4 Factors Why Stock Markets Surged, Tata Motors Quarterly Results, and Buzzing Stocks Today

Tue, 2 Nov Pre-Open

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Indian share markets ended on a strong note yesterday.

Benchmark indices reversed their 3-day losing streak led by renewed buying interest in metal, IT and select financial shares following the recent correction.

Sensex reclaimed the 60,000-mark and surged to a high of 60,220, while the Nifty touched a high of 17,954.

Broader markets also logged strong gains in today's session.

At the closing bell yesterday, the BSE Sensex stood higher by 832 points (up 1.4%).

Meanwhile, the NSE Nifty closed higher by 258 points (up 1.5%).

IndusInd Bank and Hindalco were among the top gainers.

UPL and Bajaj Finserv, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 1.8% and 1.1%, respectively.

On the sectoral front, gains were largely seen in the metal sector, realty sector and telecom sector.

Shares of Blue Star and Minda Corporation hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading up by 0.1% at Rs 47,686 per 10 grams at the time of closing stock market hours yesterday.

Here are 4 Factors Why the Stock Markets Surged Yesterday

Positive Macro Data: Goods and Service Tax (GST) collections for October, the beginning of a demand-boosting festive season, came in at Rs 1.3 tn, compared to Rs 1.2 tn in September, indicating strengthening economic recovery in the second half of the fiscal year 2021-22.

October GST collections were not only the second highest for the fiscal year, but the second highest monthly collections since the introduction of the nationwide tax in 2017. The highest ever was also this year, at Rs 1.4 tn in April.

In a statement, Financial Minister said,

• This is very much in line with the trend in economic recovery. This is also evident from the trend in the e-way bills generated every month since the second wave.

IPO Frenzy: After a month-long gap, the primary market is heading for a busy time, with 5 firms including Paytm's parent One97 Communications and Policybazaar parent PB Fintech lining up their IPOs to raise over Rs 270 bn collectively.

The other three firms are Sapphire Foods India, which operates KFC and Pizza Hut outlets, decorative aesthetics supplier SJS Enterprises and microcrystalline cellulose manufacturer Sigachi Industries.

Healthy September Quarter Results: Yesterday's market rally was also supported by better earnings from IRCTC, SAIL and HDFC.

Mortgage lender HDFC reported a standalone net profit of Rs 37.8 bn for the quarter ended 30 September 2021. This is an increase of 32% from Rs 28.7 bn in the same period last year as dividend income soared.

While, domestic steel giant SAIL India reported an over 10-fold jump in its consolidated net profit at Rs 43.4 bn for the second quarter ended September 2021, mainly on low-base effect.

Sectoral Gains: Market participants bought shares across the board after the recent correction bought valuations down. Metal, telecom, realty, banking and IT - all indices witnessed strong gains.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

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Top Stocks in Focus Today

Among the buzzing stocks today will be Tata Motors.

Homegrown auto major Tata Motors posted a consolidated net loss of Rs 44.2 bn for the second quarter ended 30 September 2021.

In the same quarter last year, the company posted a net loss of Rs 3.1 bn.

The total revenue from operations stood at Rs 613.8 bn for the quarter under consideration. It was Rs 535.3 bn for the same period year ago.

The company's earnings before interest, taxes, depreciation and amortization (EBITDA) declined 37.7% to Rs 41.2 bn in quarter two of 2022 over Rs 61 bn in the same period last year.

Coming to Jaguar Land Rover (JLR), the company reported a revenue of £ 3.9 bn and a pre-tax loss of £ 302 m for the second quarter.

Free cash outflow was £ 664 m, after £ 484 m of investment spending and £ 501 volume-related working capital outflow.

This was significantly better than prior guidance for a £ 1 bn free cash outflow, reflecting prioritised production of higher-margin products and cost controls to reduce the cash break-even point for the company.

In a statement, JLR CEO Thierry Bollore said,

• The global semi-conductor shortage remains challenging but I'm pleased to see the actions we have been implementing reduce the impact.
  
  With strong customer demand with a record order book we are well placed to return to strong financial performance as semiconductor supply begins to improve.

IRCTC share price will also be in focus today.

Indian Railway Catering & Transportation Corporation (IRCTC) reported a 386% year on year (YoY) rise in net profit to Rs 1.6 bn for the quarter ended September 2021.

The platform company's revenue from operations in the quarter spiked 357.3% YoY to Rs 4 bn.

Both the bottomline and topline of the company were aided by a low base in the year ago quarter and improvement in demand in the said quarter.

While all segments of IRCTC performed strongly on a YoY basis, the largest segment - Internet ticketing - had a stellar quarter.

Sales from internet ticketing spiked 355% YoY to Rs 2.7 bn as the company saw robust railway ticket sales in the quarter as travelling picked up.

The reopening of states post the second wave of the Covid-19 pandemic along with a high vaccination rate improved mobility in the economy during the reported quarter.

Catering, which is the second-largest revenue contributor, saw its sales rise 315% YoY to Rs 714 m in the reported quarter as the government eased restrictions on serving of food on railway platforms as well as on trains.

The surge in business activity also meant higher costs for the company. During the quarter, total expenses incurred by the company nearly doubled to Rs 2.1 bn, largely led by catering and tourism services.

Nykaa IPO Subscribed 82 Times on Final Day

The initial public offering (IPO) of Nykaa and Nykaa Fashion operator FSN E-Commerce Ventures was subscribed 82 times by 1 November 2021, the final day of bidding of the issue that opened on 28 October.

The offer has received bids for 2165 m equity shares against an IPO size of 26.4 m equity shares, as per the subscription data.

Qualified institutional investors (QII) put in bids 91.18 times the portion set aside for them and non-institutional investors bought 112.02 times the shares against their reserved portion.

A part set aside for retail investors was subscribed 12.06 times and that of employees saw 1.87 times subscription.

Falguni Nayar-promoted Nykaa aims to mop up Rs 53.5 bn through IPO. The offer consists of a fresh issue of Rs 6.3 bn and an offer for sale (OFS) of Rs 47.2 bn worth of shares by the promoter and investors.

India's Manufacturing PMI Gains Steam in October

Growth in manufacturing activities in India continued gathering momentum, remained in the expansion territory for the 4th straight month in October.

The seasonally-adjusted IHS Markit Purchasing Managers' Index came in at 55.9 in October, rising from 53.7 in September. Do note, a PMI number greater than 50 indicates expansion in business activity. A number less than 50 shows contraction.

Data shows that panelists continued to report rising prices for several materials and transportation. Selling charges had to be lifted again as overall input costs increased at the sharpest rate since February 2014.

Pollyanna De Lima, Economics Associate Director at IHS Markit said,

• Manufacturing activity will continue to expand throughout the third quarter of fiscal year 2021-22 should the pandemic remain under control.

New orders also posted an increase in October. In fact, the spike in new orders was quite sharp, the survey shows, and expanded at the fastest rate in seven months. And as such, factory output too saw a sharp recovery and was the increased at the fastest pace since March.

Highlighting the inflation concerns, De Lima noted that the input cost inflation accelerated substantially in October, to a near eight-year high amid strong global demand for scarce raw materials. The overall rate of input cost inflation surged to a 92-month high. A vast majority of the manufacturers left their fees unchanged, which led to 'moderate overall inflation'.

We will keep you posted on more updates from this space. Stay tuned.

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

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