Stock Market Investment Shot, 6th July 2023

Stock Market Live , 7th May

For the June 2023 quarter, Adani Wilmar reported 25% growth in volumes yoy. This was on the back of strong consumer demand for edible oils and foods. For the quarter, the sale of branded products in edible oils and foods were much stronger compared to overall sales of respective segments. However, sales in value terms fell 15% yoy due to a sharp fall in the prices of edible oil. The food and FMCG business had crossed Rs1,000 crore revenues last year and showed growth of 30% in June 2023 quarter on yoy basis.

For the first time, the aggregate market cap of all companies listed on BSE crossed Rs300 trillion. This makes India the fifth largest market in the world in terms of market cap after the US, China, Japan, and Hong Kong. Of course, Hong Kong market is an extension of China. India now accounts for 3.3% of global market cap. Incidentally, Indian market cap crossed the Rs100 trillion mark in 2014 and then scaled the Rs200 trillion mark in 2021. The journey to Rs300 trillion has been the fastest in a little over two years.

The RBI has brought out a detailed note on the internationalization of the Indian rupee in order to reduce the dependence on the dollar. This would also entail liberalizing the capital account. The sanctions on Russia made many countries, including India, cautious about the spillover effects of depending too much on the dollar. The committee feels the Indian rupee can be a global currency even with full convertibility on the capital account. The group has also suggested waiving the withholding tax on Masala bond issues.

Tata Power has bagged a smart metering project worth Rs1,744 crore from the Chhattisgarh State Power Distribution Company Limited (CSPDCL). Tata Power will install and maintain 18.6 lakh meters in the given area. This is a high value and specialized project aimed at transforming power distribution. The project will include design, supply, installation, and commissioning; followed by operation and maintenance. The project, once executed, is expected to improve the AT&C losses and boost revenue collection for CSPDCL.

Steel Authority of India Ltd (SAIL) achieved record-breaking steel production and sales in the June 2023 quarter. SAIL reported 8% growth in crude steel production at 4.667 MT during Q1FY24. In the quarter,

SAIL achieved its highest-ever sales performance of 3.9 MT, up 24% yoy. Earlier, World Steel Association  reported that India had registered 4.1% growth in crude steel production at 11.2 MT while global steel output had contracted by 5.1%. China output fell 7.3% but it still remained the leader with 90.1 MT output.

According to a report by CRISIL Ratings, the FMCG sector is expected to witness 7% to 9% growth in top line in FY24. This is marginally lower than FY23. The revenue thrust is expected from higher volumes with the real support coming from robust urban demand. Rural demand is likely to continue its recovery in the year. It may be recollected that Q4FY23 had reported positive rural growth after 6 quarters of negative growth. The positive momentum is likely to continue in Q1FY24, but the alpha will still come from urban.

Shares of ITC once again scaled its 52-week high of Rs480.60 after reports of ITC demerging its hotels business. It is also currently exploring alternative structures for the hotels business. The stock is already up 43% in the current calendar year so far. In the last board meeting of ITC, the chairman had mentioned that the demerger of the hotels business was on the cards. Markets are excited as this could set the trend for other businesses like paper, agriculture etc also be hived into separate entities, helping boost value.

The Rs405 crore IPO of Senco Gold Ltd was oversubscribed by the close of the second day at 2.68X. It has seen strong response from the retail and HNI / NII investors. The company had placed 30% of its issue size with anchors, so even the QIB portion is likely to pick up momentum on the last day of the IPO. The price band for the IPO has been set at Rs301 to Rs317 and the IPO includes a fresh issue and an offer for sale. Markets are a little jittery after the IPO of PKH Ventures Ltd had to be called off due to insipid response.

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