Jul 09, 2024, 3:30 pm IST
Sector Update: Life Insurance | Jun'24 Builds Up On a Strong FY25 – 1Q Individual APE +19.7% (vs 2.5% YoY)
Raghvesh R of JM Financial Institutional Securities said, “Jun’24 saw the life insurance industry maintain its strong growth outcomes in FY25 – growing 19% YoY, with the private sector at +22% and LIC reporting +13% growth in individual APE. In group business, the industry reported 15.5% growth – with LIC growing 15% and the private sector growing 18% YoY. With this, reported 1Q growth for the industry comes in at 20%/21% in individual/total APE – private sector growing 24%/22% and LIC growing 12%/19%. We expect 1Q margins to be aided by this strong growth – with private insurers reporting growth in VNB margins from FY24 levels. However, we see ticket size increase reported by IPRU and SBI Life to indicate higher ULIP sales, and hence, being margin dilutive on a YoY basis. We build in absolute VNB growth of 31%/21%/19%/31% for HDFC Life/IPRU/SBI Life/LIC in 1Q25 over 1Q24. June also saw final guidelines on surrender charges being issued by IRDAI, and management commentary would be interesting. We note that the changes are prospective and applicable on policies sold after 1st Oct’24. While actual surrenders a year later, companies will take the charges into account into their VNB margins. With finality in surrender charges and a strong start to FY25, we are positive on the leading players delivering healthy 18%-20% VNB growth over FY24-FY26e, led by APE growth. With strength of its banca, innovative product mix and growing agency, HDFC Life is our top pick.”
Jul 09, 2024, 3:17 pm IST
Sector Update: Hotels | 1QFY25 Preview: Slow start to FY25
Sumit Kumar of JM Financial Institutional Securities said, “As per our channel checks and the last two reports by HVS Anarock (Apr-May’24), growth in room rates has been muted due to general elections and extreme weather conditions across the country. So, we expect a soft quarter for companies under our coverage universe with an average 6% YoY growth in RevPARs and, accordingly, lower growth assumptions in the F&B/MICE business. Adjusted for certain one-off costs, hotel companies should be able to maintain EBITDA margins YoY. We expect room demand to improve from 2HFY25E. With various industry estimates estimating industry supply CAGR of 5-6% over FY24-28E vs. demand CAGR of 9%, we expect high single digit ARR growth and 200-250bps improvement in occupancies in FY25E-27E. Our preferred picks in the space are Chalet and SAMHI. Any further moderation in ARR growth and unexpected sharp slowdown in the broader economy remain key risks to our call.”
Jul 09, 2024, 3:00 pm IST
Sector Update: Infrastructure | 1Q25 Preview: Diversified EPC Companies To Post Strong Earnings
Vaibhav Shah of JM Financial Institutional Securities said, “Execution trend for EPC companies is a mixed bag. Diversified EPC companies are likely to post strong execution growth while being moderate to weak for highway developers. Order backlogs for diversified names continue to remain strong while that for highway developers are weak to moderate. EBITDA margins are likely to decline for most companies due to commodity cost pressures, adverse revenue mix etc. Margins are likely to be weak for GR Infra due to poor absorption of fixed costs and for KNR Constructions due to adverse revenue mix. Debt and working capital is likely to increase QoQ for most companies given the seasonality. Ordering activity was strong for most highway companies mainly led by MSRDC awarding. Among diversified names, L&T, KEC International and Ahluwalia Contracts have witnessed strong order intake while awarding was weak for NCC and PSP Projects. Asset monetisation plans continue to remain under progress for highway developers.”
Jul 09, 2024, 2:45 pm IST
Sector Update: Consumer | 1QFY25 Preview: Modest Recovery In Staples, Challenges Persist For Discretionary
Mehul Desai of JM Financial Institutional Securities said, “We estimate organic revenue growth for our consumer coverage group to be c.7.1%, tad better than 4QFY24 (+6.5%). In terms of construct, the gap between growth in Discretionary & Staples is expected to reduce as Staples coverage is seeing gradual uptick in sales growth (4.7% vs 2-4% in recent quarters) while Discretionary is seeing moderation (c.6% yoy vs 8%/15% in 4Q/3QFY24) in growth rates. Within Staples, we expect revenue growth to improve for Dabur, Marico, Britannia (aided by sequential uptick in volume growth) and TCPL (aided by India Foods & International business). On the Discretionary side, demand scenario remains challenging – a function of weak consumer sentiment as well as increasing competitive intensity across categories like QSR, Jewellery & Paints. RM prices have seen uptick (JM proprietary FMCG RM Index was up c.5-6% yoy) but not alarming as of now. Moreover, net pricing decline has tapered further and likely to turn +ve in coming quarters. In our view, some amount of inflation is beneficial for Staples as it provides pricing lever & also keeps regional competition/aggressive promotions under check. Staples stocks have seen healthy run-up in anticipation of acceleration in volume growth led by rural recovery – lot of hopes are pinned on normal monsoons and likelihood of favorable government policy to boost consumption (especially rural) going ahead. While demand trends point to some recovery, sustained improvement will be key monitorable. Stay selective – Honasa, Marico, TCPL are the key picks in the space for us.”
Jul 09, 2024, 2:23 pm IST
Sector Update: Oil And Gas | CNG Motorcycle Launch: Positive But Unlikely To Be Game-Changer For CGDs
Dayanand Mittal of JM Financial Institutional Securities Ltd said, “Bajaj Auto has launched the world’s first CNG-integrated motorcycle ‘Freedom 125’ with an ex-showroom price of INR 95k-110k; the pricing is attractive and competitive (and not significantly higher vs. the existing petrol variant model) in upto 125cc segment owing to its favourable TCO. Freedom 125 model has 2 kg of CNG kit and 2 ltr of petrol tank and claims mileage of 102km/kg for CNG and 65km/ltr for petrol and, thus, claims a total run of 330km on a single fill. Hence, fuel cost for CNG is expected to be only INR 1.07/km vs. INR 1.6-2.1/km for various petrol motorcycles in upto 125cc segment, resulting in a favourable TCO. Assuming Bajaj’s CNG motorcycle is successful and CNG penetration in the addressable segment rises to 30% by FY30, the cumulative CNG motorcycle sales could be ~7.7mn by FY26. So, assuming 100kg CNG consumption p.a. per motorcycle (10,000 km annual drive and 100km/kg mileage), total CNG consumption could be ~770mn kg p.a. or 2.7mmscmd in FY30; this is 13% of FY24 CNG volume of 21.6mmscmd or 7% of FY24 total CGD volume of 37mmscmd. Though the success of a CNG motorcycle may not be a game-changer for CNG companies, it could help to partly address some of the growth challenges for IGL, MGL and other CGD companies in the key 4-wheeler segment. We have BUY on Gujarat Gas, IGL and MGL; however, we prefer Gujarat Gas as we expect spot LNG prices to moderate in the medium to long term.”
Jul 09, 2024, 1:36 pm IST
Ashwin Sheth Group To Invest Rs 5,000 Cr To Expand Real Estate Biz; To Launch IPO In 2 Yrs
Realty firm Ashwin Sheth Group on Tuesday announced an investment of around Rs 5,000 crore to expand its business and will launch its maiden public issue in the next 18-24 months. Mumbai-based company said it has achieved sales bookings of around Rs 1,500 crore during the last fiscal, a 3-fold increase from the 2022-23 financial year. "We are targeting to double our sales bookings to Rs 3,000 crore in the current 2024-25 fiscal," the company's CMD Ashwin Sheth told reporters here. He said the company plans to expand its business portfolio in the Mumbai Metropolitan Region (MMR) and is foraying into Bengaluru, Delhi-NCR.
It is also exploring to enter Hyderabad, Chennai and Goa. "We are planning to launch an Initial Public Offering (IPO) in the next 18–24 months," Sheth said.
Jul 09, 2024, 1:11 pm IST
MCX Announces Delay In Trading, Cites Technical Glitch
Today, commodity traders on MCX Ltd. will experience a delayed start to their trading day, with sessions set to commence at 10 am instead of the usual 9 am. This announcement comes as MCX cites technical issues that have affected its end-of-day processes from yesterday's trade date.
In a statement addressing the delay, MCX clarified, "The end-of-day processes for yesterday's trade date have been delayed due to some technical issue and hence the special session will start at 9:45 AM and the market will start at 10 AM today."
Jul 09, 2024, 1:08 pm IST
SBI Proposes To Tweak Tax On Term Deposit Interest Rates
Since the time RBI has kept the repo rate unchanged starting from FY24 to date, there has been a significant jump in bank deposits. However, India's largest PSU bank, State Bank of India (SBI) believes tax parity on term deposits along with other asset classes needs a tweaking in the upcoming Union Budget which will be presented by Finance Minister Nirmala Sitharaman on July 23.
In its latest research report, SBI highlighted that currently "dispensation for Equity/MF holdings stipulate Short Term Capital Gains tax at a flat rate of 15% while the Long-Term Capital Gains are taxed at a moderate 10%, with exemption allowed till income of LTCG up to one lakh during a given FY...also, the setting-off of loss against profits and carrying over the loss up to next eight years make the opportunity cost of such alternate investments quite lucrative."
Jul 09, 2024, 12:34 pm IST
Mahanagar Gas (MGL) Raises CNG & PNG Rates In Mumbai
Mahanagar Gas Ltd (MGL) announced a revision in the prices of compressed natural gas (CNG) and domestic piped natural gas (PNG), effective from midnight on July 9 in Mumbai. This decision, driven by increased costs and higher demand, reflects broader trends in the gas distribution sector across India.
Starting from July 9, the price of CNG will rise by Rs 1.50 per kg, bringing the new rate to Rs 75 per kg, inclusive of all taxes. Similarly, domestic PNG prices will increase by Rs 1 per standard cubic metre (SCM), resulting in a new price of Rs 48 per SCM. These adjustments aim to address the rising costs associated with sourcing additional natural gas, particularly imported Re-gasified Liquefied Natural Gas (RLNG).
Jul 09, 2024, 12:22 pm IST
Ganesh Green Bharat IPO: SME Public Issue Subscribed 55x On Final Day, GMP Soars
The initial public offering (IPO) of Ganesh Green Bharat Ltd has garnered significant attention from investors since its opening for subscriptions on Friday, July 5. The subscription, set to close on Tuesday, July 9, has seen strong participation across investor segments, reflecting robust confidence in the company.
Ganesh Green Bharat Ltd, specializing in solar photovoltaic modules, solar systems, and related services, has priced its IPO in the range of Rs 181 to Rs 190 per equity share, with a face value of Rs 10 per share. The IPO, exclusively an offer-for-sale worth Rs 125.23 crore, comprises up to 6,591,000 equity shares. The proceeds will primarily fund working capital requirements, capital expenditures for expanding production capacities, and general corporate purposes, including debt repayments.
Jul 09, 2024, 12:04 pm IST
Historic Market Rally: Nifty Makes New Record, Sensex Up by 300 Points!
The Sensex increased by 295.43 points, or 0.37 percent, reaching 80,255.81. Meanwhile, the Nifty rose by 68.60 points, or 0.28 percent, to settle at 24,389.10.
Jul 09, 2024, 11:46 am IST
Budget 2024 Expectations
Finance Minister Nirmala Sitharaman is set to present the full Budget for fiscal 2024-25 on July 23. This will be the first significant policy document of the new government.
Industry leaders have suggested that the Union Budget FY25 should prioritise providing tax relief, particularly for those in lower income brackets. This move is seen as essential to stimulate consumption and drive economic growth.
The industry has also called for a reduction in corporate tax rates. They believe that lowering these rates, along with phasing out tax exemptions, could help broaden the tax base and further boost economic growth.
In addition to corporate tax cuts, industry players are advocating for measures that would make the tax system more inclusive. By broadening the tax base, they argue, the government can ensure a more equitable distribution of the tax burden.
Jul 09, 2024, 11:20 am IST
L&T wins order
The Precision Engineering Systems division of Larsen & Toubro has secured a significant contract to partially construct two Fleet Support Ships (FSS). This order comes from Hindustan Shipyard Limited (HSL), with the Indian Navy as the ultimate beneficiary.
In August 2023, the Indian Navy entered into an agreement with HSL for the design and construction of five Fleet Support Ships. This collaboration aims to bolster the naval fleet's operational capabilities.
Jul 09, 2024, 10:51 am IST
Maruti Suzuki Share in Focus
The Uttar Pradesh government has announced a significant policy change, offering a complete waiver of the registration tax on strong hybrid vehicles. This initiative aims to promote the adoption of environmentally friendly cars in the state.
By eliminating the registration tax, buyers of strong hybrid cars can save up to Rs 3.50 lakh. This move is expected to make hybrid vehicles more affordable and attractive to consumers.
Jul 09, 2024, 10:35 am IST
RBI Greenlights YES Bank's Stake Sale, Shares Soar in Response
YES Bank's shares increased by almost 2% following the bank's denial of a media report. The report had claimed that the Reserve Bank of India (RBI) had granted an in-principle approval for a potential promoter to acquire up to 51% stake in the bank.
The media report suggested that this approval was significantly higher than the standard 26% limit set for promoter holdings under banking regulations. This discrepancy raised eyebrows and led to speculation within the financial community.
The denial from YES Bank played a crucial role in calming market nerves. Investors reacted positively, leading to a nearly 2% increase in the bank's share value. This reaction underscores the importance of accurate information in maintaining market stability.
Despite the initial confusion, YES Bank's prompt response ensured that any potential panic was swiftly addressed. The bank's proactive communication strategy was instrumental in managing investor expectations and maintaining confidence.
Jul 09, 2024, 10:29 am IST
Affle India's Shares Peak at 52-Week High!
Affle India Limited's shares surged by 9.4 percent, reaching a new 52-week high of Rs 1465 during morning trade on July 9. This marks the second consecutive session of gains for the company, driven by Citi's initiation of coverage with a 'buy' rating due to promising growth prospects.
Analysts at Citi have set a target price of Rs 1,600 per share for Affle India. This target suggests a potential upside of 17 percent from the current market levels. Affle India specialises in mobile advertisement services through its information technology and software development offerings.
Jul 09, 2024, 10:18 am IST
Vodafone Idea Shares Surge To T16.76, Outperform Peers
Today, Vodafone Idea's stock price exhibited a notable uptrend, rising by 1.15% to achieve Rs 16.76. This increase contrasts with declines observed in Tata Communications and Railtel Corporation Of India's stock prices. Conversely, Bharti Airtel and Tata Teleservices Maharashtra witnessed gains in their respective stock prices. Meanwhile, the benchmark indices Nifty and Sensex also showed marginal increases, climbing by 0.19% and 0.20%, respectively.
Jul 09, 2024, 9:44 am IST
RVNL Shares Surge With Rs 827 Crore Block Deal; Stock Surpasses Rs 600 Mark
Rail Vikas Nigam Ltd witnessed a significant uptick on Tuesday, soaring by up to 8% following a substantial block trade in its shares. Data from the exchanges revealed that 1.4 crore shares of the railway PSU, amounting to Rs 827 crore, exchanged hands in this latest transaction.
Jul 09, 2024, 9:24 am IST
Market Opens With Mild Gains
Indian indices opened on a positive note on July 9, with the Nifty trading above 24,350. The Sensex rose by 170.56 points or 0.21% to 80,130.94, while the Nifty gained 46.20 points or 0.19% to reach 24,366.70. Of the stocks traded, 1842 advanced, 554 declined, and 119 remained unchanged.
Jul 09, 2024, 9:19 am IST
L&T Arm To Acquire 100% Stake In SiliConch Systems
L&T Semiconductor Technologies, a wholly owned subsidiary of Larsen & Toubro (L&T), has signed a share purchase agreement on July 8, 2024, to acquire a 100% stake in SiliConch Systems. The acquisition is expected to be completed by September 15, 2024, pending customary closing conditions. The acquisition cost includes an upfront payment of ₹133 crore at closing, with a deferred amount of Rs 50 crore payable over four years, contingent on closing adjustments and the achievement of specific targets and conditions.
Jul 09, 2024, 9:12 am IST
Recommendations By Aditya Gaggar, Director Of Progressive Shares
"Rangebound trade marginally ended lower at 24,321. DOJI candlestick pattern around its record levels indicates indecisiveness between the bulls and bears. The choppy trade can be seen in the Index with the downside protected at 24,220 while the immediate resistance placed at 24,400. As indicated yesterday, BankNifty restricted the upside of the Index. A zone of 51,900-52,000 will be considered a strong support area while 52,900 will serve as a critical hurdle. The Railways and Fertilizer counters have regained their momentum in yesterday's trade and some of the counters have already given a strong breakout with a considerable volume indicating an extension of their uptrend. From the Energy sector, we continue to remain bullish on ONGC and Reliance. With gains of over 1.60%, the FMCG sector has given a highest-ever closing which resulted in a fresh all-time high breakout but for confirmation, follow-up buying is a must. Selective buying was witnessed in the Metal segment where HindCopper and Nalco have provided a firm breakout. Some stocks from Mid and Smallcap segments look strong namely, Kopran, Olectra Greentech, Sadhana Nitrochem, Sunteck Realty, and Ultramarine Pigments."
Jul 09, 2024, 9:11 am IST
Rupee Opens Slightly Higher
The Indian Rupee opened unchanged at 83.49 per US Dollar on Tuesday compared to Monday's closing rate of 83.50.
Jul 09, 2024, 8:58 am IST
Godrej Consumer Reports Double-Digit Volume Growth
FMCG major Godrej Consumer Products Limited (GCPL) observed that operating conditions remained soft in the first quarter. Despite this, the India business achieved high single-digit organic volume growth and mid-single-digit value growth. The company's business update on July 8 indicated double-digit overall volume growth and high-single-digit value growth. On a consolidated level, GCPL anticipates flat INR sales, double-digit constant currency sales growth, and double-digit EBITDA growth.
Jul 09, 2024, 8:49 am IST
S&P 500 And Nasdaq Hit Record Highs As Chipmakers Surge
The S&P 500 and Nasdaq reached record-high closes on Monday, driven by investor anticipation of new inflation data, insights from Federal Reserve Chair Jerome Powell, and the upcoming quarterly earnings season. The S&P 500 rose 0.10% to 5,572.85 points, while the Nasdaq gained 0.28% to close at 18,403.74 points. In contrast, the Dow Jones Industrial Average declined 0.08% to 39,344.79 points. This marks the Nasdaq's fifth consecutive record-high close and the S&P 500's fourth straight.
Jul 09, 2024, 8:42 am IST
Inox Wind Gets 200 MW Order For Wind Turbines
Inox Wind Ltd, a leading wind energy solutions provider, announced on Tuesday, July 9, that it has secured an order for 200 MW from a renewable Commercial & Industrial (C&I) power producer. The order involves Inox Wind’s 3 MW Wind Turbine Generators and includes end-to-end turnkey execution.
Jul 09, 2024, 8:33 am IST
MGL Hikes CNG Prices In Mumbai
State-run Mahanagar Gas Limited (MGL) announced a price increase for CNG and domestic PNG to partially offset rising gas costs. Effective from midnight on July 8, 2024, or the morning of July 9, 2024, the delivered price of CNG will rise by Rs 1.50 per kilogram, and domestic PNG will increase by Rs 1.00 per standard cubic meter in and around Mumbai.
Jul 09, 2024, 8:27 am IST
Oil Steadies Amid Storm Beryl's Aftermath & Fed Anticipation
Oil prices steadied following a two-day decline as the worst of Tropical Storm Beryl passed, while traders awaited Federal Reserve Chair Jerome Powell’s monetary policy report. Brent crude remained below a barrel after nearly a 2% drop in the previous sessions, and West Texas Intermediate hovered above . As Beryl moved through the US mainland, recovery efforts continued in Texas, with key infrastructure such as the Port of Houston and the Explorer Pipeline still offline. Approximately 85% of Houston experienced power outages.
Jul 09, 2024, 8:21 am IST
Asian Stocks Gain Ahead Of Powell's Testimony
Asian stocks edged higher as investors awaited Jerome Powell’s testimony to Congress and the onset of the US earnings season. Equity benchmarks rose in Japan, Australia, and South Korea, while futures indicated losses in Hong Kong following a drop in an index of Chinese shares in the US on Monday. US futures advanced in early Asian trading after the S&P 500 closed marginally higher, marking its 35th record this year. The dollar and Treasuries remained relatively unchanged.
Jul 09, 2024, 8:16 am IST
GIFT Nifty Hints Flat Start For Indian Markets
GIFT Nifty, trading at no premium to Nifty Futures' Monday close, suggests a flat start for the Indian markets.
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