A broker reacts while looking at financial data on computer screens the trading floor during a charity day at BGC Brokers L.P., a unit of BGC Partners Inc., in London, U.K. (Photographer: Luke MacGregor/Bloomberg)

Sensex, Nifty Clock Longest Rally In Nearly Five Months

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Closing Bell

Indian equity benchmarks posted their longest winning streak since November as investors shrugged off disappointing Infosys earnings to focus on the just-started earnings season.

The S&P BSE Sensex rose 0.3 percent to 34,302 while the NSE Nifty 50 gained 0.5 percent to 10,530. The market breadth was tilted in favour of the sellers all through the session.

Twelve of the 19 sectoral gauges compiled by BSE Ltd. advanced led by healthcare and real estate. Meanwhile, S&P BSE Information Technology Index dropped 0.74 percent, snapping a four-day rally.

Metropolis Healthcare Mulls Rs 1,500 Crore IPO

Metropolis Healthcare Ltd., an operator of medical diagnostic centers backed by Carlyle Group LP, is considering an initial public offering to raise about Rs 1,500 crore ($230 million) as it seeks acquisitions.

The sale will likely include a partial stake held by the founders as well as new shares, Managing Director Ameera Shah, 38, told Bloomberg in an interview. A time frame for the offering has not been set and the company hasn’t appointed an adviser for the sale, she said.

For more details, click here

Kotak Mahindra Bank Overtakes ICICI Bank

Block Deal Alert

  • Idea Cellular has 39 lakh shares change hands in two block deals
  • ICICI Bank has 12 lakh shares change hands in a block deal

Buyers and sellers were not immediately known.

Source: Bloomberg

Also Read: The Four Stocks That Beat Bulls And Bears

Pharma Stocks Lead The Comeback

A benchmark of the country’s top drugmakers rose as much as 1.5 percent, the most in nearly two weeks.

Indiabulls Ventures Jumps On Heavy Volumes

Shares of the broking services provider jumped as much as 19 percent, the biggest move since Feb. 8, 2017.

Trading volume was 16.4 times the 20-day average for this time of day. The stock has risen 45 percent in the past month, compared with the 2.9 percent advance in the Sensex Index.

Other Volume Movers

  • DCB Bank: The stock is up 3.3 percent with trading volumes at nearly 6 times its 20-day average
  • India Cements: The stock is up 3.1 percent with trading volumes at nearly 6 times its 20-day average nearly twice its 20-day average

India’s Wholesale Inflation Hits Eight-Month Low In March

India’s wholesale price inflation eased to an eight-month low in March on the back of softer rise food prices

Inflation measured by the Wholesale Price Index stood at 2.47 percent last month, compared with 2.48 percent in February, according to a statement by the Ministry of Commerce and Industry. That's marginally higher than the 2.43 percent median estimate of economists surveyed by Bloomberg.

Housing Finance Companies In Focus

Rupee At 5-Month Low

JUST IN | Supreme Court Halts RCom Asset Sale

Shares of the debt-ridden company fall as much as 4.7 percent after the apex court halted its asset sale.

HSBC Daisy Investments and other minority shareholders had moved Supreme Court against National Company Law Appellate Tribunal (NCLAT)'s order that allowed State Bank of India-led bankers to sell mortaged assets of Reliance Infratel, the tower unit of Reliance Communications.

The court also agreed to hear HSBC’s plea on the sale.

Also Read: RCom Hopes To Cut Debt By Rs 25,000 Crore From Asset Sale

AngloGold CEO Venkatakrishnan Resigns To Join Vedanta Resource

Srinivasan Venkatakrishnan has resigned as CEO of AngloGold Ashanti after 18 years at the company, with the last five as its CEO. He will remain in his current role until August 30.

Venkatakrishnan will joint billionaire Anil Agarwal-led Vedanta Resources as its CEO.

Source: Bloomberg

SC Halts Jayaswal Neco Industries’ Insolvency Case

A two-judge Supreme Court panel headed by Ranjan Gogoi orders status quo on Jayaswal Neco Industries’ insolvency case.

The company had challenged the RBI’s move to push banks to file insolvency case. It’s debt restructuring is already in the works, Harish Salve, lawyer for the company told the court.

SC To Hear Jaypee Insolvency Case On May 11

Meanwhile, a three-judge bench of the top court refused Jaiprakash Associates’s plea seeking order to Resolution Professional to consider its bid for Jaypee Infratech.

Brokerage Ratings Watch

  • Somany Ceramics cut to Reduce at ICICI Securities; price target Rs 618
  • Kajaria Ceramics cut to Reduce at ICICI Securities

Cipla Shares Rise 4.2% On Heavy Trading Volume

Shares of the drugmaker rose 4.2 percent to Rs 579, the highest level since March 12. Trading volume was more than triple the 20-day average for this time of day.

The stock is at an 11 percent discount to the analysts’ consensus target price. It traded at an average 2.7 percent discount over the past year, Bloomberg data showed.

Fortis Healthcare Drops Most In 3-Weeks

Shares of the country’s second-largest hospital chain operator dropped as much as 3.32 percent to Rs 147 apiece after it confirmed getting interest from IHH Healthcare Bhd.

IHH says

  • Fortis indicated it cannot engage with IHH due to binding pact with TPG-backed Manipal Healthcare
  • Haven’t entered into any talks or transactions currently
  • Will make appropriate announcement in timely manner

Source: Bloomberg

Also Read: IHH Said to Propose Up to $1.3 Billion Fortis Bid to Top TPG

Gruh Finance Gains After Announces Bonus Shares

Shares of the lender rose as much as 6.5 percent after its fourth quarter net income beat analyst forecast. The company announced the issue of one bonus share for each held. The stock was the second-best performer on the S&P BSE 500 Index. Trading volume was 1.4 times its 3-month full-day average.

Gruh Finance To BQ

  • Experienced higher payment ratio in Q4
  • Will try to maintain cost-to-income ratio around 15 percent
  • Do not see strong demand enthusiasm
  • Challenges on recoveries to continue
  • Target 20-25 percent loan growth in FY18, more likely to see ~18 percent growth

UCO Bank Slumps As Ex-Chairman, Others Charged In Fraud

The stock plunged 18 percent intraday to lowest since August 2006 and was the worst performer on S&P BSE 500, NSE 500 and Nifty Smallcap gauges. The trading volume is 70.1 times the 20-day average for this time of day.

The Central Bureau of Investigation has booked former UCO Bank Chairman and Managing Director Arun Kaul and others for allegedly cheating the bank to the tune of Rs 621 crore, officials said today.

For more details, click here

Infosys Falls After FY19 Margin View Lower Than Year Ago

Shares of the country's second-largest software services company declined as much as 6.2 percent, most intraday since Aug. 18, after the IT firm said it expects its operating margin in 22 to 24 percent range this year, lower than previous year’s 23 to 25 percent view.

The stock snaps a four-day advance and was the worst performer on both the Sensex and the Nifty indices. Its volume was volume was 80 percent of its three-month full-day average.

Opening Bell

Indian equity benchmarks declined, halting their best performance this year, as index heavyweight Infosys tumbled after its FY19 growth outlook disappointed the street.

The S&P BSE Sensex slipped as much as 0.86 percent to 33,899 while the NSE Nifty 50 Index dropped 0.80 percent to 10,396. The market breadth was firmly titled in favour of the sellers.

Nine of the 19 sector gauges compiled by the BSE Ltd. fell, led by S&P BSE Information Technology Index’s 1.52 percent drop. On the flipside, S&P BSE Fast Moving Consumer Goods was the best performer, up 0.40 percent.

Infosys Falls 6.2% In Pre-Market Trading

Shares of the country’s second-largest software services provider dropped as much as 6.2 percent in pre-market trading.

Nearly 85 lakh shares changed hands in 14 block deals on the NSE. The buyers and sellers were not known immediately.

Oil Has Bigger Problems Than Syria: Arvind Sanger

The America-led strike in Syria may not have a significant impact on the oil market, according to Arvind Sanger, managing partner at Geosphere Capital Management.

Key highlights from interview

  • Any impact on Syria will not impact oil market
  • Oil moving up due to demand-supply factor
  • For oil supply remaining tight will keeping it at higher levels

Money Market Check

Implied opening from forwards suggests that the rupee may open little changed at around 65.23 a dollar. Investors expect the pair to consolidate after it touched a new year-to-date high of 65.45 last Friday.

The important thing to note is that rupee has now been put on its currency monitoring list by the U.S. The U.S. report also said that further reserve accumulation by India doesn’t appear necessary. It will be interesting to see how it impacts the central bank's forex interventions.

In the sovereign bonds, yield on India's benchmark note may see some easing after it climbed 25 basis points last week. Importantly, it has given up almost its entire gains after the government cut its borrowing plan for the first half and increased FII investment limits.

BQ Heads Up!

Here’s what to watch out for this week:

  • Goldman Sachs Group Inc. and Morgan Stanley among companies reporting results.
  • John Williams, soon to be president of the New York Fed, speaks on economic outlook in Madrid on Tuesday.
  • China GDP and Japanese inflation are the featured data points in Asia.
  • Trump welcomes Japan Prime Minister Shinzo Abe to Mar-a-Lago on Tuesday. North Korea and trade will probably be discussed.
  • Mining investors will get to take the pulse of the global industry this week, with Vale, Rio Tinto and BHP offering quarterly production reports.
  • 12pm: India March wholesale prices inflation YoY, estimate 2.50 percent, prior 2.48 percent
  • 3:30pm: IMD briefing on long range forecast for southwest monsoon rain 2018.

Brokerage Radar

Motilal Oswal on Bharat Electronics

  • Maintain Buy; Cut target price to Rs 196 from Rs 210
  • Akash and LR SAM orders deferred to the first half of the next financial year
  • Estimates cut to factor order deferral and higher tax rates
  • Management targets to double sales to Rs 20,000 crore by March 2023
  • EBITDA margins to sustain at 18 percent; Exports to reach 10 percent of sales
  • Venturing into ammunition production; Rs 600 crore capex likely by March 2019

Credit Suisse on Nestle

  • Maintain Outperform; Raise target price to Rs 9,600 from Rs 9,000
  • Highest volume growth in FMCG in calendar year 2017
  • Maggi volumes still below calendar year 2014 levels
  • Maggi to drive rapid growth for another few years
  • Strong free cash flow conversion; FCF is 146 percent of net profit

Earnings Reactions To Watch

Infosys (Q4, QoQ)

  • Revenue in dollar terms up 1.8 percent to $2,805 million
  • Revenue up 1.6 percent at Rs 18,083 crore
  • Net profit down 28.1 percent to Rs 3690 crore
  • Margin expanded to 24.7 percent from 24.3 percent
  • FY19 revenue guidance in constant currency at 6 percent – 8 percent.
  • FY19 operating margin guidance range at 22 percent – 24 percent.

Also Read: What Dalal Street Had To Say About Infosys Q4

Rane Brake (Q4, YoY)

  • Revenue up 13 percent at Rs 142 crore
  • Net profit up 50 percent at Rs 6 crore
  • Ebitda down 22.7 percent at Rs 17 crore
  • Margin at narrowed to 12 percent from 17.5 percent

Bhansali Engineering Polymers Q4 (Standalone, YoY)

  • Net sales up 56.5 percent at Rs 301.8 crore vs Rs 192.8 crore
  • Net profit up 82 percent at Rs 28.6 crore vs Rs 15.7 crore
  • Ebitda up 94 percent at Rs 43.8 crore vs Rs 22.6 crore
  • Margin at 14.5 percent vs 11.7 percent

DCB Bank (Standalone, YoY)

  • Net interest income up 19.7 percent at Rs 263.7 crore
  • Net Profit up 21.5 percent at Rs 64.2 crore
  • Provisions up 13.1 percent at Rs 38.8 crore (QoQ)
  • GNPA at 1.79 percent vs 1.89 percent (QoQ)
  • NNPA at 0.72 percent vs 0.87 percent (QoQ)

ICICI Securities Q4 (Consolidate, YoY)

  • Revenue up 35 percent at Rs 514.6 crore
  • Profit up 90.7 percent at Rs 158.6 crore
  • Ebitda up 86 percent at Rs 260 crore
  • Margin at 50.6 percent

Gruh Finance Q4 (Standalone, YoY)

  • Revenue up 16 percent at Rs 484.3 crore.
  • Net profit up 18 percent at Rs 130.5 crore.
  • Provisions down 94 percent at Rs 1.4 crore (QoQ)
  • Announces 1:1 bonus issue.

Earnings To Watch

  • Jay Bharat Maruti
  • LKP Finance
  • Lloyd Metals

F&O Cues

  • Nifty April Futures closed trading at 10,490 with a premium of 9.8 points versus 6.4 points.
  • April series-Nifty open interest up 3 percent, Bank Nifty open interest down 5 percent.
  • India VIX ended at 14.1, down 2.8 percent.
  • Max open interest for April series at 10,500, open interest at 42 lakh, up 11 percent.
  • Max open interest for April series at 10,300, open interest at 52.3 lakh, open interest down 6 percent.

Put Call Ratio

  • Nifty PCR at 1.63 versus 1.53
  • Nifty Bank PCR at 1.45 versus 1.61

Bulk Deals

Kirloskar Ferrous

  • HDFC mutual fund bought 17 lakh shares (1.2%) at Rs 89.05 each.
  • Quest Investment Advisors sold 14.51 lakh shares (1.1%) at Rs 89.07 each.

SS Infrastructure Development Consultants

  • HSBC mutual fund – Small Cap Equity Fund bought 99,000 shares at Rs 42 each.
  • Elara India Opportunities Fund sold 99,000 shares at Rs 42.01 each.

Shriram City Union Finance

  • Fidelity Fund – Pacific Fund sold 4.80 lakh shares (0.7%) at Rs 2200 each.

Stocks To Watch

  • Infosys looks to sell Panaya and Skava. To acquire WongDoody Holding for $75 million.
  • Dilip Buildcon sets up 5 SPVs to undertake Rs 6307 crore worth projects from NHAI.
  • Bliss GVS pharma gets $12 million from sale of 51 percent stake in Kenya unit.
  • Shalimar paints says period for rights issue extended upto April 19.
  • IL&FS Engineering wins Rs 129.66 crore pipeline laying contract from GAIL.
  • KPIT Technologies two day offer to buy starts today.
  • Alembic Ltd. two day buyback starts today.
  • Karda Constructions shifted to B group and circuit filter revised to 20 percent.
  • Alok Industries: Reliance Industries and JM Financial ARC resolution plan did not receive Committee of Creditors approval.

For a complete list of stocks to watch, click here

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.67 percent to 10,432 as of 8:50 a.m.

Asian stocks were mixed, U.S. equity futures pared gains and the yen retraced losses as traders assessed the likelihood the fallout of an American-led strike on Syria could be contained.

Commodities

  • West Texas Intermediate crude lost 0.9 percent to $66.78 a barrel.
  • Gold rose 0.1 percent to $1,347.58 an ounce.
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