Stock Market Investment Shot, 20th January 2023

Stock Market Investment Shot, 20th January 2023

Stock Market Investment Shot, 20th January 2023

Vedanta approved the sale of its global zinc assets in South Africa and Namibia to Hindustan Zinc (HZL) for $2.98 billion. HZL is a subsidiary of Vedanta Ltd. The transaction would be completed over the next 18 months, subject to regulatory clearances. HZL had also reported a 20% yoy fall in net profits at Rs2,156 crore, while the revenues fell 2% to Rs7,628 crore. Integrated zinc output fell 1.&% to 210 KT due to the shortage of quality ores. Silver production dropped 7% to 161 KT. Zinc saw cost of production rise 12.7%.

Sun Pharma bought NASDAQ listed Concert Pharmaceuticals for $576 million. Concert Pharma is a biotech company, that manufactures deuruxolitinib, an oral treatment for autoimmune dermatological disease in late-stage development. The deal size is around $827 million if additional milestone payments are added. The transaction will be completed in the first quarter of 2023. The US market accounts for 30% of Sun Pharma’s consolidated business and it ranks second in dermatological prescriptions for various ailments.

The current account deficit (CAD) is expected to reduce in 2023 from inflation being brought back inside the tolerance band. In Q2FY3, the current account had touched 4.4% of GDP and a record absolute level of $36.4 billion. With CPI inflation falling to 5.7% in December, it is clear that imported inflation is under check, although core inflation still remains an issue. GDP growth for FY23 has been pegged by the RBI at 6.8%. The RBI had raised the repo rates by 225 basis points during 2022 to bring inflation under control.

Asian Paints reported 6.4% higher net profits at Rs1,097 crore for the quarter ended December 2022. The revenues for the Q3FY23 quarter came in 1.3% higher at 8,637 crore. Volumes were flat in the domestic decorative business. Retail paint market was also impacted by the extended monsoon. However, the paint demand from the industrial segment had picked up sharply during the quarter. Its sales to Sri Lanka and Bangladesh got impacted by adverse forex conditions. Most paint companies have faced input pressure.

Indians are sending money abroad like there was no tomorrow sending out $2 billion in November under the liberalised remittance scheme (LRS) of the RBI. On a yoy basis, the outward remittances under LRS were higher by 29%. More than 50% of the outwards remittances were accounted for by global travel with airlines getting back into full action and business and private travel picking up with a vengeance. The other major reasons for remittances were maintenance of relatives, gifts and overseas education costs.

Microsoft will invest Rs16,000 crore for setting up 3 additional data centres in Hyderabad, taking the total proposed data centres to six. Each of the 6 data centres will have capacity of 100 MW of IT load. This would be part of the Azur infrastructure to serve the cloud customers in India. Microsoft is one of the key players in the data centres business in India and Hyderabad has been one of their preferred hubs in India. Apart from data centres, Microsoft will also work with the state to identify special projects to support.

Hindustan Unilever standalone net profits for Q3FY23 were up 11.6% yoy at Rs2,505 crore, marginally higher than the consensus estimates. There was higher  demand for its beauty and personal care products. Net revenues for the quarter grew 16% at Rs14,986 crore for the quarter. Over 75% of the business gained market share in the quarter. EBITDA margins of HUL dipped 180 bps yoy to 23.6%. Home Care clocked 32% revenue growth, Beauty and Personal Care rose 10% and Foods and Refreshment grew 7% in Q3FY23.

Supreme Court refused to entertain Google’s plea against NCLAT order virtually refusing interim stay on the Rs1,337 crore penalty case. Google has one week to comply with the NCLAT order and deposit 10% of the penalty amount. The order was passed by CCI for anti-competitive policies followed by Android. The ASG had argued that Google had complied with a similar order passed by the European Commission. Google has also been asked to stop and desist from involving itself in anti-competitive practices in future.

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