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Editorial

Top 5 Bluechip Stocks to Watch During a Market Fall

bluechip stocks to watch | marketfeed

As the festive season of Diwali approaches, it’s not just the festive deals in traditional or e-commerce stores turning heads—investors are spotting opportunities in the stock market, too. The Nifty 50 index has dropped by over 5% in the past month, with many stocks facing even sharper declines. This dip offers Indian investors a chance to buy low and potentially benefit from future gains. In this article, we’ll break down the market’s recent correction and unveil five bluechip stocks to watch out for.

Why Has the Nifty 50 Fallen Recently?

1. Heavy Selling by Foreign Institutional Investors (FIIs)

One of the primary reasons for the recent downturn in the Nifty 50 is the significant selling activity by Foreign Institutional Investors (FIIs). Following a recent SEBI circular that impacted futures and options (F&O) trading, FIIs have been pulling substantial amounts of money out of Indian markets. [FIIs buy assets, pledge them as collateral, and then use the funds for F&0 trading]. From October 1-21, 2024, FIIs have sold more than ₹80,000 crores worth of stocks in the cash market, marking a notable shift from their earlier buying trend.

2. Corporate Earnings Disappointments

Another contributing factor to the market’s decline is the flat earnings reports from major companies. For instance, the earnings for giants like Reliance Industries failed to meet market expectations, leading to a sell-off. Combined with FII selling, these earnings reports have contributed to a bearish sentiment in the market.

Why a Rebound is Likely to Occur

Despite these challenges, several indicators suggest that the market could rebound from its current levels:

1. Resilience of Midcap and Smallcap Stocks

Interestingly, while the Nifty 50 has fallen over 5%, midcap and smallcap stocks have not experienced a similar downturn. Historically, large-cap stocks tend to fall more sharply during market corrections. However, the relative strength of midcap and smallcap stocks this time indicates that the overall market sentiment may not be as bearish as it appears.

NIFTY50 bluechip stocks to watch | marketfeed
1-month data

2. International Market Correlation

The Indian stock market has shown a strong correlation with international markets. Currently, U.S. and European markets are trading near their all-time highs. If these markets continue their upward trajectory, it is likely that Indian markets will follow suit, leading to potential gains for investors who enter the market now.

Top 5 Bluechip Stocks to Watch

With the festive season upon us, here are five Nifty 50 stocks that present compelling investment opportunities:

1. Reliance Industries (RIL)

Reliance Industries has seen a decline of over 15% since July 2024. Currently trading below its 200-day exponential moving average, the stock has been under pressure due to FII selling and disappointing earnings, particularly in its oil-to-chemicals business. However, with an upcoming bonus issue on October 28, investor interest could rebound. Watch for resistance around ₹2,765, as a break above this level could indicate strength.

2. Tata Consultancy Services (TCS)

TCS has fallen by over 11% from its 52-week high and is currently near its 200-day exponential moving average (EMA). The stock has a strong support zone between ₹3,973 and ₹4,055, making it a solid pick for those looking to invest in a blue-chip technology company. As digital transformation continues to be a priority for businesses, TCS stands to benefit in the long run.

3. Kotak Mahindra Bank

Despite a recent earnings report that sent the stock down over 7%, Kotak Mahindra Bank has shown resilience, falling less than other banking stocks. Currently near its 200-day EMA with a support level around ₹1,730, this stock may provide a favourable risk-reward scenario for investors looking to enter the banking sector.

4. Tata Motors

Tata Motors has experienced a significant decline of more than 24% recently from its all-time high. Currently trading below its 200-day EMA, the stock’s support level at ₹888—previously an all-time high—offers an attractive entry point. With the Diwali season promising increased automobile sales, Tata Motors, with its low PE ratio, presents a compelling investment opportunity.

5. Titan Company

Titan has fallen approximately 13% recently from ₹3,866 levels, making it another attractive option. Historically, jewellery companies like Titan perform well during the festive season. The stock is nearing a critical support level around ₹3,200, and if it holds, it could be a solid investment, especially with the festive buying likely to boost sales.

Conclusion

The current market conditions present a unique opportunity for investors willing to do their homework. While the recent declines in the Nifty 50 and its constituent stocks may seem alarming, there are underlying reasons to believe a rebound is on the horizon. The stocks highlighted in this article offer a combination of strong fundamentals and favourable technical setups.

As always, it’s essential to conduct your research and consider your risk tolerance before making any investment decisions. The Diwali stock market sale could be your chance to invest in fundamentally strong companies at discounted prices. Happy investing, and may this festive season bring you financial prosperity!

Disclaimer: We are not SEBI-Registered Investment Advisors. The stocks and analysis mentioned in the article are purely for educational purposes. Kindly do your own research before investing!

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Market News Top 10 News

RBI Imposes Rs 2.5Cr Fine on L&T Finance – Top Indian Market Updates

Here are some of the major updates that could move the markets tomorrow:

RBI imposes ₹2.5 crore fine on L&T Finance

The Reserve Bank of India (RBI) has imposed a penalty of ₹2.5 crore on L&T Finance Ltd for non-compliance with certain norms concerning non-banking financial companies (NBFCs). The RBI reported that the NBFC did not disclose info about the gradation of risk and rationale for charging different interest rates to different categories of borrowers in its loan application forms.

Read more here.

JSW Steel Q2 results: Net profit at ₹2,760 crore

JSW Steel Ltd posted a net profit of ₹2,760 crore for the quarter ended September (Q2 FY24); beating street estimates. The steel company posted a net loss of ₹848 crore in Q2 last year. Its consolidated revenue from operations rose 7% YoY to ₹44,584 crore in Q2 FY24. EBITDA stood at ₹7,886 crore, up 350.11% YoY.

Read more here.

Adani Group refinances $3.5 billion debt taken for ACC-Ambuja buy

The Adani Group is to sign a definitive agreement to refinance $3.5 billion of loans taken for last year’s acquisition of ACC Ltd and Ambuja Cement. At least 18 global banks have agreed to join the consortium led by Barclays, Deutsche Bank, and Standard Chartered. The Adani family will prepay around $300 million. This will also be the largest refinancing exercise across the Asia Pacific this financial year.

Read more here.

Paytm Q2 Results: Net loss narrows to ₹290 crore

One97 Communications Ltd (Paytm) reported a net loss of ₹290 crore for the quarter ended September 2023 (Q2 FY24). Net loss stood at ₹357 crore in the same period a year ago. Its revenue from operations rose 32% YoY to ₹2,519 crore in Q2 FY24. EBITDA stood at ₹153 crore, up 82% YoY. 

Read more here.

Godrej Properties’ subsidiary gets ₹260Cr GST demand order

Godrej Properties’ subsidiary, Godrej Landmark Redevelopers, received an order from tax authorities over an alleged non-payment of Goods & Services Tax (GST). The notice is concerning one of the projects developed by the company. The Additional Commissioner, CGST, Navi Mumbai, has issued the order with a GST demand of ₹129.39 crore along with interest and a penalty of ₹129.39 crore.

Read more here.

Hindustan Zinc Q2 Results: Net profit falls 35% YoY to ₹1,729 crore

Hindustan Zinc Ltd reported a 35% YoY decline in consolidated net profit to ₹1,729 crore for the quarter ended September 2023 (Q2 FY24). Its revenue from operations fell 16% YoY to ₹6,619 crore during the same period. EBITDA stood at ₹3,139 crore, down 24% YoY.

Read more here.

Titagarh Rail Systems secures ₹350Cr contract from Gujarat Metro

Titagarh Rail Systems Ltd (TRSL) secured a ₹350 crore contract from Gujarat Metro Rail Corporation (GMRC). TRSL will design and manufacture 30 standard gauge cars for the Ahmedabad Metro Rail Phase-II Project. The prototype has to be delivered within 70 weeks from the Letter of Acceptance (LOA) and delivery completion will be 94 weeks from the LOA. These metro cars will be manufactured at the company’s facility in Uttarpara, West Bengal.

Read more here.

Kotak Bank gets RBI approval for acquisition of Sonata Finance

Kotak Mahindra Bank has received approval from the Reserve Bank of India (RBI) for its ₹537 crore acquisition of microlender Sonata Finance. The approval is for acquiring 100% of the issued and paid-up capital in Sonata. RBI has allowed Kotak to make Sonata as its business correspondent subsidiary, and the entity will now be a wholly-owned subsidiary of Kotak Mahindra Bank. 

Read more here.

Samvardhana Motherson announces three acquisitions

Samvardhana Motherson International Ltd (SAMIL) has made three acquisitions valued at over ₹380 crore in the aerospace, health and medical sectors to strengthen its non-automotive businesses. The aerospace division of the company is building its capabilities in a phased and strategic manner, enabling it to offer a much wider range of services to aerospace original equipment manufacturers (OEMs).

Read more here.

ONGC to acquire PTC India’s power generation subsidiary

PTC India’s board has approved a bid submitted by ONGC Ltd for the acquisition of a 100% stake in its wholly-owned subsidiary, PTC Energy Ltd (PEL), for ₹925 crore. PEL has a renewable energy portfolio of 288.8 MW, consisting of 50 MW wind power projects in Madhya Pradesh, 50 MW wind power projects in Karnataka and 188.8 MW wind power projects in Andhra Pradesh. PEL recorded revenue from operations of ₹296.77 crore during FY23.

Read more here.

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Daily Market Feed Pre Market Report

Crude Oil Spikes Again; Markets Down – Share Market Today

News Shots 

Ruchi Soya raised Rs 1289.80 crore through anchor investors. 46 anchor investors were allotted 1.98 crore shares at issue price of Rs 650.

Sun Pharmaceuticals settled with two plaintiff groups for amount of $485 million in Ranbaxy Generic Drug Application Antitrust Litigation ongoing in the U.S. District Court for the District of Massachusetts.

The Reserve Bank of India has granted approval to SBI Funds Management to acquire upto 9.99% stake in ICICI bank.

Adani Total Gas was granted authorization for development of City Gas Distribution Network by Petroleum and Natural Gas Regulatory Board in 10 geographical areas.

Zomato’s Canada unit, Zomato Canada has been dissolved. It didn’t have any active business operations.

IIFL Finance will buy back 5.875% US $400 million secured notes.

What to expect? 

 NIFTY opened with a gap-up at 17,415 and moved down. There were some up-moves with volume trapping the buyers. The fall continued and NIFTY closed the day at 17,246, 70 points down or 0.4%.

BANK NIFTY opened higher at 36,630 and a proper downtrend followed. But the index managed to stay above 36,000. BANK NIFTY closed the day at 36,147, 201 points down or 0.55%.

Metals moved higher.

The US markets closed deep in the red. The European markets also closed in the red.

The Asian markets also are down. The U.S. Futures and the European futures are trading flat to green.

SGX NIFTY is trading at 17,210. All the factors together indicate a gap-down opening.

NIFTY has supports at 17,200, 17,175, 17,100 and 17,000. We can expect resistances at 17,280, 17,350, 17,480 and 17,620.

BANK NIFTY has supports at 36,000 and 35,500 and 35,300. Resistances are at 36,450, 36,600, 36,900 and 37,400. 

NIFTY has the highest call OI build-up at 18,000 followed by 17,500. The highest put OI build-up is at 16,000.

BANK NIFTY has the highest call OI build-up at 37,000 and the largest put OI build-up is at 36,000.

INDIA VIX is at 24.7.

Foreign Institutional Investors net bought shares worth Rs 500 crores. Domestic Institutional Investors net sold shares worth Rs 300 crores. 

Crude oil prices have again spiked above $120. This is a major concern for India. We cannot expect the crude oil prices to calm down without an agreement being reached in the peace talks. 

Russia said that it is getting harder to go on with the peace talk with Ukraine as the latter changes the stance often. Putin’s adviser, Chubais has quit and left Russia over the war. There are reports that many insiders oppose Putin on the same.

A major move taken by Russia yesterday was the decision to accept the payment for gas in Rubles, for the ‘unfriendly nations’. He added that Russia will continue to supply natural gas unconditionally.

HDFC twins, Kotak Bank and Infosys led the fall yesterday. Reliance closed in the green for another day. Kotak Bank had a blockdeal today and that could be the reason why it fell heavily.

The five minutes candle at 2:30 was a perfect example of trapping the traders where there was a sudden up-move with good volume but there was no follow-up candle. Be prepared for such moves and make sure that you do not fall prey to the moves.

You can see that all the global markets are down. At the same time, FTSE was able to restrict the losses. UK reported inflation at 6.2%, a 30 year high. This is certainly bad for the economy but the stock market did not show any reflection. This is because UK stock market shows a different correlation with inflation data as there is focus on the defensive stocks.

PCR is 0.5. At the same time, the second-highest call build-up is not at 17,400 but 17,600. 16,800 put sellers look safe. Let us see how the OI changes after the market opens.

I will be watching 17,000 on the downside and 17,350 on the upside in NIFTY.

Follow us on the marketfeed app’s Live Feed section to get real-time updates from the market. All the best for the day!

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Market News Top 10 News

MTAR Technologies IPO Subscribed 200.8 Times on Final Day of Bidding – Top Indian Market News

MTAR Technologies IPO subscribed 200.8 times on final day of bidding

The Rs 596.41-crore initial public offering (IPO) of MTAR Technologies was subscribed 200.79 times on the second day of bidding. The issue received bids for 145.79 crore equity shares against an offer size of 72.60 lakh shares. The portion reserved for retail investors was subscribed 28.4 times. The portion set aside for non-institutional investors (NIIs) was subscribed 650.7 times and that for qualified institutional buyers (QIBs) 165 times.

Read more here.

Kotak Mahindra Bank divests 10% stake in ECA Trading Services to its subsidiary

Kotak Mahindra Bank has divested 10% stake in ECA Trading Services to its wholly-owned subsidiary, Kotak Securities, for Rs 1.98 crore. A total of 1.09 crore equity shares were sold to the subsidiary at Rs 10 per share. The divestment was done to comply with the prudential limit set by the Reserve Bank of India (RBI) on investment in a non-financial services entity.

On Thursday, Kotak Mahindra Bank signed a Memorandum of Understanding (MoU) with the Indian Army. The private sector lender will now handle the salary accounts of Indian Army personnel.

Read more here.

PNB Housing Finance, Yes Bank enters into co-lending partnership

PNB Housing Finance and Yes Bank have entered into a strategic co-lending agreement to offer customised retail loans for homebuyers at competitive interest rates. The Delhi-based housing finance company will serve customers through the entire loan lifecycle including sourcing, documentation, and collection with an information-sharing arrangement with Yes Bank. Both companies will jointly do due diligence and co-originate the loan at an agreed ratio. 

Read more here.

Tejas Network secures order from Mexico-based GigNet

GigNet, a Mexico-based digital infrastructure company, has selected Tejas Networks Limited’s optical networking and broadband access products for their high-capacity fiber-optic network expansion in the Cancun region of Mexico. Tejas Networks will supply its full range of last-mile access products to support the rapid growth of GigNet’s Smart Communities business segment for planned developments across the region.

Read more here.

Lenders agree to JSW Steel’s terms for buying Bhushan Power: Report

As per a report from BloombergQuint, the lenders to Bhushan Power & Steel Ltd (BPSL) have agreed to the terms set by JSW Steel for purchasing the assets of insolvent BPSL. A majority of the financial creditors on Friday voted in favour of accepting JSW Steel’s Rs 19,350-crore offer for the sale. The report further states that the deal will be closed by the end of March.

Read more here.

Dilip Buildcon receives LoA for two HAM projects in Karnataka

Dilip Buildcon Limited has received the Letter of Acceptance (LoA) for two Hybrid Annuity Mode (HAM) projects worth Rs 2,439 crore in Karnataka. The scope of the first project involves four laning of the Bangalore to Malur section of Bangalore-Chennai Expressway. The second project is for four-laning the Malur to Bangarpet section of Bangalore-Chennai Expressway. Both projects are to be completed within 24 months.

Read more here.

Sun Pharma’s subsidiary to acquire Australia-based WRS Bioproducts

Sun Pharmaceutical Industries announced that one of its wholly-owned subsidiaries will acquire 4.28 lakh equity shares (or 12.5% stake) of Australia-based WRS Bioproducts. The consideration to be paid for acquiring the stake will be AUD 2 million (~Rs 11.21 crore). WRS Bioproducts is engaged in developing novel technologies to produce and commercialise supplements and nutraceutical ingredients from diverse algae species in Australia. Sun Pharma expects to complete the acquisition by March 15, 2021.

PVR opens new six-screen property in Mysuru

Multiplex operator PVR Limited announced the launch of a new six-screen property in Mysuru, Karnataka. The latest PVR Cinemas in Mysuru spreads across an area of 32,240 sq feet and can accommodate a total of 1,078 audiences. PVR said the new property features advanced cinematic technological solutions that offer a holistic movie-going experience. With this opening, PVR now operates 844 screens at 177 properties in 71 cities across India and Sri Lanka.

Read more here.

Shilpa Medicare gets USFDA approval for Apremilast Tablets

Shilpa Medicare has received tentative approval from the US Food and Drug Administration (USFDA) for Apremilast Tablets- 10 mg, 20 mg, and 30 mg. The tablets are indicated for the treatment of psoriatic arthritis. According to IQVIA MAT 2020 data, the US market for Apremilast Tablets is approximately $2.4 billion (~Rs 17,541 crore). 

Read more here.

Coal India declares second interim dividend of Rs 5 per share

The Board of Directors of Coal India Limited (CIL) has approved the payment of a second interim dividend for the financial year 2020-21 of Rs 5 per share. The record date for the same has been fixed as March 16. The date of payment of the interim dividend is March 24. CIL has also revised its capital expenditure (capex) plans to Rs 13,000 crore from Rs 10,000 crore after the government asked the company to push expenditure to spur demand in the post-lockdown period.  

Read more here.

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Market News Top 10 News

Nitin Gadkari Approves Proposal to Levy ‘Green Tax’ on Old Vehicles – Top Indian Market News

Nitin Gadkari approves proposal to levy ‘Green Tax’ on old vehicles

Union Minister for Road Transport and Highways Nitin Gadkari has approved a proposal to levy a ‘Green Tax’ on old vehicles that are polluting the environment. Transport vehicles older than eight years could be taxed at the rate of 10-25% of road tax. This will be imposed at the time of renewal of the fitness certificate. Personal vehicles will be charged Green Tax at the time of renewal of registration certificate after 15 years. A higher Green Tax of 50% will be levied on vehicles registered in highly polluted cities. The ministry will now consult state governments before finalising the proposal. 

Read more here.

Kotak Mahindra Bank Q3 Results: Net profit rises 16% YoY to Rs 1,853 crore

Kotak Mahindra Bank reported a 16% YoY increase in net profit to Rs 1,853.5 crore for the quarter ended December (Q3). Net interest income (NII) rose 17% YoY to Rs 4,007 crore during the same period. [NII is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors] The lender’s gross non-performing assets (NPAs) ratio stood at 2.26% in Q3, against 2.55% in the previous quarter. Kotak Bank’s provisions and contingencies increased sharply by 34.9% to Rs 599 crore.

Read more here.

L&T Q3 Results: Net profit rises 5% YoY to Rs 2,467 crore

Larsen and Toubro (L&T) reported a 4.87% YoY increase in consolidated net profit to Rs 2,466.71 crore for the quarter ended December (Q3). Its revenue from operations declined 1.78% YoY to Rs 35,596.42 crore during the same period. The company’s total orders in Q3 jumped 76% YoY and stood at Rs 73,233 crore. During the quarter, L&T was awarded the biggest EPC contract in the country and the first of its kind- the High Speed Rail order. The consolidated order book stood at a record Rs 3,31,061 crore as of December 31, 2020.

Read more here.

ED raids 10 premises of Omkar Group for irregularities in SRA projects

The Enforcement Directorate (ED) on Monday conducted raids on 10 premises of Mumbai-based Omkar Group. The group is alleged to have misused various permissions given under the Slum Rehabilitation Authority (SRA) schemes. It is also alleged that they diverted ~Rs 450 crore taken by way of loan from Yes Bank. The premises of Omkar Realtors and Developers, which includes 7 residential and 3 commercial buildings in Mumbai, were searched by the central probe agency. 

[Piramal Enterprises’ shares fell 1.44% today. It has tied up with Omkar Realtors for various projects] 

Read more here.

Dixon Tech’s subsidiary enters into deal with HMD India to manufacture Nokia smartphones

Padget Electronics, a wholly-owned subsidiary of Dixon Technologies, has entered into an agreement with HMD India for manufacturing Nokia smartphones. The smartphones will be manufactured at Padget’s manufacturing facility in Noida, Uttar Pradesh. HMD Global Oy, branded as HMD and Nokia Mobile, is a Finnish mobile phone manufacturer.

Read more here

Lupin gets USFDA approval for Sevelamer Carbonate tablets

Lupin Limited announced that it has received approval from the US Food & Drug Administration (USFDA) to market its generic Sevelamer Carbonate tablets. The tablets are used to control phosphorus in people with chronic kidney disease on dialysis. According to the IQVIA MAT September 2020 data, Sevelamer Carbonate tablets had estimated annual sales of $348 million (~Rs 2,537 crore) in the US.

Read more here.

PNC Infratech secures EPC projects worth Rs 2,475 crore in Uttar Pradesh

PNC Infratech Ltd, in a joint venture with SPML Infra, has received Letters of Award (LoA) for six new EPC projects in Uttar Pradesh. The orders were placed by the State Water Supply & Sanitation Mission, Namami Gange & Rural Water Supply Department. The projects include the survey, design, construction, and commissioning of rural water supply for a total of 2,475 villages. The project is to be constructed and put on trial within 21 months upon signing of the agreement. The aggregate value of the six projects is approximately Rs 2,475 crore.

Read more here.

UCO Bank Q3 Results: Net profit at Rs 35 crore

UCO Bank reported a net profit of Rs 35.44 crore for the quarter ended December (Q3). The lender had posted a net loss of Rs 960.17 crore during the corresponding period in FY20. Net interest income (NII) rose 13.8% YoY to Rs 1,407.2 crore in Q3 FY21. Net non-performing assets (NPAs) were at 2.97%, against 6.34% in Q3 FY20. Provisions for bad loans fell sharply to Rs 393.06 crore in Q3, compared to Rs 1,645.51 crore a year ago.

Read more here.

ICICI Securities Q3 Results: Net profit rises 95% YoY to Rs 267 crore

ICICI Securities Ltd reported a 95% YoY increase in net profit to Rs 267 crore for the quarter ended December (Q3). Its revenue rose 47% YoY to Rs 620 crore during the same period. The company’s revenue growth in Q3 was driven by strong all-around performance in its equities & allied business, distribution business, and private wealth management business.

Strides Pharma gets USFDA approval for Ursodiol capsules

Strides Pharma Science Ltd announced that its wholly-owned subsidiary, Strides Pharma Global-Singapore, has received approval for Ursodiol capsules from the US Food & Drug Administration (USFDA). The tablets are indicated for the treatment of patients with Primary Biliary Cirrhosis (an autoimmune disease of the liver). The product will be manufactured at the company’s facility in Bengaluru and will be marketed by Strides Pharma Inc. in the US market.

Read more here.

Home First Finance Company IPO subscribed 27 times on final day

The initial public offering (IPO) of Home First Finance Company was subscribed 26.65 times on the final day of bidding (Jan 25). The issue has received bids for 41.43 crore equity shares against an offer size of 1.56 crore shares. The category reserved for qualified institutional buyers (QIBs) was subscribed 52.63 times. The reserved portion for non-institutional investors was subscribed 39.08 times and individual retail investors 6.60 times.

Read more here.

Aarti Drugs Q3 Results: Net profit jumps 144% YoY to Rs 68 crore

Aarti Drugs Ltd reported a 144.54% YoY increase in consolidated net profit to Rs 68 crore for the quarter ended December (Q3). It had posted a net profit of Rs 27.82 crore during the corresponding period in FY20. The company’s consolidated revenue rose 11.98% YoY to Rs 530.25 crore in Q3 FY21.

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Editorial

5 Reasons Why Nifty is Rising!

Nifty 50 hit a record high on November 9 as the index closed at 12,461.05, up by 1.61%. The next day, Nifty jumped again with spring and concluded at 12,631. There has been a remarkable rally in the past few days which has taken Nifty 50 to even cross its pre-covid highs. Today, as of 11 November, it has even touched 12,750.

But do we have the vaccine already? Not really. Is the global economy in a boom? Not at all. Then how are we witnessing higher highs in the Indian stock market? Here are the five reasons which are stimulating this boost in the stock market.

US Elections

As discussed in The Stock Market Show several times, the market was supposed to react positively if there was a clear winner in the US election. This is what happened. Democrat Joe Biden defeated Donald Trump to become the 46th President of the United States. To understand more about this, click here. His triumph was welcomed by the market participants. They believe that his democratic policies will help the Indian market to expand. This has instilled confidence in the investors even when India is finding it very tough to contain the spread of coronavirus. For how many days more this positive news can support Nifty is yet to be seen.

There is a constant worry lingering in the back as Trump refuses to accept defeat. Secretary of State Mike Pompeo, who is chief foreign affairs adviser to The President of The United States has even gone on to say that the Trump Administration is ready to move into a successful second term. Keep watching marketfeed for updates.

Bank Nifty Rally

Nifty Bank has been one of the key driving forces behind the Nifty rally. There are several reasons why Bank Nifty has moved on this consistent uptrend. The market was expecting not-so-great Q2 results for banks. Increased expenditure and high NPAs due to moratorium led to low expectations. But then, HDFC Bank and Kotak Bank came out with astounding numbers. Provisions for defaults were decreased which led to an increase in profits. A similar pattern was followed by every major private bank as they reported amazing numbers. The honourable Supreme Court also ruled in favour of banks in the interest-on-interest case. The government of India took the responsibility to pay the amount to the banks for some cases. The green candles in the chart below give you a look at how the index has rallied up.

Bank Nifty 1-Day Chart

COVID-19 Vaccine

The news which we were waiting for days finally hit the market last evening. US pharmaceutical giant Pfizer and German biotech firm BioNTech announced that they have registered an amazing response from their coronavirus vaccine. In the ongoing Phase 3 trials, the vaccine given to the infected patients has been 90% effective. The company is also optimistic to supply 50 million vaccine doses globally by the end of this year. This is a huge development which has taken all the global markets to go upwards. The US election is done and dusted and we believe that this positive news can take the market to even higher points in the coming days.

The Indian Festive Season

The people of the nation are struggling with the virus but that is not stopping them from celebrating the big Indian festivals. Should they refrain a bit? That’s a completely different debate. There are several festivals which are celebrated from October to December. Navratri, Dussehra, Diwali, just to name a few. Even in these uncertain times, people are venturing out to buy new goods, and boosting the economy.

Whether it’s the auto market or the consumer goods market, all are seeing a surge in sales after an almost-dead first quarter. The market has responded well to this change. Also, there’s a possibility that a new stimulus can be launched by the Indian government in the coming weeks. Any effective help from the government will surely make the market participants happier.

IT and Pharma 

Two sectors which got all the investment in the pandemic were the IT and Pharma sector. In October, both the sectors rallied Nifty to touch the levels of 12,000 three times. Strong Q2 results from the IT sector were offering a lot of boosts. TCS and Wipro announced share buybacks which signaled the success of tech companies to operate during the pandemic.

One sector which can easily transform to the work-from-home culture was the IT sector. With the help of in-built or third-party cloud-based technology, employees easily accessed the data sets. This helped them to reduce their rent cost and other fixed costs. With vaccines only the hope which can bring an end to Covid-19, people invested heavily in the pharma sector. All the pharma stocks have given staggering returns during the 6 months. This excessive demand has also made a few of the stocks in this sector overvalued. Once the vaccine is out, will these stocks correct themselves and go down? Yesterday, Nifty IT and Nifty Pharma went 3.86% and 4.33% down respectively. Is it a signal of what to come? Is a major correction in these two sectors just ahead?

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Editorial Editorial of the Day

How Kotak Bank made a Profit Jump of 26.3% for Q2 FY21 Result

Private sector lender Kotak Mahindra Bank Ltd, on Tuesday (26th October), came out with their results which defeated all the street estimates. They declared a 26.3% year-on-year (YoY) rise in standalone net profit for the September quarter 2021. Their Net Interest Income (NII) also gained 17% YoY for this quarter.

These are spectacular numbers. The previous week, HDFC Bank came out with 18% year-on-year (YoY) rise in net profits which gave birth to a lot of positive sentiments in the market. But, Kotak has left the number one bank behind and reported even better performance this quarter. Let’s have a closer look at their quarterly performance.

Robust Revenue Generation

NII is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors. Higher the spread between the two interest rates, more profitable it is for the banks.

In the same quarter previous year, Kotak declared a net interest income of Rs 3,350 crore. This quarter, it increased by 17% to Rs 3,913 crore. This 17% increase is constant for the bank since the previous three quarters. NII for the bank has increased by 18%, 17% and 17% in the previous three quarters. This shows that even amidst the pandemic, the bank has done really well to maintain its revenue growth.

Digitally Advanced

We have discussed several times how being digital is pivotal for any company in any industry, let alone the banks. Kotak has put consistent efforts to digitally transform itself. They have stressed on a paperless transaction for Home Loans and Loans Against Property (LAP) for some time now. And now this has given the bank good business, as paperless transactions became a necessity during the times of Covid-19.

Other than this, tractor, retail commercial vehicle/infrastructure loans were also available on Kotak Mobile App. As we know, tractor sales have been booming over the last few months. They have one of the most user-friendly mobile applications in the industry. Transaction volume and value of mobile banking went 81% and 56% above annually during the quarter. Also, Kotak became the 1st Bank in the country to launch Video KYC for Account Opening.

85% of the total Fixed Deposits were booked through Digital channels in Q2. 86% of all Credit Cards and 30% of the total personal loans were again carried with the help of digital channels in this quarter. All of this cumulated to 73% (YoY) growth in Digital Payments volumes.

So this digital push by Kotak Bank helped them maintain good business when most customers were staying at home.

A glance at their Asset Quality

Kotak Bank’s gross non-performing asset ratio (GNPA) fell to 2.55% this quarter. This ratio was reported as 2.7% in the preceding quarter. Also, their Net NPA ratio fell to 0.64% from 0.84% during the same period.

Due to the interim order of the Supreme Court, they didn’t recognise any NPAs since August 31, 2020. This could have given a false image of non-performing assets. But the bank was quick to discard this concern. Even if they had not considered the Supreme Court’s decision, the gross NPA would have been 2.70% and NNPA 0.74%. This is only a marginal increase from the reported values. Thus, one can conclude that Kotak has a very stable asset quality.

Market Reaction

The market sentiments were negative on the day Kotak Bank was due to announce the results. Nifty 50 and Bank Nifty closed 1.36% and 1.65% down. Yet, Kotak Bank emerged as one of the top gainers to close at Rs 1410.90, up by 2.01%. The day after the results were announced, the share price of Kotak Bank rocketed up even in the presence of the bearish global sentiments. It closed 11.70% higher at Rs 1582.70 to become the top gainer of the day. There were also reports that America’s Morgan Stanley was going to pump in funds to the stock, as covered here.

The Way Forward

The banking sector has been in the news ever since the lockdown. The 6-month moratorium on repayment of loans ended on 31st August. On 3rd October, the government of India announced that interest-on-interest for loans up to Rs 2 crore will be waived off for the borrowers. At the same time, to prevent banks from facing huge losses, the amount waived off will be paid to the banks by the government. This news was welcomed by the market as there is huge pressure on banks to maintain their asset quality. To read more on the interest waiver scheme, click here. 

The Q2 results of the banks have been great so far! Especially big banks like HDFC Bank and Kotak Mahindra Bank which operate all over India. Will this trend continue? Will all the banks come out with positive results? Where are the high NPA rates predicted by The Reserve Bank? Will Public-Sector Banks be the worst affected? Let’s wait and watch.

The upcoming quarter will be very important for the banks. This will be the quarter in which the government will implement its strategies to aid banks. The moratorium was lifted less than 30 days before the September quarter-end. The loans being defaulted and turning into sub-standard assets will be only seen in the October-December financial results. Thus, a more clear picture of NPAs will be seen in the third quarterly reports of banks and NBFCs. Keep tracking all the updates with marketfeed to follow more of this story.

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India to grow oil refining capacity to 450 MT by 2025 – Top Indian Market News

Japan's economic backbone (Lomo-esque & sepia-ish)

India to grow oil refining capacity to 450 MT by 2025: PM Modi

Prime Minister Narendra Modi, on Monday, announced that India will increase its oil refining capacity to 450 million tonnes by 2025. The refining capacity is currently at 250 million tonnes. He stated that India’s energy sector will be growth-centric, investor-friendly, and environmentally conscious. While addressing the fourth India Energy Forum by CERAWeek, PM Modi further said that energy security will be India’s biggest priority.

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Kotak Mahindra Bank reported a 26.27% year-on-year (YoY) increase in standalone net profit at Rs 2,184.48 crore, for the quarter ended September (Q2). The bank’s Net Interest Income (NII) saw a rise of 16.8% to Rs 3,913 crore, during the same period. NII is the difference between the interest income a bank receives from loans, and the interest it pays to depositors. The share price of Kotak Bank saw a rise of 1.99%, and closed at Rs 1,410.55 on the NSE today.

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Bharti Airtel enters cloud communications market with ‘Airtel IQ’

Telecom operator Bharti Airtel, on Monday, launched a cloud-based communication platform called ‘Airtel IQ’. The platform will help enterprises in India to deepen their engagement with customers. According to Airtel, companies such as Swiggy, JustDial, Rapido, and Urban Company have already signed deals to use this platform. Bharti Airtel is the first telecom company to enter this segment, and expects the market to grow 20% YoY.

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Mahindra Finance Q2 Results: 34% YoY increase in net profit

Mahindra Finance Limited has reported a 33.7% year-on-year increase in consolidated net profit at Rs 352.5 crore, for the quarter ended September (Q2). The company’s total income increased by 4.6% YoY to Rs 3,070.5 crore, during the same period. The customer base of Mahindra Finance crossed 69 lakh during July-September, and reported strong rural demand.

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SBI Life reports two-fold jump in net profit at Rs 299.73 crore

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TCS partners with Volt to expand payment offerings

Tata Consultancy Services (TCS), on Monday, announced that they have partnered with Australia’s first neo-bank, Volt. A neobank is a digital or virtual bank, or a bank that does not have any physical branches. The partnership has been aimed at launching Volt 2.0, a next-generation Banking as a Service (BaaS) platform. With the help of TCS, Volt’s digital payment methods will also be improved.

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Poly Medicure Q2 Results: Net profit rises 23% YoY to Rs 35 crore

Poly Medicure Limited reported a 23.27% year-on-year increase in net profit at Rs 35.01 crore, for the quarter ended September (Q2). The total sales of the company saw a growth of 14.81% YoY to Rs 199.63 crore, during the same period. The share price of Poly Medicure fell 0.67%, and closed at Rs 490 on the NSE on Monday.

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Aurobindo Pharma to sell US unit Natrol for $550 million

Aurobindo Pharma has signed a deal with New Mountain Capital to sell its US-based subsidiary, Natrol LLC. The cost of the sale has been estimated at $550 million (~Rs 4,048 crore). The deal is subject to regulatory approvals, and is expected to close by January 2021. The drug company had acquired Natrol in December 2014.

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Yes Bank sells DHFL bonds, raises Rs 500 crore from secondary market

Yes Bank has sold bonds in Dewan Housing Finance Corporation Ltd (DHFL) on the secondary market to raise Rs 500 crore. According to Yes Bank’s MD, Prashant Kumar, the company is planning to reduce its links with the troubled DHFL. He also stated that the bank is looking to sell its mutual funds by the end of the year, in order to raise more capital.

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CDSL reports 68% YoY increase in profit after tax to Rs 49 crore

The Central Depository Services (India) Limited reported a 68% year-on-year (YoY) increase in profit after tax (PAT) at Rs 48.87 crore, for the quarter ended September (Q2). The total income increased by 46% to Rs 101.16 crore, during the same period. CDSL allows investors to deposit securities by opening a Demat account. It gets its revenue from transaction charges and accounts maintenance charges.

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Top 10 News

‘Interest on Interest’ for loans up to Rs 2 crore to be waived off – Top Market News

‘Interest on Interest’ for loans up to Rs 2 crore to be waived off

The Finance Ministry has informed the Supreme Court that it has agreed to waive ‘interest on interest’ on loans of up to Rs 2 crore during the six-month moratorium period. Those who have already cleared their own dues between March and August would also get the benefit. The waiver comes as a relief for small businesses and retail borrowers, but can be a worry for banks.

Read more here.

Covid-19 deaths in India cross 1 lakh

India’s coronavirus death toll has crossed the 1 lakh mark, which accounts for nearly 10 percent of the global Covid-19 deaths. India’s case fatality ratio (CFR), the ratio of deaths caused by confirmed COVID cases, has declined from 1.76% to 1.56% in September. India is the third country after the US and Brazil to surpass this landmark.

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88% rise in equity funding within first 9 months of 2020

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Generic version of Sapropterin Dihydrochloride tablets launched by Dr Reddy’s in the US

Hyderabad-based Dr. Reddy’s Laboratories in a statement said that it has launched a generic version of Sapropterin Dihydrochloride in the United States markets. These medicines are used to bring down blood phenylalanine (Phe) levels in patients. This launch is a part of a wider aim to improve the company’s portfolio with a treatment of a rare disease.

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Retail selling price of petrol, diesel reduced by Indian Oil Corporation

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Farm budget increased 11-fold to Rs 1.34 lakh crore from FY10

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Read more here.

Kotak Bank registers Rs 170 crore fraud case against Cox & Kings

A case has been filed against Cox & Kings Ltd by Kotak Mahindra Bank, alleging that the travel company has defrauded the bank of over Rs 170 crore. Mumbai police has registered a case based on the complaint by Kotak, and have started the preliminary investigation. Cox & Kings is also being probed by the Economic Offences Wing after IndusInd Bank’s earlier complaint of a Rs 240 crore fraud.

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World’s longest highway tunnel inaugurated by PM modi

Prime Minister Narendra Modi on Saturday inaugurated the Atal Tunnel at Rohtang in Himachal Pradesh. The new tunnel would reduce the distance between Manali and Leh by 46 km and cut travel time by four to five hours. The 9.02-km tunnel built by the Border Roads Organisation (BRO), it is officially the longest highway tunnel in the world.

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Reliance Retail to receive $1 billion from TPF, GIC

Reliance Industries has announced an investment made of Rs 5,512 crore by Singaporean sovereign wealth fund GIC Private Ltd for a 1.22% stake in Reliance Retail. TPG Capital has also invested Rs 1837.5 crore in the retail arm for a stake of 0.41%. Since September 9, a total of 7.28% stake of the retail unit has been sold for a total of Rs 32,297.50 crore.

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Shaurya missile successfully test fired off the coast of Odisha

India has successfully test-fired the new nuclear-capable Shaurya missile off the coast of Odisha on Saturday. The missile can strike targets at a range of about 800 km. It was created by India’s Defence Research and Development Organisation (DRDO), which is aiming towards self-reliance in the field of strategic missiles.

Read more here.