Sensex, Nifty Pause Ahead Of Karnataka Poll Outcome

Indian equity benchmarks were little changed as market participants stayed away from taking risky bets a day ahead of Karnataka assembly election results.

The NSE Nifty 50 index was unchanged at 10,806.60 and the S&P BSE Sensex was little changed at 35,557.

The mid- and small-cap shares underperformed their larger peers as the S&P BSE MidCap index fell 0.9 percent and the S&P BSE SmallCap index tumbled 1 percent.

Fifteen out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Consumer Durables index's 2.5 percent drop. On the flipside, the S&P BSE Bankex was the top gainer, up 0.17 percent.

Shares of the Mumbai-based air conditioner maker pared losses after it beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Net profit at Rs 51.23 crore versus estimate of Rs 45.02 crore
• Net profit up 38 percent at Rs 51.23 crore versus Rs 37.17 crore (YoY)
• Revenue at Rs 1,480 crore versus estimate of Rs 1,539 crore
• Revenue up 7 percent at Rs 1,475 crore versus Rs 1,381 crore (YoY)
• EBITDA up 25.5 percent at Rs 90.2 crore versus Rs 72 crore (YoY)
• Margin at 6.1 percent versus 5.3 percent (YoY)

The Pune-based non-residential construction company rose 7.3 percent to Rs 101 on the back of heavy volumes.

Trading volume was more than double the 20-day average for this time of day.

European stocks retreated with bonds as political strains from Italy to the U.K. outweighed optimism over waning global trade tensions. The euro and pound headed higher as the U.S. dollar came under pressure.

Vinati Organics: The Maharashtra-based chemical maker rose as much as 4.43 percent, the most in over a month, to Rs 966 after it reported March quarter earnings.

key earnings highlights:

• Revenues up 9 percent at Rs 213 crore versus Rs 195 crore
• Net profit up 26 percent at Rs 51.9 crore versus Rs 41 crore
• EBITDA up 5 percent at Rs 65.8 crore versus Rs 62.7 crore
• Margins at 30.8 percent versus 32.1 percent

JBM Auto: The Delhi-based auto parts maker rose as much as 3.55 percent to Rs 440 after it formed a joint venture with Oghihara (Thailand) for manufacturing of press stamping dies.

NRB Bearings: The Mumbai-based industrial machinery maker rose 9.2 percent to Rs 164 after block deals

• UBS Principal Capital Asia bought 27.39 lakh shares or 2.8 percent equity at Rs 150 each.
• California State Teachers' Retirement System sold 28.03 lakh shares or 2.9 percent equity at Rs 150.02 each.

Parag Milk Foods: The Mumbai-based dairy products maker surged 9.5 percent to Rs 337.90. Trading volume was 6.8 times its 20-day average.

• Idea Cellular has 35 lakh shares change hands in a block, Stock up 3 percent at Rs 52.90.

Buyers and sellers were not immediately known

Source: Bloomberg

• Shoppers Stop: The Mumbai-based department store chain operator fell 0.84 percent to Rs 567.45. Trading volume was 14.2 times its 20-day average.
• Rain Industries: The Hyderabad-based chemical maker fell 7.6 percent to Rs 253.40. Trading volume was 8.6 times its 20-day average.
• Parag Milk Foods: The Mumbai-based dairy products maker surged 9.5 percent to Rs 337.90. Trading volume was 6.8 times its 20-day average.
• WABCO India: The Chennai-based auto parts maker fell 1.56 percent to Rs 7,956. Trading volume was 55.7 times its 20-day average.

The CBI, which is investigating the multi-crore scam at Punjab National Bank allegedly perpetrated by Nirav Modi, has named Allahabad Bank MD and CEO Usha Ananthsubramanian and two sitting executive directors of Punjab National Bank as accused, according to a CBI official.

PNB executive directors named as accused in the case include Sanjiv Sharan and KV Brahmaji Rao.

Shares of the Thrissur-based private sector lender rebounded after its net profit beat Bloomberg consensus estimates in March quarter.

The stock rose as much as 1.56 percent to Rs 26. Its shares fell as much as 4.69 percent to Rs 24.40 ahead of earnings.

Key earnings highlights:

• Net profit at Rs 114 crore versus estimate of Rs 104 crore
• Net profit up 51 percent at Rs 114 crore versus Rs 75.54 crore (YoY)
• Net interest income up 12 percent at Rs 492.2 crore versus Rs 439 crore (YoY)
• Gross non-performing assets (NPAs) as a percentage of total advances at 3.59 percent versus 3.40 percent (QoQ)
• Net NPAs at 2.60 percent versus 2.35 percent (QoQ)

Shares of the country's largest wireless carrier rose over a percent to Rs 390.50.

The telecom department approved Telenor India's merger with Bharti Airtel.

• Idea Cellular has 35 lakh shares change hands in a block. Stock up 1.56 percent at Rs 52.20.

Buyers and sellers were not immediately known

Source: Bloomberg

Wholesale prices in India hit a four-month high in April, driven by rally in crude oil and rising prices of food articles.

Inflation measured by the Wholesale Price Index (WPI) stood at 3.18 percent last month, according to a Ministry of Commerce and Industry release. The WPI in March was at an eight-month low of 2.47 percent. A Bloomberg poll of economists had estimated the wholesale inflation at around 2.9 percent.

• Network 18 Media & Investments had 40.2 lakh shares change hands in a single block. Stock up 1.4 percent at Rs 50.75.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of Indian oil refiners rose to the highest level in a month after Indian Oil Corporation Ltd. increased its petrol and diesel prices in the first revision since April 24.

• Indian Oil Corporation rose as much as 2.7 percent to Rs 173.7.
• Hindustan Petroleum Corporation Ltd. rose as much as 3.6 percent to Rs 330.2.
• Bharat Petroleum Corporation Ltd. rose as much as 2.8 percent to Rs 410.4.

The retail price for petrol in Delhi increased by Rs 0.17 per litre and for diesel by Rs 0.21 per litre, according to IOC’s website.

Shares of the Delhi-based investment special purpose vehicle of PTC India fell 13 percent, the most in six months, to Rs 21.85, its lowest level in four years after reported loss in the March quarter.

Key earnings highlights:

• Net loss at Rs 110.43 crore versus profit of Rs 109.76 crore (YoY)
• Revenue at Rs 291 crore versus Rs 432 crore (YoY)

Mid- and small-cap indices on the BSE erased intraday gains.

• The S&P BSE SmallCap index fell 0.3 percent dragged by weakness in PTC India Financial Services, Reliance Naval, PC Jeweller and Ruchi Soya.
• The S&P BSE MidCap index declined 0.5 percent dragged by weakness in Tata Global Beverages, Reliance Power, Reliance Infrastructure, Vakrangee and Reliance Capital.

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Karnataka election was not fought on an economic agenda and there will not be too much downside for benchmark indices irrespective of Karnataka election verdict, Ajay Shrivastava of Dimensions Consulting told BloombergQuint in an interview.

Key conversation highlights:

• Election was not fought on an economic agenda
• Market being driven by large-caps, no recovery seen in mid-caps and small-caps
• Do not see too much downside irrespective of election verdict
• Expect large-caps with no leverage to perform well over next 12 months
• Will start investing in MNC pharmaceuticals going forward

Shares of the Ahmedabad-based natural gas distribution company rose as much as 9 percent after ICICI Securities upgraded the stock to hold and raised its target price to Rs 853 from Rs 788.

The revised target price implies 8.25 percent upmove from its previous target of Rs 788.

Shares of drug manufacturers were witnessing buying interest.

The gauge of pharma companies on the National Stock Exchange — Nifty pharma index was the top sectoral gainer, up over 1.5 percent led by Sun Pharma, Dr. Reddy's Labs and Lupin.

Shares of the Kolkata-based state-run lender fell as much as 5 percent to Rs 43.40 after it reported loss in March quarter.

Key earnings highlights:

• NII down 35 percent at Rs 888.5 crore
• Net loss of Rs 3510 crore versus Net profit of Rs 111 crore
• Provisions up 98 percent at Rs 4,783 crore (QoQ)
• GNPA at 15.96 percent versus 14.38 percent (QoQ)
• NPA at 8.04 percent versus 8.97 percent (QoQ)

Nifty 11,000 strike price call was the most active option contract in the derivative segment.

The premium on the contract rose 2.61 percent to Rs 47.25 and as many as 50,925 shares were added to open interest which stood at over 6 million shares.

Click here to see the complete options chain

Find Out How Karnataka Elections Will Determine Fate Of Equities On The F&O Show

Shares of the Kolkata-based state-run lender fell as much as 4 percent, the most in nearly a month, to Rs 18.05 after its loss widened and asset quality deteriorated in the March quarter.

Key earnings highlights:

• Net loss at Rs 2,134.36 crore versus loss of Rs 588.19 crore (YoY)
• Net interest income up 33 percent at Rs 807.89 crore versus 609 crore (YoY)
• Gross non-performing assets (NPAs) as a percentage of total advances at 24.64 percent versus 20.64 percent (QoQ)
• Net NPA at 13.10 percent versus 10.90 percent (QoQ)

The stock dropped as much as 7.3 percent and were set for biggest drop in more than two years as losses on account of company’s joint venture led to decline in profit for fourth quarter.

It was the worst performer on the S&P BSE 100, S&P BSE 200, Nifty Midcap indices. Earlier, Kotak Securities cut its rating on the stock to reduce from add and lowered its price target to Rs 285 from Rs 300.

Shares of the South-based media firm rose as much as 9.8 percent to Rs 954 after its net profit for the fourth quarter surpassed analyst estimate and Nomura upgraded its recommendation to buy from neutral.

This was the stock’s biggest gain since Feb. 7 and the volume was 1.3 times its three-month daily average. It was the top gainer on the BSE 500 index.

Shares of the IT services provider dropped as much as 2.8 percent to their lowest since April 24 after about 1.55 crore shares changed hands on NSE, according to Bloomberg data.

The stock, down for a second session, was the most traded by value and volume. Buyers and sellers were not immediately known.

Shares of fell as much as 12.7 percent intraday to lowest since Sept. 2003 after the RBI restricted the state-run bank from giving fresh loans and hiring staff.

The stock was down most since Nov. 2016 with volume at 55 percent of its three-month average. It was the worst member of the S&P BSE 500 Index.

Indian equity benchmarks nudged marginally higher in opening trade as traders held back on big bets awaiting outcome of the Karnataka elections.

The S&P BSE Sensex climbed as much as 0.15 percent to 35,589 while the NSE Nifty 50 rose 0.19 percent to 10,826 after swinging between gains and losses.

The nervousness was evident as exit polls indicated that majority may prove elusive for Prime Minister Narendra Modi’s Bharatiya Janata Party in elections in a key southern state.

The market breadth was spilt down in the middle. Twelve of the 19 sector gauges compiled by the BSE Ltd. advanced, led by the S&P BSE Realty Index’s 1.31 percent jump. The S&P Consumer Durables Index was the worst performer, down 0.6 percent.

It is likely to be a volatile session for both the bonds and the rupee. Elections and CPI inflation data are the top two things on the minds of investors today.

Karnataka results will come out on Tuesday and exit polls over the weekend showed that the Bharatiya Janata Party is likely to emerge as the single largest party winning anywhere between 95-120 seats. If BJP forms the government, investors expect the rupee to appreciate to Rs 66.60 a dollar as political risk premium will reduce. However, if Congress retains the state, the pair can surge to Rs 68.30 levels.

On the other hand, CPI likely rose to 4.42 percent in April according to a Bloomberg survey. Retail inflation was at 4.28 percent in March. The yield on the benchmark bond is 7.73 percent, near the same levels before the RBI announced its decision to buy debt. For today, it is going to be a volatile session with yields moving in a range of 7.70-7.75 percent.

• 12 pm: India April Wholesale Prices inflation YoY, estimate 2.90 percent, prior 2.47 percent.
• 5:30 pm: India April CPI YoY, estimate 4.42 percent, prior 4.28 percent.

Insider Traders

• Udaipur Cement promoter JK Lakshmi Cement buys 1.6 crore shares on May 10
• Mindtree Promoter Kamran Ozair (A/c LSO Investment Private Limited) sold 25,000 shares on May 8

(As Reported On May 10)

On Havells

Citi

• Raise target to Rs 614 from 612, Maintain Neutral
• Believe that revenue growth outlook still remains hazy
• Operational improvements and growth initiatives continue
• Maintain Neutral as valuation remains quite expensive

IDFC

• Maintain Outperform, target price of Rs 590.
• Robust margins across segments notably Lloyd was key positive.
• Muted growth in switchgear was key negative.
• Valuations are likely to remain rich at 33 times of financial year 2020 valuations.

Kotak

• Maintain Sell; raise target to Rs 460 from Rs 450.
• Strong results and encouraging outlook but valuations expensive.
• Expect the company to deliver 21 percent compounded annual growth rate in earnings per share over March 2018-2021.

On Sun TV

IDFC

• Maintain Outperform, target price of Rs 1,124.
• Revival in ad revenue growth was key positive.
• Market-share fall in Tamil Nadu was key negative.
• Sun trading at discount to Zee because of lower and inconsistent growth.

Nomura

• Upgrade to Buy from Neutral; raise target to Rs 1,105 from Rs 1,091.
• Digitisation to drive subscription in near-term; ad industry growth picking up.
• Maintain view that the ad industry outlook is buoyant with nearly 12-15 percent growth in financial year 2019.

CLSA

• Maintain Buy, target price of Rs 1,250.
• Ad growth strong while Tamil Nadu digitisation boosts subscriptions.
• As per management, the recovery in ad revenue is sustaining.
• Expect Sun TV to deliver 17 percent CAGR earnings over financial years 2018 to 2021.

Other Earnings To Watch

• Abbott India
• Blue Star
• Bombay Dyeing
• Dr. Lal Path Labs
• Godrej Agrovet
• KEC International
• Polaris Consulting and Services
• South Indian Bank

Sun TV (Q4, YoY)

• Revenue up 23 percent at Rs 717 crore
• Net profit up 23 percent at Rs 290 crore
• EBITDA up 33 percent at Rs 522.5 crore
• Margin at 72.9 percent versus 67.6 percent

Solar Industries (Q4, YoY)

• Revenue up 30 percent at Rs 575 crore
• Net profit up 20 percent at Rs 66 crore
• EBITDA up 29 percent at Rs 117 crore
• Margin at 20.3 percent versus 20.6 percent

GlaxoSmithKline Consumer (Q4, YoY)

• Revenue up 7 percent at Rs 1180 crore
• Net profit up 20.5 percent at Rs 212 crore
• EBITDA up 14 percent at Rs 250.5 crore
• Margin at 21.2 percent versus 19.9 percent

Graphite India (Q3, YoY)

• Revenue up 3 times at Rs 1212 crore
• Net profit up 7 times at Rs 454 crore
• EBITDA up 44.5 times at Rs 668 crore
• Margin at 55.1 percent versus 4.0 percent

Relaxo Footwears (Q4, YoY)

• Revenue up 18.5 percent at Rs 557 crore
• Net profit up 67 percent at Rs 53.5 crore
• EBITDA up 71 percent at Rs 98.5 crore
• Margin at 17.7 percent versus 12.2 percent

VST Tillers (Q4, YoY)

• Revenue up 25 percent at Rs 242 crore
• Net profit up 62 percent at Rs 34 crore
• EBITDA up 45 percent at Rs 42 crore
• Margin at 17.4 percent versus 15.0 percent

Aarti Industries (Q4, YoY)

• Revenue up 23 percent at  Rs 1,029 crore
• Net profit up 15 percent at  Rs 85 crore
• EBITDA up 18 percent at  Rs 180 crore
• Margin at 17.5 percent versus 18.3 percent

Nilkamal (Q4, YoY)

• Revenue up 12 percent at Rs 596 crore
• Net profit up 6.25 percent at Rs 34 crore
• EBITDA up 9 percent at Rs 65 crore
• Margin at 10.9 percent versus 11.2 percent

Canara Bank (Q4, YoY)

• NII grew 10.3 percent to Rs 2,987 crore
• Net loss of Rs 4,860 crore versus profit of Rs 214 crore
• Provisions at Rs 8,762 crore versus Rs 1,900 crore (QoQ)
• GNPA at 11.84 percent versus 10.38 percent (QoQ)
• NNPA at 7.48 percent versus 6.78 percent (QoQ)

Sical Logistics (Q4, YoY)

• Revenue up 42 percent at Rs 372 crore
• Net profit down 50 percent at Rs 7 crore
• EBITDA up 2 percent at Rs 48 crore
• Margin at 12.9 percent versus 17.9 percent
• Cost of services up 51 percent at Rs 281 crore

Allahabad Bank (Q4, YoY)

• NII down 35 percent at Rs 888.5 crore
• Net loss of Rs 3510 crore versus Net profit of Rs 111 crore
• Provisions up 98 percent at Rs 4,783 crore (QoQ)
• GNPA at 15.96 percent versus 14.38 percent (QoQ)
• NPA at 8.04 percent versus 8.97 percent (QoQ)

Kesoram Industries (Q4, YoY)

• Revenue up 2.5 percent at  Rs 985 crore
• Net loss of Rs 158 crore versus Net loss of Rs 77 crore
• EBITDA at Rs -39 crore versus Rs -33 crore
• Margin at -4 percent versus -3.4 percent
• Other income of Rs 52 crore in base quarter
• High other expenditure of Rs 204 crore in current quarter

UCO Bank (Q4, YoY)

• NII up 33 percent at  Rs 808 crore
• Net loss of Rs 2,134 crore versus Net loss of Rs 588 crore
• Provisions up 62 percent at Rs 2,239 crore (QoQ)
• GNPA at 24.64 percent versus 20.64 percent
• NPA at 13.10 percent versus 10.90 percent

Puravankara (Q4, YoY)

• Revenue down 36 percent at Rs 288
• Net profit down 60 percent at Rs 25 crore
• EBITDA down 53 percent at Rs 60 crore
• Margin at 20.8 percent versus 28.6 percent

Gillette India (Q4, YoY)

• Revenue down 14 percent at Rs 451.5 crore
• Net profit down 33 percent at Rs 71 crore
• EBITDA down 25.5 percent at Rs 118.5 crore
• Margin at 26.2 percent versus 30.3 percent

Oracle Financial Services Software (Q4, QoQ)

• Revenue up 1.5 percent at Rs 1075 crore
• Net profit down 17 percent at Rs 24 crore
• EBIT down 17 percent at Rs 337 crore
• Margin at 31.3 percent versus 38.3 percent

Vinati Organics (Q4, YoY)

• Revenue up 9 percent at Rs 213 crore
• Net profit up 26 percent at Rs 51.9 crore
• EBITDA up 5 percent at Rs 65.8 crore
• Margin at 30.8 percent versus 32.1 percent

JK Cement (Q4, YoY)

• Revenue up 28 percent at Rs 1,316 crore
• Net profit up 126 percent at Rs 96.5 crore
• EBITDA up down 5 percent at Rs 182 crore
• Margin at 13.8 percent versus 18.5 percent
• Tax rate at 21.6 percent versus 63.7 percent last year

OBC (Q4, YoY)

• NII down 16 percent at Rs 1,095 crore
• Net loss at Rs 1,650 crore versus net loss of Rs 1,218 crore
• GNPA at 17.6 percent versus 13.7 percent
• NNP at 10.5 percent versus 8.9 percent

• Nifty May Futures closed trading at 10,820 with premium of 13.6 versus 8 points
• All series-Nifty Open Interest up 4 percent & Bank Nifty open interest up 6 percent
• India VIX ended at 13.9, down 3 percent
• Max open interest for May series at 11,000, open interest at 59.9 lakh, open interest up 3 percent
• Max open interest for May series at 10,500, open interest at 63 lakh, open interest up 16 percent

Rain Industries

• BNP Paribas Arbitrage sold 18.90 lakh shares (0.6 percent) at Rs 277.43 each

NRB Bearings

• UBS Principal Capital Asia bought 27.39 lakh shares (2.8 percent) at Rs 150 each
• California State Teachers' Retirement System sold 28.03 lakh shares (2.9 percent) at Rs 150.02 each

Alok Industries

• India Opportunities Growth Fund Ltd- Pinewood Strategy bought 3.6 crore shares (2.6 percent) at Rs 1.58 each
• Catalyst Trusteeship Ltd sold 3.62 crore shares (2.6 percent) at Rs 1.58 each

• Nilkamal to enter foam manufacturing business this financial year
• RBI bars Dena Bank from further lending
• CBI will submit a chargesheet against Allahabad Bank CEO and MD Usha Ananthasubramanian and several others in the over Rs 13,000 crore PNB scam.
• Sical approves buying L&T Infra’s stake in ore terminal unit
• 5Paisa capital approves raising of FPI investment limit to 100 percent and NRI investment limit to 24 percent
• New India Assurance approves 1:1 bonus issue
• Federal Bank to sell 26 percent in unit FedFina to True North Enterprises. Also, receives RBI approval to acquire 19.90 percent in Equirus Capital
• Ashoka Buildcon unit executes concession agreement with NHAI for a Rs 1,687 crore project
• Aarti Industries board approves demerger of home and personal care segment and merger of manufacturing operations of Nascent Chemicals with the company
• JSW Steel: Company’s big for Monnet Ispat cleared by CCI
• Westlife Development: To add 25 stores in FY19

Also Read:

• India, Mexico, Italy on top of ArcelorMittal’s agenda, aays Aditya Mittal
• ONGC Videsh drags Sudan to arbitration to recover $400 million
• Government to seek share purchase pact from Flipkart To ascertain tax liability
• After Dena Bank, RBI may put restrictions on two more lenders

IPO Watch

• IndoStar Capital Finance’s issue subscribed 6.6 times on final day.

• Exit Polls to vex Indian markets as majority seen eluding Modi.
• Morgan Stanley outlines strategy for ‘end of easy’ in markets.
• Reliance Jio files complaint against Airtel over Apple Watch service; Airtel refutes charge.
• Southwest Monsoon to hit Kerala on May 28, Skymet says.
• Startup Street: Watch out Ola, Uber. There’s a new cab service in town.
• China counters Trump by mending fences from Japan to India.
• Watch out Ola, Uber. There’s a new cab service in town.
• Indian Army finalises Rs 15,000 crore ammunition production project.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was down 0.05 percent to 10,817.5 as of 7:28 a.m.

Asian stocks had a muted start to trading Monday after the biggest weekly advance since February last week after the Wall Street closed higher on Friday. Oil fell 0.3 percent to $70.5 a barrel.

Commodities Check

• West Texas Intermediate crude was down 0.3 percent to $70.47 per barrel.
• Gold rose 0.15 percent to $1,321.3 an ounce.
• LME copper was up 0.36 percent to $6,942 a metric tonne.

Here are some key events coming up this week:

• China plans to send Vice Premier Liu He to Washington for more trade talks.
• European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K.
• China releases data including industrial production and retail sales figures Tuesday.
• U.K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union.
• U.S. retail sales, industrial production are due this week.
• Vodafone Group, Home Depot, Credit Agricole, Tencent, Cisco Systems, Burberry Group, Walmart, Vivendi, AstraZeneca, Deere, Fujifilm, Noble Group, and Campbell Soup are among the companies releasing earnings this week.