Larsen & Toubro dips 5% as investors book profit post Q2 results
The stock had gained for eight straight trading days, rallying 11 per cent, as compared to 0.48 per cent rise in the S&P BSE Sensex till Wednesday.
The construction & engineering major reported a reasonable July-September quarter (Q2FY21) operational performance amid a subdued business environment.
L&T’s standalone revenues de-grew 15.8 per cent year-on-year (YoY) at Rs 15,792 crore. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins declined marginally by 50 bps to 7.8 per cent YoY. The adjusted profit after tax (excluding impairments and E&A proceeds) declined 40.8 per cent YoY to Rs 1,052 crore during the quarter.
“L&T reported a reasonable performance on the operational and order inflow front while the infrastructure segment saw some green shoots of recovery amid productivity challenges. Also, cash proceeds from the sale of E&A business provided much-needed liquidity comfort on the balance sheet front in these challenging times,” ICICI Securities said in a note.
However, working capital levels continue to be a key monitorable in the long term. Additionally, High-Speed Rail (HSR) mega project is by far the largest EPC order that L&T has won in its history significantly improving its order intake for FY21E despite the challenging economic environment. This will further strengthen its order book and enhance its revenue visibility for the coming years. L&T plans to deploy state of art construction methods and extensive digital technologies for this project, it said.
At 09:35 am; L&T was trading 4 per cent lower at Rs 944 on the BSE, as compared to 0.66 per cent decline in the S&P BSE Sensex. A combined 2.9 million equity shares had changed hands on the counter on the NSE and BSE.
what is Alternative Investment Fund (AIF)?
Alternative Investment Fund or AIF means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities. Further, certain exemptions from registration are provided under the AIF Regulations to family trusts set up for the benefit of ‘relatives‘ as defined under Companies Act, 1956, employee welfare trusts or gratuity trusts set up for the benefit of employees, ‘holding companies‘ within the meaning of Section 4 of the Companies Act, 1956 etc.
Types of AIF
As per existing SEBI classification, these private investment funds have been divided into 3 unique categories – Category I, Category II and Category III, with the minimum qualifying corpus amount for these schemes being Rs. 20 Crores. The only exception to this rule is an ‘angel fund’, which is a subcategory of Category I AIFs, as they have lower qualifying criteria in terms of fund corpus at Rs. 10 crores. Let’s discuss them in a little more detail to gain a clear understanding of each category:
Venture Capital Funds, Startup / Early stage funds, Infrastructure funds – These are those AIFs which are positive and beneficial to the Indian economy and enhance growth. Hence, these funds receive incentives or concessions by SEBI or the government of India. Such funds generally invest in start-ups or early-stage ventures, social ventures, SMEs, infrastructure or other sectors which are considered socially or economically important for the country.
Private equity funds – Private equity (PE) funds, especially Real Estate PE funds, typically reduce the risk profile by offering diversified investment portfolios managed by experienced fund managers. Thus, it provides the dual benefit of a defensive investment alternative as well as a hedging mechanism by offering an alternative investment asset class.
Hedge funds – Category III AIFs are a unique class of privately pooled funds that employ a range of complicated trading strategies including but not limited to arbitrage, margin trading, futures and derivatives trading, etc. to generate returns. This category of AIF is also allowed to utilise leverage in order to make investments in both unlisted and listed derivatives as specified by SEBI (Alternative Investment Funds) Regulation, 2012. Leading examples under this alternative investment fund category include PIPE Funds and Hedge Funds.
Finolex Industries surges 9% on healthy September quarter numbers
Shares of Finolex Industries surged 9 per cent to Rs 579 on the BSE in the early morning deals on Tuesday after the company reported a 17 per cent year-on-year (YoY) growth in net profit at Rs 120 crore, on the back of healthy operational performance in September quarter (Q2FY21). The plastic products manufacturer had a profit of Rs 103 crore in the year-ago quarter. On a sequential basis, net profit more-than-doubled from Rs 57 crore in the June quarter (Q1FY21).
Ebitda (earnings before interest, taxes, depreciation, and amortisation) rose 76.5 per cent YoY to Rs 145 crore, while margin improved to 24.7 per cent from 14.2 per in the corresponding quarter of the previous year.
“Subsequent to a Covid-19 induced volume reduction in Q1, the business has witnessed a recovery in Q2 with near-normal operating conditions. The significant improvement in EBIT (earnings before interest tax) on a YoY basis is attributable to better realisations and lower costs in both the operating segments and higher volume in the PVC resin segment,” the company said.
In Q2FY21, EBIT margins improved to 21.4 per cent from 10.9 per cent in Q2FY20. PVC resin EBIT margin stood at 26.9 per cent as compared to 14.9 per cent. The revenue; however, registered a single-digit YoY growth of 1.6 per cent to Rs 586 crore during the quarter.
At 09:36 am, the stock was trading 4.5 per cent higher at Rs 556 on the BSE, as compared to a 0.32 per cent gain in the S&P BSE Sensex. A combined 164,000 equity shares changed hands on the counter on the NSE and BSE.
Nestle India gains 7% in two days post-September quarter results
Shares of Nestle India gained 5 per cent to Rs 17,023 on the BSE on Tuesday. The stock has risen 7 per cent in the past two trading days after the company reported stronger-than-expected recovery with double-digit sales growth for the quarter ended September 2020 (Q3CY20). The board has declared an interim dividend for 2020 of Rs 135 per equity share amounting to Rs 1,302 crore, which will be paid on and from November 20, 2020.
The packaged foods company’s total sales and domestic sales both increased by 10.2 per cent, driven by volume and mix. Export sales increased by 9.4 per cent. The demand in Out of Home channel improved through the quarter but continues to be impacted by COVID. The company stated that double-digit growth was seen in the Noodles, Coffee, and Chocolate categories.
However, the company reported a flat net profit of Rs 587 crore in Q3CY20 against Rs 595 crore in Q3CY19 due to lower effective tax rate in the base. Ebitda (earnings before interest, taxes, depreciation, and amortization) margin improved to 24.2 per cent from 23.1 per cent during the quarter.
The net profit after tax is not comparable as the cumulative effect of lower tax rate made applicable from April 1, 2019, was adjusted fully in the quarter ended September 2019, the company said.
After a blip in Q2CY20 (led by supply-chain issues), the company resumed double-digit sales growth in Q3CY20 – which appears likely to sustain given the continued benefits of an in-home consumption boost. Lower milk, wheat, and sugar costs also led to sequential gross margin improvement. Consequently, Ebitda also grew in double-digits, a first after seven quarters, Motilal Oswal Securities said.
The capex of Rs 2,600 crore over the next 3–4 years would boost longer-term growth prospects. However, it also signifies an end to the sweet spot that the company enjoyed until CY19, when it was able to take advantage of erstwhile significantly underutilized capacity. It benefited particularly after the resumption of strong sales growth, driven by a change in a leadership post the Maggi crisis in 2015, the brokerage firm said with ‘neutral’ rating on the stock.
“Nestle India’s domestic business grew 10 per cent, beating estimates by 3 per cent, with a strong performance from noodles, coffee and chocolates, benefitting from in-home consumption,” an analyst at Emkay Global Financial Services said in result update.
Softer commodity prices and control on other overheads are likely to help maintain a positive margin outlook. Nestles’ growth outlook has improved (vs. Q1), with a ramp-up in the supply chain and continued benefits from high in-home consumption. Growth in the core portfolio remains strong, it said.
Pickup in innovation pace, which appears to have slowed down post-Covid, would be positive. With Improved growth outlook and valuations reverting to reasonable levels (down 12 per cent from peak), the brokerage firm sees limited downsides and hence, upgrade the stock to ‘Hold’ from ‘Sell’.
Bharti Airtel losses narrow to Rs 763 cr in Sept quarter
Telecom operator Bharti Airtel on Tuesday reported substantial narrowing of losses for the second quarter ended September 2020 at Rs 763 crore.
The losses were significantly lower than Q2FY20 when it stood at Rs 23,045 crore after the company had made provisions of Rs 28,450 crore in the immediate aftermath of the Supreme Court ruling on statutory dues.
The company posted revenues of Rs 25,785 crore for the September 2020 quarter, up 22 per cent over the corresponding period last year “with strong growth across the portfolio geographies and segments”, a company statement said.
The net loss (before exceptional items) for Q2 FY21 was at Rs 744 crore, while loss (after exceptional items) stood at Rs 763 crore.
In a statement, Gopal Vittal, MD and CEO, India and South Asia, said: “Despite being a seasonally weak quarter, we delivered a strong performance with revenue growing at 22 per cent year-on-year”.
The company stays committed to improving the profitability of the business, he asserted.
On Adjusted Gross Revenue (AGR) dues, the Airtel statement said the Group has made a representation to the government that it has already paid more than 10 per cent of the total dues as demanded by the Telecom Department and will ensure ongoing compliance with the Supreme Court’s orders.
ICICI Prudential Life Q2 net profit marginally up at Rs 303 crore
ICICI Prudential Life Insurance on Tuesday reported a marginal rise in net profit at Rs 303 crore for September quarter of the current fiscal year.
The life insurer had posted a net profit of Rs 302 crore during a similar period a year ago.
Total income jumped to Rs 16,835.36 crore during July-September 2020-21 as against Rs 8,209.08 crore in the year-ago period, it said in a regulatory filing.
Company’s net premium income grew 6.2 per cent to Rs 8,572 crore as against Rs 8,065 crore. New business premium rose 1.1 per cent to Rs 2,957 crore during the quarter under review.
ICICI Prudential said the recovery in new business premium helped it offset some of the decline seen in June quarter due to the impact of the pandemic.
Retail renewal premium was up 6.3 per cent to Rs 5,473 crore from Rs 5,150 crore.
Value to new business (VNB)– a measure of the profitability of the new business in a period —was up 0.3 per cent to Rs 401 crore as against Rs 400 crore in the year-ago period.
VNB is the present value of all future profits to shareholders measured at the time of writing of the new business contract.
“We had a strong VNB performance for the quarter with the margin improving from 21.1 per cent for Q2-FY2020 to 27.4 per cent for Q2-FY2021. This was supported by a market-leading protection performance, with the protection mix for H1-FY2021 at 19.5 per cent compared to 14.8 per cent for H1-FY2020,” MD & CEO N S Kannan said.
Kannan said with the economy gradually opening up post lockdown, the insurer is starting to see positive trends.
“On the back of risk-averse behaviour of customers, we saw considerable interest in traditional long-term savings products which grew 45 per cent year-on-year for the quarter. Annuity products too registered a robust growth of 73 per cent year-on-year for the quarter. The unit-linked business has shown a strong sequential improvement with Q2-FY2021 nearly doubling over Q1-FY2021,” he added.
The solvency ratio was 205 per cent as on September 30, well above the regulatory requirement of 150 per cent. Assets under management stood at Rs 1,81,492 crore at the end of the second quarter, showing a growth of 18.6 per cent over March 31, 2020, it said.
ICICI Prudential Life stock settled at Rs 412.45 on BSE, up 1.90 per cent from the previous close.
which time frames to watch while day trading?
New traders often wonder which time frames to watch while day trading stocks. Do you use tick charts and a five-minute chart for context, or is it better to use a one-minute chart instead? Is a 15-minute or hourly chart more effective at monitoring major support or resistance levels created over the last several days?
Intraday traders use minute charts such as 1-minute or 15-minute. Time charts can be set for many different time frames. However, if you are using the chart for active trading you will probably want to focus on short periods. If you use a one-minute, two-minute, or five-minute chart, then a new price bar forms when the time period elapses. On a one-minute chart, a new bar forms every minute, showing the high, low, open, and close for that one-minute period.
This creates a uniform x-axis on the price chart because all price bars are evenly spaced over time. Sixty price bars are produced each hour, assuming at least one transaction took place in the stock or asset you are following. One-minute charts are popular among day traders
It indicates high and low and opening and closing of five-minute duration. A five-minute chart tracks price movement in five-minute increments. Five-minute charts are used for short term as well day trading. This time frame is best for intraday trading.
The 15minute chart is beneficial for an hour or a few sessions of trading. This chart shows high and low of price movements of stocks for 15-minute intervals
One chart type isn’t necessarily better than another. Each can be traded effectively using the right day trading strategy, but traders should be aware of all types so they can determine which works better for their trading style.
Biocon dips 11% in three days on disappointing Sept q results
Shares of Biocon slipped 6.5 per cent to Rs 390 on the BSE on Monday, falling 11 per cent in the past three trading days, after the company reported lower-than-expected performance for the quarter, largely weighed by operational challenges for the quarter ended September 2020 (Q2FY21).
Biocon reported 22 per cent year on year (YoY) decline in its consolidated net profit at Rs 169 crore in Q2FY21 against Rs 216 crore in Q2FY20. Revenue from operations grew 11 per cent at Rs 1,745 crore on YoY basis.
Ebitda (earnings before interest, taxes, depreciation, and amortization) down 8 per cent to Rs 223 crore from Rs 296 crore in the corresponding quarter of previous fiscal. Ebitda margin contracted 482 basis points to 23.32 per cent from 28.14 per cent in the year-ago quarter. The company said profitability was impacted on account of higher R&D expenses, staff costs, other expenses and forex losses.
The management guided for operational issues to be resolved soon and that it should benefit from the increasing demand for its biosimilar products. Around 50 per cent of sales in Biosimilars are from the developed markets and the other half from the emerging markets.
Motilal Oswal Securities cuts EPS estimate by 15 per cent/10 per cent for FY21/FY22, factoring in a delay in the ramp-up of biosimilars (Pegfilgrastim/Trastuzumab) and reduced operating leverage. The brokerage firm maintains ‘Neutral’ on the stock as current valuations adequately capture potential biosimilarled upsides in earnings.
At 02:42 pm, Biocon was trading 4.5 per cent lower at Rs 399 on the BSE, as compared to the 1.5 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped three-fold with a combined 8.6 million equity shares were changing hands on the NSE and BSE.
Bharti Airtel enters cloud communications market, launches ‘Airtel IQ’
Telecom operator Bharti Airtel on Monday entered the rapidly-growing cloud communications market with the launch of business-centric Airtel IQ’.
A cloud-based omnichannel communications platform, Airtel IQ, aims to enable brands to deepen engagement with customers through timely and secure communication, a company statement said, terming the move as a “game-changer” for the fast-evolving Indian enterprise communication segment.
The Indian cloud communications market, estimated at USD 1 billion, is seen growing nearly 20 per cent annually.
Airtel IQ aims to eliminate the need for multiple communication platforms for different channels, and already companies including Swiggy, Justdial, Urban Company, Havells, Dr. Lal Path Labs and Rapido have signed up as customers for Airtel IQ in the beta phase.
The platform, now commercially available, runs on a pay-as-you-go model meaning that the costs for enterprises would depend on the consumption levels.
“With just a slice of code, businesses can embed communication services such as voice, SMS, IVR (interactive voice response) in their applications and digital properties across desktop and mobile, all through a unified platform,” the statement said.
Ajay Chitkara, Director and CEO Airtel Business said that the new platform could translate into 30-40 per cent cost reduction for enterprises as compared to traditional models.
Airtel expects large call centre ecosystem, e-commerce and internet companies, start-ups, banks and those into manufacturing and distribution to be early adopters of the platform, given their need for omnichannel communications.
Citing an example, Airtel said, for a customer ordering food through an online platform and calling the delivery agent to find out the status of her order, the entire communication is conducted seamlessly and securely over Airtel IQ. The communication is encrypted and all mobile/telephone numbers are masked.
Airtel IQ has been fully developed by Airtel’s in-house engineering teams.
“Natively integrated into telco-grade infrastructure and architected by top digital talent, Airtel IQ is robust, secure, cost-efficient and intuitive,” the Airtel statement said.
Airtel is a large player in the business-to-business connectivity space and serves over one million businesses with a portfolio that spans connectivity, cloud, security and collaboration and data centre solutions.
Adarsh Nair, Chief Product Officer, Bharti Airtel, said “Airtel IQ is first amongst several game-changing products that we will be bringing to the market.
Torrent Pharma Q2 net up 27%, despite dip in US and Brazil revenues
Despite a dip in its US and Brazil revenues, Torrent Pharmaceuticals Ltd. has posted a 27 per cent growth in its consolidated profit after tax (PAT) for the second quarter ended September 30, 2020, for the current financial year 2020-21. The company registered a net profit of Rs 310 crore for Q2 of the fiscal year 2020-21 as compared to Rs 244 crore in the said quarter last year.
The company’s consolidated total revenue for the quarter ended September 30, 2020, however, fell marginally by 0.7 per cent to stand at Rs 2023 crore, as against Rs 2039 crore in Q2 of FY’2019-20.
In terms of geographies, Torrent Pharma’s India revenues grew marginally by seven per cent during the quarter to stand at Rs 963 crore as compared to one per cent growth clocked by the Indian Pharmaceutical Market (IPM), the company stated quoting AIOCD data. On the other hand, the company’s US and Brazil revenues fell by 14 per cent and 18 per cent to stand at Rs 327 crore and Rs 129 crore during the second quarter, respectively.
According to Torrent Pharma, the company’s sub-chronic and acute segments witnessed gradual recovery during the quarter while chronic momentum continued even as its field force productivity for the quarter was Rs 8 lakhs with an MR strength of 4,000.
In the US market, Torrent Pharma’s sales continued to be impacted by price erosion on-base portfolio and absence of new launches. As on September 30, 2020, the company had 47 abbreviated new drug applications (ANDAs) pending approval and six tentative approvals received with one ANDA being filed during the second quarter.
On the other hand, the company stated that with unlocking of the economy, Brazil pharma market also witnessed gradual recovery during the quarter with Torrent’s performance being aided by its chronic portfolio and market share gain.