Benchmarks extend gains; auto stocks decline

The benchmark indices extended gains in mid-morning trade. The Nifty continued to trade above the 15,850 mark. Auto shares declined for the second day.

At 11:27 IST, the barometer index, the S&P BSE Sensex, was up 94.79 points or 0.18% to 53,070.59. The Nifty 50 index added 24 points or 0.15% to 15,880.05.

In the broader market, the S&P BSE Mid-Cap index gained 0.38% while the S&P BSE Small-Cap index rose 0.22%.

The market breadth was strong. On the BSE, 1983 shares rose and 1179 shares fell. A total of 172 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 194,123,828 with 4,158,692 global deaths.

India reported 411,189 active cases of COVID-19 infection and 420,967 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

Buzzing Index:

The Nifty Auto index shed 0.24% to 10,176.95. The index has lost 0.6% in two sessions.

TVS Motor Company (up 0.85%), Eicher Motors (up 0.77%), Bajaj Auto (up 0.43%) and Bharat Forge (up 0.22%) advanced.

Tata Motors (down 0.90%), Maruti Suzuki (down 0.87%), Ashok Leyland (down 0.68%), Hero MotoCorp (down 0.42%) and Mahindra & Mahindra (down 0.17%) declined.

Earnings Impact:

ICICI Bank rose 1.12% to Rs 684.25. The private bank`s standalone net profit jumped 77.59% to Rs 4,616.02 crore on 6.47% fall in total income to Rs 24,379.27 crore in Q1 June 2021 over Q1 June 2020. Operating profit dropped 17.46% to Rs 8,894.40 crore in Q1 FY22 as against Rs 10,776.45 crore in Q1 FY21.

On the asset quality front, the ratio of gross NPAs to gross advances stood at 5.15% as on 30 June 2021 as against 5.46% as on 30 June 2020. The ratio of net NPAs to net advances stood at 1.16% as on 30 June 2021 as against 1.23% as on 30 June 2020.

Provision and Contingencies tumbled 62.44% to Rs 2,851.69 crore in Q1 June 2021 over Rs 7,593.95 crore in Q1 June 2020. Provision coverage ratio was robust stood at 78.20% at 30 June 2021, higher than 77.70% at 31 March 2021.

At 30 June 2021, the bank held COVID-19 related provisions of Rs 6,425 crore (i.e. $ 864 million). The bank`s total capital adequacy at 30 June 2021 was 19.27% and Tier-1 capital adequacy (including profits for Q1 FY2022) stood at 18.24% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively.

The Net Interest Income (NII) surged 17.84% to Rs 10,936 crore as on 30 June 2021 as against Rs 9,280 crore as on 30 June 2020. The Net Interest Margin (NIM) stood at 3.89% as on 30 June 2021 as against 3.69% as on 30 June 2020.

While total deposits rose 16% year-on-year to Rs 9,26,224 crore, total advances increased by 17% year-on-year to Rs 738,598 crore as on 30 June 2021.

SBI Cards and Payment Services (SBI Cards) advanced 5.27% to Rs 1007.45. The company posted a 22.6% fall in standalone net profit to Rs 304.61 crore on 11.6% rise in total income to Rs 2,450.94 crore in Q1 FY22 over Q1 FY21. On a sequential basis, the company`s net profit grew by 74% compared with Rs 175 crore posted in Q4 FY21.

Earnings before credit costs increased by 4% to Rs 1,056 crore in Q1 FY22 from Rs 1,014 crore in Q1 FY21. Meanwhile, the company`s finance costs decreased by 16.6% to Rs 229 Cr in Q1 FY22 from Rs 275 crore in Q1 FY21.

On the asset quality front, gross NPA were at 3.91% as of Q1 FY22 as compared to 1.35% in Q1 FY21. Net NPA were at 0.88% as of Q1 FY22 versus 0.43% in Q1 FY21.

SBI Card`s total balance sheet size as of 30 June 2021 was at Rs 26,608 crore as against Rs 24,260 crore as of 30 June 2020. Total gross advances (Credit card receivables) as of 30 June 2021 were at Rs 24,438 crore, as against Rs 23,330 crore as of 30 June 2020.

Yes Bank jumped 4.59% to Rs 13.67 after the bank`s net profit soared 355.2% to Rs 206.84 crore in Q1 FY22 from Rs 45.44 crore posted in Q1 FY21. Total income declined 8.6% year on year (YoY) to Rs 5,581.84 crore in Q1 FY22 over Q1 FY21. Standalone operating profit dropped 20% to Rs 920 crore in Q1 FY22 from Rs 1,147 crore in Q1 FY21.

On the asset quality front, the ratio of gross NPAs stood at 15.6% as on 30 June 2021 as against 15.41% as on 31 March 2021 and 17.30% as on 30 June 2020. The ratio of net NPAs stood at 5.78% as on 30 June 2021 as against 5.88% as on 31 March 2021 and 4.96% as on 30 June 2020.

Provision and Contingencies reduced by 41% to Rs 644 crore in Q1 FY22 over Rs 1,087 crore in Q1 FY21. Fresh slippages lower at Rs 2,233 crore compared to Rs 11,873 crore registered in last quarter, supported by provision write back due to recoveries / resolutions.

Global Markets:

Asian stocks were mixed on Monday, as Chinese tech stocks in Hong Kong plunged. China`s antitrust regulator ordered Tencent to give up its exclusive music licensing rights and slapped a fine on it for anti-competitive behavior, marking yet another development in Beijing`s ongoing crackdown on its domestic internet titans.

Investors likely continued to monitor the Covid situation in Asia as it weighs on sentiment. In South Korea, the second highest level of virus restrictions will be reportedly applied to non-capital areas starting Tuesday. Indonesia on Sunday also reportedly extended its Covid restrictions by a week.

U.S. equities rose Friday with the the major averages hitting new records as they overcame concerns about economic growth from earlier in the week. The Dow closed above 35,000 for the first time ever. The blue chip average rose 238.20 points, or 0.68%, to 35,061.55. The S&P 500 gained 1.01% to 4,411.79 and the Nasdaq Composite climbed 1.04% to 14,836.99, both new closing highs for the benchmarks.

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