and were the top losers amongst the NSE Nifty 50 constituents.

The broader market indices were trading lower; S&P BSE MidCap was down 0.24%, whereas S&P BSE SmallCap was lower by 0.33%.

Fifteen out of the 19 sectors compiled by BSE declined, while the only four advanced in trade.

The market breadth was skewed in favour of the bears. About 1,422 rose, 1,950 declined and 157 remained unchanged on the BSE.

• SEBI has returned Prem Watsa’s Fairfax and Virat Kohli-backed Go Digit’s DRHP on January 30.

• The company in it's statement cited that the employee stock appreciation rights issued by the company are not exempt under SEBI Regulations

• This is unlike employee stock options which are exempt

• It is therefore, evaluating amendments to it's employee stock appreciation rights scheme and will refile the revised DRHP in due course.

Source: SEBI update and company statement

Shares of Hindalco Industries Ltd. remain under pressure because of Novelis earnings.

• Net income attributable to common shareholder was $12 million, down 95% YoY

• Net income from continuing operations excluding special items was $96 million, down 60% YoY

• Adjusted Ebitda of $341 million, down 33% YoY in a challenging cost environment

• Shipments of 908 kilotonnes, down 2% YoY

• Resilient balance sheet with Net Leverage ratio of 2.6x and Total Liquidity $2.1 billion

Source: Press Statement

Shares of Kiri Industries Ltd. rose 10% to Rs 307.2 apiece in trade after the Singapore International Commercial Court shall deliver the judgement on valuation of company's stake in DyStar tomorrow i.e. Feb. 8, 2023.

Total traded volume stood at two times its 30-day average. The relative strength index at 14, implies that the stock maybe oversold.

Source: Bloomberg, Exchange filing

Shares of Tata Steel declined in trade on Tuesday after the company reported a net loss in consolidated terms for the quarter ended December. Higher material costs and a deferred tax expense during the period widened the losses.

Shares of Tata Steel Ltd. declined 4.47%, as of 11:53 a.m., to Rs 112.2 apiece in trade on Tuesday.

The Indian steel behemoth registered a net loss of Rs 2,223.84 crore during the third quarter, compared to a profit of Rs 9,572.67 crore over the corresponding period a year ago. Analysts tracked by Bloomberg had estimated a net profit of Rs 1,699.05 crore.

The sharp decline in the bottom line came as the company faced a deferred tax outgo of Rs 2,149.97 crore for the three months to December. Material costs for the quarter rose to Rs 24,695.38 crore, compared to Rs 20,546.54 crore a year ago.

Analysts tracking the company maintain their ratings on the stock as they await the concall commentary on the earnings.

Tata Steel Q3 FY23 (Consolidated, YoY)

• Revenues down 5.73% at Rs 57,354.16 crore (Bloomberg estimate: Rs 56,689.92 crore)

• Ebitda down 72.93% at Rs 4,318.44 crore (Bloomberg estimate: Rs 5,958.78 crore)

• Ebitda margin at 7.53% vs 26.22% (Bloomberg estimate: 10.5%)

• Net loss of Rs 2,223.84 crore vs net profit of Rs 9,572.67 crore (Bloomberg estimate: Rs 1,699.05 crore profit)

• The surprise loss was on account of a non-cash deferred tax outgo and higher raw material costs.

The stock fell as much as 4.56% intraday, the most in over four months since Sept. 26.

Total traded volume stood at 2.1 times its 30-day average. The relative strength index at 14, implies that the stock maybe oversold.

Out of the 33 analysts tracking the company, 24 maintain a 'buy' rating, six recommend a 'hold' and three suggest to 'sell' the stock.

The return potential as calculated by the consensus of analyst estimates, stand at an upside of 9.8% over the next 12 months.

Shares of Adani Enterprises Ltd. rose to Rs 1,887.20 apiece in trade and was locked in an upper circuit of 20% on Tuesday.

Most Adani group stocks advanced in trade, with only Adani Total Gas Ltd. and Adani Power Ltd. locked in lower circuit of 5%, each.

One 97 Communications Ltd. surged the most since its listing after analysts said the parent company of Paytm is all set to report breakeven for EBIT, Ebitda and profit after tax.

One 97 Communications (Paytm) Q3 (Consolidated, QoQ)

• Revenue up 8% at Rs 2,062 crore (Bloomberg estimate: Rs 2,120.43 crore)

• Ebitda loss fell 38% at Rs 330.70 crore (Bloomberg estimate: Rs 493.75 crore loss)

• Net loss contracted to Rs 392.1 crore (Bloomberg estimate: Rs 529.35 loss)

Shares of FSN E-Commerce Ventures Ltd. gained even as Jefferies cut its target price on Nykaa owing to slowing urban consumption.

The stock gained as much as 1.74% to Rs 140.35 apiece, compared to a 0.2% decline in S&P BSE Sensex.

Of the 20 analysts tracking the company, 15 maintain 'buy', three suggest 'hold' and two recommend 'sell'. The return potential of the stock implies a upside of 128.4%.

Source: Bloomberg, Brokerage note

Shares of Muthoot Finance Ltd. declined 0.85% to Rs 1,028.6 apiece in trade on Tuesday after company third-quarter earnings were weaker on an annual basis.

Muthoot Finance Q3 FY23

• NII down 10% at Rs 1,704.27 crore (YoY)

• Net profit down 12% at Rs 901.65 crore (YoY)

• Loan AUM up 6% at Rs 57,731 crore (YoY)

The stock fell as much as 5.54% intraday, the most in over six weeks since Dec. 23. Total traded volume stood at 7.8 times its 30-day average. The relative strength index at 14, implies that the stock maybe oversold.

Out of the 21 analysts tracking the company, 12 maintain a 'buy' rating, five recommend a 'hold' and four suggest to 'sell' the stock.

The return potential as calculated by the consensus of analyst estimates, stand at an upside of 21.3% over the next 12 months.

Source: Bloomberg, Exchange filing

Shares of Adani Transmission Ltd. rose 4.18% to Rs 1,308.95 apiece in trade on Tuesday after company third-quarter earnings beat all analyst estimates.

Also, the company's price band was reduced from 10% to 5% on BSE and NSE.

Adani Transmission Q3 FY23 (Consolidated, YoY)

• Revenues up 21.98% at Rs 3,551.7 crore (Bloomberg estimate: Rs 3,497.8 crore)

• Ebitda up 64.01% at Rs 1,477.54 crore (Bloomberg estimate: Rs 1,441.9 crore)

• Ebitda margin at 41.6% vs 30.94% (Bloomberg estimate: 41.2%)

• Net profit up 72.79% at Rs 478.07 crore (Bloomberg estimate: Rs 313.7 crore)

The stock gained as much as 5% intraday, the most since Jan. 31. Total traded volume stood at 7.3 times its 30-day average. The relative strength index implies that the stock maybe oversold.

Out of the two analysts tracking the company, one recommends a 'hold' and one suggests to 'sell' the stock.

The return potential as calculated by the consensus of analyst estimates, stand at an upside of 148.2% over the next 12 months.

Source: Bloomberg, Exchange filing

Adani group stocks saw some respite on Tuesday morning as the stocks under additional surveillance measure, i.e., Adani Enterprises Ltd., Adani Ports and SEZ Ltd., Ambuja Cements Ltd. advanced in trade.

Whereas, other stocks like Adani Transmission Ltd., the scrip for which the exchanges revised the price band to 5% gained 3.79% in trade.

Similarly, Adani Wilmar Ltd., NDTV Ltd. and ACC Ltd. also advanced in trade.

Only Adani Green Energy Ltd., Adani Total Gas Ltd. and Adani Power Ltd. declined in trade as they were locked in 5% lower circuit.

Source: Bloomberg

The Indian benchmark indices opened largely flat on Tuesday after falling in trade in the previous session.

The U.S. and European equity futures along with Asian stocks made small gains as investors awaited commentary from Federal Reserve Chair Jerome Powell later Tuesday.

On Monday, the S&P 500 and the tech-heavy Nasdaq 100 both finished lower as bond yields rose. Baidu Inc. surged as much as 13% after affirming it will launch a ChatGPT-like bot in March.

Adani group company stocks, on the other hand, were mixed as the stocks under additional surveillance measure were up, while the rest declined.

The S&P BSE Sensex opened up 5 points or 0.01% at 60,511.32 while the NSE Nifty 50 was 26 points or 0.14% lower at 17,790.10.

The yield on the 10-year bond opened 1 bp higher at 7.33% on Tuesday. It closed at 7.32% on Monday.

Source: Bloomberg

The local currency strengthened against the greenback on Tuesday by 10 paise to 82.64 at open. It weakened over 1% to 82.74 at close on Monday.

Source: Bloomberg

• U.S. Dollar Index at 103.46

• U.S. 10-year bond yield at 3.62%

• Brent crude up 0.74% to $81.73 per barrel

• Nymex crude at $74.79 per barrel

• SGX Nifty up 0.45% to 17,841.5 as of 8:20 a.m.

• Bitcoin down 0.44% to $22,816.27

• TV Today Network: Seetha Kumari sold 6.76 shares (1.13%) at Rs 302.31 apiece.

Bharti Airtel, Chambal Fertilisers & Chemicals, Adani Ports and SEZ, Kalyan Jewellers India, Ambuja Cements, EPL, Aditya Birla Fashion and Retail, Gujarat State Fertilizers & Chemicals, Thermax, NHPC, Deepak Nitrite, The Ramco Cements, Motherson Sumi Wiring India, Varroc Engineering, Gujarat Fluorochemicals, Astral, Bayer Cropscience, Power Mech Projects, GlaxoSmithKline Pharmaceuticals, Century Plyborads, Sobha, Bharat Dynamics, The Phoenix Mills, CreditAccess Grameen, Somany Ceramics, Prince Pipes & Fittings, IOL Chemicals & Pharmaceuticals, Navin Fluorine International, Mrs Bectors Food Specialities, Barbeque Nation Hospitality, Computer Age Management Services, Adani Green Energy, Hero MotoCorp, Gujarat Narmada Valley Fertilizers & Chemicals, Gujarat Alkalies & Chemicals, IRB InvIT Fund, NDTV, Panasonic Energy India Company, Cantabil Retail India, Eveready Industries India, India Tourism Development Coprporation, Elpro International, Everest Industries, Foseco India, J Kumar Infraprojects, Kirloskar Ferrous Industries, Prakash Industries, Rashtriya Chemicals & Fertilizers, Rolex Rings, Keystone Realtors, Shivalik Bimetal Controls, Sunflag Iron & Steel, Tilaknagar Industries, TTK Healthcare, Vadilal Industries, Wonderla Holidays, Yasho Industries

Tata Steel Q3 FY23 (Consolidated, YoY)

• Revenues down 5.73% at Rs 57,354.16 crore (Bloomberg estimate: Rs 56,689.92 crore)

• Ebitda down 72.93% at Rs 4,318.44 crore (Bloomberg estimate: Rs 5,958.78 crore)

• Ebitda margin at 7.53% vs 26.22% (Bloomberg estimate: 10.5%)

• Net loss of Rs 2,223.84 crore vs net profit of Rs 9,572.67 crore (Bloomberg estimate: Rs 1,699.05 crore profit)

• The surprise loss was on account of a non-cash deferred tax outgo and higher raw material costs.

Adani Transmission Q3 FY23 (Consolidated, YoY)

• Revenues up 21.98% at Rs 3,551.7 crore (Bloomberg estimate: Rs 3,497.8 crore)

• Ebitda up 64.01% at Rs 1,477.54 crore (Bloomberg estimate: Rs 1,441.9 crore)

• Ebitda margin at 41.6% vs 30.94% (Bloomberg estimate: 41.2%)

• Net profit up 72.79% at Rs 478.07 crore (Bloomberg estimate: Rs 313.7 crore)

LIC Housing Finance Q3 FY23

• Net profit down 37% at Rs 480.30 crore (YoY)

• NII up 10% at Rs 1,605.87 crore (YoY)

• Gross NPA at 4.76% vs 4.91% (QoQ)

• Net NPA at 2.4% vs 2.83% (QoQ)

Muthoot Finance Q3 FY23

• NII down 10% at Rs 1,704.27 crore (YoY)

• Net profit down 12% at Rs 901.65 crore (YoY)

• Loan AUM up 6% at Rs 57,731 crore (YoY)

• Dhampur Sugar Mills: The company has completed expansion of its distillery capacity by 130 KLPD on 'C' heavy molasses at Dhampur unit in Uttar Pradesh. With this expansion, the distillery capacity of the company now stands at 350 KLPD.

• Kirloskar Ferrous Industries: The company has announced the commissioning of its second coke oven plant in Koppal, Karnataka. The plant has production capacity of 2 lakh metric tonnes per annum. After commencement of operations of said plant, total production capacity of coke increased to 4 lakh metric tonnes per annum. Coke will be used mainly for captive consumption.

• Grasim Industries: The board appointed Ananyashree Birla and Aryaman Birla, children of group chairman Kumar Mangalam Birla, as non-executive directors, and Yazdi Piroj Dandiwala as an independent director.

• UltraTech Cement: The company commissioned 1.5 mpta brownfield cement grinding unit at Jharsuguda, Odisha, taking its total cement capacity in the state to 4.1 mtpa.

• Vakrangee: RBI renewed the authorisation issued to the company to setup, own and operate white label ATMs in India till March 31, 2024.

• Hindalco: Novelis, a subsidiary of the company, reported 95% decline year-on-year in consolidated profit attributable to common shareholders at $12 million. Net sales of the company decreased 3% on-year to $4.2 billion.

• HCL Technologies: HCL America, a wholly owned step-down subsidiary of the company, proposed a cash tender offer for up to $125 million of its $500 million 1.375% senior notes that were issued with a maturity date of March 2026.

• UPL: Life Insurance Corporation of India has reduced its shareholding in the company to 7.23% from 9.25%.

Asian markets open cautiously after U.S. stocks gave back some of this year’s gains amid bets that the Federal Reserve will keep a firm grip on monetary policy.

Australian stocks opened slightly lower, while shares in Japan and Hong Kong were little changed. The U.S. equity market came off overbought levels, with the S&P 500 and the tech-heavy Nasdaq 100 finishing lower. The U.S.-listed Chinese companies fell, with the Nasdaq Golden Dragon Index dropping to the lowest in more than two weeks.

At 8:20 a.m., the Singapore-traded SGX Nifty, an early indicator of India's benchmark Nifty 50, was up 0.45% at 17,841.5.

Meanwhile, the yield on 10-year Treasuries was at 3.62%. The crude price traded at the $81 mark, while Bitcoin was trading just below the $23,000 level.

Indian benchmark indices ended lower on Monday as I.T. and metal stocks dragged through the day.

The rupee closed lower against the U.S. dollar amid forex outflows and a stronger greenback in the foreign markets.

Overseas investors in Indian equities remained net sellers for the third day in a row on Monday. Foreign portfolio investors offloaded equities worth Rs 1,218.1 crore, while domestic institutional investors mopped up stocks worth Rs 1,203.1 crore for the 11th day in a row.