Stock Market Investment shot, 21st July 2023

Stock Market LIve Updates today, 4th June 2024

Jio Financial Services, which listed on July 20, 2023, has already achieved market cap of $20 billion. This is over and above the market cap of $233 billion for its parent Reliance Industries. This makes Jio Financial the third most valuable NBFC in India after the Bajaj Twins. This gels into the overall plan of Reliance group to separate its financial services business into a separate entity. The price of Jio Financial was determined at Rs261.85 per share, which is higher than street estimates. RIL holders get Jio Financial in ratio of 1:1.

Infosys profits were impressive but its guidance continued to be lacklustre. It cuts its FY24 growth outlook to the range of 1% to 3.5%. However, Q1FY24 net profits came in 11% higher at Rs5,945 crore. The CC guidance given by Infosys is sharply lower than the 4% to 7% guidance given earlier. It maintained its OPM guidance in the range of 20%-22% even as the attrition rate fell sharply in the quarter by over 1000 basis points to around 17%. For Q1FY24, top line revenues of Infosys were up by over 10% at Rs37,933 crore.

For the Q1FY24 quarter, Hindustan Unilever Ltd reported 3% increase in net profits to Rs2,554 crore while the top line revenues were up 6% yoy at Rs15,496 crore. While margins did improve, HUL also witnessed a positive turnaround in rural demand after nearly 6 quarters of negative rural demand growth. In the last two quarters, Hindustan Unilever has benefited from sharply lower commodity costs and now the demand has also been picking up. FMCG demand is expected to grow at 8-9% in FY24 and HUL is preparing for it.

Godrej Capital has announced the launch of unsecured business loans for the medium, small, and micro enterprises (MSMEs). Borrowers will also be entitled to a rewards program for timely payments. The full application and approval process is digital which ensures timely disbursals. It also offers up to 60 months repayment period for these loans. The MSME segment has been one of the key segments of the economy that does not gets its due share of credit, despite contributing more than 40% to the exports out of India.

The qualified institutional placement (QIP) of Federal Bank received a robust response getting subscribed over 7 times. The bank had fixed Rs132.59 as the floor price of the QIP, which is at a small discount to the current market price. The QIB attracted domestic investors like SBI MF, Birla Sunlife MF and Mirae AMC while the global investors included Fidelity, TT International, Goldman Sachs and Templeton. These QIP shares will be subjected to lock-in period of 90 days. The response is indicative of appetite for bank stocks.

Auto sector performance in the first quarter Q1FY24 is likely to be strong across auto companies due to a mix of higher price realizations and lower input costs. Bellwethers like Maruti, Tata Motors and Bajaj Auto are all expected to report flattering numbers. The 2-wheeler segment is expected to outperform the other segments of auto with 10% growth. The EBITDA of the auto sector as a whole is expected to be up by 33% for the quarter on a yoy basis. While utility vehicles will continue to drive PV sales, CV sales could be tepid.

Adani group, which had taken over Ambuja Cements and ACC last year, has clarified that there were no plans to merging the brands into a single unit. Both have a very strong brand name and distribution that includes 14 integrated units, 16 grinding units and 79 RMC plants, apart from a network of 78,000 channel partners. For now, ACC and Ambuja will be retained as separate brands. In terms of installed capacity, the Adani group is already the second largest after Ultratech. The focus is to boost EBITDA per tonne by Rs450.

In its board meeting on July 25, 2023, Larsen & Toubro is likely to consider a buyback of shares as well as a special dividend to shareholders. L&T will also be declaring its results on July 25. Buybacks are used very frequently by cash-rich IT companies in India and they serve to enhance the EPS by reducing the number of shares outstanding. The special dividend, if approved, is likely to have record date of August 02, 2023. It may be recollected that, in 2019 SEBI had denied permission for its proposed Rs9,000 crore buyback.

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