Laggards strike back while winners take a pause
The news of promising results from the Covid vaccine trials of Pfizer Inc. has triggered strong investor interest in sectors such as hospitality, entertainment and travel, which have been underperforming in recent months. The prospect of businesses returning to normalcy led to a rise in the shares of Indian Hotels (+14.2%), Lemon Tree Hotels (+9.9%), PVR (+5.7%), Indigo (+8.8%) and IRCTC (+4.7%) today. The vaccine, which may require temperature-controlled distribution, has also buoyed hopes of business opportunities for logistics companies such as Snowman (+6.8%) and Blue Dart (+3.7%). On the flip side, shares of diagnostics players—Thyrocare (-8.4%), Dr Lal PathLabs (-5.8%) and Metropolis (-3.9%)—which were on the rise until recently, witnessed profit booking.
Tractors save the day for M&M
For Q2, M&M’s automotive segment (utility vehicles and commercial vehicles) revenues declined nearly 8% primarily due to lower volumes in the wake of lockdown restrictions. However, revenue from tractor sales bucked the trend by rising 33% and contributed to an overall revenue growth of 6% on a year-on-year basis. The net profit (before exceptional items) fell by 3% due to lower other income, despite strong cost control measures taken by the company. The stock has been witnessing consolidation for over three months now, but managed to gain 0.9% today, despite weak results.
Equitas SFB profit more than doubles in Q2
Shares of the recently listed Equitas Small Finance Bank were up 2.3% today, riding on strong Q2 results. The bank’s net profit jumped 108% on a year-on-year basis to ₹103 crore. It witnessed a 32% growth in its net interest income (i.e. the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors). Asset quality also improved as the proportion of gross NPAs decreased to 2.48% from 2.88% a year ago. Last year, the RBI had restricted the bank from opening new branches after it missed the deadline to list its shares. With the bank’s listing on 2 November 2020, these restrictions have now been lifted. The stock has gained 1.2% since listing.