The Union Ministry has extended the lockdown for another two weeks till 31st May 2020. Investors will definitely mull the probable repercussions and/or benefits from such a move as the markets open for their session this week. Additionally , investors will also mull over the economic stimulus announced by the Finance Minister over 4 days. The stimulus measures seem to be lacking in boosting immediate demand and resolving current cash flow disruptions. Most of the plans announced focused on the medium -long term scenario, which though commendable, may not exactly be what investors had in mind. This week will see a lot of important quarterly earnings being released –Bharti Airtel Ltd, Bajaj Finance Holdings Ltd, Dr Reddy’s laboratories Ltd, Bajaj Auto Ltd are among the companies set to announce their results this week. Let us look at the stocks that will be in focus as markets open on Monday:
Reliance Industries Ltd: US-based private equity firm General Atlantic will invest Rs6,598.38cr to acquire a 1.34% stake in Mukesh Ambani's Jio Platforms. This happens to be the fourth big investment in Jio Platforms, a wholly-owned subsidiary of Reliance Industries, in last one month. General Atlantic's investment will translate into a 1.34% equity stake in Jio Platforms on a fully diluted basis, the company said in a statement. With this investment, Jio Platforms has raised Rs67,194.75cr from leading technology investors including Facebook, Silver Lake, Vista Equity Partners and General Atlantic in less than four weeks. Aside from this, Reliance Industries (RIL) announced that its rights issue of Rs53,125cr, the biggest ever in India, will open on 20th May and close on 3rd June. In a filing to the stock exchanges on Saturday, the Mukesh Ambani led company said The Letter of Offer will be filed with BSE, National Stock Exchange and Securities and Exchange Board of India and an abridged Letter of Offer, Application Form of Rights Issue, and Rights Entitlement Letter will be sent to the eligible equity shareholders of the company.
Maruti Suzuki Ltd: The country’s largest vehicle manufacturer announced its decision to start manufacturing at its Gurugram-based plant from 18th May. The company started production operations at the Manesar based plant from 12th May. All activity will be carried out strictly in accordance with the government regulations and guidelines and observing company’s own concern for the highest standards of safety, Maruti Suzuki said in a statement to the stock exchanges Sunday. It has also formed a Covid-19 Monitoring Committee comprising top executives of the company and a 17-member action plan committee to oversee and implement the SoPs in the plant, office and showroom premises.
Future Consumer Ltd: Kishore Biyani’s FMCG arm said that its board had approved raising up to Rs300cr through a rights issue. In a statement to the stock exchanges, Future Consumer said that the company is yet to decide the pricing of the rights issue and the number of shares that existing shareholders will be eligible to subscribe to under the rights issue. Future Consumer sells over 30 brands across packed foods, beverages, staples, personal and home care categories.
Godrej Consumer Products Ltd: The consumer business of the Godrej group announced an acquisition of the remaining 25% stake in Kenya based Canon Chemicals Ltd. In a statement to the stock exchanges post market hours Friday, the firm said Canon Chemicals would now be a wholly-owned subsidiary of the company. The acquisition was made through its step-down firm Godrej East Africa Holdings Ltd. The Godrej Group firm had earlier acquired 75% stake in Canon Chemicals Ltd in 2016.
Cipla Ltd: The Mumbai-based drugmaker posted a 33% decline in its consolidated net profit for the fourth quarter to Rs246cr as the company’s operational performance was weakened by the Covid-19 disruption. Cipla’s domestic business did reasonably well in a quarter hit by Covid-19. The India business posted a decent 12% yoy jump during the quarter, while it grew by about 5% in the full financial year. Cipla’s consolidated operating margin contracted by 7 percentage points to 15%, with 2 percentage points being the impact from Covid-19 related extension in cut-off. In a statement to the stock exchanges, the company said its board has approved fund raising upto Rs3,000cr by issue of equity shares or American depository receipts or global depository receipts or foreign currency convertible bonds or other securities / financial instruments convertible into equity shares.
Mahindra and Mahindra Financial Services Ltd: The Financial services arm of the Mahindra group posted a 65.9% drop in net profit in the fourth quarter of FY20 to Rs238.89 cr when compared to Rs700.57cr in the same period a year ago with higher provisions for losses related to Covid-19. In FY20, it reported a 42% drop in its net profit to Rs1,086cr against Rs1,867cr in FY19. Total income increased by 8% to Rs3,140cr during the quarter year ended March 31, 2020, against Rs2,902cr during the corresponding quarter last year.
L&T Financial Holdings Ltd: L&T Finance Holdings reported a 30% decline in consolidated net profit at Rs384.86cr for the fourth quarter ended March due to higher provisioning because of COVID-19 pandemic. Total income for the quarter under review rose to Rs3,427.22cr from Rs3,383.92cr a year ago, the company said in a statement to the stock exchanges post market hours Friday. Total expenses during the quarter stood at Rs2,971cr as against Rs2,634.56cr in the year-ago period. The company said that the quarter was impacted largely due to the incremental provisions taken to strengthen the balance sheet against the after effect of the pandemic
Sterling and Wilson Solar Ltd: Sterling and Wilson Solar Limited (SWSL)has bagged an Engineering Procurement Construction (EPC) contract in Australia for Rs2,600cr. Further, the contract includes operation and maintenance which is estimated to be worth Rs415cr for 20 years, the company said in a statement to the stock exchanges on Sunday. With this order, the Shapoorji Pallonji backed company’s cumulative order book in Australia is estimated to be Rs4,900cr.
Crompton Greaves Consumer Electrical Ltd: Crompton Greaves Consumer Electricals Ltd reported a 27.35% decline in consolidated net profit at Rs102.10cr for the fourth quarter ended March 2020 due to decline in sales because of COVID-19 pandemic. In a statement to the stock exchanges post market hours Friday, the company said that net sales declined 14.95% to Rs1,026.34cr during the quarter under review from Rs1,206.88cr in the corresponding period of the previous fiscal. Revenue from electric consumer durables segment declined 14.26% to Rs741.09cr during January-March period from Rs864.36cr in the corresponding quarter a year ago.
Wabco India Ltd: The parent group of Wabco India , Wabco Holdings Inc has said that it has received approval from the Chinese state administration for its merger with ZF Friedrichshafen AG. ZF is a global technology company and supplies systems for passenger cars, commercial vehicles and industrial technology, enabling the next generation of mobility. In 2019, ZF achieved sales of 36.5bn euros. The company has a global workforce of 148,000 with 240 locations in 41 countries.
Let us look at the developments which took place on the global front
U.S. stocks recovered from steep losses early Friday to close higher, despite data showing U.S. April retail sales plunged more than forecasts. The Dow Jones Industrial Average rose 61 points, or less than 0.3%, to 23,685.42, while the S&P 500 added 11.20 points, or 0.4% higher to end the session at 2,863.70. The Nasdaq Composite Index closed at 9,014.56 after gaining 70.84 points, or 0.8%.
U.S. retail sales fell 16.4% in April, the Commerce Department reported, as businesses remained all but shut down, exceeding the 12.5% drop expected on average by economists. However, investors were buoyed by hopes that the Democratic-controlled House of Representatives would authorize more than $3trn in new spending to blunt the economic impact of the COVID-19 epidemic.