Gains by ICICI Bank, SBI Life Insurance Help to Lift Indian Shares as HCLTech, Apollo Hospitals Fall

Indian shares opened higher on Monday, April 29, led by gains in SBI Life Insurance after their Q4 results.

TrimFeed gathered that the NSE Nifty 50 index rose 0.38% to 22,506.80, while the S&P BSE Sensex added 0.49% to 74,085.35. The financial services index, which has a high weightage, gained 0.7%, with 12 out of 13 major sectors logging gains.

ICICI Bank hit a record high after reporting better-than-expected quarterly profit. The bank's standalone net profit for Q4 FY24 increased 17.4% year-over-year to Rs 10,708 crore, exceeding analysts' estimates. ICICI Bank's total loans grew by 16.8% during the quarter, while deposits grew 19.6%. The bank's asset quality also improved, with its gross non-performing assets (NPA) ratio declining to 2.16% from 2.30% in the previous quarter.

SBI Life Insurance also gained after reporting a 4.4% increase in net profit for Q4 FY24, driven by a significant rise in net premium income. However, the company's margin for the value of new business declined the least among its peers.

In contrast, shares of HCLTech and Apollo Hospitals Enterprise fell on their Q4 results and merger news, respectively. HCLTech's stock plunged up to 6.3%, marking its largest drop in nearly 17 months, after the company projected lower-than-expected revenue growth of 3-5% for fiscal 2025, citing ongoing macroeconomic challenges. Analysts viewed HCLTech's outlook as below market expectations, and around 18 analysts lowered their target price for the company.

Apollo Hospitals Enterprise shares also fell over 8% after the company announced plans to raise ₹2,475 crore through private equity firm Advent International for its unit Apollo HealthCo, which manages the Apollo 24/7 vertical. The deal with Advent International raised concerns over the next 24-30 months. Advent International's investment will grant it a 12.1% stake in the merged entity, valuing it at an enterprise value of ₹22,481 crore.

Why this matters: The performance of these key companies and their sectors has a significant impact on the overall Indian stock market and investor sentiment. The financial services sector, in particular, holds a high weightage in the major indices. The Q4 results and strategic moves by these companies provide insights into the health of their respective industries and the broader Indian economy.

Brokerages expressed concerns about the lower-than-expected valuation of ₹14,478 crore for Apollo 24/7 and the aggressive doubling of Keimed's valuation to ₹8,003 crore within a year. However, the deal is seen as beneficial for Apollo Hospitals, despite concerns from the street, as it will reduce the cash burn and support future expansion of the 24/7 business and the integrated pharmacy distribution. Despite the concerns, brokerages maintained their buy recommendations on Apollo Hospitals, citing the potential positive impact of the merger and the company's growth prospects.

Key Takeaways

• Indian shares opened higher, led by gains in ICICI Bank and SBI Life Insurance.
• ICICI Bank reported better-than-expected Q4 profit, with improved asset quality.
• SBI Life Insurance's net profit rose 4.4% in Q4, despite margin decline.
• HCLTech's stock plunged after projecting lower-than-expected revenue growth for FY25.
• Apollo Hospitals' deal with Advent International raised concerns over valuation.