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Equity benchmarks underwent a global sell-off as as downbeat global cues tracking anxiety around rising inflation globally, rate hikes weighed on investor sentiments. The index has already corrected 18% from the lifetime highs and approached oversold reading on weekly momentum oscillator. Can we expect a technical pullback from current levels?

Accenture reported 18.7% YoY growth in outsourcing revenues (proxy to Indian IT companies) for Q3FY22 while consulting revenues grew 24.4% YoY, resulting in 21.8% YoY increase in overall revenues for the quarter. LTM attrition has reached 20% now, a multi-year high.

On Investor Day 2022, Dr Reddy's defined its short-to-medium term plan to leverage current Horizon 1 core businesses and invest in futuristic Horizon 2 business for sustainable growth.

Agnipath scheme for soldiers recruitment by Govt aims to cut the ballooning salary & pension bills; creates opportunity for increase in capital outlay

After hitting an all-time high of Rs 5373 in October 2021, Divi's Laboratories has corrected ~35%. Of this, almost 16% correction happened post the announcement of Q4FY22 results on May 23.

Corporate earnings for January-March 2022 (Q4FY22) were satisfactory with topline growth at the Nifty level (ex-financials) coming in at 9.8% QoQ. Operating profit, however, was up 3.4% QoQ factoring in the pressure on margins, which for the quarter was at 18.2%, down 110 bps QoQ. PAT for the quarter was up 5.3% QoQ, primarily tracking a decline in margins and other income, partially aided by lower effective tax rate. At the Nifty level (including financials), broader sequential growth trend continued with 8.8% QoQ growth in topline. PAT growth, however, was a tad higher (6.1% QoQ) than ex-financials (5.3% QoQ) on account of outperformance by BFSI domain, tracking better-than-expected credit growth & improving asset quality.

With two large cement players going aggressive on the capacity expansion front in a bid to retain leadership position, the industry is now bracing for higher competition and consolidation.

Recently an export duty of 15% had been levied on steel intermediaries and on major steel products. These duty changes were effective from May 22, 2022.

Wholesale dispatches for May 2022 came in steady with most segments witnessing sequential MoM growth. YoY comparison is redundant given the base month (May 2021) witnessed the impact of the second Covid wave. The tractor space, in particular, witnessed higher double digit YoY growth (30-48%) amid healthy crop realisations while growth was largely in high single digits in the PV (~8% MoM) & CV space (~10% MoM). The trend was mixed in the 2-W domain while the 3-W space witnessed green shoots amid economic recovery and reopening of schools & colleges.

HDFC Bank's analyst meet day offered insights on the ongoing merger of HDFC Bank with HDFC Ltd along with its long term vision.

Mahindra & Mahindra (M&M) posted a healthy performance in Q4FY22 in line with our estimates. Absence of any major one-offs related to impairment charge on investments was also a key takeaway from the quarterly results. The company remained a net debt free entity on standalone basis with healthy CFO (~Rs 7,100 crore) as well as FCF generation (~Rs 3,850 crore). It declared a dividend of Rs 11.55 for FY22. It also remained committed towards 18% RoE target through internal efficiencies and improving profitability at its overseas operations and sale of non-core assets.

JSW Steel reported a steady consolidated operational performance in Q4FY22 wherein EBITDA per tonne of standalone operations came in marginally lower than our estimate. However, better-than-expected performance from subsidiaries and higher-than-expected sales volume at standalone operations aided JSW Steel’s overall consolidated performance.

Apollo Hospitals’ Q4FY22 results were below I-direct estimates as Omicron affected two-third of the quarter.

In the past few sessions, the Nifty has been finding support near 16000, which is the highest Put base. However, it remained in a range and the Call writing quantum continued to remain higher with no respite in the volatility index, which remained on the higher side. Sectorally, IT continued to remain a laggard and was witnessing short rollover for June. Other sectors like cement, realty and metals also witnessed follow up selling with few attracting fresh shorts.

Existing paint companies will have to sacrifice profitability in order to maintain market share after Grasim Industries announced mega capex in its paint division

Divi's Laboratories quarterly performance was a significant beat vis-à-vis I-direct and consensus estimates on the back of another strong quarter from custom synthesis.

The central government has cut excise duty on petrol and diesel by Rs 8/litre & Rs 6/litre, respectively, over the past weekend. Media reports also suggest that It has also imposed higher duties on steel exports and at the same time reduced custom duty on key raw materials for steel manufacturing thereby intending to control metal prices for user industries within a broader aim to control inflation domestically.

Export duty has been levied on steel intermediaries and on major steel products. Import duty on some raw materials used in the steel making process have also been reduced. This duty changes will be effective from May 22, 2022.

Dr Reddy’s revenues were better than I-direct estimates primarily driven by market share gains, strong launches, productivity improvement and divestment of brands. Profitability for the quarter was impacted by impairment loss of non-current assets (Rs 756.2 crore) and provisions related to Texas litigation (Rs 98.3 crore)

The unabated FIIs’ selling seen in secondary markets is one of the highest ever seen in Indian equity markets. However, on the F&O front, the aggressive shorts we have seen in the May series are one of the highest seen since 2018 (exception being Covid related selling in March 2020). We have observed net short exposure (index future) above 1 lakh contracts near the bottoms. It resulted in meaningful short covering. We expect similar action this time as their short exposure was above 1.22 lakh contracts. In the last few sessions, the early trend of short covering was observed

Ashok Leyland (ALL) reported a stellar performance in Q4FY22 and was a handsome beat to our estimates. Sequential jump in EBITDA margins to the tune of ~490 bps at 8.9% was a key positive surprise for the quarter. It was primarily driven by lower than anticipated gross margin decline and operating leverage benefits with volumes for the quarter up healthy 43% QoQ at 48,719 units.

ITC witnessed strong revenue growth of 16% to Rs 16426 crore on the back of 10% growth in cigarettes, 31.8% growth in paperboard, 29.6% growth in agri & 12.3% growth in the FMCG businesses. Cigarette volume growth was ~9% during the quarter. The segment saw 128 bps improvement in cigarette segment margins. FMCG sales growth of 12.3% was led by strong growth in the education & stationary segment due to reopening of schools, sustainable growth in staples and high growth in discretionary categories. FMCG growth was led by a mix of volumes, pricing growth and product mix enhancement.

Bharti Airtel's Q4FY22 topline performance was marked by tariff hike benefits flowing in the wireless business revenues and driving the margins expansion. Consolidated topline came in at Rs 31,500 crore, up 5.5% QoQ (tad below estimates of 7% QoQ growth). Indian wireless revenues were up 9.5% QoQ at Rs 16,617 crore, led by pass through of tariff hike driving ARPU, which came in at Rs 178, up 9.7% QoQ in line with RJio’s ~10% growth). On the other segment of India business, homes services (broadband) revenues were up 10% QoQ at Rs 876 crore and Airtel business (enterprise) revenues were up 1.8% QoQ at Rs 4180 crore. Overall margins were at 50.9%, up 169 bps QoQ with India wireless margins at 50.6% (up 128 bps QoQ). Overall Indian margin was up 106 bps QoQ at 50.8%. The margins expansion was driven by tariff hike led pass through. Africa margins were at 49.6%, up 30 bps QoQ. The company reported PAT of Rs 2007.8 crore, up 142% QoQ.

Titan in its annual analyst and investor meet unveiled strong growth ambition across its business segments for the next few years

Tata Motors (TML) reported a healthy performance in Q4FY22 and was a beat to our estimates. Sequential jump in EBITDA margins to the tune of ~220 bps at 14.7% was a key positive surprise for the quarter. It was primarily driven by operational outperformance at all key divisions namely India CV, PV as well as JLR.

Asian Paints reported strong revenue growth of ~19% YoY in Q4FY22, with surprise in volume growth. Margins as expected stayed under pressure on higher RM cost & adverse product mix.

Coforge guided for 20% revenue growth in CC in FY23. The margin guidance band was maintained at 18.5-19% for FY23. Attrition of 17.7% continues to be one of the lowest in the industry.

Cipla’s Q4FY22 revenues were better than I-direct estimates while margins were a significant miss as there was a one-time expense of Rs 200 crore in this past quarter.

LTI and Mindtree have announced a merger with an all stock amalgamation of Mindtree with LTI. Shareholders of Mindtree will get 73 shares of LTI in exchange for 100 shares in Mindtree. The LTI CEO & MD have resigned due to personal reasons while the Mindtree CEO & MD have been appointed as CEO & MD of the merged entity.

Tata Steel reported a steady consolidated operational performance in Q4FY22 wherein EBITDA per tonne of European operations came in higher than our estimate. However, EBITDA per tonne of domestic operations comes in lower than our estimate.

Titan's Q4FY22 earnings print was below our/consensus estimates as a significant increase in other expenses impacted EBITDA for the quarter. Losses in the watches and eyewear segment (owing to exceptional expenses) were a drag on margins.

Supreme Industries reported strong topline growth of 23% YoY, supported by ~16% volume growth. However, higher input costs and change in product mix weighed on margins.

The company has guided for 1-3% QoQ CC revenue growth in Q1FY23. EBIT margins for the next two to three quarters would be lower than guided range of 17-17.5%.

Maruti Suzuki (MSIL) reported a robust performance in Q4FY22 and was a comprehensive beat on Street estimates. EBITDA margins for the quarter came in at 9.1%, up 240 bps QoQ. Margin performance was the real positive surprise with savings realised under all costs line items. Gross margins expanded 174 bps QoQ while employee costs & other expenses were down by ~35 bps & 30 bps respectively.

Bajaj Auto (BAL) reported a robust performance for the quarter, with all key readings surpassing our estimates. The real positive surprise came in from better-than-expected ASPs (up 6.2% QoQ), gross margin expansion (280 bps QoQ) and consequently four quarterly high operating margins of 17.1% (up 191 bps QoQ). Consequent reported PAT for Q4FY22 was up 21% QoQ to Rs 1,469 crore (supported by exceptional gains).

Indonesia, which is the world's largest producer of palm oil and meets nearly 45% of the total palm oil supplied into India annually, has decided to ban exports from April 28 till further notice

HCL Tech is guiding revenue growth of 12-14% in constant currency in FY23E while EBIT margins are expected to be in the 18-20% band.

Oil marketing companies and standalone refineries are slated to achieve elevated profitability as product cracks surged again in April.

L&T Infotech (LTI) reported muted revenue growth for Q4. It guided for 290 bps QoQ EBIT margin impact in Q1FY23 due to annual salary increments.

Textile exports continued their healthy growth momentum across categories in March 2022 and exited FY22 with strong numbers. Key positive was ready-made garment (RMG) exports surpassing Rs 13000+ crore mark for the first time in March 2022. Overall, India’s textile & apparel exports have surpassed the US$40 billion mark for the first time (US$41.3 billion) in FY22 (US$34 billion in FY20).

On the back of geopolitical uncertainty, major indices violated their sizeable Put bases. However, despite selling in heavyweights, the volatility index remained subdued and rose only on April 18 but failed to sustain above 20 levels. Lower-than-expected numbers from technology stocks kept the Nifty under pressure but money flow shifted to the banking space, which has relatively outperformed.

Mindtree's healthy order book of US$1.6 bn provides revenue visibility for FY23. EBITDA margin guidance maintained at 20%+.

The Indian Meteorological Department (IMD) in its long range forecast issued on April 14, 2022 forecasted monsoon 2022 to be normal in nature at 99% of long period average (LPA, 87 cm). Even private weather monitoring agency Skymet in the recent past forecasted monsoon 2022 to be normal in nature at 98% of LPA.

In the oil & gas coverage universe, uptrend in oil prices and refining product cracks will drive the profitability of upstream companies and oil marketing companies in Q4FY22. City gas distribution (CGD) companies’ earnings are expected to remain lower YoY due to high gas sourcing costs.

Infosys reported weak numbers on margins in Q4. The company is guiding 13-15% CC revenue growth in FY23 while EBIT margins guidance is lower at 21-23% band.

Pharmaceuticals witnessed a mixed quarter with the phase of smooth going in the first half (decent domestic traction, normalising scenario on input cost inflation and logistics) almost undone by headwinds such as Russia-Ukraine crisis and Covid wave in China.

Coking coal prices witnessed a sharp uptick during Q4FY22. In terms of point to point movement, Australian hard coking coal prices have increased from ~US$351/tonne as on January 1, 2022 to ~US$594/tonne as on March 31, 2022.

TCS reported TCV of US$11.3 billion (bn) for the quarter, adjusted to two large deals of US$1 bn each, TCV is at US$9.3 bn, up 22.4% QoQ and 1,1% YoY

As per our channel checks, apparel retailers in Q4FY22E on a per store basis have registered recovery rate in the range of 50-60% in January (owing to trade being impacted by Omicron Covid variant) while February was a month of recovery gaining ground to 80-85% of pre-Covid levels. However, March has seen a sharp recovery with most apparel companies being able to surpass pre-Covid levels owing to strong demand driven by opening up of offices, reopening of schools and increased demand due to the wedding season.

FMCG companies are expected to witness dismal volumes in Q4FY22 given steep price hikes leading to down trading to economy brands or smaller SKUs. Further rural regions have been witnessing a dismal demand scenario, specifically in discretionary categories.