Sensex, Nifty Close At 3-Week Low As Rate Cut Hopes Fade

Indian equity benchmarks closed at a three-week low after accelerating inflation tempered expectations of a rate cut by the central bank next month.

The S&P BSE Sensex declined 0.3 percent to 32,941 while the NSE Nifty 50 Index lost 0.4 percent to 10,186. The market breadth was firmly skewed towards the sellers by end of trade.

Data released late Monday showed consumer prices in October rose at the fastest pace in seven months, and may accelerate further amid rebounding oil prices. The Reserve Bank of India meets next month to rule on rates.

Fourteen of the 19 sector gauges compiled by the BSE Ltd. declined, led by the S&P BSE Capital Goods Index’s 1.41 percent slump. The S&P BSE Realty was the best performer, up 0.74 percent.

Grasim reported net income for the second quarter which missed the average analyst estimates. The stock was down 0.54 percent to Rs 1,218. It is down 7 times in 8 sessions.

Q2 Earnings Highlights

• Net income Rs 575 crore versus estimate Rs 587 crore
• Revenue Rs 4,040 crore
• Total costs Rs 3,460 crore
• Other income Rs 269 crore

Eicher Motors Ltd.’s second quarter profit rose in line with analyst estimates, led by record sales of its Royal Enfield motorcycles.

Net profit for the July-September quarter rose 25 percent from the year-ago period to Rs 518 crore, Eicher Motors said in a stock exchange filing today. The Bloomberg consensus estimate stood at Rs 540 crore.

The bottom line was boosted by a “best ever” 22 percent growth in sales of Royal Enfield motorcycles during the reported period, according to a separate media statement.

For more on Eicher Motors’ earnings, click here

Tata Global reported net income for the second quarter that beat the highest analyst estimate.

Q2 Earnings Highlights

• Net income Rs 144 crore versus estimate Rs 131 crore
• Revenue Rs 1,690 crore versus estimate of Rs 1,669 crore
• Total costs Rs 1,520 crore
• Other income Rs 33.54 crore

Shares of the drug maker rose as much as 5.23 percent to Rs 572 apiece before retreating as much as 1.57 percent.

Net profit of Rs 96.47 crore for the three-month period ending September, the company said on Tuesday. That was much higher than the Rs 44.60 crore consensus estimate of analysts tracked by Bloomberg. Revenue too came in ahead of forecast at Rs 864 crore.

Shares of the private sector lender dropped as much as 5.34 percent after its quarterly earnings missed analysts’ expectations.

• Q2 net profit Rs 75.65 crore versus estimate of Rs 152 crore
• Gross non-performing assets 4.83 percent end-Sept. versus 4.27 percent end-June
• Interest income Rs 1,400 crore; other income Rs 230 crore
• Interest expense Rs 847 crore

India's wholesale inflation rose in October on higher food prices.

Wholesale prices rose 3.59 percent during the month from a year earlier, according to a statement by the Commerce Ministry. That’s higher than the 3.01 percent median estimate of 28 economists surveyed by Bloomberg. Wholesale prices rose 2.6 percent in September.

• Primary article prices rose 3.3 percent year-on-year.
• Fuel, power, lighting prices rose 10.52 percent.
• Manufactured product prices rose 2.62 percent.
• Food article prices rose 4.3 percent.

Shares of the debt-laden telecom operator dropped as much as 6.58 percent after it failed to pay interest on its dollar bonds due 2020 within a grace period that ended Monday, according to a Bloomberg report quoting a person familiar with the matter.

The Anil Ambani company had missed a Nov. 6 deadline to pay interest of about $9.75 million on the notes. It missed interest payments due earlier this month on two rupee-denominated bonds.

Gold is set on a perilous path as global central banks withdraw the liquidity punch bowl that has driven stock markets to record highs.

As a world recovery gathers pace, the Federal Reserve is shrinking its balance sheet and raising interest rates, while the European Central Bank is about to begin tapering bond purchases. This scenario makes it very hard for a non-interest bearing asset like gold to do well, according to Troy Gayeski from SkyBridge Capital, which managed more than $11 billion at the end of August.

To read the full article, click here

The rupee went through ups and downs before trading 5 paise lower at 65.47 against the dollar today as it lost its early gains after the American currency grew in appeal.

The local currency hit 65.47 at 11:02 a.m. compared to yesterday's closing level of 65.42 at the forex market.

Globally, the US dollar came in higher against a basket currencies late yesterday. Pound sterling fell against the dollar and the euro as investors got anxious about Theresa May's ability to stay on as British Prime Minister and extract a favourable exit deal from the European Union.

PTI

Khadim India made its stock market debut at a discount of 3.07 percent at Rs 727 per share compared to an issue price of Rs 750 apiece. The stock fell 5 percent to Rs 712.40 thereafter.

For more details on the stock, click here

Yield on 6.79 percent government bonds due May 2027 rises 3 basis points to 7 percent, highest for a benchmark 10-year security since Sept. 8, 2016.

Yield climbs after a third day after official data late Monday showed consumer inflation accelerated to a 7-month high in October.

Shares of the tower infrastructure company dropped as much as 4.13 percent, to its lowest since Oct. 9, after about 8.32 crore shares (or 4.5 percent equity) changed hands on the NSE, according to Bloomberg data.

The stock was the most trading by volume and the worst performer on S&P BSE 200, Nifty 200 indexes.

Note: Bharti Airtel’s unit Nettle Infrastructure had offered to sell 3.5 percent outstanding shares in Bharti Infratel at Rs 400-415.50 apiece, according to a Bloomberg report.

Update:

• According to a Bloomberg news flash, Bharti Airtel sold shares at Rs 400 each to raise $507 million.

Indian shares fluctuated between gains and losses as the country’s consumer inflation accelerated faster than expected last month, putting calls for an interest rate cut in December at risk.

The S&P BSE Sensex rose 0.26 percent to 33,103 after retreating 0.14 percent in opening trade. The NSE Nifty 50 Index too gained as much as 0.22 percent to 10,247, after a 0.16 percent drop.

The market breadth, however, was more encouraging with buyers outnumbering the sellers by at least 4:1 on the NSE. Twelve of the 19 sector gauges compiled by the BSE Ltd. rose, led by the S&P BSE Consumer Durables Index. Meanwhile, the S&P BSE Information Technology Index was the worst performer.

Indian sovereign bonds are set for more pain after data last evening showed consumer price inflation climbed to a seven month high in October. With crude oil prices biased up, the case to own government debt is far lower now and market doesn’t rule out a further spike in yields.

The only comfort is that the 10-year bond is shut for trading in the repo market today ahead of the coupon payment. So traders will be vary to short the benchmark bond in the session. Yield is seen moving in range of 6.95 percent-7 percent.

In the currency market, the rupee is likely to trim some losses as Asian equity markets are steady today. The South Korean won has gained 0.3% against the dollar and the rupee, which usually trades in lockstep could open higher and stay in a range of 65.15-65.50 a dollar.

• Nifty November futures closed at 10,269 with a premium of 44 points versus 12points
• November contracts: Nifty open interest up 1 percent; Bank Nifty open interest unchanged
• India VIX closed up 4.2 percent at 14
• Max open interest for November series at 10,500 Call (open interest at 55 lakh, up 21 percent)
• Max open interest for November series at 10,200 Put (open interest at 49 lakh, down 13 percent)

ADF Foods

• JSL Enterprises bought 4 lakh shares (1.9 percent) at Rs 232.99 each
• KL Enterprises LLP bought 1.97 lakh shares (0.9 percent) at Rs 239.15 each

• Khadim India to start trading on BSE/NSE with a base price of Rs 750 per share. The IPO was subscribed 1.9 times.

• Bank Of Baroda
• Bata India
• Cadila Healthcare
• Ceat
• Corporation Bank
• Godrej Industries
• Grasim Industries
• Indiabulls Real Estate
• Indo Count Industries
• Infibeam Incorporation
• Ipca Laboratories
• JP Associates
• JK Tyre & Industries
• Karur Vysya Bank
• MRPL
• MOIL
• NBCC
• NLC India
• Reliance Capital
• Tata Global Beverages

• Eicher Motors
• GAIL
• Sun Pharma

Adani Enterprises Q2FY18 (YoY)

• Revenue up 19.6 percent at Rs 9083 crore
• Profit down 6.3 percent at Rs 59.1 crore
• EBITDA up 70 percent at Rs 689 crore
• Margin at 7.6 percent versus 5.3 percent

NMDC Q2FY18 (YoY)

• Revenue up 39.2 percent at Rs 2421 crore
• Net profit up 9.5 percent at Rs 844 crore
• EBITDA up 46 percent at Rs 1,202.5 crore
• Margin at 49.7 percent from 47.5 percent

Clariant Chemicals Q2FY18 (YoY)

• Revenue up 4 percent at Rs 244 crore
• Net profit up 26 percent at Rs 4.4 crore
• EBITDA up 4 percent at Rs 13.5 crore
• Margin flat at 5.5 percent

Future Enterprises Q2FY18 (YoY)

• Revenue up 19 percent at Rs 1,111 crore
• Net loss of Rs 2 crore versus a loss of Rs 23.2 crore
• EBITDA up 16.5 percent at Rs 275 crore
• Margin at 24.8 percent from 25.2 percent

Repco Home Finance Q2FY18 (YoY)

• Net interest income rose 21.2 percent to Rs 109.3 crore
• Profit 22.3 percent higher at Rs 55.87 crore
• Net interest margin at 4.8 percent from 4.3 percent (QoQ)
• Gross NPA at 3.4 percent from 3.97 percent (QoQ)
• Net NPA at 1.9 percent from 2.6 percent (QoQ)

Bajaj Hindusthan Sugar Q2FY18 (YoY)

• Revenue up 77 percent at Rs 1506.5 crore
• Net loss of Rs 91.6 crore from a loss of Rs 138 crore
• EBITDA up 78 percent at Rs 121.1 crore
• Margin flat at 8 percent

P&G Q2FY18 (YoY)

• Revenue up 9.6 percent at Rs 658 crore
• Net profit up 10.7 percent at Rs 115.6 crore
• EBITDA up 24.4 percent at Rs 188.4 crore
• Margin at 28.6 percent from 25.2 percent

KEI Industries Q2FY18 (YoY)

• Revenue up 19.84 percent at Rs 749 crore
• Net profit up 35.7 percent at Rs 28.5 crore
• EBITDA up 12.6 percent at Rs 76 crore
• Margin at 10.1 percent from 10.8 percent

Prabhat Dairy Q2FY18 (YoY)

• Revenue up 19 percent at Rs 385.6 crore
• Net profit up 2 percent at Rs 9.1 crore
• EBITDA up 15 percent at Rs 31.6 crore
• Margin at 8.2 percent vs 8.5 percent

JK Paper Q2FY18 (YoY)

• Revenue down 2 percent at Rs 671.5 crore
• Net profit up 29 percent at Rs 56.6 crore
• EBITDA up 3 percent at Rs 138.5 crore
• Margin at 20.6 percent from 18.7 percent

GSPL Q2FY18 (QoQ)

• Revenue up 13 percent at Rs 335 crore
• Net profit up 16 percent at Rs 177 crore
• EBITDA up 4 percent at Rs 286 crore
• Margin at 85.4 percent from 93.1 percent

Kalpataru Power Transmission Q2FY18 (YoY)

• Revenue up 9.7 percent at Rs 1223 crore
• Net profit up 23 percent at Rs 71.5 crore
• EBITDA up 9 percent at Rs 133 crore
• Margin flat at 10.9 percent

Man Infraconstruction Q2FY18 (YoY)

• Revenue down 13.5 percent at Rs 96 crore
• Net profit down 10 percent at Rs 11 crore
• EBITDA up 2 percent at Rs 20.4 crore
• Margin at 21.25 percent from 18 percent

SJVN Q2FY18

• Revenue down 14 percent at Rs 727 crore
• Net profit down 17 percent at Rs 435 crore
• EBITDA down 21 percent at Rs 585 crore
• Margin at 80.5 percent from 86.9 percent

Marathon NextGen Realty Q2FY18 (YoY)

• Revenue down 54 percent at Rs 14.75 crore
• Net profit down 50 percent at Rs 9.5 crore
• EBITDA down 59 percent at Rs 12.15 crore
• Margin at 82.4 percent from 91.9 percent

Dhanlaxmi Bank Q2FY18 (YoY)

• Net Interest Income up 8.2 percent at Rs 91 crore
• Profit up 0.7 percent at Rs 6.06 crore
• Provisions up 26 percent at Rs 24 crore (QoQ)
• GNPA at 6.11 percent from 5.62 percent (QoQ)
• NNPA at 3.67 percent from 3.15 percent (QoQ)

The Phoenix Mills Q2FY18 (YoY)

• Revenue down 24.4 percent at Rs 371 crore
• Profit down 22 percent at Rs 42 crore
• EBITDA down 23 percent at Rs 179 crore
• Margin at 48.2 percent from 47.1 percent

S H Kelkar Q2FY18 (YoY)

• Revenue down 9 percent at Rs 222 crore
• Profit down 21 percent at Rs 19 crore
• EBITDA down 13 percent at Rs 36 crore
• Margin at 16.2 percent from 17 percent

Shalimar Paints Q2FY18 (YoY)

• Revenue down 27.6 percent at Rs 71 crore
• Net loss of Rs 9.8 crore from a profit of Rs 2.5 crore
• EBITDA loss at Rs 9 crore from a profit of Rs 9 crore
• Margin at -12.7 percent from 9.2 percent

Shree Renuka Q2FY18 (YoY)

• Revenue down 32.7 percent at Rs 1,365 crore
• Net loss of Rs 120 crore from a profit of Rs 2.5 crore
• EBITDA down 95 percent at Rs 6 crore
• Margin at 0.4 percent from 6 percent

Tamil Nadu Newsprint and Papers Q2FY18 (YoY)

• Revenue down 21 percent at Rs 536 crore
• Net loss of Rs 13 crore from a profit of Rs 70.6 crore
• EBITDA down 62 percent at Rs 67 crore
• Margin at 12.5 percent from 25.9 percent

Indian Hotels Q2 YoY

• Revenue down 4 percent at Rs 852 crore
• Net loss of Rs 58 crore versus net loss of Rs 27 crore
• EBITDA down 21 percent at Rs 55.5 crore
• Margin at 6.5 percent versus 7.9 percent

CLSA on NTPC

• Maintain ‘Buy’ with target price of Rs 200
• NTPC added 1,210 megawatt of capacity in Q2 - highest ever added in any quarter
• Improved commercialisation of commissioned thermal capacity to boost regulated equity
• Expect marked pick-up in regulated equity growth to 21.4 percent
• Expect return on equity to expand by 230 basis points over financial years 2017 - 2019

Morgan Stanley on Adani Ports

• Maintains ‘Overweight’ with target price of Rs 471
• Modest volumes, healthy port margins and strong SEZ (special economic zone) profitability in the second quarter of the current fiscal
• Expect trade recovery, strong pricing power and pan-India presence to result into strong cash flow generation
• Management confident of volume recovery in the second half

Nomura on Yes Bank

• Maintains ‘Buy’; Cut target price to Rs 375 from Rs 440
• Difficult to assume that the bank will have solid collaterals for all its non-NPA divergences
• Target price cut to assume 50 percent divergence turning stress
• Impact on Bank’s Dec. 19 book is 5-6 percent
• If Bank’s resolution track record holds good, that will imply upside

Deutsche Bank on Adani Ports

• Maintains ‘Hold’; Hiked target price to Rs 350 from Rs 320
• Q2 cargo volume disappoints, though outlook remains strong
• Expect Revenue/EBITDA to grow at CAGR of 13 percent over financial years 2017 – 2019
• Target price hiked on faster ramp-up in container volume, particularly at newer ports

Deutsche Bank on Idea Cellular

• Maintains ‘Buy’ with target price of Rs 144
• Robust cost management in seasonally weak September-ended quarter
• Rapid rollout of 4G network and the proposed merger with Vodafone to allow it to compete
• Progressive normalisation of pricing to help Idea to revert to its past levels of profitability
• Current price appears to discount minimal merger synergies

CLSA on Idea

• Maintains ‘Sell’; Hiked target price to Rs 77 from Rs 70
• With sharp fall in EBITDA, asset sales will be crucial to control leverage
• Progress in merger is positive but merger synergies are back-ended
• Cut ebitda estimates for financial years 2018-2020 by 7-23 percent given the disappointed second quarter
• Pickup in subscribers will be key to revenue growth for Idea

IDFC Securities on Marksans Pharma

• Maintains ‘Outperform’ with target price of Rs 51
• Weak gross margins offset strong revenue growth in the July to September quarter
• Positives: Higher Europe/U.S. revenues
• Pace of recovery to be muted on account of pricing pressures in the U.S. market
• Triggers: continues improvement in U.K., ability to increase client penetration in the U.S. and securing new softgel ANDA approvals

• Bharti Airtel offered to sell 3.5 percent stake in Bharti Infratel at Rs 400-415.50 per share (Bloomberg)
• Sun Pharma subsidiary Taro gets USFDA nod for Fexofenadine Hydrochloride oral suspension
• Tata Teleservices says total mobile subscribers down 7.3 percent to 6,467 lakh in Oct. from 69.8 lakh in Sept.
• Muthoot Capital to issue 27.27 lakh shares at Rs 605 each via QIP.
• IOL Chemicals and Pharma to invest Rs 200 crore for expanding manufacturing capacity.
• Havells India signed a pact with South Korea’s Hyundai Electric for supply of low and medium voltage protection, and switching devices.

For a full list of stocks to watch, click here!

• Trump Discovers `Indo-Pacific' on Asia Tour in Boost for India
• Alibaba Seeks CCI Nod To Buy Stake In BigBasket
• SEBI Withdrew Loan Default Disclosure Circular As Banks Sought More Time
• India’s Retail Inflation Rises In Oct. Led By Higher Vegetable Prices

MSCI Small Cap Index

30 stocks added and 10 deleted from Small Cap Index

Additions

• APL Apollo Tubes
• Apollo Hospitals
• Bombay Dyeing
• Caplin Point
• CDSL
• Chambal Fertiliser
• Cochin Shipyard
• DCM Shriram
• Deepak Fertiliser
• Eris Life
• Fortis Health
• Gujarat Alkalies
• Gulf Oil Lubricants
• Himadri Chemicals
• IDFC
• Jindal Saw
• Jindal Stainless
• Minda Industries
• Nesco
• Quess Corp
• Radico
• Rain Industries,
• Shankara Building
• Suprajit Engineering
• Techno Electric
• Tejas Networks
• Time Techno
• Uflex
• VIP Industries
• Welspun Corp

Deletions

• Adani Transmission
• Future Retail
• Indo Count
• JB Chemicals
• Kansai Nerolac
• Kushal Tradelink
• L&T Financial
• TVS Motor
• Vakrangee
• Videocon

Changes effective close of November 30, 2017

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.11 percent to 10,250.

Asian markets remain steady as investors await central bank policies across the globe and also kept an eye on the U.S. tax reform developments. Treasury bond yields held gains while the dollar remained flat.

Shares in China slipped after the country’s economic expansion dialed back a notch as factory output, investment and retail sales all decelerated.

Here are some key events investors are watching this week:

• This week’s data include GDP reports for Japan, Germany, Italy and the euro area, CPI in the U.S., U.K. and Spain, along with Aussie jobs and wages.
• BOE officials address the bank’s future on Thursday, while Draghi speaks a second time Friday. A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.

Commodities:

• West Texas Intermediate crude fell 0.21 percent to $56.64 a barrel
• Gold remained fell 0.15 percent to $1,277 an ounce