Yesterday Market Updates 26/4/2021

HCL Tech reports weak quarter

• The IT major reported a 72% sequential decline in net profit, impacted by a one-time bonus to employees and higher taxes. Its revenues grew 1.8% QoQ to ₹19,642 crores. The revenue growth was lower than that of its competitors, which witnessed a growth of  2–4%.
• Last week, HCL Tech’s stock fell 5.6%, underperforming the Nifty IT index, which fell 2.7%. For FY22, its management has guided for double-digit growth, supported by deal wins and the rising share of its products and platforms business. 

ICICI Bank’s profits surge in Q4

• The private lender posted a 260% YoY growth in profits of ₹4,403 crores on account of higher interest income and lower provisioning. However, the profit was still below the street’s expectation of ₹4,507 crores.
• At 4.96%, the bank’s gross non-performing assets (NPAs) are lower than Q4FY20’s 5.53% but more than last quarter’s 4.38%. Shares of ICICI Bank were down 2% on Friday but rose 0.5% last week.

Mahindra Finance profit drops in Q4

• The Mahindra Group NBFC reported an 8% YoY drop in consolidated net profit to ₹219 crores in Q4FYF21. The total income declined 3% to ₹3,038 crores. 
• As of FY21, the company’s loan assets contracted 5% YoY to ₹64,608 crores, while disbursements were down 41% to ₹19,001 crores. Further, gross non-performing assets (GNPAs) rose to 9.0% in March 2021 from 8.4% in March 2020. The stock was up 2.1% on Friday but has fallen over 10% this month.

Oriental Hotels shows sequential recovery

• The Chennai-based hotel company reported a ₹4.6 crore loss in Q4 as its revenue declined 26% YoY to ₹52.7 crores. However, compared to Q3, revenues jumped 23% as it witnessed some recovery in demand mainly in the leisure destinations. 
• The company is an associate company of Indian Hotels Company Limited (IHCL). It has seven hotels mostly in southern states, predominantly in Tamil Nadu. 

Global markets (at 8:15 am)

Nifty50: 14,485 ▲ 143 (+1.0%)
Sensex: 48,386 ▲ 508 (+1.0%)

After a gap-up opening, buying interest kept the markets high and the benchmark indices remained in the green throughout the day. Market breadth too was positive, with 39 of the Nifty50 stocks closing with gains. 

Among sectoral indices, Nifty Realty (+3.4%) and Nifty Metal (+2.0%) gained the most, while Nifty Pharma (-0.8%) was the only laggard.  

Steel prices march upwards

• The price of steel has reportedly risen about 59% YoY in April 2021. The bump in price comes on account of major economies such as China and the USA recovering from the pandemic, spurring demand in the infrastructure and automotive sector.
• Further, the Chinese steel industry aims to lower output after record production in 2020. Meanwhile, domestic crude steel production rose 19% YoY in March, with consumption up 41%. The Nifty Metal index was up 2% today.

Blackstone to acquire stake in Mphasis

• Leading private equity firm Blackstone, along with other foreign institutional investors, has offered to acquire a 26% stake in Indian IT firm Mphasis.
• The buyers will pay ₹8,262 crores or at ₹1,677 per share in cash, at a discount of 2.5% on today’s closing price. The stock was up 1.3% today and has gained nearly 12% so far this year.

ONGC told to sell oil fields 

• The petroleum ministry has told the country’s largest and gas producer to hive off its oil fields. Further, the company has been told to monetize existing infrastructure and spin-off its drilling and other services to boost production. 
• Under the proposed divestment plan, the company is to sell a stake in its on-shore and offshore plants in Gujarat. Eastern off-shore gas projects worth nearly $6 billion are also on the chopping block. The stock rose about 3% intraday but closed nearly flat. 

Natco Pharma seeks Covid drug approval 

• The Hyderabad-based generic drugmaker has applied to the Central Drugs Standard Control Organisation (CDSCO) for approval of Phase-III clinical trials of Molnupiravir capsules for the treatment of Covid-19. 
• The company said that pre-clinical data have shown that Molnupiravir has broad anti-influenza activity and is effective in the treatment of Covid-19. The stock was up 3.9% today and has gained over 10% so far in April.