Closing Bell: A Rangebound Session
Indian equity markets ended lower for the second day but capped their best quarterly return since 2009.
Both the S&P BSE Sensex and the NSE Nifty 50 index ended little changed after trading in a narrow range throughout the session.
The Sensex ended at 34,915 while the Nifty managed to hold on to the 10,300 mark, ending at 10,302.
Among the sectoral indices, the Nifty Auto index outperformed in today's session, ending with gains of 1.1%.
Among the laggards, the Nifty PSU Bank and the Nifty Media indices fell 1.7% each while the Nifty Pharma index fell 1.5%. The Nifty Realty index fell for the fifth day in a row.
Broader markets too ended flat. The Midcap index fell 0.2% while the smallcap index ended with losses of 0.6%.
The India Volatility Index ended 0.4% higher at 29.03.
Market breadth was in favour of the laggards. 1,020 stocks on the NSE ended with losses while 786 ended with gains.
Strong Traction In Cement Stocks
Buzzing Stocks: Parag Milk Foods
- Among the worst performers on the Nifty 500 index
- Falls as much as 9.8% to Rs 94
- Down for the third straight day
- Longest losing streak in a month
- Down 11% in the last three sessions
- CEO Venkat Shankar resigned on Monday with immediate effect
- Today's volumes are 2.3 times higher than its 30-day average
- Still remains 100% above its 52-week low of Rs 48.5 on March 19, 2020
- Seven out of the 10 analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential for the stock as per Bloomberg data is 110%
Earnings Reaction: Shalimar Paints Q4FY20
- Sales down 7% to Rs 83.43 crore
- Net loss narrows to Rs 22.3 crore from Rs 43.3 crore
- Ebitda loss flat at Rs 33.74 crore
- Resumed operations in a phased manner
- No significant impact on financials as on March 31, 2020
- Do not see any medium to long-term risks in ability to continue as a going concern
- Numbers are consolidated and compared on a year-on-year basis
Shares trade 3.7% lower at Rs 62.75, post the announcement.
All Constituents Of The Pharma Index Decline
Earnings Reaction: Cera Sanitaryware Q4FY20
- Revenue down 29% to Rs 297.8 crore
- Net profit down 8% to Rs 35.65 crore
- Ebitda down 36% to Rs 42.25 crore
- Ebitda margin at 14.2% from 15.9%
- Deferred tax gain of Rs 13.55 crore this quarter
- No medium to long-term risk in the company's ability to recover carrying amount of assets in the future
- All numbers are consolidated and compared on a year-on-year basis
Stock Update: Godrej Consumer Products
- Gains for the 12th straight day
- Best gaining streak on record
- Trades at the highest level in five months
- Gained as much as 1.5% today to Rs 697.7
- Up 14% in the last 12 trading sessions
- Stock trades in overbought territory with Relative Strength Index (RSI) at 73
- Has gained 63% from its 52-week low of Rs 425.1 on March 23, 2020
- 20 out of the 39 analysts tracking the stock have a buy recommendation
- The stock trades 10.2% above its 12-month consensus price target of Rs 622.56, implying a negative return potential
Markets At 2:10 P.M.
- Benchmark indices remain rangebound
- Nifty up 0.47% at 10,360
- Sensex up 0.5% at 35,147
- Nifty Bank up 0.32% at 21,426
- Nifty Midcap Index up 0.3%
- Nifty Smallcap Index unchanged
- India Volatility Index up 0.3% to 29
- Nifty Pharma (down 1.1%), Nifty PSU Bank (down 0.9%) and Nifty Media (down 0.6%) remain the sectoral laggards
- Nifty Auto is the top sectoral gainer; up 1.4%
- Nifty Metal off the day's high; up 1%
- Shree Cement is the top Nifty gainer; up 4%
- BPCL is the top Nifty laggard; down 1.9%
- 892 stocks on the NSE trade with gains while 874 decline
Money Market Update
The rupee has ended with gains for the fourth straight day, marking its longest winning streak in two months.
The currency ended at 75.50 against the U.S. Dollar as compared to Monday's close of 75.58.
For today's session, the rupee emerged as the second best performing currency in Asia, behind the Chinese Renminbi.
For the April to June period, the currency has ended flat with a positive bias. The rupee has ended the quarter as the third worst performer in Asia behind the Hong Kong Dollar and the Japanese Yen.
Earnings Estimate: ONGC Q4FY20
- Revenue seen 13.3% lower at Rs 20,557 crore
- Net profit seen 37.8% lower at Rs 2,581 crore
- Ebitda seen 24% lower at Rs 9,348 crore
- Ebitda margin seen at 45.5% from 51.9%
- Net realisations seen at $51 per barrel from $58.24 per barrel
- All estimates are standalone and compared on a sequential basis
Factors At Play For ONGC:
- Ebitda likely to be lower due to lower crude realisation and lower added products.
- Gas prices were steady on a sequential basis
- Overall crude sales volumes may fall 4% to 5.6 MT
- Lower crude prices and gas production to impact topline
S&P Global Ratings Sees A Sharp Jump In Bad Loans
The Covid-19 pandemic may set back the recovery of India's banking sector by years, which can impact credit flows and ultimately the economy, according to S&P Global Ratings.
In our base case, we expect the nonperforming loans to shoot up to 13%-14% of total loans in the fiscal year ending March 31, 2021, compared with an estimated 8.5% in the previous fiscal year.Deepali Seth-Chhabria, S&P Global Ratings
The ratings agency also believes that the impact on NBFCs will be greater than that on banks.
The note also said that while asset quality of Indian banks was improving over the last 18 months, the pandemic has derailed the rehabilitation process.
Active Stock Options
- Tata Steel's 340 Call: Premium up 42.2% to Rs 13.1. The contract has added 93,500 shares in OPen Interest.
- HDFC's 1,800 Call: Premium up 30.6% to Rs 62.55. The contract has added 9,600 shares in Open Interest.
- HDFC Bank's 1,100 Call: Premium down 12.4% to Rs 30. The contract has added 84,700 shares in Open Interest.
Buzzing Stock: Sonata Software
- Among top performers on the Nifty Midcap Index
- Gains as much as 6.6% to Rs 248.7
- Biggest single-day gain in two months
- Trades at the highest level in over three months
- Up for the third straight day
- Longest winning streak in three weeks
- Has gained 12% in the last three trading sessions
- Today's volumes are 5.9 times higher than its 30-day average
- Breaks above its 100-Day Moving Average at 239
- Has gained 69% from its 52-week low of Rs 147 on March 24, 2020
- Five out of the seven analysts tracking the stock have a buy recommendation; 0 sell calls
- The stock is trading around its 12-month consensus price target of Rs 242
Flat Start In Europe
European markets have begun the final trading day of the quarter on a sombre note.
The Stoxx 600 has opened little changed with technology and industrial stocks leading the gains. Media and oil stocks are underperforming.
Most Asian markets have ended with gains while futures on the Dow Jones have reversed gains to trade lower by 70 points.
Brent Crude currently trades 0.8% lower at $41.37 per barrel while gold is unchanged at $1,772.8/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 0.4% at 3,246
- DAX up 0.4% at 12,283
- CAC up 0.3% at 4,961
- FTSE 100 unchanged at 6,226
- IBEX 35 up 0.2% at 7,286
How Are The Sectoral Indices Faring
Earnings Reaction: Nocil Q4FY20
- Revenue down 12% to Rs 212.7 crore
- Net profit down 39.5% to Rs 21.9 crore
- Ebitda down 38.8% to Rs 36.7 crore
- Ebitda margin at 17.3% from 24.8%
- Higher input costs impact margins
Shares fell as much as 4.4% to Rs 82.2, down for the fifth straight day.
Top Reads On BloombergQuint.com
Earnings Estimate: Vodafone Idea Q4FY20
- Revenue seen 5% higher at Rs 11,692 crore
- Ebitda seen 13% higher at Rs 3,859 crore
- Ebitda margin seen at 33% from 30.8%
- Net loss may narrow to Rs 4,610 crore from Rs 6,439 crore
- ARPU seen 10% higher at Rs 120
- All estimates are consolidated and compared on a sequential basis
Shares trade 3.1% lower at Rs 10.75, ahead of the earnings announcement.
Markets At Noon
- Benchmark indices off the day's high
- Nifty up 0.25% at 10,337
- Sensex up 0.25% at 35,050
- Nifty Bank up 0.43% at 21,450
- Nifty Midcap Index up 0.4%
- Nifty Smallcap Index gives up gains to trade little changed
- India Volatility Index up 0.7% at 29.1
- Nifty Pharma is the top sectoral laggard; down 0.9%
- Nifty I.T., Nifty Media and the Nifty PSU Bank index are the other sectoral laggards
- Nifty Metal is off the day's high; up 0.9%
- Tata Steel remains the top Nifty gainer; up 2.8%
- GAIL remains the top Nifty laggard; down 1.6%
- 901 stocks on the NSE trade with gains while 828 decline
Buzzing Stock: Adani Green Energy
- Among the worst performers on the BSE Smallcap Index
- Locked in a 5% lower circuit at Rs 358.7
- Down for the fifth straight day
- Locked in a 5% lower circuit on all five days
- Longest losing streak in four months
- Down 22.6% in the lsat five trading sessions
- Today's volumes are low
- Snapped a 14-day winning streak on June 24, 2020
- Down 26% from record high of Rs 486.6 on June 24, 2020
Stock Reaction: Talbros Automotive Components
The company informed the exchanges on Monday that it has received cumulative orders worth $31 million or Rs 234 crore including orders received by its JVs and subsidiaries.
The orders span over a period of five years, starting H2FY21 and are expected to be completed by FY26, the company said in a statement.
A major part of the order is from an international OEM company based in India and it will include domestic as well as export orders.
The company also reported earnings on Monday where net profit fell 96% compared to the previous year while revenue and Ebitda fell 14% and 22% respectively.
Shares gained as much as 20% - the biggest single-day gain since February 2015 to Rs 120.5. The stock is trading at a four-month high.
SAIL, JSPL Lead Gains On The Metal Index
Earnings Reaction: Raymond Q4FY20
- Revenue down 29% to Rs 1,278.7 crore
- Net loss of Rs 68.2 crore from net profit of Rs 67.5 crore
- Ebitda loss of Rs 7.3 crore from Ebitda gain of Rs 167 crore
- Inventory gain of Rs 180 crore this quarter
- Textile segment revenue down 30% to Rs 581.9 crore
- Shirting segment revenue down 24% to Rs 118.7 crore
- Apparel business revenue down 41% to Rs 289.3 crore
- Garmenting business revenue down 14% to Rs 181.2
- Real Estate business revenue up 90% to Rs 37.97 crore
- Topline impacted by Rs 414 crore and Ebitda impacted by Rs 134 crore due to the Covid-19 lockdown
- Secondary sales will remain sluggish due to subdued market conditions.
Shares fell as much as 3.8% to Rs 276.2, down for the sixth straight day. This is the longest losing streak for the stock in three months.
Stock Reaction: Oil India
The company has informed the exchanges regarding the loss in production due to the blowout at the Baghjan oil well in Assam.
The press release said that there was a production loss of 86 million tonnes of crude oil and 0.13 MMSCM of Natural Gas as reported on June 28, 2020. Operations were disrupted in 13 oil wells and one gas well.
According to the company, the total production loss since May 27, 2020 due to flooding and other factors like bandhs and blockades is 8,832 million tonnes of crude oil and 11.38 MMSCM of natural gas.
Shares are trading near the day's low, down 0.8% at Rs 94.9, snapping a two-day gaining streak.
Earnings Reaction: Jammu & Kashmir Bank
- Net Interest Income up 6% to Rs 987.3 crore
- Net loss of Rs 293.8 crore from net profit of Rs 213.7 crore
- Gross NPA at 10.97% from 11.1% in the previous quarter
- Net NPA at 3.48% from 4.36% in the previous quarter
- Provisions more than double to Rs 620.5 crore from the previous quarter
- Capital Adequacy Ratio at 11.38%
- Extended moratorium to accounts worth Rs 10,290.3 crore
- Provision Coverage Ratio at 78.59%
Shares are locked in a lower circuit of 5% at Rs 18.1 and are down for the third straight day.
Buzzing Stock: Emami
- Top performer on the Nifty Midcap Index
- Gains as much as 10.7% to Rs 227.5
- Biggest single-day gain in nearly three months
- Trades at the highest level since April this year
- Reverses Monday's decline of 7%
- Today's volumes are 2.6 times higher than its 30-day average
- Breaks above its 100-Day Moving Average of 216
- Brokerage firm Macquarie has maintained its outperform rating on the stock with a price target of Rs 252. In a note, Macquarie said that reduced promoter pledge post the cement business deal will contribute to the company's re-rating
- The stock has recovered 71.5% from its 52-week low of Rs 130 on March 30, 2020
- 20 out of the 32 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 16.5%
Earnings Reaction: Petronet LNG
- Revenue up 2% to Rs 8,567.7 crore
- Net profit down 20% to Rs 373.2 crore
- Ebitda up 11% to Rs 698.1 crore
- Ebitda margin at 8.1% from 7.5%
- Higher finance costs keep margins in check
- Total expenses up 4% tp Rs 8,167.3 crore
- Board declared dividend of Rs 7 per share
Shares fell as much as 3.71% to Rs 253. They have now recovered and trade 0.3% higher at Rs 263.55 per share.
Stock Reaction: Steel Strips Wheels
The company has informed the exchanges that it has won fresh export orders for the truck and caravan trailer market in the U.S.
The order consists of supplying close to 14,000 steel wheels and it will be executed in the month of July and August from the company's Chennai plant.
The revenue generated from the additional order will be close to $3,15,000, according to the company's exchange filing.
The stock gained as much as 6.1% to Rs 444. It will also be reporting its March quarter earnings today.
Earnings Reaction: Tata Steel
The steel producer reported a net loss of Rs 1,095.7 crore for the March quarter. The loss was due to an exceptional item of Rs 3,405.8 crore.
The exceptional item included provisions for impairment of non-current assets worth Rs 3,141 crore.
Operational performance of the company was better than estimates.
Ebitda fell 38.2% while margins stood at 13.7% from 17.7% in the previous year.
Brokerage firm JPMorgan has maintained its overweight rating on the stock with a price target of Rs 440. Morgan Stanley too has maintained its overweight rating on the stock with a price target of Rs 405.
Shares gained as much as 5.2% to Rs 337.6, snapping a two-day losing streak.
Markets At 10:10 A.M.
- Benchmark indices trade near day's low
- Nifty up 0.6% at 10,377
- Sensex up 0.6% at 35,160
- Nifty Bank up 0.9% at 21,555
- Nifty Midcap Index up 0.6%
- Nifty Smallcap Index up 0.2%
- India Volatility Index little changed at 28.84
- Nifty Media (down 0.7%), Nifty Pharma (down 0.6%) and Nifty I.T. (down 0.2%) are the sectoral laggards
- Nifty Metal index is the top sectoral gainer; up 2%
- Nifty Realty index snaps four-day losing streak; gains as much as 1%
- Tata Steel is the top Nifty gainer; up 4.4%
- 42 out of the 50 Nifty constituents advance
- GAIL is the top Nifty laggard; down 1%
- 1,057 stocks on the NSE gain while 607 decline
Money Market Update
The rupee opened stronger in today's session, gaining for the fourth straight day. This is the best winning streak for the rupee in two months.
The currency opened at 75.47 against the U.S. Dollar as compared to Monday's close of 75.57.
Traders will look forward to several economic indicators to be released today.
First, the government will release its fiscal deficit data for the April-May period. It will also be releasing its balance of payments data which analysts estimate at $3 billion current account deficit for the March quarter.
Yield on the 10-year government bond opened at 5.87% as compared to Monday's closing of 5.904%. Bond traders will look forward to the state government debt auction worth Rs 9,000 crore.
Coronavirus India Updates
- India reports 18,522 cases in the last 24 hours.
- Total cases rise to 5,66,840
- Active cases at 2,15,125
- Patients that have been cured / discharged or migrated at 3,34,822
- Death toll rises to 16,893
- 418 deaths reported in the last 24 hours
- 13,099 patients recovered in the last 24 hours
Stock Reaction: Axis Bank
The Mumbai-based private lender will hold a board meeting on Thursday, July 2, to consider raising of funds.
The fund raise will happen through issue of equity shares, depository receipts and any other instruments or securities through a QIP, ADR or GDR program, the bank said in an exchange filing.
The amount to be raised through these methods has not been declared yet.
Shares gained as much as 2.5% to Rs 414.8 and are among the leading gainers on the Nifty 50 index.
Earnings Fineprint: Bharat Electronics Q4FY20
- Revenue up 49% to Rs 5,805.8 crore
- Net profit up 55% to Rs 1,034.5 crore
- Ebitda up 60% to Rs 1,482.5 crore
- Ebitda margin at 23.9% from 25.5%
- Decline in finance costs aid operational performance
- Order book position as on April 1, 2020 at Rs 51,973 crore
- Recommends final dividend of Rs 1.4 per share
- All numbers are standalone and compared on a year-on-year basis
Shares gained as much as 7.6% to a five-month high of Rs 94.20.
Stock Reaction: Shilpa Medicare
The company has informed the exchanges regarding the launch of the Indian branded generic of Axitinib, with a brand name Axishil.
Axishil is used to treat patients suffering from Advanced Renal Cell Carcinoma, the company said in an exchange filing.
The company further states that the monthly cost of treatment post the launch of this drug will reduce to Rs 14,940 as compared to the earlier cost of Rs 1.66 lakh.
Shares gained as much as 5.4% to Rs 498.1, post the announcement, snapping a four-day losing streak.
Earnings Reaction: Bharat Dynamics
The defence equipment manufacturer reported a 63.7% rise in its revenue as compared to the previous year.
Net profit rose 2.5 times while Ebitda was higher by 2.4 times at Rs 404.8 crore.
Ebitda margins saw a sharp expansion, rising to 28.2% from 13.7%
A substantial decline in finance costs and employee expenses led to an expansion in the company's margins.
The company has also declared a dividend of Rs 2.55 per share.
Shares gained as much as 15.7% - the most on record to Rs 349.7. The stock now trades at the highest level since November 2019. It is also the top performer on the Nifty 500 index.
Aiding The Nifty Rebound
Opening Bell: Reversing Losses
Indian equity markets erased most of Monday's losses, opening higher on the final trading day of the April-June period. Cues from Asia are positive, while futures on the Dow Jones trade with a positive bias.
The S&P BSE Sensex rose 0.6% on open to 35,168 while the NSE Nifty 50 index opened at 10,382, up 0.7%. Both benchmark indices are up nearly 20% this quarter.
Among sectoral indices, the Auto index has opened 1.1% higher while the PSU Bank and Metal index have opened with gains close to 1%.
The Nifty Media index is the only sectoral laggard, opening 0.3% lower.
Market breadth is in favour of the gainers. 1,113 stocks on the NSE opened with gains while 325 posted losses.
Latest On The Coronavirus
- Global cases cross the 10.2 million mark
- Death toll crosses 5.04 lakh
- World Health Organisation says worst of the pandemic yet to come
- More U.S. areas scaling back reopening
- China reports 19 new cases
- South Korea reports 43 new cases
- Lowest daily rise in cases in two weeks for Mexico
- Arizona to close bars, gyms, theaters
- Iran reports 162 deaths, highest in a single day. Reports say some 10,000 healthcare workers have contracted the virus.
Key Stocks In Focus
- Tata Steel: Revenue down 20.4% while Ebitda falls 38.1% compared to the previous year. The company reported a net loss of Rs 1,095.7 crore mainly due to an exceptional item of Rs 3,405.8 crore which includes provision for impairment of non-current assets.
- Minda Industries: Board approved raising Rs 250 crore via rights issue and Rs 300 crore via NCDs.
- SBI Cards and Payments Service: Allotted NCDs worth Rs 400 crore on a private placement basis.
- Tata Power: To consider raising funds on July 2.
- Talbros Automotive Components: Gets aggregate orders worth Rs 234 crore including JVs and subsidiaries. These orders are to be executed over a period of five years starting H2FY21 and are to be completed by FY26.
- IRB Infra: Allotted NCDs worth Rs 200 crore on a private placement basis.
- Non-Nifty Earnings Today: Vodafone Idea, IRCON International, RITES, MIDHANI, Deepak Fertilisers, Godfrey Phillips, Dish TV, Allcargo Logistics, Goa Carbon, Liberty Shoes, NBCC, National Fertilisers, Steel Strips Wheels, Healthcare Global.
To know more about results reported after market hours and what brokerages make of companies, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
U.S. Markets On Monday
- Benchmark indices erase most of Monday's losses
- S&P 500 gains over 2% erasing its losses for June
- Boeing led gains on the Dow Jones
- U.S. pending home sales posted a record gain
- Fed Chair Jerome Powell stressed on the importance of keeping the infection in check as the economy recovers.
- WHO warns that the worst of Covid-19 is yet to come
- Bloomberg Dollar Spot Index gained 0.2%.
- Yield on the ten-year treasury ended at 0.64%
- West Texas Intermediate crude rose 3% to $39.63 per barrel. It trades little changed today.
Get your daily fix of the global markets here.
Quarterly Gains In Store
Good Morning!
Indian equity markets are likely to reverse Monday's losses as indicated by futures.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.6% to 10,311 as of 8:05 a.m.
In the quarter ended June, the S&P BSE Sensex has gained 18.6% and the Nifty 50 has rebounded 20%. The benchmarks are set for their best quarterly gains since 2009.
Asian markets are recovering from their worst quarter in more than a decade.
Benchmarks in Japan, Australia and South Korea rose over 1%, while Hong Kong saw modest gains after the Trump administration suspended some trade benefits for the city.
The U.S. dollar and the treasuries remained flat.
The MSCI All Country World Index is up 21% this quarter, the biggest gain in 11 years.
West Texas Intermediate crude is down 0.5% to $39.5 per barrel.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
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