Market Capsule 8th June'24 | Peak Volatility Week
- samarwealth
- Jun 8, 2024
- 7 min read
The Election Drama that Created Ruckus
Weekly Insights: Domestic stocks surged on Monday due to exit poll optimism, with the BSE Sensex and Nifty 50 rising 3%+. However, this upward momentum was short-lived as both indices experienced their steepest single-day declines since March 2020 on Tuesday. The BSE Sensex plunged 4,389.73 points (5.74%) to 72,079.05, while the Nifty 50 index dropped 1,379.40 points (5.93%) to 21,884.50. The domestic equity market rebounded on Wednesday, recovering most of Tuesday's losses. The rally continued for a second day on Thursday, driven by the BJP-led NDA's re-election and global optimism. The week ended on a strong note with robust gains on Friday, marking a third consecutive day of advances. The BSE Sensex increased by 1,618.85 points (2.16%) to 76,693.36, and the Nifty 50 index jumped 468.75 points (2.05%) to 23,290.15.
Monetary Policy: The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has decided to maintain the repo rate at 6.5%. In its meeting on 7 June 2024, the MPC resolved to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. Consequently, the standing deposit facility (SDF) rate remains at 6.25%, and both the marginal standing facility (MSF) rate and the Bank Rate are unchanged at 6.75%. The MPC reaffirmed its focus on withdrawing accommodation to ensure inflation aligns with the target, while continuing to support economic growth.
Economic Projections: The projected real GDP growth for 2024-25 has been revised upward to 7.2%. The quarterly projections are: Q1 at 7.3%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%. This marks a slight improvement from the previous estimates, which projected GDP growth at 7%, with Q1 at 7.1%, Q2 at 6.9%, Q3 at 7%, and Q4 at 7%. The risks to this projection are considered evenly balanced. The projected Consumer Price Index (CPI) inflation for 2024-25 remains at 4.5%, consistent with the previous projection. The quarterly estimates are: Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.
GST Collections: India's Goods and Services Tax (GST) collections rose by 10% year-over-year to ₹1.73 lakh crore in May 2024, fueled by increased domestic spending. This robust domestic performance indicates a healthy economy, despite a 4.3% decline in imports.
With respect to the markets IT, Pharma and FMCG were the sectors that outperformed in the last week. IT sector particularly is looking for a strong pullback fueled by rate cut expectation in the US Markets. The focus of the market has shifted for the time being from PSUs to the consumption story. Sectors like, clothing, retail, automobiles,FMCG etc should be kept on radar for the coming week.
⭐Video Recommendation:
Charting the Pulse of Indices: A) Sector Wise Performance
This week, almost all Indian sectoral indices showed Stagnant Movement lead primarily by Nifty IT and FMCG. Nifty PSE index Underperformed the other indices considerably. Nifty Pharma and Reality index however stood strong and is likely to extend the gains and showing relative strength.
B) Heatmap
Heatmap helps investors quickly understand the performance of multiple stocks or sectors in a single view. Color coding, with varying shades indicating the degree of movement - red for declines, green for gains, and sometimes grey or other colors for little or no change. Heatmaps are effective for spotting market patterns and can be a time-saving resource in investment analysis.
C) Market Breadth
A) Nifty 500
Analyzing market breadth is important as it provides insight into the underlying strength or weakness of the market, beyond just looking at benchmark indices. Breadth measures the percentage of securities in NIFTY 500 surpassing specified moving averages over the specified period. Comparing the market breadth of nifty 500 during the previous week's trading sessions, we can analyze that number of stocks above key moving average support areas are reducing by the end of week. This can be considered as a sign of weakness if change is seen to be significant.
Heritage Foods Ltd.
Heritage Foods operates in the procurement and processing of milk and dairy products, as well as in the generation of power through solar and wind energy for the captive consumption of its dairy plants. The company serves over 1.5 million households across India. Its product range includes milk and value-added items such as curd, ice cream/frozen desserts, paneer, buttermilk, flavored milk, lassi, milk powders, and various sweets.
The company maintains a strong market presence across 11 states in India and is one of the largest private dairies in South India. It holds a significant market share in Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu.
The company boasts 18 state-of-the-art milk processing facilities with a total processing capacity of 2.65 million liters per day (MLPD). Additionally, it operates 198 bulk coolers, mini chilling, and chilling units with a combined milk chilling capacity of 2.08 MLPD. The company also has a renewable energy capacity of 10.5 MW.
The company’s distribution network includes 121 Heritage Distribution Centres, over 130,000 retail outlets, 27 organized retail chains across India, and 859 Heritage Parlours. It also maintains a robust presence on 16 e-commerce websites. This extensive distribution is supported by over 11,300 milk procurement representatives, more than 1,900 distribution vehicles, and over 6,500 distributors.
During FY22, the company continued to expand its portfolio of value-added products (VAP) and ventured into new 'Ready To Eat' and 'Heat-n-Eat' segments by introducing spiced butter, cup curd, Kesar Shrikhand, and Amrakhand in its primary markets.
Financial Highlights:
Product Portfolio:
Concall Updates:
1. Cipla Ltd.
2. eMudhra Ltd.
3. Greenply Industries Ltd.
4. Indus Towers Ltd.
6. Sunteck Reality Ltd.
7. Varun Beverages Ltd.
Order Wins:
Rail Vikas Nigam has secured a contract worth Rs 440 crore from South Central Railway. Link
Deep Industries has secured an order worth Rs 56 crore from ONGC. Link
Rail Vikas Nigam Limited (RVNL) has emerged as the L1 bidder for a contract worth Rs 124 crore from Dakshin Haryana Bijli Vitran Nigam Ltd. The project involves the implementation of SCADA and DMS/OMS works in Gurugram under the Revamped Distribution Sector Scheme. Link
Rail Vikas Nigam Limited (RVNL) has secured a Rs 391 crore contract from Eastern Railway for the construction of the Sitarampur bypass line under the Asansol Division of Eastern Railway. Link
KP Green Engineering has secured new orders from multiple clients totaling Rs 351.35 crores. Link
NBCC (India) has recently secured 13 orders with a combined value of Rs 491.5 crore. Link
Bharat Heavy Electricals Ltd has secured an order from Mirzapur Thermal Energy (UP) Pvt Ltd for a 2x800 MW thermal power project in Mirzapur Phase I, Uttar Pradesh. Link
Garden Reach has emerged as the lowest bidder for the construction of a research vessel for DRDO, with the order expected to be valued at approximately ₹500 crore. Link
Bonus share Issue & Share Splits:
Appointments & Resignations:
VIP Industries announces that Ms. Nisaba Godrej has submitted her resignation as an Independent Director, effective June 3, 2024. Link
Sasken Technologies announces that Mr. Abhijit Kabra has stepped down from his position as Chief Executive Officer, effective June 3, 2024. Link
Kansai Nerolac Paints has appointed Mr. Debashish Vanikar as Senior Vice President, with the designation of Chief Executive Officer, of its wholly-owned subsidiary, Nerofix Pvt Ltd. Link
KEI Industries has appointed Dr. Zaid Kahtan Abbas as the Senior Vice President of Technical/R&D, a senior management position within the company. Link
Hindustan Unilever's Board has approved the appointment of Mr. Arun Neelakantan, currently Chief Digital Officer, as Executive Director, Customer Development, effective July 1, 2024, succeeding Mr. Kedar Lele. Link
Agreement:
Kalyan Jewellers India Ltd has entered into a share sale and exit agreement with Mr. Rupesh Jain and Enovate Lifestyles Pvt Ltd (Enovate), an existing subsidiary of the company, to acquire a 15% equity stake in Enovate by purchasing shares from Mr. Jain. Following this acquisition, Enovate (Candere) will become a 100% wholly-owned subsidiary of Kalyan Jewellers India Ltd. Link
Cupid announces the launch of its strategic venture into the Indian market with the introduction of its Rapid In Vitro Diagnostic (IVD) kits distribution network. Link
Uflex has entered into a Power Purchase Agreement and a Share Subscription and Shareholders' Agreement to acquire a 5.03% equity stake, amounting to Rs. 9.60 crores, in Onevolt Energy Pvt Ltd. Link
Torrent Pharmaceuticals has entered into a non-exclusive patent licensing agreement with Takeda to commercialize Vonoprazan in India. Vonoprazan is a novel potassium-competitive acid blocker (P-CAB) used for the treatment of acid-related disorders. Link
UNO Minda has entered into a Technical License Agreement with Suzhou Inovance Automotive Co., Ltd., China, for the manufacture and sale of select high-voltage electric vehicle products for passenger and commercial vehicles in India. Link
Other Important News:
The board of Bajaj Finance will meet on June 6 to consider and approve the IPO proposal for listing Bajaj Housing Finance, its wholly-owned subsidiary. Link
Century Textiles has entered into a joint venture with Barmalt India Pvt Ltd to develop a 13.27-acre land parcel for a luxury residential group housing project at a prime location in Gurugram. The project is expected to have a revenue potential of Rs 5,000 crore. Link
Dixon Technologies has signed a Term Sheet with HKC Corporation Limited to establish a Joint Venture for the manufacturing of Liquid Crystal Modules. Link
That's all for now! I hope you enjoyed the content. Do share your comments below! Disclaimer: Any stock or company discussed above should not be considered as a Buy/Sell recommendation. We personally or our clients might or might not have a position in any of the stocks discussed. This newsletter is purely is for educational purposes only.
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