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ICICIdirect Research Posted on 09:36am 08-Oct-2021

TCS will report its Q2 numbers today...

* Market Outlook

Indian markets are likely to open higher on the back of positive global cues, ahead of the outcome of the RBI's monetary policy review, as concerns eased about the US debt ceiling and an energy crunch.


*  Markets Yesterday

• Domestic markets ended higher tracking gains mainly in auto, IT and select index heavyweights amid positive global cues.

• US markets ended higher amid newsflow regarding extension of debt limit and release of macroeconomic data.


* Key Developments

• TCS will report its Q2 numbers today. We expect the company to report dollar revenue growth of 3% QoQ to US$6,339 million (mn) while EBIT margins are expected to decline 30 basis points QoQ to 25.2%.

• RBI’s monetary policy would be announced today. As per consensus estimates it expects the central bank to maintain status quo on key policy rates. RBI is also expected to refrain from giving any guidance on monetary tightening and maintain an easy liquidity stance.

• As per AIOCD data, the domestic pharma market grew 3.5% sequentially in September 2021. Therapy-wise, antiinfectives and pain/analgesic maintained their sequential growth pace at 6.3% and 3.1%, respectively, in September 2021. Robust sequential growth of 16.7% was seen in respiratory segment for September 2021. Some notable corporate wise sequential growth rates for September 2021 were – Cipla:8%, Sun: 5% and Torrent: 4.4%.

• Life insurers recorded premium growth of 22.2% YoY for September 2021 at | 31001 crore compared to 2.9% growth in the previous month. LIC reported growth of 11.5% YoY while private players showed strong traction of 42.4% YoY. Among private players, SBI Life and HDFC Life posted impressive growth of 30.5% YoY and 37.4% YoY, respectively.

• The National Company Law Appellate Tribunal (NCLAT) on Thursday said Zee Entertainment should be given reasonable and sufficient time to file a response to Invesco’s plea for convening a special shareholders’ meeting.

• As per JLL, the mass vaccination drive and unlocking of the economy has aided in the revival of the office market. This has led to India’s net office absorption touching 58.6 lakh sq ft in the July-September quarter, a jump of 48% QoQ and 8% YoY growth in major cities. The net absorption recorded in Q3 2021 surpassed the net absorption recorded in Q1 2021 by 12%, which paints a clear picture of improved market sentiments and growing confidence among occupiers.

• The government will partially restore tourist visa facilities from October 15 for foreigners who want to come India in chartered flights. Also, foreign tourists on commercial flights will be allowed from November 15, an official said.

• According to media reports, Sebi is unlikely to give exemption to the potential acquirer of BPCL from making mandatory open offers for Petronet LNG and Indraprastha Gas. Other promoters of Petronet LNG and IGL are likely to make counter open offers. BPCL holds 12.5% and 22.5% stake in Petronet LNG and IGL, respectively.

• M&M has received unprecedented positive response to its newly launched vehicle i.e. XUV 700 with company clocking 25,000 bookings within 57 minutes of booking commencement. With this, the company has already filled ~ six months of the production schedule of this model.

• Emami Agrotech, the edible oil & packaged food company plans to invest around | 1,500 crore over the next three years to enter newer categories to achieve its aim of becoming the leading food brand. The company also announced production commencement of edible oil from its Kandla plant in Gujarat. The new plant takes total edible oil capacity of company to 12,000 TPD from earlier 9,000 TPD figure. The move will help company to reach out a wider consumer base across northern & western regions.

• For Interglobe Aviation. Rahul Gangwal, co-promoter of InterGlobe Aviation, has moved the Delhi High Court to seek enforcement of an arbitral award in his shareholder dispute with co-promoter Rahul Bhatia.

• Sundar Raman will take over the role of CEO of fabric & home care division of P&G as part of the company's global succession plan. He succeeds Shailesh Jejurikar. Mr Raman will be responsible for delivering topline and bottomline growth through innovation (R&D), a synchronised E2E supply chain, brand building & sales. Notably he holds an engineering degree from IIT Madras and is also an alumnus of IIM Calcutta.

• India Ratings and Research (Ind-Ra) has affirmed NMDC’s Long-Term Issuer Rating at ‘IND AAA’. The outlook is stable.


*  Today's Highlight

Results: TCS

Events: India cash reserve ratio, interest rate decision, reverse repo rate, forex reserves, bank loan growth, US unemployment rate