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Informist, Thursday, Nov. 7, 2024

By Anjana Therese Antony

MUMBAI – After Apollo Hospitals Enterprise' quarterly earnings parameters came higher than the Street's expectation, traders aggressively wrote put options of the company in anticipation of a further rise in the stock price in the near term. Shares of the company surged to a record high of INR 7,483.90 on the National Stock Exchange and closed 6.6% higher at INR 7,424.85, up for the third consecutive session. The stock was among the only five constituents of the Nifty 50 which closed higher Thursday, and the only one among them to close more than 6% higher. The remaining four gainers closed less than 1% higher. 

For the September quarter, the hospital chain operator posted a 63% on-year growth in its consolidated net profit to INR 3.79 billion, higher than the INR 3.59 billion the Street had expected. Its revenue was 15% higher at INR 55.89 billion, also higher than the 54.90 billion the market had expected. The overall financial performance of the company was backed by growth across all business segments. 

The Chennai-based company expects its average revenue per occupied bed per day to improve in the coming days, supported by increased health insurance penetration, its management said in a post-earnings call Thursday. It also anticipates the hospital business' margin to increase 100 basis points in the next 12 months as the mix of the revenues may change going forward. 

Premiums on INR 7,400-8,000 call options of Apollo Hospitals expiring Nov. 28 increased 146-212% and those on INR 7,450-7,100 put options declined 66-79%, hinting at the bullish approach. The maximum addition of open interest was at INR 8,000 call and INR 7,300 put options. The futures contract of the company also mirrored the rise in the spot level and closed higher. Traders added long bets in the November contract and open interest rose nearly 16% to 2.21 million. 

However, the sharp rise in shares of Apollo Hospitals was not absorbed by the market as the latter fell sharply amid weak domestic cues. Benchmark indices, which rose Wednesday after data showed a clear win for Donald Trump in the US presidential election, erased most gains Thursday. This was due to the fear of more foreign outflows from India to the US, slowdown in domestic earnings growth, and expensive valuations, among other reasons. 

The Nifty ended 1.2% lower at 24199.35 points and the Sensex closed 1% lower at 79541.79 points. The 24000 level is a crucial support for the index, and resistance is seen at 24250-24400 points, a senior technical and derivatives analyst at a domestic broking firm said. Both indices declined over 6% in October, the biggest monthly fall since March 2020 after the COVID-19 pandemic hit India. 

In the options chain of the Nifty 50, premiums on 24200-24000 put options expiring next week rose around 96% and those on 24200-24500 call options declined 56-69%, indicating at the possibility of a further fall in the index in the near term. The highest addition of open interest was at 26900-point call and 22250-point put options expiring next week. 

--Nifty 50 Nov closed at 24281.00, down 306.10 points; 81.65-point premium to spot index

--Nifty 50 Dec closed at 24438.00, down 296.90 points; 238.65-point premium to spot index

--Nifty 50 Jan closed at 24590.00, down 292.80 points; 390.65-point premium to spot index

Trent, Hindalco Industries, State Bank of India, Mahindra & Mahindra, Apollo Hospitals Enterprise, Reliance Industries, Tata Steel, HDFC Bank, ICICI Bank, Tata Motors, Tata Consultancy Services, Infosys, Vedanta, Adani Enterprises, Dixon Technologies India, Aditya Birla Fashion and Retail, Bharat Electricals, and Page Industries were the most actively traded contracts.  End

Edited by Tanima Banerjee

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