● Earnings: In FY22, the market is now expecting Nifty Earnings to grow by more than 25 pc, out of which lot is to do with the Favourable base of 1st Half of FY21.
However, the current lockdowns of different kinds in different parts of the country is expected to have some impact on the earnings. It remains to be seen whether the same will be made up in the remianing 10 months or we actually see a cut to the earnings. Given the sharp inflation in some of the commdoities, it will be interesting to see as to how much Pricing action is taken by Cos, without impacting volumes.
● Covid: Daily new cases surged over the month, with last 12 days registering >300,000/day. Last week of April appeared to be showing first signs of stabilizing around the 350,000/day mark, likely in response to the proliferation of local restrictions being imposed around the country. However, the last three days (Apr 30 – May 2) recorded a devastating increase, with new daily cases at 0.4/0.39/0.37 mn/day, respectively, as vaccination drive in some states gets hit by shortages of shots. That said, national positivity rates remain in the alarming 19-21% range. There is, however, rotation within the country – with states such as Kerala, Karnataka, UP and Tamil Nadu now witnessing increased stress. Yet, the declines seen in Mumbai (~4k from 10k two weeks back), Maharashtra (deceleration in pace of daily new cases) and some stagnation in Delhi recently creates a template and provides hope that the second wave will rapidly peak in most other parts of India. The absolute pace of vaccinations has slowed from 3.4 million/day to 2.5 million/ day over the last 10 days; about 9.15% of India’s population has received at least one dose.
● Vaccination: India announced the next phase of vaccinations wherein all citizens above the age of 18 years would be eligible from 1st May.However, shortage of vaccines meant a delay in implementation . To bridge the gap, government decided to fasttrack approvals of vaccines cleared for use in the US, UK, EU and Japan and allowed states / private players to procure the vaccines (upto 50% of supply) directly from the manufacturers. India inoculated ~140mn+ citizens against Covid by end-April.
● Oxygen Crisis: Rapid increase in Covid cases led to a severe shortage of medical oxygen in the country, despite all the efforts to divert the supplies from industries to hospitals Government decided to import more than ~10k oxygen concentrators and sanctioned ~100k concentrators / ~500 new oxygen plants under PM Cares Fund.
● State Elections: Out of the 5 state elections in April, 3 states (West Bengal- TMC, Assam-BJP, Kerala-LDF) voted for a return of the present ruling parties in a proincumbency move. Results of state elections are unlikely to materially impact the Rajya Sabha composition in 2022, with incumbent NDA likely to lose only one seat in Tamil Nadu.