Sensex, Nifty Close At New Record Highs

Indian equity benchmarks closed at fresh record highs as a slew of corporates reported earnings that met street expectations.

The S&P BSE Sensex climbed 0.3 percent to 33,266 while the NSE Nifty 50 rose 0.4 percent to 10,363. Sixteen of the 19 sector gauges compiled by the BSE Ltd. rose led by a gauge of consumer durables companies.

Shares of the drugmaker rose as much as 5.7 percent to Rs 1,058 after reporting better-than-expected profit in the September quarter.

• Q2 net profit Rs 455 crore versus estimate of Rs 444 crore
• Revenue Rs 3,950 crore versus estimate of Rs 4,055 crore
• Total costs Rs 3,420 crore; other income Rs 74.04 crore
• Ebidta Rs 927 crore versus Rs 1,058 crore YoY
• North America sales Rs 1,360 crore versus Rs 2,000 crore YoY

Management says

• Continue to see pricing pressure in U.S. generic market, as per expectations
• Company on track with complex generic pipeline

For more details, click here

Shares of the agro-chemicals maker swung between gains and losses after it posted a lower-than-estimated quarterly earnings.

Net profit rose 44 percent to Rs 237 crore during the three-month period, the Mumbai-based company said on Monday. This widely missed the Rs 373 crore estimated by analysts, Bloomberg data showed.

Revenue rose 6 percent year-on-year to Rs 3,770 crore, again below the forecast of Rs 3,940 crore.

Shares of the ceramics manufacturer rose as much as 5.2 percent, the most in over two months, to Rs 720. The company announced its results for the previous quarter in which the bottomline beats Bloomberg estimates.

Earnings Highlights:

• Net profit remained flat at Rs 63.7 crore (YoY). Bloomberg Estimates stood at Rs 62 crore.
• Net sales At Rs 671.2 crore versus Rs 629.2 crore (YoY)
• EBITDA rose marginally from Rs 122 crore versus Rs 126 crore (YoY)
• EBITDA margin contracted to 18.18 percent versus 20.04 percent (YoY)

Besides, the company plans to buy 43.3 lakh shares of Jax Vitrified Pvt. Ltd., according to its exchange filing.

Shares of the country's biggest mortgage lender recovered from intrdaday low and advanced 1.2 percent to Rs 1,720 after it met consensus Bloomberg estimates in the July-September quarter. Click here to read full article

• Net profit up 15 percent at Rs 2,101 crore versus estimate of Rs 1,990 crore
• Net interest income at Rs 3,151 crore versus estimate of Rs 2,646 crore
• Provisions for bad loans at Rs 95 crore versus Rs 85 crore (QoQ)
• Gross non-performing assets at 1.14 percent of total advances versus 1.12 percent in June quarter
• Loan book on AUM basis grew 18 percent (YoY)
• Individual loans accounted for 70 percent of loans provided during April-September
• Individual loans gross NPA at 0.65 percent
• Non-individual gross NPA at 2.18 percent

Shares of the Mumbai-based drugmaker erased early gains and dropped as much as 3 percent after reporting loss in the September quarter.

• Net loss at Rs 3.33 crore against profit of Rs 17.02 crore (YoY)
• Revenue at Rs 1,022 crore versus Rs 1064 crore (YoY)
• Total costs at Rs 1,100 crore versus Rs 1,060 crore (YoY)

Shares of the country's biggest mortgage lender declined 0.47 percent to Rs 1,690 ahead of its September quarter earnings.

Here’s what to watch:

Shares of the state-run lenders were trading higher in noon deals. The Nifty PSU Bank Index was the top sectoral gauge on the National Stocks Exchange, up 1.8 percent.

Shares of the tea producers and marketers were trading higher and staged a good upmove in today's session.

• Rossel India up 14 percent
• United Nilgiri Tea Estates up 10 percent
• Goodricke Group up 5 percent
• Jayshree Tea up 4 percent
• Tata Global Beverages up 2.5 percent
• Mcleod Russel up 0.8 percent

Shares of the Ahmedabad-based drugmaker rose as much as 1.66 percent, the most since October 27, to Rs 498 after it received final approval from the U.S. drug regulator to market Clobetasol Propionate ointment, the company said in a stock exchange filing.

The drug is used to treat variety of skin conditions like eczema, dermatitis and allergies etc. and it will be manufactured at its Ahmedabad facility.

• Indian equity benchmarks hit record highs led by strong gains in Bharat Petroleum, ONGC, Yes Bank and ICICI Bank
• The S&P BSE Sensex rose 0.5 percent to 33,332 and the NSE Nifty 50 Index advanced 0.6 percent to 10,383.80
• All the sector gauges barring the S&P BSE Metal Index were trading higher. The S&P BSE Oil & Gas Index was the top sectoral gainer, up 1.4 percent.
• From the Nifty 50 basket of shares, 33 were trading higher while 17 were among laggards

• ITC has 19 lakh shares change hands in three blocks on the National Stock Exchange at an average price of Rs 268 per share.
• PI Industries has over 40 lakh shares change hands in two block deals on the NSE and one on the BSE.
• Bharti Infratel has 11.2 lakh shares change hands in a block

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the country's biggest cigarette maker declined as much as 1.4 percent to Rs 265.55 after brokerages cut target price on the stock.

Axis Capital on ITC

• Maintain Buy; cut price target to Rs 320 from Rs 330.
• Cigarette volume declines 6 percent due to GST rate pass-through.
• Cut earnings per share estimate by 2-4 percent for the current and next financial year.
• Expect 2 percent cigarette volume decline in the current financial year.
• Expect revenue and earning per share to grow at a compound annual growth rate of 9 percent respectively, over three years till March 2019.

Kotak Securities on ITC

• Maintain Add; cut price target to Rs 310 from Rs 340.
• Estimate a cigarette volume decline of 6-7 percent.
• Cut earnings per share estimates by 2-3 percent for the current financial year till March 2020 on lower cigarette business assumptions.
• Tobacco taxation policy continues to hurt ITC’s ability to deliver healthier Ebit growth.

Linde India

• Stock rose as much as 6.7 percent to Rs 443.
• Net profit at Rs 10 crore versus net loss of Rs 4 crore (YoY).

Tata Metaliks

• Stock rose as much as 5.8 percent to Rs 784.
• Net profit up 52.5 percent at Rs 33.55 crore (YoY).

Navin Fluorine

• Stock rose as much as 4.7 percent to Rs 769.
• Net profit up 13.1 percent at Rs 43 crore versus Rs 38 crore (YoY).

AU Small Finance Bank

• Stock fell as much as 3.5 percent to Rs 570.95.
• Net profit down 3 percent at Rs 68.24 versus Rs 70.35 crore (YoY).
• Gross NPA at 3.08 percent versus 2.98 percent (QoQ).
• Net NPA at 2.09 percent versus 2.15 percent (QoQ).
• Provisions at Rs 40.96 crore versus Rs 29.1 crore (QoQ).

Jubilant Industries

• Stock fell as much as 6.5 percent to Rs 224.
• Net profit down 50 percent at 2.5 crore (YoY).

Sun Pharma Advanced Research Company

• Stock fell as much as 6.8 percent to Rs 355.
• Net loss of Rs 62.6 crore versus net profit of Rs 15 crore (YoY).

Ineos Styrolution India

• Stock fell as much as 6.5 percent to Rs 966.10.
• Net profit down 10.5 percent at Rs 17 crore (YoY).

The proposed merger between IDFC Group and Shriram Group will be called off as talks between the two parties have failed, people with knowledge of the matter told Bloomberg.

Stock Check

• IDFC (-0.9 percent)
• IDFC Bank (-1.19 percent)
• Shriram Transport Finance (+1.51 percent)
• Shriram City Union (+1.76 percent)
• Shriram EPC (-1.6 percent)

Sovereign bonds drop after the central bank announced another open-market sale of debt to drain surplus liquidity, which has already fallen to levels seen before the government’s cash ban in November.

• RBI to sell as much as Rs 10,000 crore ($1.5 billion) of bonds via OMO on Nov. 9; bonds to be sold are in 2020-2029 tenors, RBI statement Friday said.
• Excess funds in the banking system stood at Rs 1.03 lakh crore as on Oct. 27, according to Bloomberg Intelligence India Banking Liquidity Index; was at Rs 80,000 crore rupees on Oct. 25, lowest since Nov. 2016

(Source: Bloomberg)

Shares of the budget carrier climbed as much as 1.9 percent after it said flying all 26 Airbus A320neo jets after Pratt & Whitney fixed issues. IndiGo, the world’s biggest buyer of A320neo aircraft, is flying 141 Airbus A32-family jets now.

Shares of the oil explorer rose as much as 3.8 percent after it reported its highest quarterly profit in more than two years, helped by an increase in oil prices and output.

Indian shares climbed as investors continued to digest earnings, while bond and currency markets awaited an announcement on who will helm the Federal Reserve.

The S&P BSE Sensex gained 0.42 percent to 33,296 while the NSE Nifty rose 0.45 percent to 10,369. Both the indices are trading at their fresh record highs. The market breadth was firmly tilted in favour of the advances by at least 6:1.

Nine of the 11 sector gauges compiled by the National Stock Exchange rose led by the NSE Nifty PSU Bank Index’s 3.74 percent surge. Meanwhile the NSE Nifty Pharma index dropped the most, down 0.2 percent.

The RBI on Friday announced another round of open market operations to sell bonds -- an auction that is unlikely to go down well with the bond markets, given that liquidity has come off quite a lot in the past few months.

In the absence of any positive cues from the data or the government, it looks like another lackluster day for sovereign notes with the yield on the 10-year bond trading between 6.79 percent-6.83 percent in the session.

In the currency market, the rupee is likely to open higher given that an optimistic global growth outlook is driving regional stocks higher. The South Korean won is trading up 0.5 percent against the greenback and the local currency too may show a similar strength. The market expects the rupee to stay in a range of 64.80-65.10 a dollar in the day.

Nifty Results Today

• Bharti Infratel
• HDFC
• Lupin
• Tata Steel
• UPL

Other Results Today

• Bharat Electronics
• Central Bank of India
• IDFC
• Kajaria Ceramics
• LIC Housing Finance
• Mahindra Lifespace Developers
• Marico
• Reliance Home Finance
• Sintex Industries
• Welspun Corp
• Wockhardt
• Century Plyboards

• Reliance Nippon Life Asset Management IPO closes. Final subscription subscribed 81.45 times.
• Kalyan Jewellers says it has not finalised any plans for IPO

• Nifty November futures closed at 10,356.8, premium of 33.8 points versus 16.7 points
• November contracts- Nifty open interest up 3 percent, Bank Nifty open interest down 1 percent
• India volatility index closed at 11.47, down 1.2 percent
• Maximum open interest for November series at 10,500 call, open interest at 31.6 lakh shares, up 17 percent
• Max OI for November series at 10,000 put option, OI at 46.4 lakh shares, up 5 percent

Kotak Securities on ICICI Bank

• Maintain Buy; Hiked price target to Rs 385 from Rs 370.
• Positives from second quarter earnings: stable net interest margins, lower slippages, improvement in coverage and loan growth.
• Slippages outside the watch list are likely to be minimal in future.
• Key Concern: Impact of implementation of Indian Accounting Standard on the improving return on equity.
• Bank can re-rate from current levels as there is good momentum on asset resolution post recap news.

UBS on ICICI Bank

• Maintain Buy; hiked price target to Rs 400 from Rs 380.
• The September quarter numbers remained inline on asset quality and operating metrics.
• watch list continues to decline albeit at slower than expected pace.
• Visibility on resolution under bankruptcy law and Indian Accounting Standard are key catalysts in the near term.
• Don’t expect significant divergence; Raise earnings per share estimates for financial year ending 2019 and 2020 by 4 percent and 2 percent respectively.

IDFC Securities on ICICI Bank

• Maintains Outperformer; hiked price target to Rs 345 from Rs 315.
• July-September quarter was better than expected net interest margins and lower than expected slippages.
• Management has never been confident on asset quality in last 2-3 years though there are lumpy accounts on the watch list.
• Expect slippage going ahead to be less volatile.

BoFA-ML on Indian Oil Corp

• Maintain Neutral; hiked price target to Rs 442 from Rs 428.
• Significant earnings miss on refining might be attributed to lower volumes and higher costs.
• Continues to lose diesel market share.
• Paradip volumes increase; Paradip slated for maintenance in near term.
• Indian Oil should book further inventory gains in the present quarter.

Nomura on Indian Oil Corp

• Maintain Buy with price target of Rs 495.
• The September quarter results were weak due to lower gross refinery margins, refinery maintenance shutdowns and lower inventory gains in marketing.
• Indian Oil was unable to take optimum advantage of strong refining margins environment.
• Expect improvement in coming quarters with return of refineries from maintenance shut-downs.
• Outlook in both refining and marketing remains good.
• Indian Oil remains favourite in Oil Marking Companies; Pecking Order: Indian Oil> Bharat Petroleum> Hindustan Petroleum.

Axis Capital on ITC

• Maintain Buy; cut price target to Rs 320 from Rs 330.
• Cigarette volume declines 6 percent due to GST rate pass-through.
• Cut earnings per share estimate by 2-4 percent for the current and next financial year.
• Expect 2 percent cigarette volume decline in the current financial year.
• Expect revenue and earning per share to grow at a compound annual growth rate of 9 percent respectively, over three years till March 2019.

Kotak Securities on ITC

• Maintain Add; cut price target to Rs 310 from Rs 340.
• Estimate a cigarette volume decline of 6-7 percent.
• Cut earnings per share estimates by 2-3 percent for the current financial year till March 2020 on lower cigarette business assumptions.
• Tobacco taxation policy continues to hurt ITC’s ability to deliver healthier Ebit growth.

Credit Suisse on ITC

• Maintain Neutral and price target of Rs 310.
• Cigarette volumes are likely to have declined 6 percent; Expect volume decline over next couple of quarters.
• Volume weakness is in-line, no negative surprises and the worst for now is behind.
• Focus shifts to expectations of GST hikes in cigarettes next year.

BoFA-ML on PVR

• Maintain Buy; hiked price target to Rs 1,592 from Rs 1,557.
• PVR will continue to benefit from secular demand for movies in India.
• Though screen rollout saw some delays, Guidance of 60 screen openings intact for FY18.

IDFC Securities on PVR

• Maintain Outperformer; cut price target to Rs 1,491 from Rs 1,542.
• Cut Ebitda for the current and next financial year by 5 percent and 2.6 percent respectively, to account for poor content and sale of bluO business.
• PVR’s execution is almost flawless with industry leading growth.
• Forthcoming movie pipeline appears to be strong; Expect Ebitda to grow at a compound annual growth rate of 19 percent over three years till March 2019.

Credit Suisse on Maruti Suzuki

• Maintain Neutral; hiked price target to Rs 7,300 from Rs 6,800.
• Previous quarter showed strong numbers supported by lower-than-expected costs.
• Pay commission benefit likely to scale up; First-time buyers were half of September quarter volumes.
• Margins will be impacted by higher share of Gujarat production and commodities.
• Maruti’s execution remains best in class but valuation appears stretched.

Macquarie on Maruti Suzuki

• Maintain Outperform; hiked price target to Rs 10,000 from Rs 8,250.
• Maruti is best play on Indian auto growth; Company to add to its dominant market share.
• Expect Maruti to grow ahead of the industry given new model launches and extensive dealership network.
• Expect net profit to grow at a compound annual growth rate of 17 percent over March 2020.
• Triggers: Volume growth and market share trends.

Nomura on Maruti Suzuki

• Maintains Buy; hiked price target to Rs 9,843 from Rs 8,993.
• High growth visibility; premiumisation to drive profitability.
• Raise volume growth outlook for the current financial year to 15 percent from 13.5 percent due to strong demand.
• Nomura dealer check suggest festive demand is up 15-20 percent (YoY).
• Expect volume, revenue and earnings per share to grow at a compound annual growth rate of 13 percent, 17 percent and 21 percent respectively over March 2020.
• Maruti remains top pick

IDFC Securities on ONGC

• Maintain Outperformer; hiked price target to Rs 230 from Rs 215.
• July-September period was net profit surpassed estimates widely, driven by higher other income
• Raise ewarnings per share for the current and next financial year by 4.7 percent and 1.5 percent respectively to factor marginally higher realisations
• Positive: Growth in gas volumes, with guidance of strong growth over three years till March 2021.
• Market overcompensating near term stress due to soft domestic gas prices and stress on the balance sheet from Hindustan Petroleum acquisition.

Nomura on Reliance Power

• Upgrade to Neutral from Reduce; cut price target to Rs 42 from Rs 45.
• Tepid near-term earnings outlook, but stock fairly valued.
• Cut earnings per share estimates for the current and next financial year by 33 percent and 22 percent respectively, driven by revised estimates of net finance cost.
• Cut earnings per share estimates for the current and next financial year by 33 percent and 22 percent respectively, driven by revised estimates of net finance cost

• M&M Financial: To consider fundraising proposal on November 1
• Sunteck Realty: Closes QIP; sets Issue Price at Rs 322 apiece
• Quess Corp: To acquire 46 percent stake in Heptagon Technologies
• Kridhan Infra: To acquire 36.60 percent stake in Vijay Nirman Company
• Cadila Health gets U.S. FDA approval for generic of Tazoxifen Citrate Tablets
• IDFC Bank, Shriram set to call off merger talks (Economic Times)
• SBI asks Odisha Govt to take equity in Bhushan Steel (Business Standard)
• Tata Sons to invest Rs 30,000 crore more in Tata Teleservices (Business Standard)
• L&T to invest Rs 500 crore in missile integrated facility (Business Line)

For a complete list of stocks, click here!

• India May Table New Consumer Law in Parliament’s Winter Session
• France’s Dassault Will invest More Than 100 Million Euros in India
• India sends first wheat shipment to Afghanistan via Iran port
• India plans 6 new fast breeder reactors of 600 MW each: Babu

• Who Needs A Runway? SpiceJet Wants To Land In Sea, Fields
• Forex Reserves Fall $375.8m to $399.9b in a Week to Oct. 20: RBI
• India May Table New Consumer Law in Parliament’s Winter Session
• Global funds sold Rs 641 crore of local stocks; domestic funds bought Rs 56.57 crore on Oct. 27: NSE Provisional data
• Forwards Fall as Risk Appetite Broadly Recovers: Asian NDFs
• Ease Of Doing Business Remains A Major Concern, Says Sunil Bharti Mittal
• Bhushan Steel: SBI Is Said to Ask Odisha to Take Stake in company
• India to Launch Bharat-22 ETF in November to Raise Rs 8,000 Crore (PTI)
• Gadkari Sees 100% Electric Mobility in India Before 2030 (Financial Express)

• India’s Largest Insurer LIC May Participate in Bank Rescue Plan (PTI)
• IDFC Bank, Shriram Set to Call Off Merger Talks (Economic Times)
• India Ministers Suggest GST Cut for Some Manufacturers (PTI)

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.26 percent to 10,398 as of 9:00 a.m.

Asian stocks were mixed as investors continued to digest earnings, while bond and currency markets awaited an announcement on who will helm the Federal Reserve. Profit reports due this week from some of the world’s largest companies may show if there’s enough juice in the earnings season to propel another leg higher for global shares.

Here are some key upcoming events this week:

• President Donald Trump has said he’ll reveal his choice to lead the Fed by Friday.
• The Fed’s next rate decision is on Wednesday, with economists expecting the central bank to keep rates at 1.25 percent and to increase them at the December meeting.
• The U.S. October payroll report comes out Friday. On Monday, personal income and spending data comes out, which features the Fed’s preferred inflation gauge.
• Trump starts an 11-day trip to Asia, his first as president, on Friday. He’s scheduled to visit Japan, South Korea, China, Vietnam and the Philippines for talks with leaders and to visit the APEC and Asean summits. Trade and security issues — particularly North Korea — will probably be in focus.
• A week packed with earnings releases culminates with Apple Inc. results Friday.

Commodities

• West Texas Intermediate crude was little changed at $53.94 after rising 2.4 percent on Friday, when it hit the highest in about six months.
• Gold slipped 0.2 percent to $1,271.68 an ounce.