Stock Market Investment Shot, 23rd January 2023

Stock Market Investment Shot, 21st April 2023

Stock Market Investment Shot, 21st April 2023

Reliance Industries reported 15% lower net profits at Rs15,792 crore for Q3FY23 due to higher finance cost and special additional excise duty. This is lower than street estimates. While finance costs were up 36.4%, depreciation was up 32.6% yoy. RIL board approved raising Rs20,000 crore through NCDs. Sales were up 15.3% at Rs2.20 trillion as consumer businesses continued to surge. Digital segment grew 20.4% while retail grew 17.2% yoy. RIL also saw improved realisations in its core oil-to-chemical (O2C) business.

For the week ended 20th January, 4 of 10 most valued companies added Rs82,481 crore in market cap. HDFC Bank and Adani Total Gas were among top gainers. HDFC Bank gained Rs33,433 crore and Adani Total Gas Rs22,667 crore for the week. Other gainers were HDFC Rs17,144 crore and Infy Rs9,237 crore.  Among losers, Hindustan Unilever gave up Rs17,246 crore on the royalty issue. Among others Reliance lost Rs16,676 crore, LIC Rs8,918 crore, SBI Rs7,095 crore, TCS Rs4,592 crore and ICICI Bank Rs1,961 crore.

SEBI conducted a series of nationwide raids targeting front-running by market experts appearing on a business news channels. These were search and seizures operations at the homes and offices of 6  entities allegedly engaged in front-running. The raids across Pune, Kolkata, Noida and Jaipur were based on the SEBI internal alert systems and external surveillance data. It had red-flagged specific market influencers who were giving taking positions ahead of giving a call in the channel, to exit after making a neat profit.

There is a strange asset price phenomenon visible in the market. Gold prices touched multi-month highs of over $1,930/oz while the Indian gold price is already at a life-time high, thanks to weak rupee. Ironically, the price of gold and silver have been diverging of late, and it looks more like a safe-haven demand for gold ahead of a recession. Interestingly, central bank purchases of gold have been at record highs as more central banks are diversifying their forex holdings away from fiat currencies and moving to infallible gold.

Yes Bank will move the Supreme Court against the Bombay High Court order, setting aside a 2020 order of the administrator to write off additional tier-I (AT-1) bonds up to Rs8,300 crore. This repudiation was done by Yes Bank as per the deal with SBI, since AT-1 bonds can be repudiated as per law under certain cases. The Bombay High Court has not question the legality of the order, just the process followed. AT-1 bonds are perpetual bonds with no commitment on interest payments. The order is on hold for 6 weeks.

Adani group plans to spin off a slew of high value businesses like green hydrogen, airports and data centres between 2025 and 2028 via IPOs. For now, the Adani group is raising Rs20,000 crore via FPO to bankroll the future business plans and cut debt/equity ratio. Adani group plans to invest up to $50 billion in these new age businesses and needs deep funding commitments. The equity infusion would also allay the debt related concerns that CreditSights (part of Fitch) had expressed in a research note during the year 2022.

ICICI Bank announced 34% increase in net profits for Q3FY23 at Rs8,312 crore. This was in spite of a 12% increase in provisions at Rs2,257 crore. PCR stood at 82%. The metrics of net interest income (NII) grew 35% to Rs16,465 crore in the quarter while net interest margin (NIM) expanded 69 bps to 4.65%. Retail loan portfolio grew 23.4% and deposits grew 14.2%, but CASA ratio fell 30 bps to 44.6%. Gross NPAs of ICICI Bank fell 106 bps yoy to 3.07% while net NPAs fell 30 bps to 0.55%. Capital adequacy stood at 18.33%.

A total of 168 out of the 300 PMS schemes, or 56%, failed to beat the benchmark returns in CY2022. This was in the light of enhanced volatility in markets. For CY2022, the 300 PMS plans delivered a combined return of -0.2%, compared to 4.3% for the Nifty, 3.5% for Nifty Mid-Cap and 3% for Nifty 500. Only 32 out of 300 schemes could deliver double-digit returns in 2022. While large cap PMS managed to stay in the green overall, mid-cap and small-cap PMS schemes delivered negative returns. Alpha is the question mark.

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