Sensex drops 143 pts, Nifty holds 17,500; SBI drops 1.8%

Benchmark indices ended with small losses on Friday. The Nifty closed a tad above the 17,500 mark after hitting the day`s low of 17,462.55 in afternoon trade. Metal, IT and FMCG stocks bucked a broader selling pressure.

The barometer index, the S&P BSE Sensex, fell 143.25 points or 0.24% at 58,644.82. The Nifty 50 index lost 43.9 points or 0.25% at 17,516.30.

SBI (down 1.83%), HDFC (down 0.99%), Reliance Industries (down 0.89%) and Kotak Mahindra Bank (down 1.32%) were major drags.

Selling was broad based. The S&P BSE Mid-Cap index fell 0.68% while the S&P BSE Small-Cap index shed 0.45%.

Sellers outnumbered buyers. On the BSE, 1591 shares rose and 1748 shares fell. A total of 93 shares were unchanged.

COVID-19 Update:

India added 1,49,394 new cases in the last 24 hours. The daily positivity rate stood at 9.27%. The country`s active caseload currently stood at 14,35,569.

Numbers to Track:

The yield on 10-year benchmark federal paper rose to 6.904% compared with its previous close of 6.889%.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.70, compared with its close of 74.8850 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.37% to Rs 48,093.

In the commodities market, Brent crude for April 2022 settlement rose $1.37 or 1.50% at $92.48 a barrel. This is the first time that the benchmark has topped $90 since October 2014. Crude prices rose as demand for petroleum products surges while supply remains constrained.

Global Markets:

European markets were trading mixed while Asian stocks closed higher on Friday. Markets in Hong Kong returned to trade on Friday after being closed for most of this week due to the Lunar New Year holidays. Over in mainland China, markets remain closed on Friday for the holidays.

U.S. stocks fell on Thursday, dragged down by technology and social-media companies, as Facebook owner Meta Platforms plunged after a disappointing earnings report. Meta Platforms shares plunged after the company`s quarterly profit fell short of expectations. The company also issued weaker-than-expected revenue guidance for the current quarter. It was the biggest drop ever for the Facebook parent.

On the data front, investors are awaiting the U.S. Labor Department`s nonfarm payroll count due Friday, which is seen as one of the major indicators of the how the U.S. economy is doing.

In Europe, the Bank of England pressed ahead with raising borrowing costs Thursday, nudging up its policy rate to 0.5% from 0.25%. The European Central Bank kept its key interest rates unchanged, but ECB President Christine Lagarde signaled concern about inflation and opened the door to a possible rate hike later this year.

Buzzing Segment

The Nifty Metal index rose 1.18% to 5,829.50. The index fell 0.31% in the previous session.

Hindustan Copper (up 5.84%), Vedanta (up 3.20%), Ratnamani Metals & Tubes (up 2.86%), Hindalco Industries (up 2.45%), Hindustan Zinc (up 1.76%), Jindal Steel and Power (up 1.63%), National Aluminium Company (up 1.03%), Tata Steel (up 0.67%), JSW Steel (up 0.59%), SAIL (up 0.43%), Welspun Corp (up 0.40%) and Adani Enterprises (up 0.15%) advanced.

Stocks in Spotlight:

Godrej Properties (GPL) slumped 9.75% to Rs 1506.55 after a foreign brokerage reportedly maintained a "sell" rating on the stock and cut its target price to Rs 1,424 from Rs 1,563.

The brokerage reportedly stated that GPL`s deal with DB Realty (DBR) lacks merit due to the direct purchase of a stake in the company. The brokerage is concerned over convoluted deal structure and risk-prone slum rehab projects of GPL. Both the deal with DBR and the foray into slum rehab project was unwarranted, it added.

The board of GPL on 3 February 2022 approved a potential investment in DBR and also the setting up of a special purpose vehicle along with DBR to jointly undertake slum rehabilitation and MHADA redevelopment projects. GPL will subscribe to warrants convertible into equity shares aggregating to approximately 10% of the issued and paid-up capital of DBR for an aggregate amount of approximately Rs 400 crore.

Meanwhile, on 3 February 2022 GPL said its consolidated net profit surged 171.43% to Rs 38.95 crore on 63.51% increase in net revenue to Rs 278.76 crore in Q3 December 2021 as compared with Q3 December 2020. Profit before tax surged 116.44% to Rs 67.94 crore in Q3 FY22 from Rs 31.39 crore in Q3 FY21. EBITDA jumped 42% year-on-year to Rs 115 crore in Q3 FY22. EBITDA margin stood at 28.8% in Q3 FY22 as against 26.6% in Q3 FY21.

ITC fell 0.06% to Rs 234.15 after the company`s standalone net profit rose 12.70% to Rs 4,156.20 crore on 32.06% increase in net revenue to Rs 15,689.29 crore in Q3 December 2021 over Q3 December 2020. EBITDA improved by 18.2% to Rs 5,102 crore in Q3 FY22 from Rs 4,315 crore in Q3 FY21. Profit before tax in the third quarter stood at Rs 5,492.03 crore, up by 12.53% from Rs 4,880.43 crore reported in the same period last year.

Aditya Birla Fashion and Retail fell 2.91%. The company`s consolidated net profit surged to Rs 197 crore in Q3 FY22 from Rs 58 crore in Q3 FY21. Revenue during the quarter increased by 44% YoY to Rs 2,987 crore. The company said that Q3 saw a sharp rise in consumer footfalls which led to strong revenue growth across channels. Improved consumer sentiment led to a sharp demand recovery that was amplified by the concentrated wedding season. EBITDA improved by 44% to Rs 609 crore in Q3 FY22 from Rs 422 crore in Q3 FY21. EBITDA margin was 20.4% in Q3 FY22 as against 20.3% in Q3 FY21.

Bank of India fell 3.34%. The PSU bank reported a 90% rise in standalone net profit to Rs 1,027 crore in Q3 FY22 from Rs 541 crore in Q3 FY21. Total income during the quarter decreased by 8% YoY to Rs 11,211 crore. Net Interest Income (NII) was Rs 3,408 crore in Q3 FY22, which is lower by 9% as compared with Rs 3,739 crore in Q3 FY21. NIM (Global) stood at 2.27% and NIM (Domestic) at 2.51% in Q3 FY22. Operating Profit stood at Rs 2,096 crore in Q3 FY22, down by 21% from Rs 2,665 crore in Q3 FY21. Provisions (other tax) and contingencies amounted to Rs 335 crore (down 81% YoY), of which provisions for non-performing assets was Rs 693 crore (up 11% YoY). Gross NPA declined by 8.97% QoQ to Rs 45,760 crore as on 31 December 2021 from Rs 50,270 crore as on 30 September 2021.

Lupin fell 3.25%. The drug company`s consolidated net profit jumped 24.47% to Rs 545.52 crore on a 3.57% rise in total revenue from operations to Rs 4160.93 crore in Q3 FY22 over Q3 FY21. Consolidated profit before tax (PBT) dropped 68.16% to Rs 167.08 crore in Q3 FY22 from Rs 524.84 crore in Q3 FY21. Total tax rebate during the quarter stood at Rs 382 crore in Q3 FY22 as against a tax expense of Rs 83.49 crore in Q3 FY21. Consolidated EBITDA skid 49.5% to Rs 403.90 crore in Q3 FY22 as compared to Rs 799.80 crore in Q3 FY21. EBITDA margin stood at 9.9% in Q3 FY22 from 20.4% in Q3 FY21.

PI Industries advanced 2.69% after the company reported 14% rise in consolidated net profit to Rs 223 crore on a 17% increase in revenue to Rs 1,356 crore in Q3 FY22 over Q3 FY21. Overheads amounted to Rs 333 crore in Q3 FY22, up by 24% from Rs 270 crore in Q3 FY21, mainly attributable to sharp increase in fuel and related utilities, shipping cost and one-time expenses pertaining to strategic initiatives. EBITDA improved by 8% to Rs 297 crore in Q3 FY22 from Rs 276 crore in Q3 FY21. EBITDA margin was 22% in Q3 FY22 as against 24% in Q3 FY21.

GAIL (India) fell 0.24%. The company`s consolidated net profit soared 100.31% to Rs 380 crore on a 66.98% surge in revenue from operations to Rs 2,617.56 crore in Q3 FY22 over Q3 FY21. Consolidated profit before tax (PBT) surged 105.46% to Rs 481.98 crore in Q3 FY22 from Rs 234.58 crore in Q3 FY21. GAIL (India) has recorded a good financial performance in the third quarter of FY2021-22 on account of improved gas marketing spread, better product prices and improved operating efficiency in petrochemicals and liquid hydrocarbons.

Devyani International fell 3.07%. On a consolidated basis, the company`s net profit rose 39.83% to Rs 66 crore on 64.71% increase in net revenue to Rs 624.40 crore in Q3 FY22 over Q3 FY21. The company said it recorded its highest-ever quarterly results in Q3 FY22. The performance surpassed pre-pandemic levels and was driven by new store openings coupled with solid momentum in demand. DIL reported improved profitability during the quarter on the back of several initiatives towards cost-optimization and improving store economics. Gross margins expanded by 270 basis points YoY to 71.4% in Q3 FY22. EBITDA improved by 67.38% to Rs 147.80 crore in Q3 FY22 from Rs 88.30 crore in Q3 FY21. EBITDA margin stood at 23.7% in Q3 FY22 as against 23.3% in Q3 FY21.

Venky`s (India) slumped 8.58% after the company`s net profit declined 80% to Rs 21.63 crore in Q3 FY22 from Rs 106.50 crore in Q3 FY21. Revenue from operations rose 18% YoY to Rs 1,098.50 crore during the quarter. Total expenses increased by 35% to Rs 1,079.77 crore in Q3 FY22 over Q3 FY21, due to a surge in raw material costs (up 45% YoY) and higher other expenses (up 13% YoY). "The profit margins of the poultry and poultry products segment for the quarter as well as for the 9 months ended 31st December, 2021 have been severely affected due to steep rise in the prices of key poultry feed ingredients, especially soya which has seen unprecedented increase. The performance of Animal Health Products and Oilseed segments has been good,� the company said in a statement.

Primary Market:

The initial public offer (IPO) of Vedant Fashions (Manyavar) received bids for 35,32,872 shares as against 2,54,55,388 shares on offer, according to stock exchange data at 17:00 IST on Friday (4 February 2022). The issue was subscribed 14%.

The issue opened for bidding on 4 January 2022 and it will close on 8 February 2022. The price band of the IPO is fixed at Rs 824-866. An investor can bid for a minimum of 17 equity shares and in multiples thereof.

Vedant Fashions is engaged in retailing of ethnic wear. Its Manyavar brand is a category leader in the branded Indian wedding and celebration wear market with a pan India presence. Its other brands include Twamev, Manthan, Mohey and Mebaz. The Manyavar brand accounts for about 80% of the company`s revenues.

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