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Petronet LNG share price jumps 5% on Rs 500 crore net profit in Apr-Jun quarter; rallies 56% since March

Petronet LNG share price jumped over 5 per cent to Rs 267.70 apiece on BSE after the company reported a consolidated net profit of Rs 499.79 crore in the April-June quarter. The consolidated net profit, however, declined 11 per cent as the company had reported a profit of Rs 561.94 crore in the corresponding quarter of the year-ago period. With today’s gain, the stock price has rallied over 56 per cent from March lows of Rs 170.75 apiece. “The operations of the company were not materially interrupted during the lockdown due to Covid-19 pandemic. Cost of material consumed has come down from 86.12% to 78.55% in Q1FY21. Overall the company posted a better than expected set of numbers for Q1FY21,” said Yash Gupta, Equity Research Associate, Angel Broking Ltd.

Research and brokerage firm Motilal Oswal Financial Services said that better-than-estimated volumes lead to marginal EBITDA beat. “1QFY21 EBITDA stood at INR 900 crore. The lower interest cost was offset by lower other income,” it added. The brokerage firm has given a buy rating to the stock post quarterly earnings announcement.

At 10.45 AM, Petronet LNG shares were trading 2.12 per cent higher at Rs 259.85 apiece, as compared to a 0.72 per cent rise in the benchmark S&P BSE Sensex. During the financial year 2019-20, the company has achieved a turnover of Rs 35,452 crore as against Rs 38,395 crore in 2018-19. The net profit during the year stood at Rs 2,698 crore as against Rs 2,155 crore in the previous year, according to the company’s annual report 2019-20.

The company reported profit before tax (PBT) at Rs 676.16 crore. Petronet LNG had posted PBT of Rs 839.59 crore in June 2019. The total revenue of the company during the quarter stood at Rs 4,951.95 crore, down 43 per cent against Rs Rs 8,717.85 crore in the corresponding period of the preceding fiscal. Petronet LNG reported the basic earnings per share (EPS) at Rs 3.33 against Rs 3.75 in the year-ago period.

Earlier, the company informed that post lifting of the lockdown, Regasified LNG demand recovered gradually. Since the first week of June 2020, Dahej terminal was operating at 100% capacity and Kochi terminal was operating at 20% capacity.

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Eicher Motors share price falls 4.5% on weak quarter earnings as COVID-19 lockdown hit sales

Eicher Motors shares dropped 4.5 per cent to Rs 20,686.05 apiece after the company reported a consolidated net loss of Rs 55 crore for the April-June quarter as sales were adversely hit due to COVID-19 pandemic. The company had registered a net profit of Rs 452 crore in the same period a year ago. The company’s management admitted that the previous quarter put forth unprecedented challenges for the industry and for Eicher Motors. However, it still believes that the long term potential for both Royal Enfield and (VE Commercial Vehicles) VECV seems to be very promising. “We believe new products would help expand the addressable markets and drive the next phase of growth for RE. Volume recovery, led by new product launches, would drive margin recovery in FY22,” Motilal Oswal Financial Services said in a report post quarter earnings.

The brokerage firm has maintained a buy rating to the stock with a price target of Rs 24,750, a 24 per cent upside from yesterday’s close. Eicher Motors hit a 52-week low of Rs 12,460 apiece in April this year, since then the stock price has rallied over 66 per cent. The company, however, witnessed an encouraging consumer sentiment which was evident in sales for the month of June. The company expects this trend to continue into this quarter as well.

Analysts at Spark Capital, on the other hand, have a sell rating with a target price of Rs 17,650, a downside of 18 per cent from the previous close. “Our multiples factor in the long-term growth opportunities for RE particularly in exports markets, aided by its expected higher CC launches and increasing presence, while maintaining domestic volume growth at CAGR of 7% through FY20-24E,” it added. The brokerage firm factored in the slow, but steady rise in the contribution of ‘rural heavy’ states, including UP, in the overall volumes, which it believes could impart a degree of cyclicality to volumes.

On a standalone basis, Royal Enfield business reported a profit after tax of Rs 12 crore. The bike maker sold 58,383 motorcycles in the quarter, a decline of 68 per cent from 1,81,966 motorcycles sold over the same period year ago. The management noted that there is pent up demand and the company is optimistic about stronger recovery once supply chain stabilises. “Demand from semi-urban and rural towns has picked up well, and our network of studio stores across the country have been able to cater to this demand,” said Royal Enfield CEO Vinod K Dasari.

VECV, the company’s joint venture with Volvo Group, reported a 72 per cent drop in revenue to Rs 641 crore during the first quarter as against Rs 2,255 crore a year ago. The company has signed an agreement for the integration of Volvo Bus India (VBI) business into VECV.

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Shares mostly lower in Asia after retreat on Wall Street

Shares were mostly lower in Asia on Wednesday after Wall Street pumped the brakes on its recent rally. Tokyo’s Nikkei 225 index edged higher, while the Shanghai Composite sank 1.6%. Overnight, a late slide in big technology companies left indexes broadly lower, breaking a seven-day winning streak for the S&P 500.

A discouraging lack of progress on talks over more economic aid for the US economy, coupled with worries over the coronavirus pandemic and tensions between the US and China, have prompted investors to sell and lock in profits from recent gains, analysts said.

”When you walk back the market’s expectations of an imminent fiscal deal, it is like poking the balloon with a straight pin as all semblance of near-term optimism gets immediately deflated,” Stephen Innes of AxiCorp said in a commentary.

The Nikkei 225 gained 0.3% to 22,821.28, while Hong Kong’s Hang Seng edged 0.2% lower to 24,841.00. In South Korea, the Kospi slipped 0.1%, to 2,417.12. The Shanghai Composite index lost 53 points to 3,287.13. Australia’s S&P/ASX 200 declined 0.5% to 6,110.70.

Shares fell in Taiwan, India and most of Southeast Asia. Overnight’s reversal left the S&P 500 with a 0.8% loss, at 3,333.69. Drops for big-name technology stocks like Apple and Microsoft, plus losses in health care and communications stocks, outweighed gains in financial, industrial and energy companies.

Tech stocks have far outpaced the rest of the market this year as investors bet they could still thrive in a stay-at-home economy. The pullback ended the S&P 500’s seven-day winning streak. Despite the sell-off, the benchmark index remains within 2% of the all-time high it reached in February, reflecting a stunning turnaround from a nearly 34% tumble in March when the coronavirus pandemic sent stocks into a nosedive.

Investors have grown more confident in recent weeks amid some positive economic data and better-than-expected second-quarter results from companies, suggesting corporate profits could be headed higher in the second half of this year and in 2021.

Unprecedented actions by the Federal Reserve to stabilise markets this spring, including cutting interest rates and ramping up bond purchases, have made stocks attractive relative to other assets and given traders enough confidence to keep snapping up stocks.

Traders are also increasingly optimistic that the many pharmaceutical companies working on ways to treat COVID-19 will deliver a working vaccine in the coming months. The Dow Jones Industrial Average dropped 0.4% to 27,686.91. The Nasdaq composite lost 1.7% to 10,782.82. The Russell 2000 index of small company stocks gave up 0.6%, to 1,575.10.

While talks between Democrats and Republicans on a new economic relief package appear to have stalled, investors are still optimistic both sides will reach an agreement.

The yield on the 10-year Treasury rose to 0.65% from 0.57% late Monday, a big move. The price of gold fell further after breaching $2,000 per ounce earlier last week, giving up $56.20 to $1,890.10. Benchmark US crude oil for September delivery gained 14 cents to $41.75 per barrel in electronic trading on the New York Mercantile Exchange.

It fell 0.8% to settle at $41.61 per barrel on Tuesday. Brent crude oil for October delivery picked up 20 cents to $44.70 per barrel. Overnight, it lost 1.1% to settle at $44.50 per barrel. In currency dealings, the US dollar bought 106.73 Japanese yen, up from 106.51 yen late Tuesday. The euro weakened to $1.1723 from $1.1744.

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Equity MFs see the first outflow in over 4 yrs in July on profit-booking

Equity mutual funds witnessed an outflow of Rs 2,480 crore in July, making it the first withdrawal in more than four years, primarily on profit-booking by investors.

Overall, the mutual fund industry witnessed a net inflow of 89,813 crore across all segments last month, much higher than Rs 7,265 crore seen in June, data by Association of Mutual Funds in India showed on Monday. This inflow could be attributed to infusion in liquid funds and low duration funds.

As per the data, outflow from equity and equity-linked open ended schemes was at Rs 2,480.35 crore in July as compare to an inflow of Rs 240.55 crore in June. Such schemes had attracted Rs 5,256 crore in May, Rs 6,213 crore in April, Rs 11,723 crore in March, Rs 10,796 crore in February and Rs 7,877 crore in January. July 2020 saw the first outflow since March 2016, when equity schemes witnessed a pull out of Rs 1,370 crore.

In July this year, except for equity linked saving schemes (ELSS) and focused fund categories, all the other equity categories witnessed net outflow.

Association of Mutual Funds in India (Amfi) Chief Executive N Venkatesh attributed the outflow from equity-oriented funds to withdrawal from multi-cap and large cap funds due to profit booking by investors.

“Equity-oriented mutual funds witnessed their first major monthly net outflow in a long time. Multi-cap fund category was the worst hit followed by mid-cap and value fund categories,” said Himanshu Srivastava, Associate Director Manager Research at Morningstar India.

This could be largely attributed to investors booking profit given the surge in the equity markets, across market segments, in the recent times, he added.

Multi-cap, midcap, value fund and multi-cap saw outflows to the tune of Rs 1,033 crore, Rs 579 crore, Rs 549 crore and Rs 365 crore, respectively, during the month under review. However, focussed funds attracted Rs 535 crore, while the same for ELSS was Rs 279 crore.

Apart from equity funds, overall hybrid funds saw an outflow of Rs 7,301 crore. With equity markets doing well and stable scenario in the fixed income markets, hybrid schemes too witnessed significant net outflows, with viewing this scenario as a good exit opportunity, Srivastava said.

Within the hybrid schemes, balanced hybrid or aggressive hybrid fund, whose mandate is to invest between 65-80 per cent of assets in equities, witnessed a net outflow of Rs 2,196 crore in July. “This category has been witnessing consistent net outflow for a long time, given the challenging scenario in both equity and debt markets earlier,” he added.

Fixed income securities or debt funds saw an inflow of Rs 91,392 crore last month compared to Rs 2,862 crore in June. Among fixed-income securities, low duration funds saw an infusion of Rs 14,219 crore, liquid schemes (Rs 14,055 crore) corporate bond funds (Rs 11,910 crore) and banking and PSU funds (Rs 6,323 crore).

However, credit risk funds saw an outflow of Rs 670 crore in the period under review, which was much lower than a withdrawal of Rs 1,494 crore in June, Rs 5,173 crore in May and Rs 19,239 crore in April. Besides, investors are preferring safe haven assets, gold exchange traded funds (ETFs), as such instruments saw an inflow of Rs 921 crore last month as compared to Rs 494 crore witnessed in June. The assets under management of the 45-players mutual fund industry rose to Rs 27.12 lakh crore in July-end from Rs 25.5 lakh crore in June-end.

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