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Broader market lags benchmarks; Solara Active Pharma slumps

Published on Feb 10, 2022 13:32

Equity indices traded range bound with strong gains in afternoon trade. The Nifty hovered at the 17,600 mark. Banks and financial stocks were in demand after the RBI kept the policy repo rate unchanged after its latest monetary policy decision.

At 13:30 IST, the barometer index, the S&P BSE Sensex, rallied 495.45 points or 0.85% at 58,961.42. The Nifty 50 index gained 145.4 points or 0.83% at 17,609.80.

The broader market underperformed the main indices. The S&P BSE Mid-Cap index added 0.34% while the S&P BSE Small-Cap index rose 0.13%.

The market breadth was almost even. On the BSE, 1,602 shares rose and 1,653 shares fell. A total of 114 shares were unchanged.

Economy:

The Reserve Bank of India (RBI) Governor Shaktikanta Das heading a six-member Monetary Policy Committee (MPC) announced the policy resolution today. The RBI kept repo rate unchanged at 4%. Reverse repo rate stands at 3.35%. The Marginal Standing Facility (MSF) rate at 4.25%. The MPC said the policy stance will remain "accommodative" as long as needed. The real GDP growth is projected at 7.8% for FY 2022-23. FY23 inflation target is reduced to 4.5%.

Gainers & Losers:

Kotak Mahindra Bank (up 2.56%), HDFC Bank (up 2.38%), HDFC (up 2.37%), ONGC (up 2.1%) and Tata Steel (up 1.86%) were top gainers in Nifty 50 index.

Maruti Suzuki (down 0.84%), Indian Oil Corporation (down 0.5%), Shree Cement (down 0.33%) and Dr. Reddy`s Laboratories (down 0.33%) were top losers in Nifty 50 index.

Stocks in Spotlight:

Solara Active Pharma Sciences hit a lower circuit limit of 20% at Rs 775.05 after the company reported consolidated net loss of Rs 139.87 crore in Q3 FY22 as against net profit of Rs 65.80 crore in Q3 FY21. Net sales fell 76.48% to Rs 100.34 crore in Q3 FY22 over Q3 FY21. The company reported operating EBITDA loss of Rs 81.7 crore in Q3 FY22 as against profit of Rs 88.5 crore in Q2 FY22 and profit of Rs 122.7 crore in Q3 FY21. Solara has long operated as a dominant player in the global Ibuprofen market. Over the last 4-5 years, an acute shortage in the capacities of Ibuprofen enabled Solara to increase its market share significantly, especially in the regulated markets. As a result of the COVID-19 pandemic, Ibuprofen, being an acute product, witnessed a considerable decline in the demand in the regulated markets which impacted the business of Solara.

Shares of Tata Power Company were trading 2.06% higher after the company`s consolidated net profit soared 73.3% to Rs 551.89 crore on a 43.6% jump in net sales to Rs 10,913.14 crore in Q3 FY22 over Q3 FY21. Consolidated PAT improved on the back of strong all-round business performance by all verticals while revenue witnessed a robust growth on account of expanded operation in Odisha DISCOMs, higher project execution by Tata Power Solar Systems (TPSSL) and strong performance of all other businesses. Consolidated profit before tax (PBT) surged 87.2% to Rs 788.49 crore in Q3 FY22 from Rs 421.09 crore in Q3 FY21. Underlying EBITDA grew 16% to Rs 2,499 crore in Q3 FY22 as against Rs 2,149 crore in Q3 FY21, mainly due to higher profit from coal mines offset by higher losses in CGPL due to increase in coal prices.

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