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Shares trade with minor gains; RIL slips after Q3 earnings

·6-min read

The domestic equity benchmark traded with minor gains amid significant volatility in morning trade. The Nifty was trading a tad above the 14,450 mark. Weakness in Reliance Industries offset gains in private banks.

At 10:24 IST, the barometer index, the S&P BSE Sensex, was up 141.59 points or 0.29% at 49,020.13. The Nifty 50 index was up 79.75 points or 0.55% at 14,451.65.

The slow pace of the COVID-19 vaccine rollout coupled with sparring by the US lawmakers over President Joe Biden's proposed $1.9 trillion Covid-19 relief plan worried investors as they imposed significant risks to the global economic recovery from the pandemic.

The investor community hoped for a reassurance from the Fed Chair Jerome Powell after Wednesday's policy meeting that $120 billion of monthly bond purchases won't be tapered any time soon.

In the broader market, the S&P BSE Mid-Cap index slipped 0.34% while the S&P BSE Small-Cap index lost 0.54%.

The market breadth was weak. On the BSE, 953 shares rose and 1493 shares fell. A total of 131 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 99,178,504 with 2,129,138 deaths. India reported 184,182 active cases of COVID-19 infection and 153,470 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

Results Today:

Among the Nifty stocks, Kotak Mahindra Bank (up 0.80%) and Larsen & Toubro (up 0.41%) will announce Q3 earnings today.

Aarti Drugs (up 0.40%), APL Apollo Tubes (up 0.56%), Astec Lifesciences (up 0.70%), Can Fin Homes (up 0.80%), Chennai Petro (down 1.78%), ICICI Securities (up 1.05%), Mahindra Holidays (up 1.74%), Navin Fluorine (up 1.23%), RPG Life (down 4.40%), Sharda Cropchem (up 1.96%) and UCO Bank (up 2.02%) are some other companies that will announce their quarterly earnings today.

Earnings impact:

Reliance Industries (RIL) slipped 3.78% to Rs 1972.10. On a consolidated basis, RIL reported 12.5% rise in net profit to Rs 13,101 crore on 23.12% decline in net sales to Rs 117,860 crore in Q3 December 2020 (Q3 FY21) over Q3 December 2019 (Q3 FY20). The net revenue increased 5.95% sequentially primarily due to higher price realizations and higher volumes in O2C segment, higher ARPU and FTTH expansion in digital services business.

Outstanding debt as on 31 December 2020 was Rs 257,413 crore ($35.2 billion). Cash and cash equivalents as on 31 December 2020 were at Rs 220,524 crore ($30.2 billion). Balance capital commitment receivables (on account of rights issue) are in excess of quarter-end net debt levels.

Jio Platforms (JPL) reported net profit of Rs 3,489 crore in Q3 FY21, a rise of 15.5% over Rs 3,020 crore in Q2 September 2020 (Q2 FY21). Revenue from operations rose 5.3% quarter-on-quarter (QoQ) to Rs 19,475 crore in Q3 FY21. Total customer base as on 31 December 2020 stood at 410.8 million, net addition of 5.2 million customers. Average revenue per user (ARPU) during the quarter of Rs 151 per subscriber per month as against Rs 145 per subscriber per month in the trailing quarter.

Reliance Retail's value of sales and services for Q3 FY21 decreased by 8% QoQ to Rs 37,845 crore while EBITDA for Q3 FY21 increased by 54% QoQ to a record Rs 3,087 crore, with underlying operating margin at 7%. Overall footfalls remained at similar levels to last quarter but still lower than pre-COVID levels. Overall revenue was further affected by the transfer out of the fuel retailing business to the RIL-BP JV and the decision to convert Reliance Market stores to fulfilment centers to enable city expansion of new commerce.

Oil to Chemicals (O2C) segment revenues for Q3 FY21 increased by 10% QoQ to Rs 83,838 crore primarily on account of higher volumes mainly in transportation fuels, PTA and polyester supported by improved product realization across polymers, intermediates and polyester.

Oil and Gas (Exploration & Production) Business revenues for Q3 FY21 increased by 21.4% QoQ to Rs 431 crore primarily due to higher commodity price realization and incremental production from R-Cluster.

The revenues of the Media Business recovered fully from the pandemic impact in Q3 FY21, rising sharply by 34% QoQ to Rs 1,422 crore. Festive season buoyancy and sustained elevation in media consumption largely eliminated the COVID-linked drag on ad-spending. Revenue of the primary business of broadcast and digital media (i.e ex-film production) grew 35% QoQ and 1% YoY, as a result of sustained viewership and faster than expected recovery in Ad revenues.

JSW Steel rose 1.48% to Rs 381.15. The steel major's consolidated net profit jumped nearly 13 times to Rs 2681 crore in Q3 December 2020 from Rs 211 crore in Q3 December 2019. Revenue from operations grew by 21% to Rs 21,859 crore in Q3 December 2020 from Rs 18,055 crore in Q3 December 2019.

JSW said that steel industry witnessed sharp demand recovery driven by restocking and higher demand from automotive, machinery, construction and infrastructure sectors aided by increased government spending. The company improved its average capacity utilization level to 91% in Q3 December 2020 from 86% in Q2 September 2020.

JSW Steel's saleable steel sales declined by 5% quarter on quarter to 3.95 million tonnes in Q3 December 2020. Domestic sales volume stood at 3.48 million tonnes, increasing 16% quarter on quarter and 13% year on year. The company said it calibrated its export volumes to 12% of total sales at 0.47 million tonnes.

HDFC Life Insurance Company slipped 1.29% to Rs 678.75. The life insurer's consolidated net profit rose by 4.9% to Rs 263.44 crore on a 81.4% jump in total income to Rs 21,128.63 crore in Q3 FY21 over Q3 FY20.

While the company's net premium income improved by 20.8% to Rs 9,488.84 crore, net income from investments increased by 3.1 times to Rs 11,594.24 crore in Q3 December 2020 over Q3 December 2019.

Value of New Business remained flat at Rs 1,408 crore in the nine months ended in December 2020 (9M FY21) from Rs 1,407 crore in the nine months ended in December 2019 (9M FY20). New business margin stood at 25.6% in 9M FY21 as compared to 26.6% in 9M FY20. The company's operating expense ratio fell to 12.1% in 9M FY21 from 13.7% in 9M FY20.