According to the India Strategy – the Eagle Eye Report by Motilal Oswal Financial Services Limited (MOFSL), Oil & Gas, Consumer and Automobiles sectors outperformed in Apr’22. On the other hand, the Technology sector was the main laggard. Overall, Global equity markets declined in Apr’22 due to concerns on inflation and monetary tightening. 60% of BSE 200 constituents have gained in Apr’22. The 4QFY22 earnings were in line so far with EBITDA margin seen impacted. For the MOFSL Universe (65 companies), sales/EBITDA/PBT/PAT growth stands at 19%/14%/26%/30% YoY (v/s MOFSL’s expectation of 18%/15%/23%/22% YoY), respectively.
Nifty: 56% of the index constituents gain in Apr’22:
Ø Within Nifty, 28 companies posted gains in Apr’22 led by Auto stocks. M&M, Hero Motocorp and Eicher are among the top-10 gainers. Five out of top 10 laggards were from the Technology space (TCS, HCL Tech, Wipro, Tech Mahindra, and Infosys).
Ø Within Nifty, 50% of the constituents are trading higher in CY22YTD. NTPC, Coal India, ITC, Reliance Industries, Adani Ports and Bajaj Auto led the gainers pack with gains of over 15% CY22YTD.
BSE 200: 60% of the index constituents gain in Apr’22:
Ø Around 60% of the BSE 200 constituents gained in Apr’22 with Adani Group companies leading the gainers pack MoM.
Ø Around 38% of the BSE 200 constituents are trading higher in CY22YTD with two companies having gained by more than 100% YoY.
BSE 200: 40% of the index constituents decline in Apr’22:
Ø About 40% of the BSE 200 constituents declined in Apr’22. LTI, LTTS, Mindtree, and Mphasis dipped by more than 15% MoM.
Ø Around 62% of the BSE 200 companies have declined in CY22YTD. Vodafone Idea, L&T Infotech, Dr Lal Pathlabs have dropped by over 30%.
Midcaps outperform largecaps during the last 12 months:
Ø During the last 12 months, midcaps have risen 23% (v/s a 17% rise for the Nifty) while in the last five years, midcaps have underperformed by 19%.
Average daily cash volumes highest in six months:
Ø Average daily cash volumes after hitting a 14-month low in Dec’21 to INR579b have steadily increased and are up 27% since then to INR733b.
Ø Non-institutional participation rose to 58% of total cash volumes in Apr’22.
GST collections at a record high in Apr’22:
Ø GST collections in Apr’22 totaled INR1.7t, implying a five-month high growth of 18.5% YoY. This amounts to 10.7% of FY23BE of INR15.6t, higher than 9.5% of FY22 actual collections.
Ø This was the 10th consecutive month of more than INR1t GST collection and also the highest since inception.
Headline CPI inflation at multi-decade highs all across the globe:
Ø Global headline CPI inflation is now above 7% YoY across the advanced economies (AEs) and emerging & developing economies (E&DEs). Interestingly though, the core inflation in E&Des (excluding Russia) softened from its 13-year peak of 5.1% YoY in Feb’22 to 4.8% in Mar’22, the same as in Jan’22.
Earnings in line so far in 4QFY22; EBITDA margin has been impacted:
Ø For the MOFSL Universe (65 companies), sales/EBITDA/PBT/PAT growth stands at 19%/14%/26%/30% YoY (v/s our expectation of 18%/15%/23%/22% YoY), respectively.
Ownership analysis: FII stake in Nifty-500 at a multi-quarter low:
Ø FII holding in Nifty-500 was down 40bp QoQ/210bp YoY to 20.3% in 4QFY22. DII holding in Nifty-500, however, was up 70bp QoQ/30bp YoY to 14.5%.
Ø The FII-DII ownership ratio in the Nifty-500 declined to 1.4x in 4QFY22 (from 1.6x in 4QFY21).
FII allocation in BFSI at a multi-quarter low:
Ø FIIs increased their weights in Oil & Gas, Utilities, Metals, Private Banks, Telecom, Chemicals, and PSU Banks, while reduced their holdings in NBFCs, Technology, Healthcare, Consumer, Insurance, Cement, Consumer Durables, Retail, Automobiles, and Capital Goods, sequentially.
DIIs increase their allocations in Oil & Gas, Utilities, and Metals:
Ø In 4QFY22, DIIs increased their weights in Oil & Gas (+80bp), Utilities (+60bp), Metals (+40bp) and Private Banks (+30bp).
Ø Conversely, they decreased their weights in Technology, Healthcare, Cement, Autos, Capital Goods, and Consumer, sequentially.
Nifty composition: O&G leads the gainers pack in Apr’22:
Ø O&G sector’s weight increased 180bp since Dec’21 at 14.1%, which was the highest since Dec’11 levels.
Ø Technology sector’s weight declined 300bp to 16.1% in Apr’22.
Ø NBFCs + Insurance sectors’ weights declined 110bp since Dec’21 to 10.3%.
FIIs saw seven straight month of outflows; DIIs saw inflows for 14th straight month:
Ø FIIs saw outflows for the seventh consecutive month at USD3.8b.
Ø Domestic inflows continue for the 14th consecutive month at USD3.1b in Apr’22.
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