Infosys Q4FY21 Results, HDFC Bank to Raise Rs 500 Billion, and Buzzing Stocks Today

Fri, 16 Apr Pre-Open | Monish Vora, TM Team

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Indian share markets ended on a positive note yesterday, helped by gains in metals and banking stocks.

Benchmark indices witnessed volatile trading activity and swung between gains and losses amid mixed cues from global peers and a record surge in Covid-19 cases.

At the closing bell yesterday, the BSE Sensex stood higher by 260 points (up 0.5%).

Meanwhile, the NSE Nifty closed higher by 77 points (up 0.5%).

In early trade, the Sensex tumbled over 450 points while the Nifty fell as much as 150 points tracking losses in index heavyweights Infosys and Maruti Suzuki.

TCS and ICICI Bank were among the top gainers.

Maruti Suzuki and Infosys, on the other hand, were among the top losers.

Both, the BSE Mid Cap index and the BSE Small Cap index ended on a flat note.

Sectoral indices ended on a mixed note with stocks in the metal sector and banking sector witnessing most of the buying interest.

Automobile stocks and realty stocks, on the other hand, witnessed selling pressure.

Shares of Linde India and Balrampur Chini hit their respective 52-week highs.

At 8:00 am today, the SGX Nifty was trading down by 21 points, or 0.1% lower at 14,600 levels. Indian share markets are headed for a flat opening today following the trend on SGX Nifty.

Gold prices for the latest contract on MCX were trading up by 0.4% at Rs 46,809 per 10 grams at the time of closing stock market hours yesterday.

Speaking of stock markets, in one of his videos for Vijay Bhambwani talks about how the RBI's new quantitative easing program could affect the stock market.

Recently the Reserve Bank of India announced a major bond buyback program, its version of quantitative easing.

So how does it impact the stock market? Vijay tells you how your wallet will be impacted by this decision.

Tune in to the below video to find out more:

Top Stocks in Focus Today

Maruti Suzuki will be among the top buzzing stocks today.

Maruti Suzuki's S-CNG sales stood at over 1.6 lakh units in the period between April 2020 and March 2021, making it the highest tally. In FY20, the auto major had sold 1.06 lakh CNG units.

The company retails a range of CNG-spec passenger vehicles in the domestic market including the Alto, Celerio, Wagon-R, S-Presso, Eeco, Ertiga, Tour S and Super Carry. The wide fleet of CNG cars has helped in the brand posting the highest ever S-CNG sales in the financial year between April 2020 and March 2021.

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The company has consistently been expanding its S-CNG portfolio over the last two years and is considered as a definitive alternative for the absence of diesel engines while being cleaner and more efficient. The largest carmaker in the country sold more than 1.6 lakh factory-fitted S-CNG vehicles in FY 2020-21.

Private sector lender HDFC Bank share price will also be in focus today as the lender said it plans to raise up to Rs 500 billion through private placement of debt instruments over the next 12 months. The bank's board will consider the proposal on April 17, 2021.

"We wish to inform you that the bank proposes to raise funds by issuing perpetual debt instruments (part of additional tier I capital), tier II capital bonds and long-term bonds (financing of infrastructure and affordable housing) up to a total amount of Rs 500 billion", India's largest private sector lender said in a regulatory filing.

This comes a couple of days after Reserve Bank of India (RBI) governor Shaktikanta Das met bank chiefs and emphasized the need for raising adequate capital for strengthening balance sheets.

Infosys Reports 17% YoY Growth in Q4FY21 Net Profits

In news from the IT sector, Infosys share price will also be in focus today.

Infosys, India's second largest information technology company, reported a 17.1% year-on-year (YoY) rise in net profit at Rs 50.8 billion for the quarter ended in March on Wednesday. It had posted Rs 43.2 billion net profit in the same quarter last year.

Revenue for the March quarter grew 13.1% YoY to Rs 263.1 billion. Revenues in constant currency terms grew by 9.6% YoY.

The company reported consolidated operating margin of 24.5%. Total operating expenses for the company dropped 4.6% YoY in March quarter to Rs 27.1 billion.

Infosys also guided for 12-14% sales growth in constant currency terms in 2021-22 and an operating margin band of 22-24%. "A strong momentum exiting FY21, alongside a focused strategy to accelerate client digital journeys, gives us confidence for a stronger FY22," Infosys' CEO Salil Parekh said.

The Bengaluru-based company also announced a share buyback of up to Rs 92 billion at a maximum price of Rs 1,750 per share, a premium of 25% to Tuesday's closing price.

Note that this would be the be the third buyback by the IT major in the last five years. Infosys completed its first buyback of Rs 130 billion in December 2017, comprising 113 million equity shares at a price of Rs 1,150 per share.

In August 2019, it had bought back 110.5 million shares under its Rs 82.6 billion buyback offer, at an average price of Rs 747.38 per equity share.

The company also announced a final dividend of Rs 15 per share.

World Bank's IFC to Invest US$ 100 Million to Resolve Indian NPAs

World Bank's international finance corporation (IFC) is going to invest US$ 100 million in JC Flowers India fund to help resolve non-performing assets (NPAs).

The World Bank Group entity IFC is partnering with JC Flowers to help domestic lenders resolve their distressed assets and free up capital for new lending apart from allowing mid-sized firms to preserve jobs and avoid insolvency amid the raging pandemic.

On 13 April 2021, IFC said that 'Under the project, which is an expansion of IFC's distressed asset recovery programme in India, the lender will invest up to US$ 100 million in the JC Flowers India opportunities fund on meeting certain conditions, with an initial commitment of US$ 40 million'.

This partnership will create the first dedicated platform in India for mid-sized distressed assets, which account for US$ 27 billion more than a third of corporate stressed assets.

Note that JC Flowers India opportunities fund is a partnership with Eight Capital Management, an Indian distressed assets investment firm.

The Reserve Bank of India's (RBI) estimates that a second wave of the pandemic could potentially cause non-performing loans to reach US$ 200 billion, which nearly 15% of gross loans by September 2021.

Motive behind this partnership is to support an inclusive economic recovery and revitalization of the economy, promote credit growth, and ensure the continuity of hardest-hit businesses and livelihoods.

In addition to its investment, IFC will also support JC Flowers and Eight Capital to adopt environmental and social standards in line with the IFC performance standards.

Since its launch in 2007, the distressed asset recovery programme has committed US$ 7.7 billion globally, including US$ 5 billion mobilised from outside. It has also enabled banks to offload over US$ 33 billion of NPAs and help over 18 million debtors resolve their obligations.

How this development pans out remains to be seen. Meanwhile, we will keep you posted on all the news from this space. Stay tuned!

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

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