Rise in D-Mart’s net profit triggers buying interest
Avenue Supermarts, which owns and operates D-Mart stores, reported a strong sequential rise in its net profit to ₹199 crore in Q2 (versus ₹40 crore in Q1) due to the improvement in month-on-month sales. In Q2, the demand for FMCG and staples was robust. However, demand for general merchandise and garments is yet to see a major pick-up as consumers have reduced discretionary spends. Also, supply-side challenges in that category are a cause for concern. In the coming quarter, consumer spending during the festive season in the wake of the pandemic will be a key to growth. Meanwhile, D-Mart’s stock rose 5.4% thanks to above-average volumes, indicating strong buying interest. Stock performance of other retailers such as Trent (-2.5%), Aditya Birla Fashion (+5.8%) and V-mart Retail (-0.5%) was mixed.
Revival plans bring cheer to DHFL & Jet Airways
Jet Airways (+4.9%) and DHFL (+9.9%), both of which are mired in financial troubles, hit the upper circuit today. In fact, Jet Airways has gained nearly 47% this month. The buying interest is due to the positive developments towards reviving these companies. In the case of Jet Airways, the committee of creditors approved the resolution plan of the Kalrock Capital–Murari Lal Jalan consortium, which has proposed to re-launch Jet as a full-service carrier, with an initial investment of ₹1,000 crore. On the other hand, four entities have reportedly submitted bids for a part of DHFL’s portfolio or the company as a whole. The revival of these troubled companies could turn into a win-win proposition for stakeholders.
HDFC Bank’s Q2 results beat street expectations
HDFC Bank, India’s largest private sector lender, reported net profit ₹7,513 crore in Q2, an 18% increase over the same period last year. The bank’s gross non-performing assets or NPAs (which reflect the quality of the loans given) improved and stood at 1.08% (versus 1.36% on 30 June 2020). Buying interest was also seen in other bank stocks, such as ICICI Bank (+5.1%) and Axis Bank (+4.1%). However, HDFC Bank’s shares witnessed profit booking, and the stock ended with a modest gain (+0.2%) after the initial cheer. PSU banks shares had an additional reason to rise, as there were reports that the government is looking to exit the PSU banks entirely when they are privatised. Smaller PSU banks, such as Central Bank (+9.8%), Bank of Maharashtra (+6.7%) and UCO Bank (+3.5%), saw a surge in stock prices.