Sensex, Nifty Rally For Second Straight Day As Oil Prices Drop

Indian equity benchmarks rallied along with rupee after crude oil prices fell in international markets. The rally in today's session was led by private sector lenders.

The S&P BSE Sensex rose 0.76 percent or 262 points to 34,925 and the NSE Nifty 50 index climbed 0.87 percent or 91 points to 10,605.

For the week, benchmarks rebounded from worst week in two months. Sensex rose 0.2 percent and the Nifty advanced 0.08 percent.

All sector gauges barring the S&P BSE Consumer Durables index ended higher led by the S&P BSE Oil & Gas index's 3 percent gain.

The mid- and small-cap shares outperformed their larger peers as the Nifty Midcap 100 index surged 1.95 percent and the Nifty Smallcap 100 index jumped 1.5 percent.

Shares of the Bengaluru-based innerwear maker rose as much as 6.60 percent to Rs 24,930 after its profit beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Revenue up 22.4 percent at Rs 608.4 crore versus estimate of Rs 596 crore
• Net Profit up 41 percent at Rs 94.22 crore versus estimate of Rs 79.90 crore
• Margin at 24.1 percent versus 19.6 percent (YoY)
• EBITDA up 51 percent at Rs 146.9 crore versus Rs 97.3 crore (YoY)

Shares of the Mumbai-based department store chain operator pared gains after it reported loss in March quarter.

Key earnings highlights:

• Net loss widens to Rs 46.7 crore versus loss of Rs 39.3 crore (YoY)
• Revenues at Rs 941 crore versus Rs 981 crore (YoY)

Shares of the Mumbai-based government-owned bank fell as much as 4.84 percent to Rs 63.85 after its losses widened in March quarter.

Key earnings highlights:

• Net loss at Rs 5,662.76 crore versus loss of Rs 3,199.70 crore
• Net interest income down 44 percent at Rs 915 crore versus Rs 1,634 crore (YoY)
• Gross non-performing assets as a percentage of total advances at 27.95 percent versus 24.72 percent (QoQ)
• Net non-performing assets as a percentage of total advances at 16.69 percent versus 16.02 percent (QoQ)
• FY17 divergence in provisioning at Rs 4,464 crore
• Provisions for NPAs at Rs 10,773 crore versus Rs 3,637.5 crore (QoQ); Rs 6,054.4 crore (YoY)

Shares of the Ahmedabad-based drugmaker rose as much as 9 percent, the most in over 11 months, to Rs 389.90 after its profit beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Net profit up 53 percent at Rs 591 crore versus estimate of Rs 547 crore
• Revenues up 29 percent at Rs 3,250 crore versus Rs 3,208 crore
• EBITDA up 87 percent at Rs 870.4 crore versus Rs 464.9 crore (YoY)
• Margins at 26.8 percent versus 18.8 percent (YoY)

• Rupee appreciated as much as 0.88 percent or 60 paise, the most in over six months, to 67.74 against the U.S. dollar.

Indian equity benchmarks extended gains led by HDFC Bank, Infosys, Kotak Mahindra Bank and ONGC.

The S&P BSE Sensex rose 260 points or 0.7 percent to 34,900 and the NSE Nifty 50 index climbed 0.88 percent or 93 points to 10,607.

The mid- and small-cap shares were outperforming larger peers as bot the indexes rose over a percent.

All sector gauges but one were trading higher led by the S&P BSE Oil & Gas index's 2.4 percent surge.

The overall market breadth was positive as 1,555 shares were advancing while 944 were declining on the BSE.

Shares of the Delhi-based power project financer swung between gains and losses after it missed Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Net profit at Rs 936 crore versus loss of Rs 3,409 crore; estimate of Rs 1,500 crore
• Revenues up 11 percent at Rs 6,016 crore versus 5,513 crore (YoY)
• Provisions for bad loans at Rs 193 crore versus Rs 19.51 crore (YoY)

Shares of the Mumbai-based logistics service provider held on to gains an was trading 10.58 percent higher at Rs 183.50.

Gateway Distriparks will buy Blackstone's stake in railway freight unit for Rs 810 crore, it said in an exchange filing.

Shares of Maruti Suzuki rose 1 percent to Rs 8,499.

Toyota Motor Corporation and Suzuki Motor Corporation have agreed to discuss projects in fields of technological development, vehicle production and market development.

Projects to be discussed are:

• Denso, Toyota to provide Suzuki with technological support for powertrain to be developed by Suzuki
• Toyota Kirloskar Motor to produce models developed by Suzuki for sale in India through each of their brand networks
• Supply of models developed by Suzuki from India to African and other markets by Toyota and Suzuki, employing their sales networks to sell such vehicles

• Petronet LNG has 20 lakh shares change hands in a block. Stock down 0.2 percent at Rs 210.25.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Chennai-based cement maker rose as much as 6 percent to Rs 132 after its net profit beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Net profit up 3 percent at Rs 35.27 crore versus estimate of Rs 24 crore
• Revenues down 8.2 percent at Rs 1,397.81 crore versus estimate of Rs 1,522.58 crore

Shares of the Mumbai-based vessels operator surged as much as 18 percent to Rs 615.

Shreyas Shipping reported net profit of Rs 23.17 crore versus loss of Rs 12.58 crore.

Shares of the Gujarat-based cement maker rose as much as 20.41 percent to Rs 35.10 after March quarter earnings.

Gujarat Sidhee Cement reported net profit of Rs 23.17 crore versus loss of Rs 13.1 crore.

• Gujarat Alkalies: The Vadodara-based chemical maker rose 5.51 percent to Rs 652.60. Trading volume was 44.3 times its 20-day average.
• Schaeffler India: The Mumbai-based ball and bearings maker rose 1 percent to Rs 5,380. Trading volume was 12.3 times its 20-day average.
• Mcleod Russel: The Kolkata-based tea cultivator 1.35 percent to Rs 150. Trading volume was 25.6 times its 20-day average.
• Cochin Shipyard: The Cochin-based ship building company rose 7 percent to Rs 517.45. Trading volume was 14.3 times its 20-day average.

Shares of the Tamil Nadu-based private sector lender rose 4.36 percent to Rs 99.55 after March quarter.

Key earnings highlights:

• Net interest income at Rs 640 crore
• Net profit down 76.7 percent at Rs 50.56 crore versus Rs 217.5 crore (YoY)
• Net interest income up 10.8 percent at Rs 642.8 crore versus Rs 580 crore (YoY)
• Net NPAs at 4.16 percent versus 3.88 percent (QoQ)
• Gross NPAs at 6.56 percent versus 5.94 percent (QoQ)
• Net NPA divergence for FY17 at Rs 202 crore
• Gross NPA divergence For FY17 at Rs 650.9 crore
• Provisions at Rs 394 crore versus Rs 325 crore (QoQ); Rs 218 crore (YoY)
• Base III Capital Adequacy Ratio at 14.43 percent versus 13.92 percent (QoQ)

Shares of the Mumbai-based adhesive maker rose as much as 5.4 percent to record high of Rs 1,139 after it reported March quarter earnings.

Key earnings highlights:

• Revenues up 15 percent at Rs 1485 crore versus Rs 1295 crore
• Net profit up 55 percent at Rs 244 crore versus Rs 157 crore
• EBITDA up 6 percent at Rs 274 crore versus Rs 258 crore
• Margins at 18.5 percent versus 19.9 percent

Shares of the Pune-based chemical maker rose as much as 15.47 percent, the most in over a month, to Rs 518.70 after it reported March quarter earnings.

Key earnings highlights:

• Revenue up 31 percent at Rs 384 crore
• Net profit up 32 percent at Rs 22.5 crore
• Ebitda at Rs 56 crore versus Rs 33 crore
• Margin at 14.6 percent versus 11.3 percent

Nifty 10,500 put option was among the most active derivative contracts on the National Stock Exchange.

The premium on the contract fell 50 percent to Rs 27.60. Over 16 lakh shares were added to the open interest which stood at 71.98 lakh shares.

Click here to see complete options chain

Shares of the construction company rose a much as 2.8 percent to Rs 194.95.

The company received a letter of award for the highway project in Telangana worth Rs 425 crore, according to its stock exchange filing.

Growth in developed markets offsets risks in emerging markets, Jahangir Aziz, senior Asia economist at JPMorgan told BloombergQuint in an interview.

Key conversation highlights:

• Money has flown out of India due to fiscal deficit and current account deficit rise
• May see EMs across the world hike rate if dollar strength continues
• Rate hike may come in by RBI for financial stability

• Shares of the logistics companies were trading higher led by gains in Patel Integrated Logistics' 10 percent surge.

Shares of the Mumbai-based travel company rose as much as 14.39 percent, the most in nearly four years, to Rs 237.75 after its unit — Cox & Kings Financial Service got a NBFC license from the Reserve Bank of India.

Cox & Kings Financial Service proposes to carry on the business of holiday financing, student loan financing and foreign exchange business, the company said in a press release.

Shares of the Delhi-based gas distribution company rose as much as 3.76 percent to Rs 321.15 as brokerages maintained their bullish stance on the company after March quarter earnings.

CLSA upgraded the stock to 'buy from 'sell' with a target price of Rs 405. While, Morgan Stanley maintained its 'overweight' stance on the stock for target price of Rs 510.

Shares of the Mumbai-based infrastructure developer declined 0.17 percent to Rs 1,336.

The company's construction arm has won order for electrical and mechanical packaging for Dhaka Metro worth Rs 3,190 crore.

• Suzlon Energy has 16 lakh shares change hands in a block deal. Stock slips 1.1 percent to Rs 9.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the country's largest IT company rose 1.6 percent to record high of Rs 3,662.

Surge in today's share price made TCS the first Indian company to cross Rs 7 lakh crore in market capitalisation.

Shares of the Bengaluru-based beer maker rose as much as 6.77 percent, the most in over three months, to record high of 1,259.90 after it reported strong earnings in March quarter.

Key earning highlights:

• Net profit at Rs 90.88 crore versus Rs 6.73 crore (YoY)
• Revenues up 28 percent at Rs 3,270 crore versus Rs 2,557 crore (YoY)

Shares of the Bengaluru-based liquor maker rose as much as 7 percent, the most in nearly five months, to Rs 3,341 after it beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Revenues up 7 percent at Rs 2,173 crore versus Rs 2,025 crore
• Net profit at Rs 211 crore versus net loss of Rs 104 crore; estimate of Rs 149 crore
• One-time loss of Rs 291 crore in base quarter
• EBITDA up 5 percent at Rs 274 crore versus Rs 261 crore

Margins at 12.6 percent versus 12.9 percent

Meanwhile, global brokerage Morgan Stanley has maintained its stance on United Spirits. the brokerage in a note said:

• Maintained ‘Equal Weight’ with a price target of Rs 3,250.
• Strong volume growth will drive 2018-19 consensus estimates.
• Strong volume growth in the 'prestige and above' segment.
• Risk-reward for the next 12 months appears less favorable at current valuations.

Indian equity benchmarks edged higher led by in Infosys, HDFC twins and TCS. However, the gains were capped as ITC, ONGC and State Bank of India were trading with a negative bias.

The S&P BSE Sensex rose 0.2 percent or 69 points to 34,730 and the NSE Nifty 50 index advanced 0.2 percent or 25 points to 10,539.

Eleven out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Information Technology index's 1 percent gain. On the other hand, the S&P BSE FMCG index was the top loser, down 0.7 percent.

The mid- and small-cap shares were in line with their larger peers as the S&P BSE MidCap and SmallCap indexes rose 0.3 percent each.

• Rupee opened higher at 68.28 per dollar against yesterday's close of 68.34.

The rupee is set for its seventh weekly loss - the longest losing streak for the unit since November 2015. The currency is approaching record lows as there is no respite from outflows from both bonds and equities as global crude oil prices continue to surge.

Implied opening from forwards suggest it may open at 68.2930 however, the weak equity clues from Asia may restrict a major recovery. A range of 68.20-68.50 a dollar is expected.

In bonds, the central government will tap the market to raise Rs 12,000 crore of debt today. Importantly, primary dealers had to rescue four out of the last five auctions.

Yield on the 10-year note has risen to 7.87 percent amid overseas investors reducing the holding of Indian debt. A range of 7.85 percent-7.90 percent is expected and auction cutoffs will be closely watched.

State-run oil marketers hiked petrol and diesel prices for the twelfth day in a row.

The price of petrol was hiked by 36 paise today to Rs 85.65 a litre in Mumbai and diesel was raised by 24 paise to Rs 73.20 a litre, according to data released by Indian Oil Corporation Ltd.

CLSA On GAIL

• Upgraded to ‘Buy’ from ‘Sell’, hiked price target to Rs 405 from Rs 337.
• Bunched-up expenses and lower gas trading profit led to 20 percent PAT miss.
• Recent crude price spike not only eliminates U.S. LNG risk but also boosts its core earnings per share.
• China demand and crude spike has turned U.S. LNG from a headwind to a tailwind.
• Several imminent triggers and stock ignoring crude spike gains.

Morgan Stanley On GAIL

• Maintained ‘Overweight’ with a price target of Rs 510.
• High imported gas costs were key to the Q4 miss; operationally good quarter.
• GAIL's contracted gas sourcing should shield it from seasonal volatility.
• Oil to gas differentials widen and concerns about contracted LNG diminish.

Morgan Stanley on United Spirits

• Maintained ‘Equal Weight’ with a price target of Rs 3,250.
• Strong volume growth will drive 2018-19 consensus estimates.
• Strong volume growth in the 'prestige and above' segment.
• Risk-reward for the next 12 months appears less favorable at current valuations.

CLSA On NCC

• Maintained ‘Buy’ with a price target Rs 160.
• Backlog growth robust and reports all–time high Ebitda margin.
• Record inflow driven by AP Capital infrastructure and Delhi government building contracts.
• Buy on improving state capex growth visibility and asset-light model.

Kotak On City Union Bank

• Maintained ‘Add’; hiked price target to Rs 190 from Rs 180.
• Healthy operating profit growth with stable performance on most metrics.
• Return on equity improvement still looks unlikely; FY2015-18 has been at 15 percent.
• Consistent performance maintained, valuing bank at 2.4 times book and 16 times March 2020E EPS.

Deutsche Bank On Jain Irrigation

• Maintained ‘Sell’ with a price target of Rs 82.
• Higher polymer costs likely to pressure micro irrigation project margins.
• Net debt/EBITDA remained elevated at 3.8 times (versus guidance of 3 times).
• Margins at risk from higher oil price.

Insider Trades

• Chambal Fertilizers promoter Yashovardhan Investment & Trading bought 1.20 lakh shares on May 22.
• Bajaj Holdings & Investment promoter Jamnalal Sons bought 3.49 lakh shares on May 21–22.
• Balaji Telefilms promoter Ekta Kapoor bought 6.66 lakh shares on May 23.
• Man Infra Construction promoter Vatsal Shah bought 84,348 shares on May 23.

(As reported on May 24)

Bulk Deals

Avenue Supermarts

• Radhakishan Damani sold 47.30 lakh shares or 0.8 percent stake at Rs 1,360.2 each.

Shaily Engineering

• HDFC Mutual Fund bought 1.98 lakh shares or 2.4 percent stake at Rs 1,292 each.
• DSP Blackrock Emerging Stars Fund sold 2 lakh shares or 2.4 percent equity at Rs 1,292 each.

F&O Cues

• Nifty May futures closed trading at 10,505 with a discount of 8.6 points
• May series- Nifty open interest (OI) down 2 percent and Bank Nifty OI slips 1 percent
• India VIX ended at 13.1, down 7 percent
• Max OI for May series call at 10,800 strike price, OI at 49.4 lakh shares, down 11 percent
• Max OI for May series put at 10,500 strike price, OI at 55.2 lakh shares, up 20 percent

Nifty Results To Watch

• Sun Pharma
• Tech Mahindra

Other Results

• Amber Enterprises India
• Bank of Baroda
• BEML
• Cadila Healthcare
• Central Bank of India
• Engineers India
• General Insurance Corporation of India
• India Cements
• Indian Hotels
• Jagran Prakashan
• Karur Vysya Bank
• Lakshmi Vilas Bank
• Lemon Tree Hotels
• Max Financial Services
• NBCC
• NLC India
• Page Industries
• PC Jeweller
• PFC
• Va Tech Wabag
• Waterbase

Earnings Reactions To Watch: Triveni Engineering, Kaveri Seed Post Losses In Q4

United Spirits (Q4 YoY)

• Revenues up 7 percent at Rs 2,173 crore versus Rs 2,025 crore
• Net profit at Rs 211 crore versus net loss of Rs 104 crore
• One-time loss of Rs 291 crore in base quarter
• EBITDA up 5 percent at Rs 274 crore versus Rs 261 crore
• Margins at 12.6 percent versus 12.9 percent

MOIL (Q4 YoY)

• Revenues up 57 percent at Rs 398 crore versus Rs 253 crore
• Net profit up 10 percent at Rs 128 crore versus Rs 116 crore
• EBITDA up 42 percent at Rs 173 crore versus Rs 122 crore
• Margins at 43.5 percent versus 48.2 percent

Camlin Fine Sciences (Q4 YoY)

• Revenues up 54 percent at Rs 232 crore versus Rs 151 crore
• Net loss of Rs 4 crore versus Net loss of Rs 7 crore
• EBITDA at Rs 11 crore versus EBITDA loss of Rs 7 crore
• Margins at 4.7 percent versus -4.6 percent

South India Paper Mills (Q4 YoY)

• Revenues up 30 percent at Rs 56 crore versus Rs 43 crore
• Net profit up 50 percent at Rs 3 crore versus Rs 2 crore
• EBITDA up 27 percent at Rs 7 crore versus Rs 5.5 crore
• Margins at 12.5 percent versus 12.8 percent

Sudarshan Chemicals (Q4 YoY)

• Revenues up 31 percent at Rs 384 crore versus Rs 293 crore
• Net profit up 32 percent at Rs 22.5 crore versus Rs 17 crore
• EBITDA up 70 percent at Rs 56 crore versus Rs 33 crore
• Margins at 14.6 percent versus 11.3 percent

Kaveri Seed Company (Q4 YoY)

• Revenues up 5 percent at Rs 42 crore versus Rs 40 crore
• Net loss of Rs 18 crore versus Net loss of Rs 87 crore
• EBITDA at Rs -13 crore versus Rs -27 crore
• Margins at -31 percent versus -67.5 percent

Pidilite Industries (Q4 YoY)

• Revenues up 15 percent at Rs 1485 crore versus Rs 1295 crore
• Net profit up 55 percent at Rs 244 crore versus Rs 157 crore
• EBITDA up 6 percent at Rs 274 crore versus Rs 258 crore
• Margins at 18.5 percent versus 19.9 percent

Sequent Scientific (Q4 YoY)

• Revenues up 18 percent at Rs 233 crore versus Rs 198 crore
• Net profit at Rs 399.5 crore versus Rs 7 crore
• One-time gain on sale of assets worth Rs 393 crore in current quarter
• EBITDA up 36 percent at Rs 30.5 crore versus Rs 22.5 crore
• Margins at 13.1 percent versus 11.4 percent

GlaxoSmithkline Pharmaceuticals (Q4 YoY)

• Revenues down 1 percent at Rs 749 crore versus Rs 760 crore
• Net profit down 6 percent at Rs 106 crore versus Rs 113 crore
• EBITDA up 13 percent at Rs 155 crore versus Rs 137 crore
• Margins at 20.7 percent versus 18.0 percent

Heritage Foods (Q4 YoY)

• Revenues up 14 percent at Rs 562 crore versus Rs 494 crore
• Net profit down 91 percent at Rs 21 crore versus Rs 223 crore
• Other income of Rs 247 crore in base quarter
• EBITDA at Rs -4 crore versus Rs -10 crore
• Margins at -0.7 percent versus -2 percent

LT Foods (Q4 YoY)

• Revenues up 15.5 percent at Rs 1,071 crore versus Rs 927 crore
• Net profit flat at Rs 32 crore versus Rs 32.2 crore
• EBITDA up 4 percent at Rs 96.5 crore versus Rs 93 crore
• Margins at 9 percent versus 10 percent

Cummins India (Q4 YoY)

• Revenues up 4 percent at Rs 1233 crore versus Rs 1185 crore
• Net profit up 2 percent at Rs 161 crore versus Rs 158.5 crore
• EBITDA flat at Rs 172 crore versus Rs 171 crore
• Margins at 13.9 percent versus 14.4 percent

Triveni Engineering (Q4 YoY)

• Revenues down 18 percent at Rs 735 crore versus Rs 894.5 crore
• Net loss of Rs 102 crore versus Net profit of Rs 60.5 crore
• EBITDA at Rs -114 crore versus Rs 169.5 crore
• Margins at -15.5 percent versus 18.9 percent

• Avenue Supermarts says founder Radhakishan Damani has completed the sale of 62.40 lakh shares or 1 percent equity between May 21- 24
• Neuland Labs to allot 16.75 lakh equity shares at Rs 750 each via QIP
• Gayatri Projects receives letter of award for highway project in Telangana worth Rs 425 crore
• Camlin Fine Sciences to raise Rs 250 crore via issue of securities
• Kaveri Seeds to buyback 29.63 lakh shares at a price of Rs 675 each

• Trump cancels Kim summit, North Korea says it still wants to meet U.S.
• ED charges Nirav Modi, others for laundering Rs 6,498 crore bank funds
• GAIL looks to list subsidiary GAIL Gas
• Debt outflows in May at the highest in 17 months
• Telecom department clears Rs 4,000 crore Idea-ATC mobile tower sale deal
• Jet Airways’ debt may rise in short term, says chief financial officer
• Sterlite row: Section 144 extended till 27 may in Tuticorin
• Bringing fuel under GST one of the options, says oil minister
• How a relentless crude rally has become Modi’s final opponent
• Fight between Singapore, India stock exchanges worries investors
• Tata Motors looks to sell stake in vehicle finance arm
• Windfall tax on ONGC will be damaging, industry experts say
• Four years of Modi’s BJP and missed opportunities
• Delta returns to Mumbai after U.S. pact on Persian Gulf Airlines

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India traded largely unchanged at 10,513 at 7:50 a.m.

Asian stocks opened lower after the cancellation of the U.S.-North Korea summit, which sparked a move to safe-haven assets. Treasuries and the yen held gains from Thursday, as did gold after its biggest advance in a month.

Shares in Japan and Korea dropped alongside those in Australia. U.S. stocks closed lower despite a late rally, though S&P 500 futures edged higher.

Bonds

• The yield on 10-year Treasuries fell less than one basis point to 2.98 percent.
• Australia’s 10-year yield fell two basis points to 2.79 percent.

Commodities

• West Texas Intermediate crude was little changed at $70.68.
• Gold traded largely unchanged at $1,304.28 an ounce.

Here are some key events to watch today:

• At the St. Petersburg Forum, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in-Chief John Micklethwait.
• European Union finance ministers discuss the latest on Brexit talks, in Brussels.