Daily Big Picture : Nifty Adds Distribution Day; Kotak Bank Q2 Beats Consensus, Avanti Feeds Rallies on Strong Q2 Numbers

Today’s Action

Nifty, -0.6%; Sensex, -0.9%; Nifty Midcap, +0.1%; Nifty Smallcap, +1.0%; and Model Portfolio, +1.0%.

Daily Market Review

Market StatusConfirmed Uptrend

Today, benchmark indices witnessed a volatile trading session with Nifty and Sensex closing 0.6% and 0.9% lower, respectively. The news on overstating financial statements by Infosys and fresh barrier in Brexit deal has shattered investor sentiment and defied the optimism over the likely win for BJP in Maharashtra and Haryana elections, as per exit polls. The sell-off came on higher volume and Nifty added a distribution day today, taking the total count to three.

However, market breadth witnessed an improvement with advance-decline ratio tilting toward advancers. Of the 2,146 stocks traded on the NSE, 921 advanced, 889 declined, and the rest remained unchanged. Midcap and smallcap closed with gains of 0.1% and 1.0%, respectively.

Looking ahead, we would like Nifty to hold its key moving averages with good participation from Midcap and Smallcap stocks. With Nifty in a Confirmed Uptrend, we recommend focusing on non-extended ideas trading above their respective moving averages with RS lines at or near new highs. On the flip side, if Nifty registers additional distribution days, it will be a subtle sign of weakness in the market.

Key News

Kotak Mahindra Bank Q2 results beat consensus estimates. Net profit rose 51% to Rs 1,724.48 crore and NII increased 25% to Rs 3,349 crore. The stock was up 0.8%.

Avanti Feeds reported Q2 results today during market hours. The consolidated net profit grew 133% to Rs 127 crore. Sales and EBITDA grew 41% and 78%, respectively. The stock was up 10.7%.

Jubilant Foodworks reported its Q2 results today. Its consolidated revenue grew 12.2% y/y to Rs 998 crore. EBITDA jumps 59.9% y/y to Rs 234.1 crore and margin expanded 700bps to 23.5%. Same-store sales growth stood at 4.9%. It opened 40 new Domino’s stores during the quarter.

What do you think? Please email us any questions or comments.

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