KEY HIGHLIGHTS
Closing Bell: Banks Aid Gains
Indian equity markets began the new trading week with gains led by a recovery in banking stocks that bounced off their lows in the final 30 minutes of trade.
The S&P BSE Sensex ended 0.6% higher at 38,099 while the NSE Nifty 50 ended above the mark of 11,250, up 0.72% at 11,259.
The recovery was led by the banking stocks. The Nifty Bank recovered 350 points from its day's low of 21,404 to end 0.3% higher at 21,754.
Among other sectoral indices - Auto, Media and Metal stocks outperformed in today's session. The three sectoral indices ended with gains of 2.5% each.
The Nifty FMCG and I.T. indices ended with gains of over 1% each.
Pharma and PSU banking stocks were the laggards in today's session. The Pharma index fell 0.3% while the PSU Bank index fell 0.5%.
Broader markets were in-tandem with the benchmarks. The Midcap index ended with gains of 0.5% while the smallcap index rose 0.9% at the close of trade.
India Volatility Index ended 2.5% lower at 21.14.
Market breadth ended in favour of the gainers. 1,153 stocks ended with gains while 684 reported losses.
Stocks That Were Buzzing In Today's Trading Session
How Have The Sectoral Indices Fared
Cotton Inventory In India Seen Rising To Record
Cotton stockpiles in India, the world's biggest grower are expected to climb to an all-time high, Bloomberg News reports.
Lockdowns related to Covid-19 cutting demand from spinning mills is one of the primary reason for the same, according to the Cotton Association of India.
Stockpiles may total 10.25 million bales of 170 kg each at the end of the marketing year of September 30 as compared with an earlier estimate of 5.55 million bales.
Cotton output in the year that began in October is estimated at 35.45 million bales as compared to an earlier forecast of 33.55 million.
Buzzing Stock: NOCIL
- Gains as much as 10.8% to Rs 125.3
- Biggest single-day gain since January 2018
- Trades at the highest level since June 2019
- Has gained in four out of the last five trading sessions
- Today's volumes are 44% higher than its 20-day average
- Trades above all key Daily Moving Averages
- Average time to collect from customers is one fo the worst among comparable companies
- Stock approaching overbought territory with Relative Strength Index (RSI) at 68
- Has nearly tripled from its 52-week low of Rs 44 on March 24, 2020
- six out of the nine analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 8.2% above its 12-month consensus price target of Rs 107, implying a negative return potential
Hero Pins Hopes On Festive Sales
Buzzing Stock: Zee Entertainment
- Second best performer on the Nifty 50 index.
- Gains as much as 5.5% to Rs 170.
- Trades at the highest level in over a month.
- Has gained in nine out of the last 10 trading sessions.
- Snapped a eight-day gaining streak on Friday
- Up 26% in the last 10 trading sessions
- The company will be reporting its June quarter results tomorrow
- Today's volumes are 26% higher than its 20-day average
- Breaks above its 50-Day Moving Average at 163.5
- Has gained 49% from its 52-week low of Rs 114 on March 25, 2020
- 10 out of the 27 analysts tracking the stock have a buy recommendation; 7 sell calls
- The stock trades at the level of its 12-month consensus price target of Rs 169.33
Metal Index Gains In 10 Out Of The Last 11 Sessions
Stock Reaction: Britannia
The company at its board meeting held today has declared an interim dividend of Rs 83 per share.
The record date for the interim dividend has been set as August 27, 2020.
The company has also accorded its approval to issue unsecured, non-convertible, redeemable, fully paid-up debentures, along with an appropriate cash component as may be decided worth Rs 41.5 per equity share.
Shares recovered from the day's low to gain as much as 2.5% to Rs 3,895, post the announcement.
Buzzing Stock: Parag Milk Foods
- Trades at the highest level in six months
- Gains as much as 8.1% to Rs 113.5
- Biggest single-day gain in two months
- Up for the 11th straight day
- Longest winning streak on record
- Has gained 30% in the last 11 trading sessions
- Today's volumes were nearly triple its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 79
- Has more than doubled from its 52-week low of Rs 48.5 on March 19, 2020
- 7 out of the 10 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 20.6%
Markets At 2:10 P.M.
- Benchmark indices remain rangebound
- Nifty up 0.37% at 11,219
- Sensex up 0.2% at 37,954
- Nifty Bank down 0.5% at 21,574
- Nifty Midcap index up 0.4%
- Nifty Smallcap index up 0.8%
- India Volatility Index unchanged at 21.64
- Nifty Media index remains the top sectoral gainer; up 2.6%
- Nifty Metal, Nifty Auto are the other sectoral indices with gains of over 2%
- Nifty I.T., Nifty Realty up 1% each
- Nifty PSU Bank remains the top sectoral laggard; down 0.9%
- NTPC remains the top Nifty gainer; up 8.3%
- State Bank of India is the top Nifty laggard; down 2%
- 1,144 stocks on the NSE trade with gains while 675 decline
Money Market Update
The rupee has ended flat after a rangebound session of trade.
The currency ended at 74.88 against the U.S. Dollar as compared to Friday's close of 74.90. The rupee made an intra-day low of 74.91 while its high was 74.78, from which is had a pullback.
The currency managed to outperform six of its peers in today's trading session.
Yield on the 10-year government bond ended at 5.95% which is the same level at which is ended on Friday.
Active Stock Options
- Reliance Industries' 2,200 Call: Premium down 29.65% to Rs 33.45. The contract has added 120 shares in Open Interest.
- NTPC's 100 Call: Premium up 311.1% to Rs 1.85. The contract has added 451 shares in Open Interest.
- Sun TV's 440 Call: Premium up 151.4% to Rs 13.2. The contract has added 436 shares in Open Interest.
F&O Snapshot: Active Options Contracts
- Nifty August futures add 8.7% and 11,761 shares in Open Interest.
- Nifty Bank August futures add 12.3% and 7,344 shares in Open Interest.
Nifty: August 20 Expiry
- 11,200 Put: Premium down 26.5% to Rs 81.1. The contract has added 20,240 shares in Open Interest.
- 11,200 Call: Premium up 6% to Rs 97.5. The contract has added 15,149 shares in Open Interest.
- 11,100 Put: Premium down 31.1% to Rs 47.5. The contract has added 15,076 shares in Open Interest.
Nifty Bank: August 20 Expiry
- 21,500 Put: Premium up 5.4% to Rs 265. The contract has added 11,956 shares in Open Interest.
- 21,000 Put: Premium down 1.6% to Rs 99.2. The contract has added 8,966 shares in Open Interest.
- 22,000 Call: Premium down 29% to Rs 136.1. The contract has added 12,329 shares in Open Interest.
India's Diesel Sales Fall 20% In August
Diesel sales at India's three biggest fuel retailers fell in the first half of August as compared to the previous month while Gasoline sales rose slightly, Bloomberg News reports, citing preliminary data from officials with direct knowledge of the matter.
Sale of diesel - the most widely used petroleum product in India fell 20% as compared to the previous month and 23% year-on-year to 1.78 million tonnes over August 1-15.
Seasonal rains and rolling lockdowns in several provinces impacted consumption of Diesel.
Gasoline sales for the first half of August rose 3% month-on-month and declined 6% year-on-year.
Spokespeople of the three fuel retailers were not available for comments on the provisional data.
Buzzing Stock: Thyrocare Technologies
- Trades at an all-time high
- Gains as much as 14.9% to Rs 810
- Biggest single-day since May 2016
- Today's volumes are nearly 15 times higher than its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 78
- Has nearly doubled from its 52-week low of Rs 409.6 on March 13, 2020
- 8 out of the 11 analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 18.1% above its 12-month consensus price target of Rs 636.2, implying a negative return potential
European Markets Open Higher
Benchmark indices in Europe opened higher, taking cues from its peers in China and futures in the U.S.
The Stoxx 600 has opened 0.2% higher led by miners and tech shares. Travel & Leisure are the biggest laggards.
Asian markets have ended mixed while futures on the Dow Jones are trading higher by 120 points.
Brent crude trades 0.7% higher at $45.14 per barrel while Gold trades 0.4% higher at $1,952.8/Oz.
Let's take a look at how benchmarks across Europe have opened:
- Euro Stoxx 50 up 0.2% at 3,311
- DAX up 0.3% at 12,937
- CAC up 0.3% at 4,977
- FTSE 100 up 0.2% at 6,099
- IBEX 35 little changed at 7,149
How Are The Sectoral Indices Faring
Nifty Media Index Up In Five Out Of The Last Six Sessions
Analysts Divided On Endurance Tech
Most analysts have raised price targets on Endurance Technologies Ltd. but remain divided over its growth outlook.
Investec has maintained a buy rating on the stock and raised its price target to Rs 1,030 from the earlier Rs 700, citing a good track record, product & client expansion and capital allocation.
Investec has increased its target PE multiple on the stock to 25x from 18x.
On the other hand, Antique stock broking too has raised its price target on the stock to Rs 652 from Rs 563 but has maintained a sell rating citing an unfavourable risk-reward.
Antique believes that the company announced past order-books is unlikely to reach its peak revenue potential over the next two years due to loss of business orders elsewhere.
Shares of the company gained as much as 2.8% to Rs 987.5 and are up for the second straight day.
Markets At Noon
- Benchmark indices continue to fluctuate between gains and losses
- Nifty up 0.16% at 11,197
- Sensex unchanged at 37,889
- Nifty Bank down 0.55% at 21,560
- Nifty Midcap index up 0.25%
- Nifty Smallcap index up 0.5%
- India Volatility Index up 1.15% at 21.92
- Nifty Auto, Nifty Media are the top sectoral gainers; up 1.9% each
- Nifty Realty is the other major sectoral gainer; up 1.5%
- Nifty PSU Bank is the top sectoral loser; down 0.8%
- NTPC is the top Nifty gainer; up 5.9%
- Grasim is the top Nifty laggard; down 2.5%
- 1,056 stocks on the NSE trade with gains while 706 decline
The Story Of GMM Pfaudler's 300% Surge
Buzzing Stock: NTPC
- Top gainer on the Nifty 50 index
- Gains as much as 8.9% to Rs 96.25
- Biggest single-day gain since May 2014
- Trades at the highest level in over a month
- Up for the second straight day
- Today's volumes are more than five-times higher than its 20-day average
- Breaks above its 50 and 100-Day Moving Average at 91.2 and 90.8 respectively
- 26 out of the 27 analysts tracking the stock have a buy recommendation; 0 sell call
- Return potential of the stock is per Bloomberg data is 46.8%
- The company's chairman Gurdeep Singh during its first quarter analyst call said that it plans to enter the power distribution business and may begin by acquiring one of the state utilities.
- The company plans to appoint a leader for its distribution business.
- It is not looking at building greenfield thermal power projects and will be selective in brownfield expansion.
Earnings Reaction: Dilip Buildcon Q1FY21
- Revenue down 13.8% to Rs 2,099.9 crore
- Net profit down 73.6% to Rs 27.1 crore
- Ebitda down 9.1% to Rs 461.1 crore
- Ebitda margin at 22% from 20.8%
- Recorded orders worth Rs 10,732 crore across four sectors and five states
- Total order book at Rs 26,115 crore
- 37% of the order book from state government while 63% from central government
- Board approved raising Rs 2,000 crore via issue of shares and to raise up to Rs 1,000 crore each via NCDs and commercial papers.
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 3.1% to Rs 361.95, before cooling off. The stock trades at the highest level in six months.
Stock Reaction: Aarti Drugs
The company has informed the exchanges that the board will consider an issue of bonus shares at its next board meeting, scheduled to be held on Thursday, August 20.
Shares gained as much as 13.3% to trade at an all-time high of Rs 2,398. The stock had declined in four out of the last five trading sessions.
Today's volumes are on-par with the company's 20-day average. Today's move has sent the stock into overbought territory as its Relative Strength Index (RSI) is at 72.
Buzzing Stock: Quess Corp
- Second best performing stock on the Nifty Midcap index
- Gains as much as 7.4% to Rs 395
- Biggest single-day gain since October 2019
- Trades at the highest level in nearly two months
- Snaps three-day losing streak
- Today's volumes are 23% below its 20-day average
- Trades at 22.8x estimated forward EPS as compared to 14.2x for peers
- Tests 200-Day Moving Average of 398.3
- Has more than doubled from its 52-week low of Rs 165 on May 20, 2020
- 10 out of the 12 analysts tracking the stock have a buy recommendation; 2 sell calls
- Return potential of the stock has per Bloomberg data is 14.4%
Auto Index Up In Nine Out Of The Last 10 Trading Sessions
Stock Reaction: PTC Industries
- Mona Russel Mehta acquired 4.5 lakh shares of the company or 8.59% stake at Rs 453.01 per share.
- Vikas Khemani acquired 0.52% stake or 27,000 shares at Rs 533.46 per share.
- Porinju Veliyath acquired 0.52% stake or 27,000 shares at Rs 469.5 per share.
- Pragati India Fund sold 7.86 lakh shares or 15% stake at Rs 453.74 per share.
Shares are locked in a second straight upper circuit of 20% at Rs 699. The stock is trading at an all-time high.
Earnings Reaction: Kaya Q1FY21
- Revenue down 76% to Rs 23.9 crore
- Net loss widens to Rs 31.7 crore from Rs 9.6 crore
- Ebitda loss of Rs 19.2 crore from Ebitda gain of Rs 13 crore
- India business revenue declines 89%
- Overseas business revenue declines 63%
- Clinic business heavily impacted due to lockdowns
- Kaya Middle East ticket size trending at 109% as compared to the previous year
- Overall collection at 21% of Q1FY20
- Middle East collection in June at 67% of last year
- India collection in June at 14% of last year
- E-commerce revenue recovered to previous year's numbers by June
- All numbers are consolidated and compared on a year-on-year basis
Shares fell as much as 5% to Rs 225, snapping a two-day gaining streak.
Buzzing Stock: GMDC
- Among the top performers on the BSE 500 index
- Gains as much as 6.2% to Rs 46.2
- Biggest single-day gain in two months
- Trades at the highest level in five months
- Gains for the sixth straight day
- Longest winning streak in nearly three months
- Up 12% in the last six trading sessions
- Today's volumes are more than triple its 20-day average
- Nearing its 200-Day Moving Average of 48.6
- Has gained 56% from its 52-week low of Rs 29.5 on March 27, 2020
- Both analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 29.5%
Earnings Reaction: Berger Paints Q1FY21
- Revenue down 45.8% to Rs 930.8 crore
- Net profit down 91.3% to Rs 15.4 crore
- Ebitda down 69.8% to Rs 92.2 crore
- Ebitda margin at 9.9% from 17.8%
Shares fell as much as 4.2% - the most in over three months to Rs 527.3. Only two out of the 24 analysts tracking the stock have a buy recommendation on the stock. Eight have a hold call while 14 analysts recommend selling the stock.
The stock trades 14.5% higher than its 12-month consensus price target of Rs 435, implying a negative return potential.
Markets At 10:10 A.M.
- Benchmark indices fluctuate between gains and losses
- Nifty up 0.2% at 11,204
- Sensex up 0.16% at 37,937
- Nifty Bank down 0.4% at 21,593
- Nifty Midcap index up 0.15%
- Nifty Smallcap index up 0.3%
- India Volatility Index up 3.2% to 22.38
- Nifty Media extends gains as the top sectoral gainer; up 3.1%
- Nifty Realty, Nifty I.T., Nifty Metal up over 1% each
- Nifty Pharma, Nifty PSU Bank are the sectoral laggards
- Zee Entertainment is the top Nifty gainer; up 3.5%
- BPCL is the top Nifty laggard; down 2.1%
- 1,027 stocks on the NSE are trading with gains while 666 decline
Money Market Update
The rupee opened flat in today's session after a rangebound last week that saw the currency remain little changed.
The currency opened at 74.85 against the U.S. Dollar as compared to Friday's close of 74.90.
The currency has been shielded from the headwinds it typically faces in the month of August due to robust foreign inflows into share sales from some of the country's largest banks.
The fund raising, coupled with a weak dollar have ensured stability for the rupee as compared to an average monthly decline of 2.5% in August over the last decade, Bloomberg reports.
Meanwhile, cracks are beginning to appear in India's bond market after underwriters stepped in to rescue a 10-year bond auction on Friday.
An unprecedented government bond supply and the prospects of a prolonged interest-rate pause from the Reserve Bank is causing jitters across the bond market, Bloomberg reports.
Earnings Reaction: Sun TV Q1FY21
- Revenue down 44.9% to Rs 611.5 crore
- Net profit down 33.4% to Rs 257.4 crore
- Ebitda down 41.1% to Rs 409.1 crore
- Ebitda margin at 66.9% from 62.6%
- Lower operating expenses and recording of operating expenses in base quarter aid margins
- Subscription revenue up 18% to Rs 442.2 crore
Brokerage firm CLSA said that the results were a positive surprise, attributing it to a strong growth in subscription reveune.
In its note, CLSA also said that advertising revenue was back to 75% of the pre-Covid levels. It also expects the current dividend yield of 4% to rise higher considering the high cash on the books of the company.
CLSA has a buy rating on the stock with a price target of Rs 490.
Shares rose as much as 9.6% - the most in four months to Rs 438.7. The stock trades at the highest level in six months.
Coronavirus India Update
- New cases and recoveries at par over the last 24 hours
- 57,981 new cases reported over the last 24 hours
- Total confirmed cases now at 26,47,663
- Active cases at 6,76,900
- Patients cured / discharged / migrated at 19,19,842
- Death toll rises to 50,921
- 941 deaths reported over the last 24 hours
- 57,584 recoveries reported over the last 24 hours
Brokerage Reaction: Sterlite Technologies
Brokerage firm CLSA has initiated coverage on the optical fiber, cable products provider with a buy rating, citing growing revenue in the services business, strong order book and compelling valuations.
CLSA’s Rationale:
- Strong order book and has rapidly transitioned from manufacturing to digital networks services
- Management targets to double FY20 revenue by FY23
- Management focused on top 20 clients in India and overseas
- See revenue / Ebitda CAGR of 28% / 35% respectively over FY21-23CL.
- Growth prospects and valuations are compelling
Shares gained as much as 10.8% - the most in a month to Rs 144.4. CLSA has a price target of Rs 185 on the stock.
Earnings Reaction: Glenmark Q1FY21
The drugmaker reported revenue growth which was flat as compared to the previous year for the quarter ended June.
Net profit more than doubled from last year to Rs 254 crore, courtesy higher other income. Other income for the quarter rose to Rs 58.5 crore from Rs 1.7 crore.
Operational performance of the company was above estimates with Ebitda rising 39.8% year-on-year while margins rising to 20.4% from 14.7% last year.
Expansion in Ebitda margins was aided by lower raw material costs.
Glenmark's Geographical Performance:
- India business revenue up 3.7% to Rs 779.8 crore
- Europe business revenue up 12.8% to Rs 273.8 crore
- U.S. business revenue up 1.6% to Rs 742.6 crore
- API business revenue up 1.8% to Rs 234.8 crore
- RoW business revenue fell 18% to Rs 212 crore
Shares gained as much as 7% to Rs 509 - the highest level in two months.
Opening Bell: A Steady Start
Indian equity markets opened the new trading week with gains after a rangebound last week where benchmark indices posted losses.
The S&P BSE Sensex opened 0.5% higher at 38,602 while the NSE Nifty 50 index opened at 11,248, up 0.6%. The Sensex and Nifty ended 0.4% and 0.3% lower last week.
All sectoral indices opened with gains. The Media and Realty index opened with gains of nearly 1.5%, while Nifty I.T., FMCG and the Nifty Bank gained between 0.5-1%.
Broader markets opened higher as well. The midcap index opened 0.8% higher while the smallcap index was up 1.2% at the start of trade.
Market breadth was in favour of the gainers. 1,198 stocks on the NSE opened with gains while 406 declined.
Latest On The Coronavirus
- Global cases cross 21.5 million
- Death toll rises to 7.73 lakh
- New Zealand delays general elections by four weeks
- U.S. Fatalities exceed 1,000 for the fifth straight day
- 197 additional cases reported in South Korea
- Malaysia finds cases with a more infectious strain
- Japan's GDP shrinks 28% in the June quarter - the most on record
- Australia's Victoria reports 282 new cases and 25 fatalities in the last 24 hours
- Italy, Spain to order closure of nightclubs
- Brazil reports 23,101 new cases and 620 deaths over last 24 hours
- 7,873 new cases reported in California
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- ICICI Bank: Approves allottment of 41.89 crore shares of Rs 2 each to qualified institutional buyers at an issue price of Rs 358 per share. The lender has raised Rs 15,000 crore from the QIP issue. The issue price is a 1.9% premium to the floor price and a 1.5% discount to Friday's closing price. Monetary Authority of Singapore, Morgan Stanley Investment Management Inc. and Societe Generale have been allotted over 5% of the equity shares in the issue.
- Infosys: Notified stock exchanges of inadvertent trading by the portfolio management services of Bela Parikh, spouse of company's independent director Bobby Parikh. 2,754 shares were bought during the open trading window period without the knowledge of Bobby Parikh and without obtaining pre-clearance of trade. The Audit Committee has determined that there was a violation of the company’s policy and PIT Regulations and has therefore imposed a penalty of Rs 2 lakh on Bobby Parikh.
- India Grid Trust: Sponsor Sterlite Power sold 14.7% stake in India Grid Trust to Institutional and HNI investors at a unit price of 98 per unit aggregating to Rs 840 crore. Buyers include Danske Invest India Fund, Societe Generale, Morgan Stanley Asia and Larsen & Toubro.
- IDFC First Bank: Clarifies that there has been no discussion regarding a reverse merger with IDFC at any level. The bank also said that any report suggesting that such an application will be made by the end of September 2020 is purely speculative in nature.
- SJVN: Received 100 MW solar project in Gujarat for Rs 2.8 per unit. Cost of construction for this project is pegged at Rs 450 crore. The project is expected to generate 244 MU / year and power purchase agreement shall be signed between GUVNL and SJVN for 25 years. Plant is expected to be commissioned by March 2022.
- PNB Housing Finance: To consider raising funds on August 19.
- Embassy Office Parks REIT: Board approved raising Rs 2,000 crore via NCDs.
- Dilip Buildcon: Board approved raising Rs 2,000 crore via issue of shares and to raise up to Rs 1,000 crore each via NCDs and commercial papers.
- Non-Nifty Earnings Today: Can Fin Homes, Lux Industries, Orient Papers, Petronet LNG, Suven Pharma
To know more about earnings reported after market hours, key brokerage updates and other trading cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Futures Indicate A Positive Start
Good Morning!
India's equities faced pressure at higher levels throughout last week. Lack of positive global cues and support from domestic investors kept the indices range-bound.
The S&P BSE Sensex and the NSE Nifty 50 ended 0.4% and 0.3% lower, respectively, for the week ended Aug. 14.
Futures, however, are indicating a positive start to Monday's trade. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.9% to 11,275 as of 7:40 a.m.
The quarterly earnings season is drawing to a close. The street will keep an eye on companies like Glenmark, United Breweries, Fortis Healthcare and Dilip Buildcon that announced their financials after market hours on Friday.
Can Fin Homes, Petronet LNG and Orient Paper are among the few that are set to declare their results today.
Markets in Japan and Australia have opened lower, while those in South Korea are shut on account of a holiday. Futures on the Dow Jones are trading higher by 80 points. The index ended flat on Friday.
West Texas Intermediate crude rose 0.6% to $42.25 per barrel, while gold fell 0.5% to $1,935.6/Oz.
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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