Trendlyne Analysis

Nifty 50 rose over 220 points and closed at a three-month high, with the volatility index, India VIX, falling below 17%. The Nifty 50 closed above the 17,100 mark and ended the session higher than its 200-day simple moving average or SMA. European stocks traded higher as Eurozone’s GDP rose 0.7% in the second quarter, topping analysts’ expectations. However, Eurozone inflation hits a record high of 8.9% in July.

Major Asian indices closed mixed despite the US indices closing higher on Thursday. The tech-heavy index, NASDAQ 100, rose 0.9% while the S&P 500 closed 1.2% higher. US GDP falls 0.9% in Q2CY22 and shrinks for a second consecutive quarter, which is one of the common criteria for a recession. This fall in GDP may push the US Federal Reserve to re-assess the aggressive rate hikes going forward. 

Nifty Smallcap 100 and Nifty Midcap 100 closed in the green, following the benchmark index. Nifty Metal and Nifty Auto closed higher than Thursday’s levels. Nifty IT closed sharply higher, tracking the NASDAQ 100, which closed in the green on Thursday.

Nifty 50 closed at 17,158.25 (228.7, 1.4%), BSE Sensex closed at 57,570.25 (712.5, 1.3%) while the broader Nifty 500 closed at 14,665.65 (196.6, 1.4%)

Market breadth is in the green. Of the 1,884 stocks traded today, 1,187 showed gains, and 644 showed losses.

• Chemplast Sanmar, Cholamandalam Financial Holdings, Zydus Wellness, and Procter & Gamble Hygiene & Healthcare are trading with higher volumes as compared to Thursday.

• Sun Pharma reports an increase in net profit by 42.7% YoY to Rs 2,060.8 crore, against a net loss of Rs 2,277.2 crore in Q4FY22. Expenses increase 14% YoY causing EBITDA margin to fall 190 bps to 26.8%. The management continues to focus on expanding the specialty business globally and improve its market share.

• Ashok Leyland is rising as it posts a net profit of Rs 5.3 crore in Q1FY23 compared to a loss of Rs 273.9 crore last year. The softening of steel prices along with a more than 2X YoY rise in revenue aids profit growth. Revenue grows on the back of robust volume growth in the medium and heavy commercial vehicles (MHCV) segment. The company’s MHCV market share in Q1 rises by 300 bps YoY to 30%. Revenue from the commercial vehicle segment rises 2.3X YoY.

• Deepak Fertilisers & Petrochemicals' Q1FY23 net profit rises 233.5% YoY to Rs 435.7 crore as its margins improve. EBITDA margins rise 910 bps YoY to 24.3%. Increase in revenue of chemicals segment by 59.4% YoY to Rs 3,031.1 crore aids revenue growth.

• All commodity stocks are trading in the green. Stocks like UltraTech Cement, Oil and Natural Gas Corp, JSW Steel, NTPC, among other are up by 1.5%. The broader sectoral index Nifty Commodities is also rising in trade.

• HDFC is rising as its Q1FY23 net profit is up 22% YoY to Rs 3,668.8 crore. Net interest income rises 7.8% YoY as assets under management also increase 17% YoY to Rs 6.7 lakh crore. The management says that despite the rate hikes, demand for home loans remains strong with 92% of home loan applications coming in through digital channels.

• Glenmark Pharmaceuticals’ US arm receives US FDA approval for its Norethindrone Acetate and Ethinyl Estradiol Capsules. These drugs, which are used as contraceptives, have a market size of $ 85.9 million.

  Glenmark Pharmaceuticals gets a nod from US FDA for its generic Norethindrone Acetate & Ethinyl Estradiol Capsules & Ferrous Fumarate birth control capsules.#GlenmarkPharma #USFDA #birthcontrolhttps://t.co/LOlcb3AGoM

  — Business Standard (@bsindia) July 29, 2022

• PNC Infratech is rising as its signs a concession agreement with the National Highways Authority of India for a hybrid annuity mode project worth Rs 864 crore. The project involves the upgradation of an existing road to a four-lane bypass in Hardoi district of Uttar Pradesh.

• GMM Pfaudler rises as its Q1FY23 net profit jumps 17.2X YoY to Rs 44.5 crore. Its revenue is also up 34% YoY with overseas revenue increasing 32%. The board also approves the acquisition of 100% stake in Hydro Air Research Italia for 4.96 million euros.

• ICICI Direct maintains its ‘Buy’ rating on Maruti Suzuki India with a target price of Rs 10,000. This indicates an upside of 15%. The brokerage believes the company is well-placed to capitalise on the growing demand for passenger vehicles and sport utility vehicles in India. It also sees the company’s robust order book and encouraging customer responses towards its new product launches as key positives. The brokerage expects the company’s net profit to grow at a CAGR of 63.5% over FY22-24.

• TVS Motor Co rises and touches an all-time high of Rs 953 as it is back in black with a net profit of Rs 305.4 crore in Q1FY23 against a loss of Rs 10.6 crore in Q1FY22. It missed Trendlyne’s Forecaster estimate by 1.5%. Revenue is up 56% YoY with revenue from automotive vehicle and parts rising 57%.

• GMM Pfaudler is trading with more than 20 times its weekly average trading volume. Westlife Development, Finolex Cables, The Fertilisers and Chemicals Travancore, and SBI Life Insurance Company are trading at more than five times their weekly average trading volumes.

• Punjab National Bank is falling as its net profit falls 70% YoY to Rs 308.4 crore as provisions for non-performing assets (NPAs) rise 48% YoY. The asset quality of the bank fell as gross and net NPA falls 306 bps and 156 bps YoY, respectively. However, net interest income rises 4.3% YoY in Q1FY23.

• Vedanta is rising as its Q1FY23 net profit grows despite high production costs as power and fuel costs rise 2.3X YoY to Rs 8,953 crore. Net profit rises 4.7% YoY to Rs 4,421 crore. Revenue grows 35.9% YoY on the back of higher sales volume and strategic hedging gains. The domestic zinc and lead segment drives revenue growth, as it rises 54.6% YoY to Rs 8,066 crore. However, high input costs dent margins, as the operating margin falls by 8.3 percentage points YoY to 26.4%

• Yes Bank’s board to consider raising funds today, according to reports. Private Equity firms like Carlyle and Advent are looking for a 10% stake each as a part of funding.

  .@YESBANK board to meet today to consider fund raise, and may consider PE proposals for investment
  
  Carlyle, Advent are eyeing up to 10% stake each & seek board nominations as part of the funding
  
  Sources say
  
  Alert: Yes Bank, Advent, and Carlyle declined to comment on the deal pic.twitter.com/F8GqN8rztC

  — CNBC-TV18 (@CNBCTV18Live) July 29, 2022

• IFB Industries posts its first profit in two quarters in Q1FY23 at Rs 1.9 crore. This was helped by the company posting an EBITDA of Rs 34.4 crore during the quarter compared to an operating loss of Rs 31.6 crore in Q1FY22. Revenue from home appliances and engineering segments aided the company's revenues to grow 86.6% YoY to Rs 1,067.4 crore.

• All metal stocks are trading in the green. Stocks like JSW Steel, Tata Steel, Hindalco Industries, Jindal Steel & Power, Steel Authority of India (SAIL), among others are up by more than 2.5%. The broader sectoral index Nifty Metal is also rising in trade.

• Dr. Reddy’s Laboratories is falling despite net profit surging more than 3X YoY to Rs 1,189 crore. Profit jumps as the company recognizes Rs 563 crore in Q1 as other income from a settlement agreement with Indivior Inc. It received $ 50 million or (Rs 397.3 crore) out of the total $ 72 million which is receivable by March 31, 2024. Revenue rises 6% YoY driven by new product launches across businesses and divestment of a few non-core brands in India. However, high commodity prices hurt the company’s margins, gross margin falls 230 bps YoY to 49.9%.

• Indus Towers Managing Director and Chief Executive Officer Bimal Dayal resigns on Thursday to pursue opportunities outside the company. His relieving date is under discussion.

• Kalpataru Power Transmission (KPTL) receives new orders worth Rs 1,842 crore on a consolidated basis for metro rail electrification, railway projects and other overseas projects. Its subsidiary, JMC Projects, also receives orders worth Rs 631 crore in its buildings and factories business. KPTL’s order book now stands at Rs 8,000 crore for the current year.

• SBI Life Insurance’s Q1FY23 net profit rises 17.8% YoY to Rs 262.8 crore as annualized premium equivalent (APE) rises 80% YoY. Also, the company’s gross written premium (new business premium + renewal premium) is up 35% YoY. With the pandemic effects waning out, the company sees a surge in value of new business premiums (VNB) by 130% YoY. This lead to an improvement in margins by 6.7 percentage points to 30.4%.

Riding High:

Largecap and midcap gainers today include SBI Life Insurance Company Ltd. (1,294.40, 8.64%), Dr. Lal Pathlabs Ltd. (2,303.60, 7.42%) and Tata Steel Ltd. (107.60, 7.22%).

Downers:

Largecap and midcap losers today include Shriram Transport Finance Company Ltd. (1,379.75, -5.56%), Mahindra & Mahindra Financial Services Ltd. (186.70, -5.32%) and Dr. Reddy's Laboratories Ltd. (4,090.35, -3.98%).

Volume Shockers

38 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included GMM Pfaudler Ltd. (1,599.40, 19.06%), Route Mobile Ltd. (1,400.60, 13.37%) and Westlife Development Ltd. (584.30, 9.32%).

Top high volume losers on BSE were Intellect Design Arena Ltd. (630.40, -5.47%), Dr. Reddy's Laboratories Ltd. (4,090.35, -3.98%) and Shriram City Union Finance Ltd. (1,941.65, -1.95%).

Sundaram Clayton Ltd. (4,676.75, 2.70%) was trading at 24.4 times of weekly average. Finolex Cables Ltd. (424.55, 6.75%) and HEG Ltd. (1,176.05, 8.18%) were trading with volumes 13.8 and 8.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

19 stocks took off, crossing 52-week highs, while 1 stock tanked below its 52-week lows.

Stocks touching their year highs included - Adani Transmission Ltd. (3,109.60, 3.22%), Ashok Leyland Ltd. (149.00, 2.37%) and Blue Dart Express Ltd. (8,587.45, 3.45%).

Stock making new 52 weeks lows included - Sanofi India Ltd. (6335.00, -0.08%).

43 stocks climbed above their 200 day SMA including GMM Pfaudler Ltd. (1,599.40, 19.06%) and Devyani International Ltd. (178.95, 8.22%). 2 stocks slipped below their 200 SMA including Gillette India Ltd. (5,201.30, -0.38%) and Granules India Ltd. (299.65, -0.17%).