The quarterly earnings along with the economic data releases and COVID-19 updates will keep investors busy this week. Investors have started to feel tad anxious after an extended period of lockdown. Concerns over the state of the economy has begun worrying stake holders as data has begun reflecting heightening unemployment and shrinking economic growth. The absence of any significant economic stimulus package has also worried investors. Aside from that fact, number of COVID cases crossed 60,000 and Mumbai has emerged as an epicentre with over one-fifth of the total cases. The sharp rise in the patient count has spooked market participants who will be closely monitoring the evolving situation. This week will see a lot of important quarterly earnings being released –Kotak Mahindra Bank, Maruti Suzuki Ltd, Nestle Ltd, Godrej Properties Ltd, Biocon, among the companies set to come out with their results this week. Let us look at the stocks that will be in focus as markets open on Monday:
- ICICI Bank: Mumbai based private lender ICICI Bank reported a sharp 135% yoy growth in its net profit at Rs7,931cr for the financial year ended 31st Mar, 2020, driven by rise in other income, operating income, NII and lower tax cost. ICICI Bank reported a 26% rise in net profit at Rs1,221cr compared to Rs969cr a year ago, due to higher COVID-19 related provisions. ICICI Bank's asset quality improved during FY20, with gross non-performing assets (NPAs) ratio declining to 5.53% compared to 6.70% in the year-ago period. Net NPA stood at 1.41% as compared to 2.06% in FY19. ICICI Bank's board also approved fund raising by way of issuances of debt securities including by way of NCDs in domestic markets upto an overall limit of Rs25,000cr by way of private placement.
- Cadila Healthcare Ltd: The government has roped in Zydus Cadila for mass production of the country’s first indigenous ELISA test kit for antibody detection of COVID-19 which was developed by National Institute of Virology in Pune. The test kit was developed in one month, and will be used for surveillance of the Indian population to see how many people in the country have been infected with covid-19 since the pandemic hit Indian shores. The test has an advantage of having much higher sensitivity and specificity as compared to the several rapid test kits which have recently flooded the Indian market, the government said in a release.
- Reliance Industries Ltd: Mukesh Ambani-led conglomerate has fixed May 14 as the record date for India's biggest rights issue of Rs53,125cr. RIL, which had on April 30, 2020 announced its fundraising plan of Rs53,125cr through a 1:15 rights issue, will offer shares at Rs1,257, a 14% discount to the stock's closing price on April 30, 2020 of Rs1,467.05. Shareholders willing to subscribe to the issue will have to pay 25% on application and the rest in one or more tranches, RIL said in a statement to the stock exchanges on Saturday. The rights issue opening and closing dates will be informed separately, RIL added.
- Lupin Ltd: The drug major said that the inspection of its three units at Pithampur in Madhya Pradesh by the UK health regulator has been completed. The Medicines and Healthcare Products Regulatory Agency (MHRA) of the UK conducted the inspection of the three units at Pithampur (Unit I, Unit II and Unit III) in January 2020, Lupin said in a statement to the stock exchanges post market hours Friday.
- Tech Mahindra Ltd: IT services company Tech Mahindra has been issued a notice by the Pune Labour Commisioner’s office after an IT employee welfare organisation filed a complaint alleging that the company had reduced salaries to maintain profitability. According to the complaint filed by National Information Technology Employees Senate (NITES), the organization received complaints from employees of Tech Mahindra. According to NITES over 13,000 employees of the company have been affected due to this move. The employees received emails last week informing that payment between Rs5,000 to Rs10,000 shift allowance per employee will be discontinued from May 01, 2020.
- Sequent Scientific Ltd: The Carlyle Group, has agreed to acquire an equity stake of up to 74% in SeQuent Scientific in a deal valued between Rs1,500 to Rs1,800 cr. CA Harbor Investments has proposed to acquire a majority stake in SeQuent via private share purchase agreements, at a purchase price of Rs86 per share. As per SEBI’s takeover norms, the proposed transaction will trigger a mandatory open offer by CA Harbor Investments and CAP V Mauritius Ltd. for the purchase of up to 26% equity shares of SeQuent from public shareholders. If fully subscribed the deal will be valued at Rs1,800cr. The transaction is expected to close in the third quarter of 2020.
- HDFC Asset Management Company: HDFC Asset Management Company (AMC) reported profit before tax (PBT) of Rs 425cr in the March quarter, a negligible yoy improvement of 0.13%. After adjusting for non-recurring items — which entails investments on the company’s books — PBT was down 20% (on a YoY basis) at Rs329cr. The company had a market share of 15% in the individual monthly average assets under management category. Overall, the AMC’s market share in the industry stood at 13.7%, with quarterly average asset base of Rs3.69tn. Compared to the industry’s equity-debt asset mix of 38:62, the fund house’s asset mix stood at 37:63.
- Shree Cement Ltd: The cement maker reported 83% jump in its net profit for the quarter ending 31 March, 2020 at Rs588cr. The cement-maker reported net profit of Rs321cr in the same period a year ago. The revenue from operations declined marginally to Rs3,218cr as against Rs3,285cr in March 2019. Total expenditure declined to Rs2,647.51cr in Q4FY20 from Rs2,927.33cr in Q4FY19.
- Swaraj Engines Ltd: Swaraj Engines' net profit fell 4.9% to Rs15.84 cr due to 8.5% decline in net sales to Rs175.13cr in Q4FY20 over Q4FY19. Profit before tax (PBT) stood at Rs21.43cr in Q4 March 2020, down by 16.8% from Rs25.76cr in Q4 March 2019. Total tax expenses declined 38.63% to Rs5.59cr during the period under review. Engine sales during the quarter dropped 4.3% to 20,827 units yoy. Engine sales for FY20 stood at 89,928 units, down 9.75% compared with last year's sale of 99,638 units. The company's board recommended a dividend of Rs 25 per share for the year ended March 2020. It has also recommended a special dividend of Rs 15 per share.
- TCI Express Ltd: The express distribution company reported a 12.55% dip in its net profit at Rs19.01cr for the quarter ended 31st Mar, 2020. Its total income declined to Rs239.11cr during the quarter under review as against Rs267.04cr in the same quarter a year ago. During the year, the company added 70 new branches to penetrate deeper in selected geographies. During FY2020, the company has incurred a capex of Rs32 cr.
U.S. stocks ended Friday’s session higher despite Labor Department data showing the unemployment rate rising to 14.7%, underscoring the depth of the impact of the COVID-19 pandemic on the American economy. The Dow Jones Industrial Average rose 455.43 points, or 1.9%, to close at 24,331.32 and the S&P 500 index gained 48.61 points, or 1.7% to end the session at 2,929.80. The Nasdaq Composite Index advanced 141.66 points, or 1.6%, to 9,121.32.
The monthly report on the employment situation in the U.S. showed that 20.5mn jobs were eliminated last month, and the unemployment rate rocketed 14.7% from a 50-yr low of only 3.5% two months ago and 4.4% last month. However, the headline number was better than some estimates for 22mn newly unemployed. The report comes after weekly jobless claims data earlier that week revealed that those looking for unemployment benefits increased another 3.2mn in early May.