Broad Strokes, July 24, 2024

Quarterly Earnings Reports: L&T, Axis Bank, SBI Life, Bajaj Finserv

• Larsen & Toubro (L&T) reported a 12% increase in net profit to Rs 2,786 crore and a 15% rise in revenue to Rs 55,120 crore for Q1FY25, with strong order inflows and a robust international order book despite a slight decline in share price.
• Bajaj Finserv achieved a 10% rise in net profit to Rs 2,138 crore and a significant increase in consolidated income to Rs 31,480 crore, indicating strong performance in the financial sector.
• SBI Life Insurance posted a 36% YoY increase in net profit to Rs 519 crore, reflecting growth in key financial metrics and positive trends in the insurance sector.

Pharma Stocks Performance in Q1FY25

• Torrent Pharma experienced a 4% decline in stock despite a strong Q1FY25 performance with 21% YoY net profit and 10% YoY revenue growth; target prices were adjusted by analysts due to recent performance issues.
• Thyrocare Technologies saw a 17% surge in stock following a 38.2% YoY net profit increase and 16% YoY revenue growth, supported by strategic B2B services and expansion plans.
• Bajaj Finance faced a 3% stock decline as analysts anticipate NIM pressure and credit cost impacts despite reporting a 31% YoY AUM increase and 14% YoY net profit growth.

Sebi Study Reveals High Losses in Intraday Trading

• A Sebi study showed that 70% of individual intraday traders incurred losses in FY23, with the proportion rising to 80% among very frequent traders.
• The study highlighted a surge in young traders under 30, who now account for 48% of intraday traders, up from 18% in FY18-19.
• Loss-makers spent 57% of their losses on trading costs compared to 19% for profit-makers; Sebi aims to increase awareness about the risks of intraday trading.

Tech Mahindra, United Spirits, Cipla, Nestle India Q1 Earnings Preview

• Tech Mahindra is expected to report a 30% increase in net profit to Rs 861 crore, with a marginal 0.8% revenue rise to Rs 12,968 crore, driven by volume growth and cost management.
• United Spirits, Cipla, and Nestle India are also in focus, with anticipated earnings results likely to reflect trends in their respective sectors.
• Market attention will be on Tech Mahindra’s operational strength and strategic direction amid evolving industry dynamics.

RBL Bank Stake Sale by Baring PE

• Baring Private Equity Asia plans to sell a 7.9% stake in RBL Bank through a Rs 1,080-crore block deal, with shares offered at a 5% discount.
• RBL Bank reported a 28.95% increase in net profit to Rs 371.52 crore for Q1FY25, driven by a 20% rise in net interest income.
• YES Bank faces a 20% downside risk despite a 47% YoY rise in net profit; ICICI Prudential Life Insurance saw an 8% stock price increase following strong Q1FY25 results.

ITC Stock Crosses Rs 500 After Budget 2024

• ITC’s stock surged nearly 10% over two days to a record high of Rs 510.60, following the Union Budget 2024 that maintained tobacco tax rates.
• Stable taxation on cigarettes, a significant revenue source for ITC, is seen as a positive driver for the company’s financial performance.
• Analysts have upgraded ITC’s stock, citing favorable tax conditions and potential growth in key business segments.

Kataria Industries and Macobs Technologies List at Premium on NSE

• Kataria Industries and Macobs Technologies listed on the NSE SME platform with premiums of 90% and 28% respectively, indicating strong market interest.
• Both companies’ IPOs were oversubscribed, with Kataria Industries being subscribed 393.72 times and Macobs Technologies over 200 times.
• The proceeds from these IPOs will be used for debt repayment, capital expenditure, and other corporate needs.

Capital Gains Tax Hike Impact on Market Sentiment

• The 2024 Budget proposal to increase long-term capital gains tax to 12.5% and short-term capital gains tax to 20% has sparked concerns similar to the 2018 tax hike.
• Initial market reactions included a slight dip, with analysts divided on the long-term impact on investor behavior and FIIs.
• The tax changes aim to stabilize savings and reduce distortions, with experts noting India’s strong macroeconomic indicators and growth potential despite short-term market corrections.

Budget 2024 Boosts Infrastructure and Construction Stocks

• The Union Budget 2024 allocated Rs 14.8 lakh crore to infrastructure, marking a 16% increase from the previous fiscal year, benefiting stocks in the sector.
• Key highlights include increased focus on rolling stock procurement by Indian Railways and infrastructure development in Andhra Pradesh and Bihar.
• The budget’s impact on defense, railway stocks, and cement demand with shifts in road capex composition influences market sentiment and stock performance.

Union Budget 2024 Focuses on Economic Growth and Stability

• The Union Budget 2024 emphasizes economic growth through balanced investments in agriculture, manufacturing, infrastructure, and employment generation.
• Key measures include maintaining fiscal discipline, significant infrastructure investment, support for MSMEs, tax relief for salaried employees, and initiatives to promote entrepreneurship.
• The budget also focuses on social welfare, education, and job creation, aligning with the vision of ‘Viksit Bharat’ and setting the stage for India’s growth trajectory.