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The weekly expiry of the Nifty Financial Services index had a big role to play in the reversal that the Nifty witnessed on Tuesday. The index reversed nearly 250 points from the highs of the session, which took the Nifty Bank lower and consequently, the Nifty as well. If one puts the three charts next to each other, they would look a splitting image of each other.
24,971 was the high that the Nifty made on Tuesday and that will become the first barrier for the index to cross as it steps into the mid-week trade. For the index that has had a trading range of 550 points in the last two trading sessions, the eventual gain at close, is only three points! Wednesday will also be the weekly expiry of the Nifty Bank, which will yet again bring the indices back in the spotlight.
It will also be the last trading day of the month on Wednesday and as volatile a month as this has been, the index has so far gained 3.5% since the start of July.
Wednesday also promises to be an earnings-reaction and earnings-heavy day. Stocks like Tata Consumer Products, Ajanta Pharma, Dixon Technologies, Indus Towers, Navin Fluorine, Torrent Power, Macrotech Developers among others will be reacting to their quarterly results.
Four Nifty 50 constituents – Coal India, Mahindra & Mahindra, Maruti Suzuki and Tata Steel report results on Wednesday along with broader market names like Adani Power, Ambuja Cements, Aster DM Healthcare, Bank of Baroda, BHEL, Deepak Fertilisers, Birlasoft, Godrej Properties, Mankind Pharma, Prestige Estates and Zee Entertainment.
Foreign institutions remained net sellers in the cash market on Tuesday, while domestic institutions continued to be net buyers.
The short-term Nifty trend is choppy but the near-term trend remains intact, said Nagaraj Shetti of HDFC Securities, adding that the overall chart pattern is indicating some more consolidation or a minor dip in the next 1-2 sessions before a bounce from the lows. Immediate support remains at 24,600, while a move above 25,100 will bring the bulls back into action.
Osho Krishnan of Angel One believes that 25,000 will be a challenge for the bulls and only a sustained move above that level will begin the next leg of the rally. Immediate support stays at 24,600. He added that the muted price action does not change the scenario but raises concerns regarding the inherent strength of the index.
An underperforming Nifty Bank will again be in focus on Wednesday as it is the weekly options expiry. The index kept the Nifty gains in check through most of the July month, led the resurgence on Friday and Monday, and the sell-off from higher levels also took the Nifty down with it. The Nifty Bank made a high of 51,957 on Tuesday but corrected over 500 points from those levels, a script similar to Monday’s drop.
Om Mehra of SAMCO Securities said that the Nifty Bank formed a shooting star pattern on its charts for the second day in a row and remained below its 23.6% Fibonacci retracement level of 51,650. The immediate support remains at 51,000, followed by 50,750, with resistance at 52,100. The RSI too is struggling to cross the mark of 50.
The Nifty Bank is encountering resistance from a falling trend line which is near levels of 52,300 and hence, 52,000 – 52,300 will continue to act as a barrier for the index, while 51,000 will remain a strong support, said Hrishikesh Yedve of Asit C Mehta Investment Interrmediates.
What Are The F&O Cues Indicating?
These stocks saw fresh long positions on Tuesday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| IndiaMART | 4.95% | 19.21% |
| GNFC | 3.12% | 16.27% |
| Godrej Properties | 1.77% | 13.19% |
| Chambal Fertilisers | 2.74% | 11.13% |
| Dixon Tech | 2.98% | 9.14% |
These stock saw fresh short positions on Tuesday, meaning a decline in price but an increase in Open Interest:
| Stock | Price Change | OI Change |
| Exide Industries | -3.64% | 17.84% |
| Petronet LNG | -2.14% | 9.86% |
| Tata Consumer Products | -0.49% | 9.07% |
| Bata | -1.08% | 6.91% |
| Birlasoft | -1.26% | 6.41% |
Short covering was seen in these names on Tuesday, meaning a decline in Open Interest but an increase in price:
| Stock | Price Change | OI Change |
| Colgate-Palmolive | 4.88% | -10.91% |
| Navin Fluorine | 6.78% | -8.49% |
| SBI Card | 2.17% | -8.06% |
| Crompton | 3.58% | -7.95% |
| Bandhan Bank | 0.42% | -6.92% |
These are the stocks to watch out for ahead of Wednesday’s trading session:
- Tata Consumer Products: Net profit of ₹289.3 crore, lower than poll of ₹326 crore. Revenue of ₹4,352.1 crore, marginally below expectations of ₹4,376 crore. EBITDA up 22.5% to ₹667.4 crore, slightly higher than estimates of ₹655 crore. EBITDA margin expands by 70 basis points year-on-year to 15.3%, higher than the 15% estimate. Organic growth excluding acquisitions was 10%. Profit impacted by exceptional items and lower share of profits from associates and joint ventures. India beverage business revenue grew by 6% from last year. Coffee saw revenue growth of 28% this quarter. India foods business revenue grew 30% with 14% organic growth. Growth businesses, including Capital Foods and Organic India now account for 29% of the business.
- Dixon Technologies: Revenue at ₹6,580 crore, double from last year, and higher than poll of ₹5,325 crore. Earnings beat driven by strong performance in mobile segment. EBITDA up 88% to ₹248 crore, higher than poll of ₹205 crore. EBITDA margin at 3.8% from 4% last year, in-line with poll of 3.9%. Net profit also doubles year-on-year to ₹140 crore, well above the poll of ₹115 crore. Mobile and EMS business contributed to 79% of overall topline from 55% last year. Revenue up 189% from last year for Mobile and EMS business to ₹5,192 crore. Consumer Electronics business contribution down to 13% from 27% last year. Management aspires to scale up volumes to 40-45 million by financial year 2026-2027.
- Indus Towers: Net profit up 42.9% to ₹1,925.9 crore. Margins at 61.6% from 49.7% last year. Revenue up 4.3% to ₹7,383 crore. Board approves buyback worth ₹2,640 crore. The company intends to buyback up to 5.67 crore equity shares or 2.1% of the total paid-up equity capital of the company. Buyback price has been fixed at ₹465 per share. The buyback price is a 4% premium to Tuesday’s closing price. The buyback will be done through the tender offer route. August 9, 2024 has been fixed as the record date for the share buyback.
- Castrol India: Net profit up 3% to ₹232.2 crore. Revenue up 4.8% year-on-year to ₹1,397.5 crore. EBITDA up 4.1% to ₹322.4 crore. EBITDA margin at 23.1% from 23.2% last year.
- Navin Fluorine: Net profit down 16.8% to ₹51.2 crore. Revenue up 6.6% to ₹523.7 crore. EBITDA down 12.1% to ₹100.4 crore. EBITDA margin down to 19.2% from 23.3% last year. Refrigerant Gas prices continue to show recovery. AHF capex for ₹450 crore on schedule to commission by end of financial year 2025 or early financial year 2026. Specialty Chemical sales immpacted by inventory level rationalisation. It also signed a supply agreement for a patented agrochemical product catering to the Japanese market with incremental annual revenue potential worth ₹20 crore to ₹30 crore from 2025. Agro specialty capex at Dahej worth ₹540 crore to begin commercial production by September 2024.
- Zaggle Prepaid Ocean Services: Revenue up 112.9% from last year but down 7.7% sequentially to ₹252.2 crore. EBITDA up 186.3% to ₹26.95 crore but down 15.5% from March. Corporate customers at 3,119, up 20.2% year-on-year. Users on platform at 28.9 lakh, up 19.4% from last year and 5.9% from March.
- Torrent Power: Revenue up 23.3% to ₹9,033.7 crore. EBITDA up 56.8% to ₹1,857.9 crore. EBITDA margin at 20.6% from 16.2%. Net profit up 87.2% to ₹996.3 crore. Thermal PLF at 60.4% from 39.6% last year. Wind PLF at 28.3% from 30.5% last year. Solar PLF at 19.5% from 21.1% last year. Generation revenue up 65% from last year. Management saw increase in contribution from merchant power sales in gas-based power plants.
- MOIL: Strong quarter but in-line with Antique estimates. Revenue up 30% to ₹493 crore. EBITDA up 72% to ₹214 crore. EBITDA margin at 43.37% from 32.7%. Net profit up 76% to ₹152.35 crore. Had undertaken three successive price hikes between 3% and 40% across product range in April, May and June. Realisations will be impacted in Q2 as a 8% price cut was taken across products in July.
- Ajanta Pharma: Revenue up 12.1% to ₹1,145 crore, better than the ₹1,119 crore estimate. EBITDA at ₹330.35 crore, also higher than estimate of ₹296.2 crore. EBITDA margin at 28.9%, higher than the estimate of 26.5%. Net profit of ₹245.7 crore, higher than the estimate of ₹209 crore. Growth led by India, Asia, Africa and US generics. US Generics sales up 7% to ₹228 crore and now form 20% of sales. India business up 10% to ₹353 crore.
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