In just nine sessions, the Nifty recovered 1,200 points from its May 13 low of 21,821. Only par for the course, that this rally had to take a pause after hitting a landmark. The Nifty could not sustain above 23,000 on Friday, ending over 70 points off the intraday record high of 23,026. Yet, the index managed to end 2.2% higher for the week, notching its fourth straight weekly gain in the last five.
Largecaps have led the Nifty upmove in the last week. Reliance Industries and HDFC Bank were among the top contributors to the Nifty upmove. Nine out of the top 10 companies in India by market capitalisation added ₹1.9 lakh crore to their market value last week.
The upcoming week will also be the monthly F&O expiry for the Nifty and the Nifty Bank. The Nifty is up over 400 points so far in this series, and a positive end would mean the fourth consecutive positive F&O series for the Nifty.
Earnings season also concludes next week with many PSU names like LIC, NMDC, IRCTC, among others reporting results.
Monday’s trading session will see stocks like United Spirits, NTPC, Hindustan Copper, Sun TV, Allcargo Logistics, Gokaldas Exports among others react to results that were reported after market hours on Friday and over the weekend.
Stocks like DCM Shriram, Electronics Mart, GMDC, Natco Pharma, Vishnu Prakash R Punglia will be reporting their results on Monday.
Foreign institutions continued to remain net sellers in the cash market on Friday, and have pulled out over ₹22,000 crore this month, while domestic institutions continued to remain net buyers.
The overall trend of the Nifty continues to be positive as there is no sign of a reversal yet. The higher end of the channel indicates resistance for the Nifty in the range of 23,050 – 23,150, said Ruchit Jain of 5paisa.com. On crossing these levels, he sees levels of 23,400 – 23,500 on the Nifty. Immediate support is at 22,700, followed by 22,500. He advises buying on any decline.
Amol Athawale of Kotak Securities said that the breakout formation on the daily charts supports further upside on the Nifty from current levels. However, he sees rangebound activity due to temporary overbought conditions in the near future. 22,800 – 22,700 on the downside will be the key suport, while 23,150 – 23,250 will be a hurdle.
Nifty is likely to remain sideways or rangebound in the near-term with heavy call and put writing around the 23,000 mark, said Rupak De of LKP Securities. Only a fall below 22,950 may drag the index towards 22,800, while a meaningful move above 23,050, will result in a sustained rally.
While the Nifty scaled new peaks last week, the Nifty Bank is still 1,000 points away from its record high. The index though, reclaimed the mark of 49,000 for the first time after May 7, although it could not close above those levels. Yet, the banking index outperformed the Nifty on Friday and ended with gains of 1.8% for the week.
The Nifty Bank has closed above the 48,260 resistance mark and sustained above it, indicating strength, said Neeraj Sharma of Asit C Mehta Investment Interrmediates. He expects the Nifty Bank to test levels of 49,500, till the time it holds 48,000. He advises a buy-on-dips approach on the index.
Om Mehra of SAMCO Securities said that the immediate support for the Nifty Bank remains at 48,600, followed by 48,500. On the upside, only a sustained move above Friday’s high of 49,050, would likely lead to levels of around 49,400 – 49,500.
What Are The F&O Cues Indicating?
Nifty’s futures added 4% across series on Friday. Current rollovers at the start of the expiry week are at 38%. They are currently trading at a premium of 62.5 points compared to 35.05 points earlier. On the other hand, the Nifty Bank futures across series added 4.1% in Open Interest on Friday. Current rollovers are at 29.2%.
Biocon, GNFC, Vodafone Idea are back in the F&O Ban.
Aditya Birla Capital, Balrampur Chini, Zee Entertainment, IEX, and Metropolis are out of the F&O ban.
Nifty 50 on the Call side for May 30 expiry:
On the Call side, the Nifty 50 strikes between 23,000 and 23,300 have seen Open Interest addition for this Thursday’s monthly expiry.
| Strike | OI Change | Premium |
| 23,000 | 19.31 Lakh Added | 163.1 |
| 23,100 | 16.6 Lakh Added | 112.7 |
| 23,200 | 11.64 Lakh Added | 74 |
| 23,300 | 11.23 Lakh Added | 46.35 |
Nifty 50 on the Put side for May 30 expiry:
On the Put side, the Nifty 50 strikes between 22,500 and 23,100 have seen Open Interest addition for this Thursday’s monthly expiry.
| Strike | OI Change | Premium |
| 23,000 | 35.14 Lakh Added | 145.15 |
| 22,900 | 15.23 Lakh Added | 106.6 |
| 23,100 | 9.46 Lakh Added | 195.15 |
| 22,500 | 15.92 Lakh Added | 26.3 |
Short covering was seen in these names on Friday, meaning an increase in price but a decline in Open Interest:
| Stock | Price Change | OI Change |
| Vodafone Idea | 6.74% | -61.28% |
| Biocon | 0.98% | -36.32% |
| HDFC Bank | 1.54% | -13.54% |
| Aditya Birla Fashion | 2.91% | -13.40% |
| Coforge | 0.64% | -13.07% |
Unwinding of long positions was seen in these stocks on Friday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| ICICI Lombard | -0.25% | -14.79% |
| Grasim | -0.20% | -13.46% |
| Ashok Leyland | -0.92% | -13.40% |
| IDFC First Bank | -0.38% | -13.29% |
| AU Small Finance Bank | -0.10% | -11.25% |
These are the stocks to watch out for ahead of Monday’s trading session:
- Divi’s Laboratories: EBITDA margin recovers to over 30% after five quarters. Revenue up 18.1% to ₹2,303 crore. EBITDA margin at 31.7%, higher than estimate of 27.7%. Net profit up 67% to ₹538 crore. Maintained margins despite fall in API prices due to backward integration and higher volume share. Two molecules going off-patent will provide business opportunity in FY25. Cash at ₹3,200 crore at the end of FY24.
- NTPC: Revenue up 7.6% to ₹47,622 crore. EBITDA up 19% to ₹14,195.2 crore. EBITDA margin at 29.8% from 27%. Net profit up 26.9% to ₹6,168 crore. Targeting new thermal orders of 15.2 GW. Renewable business listing may happen between October-November this year. Thermal power guidance is for commissioning 2.8 GW in FY25 and 1.5 GW in FY26. Capital outlay may grow to ₹22,000 crore in FY25. Renewable execution impacted by constraints on importing modules and land availability.
- Hindustan Copper: Margin nears 40% due to sharp drop in costs. Net profit down 6% due to drop in other income. Revenue flat year-on-year at ₹565 crore. Copper prices increasing will lead to further improvement in margins.
- Aurobindo Pharma: Revenue up 17.1% to ₹7,580.5 crore. US Sales at lower end of the estimate at $432 million, compared to estimates that ranged between $430 million and $477 million. However, double-digit growth in Europe, growth markets and ARV offsets US sales. Margins at multi-quarter high and above 20% for second straight quarter. One time exceptional loss of ₹122 crore. European sales up 10.4%, Growth market sales up 50%, ARV sales up 31.5%. Unit 3 of Eugia Pharma Specialities classified as Official Action Indicated Status.
- Manappuram Finance: Gold tonnage grows the highest sequentially in the last nine quarters. Calculated NIM is the lowest in three quarters. Net Interest Income up 33.2% to ₹1,580 crore. Net profit up 35.7% to ₹563.5 crore. Operating profit up 52.3% to ₹933.3 crore. Gross NPA at 1.93% from 2% in December. Net NPA at 1.7% from 1.8% in December. AUM growth of 18.7% is the lowest in four quarters. Non-gold share in AUM at 48.9%. Calculated ticket size up 3% to ₹61,867.
- Indiabulls Housing Finance: AUM down 2.5% to ₹65,335 crore. Securitisation down 3.9% to ₹12,245 crore. Net Interest Income down 19.7% to ₹282 crore. Provisions up more than 2.5x to ₹290 crore. Net profit up 23.1% aided by 77% jump in other income to ₹320 crore. Gross Spreads at seven quarter low. Gross NPA at 2.69% from 2.85%. Net NPA at 1.52% from 1.71%.
- Karnataka Bank: Net Interest Income down 3% to ₹834 crore. Net profit down 22.5% to ₹274.2 crore. Employee expenses up 27.1% dent profit. Provisions up 27.9% quarter-on-quarter to ₹184.7 crore. Gross NPA at 3.53% from 3.64% in December. Net NPA at 1.58% from 1.55% last year.
- SPARC: Net loss widens to ₹105.8 crore from loss of ₹82 crore last year. EBITDA loss also widens to ₹105.8 crore from loss of ₹89.57 crore. Revenue down to ₹16.56 crore from ₹47.69 crore. CFO Chetan Rajpara resigns from June 5. Will look to take shareholder approval for enabling resolution to raise ₹1,800 crore.
- Torrent Pharma: Numbers largely in-line with estimates. Revenue up 10.2% to ₹2,745 crore. EBITDA up to ₹883 crore, in-line with estimate of ₹890 crore. EBITDA margin at 32.2% from 30% last year. India business revenue up 10% to ₹1,380 crore, US business sales down 6% to ₹262 crore. Germany revenue up 11%, Brazil revenue up 17%. To take shareholder approval at AGM to raise up to ₹5,000 crore.
- Glenmark: Revenue up 2% to ₹3,062 crore. EBITDA up 27% to ₹504.3 crore versus estimates of ₹507.5 crore. Net loss widens to ₹1,218 crore from loss of ₹428 crore. EBITDA margin at 16.5% from 13.3%. India revenue up 12.9% to ₹939.1 crore. North America revenue down 12.4% to ₹755.7 crore. US sales at $91 million lower than estimates of $101 million to $105 million.
- Sundaram Finance: Disbursements up 18.1% at ₹6,209 crore. AUM up 27.3% to ₹43,987 crore. AUM growth year-on-year is the highest in nearly seven years. Net Interest Income up 20% to ₹517 crore. Net profit up 60% to ₹506.3 crore. Gross NPA at 1.26% from 1.77% in December. Net NPA at 0.63% from 1.02% in December.
- Affle India: Revenue up 42.3% to ₹506.2 crore. EBITDA margin flat at 19.3% from 19.4%. Net profit up 40% to ₹87.5 crore. Achieved highest quarterly revenue run-rate, highest EBITDA, net profit and consumer conversions till date.
- MM Forgings: Board meet on May 29 to consider bonus issue, dividend along with quarterly earnings.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
