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Monday 11am - 5pm Tuesday 11am - 5pm Wednesday 11am - 5pm Thursday 11am - 5pm Friday 11am - 5pm

Mahesh Devaram Dharmavat, Tilak Road, Pune (2026)

09/06/2021

Analysis of market behavior of last 41 year:
*Sensex in 1979 – 100*
*Sensex in 2021 – 52,000* …. *_520 TIMES_*, In-spite of….

1982 – 𝐖𝐨𝐫𝐬𝐭 𝐫𝐞𝐜𝐞𝐬𝐬𝐢𝐨𝐧 𝐢𝐧 40 𝐲𝐞𝐚𝐫𝐬, 𝐝𝐞𝐛𝐭 𝐜𝐫𝐢𝐬𝐢𝐬.
1983 – 𝐌𝐚𝐫𝐤𝐞𝐭 𝐡𝐢𝐭𝐬 𝐫𝐞𝐜𝐨𝐫𝐝 𝐡𝐢𝐠𝐡.
1984 – 𝐑𝐞𝐜𝐨𝐫𝐝 𝐔𝐒 𝐅𝐞𝐝𝐞𝐫𝐚𝐥 𝐝𝐞𝐟𝐢𝐜𝐢𝐭𝐬.
1985 – 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐠𝐫𝐨𝐰𝐭𝐡 𝐬𝐥𝐨𝐰𝐬.
1986 – 𝐃𝐨𝐰 𝐧𝐞𝐚𝐫𝐬 2000 – “𝐌𝐚𝐫𝐤𝐞𝐭 𝐭𝐨𝐨 𝐡𝐢𝐠𝐡”
1987 – 𝐓𝐡𝐞 𝐂𝐫𝐚𝐬𝐡 -𝐁𝐥𝐚𝐜𝐤 𝐌𝐨𝐧𝐝𝐚𝐲.
1988 – 𝐅𝐞𝐚𝐫 𝐨𝐟 𝐑𝐞𝐜𝐞𝐬𝐬𝐢𝐨𝐧.
1989 – 𝐉𝐮𝐧𝐤 𝐁𝐨𝐧𝐝 𝐜𝐨𝐥𝐥𝐚𝐩𝐬𝐞.
1990 – 𝐆𝐮𝐥𝐟 𝐖𝐚𝐫, 𝐰𝐨𝐫𝐬𝐭 𝐦𝐚𝐫𝐤𝐞𝐭 𝐝𝐞𝐜𝐥𝐢𝐧𝐞 𝐢𝐧 16 𝐲𝐞𝐚𝐫𝐬.
1991 – 𝐑𝐞𝐜𝐞𝐬𝐬𝐢𝐨𝐧 – 𝐌𝐚𝐫𝐤𝐞𝐭 𝐭𝐨𝐨 𝐡𝐢𝐠𝐡
1992 – 𝐄𝐥𝐞𝐜𝐭𝐢𝐨𝐧𝐬, 𝐦𝐚𝐫𝐤𝐞𝐭 𝐟𝐥𝐚𝐭.
1993 – 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬𝐞𝐬 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞 𝐫𝐞𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐢𝐧𝐠.
1994 – 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐫𝐚𝐭𝐞𝐬 𝐠𝐨𝐢𝐧𝐠 𝐮𝐩.
1995 – 𝐓𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭 𝐢𝐬 𝐭𝐨𝐨 𝐡𝐢𝐠𝐡.
1996 – 𝐅𝐞𝐚𝐫 𝐨𝐟 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧.
1997 – 𝐈𝐫𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐄𝐱𝐮𝐛𝐞𝐫𝐚𝐧𝐜𝐞.
1998 – 𝐀𝐬𝐢𝐚 𝐂𝐫𝐢𝐬𝐢𝐬.
1999 – 𝐘2𝐊.
2000 – 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐂𝐨𝐫𝐫𝐞𝐜𝐭𝐢𝐨𝐧.
2001 – 𝐑𝐞𝐜𝐞𝐬𝐬𝐢𝐨𝐧, 𝐖𝐓𝐂 𝐀𝐭𝐭𝐚𝐜𝐤.
2002 – 𝐂𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐒𝐜𝐚𝐧𝐝𝐚𝐥𝐬.
2003 – 𝐖𝐚𝐫 𝐢𝐧 𝐈𝐫𝐚𝐪.
2004 – 𝐔.𝐒. 𝐡𝐚𝐬 𝐦𝐚𝐬𝐬𝐢𝐯𝐞 𝐭𝐫𝐚𝐝𝐞 & 𝐛𝐮𝐝𝐠𝐞𝐭 𝐝𝐞𝐟𝐢𝐜𝐢𝐭𝐬.
2005 – 𝐑𝐞𝐜𝐨𝐫𝐝 𝐨𝐢𝐥 & 𝐠𝐚𝐬 𝐩𝐫𝐢𝐜𝐞𝐬.
2006 – 𝐇𝐨𝐮𝐬𝐢𝐧𝐠 𝐛𝐮𝐛𝐛𝐥𝐞 𝐛𝐮𝐫𝐬𝐭𝐬.
2007 – 𝐒𝐮𝐛-𝐩𝐫𝐢𝐦𝐞 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐜𝐫𝐢𝐬𝐢𝐬.
2008 – 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 & 𝐂𝐫𝐞𝐝𝐢𝐭 𝐜𝐫𝐢𝐬𝐢𝐬.
2009 – 𝐑𝐞𝐜𝐞𝐬𝐬𝐢𝐨𝐧 – “𝐂𝐫𝐞𝐝𝐢𝐭 𝐂𝐫𝐮𝐧𝐜𝐡”
2010 – 𝐒𝐨𝐯𝐞𝐫𝐞𝐢𝐠𝐧 𝐝𝐞𝐛𝐭 𝐜𝐫𝐢𝐬𝐢𝐬.
2011 – 𝐄𝐮𝐫𝐨𝐳𝐨𝐧𝐞 𝐜𝐫𝐢𝐬𝐢𝐬.
2012 – 𝐔.𝐒. 𝐟𝐢𝐬𝐜𝐚𝐥 𝐜𝐥𝐢𝐟𝐟.
2013 – 𝐅𝐞𝐝𝐞𝐫𝐚𝐥 𝐑𝐞𝐬𝐞𝐫𝐯𝐞 𝐭𝐨 “𝐭𝐚𝐩𝐞𝐫” 𝐬𝐭𝐢𝐦𝐮𝐥𝐮𝐬.
2014 – 𝐎𝐢𝐥 𝐩𝐫𝐢𝐜𝐞𝐬 𝐩𝐥𝐮𝐧𝐠𝐞.
2015 – 𝐂𝐡𝐢𝐧𝐞𝐬𝐞 𝐬𝐭𝐨𝐜𝐤 𝐦𝐚𝐫𝐤𝐞𝐭 𝐬𝐞𝐥𝐥-𝐨𝐟𝐟.
2016 – 𝐁𝐫𝐞𝐱𝐢𝐭, 𝐔.𝐒. 𝐩𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭𝐢𝐚𝐥 𝐞𝐥𝐞𝐜𝐭𝐢𝐨𝐧.
2017 – 𝐒𝐭𝐨𝐜𝐤𝐬 𝐚𝐭 𝐫𝐞𝐜𝐨𝐫𝐝 𝐡𝐢𝐠𝐡𝐬, 𝐁𝐢𝐭𝐜𝐨𝐢𝐧 𝐦𝐚𝐧𝐢𝐚.
2018 – 𝐓𝐫𝐚𝐝𝐞 𝐖𝐚𝐫𝐬, 𝐫𝐢𝐬𝐢𝐧𝐠 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐫𝐚𝐭𝐞𝐬.
2019 – 𝐈𝐧𝐝𝐢𝐚 𝐆𝐃𝐏 𝐚𝐭 5%.
2020- C𝐨𝐯𝐢𝐝 19 Crash.

𝐇𝐢𝐬𝐭𝐨𝐫𝐲 𝐬𝐚𝐲𝐬 𝐨𝐧𝐞 𝐰𝐢𝐥𝐥 𝐚𝐥𝐰𝐚𝐲𝐬 𝐟𝐢𝐧𝐝 𝐰𝐡𝐲 𝐧𝐨𝐭 𝐭𝐨 𝐢𝐧𝐯𝐞𝐬𝐭! However we Recommend Staying Invested....💪💪💪

03/06/2021

*ABM Morning Update*

*STOCKS TREAD DIVERSE TRACKS – NIFTY50 FAILS TO FIRE FOR 2ND STRAIGHT DAY WHILE MIDCAP INDEX EXTEND RECORD!!!!*

Asian equities hover arnd their recent 3-M top with Chinese mkts being a tad weaker as investors weighed inflation concerns ahead of key U.S. economic data. A weekly unemployment rpt & May pvt payrolls data today will be followed by monthly jobs nos on Friday, with investors looking for signs of an economic rebound & rising inflation. The U.S. Fed published its "Beige Book" rpt, which pointed to labour shortages & inflation pressures. Adding to inflation pressures, Oil prices rose owing to decision by major producing nations to restore supply only gradually while the slow pace of nuclear talks b/w the US & Iran also helped. Brent trades nr 1-1/2 yr highs at $72/bl.

Fag-end buying in RIL, Auto, & metal counters helped Nifty erase most of the day's losses & end flat for 2nd straight day. A surge in Brent Crude price, which was hovering arnd $71/bl, too was a possible reason for investors taking some money off the table. Nifty50 index settled up 1 pt. ITC (dn 3%), Asian Paints, HDFC, Axis Bk, Tech M, HCL Tech, & TCS led the list of losers. This was countered by gains in RIL, SBI & Maruti Suzuki, that rallied up to 2%. Mkt breadth, however, remained firmly in the favour of advances amid buying in the broader mkt stocks. The MidCap index, that hit a record peak earlier yesterday, closed 1.7% higher on the back of gains in PNB Hsg Fin, Adani Ent, Muthoot Finance, Central Bank & IDFC First Bk. The SmallCap index, on the other hand, gained 1.35% aftr hitting a new peak in intra-day trade. Nifty PSU Bk index zoomed nearly 3% on rpt NITI Aayog has submitted list of privatisation-bound state-owned banks to the Core Grp of Secretaries on Disinvestment. Individually, BoM, PNB, CBI, Indian Bank, IOB & Canara Bank jumped b/w 3-8%. That apart, the Nifty Metal & Pharma indices gained 2% each.

The Indian govt is xptd to grant foreign vaccine makers Pfizer & Moderna indemnity against legal proceedings, as part of its bid to ramp up Covid-19 vaccine supply in the country. Countries like the US have granted these vaccine makers immunity where they can’t be sued for any adverse effects. It is xptd that they will be granted indemnity against legal proceedings along the lines of what has been allowed in other countries for Pfizer & Moderna.

*Results*

1. Motherson Sumi Systems – Strong result. Revenue was up 17% YoY at Rs 16971 cr vs Rs 14434 cr EBITDA margin expanded 150bps YoY to 10.1% vs 8.6%. NP up 13.5% YoY at 714 cr. In last 2 yrs, co has reduced its Indian debt which stands at Rs 4820 cr in FY21 vs. Rs 8000 cr in FY19. Order book remains strong at 15.6bn Euro.

2. Muthoot Finance – Good results as xptd. NII grew 15.7% YoY to Rs 1,829.5 cr with NIM at 14.27%. It rptd a 22% YoY growth in NP to Rs 995.6 cr owing to a strong growth in loan assets of 26% YoY to Rs 52,622 cr. Gold loan assets increased by 27% YoY to Rs 51,926 cr while Non-gold assets contracted by 17% YoY to Rs 6,957 cr. CAR was strong at 27.4% vs. 25.5% on YoY basis.

3. PVR – Disappointment. Revenue stood at Rs 263.3 cr against Rs 661.8 cr on YoY basis. It rptd a consolidated net loss of Rs 289.1 cr as co continued to be impacted by the COVID-19 pandemic. PVR said even though there were no major Bollywood or Hollywood movie releases in Q4 FY21, the Southern film industry which saw new movie releases showed a strong recovery.

SGX Nifty indicates a 72 pts gap up opening for Nifty today. Lower covid cases, decent earnings season & xptd recovery on opening up of economy will keep mkts in +ve traction.

*Quote of the Day : “As technology becomes a driving force in all businesses and facets of life, the future belongs to organizations that can lead and leverage the digital revolution." - Mukesh Ambani, Chairman of RIL*

*Key corporate developments/policy actions:*

1. Airtel Africa announced sale of the tower portfolio belonging to Airtel Tanzania for abt $ 175 mn. The grp to focus on an asset-light business model

2. Tata Consumer launches a premium roasted & ground coffee under the Sonnets brand targeting urban & increasingly discerning coffee drinkers in India.

3. Rossari Biotech inks pact to acquire Unitop Chem for Rs 421 cr in cash

4. Kotak launches pre-IPO fund, plans to raise Rs 2,000 cr

5. Nestle working on co-wide project to update its nutrition, health strategy

*Fund Flow:*

FII: (+) Rs 9.21 bn; DII : (+) Rs 2.42bn

*Stocks to focus 😗

*Large Cap 😗 Abbott India, Bajaj Finance, Divis Lab, HDFC Bank, HCL Tech, HUL, Infosys, ICICI Lombard, , Maruti, Nestle, PI Ind, Tata Steel.

*Mid Cap 😗 AAVAS Financiers, Amber Ent, AU SFB, Dalmia Bharat, Gmm Pfaudler, GNFC, Nalco, Varun Beverages, Westlife Development.

02/06/2021

*ABM Morning Update*

*NIFTY TURNS IN LACKLUSTRE PERFORMANCE AS EARLY BUYING INTEREST FADES*

Asian equities trade near 3-M highs, taking +ve sentiment fm US indices. The S&P 500 & the Dow rose on Tues, with the former within 0.5% of its record high as investors cheered strong mfg PMI data (61.2 in May vs 60.7 in Apr), indicating improving economy ahead of a wk packed with major data that is xptd to shed more light on the path of inflation. The 2 indexes rose for the 4th straight session as investors bet on economically sensitive stocks benefiting the most fm a post-COVID-19 recovery. US mfg PMI rose for 12th straight month as pent-up demand boosted orders in a reopening economy, even as unfinished work piled up because of shortages of rm & labour. Investors will be watching U.S. jobs data due Friday for clues to the Fed's plans for policy in the cmng weeks & months. In commodities mkts, prospects for a solidifying global economic recovery fm pandemic lockdns lifted oil prices, with Brent crude trading at its highest levels since Mar, despite the OPEC+ alliance agreeing to hike output in July. Brent trades abv $70/bl currently.

A volatile session culminated nr flat line in yesterday’s trade as investors preferred to book profits aftr 7 straight days of gains. That apart, a cut in GDP growth forecast by global agency Moody's & a downtick in mfg activity kept investors on the side-line. Against this backdrop, Nifty50, ended dn 8 pts or 0.05%. ONGC, Adani Ports, BAF, SBI were the top gainers on the index, up b/w 2-4%. Participation in the broader mkt space also remained muted.

The data released by IHS Markit showed that domestic factory orders & prodn slowed to a 10M low in May as most states restricted businesses amid localised lockdowns. The Mfg PMI slipped to 50.8 in May against 55.5 in Apr, making it one of the steepest falls.

Indian govt will pick a maximum of 55 applicants based on clearly laid out selection criteria under the new PLI scheme that offers a total of Rs 150 bn in incentives over a 6Y period till FY27, for the identified pharma products. The IMD on Tuesday upped its 2021 monsoon forecast to 101% of the LPA, meaning most parts of the country can xpt to get normal to abv normal rainfall. The abv normal forecast excludes parts of East & NE India. Moody's said it expects the damage to the economy fm the 2nd wave of Covid-19 & the ensuing lockdns to be restricted to the Q1. Taking the slowdn into account, it now expects India's GDP in FY22 to grow at 9.3% & at 7.9% in FY23.

*Results*
1. ITC – Yet another disappointment. Standalone revenue (excluding excise duty) in Q4FY21 grew by 22.6% to Rs 13,294.7 cr YoY, beating expectations. However, EBITDA grew by mediocre 7.4% to Rs 4,473 cr as margin contracted 480 bps YoY to 33.6% in Q4, against est of Rs 4,585 cr & 37.6% resp. NP declined 1.3% YoY to Rs 3,748 cr. Cigarette business, which contributed 41% to total business, clocked 14.2% YoY growth in Q4FY21 at Rs 5,859.6 cr & its EBIT grew by 7.7% to Rs 3,666.5 cr during Q4. FMCG (others) revenue at Rs 3,687.5 cr, grew by 15.8% YoY & at operating level, its EBIT increased 28.4% to Rs 188.6 cr.

*OEM Auto sales*

1. Hero MotoCorp's sales fell 51% over the last month to 183,044 units due to the closure of plant operations amid a 2nd wave of Coronavirus.

2. TVS Motor rptd a 30.2% fall in total sales to 1,66,869 units in May

3. Bajaj Auto Ltd volumes declined 30% MoM to 2,71,862 units in May, supported by a surge in exports.

4. Eicher Motors – RE volumes stood at 27,292 units – dn 49% MoM. VECV rptd overall sales of 1,223 units in May dn 43% over the last month

5. Tata Motors PV division sold 15,181 units in May – dn 40% MoM.

6. Maruti Suzuki posted total sales of 46,555 units in May, registering a de-growth of 71% over the 1,59,691 units it sold last month.

7. M&M's PV business posted total sales of 8,004 units in May – dn 56% MoM. Farm Equipment segment saw its sales fall 12.1% in May to 24,184 units, as covid spread in rural mkts led to stringent lockdns, leading to deferment of tractor purchase & ltd operations at dealerships.

8. Ashok Leyland vol stood at 3199 units in May vs. 8340 units in Apr

9. Escorts sold 6,423 tractors in May - dn 8% MoM.

Mkts r holding up & consolidating at their new life time high levels, though supported by select stocks. Xpt mkts to consolidate in near term while medium term outlook stays +ve. For today, SGX Nifty indicates 18 pts gap dn opening for Nifty.

*Quote of the Day : “Second Covid wave threatens India's long-term credit rating” - Moody's*

*"Credit losses set to decline for most Asia Pacific banks” - S&P*

*Focus For the Day:*

1. Key Results - Motherson Sumi, Muthoot Finance, PVR.

*Key corporate developments/policy actions:*

1. Route Mobile announced an agreement with Emirates Integrated Telecommunications(EITC) - du, UAE's 2nd integrated telecom service provider, by offering a turnkey solution using Route Mobile's Smart Messaging Hub. This enables du to launch a highly scalable revenue-generating messaging platform to enable A2P wholesale transit business.

2. Infosys orders an internal investigation on 2 employees named in an insider trading case.

3. Wadhawan moves SC against NCLAT stay against his offer for DHFL

4. Revenue fm shrimp export to jump 20% in CY21: Crisil

*Fund Flow:*

FII: (-) Rs 4.5 bn; DII : (+) Rs 2.3bn

*Stocks to focus 😗

*Large Cap 😗 Abbott India, Bajaj Finance, Divis Lab, HDFC Bank, HCL Tech, HUL, Infosys, ICICI Lombard, , Maruti, Nestle, PI Ind, Tata Steel.

*Mid Cap 😗 AAVAS Financiers, Amber Ent, AU SFB, Dalmia Bharat, Gmm Pfaudler, GNFC, Nalco, Varun Beverages, Westlife Development.

01/06/2021

*ABM Morning Update*

*REOPENING BET PAYS OFF BIG FOR STOCK PICKERS WHO WAGERED ON BUSINESSES REVVING UP AGAIN. NIFTY EXTENDS GAINS TO NEW RECORD!!!!!*

Asian equities rose in early trade aftr US indices were closed yesterday owing to a Memorial day. According to the OECD, the global economic outlook is improving as vaccine rollouts allow businesses to resume operations & as the US pumps tns of dollars into the economy. The global economy is set to grow 5.8% this yr & 4.4% nxt yr, raising its estimates fm 5.6% & 4.0% resp in its last forecasts released in Mar. The global economy has now returned to pre-pandemic activity levels, but has not yet achieved the growth xptd prior to the global health crisis. China’s factory activity expanded at the fastest pace this yr in May as domestic & export demand picked up, though sharp rises in rm prices & strains in supply chains crimped some co's prodn, a business survey showed yesterday. S Korea’s index jumped 0.8% & led regional gains aftr the country’s exports logged their sharpest expansion in 32 yrs in May, marking another robust month of shipments fuelled by stronger consumer demand globally. The MSCI Asia index rose to the highest in a month, taking total gains to ~7% for this yr. World equities have risen for a 4th straight month as ample liquidity supported risk taking despite worries of higher inflation. The main event of the wk remains U.S. payrolls on Friday with median forecasts at 650,000. Oil prices rose ahead of an OPEC+ meeting & on optimism that fuel demand will grow in the months ahead. Brent trades close to $70/bl currently.

Nifty50 hit a fresh record led by healthy buying in RIL, ICICI Bk, Bharti Airtel, HDFC Bk, ITC, Axis Bk, TCS, & Maruti Suzuki. Add to it, the lowest daily case count of Covid-19 infections in 48 days further improved sentiment in the broader mkt. Country rptd 152,734 fresh Covid-19 cases in the last 24 hrs - lowest daily count since Apr 13, 2021. RIL - up over 3% on NSE - single-handedly lifted the Nifty50 index to record peak of 15,606 in the intra-day session ystrdy. By close, the Nifty index closed up 147 pts or 0.95%.

India’s GDP for COVID-hit 2020-21 contracted by 7.3%, even as GDP for the Q4 grew by 1.6%. This contraction is much better than the forecasts of the RBI & the MOSPI, both of which had xptd GDP for the full yr to contract by 8%. Once again the primary driver was the agri sector. Mfg, construction & services sectors also showed improvement QoQ. This was the 1st yrly economic contraction since 1980-81 & the largest since the calculations of national accts began in the early 1950s. Most of the damage to the economy was done in Q1, when GDP had contracted by an unprecedented 24.4% due to the nationwide lockdn. The output of 8 core sectors jumped by 56.1% in Apr mainly due to low base effect & uptick in prodn of natural gas, refinery products, steel, cement & electricity. Additionally, fiscal deficit data for FY21 came in at 9.3% of nominal GDP, compared with revised estimates of 9.5%. It faced massive tax revenue shortfall, inability to carry out privatisation & increased expenditure commitments due to the COVID-19 pandemic.

The Chief Economic Adviser K V Subramanian on Monday said the overall impact of the 2nd wave of Covid-19 on the country's economy is not likely to be large but cautioned abt an uncertainty surrounding the pandemic going ahead. He further said that given the circumstances due to the pandemic, it is difficult to forecast if the country wud achieve a double digit growth in the current fiscal.

*Results*

1. Aurobindo Pharma – Results were marginally below expectations. Net sales stood at Rs 6,002 cr in Mar 2021 fm Rs. 6,158 cr in Mar 2020. EBITDA stands at Rs. 1,266 cr in Mar 2021 vs. Rs 1297 cr. EBITDA margin remained largely stable at 21%. Its NP was Rs. 802 cr in Mar 2021 vs. Rs 850 cr in Mar 2020.

2. Honeywell Automation - Decent Result. Revenue declined by 4.5% YoY to Rs 673 cr. EBITDA stood at Rs 130 cr vs Rs 128 cr YoY. EBITDA margin stood at 19.3% vs. 18.2%. NP declined by 6% YoY to Rs 104 cr.

Overall earnings season has been decent & coupled with reducing covid cases will keep mkt in +ve traction going ahead. From today, Sebi's peak margin rule of 75% in 3rd phase will be implemented wherein mkt volumes will be keenly watched. To start the day, SGX Nifty indicates a 47 pts gap up opening for Nifty.

*Quote of the Day : “The impact of the second Covid-19 wave on rated Indian firms is expected to be manageable, as most companies' credit profiles are supported by their strong market positions, adequate balance sheets, liquidity and diversified operations. They have the flexibility to adjust costs and key business drivers, until operations recover with the easing of restrictions” - Fitch Solutions*

*Focus For the Day:*

1. Key Results - ITC, Radico

*Key corporate developments/policy actions:*

1. A clutch of investors led by Carlyle will invest Rs 40 bn in PNB Housing, making it the largest shareholder. The investors will also launch an open offer for 26% of the co’s expanded voting share capital.

2. Govt approves 4 firms under PLI scheme for bulk drugs

3. Sebi asks listed co's to disclose loans, guarantees given to promoters

4. Monthly GST return filing deadline extended till June 26

*Fund Flow:*

FII: (+) Rs24.12bn; DII : (+) Rs.1.8bn

*Stocks to focus 😗

*Large Cap 😗 Abbott India, Bajaj Finance, Divis Lab, HDFC Bank, HCL Tech, HUL, Infosys, ICICI Lombard, , Maruti, Nestle, PI Ind, Tata Steel.

*Mid Cap 😗 AAVAS Financiers, Amber Ent, AU SFB, Dalmia Bharat, Gmm Pfaudler, GNFC, Nalco, Varun Beverages, Westlife Development.

31/05/2021

*ABM Morning Update*

*OPTIMISM RUNS HIGH ON BACK OF RAPIDLY EBBING 2ND WAVE. ‘REMARKABLE-EXUBURENCE’ BACKED BY ABUNDANT LIQUIDITY HELP NIFTY STORM TO NEW HIGH!!!!*

Asian equities trade firm & r extending their recent rally to a 3rd wk in the hope U.S. jobs figures show the xptd revival in hiring in May & keep the global recovery on track. Mkts in the US & Britain r closed for a holiday, though their futures r still trading in Asia. Chinese blue chips were soft as a survey showed a slight slowdn in factory activity but a pick-up in the service sector. The main event of the wk will be U.S. payrolls on Friday with median forecasts at 650,000 but the outcome is uncertain following April's shockingly weak 266,000 gain. That Apr figure was close to 750,000 lower than forecasts, the largest "miss" in the history of the series. Seperately, Oil prices were firm after gaining more than 5% last wk to reach 2-yr closing highs as expectations of a rebound in global demand outweighed concerns abt more supply fm Iran once sanctions are lifted. All eyes will be on OPEC this wk as it reviews its supply agreement, & any hint of an increase in output cud pressure prices. Brent trades close to $69/bl level.

On the 1st day of the June F&O series, Nifty stormed to new heights, as a trinity of rapidly ebbing 2nd wave, announcement of unlocking in the NCR, & $6 tn fiscal stimulus in the US held up investor confidence. While on one side optimism was in the air, the RBI’s AR was at pains to pt out that while some areas of the economy were badly scarred, others such as agriculture, IT, highway infrastructure, tractor sales, railway freight, domestic trade & electricity demand have been resilient. Mkt, however, was determined to look beyond the lockdowns. It ignored RBI’s warning that there may be a bubble in the making. The benchmark Nifty index scaled a fresh record peak closed up 98 pts or 0.64%. RIL was the biggest contributor towards the indices' rally, aftr the stock clocked its sharpest intra-day gain in 2Ms & zoomed 6%. That apart, Grasim, Adani Ports, M&M, Eicher Motors, Coal India, HDFC, Kotak Bk, & IndusInd Bk were the top gainers of the day, up b/w 1-3%. Broader mkts, however, settled the day in the red on the back of profit-booking.

The GST Council meeting, held after a gap of 8M announced

a) extension of IGST exception on import of free Covid relief items till 31 Aug’21,

b) inclusion of black fungus drug Amphotericin B in the exemption category, and

c) simpler compliance measures.

On the COVID-19 front, daily cases in India has fallen by over 50% (lowest since 14 Apr’21). However, WB & TN extended their lockdowns while Delhi & Maharashtra announced plans to soon unlock in a phased manner. Further, the Ministry of Home Affairs- i) directed states/UTs to continue the ongoing Covid-19 guidelines, & ii) extended the ban on international flights till 30 Jun’21. Other highlights of the wk included rptd possible stimulus package for tourism, aviation & hospitality industries & MSMEs, though FM over the weekend made it clear that the decision to grant another fiscal stimulus will be taken only after a thorough assessment.

The govt has expanded the ECLGS scheme to help businesses hit by the 2nd wave of the Covid-19 pandemic. The scheme removes the ceiling of outstanding loans of Rs 5 bn, but keeps the government’s guarantee cover of Rs 3 tn unchanged. Borrowers will be able to avail assistance ltd to 40% or Rs 2 bn, whichever is lower.

According to IMD, Monsoon rains r likely to hit India's southern coast arnd May 31, in line with typical patterns. Nearly half of India's farmland has no irrigation & depends on annual June-Sept rains to grow crops such as rice, corn, cane, cotton & soybeans. India's weather office said last month the country was xptd to get avg monsoon rains this yr, raising expectations of higher farm output, which is central to the country's economy.

Amid the concerns regarding shortage of COVID vaccines, the Centre on Sunday said India will have nearly 12 cr doses of COVID-19 vaccines available for domestic use in June. This is a significant jump from the 7.9 cr doses that were available in May. Till now, India has administered 212 mn doses, the most aftr China & the US. However, only abt 3% of the population received both the doses.

The clinical trial of Zycov-D, the 4th Covid vaccine, is over & the final results have been submitted by manufacturer Zydus Cadila to the DCGI for a go-ahead. The vaccine can be used on children in the 12-17 yrs age bracket.

*Key Things to watch out for the wk –* The MPC's int rate decision, a host of macroeconomic data announcements, COVID-19 trends & global factors wud be the major highlights in the eq mkt this wk & their outcome wud be a major driving force going ahead.

On the macroeconomic front, i) we have GDP data for the 1st qtr, core sector data, Markit Mfg PMI & services data scheduled during the wk. ii) The MPC review meeting is also scheduled this wk wherein RBI is likely to retain the benchmark int rate at the existing levels. iii) Further the monthly auto sales nos will also start pouring in fm June 1. The nos r xptd to be soft on MoM basis, mainly because of strict lockdn across many states impacting the dealership operations i.e. sales & also after major OEM had plant closure shut-dn for most part of the month.

Earnings - We are now in the last leg of earnings season. Prominent co's including Aurobindo Pharma, ITC, Motherson Sumi, PVR, Bharat Forge, will release their qtrly earnings in the coming wk. Further the expectations of state-wise gradual unlocking due to declining COVID-19 cases r giving hopes of economic recovery & wud also be watched out for by the mkt participants.

*Results*

*Divis Labs*

Sales at Rs 1788 cr vs Rs 1390 cr YoY
EBITDA at Rs 1788 cr vs Rs 1390 cr YoY
EBITDA margin at 40.1% vs 32% YoY
Profit at Rs 502 cr vs Rs 388 cr YoY

*3M India – Decent performance*

Revenue came at Rs. 827.2 cr (11.6% QoQ, 22.9% YoY)
EBIDTA came at Rs. 102.4 cr (11.7% QoQ, 34.2% YoY)
EBITDA Margin came at 12.4% vs QoQ 12.4%, YoY 11.3%
NP came at Rs. 70.5 cr vs QoQ Rs. 59.4 Cr, YoY Rs. 60.1 Cr

*GMM Pfaudler – Strong Results - (Standalone + MAVAG for like to like comparison)*

Revenue came at Rs. 214.7 cr (6.4% QoQ, 62.9% YoY)
EBIDTA came at Rs. 57.8 cr (37.8% QoQ, 157.2% YoY)
EBITDA Margin came at 26.9% vs QoQ 20.8%, YoY 17.1%
NP came at Rs. 36.2 cr vs QoQ Rs. 23.2 cr, YoY Rs. 11.6 cr
Pfaudler was consolidated only for months of Feb & Mar. Including this the combined revenue was Rs. 471 cr, EBITDA was Rs. 75.5 cr with margin of 16.0% & PAT was Rs. 57 cr (before Minority int)

*M&M – Q4FY21 - Result is marginally below expectations*

Revenue came at Rs. 13512.4 cr (-4.9% QoQ, 47.8% YoY) vs expectation of Rs. 12795.1 cr
EBIDTA came at Rs. 1789.3 cr (-21.4% QoQ, 57.7% YoY) vs expectation of Rs. 1865.1 cr
EBITDA Margin came at 13.2% vs expectation of 14.6%, QoQ 16%, YoY 12.4%
EBIT grew 92% YoY to Rs 1485 cr
NP came at Rs. 935.1 cr vs expectation of Rs. 1094.7 cr
M&M will spend Rs 12,000 cr in the nxt 3 yrs towards launching & upgrading a range of PVs & CVs as it seeks to regain lost mkt share. The capex earmarked will fuel the co’s plan of launching 23 new products in nxt 5 yrs

*Affle India – Decent Result*

Revenue came at Rs. 141.5 cr (-6% QoQ, 76.8% YoY)
EBIDTA came at Rs. 34.2 cr (-10.9% QoQ, 69.7% YoY)
EBITDA Margin came at 24.2% vs QoQ 25.5%, YoY 25.2%
NP came at Rs. 58.5 cr vs QoQ Rs. 30.6 cr, YoY Rs. 15.3 cr (Higher PAT is on a/c of higher Other Income)

Overall, the underlying momentum of mkt is xptd to stay +ve as it looks ahead at re-opening of economy & corporate profitability in the medium term.

*Quote of the Day : “There’s ‘mounting-evidence’ that commodities are no longer China-centric. The main reason for the U.S.’s greater power in the market is Washington’s fiscal stimulus, but there are also structural factors - China no longer benefits as much from low-cost labor or from its previous indifference to environmental concerns - that make this a paradigm shift” – Goldman Sachs. China’s efforts to rein in surging commodities prices are likely to be in vain as it’s lost the ability to boss the market around, according to two of Wall Street’s biggest firms. The speed of the rebound in demand in advanced economies, particularly the U.S., means China is no longer the buyer dictating pricing, Goldman Sachs Group Inc. analysts led by Jeff Currie said with the view echoed by his equivalent at Citigroup Inc., Ed Morse*

*Focus For the Day:*

1. Key Results - Aurobindo, Honeywell Automation,

2. India Q4FY21 GDP

*Key corporate developments/policy actions:*

1. India extends ban on international flights till June-end

2. In a first, petrol price crosses Rs.100 mark in Mumbai last Fri as fuel prices hiked again

3. RBI imposes Rs10 cr penalty on HDFC Bk

4. CPP Investments to buy stake in Phoenix Mills’ Kolkata mall for Rs 560 cr

5. Adani Ports and SEZ looks to acquire Karaikal Port

6. Paytm eyes $3-bn IPO

*Fund Flow:*

FII: (+) Rs9.14bn; DII : (+) Rs.12.75bn

*Stocks to focus 😗

*Large Cap 😗 Abbott India, Bajaj Finance, Divis Lab, HDFC Bank, HCL Tech, HUL, Infosys, ICICI Lombard, , Maruti, Nestle, PI Ind, Tata Steel.

*Mid Cap 😗 AAVAS Financiers, Amber Ent, AU SFB, Dalmia Bharat, Gmm Pfaudler, GNFC, Nalco, Varun Beverages, Westlife Development.

28/05/2021

*ABM Morning Update*

*EVEN AS RBI FLAGS RISK OF BUBBLE IN INDIAN EQUITIES, NIFTY CLOSES @ RECORD*

Asian equities trade on a +ve note, taking cues fm US stocks which rose aftr a slew of economic data releases that r xptd to spur discussion among investors abt the Fed’s response to the strengthening economic recovery. The U.S. economy expanded at an annualized 6.4% pace in the Q1 vs expectation of 6.6%. Economists predict GDP will grow at an 8.2% annualized rate in the Q2. While consumer spending was revised higher, this was offset in part by stronger import growth. The no. of Americans seeking unemployment benefits dropped last wk to 406,000, a new pandemic low & more evidence that the job mkt is strengthening as the virus wanes & economy further reopens. Thursday's rpt fm the Labour Dept showed that applications declined 38,000 fm 444,000 a wk earlier. The no. of wkly applications for jobless aid -- a rough measure of the pace of layoffs -- has fallen by more than half since Jan. Resultantly, bond yields have risen & r back again abv 1.6% levels. Oil prices extended gains, bolstered by strong U.S. economic data that offset investors concerns abt the potential for a rise in Iranian supplies. Brent trades abv $69/bl currently.

Fag-end buying in the PSBs, IT, & metal counters ahead of the expiry of May derivatives contracts propelled the benchmark Nifty50 index to record closing high on Thurs. The Nifty 50 closed up 36 pts or 0.24%. Overall, Shree Cement, SBI, BAL, KMB, Tech M, Ultratech Cement, Axis Bk, & Tata Steel were the top large-cap gainers. Rally in the broader mkt space continued unabated which outperformed the large cap brethren. Sectorally, the Nifty PSU Bk remained the top performing index on the NSE - up arnd 3%. This was followed by the Nifty IT index which grew 1.2%. TCS, Tech M, Infosys, HCL Tech & LTI advanced in the range of 1-3%.

Paytm, India’s leading digital payments provider, is aiming to raise abt $3 bn in an IPO late this yr. The startup, backed by investors including Berkshire Hathaway Inc., SoftBank Grp Corp. & Ant Group Co., plans to list in India arnd Nov & its offering cud coincide with the Diwali festival season. Paytm, formally called One97 Communications Ltd., is targeting a valuation of ~ $25-30 bn. If successful, Paytm’s initial share sale wud surpass CIL’s offering, which raised more than Rs 15k cr in 2010 in the country’s largest IPO so far.

*Results*

1. Eicher Motors – Result is marginally below expectation. No. of vehicles sold 222771 vs QoQ 212470,YoY 174499. Revenue came at Rs. 2940.3 cr (4% QoQ, 33.2% YoY) vs expectation of Rs. 2932.1 cr. EBIDTA came at Rs. 634.4 cr (-5.6% QoQ, 46.8% YoY) vs expectation of Rs. 670.7 cr. EBITDA margin of 21.6% was below expectation of 22.9% because of 1-time exp of Rs 50 cr mainly towards currency volatility. Thus, adjusting for that the margin wud have been >23%. NP came at Rs. 526.1 cr vs expectation of Rs. 556.8 cr. The mgt xpts the unlocking to happen in the cmng days, & expects the demand to come back fm July 2021 onwards. Some supply side challenges do persist, however the same will ease gradually in 2021. RE have 2-3 months of order-book & continues to expand its network. It maintains its stance to launch 1 new product/qtr.

2. Sun Pharma – Result is broadly in-line with expectations. Revenue came at Rs. 8523 cr (-3.6% QoQ, 4.1% YoY) vs expectation of Rs. 8716.4 cr. EBIDTA came at Rs. 2059.2 cr (-11.8% QoQ, 36.8% YoY) vs expectation of Rs. 2096.3 cr. EBITDA Margin came at 24.2% vs expectation of 24%. NP came at Rs. 1567 cr vs expectation of Rs. 1375 cr.

3. Cadila Healthcare – Result is marginally abv expectations. Revenue came at Rs. 3846.7 cr (1.3% QoQ, 2.5% YoY) vs expectation of Rs. 3852.4 cr. EBIDTA came at Rs. 855.3 cr (6% QoQ, 8.1% YoY) vs expectation of Rs. 819.9 cr. EBITDA Margin came at 22.2% vs expectation of 21.3%. NP was higher at Rs. 752.1 cr vs expectation of Rs. 496.3 cr.

4. Alkyl Amines – Strong results. It rptd total income was higher by 62% YoY to Rs.383.6 cr. It rptd EBITDA margin of 35% vs 29% on YoY basis. It posted NP of Rs.92.6 cr vs Rs.49.2 cr on YoY basis.

5. Dixon Tech – Result is below expectations mainly due to higher Opex; however mgt commentary remains strong. Revenue came at Rs. 2109.7 cr (-3.3% QoQ, 146.1% YoY) vs expectation of Rs. 2015.3 cr. EBIDTA came at Rs. 79.8 cr (-20.6% QoQ, 42.8% YoY) vs expectation of Rs. 98.2 cr. EBITDA Margin came at 3.8% vs expectation of 4.9%. NP came at Rs. 44.3 cr vs expectation of Rs. 54.6 cr. The mgt commentary remains strong & expects additional PLI schemes is likely to drive the revenue & profitability in non-linear pace in the cmng yrs. The revenue cud be 3x in nxt 5 yrs implying growth of ~25%.

6. Metropolis Healthcare – Result is abv expectations. Revenue came at Rs. 291.7 cr (6.2% QoQ, 40.9% YoY) vs expectation of Rs. 289.8 cr. Non-Covid/Covid revenue mix stands at 86/14 respectively in Q4 vs.81/19 in Q3FY21. EBIDTA came at Rs. 96.4 cr (11.3% QoQ, 87.5% YoY) vs expectation of Rs. 89.3 cr. EBITDA Margin came at 33% vs expectation of 30.8%. NP came at Rs. 61.3 cr vs expectation of Rs. 60.3 cr. Mgt commentary – It recorded highest ever qtrly revenues driven largely by Non-Covid business. Its large capacities & expertise in specialized testing enabled to seamlessly serve over 8L new customers for Covid tests. Covid tests & Covid allied tests have witnessed an uptick in Q1FY22.

7. Page Ind – Result is in-line with expectations. Revenue came at Rs. 880.8 cr (-5% QoQ, 62.7% YoY) vs expectation of Rs. 784.2 cr. It rptd vol growth of 54% in Q4FY21 & was the best ever Q4 in the co history. EBIDTA came at Rs. 169.8 cr (-24.9% QoQ, 192.1% YoY) vs expectation of Rs. 170.1 cr. EBITDA Margin came at 19.3% vs expectation of 21.7%. NP came at Rs. 115.5 cr vs expectation of Rs. 113.1 cr. The demand commentary remains strong & co’s strategy to diversify its product portfolio & geographical reach remains +ve fm a long term perspective.

Overall, earnings season has been healthy, across large cap & midcap space. With expectation of good monsoon, lower covid cases & availability of vaccine - xpt mkts to maintain their +ve traction. For today, SGX Nifty indicates 34 pts gap up opening for Nifty.

*Quote of the Day : “Kind of a mind blowing stat today during the Microsoft Build conference. In the last year the Automotive Industry has hired 35% more software engineers than mechanical engineers” – Pierre Hulsebus, Biz Apps Technical Director, Manufacturing & Automotive at Microsoft*

*Prices of risky assets surged across countries to record high levels during the year on the back of unparalleled levels of monetary and fiscal stimulus, and the turn in market sentiments following positive news on the development of and access to vaccines and the end of uncertainty surrounding US election results. The widening gap between stretched asset prices relative to prospects for recovery in real economic activity, however, emerged as a global policy concern,” - RBI said in a note titled "Is the bubble in stock markets rational?".*

*Focus For the Day:*

1. Key Results - M&M, GMM, Sumitomo

2. GST Council meet. FM to address media post the meet @ 7 pm

*Key corporate developments/policy actions:*

1. GST council meeting schedule later today is xptd to reduce GST on yarn to 12% fm 18% (+ve for textile stocks). For footwear products, the suggestion is to increase GST for below Rs 1000 footwear to 12% fm 5% (-ve for footwear)

2. Reliance Jio is planning to bring affordable 4G & 5G smartphones to India. The co has also joined hands with Google for the same

3. BPCL says no intention to sell stake in Petronet, IGL

4. TCS acquires GE's stake in TCS S Arabia

*Fund Flow:*

FII: (-) Rs6.61bn; DII : (+) Rs.1.12bn

*Stocks to focus 😗

*Large Cap 😗 Abbott India, Bajaj Finance, Divis Lab, HDFC Bank, HCL Tech, HUL, Infosys, ICICI Lombard, , Maruti, Nestle, PI Ind, Tata Steel.

*Mid Cap 😗 AAVAS Financiers, Amber Ent, AU SFB, Dalmia Bharat, Gmm Pfaudler, GNFC, Nalco, Varun Beverages, Westlife Development.

Mahesh Devaram Dharmavat

09/06/2021

03/06/2021

02/06/2021

01/06/2021

31/05/2021

28/05/2021

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