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Shares witness steep losses; Nifty below 17,000 level

Published on Jan 27, 2022 10:35

The benchmark indices were trading with deep losses in morning trade, tracking weak global cues. Fears of monetary policy tightening, geo-political tensions of Russia invading Ukraine and firm crude oil prices dented investors sentiment. Media and PSU banks shares bucked weak market trend. The Nifty fell below the 17,000 mark.

At 10:30 IST, the barometer index, the S&P BSE Sensex, dropped 979.45 points or 1.69% at 56,878.70. The Nifty 50 index lost 298.60 points or 1.73% at 16,979.35.

In the broader market, the S&P BSE Mid-Cap index fell 1.97% while the S&P BSE Small-Cap index slipped 0.77%.

The market breadth was weak. On the BSE, 1,141 shares rose and 1,861 shares fell. A total of 98 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 7,094.48 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 4,534.53 crore in the Indian equity market on 25 January 2022, provisional data showed.

The Budget session of Parliament is set to commence on 31 January 2022 and will conclude on 8 April 2022. The government will present the Budget for fiscal 2022-23 on 1 February 2022. The Economic Survey is likely to be tabled on 31 January 2022 after the president`s address.

On the political front, developments in the upcoming assembly polls in Uttar Pradesh, Uttarakhand, Goa, Punjab, and Manipur will be closely watched. Polls in all the five states will be held between 10 February 2022 and 7 March 2022 in seven phases. The counting of votes and the result will be declared on 10 March 2022.

Upcoming Results:

Bharat Heavy Electricals (BHEL), Punjab National Bank (PNB), RBL Bank, Canara Bank, AIA Engineering, Arvind, Aurionpro Solutions, Birlasoft, CG Power and Industrial Solutions, Chalet Hotels, Coforge, Colgate-Palmolive, Dalmia Bharat, Exxaro Tiles, Fino Payments Bank, GHCL, Gujarat Mineral Development Corporation, Home First Finance Company, HSIL, Laurus Labs, LIC Housing Finance, Mahindra Logistics, CE Info Systems, Motilal Oswal Financial Services, Nippon Life India Asset Management, PSP Projects, Route Mobile, Transport Corporation of India, Wabco India and Wockhardt will announce their quarterly results today.

Economy:

The International Monetary Fund (IMF) has raised its forecast for growth in India`s gross domestic product (GDP) in FY23 by 50 basis points (bps) to 9%. India`s GDP growth forecast for FY24 was also raised by 50 bps to 7.1%. Explaining the upward revision in an update to its World Economic Outlook report, the IMF said it expects an improvement in India`s credit growth which would boost consumption and investment and "better-than-anticipated performance of the financial sector".

Buzzing Index:

The Nifty IT index declined 2.92% to 33,694.10. The index lost 13.21% in eight trading sessions.

MindTree (down 6.46%), L&T Technological Services (LTTS) (down 4.72%), L&T Infotech (LTI) (down 4.36%), Coforge (down 4.18%) and HCL Technologies (down 3.97%) were the top losers in the IT segment.

Wipro skid 3.04%. The IT major completed the acquisition of additional 13.3% equity stake in Encore Theme. Consequently, the company`s holding in Encore Theme increased from 83.4% to 96.7%.

Stocks in Spotlight:

Cipla rose 0.58%. The pharmaceutical major reported a 2.6% decline in consolidated net profit to Rs 729 crore in Q3 FY22 from Rs 748 crore posted in Q3 FY21. The drug maker`s total revenue from operations grew by 6% year on year to Rs 5,479 crore in Q3 FY22 over Q3 FY21. Consolidated profit before tax grew by 3.2% to Rs 1,054 crore in Q3 FY22 over same period last year. Consolidated EBITDA fell 3% to Rs 1,243 crore in Q3 FY22 from Rs 1,281 crore posted in the same quarter last year. EBITDA margin declined to 22.7% in Q3 FY22 from 24.8% in Q3 FY21.

United Spirits fell 2.31%. United Spirits reported 26.6% rise in standalone net profit to Rs 291.1 crore on a 15.9% increase in net sales to Rs 2,884.7 crore in Q3 FY22 over Q3 FY21. The company said that the growth in sales reflected a strong quarter driven by resilient consumer demand in the off-trade channel, continued premiumisation and recovery of the on-trade channel. Underlying net sales increased 14.3%, excluding the one-off sale of bulk scotch.

Gross margin was 44.1%, down 49 bps on a reported basis, driven by input cost inflation, partially offset by favourable product mix and productivity savings. Adjusting the one-off sale of bulk scotch, underlying gross margin was 44.3%, down 31 bps. Reported EBITDA was Rs 491 crore, up 27.9%. Reported EBITDA margin was 17.0%, up 159 bps, primarily driven by operating leverage on fixed costs. The company upweighted its investment in marketing to support strategic priorities and on-going demand growth initiatives.

SRF dropped 5.60%. The company`s consolidated net profit rose 55.68% to Rs 505.54 crore on 55.64% rise in net sales to Rs 3314.14 crore in Q3 December 2021 over Q3 December 2020. On a consolidated basis, profit before tax jumped 65% year-on-year to Rs 730.28 crore in Q3 December 2021. The company`s Earnings before Interest and Tax (EBIT) increased 66% to Rs 796 crore in Q3FY22 when compared with the same period last year.

Total expenses jumped 52.22% to Rs 2626.26 crore with cost of materials consumed rising 55.39% to Rs 1739.73 crore during the period under review. Power and fuel expense rose 54.24% to Rs 300.18 during the period under review.

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