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Daily Market Feed Post Market Analysis

Bulls Take Over Bank Nifty? Nifty Closes Flat Amidst Choppiness – Post-Market Analysis

post-market analysis | marketfeed

NIFTY started the day flat at 19,404. After an initial 60-point fall in the first 5 minutes, the index attempted to recover but didn’t succeed, and fell sharply below the day’s low. Then, Nifty moved down to 19,330 levels, took support there, and moved up back up— breaching the opening levels and the day’s high. Nifty closed at 19,406, down by 5 points or 0.03%.

Nifty chart November 7 - post-market analysis | marketfeed

BANK NIFTY (BNF) started the day flat at 43,598. Right after the market opened, the index quickly fell more than 200 points to 43,380 levels. It then made a temporary recovery before again falling to 43,280. Then, the index shot up nearly 520 points to reach the resistance zone of 43,800! BNF closed at 43,737, up by 118 points or 0.27%.

All indices except Nifty Realty (-1.34%), Nifty Media (-0.64%), and Nifty Auto (-0.18%), closed flat-to-green.

Major Asian markets closed in the red. European markets are currently trading up to 1% in the red.

Today’s Moves

Sun Pharma (+1.82%) was NIFTY50’s top gainer. Some brokerages have upgraded the stock after the company posted strong Q2 results.

Trent (+8.54%) surged today after reporting an 189% YoY jump in net profit to ₹228 crore in Q2.

Shares of Jyothy Labs (+8.69%) rallied after the FMCG company’s net profit rose 59.1% YoY to ₹103.98 crore in Q2, while revenue was up 11.09% YoY.

Hero MotoCorp (-1.16%) was NIFTY50’s top loser. 

Sobha (-3.68%) fell sharply after the realty firm’s net profit fell 22% YoY to ₹15 crore in Q2 FY24; missing analysts’ estimates.

SEBI has revoked the securities market ban against entities in Lux Industries Ltd’s (-2.4%) insider trading case.

Markets Ahead

Remember when we were talking about the rise in India VIX and the chance of a retracement/pullback? Well, we saw a similar structure in the market today. With the earlier resistance levels now acting as supports, the major indices have moved up with strength, especially Bank Nifty.

Nifty: It’s crucial to keep an eye on the significant resistance at 19,400. If the index manages to break out from that level, it could potentially climb towards the round level of 19,500. On the other hand, there’s strong support for the index at 19,380 levels. If it falls below this point, we might see a decline towards 19,320 and 19,250 levels.

Bank Nifty: The resistance to look for in Bank Nifty is clearly the 43,800-900 zone. If the index manages to surpass these levels, it might make its way up to the round figures of 44,000 and 44,100. Meanwhile, the support to look out for is near 43,600 (the previous swing level). If the index falls below this point, it could potentially slide down to 43,400 and 43,200 levels.

Bank Nifty is testing important breakdown levels (as shown in the chart below). So, a breakout will confirm the change in the trend.

The Indian stock market faced resistance at higher levels and broke its 3-day winning streak today. Negative global news came in as Chinese exports fell more than expected, indicating that global trade is slowing down.

How was FIN NIFTY expiry today? Are you in net profit/loss? Let us know in the comments section below!

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Daily Market Feed Post Market Analysis

Nifty Consolidates Above 19,520. RBI Announcement Tmrw! – Post-Market Analysis

post-market analysis | marketfeed

NIFTY started the day at 19,521 with a gap-up of 85 points. After an initial consolidation, the index fell sharply to hit the day’s low at 19,485 levels. From there, Nifty moved up 90 points with strength to near 19,580. It consolidated in a 60-point range for the remaining part of the day. Nifty closed at 19,545, up by 109 points or 0.56%.

Nifty chart October 5 - post-market analysis | marketfeed

BANK NIFTY (BNF) started the day at 44,181 with a gap-up of 217 points. After opening, the index fell gradually to hit 44,110 levels. From there, Bank Nifty rose sharply by 285 points to hit 44,390 levels (day’s high). Then, it slowly fell over 205 points from the day’s high, making lower-lows along the way. BNF closed at 44,213, up by 249 points or 0.57%.

Bank Nifty chart October 5 - post-market analysis | marketfeed

All indices except Nifty PSU Bank (-0.51%), Nifty Pharma (-0.3%), Nifty Metal (-0.25%), and Nifty FMCG (-0.1%) closed in the green. Nifty Media (+1.58%) moved up the most.

Major Asian markets closed in the green (Japan’s Nikkei rose 1.7%). European markets are currently trading mixed.

Today’s Moves

L&T (+2.06%) was NIFTY50’s top gainer. The company’s Buildings & Factories segment secured several ‘large’ projects across various business units.

Infibeam Avenues (+13.2%) broke its 2-day losing streak and surged up to 14% on the back of strong volumes.

Shares of Sobha (+6.48%) moved up after the company recorded sales worth ₹1,723.8 crore in Q2 FY24, a growth of 48.1% YoY.

PowerGrid (-1.26%) was NIFTY50’s top loser. 

Marico (-4.9%) fell sharply after the company said its consolidated revenue in Q2 FY24 would be lower due to price correction and forex impact.

Markets Ahead

Continuous net selling from FIIs is causing a lot of pressure in the Indian market. Nifty opened in the green and continued in the green zone. This might be a reflection of weekly expiry and cannot be considered an indication of reversal in the market.

But you can keep your faith in Nifty’s 19,250 zone, which can trigger fresh buying in equities. Also, you can mark the 19,520 level as short-term and intraday support.

Yesterday’s hammer formation in Nifty is slightly invalid now because the index couldn’t form a connecting green candle today.

RBI’s interest rate decision will be announced tomorrow at 10 AM.

Question of the day: Why do you think Trent Limited has two brands (Zudio and Westside) in the same market segment?

How did Nifty expiry go? Are you in net profit or loss? Let us know in the comments below!

Please tune in to The Stock Market Show at 7 PM on our YouTube channel!

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Daily Market Feed Post Market Analysis

Nifty to Hit All-Time High Soon? – Post-Market Analysis

NIFTY started the day at 19,774 with a gap-up of 47 points. After an initial down move till yesterday’s closing, the index moved up gradually to 19,870 levels. Nifty closed at 19,819, up by 92 points or 0.47%.

Nifty chart Sept 8 - post-market analysis | marketfeed

BANK NIFTY (BNF) started the day at 44,953 with a gap-up of 75 points. After consolidating near the opening levels, the index gave a breakout from the important resistance of 45,000 and moved up 400 points to 45,380 levels. BNF closed at 45,156, up by 469 points or 1.06%.

Bank Nifty chart Sept 8 - post-market analysis | marketfeed

All other indices except Nifty Realty (+2.12%), Nifty Auto (+0.67%), and Nifty PSU Bank (+0.32%) closed flat-to-red. Nifty Media (-0.97%) fell the most.

Major Asian markets closed up to 1.3% in the red. European markets are currently trading in the red.

Today’s Moves

Coal India (+2.96%) was NIFTY50’s top gainer. The stock has surged nearly 22% in a week!

Stocks related to the power sector were in high demand today. NTPC (+2.63%), PFC (+12.23%), REC (+10.02%), and Tata Power (+1.95%) moved up.

Sobha (+10.89%) jumped after HDFC Securities said it expects a potential upside of around 66% in the stock over the next 12 months.

Eicher Motors (-0.93%) was NIFTY50’s top loser. 

Natco Pharma (-3.5%) fell after the company was named a defendant in an antitrust lawsuit in the U.S.

Markets Ahead

As discussed earlier, the markets have turned bullish and buy-on-dips can be planned. The targets of 19,840 in Nifty and 45,370 in Bank Nifty were hit, and the bullishness could continue till immediate supports are breached.

Nifty: The index is near a very important resistance zone of 19,850-870. A breakout from this level can take the index to the all-time high (ATH) of 19,990 levels. Now, the important support zone for Nifty will be the previous swing of 19,730 levels. A breakdown from there with a re-test may take the index down to 19,680 and 19,630 levels.

Bank Nifty: The index finally broke out. Now, the immediate support to watch out for will be 45,150. A breakdown from there can take the index down to 45,000 and 44,800 levels. The immediate resistance would be 45,350. A breakout from that level can give us targets of 45,740.

The indices are on a strong uptrend. Many market participants are likely to buy during price dips, aiming to push the markets higher. This strategy is expected to continue until the key breakout levels of 19,640 in Nifty and 45,000 in Bank Nifty are maintained.

Meanwhile, global markets have stabilized today, while the U.S. Dollar appeared to be on its longest winning streak since 2014, thanks to a strong U.S. economy. Investors are anticipating that central banks will keep interest rates unchanged in the next two weeks.

How did this week go? Are you in net profit or loss? Let us know in the comments section of the marketfeed app.

Don’t forget to tune in to The Stock Market Show at 7 PM on our YouTube channel!

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Daily Market Feed Pre Market Report

GIFT NIFTY in Red ahead of Key Data – Pre-Market Analysis Report

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

Stocks

Godrej Consumer reported a consolidated profit of Rs 318.8 crore for the quarter, falling 7.6% YoY due to one-time costs.

Tata Chemicals reported a profit of Rs 523 crore for Q1, falling 11.8% YoY due to lower margins.

RailTel received a work order for monetisation of a city network infrastructure on revenue sharing model. The estimated total revenue from the contract is Rs 70 crore over 10 years.

PB Fintech (Policybazaar) reduced its losses to Rs 12 crore for Q1, compared to a loss of Rs 204 crore last year.

Sobha registered a profit of Rs 12.05 crore for the quarter, growing 165% over the year-ago period despite a fall in operating performance.

Major results today: Coal India, Hindalco Industries, Adani Ports, Oil India, Prestige Estates Projects

What to Expect Today?

NIFTY started the day at 19,559, with a small gap-up. Support was taken around Friday’s high, but started moving up by noon. NIFTY closed the day at 19,597, up by 80 points or 0.41%. 

BANK NIFTY started the day at 44,934 and had a consolidation day. It was the narrowest trading zone since June 28 for the index. BANK NIFTY closed the day at 44,837, down by 42 points or 0.09%. 

US markets closed in the green. The European markets closed flat.

The Asian markets are trading mixed, as they wait for China’s inflation data tomorrow.

The U.S. Futures are trading flat.

GIFT NIFTY is trading slightly in the red at 19,646.

All the factors combined indicate a flat to gap-down opening in the market.

NIFTY has supports at 19,566, 19,530 and 19,438. We can expect resistances at 19,617, 19,658, and 19,720. PCR is at 1.08. Heavy put selling was seen yesterday.

BANK NIFTY has supports at 44,600, 44,277 and 44,000. Resistances are at 45,229, 45,472, and 45,635. PCR is at 0.71.

NIFTY has the highest call OI build-up at 19,600. The highest put OI build-up is at 19,400.

BANK NIFTY has the highest call OI build-up at 45,000. The highest put OI build-up is at 44,500.

Foreign Institutional Investors net-sold shares worth Rs 1,892 crores. Domestic Institutional Investors net-bough worth Rs 1,080 crores.

INDIA VIX jumped 5% to 11.10.

U.S. markets have moved up overnight, ahead of the country’s inflation data on Thursday night. This comes even after Fed members said further interest rate hikes would be necessary, and the bond market is ready for a breakout.

NIFTY technicals and options data indicate bullishness for the week, while Bank Nifty does not. 

For FINNIFTY, I will be selling 19,900-20,200 to start off the day. If premiums are higher, even further away strikes will be looked at.

It is interesting to see that our market might open flat even with U.S. 1% in the green. Bank Nifty option sellers will be happy, as there was heavy call writing yesterday.

Speaking of this, do be aware that there are 3 lakh+ contracts at the 45k call strike. This would be a very tough resistance to break and will turn into a support once broken.

Do be aware that on Thursday morning 10 AM, RBI will be having its policy meeting where the expectation is for interest rates to remain unchanged.

So till then, markets are most likely to trade in a range.

Follow along with Smart Money(NIFTY) and Piggy Bank(BANK NIFTY) trades. Follow along on the marketfeed app, or on our website for trades!

Make sure that you tune in to The Stock Market Show at 7 PM on our YouTube channel. All the best for the day!

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Market News Top 10 News

India’s GDP Likely to Grow 7% in FY23 – Top Indian Market Updates

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

India’s GDP likely to grow 7% in FY23: NSO

The Indian economy is seen growing at a rate of 7% in the current financial year (FY23), as per the first advanced estimates of the National Statistical Office (NSO). The expected growth rate is lower than the 8.7% estimate for FY22. The advanced GDP estimates are an important figure for the government as they use it as a base to work out its economic growth and fiscal projections for the next Union Budget (Feb 1).

Read more here.

Sobha’s sales bookings rise 36% YoY to ₹1,425 crore in Q3

Sobha Ltd reported a 36% YoY growth in sales bookings to ₹1,424.7 crore for the quarter ended December 2022 (Q3 FY23) on a strong revival in demand. The company achieved its highest-ever quarterly sales volume of 1.47 million square feet, recording an increase of 11.6% YoY. The average price realisation improved to ₹9,650 per square feet in Q3, up 21.9% YoY.

Read more here.

Bharti Airtel launches 5G services in Hissar, Rohtak

Bharti Airtel has launched its 5G services in Hissar and Rohtak, expanding the reach of the new-age high-speed network in Haryana. The company’s 5G services are already live in Gurugram and Panipat. Airtel ‘5G Plus’ services will be available to customers in a phased manner as the company continues to construct its network and complete the rollout.

Read more here.

Macrotech Developers records ₹9,000 crore pre-sales in 9 months

Macrotech Developers (Lodha) has reported a 16% YoY growth in pre-sales for the quarter ended December (Q3 FY23) at ₹3,035 crore, taking its first nine months’ cumulative performance to a record level of 9,039 crore. The company’s net debt in India was reduced further by over ₹750 crore to ₹8,042 crores during Q3. Lodha has added four new projects across Mumbai and Pune with a gross development value potential of ₹8,500 crore.

Read more here.

Oil companies making ₹10 a litre profit on petrol, ₹6.5 loss on diesel: Report

Oil companies are selling petrol at a profit of ₹10 per litre and a loss of ₹6.5 a litre on diesel, according to an ICICI Research report. But for the past 15 months, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) have not revised petrol and diesel prices in line with the cost. They have times of low oil prices to recoup losses incurred when rates were high.

Read more here.

Unitech, former directors booked by CBI in fresh bank fraud case of ₹395 crore

The Central Bureau of Investigation (CBI) has filed a new case against Unitech Ltd and its former directors in connection with an alleged fraud in IDBI Bank involving an amount of ₹395 crore. The company was allegedly enjoying a vendor bill discounting facility (a kind of credit) of ₹400 crore from the IDBI bank in 2012. The accused Unitech founders are facing another CBI probe pertaining to alleged fraud in Canara Bank.

Read more here.

Sale of health insurance policies rising in rural areas: Report

The rising cost of healthcare services, demand from the micro-insurance segment, and post-Covid awareness are pushing the sale of health insurance policies in semi-urban and rural markets, according to a Times of India report. For instance, Kotak Mahindra General Insurance has more than doubled its rural policies from 13% in FY20 to 32% through September of the current financial year (FY23). 

Read more here.

Alembic Pharma gets USFDA approval for overactive bladder treatment drug 

Alembic Pharmaceuticals has received final approval from the US Food & Drug Administration (USFDA) for Fesoterodine Fumarate Extended-Release (ER) tablets. The drug is used to treat overactive bladder (OAB) in adults with symptoms of urinary incontinence, urgency, and frequency. According to IQVIA data, Fesoterodine Fumarate ER Tablets have an estimated market size of $177 million for the 12 months ended Sept 2022.

Read more here.

Kolkata-based JG Chemicals files papers for IPO

Kolkata-based JG Chemicals has filed a Draft Red Herring Prospectus (DRHP) with markets regulator SEBI to raise funds through an initial public offering (IPO). The IPO comprises a fresh issue of equity shares worth up to ₹202.50 crore and an offer-for-sale (OFS) of 57 lakh equity shares by its existing promoter group shareholders. JG Chemicals is India’s largest zinc oxide manufacturer in terms of production and revenue.

Read more here.

KIMS buys additional 5.53% stake in Sarvejana Healthcare

Hospital chain Krishna Institute of Medical Sciences Ltd (KIMS) has acquired an additional 5.53% stake in Sarvejana Healthcare Pvt Ltd. The shares were acquired at ₹340 per equity share. With this acquisition, KIMS holds 56.61% of the total paid-up equity share capital of Sarvejana Healthcare Private Ltd. 

Read more here.

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Market News Top 10 News

Jio-bp to Set Up Charging Network for M&M – Top Indian Market Updates

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

Jio-bp to set up charging network for M&M’s upcoming e-SUVs launches

Jio-bp said it will set up a charging network for Mahindra & Mahindra’s upcoming electric SUV launches. Starting with 16 cities, Jio-bp will install DC fast chargers at M&M’s dealership network and workshops across India. M&M launched its first all-electric SUV, the XUV400, at Mahindra Research Valley in Chennai earlier this month. Jio-bp is a fuels & mobility joint venture between Reliance Industries Ltd (RIL) and UK-based bp.

Sobha achieves highest-ever quarterly sales value in Q2

Sobha Ltd achieved its highest-ever quarterly sales value of ₹1,164 crore during the Sept quarter (Q2 FY23), up 13% YoY. In terms of volume, total sales fell 0.89% YoY to 1.35 million sq. ft. during the same period. Total average price realization improved to ₹8,709 per square feet in Q2, registering a growth of 14% YoY. 

Sobha has launched three new residential projects— two in Bangalore and one in Thiruvananthapuram with a total saleable area of 880,893 sq. ft.

Read more here.

India to offer 26 blocks for producing oil, gas in mega offshore bid round

The Directorate General of Hydrocarbons said the Indian government will offer 26 blocks or areas for finding and producing oil & gas in a mega offshore bid round. Out of the 26 blocks, 15 areas are in ultra-deepwater, 8 in the shallow sea, and 3 blocks are onland. Around 16 areas for prospecting for coal-bed methane (CBM) are also being offered in a separate round. 

Read more here.

Power Grid acquires SPV to build transmission project

Power Grid Corporation of India has acquired 100% equity in a special purpose vehicle (SPV) to build an inter-state transmission project for eastern and northeastern regions. The consideration paid for the acquisition was ₹7.04 crore, including 50,000 equity shares and assets & liabilities of the company. The SPV is yet to start commercial operations.

Read more here.

JSW Neo Energy to develop 126 MW Chhatru hydel project in Himachal Pradesh

JSW Neo Energy (a subsidiary of JSW Energy Ltd) has received a Letter of Intent from the Himachal Pradesh government for developing the 126 megawatts (MW) Chhatru hydro-power plant. JSW Energy has set an ambitious target for a 50% reduction in its carbon footprint by 2030 and to achieve carbon neutrality by 2050. It has set a target to reach 20 GW capacity by 2030, with the share of renewable energy increasing to 85%.

Read more here.

Marksans Pharma to acquire Teva’s manufacturing site in Goa

Marksans Pharma has entered into an agreement with Israeli drugmaker Teva to acquire its manufacturing site in Goa on a slump sale basis. The Mumbai-based company has agreed to retain the site employees with existing terms of employment. Marksans Pharma has also entered into a business transfer agreement with Tevapharm India to acquire its business relating to the manufacture and supply of bulk pharmaceutical formulations.

Read more here.

L&T Construction wins order under its water and effluent treatment business

Larsen & Toubro Ltd’s (L&T) construction arm has secured a significant contract (in the range of ₹1,000-2,500 crore) from the Government of Odisha to execute irrigation projects.  The scope of work includes the execution of 23 lift irrigation schemes consisting of intake points spread across Anandapur Left Main Canal, Bidydharpur Barrage, Hadagarh Reservoir, Anandapur Barrage & Kharsua, Kani & Baitarani Rivers. 

Read more here.

NMDC signs pact with RailTel for ICT and digital solutions

NMDC and RailTel Corporation of India have entered into an agreement covering the information & communications technology (ICT) and digital transformation services of NMDC at its corporate offices and mining complexes. This partnership will focus on the optimal utilization of resources and build mineral accountability. RailTel will provide consultancy, project management, and execution services to enhance NMDC’s efficiency and transparency.

Read more here.

G M Breweries Q2 Results: Net profit rises 4% YoY to ₹22 crore

G M Breweries Ltd reported a 3.8% YoY (or 40.4% QoQ) increase in net profit to ₹22.69 crore for the quarter ended September (Q2 FY23). The company’s revenue from operations rose 22.35% YoY to ₹141.86 crore during the same period. Total expenses stood at ₹532.60 crore in Q2, up 26.11% YoY. G M Breweries manufactures country liquor (CL) and Indian-made foreign liquor (IMFL).  

Read more here.

Dr Reddy’s Labs’ plant gets World Economic Forum recognition

The World Economic Forum has recognised Dr. Reddy’s Laboratories Ltd’s largest manufacturing facility in Bachupally, Hyderabad, as part of its Global Lighthouse Network. Lighthouses are factories leading the way in Fourth Industrial Revolution technologies to drive impact in productivity, workforce engagement, sustainability, and supply chain resilience.

Read more here.

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Market News Top 10 News

Centre to Buy 1 Crore Shots of Zydus Cadila’s Covid-19 Vaccine – Top Indian Market News

Centre to buy 1 crore shots of Zydus Cadila’s Covid-19 vaccine

The Central government has placed a purchase order of 1 crore doses of Zydus Cadila’s three-dose Covid vaccine ZyCoV-D at Rs 265 per dose. The needle-free vaccine will cost Rs 93 per dose (excluding GST). The complete dose of the vaccine will cost Rs 1,128. ZyCoV-D was approved by India’s drug regulator in August 2021 for emergency use in adults and children aged 12 years and above.

Read more here.

Britannia Industries Q2 Results: Net profit falls 23% YoY to Rs 384 crore

Britannia Industries Ltd reported a 23% YoY decline in consolidated net profit to Rs 384.22 crore for the quarter ended September (Q2 FY22). Its revenue from operations rose 5.5% YoY to Rs 3,607.4 crore during the same period. The FMCG company’s raw material cost stood at Rs 1,914.7 crore in Q2, an increase of 8% YoY. Britannia said it is witnessing unprecedented inflation in market prices of key ingredients such as palm oil, industrial fuel, and packaging material.

Read more here.

JBM Auto secures order for 200 low-floor electric buses from Delhi govt

JBM Auto Limited has received an order for 200 electric buses from Delhi Transport Corporation (DTC). The order has been placed under the central government’s FAME II electric vehicle policy. The company will supply, operate and maintain 200 air-conditioned fully built low-floor electric buses of 12-meter length. Gurgaon-based JBM Auto is a leading manufacturer of key auto systems, electric vehicles, and buses.

Read more here.

Sobha Q2 Results: Net profit jumps 198% YoY to Rs 48 crore

Sobha Ltd reported a 198% YoY jump in consolidated net profit to Rs 48.3 crore for the quarter ended September (Q2 FY22). Net profit jumped 347% compared to the previous quarter. Its total income rose 52% YoY to Rs 832.3 crore during the same period. The realty firm’s board has approved the issue of unlisted, secured, non-convertible debentures (NCDs) worth up to Rs 140 crore on a private placement basis.

Read more here.

L&T’s construction arm secures orders worth up to Rs 2,500 crore

Larsen & Toubro’s (L&T) construction arm has secured significant orders (in the range of Rs 1,000-2,500 crore) from the metal industry and Defence Research & Development Organisation (DRDO). The order from DRDO consists of constructing a flight control system facility at Aeronautical Development Establishment, Bengaluru. L&T has also received an engineering, procurement, and construction (EPC) order for a 12 million ton per annum (MTPA) dry circuit system for a screening plant (SP-III) from NMDC Limited in Chhattisgarh.

Read more here.

Shyam Metalics Q2 Results: Net profit jumps 159% YoY to Rs 414 crore

Shyam Metalics & Energy Ltd (SMEL) reported a 159.22% YoY jump in consolidated net profit to Rs 414.18 crore for the quarter ended September (Q2 FY22). Net profit fell 9% compared to the previous quarter. Its revenue from operations rose 87% YoY to Rs 2,494.34 crore during the same period. EBITDA stood at Rs 689 crore in Q2, an increase of 96% YoY. SMEL is a leading integrated metal producing company in India.

Exchanges to launch T+1 settlement cycle from Feb 25

The National Stock Exchange (NSE) and other Market Infrastructure Institutions (MIIs) are bracing to launch T+1 trading settlement cycle from February 25, 2022. All listed stocks across stock exchanges (BSE, NSE & MSEI) will be ranked in descending order based on daily market capitalization averaged for the month of October 2021.

Currently, if an investor buys or sells a stock on Monday, they receive the money or shares on Wednesday (T+2 working days). With T+1 settlement, the transfer will be completed on Tuesday itself. You can learn more about T+1 settlement cycle here.

Read more here.

Balrampur Chini Mills Q2 Results: Net profit rises 6% YoY to Rs 83 crore

Balrampur Chini Mills Ltd reported a 6.1% YoY increase in consolidated net profit to Rs 83.1 crore for the quarter ended September (Q2 FY22). Its revenue from operations fell 5.9% YoY to Rs 1,213.8 crore during the same period. EBITDA stood at Rs 134.8 crore in Q2, an increase of 5.6% YoY.

Read more here.

DCM Shriram to invest over Rs 350 crore on expansion of sugar business

DCM Shriram Ltd has announced an investment of over Rs 350 crore to expand the capacity of its sugar mills. The company approved three investment proposals for its sugar business to capitalise on the increase in sugarcane availability in its catchment area. These investments will help enhance production capacity for refined sugar production and build flexibility of feedstock for its distilleries.

Read more here.

Paytm IPO subscribed 18% on first day of bidding

The Rs 18,300 crore initial public offering (IPO) of One97 Communications Ltd (Paytm) was subscribed 18% on the first day of bidding. The IPO has received bids for 88.23 lakh equity shares against the issue size of 4.83 crore shares. Retail investors have subscribed 78% against their reserved portion. Non Institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) have subscribed 2% and 6%, respectively, against their reserved portions. 

To learn more about the IPO, click here.

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Market News Top 10 News

Vodafone Idea’s Net Loss Widens to Rs 7,319 crore in Q1 – Top Indian Market News

Vodafone Idea Q1 Results: Net loss at Rs 7,319 crore

Vodafone Idea Ltd (Vi) reported a net loss of Rs 7319.1 crore for the quarter ended June (Q1 FY22). It had posted a net loss of Rs 7,022.8 crore in the previous quarter (Q4 FY21). The telecom operator’s revenue fell 4.7% QoQ (or 14% YoY) to Rs 9,152.3 crore during the same period. Its wireless subscriber base stood at 25.54 crore as of June 2021, as it lost 1.23 crore subscribers since March. The average revenue per user (ARPU) stood at Rs 104 in Q1 FY22, compared to Rs 107 in Q4 FY21.

Vi’s gross debt stands at Rs 1,91,590 crore, including deferred spectrum payment obligations of Rs 1.06 lakh crore and AGR liabilities of Rs 62,180 crore.

Read more here.

Sobha Q1 Results: Net profit rises 73% YoY to Rs 11 crore

Sobha Limited reported a 73% YoY increase in consolidated net profit to Rs 11.4 crore for the quarter ended June (Q1 FY22). Its total income rose 46.1% YoY to Rs 525 crore during the same period. The company’s cash flows remained healthy during the April-June quarter (Q1), which resulted in a reduction in net debt. Bengaluru-based Sobha Ltd is one of the leading real estate developers in India.

Read more here.

Amara Raja Batteries Q1 Results: Net profit doubles to Rs 167 crore

Amara Raja Batteries Ltd (ARBL) reported a 98.8% YoY increase in net profit to Rs 167 crore for the quarter ended June (Q1 FY22). Its revenue from operations rose 63.85% YoY to Rs 1,886 crore during the same period. ARBL said automotive segment revenue grew on the back of strong growth in exports compared to last year. The company’s telecom and UPS applications registered strong year-on-year (YoY) growth in Q1.

Read more here. 

NTPC invites EOI to set up pilot project on hydrogen blending with natural gas

NTPC Limited has floated a global Expression of Interest (EOI) to set up a pilot project on hydrogen blending with natural gas in city gas distribution networks. The project will be the first of its kind in India and will explore the viability of decarbonizing India’s natural gas grid. State-run NTPC is also exploring the production of green ammonia to decarbonize the fertilizer industry. It aims to fulfill the government’s upcoming mandate of using a certain percentage of green hydrogen in the fertiliser and refinery sector.

Read more here.

SJVN Q1 Results: Net profit rises 13% YoY to Rs 342.13 crore

SJVN Limited reported a 13% YoY increase in consolidated net profit to Rs 342.13 crore for the quarter ended June (Q1 FY22). Its total income declined by 1.3% YoY to Rs 704.9 crore during the same period. Currently, SJCN has a portfolio of more than 9,000 MW and is executing 27 projects in the hydro, thermal, solar, and wind sectors in India. The state-run company announced that it has secured a 200 megawatt (MW) grid-connected solar PV power project worth Rs 1,000 crore in Bihar.

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ONGC Q1 Results: Net profit jumps 772% YoY to Rs 4,335 crore

Oil and Natural Gas Corp (ONGC) reported a 772% YoY increase in net profit to Rs 4,334.8 crore for the quarter ended June (Q1 FY22). Net profit has declined by 35.6% when compared to the previous quarter. Its revenue from operations rose 77% YoY (or 8.6% QoQ) to Rs 23,021.6 crore during the same period. ONGC’s net crude realisation (price after the deduction of subsidies) rose 13% QoQ to $65.59 in Q1.

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VLCC Health Care files DRHP to raise funds via IPO

VLCC Health Care Ltd has filed a Draft Red Herring Prospectus (DRHP) with market regulator SEBI to raise funds through an initial public offering (IPO). It is one of the largest players in the wellness and beauty services industry in India. The IPO comprises a fresh issue of equity shares worth Rs 300 crore and an offer for sale (OFS) of up to 89.2 lakh shares by promoters and shareholders. The proceeds from the IPO will be used to set up VLCC Wellness clinics in India and Gulf Cooperation Council (GCC) region. 

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Minda Industries Q1 Results: Net profit at Rs 15.4 crore

Minda Industries Ltd reported a net profit of Rs 15.42 crore for the quarter ended June (Q1 FY22). It had reported a net loss of Rs 134.5 crore in the corresponding quarter last year (Q1 FY21). The company’s revenue from operations jumped 242.5 YoY to Rs 1,602.55 crore in Q1 FY22. Minda Industries is a leading manufacturer and supplier of automotive solutions to original equipment manufacturers (OEMs).

India’s exports rise 49.85% to $35.43 billion in July; trade deficit at $10.97 billion 

India’s total exports increased by 49.85% YoY to $35.43 billion (~Rs 2.62 lakh crore) in July 2021. This can be attributed to the recovery in global markets and strong demand. There was healthy growth in the petroleum, engineering, and gems & jewelry segments in July. Imports rose 63% YoY to $46.4 billion (~Rs 3.44 lakh crore) during the same month. The trade deficit stood at (-) $10.97 billion in July 2021, compared to 4.83 billion in July 2020. India’s oil exports jumped 97.45% YoY to $12.89 billion in July 2021. 

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Market News Top 10 News

NCLT Approves Jet Airways Revival Plan – Top Indian Market News

NCLT approves Kalrock-Jalan consortium resolution plan for Jet Airways

The Mumbai bench of the National Company Law Tribunal (NCLT) has approved the resolution plan submitted by the Kalrock Capital and Murari Lal Jalan consortium. The Directorate General of Civil Aviation (DGCA) has been given 90 days to allot slots to the airline. The Kalrock-Jalan consortium is believed to have offered Rs 1,183 crore as repayment over a period of five years to financial creditors, employees, and other staff of the airline. 

Jet Airways suspended operations in April 2019 due to financial distress. The company has been undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC) for two years.

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Sobha Q4 Results: Net profit falls 64% YoY to Rs 17.9 crore

Sobha Limited reported a 64.69% YoY decline in consolidated net profit to Rs 17.90 crore for the quarter ended March (Q4). Its revenue from operations declined by 39.19% YoY to Rs 553.40 crore during the same period. Net profit for the financial year ended March 31, 2021 (FY21) declined by 77.87% YoY to Rs 62.30 crore. The real estate developer’s board has recommended a final dividend of Rs 3.5 per share. 

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Dr Reddy’s Labs launches Icosapent Ethyl Capsules in the US

Dr Reddy’s Laboratories announced the launch of Icosapent Ethyl Capsules in the US market. The drug is used to reduce triglyceride (TG) levels in adult patients with severe hypertriglyceridemia. It is available in 1 gram capsules in bottle count size of 120’s count. The pharma company had received approval from the US Food & Drug Administration (USFDA) for Icosapent Ethyl Capsules in August 2020. 

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Minda Industries to acquire 51% stake in UzChasys

Minda Industries Ltd has won a bid for the acquisition of a 51% stake in Uzbekistan-based UzChasys LLC. The cost of the acquisition is 83.1 billion soms (~Rs 58.13 crore). UzChasys is engaged in the manufacturing of automobile headlights and lamps. It is a joint venture (JV) firm of AMS Co. (30% stake) and UzautoComponents LLC (70% stake). The proposed investment in UzChasys will enable the UNO Minda Group to have a significant presence in Uzbekistan as a leading supplier to original equipment manufacturers (OEMs).

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Avanti Feeds Q4 Results: Net profit declines 19% YoY to Rs 69 crore

Avanti Feeds Limited reported a 19.88% YoY decline in consolidated net profit to Rs 69.69 crore for the quarter ended March (Q4). Net profit has declined by 7.06% when compared to the previous quarter. Its revenue from operations rose 6.12% YoY to Rs 1,098.11 crore during the same period. Net profit for the financial year ended March 31, 2021 (FY21) rose 3.92% YoY to Rs 360.07 crore. Avanti Feeds’ board has recommended a final dividend of Rs 6.25 per share.

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Subex partners with Spire Solutions to address cyberattacks in the Middle East

Subex Limited has entered into a strategic partnership with Spire Solutions to address the sharp rise in cyberattacks and associated cyber risks in the Middle East and Africa. The companies will ensure that businesses are protected at critical infrastructure level security with the most comprehensive stack of Internet of Things, Operational Technology, and converged environment (IoT-OT & Information Tech) protection solutions. Subex and Spire Solutions have also received a project by a major oil & gas entity in the Middle East to meet its cybersecurity and cyber risk assessment requirements. 

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Shilpa Medicare launches Paracetamol Oral Thin Film

Shilpa Medicare Ltd announced the launch of a pediatric dose Paracetamol Oral Thin Film, under the brand name ‘Molshil’. The drug has been launched in strengths of 60 mg and 120 mg in orange flavour. The pharma company’s Paracetamol Oral Thin Films are patent protected and are the first of their kind in the world. Shilpa Medicare manufactures and sells active pharmaceutical ingredients (APIs), intermediates, and formulations globally.

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HPL Electric & Power to install NB-IoT technology smart meters in parts of Delhi

HPL Electric & Power Ltd has received approval and production clearance from a leading private distribution company for the implementation of Narrow Band-Internet of Things (NB-IoT)-based smart meters in parts of Delhi. HPL’s new range of smart meters is both 4G and 5G compatible. It offers a dedicated channel for smart metering and avoids any reduction in performance from obstruction due to congestion on the public network. These smart meters have been developed at HPL’s new R&D facility at Gurugram. HPL Electric & Power is a leading meter and electrical equipment manufacturing company.

Hero MotoCorp to hike prices from July

Hero MotoCorp Ltd has announced plans to hike the prices of its two-wheelers by up to Rs 3,000 with effect from July 1. This is to partially offset the impact of the continuous rise in commodity prices. The exact quantum of the increase will depend on the model and the specific market. Hero MotoCorp further said it continues to drive cost-saving programs aggressively to minimize the impact on the final consumer.

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Engineers India receives order worth Rs 111 crore from Numaligarh Refinery

Engineers India Ltd (EIL) has secured an order from Numaligarh Refinery (NRL) for the execution of revamp of a delayed coker unit (DCU). EIL will execute this project as a licensor cum engineering, procurement & construction management (EPCM) consultant. The project involves increasing the capacity of the DCU from 0.306 million metric tonnes per annum (MMTPA) to 0.560 MMTPA. The estimated value of the order is Rs 111 crore.

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Sun Pharma settles patent litigation with Celgene over cancer drug

Sun Pharmaceutical Industries has reached an agreement with Celgene Corp to resolve the patent litigation regarding submission of an Abbreviated New Drug Application (ANDA) for a generic version of Revlimid (lenalidomide capsules) in the US. As per terms of the settlement, Celgene will grant Sun Pharma a license to its patents required to manufacture and sell limited quantities of generic lenalidomide capsules in the US after March 2022. 

Celgene is a wholly-owned subsidiary of New York-based pharma company Bristol Myers Squibb (BMS). Revlimid is a blood cancer drug, which had annual sales of $12.1 billion (~Rs 89,900 crore) in 2020.

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Market News Top 10 News

IMF Raises India’s Growth Projection to 12.5% in FY22 – Top Indian Market News

IMF raises India’s growth projection to 12.5% in FY22

The International Monetary Fund (IMF) has upgraded its growth projection for India to 12.5% for FY 2021-22 from 11.5% estimated in January. As per IMF’s report, India is the only country expected to register double-digit growth in the current financial year. The GDP growth for FY23 is estimated at 6.9%. However, the surge in Covid-19 cases poses a severe downside risk to the growth outlook for the economy. The IMF’s World Economic Outlook now sees world growth of 6% this year, after the contraction of 3.3% in 2020 amidst the Covid-19 pandemic.

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Cargo volume handled by Adani Ports rises 41% YoY in March

Adani Ports & Special Economic Zone Ltd (APSEZ) said it had handled cargo volume of 26 million metric tonnes (MMT) in March, an increase of 41% over the corresponding period last year. The overall cargo volumes handled by APSEZ rose 27% year-on-year (YoY) to 73 MMT for the quarter ended March (Q4). In the container segment, APSEZ handled cargo volumes of 247 MMT, an increase of 11% YoY.

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Bharti Airtel to transfer 800MHz spectrum in 3 circles to Jio

Reliance Jio Infocomm has signed a definitive agreement with Bharti Airtel for acquiring the ‘Right to Use’ spectrum in the 800MHz band in Andhra Pradesh, Delhi, and Mumbai circles. Through this agreement, Airtel will receive a consideration of Rs 1,037.6 crore from Jio for the proposed transfer. With this trading of the right to use spectrum, Jio will have 2x15MHz of spectrum in the 800MHz band in Mumbai circle and 2x10MHz of spectrum in the 800MHz band in Andhra Pradesh and Delhi circles.

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Flipkart partners with Mahindra Logistics to accelerate deployment of EVs

E-commerce giant Flipkart has announced its partnership with Mahindra Logistics Ltd (MLL) to help accelerate the deployment of electric vehicles (EVs) across its logistics fleet in India. Flipkart has committed to 100% electric mobility of its logistics fleet and will deploy more than 25,000 EVs by 2030. Through its EDEL brand, MLL will play a significant role in working with various original equipment manufacturers (OEMs) to help Flipkart’s sustainable transition to EVs. 

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Sobha posts record sales bookings in FY21

Sobha Limited reported a total sales volume of 13.37 lakh square feet of super built-up area worth Rs 1,072 crore for the quarter ended March (Q4). The real estate developer’s sales volumes achieved in Bengaluru, Gurugram, Pune, and Kochi were the highest ever in its history. Sales volume and total sales value were up 48% YoY and 54% YoY, respectively, in Q4 FY21. Sobha launched new residential projects of 2.77 million square feet of super built-up area and 0.27 million square feet of commercial space.

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Power market traded highest ever monthly volume of 8,249 MU in March: IEX

Indian Energy Exchange (IEX) said its power market traded the highest ever monthly volume of 8,249 million units (MU) in March 2021, posting a growth of 92% YoY. This has been due to the increase in demand and consumption of electricity across the country. The electricity market achieved an all-time high volume of 73,941 million units in FY21. This a growth of 37.2% as compared to the previous financial year.

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Delhi HC rejects Britannia’s plea of trademark infringement against ITC’s Sufeast Digestive Biscuits

A single-judge bench of the Delhi High Court dismissed a petition of Britannia Industries against ITC Limited for alleged trademark infringement by ITC’s Sunfeast Farmlite Digestive biscuits. Britannia had claimed that the labelling and packaging of ITC’s digestive biscuits were deceptively similar to that of its NutriChoice Digestive biscuits. The court ruled that it “cannot readily presume the digestive biscuit consumer, even if of average intelligence and imperfect recollection, to be unaware of the difference between these categories of digestive biscuits”.

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G M Breweries Q4 Results: Net profit rises 155% YoY to Rs 45 crore

G M Breweries Limited reported a 155.29% YoY increase in net profit to Rs 45.34 crore for the quarter ended March (Q4). Its revenue from operations rose 17.18% YoY to Rs 127.70 crore during the same period. G M Breweries’ net profit has increased by 18.02% YoY to Rs 80.09 crore for the financial year ended March 2021. The company’s board has proposed a dividend of Rs 4 per share.

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JSPL reports highest ever production, sales in FY21

Jindal Steel & Power Ltd (JSPL) reported a 61% year-on-year (YoY) increase in sales to a record high of 7.86 lakh tonnes in FY 2020-21. This can be attributed to robust domestic demand, attractive export markets, and a wide range of product offerings. The steelmaker said its production has crossed the 20 lakh tonne mark for the first time.

In other news, JSPL has announced plans to sell its entire stake in its wholly-owned subsidiary, Jindal Power Ltd, to bring down its overall debt to Rs 28,000 crore and reduce carbon emissions within the group.

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Axis Bank becomes co-promoter of Max Life Insurance

Axis Bank, along with its subsidiaries— Axis Capital and Axis Securities, has become the co-promoter of Max Life Insurance Company after completing the acquisition of a 12.99% stake in the firm. The Axis entities have a right to acquire an additional stake of up to 7% in Max Life in one or more tranches (rounds). “With the conclusion of this transaction, Max Life’s Board will be strengthened further, with co-option of three nominee directors of Axis entities on its Board,” said Axis Bank in a statement.

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Saregama signs licensing deal with short video app Triller

Saregama India Limited has signed a global licensing deal with short format video platform Triller. As part of the deal, Saregama will license its entire catalog to Triller, which will allow users to create innovative content using the robust music library of over 1.30 lakh songs in diverse Indian languages. Saregama is India’s oldest music label owned by RP-Sanjiv Goenka group of companies. 

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Market News Top 10 News

Retail Inflation Eases to 4.06% in January; Industry Output Grows 1% in December – Top Indian Market News

Retail inflation eases to 4.06% in January; industry output grows 1% in December

India’s retail inflation, calculated by the Consumer Price Index (CPI), eased to 4.06% in January 2021, primarily due to a decline in vegetable prices. The CPI stood at 4.59% in December 2020 and 7.6% in January 2020. Meanwhile, the Index of Industrial Production (IIP) grew 1% in December 2020. Mining output declined by 4.8%, while power generation grew 5.1% last month. Thus, the Indian economy is witnessing a strong recovery with inflation cooling down and industry output showing a rebound. 

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Motherson Sumi Q3 Results: Net profit nearly triples to Rs 798 crore

Motherson Sumi Systems reported a 194% YoY increase in consolidated net profit to Rs 798 crore for the quarter ended December (Q3). The auto parts maker posted a 14% YoY increase in revenue to Rs 17,092.4 crore during the same period. With strong operating cash flows, the company’s net debt is at its lowest level compared to the previous 14 quarters. Motherson Sumo’s domestic wire harness business showed a 44% YoY increase in revenue to Rs 1,343 crore in Q3. 

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NTPC commissions Unit-4 of Kameng hydro-electric project

NTPC announced that its fourth 150 megawatt (MW) unit of Kameng Hydro-Electric Project is commercially operational. The project is run by its subsidiary- North Eastern Electric Power Corporation. With this, the commissioned and commercial capacity of NTPC has increased to 64,075 MW.

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Voltas Q3 Results: Net profit rises 46% YoY to Rs 129 crore

Tata Group company Voltas Ltd reported a 46.26% YoY increase in consolidated net profit to Rs 128.64 crore for the quarter ended December (Q3). Its revenue rose 32.29% YoY to Rs 2,046.26 crore during the same period. The company saw a strong recovery in its cooling products segment. Voltas’ revenue from unitary cooling products for commercial use increased 40% YoY to Rs 840 crore in Q3.

The company’s board has approved the transfer of domestic projects business to its subsidiary, Universal MEP Projects & Engineering Services. The cash consideration for the business transfer has been estimated at Rs 1,000-1,200 crore.

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Sobha Q3 Results: Net profit falls 70% YoY to Rs 21 crore

Sobha Limited reported a 70.49% YoY decline in consolidated net profit to Rs 21.6 crore for the quarter ended December (Q3). The real estate developer’s revenue fell to Rs 696.3 crore, compared with Rs 901.2 crore in Q3 FY20. However, the firm achieved its highest-ever pre-sales volume during the October-December quarter.

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Bharat Forge Q3 Results: Net loss at Rs 210 crore

Bharat Forge reported a consolidated net loss of Rs 210.45 crore for the quarter ended December (Q3). The auto components manufacturer posted a 5.9% YoY decline in revenue to Rs 1,723.1 crore during the same period. Bharat Forge stated that a strong recovery in end-market demand in the automobile sector helped the company register healthy double-digit growth in key parameters.

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HAL Q3 Results: Net profit rises 85% YoY to Rs 853 crore

Hindustan Aeronautics Ltd (HAL) reported an 85% YoY increase in consolidated net profit to Rs 853 crore for the quarter ended December (Q3). Its consolidated revenue rose 21.8% YoY to Rs 5,425.46 crore during the same period.

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Indiabulls Housing Finance Q3 Results: Net profit declines 40% YoY to Rs 329 crore

Indiabulls Housing Finance reported a 40.3% YoY decline in consolidated net profit to Rs 329.32 crore for the quarter ended December (Q3). Its revenue from operations declined by 25% YoY to Rs 2,513.25 crore during the same period. The company’s board has approved fundraising of Rs 5,000 crores through the issue of non-convertible debentures on a private placement basis.

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Grasim Q3 Results: Net profit jumps 107% YoY to Rs 2,152 crore

Grasim Industries Limited reported a 107% YoY increase in consolidated net profit to Rs 2,152.33 crore for the quarter ended December (Q3). Its revenue from operations grew 13% YoY to Rs 20,986 crore during the same period. This is the highest-ever consolidated quarterly profit reported by the company, with strong growth across its business segments. 

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Equitas SFB launches FASTag powered truck terminal

Equitas Small Finance Bank has launched a FASTag powered truck terminal at Khalapur, Maharashtra. The bank has partnered with Maharashtra State Road Development Corporation Ltd (MSRDC) and Ocean Highway Facilities and Solutions Pvt Ltd for the same. The terminal has a capacity of 160 trucks that can be parked at any given point in time.

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Editorial

The Real Estate Boom in India. Who Will Benefit?

The real estate sector is one of the largest contributors to India’s economy. It is a highly competitive industry that constantly faces massive hurdles. Amidst the Covid-19 pandemic, real estate developers were forced to halt construction activities. They saw a considerable decline in sales volumes. The rental income from malls and office complexes saw a fall. All external conditions led these companies to incur losses. 

Fortunately, with the removal of lockdowns, things are finally looking positive for the sector. Certain realty firms are now witnessing demand recovery and have also posted great Q3 results. However, we must understand an interesting concept that defines the trend of this particular industry. We shall look at how the present conditions prove to be favourable for large real estate companies. Let us dive right in. 

What is the Real Estate Cycle?

The real estate cycle is a concept that helps predict the income and appreciation performance of a real estate property. It is a sequence of recurrent events based on the economic and emotional factors that affect supply and demand for properties. Historically, it is found that the average real estate cycle spans 15-18 years. However, these cycles are unpredictable and can sometimes last much longer. The population structure, interest rates, overall health of the economy, and government policies (taxation) are some of the major factors that affect this cycle. With interest rates of loans at very low levels, there is no doubt that Indian Real Estate is in a booming cycle now.

Four Phases of the Real Estate Cycle

The real estate cycle consists of four main phases- recovery, expansion, hyper-supply, and recession. This means that there has never been a sustained period of expansion or hyper-supply without a recession- followed by recovery. Let us understand each phase in detail:

1. Recovery: This is a period when rental growth remains stagnant and there are no signs of new construction. Due to financial setbacks, people would be hesitant to buy or construct new properties. It is also a phase when investors buy and hold distressed properties and add value to them. This would allow them to sell or rent out these properties at high rates, right as the economy shifts into the expansion phase.

2. Expansion: This refers to a period when the general economy is improving, with more people being employed. They will regain their confidence in the economy, and thus, the real estate market. Individual renters and homebuyers will be in a better position to move to higher-quality houses/apartments. Real estate developers receive greater demand for their properties. New residential or commercial projects would be launched to meet this growing demand.

3. Hyper Supply: During the expansion phase, there would be a tipping point when supply begins to exceed demand. This could be due to the availability of too many apartments or houses in the market. And, there could be a sudden shift in the economy that leads to a decline in demand. Property owners often start to liquidate their assets out of fear that their properties will go vacant or unsold. 

4. Recession: This is a period when supply exceeds demand by a wide margin, and property owners suffer from high vacancy rates. People would be suffering from the economic downturn, and landlords would be forced to lower their rental rates. At the same time, certain investors use this opportunity to purchase distressed properties at very high discounts. They hold on to these properties, add value to them, and finally sell or rent them out just as the economy begins to recover.

The Current Scenario in India

Major real estate developers in India feel that the real estate cycle has now turned for the better. According to Pirojsha Godrej (Executive Chairman of Godrej Properties), demand is picking up and inventory is getting absorbed steadily. Customers and investors who had stayed away from residential real estate over the last 4-5 years are returning to the sector. This is primarily due to lower interest rates and higher disposable income among individuals. With the removal of all lockdown restrictions, we are witnessing a great recovery in economic activities. Developers have been receiving an influx of demand from home buyers or even investors who wish to buy and hold properties. There is a marginal increase in demand for commercial spaces, as people are now slowly returning to work from offices.

As we know, people were forced to work from home amidst the Covid-19 pandemic. Many felt an urge to shift to better locations or apartments/houses. The geographical markets of Bengaluru, Hyderabad, Pune, and Gurugram have contributed heavily to the overall sales volumes of real estate companies. These firms believe that the real estate sector will continue to perform well over the next 6 months. The Maharashtra Government even reduced all premiums related to this sector by 50% till December 31, 2021. It has been reported that other states would follow suit and introduce cuts on stamp duties and registration fees. The Centre had also introduced a ‘last-mile’ funding mechanism for delayed housing projects. These measures would bring down the financial burden on developers and allow them to offer properties at cheaper rates. 

On the other hand, construction activities have resumed and are now in full swing. To meet the growing demand, developers are focusing on completing existing projects. They have also acquired land in major cities and towns to launch new projects. This ultimately provides a well-needed boost for the cement, steel, paint, and other allied industries. It also generates employment opportunities for lakhs of people in India.

Listed Companies in Focus

As mentioned above, real estate companies in India are now showing an improvement in overall operational performance. Some of the major players in this sector had posted very strong results for the October-December quarter (Q3). Let us look at some of these: 

  • Oberoi Realty Ltd reported a 93% year-on-year (YoY) increase in net profit to Rs 286 crore in Q3, while its revenue rose 57% YoY to Rs 828 crore. There was a sharp surge in demand for higher-end apartments in Mumbai, where the company has a strong foothold.
  • Indiabulls Real Estate Ltd reported a 64% YoY increase in net profit to Rs 80.69 crore in Q3. Its revenue stood at Rs 756.81 crore during the same period. We saw that the share price of the company jumped 12% after it posted these results.
  • Sobha Ltd is yet to post its Q3 financial results. However, the company announced that it had achieved its highest-ever quarterly sales volume in Q3 FY21. It posted a total sales volume of 11.33 lakh square feet of super built-up area, valued at Rs 888 crore. Sales volume and total sales value were up by 27% and 29%, respectively, as compared to Q2 FY21.

It is expected that prominent firms such as DLF, Godrej Properties, Phoenix Mills, Prestige Estate, Embassy Office Parks REIT, and others are very likely to show robust sales growth during Q3. These companies have a positive outlook on India’s real estate sector for the upcoming fiscal year.

Allied Sectors

As construction activities have resumed, the demand for steel and cement are at a record high. At the same time, the prices of both these components have skyrocketed due to alleged cartelisation by large domestic players. China has also been importing and hoarding large quantities of steel, even though they contribute ~51% to global steel production. Now, companies such as SAIL, Tata Steel, JSW Steel, ACC, JK Cements, and Ambuja Cements are benefiting from increased margins. 

Similarly, we are also witnessing strong sales growth of companies such as Asian Paints, Berger Paints, and Kansai Nerolac Paints. The paint business in India is booming, and we can see conglomerates having a strong desire to enter this segment. For example, Aditya Birla Group’s flagship company- Grasim Industries Ltd – announced its plans to enter into the paints business with an initial capital of Rs 5,000 crore. 

Conclusion

After going through a prolonged period of difficulties, things are finally looking positive for the real estate sector. With the anticipation of robust growth and financial performance, we could see an uptrend in the share prices of companies mentioned above. These firms are highly confident about the future prospects of the industry as a whole. This is supported by the present economic conditions, which encourage people to invest or buy new properties. The very low interest rates offered in housing loans, and lower stamp duties and other taxes are making this a perfect time for house-owners.

Developers are in a position to offer incentives or attractive payment schemes. The state and central governments had also introduced mechanisms to decrease the financial burden faced by these companies. The changing patterns of consumer behaviour and the integration of online and offline retail formats have positively influenced the real estate sector. Firms that offer interior-decoration solutions will also obtain a massive boost.

In the upcoming Union Budget 2021, this sector will look forward to additional measures that can support a further recovery in demand and remove supply-side challenges faced by developers. Such policies would help them show increased growth in the prevailing favourable conditions. Exemptions or deductions in tax rates would encourage people to acquire the houses or apartments of their choice. All eyes are focused on how the developers make use of the recovery and expansion phases of the real estate cycle. Will they be able to leverage the current situation and cater to the rising demand? Let us wait and watch.