Indices bounce back; breadth strong

The key equity indices managed to reverse early losses and traded with minor gains in morning trade. The Nifty was trading above the 15,850 mark. IT, FMCG, metal and media stocks advanced. Asian stocks were trading mixed.

At 10:27 IST, the barometer index, the S&P BSE Sensex, was up 45.85 points or 0.09% to 53,021.65. The Nifty 50 index was down 4.75 points or 0.03% at 15,851.30.

In the broader market, the S&P BSE Mid-Cap index gained 0.72% while the S&P BSE Small-Cap index rose 0.14%.

The market breadth was strong. On the BSE, 1903 shares rose and 1110 shares fell. A total of 165 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 IT index rose 0.58% to 30,066.50, extending gains for third day. The index has added 2.8% in three sessions.

Oracle (up 3.02%), Mphasis (up 2.73%), Infosys (up 1.08%), Coforge (up 0.74%) and MindTree (up 0.71%) edged higher while Wipro (down 0.63%) and TCS (down 0.06%) lagged behind.

Earnings Today:

Axis Bank (down 0.47%), Kotak Mahindra Bank (up 0.38%), Larsen & Toubro (down 0.23%), SBI Life (down 0.62%) and Tata Motors (down 0.49%) will announce their quarterly earnings today.

Alembic Pharma (down 0.27%), Coromandel International (up 1.02%), DLF (up 0.76%), M&M Financial (up 0.06%), Navin Fluorine (up 0.48%), Vedanta (up 1.79%), Apollo Pipes (up 1.78%), GSK Pharma (up 0.27%), Garden Reach Shipbuilders (up 0.37%), Jindal Stainless (up 2.17%), KPIT Tech (up 8.20%), Phillips Carbon (up 3.33%), RK Forgings (up 2.62%), SPARC (down 0.02%) and Zensar Tech (up 1.48%) are some other companies that will announce their quarterly earnings today.

Earnings Impact:

Reliance Industries (RIL) shed 0.18% to Rs 2101.45. The conglomerate reported a 7.3% fall in consolidated net profit to Rs 12,273 crore on a 58.6% rise in net sales to Rs 139,949 crore in Q1 FY22 over Q1 FY21. On a sequential basis, RIL`s net profit declined 8% while net sales fell 6.44% in Q1 FY22 over Q4 FY21.

The telecom arm of RIL, Reliance Jio, witnessed a 44.9% year-on-year (YoY) growth in the net profit at Rs 3,651 crore in Q1 FY22 over Q1 FY21. The consolidated revenue from operations grew by 9.8% to Rs 22,267 crore in Q1 FY22 over Q1 FY21. Jio posted a total average revenue per customer (ARPU) during the quarter of Rs 138.40 per subscriber per month while customer base as on 30 June 2021 stood at 440.6 million with a net addition of 42.3 million customers year on year.

For Reliance Retail, net profit for the quarter was Rs 962 crore higher by 123% year on year. Gross Revenue stood at Rs 38,547 crore, rising by 21.9% year on year. Reliance Retail`s store expansion was constrained during the quarter as the business opened 123 stores taking the total count to 12,803.

Oil to chemicals (O2C) segment, segment revenues for Q1 FY22 increased by 75.2% year on year to Rs 103,212 crore ($ 13.9 billion) primarily on account of sharp increase in product prices on the back of higher crude prices. RIL said downstream margins continued to remain strong with product deltas near or above 5-year averages. Favorable light-feed cracking environment and increased domestic gas availability helped O2C optimize its costs. O2C maintained its market share in domestic markets. In addition, O2C continues to strategically place its products in export markets.

In the oil and gas (exploration & production) business, segment revenue for Q1 FY22 increased by 153.2% year on year to Rs 1,281 crore. This was primarily due to smooth ramp up of gas production from R-Cluster and commencement of production from SatCluster field in KG D6 block. Price realization for CBM gas for the Quarter was higher by 16% at $ 6.01/mmbtu (GCV). Realizations in the US Shale business improved to $ 4.95/MCFe on the back of higher gas and condensate prices.

In the media business, revenue from operations rose 50% year on year to Rs 1,214 crore during Q1 FY22. Viewership share of TV entertainment rose further to 11%, up sharply from a low of 9.2% in Q1 FY21. On the back of a full roster of compelling content, the portfolio was able to re-scale adrevenue to the same levels as in 1Q FY20. News advertising remained resilient despite the second wave, led by a rise in news consumption and digital events replacing physical ones.

ITC rose 0.78% to Rs 214. The tobacco major reported 28.6% rise in standalone net profit to Rs 3,013.49 crore on a 37.3% rise in net sales to Rs 12,142.43 crore in Q1 FY22 over Q1 FY21. As compared to Q4 FY21, the company`s net profit and net sales are lower by 19.6% and 7.7%, respectively.

Total FMCG segment revenue increased by 22.4% YoY to Rs 8,848 crore during the period under review. In the FMCG segment, cigarettes revenue rose by 32.9% YoY to Rs 5,122 crore while the revenue from other FMCG segment improved by 10.4% YoY to Rs 3,726 crore during the quarter.

Hotel business revenue stood at Rs 127 crore (up 4.6x YoY), agri-business revenue was at Rs 4,091 crore (up 9.2% YoY) and paperboards, paper & packaging revenues were at Rs 1,583 crore (up 54.2% YoY) in the first quarter of FY22.

With regard to the FMCG - Others business, the company said that both urban & rural growth rates in the FMCG Industry moderated in the immediate aftermath of the sharp rise in new cases; however there has been a progressive rebound since June`21 with the easing of restrictions and increase in mobility.

With regard to the FMCG - Cigarettes business, the company said that the strong volume recovery momentum witnessed in the second half of FY21 was impacted by localised lockdowns and restricted hours of convenience store operations in the wake of second wave of the pandemic. Product accessibility was sustained despite market disruptions leveraging the company`s multi-channel distribution network. Certain markets in the South, metro cities and towns were relatively more impacted

�Wide availability of smuggled cigarettes continues despite deterrent actions by concerned authorities; this remains a key challenge for the legal cigarette industry which has witnessed significant reduction in volumes in recent years,� ITC added.

The second wave of the pandemic triggered a fresh round of mobility and travel restrictions leading to severe disruptions, impacting the progressive recovery witnessed in H2 of FY21 in the Hotels business. With reduction in new COVID infections and easing of travel restrictions in June`21, domestic leisure segment witnessed an uptick.

In the Agri Business, the company recorded strong growth in Wheat, Rice & Leaf Tobacco exports and Soya in the domestic market.

In the Paperboards and Specialty Papers Business, domestic customer offtake saw positive trends in most key segments such as pharma and consumer goods. However, certain end-user segments such as publications, cupstock, On-the-Go liquid packaging and wedding cards continued to be impacted by the pandemic-related disruptions.

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