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Budget News

  • Shares off the day's high; private banks in demand
  • May 26,2020  10:25
  • Domestic equity barometers came off the day's high in morning trade, tracking strength in other Asian stock markets. Sentiment improved as several countries across the globe have now moved to lift restrictions as early as next week. Private banks and FMCG stocks pushed the market higher. Telecom major Bharti Airtel dragged.

    At 10:25 IST, the barometer index, the S&P BSE Sensex, was up 313.45 points or 1.02% at 30,986.04. The Nifty 50 index added 96.45 points or 1.07% at 9,135.70.

    In the broader market, the S&P BSE Mid-Cap index rose 0.87% while the S&P BSE Small-Cap index gained 0.58%. Both these indices underperformed the Sensex.

    The market breadth, indicating the overall health of the market, was positive. On the BSE, 1059 shares rose and 681 shares fell. A total of 137 shares were unchanged. In the Nifty 50 index, 41 shares advanced while 9 stocks declined.

    Bharti Airtel fell 3.40% to Rs 572.85 on the BSE after the counter witnessed block deals in early trade today, 26 May 2020.

    On the BSE, the counter clocked a volume of 16.39 crore shares as against its average trading volume of 6.06 lakh shares in the past one quarter. The stock fell 5.38% to hit a low of Rs 561.10 on BSE in early trade today. On the NSE, the counter clocked a volume of 3.13 crore shares compared with its average trading volume of 1.75 crore shares in the past one quarter. The stock fel 4.11% to hit a low of Rs 568.60 on NSE in early trade today.

    The media reported on Monday (25 May 2020) that Bharti Telecom, promoter of Bharti Airtel, will sell $1 billion worth of stake in the mobile operator through a block deal on Tuesday. The block deal involving 2.75% stake sale would be conducted at around Rs 558 per share. The floor price marks a discount of 5.90% to the company's stock price of Rs 593 on Friday. The move will reportedly help the telecom major in becoming debt free. Bharti Telecom held 38.79% stake in Bharti Airtel as on 31 March 2020.

    Buzzing Index:

    The Nifty Private Bank index rose 1.91% to 9,601.20, amid value buying. The index had lost 3.51% in the past two sessions.

    IndusInd Bank (up 3.52%), HDFC Bank (up 3.39%), RBL Bank (up 2.14%), ICICI Bank (up 1.85%), Axis Bank (up 1.75%), Federal Bank (up 1.47%), Bandhan Bank (up 1.03%), City Union Bank (up 0.55%), Yes Bank (up 0.38%) and Kotak Mahindra Bank (up 0.01%) advanced.

    Meanwhile, DCB Bank fell 2.65% to Rs 58.85. The bank's net profit fell 28.6% to Rs 68.76 crore on 9.2% rise in total income to Rs 1011.79 crore in Q4 March 2020 over Q4 March 2019.

    Net interest income rose by 7.6% to Rs 324 crore in Q4 FY20 from Rs 301 crore in Q4 FY19. Profit before tax (PBT) stood at Rs 93.84 crore in Q4 FY20, down by 37.6% from Rs 150.50 crore in Q4 FY19. Both FY20 and Q4 2020 profit before tax were impacted by Rs 63 crore COVID-19 regulatory package provision. The bank conservatively made more provision than required as per guidelines, the bank said in a statement.

    Provisions and contingencies surged 239.97% to Rs 118.24 crore in Q4 March 2020 from Rs 34.78 crore in Q4 March 2019. Provision coverage ratio stood at 70.81% as on 31 March 2020 as against 78.77% as on 31 March 2019.

    Gross non-performing assets (NPAs) stood at Rs 631.51 as on 31 March 2020 as against Rs 552.03 crore as on 31 December 2019 and Rs 439.48 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 2.46% as on 31 March 2020 as against 2.15% as on 31 December 2019 and 1.84% as on 31 March 2019. The ratio of net NPAs to net advances stood at 1.16% as on 31 March 2020 as against 1.03% as on 31 December 2019 and 0.65% as on 31 March 2019.

    The bank's deposits rose 6.8% to Rs 30,370 crore as on 31 March 2020 from Rs 28,435 crore as on 31 March 2019. CASA ratio stood at 21.47% as on 31 March 2020 compared with 23.95% as on 31 March 2019. Net advances increased 7.5% to Rs 25,345 crore as on 31 March 2020 from Rs 23,568 crore as on 31 March 2019.

    Q4 Results Today:

    Torrent Pharmaceuticals (down 0.08%), Deepak Nitrite (up 1.47%), Max Financial Services (down 0.23%), Blue Dart (up 1.66%), Coromandel International (up 1.48%), Praj Industries (up 0.9%), V.I.P Industries (up 0.92%) and Wonderla Holidays (down 0.67%) are some of the companies that will announce their quarterly results today.

    Earnings Impact:

    Avenue Supermarts tumbled 4.94% to Rs 2283.95. The company's net profit jumped 41.61% to Rs 271 crore on 23.6% increase in to Rs 6,256 crore in Q4 March 2020 over Q4 March 2019. Consolidated EBITDA rose 12.1% to Rs 417 crore in Q4 FY20 from Rs 372 crore in Q4 FY19. EBITDA margin stood at 6.7% in Q4 March 2020, lower than 7.4% in Q4 March 2019.

    The company said its overall revenue during the month of March 2020 grew by just 11% over March 2019 due to the lockdown effect of the last 9 days of March this year. The trend rapidly deteriorated in April during which more than half of its stores remaining closed for operations or operating for extremely restricted hours.

    Our revenue for April was down by more than 45% as compared to April 2019. Our margins have also seen erosion as regulations did not permit us to sell any apparel and general merchandise products, the company said in the release.

    Significantly large EBITDA declines are to be expected due to lower sales, lower gross margins, higher cost of operations on account of hardship allowance to front line staff during lockdown and higher personal hygiene/store sanitation costs, it added.

    GMM Pfaudler slumped 7.49% to Rs 3601.20. The firm's net profit declined 13% to Rs 11.60 crore on 5.28% decline in net sales to Rs 131.78 crore in Q4 March 2020 over Q4 March 2019. EBITDA improved 14% to Rs 22.5 crore in Q4 FY20 from Rs 19.8 crore in Q4 FY19. EBITDA margin stood at 17% in Q4 FY20, higher than 14% in Q4 FY19.

    COVID-19 began impacting our normal business operations on 14th March 2020 by affecting our supply chain and our ability to ship ready equipment to our customers, our production eventually shut down completely on March 23rd, 2020. All in all, additional revenue that could have been recognized in the last quarter in a normal business environment is estimated to be Rs 300 million, the company said in a statement.

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