Yesterday’s Market Performance
Nifty: 15811.90 I 12.50 (0.08%)
FII Sell Net: 503.51 CR
DAX: 15673.64 I 19.63 (0.13%)
Sensex: 52551.53 I 76.77 (0.15%)
DII Buy Net: 544.26 CR
FTSE: 7146.68 I 12.62 (0.18%)
In today’s issue, we discuss;
- India’s IIP has surged by 134.4% in April on low base effect.
- A cultural reset in the AlcoBev consumption space- consumer’s sentiments and consumption patterns have taken a swing for sure.
- Reliance Power’s performance, other important financial news, and an educative concept to help you keep learning. Read along!
- Anil Ambani-backed Reliance Power touched a 52-week high of Rs 13.10 and added 5 percent after the board approved a plan to raise up to Rs 1,325 crore through the preferential issue of equity shares.
Adani Enterprises: 1,501.45 | 100.15 (6.25%)
Adani Transmission: 1,522.50 | 80.10 (5.00%)
Adani Total Gas: 1,544.90 | 81.30 (5.00%)
Adani Green: 1,212.90 | 4.80 (0.39%)
- Adani group stocks lost 5-9 percent following reports that the National Securities Depository (NSDL) had frozen accounts of three FPIs that owned shares in four listed Adani firms.
Later in the day, the Adani group companies said the accounts were not frozen. The statement notwithstanding, NSDL data showed that accounts were indeed frozen.
IIP Skyrockets on account of a low base effect (okay, what?)🤨
Index of Industrial Production, which shows the growth rates of different industrial groups in an economy, during a stipulated period of time has surged 134.4% on April 21 (woahh).
A major caveat here though, April ‘20 was a whitewash, with industrial activity at a standstill, and ‘base effect’ magnifying this year’s performance; if we compare April 21 to April 19, we’re just about at similar levels.
Sector-wise, manufacturing, mining & electricity were all sequentially much higher, and within each, gains were recorded across Motor Vehicles, Tobacco, and fabricated metals products.
Use Based Manufacturing (which includes sectors like Consumer Goods, Infra & Construction, Consumer Durables) all reported beyond ordinary surges in production, but if we compare April 19, positive performance was highlighted in Infra & Construction (corroborated below) only.
- May’21 IIP Growth is expected to be impacted as well, with localized lockdowns in Maharashtra (accounts for 18% of overall India production) & Delhi impacting activity.
Economists expect a Real GDP growth of 9% on the back of Q1FY22 seeing maximum covid related heat, decreased state of lockdowns, better preparation of third wave, and pent-up demand/revenge spending come through.
CPI Inflation is expected to rise to 5.35%, with the expectation (covered this in our earlier note) that the RBI will be okay with a sub-6% CPI Inflation, and a keener focus on growth.
Yoo! Let’s get a drink sometime? (at home right) 🥂🤭
- A cultural reset (much like everything else) has taken place in the AlcoBev consumption space (by choice or otherwise is questionable).
On-Trade (terminology for Bars & restaurants) which accounted for ~27% of all liquor sold in the country in 2019, shrank to 11% in 2020 (makes sense though right, everything has been shut?).
Covid induced lockdowns have hurt Bars & Restaurants the most, with limited business activity for large periods of the year (in-person at least), although the government allowed alcohol delivery last year, consumer preference towards ordering from outside (for cost & other reasons) coupled with limited logistical capabilities has meant that the online channel accounted for less than 0.1% of overall sales.
Of notable concern for AlcoBev manufactures has been the limited signs pointing towards a revenge spending/consumption of sorts (present in other sectors).
- Diageo, which owns USL (Bagpiper, Antiquity, Signature, etc) has embarked on a two-year initiative, titled ‘Raising the Bar’ (poetic we’d say) to bring customers back to restaurants & bars.
Radico Khaitan (8 pm Whiskey, Magic Moments Vodka) has noticed a shift in purchasing trends, with a post-pandemic preference of stocking up, instead of heading out, with cost & ease of movement key in decision making.
More so, consumption patterns have changed, with Wednesday the new Friday (Beat drop!!), in addition to Friday & Saturday drinks, and consumers not feeling to need to confine drinking to the weekends only.
In-home consumption has made it easier for people to upgrade to higher-priced brands, (not surprising at all) with importers increasing availability of brands that were previously only available at duty-free stores & on-trade segments (yess).
What else caught our eye? 👀
Adani Group Stocks suffer after NSDL freezes three FPI accounts for non-compliance of disclosure norms
- Everyone’s favourite stock was in the news over the weekend, with three overseas funds, which combined control INR 43,500 Crore worth of shares in four Adani Group Companies, were frozen.
- Surprisingly though, these accounts were frozen on/before May 31, as per the depository’s website, for violation of Money Laundering Acts (PMLA).
Realty Players preparing for a revival in bookings
- One of the country’s largest players, DLF has indicated it expects sales to grow by ~30% in the coming fiscal, on the back of rising housing demand (irrespective of Covid-19).
- The company is in the process of launching 8 Million Square Feet of the saleable area to meet increased demand, with key drivers such as affordability, consumer sentiments, and a desire towards ownership fundamentally driving this recovery Indian airlines are expected to lose USD 4.1 billion in the ongoing fiscal FY 2022, split equally between full service and low cost carriers.
Indian Pharma Market momentum continues on low base & Covid Tailwinds (Yes, that’s what we’re calling it)
- Banks are okay not lending, and showing minimal growth for the fear of rising NPAs in a challenging environment.
- In this note, we cover the liquidity features extended by RBI, however limited uptake by the banking industry will threaten the implementation, although the results could be worse.
- The addition in deposits at Rs.13.4 lakh crore over the last 12 months ended May 21, 2021, was more than double the Rs. 6.1 lakh crores of credit outstanding during the same period, data from the RBI shows.
TATA Sons plans to rejig its board, bring on-board strategic expertise, in tune with the next phase of growth
- IPM grew 47% you, on the back of a low base and increased covid induced fear medication driving sales.
All major therapies posted double-digit growth in May’21, with acute therapies like Anti-Infective, Respiratory, and Antiviral growing handsomely.
Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. A beta coefficient can measure the volatility of an individual stock compared to the systematic risk of the entire market. In statistical terms, beta represents the slope of the line through a regression of data points. In finance, each of these data points represents an individual stock’s returns against those of the market as a whole.