Opening Bell

August 2, 2021

Market Outlook Today’s Highlights

Indian markets are likely to open higher tracking mixed Results: HDFC Ltd, Castrol, Kalyani Steel,
global cues as tensions around China's regulatory Emami, Avadh Sugar, Varun Beverages
crackdown eased and the US showed progress on its
Events: India imports, India exports, India
infrastructure plan. Also, the domestic market is likely to
trade balance, US manufacturing PMI
react on auto sales numbers for July 2021.

Index Movement
Markets Yesterday 55000 17000
 Domestic markets ended slightly lower on the back of losses 52000 16000
in metal and select BFSI stocks amid weak global cues that 49000 15000
were partially offset by gains in pharma stocks 46000 14000
43000 13000
 US markets ended lower amid corporate quarterly earnings 40000 12000
results and release of macroeconomic data

30-Jun

12-Jul

15-Jul

18-Jul

21-Jul

24-Jul

27-Jul

30-Jul
3-Jul

6-Jul

9-Jul
BSE (LHS) NSE (RHS)
Key Developments
 Output of eight core industries grew for a fourth Close Previous Chg (%) MTD(%) YTD(%) P/E (1yrfwd)
consecutive month, increasing 8.9% YoY in June 2021 (up Sensex 52,587 52,653 -0.1 0.2 10.1 25.9
16.3% in May 2021) on a lower base. Except for crude oil Nifty 15,763 15,778 -0.1 0.3 12.7 24.2
which de-grew 1.8%, all other sectors - steel (25%),
natural gas (20.6%), coal (7.4%) electricity (7.2%), cement Institutional Activity
(4.3%), refinery products (2.4%) and fertilisers (2%) CY19 CY20 YTD CY21 Yesterday Last 5 Days
reported growth in production in June. During April-June FII (| cr) 40,893 64,379 10,343 -3,848 -7,140
2021, the sectors' output grew 25.3% YoY DII (| cr) 44,478 -28,544 15,469 2,957 7,437

 HDFC Ltd’s loan growth is expected to surge to ~12% YoY World Indices – Monthly performance
to | 507800 crore, led by strong real estate sales. Hence, France Dow Jones NSE Nasdaq BSE
growth in NII is seen at 19.5% YoY to | 4055 crore. Expect 6,613 34,935 15,763 14,673 52,587
0.9% 0.4% 0.3% 0.2% 0.2%
flat NIM at ~3.2%. Dividend income of | 160 crore and
U.K. Kospi Shanghai Nikkei Germany
lower profit from sale of investments at | 263 crore led by
7,032 3,202 3,397 27,284 15,544
HDFC Ergo stake sale are likely to lead to overall other -1.3% -2.4% -3.5% -5.2% -6.8%
income at | 1065 crore. Provisions are seen at | 600 crore
after higher provisions in Q1FY21, Q4FY21. Accordingly,
standalone profit is seen flat at ~| 3055 crore YoY.
Restructuring in wholesale loan portfolio to be watched

Nifty
 Heat Map
Sun 774 1,210 920 Shree 28,266 675
TechM Cipla Adani Ports
Pharma 10.1% 7.2% 4.2% Cement 2.3% 2.3%
171 3,830 1,025 743 4,906
Power Grid Bajaj Auto HCL Tech M&M Divis Lab
2.2% 1.7% 1.7% 1.6% 1.3%
118 2,441 4,711 143 1,655
NTPC HDFC Ltd Dr Reddy Coal India Kotak Bank
1.2% 1.1% 0.8% 0.8% 0.8%
Markets Today (Updated till friday)
Tata 756 2,763 1,426 3,423 115
Hero Moto HDFC Bank Britannia ONGC
Consum 0.7% 0.6% 0.6% 0.5% 0.5% Commodities Close Previous Chng (%) MTD(%) YTD(%)
Gold (|/10 gm) 48,032 48,396 -0.8 2.5 -4.2
1,551 Tata 294 1,601 664 2,530
Grasim Ind L&T HDFC Life Eicher Silver (|/kg) 67,885 68,200 -0.5 -0.4 -0.3
0.4% Motors 0.4% 0.3% 0.2% 0.1% Crude ($/barrel) 76.3 76.1 0.4 1.6 47.4
2,333 6,978 1,611 205 587 Copper ($/tonne) 9,728 9,824 -1.0 4.0 25.5
HUL Maruti Infosys ITC Wipro
-0.1% -0.2% -0.4% -0.5% -0.6% Currency
USD/INR 74.4 74.5 -0.2 -1.0 -0.3
103 683 446 Reliance 2,035 3,167
IOC ICICI Bank BPCL TCS EUR/USD 1.2 1.2 -0.1 0.1 -2.8
-0.7% -0.7% -0.8% Ind. -0.9% -0.9% USD/YEN 109.7 109.5 0.2 -1.1 -5.4
Bharti 562 7,619 Indusind 981 709 17,703 ADRs
Ultratech Axis Bank Nestle
Airtel -1.0% -1.1% Bank -1.1% -1.2% -1.2% HDFC Bank 70.6 71.2 -0.9 -3.5 -2.3
ICICI Bank 18.6 18.8 -0.2 8.7 25.1
Asian 2,958 809 1,715 737 1,434
UPL Titan JSW Steel Tata Steel Tata Motors 19.7 19.8 -0.7 -13.6 56.2
Paints -1.3% -1.4% -1.4% -1.5% -1.7%
Infosys 22.1 21.9 0.9 4.4 30.5
432 Bajaj 14,222 1,099 Bajaj 6,228 445 Dr Reddys Labs 62.6 63.0 -0.6 -14.9 -12.3
SBI SBI Life Hindalco
-2.2% Finserv -2.6% -2.7% Finance -2.7% -2.9% Wipro 8.3 8.4 -0.8 6.7 47.4
 Opening Bell ICICI Direct Research

Key Data Points Exchange Cash Turnover (| crore)

Key Economic Indicator Period Latest Prior Values

68,030

61,528

70,711

67,626

74,356

76,758
100000
RBI Cash Reserve Ratio N/A 4.00% 4.00%
RBI Repo Rate N/A 4.00% 4.00%
50000

5,980
5,438

5,411
5,264

5,265

4,997
RBI Reverse Repo Rate N/A 3.35% 3.35%
CPI YY Jun 6.26% 6.30%
0
Current Account Balance Q4 -8.1bln $ -2.2bln $
23-Jul 26-Jul 27-Jul 28-Jul 29-Jul 30-Jul

Opening Bell
Exports - USD Jun 32.5 bln$ 32.3 bln$ BSE Cash NSE Cash
FX Reserves, USD Final Jun 610 bln$ 598 bln$
GDP Quarterly yy Q4 1.60% 0.40%
GDP Annual FY21 -7.30% 4.20% NSE Derivative Turnover (| crore)
15000000

9,627,514
Imports - USD Jun 41.8 bln $ 38.6 bln $

6,915,352
Industrial Output yy May 29.3% 134.4%

4,840,684
3,604,114
3,522,470
10000000

2,884,874
Manufacturing Output May 34.5% 197.1%
Trade Deficit Govt - USD Jun -9.4bln $ -6.3bln $
5000000
WPI Food yy Jun 6.7% 8.1%
WPI Fuel yy Jun 32.8% 37.6% 0
WPI Inflation yy Jun 12.1% 12.9% 23-Jul 26-Jul 27-Jul 28-Jul 29-Jul 30-Jul
WPI Manuf Inflation yy Jun 10.9% 10.8% NSE Derivative

Corporate Action Tracker Sectoral Performance – Monthly Returns (%)

Security name Action Ex Date Record Date Status Price (|)
Real Estate 16.1
Jagran Prakashan Buyback Ongoing

ICICI Securities – Retail Equity Research

Metals 12.6
Navneet Education Buyback Ongoing BSE Small Cap 6.2
Capital Goods 3.1
Infosys Buyback Ongoing
BSE Midcap 2.4
Brigade Enterprises Ltd Dividend 2-Aug-21 3-Aug-21 1.20 IT 2.4
Motilal Oswal Dividend 2-Aug-21 3-Aug-21 5.00 Consumer Durables 2.3
Healthcare 2.2
Nesco Ltd Dividend 2-Aug-21 3.00 FMCG -0.3
Ultratech Cement Dividend 2-Aug-21 37.00 Banks -0.4
PSU -0.4
Automotive Axles Dividend 3-Aug-21 4.50
Oil & Gas -4.5
Greaves Cotton Dividend 3-Aug-21 0.20 Power -5.0
JK Cement Dividend 3-Aug-21 15.00 Auto -5.4
Matrimony.com Ltd Dividend 3-Aug-21 4-Aug-21 3.50 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0
(%)

Key News for Today

Company/I News View Impact
ndustry
Sun Revenues grew 28.1% YoY to | 9718.7 crore. While the company’s US generics front is
Pharma Indian formulations grew 38.5% YoY to | going through calibrated product
3308.4 crore. US formulations grew to | 2800 rationalisation, the specialty segment
crore, up 31.1% YoY. Emerging markets looks promising due to robust product
business grew 22% YoY to | 1605.3 crore pipeline, steady progress. This
while RoW Markets business grew 32.8% metamorphic shift from generics to
YoY to | 1368 crore. API segment de-grew specialty, however, is likely to weigh on
1.4% YoY to | 587.8 crore. EBITDA margins US growth in the near term.That said,
expanded 472 bps YoY to 29.0% mainly due higher contribution from specialty and
steady employee expense. Subsequently, strong domestic franchise is likely to
EBITDA grew 53% YoY to | 2821.1 crore. change the product mix towards more
Adjusting for exceptional items in current and remunerative businesses by FY22
base quarter, PAT grew 81.1% YoY to |
2075.1 crore

ICICI Securities | Retail Research

 Opening Bell
Indian Oil IOC’s revenue fell 5.2% QoQ to | 155056.3
Corp (IOC) crore as marketing sales dipped 11.6% QoQ
due to the second wave of Covid-19. Crude
throughput was 16.7 MMT, down 5% QoQ
while reported GRM stood at US$ 6.6/bbl
supported by inventory gain of US$ 4.3/bbl.
EBITDA was | 11126.1 crore, down 17.6%
QoQ leading to PAT at | 5941.4 crore, down
32.3% QoQ
KEC KEC reported revenue at | 2540 crore, up
Internation 15.1% YoY, (above our estimate of | 2399.4
al crore) aided by strong growth in non-T&D.
EBITDA margins came in at 6.3% (below our
estimate of 7.9%), down 250 bps YoY, mainly
impacted by change in business mix, SAE
project cost overruns. PAT came in at | 46.1
crore (below our estimate of | 69.4 crore)
which declined significantly by 34.8% on YoY
basis, partly impacted by lower other income.
KEC’s YTDFY22 order inflow came in decent
at | 4401 crore while order book was at |
26000 crore (including L1)
Kansai Kansai’s Q1FY22 revenue, EBITDA and PAT
Nerolac were up ~118%, 132% and ~178% YoY to |
1301 crore, | 187 crore and | 119 crore,
respectively
V-Guard V-Guard’s Q1FY22 revenue was up 39% YoY
Industries to | 565 crore while PAT was up 7x YoY to |
~26 crore led by EBITDA margin expansion
by 565 bps YoY to 8.1%
ICICI Securities | Retail Research
ICICI Direct Research
IOC's results were better than our
estimates on the profitability front, mainly
on account of the marketing segment's
improved performance improved QoQ.
The second wave of Covid-19 and
subsequent restrictions on movement
affected petrol and diesel demand during
Q1FY22. In Q2FY22, a faster demand
recovery (mainly in diesel) with easing
restrictions will be key. Core GRMs are still
subdued and affecting the refining
performance. Improvement in product
cracks and recovery in fuel demand will be
important for IOC's performance in the
near term
KEC delivered muted Q1FY22
performance on the margins front while
execution was aided by strong growth in
non-T&D segment amid challenges in
domestic T&D and T&D-SAE. Margins saw
some impact on the back of change in
business mix (higher contribution by non-
T&D), SAE cost overruns, higher
commodity prices, which are expected to
normalise in medium term. Also, stable
working capital management, strong
recovery in revenues, decent order inflows
and further execution ramp-up is expected
to aid overall performance, going forward
Kansai Nerolac reported a strong recovery
in the decorative paint segment supported
by pent up demand across regions.
However, a sharp increase in raw material
prices and delay in passing the same has
hurt the company’s overall gross margin in
Q1FY22. We believe gross margins will
stabilise with further price hikes by
industry players in the coming period
The Q1FY22 was performance was ahead
of our estimate on all fronts but sales
recovery was still 80% of its pre-Covid-19
level in Q1FY20. We believe the slow
recovery is attributable to impact of Covid-
19 second wave in its key selling markets
in the southern region
 Opening Bell
BlueDart BlueDart reported its Q1FY22 numbers. While
express revenues de-grew 11% QoQ to | 866 crore,
absolute EBITDA de-grew 36% to | 159 crore
(EBITDA margins contracted 730 bps to
18.4%). Subsequently, PAT de-grew 65% to |
31 crore on a weak operational performance
Exide In Q1FY22, EIL's standalone net sales fell by
Industries 15.4% QoQ to | 2,486 crore with margin
(EIL) decline for the quarter at 350 bps sequentially
to 10.5%. Consequent PAT at | 125 crore was
down ~49% QoQ
PI PI Industries reported topline growth of 13%
Industries YoY to | 1194 crore against our estimates of |
1323 crore, impacted by poor performance
from domestic formulation business (-13%
YoY). Revenue from CSM business was up
31% YoY to | 807 crore. Lower-than-expected
gross margins (43.8% vs. our expectations of
44.2%) owing to changes in the product mix
and higher employee cost (+20% YoY)
affected operational performance. OPM for
the quarter contracted by 80 bps YoY to
20.8% leading to EBITDA growth of 9% YoY
to | 248.9 crore against our estimates of |
289.6 crore. Higher other income (| 27.7 crore
vs. | 8.2 crore in Q1FY21) owing to increase
in liquid investments/cash post QIP negated
the impact of poor operational performance
to certain extent. PAT grew 29% YoY to |
187.2 crore against our estimates of | 221.6
crore
Vinati Vinati Organics reported topline growth of
Organics 67% YoY to | 386.4 crore against our
estimates of | 350 crore. We expect growth to
have been driven largely on account of better
sales from ATBS segment. Higher RMAT cost
(+152% YoY) impacted operational
performance, which was up mere 4% YoY to
| 101.5 crore against our estimates of | 137.8
crore. OPM for the quarter remained at 26.3%
(down 1570 bps YoY). A subdued operational
performance dented bottomline performance,
which was up 12% YoY to | 80.9 crore
against our estimates of | 100.4 crore
ICICI Securities | Retail Research
ICICI Direct Research
The company carried 1.84 lakh tonne of
cargo during the current quarter
(realisation: | 47 per kg vs. | 45.8 in FY21).
EBITDA margins contraction was led
mainly by higher employee cost (higher by
410 bps) and higher other expense (up 230
bps). The management remains cautiously
optimistic regarding recovery in economy
and a sustainable e-commerce boom
EIL’s topline performance was relatively
decent compared to a sharp 30%+ OEM
industry volume decline in the quarter. As
per management commentary,
replacement demand was strong across
automotive and industrial segments while
OEM and export markets registered better
than expected growth. Margins were lower
primarily due to ~320 bps gross margin
decline during the quarter
Since monsoon was delayed in some parts
of the country, domestic formulation
business were impacted for the quarter.
However, the same was negated by
decent growth from the CSM business.
Going ahead, we expect successful
penetration into pharma CDMO through
ind-swift lab would drive meaningful
growth, going ahead
Vinati reported topline growth of 67% YoY
to | 386.4 crore against our estimates of |
350 crore. We expect growth to have been
driven largely on account of better sales
from ATBS segment. Higher RMAT cost
(+152% YoY) impacted operational
performance, which was up by mere 4%
YoY to | 101.5 crore against our estimates
of | 137.8 crore. OPM for the quarter
remained at 26.3% (-1570bps YoY). Higher
Subdued operational performance dented
bottomline performance, which was up
12% YoY to | 80.9 crore against our
estimates of | 100.4 crore
 Opening Bell
Marico Marico's Q1FY22 results were in line with our
estimates on revenue front & above our
estimate on earnings front. Revenue grew
31.2% to | 2525 crore (Idirect estimate: |
2474 crore) on the back of domestic sales
growth of 34.8% & International sales growth
of 17.8%. Domestic volume growth was 21%
led by continued strong growth in Saffola
despite high base & strong recovery in
parachute & VAHO portfolio. With the sharp
increase in commodity prices, the company
took aggressive price hikes in last six months.
Saffola edible oil saw low double digit growth
& foods business clocked 100% growth
during the quarter. With saving of 138 bps in
overhead spends, 107 bps in employee
spends & 19 bps in marketing spend, Marico
was partially offset the contraction of gross
margins. Nonetheless operating profit grew at
a slower pace of 3.1% to | 481 crore (I-direct
estimate : | 450.3 crore) with operating
margins contraction of 518 bps to 19%. PAT
dipped 5.3% to | 365 crore (I-Direct estimate:
|335.7 crore)
Dalmia Dalmia Bharat Sugar reported Q1FY22
Bharat number with 7.1% de-growth in revenues &
Sugar 28.4% decline in operating profit. The decline
in operating numbers were mainly due to
lower sugar & distillery volumes. Revenue de-
grew 7.1% to | 818.6 crore. Dalmia sold 1.96
lakh tonnes (lt) of sugar against 2.03 lt in
corresponding quarter. The company has
contracted ~1.6 lt of exports in the 2020-21
sugar season, out of which ~1 lt has already
been exported & ~0.6 lt would be exported in
Q2FY22. Distillery sales declined 12.1%
mainly on account of 9% dip in distillery
volumes. The volumes impacted by lower
offtake from OMCs. This is a quarterly
phenomenon, which would be rectified in
subsequent quarter. With accounting for tax
reversals, PAT dipped by 1.2% to | 124.4
crore. The company has announced capex of
two grain based distilleries of 100 KLD each,
which would be commissioned by December
2022. This would result in annual distillery
capacity increasing to 21 crore litre by FY24
ICICI Securities | Retail Research
ICICI Direct Research
Marico witnessed a strong sales recovery
during the quarter with 21% domestic
volume growth with slight impact of Covid-
19 second wave. Moreover, price hikes to
pass on sharp rise in commodity costs
also supported sales growth. Though
gross margins & subsequently operating
margins were adversely impacted by high

commodity costs, we believe copra prices
have peaked in Q1FY22. We believe
Marico would be able to regain its
operating margins by H2FY22. Moreover,
it has been able to garner market share
from unorganised players in parachute &
VAHO category given high commodity
prices have made it difficult for smaller &
regional brands to sustain the older price.
The newly launched products are gaining
strong traction under Saffola brand. The
company is leveraging its existing brands
& tailwind in healthy foods habits to grow
the category. We believe newer sub
categories within foods, digital only
brands would be driving the growth for the
company in future. we remain positive on
the company
In an effort to fulfil the 20% ethanol
blending program, sugar industry is
aggressively adding ethanol capacity to
meet the deadline of 2025. Most sugar
companies in our coverage universe
would reach 2-3x of their current distillery
capacity in the next two years. This would
not only result in higher profitability from
distillery segment but also reduce the
sugar inventory in the system improving
domestic sugar prices. Dalmia has been
fastest in creating distillery capacity from
sugarcane juice and now would also utilise

the available opportunity in grain based
ethanol. We believe the company would
witness strong earnings growth in next
three years owing to the incremental
distillery volumes & improvement in sugar
prices. We remain positive on the sector
as well as the company
 Opening Bell ICICI Direct Research

Zydus Zydus Wellness' Q1FY22 numbers were in
Wellness line with our estimates on both revenues &
earnings front. Revenue grew by 11.2% to |
597.6 crore (I-direct estimate : | 635.2 crore)
on the back of low base quarter. The
company maintained its leadership position in
respective categories with Sugarfree, Glucon-
D (MS of 58.2% in glucose category), Nycil
(35.2% MS in Prickly heat powder), Everyuth
Scrub & Everyuth Peel off Brands. Sugarfree
continue to grow at a fast pace despite high
base quarter. The company was able to
maintain gross margins (slight contraction of
26bps) despite high milk & other commodity
prices. It generally holds high inventory of
skimmed milk powder (SMP ) during off-
season. Operating profit increased 14.8% to |
140.4 crore (I-direct estimate : | 149.6 crore)
with operating margins expansion of 73 bps
to 23.5%. Interest cost declined by 81.4% to
|6.4 crore mainly on account of repayment of
debt in October through fund raising. Net
profit witnessed a growth of 46.6% to | 130.8
crore (Idirect estimate : | 137.5 crore)
Zydus has strong product portfolio in
health & wellness segment. In last one
year, the company has witnessed strong
traction in ‘Sugarfree’, ‘Glucon-D’ & ‘Nycil’.
However, ‘Nutralite’ & ‘Everyuth’ brands
have been adversely impacted by
Pandemic induced lockdowns. We believe
the company would be able to grow these
brands with the enhancement of its direct
distribution & chemist channel network. In
the existing brands there are possibility of
introducing new products & variants.
Moreover, the company would be able to

grow Complan through doctor’s advisory.
The company also have very strong gross
margins, which give it leeway to spends as
high as 12-14% of sales as ad-spends to
support the existing brands & new
products. We believe Zydus would be able
to grow the revenues & expand the
margins over the next two to three years

IDFC First IDFC First Bank posted weak results as IDFC First bank’s liability side is shaping
Bank elevated provisions due to rise in stress led to up well, however asset quality concerns in
loss. NII growth was 25% YoY at |2185 crore retail have risen which may be an
mainly due to 42 bps QoQ improvement in overhang in the near term
NIMs to 5.5%. Opex declined 6% QoQ as a
result of restricted business activity due to
lockdowns. Provisions up by 3x from |603
crores in Q4FY21 to |1879 crores, including
additional COVID-19 related provisions of
|350 crores. As a result, the bank has posted
a net loss of |630 crore. Total funded assets

stood at |113794 crores, up 9% YoY.
Reduction of ~100 bps in deposit rates has
restricted deposit accretion momentum at
36% YoY. Asset quality deteriorated QoQ as
GNPA increased by 46 bps QoQ to 4.61%.
Restructured book stood at 2.1% in retail
which up by ~1% QoQ

ICICI Securities | Retail Research

 Opening Bell
Relaxo Disruptions owing to store closures (general
Footwear trade channels) have put the brakes on
growth momentum for Relaxo Footwears in
Q1FY22. Revenue for the quarter declined by
34% QoQ to | 497.1 crore (vs. estimated
decline of 40%). On a low base of Q1FY21,
company reported topline growth of 37%
YoY. On the profitability front, gross margins
contracted by 230 bps QoQ to 54.5% owing
to increase in RM prices. Furthermore, owing
to negative operating leverage, EBITDA
margins declined by 850 bps QoQ to 13.3%,
with absolute EBITDA declining by 59% QoQ
to | 66.2 crore (up 16% YoY). Ensuing PAT
declined by 70% QoQ (up 28% YoY) to | 31.0
crore
Aditya Birla Covid induced lockdowns significantly
Fashion & disrupted the performance for ABFRL in
Retail Q1FY22. ABFRL reported revenue de-growth
(ABFRL) of 57% QoQ to | 774.0 crore (up 141.9% YoY,
I-direct estimate: | 630 crore). On the base of
Q1FY20, recovery rate stood at ~40% of pre-
covid levels. Company managed to
rationalised fixed cost overheads by ~ | 174
crore on a QoQ basis. Further, finance cost
declined sharply by ~30% QoQ to | 83.8
crore. However, owing to significant loss in
sales, company reported PBT loss of | 448.9
crore (Q4FY21: | 90 crore, Q1FY21: | 533
crore)
Gokaldas Strict lockdown measures in Karnataka
Exports (factories shut) for most of the period in
Q1FY22 had a material impact on the
production of Gokaldas exports. Revenue for
the quarter declined by 35% QoQ (up 3%
YoY) to | 241.0 crore. During the quarter, the
company has recognised RoSCTL incentives
for Q1FY22 and also recognised the balance
income to the extent previously not
recognised in Q4FY21 (company had factored
in partial incentives in Q4FY21).
Subsequently, gross margins improved by
830 bps QoQ to 52.1%. However, on account
of negative operating leverage, EBITDA
margins remained flattish QoQ to 7.4%, with
absolute EBITDA declining by 35% QoQ to |
17.9 crore. Company reported net loss worth
| 2.6 crore vs. net profit of | 16.0 crore in
Q4FY21 (Q1FY21 net loss: | 4.2 crore)
ICICI Securities | Retail Research
ICICI Direct Research
Overall performance was resilient
considering the adverse market
environment. Despite having a challenging
start in previous financial year (FY21),
Relaxo had witnessed swift recovery in
volumes and captured market share from
unorganised players in FY21. Given the
robust balance sheet and being the market
leader in the value priced segment (in
terms of volume), Relaxo is well placed to
further consolidate its market share and
emerge stronger post pandemic
With reopening of stores from second half
of June onwards, recovery has been swift
with lifestyle brands recording 85%
recovery rate and Pantaloons recording
70% recovery rate in July 2021.
Management expects Q2FY22 to be
significantly better than Q2FY21. Company
has slew of initiatives lined up for
remainder of FY22; a)expected to launch
two new brands in the ethnic space, b)
launch new pantaloons website in Q3 and
multi-branded app in Q4, c) lifestyle
brands and Pantaloons to open 400+ and
60+ stores, respectively in FY22
The company has successfully managed
to realign its delivers consequent to the
disruption and is in process of catching up
on its Q1 production loss. It has a strong
order book and units are currently
operating at full capacity. It expects to
quickly bounce back from effect of
lockdown in Q1FY22
 Opening Bell ICICI Direct Research

Auto For July 2021, market leader Maruti Suzuki
sector (PV) (MSIL) posted 9.8% MoM increase in PV
volumes to 1.6 lakh units. For Tata Motors,
volumes rose by 25.3% MoM to 30,271 units
For MSIL, product mix improved
considerably as UV portfolio volumes
grew by 14.6% MoM vs. 4.2% increase in
mini & compact car sales. Tata Motors
continues to make rapid market share

gains amid strong response to its products

Auto Tata Motors’ CV volumes for July 2021 rose
sector (CV, by 7.9% MoM to 23,848 units. VECV volumes
tractor and were strong, growing by 75.2% MoM to 4,271
off-
highway)
units. At Escorts, tractor sales reported 23.3%
YoY increase to 6.564 units with construction
equipment sales up 40.1% MoM to 262 units
The segment recorded strong recovery.
Headline growth at Tata Motors was
driven by I&LCV and SCV segments,
however M&HCV truck volumes were
flattish MoM while buses registered ~13%
domestic decline. Tractor performance at

Escorts was encouraging amid persistent
sector tailwinds (normal monsoons, higher
crop production and procurement, etc)

Auto Market leader Hero MotoCorp (HMCL) The space as a whole reported relatively
sector (2- reported 3.1% sequential decline in July 2021 soft numbers, with HMCL volumes down
W) volumes to 4.54 lakh units. Royal Enfield 12.6% on YoY basis also. Scooter sales,
volumes at Eicher Motors were up 2.3% MoM
to 44,038 units
however rose by 9.6% MoM indicating a
faster recovery in urban pockets post
Covid-19 second wave. For Eicher Motors,

>350 cc portfolio grew by 12% MoM with
<350 cc segment being flattish

Key developments (Continued…)

 India's daily petrol sales by PSU OMCs increased 5.7% MoM in July while daily diesel demand fell 3.5% MoM
in the same period. On YoY basis, both daily petrol and diesel demand grew 17% and 12.4%
 According to media sources, India's power consumption grew nearly 12% in July to 125.51 billion units (BU)
and returned to pre-pandemic level mainly due to easing of lockdown curbs and delayed monsoon. Peak
power demand met for the entire month of July 2020 was 170.40 GW. Therefore, peak power demand met
recorded growth of nearly 18% in July 2021, compared to 170.40 GW (recorded on July 2, 2020)
 Coal India reported production and off-take numbers for the month of July 21. Production numbers for the
month of July 21' stood at 43 million tonnes (MT) (up 14% YoY), while off take volume stood at 51 MT (up 17%
YoY). For the period Apr-Jul '21 production volume stood at 167 MT (up 5% YoY), while offtake volume for the
aforesaid period stood at 211 MT (up 28% YoY)
 BHEL registered muted set of numbers across all parameters for Q1FY22. BHEL’s Q1FY22 revenues came in at
| 2901.3 crore which grew by 45.7% on YoY basis on a low base with some impact of execution headwinds
and pandemic. The company registered EBITDA level loss of | 474 crore (Vs. EBITDA loss of | 1058.9 crore in
Q1FY21) YoY owing to lesser than expected execution and higher than expected operating expenses. Net loss
came in at | 445.4 crore (Vs Net loss of | 897.2 crore in Q1FY21) partly impacted by lower other income which
declined by 21.5% to | 75.0 crore
 Bandhan Bank posted optically improved performance with healthy NII growth of 20.3% QoQ and 16.7% YoY
at |2114 crore mainly on account of sharp sequential improvement in NIMs by 170 bps to 8.5% on low base.
Provisions remained elevated due to higher stress accretion and stood at |1374 crore. PAT stood at |373 crore
and was in line with our estimates. Asset quality performance was disappointing as GNPA increased by 137
bps QoQ to 8.18%. The bank has made accelerated provisions worth |751 crore as a result PCR has improved
from 50% to 62% QoQ. The bank restructured EEB loans worth |4057 crore and housing loans worth |604
crore during this quarter. Business growth was muted as loan book was flattish on YoY basis and declined
8.4% QoQ to |74766 crore. Deposit growth was healthy on yearly basis at 27% YoY but flat sequentially
 NTPC reported operationally muted set of Q1FY22 results. Reported revenues came in at | 26038.5 crore vs our
estimates of |27140.5 crore, the key reason being NTPC reporting lower than expected tariff of | 3.73/KwHr.
Energy sold was tad higher than estimates at 66.6 BUs vs. 66.2 BUs. EBITDA came in at |7438.9 crore. The fuel
cost per unit during Q4FY21 stood at |2.08/unit vs. |2.12/unit QoQ. Reported PAT came in at |3145.6 crore vs.
our estimate of |3862.7 crore, on account of higher lower operational income and higher than expected interest
costs

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 Action Construction reported a decent set of numbers amid a disrupted quarter. Revenue for the quarter came
in at | 321.5 crore, up 218% YoY & down 29.7% QoQ. Gross margins contracted ~ 220 bps YoY & ~ 55 bps
QoQ. EBIDTA margins came in at 9.4% vs 10.9% QoQ. Absolute EBIDTA came in at | 30.2 crore, down 39.5%
QoQ vs a loss in Q1FY21. Ensuing PAT came in at | 19.3 crore vs 38.8 crore in Q4FY21 & a loss in Q1FY21. The
Board has considered and approved raising of funds via private placement or QIP for an aggregate amount of |
175 crore
 Sunteck Realty total pre-sales and collections stood at |176 crore and |172 crore which was up 74% and 165%
YoY, respectively on a washout base. On QoQ basis, however, pre-sales and collections declined by 53% and
46%, respectively owing to second wave. On financial front, Revenue for stood at | 92.7 crores, up 69% YoY
on a depressed base, but down 51% QoQ. EBITDA was at | 21 crore with margins of 22%, down 600 bps YoY.
PAT was at | 3 crore
 NIIT reported Q1FY22 numbers. The company's revenues increased 9% QoQ to | 301 crore led by 12%QoQ
growth corporate learning group. EBITDA margin declined 124 bps QoQ to 24%. PAT increased 11% QoQ to |
51 crore
 Dlink India reported healthy numbers on bengin base, albeit a decline on QoQ basis due to second wave.
Topline at | 162.7 crore, was up 29.8% YoY but down 23.5% QoQ. EBITDA at | 11.5 crore, was up 3.2x
YoY/down 15% QoQ with margins of 7.1%. PAT at | 8.5 crore was up ~4.5x YoY, and down 14% QoQ.
 IOC and Malaysia's Petroliam Nasional Bhd (Petronas) ware planning to launch separate brand for auto fuel
retailing in India. Currently, Indian Oil Petronas Pvt Ltd (IPPL), the JV's business is limited to LPG and companies
will start retailing petrol, diesel and natural gas
 Adani Enterprises has incorporated a wholly owned subsidiary, Adani Petrochemicals. The company will carry
out business of setting up refineries, petrochemicals complexes, specialty chemicals units, hydrogen and
related chemical plants and other such similar units
 Ashok Leyland announced that Dana Incorporated has acquired ~1% stake in its EV focused subsidiary, Switch
Mobility for US$ 18 million. Dana, a global leader in drivetrain and e-propulsion systems, would also be a
preferred supplier for the company
 As per ET Auto, the management of Tata Motors has stated it intends to take contribution of EV to 25% from
present ~2% in its domestic business over the next few years. It also stated it would raise capital for its EV
business at an appropriate time. Tata Motors continues to aim for a leadership role in the sunrise space and
has already announced that it would be introducing 10 battery electric models in India by 2025 to this end
 State Bank of India (SBI) has announced waiving processing fee on home loans till August-end. Currently, the
processing fee on home loans is 0.40% which shall be waived off to lift customer sentiments and encourage
buyers, as reported in business standard
 Cadila has received USFDA final approval to market Fulvestrant Injection, 250mg/5mL per single dose pre-filled
Syringe (USRLD: Faslodex Injection). The drug is indicated for treatment of breast cancer and will be
manufactured at Zydus Biologics, Ahmedabad
 Lupin has acquired Southern Cross Pharma in Australia which is engaged in developing, registering and
distributing generic products. The deal will give acess to 60 registered products with sales of ~ US$22 million
(~| 163 crore) in FY21. This deal is anticipated to be completed in 5-6 months
 Airtel Africa has inked a deal to sell ~7.5% stake in its mobile money unit to Qatar Holding LLC, an affiliate of
Qatar Investment Authority (QIA), for around $200 million. Proceeds will be used to reduce group debt and
invest in network and sales infrastructure in the respective operating countries.
 HPCL signed an agreement with Convergence Ebergy Services (CESL) to set up EV charging points across
HPCL's select retail outlets in several cities
 Coal India board has approved the following; i) Rapid Loading Charges be subsumed with Evacuation Facility
Charges with effect from 1st August' 2021. ii) Evacuation Facility Charges be enhanced to Rs.60/- per tonne with
effect from 1st August,2021' and iii) Subsidiary Board be authorised to determine the Evacuation Facility
Charges to be charged from the consumers with the provision of annual review with effect from 1st August’
2021
 As per Financial express, the Telecom Regulatory Authority of India (Trai) has rejected the demand by the
telecom operators for fixing a floor price for voice and data tariffs and has added that government should
provide relief to the sector
 H.G. Infra Engineering Limited has received the Letter of Award (LOA) from. NHAI for the project “Development
of Six Lane Aluru-Jakkuva section of NH-130-CD – Road from km 365+033 to km 396+800 under Raipur-
Visakhapatnam Economics Corridor in the state of Andhra Pradesh on HAM mode. The company's bid project
cost stood at |1,060 crore
 Info Edge has invested an amount of about | 7 crores in 4B Networks Private Limited. The Company has agreed
to increase its shareholding in 4B from 12.3% to 19.9%. 4B is engaged in the business of enabling real estate
developers and brokers to communicate with each other and conduct their business via the Broker Network
Platform
 Government launched third round of bidding for Discovered Small Fields (DSF). 32 oil & gas blocks are being
offered in DSF third round

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 Opening Bell ICICI Direct Research

 According to Times of India, City Gas Distribution companies have opposed the change of rules in exclusivity
proposed by PNGRB
 Castrol has launched an advanced new ‘direct’ battery e-thermal fluid, Castrol ON e-thermal that will enable EVs
to be charged more rapidly and offer increased performance, protection, and sustainability

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 Opening Bell ICICI Direct Research
Nifty Daily Chart Technical Outlook
The Nifty extended breather over second
consecutive week and settled on a subdued
note as Nifty dropped 0.6% to end the week
at 15763. In the coming session, the index is
likely to open on a positive note tracking firm
Asian cues. We expect index to trade with
positive bias while maintaining higher high-
low. Hence use intraday dips towards 15790-
15815 to create long for target of 15903.

Key thing to monitor in the coming week is

that, the faster pace of retracement along
with multi sector participation would confirm
breakout from ongoing consolidation
(15950-15500) and open the door for 16300.
Over past two sessions, the index has
retraced 80% of past seven sessions decline
(15962-15513). Thus a breach above upper
band of consolidation (15950) would dictate
directional bias and lead index gradually to
16300 in coming weeks, else extended
consolidation with positive bias amid stock
specific action. Thus, dips from hereon
should be capitalised on to accumulate
quality stocks amid progression of Q1FY22
earning season.

Pivot Points CNX Nifty Technical Picture

Index/ Stocks Trend Close S1 S2 R1 R2 Nifty 50 Intraday Short Term
SENSEX Positive 52586.8 52444 52301 52820 53053 Trend Up Range Bound
Nifty 50 Positive 15763.1 15717 15672 15835 15908 Support 15790-15740 15500
ACC Ltd Positive 934.8 904 874 953 972 Resistance 15890-15950 15950
Axis Bank Ltd Negative 2958.5 2937 2916 2994 3030 20 day EMA 0 15775
GODREJ PROPERTIE Positive 1602.4 1564 1525 1633 1663 200 day EMA 0 14359
SBI Positive 431.8 428 422 441 450
GRANULES INDIA Positive 379.4 373 366 386 392
Advances/Declines
CUMMINS INDIA Positive 852.4 844 834 861 868
Tata Motors Positive 294.0 292 289 299 303 Advances Declines Unchanged
JSW STEEL LTD Neutral 737.0 728 719 752 767 BSE 1782 1449 136
BHARAT HEAVY ELE Neutral 59.4 58 57 61 63 NSE 1062 907 69
TCS Negative 3167.5 3145 3123 3206 3245
HERO MOTOCORP LT Positive 2763.3 2738 2714 2794 2826 Daily Technical Calls
CONTAINER CORP Positive 643.9 634 626 659 674 Daily Technical Calls
MAHINDRA & MAHIN Positive 743.1 730 717 758 773 1. Buy Aarti Industries in the range of 936.00-939.00
Reliance Industries Negative 2035.3 2022 2008 2059 2082
1. Buy Godrej properties in the range of 1602.00-1606.00
AUROBINDO PHARMA Neutral 916.6 904 890 931 944
All recommendations of July Future
COAL INDIA LTD Neutral 143.3 141 139 145 147

See Momentum Pick for more details

Nifty Call – Put Strike (Number of shares in lakh) – July, 2020 Intraday Derivative Strategy
i) Godrej Consum er
Buy GODCON August Fut at ₹ 991.00-993.00
CMP: 992.55
Target 1: 1001 Target 2: 1014.5
Stop Loss: 983

ii) Indusant Bank

Sell INDBA August Fut at ₹ 995.00-997.00
CMP: 2977.80
Target 1: 986.00 Target 2: 971.00
Stop Loss: 1006

See Derivatives view for more details

See Daily Derivatives for more details

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 Opening Bell ICICI Direct Research

Results/Events Calendar

19 July 20 July 21 July 22 July 23 July 24 July

Monday
Swaraj Engines,Mastek,ACC
HCL Technologies,Indian Bank
GTPL Hathway
Nippon Life Ind Asset Manag.
HDFC Life Insurance Co. Ltd.
Tuesday Wednesday Thursday Friday Saturday
Bajaj Finance Ltd.,Syngene Mahindra CIE, CEAT Ultratech,Hindustan Zinc,HUL RIL, Crompton Greaves ICICI Bank Ltd.
Asian Paints,ITDC, ICICI Securities Bajaj Finserv Ltd. Bajaj Auto,Mphasis,IEX, CSB Bank JSW Steel,USL,Federal Bank, Zee Media, MCX
Shyam Metalics & Energy Sasken,Schaeffler,Rallis India South India Bank, IIFL Securities Jubilant Pharmova, SKF India, GNA Axles
JSW ISPAT Special Prod. Havells India Sterlite Tech,Saregam India Yes Bank, SBI Cards, Atul Ltd ITC
JP Trade Balance Supreme India,Polycab India Music Broadcast,Biocon US JP Manufacturing PMI 0

26 July 27 July 28 July 29 July 30 July 31 July

Monday Tuesday Wednesday Thursday Friday Saturday
Navin Fluorine,Vedanta Ltd. Dr.Reddy's,KPR Mill, IndusInd Bank Intellect,Mahanagar Gas, Wabco Firstsource,Dwarikesh,JyothyLab Marico, IOC, Gokaldas, Finolex, KEC IDFC First Bank Ltd.
Zensar,TataMotors,L&T Oriental Hotels,Torrent Pharma Nestle,Maruti Suzuki, Birlasoft TechMahi,AjantaPhrma, Jindal SH Exide Industries, BHEL, PI Industries Sarda Energy & Minerals Ltd.
Axis Bank Ltd.,Alembic, SBI Life GM Breweries, VST Ind, Filatex JM Financial Ltd.,Sagar Cement TVS Motors,IndusTwrs,Colgate,PVR Nerolac,Zydus,Vguard,Sunteck,ABFL D-Link India, Relaxo Footwear
M&M FinServ, Jindal Stainless Ltd. TTK Prestige, Anup Engineering TCI Express, Nestle, Moldtek Pack Laurus Labs, MRPL, Concor, MOSL Bluedart,Jindal SAW, Bandhan Bank Vinati Organics
Kotak Mahindra Bank, ApolloPipe Granules,Sanofi, DixonTech Teamlease, Coforge LICHousing, ShoppersStop, Hawkins Sun Pharma,Sunflag,Dalmia Sugar KEI Ind, Surya Roshni

02 August 03 August 04 August 05 August 06 August 07 August

Monday
Castro, HDFC Ltd, OrientCem
Kalyani Steel Ltd., Emami
Avadh Sugar, Varun beverages
US UK EU - Manufacturing PMI
IN Imp/Exp, TradeBal, Manu PMI
Tuesday Wednesday Thursday Friday Saturday
Dabur, TATA Consumer Bosch,Sumitmo,AdaniTotlGs,Apollo SonataSoft,Escorts,GAIL,Thermax Hindalco, Bharat Ele, Abbott,TajGVK Hindusthan Copper,Divis
Indo Count, Kajaria ChambalFerti,Titan,GodrejComm Ipca, Ador Welding, Hikal,Birla corp SudarshanChem,Berger,Zee,JKTyre Bank of Baroda, AmberEnt
Elgi Equipments HPCL,Butterfly Gandhimati,BlueStar Cipla,NCC,Accelya,Brigade,CaplinPt Voltas, Huhtamki, GraphiteInd,M&M Affle,NRBBearings
Inox, Bharti Airtel, Pratap Snacks Gabriel,MayurUni,BharatForge, SBI TATA chem, Quess Corp,Bajaj Cons Hindalco,IndigoPaints, Astral QuickHeal
JPY Services PMI Tata Comm, HG Infra, Srikalahasthi Narayana Hrudayalaya, Somany Aarti Indus, Phoenix,PPAP Auto CH Trade Bal IMP/EXP Forex

09 August 10 August 11 August 12 August 13 August 14 August

Monday Tuesday Wednesday Thursday Friday Saturday
Petronet LNG Trent, Ashoka Buildcon Pidilite Hero MotoCorp, Matrimony NCLInd JKCement, Sobha
ShreeCem, GSPL CAMS, Pricol Indoco Remidies Ashok Leyland 0 0
Shankara Building Products Motherson Sumi, Lupin Bata US PPI, Mishra Dhatu, NMDC 0 0
Balrampur chini Century Ply, Wonderla HEG EU Ind Prod, IN CPI Manu Output US Import Export Price Index 0
0 US CPI 0 GB GDP Ind. Manu. Prod Trade Bal EU Trade Balance 0

16 August 17 August 18 August 19 August 20 August 21 August

Monday Tuesday Wednesday Thursday Friday Saturday
0 0 0 0 0 0
0 US Retail Sales 0 0 0 0
IN WPI Food Fuel Inflation, Imp/Exp Industrial/Manufacturing Production 0 0 0 0
US NY Empire State Manu Index EU Unemployment Rate, GDP GB CPI, RPI, PPI 0 0 0
US Overall Net Capital Flow GB Unemployment Rate US Housing Stats EU Current Account GB Retail Sales 0

Major Economic Events this Week Result Preview

Date Event Country Period Expected Previous Company Revenue Chg(%) EBITDA Chg(%) PAT Chg
Manufacturing PMI Jul 50.5 48.1 | Crore Q1FY22E YoY QoQ Q1FY22E YoY QoQ Q1FY22E YoY
02-Aug IN
HDFC Bank 17,191.0 9.7 1.7 15,356.8 19.7 1.7 8,511.3 27.8
02-Aug Manufacturing PMI EU Jul 62.6 63.4
02-Aug Manufacturing PMI GB Jul 60.4 60.4
02-Aug Manufacturing PMI US Jul - 63.1
02-Aug Exports (USD) IN Jul - 32.50B
02-Aug Imports (USD) IN Jul - 41.87B
02-Aug Trade Balance IN Jul - -9.37B
03-Aug Composite PMI CH Jul - 50.6
04-Aug Service PMI IN Jul 49.0 41.2
04-Aug Crude Oil Inventories US Jul - -4.089M
05-Aug BoE Interest Rate GB Aug 0.1% 0.1%
05-Aug Construction PMI GB Jul 63.8 66.3
05-Aug Initial Job Claims US Jul 380K 400K Recent Releases
06-Aug Cash Reserve Ratio IN Aug 4.0% 4.0% Date Report
06-Aug Interest Rate Decision IN Aug 4.0% 4.0% July 19,2021 Result Update- Zydus Wellness
07-Aug Reverse REPO Rate IN Aug 3.35% 3.35% July 17,2021 Result Update- Bandhan Bank
06-Aug FX Reserves, USD IN Aug - 611.15B
Unemployment Rate Jul 5.7% 5.9% July 17,2021 Result Update – Marico
06-Aug US
07-Aug Trade Balance (USD) CH Jul 44.20B 51.53B July 16,2021 Result Update- Oberoi Realty
08-Aug CPI (MoM) CH Jul -0.4% July 16,2021 Result Update- Indus Towers

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 Opening Bell ICICI Direct Research

Pankaj Pandey Head – Research

pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

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 Opening Bell ICICI Direct Research

Disclaimer
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