Sensex, Nifty End Lower As Government Gets No-Confidence Motion

Indian equity benchmarks ended lower as the central government received a no-confidence motion today.

The S&P BSE Sensex Index closed 0.4 percent lower at 36,373.44 and the NSE Nifty 50 Index closed at 10,980.45, down 0.3 percent.

The market breadth was firmly tilted in favour of sellers. Ten out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Metal Index's 3.2 percent decline. On the flipside, NSE Nifty IT Index was the only sectoral gainer, up 0.1 percent.

Shares of the financial services provider ended 2.3 percent lower at Rs 120.10. The company announced its quarterly results for April-June period in a regulatory filing.

Key earnings highlights (Q1 YoY):

• Net profit up 8.8 percent at Rs 199.2 crore.
• Revenue up 23 percent at Rs 827.7 crore.

Shares of the commercial vehicle maker fell as much as 14.4 percent, the most since August 2015, to hit a eleven-month low at Rs 110.05.

Trading volume was 6.3 times its 20-day average, Bloomberg data showed. The Relative Strength Index was 29, indicating that the stock may be oversold.

Gopal Mahadevan, chief financial officer of Ashok Leyland spoke to BloombergQuint on the company's June quarter's performance.

Here are the key highlights from the interaction:

• See 8-10 percent overall growth.
• We will continue to see growth in profits.
• We have added substantially to market share over the last year.
• Demand is coming from both light and heavy commercial vehicle segments.
• We are going to see growth in intermediate CVs and LCVs.
• You are going to see a move towards heavier tonnage trucks.
• Too early to comment on new axle rules right now.
• Challenges of safety arise if new axle rules are applied retrospectively.

Shares of the software solutions provider rose as much as 2.9 percent to Rs 523.95 after it announced its results for April-June quarter.

Key earnings highlights (Q1, QoQ):

• Net profit up 16 percent at Rs 22.5 crore.
• Revenue up 9.1 percent at Rs 244 crore.
• EBIT up 11.1 percent at Rs 27 crore.
• EBIT Margins at 11.1 percent versus 10.9 percent.

European equities rose at the open after earnings season started on a high note and upbeat assessment on the U.S. economy from Federal Reserve Chairman Jerome Powell comforted investors wary of a blowout in protectionism.

NIIT Technologies Ltd.'s net profit remained flat at Rs 86 crore on a sequential basis, according to its stock exchange filing.

Key earnings highlights (Q1, QoQ):

• Net profit flat at Rs 86 crore.
• Revenue up 4.6 percent at Rs 825 crore.
• EBIT down 13.2 percent at Rs 100 crore.
• EBIT Margins at 12.1 percent versus 14.6 percent.

Shares of the IT company fluctuated between gains and losses to trade at Rs 1,112.95 crore.

Shares of the country's largest cement maker fluctuated between gains and losses to trade at Rs 3,902 as of 2:20 p.m. after it announced April-June quarter results.

Key earnings highlights (Q1FY18):

• Net profit at Rs 598.4 Cr versus Bloomberg estimate 581.3 crore.
• Revenue at Rs 8,655 crore versus Bloomberg Estimate of Rs 8,655.4 crore.
• Ebitda at Rs 1,623.7 crore versus Bloomberg estimate of Rs 1,553.5 crore.
• Margin at 18.8 percent versus Bloomberg estimate of 17.9 percent.

The results number are not comparable as the results include that cement plants acquired from JP Associates and JP Cement Corporation it acquired on June 29, 2017.

Shares of the media company fell as much 11 percent, the most since August 2017, to trade more than nine-year low at Rs 63.95. The company net profit and revenue missed estimate in April-June quarter.

Key earnings highlights (Q1, YoY):

• Net profit up 86 percent at Rs 5.7 crore.
• Revenue 7 percent at Rs 542.4 crore.

Deepak Parekh, chairman at HDFC Ltd. speaks during a news conference. Key highlights from the interaction:

• Markets are looking for a re-rating in India’s corporate earnings.
• Inflation concerns have increased.
• Markets will closely watch oil price movements.
• In a pre-election year, markets will also closely track government policies and will accord a premium to credible policies.

“Yet, India stands out well when placed against countries like South Africa, Brazil, Turkey, Argentina, amongst several others that have bled with currency depreciations ranging between 12-30 percent,” Parekh said.

He added that many believe that the Indian Rupee is still overvalued. “It is important to reiterate that the Indian currency depreciation is not worrisome, especially with forex reserves at over $ 405 billion.”

India’s forex reserves have reduced from its peak of $ 420 billion, partly due to revaluation of reserves, as a large part the reserves are held in U.S. dollars and partly due to the RBI supporting the rupee to stem volatility, Parekh said. “So there is some uncertainty, but India is nowhere near the precarious position it was in 2013.”

Bandhan Bank Ltd. rose as much as 6.1 percent to hit an all-time high at Rs 597, after its June quarter’s profit rose 47 percent on a yearly basis.

Key earnings highlights (Q1, YoY):

• NII up 39.4 percent at Rs 1,037 crore.
• Net profit up 47.5 percent at Rs 481 crore.
• Gross NPA at 1.26 percent versus 1.25 percent (QoQ).
• Net NPA at 0.64 percent versus 0.58 percent (QoQ).
• Provisions at Rs 80 crore versus Rs 109 crore (QoQ); Rs 55.6 crore (YoY).

• Indian equity benchmarks erased gains after Lok Sabha speaker admitted no-confidence motion against the government today.
• The S&P BSE Sensex Index dropped more than 400 points from day's high after it fell 0.3 percent to 36,409 and the NSE Nifty 50 index fell below 11,000, down 0.2 percent.
• The market breadth was firmly tilted in favour of sellers. About 1,188 stocks declined and 490 stocks advanced on NSE.

• City Union Bank: About 14.1 lakh shares changed hands in a block deal.
• ICICI Bank: About 32.1 lakh shares changed hands in a block deal.
• Future Consumer: ABout 58 lakh shares changed hands in six block deals.

Buyers and sellers were not known immediately.

Source: Bloomberg

The NSE Nifty Metal Index fell 1.8 percent as of 11:45 a.m., making it the worst sectoral performer on National Stock Exchange. The Index was weighed by Jindal Steel & Power Ltd., followed by Tata Steel Ltd.

Shares of the country's largest drugmaker fluctuated between gains and losses to trade 1.4 percent higher at Rs 556.10 as of 11:30 a.m.

The pharmaceutical company received its first regulatory approval for a product from Halol plant after receiving EIR. The U.S drug regulator gave a green signal for the company’s INFUGEM Injection, according to its statement on the exchange.

The addressable market size is approximately $ 35 million for the previous financial year, the statement added, quoting IQVIA.

Key highlights from the conversation:

• Business seeing substantial growth.
• Focused on long-term recurring projects.
• Will increase investment in IP going forward.
• Appointed Deloitte as auditors, adapting to new filing procedures.

• Bharti Airtel: About 17.8 lakh shares changed hands in a single block deal on BSE. About 56.7 lakh shares changed hands in another block deal.
• Edelweiss Financial Services: About 34.7 lakh shares changed hands in a single block deal.
• NTPC: About 19.2 lakh shares changed hands in a single block.

Buyers and sellers were not known immediately.

Source: Bloomberg

• Indian equity benchmarks rallied in today's trade led by HDFC twins.
• The S&P BSE Sensex Index rose 0.3 percent to 36,618 as of 11 a.m. and the NSE Nifty 50 Index hovered around 11,050.
• The market breadth was under pressure as 802 stocks advanced and 830 shares declined on NSE.

Key highlights from the conversation:

• Koovs business model works well with Future Lifestyle.
• Will be able to bring in latest fashion more faster with Koovs.
• Plan to expand central stores.
• Koovs will help expand our brand portfolio.
• Koovs will enable to target different set of customers.
• Objective to offer huge variety; want to offer all footwear brands in one store.
• Planning to bring in synergies between Brand Factory and Central.
• Need to regain traction in brand factory.

Watch the full conversation here:

Key highlights from the conversation:

• Raised Rs 337 crore via anchor book.
• Marquee investors across the globe include GMO, Goldman Sachs.
• Will market Aurelia and Wishful brands aggressively after scaling up to minimum limit.
• Started opening exclusive stores of wishful to aid visibility.
• Price brands according to value addition, fabrics and prints.
• Manage to churn inventory by introducing new styles every 2-3 weeks.
• All the channels are extremely profitable; slightly channel agnostic.
• Omnichannel business will have a bigger play.
• Rise in margins due to scale, volume discounts.
• Expect to be in a sweet price point in future.
• Looking to open 75-85 new stores going ahead.
• Looking at capex payback period will take less than 12 months to break-even.
• Looking at international expansions & further brand additions.

Watch the full conversation here:

Shares of the steel products maker snapped a four-day losing streak, its longest losing streak in 20 days. The stock rose as much as 13.9 percent to Rs 89.90.

The company's associate Vijay Nirman Company bagged a new project worth Rs 222.6 crore to upgrade NH 167 in a joint venture in which it holds 51 percent.

Trading volume was 11.6 times its 20-day average. The stock trades at 29.3 times trailing 12-month earnings per share, Bloomberg data showed.

Key highlights from the conversation:

• 10 percent subsidy on milk exports is not beneficial at all.
• Government's announcement on incentive on milk exports is too little and too late.
• The ageing stock is stuck with many co-operatives.
• The incentive has no use to the industry.

Key highlights from the conversation:

• Hopeful that growth momentum will continue.
• Remain confident on underlying fundamentals of the bank.
• Don't expect any large stressed assets aside of Air India.
• Formation of new NPLs has come down.
• IDBI Federal Life Insurance continues to do well.

Key highlights from the conversation:

• Government’s incentive will bridge gap between domestic and global milk prices.
• Central and state government incentives together are a positive.

Sintex Industries Ltd. profit rose for the second straight quarter. Net profit of the engineering company rose 11 percent year-on-year to Rs 39 crore in the previous quarter, according to its stock exchange filing.

Sintex Industries (Q1, YoY)

• Revenue up 34 percent at Rs 925 crore.
• Net profit up 11 percent at Rs 39 crore.
• Ebitda up 43 percent at Rs 110 crore.
• Margin at 11.9 percent versus 11.2 percent.

The stock rose as much as 10.9 percent to trade one-month high at Rs 16.30.

Shares of Mumbai-based lender swung between gains and losses to trade 0.3 percent higher at Rs 37.55 as of 9:45 a.m. The stock rose 1.7 percent intraday.

About 10.3 lakh shares changed hands in a single block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

The stock traded at 11.6 times estimated forward earnings per share compared to 17.7 percent for two-year historical average, according to Bloomberg data.

Shares of the construction company rose as much as 6.4 percent to Rs 160.

The company bagged an order worth Rs 1,157 crore for a highway project in Karnataka, according to its stock exchange notification.

Trading volume was 10.7 times its 20-day average, according to Bloomberg data. The stock declined 2.4 percent so far this year compared to a 8.5 percent advance in the country's benchmark Sensex.

Shares of the media company rose as much as 3.3 percent, the most in over two months to Rs 533.70.

The company's profit rose in the April-June period and was in line with the street expectations. (more details here).

Key earnings highlights (Q1, YoY):

• Revenue up 15 percent at Rs 1,772 crore.
• Net profit up 31.5 percent at Rs 326 crore.
• Ebitda up 17 percent at Rs 565.6 crore.
• Margin at 31.9 percent versus 31.4 percent.

Indian equity benchmarks advanced in open, tracking its Asian peers. The S&P BSE Sensex Index rose as much as 0.6 percent to 36,747.87, while the NSE Nifty 50 Index rose as much as 0.6 percent to 11,076.20.

The market breadth was tilted in favour of buyers. Seven out of 11 sectoral gauges compiled by NSE advanced, led by NSE Nifty Media Index's 1.3 percent gain. On the flipside, NSE Nifty Metal Index was the top sectoral loser, down 0.4 percent.

The Indian rupee opened today at 68.39 against the U.S. dollar after depreciating about 0.1 percent.

The benchmark 10-year bond dropped three basis points to 7.72 percent on Reserve Bank of India's announcement on open market debt purchase.

Nestle India Ltd., which hit a record high yesterday crossed Rs 1 lakh crore-mark in market capitalisation. The stock closed 3 percent higher at 10,511.75 in its last regular trade.

• Rupee closed at 68.46/$ on Tuesday from 68.57/$ on Monday.
• Sovereign bonds rise with yields at 7.4 percent, lowest levels since May.

F&O Cues

• Nifty July Futures closed trading at 11,023.7 premium of 15.7 points versus 7 points.
• July series: Nifty open interest up 2 percent; Bank Nifty open interest up 3.5 percent.
• India VIX ended at 12.8, down 1 percent.
• Max open interest for July series at 11,000 Call (open interest at 35.3 lakh, down 11 percent).
• Max open interest for July series at 10,800 Put (open interest at 46.5 lakh, up 13 percent).

F&O Ban

• In ban: Adani Enterprises, Adani Power, Jet Airways.

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

Put Call Ratio

• Nifty PCR at 1.68 versus 1.62
• Nifty Bank PCR at 1.15 versus 0.73

CLSA on ITC

• ITC has become the second-largest FMCG firm in India.
• Meaningful profits still some time away.
• Hurdles: Aggressive launches, steep learning curve in personal care and tough retail environment for apparels.
• FMCG forms 13 percent of price target; could be higher on peer multiples.

BoFA-ML on Zee Entertainment

• Maintained ‘Underperform’ with a price target of Rs 532.
• June quarter was largely inline with estimates.
• Marketing on "Zee5" will pick in current quarter.
• Zee would grow at the rate higher than industry in 2018-19.
• Underperform as valuations high in context of growth and limited clarity on traction of Zee5.

Edelweiss on Federal Bank

• Maintained ‘Buy’ with a price target of Rs 130.
• June quarter earnings show sustained buildup in operating.
• rhythm along with normalisation of asset quality.
• Core profitability gaining momentum and becoming more predictable.
• June performance reinforces our view that FB is on course to deliver return of assets and return of equity of 1 percent and 13 percent by March 2020.

HSBC on L&T Infotech

• Initiated ‘Buy’ with a price target of Rs 2,100, implying a potential upside of 13.5 percent from current levels.
• Strong brand, ability to penetrate large accounts and large deal wins support strong growth.
• Expect organic revenue to grow above industry average CAGR of 15 percent over FY18-21.
• Expect margins to improve by 250 basis points, led by operational efficiency and INR depreciation
• Better organic growth warrants higher valuation.

Macquarie on Ashok Leyland

• Maintained ‘Underperform’ with a price target of Rs 113.
• June quarter’s operating income was below estimates.
• Volume growth drives margin improvement.
• Domestic medium and heavy commercial vehicle market share at three-year low.
• Underperform on near term demand uncertainty, high competitive intensity and expensive valuations.

Citi on Glenmark Pharma

• Maintained ‘Neutral’ with a price target of Rs 640.
• Received approval of gWelchol suspensiona - $73 million brand in the U.S.
• Competition is difficult to predict.
• Market share gains key to track.
• Execution in the U.S. is key to sustained recovery

Citi on Shriram Transport Finance

• Maintained ‘Buy’ with a price target of Rs 1,580.
• SHTF sees asset quality improving gradually with gross NPA ratio declining.
• Expect net interest margins to sustain despite rise in yields.
• Merger with Shriram City Union a possibility.
• Expect 18-20 percent growth rate; can achieve 18 percent RoE in two years.

JPMorgan on ONGC

• Maintained ‘Overweight’ with a price target of Rs 265.
• Fears of subsidy, acquisition of GSPC's KG block, impending HPCL merger led to de-rating.
• Formal restructuring refining and petchem assets would be a positive.
• Net beneficiary of rupee depreciation and higher domestic gas prices.
• Higher cess is more likely than an explicit subsidy.
• Stock lacks immediate catalysts; believe risk-reward favourable for long term.

• Aksharchem: BNP Paribas Arbitrage sold 43,448 shares or 0.5 percent equity at Rs 500.14 each.
• PC Jeweller: Well Management sold 37.45 lakh shares or 0.9 percent equity at Rs 85.43 each.

• TCNS Clothing Co. IPO at Rs 714-716 a share opens; close on July 20. (More details here)
• HDFC AMC IPO price band set at Rs 1,095-1,100 per share; offer ope July 25, close July 27.

Zee Entertainment (Q1, YoY)

• Revenue up 15 percent at Rs 1,772 crore.
• Net profit up 31.5 percent at Rs 326 crore.
• Ebitda up 17 percent at Rs 565.6 crore.
• Margin at 31.9 percent versus 31.4 percent.

Also Read: Q1 Results: Zee Entertainment Profit Matches Analyst Estimates In June Quarter

Rallis India (Q1, YoY)

• Revenue up 30 percent at Rs 573 crore.
• Net profit up 22 percent at Rs 55 crore.
• Ebitda up 22 percent at Rs 83.5 crore.
• Margin at 14.6 percent versus 15.5 percent.

Nucleus Software Exports (Q1, QoQ)

• Revenue up 2 percent at Rs 113 crore.
• Net profit up 3.5 percent at Rs 17.6 crore.
• Ebit up 21 percent at Rs 17 crore.
• Margin at 15 percent versus 12.6 percent.

Sintex Industries (Q1, YoY)

• Revenue up 34 percent at Rs 925 crore.
• Net profit up 11 percent at Rs 39 crore.
• Ebitda up 43 percent at Rs 110 crore.
• Margin at 11.9 percent versus 11.2 percent.

5Paisa Capital (Q1, YoY)

• Revenue up 4.1 times at Rs 9.1 crore.
• Net loss of Rs 5.6 crore versus net loss of Rs 6.2 crore.
• Ebitda loss of Rs 6.7 crore versus a loss of Rs 6.9 crore.

Crisil (Q1, YoY)

• Revenue up 7 percent at Rs 436 crore.
• Net profit up 15 percent at Rs 77 crore.
• Ebitda up 5 percent at Rs 108 crore.
• Margin at 24.8 percent versus 25.2 percent.

Jindal Stainless (Q1, YoY)

• Revenue up 56 percent at Rs 3,147 crore.
• Net profit at Rs 91 crore versus Rs 41.5 crore.
• Ebitda up 50 percent at Rs 375 crore.
• Margin at 11.9 percent versus 12.4 percent.

Tata Sponge Iron (Q1, YoY)

• Revenue up 49.1 percent at Rs 260.9 crore.
• Net profit at Rs 45.6 crore versus Rs 30.6 crore.
• Ebitda up at Rs 60.2 crore versus Rs 38.7 crore.
• Margin at 23.1 percent versus 22.1 percent.

8K Miles Software Services (FY18 versus FY17)

• Revenue up 61 percent at Rs 849 crore.
• Net profit up 64 percent to Rs 172 crore.
• EBIT up 56 percent to Rs 267 crore.
• Margin at 31.5 percent versus 32.4 percent.

Nifty Earnings To Watch

• Ultratech Cement

Other Earnings To Watch

• Bandhan Bank
• GHCL
• JK Tyre
• JM Financial
• Mahindra CIE Automotive
• Mastek
• Mindtree
• NIIT Tech
• Reliance Communications
• Sasken Technologies

• IDBI Bank board seek government’s view on LIC’s proposal to buy 51 percent stake.
• HDFC Bank to allot 3.9 crore shares to parent HDFC at Rs 2174.09 per share.
• PNC Infratech bagged order worth Rs 1,157 crore for highway project in Karnataka.
• 5Paisa Capital board approved 1:1 rights issues at Rs 80 per share.
• Kridhan Infra JV won Rs 222.6 crore order for highway project.
• Tejas Networks implements 100G DWDM network for MCM Telecom in Mexico.
• Rolta India signed pact to implement revised restructuring of bonds.
• Kansai Nerolac completed acquisition of 55 percent stake in RAK Paints Bangladesh for Rs 41.5 crore.
• Allahabad Bank, Andhra Bank, Corporation Bank, PNB, IOB in focus as government may infuse Rs 11,396 crore in five state-owned banks, says government official. The capital will be used by banks to pay interest due on AT1 bonds.

• Six controversial bills up for discussion in the Monsoon session.
• Commercial courts and the ease of deciding cases.
• Vicious farm cycle: can’t repay loans, don’t get crop insurance cover.
• U.S. to make more drugs easily available, cutting role docs play.
• Bitcoin surges after breaking back through $7,000 level.
• Goldman Sachs ushers in new era as Solomon takes CEO reins.
• Ex-Googler set to join China's top 25 richest with tech IPO.
• The secret rooms hotels don’t tell you about.
• Tokyo wants people to go to work earlier to ease train crush.
• A guide to the key players in Pakistan’s coming election.
• Mckesson, cardinal health must face New York Opioid suits.
• Trump retreats and says he accepts U.S. Finding Russia meddled.
• Reliance Jio tops 4G download speed in May; Idea’s upload rate is the highest.
• Amazon recovers from Prime Day stumble with soaring sales.
• Trump or cheap Iran oil: Dilemma facing fastest growing oil user.

Here are some key events coming up this week:

• Monsoon Session of Parliament will begin today
• Earnings season continues, with reports due from companies including: Morgan Stanley, American Express, Microsoft, Taiwan Semiconductor Manufacturing, Unilever and IBM.
• Euro-zone inflation data for June is expected on Wednesday to show the annual rate inched higher to 2 percent.

• West Texas Intermediate crude fell 0.4 percent to $67.78 a barrel.
• Brent crude traded 0.5 percent lower at $71.79 per barrel.
• Gold was little changed at $1,227.64 an ounce. Earlier it fell more than 1 percent.

Shanghai Exchange

• Steel snapped two-day losing streak; up 0.4 percent.
• Aluminium traded flat.
• Zinc snapped six-day losing streak; up 0.5 percent.
• Copper traded lower for second day; down 0.5 percent.
• Rubber traded higher for second day; up 0.2 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.3 percent higher at 11,059 as of 8 a.m.

Asian stocks advanced after an upbeat assessment on the U.S. economy from Federal Reserve Chairman Jerome Powell comforted investors wary of a blowout in protectionism. Equities climbed in Japan, Australia and South Korea at the open, while futures signaled a firmer start in Hong Kong.