*Praj Industries*

HDFC Mutual Fund sold 4,34,583 equity shares (0.24 percent) in Praj Industries via open market transaction on May 3, reducing shareholding to 6.51 percent from 6.75 percent earlier.

*Adani Green Energy*

The company reported consolidated profit of Rs 104 crore for Q4FY21 against Rs 56 crore reported in Q4FY20, revenue rose to Rs 986 crore from Rs 696 crore in the year-ago period.

*Tata Steel*

The company posted consolidated profit of Rs 6,644.1 crore for Q4FY21 against loss of Rs 1,481.3 crore in the year-ago period. Consolidated revenue increased to Rs 49,977.4 crore from Rs 36,009.4 crore in Q4FY20.

*Maharashtra Seamless*

ONGC has issued the letter of award to Jindal Drilling & Industries for deployment of Jack-up drilling rig 'Jindal Explorer' owned by Maharashtra Seamless on charter hire contract for a period of 3 years.

*Tata Motors*

Competition Commission of India has ordered a detailed probe against Tata Motors for alleged abuse of dominant position with respect to dealership agreements. The order has come on two complaints filed against Tata Motors, Tata Capital Financial Services and Tata Motors Finance.
A clause in the dealership agreement allows Tata Motors to restrict, confine the territory of its dealers. Such a clause can create barriers to new entrants in the restricted market and can result in foreclosing of competition by hindering entry into the market, the competition regulator said.

*Cipla*

Roche has received emergency use authorisation in India for its investigational antibody cocktail (Casirivimab and Imdevimab) used in the treatment of Covid-19. The EUA will now enable Roche to import the globally manufactured product batches to India which will be marketed and distributed in India through a strategic partnership with Cipla.

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*FMCG Companies Under Stress - Comparing the Q4 Results of the Major Players*

Industry background - 

Fast Moving Consumer Goods or FMCG sector is regarded as the 4th largest sector in the Indian economy. The industry report is a testimonial to the exponential growth potential of the industry. The CAGR of the FMCG industry from 2016-2020 is around a whopping 28%. 

According to reports from RBI and other credible sources, the Indian retail sector touched a milestone of $1.1 trillion in trade which boosted the FMCG revenue from $ 52.75 billion to $103.7 billion in 2020.

A year ago when the country witnessed a nationwide lockdown that disrupted all major industries including the FMCG. However, the FMCG industry can expect a gradual recovery around the uncertainty of the second wave. 

The major influencing factors that lead to the skyrocketing growth of the industry include the following -

Investment Boost- The government’s latest initiatives including but not limited to the approval of the 100% foreign direct investment in single-brand retail and food retail, the change of the GST tax bracket from 23%-24% to 18% tax bracket. 

Increase in Rural Consumption - Given the improvements and developments in logistics and transportation, the FMCGs are flourishing in the rural parts of the country. Additionally, there is a general rise in the income of the rural population. Rural consumption is expected to reach$220 billion by 2025. 

The Increasing Popularity of E-Commerce and Online Portals- The pandemic has been a catalyst for the already booming e-commerce industry. According to various surveys, more than 60% of the FMCG consumption took place online. The growing online portals make it convenient for consumers to buy the product and that appropriately reflects the rise in numbers.

Quarter 4 Result Analysis - 

1. Nestle India Ltd (NS: NEST ) - 

The manufacturer of the customer favourite maggie noodles and instant coffee, Nestle’ India reported a net profit of Rs. 602 Crs, registering a double-digit growth of roughly 15%. The quarterly profits grew owing to the ease in national lockdown but they miss the estimates. The revenue was recorded at Rs. 3,432.6 Crs. The company has managed to increase its marketing spend to maintain innovation and research on new products. 


2. Britannia Industries Ltd (NS: BRIT ) - 

Britannia (NS: BRIT ) is one of the oldest food and beverage companies in India. Britannia enjoys a strong brand positioning along with a direct expansion of distribution channels. Britannia reported a 3.3% decline in profits year on year at Rs. 360 Crs. The company also registered a growth in revenue at Rs. 3,130.7 Crs. The relaunch of “Milk Bikis”, a milk glucose biscuit was proven to be a successful strategy and the company is likely to stick with the master plan. The additional growth and development of other new segments like salty snacks, wafers, croissants were also ancillary to the growth. 

Marico (NS: MRCO ) - 

Marico is a global giant with a strong presence across Asia and Africa. Marico reported robust growth with a gross profit of Rs. 227 Crs. The company’s revenue also stood at Rs. 2,012 Crs which is a 34.5% increase from the previous year. 
Marico reported a squeeze in margins given the aftermath of inflations. However, the “Saffola Oil” division registered double-digit growth over the last six quarters ushering the company in a strong position. The company has also refocused on its’ rural reach. 

Conclusion - 

Consumer staples have recorded healthy growth patterns however the major FMCG companies are struggling to maintain their margins due to the increasing inflations and disruptions in the supply chain. 

The initiatives by the government promise a favourable base and strong recovery but the uncertainties and Deja Vu of lockdown and pandemic are still lurking around. 

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*IDBI Bank*

Cabinet Committee on Economic Affairs has approved the strategic divestment of IDBI Bank, along with a transfer of management control. The extent of respective shareholding to be divested by government and Life Insurance Corporation to be decided at the time of structuring of transaction in consultation with RBI.

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Economic Times
 
Business Standard

Ø  RBI turns focus to small borrowers, allows another loan recast
Ø  Cabinet approves strategic disinvestment in IDBI Bank
Ø  Govt eases procedure for import of oxygen cylinders, cryogenic tankers
Ø  CCI orders probe against Tata Motors for alleged unfair biz practices
Ø  Andhra decides to sell stake in Gangavaram Port to Adani for Rs 645 cr
Ø  Ceat to make a fresh investment of Rs 1200 crore in truck and bus plant

 
Ø  India's services growth slowed to 3-month low in April, input costs soared
Ø  RBI announces loan relief, Rs 50,000 cr liquidity to tide over Covid
Ø  Saudi Arabia cuts oil prices for Asia as virus hits India demand
Ø  Asian equities see foreign investment inflows for first time this year
Ø  Tata Steel posts profit of Rs 6,644 cr in Q4; declares dividend of Rs 25
Ø  Supreme Court defers hearing Amazon, Future case amid Covid-19 surge
Business Line
 
Mint
Ø  India will sail through the Covid storm, says Finance Minister
Ø  Adani Airport becomes the largest airport company; caters 10% of India's traffic
Ø  Income Tax department notifies exemption for four Canadian Funds
Ø  Hikal in 10-year multi-product deal with global player
Ø  Ease import of pharma inputs: AP Industries Min to Centre
Ø  DoT clears 5G trials sans Chinese vendors
 
Ø  Adani Green Energy Q4 net profit rises over 8% to ₹105 crore
Ø  Canada authorizes Pfizer vaccine for for children from 12 to 15 age group
Ø  Serum Institute of India leads cross-sector Indian investments into UK
Ø  India accounts for 46% of world's new Covid-19 cases, 25% of deaths: WHO
Ø  Galaxy Digital to buy BitGo in crypto sector’s first $1 billion deal
Financial Express
 
Business World
Ø  S&P: Second COVID wave may derail India’s budding recovery; 8.2-9.8 pc GDP growth in diff scenarios
Ø  Indian Bank declares Saravana Stores account as fraud
 
Ø  Adani Enterprises Q4 Net Profit Up 282% To Rs 233.95 Cr
Ø  Sensex Rallies 424 Pts On RBI Announcements; Financial Stocks Shine

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#BREAKING US announces support for Covid-19 vaccine patent waiver, WHO's Tedros hails "historic" US decision to support vaccine patent waiver. Pharma federation IFPMA says US support for patent waiver "disappointing"

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Dear Readers,



Good morning!



Covid is raging, the market refuses to fall. The market is basically over Covid. It knows there will be another V shaped recovery as soon as this wave ends.



Coming back to the original topic, I wanted to share the names of 3 of the best IT names (growth wise) which we track (also own) in our Negen PMS.



1- Intellect Design Arena: Revenue growth expectations for next 2-3 years is +15% to +18%.

EPS growth expectations are +30%

*The source is the management directly.

This company seems to have reached inflection point. Let us see what the future holds here. If they can 'walk the talk', it would make me happy.

*Disclaimer: We own Intellect. Our 2nd biggest holding.



2- Mastek: Revenue growth expectations are 20-22% for the next 2-3 years.

*Source is concall extrapolation. This is just my view and I could be very wrong too.

The company plans to keep up the growth rate via the inorganic route.

The management is executing beautifully.

*Disclaimer: We track this. Dont own yet. Not buy advice.



3- Just Dial: This is not an IT company. It is a pure Tech company but, it comes with a great OPTIONALITY factor.

If their B2B marketplace strategy pays off, then this company's earnings will go wild. Revenue could very easily grow at 25% CAGR or even better for the next 2-3 years.

But that is a BIG IF. It surely wont be easy to compete with IndiaMart and create a competing B2B marketplace.

What is good that, company wont go in losses or anything if the B2B marketplace bet does not come good. So, it is this Optionality factor which I love here.

*Disclaimer: We do not own yet. Tracking. May buy. Not buy advice.



The beauty of owning Tech/IT names is that, they are all debt free, generate significant Free Cash Flow and best of all, they have Growth. (Atleast the ones I have mentioned above, hopefully).





I hope this email added value to you. Will keep sending more of such emails in the coming days.

As always, all my emails would be bold and short. Be clutter free.



Take care friends.





Best,



Neil Bahal

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DEEPAK NITRITE Q4 (YoY)
Revenues growth of 40%
PAT growth of 69%
EBITDA growth of 69%
Margins at 30.3% vs 24.8%
EPS at 21.3 vs 12.6

Finance cost down 48%
Tax rate at 26% vs 14%

DEEPAK NITRITE Q4 (QoQ)
Revenues growth of 18%
PAT growth of 34%
EBITDA growth of 32%
Margins at 30.3% vs 27.1%
EPS at 21.3 vs 15.9

Finance cost down by 13%
Tax rate constant at 26%

INTERNALS
Highest quarterly revenues and profits
Strong growth led by phenolics division
Performance products very weak
Basic and Speciality chemicals do well
Margins led by strong growth in basic chemicals and seciality chem
Financial borrowings come down
Strong cash flows

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*SGX Nifty +66 pts (14760) from last trade 14694*

Nikkei +531 pts,
Hangseng +230 pts,
Now @6.52am.

Dow +97.31 pts ,Nsdq -51.08 pts, S&P +2.93 pts, Bovespa +1852 pts , Ftse +116 pts , Dax +314 pts , Cac +87 pts , Crude @ $65.12 brl (-0.51), Brent @ $68.96 brl (+0.00) , Gold @ 1785.80 (+1.39), Silver @ $26.53 (+0.00), Euro @ $1.2007, JPY @ $109.24 INR @ 73.805

*Today's Corporate Action*
*6th May Ex Date*
ALLSEC
Interim Dividend - Rs. - 15.0000

APTECHT
Interim Dividend - Rs. - 2.2500

EMBASSY
Income Distribution (InvIT)

PRIMEFRESH
Bonus issue 2:1

SRIND
E.G.M.

*Today's Key Results/Board Meetings*
*6-May-21*
ADANIPOWER
Audited Results

ADANITRANS
A.G.M.;Quarterly Results

APCOTEXIND
Final Dividend; Quarterly Results

ASHIKACR
General; Audited Results; Dividend; Quarterly Results

BBTC
Audited Results;Dividend

BLUESTARCO
Final Dividend; Audited Results

CAPPL
Audited Results; Interim Dividend

CENTURYTEX
Dividend;Audited Results

COFORGE
Audited Results; Interim Dividend

CREDITACC
Audited Results

DHANADACO
General

FIVEXTRADE
General;Audited Results

FOSECOIND
Quarterly Results

HEROMOTOCO
Final Dividend; Audited Results

HIKAL
Audited Results; Final Dividend

HINDMILL
Audited Results

ICRA
Audited Results;Dividend

IIFL
General;Audited Results

JOSTS
Audited Results; Final Dividend; Quarterly Results

LUDLOWJUT
Audited Results;Dividend

PGHL
Quarterly Results

PRAJIND
Audited Results;Final Dividend

RAYMOND
Audited Results

SOLARA
Audited Results;Dividend

SUNDRMFAST
Audited Results;Interim Dividend

TATACONSUM
Audited Results; Final Dividend; Quarterly Results

*Stock under F&O ban on NSE*
*6-May-21*
1SUNTV
2TATACHEM

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*Good Morning*
• RBI Steps Up Loan Relief, Liquidity for India’s Virus Fight
o Central bank to provide $6.8b liquidity to key sectors
• Tata Steel Posts Bumper Profit on Price Rally, Demand Revival
• India Plans to Privatize IDBI Bank, Seek Strategic Investor
• Indian Delegation Self-Isolates at G-7 Meeting of Top Diplomats
• China Urges India to Provide Level Playing Field for Its Firms
• India’s Currency Market Roiled as Banks Protect Dollar Assets
o State-run banks are staying away from receiving dollars
• Saudi Arabia Cuts Oil Prices for Asia as India Battles Virus
• India to Boost Fuel Exports Through June on Better Margin: FGE
• India Oil Demand to Drop 670k B/D in May as Outlook Darkens: FGE
• SpiceJet, Dunzo Receive Approval for Drone Operations in India
• Global Funds Sell Net INR11.1B of India Stocks on Wednesday: NSE
o Domestic funds buy net 2.41b rupees of stocks
• Foreign Investors Sell Net INR17.4B of India Equities on May 4
• Foreigners Sell Net INR18.5B Indian Equity Derivatives Wednesday
• Oil Gains With U.S. Supply Drop Signaling Recovery
• EU Seeks India Support for Treaty on Plastic Pollution: Reuters
• Second covid wave may lead to slowdown in coming months: PHDCCI: PTI
• Three more Rafales head for India; to take IAF’s count to 21: PTI
• Adani Green (ADANIGR): 4Q net income 1.05b rupees Vs. 964.1m Y/y; Plans INR150B FY22 Capex
• Blue Dart (BDE): 4Q net income 890.8m rupees Vs. loss 237.9m Y/y; Revenue +33% to 9.66b
• Ceat (CEAT): 4Q net income 1.53b rupees vs. 518.8m y/y, beats est. 1.10b; Revenue +46% to 22.9b
• Cipla (CIPLA): Roche’s Covid Treatment Gets India Approval, Partner Cipla Says
• Tata Steel (TATA): 4Q net income 66.44b rupees vs. loss 14.80b y/y, misses est. 74.22b; Revenue +39% to 499.8b; To Raise India Capex Spending; to pay 25 rupees/shr as dividend
• Wipro Ltd. (WPRO): Says partners with Transcell Oncologics on vaccine safety AI

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Money Market Update

The rupee ended at 73.91 against the U.S. Dollar on Wednesday as compared to Tuesday's closing of 73.86.

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Stocks To Watch

IDBI Bank: Cabinet Committee on Economic Affairs has approved the strategic divestment of IDBI Bank, along with a transfer of management control. The extent of respective shareholding to be divested by government and Life Insurance Corporation to be decided at the time of structuring of transaction in consultation with RBI.

Tata Motors: Competition Commission of India has ordered a detailed probe against Tata Motors for alleged abuse of dominant position with respect to dealership agreements. The order has come on two complaints filed against Tata Motors, Tata Capital Financial Services and Tata Motors Finance. A clause in the dealership agreement allows Tata Motors to restrict, confine the territory of its dealers. Such a clause can create barriers to new entrants in the restricted market and can result in foreclosing of competition by hindering entry into the market, the competition regulator said.

Cipla: Roche has received emergency use authorisation in India for its investigational antibody cocktail (Casirivimab and Imdevimab) used in the treatment of Covid-19. The EUA will now enable Roche to import the globally manufactured product batches to India which will be marketed and distributed in India through a strategic partnership with Cipla.

Wipro: Has partnered with Transcell Oncologics to transform vaccine safety assessment using augmented intelligence. Transcell’s stem cell technology with the augmented intelligence capabilities of Wipro HOLMES® to improve the safety of global vaccine immunisation programs. Also, by applying AI to the vaccine development process, our solution can predict adverse neurovirulent impacts resulting from vaccinations, the company said.

Godrej Industries: Board has approved the Information memorandum for issuance of up to 7,500 listed, unsecured NCDs of the face value of Rs 10 lakh each, aggregating to Rs 750 crore on a private placement basis.

Maruti Suzuki: Total production in April stood at 1.59 lakh units. Total passenger vehicle production stood at 1.57 lakh units.

Force Motors: The company's total production in April stood at 1,042 units. It reported domestic sales of 1,094 units and exports of 187 units.

Indian Bank: Has declared Saravan Stores (Gold Palace) bad loan account as fraud and reported it to the RBI.

Bank of India: Has approved allotment of up to 42.11 crore shares at Rs 71.23 per share aggregating up to Rs 3,000 crore on a preferential basis to the Government of India.

Quess Corp: Has declared an interim dividend of Rs 7 per share for FY21. The record date for the same is May 13.

Nifty Earnings: Tata Consumer Products, Hero MotoCorp

Non-Nifty Earnings: Adani Power, Adani Transmission, Apcotex Industries, Bombay Burmah Trading Corp, Blue Star, Caplin Point Laboratories, Century Textiles & Industries, Coforge, CreditAccess Grameen, Foseco India, Hikal, ICRA, IIFL Finance, Procter & Gamble Health, Praj Industries, Raymond, Solara Active Pharma Sciences, Sundram Fasteners

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World Markets

Dow + 97
Nasdaq - 51
Dax + 314
Nikkei + 552
Hangseng + 211
Sgxnifty + 84 (14778)
Brent Crude 68.91
Dow Fut + 52
Dollar Index 91.25

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Stocks Ban In F&O:
Sun TV,
Tata Chemical

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