Sensex, Nifty Post Seventh Weekly Gains, Longest Run Since 2012

Indian equity benchmarks posted their seventh straight week of gains, the longest run since February 2012 amid a slew of earnings that either met or beat street.

The S&P BSE Sensex rose 0.71 percent or 251 points to fresh record high 35,511 and the NSE Nifty 50 Index gained 0.72 or 78 points to 10,895. On a weekly basis, the Sensex gained 2.66 percent and Nifty climbed 2 percent.

Gains were broad-based as the S&P BSE MidCap Index advanced 0.77 percent and the S&P BSE SmallCap Index rose 0.88 percent. All sector gauges compiled by BSE ended higher led by the S&P BSE Bankex Index's 1.5 percent gain.

• ICICI Prudential: Shares of the Mumbai-based life insurance service provider rose as much as 6 percent to Rs 437.35 after its value of new business rose 82.2 percent to Rs 767 crore versus Rs 421 crore.
• Biocon: Shares of the Bangalore-based bio-pharmaceutical firm rose as much as 6.6 percent to record high of Rs 575 after it announced exclusive global collaboration with Sandoz to develop, manufacture and commercialize multiple biosimilars products in immunology and oncology in the coming years.
• Healthcare Global: Shares of the Bangalore-based provider of medical and surgical services rose as much as 9.57 percent to Rs 305 after RBI approved hike in FII Limit from 24 percent to 100 percent.
• Alembic: The Gujarat-based drug maker rose as much as 9.83 percent to Rs 64.80 after the RBI approved hike in FII Limit from 24 percent to 100 percent.

The initial public offering of Amber Enterprises, the manufacturer of air-conditioners, was subscribed 82 times as of 3:00 p.m. on final day of subscription.

• Portion reserved for institutional buyers subscribed 107 times
• Non-institutional bidders portion subscribed 223.73 times
• Retail portion subscribed 9.2 times

Source: Data provided Axis Capital

• Sunteck Realty: The Mumbai-based real estate developer rose as much as 3.35 percent to Rs 417.90. Trading volume was 116.5 times its 20-day average.
• Solar Industries: The Nagpur-based explosives maker rose as much as 1.02 percent to Rs 1,145.70. Trading volume was 96 times its 20-day average.
• Sharda Cropchem: The Mumbai-based agricultural chemicals maker rose as much as 2.11 percent to Rs 449.55. Trading volume was 14.1 times its 20-day average.
• Cyient: The Hyderabad-based engineering and data analytics services provider rose as much as 7.87 percent to Rs 624.30. Trading volume was 8.8 times its 20-day average.

• ICICI Bank has 1.55 crore shares (0.24 percent equity) change hands.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the pizza chain operator Domino’s Pizza rose as much as 3.9 percent to record high of Rs 2,020 after it reported strong set of earnings in October-December quarter.

Key earnings highlights:

• Domino’s same store sales growth at 17.8 percent
• Net profit at Rs 66 crore versus Bloomberg Est Of Rs 44 crore
• Net profit up 230 percent at Rs 66 crore versus Rs 20 crore (YoY)
• Revenue at Rs 795 crore versus Rs 658 crore (YoY)
• EBITDA up 115 percent at Rs 136 crore versus Rs 63 crore
• Margin at 17.1 percent versus 9.6 percent
• Appoints Prakash Bisht as CFO

• Indian equity benchmarks were trading in a narrow range as gains in HDFC Bank and ICICI Bank were offset by losses in Infosys and NTPC.
• The S&P BSE Sensex rose 0.13 percent to 35,304 and the NSE Nifty was little changed at 10,825.
• The broader markets were trading with a negative bias as the S&P BSE MidCap Index fell 0.3 percent and the S&P BSE SmallCap Index declined 0.2 percent.
• The overall market breadth was negative as 1,748 stocks were declining while 1,036 were advancing.
• Fourteen out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Basic Materials Index's 0.7 percent drop. On the flipside, the S&P BSE Bankex Index was the top sectoral gainers, up 0.7 percent.

Shares of the Gujarat-based chemical maker declined 1 percent to Rs 2,916 after it reported December quarter earnings.

Key earnings highlights:

• Net profit up 12.6 percent at Rs 65.99 crore versus Rs 58.58 crore (YoY)
• Revenue at Rs 803.68 crore versus Rs 741.5 crore (YoY)
• EBITDA up 15.7 percent at Rs 126 crore versus Rs 109 crore (YoY)
• Margin at 15.7 percent versus 17 percent (YoY)

Shares of the life insurance service provider were trading 0.13 percent lower at Rs 411.90 after it reported December quarter earnings.

Key earnings highlights:

• Net profit at Rs 452 crore versus Rs 450 crore (YoY)
• Net premium earned Rs 6,795 crore versus Rs 5,700 crore (YoY)

Shares of the country’s biggest cigarette maker were trading 0.7 percent higher at Rs 277.50 after it reported October-December quarter earnings.

Key earnings highlights:

• Standalone net profit at Rs 3,090 crore versus Bloomberg estimate Of Rs 2,830 crore
• Standalone net profit up 17 percent at Rs 3,090 crore versus Rs 2,640 crore (YoY)
• Standalone revenue at Rs 9,772 crore versus Bloomberg estimate Of Rs 10,608 crore
• Standalone revenue down 26.7 percent at Rs 9,772 crore versus Rs 13,570 crore (YoY)
• Standalone EBITDA at Rs 3,904 crore versus Bloomberg estimate Of Rs 3,825 crore
• Standalone EBITDA up 10.1 percent at Rs 3,904 crore versus Rs 3,546 crore (YoY)
• Standalone margin at 40 percent versus Bloomberg estimate Of 36.1 percent
• Standalone margin at 40 percent versus 38.3 percent (YoY)
• Standalone cigarette Sales at Rs 4,629.2 crore

Shares of the country’s third biggest private sector lender by market cap were trading 0.5 percent higher at Rs 1,052.10 after it reported December quarter earnings.

Key earnings highlights:

• Standalone net profit at Rs 1,053 crore versus BloombergQuint estimate of Rs 1,090 crore
• Standalone net profit up 19.7 percent at Rs 1,053 crore versus Rs 880 crore (YoY)
• Gross NPA at 2.31 percent versus 2.47 percent (QoQ); Net NPA at 1.09 percent versus 1.26 percent (QoQ)
• Provisions at Rs 212.8 crore versus Rs 216.5 crore (QoQ); Rs 192 crore (YoY)
• Standalone NII at Rs 2,394 crore versus BloombergQuint estimate Of Rs 2,427 crore
• Standalone NII up 17 percent at Rs 2,394 crore versus Rs 2,050 crore (YoY)
• Basel III Capital Adequacy Ratio at 17.09 percent as on Dec. 31
• Gross NPA at Rs 3,715 crore versus Rs 3,814 crore (QoQ
• Net NPA at Rs 1,728 crore versus Rs 1,919 crore (QoQ)
• Net interest margin at 4.2 percent versus 4.5 percent (YoY)
• Advances up 23.1 percent at Rs 1.59 lakh crore versus Rs 1.3 lakh crore (YoY)
• Deposits at Rs 1.8 lakh crore versus Rs 1.5 lakh crore (YoY)
• Current, savings account ratio at 46.7 percent as on Dec. 31

• Q3 core NIMs at 4.3 percent; other income up 23 percent Rs 3,869 crore versus Rs 3,143 crore (YoY)
• Advances up 27.5 percent at Rs 6.31 lakh crore (YoY)
• Deposits up 10.1 percent at Rs 6.99 lakh crore (YoY)
• Current, savings account ratio at 43.9 percent As on Dec. 31
• FY17 NPA Provision Divergence versus RBI audit at Rs 793 crore
• FY17 Gross NPA divergence versus RBI assessment at Rs 2,052 crore
• Basel III Capital adequacy ratio 15.5 percent versus 15.9 percent (YoY)
• Upgraded one NPA account to standard after JLF approval

Shares of the country's biggest private sector lender were trading 0.6 percent higher at Rs 1,946 after it reported October-December quarter earnings.

Key earnings highlights:

• Net profit up 20 percent at Rs 4,642.60 crore versus Rs 3,865.33 crore (YoY)
• Net interest income up 24 percent at Rs 10,314 crore versus Rs 8,309 crore (YoY)
• Net non-performing assets as a percentage of total advances at 0.44 percent versus 0.43 percent (QoQ)
• Gross non-performing assets as a percentage of total advances at 1.29 percent versus 1.26 percent (QoQ)
• Provisions for bad loans at Rs 1,351 crore versus Rs 1,476 crore (QoQ); Rs 716 crore (YoY)

• Digital is at the center of our strategy which aided growth
• U.S. led the growth in the third quarter
• Moderate decline in Europe due to seasonality
• Strengthening of rupee led to decline in the net income of the company
• Each quarter we are gaining significant momentum in digital business
• Sequentially, financial services growth was very strong in Q3

Shares of the Ahmedabad-based drug maker rose as much as 3 percent to Rs 451 after the U.S. drug regulator issued Form 483 with no observations to the company for its Dabhasa manufacturing facility.

U.S. FDA had inspected its API manufacturing facility at Dabhasa from Jan. 15-Jan. 19.

Shares of the Delhi-based jewller rose 0.57 percent to Rs 586.95 after it repoted October-December quarter earnings.

Key earnings highlights:

• Net profit up 52 percent at Rs 163 crore versus Rs 107 crore.
• Revenue at Rs 2,645 crore versus Rs ,1941 crore

Shares of the Gujarat-based drug maker rose as much as 9.8 percent, the most since Dec. 21, to Rs 64.80 after the company said its board will consider shares buyback plan on Jan. 23 when it will meet to approve standalone financial statement for the quarter and nine months period ended 31st December, 2017.

• Signed huge infra services deal with a consumer goods company last quarter
• See growth in infra services segment by FY19
• Will remain at lower end of guided range at 10.5-12.5 percent
• Deal wins give us good visibility going into FY19
• Engineering has been one of the strongest service lines
• Continue to invest in inorganic strategies
• Don't see threat to margins
• Continue to remain positive over next few quarters on BFSI transformation

Shares of the Bhopal-based road construction company rose as much as 3.2 percent to Rs 965 after it won an EPC order worth Rs 360.58 crore from Karnataka.

Shares of the Jalgaon-based micro irrigation system maker rose as much as 4.24 percent to Rs 138.75 after GST Council yesterday reduced GST on drip Irrigation system including laterals and sprinklers to 12 percent from 18 percent.

Shares of the Hyderabad-based engineering and data analytics service provider rose as much as 7.13 percent to Rs 623 after it reported December quarter earnings. Its board announced interim dividend of Rs 4 for its shareholders.

Key earnings highlights:

• Revenue up 2 percent at Rs 983 crore.
• Net profit down 21 percent at Rs 87.8 crore.
• EBIT down 1 percent at Rs 112 crore.
• Margin at 11.4 percent from 11.7 percent.

Shares of the Mukesh Ambani-led oil-to-telecom conglomerate were trading 1.3 percent higher at Rs 932 ahead of October-December quarter earnings which will be declared later in the day.

Analysts polled by Bloomberg expect Reliance Industries to report:

• Net profit of Rs 8,450 crore versus Rs 8,022 crore (YoY)
• Revenue of Rs 85,000 crore versus Rs 66,606 crore (YoY)
• EBITDA expected at Rs 13,500 crore versus Rs 10,099 crore (YoY)

Shares of the Bangalore-based amusement park operator rose as much as 8.89 percent, the most in six months, to Rs 425 after the GST Council at its meeting yesterday reduced tax rate to 18 percent from 28 percent on admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet.

Shares of the companies promoted by Anil Dhirubhai Ambani were trading lower.

• Reliance Infrastructure fell 1.08 percent to Rs 501
• Reliance Communications fell 3.58 percent to Rs 28.30
• Reliance Capital fell 0.84 percent to Rs 521
• Reliance Power fell 1.44 percent to Rs 48
• Reliance Naval fell 1.1 percent to Rs 49.55

Shares of the country's largest telecom service provider fell as much as 2.3 percent to Rs 483.50 after its net profit declined for sixth quarter in a row after the telecom regulator reduced the fee that operators earn for cross-network calls by more than half.

Bharti Airtel's net profit in the December-ended quarter declined 11 percent over the previous three months to Rs 306 crore, Bharti Airtel said in a stock exchange filing. The consensus estimate of analysts tracked by Bloomberg had expected profit at Rs 359 crore.

• Revenue fell 6.7 percent to Rs 20,320 crore, less than the estimated Rs 21,095 crore.
• Operating income fell 5.7 percent sequentially, to its lowest level in the last fifteen quarters at Rs 7,469 crore.
• Operating margin rose slightly to 36.76 percent from 36.38 percent in the last quarter.
• Africa mobile operations reported a higher margin than its Indian business first time in at least eight quarters—35.5 percent compared to 32.6 percent, respectively.

Indian equity benchmarks were little changed as gains in Yes Bank, Reliance Industries and ITC were offset by weakness in Bharti Airtel, Infosys and Wipro.

The S&P BSE Sensex 0.12 percent to 35,300.84 and the NSE Nifty 50 Index was little changed at 10,822.

The broader markets were also trading on a muted note with the S&P BSE MidCap Index down 0.14 percent while the S&P BSE SmallCap Index was little changed.

Twelve out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Telecom Index's 0.9 percent fall. On the flipside, the S&P BSE SMCG Index was the top sectoral gainer, up 0.4 percent.

The Noida-based IT outsourcing company met consensus earnings estimates compiled Bloomberg in October-December quarter.

Key earnings highlights:

• Consolidated revenue at Rs 12,809 crore versus Bloomberg estimate of Rs 12,764 crore
• Consolidated revenue up 3 percent at Rs 12,809 crore versus Rs 12,433 crore (QoQ)
• Consolidated EBIT at Rs 2,510 crore versus Bloomberg estimate Of Rs 2,507 crore
• Consolidated EBIT at Rs 2,510 crore versus Rs 2,451 crore (QoQ)
• Consolidated margin at 19.6 percent versus Bloomberg estimate Of 19.6 percent
• Consolidated margin at 19.6 percent versus 19.7 percent (QoQ)
• Consolidated dollar revenue at $1,988 million versus Bloomberg estimate of $1,971 million
• Maintains revenue guidance of 10.5-12.5 percent for FY18 in constant currency
• Retains FY18 operating margin guidance at 19.5 percent-20.5 percent
• Keeps FY18 dollar sales growth guidance at 12.1-14.1 percent
• Constant currency financial services operations grew 2.8 percent (QoQ)

• HDFC Bank
• ITC
• Kotak Mahindra Bank
• Reliance Industries
• Wipro

Other Earnings To Watch

• Atul
• CDSL
• GNA Axles
• HDFC Standard Life Insurance
• ICICI Prudential Life Insurance
• IDFC Bank
• Jubilant Foodworks
• Kansai Nerolac Paints
• NIIT Technologies
• PC Jeweller
• Tata Elxsi

Bharti Airtel Q3 (QoQ)

• Revenue down 7 percent at Rs 20,319 crore.
• Ebitda down 6 percent at Rs 7,469 crore.
• Margin at 36.76 percent from 36.38 percent.
• Net Profit down 11 percent at Rs 306 crore.
• ARPU down 15 percent to Rs 123.

Cyient Q3 (QoQ)

• Revenue up 2 percent at Rs 983 crore.
• Net profit down 21 percent at Rs 87.8 crore.
• EBIT down 1 percent at Rs 112 crore.
• Margin at 11.4 percent from 11.7 percent.

Zensar Technologies Q3 (QoQ)

• Revenue up 4 percent at Rs 794 crore.
• Net profit down 6 percent at Rs 59 crore.
• EBIT up 26.8 percent at Rs 90 crore.
• Margin at 11.3 percent from 9.3 percent.

Deepak Nitrite Q3 (YoY)

• Revenue up 22 percent at Rs 371 crore.
• Net profit up 170 percent at Rs 20 crore.
• Ebitda up 68 percent at Rs 52 crore.
• Margin at 14.0 percent from 10.2 percent.

Jubilant Industries Q3 (YoY)

• Revenue up 4.9 percent at Rs 119 crore.
• Net loss of Rs 2.2 crore from a net loss of Rs 5.6 crore.
• Ebitda up 6 percent at Rs 5.3 crore.
• Margin at 4.5 percent from 4.4 percent.

Kewal Kiran Clothing Q3 (YoY)

• Revenue flat at Rs 94.4 crore.
• Net profit up 25 percent at Rs 10.4 crore.
• Ebitda up 48 percent at Rs 15.8 crore.
• Margin at 16.7 percent from 11.4 percent.

• BI hikes foreign investment limit in Healthcare Global to 100 percent from 24 percent earlier.
• Alembic board to consider buyback of shares on Jan. 23.
• Biocon enters into a global partnership with Sandoz to develop, manufacture and commercialise multiple biosimilars in immunology and oncology.
• Savita Oil Technologies to consider share buyback on Jan. 23.
• Torrent Pharma acquires U.S.-based generic pharmaceuticals Bio-Pharma Inc.
• Tech Mahindra to acquire 17.5 percent shares of Altiostar on a fully diluted basis.

For a complete list of stocks to watch, click here

• Circuit filter revised to 10 percent: Excel Crop Care and Thirani Projects.
• Circuit filter revised to 5 percent: Gallant Ispat and Confidence Petroleum.

Websol Energy System

• Garnet International bought 1.40 lakh shares or 0.5 percent equity at Rs 130.62 each.

Star Cement

• SBI MF bought 1.53 crore shares or 3.7 percent equity at Rs 129.97 each.
• Promoters sold 1.4 crore shares or 3.3 percent equity at an average of Rs 130.05 each.

Arman Financial Services

• Param Capital bought 3.25 lakh shares or 5.7 percent equity at Rs 255.5 each.
• Reliance MF sold 3.94 lakh shares or 6.9 percent equity at Rs 255.5 each.

Shah Alloys

• General Insurance Corp of India sold 1.12 lakh shares or 0.6 percent equity at Rs 18.3 each.
• United India Insurance sold 1 lakh shares or 0.5 percent equity at Rs 18.25 each.

• Nifty January futures trading at 10,810.8, discount of 6.2 points from a premium of 3.3 points.
• January Series: Nifty open interest unchanged; Bank Nifty open interest down 1 percent.
• India VIX ended at 13.9, up 0.7 percent.
• Max open interest for January series at 11,000 Call (open interest at 62.2 lakh, up 24 percent).

• Max open interest for January series at 10,500 Put (open interest at 70 lakh, down 12 percent).

Equirus on Ajanta Pharma

• Initiated ‘Add’ with price target of Rs 1,648.
• Company’s relentless growth trajectory likely to pause in the financial years through March 2019.
• Growth recovery would only be back-ended.
• Domestic business – on a strong footing.
• Africa business - IPCA's re-entry should hurt.
• Asia business - Middle East Asia and Central Asia to remain a drag.
• US business - Bleak visibility over future launches.
• Expect revenue to grow at a compounded rate of 10 percent over the financial years through March 2020.
• Operating margins to contract by 250 basis points over the financial years through March 2020 on higher costs/overheads.
• With a moderate growth profile, we expect return on equity and return on capital employed to decline by 10 percentage points.

IDFC on Hindustan Zinc

• Maintained ‘Underperform’; raised price target to Rs 278 from Rs 267.
• Results could have been better with increase in zinc and lead prices .
• Higher cost of production offset pricing gain.
• Volume guidance maintained for the current financial year; positive commentary on zinc market.
• Cost of production to be 10 percent lower on a quarterly basis in the current quarter.
• Stock price factors in average zinc price of US$3,300/t in the financial year-ending March 2020.
• Comfort is dividend yield of 5 percent.

Citi on Yes Bank

• Maintained ‘Buy’ with price target of Rs 400.
• Strong growth, but margin and asset quality miss.
• CASA and fee momentum continue with gains in retail lending franchise.
• Slippages and credit costs remained relatively elevated.

Morgan Stanley on Yes Bank

• Maintained ‘Overweight’ with price target of Rs 450.
• Earnings in the previous quarter missed, driven by lower-than-expected net interest income and higher provisions, partially offset by higher non-interest income.

Emkay on UltraTech Cement

• Maintained ‘Accumulate’; raised price target to Rs 4,686 from Rs 4,585.
• Impressive volume growth, pricing pressure drags margins.
• Volume beats estimates, realisation lags.
• Management upbeat on volume growth on government initiatives.
• Company well positioned to generate superior profits.
• Positives: demand recovery, capacity expansion plans and under-utilized capacities.

Credit Suisse on UltraTech Cement

• Maintained ‘Underperform’; raised price target to Rs 3,500 from Rs 2,900.
• Weak results due to lower average selling price and higher costs.
• Weak ASP trend continues; No meaningful pick-up in January.
• JPA assets: Brand transition done; Focus on utilisation.
• Expect high supply pressure in the next financial year.
• Weak demand impacting pass through of cost increase.
• Stock already factoring in upside from demand pick-up over the next three years.

HSBC on Hospitals

• Regulatory overhang continues India.
• Private players focus on volume growth.
• Government continues scrutiny on healthcare services costs.
• Maintain Buy on Apollo and Fortis on long-term growth outlook.

HSBC on Fortis

• Maintained ‘Buy’; raised price target to Rs 225 from Rs 172.
• Outlook remains positive for hospital business with scope of margin improvement.
• Wait on update on SRL demerger progress.
• Rationalisation & higher focus on retail customers continue to grow margins.
• Fortis on track to focus on clinical excellence programs and hence improving case mix.

HSBC on Apollo

• Maintained ‘Buy’ with price target of Rs 1,300.
• Near-term challenges continue
• Expect operating leverage-driven gradual recovery to begin in the next financial year.
• Breakeven at Navi Mumbai expected by first half of the next fiscal year.
• Tariff hike and rationalisation at Chennai should offset low volume growth.
• Consolidation to benefit hospital business post capex expansion cycle.

Citi on Adani Ports

• Maintained ‘Buy’ with price target of Rs 575.
• Previous quarter was well-rounded and strong.
• Volume growth was strong and broad based across commodities and ports.
• Strong volumes led to strong headline numbers.
• Management guided for increase in free cash flow and increase in dividend payout.
• Prominent and strong position in Indian port services space.
• Adani Ports one of the top picks in India infrastructure/logistics.

Goldman Sachs on Infra

• L&T: Maintained ‘Buy’ and added to conviction List with a price target of Rs 1,600, implying a potential upside of 21 percent from last regular trade.
• Container Corp: Upgraded to ‘Buy’ with price target of Rs 1,660, implying a potential upside of 17 percent form last regular trade. Improving execution and cash flow to drive re-rating.
• Adani Ports: Maintained ‘Buy’ with price target of Rs 488, implying a potential upside of 15 percent form last regular trade. Successfully moving to cash generating mode from CAPEX mode.

Macquarie on Hindustan Zinc

• Maintained ‘Outperform’ with price target of Rs 329.
• Strong commodity prices drive previous quarter earnings.
• No risk to current fiscal earnings despite hedge losses and higher costs.
• Impressive growth pipeline with expansion on track.
• Hindustan Zinc remains in a sweet spot with a strong volume growth pipeline.

• Bharti Airtel profit falls for sixth straight quarter
• Netanyahu’s visit to India shows great optics – and obstacles
• Cyrus Mistry equally to blame in ‘mismanagement’, says Tata Sons
• U.S. House passes spending bill to avoid government shutdown
• No legal framework for biometric data collected before Aadhaar Act, petitioners argue
• NSE seeks Singapore delay on stock futures
• India starts biggest oilfield auction in eight years
• As Trump shreds global trade deals, Xi basks in ‘Davos man’ role
• Hackers have walked off with about 14% of big digital currencies
• Biocon inks deal with Novartis after U.S. nod for biologic drug

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.11 percent to 10,825 as of 8:07 a.m.

Asian equities headed for a sixth week of gains even as investors face the test of rising yields, with benchmark 10-year Treasuries reaching levels last seen in 2016.

The MSCI Asia Pacific Index climbed, led by industrial stocks and consumer staples, while Japanese shares posted the largest gains. Equities in Hong Kong and Sydney were flat, while those in Shanghai advanced.

Commodities

• Gold rose 0.3 percent to $1,330.90 an ounce.
• West Texas Intermediate crude fell 0.8 percent to $63.43 a barrel.