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Diwali Rally in Nifty? – Post-Market Analysis

NIFTY started the day at 19,345 with a gap-up of 115 points (near the 50% Fibonacci rejection levels). After facing initial resistance at 19,380 levels, the index fell to 19,310. The earlier resistance acted as support. Then, Nifty gradually continued the up-move to 19,420 levels. Nifty closed at 19,411, up by 181 points or 0.94%.

Nifty chart November 6 - post-market analysis | marketfeed

BANK NIFTY (BNF) started the day at 43,627 with a big gap-up of 310 points. There was an immediate sell-off to 43,400 levels. But the earlier resistance now acted as support, and the index moved up till the opening levels. BNF closed at 43,619, up by 301 points or 0.7%.

Bank Nifty chart November 6 - post-market analysis | marketfeed

All indices except Nifty PSU Bank (-1.09%) closed in the green. Nifty Metal (+1.36%), Nifty Pharma (+1.28%), and Nifty Realty (+1.2%) moved up the most.

Major Asian markets closed well in the green (Japan’s Nikkei rose nearly 2.3%). European markets are currently trading mixed.

Today’s Moves

Divi’s Labs (+4.6%) was NIFTY50’s top gainer despite reporting a 29% YoY fall in net profit to ₹348 crore in Q2.

Shares of Aarti Industries (+10.7%) surged as investors cheered the management’s positive commentary and improved sequential performance in Q2.

JK Cements (+8.6%) moved up with strength after the cement manufacturer posted robust Q2 results yesterday.

SBI (-0.66%) was NIFTY50’s top loser. 

Krsnaa Diagnostics (-6.04%) fell sharply after the diagnostic company’s net profit declined 32% YoY to ₹10.5 crore in Q2 due to higher operational expenses.

Markets Ahead

The Indian stock market has been showing a consistent pattern lately. It opened with a gap-up and either continued to rise or remained steady for the last three trading sessions. The markets have now closed above significant Fibonacci levels – 50% at 19,300 in Nifty and 43,400 in Bank Nifty.

This suggests a potential shift in the market trend to bullishness. However, there’s a concern regarding the increase in India VIX, which has risen by 2% despite the upward movement. So, it’s important to be cautious in case the market experiences a downturn tomorrow.

Nifty: A breakout from 19,420 may take the index up to 19,500, which will be the next major resistance to watch out. Meanwhile, the immediate support for Nifty is near 19,360 levels. A breakdown from there could take Nifty down to 19,300 and 19,240 levels.

Bank Nifty: The major resistance for BNF is near 43,700 levels. A breakout from there might take the index up to 43,900 and 44,000 levels. On the other hand, the immediate support for the index is near the 43,500 round levels. A breakdown from there may take the index down to 43,300 and 43,000.

Key resistance levels are being breached mainly due to the gap-ups, and we haven’t seen much intraday price action to reach our targets. As long as the market remains above these resistance levels, it may be a good strategy to buy on dips. However, if an unexpected gap-down occurs in the coming days, you may consider selling when the market rises.

What levels are you watching out for FIN NIFTY expiry tomorrow? Let us know in the comments section below!

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Market News Top 10 News

Axis Bank’s Net Profit Rises 62% YoY in Q3 – Top Indian Market Updates

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

Axis Bank Q3 Results: Net profit rises 62% YoY to ₹5,853 crore

Axis Bank reported a 62% YoY increase in net profit to ₹5,853 crore for the quarter ended December (Q3 FY23). Its net interest income (NII) rose 31% YoY to ₹10,360 crore during the same period. The gross non-performing assets (GNPA) ratio improved from 3.53% in Q3 FY22 to 2.5% in Q3 FY23. Provisions stood at ₹550 crore in Q3 FY23, down 68% YoY.

Read more here.

IndiGrid to acquire Khargone Transmission for ₹1.497.5 crore

India Grid Trust (IndiGrid) will acquire a 100% equity stake in Khargone Transmission at an enterprise value of about ₹1,497.5 crore. Khargone Transmission was incorporated on November 28, 2015, to improve power supply and grid reliability by delivering 1320 MW of thermal power from Khargone power plant to consumers in the domestic, commercial, agricultural, and industrial segments in the state of Madhya Pradesh and Maharashtra.

Read more here.

Canara Bank Q3 Results: Net profit rises 92% YoY to ₹2,882 crore

Canara Bank reported a 92% YoY increase in net profit to ₹2,881.5 crore for the quarter ended December (Q3 FY23). Its net interest income (NII) rose 24% YoY to ₹8,600 crore during the same period. The gross non-performing assets (GNPA) ratio improved from 6.37% in Q2 FY23 to 5.89% in Q3 FY23. Provisions stood at ₹3,121 crore in Q3 FY23, up 39% YoY.

Read more here.

Glenmark Pharma launches medication to prevent chemotherapy-induced nausea

Glenmark Pharmaceuticals Ltd has launched the IV injection formulation Akynzeo IV under an exclusive licensing agreement with Helsinn (a Swiss biopharma group company). It is administered 30 minutes before the start of each chemotherapy cycle which helps prevent both acute and delayed phases of chemotherapy-induced nausea and vomiting. The drug is already being marketed in the EU, the US, and Australia. 

Read more here.

Route Mobile Q3 Results: Net profit rises 84% YoY to ₹85 crore

Route Mobile Ltd reported an 84.4% YoY increase in consolidated net profit to ₹85.36 crore for the quarter ended December (Q3 FY23). Its revenue from operations rose 75.16% YoY to ₹985.72 crore during the same period. EBITDA stood at ₹128.3 crore in Q3, recording a growth of 66.19% YoY. Route Mobile is a cloud communications platform service provider that caters to enterprises, OTT players, and mobile network operators (MNO).

Read more here.

L&T Construction wins “significant” orders across various businesses

Larsen & Toubro’s construction arm has secured significant orders (in the range of ₹1,000-2,500 crore) for its power transmission & distribution (PT&D) and buildings & factories (B&F) businesses. The PT&D business has bagged a turnkey engineering, procurement, and construction (EPC) order to set up a 112.5 MW solar plant in West Bengal. The B&F business has secured an order from Nanavati Max Super Specialty Hospital to construct a state-of-the-art 600-bed super specialty hospital in Mumbai.

Read more here.

IDBI Bank Q3 Results: Net profit rises 60% YoY to ₹927 crore

IDBI Bank reported a 60% YoY increase in net profit to ₹927 crore for the quarter ended December (Q3 FY23). Its net interest income (NII) rose 23% YoY to ₹2,925 crore during the same period. The gross non-performing assets (GNPA) ratio improved from 21.68% in Q3 FY22 to 13.82% in Q3 FY23. Provisions came in at ₹784.28 crore in Q3 FY23, down 2.18% YoY.

Read more here.

Krsnaa Diagnostics opens 14 pathology labs, 64 collection centers in Himachal

Krsnaa Diagnostics has operationalised 14 pathology laboratories and 64 collection centres in Himachal Pradesh. With this, the company has completed 100% of the project implementation in the state. The company had bagged a tender for providing diagnostic services at the Himachal Pradesh Government’s health institutions in the entire state in February 2022.

Read more here.

Tata Motors partners with ICICI Bank to offer financing solutions to its passenger EV dealers

Tata Motors has partnered with ICICI Bank to offer financing solutions to its authorised passenger electric vehicle (EV) dealers. Under the partnership, ICICI Bank will provide inventory funding to the authorised passenger EV dealers in addition to the bank’s funding to dealers for diesel and petrol models. The EV dealers can avail of flexible repayment tenures through the partnership.

Read more here.

Tata Power to install public EV charging points at GAIL CNG stations in Bengaluru

Tata Power has signed an agreement with GAIL Gas Limited to install DC fast charging points at two of its CNG stations in Bengaluru. The partnership is in line with Tata Power’s commitment to encourage and promote electric mobility across the country and GAIL Gas’ commitment to delivering convenience to its customers who wish to switch to EVs. Tata Power plans to install 25,000 public EV charging stations across the length and breadth of India in the next five years.

Read more here.

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Market News Top 10 News

Adani Enterprises to Raise ₹20,000Cr Via FPO – Top Indian Market Updates

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

Adani Enterprises to raise up to ₹20,000 crore via FPO

Adani Enterprises Ltd’s board has approved a proposal to raise up to ₹20,000 crore through a follow-on public offer (FPO). The capital raise will boost the Adani Group’s aggressive growth across business verticals, both organically and via acquisitions.

As per a Financial Times report, Adani Group is planning to invest more than $4 billion in a petrochemical complex in Gujarat. Gautam Adani also plans to launch a “super app” in the next 3-6 months to connect Adani airport passengers with other Adani Group services.

Read more here.

JLR to cut production at UK factories till spring: Report

According to a Guardian report, Tata Motors-owned Jaguar Land Rover has decided to cut production at factories in Solihull & Halewood (UK) between January & March. The global auto industry has suffered from semiconductor shortages and supply issues since the Covid-19 pandemic broke out in early 2020. Semiconductor shortages have left JLR customers waiting more than a year for their vehicles, with sales suspended for some variants.

Read more here.

Castrol India to acquire 7.09% stake in TVS Automobile Solutions’ digital arm

Castrol India Ltd (CIL) will acquire a 7.09% stake in TVS Automobile Solutions’ digital subsidiary Ki Mobility Solutions (KMS) with an investment of ₹487.5 crore in an all-cash deal. With this strategic investment, CIL aims to expand its presence in service & maintenance for both internal combustion engine (ICE) and electric vehicles (EV). It will also leverage myTVS’ digital and operational capabilities.

Read more here.

Krsnaa Diagnostics plans 600 testing centres by end of FY24

Krsnaa Diagnostics plans to enter the retail segment of diagnostic services by setting up 600 collection centres under franchisee model by end of FY24. The company will open collection centres across Maharashtra, Himachal Pradesh, Punjab, West Bengal, and Rajasthan. Krsnaa will leverage its network of labs that are operational under public-private partnership (PPP) mode for its business-to-consumer (B2C) expansion.

Read more here.

Reliance Jio rolls out True-5G in Gujarat

Reliance Jio has started rolling out its True-5G services in Gujarat. The state has become the first in the country to get Jio True-5G connection across all 33 district headquarters. Jio will launch a series of True 5G-powered initiatives across the education, healthcare, agriculture, and industry 4.0 sectors in Gujarat and then extend it across the country. Jio users in Gujarat will have access to 1 Gbps+ speed at no additional cost.

Read more here.

Shriram Properties acquires Suvilas Realities

Shriram Properties Ltd (Ltd) has completed the acquisition of Suvilas Realities Pvt. Ltd. through its wholly-owned subsidiary, Shriprop Builders Pvt Ltd. Suvilas Realities is currently developing a 0.65 million square feet residential project at Jalahalli, Bengaluru, under the brand name “Shriram Suvilas Palms”. The project has a revenue potential of over ₹400 crore.

Read more here.

IEX’s board approves buyback of shares at ₹200 per share

Indian Energy Exchange’s (IEX) board has approved a share buyback of up to Rs 98 crore at ₹200 per share through the open market route. The maximum buyback price of ₹200 per share represents a 36.01% premium to Thursday’s closing price of ₹147.05 on the BSE. The maximum number of equity shares to be bought back under the buyback would be 49 lakh.

Read more here.

Nykaa records 12x jump in revenue on first day of Pink Friday Sale

Nykaa recorded a 75% year-on-year (YoY) growth in gross merchandise value (GMV) and a 12-fold jump in revenue on Day 1 of its Pink Friday sale. The company recorded over 400 orders per minute on Nov 21. The number of visitors on Day 1 of the sale grew 37% YoY to 1 crore. The sale will be live until November 28 on its website, app, and Nykaa stores. Purchases of make-up, skincare, and haircare jumped 14x, 12x, and 9x, respectively.

Read more here.

VA Tech Wabag to raise ₹200 crore via NCDs

VA Tech Wabag Ltd’s board has approved a proposal to raise ₹200 crore through non-convertible debentures (NCDs) in one or more rounds to Asian Development Bank (ADB). The NCD proposal will further help the company to optimise debt. The tenure of the debt instrument would be 5 years and three months. VA Tech Wabag offers turnkey solutions for water & wastewater treatment to municipal and industrial segments in India and abroad. 

Read more here.

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Editorial

Krsnaa Diagnostics IPO: All You Need To Know

krsnaa diagonostics

Ever gone for an X-Ray scan? Or a blood test? These are called Diagnoses in medical terms. In the IPO boom, many hospitals, pharma companies, etc from the health industry have come up with their IPOs. Krsnsaa Diagnostics is one such company that has taken part. Krsnaa Diagnostics’ IPO opens on August 4, 2021, and closes two days later on August 6, 2021. 

In this piece, we cover the business model, the financial health and future prospects of the company.

Business Model

Established in 2010, Krsnaa Diagnostics offers radiology, pathology/clinical laboratory and teleradiology services to public and private hospitals, medical colleges and community health centres.  It operates 1,801 diagnostic centres offering both radiology and pathology services in 14 states across India, with the largest presence in Maharashtra, Rajasthan and Karnataka. These three states contain 690 diagnostic centres or ~29% of the total footprint. 

Apart from operating its own diagnostic centres, it forms Public-Private Partnerships (PPP) contracts with different health agencies. Krsnaa has won 77.59% of all tenders that it has bid for, making it a preferable choice by public health agencies. Close to ~70% of the company’s revenue comes from tenders and partnerships with public health agencies. Krsnaa takes tenders from the National Health Mission to conduct operations in the premises of district hospitals and health care centres.

Krsnaa operates a capital intensive business. It needs to spend on syringes, refills, testing kits, X-Ray machines, testing kits, RT-PCR kits, testing devices, machines, nurses, staff, doctors and much more. In case the company falls short of working capital or has insufficient cash flows, it could impact the business. 

Finances

.FY21FY20FY19
Total Assets604.5 629.9 528.9
Total Revenue661.40258.42209.23
Profit After Tax184.90−111.95−58.05
Total Expense366.0 429.7 292.0 
Debt231.2 169.2 100.6
All Amount In Rs Crores

Krsnaa Diagnostics’ revenue increased by 53.41% over a year to Rs 396.45 crore in March 2021. Close to Rs 147 crore of the revenue came from COVID-19 related diagnostics. 67.49% of the total revenue in FY21 came from tenders by public health agencies like National Health Mission to name one.

The company posted a profit of Rs 184.93 crore in FY21 versus a loss of Rs 58.06 crore in FY19.

The company has a total debt of Rs 231 crores as of March 31, 2021. It plans to repay Rs 146 crores of debt by the end of FY22. 

A special mention to the revenue statement. Out of Rs 661.4 crore earned in FY21, only Rs 396.4 crores were earned from operations. Close to Rs 252.7 crores were earned because of ‘Gain on fair value movement of compulsory convertible preference shares (CCPS)’. CCPS are a form of fixed income instrument that companies use to raise capital. They can be converted to equity shares. 

Industry Peer Comparison

Peer Comparison Total Income (Rs Crore)PAT (Rs Crore)PE (X)RoNW (%)Market Cap (Rs Crore)
Dr Lal PathLabs1,581.26290.894.323.430,992.60
Krsnaa Diagnostics661.40184.9095.379.82,994.00
Metropolis Healthcare997.98182.077.725.914,754.50

IPO In A Nutshell

The proceeds from the IPO will be used:

  • To finance the cost of establishing diagnostics centres at Punjab, Karnataka, Himachal Pradesh and Maharashtra.
  • For Repayment/pre-payment, in full or part, of borrowings from banks and other lenders availed by the Company

Conclusion

Krsnaa Diagnostics is looking to raise a total of Rs 1,213.33 crore through the IPO. It has received fair feedback from the grey market or the market for unlisted shares. In the grey market, the shares are trading for Rs 400 more (Grey Market Premium or GMP) than the expected price band. The company’s business model, India-wide market presence and rapport with public health agencies are impressive. The finances however print a different story. According to the company’s prospectus, FY21 has been the first profitable year, that too most of it comes from the gain on fair value movement of compulsory convertible preference shares (CCPS). 


NIFTY index has crossed a record 16,000 mark for the first time just a day before the company’s listing. A correction in the market could hit valuations on listing day. Three more companies apart from Krsnaa have their IPOs debuting on the same day. The saturation might not attract sufficient interest, especially from retail investors. This is because they have a pool of IPOs to choose from, but have limited capital. 

Do you think Krsnaa Diagonistics could give listing gains? Or it is a long term investor’s haven. You can let us know in the comments section in the marketfeed app available exclusively for Android and iOS.