Sensex drops 770 pts, Nifty holds 17,550 mark; HDFC twins drag

Benchmark indices ended with deep losses on Thursday as investors locked profits after a three-day rally. The Nifty closed above the 17,550 mark after hitting the day`s low of 17,511.15 in late trade. Auto stocks bucked a broader selling pressure.

The barometer index, the S&P BSE Sensex, dropped 770.31 points or 1.29% at 58,788.02. The Nifty 50 index lost 219.80 points or 1.24% at 17,560.20. Both the indices climbed about 4% in the past three sessions.

HDFC (down 3.23%), Infosys (down 2.76%), Reliance Industries (down 1.29%) and HDFC Bank (down 1.10%) were major drags.

Selling was broad-based. The S&P BSE Mid-Cap index fell 0.9% while the S&P BSE Small-Cap index declined 0.38%.

The market breadth was positive. On the BSE, 1,704 shares rose and 1,653 shares fell. A total of 81 shares were unchanged.

Economy:

IHS Markit India Services PMI came at 51.5 in January 2022 lower than 55.5 posted in December 2021. The headline figure pointed to the slowest rate of expansion in the current six month sequence of growth. The upturn was reportedly stymied by the intensification of the pandemic, the reintroduction of restrictions and inflationary pressures.

Numbers to Track:

The yield on 10-year benchmark federal paper fell to 6.889% compared with its previous close of 6.880%.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.8850, compared with its close of 74.83 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.08% to Rs 47,961.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, rose 0.30% to 96.22.

In the commodities market, Brent crude for April 2022 settlement fell 92 cents or 1.03% at $88.55 a barrel.

Global Markets:

In US, Dow Jones index futures were down 101 points, indicating a negative opening in the US stocks today.

European markets fell across the board while Asian stocks ended on a mixed note on Thursday amid some lingering concerns about global growth and ongoing geopolitical tensions. A number of major markets, including those on the Chinese mainland and in Hong Kong, were shut for the Lunar New Year holidays.

US stocks rose for a fourth straight day Wednesday, as Alphabet propelled gains in tech thanks to strong quarterly earnings. Shares of Google-parent Alphabet surged after its quarterly numbers topped analyst expectations. The company also announced a 20-for-1 stock split.

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.

Meanwhile, the United States is sending 2,000 additional soldiers to Europe and repositioning another 1,000 from Germany to Romania to ensure the "robust defence" of European NATO members, amid the ongoing impasse between Russia and Ukraine.

That deployment comes as an estimated 100,000 Russian troops equipped with advanced weaponry line Ukraine`s eastern border with Russia and northern border with Belarus, which is an ally to Moscow.

Buzzing Segment:

The Nifty Auto index rose 0.44% to 11,683.40. The index has risen 0.58% in two sessions.

TVS Motor Company (up 4.37%), Hero MotoCorp (up 2.3%), Bajaj Auto (up 2.09%), Ashok Leyland (up 1.45%), Tube Investments of India (up 1.34%), Maruti Suzuki India (up 0.75%) and Balkrishna Industries (up 0.12%) advanced.

Stocks in Spotlight:

Coromandel International rallied 3.09% after the company`s consolidated net profit surged 14.31% to Rs 381.58 crore on a 43.60% jump in revenue from operations to Rs 5,073.60 crore in Q3 FY22 over Q3 FY21. Profit before tax (PBT) soared 14.44% to Rs 511.38 crore in Q3 FY22 from Rs 446.84 crore in Q3 FY21.

Westlife Development rose 0.55%. The company reported a consolidated net profit of Rs 20.82 crore in Q3 FY22 as against a net profit of Rs 0.11 crore in Q3 FY21. Total revenue increased by 46.7% YoY to Rs 476.83 crore during the quarter. This was driven by growth across both dine-in and convenience channels that grew bya solid 39% and 55% respectively. The company`s same store sales growth for the quarter stood at 44% YoY. Operating EBITDA increased by 66.7% to Rs 83.45 crore in Q3 FY22 from Rs 50.06 crore in Q3 FY21. Operating EBITDA margin was 17.5% in Q3 FY22 as against 15.4% in Q3 FY21.

Radico Khaitan fell 2.46% after the liquor maker`s standalone net profit declined 4.7% to Rs 76.71 crore in Q3 December 2021 as against Rs 80.53 crore reported in Q3 December 2020. On a standalone basis, revenue from operations increased by 12% to Rs 765.99 crore in Q3 December 2021 from Rs 684.21 crore in Q3 December 2021.

Titan Company rose 0.46%. The company reported a standalone net profit of Rs 987 crore in Q3 FY22 as against a net profit of Rs 419 crore Q3 FY21, recording a growth of 136% on YoY basis. The company`s revenue excluding bullion sales grew by 36% in Q3 FY22 compared to Q3 FY21. The total income for the quarter was Rs 9,570 crore, registering a growth of 31% as compared to Rs 7,324 crore in Q3 FY21. The Jewellery business registered an income of Rs 8,563 crore with 37% YoY growth in Q3 FY22. The Watches and Wearables business recorded an income of Rs 708 crore with 29% YoY growth in Q3 FY22. The Eyewear business recorded an income of Rs 156 crore with 26% YoY growth in Q3 FY22. The other segments of the company comprising Indian dress wear and fragrances & accessories recorded an income of Rs 52 crore in Q3 FY22 compared to Rs 36 crore in Q3 FY21, a growth of 44%. The strong recovery and the product mix improvement helped the company achieve profit before taxes and exceptional items of Rs 1,317 crore for the quarter compared to Rs 765 crore in the same quarter previous year, registering a growth of 72%.

Godrej Properties lost 6.41%. The realtor`s consolidated net profit soared 171.4% to Rs 38.95 crore in Q3 FY22 over Q3 FY21. The company`s net sales jumped 63.5% to Rs 278.76 crore in Q3 FY22 over Q3 FY21. Consolidated profit before tax jumped 116.4% to Rs 67.94 crore in Q3 FY22 as against Rs 31.39 crore in Q3 FY21. The Q3 FY22 witnessed a total booking value of Rs 1,541 crore and total booking volume of 2.22 million sq. ft. as compared to total booking value of Rs 1,488 and total booking volume of 2.40 million sq. ft. in Q3 FY21. Consolidated EBITDA grew 42% to Rs 115 crore in Q3 FY22 as compared to Rs 81 crore in Q3 FY21. Godrej Properties added three new projects with saleable area of 2.4 million sq. ft. in Q3 FY22.

Cadila Healthcare declined 1.66% after the company`s consolidated net profit fell 5.08% year on year to Rs 500.40 crore in Q3 FY22. Revenue from operations stood at Rs 3,655 crore in Q3 FY22. Profit before tax rose 1.46% to Rs 599 crore in Q3 FY22 over Q3 FY21. Earnings before Interest, Depreciation and Tax (EBIDTA) stood at Rs 753 crore, down 1.83% YoY and down 12.54% QoQ. India formulations business posted revenues of Rs 1079 crore during the quarter. The branded formulations business posted a robust double-digit growth of 17% on a y-o-y basis.

Radico Khaitan fell 2.46% after the liquor maker`s standalone net profit declined 4.7% to Rs 76.71 crore in Q3 FY22 as against Rs 80.53 crore reported in Q3 FY21. Revenue from operations increased by 12% to Rs 765.99 crore in Q3 FY22 from Rs 684.21 crore in Q3 FY21. Total Indian Made Foreign Liquor (IMFL) volume growth was 7.4% y-o-y led by Prestige & Above category volume growth of 18.2%. Prestige & Above net revenue growth was 21.5% compared to Q3 FY2021. IMFL sales value accounted for 82.1% T(vs. 81.7% in Q3 FY2021) of the Revenue from Operations (Net). EBITDA fell 4.2% to Rs 118.71 crore in Q3 FY22 from Rs 123.98 crore in Q3 FY21. EBITDA margin slipped to 15.5% in Q3 FY22 from 18.1% in Q3 FY21.

Varun Beverages (VBL) rose 0.66%. On a consolidated basis, the company reported a net profit of Rs 16.49 crore in Q4 December 2021 as against net loss of Rs 19.73 crore in Q4 December 2020. Net sales rose 30.31% to Rs 1,734.33 crore in Q4 December 2021 over Q4 December 2020, primarily on account of strong volume growth. Total sales volumes were up by 28.5% YoY at 112.0 million cases in Q4 CY 2021. Pre-tax profit stood at Rs 41.85 crore in Q4 December 2021 as against pre-tax loss of Rs 18.86 crore in Q4 December 2020. EBITDA increased 20.5% to Rs 207.57 crore in Q4 CY 2021 from Rs 172.23 crore. Despite being a seasonally weak quarter, the company reported a positive PAT led by improvement in profitability of international operations and lower financing cost. Finance cost in Q4 CY 2021 declined by 39.8% owing to lower average cost of borrowing.

Tata Consumer Products fell 0.62%. The FMCG company reported a 38.1% rise in consolidated net profit to Rs 194.48 crore in Q3 FY22 from Rs 140.86 crore posted in Q3 FY21. Net sales increased by 3.5% to Rs 2,030.48 crore in Q3 FY22 over Q3 FY21. EBITDA improved by 28% to Rs 468 crore in Q3 FY22 from Rs 365 crore in Q3 FY21. EBITDA margin was 14.6% in Q3 FY22 as against 11.9% in Q3 FY21.

Welspun Enterprises tumbled 7.18% after the company`s consolidated net profit slumped 66.6% to Rs 12.94 crore on a 42.9% fall in net sales to Rs 241.58 crore in Q3 FY22 over Q3 FY21. Consolidated EBITDA dropped 32.1% to Rs 56.6 crore in Q3 FY22 as against Rs 83.3 crore in Q3 FY21. EBITDA margin improved to 19.9% in Q3 December 2021 from 17.9% in Q3 December 2020. Profit margin stood at 5.4% in Q3 December 2021 from 9.2% in Q3 December 2020.

IIFL Wealth Management gained 1.89%. The company`s consolidated net profit rose 58.52% to Rs 152.94 crore on 22.53% increase in total income to Rs 570.62 crore in Q3 December 2021 over Q3 December 2020. On a consolidated basis, profit before tax rose 54.67% to Rs 197.87 crore in Q3 December 2021 over Q3 December 2020. Annual Recurring Revenues stood at Rs 245 crore, up 10% Q-o-Q and 59% Y-o-Y. Total AUM is up 2.4% Q-o-Q and up 31.1% Y-o-Y at Rs 2,62,780 crore. Total expenses rose 10.36% year-on-year to Rs 372.74 crore in Q3 December 2021. Employee expenses jumped 56.90% to Rs 168.57 crore during the period under review. From FY 23 onwards, the company expects the overall employee cost to stabilize around 32-33% of total revenues.

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