The National Stock Exchange (NSE) in Bandra Kurla Complex (BKC) in Mumbai, India. The Nifty 50 uses free float market capitalisation to decide weightage of its 50 stocks. (Photographer: Dhiraj Singh/Bloomberg)
The National Stock Exchange (NSE) in Bandra Kurla Complex (BKC) in Mumbai, India. The Nifty 50 uses free float market capitalisation to decide weightage of its 50 stocks. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Log Best Single-Day Gains In Over A Month Led By Lenders

Closing Bell

India equity benchmarks logged their best single-day gains in more than a month boosted by the country’s largest lenders.

The S&P BSE Sensex added 1.74% to 49,580.73, its best gains since March 30, while the NSE Nifty 50 Index advanced by a similar magnitude. Seventeen of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of banks.

Both the Sensex and the Nifty ended last week lower amid concerns that coronavirus cases may trigger a national lockdown. The world’s worst outbreak saw the daily infection tally moderate to around 300,000 for the last few days from a peak of 410,000 a week ago.

“Markets are rejoicing the early signs of virus peak and stability in the global markets. But we feel participants shouldn’t read much into a single-day rise and wait for a decisive break above 15,000 in Nifty,” Ajit Mishra, vice president-research at Religare Broking Ltd., said in an emailed statement. “Needless to say, the performance of the banking and financial pack holds importance. Meanwhile, participants should continue with a positive yet cautious approach and maintain their focus on risk management.”

Bharti Airtel Q4 Net Income, Revenue Miss Estimates

Bharti Airtel reported net income for the fourth quarter that missed the average analyst estimate.

  • Net income Rs 759 crore vs. loss Rs 5,240 crore YoY, estimate Rs 959 crore
  • Revenue Rs 25,750 crore, +12% YoY estimate Rs 26,165 crore
  • Total costs Rs 13,420 crore
  • Other income Rs 83.9 lakh
  • India mobile ARPU Rs 145
  • Ebitda margin 48.9%, estimate 47.6%
  • Capital expenditure Rs 6,850 crore
  • Ebitda Rs 12,580 crore, estimate Rs 12,626 crore

COMMENTARY AND CONTEXT

  • Q4 exceptional gain Rs 440 crore vs Rs 6,860 crore expense
  • See no material impact from pandemic as of now; management will continue to closely monitor and evaluate the impact of any material changes in the macro-economic situation, other factors
  • India business quarterly revenues up 17.5% YoY
  • Q4 capex spend Rs 6,846 crore
  • India EBITDA Rs 8,970 crore; EBITDA margin 48.9%
  • Company continues to see strong traction in post-paid business; added ~630,000 post-paid customers Q4 and ~1.9 million over last four quarters
  • Net Debt-EBITDA ratio annualized and including the impact of leases as on March 31, 2021 is at 2.95 times vs 3.19 times as on March 31, 2020
  • Mobile India 4G customers at 179.3 million, up by 13.7 million QoQ

Second Covid Wave to Delay India Earnings Recovery: Moody’s

Sharp rise in new coronavirus infections will disrupt earnings recovery of companies recorded over the past six months; prolonged and wider lockdown will have a severe effect, Moody’s Investors Service write in a note.

  • Restrictions on movement, weaker consumer sentiment to temporarily hit housing, vehicle sales and demand for transportation fuel
    • Still, rising preference for remote working and personal mobility to drive long-term demand for bigger homes, entry-level cars
  • Demand for technology, telecom to remain strong despite the expectation of a slowdown in economic activity over the next few months
  • Steelmakers could see an export boost led by strong global demand; exports are attractive as local steel prices are lower than international, note said
    • Tata Steel Ltd., JSW Steel Ltd to have limited impact on production from diverting part of oxygen production toward medical use
  • Slowdown in the construction activity to cut cement demand; government’s high spending on infrastructure and a pickup in housing demand will support sector fundamentals and earnings for UltraTech Cement Ltd.
  • Weaker entities could face liquidity pressure; companies with weak balance sheets may face problems in refinancing

SBI Shares Up 6.8%, Most In 14 Weeks

State Bank of India rose 6.8%. Trading in the company's call options was quadruple the average. Trading volume was double the average for this time of day.

  • Trading volume was 111.9 million shares, double the 20-day average of 49.5 million shares for this time of day.
  • Trading in the company's call options totalled 162,756 contracts, compared with the average of 44,909 over the past 20 days. Trading in the company's put options totalled 65,690 contracts, compared with the average of 27,080 over the same period.
  • Analysts have 47 buy, two hold, and no sell recommendations on the stock.
  • The price target of Rs 475.09 represents a 23% increase from the last price

Adani Green At One-Month High

Shares in Adani Green climbed as much as 5%, touching their highest level in more than a month. They have risen nearly 400% in the past year, giving the company a market value of about $24 billion.

Also Read: Adani Green Said in Advanced Talks for SoftBank’s SB Energy

United Spirits Rises For Tenth Session

United Spirits Ltd. is higher for the 10th straight day, on track for the longest winning streak since the period ended Dec. 29, 2017.

United Spirits has gained a total of 9.2% during the streak while the Sensex Index increased 1.3%..

Colgate India Q4 Net Income Beats Estimates

Colgate India reported net income for the fourth quarter that beat the average analyst estimate.

  • Net income Rs 315 crore , +58% YoY, estimate Rs 240 crore (Bloomberg Consensus)
  • Revenue Rs 1,280 crore, +21% YoY, estimate Rs 1250 crore
  • Total costs Rs 908 crore, +6% YoY
  • Other income Rs 66.20 lakh, -66% YoY

Cipla, ITC Ltd, Larsen, SBI, UPL in Focus: Options Watch

  • Larsen options volume 3.7x the 20-day average, with 52,458 calls changing hands vs 18,992 puts
    • Stock down 1.9%, volume 2.6x the 20-day average for this time of day
  • UPL options volume 2.9x the average, with 48,167 calls vs 14,206 puts
    • Stock up 4%, volume 2.4x the average
  • Cipla options volume 2.2x the average, with 39,922 calls vs 18,674 puts
    • Stock down 2.9%, volume 1.2x the average
  • SBI options volume 2.1x the average, with 111,394 calls vs 43,181 puts
    • Stock up 4.9%, volume 1.3x the average
  • Asian Paints options volume 1.8x the average, with 27,454 calls vs 14,448 puts
    • Stock up 0.6%, volume 0.9x the average
  • ITC Ltd options volume 1.7x the average, with 43,185 calls vs 11,733 puts
    • Stock up 0.6%, volume 1.3x the average

Federal Bank Q4 Net Income Beats Estimates

Federal Bank reported net income for the fourth quarter that beat the average analyst estimate.

  • Net income Rs 478 crore, +59% YoY, estimate Rs 410 crore (Bloomberg Consensus)
  • Net interest margin 3.23% vs. 3.04% YoY, estimate 3.05%
  • Net interest income Rs 1,420 crore, +17% YoY, estimate Rs 1,440 crore
  • Gross non-performing assets 3.41% vs. 2.71% QoQ
  • Provisions Rs 242 crore, -43% QoQ
  • Interest income Rs 3,370 crore, -0.9% YoY
  • Interest expense Rs 1,950 crore, -11% YoY
  • Other income Rs 465 crore, -35% YoY
  • Dividend per share Rs 0.70
  • Names Venkatraman Venkateswaran as CFO from May 18
  • Current CFO Ashutosh Khajuria to be responsible for treasury, credit and collections, strategic initiatives; he will also establish the ESG function of the bank

India’s April Wholesale Inflation Soars To 11-Year High

India’s wholesale inflation quickened at the fastest pace in more than a decade on the back of higher commodity prices and a low base last year.

Wholesale prices rose 10.5% in April from a year earlier, data released by the Commerce Ministry showed Monday. That’s faster than the median 9.35% gain forecast in a Bloomberg survey of 20 economists, and compares with a 1.57% contraction during the same month last year.

Read the full report here.

Balkrishna Shares Up Most In Five Weeks

Balkrishna Industries Ltd. rose 4.2%. Trading volume was six times the average for this time of day. The stock was the best performer among its peers.

  • Trading volume was 645,618 shares, six times the 20-day average of 116,628 shares for this time of day.
  • The relative strength index on the stock was above 70, indicating it may be overbought.
  • Analysts have 13 buy, eight hold, and seven sell recommendations on the stock.
  • The price target of Rs 1,849.89 represents a 6.3% decrease from the last price

The tyremaker is likely to benefit from growth momentum across agriculture and off-the-road segment, analysts Nishant Vass and Pratit Vajani, at Mumbai based ICICI Securities Ltd., wrote in a note.

  • Upgrades earnings estimate by 2.2%/7.4% for FY22/FY23; expects sales/EPS CAGR 21%/26% FY21-FY23
    • Balkrishna Industries Jan.-March results were above consensus on a surprise 26% jump in revenues, the note said
  • Timely tire capacity expansion is likely to aid volume growth in FY23; the company remains export market-oriented play with improving RoCE of 27%
  • Maintain buy, raises price target to Rs 2,269 vs Rs 1,937 earlier

Edelweiss Capital analyst Shradha Sheth raised the recommendation on Balkrishna Industries Ltd. to buy from reduce.

  • The price target set to Rs 2,298, implies a 19% increase from the last price. Balkrishna average price target is Rs 1,849.89.
  • Balkrishna reported earnings and sales that topped estimates for the quarter on May 14.

Rupee Gains To Buck Asia FX On IPO-Related $ Flows

The Indian rupee advances to buck most of Asian FX amid foreign inflows related to company share sales. Sovereign bonds are marginally higher after the central bank last week scrapped a sale of the benchmark 10-year bond amid speculation traders demanded higher yields.

It’s mainly selling on dollar/rupee with RBI standing firm around 73.20 levels, says Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors

  • There are a lot of flows with premiums moving so high. A lot of IPOs have been announced
  • Declining Covid cases are also helping as also the approaching monsoon

L&T Worst Performer On Sensex, Nifty

Also Read: L&T Shares Drop Despite Bullish Brokerage Reviews

Krsnaa Diagnostics Seeks Sebi Approval for IPO

Pune-based Krsnaa Diagnostics seeks to raise as much as Rs 400 crore ($54.6 million) via new shares in an initial public offering, according to a copy of its draft red herring prospectus on issue manager IIFL Securities’ website.

  • Holders of Krsnaa Diagnostics plan to sell as many as 9.42 million shares in an offer-for-sale as part of the IPO
    • Among the shareholders, PHI Capital Trust plans to sell up to 1.6 million shares, Kitara PIIN 1104 plans sale of up to3.34 million shares and Somerset Indus Healthcare Fund plans to sell up to 4.45 million shares
  • The company may consider a pre-IPO placement of as much as Rs 200 crore; new share sale in the IPO will be lower than planned if the pre-IPO sale happens
  • JM Financial, DAM Capital, Equirus Capital and IIFL securities will manage the IPO

Shilpa Medicare Jumps After Vaccine Making Tie-Up

Shares of the drugmaker jumped as much as 13.5%, to the highest since Oct., after it announced a tie-up with Dr Reddy's Laboratories for production of Sputnik V vaccine.

  • The production target of the vaccine for the first 12 months is 50 million doses
  • Under the agreement, the company’s unit Shilpa Biologicals will be responsible for the manufacture of the vaccine, while Dr. Reddy’s will be responsible for distribution and marketing
  • The vaccine will be made at the company’s centre in Dharwad, Karnataka
  • The companies are also exploring the option to make Sputnik Light, a single-dose version of the vaccine, in the near future

Opening Bell: Sensex, Nifty Climb Amid Steady Asian Trade

Indian equity benchmarks rose, boosted by the country’s largest lenders, after the benchmark index capped a loss last week.

The S&P BSE Sensex added 1% to 49,225.01, with the nation’s largest banks giving it the biggest boost. The NSE Nifty 50 Index advanced by a similar magnitude. Fifteen of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by a gauge of banks.

Both the Sensex and the Nifty ended last week lower amid concerns that coronavirus cases may trigger a national lockdown. The world’s worst outbreak saw the daily infection tally moderate to around 300,000 for the last few days from peak of 410,000 a week ago.

Rupee Bonds May Extend Gains On 10-Year Debt Scrap

Indian sovereign bonds may extend Friday’s gains after the central bank scrapped a sale of the benchmark 10-year bond amid speculation traders demanded higher yields. The rupee may open lower in line with Asian peers.

  • Implied opening from forwards suggest spot may start trading around 73.28
  • RBI to conduct 1st Special Long-Term Repo Operation for Rs 10,000 crore
  • India to convert/switch Rs 20,000 crore of government securities via auctions to longer tenor: RBI

SGX Nifty Climbs Amid Steady Asian Trade

Good morning!

Asia stocks fluctuated Monday with U.S. futures as spikes in virus cases in parts the region and lingering inflation concerns weighed on investor sentiment.

Shares had modest gains in Australia and Hong Kong but slipped in Japan and South Korea as markets responded to the latest curbs on activity to halt the spread of Covid-19. U.S. stocks ended in the green Friday after gathering price pressures pushed equity markets globally to their worst weekly loss since February.

India’s SGX Nifty 50 Index futures for May delivery rise 0.4% to 14,767.00, while MSCI Asia Pacific Index +0.2%. The NSE Nifty 50 Index fell 0.1% Friday to 14,677.80.

China’s stocks climbed, shrugging off some below-forecast readings on retail sales, industrial output and fixed-asset investment.

Treasury yields were steady after dropping Friday on a report that showed the recent surge in U.S. retail sales stalled in April. The dollar edged up against its major peers.

The momentum in commodity markets seems to have flagged after breakneck gains, with copper and iron ore coming off record highs amid efforts by China to clamp down on surging prices.

Meanwhile, Bitcoin fell to the lowest since February, with the digital coin dipping below $45,000 for the first time in almost three months on Sunday before paring losses.

Back home, Larsen, Cipla, SKF, Oberoi, Just Dial, Aarti Drugs, Aditya Birla Capital may react as the companies reported quarterly results after the market closed Friday. Bharti Airtel, Colgate, Federal Bank, Gland Pharma are among the companies scheduled to report earnings Monday.

Govt to release wholesale-price inflation data for April. Foreign investors sold net Rs 1,170 crore of stocks on May 12, according to the NSDL website.

Also Read: All You Need To Know Going Into Trade On May 17

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