Sensex, Nifty Clock Best Weekly Gains In Three Months Led By Banks

India’s equity benchmarks clocked their best week since early February as investors weighed global and domestic economic recoveries from the pandemic.

The S&P BSE Sensex ended 2% higher at 50,540.48 after two days of back-to-back losses and gains during the week. The NSE Nifty 50 Index climbed 1.8%, with both gauges rising the most since March 30. All of the 19 sector sub-indices compiled by BSE Ltd. advanced, led by a gauge of lenders.

JSW Steel reported net income for the fourth quarter that missed the average analyst estimate.

• Net income Rs 4,200 crore vs. Rs 2.3 crore YoY, estimate Rs 4,325 crore (Bloomberg Consensus)
• Revenue Rs 26,930 crore, +51% YoY, estimate Rs 26,010 crore
• Total costs Rs 20,750 crore, +22% YoY
• Operating Ebitda Rs 8,440 crore, estimate Rs 7,952 crore
• Dividend per share Rs 6.50

Other Highlights

• Approves raising of long-term funds through issue of as much as Rs 7,000 crore of non-convertible debentures with warrants which are convertible into or can be exchanged with shares
• Approves issue of shares or convertible securities of as much as Rs 7,000 crore
• Board also approves rights share issue of as much as Rs 5,000 crore
• Net debt to Ebitda at 2.6x vs. 4.5x YoY; debt has come down by Rs 860 crore

Hindalco reported a consolidated net for the fourth quarter that beat the average analyst estimate.

• Consolidated net Rs 1,928 crore vs. Rs 668 crore YoY, estimate Rs 1,848 crore Bloomberg Consensus)
• Ebitda Rs 5845 crore, estimate Rs 4835 crore
• Sales Rs 40,507 crore, +38% YoY
• Parent net Rs 495 crore, +52% YoY
• Parent sales Rs 14,410 crore, +44% YoY
• Dividend per share Rs 3
• Aleris business continues to positively impact the overall top line and EBITDA

The rise of retail investors in Indian equities poses a risk that any slide in sentiment could trigger a liquidity squeeze and price corrections, as many individual investors would seek to exit the market at the same time, according to a report by JPMorgan Chase & Co.

Click here to read the full report.

State Bank of India’s quarterly net profit rose on higher interest income and lower provisions.

Net profit of India’s largest lender rose 81% year-on-year to Rs 6,451 crore for the three months ended March, according to an exchange filing. That compares with the Rs 6,166-crore consensus estimate of analysts tracked by Bloomberg.

Its net interest income, or core income, increased 19% over the year earlier to Rs 27,067 crore, against a forecast of Rs 28,853 crore. The bank’s other income, too, rose 21.6% to Rs 16,225 crore.

To read the full earnings report, click here

Shares of Torrent Power rose as much as 7.5% to a record high after the Gujarat-based electricity generator and distributor reported quarterly profit ahead of analysts estimates, partly helped by lower interest costs.

On May 20, the company reported net income of Rs 397 crore for the three-months ended March, ahead of the consensus analysts estimate for Rs 351 crore.

• Torrent Power’s Q4 Ebitda of Rs 910 crore was 11% higher on a YoY basis, helped by a 26% decline in interest costs, Motilal Oswal Financial Services Ltd. said in a note
• “While lower interest costs would have contributed to the beat, we await clarity on any one-offs,” the note added
• The brokerage has a buy rating on Torrent Power with a price target of Rs 431

The board of Reserve Bank of India approved the transfer of Rs 99,122 crore ($13.6 billion) as surplus to the government for the accounting period of nine months ended March 31, 2021, while deciding to maintain the contingency risk buffer at 5.50%, the central bank said in a statement.

• The board in its meeting Friday reviewed the current economic situation, global and domestic challenges and recent policy measures taken by the RBI to mitigate the adverse impact of the second wave of Covid-19 on the economy

To read the full report, click here

Shares of JK Lakshmi Cement Ltd. climbed as much as 9.5% to the highest level since June 2017 after reporting Jan-March net profit of Rs 159 crore vs Rs 98.63 lakh YoY.

• Company’s “healthy” performance was led by better-than-expected volumes and higher sales realization, ICICI Securities Ltd. said in a note
  • Also cites lower interest costs (down 29.5% y/y) and better margins
• Cement maker achieved 99% capacity utilization led by improved sales volume from both retail and infrastructure segments, report said
• Company’s waste-heat recovery unit project is as per schedule; capacity expansion at subsidiary Udaipur Cement Works likely to be commissioned in Dec. 2023

The Indian rupee is poised to advance for a fourth straight week on the back of rising foreign inflows and a weaker dollar. Sovereign bonds are marginally higher ahead of a Rs 32,000-crore ($4.4 billion) debt sale.

• USD/INR fell 0.2% to 72.9725; down 0.4% this week; rupee is Asia’s best performer on the week
• Foreigners bought $318 million of stocks so far this week to Wednesday
• Inflows have ensured that rupee does not weaken beyond a certain level, says Anil Kumar Bhansali, treasurer at Finrex Treasury Advisors
  • For the day, it should see a range of 72.80 and 73.15 with exporters to sell near 73.15 and importers to buy near term at 72.90 levels
• 10-year yields steady at 5.97% Friday; RBI bought Rs 35,000 crore of bonds at its purchase auction Thursday

Source: Bloomberg

Shares of the oil marketing company rose as much as 8.2%, the most since Nov., after reporting better-than-expected March quarter earnings.

The state-controlled firm posted a net profit of Rs 3,017.96 crore in the fourth quarter as against Rs 26.80 crore profit same period last year. Revenue stood at Rs 85,748 crore. The average gross revenue refining margin during the period was $3.86 per barrel as against the $1.02 per barrel year-on-year.

The broking firm maintained its ‘Buy’ rating on the stock with an unchanged Rs 370 price target. “We continue to prefer HPCL over BPCL on favourable valuation.”

Indian equity benchmarks opened higher amid positive Asia trade after a Wall Street rebound as traders weighed the economic recovery from the pandemic as well as the possibility of reduced U.S. stimulus.

The S&P BSE Sensex added 0.8% to 49,978, while the NSE Nifty 50 Index rose by a similar magnitude. Al of the 19 sector sub-indices compiled by BSE Ltd. advanced, led by a gauge of real estate companies.

State Bank of India, the country’s biggest lender, added 1.6% ahead of its quarterly earnings report during market hours today. So far, 21 of the 34 Nifty 50 companies that have so far posted results have missed analysts’ estimates, while 12 have beaten or met, according to data compiled by Bloomberg.

India’s sovereign bond traders are waiting to gauge demand at a Rs 32,000-crore bond ($4.4 billion) sale after an offering of benchmark 10-year debt was cancelled last week. The rupee may rise after the dollar dropped overnight.

• USD/INR fell 0.1% to 73.1013 on Thursday
  • Implied opening from forwards suggests spot may start trading around 73.04
• 10-year yields down 1bp to 5.97% on Thursday; RBI bought Rs 35,000 crore of bonds at its purchase auction Thursday
• RBI to hold Rs 2 lakh crore 14-day reverse repo auction Friday

Good morning!

Asian stocks were steady Friday after a Wall Street rebound as traders weighed the economic recovery from the pandemic as well as the possibility of reduced U.S. stimulus. The dollar pared a decline.

Shares rose in Japan but slipped in Hong Kong and China. The Singapore-traded SGX Nifty, an early indicator of India's Nifty 50 Index’s performance, rose 0.5% to 15,005 as of 8:15 a.m.

Overnight, nearly all major industry groups in the S&P 500 pushed higher, while the Nasdaq 100 rallied past its 50-day moving average.

A drop in U.S. initial jobless claims put the focus back on the economic recovery, but there are lingering fears price pressures imperil loose financial conditions. U.S. equity contracts fluctuated. Treasury yields maintained a retreat.

Weaker-than-expected demand for an auction of 10-year inflation-protected debt suggested confidence in the Federal Reserve’s narrative that the recent acceleration in inflation is unlikely to be sustained. A pause in this year’s commodity boom continued.

Gold is around the highest level in more than four months. Its claimed virtual rival, Bitcoin, steadied after a volatile cryptocurrency slump this week.

Back home, HPCL, Zee, Havells, Torrent Power may react as the companies reported quarterly results after the market closed Thursday. SBI, JSW Steel, Hindalco, Shree Cement, United Spirits, Container Corp are among the companies scheduled to report earnings Friday. Foreign investors bought net Rs 2,530 crore of stocks on Wednesday, according to NSDL website.