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Stock in Action

Gabriel India: Gabriel India, a leading shock-absorber manufacturer, continues to post a strong set of numbers. In Q2FY23, Gabriel’s net revenue grew 11.4% QoQ, led by a strong volume growth in the passenger car and CV segments, post the easing of chip-supply constraints. The company’s EBITDA margin expanded by 30 basis points on a YoY basis, led by softening commodity prices, improved product mix, and cost reductions. On the demand front, what is helping is the PV and the 2W segments. The shift in preference towards personal transport as people continue to remain wary of taking public vehicles is good news for the company. The changing consumer behaviour will continue to remain a key growth trigger for Gabriel as it generates more than 85% of its revenues from these segments. Like any other ancillary segment, EVs offer a significant opportunity to shock- absorber manufacturers like Gabriel. In fact, on the back of a strong product portfolio, the company has already garnered 50% market share for suspension products in the e-2W segment. Positive on Gabriel India given the strong 2QFY23 numbers and healthy order wins to boost top line.

Tata Consumer ltd: Tata Consumer management remains confident that 2HFY23 will be better than 1HFY23. Growth in Tea is expected to come back going forward while it continues to gain market share in Salt. Increased focus on innovation continues for the company as pipeline continues to get stronger. In tea segment, company is targeting high single-digit volume growth and it will be driven by distribution expansion. Tata Salt is seeing market share gains as strong growth is coming on the back of conversion from lower end products. Premium products are also doing well as consumers are becoming more and more health conscious. Company is broadly focused on the Food & Beverages category and aspires to look beyond F&B only over time. It sees lot of opportunities in the Health & Wellness space, particularly Protein & Protein Supplements. It is also looking at export opportunities because of the large Indian food market overseas. Positive on Tata Consumer as the price actions and structural cost savings in the International business along with normalization of margins in the India Salt business will help in supporting the margins.

Morning Alert…

*Indices log new record highs buoyed by RIL; Sensex rises 211 points*
Despite volatility in global markets, Indian benchmark indices scaled new highs on Monday aided by falling oil prices and gains in the Reliance Industries (RIL) stock. The benchmark Sensex rose for the fifth successive session and ended at 62,505, a gain of 211 points or 0.3 per cent. The Nifty too rose 0.3 per cent to end the session at 18,563, a gain of 50 points. Both indices hit fresh highs on Monday. The Nifty touched 18,614.25 intraday, beating its earlier record of 18,604.5 that it hit on October 19, 2021. Shares of RIL ended the session at a five-month high after they rose 3.5 per cent. It made a 277-point contribution to the Sensex’s gains. If not for RIL, the domestic indices would have ended in the red like most of their global peers, as protests in China hit sentiment and raised concerns over economic recovery.

Budget 2023-24…

*Budget 2023-24: Stay on fiscal glide path, economists advise FM Sitharaman*
The Union government could target a fiscal deficit of 5.8-6 per cent of nominal GDP for 2023-24, and it should continue its capital expenditure push and look to simplify the personal income tax regime, economists recommended Finance Minister Nirmala Sitharaman and her team during their pre-Budget interaction on Monday. Starting last week, Sitharaman had eight pre-Budget consultations this time. More than 110 invitees representing seven stakeholder groups participated in these meetings, the finance ministry said in a statement. The stakeholder groups included representatives and experts from agriculture and agro-processing industry; industry, infrastructure & climate change; financial sector and capital markets; services and trade; social sector; trade unions and labour organisations; and economists. “Most economists have suggested that the fiscal deficit be kept between 5.8 per cent and 6 per cent in order to stay on the glide path towards a medium-term target of 4.5 per cent of GDP. The suggestions were that the Centre continue with its capex push, and look to simplify taxes,” said a person aware of the discussions with economists.

*PowerMin invites bids to supply 4.5 Gw electricity during coming summer*
Looking to maintain surplus power supply in all parts of the country in the coming year, especially during high-demand summer months, the union power ministry has called for bids to procure 4.5 gigawatt (Gw) from generating companies (gencos). The supply period would be five years and additional coal would be allocated to the gencos which qualify under the scheme. “PFC Consulting Limited (A wholly-owned subsidiary of PFC Ltd) has been designated as the nodal agency by the power ministry. Under the scheme, PFC Consulting has invited bids for the supply of 4,500 Mw. Power supply will commence in April 2023. The Ministry of Coal has been requested to allocate about 27 million tonnes of coal per annum,” said a statement by the ministry of power. The bidding is under the SHAKTI scheme launched by the Centre in 2017 to build coal linkages for optimal supply of power across the country. The current round is the first such under the section B(v) of SHAKTI Policy which states: “Power requirement of group of States can also be aggregated and procurement of such aggregated power can be made by an agency designated by Ministry of Power or authorised by such States on the basis of tariff-based bidding.”

*Commodities play*
Gold – Rs 52682/10gm, Silver – Rs 61816/kg, Brcrude – Rs 6158/barrel, Degumsyoil – Rs 1296/10kg, Copper – Rs 667/kg.

*Corporate News*
NBCC gets Rs 271 cr order in stalled projects of erstwhile Amrapali Group.

Welspun One Logistics Parks Fund 1 commits Rs 500 crore warehousing AIF.

HCLTech signs multi-year contract with Swiss MRO firm SR Technics.

SGX Nifty indicates negative start to Indian markets trading at 18670 levels down by 59 points or 0.32%. Dow Jones also ended in red down by 1.45% at close.

Sector in focus – IT, Banks, Metals & Pharma.

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