Sensex sheds 230 pts, Nifty down 80 pts; FMCG, Metal lag; Bank gains

Indices shed 0.4% with Sensex dropping 235 pts and Nifty 80 points

Indian indices remained under pressure for the second day tracking the overnight fall at Wall Street along with stocks with disappointing earnings reports dragging the overall market. The indices stayed around the flat line for most of the session but moved in the negative zone towards the end to close 0.4% lower.

Sensex shed 236 points to close at 60,621. Nifty managed to defend the 18,000 mark to close at 18,027, a drop of 80 points.

FMCG, Consumer Durables, Metal and Media shed the most in today’s session, with each dropping around a percentage point. Bank indices were the only notable gainers, while most other sectors ended in the red.

Hindustan Unilever dropped more than 3% after they declared their quarterly earnings reports on Thursday. Asian Paints, Bajaj Finance, Nestle India and JSW Steel were other prominent stocks that ended in the red with each dropping more than 2%. Coal India, HDFC Bank, HDFC, Power Grid and ITC climbed in today’s session.

Japan’s Nikkei share average reversed its early losses to end higher as sentiment was boosted by higher U.S. futures after Wall Street losses overnight and a weaker yen. The Nikkei ended the day up 0.56% having fallen as much as 0.3% earlier in the day tracking Wall Street losses. The index posted a 1.66% weekly gain. The broader Topix rose 0.59% and gained 1.25% for the week.

China stocks ended higher on Friday ahead of the Lunar New Year holidays, as strong foreign inflows boosted sentiment after the country said the worst in its battle against COVID-19 was over.

China’s blue-chip CSI 300 Index added 0.6%, touching a 5-month high, and the Shanghai Composite Index gained 0.8%. Hong Kong’s Hang Seng Index rose 1.8%, while the Hang Seng China Enterprises Index climbed 2.3%. In the week ahead of China’s new year holidays, the CSI 300 Index added 2.6%, while the Hang Seng benchmark was up 1.4%.

European shares climbed in the morning session as optimistic investors gauged the potential impact of a week-long Lunar New Year holidays after China lifted its COVID-19 curbs, even as concerns over global economic slowdown continued to sap sentiment. The pan-European STOXX 600 was up in the morning boosted by banks and industrials.

UK’s commodity-heavy FTSE 100 bounced back on Friday after ending lower in the previous session supported by miners and energy firms, while marketing firm 4imprint jumped on an upbeat profit forecast. The export-oriented FTSE 100 rose in the morning but was set to end the week in the red.

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Back India remains bright spot amid geopolitical uncertainty: WEF Chairman

Klaus Schwab, the chairman of the World Economic Forum, said that India remains a bright spot amid global geo-economics and a prolonged geopolitical crises. “I had the pleasure of meeting the Indian ministerial delegation and many of its top business leaders,” Schwab said.

As global economic slowdown seems to worsen, the WEF chairman said: “I commend the country’s decisive action on the climate case for renewables, its contribution to the global healthcare ecosystem, the focus on an economic model for women-led development, and its leadership on digital public infrastructure. India remains a bright spot amid global geo-economics and geopolitical crises.” (Read More)

Indian banks’ switch to IFRS accounting norms unlikely to hit rating -Fitch

The benefits of Indian banks’ switching to the International Financial Reporting Standards (IFRS) accounting rules will outweigh any short-term impact on capital levels and is unlikely to drive rating changes, said credit rating agency Fitch.

While the Reserve Bank of India has not yet set a deadline to shift from the Generally Accepted Accounting Principles (GAAP) standard, Fitch said lenders have been expecting the move and should be able to recalibrate to final guidelines quickly.

“The transition will probably negatively affect banks’ capital levels as more impairment charges are front-loaded but should bring qualitative benefits in credit risk management over the longer term,” Fitch said in a note on Friday.

However, it warned that specific banks’ capital and risk management responses could have an impact on their standalone viability ratings.

The RBI introduced a discussion paper last week that suggested banks make provisions for bad loans using the expected credit loss (ECL) method. (Reuters)

HDFC Life reports 15% jump in Q3 profit as premiums climb

HDFC Life Insurance Co reported a 15% rise in third-quarter profit on Friday, driven by higher income from premiums and its investments and said it expects to sell more policies in the next few quarters.

“Insurance as a sector continues to be a beneficiary of a relatively robust economy, stable savings trends and favourable regulatory regime,” Vibha Padalkar, managing director and chief executive, said in a statement.

Though growth in retail protection was tepid on a year-over-year basis, it rose 13% sequentially, said Padalkar.

“… we expect individual protection to continue picking up in the coming quarters.”

The Mumbai-based insurer said profit rose to 3.15 billion rupees ($38.8 million) in the third quarter ended Dec. 31, from 2.74 billion rupees a year ago.

Its net premium income rose 18.6% to 143.79 billion rupees, while income from investments more than doubled to 49.28 billion rupees. (Reuters)

Metal index sheds with half of the stocks in red; Hindustan Zinc drags the index as it drops 7%

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Back Air India urination case: DGCA imposes ₹30 lakh penalty on airline

Air India Pee-Gate case: The Directorate General of Civil Aviation (DGCA) has imposed a penalty of ₹30 lakhs on Air India for the violation of rules after the New York-Delhi flight passenger Shankar Mishra urinated on an elderly woman. In addition, the Pilot-In-Command has also been suspended for three months for failing to discharge his duties and a fine of ₹3 lakhs has also been levied on AI’s Director-in-flight services. (Read More)

PL Stock Report – Rallis India (RALI IN): Dismal performance; Miss on all fronts – Downgrade to ‘HOLD

Rallis India (RALI IN) – Himanshu Binani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Rating: HOLD | CMP: Rs224 | TP: Rs240

Q3FY23 Result Update – Dismal performance; Miss on all fronts

Quick Pointers:

§ Domestic business grew 8%YoY, while exports business declined 7%YoY.

§ Seed revenues down 14% YoY to Rs240mn.

We trim our EPS estimates by 7%/5%/5% for FY23E/24E/25E citing slower revenue growth & margin pressure and downgrade to ‘HOLD’ from BUY with revised TP of Rs240 from Rs250 earlier based on 18xFY25 EPS (due to limited upside from the CMP).

Rallis India (RALI) 3QFY23 results were below of our and consensus expectations, primarily led by subdued growth across business segments. Domestic crop protection (CP) revenue grew 8% YoY (largely led by price growth) resulting in overall crop care segment growth of 1% YoY. The company launched 3 new products under 9(3) and 9(4) category in 9MFY23. Export revenues were down by 7% YoY, due to higher inventory build-up resulting in lower volumes. While, in CRAMS business- PEKK is expected to revive by FY23 end. Seed revenues were down 14% YoY to Rs240mn. Gross margins contracted by 80bps YoY coupled with higher opex (including one-off of Rs40mn towards provisions for retrospective rent demand by MBPA) resulting into EBITDA margin contraction of 220bps YoY to 8.5%. We expect Revenue/PAT CAGR of 14%/16% over FY22-FY25E, led by domestic market share gains and export ramp-up. Downgrade to ‘Hold’.

IndusInd Bank shines in today’s trading as one of the top gainers 

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India regulator opts for principles-backed approach on ESG ratings -sources

India’s market regulator will adopt a principles-based, rather than prescriptive, approach in its first set of rules, expected over the next few months, for rating a company on environment, social and governance (ESG) issues, two sources said.

The move by the Securities and Exchange Board of India (SEBI) would allow such scores to be assigned to more companies, making it increasingly possible for investors to assess businesses with a yardstick seen to be growing in importance.

The regulator will canvass public opinion on draft rules set to be unveiled in the next two to three months, which it aims to finalise this year.

That follows steps by global regulators such as the European Securities and Market Authority (ESMA), the Securities Exchange Commission in the United States and the China Securities Regulatory Commission (CSRC).

Details of the Indian rules have not been reported previously. (PTI)

Sustaining 19.5% growth in direct tax mop-up in FY24 may be difficult: Source

Sustaining the current 19.5 per cent growth rate in income and corporate tax collections may be difficult in next fiscal year given headwinds from a slowing world and high base effect, a government source said.

Net direct taxes, which are made up of personal income tax and the tax levied on corporate earnings, have seen a record growth in current fiscal year, topping up the numbers projected in the Budget.

The expected lower nominal GDP growth in 2023-24 on the back of threats of global recession could impact income tax collection, the government source told reporters ahead of the presentation of Union Budget 2023-24 on February 1.

The net direct tax collection grew 19.55 per cent to ₹12.31 lakh crore till January 10. This is 86.68 per cent of the Budget estimates for current fiscal year.

The forthcoming Budget will have revised revenue estimates for current fiscal year as well as tax collection estimates for the next year.

“It would be difficult to maintain current 19.5 per cent growth rate in net direct taxes in 2023-24,” the source said. (PTI)

UK Retail Sales Fall Unexpectedly Finishing Worst Year on Record

UK retail sales fell unexpectedly last month, capping the worst year on record after a cost-of-living squeeze and strikes rattled the industry.

The volume of goods purchased in shops and online dropped 1% in December after a decline of 0.5% the month before, the Office for National Statistics said Friday. Economists had expected a gain of 0.5%.

The drop was driven by non-food sales as “consumers cut back on spending because of increased prices and affordability concerns,” the ONS said.

Retail sales fell 5.8% from a year ago, the sharpest decline since records began in 1997. Excluding fuel sales, the drop was 6.1%, also the most in records going back to 1989.

In a sign of how red-hot inflation is eroding consumers’ spending power, sales were 13.6% higher in value terms in December compared with pre-Covid levels, but volumes were 1.7% lower. That means consumers are having to pay more to buy less. (Bloomberg)

YES SECURITIES – Stylam Ind BUY; Havells BUY; AU Bank; L&T Tech; Polycab

Stylam Industries Ltd (SYIL IN) Result Report Q3 FY23

Recommendation: BUY CMP: ₹1,060 Target Price: ₹1,534 Potential Return: +45%

We expect revenue growth of 33% over FY22-FY24E. We reckon EBITDA margins to improve steadily with contraction in input cost & increase in contribution from value-added products. Hence, we expect margins to come in at 15.5%/16.5% in FY23E/FY24E respectively. We reiterate our BUY rating on the stock with a target price of Rs1,534 (revised upwards by 7%), valuing the company at P/E(x) of 20x on FY24E EPS of Rs76.7.

Havells India Ltd (HAVL IN): Result Report Q3 FY23

Recommendation: BUY CMP: ₹1,205 Target Price: ₹1,480 Potential Return: +22.0%

Outperformance to continue; reiterate BUY

Havells has once again delivered inline revenue growth with sequential margin improvement. Growth was aided by higher volumes across the product categories with B2B side faring better while B2C business saw impact of high inflationary environment. Margins saw sequential improvement on back of stable commodity prices as most of the high‐cost inventory for Havells was liquidated in Q3. We estimate EBITDA and PAT CAGR of 13% and 16% respectively. We maintain our target price to ₹1,480 valuing the stock at 55x and roll forward our target multiple and reiterate our BUY rating.

AU Small Finance Bank (AUBANK IN) Result Report Q3 FY23

Recommendation: ADD CMP: ₹621 Target Price: ₹745 Potential Return: +20.0%

Core income growth and asset quality remains strong

AU Bank delivered a stronger performance over expectations set by the pre-quarter disclosures. Adjusted for the lower PSL income, there was a PPOP/PAT beat of 5-6%/10-11% respectively. Notably, bad debts recovery and the quantum of contingency/restructuring provisions utilization/reversal was higher in this quarter. At the core, growth in NII and Opex was in-line with expectations, while fee growth and asset quality trends were stronger. Resilient NIM, improving core fee yield, mild moderation in cost/income ratio and modest credit cost underpinned robust RoA/RoE (2%/15%) performance. Our FY23/24 earnings estimates underwent mild upgrades. While we hold constructive view on the stock with an ADD rating (12m PT of Rs745), NIM/Spread and cost/income trends would be closely monitored.

L&T Technology Services (LTTS IN) Result Report Q3 FY23

Recommendation: NEUTRAL CMP: ₹3,397 Target Price: ₹3,502 Potential Return: +3%

Mixed operating performance for the quarter; seeing signs of softness in certain segments

L&T Technology Services (INFO) reported mixed financial performance for the quarter. While, the revenue growth was below with estimates, EBIT margin came slightly above expectation. It reported revenue growth of 0.4% QoQ in USD terms, led by Transportation vertical( up 4.4% QoQ) and Industrial products( up 0.9% QoQ). The INR reported growth of 2.7% QoQ was supported by depreciation of INR by 2.9% QoQ vs USD. There was sequential improvement in EBIT margin(up 51 bps QoQ) led by control on other expenses. There was slight decrease in reported employee attrition as LTM attrition decreased by 80 bps QoQ to 23.3%. We maintain our NEUTRAL rating on the stock with revised target price of ₹3,502/share at 28.5x on FY24E EPS.

Polycab India Ltd (POLYCAB IN) Q3FY23 Result First Cut

Strong performance led by wires and cables

Our view – The stock is currently trading at 29x FY24E P/E and 20x EV/EBITDA. We remain positive on the stock with BUY rating with TP of Rs3,341. Given the strength in the balance sheet, focus on B2C business and increasing efficiencies should lead to stock trading at higher multiple.

Swiggy to lay off hundreds of employees

Indian food delivery firm Swiggy on Friday said it will lay off 380 employees, citing challenging macroeconomic conditions and slowdown in growth of its food delivery business.

Apart from startups, big tech global tech firms including Facebook-owner Meta, Amazon, Twitter and Salesforce have also announced thousands of layoffs. The redundancies follow a major hiring spree during the height of the coronavirus pandemic when companies scrambled to meet demand as people went online for work, shopping and entertainment. (Read More)

Consumer Durable index among biggest laggards in today’s sessions as most stocks trade in red

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India to encourage greater investments in Sri Lanka’s economy: EAM Jaishankar

India will encourage greater investments in Sri Lanka’s economy, especially in areas of energy, tourism and infrastructure, External Affairs Minister S Jaishankar said on Friday, as he expressed India’s solidarity with the debt-ridden Island nation during its “difficult moments”.

Jaishankar, who is here on a two-day visit, called on President Ranil Wickremesinghe on Friday morning.

“My primary purpose to visit Colombo is to express India’s solidarity with Sri Lanka during these difficult moments,” Jaishankar said in a press statement.

“We’ve had a very good discussion that follows up on my meetings with my counterpart and other Sri Lankan ministers yesterday (Thursday) evening,” he said.

India has extended about USD 4 billion in terms of credits and rollovers to help Sri Lanka get through an economic crisis.

“For us, it was an issue of the neighbourhood first and not leaving a partner to fend for themselves,” Jaishankar said. (PTI)

Indices trade flat in today’s session as FMCG and Consumer Durable drag, while Bank index remains steady

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Tata Tech IPO, the first from the Tatas after 2004, should cheer investors

Tata Motors Ltd issued a statement to all the stock exchanges on December 12, 2022, soon after the conclusion of its board meeting on the same day, that it proposed to explore the possible partial divestment of shares in its wholly-owned subsidiary Tata Technologies Ltd through the initial public offer (IPO) route sometime in the future in what is good news for Tata Motors shareholders because it helps the company unlock value and reduce its debt burden.

Yet, the market has not greeted this news enthusiastically. The share price rose initially on the news but then dropped and not recovered since then. This could be due to an overall bearish sentiment that has gripped markets worldwide. Alternatively, it could be that investors have chosen to sit on their hands till the Tata Motors management shares more information about the proposal and the full purport or details of the disinvestment is available. Or, as a third option, investors do not perhaps view the disinvestment as value accretive to the company. We will get to that shortly. (Read More)

Tanishq enters American market; first store inaugurated by Senator Robert Menendez

Tanishq, India’s leading jewelry retail brand from the house of Tata, has entered the American market and its first store, in New Jersey’s Little India, was inaugurated by Senator Robert Menendez this week.

“Oak Tree road is the jewelry capital of New Jersey,” Menendez, Chairman of the powerful Foreign Relations Committee, told a gathering of jewelers, local businessmen and Indian Americans.

While Oak Tree Road has more than a dozen jewelry stores, mostly owned by Indian Americans, Menendez said the arrival of Tanishq at this popular Indian shopping destination is significant and different from others.

“Some people might look at it as another jewelry store …, a new business, but this is different … because of the creativity of the designer … to create very unique pieces,” the Senator said.

A Senator inaugurating a jewelry store is very rare in American politics. (PTI)

Moody’s upgrades ratings on 3 Indian state-run banks, affirms SBI at Baa3

Moody’s Investors Service on Friday upgraded long-term currency deposit ratings for three Indian state-run lenders on improving credit metrics, better macroeconomic health and a bet on government support for financial institutions.

The ratings agency lifted Bank of Baroda, Punjab National Bank and Canara Bank to Baa3 from Ba1, and affirmed State Bank of India’s rating at Baa3, while upgrading its baseline credit assessment and additional tier 1 securities program rating to Ba1 and (P)B1 from Ba2 and (P)B2, respectively.

Outlook on long-term ratings of all four banks remain stable, Moody’s said.

The rating upgrades “reflect an improvement in India’s macro profile to Moderate from Moderate, improving credit metrics of the four banks and Moody’s continued assumption of very high level of government support to the banks in times of need,” the ratings agency added.

Indian banks have been able to weather the impact of the pandemic to report an improvement in their profitability and asset quality in recent quarters.

Various liquidity-supporting measures by the government and the Reserve Bank of India during the Covid-19 pandemic have also helped lenders secure their balance sheets from future shocks. (Reuters)

IT stock declares interim dividend of ₹19 per share, fixes record date for payment

While announcing its third-quarter earnings for the three-month period ended December 2022 of the current fiscal (Q3FY23), Indian IT services company Coforge Ltd’s board of directors recommended an interim dividend of ₹19 per share, and the record date for the interim dividend payout has been fixed as Friday, February 3, 2023.

“We wish to inform you that the Board of Directors at their meeting held on January 20, 2023, have considered and approved the Un-audited Standalone and Consolidated financial results for the third quarter ended December 31, 2022. The Board has also declared third interim dividend of Rs. 19/- (Rupees Nineteen only) per Equity Share of the Company the face value of Rs. l 0/- each fully paid-up, for the financial year 2022-23,” Coforge said in an exchange filing on Friday. (Read More)

Asian Paints finds itself among biggest laggards for second day after a disappointing quarterly earnings report

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Hospitality & F&B Sector expectation from this year’s budget

Angadh Arora – CEO, Centre Point Hospitality: Now that the hospitality industry has bounced back to pre covid levels, the top 5 expectations from this year’s union budget are as follows :

1. Uniformity and reduction in the GST rates along with liquor sales also coming into the blanket of GST. Also, allow Input tax credit in GST for stand-alone restaurants and leased properties. Reduction of GST for F&B outlets and conferences in hotels from 18 percent to 12 percent

2. Simplified subsidy structures for encouraging new hospitality projects all over the nation.

3. Specials incentives and guided marketing support to bring in inbound tourism in India specially post-pandemic.

4. During the pandemic a lot of hospitality groups had no choice but to take help of the GECL 1 and 2 loans from the bank as per the subscribed guidelines of the govt however looking into the long run of the pandemic and the run rate at which the industry is recovering, the tenure of the GECL should be extended similar to normal term loans to avoid more defaults and restructuring which is likely to happen if the Guaranteed Emergency Credit Line (GECL) loan tenure is not extended resulting is higher EMIS and negative cash flows.

5. Single window clearances and self-assessment guidelines should be put forward to avoid harassment and penalties.

Sasha Wadhwa, Cloud Kitchen owner of Couche Patisserie: Cloud kitchen companies are hoping for some respite until a certain amount of revenue is recorded. “Any cloud kitchen operation requires the purchase of machines and appliances, which can be subject to machinery endowment schemes under manufacturing assistance from the government, which is not reflected yet, “There also needs to be a defined definition of qualification and definition of a cloud kitchen, which is currently defined under e-commerce food business operators, allowing even last mile delivery operators to operate as cloud kitchens, which is not the case,”

Karan Pardal, Managing Partner of Drifters Cafe & Bar: Multiple operating hour restrictions, capacity restrictions, and a lack of government support for restaurant industry, which employs more than 10 percent of the “young” working class in the country. Specifically, the enhancement of ECLGS, the ABRY relief, and the reinstatement of the input tax credit on GST will provide the impetus for revitalization; it would be incredibly advantageous if restaurants could once again utilize the GST input tax credit.

Roshan Nichani Managing Director of BJN Cloud Kitchens: As a cloud kitchen owner, we would expect some tax relief until a certain revenue hits the sheets so that as business owners, we can show growth reflecting on the performance of the overall industry.

All bank indices shine with the Bank Index trading solidly in green; most stocks gain

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₹12 to ₹158: Penny stock turns multibagger in one year. Trade ex-split today in 1:10

A long-term investor not just gains from appreciation in stock price but from various other rewards that a listed company announces for its loyal investors. A stock split is one such benefit that a long-term investor enjoys from the rise in the trade volume of the stock post-split. However, in the case of Deep Diamond India shares, the stock has tuned a multibagger in a period of nearly one year as it ascended from around ₹12 to ₹158 apiece levels, delivering more than 1200 per cent return to its shareholders.

The small-cap stock is trading ex-split today as the board of directors of the company had fixed 20th January 2023 as the record date for stock sub-division. The company board had announced the stock split in 1:10 ratio which means a shareholder’s stock will multiply by 10 times after stock subdivision. Now, Re 1 rise in the share would mean ₹10 (Re 1 x 10) for those shareholders of the company who are beneficiaries of this 1:10 stock subdivision. (Read More)

Sun Pharma lags in early trading as it sheds more than a per cent

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IT stock Coforge jumps as Q3 net profit rises on deal wins

Shares of Coforge Ltd jumped over 5% to ₹4,188 apiece on the BSE in Friday’s opening deals after the Indian IT services provider Coforge Ltd reported a better-than-expected net profit for the third quarter ended December 2022 in which rose 25% helped by deal wins across sectors. The company has also raised FY23 constant currency (CC) revenue growth guidance to 22% from at least 20%.

Coforge’s consolidated profit increased to ₹228 crore from ₹184 crore a year earlier. Analysts on average had expected the company to report net income of ₹221 crore, according to Refinitiv data. The IT company said it won five large deals during the quarter, including one over $50 milllion and two large deals, worth over $30 million in the previous quarter, and highest ever order intake of $345 million. (Read More)

RIL share price lower ahead of Q3 earnings

The share price of Reliance Industries started the day higher at ₹2481.70 versus the previous day close of ₹2471.10, but could not sustain the gains and soon turned in the red. The oil-to-retail conglomerate is expected to announce its Q3 earnings today. At the time of writing this copy, the stock was trading at ₹2,451, or 0.80% lower than the close of January 19. It had hit a low of ₹2,447 during the day so far.

Pharma index comes under pressure in early trading as it is trading lower with most stock in red

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Google vows to cooperate with India antitrust authority after Android decision

Google said on Friday it will cooperate with India’s antitrust authority after the country’s top court upheld an antitrust order forcing the U.S. firm to change how it markets its popular Android platform.

The Competition Commission of India (CCI) ruled in October that Google, owned by Alphabet Inc, exploited its dominant position in Android and told it to remove restrictionson device makers, including those related to pre-installation of apps. It also fined Google $161 million.

On Thursday, Google lost a challenge in the Supreme Court to block the directives, getting seven days to comply.

“We remain committed to our users and partners and will cooperate with the CCI on the way forward,” a Google spokesperson said in a statement to Reuters.

“We are reviewing the details of yesterday’s decision,” Google said, adding that it would continue pursue its legal challenge to the Android decision. (Reuters)

Oil Heads for Second Weekly Advance as China Outlook Brightens

Oil headed for a second weekly gain as optimism over stronger Chinese demand overshadowed a weaker outlook in other major economies.

West Texas Intermediate rose toward $81 a barrel, putting the US benchmark on course for a gain of just over 1% this week. Chinese consumption has been picking up after the top crude importer abandoned harsh virus restrictions, with signs of increased buying by refiners in the physical market.

Still, weakness elsewhere has limited the rally. European Central Bank President Christine Lagarde vowed policy would remain tight as inflation was still too high. In the US, Federal Reserve Vice Chair Lael Brainard, considered a dove, said Thursday that rates will need to stay elevated for a period.

Crude has been whipsawed in the first three weeks of the new year as investors took stock of the market’s opposing forces, as well as the outlook for Russian flows into 2023 as sanctions are tightened amid the war in Ukraine. Against that backdrop, there are widely divergent outlooks from banks on where crude is headed, with Goldman Sachs Group Inc. arguing Brent could top $100 a barrel, while JPMorgan Chase & Co. is much more cautious. (Bloomberg)

Hindustan Unilever sheds 2% at the start, puts a huge drag on the market

Hindustan Unilever Ltd (HUL) on Thursday beat Street expectations with a 12% rise in quarterly net profit, with the maker of household goods gaining from higher demand for products and easing inflationary pressures. The company’s board also approved increased payout to its European parent Unilever Plc for providing technology, trademark licences and services. This entails paying royalty and central services fees at 3.45% of HUL’s revenue, up from 2.65% in FY22. The new arrangement, which is effective from February, will be in force for a period of five years. Meanwhile, HUL’s standalone net profit climbed to ₹2,505 crore for the three months ended 31 December, from ₹2,243 crore a year earlier. A Bloomberg survey of analysts forecast the company to report a profit of ₹2,488 crore.

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As gold hits new high, experts recommend these two stocks

Following disappointing US data that renewed fear of global economic recession, gold rates today climbed to new life-time high of ₹56,746 per 10 gm levels in domestic market, breaching its previous record high of ₹56,588 levels that it made on Thursday deals. As gold rates today climbed to a new high, stock market experts have said that it would have a direct impact on those financial stocks that deals heavily in gold loan.

Stock market experts went on to add that in India there are limited financial institutions that have a bulk business in gold loan. But, Muthoot Finance and Manappuram Finance have huge exposure in gold loan lending. As gold prices are expected to continue uptrend in medium to long term, they recommended positional investors to buy Muthoot Finance and Manappuram Finance stocks. (Read More)

Indices flat at open with HUL and Asian Paints dragging the market

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Wayfair to lay off over 1,000 employees due to sales decline

Layoffs are accelerating across the technology world since 2022. Many companies including Microsoft, Amazon, Twitter, Meta, and Ola have recently fired many employees and slashed the job opportunities. Another such company, Wayfair Inc has also announced a round of job cuts, said a person familiar with the situation on the condition of anonymity, adding that more than 1,000 employees will lose their jobs, according to Bloomberg news. (Read More)

Sensex preopens flat with a little tilt towards green; HUL and Adani Enterprises in focus today

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Geojit Financial Services: Triggers to take Nifty beyond 18200 are not yet visible

Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services: Nifty which is now stuck in a narrow band of 17800-18200 is likely to remain in this range in the absence of major triggers. FIIs turning buyers is a major support at 17800. Triggers to take Nifty beyond 18200 are not yet visible. Large Q3 results from the likes of RIL, ICICI Bank and Kotak have to be closely watched for indications. The strength of HDFC twins and the weakness of ICICI Bank indicate some churn within financials. Data on capex, credit growth and manufacturing and services PMI indicate that the growth rebound in the economy is robust. Capital goods segment has the potential to outperform this year.

Reliance Securities Stock in Focus for Today: IndiGo

STOCK IN FOCUS

IndiGo (CMP 2,123): We have a positive stance on Indigo considering the strong market share position, undisputed leadership, best cost structure, potential in the fastest-growing aviation sector and lower crude prices bringing early turnaround, we reiterate our BUY rating on INDIGO with a Target Price of Rs2,350, valuing the stock at an unrevised EV/EBITDAR multiple of 7.5x FY24E.

Intraday Picks

BPCL (PREVIOUS CLOSE: 350) BUY

For today’s trade, long position can be initiated in the range of Rs347.50-

345 for the target of Rs358 with a strict stop loss of Rs341.50.

BAJAJ-AUTO (PREVIOUS CLOSE: 3,576) SELL

For today’s trade, short position can be initiated in the range of Rs3,598-

3,620 for the target of Rs3,520 with a strict stop loss of Rs3,645.

TATACONSUM (PREVIOUS CLOSE: 739) SELL

For today’s trade, short position can be initiated in the range of Rs742-

747 for the target of Rs722 with a strict stop loss of Rs754.

Inflation too high, European Central Bank committed to containing it

European Central Bank President Christine Lagarde said inflation is too high and reiterated the central bank’s determination to bring it back to 2 per cent.

“Inflation, by all accounts, however you look at it, is way too high. Our determination at the ECB is to bring it back to 2% in a timely manner, and we are taking all the measures that we have to take in order to do that,” Lagarde said speaking at the ongoing five-day World Economic Forum’s annual meeting.

The ECB chief was speaking at a session ‘Finding Europe’s New Growth,’ Thursday (local time).

While saying the central bank had already increased interest rates by 250 basis points, Lagarde said it shall “stay the course” until such time when monetary policy moved into “restrictive territory” for long enough so that the inflation can return to 2 per cent in a timely manner. (ANI)

Stocks to Watch: HUL, Adani Ent, Hindustan Zinc, LTTS, PVR, AU Small Finance Bank, Bhel, Indiamart Intermesh, Jubilant Foodworks, and Sun Pharma

Reliance Industries, JSW Steel, HDFC Life, LTMindtree, Bandhan Bank, Coforge, Union Bank of India, and JSW Energy, will be among the stocks in focus as they declare their December quarter earnings today. (Read More)

India Post Payments Bank looks set to break even in FY23: CEO

India Post Payments Bank (IPPB) is looking to break even by the end of this financial year with gross revenue crossing ₹500 crore. J. Venkatramu managing director and chief executive, IPPB, said the bank is investing heavily in technology and is focusing on getting small savings customers to the India Post network.

“We have a 3.5 million common customer base, who have various small savings schemes and accounts with India Post. The business model is linked to small savings schemes, with very attractive interest rates, which attracts a lot of people to invest in them. But since digital channels are not available, we are focussing on offering online access. Anybody having an account with our payments bank can move money to various small savings schemes digitally, and need not have to go to a branch to deposit cash. We are trying to digitize the whole journey for small savings.” (Read More)

AU Bank net jumps 30% to ₹393 cr on healthy core income

AU Small Finance Bank on Thursday reported its highest quarterly net profit of ₹393 crore, a growth of 30 per cent annually, for the October-December period of 2022-23 on improved asset quality and the resultant decline in provisions.

The bank said its gross bad loans declined to 1.81 per cent or ₹1,019 crore in the reporting quarter from 2.60 per cent or ₹1,058 crore in December 2021 and net bad loans improved to 0.51 per cent from 1.29 per cent or ₹285 crore and ₹520 crore, respectively.

Of the total provision, ₹127 crore are for the restructured book and ₹98 crore are for contingency provisions and ₹41 crore are floating provision. Standard provisions stood at ₹176 crore or 30 bps of total advances.

Total income of the Jaipur-based company rose 36 per cent to ₹2,413 crore, driven by a full 41 per cent jump in net interest income at ₹1,153 crore. The key profitability metric net interest margin which is the difference between the cost of deposit and loan pricing, at 6.2 per cent. (PTI)

Hindustan Unilever Q3 net profit rises 7.9 pc to ₹2,481 crore

FMCG major Hindustan Unilever Ltd on Thursday reported a 7.9 per cent increase in its consolidated net profit at ₹2,481 crore for the third quarter ended December 31, 2022.

The company, which had posted a net profit of ₹2,300 crore in the October-December quarter of the previous fiscal, said its board has approved a new royalty and central services arrangement with Unilever Group that will see an increase in the fees for the same to 3.45 per cent of turnover from 2.65 per cent in FY22.

Its consolidated total income during the quarter under review rose 16.35 per cent to ₹15,707 crore against ₹13,499 crore a year ago, Hindustan Unilever Ltd (HUL) said in a regulatory filing.

The total expenses stood at ₹12,225 crore in Q3 against ₹10,329 crore in the year-ago period, it added.

HUL CEO and Managing Director Sanjiv Mehta said the company has sustained its strong momentum and had yet another quarter of solid all-round performance. (PTI)

Netflix’s Hastings Gives Up CEO Title; Peters Named Co-Chief

Netflix Inc. co-founder Reed Hastings is stepping aside as chief executive officer of the company he’s led for more than two decades, leaving the position to his two longtime associates, Ted Sarandos and Greg Peters.

Sarandos, who was already co-CEO, is the company’s public face in Hollywood while Peters, previously chief operating officer, has overseen its product development and push into advertising. Hastings, 62, will serve as executive chairman of the company.

“Our board has been discussing succession planning for many years (even founders need to evolve!),” Hastings said in a blog post. “The board and I believe it’s the right time to complete my succession.”

Netflix ended the year on a high note. The company added 7.66 million subscribers in the final quarter of 2022, easily topping the 4.5 million average estimate of Wall Street analysts. Revenue, at $7.85 billion, was in line with estimates. Although it earnings, at 12 cents per share, fell well below the same period a year ago, the company forecast that its profit margin and free cash flow would improve in the year ahead.

Netflix jumped about 6% in after-hours trading after the announcement. Shares of Paramount Global, Walt Disney Co. and Warner Bros. Discovery also rose in late trading. (Bloomberg)

Microeconomic stability getting bolstered as inflation coming under control: RBI

The economic outlook of the country is optimistic and as the inflation rate is also falling around the tolerance limit, the macroeconomic stability is getting bolstered, the Reserve Bank of India (RBI) said in its January monthly bulletin. The central bank pointed towards narrowing the current account deficit (CAD) and said that emerging markets are appearing more resilient.

The year 2023 is coming with bigger risk than the previous year stemming from United States monetary policy and the US dollar, an article in RBI bulletin said. (Read More)

Adani Enterprises to list all its businesses over 2026-29

Billionaire Gautam Adani’s flagship Adani Enterprises Ltd, which is set to raise ₹20,000 crore through a follow-on public offer, expects all its business verticals across roads, airports and industries, to achieve the scale for independent listing between 2026 and 2029.

Adani Enterprises is the incubation platform of the group, having spun off businesses across ports, transmission, renewables and city gas distribution into separate listed entities.

“Once a business meets three tests—the capacity to execute business plans independently; stable capital structure; and organizational capability, meaning the business has the capability to execute the projects it undertakes and can operate the assets in a world class manner—it possibly becomes available for demerger,” Jugeshinder Singh, chief financial officer, Adani Group, said at a press conference on Thursday. (Read More)

Air India’s mega jet deal with Airbus, Boeing held up by engine-cost debate

Air India Ltd.’s order for as many as 500 aircraft from Airbus SE and Boeing Co. is being held up by an impasse with engine makers powering the 737 Max, dragging out what stands to be one of the biggest single purchases in civil aviation history.

CFM International, the General Electric Co. and Safran SA joint venture, is reluctant to offer big discounts on engines and maintenance that typically accompany mega orders, according to people familiar with the negotiations. The deadlock centers on the hourly rates Air India would pay for repairs, said one of the people, asking not to be identified as the deliberations are private. (Read More)

Vedanta to sell Zinc International assets to Hindustan Zinc for USD 2,981 million

Anil Agarwal-promoted Vedanta on Thursday said it will sell Zinc International assets to Hindustan Zinc for a cash consideration of USD 2,981 million.

Vedanta’s board approved the sale of Zinc International assets held by THL Zinc Ventures Ltd (Mauritius) (THLZV), a direct wholly-owned subsidiary of the metals and mining major.

The assets held THLZV through THL Zinc Ltd (Mauritius) comprising shares held in Black Mountain Mining Pty Ltd, South Africa (69.6 per cent) and THL Zinc Namibia Holdings (Pty) Ltd (100 per cent), Namibia, will be sold to the proposed wholly-owned subsidiary (SPV) of Hindustan Zinc Ltd (HZL) for a cash consideration not exceeding USD 2,981 million, Vedanta said in a filing.

Vedanta holds 64.92 per cent of the equity share capital of HZL.

The proposed transaction will be subject to receipt of necessary regulatory nods. (PTI)

Longer wait for GST tribunals with Council yet to clear proposals

Businesses may have to wait longer for quicker resolution of Goods and Services Tax (GST)-related disputes under the proposed appellate tribunals, as the Finance Bill 2023 is expected to skip crucial amendments needed in this regard.

The plan to set up GST appellate tribunals (GSTAT) across the country missed a crucial opportunity with the federal tax body, the GST Council, not clearing the proposals at its last meeting on 17 December, a person informed about the Centre-state discussions said. (Read More)

Buy or sell: Vaishali Parekh recommends 2 stocks to buy today

Vaishali Parekh of Prabhudas Lilladher has recommended two stocks to buy today, here we list out important details in regard to those day trading stocks:

1] Jubilant Food: Buy at ₹510, target ₹535, stop loss ₹500; and

2] UPL: Buy at ₹747, target ₹773, stop loss ₹738. (Read More)

Sun  Pharma  to  acquire  US firm Concert for $576 mn

Sun Pharmaceutical Industries Ltd on Thursday agreed to buy Concert Pharmaceuticals Inc. for $576 million to access the US company’s experimental drugs for treating skin diseases, including patchy hair loss.

Concert Pharmaceuticals has an extensive patent portfolio, including its lead product candidate, deuruxolitinib, a late-stage drug for treating alopecia areata, an autoimmune dermatological disease resulting in patchy hair loss.

The deal will help strengthen Sun Pharma’s dermatology product range in the US. The company said its immediate focus is on submitting a New Drug Application to the US Food and Drug Administration (FDA) in the first half of 2023. (Read More)

US Wall Street lose ground on Thursday as recession fears weigh on market

Wall Street’s losses deepened Thursday as worries that the U.S. may be headed for a painful recession kept stock traders in a selling mood.

The S&P 500 and Dow Jones Industrial Average each fell 0.8%, their third straight drop. The Nasdaq composite lost 1%.

Every major index is on track for a weekly loss after the market kicked off the year with a two-week rally. Analysts expect the broader market to remain unsteady as investors try to get a clearer picture of inflation and the economy’s path ahead.

“It’s very reflective of the conflicting views that investors have with respect to where things are headed here in early 2023,” said Greg Bassuk, CEO at AXS Investments.

Reports showed weakness in several areas of the economy, including the housing industry and manufacturing in the mid-Atlantic region, though they weren’t quite as bad as expected and the job market appears to remain healthy. They follow worse-than-expected readings a day earlier on retail sales, a cornerstone of the economy, and industrial production.

The weaker economic data “has investors a little bit on edge, questioning how much consumer resilience is left in the tank,” said Ross Mayfield, investment strategist at Baird. (AP)