Traders monitor financial data on computer screens on the trading floor. (Photographer: Luke MacGregor/Bloomberg)

Sensex, Nifty Halt Best Run In Over Three Years

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Closing Bell

Indian equity benchmarks halted nine-day winning streak, the long rally in over three years.

The S&P BSE Sensex Index closed 0.2 percent lower at 34,331.68, while the NSE Nifty 50 Index closed at 10,526.20, down 0.2 percent.

The market breadth tilted in favour of sellers. Seven out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty PSU Bank Index’s 1.1 percent decline. On the flipside, NSE Nifty FMCG Index was the top gainer, up 1.7 percent.

Mastek Declines After Reporting Its March Quarter Results

Shares of the software service provider fell as much as 3.9 percent to Rs 571.50 after announcing its march quarter results.

Key Earnings Highlights (Q4, QoQ)

  • Net profit rose 5.3 percent to Rs 19.4 crore.
  • Revenue rose 6.7 percent to Rs 224 crore.
  • EBIT rose 7.2 percent to Rs 179 crore.
  • EBIT margin at 79.9 percent versus 79.5 percent.

Akshaya Tritiya Hasn’t Always Been Good For Titan’s Shares

Titan Company Ltd., India’s largest maker of branded jewellery, has often disappointed investors on Akshaya Tritiya. (To know more, click here)

Block Deal Alert

  • Thomas Cook India: About 14 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Dynamatic Technologies Surges 7% After Pact With French Firm

Shares of Dynamatic Technologies surged as much as 7 percent. The company announced that it had signed pact with French aircraft manufacturer Daher Aerospace and that it is exploring possibilities of partnering with the overseas firm, according to its stock exchange notification.

Amit Jaiswal, Chief Financial Officer At Royal Orchid Speaks To BloombergQuint

Key highlights from the conversation:

  • Hotel Industry is overall performing well over last year.
  • Current occupancy levels at 75 percent.
  • Expect occupancy rate to move up to 80 percent.
  • Expect average prices to rise by 8-10 percent.
  • See stronger bottom line going forward if current trend continues.
  • Have six properties in pipeline currently.
  • Planning to expand business via leases.

Countdown

Where Do Equity Shareholders Stand In An Insolvency Process?

Power Lunch

Ask BQ

Block Deal Alert

  • About 15 lakh Indian Oil Corporation Ltd. shares change hands in a block deal.
    Buyers and sellers were not immediately known.
    Source: Bloomberg

Hot Money

Bloomberg Exclusive: DLF Is Said in Talks To Sell Noida, Delhi Assets To GIC Venture

DLF is said to be in final stages of talks to transfer retail assets in Delhi and Noida to the recently formed venture with Singapore-based GIC Pte, Bloomberg reported, quoting a person with knowledge of the matter.

‘Mall of India’ in Noida spread over 20 lakh square feet and ‘DLF Place’ at Saket in Delhi of about four lakh square feet are prime rent-yielding retail assets that are being evaluated for transfer, the person told Bloomberg.

Stocks Reacting To Earnings

Tata Sponge Iron (Q4, YoY)

  • Stock rose as much as 2.7 percent to Rs 1,181.45.
  • Revenue up 46 percent at Rs 243.5 crore.
  • Net profit at Rs 47 crore versus Rs 21 crore.
  • Ebitda at Rs 61.5 crore versus Rs 25.5 crore.
  • Margin at 25.3 percent versus 15.3 percent.

Orchid Pharma (Q4, YoY)

  • Stock rose as much as 3.9 percent to Rs 13.35.
  • Revenue down 20 percent at Rs 144 crore.
  • Net loss of Rs 77 crore versus net loss of Rs 65 crore.
  • Ebitda down 31 percent at Rs 13.5 crore.
  • Margin at 9.4 percent versus 10.8 percent.

5Paisa Capital (Q4, YoY)

  • Stock rose as much as 2.5 percent to Rs 369.
  • Revenue at Rs 8 crore versus Rs 5 crore.
  • Net loss of Rs 7 crore versus net loss of Rs 3 crore.

Market Check

  • Indian equity benchmarks extended gains after a volatile start.
  • The S&P BSE Sensex index rose 0.25 percent to 34,481, while the NSE Nifty 50 Index rose 0.2 percent to 10,569.
  • About 895 stocks advanced and 758 stocks declined on NSE.

The F&O Show

RBI Clarifies On Concerns Around Cash Shortage

  • Sufficient cash in the RBI vaults and currency chests.
  • Printing of the notes has been ramped up in all the 4 note presses.
  • Shortage felt in some pockets largely due to logistical issues
  • RBI closely monitoring replenishing and recalibration of ATMs
  • RBI moving currency to areas which are witnessing unusually large cash withdrawals.

Indian IT Companies Are Ageing, Says Aswath Damodaran

India’s information technology companies need to adapt in order to grow, as they reach a level of maturity in the market, said Aswath Damodaran, professor of finance at the NYU Stern School of Business. (Click here to read more).

Watch the full conversation here:

Indian Hume Pipe Jumps After Order Win

Shares of the pipe maker rose as much as 8.9 percent to Rs 368.70, after it bagged a work order worth Rs 108.19 crore from the Gujarat government.

The stock has gained the most since March 27 after it secured an order from Narmada Water Resources, Water Supply & Kalpsar Department, Gujarat, for a lift irrigation project, according to its stock exchange notification.

Traded volume is 142 times the 30-day average. The stock declined 20.8 percent since the beginning of the year, compared to 1.4 percent gain in the country's benchmark Sensex.

Lupin Gains After Receiving Green Signal From FDA

Shares of the drug maker extended gains for the fourth straight trading session, the longest winning streak in over two months. The stock rose a much as 1 percent to Rs 813.05.

The pharmaceutical company received tentative U.S. FDA approval for generic AndroGel, according to its stock exchange notification.

The stock has declined 42.5 percent over the past year, compared to 18.9 percent in the country's benchmark Sensex.

Shyam Sekhar , Chief Ideator And Founder, iThought Speaks To BloombergQuint

Key highlights from the conversation:

  • Quality of investors coming in to the market is the risk to the market.
  • Market looks for sustainability of news in order for valuations to hold.
  • Defensives like tech, pharma performed reasonably well.

Watch the full conversation here:

ICICI Bank Erases Gains After A Block Deal

Shares of the private sector lender erased early gains and fell as much 0.8 percent to Rs 289.55. About 20 lakh shares changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Trading volume was 33 percent its 20-day average. The stock has declined 7.2 percent so far this year.

Opening Bell

Indian equity benchmarks extended gains for the tenth consecutive trading session. The S&P BSE Sensex Index is set to post its longest winning streak since October 2007.

The 31-stock index opened 0.1 percent higher at 34,436.22 before rallying as much as 0.3 percent. The NSE Nifty 50 Index opened at 10,578.70, up 0.3 percent

The market breadth tilted in the favour of buyers. Seven out of 11 sectoral gauges compiled by NSE advanced, led by NSE nifty FMCG Index's 0.5 percent gain. On the flipside, NSE Nifty PSU Bank Index was the top sectoral loser, down 0.3 percent.

How Investors Can Manage India’s 2019 Election Risk

India’s next general election presents a tail risk as the market is unsure if the world’s largest democracy will re-elect a majority government for the second straight term.

That risk is even more pronounced this time, according to Morgan Stanley Research. History suggests that markets approach general elections with a tinge of optimism and stocks tend to do well in the run-up to elections, Ridham Desai and Sheela Rathi, analysts at Morgan Stanley India, said in a report. (Click here to read more).

Abizer Diwanji, Partner & National Leader Financial Services At EY Speaks To BQ

Key highlights from the conversation:

  • Minority shareholders of Electrosteel at the bottom of the pile
  • Electosteel’s market cap of Rs 700 crore will be reduced to Rs 200 crore for existing shareholders.

First Word: Fortis In Demand; Salil Parekh's Strategy For Infosys And Much More

Money Market Heads-Up

The yield on the benchmark 10-year note was steady at 7.49 percent after the states sold fewer bonds than planned at an auction in the last session.

Further, foreigners sold rupee bonds for a third successive day as yields climbed 25 basis points in the last week. The selling pressure may continue to weigh on bonds and yields may stay in a range of 7.40-7.60 percent in the near term.

In the currency market, a surge in crude oil prices continues to weigh on the Indian rupee. According to DBS, renewed signs of dollar strength and weaker equities may push the pair to 67 a dollar by end-2018. The currency may open around 65.73 a dollar and may then trade in a range of 65.65-65.95 a dollar in the day.

BQ Heads Up

Earnings Reactions To Watch

Tata Sponge Iron (Q4, YoY)

  • Revenue up 46 percent at Rs 243.5 crore.
  • Net profit at Rs 47 crore versus Rs 21 crore.
  • Ebitda at Rs 61.5 crore versus Rs 25.5 crore.
  • Margin at 25.3 percent versus 15.3 percent.

Orchid Pharma (Q4, YoY)

  • Revenue down 20 percent at Rs 144 crore.
  • Net loss of Rs 77 crore versus net loss of Rs 65 crore.
  • Ebitda down 31 percent at Rs 13.5 crore.
  • Margin at 9.4 percent versus 10.8 percent.

5Paisa Capital (Q4, YoY)

  • Revenue at Rs 8 crore versus Rs 5 crore.
  • Net loss of Rs 7 crore versus net loss of Rs 3 crore.

Nifty Earnings To Watch

  • ACC

Other Earnings To Watch

  • HDFC Standard Life Insurance Company
  • Mastek
  • MindTree

F&O Cues

  • Nifty April futures closed trading at 10,551 with a premium of 2.5 points versus 14.6 points.
  • April series: Nifty open interest up 2 percent, Bank Nifty open interest up 5 percent.
  • India VIX ended at 14.04, down 1.5 percent.
  • Max open interest for April series at 10,700 (open interest at 46.3 lakh, up 5 percent).
  • Max open interest for April series at 10,400 (open interest at 52.6 lakh, down 2 percent).

F&O Ban

  • In ban: IRB Infra, JP Associates, TV18 Broadcast, Reliance Communications.
  • Out of ban: Balrampur Chini.

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

  • Nifty PCR at 1.63 versus 1.65.
  • Nifty Bank PCR at 1.47 versus 1.53.

Brokerage Radar

Edelweiss on Future Supply Chain

  • Initiated ‘Buy’ with a price target of Rs 862.
  • Expect demand boom for third party logistics services.
  • Rapidly expanding anchor client to ensure growth.
  • Asset-light model to ensure strong free cash flow.
  • Improving working capital cycle to spur return ratios.
  • Expect revenue, operating income and earnings per share to compound at 36 percent, 33 percent and 36 percent over the fiscal 2018-2020.
  • Future Supply well placed to capture opportunity.

Motilal Oswal on Room Air Conditioners

  • 2018 to be another year of strong industry growth.
  • AC penetration to inch up from current low levels.
  • Expect 15 percent compounded growth rate in room AC industry over the fiscal 2018-2020.
  • Inverters’ share in industry volumes to rise to 50 percent by March 2020.
  • Prefer Blue Star over Voltas.

Haitong on ICICI Lombard

  • Maintained ‘Buy’ with a price target of Rs 1,000.
  • Star Health acquisition could significantly increase ICICI Lombard’s retail health book.
  • Retail health has been a profitable segment for insurers.
  • Potential acquisition of Star Health could be positive.

Macquarie on Phoenix Mills

  • Maintained ‘Outperform’ with a price target of Rs 732.
  • Phoenix Mills-CPPIB inked an agreement to purchase 16 acres of land in Hebbal - media reports.
  • Catchment area for the mall is good.
  • Visibility of growth increasing.
  • Phoenix Mills is one of our top picks in the Indian real estate space.

CLSA on Vedanta

  • Maintained ‘Buy’ with a price target of Rs 410; implying a potential upside of 42 percent from the last regular trade.
  • Acquired Electrosteel Steels at attractive valuations.
  • Acquisition price implies an EV/tonne of $562.
  • If capacity expanded to 2.5 MTPA, then EV/tonne down to $409.
  • Acquisition marginally EPS/Value accretive at full utilisation and EBITDA/tonne of $120.

CLSA on FMCG

  • Dabur: Upgraded to ‘Buy’ from ‘Outperform’; raised price target to Rs 415 from Rs 400.
  • Rural growth outlook improving.
  • Pressures from Patanjali Ayurved seem to be behind.
  • IMD forecast and expected increase in MSP is positive.
  • Emami, Dabur, HUL and Colgate have highest rural exposure.
  • Top consumer picks: Emami, Dabur, ITC, Varun Beverages and Jubilant Foods.

HSBC on India Non-Ferrous

  • Ongoing disruptions have led to a surge in alumina and aluminium prices.
  • Integrated producers to benefit more.
  • Q4 earnings to be lacklustre on the back of rising input cost.
  • Hindalco: Maintained ‘Buy’; raised price target to Rs 305 from Rs 284.
  • Hindustan Zinc: Maintained ‘Buy’; raised price target to Rs 370 from Rs 365.
  • Vedanta: Maintained ‘Buy’; cut price target to Rs 405 from Rs 435.
  • Supply cuts due to ongoing disruptions pose further upside.

CLSA on India Power

  • Government’s 24x7 plan has better chances of being implemented
  • Expect 30 percent rise in demand.
  • Lays foundation for next bull market for power stocks.
  • Expect utilities to report profit growth of 5-15 percent in the current quarter
  • Buy: NTPC, Power Grid, CESC, Tata Power.
  • Sell: Adani Transmission, Adani Power and JSW Energy.

Trading Tweaks

  • Phillips Carbon Black last trading day before 5:1 stock split.
  • Foods & Inns last trading day before 10:1 stock split.
  • Talwalkars Better Value Fitness Ltd placed under Additional Surveillance Measures with effect from today by BSE.

Bulk Deals

  • Karda Constructions: Capstone Capital Partners sold 87,360 shares or 0.7 percent equity at Rs 185.94 each.
  • Kwality: UA Enterprises Pvt Ltd sold 12 lakh shares or 0.5 percent equity at Rs 59.06 each.
  • Talwalkar Fitness: Tata MF sold 4.09 lakh shares or 1.3 percent equity at Rs 88.41 each.
  • Ajmera Realty: Promoter Rajnikant Ajmera sold 5 lakh shares or 1.4 percent equity at Rs 282.6 each.
  • Idea Cellular: First State Investments ICVC- Stewart Investors Asia Pacific Leaders Fund sold 3.92 crore shares or 0.9 percent equity at Rs 71.5 each.
  • Moldtek: AKG Finvest sold 1.5 lakh shares or 0.5 percent equity at Rs 50 each.

Stocks To Watch

  • Fortis Healthcare received non-binding interest from Fosun.
  • Lupin received tentative U.S. FDA approval for generic AndroGel.
  • Indian Hume Pipe Company Ltd received order of Rs. 108.19 crore.
  • Shalby Signs memorandum of understanding with Sen Sok International University Hospital, Cambodia.
  • Ducon received final NCLT order approving ongoing merger process.
  • Jayaswal Neco Industries said Supreme Court directed parties involved in debt restructuring of company to maintain status quo.
  • AstraZeneca to invest $90 million over the next five years in India.
  • Vedanta’s resolution plan for Electrosteel Steels approved by NCLT. Vedanta will hold 90 percent stake while existing shareholders and creditors to get the remaining 10 percent.
  • KS Oils said corporate insolvency resolution process expired on April 16. The committee of creditors has not approved resolutions plans.
  • Andhra Bank said that the exposure to SSK Trading of Rs 30 crore is non performing asset. (Bloomberg)
  • HAL enhanced jet production capacity. (Bloomberg)
  • Jagran Prakashan to consider share buyback on April 27.
  • Uttam Galva says lenders yet to accept offer to settle debt.
  • Future Consumer hiked stake in Integrated Food Park Pvt. Ltd. to 99.93 percent.
  • Tata Steel raises $1.9 billion in loans as it looks to refinance high-cost debt of its Singapore unit; fresh loans priced at 200 bps above LIBOR (Economic Times).
  • ‘Well wishers’ cleared Kochhar company dues prior to ICICI Bank appointment; Credential Finance settled dues before Chanda Kochhar became ICICI Bank CEO (Economic Times).

Talking Points

Commodity Cues

  • West Texas Intermediate crude rose 0.5 percent to $66.86 a barrel.
  • Gold fell 0.1 percent to $1,346.36 an ounce.
  • Brent trades higher at $71.9 per barrel; up 0.4 percent
  • Sugar ended lower at 11.8 cents per pound; down 2.9 percent.

Shanghai Exchange

  • Steel snapped two-day losing streak; up 1.6 percent.
  • Aluminium traded higher for fourth day; up 0.2 percent.
  • Zinc traded higher for third day; up 1 percent.
  • Copper traded lower; down 0.3 percent.
  • Rubber snapped two-day losing streak; up 0.4 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 10,585 as of 8:05 a.m.

Asian equities advanced on Wednesday, helped by an encouraging start to the U.S. earnings season, while Chinese bonds rallied after the nation’s central bank moved to support liquidity.

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