A trader points at financial data on a computer screen inside the Frankfurt Stock Exchange. (Photographer: Alex Kraus/Bloomberg)

Sensex, Nifty End At Two-Month High Led By IndusInd Bank, M&M

Closing Bell

Indian equity benchmarks rose to their highest level in two months led by IndusInd Bank, Mahindra & Mahindra, Reliance Industries and Kotak Mahindra Bank.

The S&P BSE Sensex rose 0.1 percent or 35.19 points to 34,450.77 and the NSE Nifty 50 index gained 0.2 percent or 20.65 points to 10,584.70.

Fifteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Realty index's 1.8 percent gain. On the flipside, the S&P BSE Metal index was the top sectoral loser, down 0.9 percent.

The mid- and small-cap shares outperformed their larger counterparts as the S&P BSE MidCap and S&P BSE SmallCap indices rose 0.5 percent each.

Find Out All That You Missed During The Day In Countdown

Coal India May Plan Rs 6,500 Crore Gratuity Payout

  • Coal India likely to plan Rs 6,500 crore provision for gratuity payout. Stock down 0.7 percent.

Source: Bloomberg

Fab Four Stocks Of The Day

Sasken Tech: The Bangalore-based software developer rose as much as 20 percent to record high of Rs 904 after it reported strong March quarter earnings.

  • Revenues down 2.4 percent at Rs 128.7 crore versus Rs 131.9 crore.
  • Net profit up 27.5 percent at Rs 26 crore versus Rs 20.4 crore.
  • EBIT up 31 percent at Rs 21.5 crore versus Rs 16.4 crore.
  • Margins at 16.7 percent versus 12.4 percent.

Indian Hume Pipe: The Mumbai-based pipe maker rose as much as 9.55 percent, the most in nearly a month, to Rs 375 after it bagged Rs 578.50 crore order from Madhya Pradesh Jal Nigam Maryadit.

Unichem Labs: The Mumbai-based drug maker rose as much as 8.7 percent, the most in over three months, to Rs 283.10 after the U.S. FDA completed inspection of its Ghaziabad unit without any observations.

Minda Corp: The Noida-based electrical equipment maker rose as much as 18 percent to Rs 207.60. As many as 23.6 lakh shares or 1.1 percent equity changed hands in a block, Bloomberg data showed.

Mahindra & Mahindra Surges To Record High

Shares of the Mumbai-based country's largest utility vehicle maker rose as much as 4.29 percent to record high of Rs 833.

Rupee Continues To Weaken Against U.S. Dollar; Hits Fresh 13-Month low

Indian rupee depreciated further against the U.S. dollar.

The local unit fell as much as 0.47 percent to 66.41, its lowest level against the dollar since March 10, 2017.

Block Deal Alert

  • ITC: About 10 lakh shares change hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Jubilant Life Science Surge After Rakesh Jhunjhunwala Buys Stake

Shares of the pharmaceutical company rose as much as 8.2 percent, the most in over two months, to Rs 827.30.

Well-known investor Rakesh JhunJhunwala owned about 1.26 percent stake in the company, according to its stock exchange notification.

Jubilant Life Sciences trades at 21.7 times trailing 12-month earnings per share and 18 times its estimates for the coming year, Bloomberg data showed.

Bond Traders in India Hope Mystery Buyer Is the Central Bank

Has an invisible hand stepped in to support the Indian sovereign bond market? Traders are abuzz with speculation over the identity of the buyer or buyers behind the $862 million of purchases Friday. (Click here to read more.)

Minda Corp Gains The Most In Over Seven Months After A Block Deal

Shares of electrical equipment maker rose as much as 18.1 percent, the most in over seven months to Rs 207.60 after about 23.6 lakh shares or 1.1 percent equity changed hands in a block, Bloomberg data showed.

Buyers and sellers were not known immediately. Trading volume was 77.9 times its 20-day average. The stock rose 16 percent in the past month, compared to 1.8 percent gain in Sensex.

Block Deal Alert

  • Astra Microwave: About 31 lakh shares or 3.6 percent equity change hands in a block deal.

Buyers and sellers were not known immediately

Source: Bloomberg

Market Check

  • Indian equity benchmarks held on to gains led by IT shares and select private sector lenders.
  • The S&P BSE rose 0.5 percent or 185 points to 34,600 and the NSE Nifty 50 index advanced 0.6 percent or 62 points to 10,625.
  • Fifteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE IT index's 2.4 percent gain. On the flipside, the S&P BSE Metal index was the top sectoral loser, down 0.3 percent.
  • The overall market breadth was positive as 1,429 shares were advancing while 1,143 were declining on the BSE.

Click here for more stock market data

European Shares Decline

European stocks are little changed as the 10-year Treasury yield holds above 2.97 percent ahead of economic data that may confirm momentum in the euro-area manufacturing sector has peaked.

Gujarat Ambuja Exports Rises On Starting Production At Chalisgaon Unit

Shares of the Ahmedabad-based agricultural processed products maker rose as much as 3.87 percent to record high of Rs 286.95.

The company informed exchanges that it has started commercial production at its 1,000 million tonnes per day green field maize processing plant at Chalisgaon in Maharashtra.

Fab Four Stocks Of The Day

  • Tata Investment Corp: The Mumbai-based institutional brokerage firm rose 3 percent to Rs 853. Trading volume was 32.8 times its 20-day average.
  • Minda Corp: The Noida-based electrical equipment maker rose 9.8 percent to Rs 193.10. Trading volume was 60.2 times its 20-day average. Meanwhile, the company has organised a plant visit for investors at its Pune plant.
  • SML Isuzu: The Chandigarh-based commercial vehicle maker rose 8 percent to Rs 897. Trading volume was 11.2 times its 20-day average.
  • Thomas Cook India: The Mumbai-based leisure and travel company rose 3.11 percent to record high of Rs 286.20. Trading volume was 6.6 times its 20-day average.

Trend Spotting: Find About Impact Of Rising Alumina Prices On Nalco

Lupin Gains On U.S. FDA Nod For Drug To Cure Huntington's Disease

Shares of the Mumbai-based drug maker rose as much as 1.6 percent to Rs 812.85 after it received U.S. drug regulator's approval for generic Xenazine 12.5 mg and 25 mg tablets, Lupin said in an exchange filing.

The drug is used in treatment of Huntington's Disease.

L&T Infotech Surges 12%, Hits Record High

Shares of the Mumbai-based IT company rose as much as 12 percent, the most in nearly two years, to record high of Rs 1,567 tracking weakness in Indian rupee amid heavy volumes.

Trading volume was 7 times its 20-day average.

Find Out On Hot Money: Can Phoenix Mills Outperform Its Peers?

Merck Surges For Second Day After Procter & Gamble Proposes To Buy Stake

Shares of the Mumbai-based drug maker rose as much as 14.67 percent to record high of Rs 2,020 after it informed exchanges that Procter & Gamble has proposed to buy 8.5 million shares of the company or 51.8 percent equity in the company, Merck said in an exchange filing on Thursday.

India's Crude Oil Imports Rise 2.9% In March

  • India's crude oil imports rose 2.9 percent (YoY) to 18.7 million tonnes in March.

Source: Bloomberg

F&O Check: Nifty 10,600 Call Most Active On NSE

Nifty 10,600 strike price call option was among the most active option contracts on the National Stock Exchange.

The premium on the contract rose 17 percent to Rs 45.70. Over 2.96 lakh shares were added to the open interest which stood at 37.88 lakh shares.

Click here to see the complete options chain

Find Out What Experts Are Betting On Ahead Of F&O Expiry On The F&O Show

NCLT Allows Liberty House Bid For Bhushan Power

Shares of Bhushan Steel fell as much as 7.9 percent to Rs 33.20 after NCLT allowed Liberty House to bid for Bhushan Power.

  • NCLT asked Bhushan Power lenders to finalise to consider Liberty House bid
  • NCLT asked lenders to finalise Bhushan Power resolution by June 23

Source: Bloomberg

Indian Hume Pipe Gains After Order Win

Shares of the pipe manufacturer rose as much as 9.6 percent to Rs 375.

The company bagged Rs 578.50 crore order from Madhya Pradesh Jal Nigam Maryadit, according to its stock exchange notification.

Cipla Shares Decline As Regulatory Concerns Prevail At Pithampur Unit

Shares of the drug maker fell as much as 2.9 percent to Rs 572.15.

The pharmaceutical company received three observations from the U.S. drug regulator for its Pithampur unit, according to its exchange filing.

Cipla trades at 45.7 times trailing 12-month earnings per share and 28 times its estimates for the coming year. The stock has declined 6 percent so far this year.

Start Of Next Bull Run For TCS: N Chandrasekaran On TCS Entering $100 Billion Club

  • Deal wins have been fully integrated into the company
  • Digital transformation has aided company's growth
  • TCS is in extremely good position, engaging with clients on digital transformation

Walmart Likely To Close $12 Billion Deal For Flipkart Control

Walmart will take stake of 60-80 percent in India’s biggest e-commerce company with all existing investors backing the deal, people familiar with the matter said.

  • SoftBank, which owns more than 20 percent of Flipkart, plans to sell a substantial part to Walmart, the people said, asking not to be identified ahead of a public announcement
  • Tiger will sell nearly all its shares, the people said
  • Valuation on Flipkart remains at about $20 billion, the people said
  • Walmart declined to comment while Flipkart didn’t immediately comment
  • Issues yet to be resolved include role of founders and the exact amount each investor will sell, the people said

Source: Bloomberg

Analysts On TCS Hitting $100 Billion Market Cap

Urmil Shah, IDBI Capital

  • TCS good contender to become $200 billion company
  • Confident on TCS management to maintain margins
  • TCS set to move to double digit growth going forward
  • Big deals n past few quarters aided growth

Deven Choksey, KR Choksey Securities

  • Entire market cap of Pakistan is $80 billion and TCS alone has market cap of $100 billion
  • Even with challenges TCS has emerged to be a very strong company fundamentally
  • Not seeing a 30 percent growth but 5-10 percent growth possible for larger IT companies

Hiren Ved, Alchemy Capital

  • Indian companies have created a competitive advantage in the IT sector globally

TCS Rises For Second Day; Market Cap Crosses $100 Billion

Shares of the country's largest IT company rose for second straight day after it reported better-than-expected March quarter earnings on Thursday.

The stock rose as much as 2.81 percent to record high of Rs 3,498 and crossed $100 billion in market capitalisation.

Block Deal Alert

  • Idea Cellular has 19.6 lakh shares change hands in a block on BSE. Stock up 1.27 percent at Rs 71.75.

Buyers and sellers were not immediately known

Source: Bloomberg

Sasken Technologies Hits Record High Post Q4 Earnings

Shares of the Bangalore-based software developer rose as much as 13 percent to record high of Rs 847 after it reported its March quarter earnings.

Key earnings highlights:

  • Revenues down 2.4 percent at Rs 128.7 crore versus Rs 131.9 crore.
  • Net profit up 27.5 percent at Rs 26 crore versus Rs 20.4 crore.
  • EBIT up 31 percent at Rs 21.5 crore versus Rs 16.4 crore.
  • Margins at 16.7 percent versus 12.4 percent.

Dilip Buildcon Surges After Kotak Securities Initiates Coverage

Shares of the Bhopal-based road developer rose as much as 2.9 percent to Rs 1,162 after homegrown brokerage — Kotak Securities initiated coverage on the stock with a 'buy' for a target price of Rs 1,365 per share.

Kotak Securities on a note said:

  • Well-placed to leverage growing EPC opportunity in roads and beyond.
  • Expect compounded growth rate of 8 percent in order inflow over the fiscal 2018-2022.
  • Bharatmala to offer EPC opportunity of Rs 3.3 lakh crore in the next few years.
  • Market share in NHAI ordering to improve to 17 percent by March 2022, compared to 15 percent clocked in the previous financial year.
  • Healthy backlog and reasonable cash flow to service debt.
  • Expect revenue, operating income and net profit to compound at 26 percent, 27 percent and 28 percent respectively through the financial years till March 2022.

Unichem Labs Surges On U.S. FDA's Inspection With No Observations

Shares of the Mumbai-based drug maker rose as much as 8.7 percent, the most in over three months, to Rs 283.10 after the U.S. FDA completed inspection of its Ghaziabad unit with no observation, the company said in an exchange notification.

Opening Bell

Indian equity benchmarks edged lower dragged by heavyweights like ICICI Bank, Infosys, Bharti Airtel and Hero MotoCorp. However, the losses were capped as HDFC, Larsen & Toubro and Kotak Mahindra Bank were among the gainers

The S&P BSE Sensex fell 0.15 percent to 34,396 and the NSE Nifty 50 index was little changed at 10,568.

Thirteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Oil & Gas index's 0.57 percent gain. On the other hand, the S&P BSE Bankex was the top sectoral loser, down 0.4 percent.

Rupee Falls For Sixth Straight Day, Hits 66.20 Against U.S. Dollar

Rupee depreciated for sixth the day in a row against the U.S. dollar falling to its lowest in over a year.

The domestic unit fell as much as 0.14 percent or 9 paise to 66.20 against the U.S. dollar.

Rupee Expected To Open Lower Around 66.15 Per Dollar

India government bonds were supported on Friday by a category of investors classified as "others" which bought a record amount of debt. Now other categories include the central bank itself and also insurance companies.

They overall bought Rs 5,700 crore of bonds, the most since 2006. However, the yield on the benchmark note continued to rise. It was up 9 basis points on Friday at 7.72 percent. Investors are expecting more pain as states plan to borrow more than planned this week and U.S. treasuries continue to see a sell off. Yield may stay in a range of 7.70-7.80 percent today.

In the currency market, implied opening from the forwards market suggests that rupee may open weaker at around 66.15 a dollar. Spot has already breached the 100-day WMA and we may see a new range for the pair the top of which could be 67.4413 a dollar. For today, a range of 66.10-66.60 is expected.

BQ Heads Up!

Brokerage Radar

Kotak Securities on Dilip Buildcon

  • Initiated ‘Buy’ with a price target of Rs 1,365.
  • Well-placed to leverage growing EPC opportunity in roads and beyond.
  • Expect compounded growth rate of 8 percent in order inflow over the fiscal 2018-2022.
  • Bharatmala to offer EPC opportunity of Rs 3.3 lakh crore in the next few years.
  • Market share in NHAI ordering to improve to 17 percent by March 2022, compared to 15 percent clocked in the previous financial year.
  • Healthy backlog and reasonable cash flow to service debt.
  • Expect revenue, operating income and net profit to compound at 26 percent, 27 percent and 28 percent respectively through the financial years till March 2022.

CLSA on Ashok Leyland

  • Maintained ‘Buy’; raised price target to Rs 185 from Rs 145.
  • Commendable market-share defence in crucial previous fiscal.
  • Commercial vehicle cycle surprising positively; raise current fiscal’s industry growth estimates to 13 percent.
  • Expect strong 23 percent compounded growth rate in earnings per share over the next two years
  • Expensive valuations justified.

CLSA on HDFC Bank

  • Maintained ‘Buy’; raised price target to Rs 2,470 from Rs 2,340.
  • Key positive: 25 percent growth in operating profit.
  • Asset quality stable, but unsecured loans rising fast.
  • Subsidiaries scaling up well.
  • Expect 21 percent compounded growth rate in earnings over the fiscal 2018-2021.

MOSL on HDFC Bank

  • Maintained ‘Buy’ with a price target of Rs 2,400
  • March quarter remained steady; fee growth surprises positively.
  • Retail loan growth remains healthy.
  • Asset quality stable; Provisions coverage ratio improved to 70 percent.
  • Expect market share to increase and RoEs to remain best.

CLSA on Indiabulls Housing

  • Maintained ‘Buy’; raised price target to Rs 1,650 from Rs 1,620.
  • Tad disappointed by compression in spreads.
  • Stability in spreads will be key.
  • Housing segment drives loan growth.
  • Asset quality stable.
  • Expect 22 percent compounded growth rate in profits over the fiscal 2018-2021.

Macquarie on Indiabulls Housing Finance

  • Maintained ‘Outperform’ with a price target of Rs 1,599.
  • Loan growth much ahead of peers.
  • Loan growth led by home loans and corporate.
  • Rate hikes, increased securitization to aid margins.
  • Expect strong loan growth, steady spreads and high return ratios.

CLSA on India Strategy

  • NPL resolution process well underway.
  • Legal delays the possible risk in NPL resolution.
  • Multi-pronged approach to improve farm incomes.
  • Increase of above 10 percent in MSP appears to be a done deal now.
  • Oil at a tipping point; remains the main worry.
  • Legal issues restrict UID, but subsidy savings continue to rise.

Stocks To Watch

  • Cipla's Pithampur Plant gets 3 observations from U.S. FDA (Bloomberg)
  • Unichem Labs: U.S. FDA concludes inspection of Ghaziabad facility with no observation
  • Coal India plans 41.5 million tonnes forward coal auctions in FY19 (Bloomberg)
  • Axis Bank commenced succession process for new CEO & MD, appoints Egon Zehnder to succession conduct process
  • SJVN signs accord with power ministry; Aims to achieve 9,200 million units in FY19
  • RIL says not aware of any further investigation undertaken by IT Dept into Rs 6,500 crore FDI by Biometrix in RIL group entities
  • Adani Enterprises forms a JV with Prakash Asphaltings for Bilaspur Pathrapali Road Pvt Ltd (SPRPL) in the ratio of 74:26.
  • Indian Hume Pipe Company secures Rs 578.50 crore order from Madhya Pradesh Jal Nigam Maryadit
  • Kitex Garments board to meet on April 25 to consider proposal for further investments
  • India Ratings upgrades HEG's long-term issuer rating to 'IND AA' from 'IND A+'. The outlook is stable
  • Orchid Pharma says committee of creditors have rejected all three bids for the company
  • Morepen Labs appeals in NCLAT against order passed by NCLT, Chandigarh bench
  • Electrosteel Steels says steering committee set up as per resolution plan
  • Nagarjuna Oil Corporation lenders decide the company to go for liquidation

Nifty Earnings To Watch

  • Bharti Infratel

Others

  • Bharat Financial Inclusion
  • Cholamandalam Investment
  • Delta Corp
  • GNFC
  • Indiabulls Ventures
  • LIC Housing Finance
  • Reliance Infrastructure
  • Reliance Naval and Engineering
  • 3i Infotech
  • Foseco India
  • Kewal Kiran Clothing
  • Swaraj Engines

Earnings Reaction To Watch

HDFC Bank Q4FY18 (YoY)

  • Net interest income (NII) up 17.7 percent at Rs 10,658 crore versus Rs 9,055 crore.
  • Net Profit grew 20.3 percent to Rs 4,799 crore versus Rs 3,990 crore.
  • GNPA at 1.30 percent versus 1.29 percent (QoQ).
  • NNPA at 0.40 percent versus 0.44 percent (QoQ).

Also Read: HDFC Bank Q4 Profit Up 20%; Asset Quality Remains Stable

Indiabulls Housing Finance Q4FY18 (YoY)

  • NII up 22.2 percent at Rs 1,661 crore versus Rs 1,360 crore.
  • Net profit grew 22.6 percent to Rs 1,030 crore versus Rs 841 crore.
  • Provisions at Rs 326 crore versus Rs 262 crore (QoQ).
  • Gross NPA unchanged at 0.77 percent (QoQ).

CDSL Q4FY18 (YoY) Consolidated

  • Revenues up 35.1 percent at Rs 51.8 crore versus Rs 38.3 crore.
  • Net profit up 10.2 percent at Rs 25.9 crore versus Rs 23.5 crore.
  • EBITA up 54 percent at Rs 29.5 crore versus Rs 19.1 crore.
  • Margins at 57 percent versus 50 percent.

Sasken Technologies Q4FY18 (QoQ)

  • Revenues down 2.4 percent at Rs 128.7 crore versus Rs 131.9 crore.
  • Net profit up 27.5 percent at Rs 26 crore versus Rs 20.4 crore.
  • EBIT up 31 percent at Rs 21.5 crore versus Rs 16.4 crore.
  • Margins at 16.7 percent versus 12.4 percent.

Also Read: Indiabulls Housing Finance Q4 Profit Jumps 22.5%

F&O Cues

  • Nifty April Futures closed at 10,585.5 with a premium of 21.5 points versus 12.8 points.
  • April series — Nifty open interest (OI) unchanged, Bank Nifty OI up 1 percent.
  • India VIX ended at 12.9, down 5.8 percent.
  • Max OI for April series call at 10,700 strike price call option, OI at 50 lakh shares, down 1.3 percent.
  • Max OI for April series put at 10,500 strike price put option, OI at 54.9 lakh shares, up 1 percent.

Trading Tweaks

  • Avenue Supermarts, CL Educate and Shankara Building Products dropped from S&P BSE IPO Index.
  • Omkar Speciality Chemicals is placed under Additional Surveillance Measure
  • Monnet Ispat & Energy circuit filter revised to 5 percent
  • Phillips Carbon Black FII / MF limit increases to 8 lakh shares versus 1.6 lakh shares earlier
  • Mangalam Organics buy back from 23 April to 8 May
  • Sona Koyo Steering Systems Ltd.’s name has been changed to JTEKT India Ltd.

Bulk Deals

L&T Infotech

  • L&T sells 10 lakh shares or 0.58 percent equity at Rs 1,399 each.

Ajmera Realty

  • Promoter Rajnikant Ajmera sold 5 lakh shares or 1.4 percent equity at Rs 277.2 each.

Moldtek Technologies

  • AKG Finvest sold 3 lakh shares or 1.1 percent equity at Rs 49.87 each.

Talking Points

Also Read: Scandals, Bad Debts at India Banks Threaten Economic Outlook

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.4 percent to 10,560 as of 6:43 a.m.

Asian stocks had a mixed start Monday, with investors continuing to assess the outlook for trade discussions and geopolitical tensions. The dollar extended last week’s advance and the 10-year Treasury yield steadied around 2.96 percent.

Equity benchmarks rose in Sydney, while those in Tokyo and Seoul were little changed.

These are some important events coming up this week:

  • Japan manufacturing flash PMI data.
  • French President Emmanuel Macron begins a three-day visit to the U.S. Monday.
  • U.S. manufacturing and services sector PMIs. Later this week’s GDP and jobless claims.
  • Earnings season continues. Among those reporting: Alphabet/Google, Microsoft, Amazon.com, Twitter, Samsung, Facebook,SAP,Sony, Caterpillar, Halliburton, Airbus, Daimler, Honda, Deutsche Bank, Barclays, Credit Suisse, UBS, Visa, Nomura, Bank of China, Vale, Statoil, Royal Dutch Shell, Barrick Gold, Total, Exxon Mobil and Chevron.
  • European Central Bank rate decision on Thursday. While no change to interest rates or the pace of asset purchases is expected, investors will watch for any sign that officials are preparing a shift in stimulus plans for their June meeting.
  • Bank of Japan announces its latest policy decision Friday and releases a quarterly outlook report.

Commodities

  • West Texas Intermediate crude dropped 0.2 percent to $68.24 a barrel.
  • Gold lost 0.3 percent to $1,332.82 an ounce.
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