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ITC Q2 profit, revenue rise but shares extend losses

by 5paisa Research Team 28/10/2021

Cigarette-to-hospitality conglomerate ITC Ltd has reported a 10% increase in its consolidated net profit for the second quarter as sales rose, but its shares continued to fall after touching a one-year high earlier this month.

Profit for the July-September climbed to Rs 3,714 crore from Rs 3,368 crore during the year-ago period. 

Sequentially, the profit after tax grew 13% from Rs 3,276 crore in the three months ended June.

The rise in profit was in line with the increase in revenue from operations, which grew 13% to Rs 14,844 crore from Rs 13,147 crore during the year ago period. 

The numbers were above the estimates projected by several analysts, even though cigarette sales volumes were lower than expected. Jeffries, however, said in a report that lower cigarette volumes were offset by higher margins. 

Shares of ITC, a stock market laggard in recent years, fell 3% in early afternoon trade to Rs 231.25 apiece on the BSE, where the benchmark Sensex was 0.8% lower. The shares have declined 12.5% from a one-year high of Rs 265.30 apiece on October 18, but are still up 41% from a one-year low touched in October last year.

ITC Q2: Other highlights

1) Profit before tax rose to Rs 5,055 crore from Rs 4,565 crore a year earlier.

2) Revenue from the cigarette segment increased to Rs 6,219 crore from Rs 5,627 crore a year ago.

3) The cigarette segment saw a 10% increase in profit before tax to Rs 3,762 crore.

4) Revenue from the FMCG business rose 1% on a year-on-year basis to Rs 10,623 crore.

5) Revenue from the hotels business jumped 253% to Rs 311 crore as the hospitality sector recovered from the impact of Covid-related lockdowns

6) Revenue from other businesses grew just 2.8% over the year-ago period to Rs 4,043 crore.

ITC commentary

The company said it saw a broad-based recovery across sales channels and markets, as the intensity of the pandemic declined and the pace of vaccination picked up in the country. 

Although there was an uptick in demand, the positives were also offset by a steep inflationary impact on input costs as well as supply chain disruptions. 

ITC also reported a significant growth in its revenue from its agribusiness. This was mainly on account of growing exports of commodities like wheat, rice and leaf tobacco, as well as its strong sourcing network and the customer relationships, which it was able to take advantage of. 

The company launched two new hotel brands, ‘Storii by ITC’ and ‘Momentos by ITC’. Two new hotels were also launched in the country under the brand ‘Welcome’.

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Technical Analysis: Astra Micro gives channel breakout

Technical Analysis: Astra Micro gives channel breakout
by 5paisa Research Team 28/10/2021

Astra Micro was consolidating from the past 22 trading sessions and breaks out from a consolidation phase on October 28, 2021. Read on to find out more.

Astra Microwave Products Ltd indulges in the business of designing, developing and manufacturing sub-systems for radiofrequency and microwave systems that are particularly used in defence, space, meteorology and telecommunications.

The company in Q1 FY22 posted a net profit of Rs 9.66 crore compared to a net loss of Rs 83 lakh that was reported in Q1 FY21. However, on a sequential basis, the stock has witnessed a 62% fall in its net profits when compared with Q4 FY21 earnings. Speaking about revenue, the company reported 23% growth in its revenue to Rs 120 crore as against Rs 97 crore in Q1 FY21.

In the last one year, this small-cap stock has soared almost 131%, outperforming the Nifty Small Cap 100 Total Returns Index (TRI) that ascended 87%. Whereas in the last one and a half year, Astra Micro jumped fourfold. Having said that, the stock has broken out from the channel on the daily charts. Even the volumes seem to be elevated signalling the strength of breakout.

Looking at the technical indicators such as Relative Strength Index (RSI), which is presently trading at 66 level which is above its 20-Day Exponential Moving Average (EMA) of 60. However, from the present consolidation phase, it is showing a negative divergence. On the other hand, Moving Average Convergence Divergence (MACD) is showing positive signs as, at the time of breakout, it witnessed a positive crossover in the positive territory.

The immediate support is placed at 214 levels, whereas the 234.35-238.30 zone would be the resistance for the stock. It is advisable to invest in stock on a pullback. In fact, in today’s trade, we do see the stock price moving down. Therefore, entering on pullback o validation makes complete sense.

At the time of writing Astra Microwave Products Ltd was trading at 225.45.

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Multibagger Alert: This midcap IT stock has risen close to 323% in the past year!

Multibagger Alert: This midcap IT stock has risen close to 323% in the past year!
by 5paisa Research Team 28/10/2021

On a YTD basis the stock has given investors a 285% return in 2021.

Bengaluru-based IT services firm, Happiest Minds Technologies Limited has given investors stellar returns of 323.97% over the last year. The share price stood at Rs 309.20 on October 27, 2020, and since then, the stock has more than quadrupled investors wealth who are betting on the strong growth prospects for digital IT services across the globe in the post-covid world.

Happiest Minds was listed on the exchanges in September 2020 at Rs 350 on NSE and Rs 351 on BSE, against its issue price of Rs 165 to Rs 166 per equity share. Today Happiest Minds share price has gone up to Rs 1300 (at 12:50 PM). When the Happiest Minds IPO was launched, the response was very positive as it had big-name Ashok Soota as Executive Chairman. Ashok Soota was one of the 10 founders of Mindtree and is widely recognized as one of the pioneering leaders of the Indian IT industry.

With regards to the business operations, Happiest Minds Technologies deals in the cloud and digital business, where huge corporate investment is expected post-Covid-19. With services such as cloud and security and analytics accounting for 97% of its revenues, and hence the company is being touted more as a digital services firm than legacy IT players. Hence, the business model of the company augurs strong revenue in future.

The IT firm reported its Q2FY22 numbers yesterday, October 27, 2021. Operating Revenues in US$ terms stood at US$ 35.8 million, registering a growth of 8.0% QoQ and 44.9% YoY. In Indian Rupees, revenue stood at Rs 264.53 crore, up by 8.1% QoQ and 44.7% YoY. EBITDA and PAT both grew impressively by 42% and 30.4% respectively. The IT company had 8 client additions in the quarter and the total client base stood at 186 as of September 30, 2021.

At 12.50 pm on Thursday, the stock is trading at Rs 1300, down by 0.83% or Rs 10.90 per share on BSE. The 52-week high of the scrip is recorded at Rs 1,580.80 and the 52-week low at Rs 285.55 on the BSE.

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These penny stocks are locked in the upper circuit on Thursday

These penny stocks are locked in the upper circuit on Thursday
by 5paisa Research Team 28/10/2021

On Thursday, the benchmark indices are trading in red dragged by oil and gas, realty and power stocks. Sensex has tanked beyond 1000 points and Nifty is more than 300 points down. About 789 shares have advanced, 2247 shares declined, and 95 shares are unchanged up till 3 pm.

IndusInd Bank, L&t, Ultratech Cement, Asian Paints and Bajaj Finance are the top 5 gainers in the Sensex group whereas ITC, ICICI Bank, Kotak Mahindra Bank, Titan and Axis Bank were among the top 5 losers within the index. The stocks of IndusInd Bank has made fresh 52-week highs in Thursday’s trading session on the back of strong quarterly results in Q2FY22.

In the broader markets, the BSE Midcap and BSE Smallcap indices are seen trading in red similar to benchmark indices declining 1.36% and 1.46%, respectively. IRCTC is holding the top position in the BSE Midcap index zooming more than 10% whereas, in the smallcap space, Gokul Agro Resources is shining after gaining beyond 9.5% on Thursday. In Thursday’s trading session, the stock of Indian Railway Catering & Tourism Corp (IRCTC) rose 15% as the stock traded ex-split.

On the sectoral front, all the sectoral indices are trading in red with BSE Realty index plunging 3.39% in Thursday’s trading session. The worst performing stock dragging the index is Godrej Properties contracting up to 4.59% followed by Indiabulls Real Estate, DLF, Brigade Enterprises and Sobha.

During the session, several penny stocks were seen outperforming the markets gaining up to 4.92%.

Following is the list of penny stocks that locked in the upper circuit on Thursday, October 28.

Sr. No   

Stocks   

LTP   

Price Gain (%)   

1  

Sintex Industries   

5.35  

4.9  

2  

Sintex Plastics Technology   

6.05  

4.31  

3  

Llyods Steel   

6.7  

4.69  

4  

Ankit Metal Power   

4.25  

4.94  

5  

Indosolar Ltd   

3.95  

3.95  

6  

Usha Martin   

5.15  

4.04  

7  

Eastern Silk   

4.75  

4.4  

8  

Parenteral Drug   

3.8  

4.11  

9  

Premier Ltd   

4.2  

5  

10  

PVP Ventures   

5.15  

4.04  

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Rajeev Thakkar - A disciplined fund manager

 Rajeev Thakkar - A disciplined fund manager
by 5paisa Research Team 28/10/2021

A value investor, a man of few words whose plethora of work in the investment industry speaks on his behalf.

Rajeev Thakkar is the Chief Investment Officer of PPFAS ( Parag Parikh Financial Advisory Services Ltd). His tenure with PPFAS started in 2001 and in 2007 he became the CEO of the Fund house. He has worked since the inception of the flagship scheme of the Portfolio Management Service, titled "Cognito"

A Chartered Accountant, Cost Accountant, CFA Charterholder and a CFP Certificant, Rajeev Thakkar is an epitome of a disciplined fund manager who is unshaken by the transitory events, his beliefs are firmly influenced by Warren Buffet and Charlie Munger, a value investor, a man of few words whose plethora of work in the investment industry speaks on his behalf.

Rajeev Thakkar possesses over two decades of experience in various segments of the Capital Markets such as investment banking, corporate finance, securities broking and managing clients' investments in equities. He is the face of PPFC( Parag Parikh Flexi Cap Fund) and PPTSF (Parag Parikh Tax Saver Fund), which has a track record of strong performance vis a vis their benchmark indices Nifty 500 and Nifty50 since inception.

The funds cater to long term value investors by deploying active management strategies across sectors, market capitalization and geographies.

Since its inception in 2013, PPFC has delivered an annualized return of 21.11% against 16.35% and 15.24% returns by Nifty 500 and Nifty50 respectively.

Since its inception in 2019, PPFTS has delivered an annualized return of 32.51% against 26.82% and 24.03% returns by Nifty 500 and Nifty50 respectively.

The exception was last one year, where the Flexi Cap Fund has delivered annualized return of 57.38% against 62.87% and 58.84% returns by aforesaid benchmarks respectively. The tax saver fund has delivered 49.13% for the said period but gave better risk-adjusted returns vis a vis the benchmarks.

In an interview, he exclaimed that six months before the pandemic he had no clue to predict the fall and the sharp recovery, so there is no reason he could predict the future of the market now.

That said, he is not a believer in playing the momentum game (not a fan of cyclical), his deep-rooted belief in the virtues of value investing, a keen eye for ferreting out undervalued companies by employing a diligent and disciplined approach has been instrumental in the stellar performance of the scheme.

Famous Quote by Rajeev Thakkar

“While the risk-mitigating factors does not work in your favour beyond a point as you go on adding stocks, you may also find it difficult to manage a large holding”

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These Low-Priced stocks are locked in the upper circuit on Thursday, October 28

These Low-Priced stocks are locked in the upper circuit on Thursday, October 28
by 5paisa Research Team 28/10/2021

Some of the low-price shares were seen outperforming the markets in Thursday’s trading session.

The markets are in a panic with the BSE Sensex rattling beyond 1000 points on Thursday.

Despite a red day for the market, IndusInd Bank is the top BSE Sensex gainer up by more than 2.5% on Thursday while ITC is the top BSE Sensex loser on Thursday. The rise in IndusInd Bank shares was on the back of stellar quarterly results reported by the company for the quarter ended September 30, 2021.

Along with IndusInd Bank, L&T, Ultratech Cement, Asian Paints and Maruti Suzuki are only the BSE Sensex gainers. The broader market is seen outperforming the frontline indices in the Thursday trading session with both BSE Midcap and BSE Smallcap trading in red down by 388.37 and 450.92 points, respectively.

Gokul Agro Resources, Sanghvi Movers, Asahi Glass India, Menon Bearings and Krishna Institute of Medical Sciences are some of the top BSE Smallcap index gainers on Thursday.

IRCTC, Sona BLW Precision Forgings, ABB India, Whirpool India and TVS Motors are some of the top-performing BSE Midcap index constituents. Union Bank which outperformed in the previous trading session is the worst performing BSE Midcap stock on Thursday.

BSE Bankex, BSE Realty, BSE Power and BSE Oil & Gas are the weakest performing sectoral indices in Thursday’s trading session.

The price-volume breakout is seen in some of the low-priced stocks on Thursday with several stocks being locked in the upper circuit.

Following is the list of low-priced stocks that are locked in the upper circuit in Thursday’s trading session:

Sr. No   

Stocks   

LTP   

Price Gain (%)   

1  

3i Infotech   

37.6  

4.88  

2  

Brightcom Group   

76.45  

4.94  

3  

Andhra Cements   

19.6  

4.81  

4  

Digicontent   

13.45  

4.67  

5  

Digjam Ltd   

25.25  

4.99  

6  

Rohit Ferro Tech   

17.05  

4.92  

7  

Twentyfirst century   

53.3  

1.91  

8  

One Point One Solutions  

55.15  

4.95  

9  

Praxis Home Retail   

36.9  

4.98  

10  

Atlanta Ltd   

14.15  

4.81  

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