CarTrade Tech's Disappointing Debut, Aarti Industries' Demerger, and Buzzing Stocks Today

Mon, 23 Aug Pre-Open

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Indian share markets ended on a negative note on Friday.

Benchmark indices witnessed a sharp selloff as investors shunned riskier assets amid concerns over tapering of US stimulus later this year and fast spreading of Covid-19 Delta variant.

At the closing bell on Friday, the BSE Sensex stood lower by 300 points (down 0.5%).

Meanwhile, the NSE Nifty closed lower by 118 points (down 0.7%).

Hindustan Unilever and Britannia Industries were among the top gainers.

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

The BSE MidCap index and the BSE SmallCap index ended down by 1.9% and 1.8%, respectively.

Sectoral indices ended on a negative note with stocks in the metal sector and realty sector witnessing most of the selling pressure.

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

Shares of Mindtree and Hindustan Unilever hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading on a flat note at Rs 47,170 per 10 grams at the time of closing stock market hours on Friday.

Speaking of the stock market, India's #1 trader, Vijay Bhambwani shares the immediate impact of the Taliban on the Indian stock market, in his latest video for Fast Profits Daily.

Tune in to the video below to find out more:

Top Stocks in Focus Today

Among the buzzing stocks today will be Aarti Industries.

The board of directors of the company has approved the demerger of Aarti Industries, carving out Aarti Pharmalabs, which will house its pharma business along with specialty chemicals related to the pharma sector.

The company said the demerger will also result in Aarti Industries and Aarti Pharmalabs achieving operational efficiencies by streamlining of the relevant businesses.

Shareholders of Aarti Industries will get one share of Aarti Pharmalabs for every four shares they hold.

The record date for this is yet to be announced.

Reportedly, this demerger will enable the Aarti Pharmalabs to expand its presence in the fast moving pharma business in India and abroad.

It will result into two dedicated and focused business segments i.e. speciality chemical and pharma without any risk or overlap of one business over the other.

For financial year ending March 2021, Aarti Pharmalabs contributed 19.8% of total revenue for Aarti Industries. In the June quarter, the share stood at 18.4%.

Tata Elxsi share price will also be in focus today.

Tata Elxsi has collaborated with DStv Media Sales, a media sales organisation, to consult and collaboratively build a vision for the company's future growth.

DStv Media Sales (DMS) specializes in advertising on DStv's digital platforms and linear channels. The company's mission is to assist global and local companies in reaching a larger audience across Africa and expanding their brand presence with unique platforms and creative advertising.

As part of the major transformation goals set by the company, Tata Elxsi will establish an integrated cross-platform for linear and digital ad sales workflows.

The technology platform is expected to support the entire process, from media insights and analytics, bespoke campaign design and budget allocation, to campaign management, optimisation, and post-campaign expenditure analysis.

It will also include a custom programmatic trading portal that powerfully blends design and digital technologies to make it intuitive, easy and simple for DMS specialists, brand managers and media planners to develop and deploy omni-channel advertising campaigns.

Mindtree Shares Hit New High Amid Positive Growth Outlook

On Friday, shares of Mindtree surged over 6% and touched a new high of Rs 3,399.5 on the BSE, amid positive growth outlook.

The stock, which has been surging for the last three sessions, has soared around 110% from Rs 1,616 per share on the BSE in the last six months, against a 9% rise in the Sensex.

The mid-cap information technology (IT) consulting and services company reported a healthy set of numbers in the first quarter of the financial year 2021-22.

It's net profit jumped by 61.2% year on year (YoY) at Rs 3.4 bn in the June 2022 quarter.

While broad-based growth across verticals aided the company's revenue to rise by over 20% YoY at Rs 22.9 bn for the quarter, while it grew by 8.6% on quarter on quarter (QoQ) basis.

In dollar terms, Mindtree's revenue grew 7.7% sequentially and profit was up by 7.5%.

Similarly, the earnings before interest, tax, depreciation, and amortisation (EBITDA) margin was at 20.3%, down 166 basis points (bps) sequentially, mostly led by headcount addition.

The deal pipeline also grew by over 34% QoQ (up 28.9% YoY) to US$504 m. It added 3,442 employees in the quarter.

Mindtree has a healthy order book led by the closure of certain deals (especially banking, financial services and insurance). The increase in multi-year deals, renewals, higher demand from retail & CPG clients, and traction in cloud and customer experience, could bode well for the IT company.

CarTrade Shares Make a Weak Debut on the Bourses

Shares of multi-channel auto platform CarTrade made a weak debut on the exchanges as the stock listed with a 1.1% discount to its issue price of Rs 1,618 per share on Friday.

The stock opened at Rs 1,600 on the BSE and Rs 1,599.8 on the NSE.

The public offer had received healthy response from investors last week as it was oversubscribed by 20.3 times.

The portion set aside for qualified institutional buyers was subscribed 35.5 times and that of non-institutional investors was subscribed 41 times. The retail portion was booked 2.75 times.

The company had mopped up Rs 30 bn through its initial public offering (IPO).

It was a complete offer for sale (OFS) by existing shareholders including JP Morgan's CMDB II, Highdell Investment, Macritchie Investments, and Springfield Venture International.

CarTrade Tech is a multi-channel auto platform with coverage and presence across vehicle types and value-added services, providing services through platforms under several brands - CarWale, CarTrade, Shriram Automall, BikeWale, CarTrade Exchange, Adroit Auto and AutoBiz.

How the stock performs in the long term remains to be seen. Meanwhile, stay tuned for more updates from this space.

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