Reliance Industries’ Profit Drop, HDFC Bank’s Decline, Wipro’s Revenue Dip, and Kotak Mahindra Bank’s Profit Surge

Opening Bell:

Gift Nifty is down by 131.0 points in the early morning trade, indicating a negative opening for Indian stock market

Asian markets traded lower on Monday amid news of US President Joe Biden potentially dropping out of the presidential race and investors awaiting the People’s Bank of China’s loan prime rate decision. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%, having shed 3% last week. Japan’s Nikkei 225 fell 0.5%, while the Topix declined 0.41%. South Korea’s Kospi dropped 0.16%, and the Kosdaq fell 0.39%. Meanwhile, Hong Kong’s Hang Seng index indicated a marginally higher opening.

The US stock market dropped on Friday as a global technical outage caused by a software glitch added uncertainty to an already anxious market. The Dow Jones Industrial Average declined 377.49 points, or 0.93%, to 40,287.53, while the S&P 500 fell 39.59 points, or 0.71%, to 5,505. The Nasdaq Composite ended 144.28 points, or 0.81%, lower at 17,726.94.

Stocks News: 

👉 Reliance Industries reported a Q1 consolidated profit of ₹17,448 crore, down from ₹18,182 crore. Revenue increased by 11.5% to ₹2,57,823 crore, compared to ₹2,31,132 crore. EBITDA rose by 2% to ₹42,748 crore, though the EBITDA margin decreased to 16.6% from 18.1%. Jio Platforms saw an 11.7% increase in profit, reaching ₹5,698 crore, and its revenue grew by 12.8% to ₹34,548 crore. Reliance Retail Ventures reported a 4.6% rise in profit to ₹2,549 crore and an 8.1% increase in revenue to ₹75,615 crore. Revenue from the Oil to Chemicals segment surged by 18.1% to ₹1,57,133 crore, while Oil & Gas revenue jumped by 33.4% to ₹6,179 crore.

👉 HDFC Bank reported a 2% decline in standalone profit for Q1FY25, which fell to ₹16,174.8 crore from ₹16,511.85 crore. Revenue increased by 2.6% to ₹29,837.1 crore, up from ₹29,076.8 crore. Provisions saw a sharp decrease to ₹2,602 crore from ₹13,511.6 crore. The Gross NPA ratio rose to 1.33% from 1.24%, and the Net NPA ratio increased to 0.39% from 0.33%.

👉 Wipro reported a 0.8% decline in IT services revenue for Q1FY25, which fell to ₹21,896.3 crore from ₹22,079.6 crore. IT services EBIT decreased by 0.4% to ₹3,605.7 crore from ₹3,619.5 crore. However, the margin improved by 10 basis points to 16.5% from 16.4%. Dollar revenue also fell by 1.2% to USD 2,625.9 million, down from USD 2,657.4 million. The company anticipates IT services revenue to range between $2,600-2,652 million in Q2 compared to Q1.

👉 Kotak Mahindra Bank reported a significant 81% year-on-year increase in standalone profit for Q1, reaching ₹6,249.8 crore, up from ₹3,452.3 crore. Revenue rose by 9.8% to ₹6,842.4 crore, compared to ₹6,233.7 crore. Provisions increased to ₹578.5 crore from ₹364.3 crore. The Gross NPA ratio remained stable at 1.39% quarter-on-quarter, while the Net NPA ratio rose slightly to 0.35% from 0.34%.

👉 The foreign institutional investors (FIIs) bought equities worth Rs 1506 crore, while domestic institutional investors sold equities worth Rs 461 crore, on July 19.

Domestic and International Events

• The surge in futures and options (F&O) trading volume has evolved into a macroeconomic concern, according to Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch. She highlighted the need to evaluate whether household savings are being diverted into speculation rather than contributing to capital formation.

• China’s central bank reduced benchmark lending rates in its monthly fixing after earlier lowering a key short-term policy rate. The People’s Bank of China cut the one-year loan prime rate (LPR) by 10 basis points to 3.35% from 3.45%. Similarly, the five-year LPR was lowered by 10 basis points to 3.85% from 3.95%.

• Joe Biden dropped out of the US presidential election and endorsed Vice President Kamala Harris as the Democratic Party’s new nominee, in the 2024 race for the White House.

• Crude oil prices traded higher on Monday after falling nearly 3% on Friday. Global benchmark Brent increased by 0.57% to $83.10 a barrel, while West Texas Intermediate rose by 0.52% to $80.55.