Sensex, Nifty End At Fresh All-Time Highs Led By Gains In Bharti Airtel

Indian equity benchmarks rose to record highs led by gains in telecom, auto and pharma shares.

The S&P BSE Sensex rose 0.6 percent to 32,633.64 and the NSE Nifty 50 Index advanced 0.6 percent to 10,231.

Seventeen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom Index's 4.2 percent surge. On the other hand, the S&P BSE Power Index declined 0.1 percent.

• Federal Bank: The stock gained the most in over four months on the back of strong earnings. Net profit grew 31 percent to Rs 264 crore versus Rs 201 crore (YoY). Gross non-performing assets (NPA) came in at 2.39 percent as a percentage of total advances compared with 2.42 percent in the previous quarter.
• Polyplex Corporation: The stock gained more than 5 percent and trading volume was 16 times its 20-day average. The company will set up greenfield PET Film Line Project in Indonesia with a capacity of 44,000 tonnes per annum for an investment of $95 million.
• Cyient: The stock gained close to 4 percent after Reliance MF acquired 23.34 lakh shares in the Company
• Jindal Steel and Power: The Delhi-based steel maker jumped as much as 4.3 percent, the most since October 12, to Rs 169.70 after it repaid outstanding interest to lenders by selling two oxygen plants to SREI Equipment Finance last week, The Economic Times newspaper reported.

Shares of the FMCG maker fell as much as 2.9 percent, the most since August 2, to Rs 1,060.35 after it reported second quarter earnings.

Key Q2 Highlights:

• Net profit at Rs 178 crore against Bloomberg estimate of Rs 179 crore
• Revenue at Rs 1,080 crore versus estimate of Rs 1,130 crore
• Total costs at Rs 823 crore
• Sales volume fall 0.9 percent

Shares of the education service provider rose as much as 3.7 percent to Rs 48 after it reported a 55 percent increase in the net profit in September quarter.

Key Q2 Highlights:

• Net profit up 55 percent at Rs 11.33 crore versus Rs 7.31 crore (YoY)
• Revenue at Rs 60.48 crore versus Rs 38 crore (YoY)

• Bajaj Finance is an expensive stock as it trades at 7-8 times price to book value
• Going forward asset quality can come under pressure due to farm loan waivers and short-term hiccups due to GST implementation
• Investors should wait for more correction to buy this stock
• Bullish on pharma stocks we have been doing SIP in pharma stocks
• Overweight on Sun Pharma, Lupin and Dr. Reddy's Labs as the worst is behind us
• Data usage will soar from hereon for telecom companies
• Pricing power to come back in next few quarters for telcos

Shares of the Mumbai-based mortgage lender advanced as much as 3.2 percent, the most since October 12, to Rs 555 after it met consensus estimates compiled by Bloomberg.

Key Q2 Highlights:

• Net profit up 24 percent at Rs 293 crore versus Rs 232.6 crore (YoY)
• Revenue up 21 percent at Rs 2,610 crore versus Rs 2,160 crore (YoY)
• Board declares interim dividend of Rs 3 per share

Shares of the Mumbai-based paint manufacturer were little changed after company reported flat earnings growth in the September quarter.

Key Q2 Highlights:

• Net profit at Rs 145 crore versus Rs 139 crore during the same period last year
• Revenue at Rs 1,162 crore versus 1,131.54 crore
• Total costs at Rs 962 crore

Shares of the Pune-based consumer finance company fell as much as 1.57 percent to Rs 1,922 after its net profit missed consensus analysts estimate compiled by Bloomberg.

Key Q2 Highlights:

• Net profit up 36.6 percent at Rs 557 crore verus Bloomberg estimate of Rs 582 crore
• Net interest income up 41 percent at Rs 1,958 crore versus Rs 1,385 crore in the previous quarter
• Total deposits at Rs 5,517 crore
• Assets under management at Rs 72,139 crore versus Rs 52,332 crore in the same period last year

Shares of the media company slipped after the company reported September quarter earnings.

Key Q2 Highlights:

• Net profit fell 25 percent to Rs 40.9 crore versus Rs 54.65 crore (YoY)
• Revenue at Rs 211 crore versus Rs 229 crore (YoY)

The Pune-based telecom cable maker jumped as much as 2.3 percent, the most since October 12, to Rs 274.9 after its earnings came in-line with the consensus analysts estimate compiled by Bloomberg.

Key Q2 Highlights

• Net profit at Rs 71.23 crore versus estimate Rs 65.8 crore
• Revenue at Rs 779 crore versus estimate of Rs 780 crore
• Total costs at Rs 677 crore

Shares of the private sector lender rose as much as 4.1 percent, the most since June 1, to Rs 122 after its net profit in the September quarter rose 31 percent to Rs 263.7 crore, beating consensus analysts estimate compiled by Bloomberg.

Key Q1 Highlights:

• Gross non-performing assets as a percentage of total advances at 2.39 percent versus 2.42 percent in the previous quarter
• Gross non-performing assets at Rs 1,948.97 crore versus Rs 1,867.94 crore in the previous quarter
• Net non-performing assets as a percentage of total advances at 1.32 percent versus 1.39 percent in June quarter
• Net interest income at Rs 900 crore versus Rs 726 crore

• September wholesale price index (WPI) inflation at 2.60 percent versus 3.24 percent (MoM)
• September primary articles WPI 0.15 percent versus 2.66 percent (MoM)
• September manufactured products WPI at 2.72 percent versus 2.45 percent (MoM)
• September fuel and power inflation at 9.01 percent versus 9.99 percent (MoM)
• September food articles inflation at 2.04 percent versus 5.75 percent (MoM)
• September WPI core inflation rate at 3.0 percent versus 2.5 percent (MoM)

Shares of the Delhi-based steel maker jumped as much as 4.3 percent, the most since October 12, to Rs 169.70 after it repaid outstanding interest to lenders by selling two oxygen plants to SREI Equipment Finance last week, The Economic Times newspaper reported.

• Hindalco has 28 lakh shares, worth Rs 77 crore, change hands in two blocks on the National Stock Exchange at Rs 272.3 per share

Buyers and sellers were not immediately known

Source: Bloomberg

Banking shares were trading lower with the NSE Nifty Bank Index declining 0.3 percent. The Nifty PSU Bank Index declined 0.6 percent and the NSE Nifty Private Bank Index fell 0.27 percent.

Shares of the Kolkata-based steel products maker jumped as much as 18 percent, the most since September 25, to Rs 21.35 after the Reserve Bank of India hiked foreign investment limit in the company to 74 percent from 24 percent.

Meanwhile, NCLT also approved scheme of amalgamation between VISA BAO Ltd and itself, the company said in a stock exchange filing on Friday.

Indian equity benchmarks came off the record highs on the back of profit-booking in Reliance Industries which rose to record high after Jio surprised the Street in September quarter.

• The S&P BSE Sensex was up 86 points at 32,523 and the NSE Nifty 50 Index was up 32 points at 10,200
• Eighteen out of 19 sector gauges were trading higher led by the S&P BSE Metal Index's 1.65 percent gain
• The S&P BSE Energy index was the only sectoral loser, down 0.4 percent
• S&P BSE Bankex index was trading flat after rising 0.7 percent earlier in the day
• From the Nifty 50 basket of shares, 41 were trading higher while 9 were among the losers

Shares of the Jalgaon-based agricultural machinery maker rose as much as 3.3 percent, the most since September 20, to Rs 96 after it won an order worth Rs 178.4 crore from the Gujarat government for supplying pipes.

The Mumbai-based animal feed maker rose as much as 37 percent on its stock market debut against its issue price of Rs 460 per share.

The company sold 2.5 crore in the IPO that was subscribed 95 times. The promoters and investors raised Rs 865 crore in an offer for sale. The rest came through a fresh issue.

Shares of the Hyderabad-based engineering service provider jumped as much as 3.89 percent to Rs 560 after Reliance Mutual Fund bought stake in the company.

• Reliance MF Small Cap Fund bought 11.67 lakh shares or 1 percent equity stake at Rs 520 each
• Reliance MF Growth Fund bought or 1 percent equity stake at Rs 520 each
• Lavender Investments Ltd sold 24.2 lakh shares or 2.2 percent equity stake at Rs 520.08 each

Shares of the private sector lender fell as much as 3 percent, the most in over a month, to Rs 1,697.70. While, the micro-finance lender rose as much as 4 percent, the most since September 11, to Rs 1,045 after IndusInd Bank on Saturday sealed a deal to acquire Bharat Financial Inclusion.

Indian equity benchmarks moved higher with the NSE Nifty 50 Index rising to an all-time high led by strong gains in Reliance Industries, HDFC Bank and ICICI Bank.

The S&P BSE Sensex rose as much as 0.67 percent to 32,658 and the NSE Nifty 50 Index advanced 0.66 percent to an all-time high of 10,234.80. Meanwhile, the gains were broad-based as the S&P BSE MidCap and S&P BSE SmallCap Indices rose 0.5 and 0.7 percent each respectively.

All the 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom Index's 1.3 percent gain.

• Markets are currently overbought
• Despite FII outflows markets have been gaining strength on the back of domestic flows
• Minor correction of 5 percent not ruled out
• Geo-politics risk is a concern for markets
• Export growth in September has surprised the street
• In last two quarters Indian economy may grow at 6-6.5 percent
• Recommending caution on defence stocks
• Valuations of NBFCs are expensive but investors are betting on growth
• NBFCs are gaining share of business from banks
• Growth for NBFCs is in sight for next 6-8 quarters
• Indian stocks are always at premium to other emerging markets
• Investors can make fortunes in mid-cap and small-cap shares
• Real estate shares will outperform
• Highly leveraged players based out of Delhi and Mumba will remain under pressure
• South India-based real estate companies will do well

India's trade data showed a steep 26 percent jump in September exports. That has helped narrow trade deficit by to less than $9 billion. Today wholesale price index (WPI) numbers for the month of September will be watched. The estimate is for a 3.30 percent gain, compared with 3.24 percent in August.

The Indian rupee may trade in the negative territory tracking Asia Pacific peers. The U.S. Fed chair Janet Yellen kept up her mantra for gradual rate hikes while acknowledging that pricing pressures haven't materialized. At a G-30 meeting in Washington Yellen said that she expects inflation to move higher next year.

More geo-political reasons have emerged since Friday that could impact the currency. The U.S. president Donald Trump decided to decertify the Iran nuclear deal and fighting broke out between Iraqi and Kurdish forces near Kirkuk, raising uncertainty in the Middle-East region.

Indian sovereign bonds may be under pressure today, as RBI announced OMO bond sales and BlackRock said it's selling the government bonds, citing accelerating inflation and the prospect of a swelling fiscal deficit.

• Nifty October Futures closed with a premium of 24.9 points versus 15 points at 10,192.4
• October Futures-Nifty open interest up 1 percent and Bank Nifty open interest up 1 percent
• India VIX closed higher by 2 percent at 11.26
• October series highest Call base at 10,200 (open interest at 34.4 lakh, up 11 percent)
• October series highest Put base at 10,000 (open interest at 70.7 lakh, open interest up 8 percent)
• October call strikes 10,000 10,100, see OI unwinding & addition seen for 10,200
• October put strikes 10,000, 10,100 and 10,200 see open interest addition

Reliance Industries (Q2FY18, QoQ)

• Revenue up 6.7 percent at Rs 68,532 crore versus Rs 64,217 crore
• PAT up 0.8 percent at Rs 8,265 crore versus Rs 8,196 crore
• GRM at $12 per barrel versus $11.9 per barrel
• Net loss of Rs 271 crore for Reliance Jio
• Average revenue per user (ARPU) at Rs 156.4

GNA Axles (Q2FY18, YoY)

• Revenue up 18 percent at Rs 153.5 Crore versus Rs 130 Crore
• EBITDA up 11 percent at Rs 24 Crore versus Rs 21.6 Crore
• Margin at 15.6 percent versus 16.6 percent
• PAT up 42.7 percent at Rs 10.7 Crore versus Rs 7.5 Crore

Bhansali Engineers Polymers (Q2FY18, YoY)

• Revenue up 60 percent at Rs 293 Crore versus Rs 183 Crore
• EBITDA up 137.5 percent at Rs 38 Crore versus Rs 16 Crore
• Margin at 15.3 percent versus 9.8 percent
• PAT up 184 percent at Rs 25 Crore versus Rs 8.8 Crore

MCX (Q2FY18, YoY)

• Revenue up 3.1 percent at Rs 67.3 crore versus Rs 65.3 crore
• EBITDA down 16 percent a Rs 21.1 crore versus Rs 25.1 crore
• Margin at 31.4 percent versus 38.4 percent
• PAT down 23.7 percent at Rs 29 crore versus Rs 38 crore

Reliance Naval And Engineering (Q2FY18, YoY)

• Revenue down 16 percent at Rs 83 Crore versus Rs 98.5 crore
• EBITDA down 66.7 percent at Rs 4 Crore versus Rs 12 crore
• Margin at 4.8 percent versus 12.2 percent
• Net loss of Rs 151 crore versus net loss of Rs 116 crore

Gruh Finance (Q2FY18, YoY)

• Revenue from operations up 12.7 percent at Rs 414 crore versus Rs 367.4 crore
• Net profit up 25.5 percent at Rs 77.8 crore versus Rs 62 crore

Maharashtra Scooters (Q2FY18, YoY)

• Total revenue at Rs 3.51 crore versus Rs 1.61 crore
• Net profit at Rs 58 crore versus Rs 9 crore
• Other income at Rs 59.3 crore versus Rs 10.6 crore
• Dividend on equity shares at Rs 55.75 crore versus 7.3 crore

Avenue Supermarts (Q2FY18, YoY)

• Revenue from operations up 26.2 percent at Rs 3508 crore versus Rs 2,778.7 crore
• EBITDA up 36.5 percent at Rs 317.9 crore versus Rs 232.8 crore
• EBITDA margin at Rs 9.06 percent versus 8.4 percent
• Net profit up 65.2 percent at Rs 191 crore versus Rs 115.6 crore

• Bajaj Finance
• Bajaj FInserv
• Binani Industries
• Colgate
• DCB Bank
• Delta Corp
• DHFL
• Federal Bank
• Hatsun Agro
• JM Financial
• Kansai Nerolac
• Oberoi Realty
• Persistent Systems
• Sasken Tech
• Sterlite Tech
• Texmaco Rail
• Texmaco Infra
• Zee Learn

• General Insurance Corporation of India issue subscribed 1.3 times at end of day 3.
• Godrej Agrovet lists on exchanges. Issue price at Rs 460 per share. Issue was subscribed 95.2 times.

Ashiana Housing

• Kotak Mahindra AMC bought 14.10 lakh shares or 1.4 percent equity stake at Rs 170 each
• Idria Ltd sold 14.43 lakh shares or 1.4 percent equity stake at Rs 170.15 each

Cyient

• Reliance MF Small Cap Fund bought 11.67 lakh shares or 1 percent equity stake at Rs 520 each
• Reliance MF Growth Fund bought or 1 percent equity stake at Rs 520 each
• Lavender Investments Ltd sold 24.2 lakh shares or 2.2 percent equity stake at Rs 520.08 each

Goa Carbon

• Winnimus LLP buys 88,701 shares or 1 percent equity stake at Rs 647.17 each

Gulf Oil Corp

• Hinduja Power Ltd buys 8.75 lakh shares or 1.8 percent equity stake at Rs 545 each
• IAM Ltd sold 8.75 lakh shares or 1.8 percent equity stake at Rs 545 each

Genesys Intenrational Corp

• Bridge India Fund sold 1.75 lakh shares or 0.6 percent equity stake at Rs 363.39 each

Brokerages On Reliance Industries

CLSA

• Maintain ‘Buy’; hiked price target to Rs 1,080 from Rs 1,050
• Big beat in Jio’s revenues driven by higher than expected paying subscribers; Expect Jio to be profit making from first year
• Off-gas cracker and gasification should be at full utilisation in FY19
• EPS estimates for FY18, FY19 and FY20 hiked by 25 percent, 16 percent and 12 percent respectively

JP Morgan

• Maintain ‘Neutral’; hiked price target to Rs 820 from Rs 730
• Petchem offsets sluggish refining
• Core business should remain strong given the refining and petchem environment and core projects ramping up
• Jio benefited from revenue booking of Q1, capitalisation of some expenses and lower depreciation and interests
• EPS estimates hiked by 6-13 percent across FY18-20 to factor in improved Jio financials, IUC cut, lower capital cost and higher petchem spreads

Edelweiss

• Maintain ‘Buy’; hiked price target to Rs 1,104 from Rs 1,009
• Commissioning of core projects to boost earnings, return on equity and free cash flow
• Hiked target price to factor in higher value from Reliance Jio
• Expect EBITDA/EBIT breakeven for Jio in FY18

Motilal Oswal

• Upgraded to ‘Buy’ from ‘Neutral’; Hiked price target to Rs 1,005 from Rs 941
• Company to clock GRMs of $11.5 a barrel led by strong risk management, better yield management and crude optimization
• Commissioning of downstream units to boost the petchem performance
• Jio surprised with positive EBIT in the first quarter; Raise Jio’s value to Rs 245 from Rs 190
• Jio’s revenue coming partly from Q1FY18 recharges; Effective ARPU for Q2 to be Rs 130
• Expect Q3 and Q4 ARPUs at Rs 142 and Rs 163 respectively as freebies gets reduced
• In second half FY18, expect 4.2 crore subscriber additions

IDBI Capital

• Upgraded to ‘Buy’ from ‘Accumulate’; hiked price target to Rs 1,004 from Rs 875
• Raised EPS estimates by 6 percent for FY18/19 on the back of strong petchem performance; Expect GRM of $11/bbl for H2FY18 & FY19
• Jio surprised with positive EBIT in Q2 led by higher ARPU owing to one-time conversion and higher subscriber base
• Company to revise tariff plan and Q3 ARPU may not fall on QoQ basis
• CAPEX for Jio may rise in H2FY18; Major capex likely to be done in FY18
• Depreciation calculated on utilisation of network

Morgan Stanley on MCX

• Maintain ‘Overweight’ with price target of Rs 1,300
• Q2FY18 misses estimates due to lower investment income; Core trends in-line
• Trading volumes can go up as regulation in commodities becomes aligned with equities
• MCX best positioned to capture long-term growth in commodity derivatives market

Goldman Sachs on Fortis Healthcare

• Maintain ‘Buy’ with price target of Rs 186
• Delhi High Court ruling to clarify path ahead
• Any resolution on legal disputes to remove the overhang and serve as a share price catalyst
• Buy rating based on fundamentals; Expect strong EBITDA growth led by footprint expansion, operational improvements and operating leverage
• Fortis screens as a potential M&A target

Citi on Eris Lifesciences

• Initiates ‘Buy’ Rating with price target of Rs 700
• Presence in high growth lifestyle segments in India, focused product selection and strong execution have enabled it to create multiple, leading brands and augur well for long-term growth
• Eris is a pure play on the Indian formulations market; Fastest growing company in chronic categories
• Eris has asset-light model with a healthy return; Strong balance sheet and cashflows to drive future growth
• Eris has significant cash and will generate more every year; Expect the company to pursue inorganic growth opportunities
• Expect revenue to grow at CAGR of 20 percent over FY17-19
• Bull Case price target of Rs 880: Revenue to grow at CAGR of 23 percent over FY17-19; Margins to expand by 500 basis points

Nomura on IndusInd Bank

• Maintain ‘Buy’ with price target of Rs 1,850
• Swap ratio implies 10 percent premium for Bharat Financial
• Micro-finance business is much more attractive in a bank if managed well
• Merger will not be dilutive for IndusInd
• Merger will largely be both book and EPS-neutral on FY19 basis

Motilal Oswal on IndusInd Bank

• Maintain ‘Buy’ with price target of Rs 2,000
• Swap ratio implies 11 percent gain for Bharat Financial
• IndusInd to benefit as merger will be accretive on Margins/Return on Asset/Return on Equity by 30/15/80 basis points
• Continue to like IndusInd for its strong earnings/business growth and ability to deliver industry leading margins & RoA

Edelweiss on IndusInd-Bharat Financial Deal

• Merger values Bharat Financial at 11.5 percent premium, implying FY19E BV of 3.6 times, entailing dilution of 14.9 percent for IndusInd
• Deal is an aggressive and determined bet in line with the bank’s Planning Cycle ‐IV objective
• Merger will be synergistic, capital accretive, boost return profile and provide cross‐selling opportunities over the long term

• IndusInd Bank approves merger with Bharat Financial Inclusion
• Cadila Healthcare: Gets final U.S. FDA nod for Allopurinal tablets
• Hindustan Unilever names Srinivas Phatak as CFO
• Bodal Chemicals approved closure of QIP. To allot 1.30 crore equity shares at issue price of Rs 172 per share.
• Shreyas Shipping takes delivery of three vessels and signs MOA for sale of SSL Sagarmala vessel
• Dena Bank approved closure of QIP. Issue price fixed at Rs 29.20 per share
• Titagarh Wagons wins order worth $9 million for supply of modular bridges to Nepal
• Polyplex Corporation to set up a PET film line project having a capacity of 44,000 tonnes per annum in Indonesia for an investment of $95 million
• Visa Steel says NCLT approved scheme of amalgamation between VISA BAO Ltd and itself
• Reliance Naval and Engineering approves rights issue of Rs 1500 crore
• Info Edge invests Rs 50.71 crore in Etechaces Marketing and Consulting (Policybazaar)
• Shirpur Gold Refinery acquired 70 percent stake in Metalli Exploration and Mining, Mali (MEAM) for $6.86 million
• Gokul Refoils completes divestment of Haldia undertaking of the company
• HCL Technologies to discontinue JV with DXC Technologies
• Den Networks partners with BARC India for measuring TV viewership via its digital set top boxes

• Group of ministers on composition scheme holds first meeting
• Government mulling 2-3 tariff-based auctions for wind projects
• Foreign investors invest $1.5 billion in debt markets in October so far
• Bad-loan recast failures portend more pain for Indian lenders
• U.S., South Korea start drill as North seen readying missile
• Yellen leads world in betting inflation will soon accelerate
• Chaos in implementation of GST, need to simplify it: Punjab Finance Minister
• Quarterly earnings, inflation data to steer markets this Diwali week
• Great interest about India among investors in U.S.: Arun Jaitley
• IndusInd Bank seals deal to acquire Bharat Financial Inclusion
• Tata Steel targets 20 percent women in workforce by 2020
• Indian economy on ‘very solid track’: IMF Chief Lagarde
• Gloom to boom: Gold gets festive sparkle back for Diwali
• Imperfect skills programs no match for India’s army of workers
• This sector’s earnings will offer a better view of India’s economy
• Anil Agarwal not to seek board position on Anglo American
• French caterer Elior on a buyout hunt for India’s office canteens

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.4 percent to 10,249.

Stocks in Asia advanced with bonds after inflation data in the U.S. added to evidence that global growth is continuing steadily with limited price pressures in the American economy.

Here are some key events coming up this week:

• Chinese President Xi Jinping gives the opening speech at the 19th Communist Party Congress in Beijing on Wednesday.
• China releases data for GDP,industrial production and retail sales on Thursday.
• U.S. economic data will include a couple of September housing reports. Beginning construction on new homes and sales of previously owned properties will probably show the negative effects of Hurricanes Harvey and Irma on demand and building.
• Catalan President Carles Puigdemont faces a deadline to clarify to the Spanish government whether he’s actually declared independence for the region.
• Earnings season gets into full swing with major U.S. financial firms including Morgan Stanley, Goldman Sachs Group Inc. and Blackstone Group LP. posting results. Netflix Inc. and General Electric Co. are also reporting.
• Bank of England Governor Mark Carney appears before the U.K. Parliament’s Treasury Committee for the first time since June’s election on Tuesday.

Commodities

• West Texas Intermediate crude climbed 0.9 percent to $51.92 a barrel.
• Gold was steady at $1,304.04 an ounce.