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ICICIdirect Research Posted on 09:37am 14-Oct-2021

The Prime Minister has launched the Gati Shakti...

* Market Outlook

Indian markets are likely to open higher on the back of positive global cues as traders assessed the durability of the economic recovery to inflationary pressures and a looming reduction in the Federal Reserve's Pandemic-era stimulus.


*  Markets Yesterday

• Domestic markets ended higher tracking gains in auto, IT and metals stocks amid news flows and quarterly corporate earnings reports.

• US markets ended mostly higher amid release of new earnings data and key inflation report.


* Key Developments

• NII growth for HDFC Bank is expected at | 17183 crore, reflecting growth of 8.9% YoY with stable NIMs. The bank reported 15.4% YoY growth in advances at | 11.9 lakh crore, driven by commercial and rural banking segment. Other income is expected to see improvement QoQ with asset quality expected to be stable. Hence, expect provision to decline to | 3351 crore, after sharp surge in Q1FY22. PAT growth is expected to be 15% YoY to | 8677 crore. Asset quality in rural segment may show positive surprise.

• HCL Tech is reporting its Q2 numbers today. We expect the company to report dollar revenue growth of 4.2% QoQ to US$ 2833.8 mn while EBIT margins are expected to decline 104 basis points QoQ to 18.5%.

• India's fuel demand increased 5.2% YoY to 15.9 MMT in September. Petrol and diesel sales increased 6% and 0.5% YoY, respectively. On an MoM basis, petrol & diesel sales declined 3.5% and 1.7%, respectively.

• According to The Economic Times, five lenders, including HDFC Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank and DBS India are expected to submit binding bids for the Citi India consumer businesses before the October 26 deadline.

• World Steel Association (WSA) has elected Sajjan Jindal, Chairman and Managing Director of JSW Steel, as Chairman for 2021-22. Mr Jindal is the first representative from India to serve as Chairman of the WSA.

• Westlife development plans to invest | 800-1000 crore in the next three to five years to drive future growth of its McDonald's brand. The proceeds will be used to open about 200 brand's restaurants to drive future growth as well as revamp its existing facilities.

• According to The Economic Times, Vodafone Idea (Vi) is in advanced talks to sell a minority stake to global private equity investors including Apollo Global Management and Carlyle to raise up to $1 billion, over the next two-to-three months. It will follow that up with a follow-on public offer (FPO) to raise another $1 billion around June 2022. Moneycontrol reports also suggests that promoters are looking to infuse US$400 mn. With debt redemption due and lagging capex, fund raising will be key to survival.

• The Prime Minister has launched the Gati Shakti, a digital platform, that will bring 16 Ministries including Railways and Roadways together for integrated planning and coordinated implementation of infrastructure connectivity projects. It will incorporate the infrastructure schemes of various Ministries and State Governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN etc. Economic zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, agri zones will be covered to improve connectivity & make Indian businesses more competitive.

• Hero MotoCorp has introduced several financing schemes for its products such as no-hypothecation, no cost EMI, cash EMI, Kisan EMI and balloon EMI. Separately, it has tied up with Gilera Motors Argentina, appointing the latter as exclusive distributor for sales and service of Hero 2-Ws in Argentina.

• According to ET Auto, the Delhi government has floated a tender for purchase of 140 electric buses.


*  Today's Highlight

Results: HCL Tech, GTPL Hathway, Mahindra CIE, Cyient, HDFC Bank, Avenue Supermarts.

Events: India WPI Inflation, WPI Food Inflation WPI Manufacturing Inflation, WPI Fuel.