Shares trade with steep losses

Key equity indices continued to trade with significant losses in morning trade. Selling was broad based with banks, financials, realty shares declining the most. A spike in domestic coronavirus cases and localized lockdown being announced by various state governments dented investors sentiment.

At 10:24 IST, the barometer index, the S&P BSE Sensex, was down 1201.29 points or 2.46% to 47,630.74. The Nifty 50 index lost 352.90 points or 2.41% to 14,264.95.

In the broader market, the S&P BSE Mid-Cap index fell 2.44% while the S&P BSE Small-Cap index slipped 2.04%.

The market breadth was weak. On the BSE, 486 shares rose and 2051 shares fell. A total of 138 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 141,125,074 with 3,017,632 deaths.

India reported 1,929,329 active cases of COVID-19 infection and 178,769 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

Several states like Maharashtra, Delhi, Rajasthan, Uttar Pradesh, Kerala, Karnataka etc continued to witness a record surge on Sunday. In view of the unprecedented surge, governments have imposed weekend lockdowns, night curfews etc in their respective states. The state of Rajasthan, for example, began a "self-discipline fortnight" on Monday which will be in effect till 5am on May 3.

Buzzing Index:

The Nifty IT index fell 1.07% to 26,042.20. The index had advanced 1.83% in the past two sessions.

Mphasis (down 2.17%), Tech Mahindra (down 2%), Larsen & Toubro Infotech (down 1.88%), Coforge (down 1.24%), TCS (down 1.13%), HCL Tech (down 0.90%), Infosys (down 0.83%), Info Edge India (down 0.69%) and Wipro (down 0.56%) declined.

Earnings Today:

ACC (down 1.79%), Bajaj Consumer (down 3.32%), Crisil (down 2.39%) and ICICI Prudential (down 1.51%) are some of the companies that will announce their quarterly earnings today.

Earnings Impact:

HDFC Bank fell 2.94% to Rs 1386.40. The private lender reported 18.2% rise in net profit to Rs 8,186.51 crore in Q4 FY21 compared with Rs 6,927.69 crore in Q4 FY20. Total income of the bank rose 5.8% year-on-year (YoY) to Rs 38,017.50 crore during the quarter.

Net interest income for the quarter ended 31 March 2021 grew by 12.6% to Rs 17,120.20 crore from Rs 15,204.10 crore for the quarter ended 31 March 2020, driven by advances growth of 14%, and a core net interest margin of 4.2%. Other income stood at Rs 7,593.90 crore in Q4 FY21, up by 25.9% from Rs 6,032.60 crore in Q4 FY20.

On the asset quality side, Gross non-performing assets were at 1.32% of gross advances as on 31 March 2021, as against 1.38% (proforma approach) as on 31 December 2020 and 1.26% as on 31 March 2020.

Net non-performing assets were at 0.40% of gross advances as on 31 March 2021, as against 0.40% (proforma approach) as on 31 December 2020 and 0.36% as on 31 March 2020.

Provisions and contingencies for the quarter ended March 31, 2021 were Rs 4,693.7 crore (including a build of approximately Rs 1,300 crore in contingent provisions) as against Rs 3,784.5 crore for the quarter ended 31 March 2020.

The bank continues to hold provisions as on 31 March 2021 against the potential impact of COVID-19 based on the information available at this point in time and the same are in excess of the RBI prescribed norms. The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 5,861 crore as on 31 March 2021. Total provisions (comprising specific, floating, contingent and general provisions) were 153% of the gross non-performing loans as on 31 March 2021.

"Given that the current second wave has significantly increased the number of COVID-19 cases in India and uncertainty remains, the board of directors of the bank, at its meeting held on 17 April 2021, has considered it prudent to currently not propose dividend for the financial year ended 31 March 2021," the private lender said in a statement.

Separately, the bank informed that the board of directors of the bank approved issuance of Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and Long Term Bonds (financing of infrastructure and affordable housing) up to a total amount of Rs 50,000 crore in the period of next twelve months through private placement mode.

Mindtree rose 2.63% to Rs 2121.90. The company reported a 2.8% decline in consolidated net profit to Rs 317.30 crore on 4.2% increase in revenues to Rs 2,109.30 crore in Q4 March 2021 over Q3 December 2020.

EBITDA in the fourth quarter fell 1.1% to Rs 462.6 crore from Rs 467.90 crore in the same period last year. EBITDA margin was at 21.9% as on 31 March 2021 compared with 23.1% as on 31 December 2020.

As compared to Q3 FY21, Mindtree has added one client in $5 million category during the quarter, but witnessed reduction of 2 clients in $1 million band and 1 client in $10 million band. The total active clients at the end of March 2021 stood at 270, down from 276 clients seen at the end of December 2020.

Stocks in Spotlight:

Angel Broking tanked 3.98% to Rs 310.20 after Vinay Agrawal, the whole-time director and chief executive officer (CEO) of the company passed away on Saturday, 17 April 2021.

ISGEC Heavy Engineering rose 1.73% to Rs 528.90. The company has signed a project-specific collaboration pact with United Conveyor Corp., USA, for Dry Sorbent Injection (DSI) technology. The DSI technology can be used to reduce sulphur dioxide emissions from thermal power plants.

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