Sensex, Nifty Gain For Third Day As Investors Focus On Earnings

Indian equity benchmarks rose for third day in a row led by Tata Motors, TCS, Reliance Industries and HDFC Bank as investors shrugged off concerns that crude oil prices may hurt the economy after the U.S. reinstated sanctions on Iran, keeping their focus on company earnings reports.

The S&P BSE Sensex rose 0.29 percent or 103 points to 35,319 and the NSE Nifty 50 index gained 0.22 percent or 24 points to 10,742.

Of the 20 Nifty 50 companies that have posted quarterly results so far, net profits at nine have matched or beaten analyst estimates.

"In-line corporate earnings and strong auto sales numbers hold promise that the economy is improving," Jitendra Panda managing director at Peerless Securities told Bloomberg News.

Ten out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Information Technology index's 0.7 percent gain. On the other hand, the S&P BSE Power index was the top loser, down 0.6 percent.

The mid- and small-cap stocks underperformed their larger counterparts as the S&P BSE MidCap index fell 0.6 percent and the S&P BSE SmallCap index declined 0.13 percent.

Shares of the Noida-based drugmaker pared gains and was up 0.8 percent at Rs 835.50 after it missed Bloomberg estimates in March quarter.

Key earnings highlights:

• Net profit at Rs 155 crore versus estimate of Rs 210 crore
• Revenue at Rs 2,252 crore versus estimate of Rs 2,100 crore
• Consolidated revenue up 41 percent at Rs 2,252 crore versus Rs 1,598 crore (YoY)
• Consolidated net profit up 3.3 percent at Rs 155 crore versus Rs 150 crore (YoY)

Arvind: The Ahmedabad-based textile maker rose as much as 5.81 percent, the most in six months, to Rs 444.45 after it beat Bloomberg consensus estimates in March quarter.

• Consolidated revenue up 21.2 percent at Rs 2,990 crore versus Rs 2,466 crore (YoY)
• Consolidated EBITDA up 29.3 percent at Rs 291.5 crore versus Rs 225.4 crore (YoY)
• Consolidated margin at 9.7 percent versus Bloomberg estimate of 9.3 percent
• Consolidated net profit up 16.6 percent at Rs 108.9 crore versus Rs 93.4 crore (YoY)

KRBL: The Delhi-based rice producer and exporter rose as much as 11.55 percent to Rs 565 after company said it is unlikely to see significant impact of the U.S. pulling out of the Iran deal because staples like rice are kept out of sanctions and not more than 5 percent of their turnovers are exported to Iran.

Enkei Wheels: The Pune-based auto parts maker rose as much as 13.58 percent to record high of Rs 475.10 after Blue Lotus Capital Multi Bagger Fund I bought 85,000 shares or 0.6 percent equity at Rs 420.99 each.

IFB Industries: The Kolkata-based home improvement products maker rose 6 percent to Rs 1,390.65. Trading volume was 15.7 times its 20-day average.

Shares of the Chennai-based fertilizer, sugar and ceramic maker fell 6.2 percent to Rs 252 after it reported steep fall in March quarter profit.

Key earnings highlights:

• Tax expense at Rs 57.6 crore versus Rs 17.6 crore (YoY)
• Consolidated Margin at 7.6 percent versus 12.5 percent (YoY)
• Consolidated EBITDA down 38.4 percent at Rs 259 crore versus Rs 420.5 crore (YoY)
• Consolidated revenue up 0.3 percent at Rs 3386.6 crore versus Rs 3375 crore (YoY)
• Consolidated net profit down 95 percent at Rs 11.3 crore versus Rs 247.6 crore (YoY)

• Shree Renuka Sugars had 1.11 crore shares changed hands in 20 block deals on stock exchanges. Stock up 0.3 percent at Rs 15.50.

Buyers and sellers were not immediately known

Source: Bloomberg

• European stocks inch higher as traders assess the implications of the U.S. withdrawal from a historic accord to curb Iran’s nuclear program on a busy day for profit updates.

• Indian equity benchmarks broke out of rangebound trading on the upside led by Tata Motors, Reliance Industries, TCS and HDFC Bank.
• The S&P BSE Sensex rose 0.49 percent or 173 points to 35,389 and the NSE Nifty 50 index climbed 0.38 percent or 41 points to 10,759.
• Fourteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom index's 1 percent gain. On the other hand, the S&P BSE Utilities index was the top loser, down 0.2 percent.
• The overall market breadth was marginally negative as 1,324 shares were declining while 1,253 were advancing on the BSE.

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Shares of the Ahmedabad-based textile manufacturer rose as much as 3 percent to Rs 432.95 after it beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Consolidated net profit at 16.67 percent at Rs 109 crore versus Rs 93.42 crore (YoY)
• Consolidated net profit at Rs 109 crore versus estimate of Rs 97.5 crore
• Revenue up 21.25 percent at Rs 2,990 crore versus Rs 2,465.89 crore (YoY)
• Revenue at Rs 2,990 crore versus Bloomberg estimate of Rs 2,799 crore
• Consolidated margin at 9.7 percent versus 9.1 percent (YoY)
• Consolidated margin at 9.7 percent versus Bloomberg estimate Of 9.3 percent
• Consolidated EBITDA up 29.3 percent at Rs 291.5 crore versus Rs 225.4 crore (YoY)
• Consolidated EBITDA at Rs 291.5 crore versus Bloomberg estimate Of Rs 259 crore

Shares of the Delhi-based rice producer and exporter rose as much as 4.86 percent to Rs 531 on the back of heavy volumes.

Trading volume was 11.6 times its 20-day average.

Meanwhile, the maker of India Gate basmati rice is not overly worried about the U.S. reinstating sanctions on Iran. This despite the country along with Saudi Arabia account for nearly 40-45 percent of India’s basmati rice exports, according to rating agency ICRA.

• SKF India: The Mumbai-based ball-bearings maker fell 2 percent to Rs 1,819. Trading volume was 12.3 times its 20-day average.
• IFB Industries: The Kolkata-based home improvement products maker rose 6 percent to Rs 1,390.65. Trading volume was 15.7 times its 20-day average.
• Relaxo Footwear: The Delhi-based footwear maker rose 3 percent to Rs 705.70. Trading volume was 11.2 times its 20-day average.
• Aditya Birla Fashion and Retail: The Mumbai-based apparel manufacturer and retailer rose 3 percent to Rs 146.20. Trading volume was 7.4 times its 20-day average.

Shares of the Delhi-based Royal Enfield motorcycle maker rose 0.7 percent to Rs 30,642.35 ahead of its March quarter earnings.

Here is what analysts tracked by Bloomberg expect Eicher Motors to report in March quarter:

• Revenue seen at Rs 2,510 crores versus Rs 1,888 crore, up 33 percent
• EBITDA seen at Rs 800 crores versus Rs 585 crore, up 36.8 percent
• Profit seen at Rs 630 crore versus Rs 459 crore, 37.3 percent
• Margins seen at 31.8 percent versus 31 percent

Shares of the Mysore-based auto component maker rose as much as 7.5 percent, the most in over four months, to Rs 1,689.95 after it reported strong March quarter earnings.

Key earnings highlights:

• Revenue up 30.5 percent at Rs 469 crore
• Net profit up 56 percent at Rs 28 crore
• Ebitda up 51 percent at Rs 55 crore
• Margin at 11.7 percent versus 10.2 percent

Shares of the Bangalore-based drugmaker rose 1.11 percent to Rs 558.15 after Strides agreed with Apotex to merge their respective Australian business operations.

Bank Nifty 26,200 strike price call option was among the most active call option contracts on the National Stock Exchange.

Premium on the contract fell 15.5 percent to Rs 31.95. Over 4.3 lakh shares were added to open interest of 9.57 lakh shares.

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Shares of the country's largest wireless carrier rose 1 percent to Rs 405.10 as Airtel is planning to launch IPO for its African subsidiary, Bloomberg reported citing sources.

• Airtel is said to plan Africa unit IPO in London or South Africa
• Airtel Africa unit is said to have enterprise value of $8.3 billion
• Airtel said to plan appointing bankers for Africa IPO by September
• Airtel is said to plan paring$4.6 billion of debt in three years

Shares of the Mumbai-based automobile maker rose over 2 percent to Rs 339.60.

Sales of Tata Motors-owned luxury car maker Jaguar Land Rover rose 11.9 percent year-on-year to 45,180 units in April driven by introduction of new models, the company said in a press release.

Retail sales for April were up significantly year-on-year in China (28.9 percent), the UK (25.9 percent), Overseas markets (21.3 percent) and North America (2.5 percent) but down in Europe (-10.2 percent), with continuing uncertainty over diesel in the UK and Europe, the press release added.

Shares of the Kalol-based diversified manufacturing company rose as much as 15.73 percent, the most in nearly 10 months, to Rs 19.50 after it reported strong March quarter earnings.

Key earnings highlights:

• Revenue up 8 percent at Rs 704 crore
• Net profit up 24 percent at Rs 72 crore
• Ebitda up 34 percent at Rs 106.5 crore
• Margin at 15.1 percent versus 12.2 percent

Shares of the Bengaluru-based gold mining exploration company surged as much as 20 percent, the most since April 23, to Rs 62 after it won a case in Supreme Court.

The apex court has set aside a Karnataka High Court order which granted the state permission to set aside Hutti gold mines in the northern part of the state for state -owned miner.

The top court in its judgement said, “we are clearly of the view that the Karnataka High Court erred in allowing the writ petition and the state of Karnataka is directed to consider the case of Geomysore and Deccan for grant of Prospecting Licence in accordance with the provisions of the Act”.

Commenting on Supreme Court order, Sandeep Lakhwara, MD at Deccan Gold Mines told BloombergQuint that verdict clears the way to additionaly explore prospects under 11 Prospecting Licenses.

Key conversation highlights:

• State of Karnataka directed to consider the case of co for grant of Prospecting license
• SC sets aside the order passed by Karnataka HC
• Central government has set aside state govt's reservation in favour of HGML
• This order ensures preferential treatment in areas where exploration has taken place
• Rules suggest completion of prospecting license process in 3-6 months

• India’s rupee slumped to a fresh 15-month low amid outflows from local assets and elevated crude oil prices. Sovereign bonds also slipped, tracking an advance in U.S. Treasury yields.

Shares of the Mumbai-based aluminium and copper producer rose as much as 4 percent, the most since April 19, to Rs 248.35 after its U.S.-based subsidiary Novelis reported strong earnings in March quarter.

Novelis reported record results for the fourth quarter and fiscal year 2018 with significant year-over-year increases in adjusted EBITDA, net sales, net income, free cash flow and shipments, Novelis said in a press release.

Key Q4 earnings highlights:

• Net profit attributable to common shareholder at $106 million
• Adjusted EBITDA up 9 percent to $319 million
• Net Sales increased 17 percent to $3.1 billion
• Reduced net debt leverage ratio to 3 times

Shares of the government-owned oil marketing companies fell after President Donald Trump said the U.S. will withdraw from the landmark 2015 accord to curb Iran’s nuclear program and reinstate financial sanctions on the Islamic Republic, opening an uncertain new chapter for the Middle East.

Analysts say in the backdrop of this development crude oil prices could rise further which would impact margins of the oil refining companies.

• Bharat Petroleum fell 3.21 percent
• Hindustan Petroleum declined 3.75 percent
• Indian Oil dropped 2.10 percent

Indian equity benchmarks drifted lower dragged by oil retailers after President Donald Trump said the U.S. will withdraw from the landmark 2015 accord to curb Iran’s nuclear program and reinstate financial sanctions on the Islamic Republic.

The S&P BSE Sensex fell 0.13 percent or 46 points to 35,167 and the NSE Nifty 50 index declined 0.12 percent or 13 points to 10,704.

Ten out 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Oil & Gas index's 0.8 percent drop. On flipside, the S&P BSE Metal index was the top sectoral gainer, up 1 percent.

The mid- and small-cap shares were in-line with their larger counterparts as the S&P BSE MidCap index fell 0.2 percent and the S&P BSE SmallCap index slipped 0.1 percent.

Indian rupee is set for a day of weakness as outflows from local assets and a sharp surge in crude oil prices is bound to weigh on the unit.

The implied opening from forwards suggests the pair may open at 67.37 and may trade in a range of 67.20-67.60 a dollar in the day.

Sovereign bonds continued with their relief run on Tuesday. The yield on the 10-year bond dropped another 4 basis points to 7.58 percent. However, this rally may take a break as higher crude oil prices remains a big concern while global developments are putting upward pressure on bond yields.

Investors expect the RBI to continue with OMO purchases throughout the fiscal to offset this. For today, yield may stay in a range of 7.50 percent-7.60 percent.

On Jubilant FoodWorks

CLSA

• Maintain ‘Buy’; Raised target price to Rs 3,150 from Rs 2,800
• Q4 marginal beat in Ebitda and margins
• Strong earnings growth likely to drive stock
• Strong SSSG coupled with margin expansion to drive over 40 percent EPS CAGR over FY18-20

Credit Suisse

• Maintain ‘Outperform’; Raised target price to Rs 3,050 from Rs 2,750
• Q4: Strong quarter again; Drivers in place for FY19
• Ebitda margins spike on operating leverage, lower Dunkin losses and cost cuts
• Expect double-digit SSSG and margin expansion in FY19

Edelweiss

• Maintain ‘Hold’; Raised target price to Rs 2,766 from Rs 2,399
• Q4FY18 revenue, Ebitda and PAT ahead of estimates
• SSSG spurts; Cost efficiencies boost Ebitda margin
• Expect 12 percent (YoY) same-store sales growth and 354 basis points Ebitda margin expansion in FY19

On Godrej Consumer Products

Jefferies

• Maintain ‘Hold’ with target price of Rs 1,100.
• Topline soft, but margin remains healthy.
• Branded volume growth decent; international continued to drag.
• Management confident of double-digit volumes and margin improvement for FY19.

Credit Suisse

• Maintain ‘Outperform’ with target price of Rs 1,175.
• Net profit in-line, topline growth weak across markets.
• Strong margin expansion in India and Indonesia drive earnings.
• Innovations to accelerate in FY19.

Credit Suisse on Kajaria Ceramics

• Maintain ‘Neutral’ with target price of Rs 650.
• No signs of volume pick-up.
• Increasing gas prices and weaker rupee pressurize margins
• Impact could be more severe in FY19 given hike in gas price and weakness in rupee.
• Can pass on cost if demand picks up or e-way bill hurts unorganised players.

Jefferies on Newgen Software

• Initiate ‘Buy’ with a target price of Rs 305.
• Well established product suite; market leader in BFSI in India.
• Positives: Continued shift towards digitisation and several other drivers.
• Expect revenue/EPS to grow at a CAGR of 23/27 percent over FY18-20.
• Economies of scale to drive margin expansion.
• Management to address high debtor days which is a concern.
• Valuation reasonable given strong growth prospects.
• Bull case target price of Rs 380.

• Hindalco in focus as subsidiary Novelis posts strong results.
• Lupin submits new drug application for Etanercept biosimilar in Japan.
• Everest Kanto: Removes CFO for criminal activity against company.
• MCX to launch options trading in crude oil on May 15.
• Nestle clarifies that it will deposit money in consumer welfare fund formed under GST.
• Tata Steel Europe explores potential sale of non-core operations.
• Automotive Axles board approves expansion of Axle Housing and Brake capacity.

Other Earnings To Watch

• Arvind
• EID Parry
• Federal Bank
• GMDC
• Jindal Steel & Power
• Jubilant Life Sciences
• Oriental Bank Of Commerce
• Parag Milk Foods
• Sintex Plastics Technology

SKF India (Q4, YoY)

• Revenue up 8 percent at Rs 704 crore
• Net profit up 24 percent at Rs 72 crore
• Ebitda up 34 percent at Rs 106.5 crore
• Margin at 15.1 percent versus 12.2 percent

Sintex Industries (Q4, YoY)

• Revenue down 7 percent at Rs 617 crore
• Net profit up 15 percent at Rs 57 crore
• Ebitda up 20 percent at Rs 92.5 crore
• Margin at 15 percent versus 11.6 percent

Automotive Axles (Q4, YoY)

• Revenue up 30.5 percent at Rs 469 crore
• Net profit up 56 percent at Rs 28 crore
• Ebitda up 51 percent at Rs 55 crore
• Margin at 11.7 percent versus 10.2 percent

Sadbhav Infrastructure Project (Q4, YoY)

• Revenue up 96 percent at Rs 761 crore
• Net loss Rs 82 crore
• Ebitda up 25 percent at Rs 285 crore
• Margin at 37.5 percent versus 58.6 percent

Whirlpool Of India (Q4, YoY)

• Revenue up 24 percent at Rs 1,258 crore
• Net profit up 23 percent at Rs 91 crore
• Ebitda up 12 percent at Rs 140 crore
• Margin at 11.1 percent versus 12.3 percent
• Raw material cost up 11 percent at Rs 624 crore

Huhtamaki Ppl (Q4, YoY)

• Revenue up 8 percent at Rs 553 crore
• Net profit up 12.5 percent at Rs 18 crore
• Ebitda flat at Rs 54 crore
• Margin at 9.8 percent versus 10.6 percent

Mahindra Holidays & Resorts India (Q4, YoY)

• Revenue down 3 percent at Rs 296 crore
• Net profit up 22 percent at Rs 39 crore
• Ebitda up 3 percent at Rs 62 crore
• Margin at 20.9 percent versus 19.7 percent

Blue Dart Express (Q4, YoY)

• Revenue up 6 percent at Rs 717 crore
• Net profit up 39 percent at Rs 34 crore
• Ebitda up 4 percent at Rs 57 crore
• Margin at 7.9 percent versus 8.1 percent

The Phoenix Mills (Q4, YoY)

• Revenue down 4 percent at Rs 437 crore
• Net profit up 258 percent at Rs 93 crore
• Tax expenses of Rs 0.7 crore from Rs 18 crore
• Share in profit of associates at Rs 9 crore from Rs 0.2 crore
• Ebitda up 9 percent at Rs 217 crore
• Margin at 49.7 percent versus 43.8 percent

ABB India (Q1, YoY)

• Revenue up 17 percent at Rs 2525.5 crore
• Net profit up 14 percent at Rs 102.5 crore
• Ebitda up 18 percent at Rs 189.5 crore
• Margin flat at 7.5 percent

Sun Pharma Advanced Research (Q4, YoY)

• Revenue down 52 percent at Rs 20 crore
• Net profit of Rs 2.5 crore versus net loss of Rs 32 crore
• Exceptional gain of Rs 49 crore in current quarter
• Ebitda loss Rs 45 crore

• IndoStar Capital Finance to launch its Rs 1,844 crore initial public offering. (Here’s all you need to know)

• Nifty May Futures closed trading at 10,735 with premium of 17.2 points versus 25 points.
• All series-Nifty open interest up 0.5 percent and Bank Nifty open interest up 14 percent.
• India VIX ended at 14, up 2 percent.
• Max open interest for May series at 11,000, open interest at 57 lakh.
• Max open interest for May series at 10,500, open interest at 54.9 lakh, open interest up 6 percent.

Enkei Wheels

• Blue Lotus Capital Multibagger Fund I bought 85,000 shares (0.6 percent) at Rs 420.99 each.

Eveready Industries

• Amansa Holding sold 9.78 lakh shares (1.3 percent) at Rs 290.92 each (Average).

Shree Renuka Sugar

• Promoter Khandepar Investments Pvt Ltd. sold 4.37crore shares (2.3 percent) at Rs 15.5 each.

PNB Housing Finance

• General Atlantic Singapore Fund FII Pte bought 17.30 lakh shares (1 percent) at Rs 1279.87 each.
• Quality Investment Holdings sold 80 lakh shares (4.8 percent) at Rs 1280 each.

International Conveyors

• Promoter I.G.E (India) Private Limited bought 9.88 lakh shares (1.5 percent) at Rs 28.5 each.
• Lotus Global Investments sold 10 lakh shares (1.5 percent) at Rs 28.5 each.

• U.S. seeks to quickly curb Iran oil after scrapping deal
• Nestle to pay up for failing to pass on GST rate cut benefit
• IOC says petrol, diesel prices on hold in the interest of consumers
• Who gets hit when U.S. resumes Iran sanctions
• Government keeps an arms length from ICICI Bank-Videocon loan controversy
• Congress fishing in troubled waters: Jaitley on Chief Justice of India’s impeachment row
• Flipkart founders may have to pay 20% capital gains tax after Walmart deal
• Asia flings open doors to foreign cash. But there’s a catch
• Piramal buys Goyal’s company only to sell most of its assets in months
• What is the farmers’ pulse this Karnataka elections?
• Vijay Mallya loses U.K. lawsuit over $1.55 billion claims from Indian banks
• Deutsche Bank weighs cutting U.S. staff about 20%

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.37 percent to 10,701 as of 7:54 a.m.

Asian stocks headed lower in early trading Wednesday as investors assessed the implications of President Donald Trump’s decision to scrap a nuclear deal with Iran. The dollar traded flat after recent gains, and Treasury yields consolidated.

Equity benchmarks in Japan and South Korea dipped, while Australia’s were little changed after that country’s government announced tax cuts.

Here are some key events coming up this week:

• Malaysia holds a general election Wednesday.
• Japanese Prime Minister Shinzo Abe hosts South Korean President Moon Jae-in and Chinese Premier Li Keqiang on Wednesday.
• The Bank of England decides on policy Thursday.
• U.S. inflation data for April is due the same day.
• Some of the company earnings due include Walt Disney, Petrobras, Marriott, Toyota, Ambev and Deutsche Telekom.

Commodities

• West Texas Intermediate crude rose 1.6 percent to $70.17 a barrel.
• Gold was little changed at $1,315.24 an ounce.
• LME copper climbed 0.9 percent to $6,805 a metric tonne.