Sensex Trades Flat Tracking Mixed Global Cues; Tata Motors & SBI Top Losers

Asian share markets are mixed today tracking falls on Wall Street over lingering uncertainties about the fast-spreading Omicron variant, inflation, and Ukraine worries.

The Nikkei is up 0.3% while the Hang Seng is down 1.6%. The Shanghai Composite is trading lower by 0.9%.

In US stock markets, Wall Street indices ended lower on Monday as investors digested recent quarterly results from Facebook owner Meta Platforms and other mega-caps, while Peloton jumped following reports of interest from potential buyers, including Amazon.

The Dow Jones ended flat while the Nasdaq Composite dropped 0.6%.

Back home, Indian share markets are trading on a flat note. Benchmark indices are trading flat tracking mixed cues from Asian peers.

Adani Group's FMCG firm - Adani Wilmar listed on the bourses today. The company had raised Rs 36 bn via its IPO.

Market participants are tracking shares of Bharti Airtel, Godrej Consumer, Gujarat Gas, IRCTC, and Bata India as these companies will announce their December quarter results today.

The BSE Sensex is trading down by 18 points. Meanwhile, the NSE Nifty is trading lower by 8 points.

Bajaj Finserv and Dr. Reddy's Lab are among the top gainers today. SBI, on the other hand, is among the top losers today.

The BSE Mid Cap index is up 0.1% while the BSE Small Cap index is trading lower by 0.4%.

Sectoral indices are trading mixed with stocks in the power sector and banking sector witnessing selling pressure.

Healthcare stocks and energy stocks, on the other hand, are trading in green.

Shares of Jindal Stainless hit their 52-week high today.

The rupee is trading at 74.61 against the US$.

Crude oil prices eased ahead of the resumption of indirect talks between the US and Iran which may revive a nuclear deal that could lead to the removal of sanctions on Iranian oil sales, increasing global supplies.

Gold prices are trading up by 0.1% at Rs 48,260 per 10 grams.

Meanwhile, silver prices are trading down by 0.3% at Rs 61,830 per kg.

Gold is steady today as inflationary pressures kept the safe-haven metal-supported near the previous session's one-week high.

In news from the steel sector, managing director of Tata Steel TV Narendran said the steel industry will lead private sector investments in India as manufacturers make healthy profits during the ongoing cycle of high commodity prices.

In an interview, he said that the profits that Tata Steel makes, pretty much all of it, flow back into the country as investments.

Here's an excerpt from the interview:

And when you look at triggering private sector investment, I think the steel industry can certainly lead the way and we should allow the steel industry to do that with more capacity in India.

Last week, Tata Steel reported a stellar set of numbers. It reported a net profit of Rs 95.7 bn.

As per reports, the top three producers - Tata Steel, JSW Steel, and ArcelorMittal-Nippon Steel have discussed plans of investing up to Rs 1.5 lakh crore over an unspecified period.

Explaining Tata Steel's rationale for buying Neelachal Ispat Nigam (NINL) for Rs 121 bn, which many termed as an expensive purchase, Narendran said that the asset was a perfect match for India's oldest steel maker.

With this acquisition, Tata Steel can sufficiently meet its growth ambitions for the coming decade and organically reach up to 50 m tons per annum (MTPA) of production capacity.

Tata Steel's share price is currently trading up by 0.6%.

Moving on to news from the auto-ancillary sector, Minda Industries is among the top buzzing stocks today.

Minda Industries, the flagship firm of UNO Minda Group has reported a 13% fall in its profit after tax (PAT) to Rs 1.2 bn for the December 2021 quarter.

The company had posted a PAT of Rs 1.4 bn in the corresponding quarter last year.

Its revenue from operations during the quarter under review rose a mere 7% to Rs 21.8 bn.

The muted show was amid rising input costs which continued to have an impact on the profitability and margin of the business.

In a statement, the company's CFO Sunil Bohra said:

Along with good numbers, the company has successfully entered into multiple arrangements with strategic partners to synergistically drive the next chapter of the Group's success story.

He further added that Minda has been actively engaged with the top new-age electric two-wheeler original equipment manufacturers (OEMs) and now secured orders of over Rs 4 bn of peak annual sales value from the two players.

The peak sale is expected in fiscal 2025 as they ramp up production with the increasing adoption of electric two-wheelers.

Minda Industries' board approved and declared an interim dividend of Rs 0.5 per share, i.e., 25% on its face value of Rs 2 for the financial year 2021-22. 17 February 2022 has been fixed as the record date for the same.

While announcing results, the auto parts firm also said it is increasing its stake in the subsidiary company Minda Kosei Aluminum Wheels (MKA) to 77.35% from 70%, with an investment of Rs 612 m in the venture.

A 70:30 joint venture company between Minda Group and Kosei International Trade and Investment Company, Japan (Kosei Japan), Minda Kosei is into the development, manufacturing, and sales of aluminum alloy wheels for major car OEMs and aftermarket in India.

Meanwhile, the company also said it will invest around Rs 174.9 m to acquire the remaining stake of promoters in four partnership firms, namely Samaria Engineering, SM Auto Industries, YA Auto Industries, and auto components.

This is in line with Minda's consolidation efforts. The group had initiated a consolidation exercise five years ago.

Minda Industries' share price is currently trading lower by 6.4%.

Note that Minda Industries forms part of the elite list of stocks that turned Rs 1 lakh into 1 crore in the past 10 years.

From trading at Rs 10 back in 2011, Minda Industries shares currently trade at Rs 1,000.

The company's focus on the automotive sector has made it eligible to ride the growth on multiple fronts. For example, between 2012-14, when everyone was going crazy over the solar hype, Minda group too invested in it, only to realize later that wasn't a cup of their tea. The group immediately exited the business and since then, focused solely on automobiles.

Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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