Sensex Ends 338 Points Lower, Nifty Ends Below 14,950; Tata Steel and Hindalco Plunge Over 4%

Thu, 20 May Closing | Nandini Mehta, TM Team

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Indian share markets witnessed volatile trading activity throughout the day today and ended lower.

Benchmark indices continued to fluctuate between gains and losses and tumbled in the last hour of trade today amid mixed cues from global peers.

At the closing bell, the BSE Sensex stood lower by 338 points (down 0.7%).

Meanwhile, the NSE Nifty closed lower by 124 points (down 0.8%).

Mahindra & Mahindra and Cipla were among the top gainers today.

Tata Steel and Hindalco, on the other hand, were among the top losers today.

The SGX Nifty was trading at 14,942, down by 93 points, at the time of writing.

The BSE Mid Cap index ended the day on a flat note and the BSE Small Cap index ended up by 0.3%.

Sectoral indices ended on a mixed note with stocks in the metal sector, oil & gas sector and banking sector witnessing most of the selling pressure.

Realty stocks, on the other hand, witnessed buying interest.

Shares of TCI Express and Adani Transmission hit their respective 52-week highs today.

Asian stock markets ended on a mixed note as investors weighed the Fed minutes that flagged the possibility of a debate on scaling back asset purchases.

The Hang Seng and the Shanghai Composite ended the day down by 0.5% and 0.1%, respectively. The Nikkei ended up by 0.2% in today's session.

US stock futures are trading on a negative note today with the Dow Futures trading down by 185 points.

In cryptocurrencies, massive action was witnessed in the crypto market with bitcoin plunging as much as 30% to its lowest level since January following China's decision to ban financial and payment institutions from providing digital currency services. The currency recouped some losses and was last trading around US$ 40,000 level as against US$ 30,000 it touched yesterday.

The rupee is trading at 73.10 against the US$.

Gold prices for the latest contract on MCX are trading down by 0.7% at Rs 48,340 per 10 grams.

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In news from the automobiles sector, JK Tyre was among the top buzzing stocks today.

Shares of one of the country's leading tyre maker JK Tyre and Industries rose as much as 6.2% to hit an intraday high of Rs 131.3 per share on the BSE a day after it reported March quarter earnings.

The stock of the auto tyres and rubber products maker has rallied 161.3% over the last one year.

JK Tyre and Industries on Wednesday reported a consolidated profit after tax of Rs 1.9 billion for the March quarter of the previous fiscal against a consolidated net loss of Rs 472 million in the year-ago period.

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For FY21, the tyre maker's net profit spurted 134% to Rs 3.3 billion, compared to Rs 1.4 billion recorded in the previous fiscal year.

The company posted a pre-tax profit of Rs 2.8 billion in Q4FY21 compared with pre-tax loss of Rs 824 million in Q4 FY20.

Revenue from operations climbed 63% to Rs 29.3 billion during the quarter under review as against Rs 17.9 billion in the year-ago period.

For the full financial year 2021, the company's total income stood at Rs 91.5 billion, up 4% as against Rs 87.5 billion in the last year.

On a consolidated basis, earnings before interest, tax, depreciation, and amortisation (EBITDA) came in at Rs 4.7 billion for the quarter under review, recording an increase of 119% year on year (YoY). The company saw a margin expansion of 400 basis points (bps) in Q4FY21 over Q4FY20.

EBIDTA stood at Rs 13.5 billion for the year ended 31 March 2021, up 33% with margin expansion of 310 bps.

It has also reported earnings per share (EPS) of Rs 13 for the 12 months period ended 31 March 2021 as compared to Rs 6.1 in FY22.

Commenting on the results, Dr Raghupati Singhania, Chairman and Managing Director,said,

• "The year began with India in lockdown due to COVID-19 pandemic and the economy grinding to a halt with Q1FY21 almost a wash out. Economy started opening up gradually from mid-May.
  
  As a result of several initiatives taken JK Tyre recovered fast and achieved highest Sales in Q3FY21 & Q4FY21 increasing its market presence.
  
  With high capacity utilization, control on costs and reduced working capital, special focus on customer outreach and premium products offering, profitability improved significantly.
  
  Similarly, JK Tyre subsidiaries - Cavendish Industries and JK Tornel also added to substantial overall improvement in the profitability of the Company".

The board has also recommended a dividend of Rs 2 per equity share having face value of Rs 2 each that is 100% for the financial year ended March 2021.

JK Tyre and Industries share price ended the day up by 1.9% on the BSE.

Moving on to news from the fertiliser sector...

Fertilizer Stocks Rallied After Centre Hikes Fertilizer Subsidy for FY22

Fertiliser stocks gained ground at the bourses today after the centre increased its share of subsidy for di-ammonia phosphate (DAP) by 140% from, translating into reduction of market price of DAP from Rs 2,400 per bag to Rs 1,200 per bag.

The union government has decided to increase the fertilizer subsidy outlay for the year by Rs 147.8 billion, after a meeting chaired by Prime Minister Narendra Modi on the prices of fertilizers.

This will take the fertilizer subsidy outlay for 2021-22 to Rs 943.1 billion from a budgeted outlay of Rs 795.3 billion.

In a statement released by centre, said, "It was discussed that the price of fertilisers is undergoing an increase due to the rising prices of phosphoric acid, ammonia etc. internationally. PM stressed that farmers should get fertilisers at old rates despite the international rise in prices".

It added that a decision was taken to increase the subsidy for diammonium phosphate (DAP) fertilizer from Rs 500 to Rs 1200 per bag, an increase of 140%.

"Thus, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs 1200 and the central government has decided to bear all the burden of price hike," it said.

Earlier this month, the central government had asked the fertiliser industry to maintain retail prices of fertilizers at 'reasonable' levels, as the cost of their raw materials and imports surged due to an uptick in global commodity prices.

Note that this is the government's second big decision in favour of farmers, following the direct transfer of Rs 206.7 billion to farmers' accounts under PM-KISAN scheme on Akshay Tritiya day.

How this pans out remains to be seen. Meanwhile, we will keep you updated on the latest news from this space.

Deepak Fertilisers, Chambal Fertilisers and Rashtriya Chemicals & Fertilizers ended the day up 2.5%, 2.6% and 4.5%, respectively on the BSE.

On the other hand, share price of Tata Chemicals ended the day down by 0.8% on the BSE.

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