Benchmark indices closed with strong gains on Monday amid positive global stocks. Robust GST collection data for July boosted sentiment. The Nifty closed below 15,900 level. All sectoral indices on the NSE closed higher, led by realty, auto and FMCG stocks.

As per the provisional closing data, the barometer index, the S&P BSE Sensex, was up 363.79 points or 0.69% at 52,950.52. The Nifty 50 index surged 122 points or 0.77% at 15,885.05.

The broader market outperformed the main indices and closed with strong gains. The S&P BSE Mid-Cap index was up 1.05% while the S&P BSE Small-Cap index gained 1.07%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 2179 shares rose and 1156 shares fell. A total of 167 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 19,83,35,925 with 42,24,492 deaths. India reported 4,13,718 active cases of COVID-19 infection and 4,24,773 deaths while 3,08,57,467 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India reported 40,134 new cases of the COVID-19 in the last 24 hours, a government statement said on Monday. Deaths rose by 422 in the same period, according to the federal health ministry.

Economy:

The gross GST revenue collected in the month of July 2021 stood at Rs 1,16,393 crore of which CGST was Rs 22,197 crore, SGST was Rs 28,541 crore, IGST was Rs 57,864 crore (including Rs 27,900 crore collected on import of goods) and cess was Rs 7,790 crore (including Rs 815 crore collected on import of goods).The above figure includes GST collection received from GSTR-3B returns filed between 1st July 2021 to 31st July2021 as well as IGST and cess collected from imports for the same period.

With the easing out of COVID restrictions, GST collection for July 2021 has again crossed Rs 1 lakh crore, which clearly indicates that the economy is recovering at a fast pace.

Meanwhile, India's unemployment rate fell to a 4-month low of 6.95% in July 2021 [Urban (8.30%) and Rural (6.34%)] as compared to 9.17% in June 2021 [Urban (10.07%) and Rural (8.75%)].

July Auto Sales:

Ashok Leyland added 1.28% after the commercial vehicle maker posted an 81% jump in total sales (domestic + exports) to 8,650 units in July 2021 from 4,776 units sold in July 2020. On a sequential basis, Ashok Leyland's total sales surged 34.15% in July 2021 from 6,448 units sold in June 2021. Total domestic medium and heavy commercial vehicle (M&HCV) sales soared 132% year-on-year to 3,473 units in July 2021. Total domestic light commercial vehicle (LCV) sales climbed 67% to 4,656 units in July 2021 over July 2020.

Maruti Suzuki India advanced 1.47% after the company's total sales rose 50.3% to 162,462 units in July 2021 from 108,064 units sold in July 2020. The company's total sales are higher by 10.2% as compared with 147,368 units sold in June 2021. While the company's total domestic sales (domestic + OEM) increased by 39.4% to 141,238 units, exports sales surged to 21,224 units (up 3.14x YoY) in July 2021 over July 2020. On a month-on-month (MoM) basis, the company's domestic sales (domestic + OEM) and exports have improved by 8.4% and 24.7%, respectively.

Bajaj Auto rose 0.38%. The auto major's total sales surged 44% to 3,69,116 units in July 2021 as against 2,55,832 units sold in July 2020. Sequentially, Bajaj Auto's total sales rose 6.63% in July 2021 compared with 3,46,136 units sold in June 2021. Total domestic sales increased 5% to 1,67,273 units in July 2021 as against 1,58,976 units in July 2020. Exports zoomed 108% to 2,01,843 units July 2021 over 96,856 units in July 2020.

Tata Motors gained 1%. The company's total sales stood at 54,119 units in July 2021, compared to 27,711 units in July 2020, registering a growth of 95.3% on a YoY basis. The company's domestic sales rose by 92% to 51,981 vehicles in July 2021 from 27,024 vehicles in July 2020. The domestic sales are higher by 19% as compared with 43,704 vehicles sold in June 2021. The auto major said its passenger vehicle sales in the domestic market stood at 30,185 units in July, as compared to 15,012 units in the same month last year. Commercial vehicle sales in the domestic market stood at 21,796 units, up 81% from 12,012 units in July 2020.

Escorts gained 1.41%. The company's tractor sales rose 23.3% to 6,564 units in July 2021 from 5,322 units sold in July 2020. Sequentially, Escorts' total tractor sales declined 47.6% in July 2021 as compared with 12,533 tractors sold June 2021. The company said it has registered highest ever July sales. Domestic tractor sales in July 2021 was at 6,055 tractors as against 4,953 tractors in July 2020, registering a growth of 22.2%. The three-week slowdown in monsoon activity from mid-June to mid-July temporarily affected sowing of Kharif crops leading to some slowdown in sales in July. Meanwhile, Escorts said that the commodity inflation continued to put pressure on the margins despite three price increases in the last nine months. Export tractor sales in July 2021 was at 509 tractors against 369 tractors sold in July 2020, registering a growth of 37.9%.

Hero MotoCorp rose 0.93%. The company said that its total sales in July 2021 stood at 4,54,398 units, down by 12.6% from 5,20,104 units sold in July 2020. The company's total sales are lower by 3.1% as compared with 4,69,160 units sold in June 2021. While domestic sales declined by 16.3% to 4,29,208 units, exports, however, surged to 25,190 units (up 3.33x YoY) in July 2021 over July 2020. As compared with June 2021, domestic sales and exports are lower by 2.1% and 17.8%, respectively.

Earnings Impact:

Housing Development Finance Corporation (HDFC) rose 0.99%. The housing financer reported 1.7% fall in standalone net profit to Rs 3,000.67 crore on a 10.4% fall in total income to Rs 11,663.14 crore in Q1 FY22 over Q1 FY21. The net interest income (NII) for the quarter ended 30 June 2021 stood at Rs 4,147 crore compared to Rs 3,392 crore in the previous year, representing a growth of 22%. The reported Net Interest Margin (NIM) was 3.7%. The spread on loans over the cost of borrowings for the quarter ended 30 June 2021 was 2.29%. The spread on the individual loan book was 1.93% and on the non-individual book was 3.32%.

Emami rose 2.17%. The FMCG company reported 96.4% jump in consolidated net profit to Rs 77.79 crore in Q1 FY22 from Rs 39.30 crore in Q1 FY21. Revenue from operations increased by 37.3% YoY to Rs 660.95 crore during the quarter. As compared with Q4 FY21, the company's net profit and revenue from operations have declined by 11.3% and 9.6%, respectively. Emami said that the second wave of COVID pandemic surged across the country from mid-April onwards leading to lockdowns and restrictions in various states, severely affecting both urban and rural regions. While the initial weeks of April witnessed sustained growth momentum, subsequent increase in COVID cases led to a challenging phase over the month of May. While personal care products were impacted, demand for Health and hygiene products was also muted compared to the first wave phase.

Macrotech Developers spurted 8.95% after the real estate company posted a consolidated net profit of Rs 160.91 crore in Q1 FY22 as compared to a net loss of Rs 134.44 crore in Q1 FY21. Consolidated net sales soared 221% to Rs 1,605 crore in Q1 FY22 from Rs 500 crore in Q1 FY21. On a sequential basis, net profit slumped 48% while net sales declined 36.6% in Q1 FY22 over Q4 FY21. Profit before tax stood at Rs 219.56 crore in Q1 FY22 as compared to a pre-tax loss of Rs 230.52 crore in Q1 FY21. The company witnessed strong recovery from the second wave of COVID-19 with pre-sales of Rs 650 crore in June which is 69% of the overall pre-sales in the quarter, inspite of the continuing partial restrictions in Mumbai. For Q1 FY22, Lodha had 88% growth in pre-sales and 346% growth in collections compared to Q1 FY21 which was the first wave of COVID.

Varun Beverages rose 3.08% after the company reported 123% jump in consolidated net profit to Rs 318.80 crore in Q2 2021 from Rs 142.97 crore in Q2 2020. Improved profitability was driven by lower finance cost in Q2 CY 2021 which declined by 36.9% to Rs. 46.78 crore from Rs. 74.19 crore in Q2 CY2020. Finance cost declined due to lowering of average cost of borrowing and reduction in total debt. Net revenues increased by 49.4% YoY to Rs 2,449.85 crore during the quarter, primarily because of robust volume growth over last year and marginal increase in realizations per case. Total sales volume increased by 45.4% YoY to 152.3 million cases in Q2 CY2021 as compared to 104.8 million cases in Q2 CY2020, led by strong growth in the month of Apr'21 compared to low base of previous year same month and a steady recovery in the month of Jun'21, despite the second wave of pandemic and related lockdowns, which led to a de-growth in the month of May'21.

PI Industries soared 12.56% after the company's consolidated net profit rose 28.7% to Rs 187.20 crore on a 12.6% increase in net sales to Rs 1,193.80 crore in Q1 FY22 over Q1 FY21. Consolidated profit before tax rose 19.9% to Rs 227.70 crore in Q1 FY22 as against Rs 189.90 crore in Q1 FY21. Meanwhile, PI Industries has intimated regarding its execution of a business transfer agreement with Ind Swift Laboratories (ISLL) and certain identified promoters of ISLL for the acquisition (either itself or through its affiliate) of its API business division by way of a slump sale on a going concern basis. ISLL is engaged in the business of manufacturing Active Pharmaceutical Ingredients (API) and intermediates.

Britannia Industries rose 2.51% after the FMCG major posted a 7% rise in consolidated net profit to Rs 389.55 crore on a 10.3% rise in net sales to Rs 3,352 crore in Q1 FY22 over Q4 FY21. The FMCG company's consolidated sales & net profit declined 1% & 29% respectively versus last year on a higher base. Consolidated profit before tax rose 7.8% quarter on quarter while it tumbled nearly 28% year on year to Rs 531 crore in Q1 FY22. The FMCG major reported its quarterly result after market hours yesterday, 30 July 2021.

UPL fell 2.13%. The company posted a 23% rise in consolidated net profit to Rs 678 crore on a 9% rise in revenue to Rs 8,515 crore in Q1 FY22 over Q1 FY21. Consolidated profit before tax declined 25% to Rs 597 crore in Q1 FY22 from Rs 796 crore reported in Q1 FY21. The company reported a deferred tax credit of Rs 337 crore in Q1 FY22 which aided net profit. EBITDA grew by 9% to Rs 1,862 crore in Q1 FY22 from Rs 1,704 crore in Q1 FY21, supported by favorable product mix and realisations partly offset by cost pressures. EBITDA margin slightly improved to 21.9% in Q1 FY22 from 21.7% in Q1 FY21.

Bandhan Bank rose 2.97%. The bank's standalone net profit dropped 32.1% to Rs 373.08 crore on a 15.8% rise in total income to Rs 3,943.37 crore in Q1 FY22 over Q1 FY21. Standalone profit before tax skid 32.5% to Rs 496.21 crore in Q1 FY22 as against Rs 735.12 crore in Q1 FY21. The bank's gross non-performing assets (NPAs) grew 539.77% to Rs 6,440.38 crore as on 30 June 2021 as against Rs 1,006.66 crore as on 30 June 2020. The ratio of gross NPAs to gross advances stood at 8.18% as on 30 June 2021 as against 1.43% as on 30 June 2020. The ratio of net NPAs to net advances stood at 3.29% as on 30 June 2021 as against 0.48% as on 30 June 2020.

Central Depository Services (India) was locked in an upper circuit of 5% at Rs 1,397.95 after the company posted a 38.4% rise in consolidated net profit to Rs 63.87 crore on a 79.7% rise in net sales to Rs 117.28 crore in Q1 FY22 over Q1 FY21. Sequentially, net profit grew 24% while net sales rose by 13.5% in Q1 FY22 over Q4 FY21. Profit before tax stood at Rs 84.6 crore in Q1 FY22, rising 50.2% year on year and 22.75% quarter on quarter.

Global Markets:

European Asian stocks edged higher on Monday tracking positive sentiment around the world to begin the month.

The Caixin/Markit manufacturing Purchasing Managers' Index for July 2021 released on Monday came in at 50. The Caixin manufacturing PMI figure had come in at 51.3 in June 2021. China's official manufacturing PMI released over the weekend also showed factory activity growth slowing in July 2021, with the figure for the month coming in at 50.4 versus June's reading of 50.9. The COVID-19 situation in the region may also weigh on investor sentiment. More areas in Japan entered a COVID-19 state of emergency on Monday due to a spike in virus cases, as per reports.

U.S. stock indexes closed lower Friday, with renewed concerns about a rise of cases of the delta variant COVID-19 and disappointing results from Amazon.com partly blamed for the slump. Data on Friday showed the core personal consumption expenditures price index rose 3.5% in June year over year. A final reading of the University of Michigan's consumer-sentiment index fell to 81.2 in July from a reading of 85.5 in June, though it exceeded the initial July figure of 80.8.

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