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An investment of Rs 2,000 pm would have made Rs 3 lakh in eight years

An investment of Rs 2,000 pm would have made Rs 3 lakh in eight years
by 5paisa Research Team 29/10/2021

If you had invested Rs 2,000 every month then by now your worth of investment would have been approximately Rs 3,80,000.

An individual can create huge wealth by investing via a Systematic Investment Plan (SIP). Mutual fund offers an investor two investment options such as SIP and Lump sum. SIP option is feasible to all types of individuals whether they have low income, moderate-income or high income as it can be started as low as Rs 100 or Rs 500 which vary according to the mutual funds. SIP aids an individual to make the habit of investing regularly.

Mutual funds offer various types of schemes such as debt-oriented schemes, equity-oriented schemes, hybrid schemes and other schemes which are divided into various categories. One of the prime benefits of investing via SIP is rupee cost averaging. Investors, who are at an early stage of earning, have a high-risk capacity as compared to mid-earning or pre-retirement and retirement stage investors. So, investors with high-risk capacity can invest the amount in equity-related schemes in their early stage and further, can shift some proportion to debt once they get decent returns from the equity markets.

Let’s look at an example:

If you had invested just Rs 2000 per month in any large-cap fund, for instance, Nippon India Large Cap Fund from the year 2013 till date, then what will be your worth of investment as of now?

 
Details:

Start date of investment: October 1, 2013

Worth of investment as of: October 1, 2021

Rate of return on SIP: 15.57% 

Term of investment: 8 years i.e., 96 months.

Per month SIP investment amount: Rs 2,000

Worth of investment as of October 1, 2021:  FV(15.57%/12,8*12,-2000,0,1) = 3,82,058

As you can see in the above calculation, the worth of investment will be Rs 3,82,058. So, you can create wealth by just investing Rs 2,000 every month. In all, invested amount is Rs 1,92,000 in 8 years, which is increased to Rs 3,82,058. As and when your earnings increase, you can increase your SIP amount from Rs 2,000 to Rs 3,000 or Rs 5,000 with whichever amount you are comfortable with. 

Investing an amount for a longer period helps investors to reap maximum returns as compounding is a boon in the longer term.

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Closing Bell: Markets close red for a third straight session, Sensex falls by 678 points, Nifty ends at 17671

Closing Bell: Markets close red for a third straight session, Sensex falls by 678 points, Nifty ends at 17671
by 5paisa Research Team 29/10/2021

Domestic benchmark indices ended the week on a weak note for the third consecutive day on October 29, 2021.

The Indian markets closed in red for the third day in a row on Friday, dragged by banking and financial services shares. Index heavyweight Reliance Industries came under selling pressure. Consistent selling by foreign institutional investors amid a downgrade of Indian equities by global investment bank Morgan Stanley dented the investor sentiments. During today's trade, the Sensex fell as much as 895 points and the Nifty index touched an intraday low of 17,613.

At the closing bell, the Sensex was down 677.77 points or 1.13% at 59,306.93, and the Nifty was down 185.60 points or 1.04% at 17,671.70. On the overall market breadth, around 1326 shares have advanced, 1836 shares declined, and 157 shares are unchanged.

Top losers in the Friday trading session were, Tech Mahindra, NTPC, Kotak Mahindra Bank, IndusInd Bank, Reliance and L&T. Top gainers of the day were, UltraTech Cement, Maruti Suzuki, Cipla, Dr Reddy’s Laboratories and Shree Cements.

Among the sectors, bank, IT energy, power and oil & gas indices closed in red, while buying was witnessed in the realty, pharma, metal and auto shares. In the broader markets, the BSE midcap and smallcap indices ended with marginal change.

On stock activity, shares of the Indian Railways' catering, tourism and online ticketing arm - Indian Railways Catering and Tourism Corporation (IRCTC) staged a strong recovery after the Ministry of Railways withdrew IRCTC convenience fee-sharing decision.

RBL Bank today went down as much as 15 per cent to hit an intraday low of Rs 172.10 a day after it reported September quarter earnings.

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Dr Reddy’s beats street estimates with 30% jump in Q2 profit

by 5paisa Research Team 29/10/2021

Dr Reddy’s Laboratories Ltd, one of the largest homegrown drugmakers, came up with strong results for the second quarter with double-digit growth in both revenue as well as profit.

Dr Reddy’s consolidated net profit rose 30.2% to Rs 992 crore from Rs 762.3 crore in the quarter ended September 2020, powered by a sharp jump in numbers from its proprietary products unit.

The company had clocked a net profit of Rs 571 crore in Q1. This translates into a 74% jump in earnings on a sequential basis.

Meanwhile, revenue for the second quarter rose 17.7% to Rs 5,763.2 crore from Rs 4,897 crore a year earlier and compared with Rs 4,919 crore in the quarter ended June 30.

Analysts were expecting revenue to grow in single digits to around Rs 5,100-5,200 crore while they expected profit to be under Rs 700 crore.

Dr Reddy’s share price was up 1% at Rs 4,621 apiece in a weak Mumbai market as of 3.30 PM on Friday.

Dr Reddy’s Q2: Other highlights

1) EBITDA margin rose to 27% from 20.7% in same quarter last year and 25.9% in Q1.

2) R&D expense proportion declined to 7.7% as against 8.9% in Q2 FY21 and 9.2% in Q1.

3) Global generics unit’s revenue climbed 19% to Rs 4,743 crore, powered by 50% growth in emerging markets (excluding India) to Rs 1,298.5 crore.

4) India revenue was up 25% to Rs 1,140.2 crore. European sales grew 10% to Rs 413.5 crore.

5) The mainstay North America unit saw a 3% growth over the year-ago period.

6) Pharmaceuticals and API business declined 2% to Rs 8,372 crore over Q2 FY21.

7) Proprietary business jumped on account of recognition of a licence fee associated with the sale of US and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/ml to BioDelivery Sciences International, Inc.

Dr Reddy’s management commentary

GV Prasad, the company’s co-chairman and MD, said the company recorded an improvement in its financial performance across its businesses.

“While we continue to strengthen our core businesses of generics and APls, we are also making investments in our long-term growth drivers and deeper innovation capabilities,” he said.

“Our focus remains on meeting unmet patient needs around the world in keeping with our purpose,” he added.

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Larsen & Toubro reports stellar performance in Q2FY22 despite COVID challenges

by 5paisa Research Team 29/10/2021

L&T's 2QFY22 operational results were better than estimated, and the margins reported in both the segments were exceptional.  Core business performance was affected by COVID challenges and uncertainties, however, margins fared better and were unhindered. Despite COVID challenges, in 2HFY22, the company believes that the long term business prospects remain promising and expects traction towards the core business and GATI Shakti remains a key pivotal theme to revive and put the Indian Economy on a growth trajectory.

Operational performance reported better than estimated margins in both segments. Sales stood at 12% YoY (Rs. 348bn), core segment revenue stood at Rs. 228bn, up 12% YoY and segment revenue stood at Rs.  120bn (13%) YoY basis, EBITDA stood at Rs. 40bn, service margins stood at 18.2% (+80bps) YoY while core business margins stood at 8% (+56bps) YoY and Adjusted PAT was reported at Rs. 17.2bn, up by 56%, YoY basis.

Core business (ex-services) sales registered strong growth of 12% YoY while margins positively improved to 8% (+60bps) YoY basis as L&T adopted a calibrated approach in executing projects supported by cashflow availability and improvement in infrastructure segment. Domestic E&C segment grew by 27% YoY in 2QFY21 whereas Overseas E&C revenue declined by 22% YoY. The Infrastructure sector margins improved to 8.3% by 190bps YoY whereas margins in the Heavy engineering & defence, hydrocarbon and power sector remained under pressure and declined 140, 20, and 40bps YoY respectively, partially due to offsetting the margin improvement of the infrastructure segment. 

Execution has resumed at all sites, with sites operating with labour availability at pre-COVID levels. Execution can witness sharp pick up going ahead as productivity related challenges are broadly addressed, order backlog remains healthy 
and company has not seen any cancellations of awarded orders. 
During 2QFY22, delays in deliveries due to COVID heavily impacted the order inflow which stood at Rs. 421bn (up by +50% YoY), and working capital cycle for 2QFY22 stood at 22% vs 26.7% in 1HFY21, L&T extremely healthy ordering pipeline at Rs.6.8t which includes domestic orders worth Rs. 4.7t and international orders worth Rs. 2.1t. The backlog in orders stands at INR3.3t (+11% YoY) which provides strong revenue visibility and comfort on Core E&C revenue.
 

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Titan Q2 results | Titan’s sales performance and high EBIT margins drives earnings growth

by 5paisa Research Team 29/10/2021

Titan's robust margin expansion and earnings growth was driven by stellar sales performance along with the rate of expansion in EBIT margin across all its businesses in Q2FY22. 

Titan's total revenue excluding bullion segment sales grew by 76% YoY to Rs. 7.03bn and including bullion sales, grew 66% YoY. Jewellery revenue, including bullion sale, grew 64% YoY, EBIT margin was higher than pre-pandemic levels and sales during the quarter were primarily driven by higher wedding sales (+81% YoY) vs sales in FY21 and FY22. Titan expects for a favourable festive season followed by a wedding season which would drive sales and profitability. During 1HFY22, Titan opened 15 Tanishq stores and is targeting to open another 20 stores in 2HFY22. The management believes that an EBIT margin of 12-13% is sustainable going ahead.

In Q2FY22, revenue for watches & wearables segment grew 72% YoY to Rs. 6.87bn. E-commerce channel reported sales stood at 25% vs 18% of sales in pre-pandemic period whereas retail channel recovery stood at +90% of pre-pandemic levels. Tier-2 cities have posted better recovery than when compared to Metros. The EBIT of watches and wearables segment stood at Rs. 920mn in 2QFY22 vs loss of Rs. 40mn in 2QFY21. Better scale of operations and expansion in gross margin improved the profitability and will continue this trend going forward. The main focus is on analog watches to drive sales and has gained share in its multi brand outlets. 

On the other hand, Titan's eyewear revenue surpassed pre-pandemic levels during 2QFY22 and reported a revenue growth of 70% YoY at Rs. 1.6bn and the highest ever EBIT margin of 23%. The jump in the EBIT margin was caused by changes to improve gross margin and cost reduction in the last 18 months. However, going ahead, the company stated that it will be difficult to sustain these margins during the next few quarters. Higher contribution of own brands has been one of the key factors aiding gross margins during the quarter.
 

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ITC Q2 results | Pre-COVID volumes in cigarette and strong performance in Paperboard segment drives recovery

by 5paisa Research Team 29/10/2021

ITC's 2QFY22 performance was driven by recovery in cigarette volumes and strong performance in the paperboard segment. Overall net sales stood at Rs. 1,27,310mn grew 13.8% YoY and 4.2% QoQ, PAT stood at Rs. 36,972mn, grew 14.4% YoY and 22.7% QoQ, and EBITDA stood at 13.7% (down by 6 bps) YoY and 15.6% (up by 357 bps) QoQ.

Cigarette net segment grew 10.3% with volume growth of 10% on a low base, FMCG sales grew 6% on a high base of 15% and Paperboard segment sales grew strongly by 25%.

The cigarette segment saw a faster recovery in demand and volumes in 2nd wave compared to 1st wave with exit cigarette volumes were back to pre-COVID levels. The EBIT of the segment grew by 10%. Easing restrictions and increasing mobility helped increase volumes on a sequential basis. However, East India and Kerala did not contribute much to this recovery growth. In the quarter, the company launched differentiated offerings like Classic Connect, Gold Flake Neo Smart Filter, Gold Flake Kings Mixpod, American Club Smash, Wave Boss and Flake Nova and 5s pack of Gold Flake Premium, Capstan Special and Flake Mint in line with evolving consumer preferences and in focus markets, it launched modernised and refreshed packs of Flake Excel, Wills Navy Cut Filter, Berkeley Hero.

Snacks, confectionery, and beverages performed well while discretionary or out-of-home categories recorded strong growth in the FMCG segment. Despite moderate growth witnessed in staples and convenience foods, the revenue generated was above pre-COVID levels. Input cost inflation impacted the margins which declined by 40bps to 10%, however, FMCG EBITDA remained unhindered and grew by 2%. EBIT margin remained stable at 6.7% on account of operating leverage and lower depreciation. Notably, availability in rural markets was enhanced through the scale-up of the stockist network (2x of last year), market coverage and direct outlet servicing at 1.4x and 1.1x of last year. 

Exports and cartons segment were the key growth drivers of the Paperboard segment. With the aid of in-house manufacturing of pulp, the margins remained stable even with input cost inflation in play. Paperboard segment EBIT grew 22% but margins contracted by 20bps to 22.4%. Despite shortage in availability of shipping containers/port congestion faced by Agri segment, EBIT grew 15% driven by favourable mix but revenue declined by 7%. Hotel revenue was back to 4QFY21 levels with easing restrictions. The strong recovery in occupancy levels and ARRs, but remained below pre-COVID levels.

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