Sensex, Nifty Log Weekly Losses As PM Modi Faces Trust Vote

Indian equity benchmarks registered losses this week as Prime Minister Narendra Modi faced a no-trust vote.

The S&P BSE Sensex Index ended 0.1 percent lower this week to close at 36,496.37 and the NSE Nifty 50 Index ended above 11,000.

The market breadth was tilted in favour of sellers. Nine out of 11 sectoral gauges compiled by NSE advanced today, led by NSE Nifty Pharma Index's 1.7 percent gain. On the flipside, NSE Nifty Media Index was the top sectoral loser, down 0.5 percent.

Shares of the media company rose as much as 20 percent, the most in nearly 26 months to Rs 27.90, after the company's June quarter profit rose on exceptional gains.

Key earnings highlights (Q1, YoY):

• Net profit at Rs 35 crore versus Rs 5.2 crore.
• Revenue up 35 percent at Rs 154.7 crore.
• Ebitda up 43.3 percent at Rs 35.8 crore.
• Margin at 231 percent versus 21.8 percent.
• One-time gain of Rs 41.2 crore.

Key highlights from the conversation:

• Expect to close the European transaction by august.
• European acquisition order is EPS accretive.
• European market continues to show robust growth.
• Expect to expand capacity utilisation of European acquisition to 100 percent.
• Execution of the order will happen over the next two years.
• Expect formal purchase order within the next 1-2 months.
• Need to complete certain formalities before formalising the navy order.
• Focus on growing Ebitda; margin is a derived number.

Shares of the paint manufacturer fell as much as 3.3 percent to Rs 464.05, after announcing its June quarter results.

Key earnings highlights (Q1, YoY):

• Revenue up 17 percent at Rs 1376 crore.
• Net profit down 0.7 percent at Rs 140 crore.
• Ebitda up 6 percent at Rs 220 crore.
• Margins at 16 percent versus 17.6 percent.

Shares of the tyre manufacturer rose as much as 9 percent, the most since June 2017, to Rs 1,345. The company net profit and revenue surpassed analysts estimates during the quarter ended June.

Key earnings highlights (Q1, YoY):

• Net profit at Rs 72 crore versus Rs 1.6 crore.
• Revenue up 17 percent at Rs 1,706 crore.

European equities opened lower, following yesterday’s drop in U.S. stocks, amid concerns that President Donald Trump’s criticism of U.S. Federal Reserve policy could speed up interest-rate increases.

Shares of the insurance services provider rose as much as 2 percent to Rs 479.05 after the company reported its quarterly earnings for April-June period.

Key earnings highlights (Q1, YoY):

• Net profit at Rs 380 crore versus Rs 316 crore.
• Net premium at Rs 5,001 crore versus Rs 3,661.5 crore.
• Income form investment at Rs 1,796.7 crore versus Rs 2,772 crore.
• Solvency ratio at 1.97 times versus 1.98 times.
• Value of new business margin at 24.2 percent versus 20.5 percent.

Rakesh Jhunjhunwala and Ashish Kacholia sold stakes in their favourite stocks in the three months to June As companies report earnings for the quarter, click here to find out what India’s well-known investors, including Dolly Khanna, Porinju Veliyath and Vijay Kedia, bought and sold during the period.

Shares of the non-banking financial company fell as much as 11.3 percent to trade over a two-year low at Rs 52.10.

The stock fell 46.3 percent so far this year, compared to a 8.2 percent advance in the Sensex.

Shares of the two-and-three-wheeler maker fell as much as 5.6 percent, the most in over five months to Rs 3,020 after its June quarter's profit missed estimate.

Key Earnings Highlights (Q1, YoY):

• Net profit up 20.7 percent at Rs 1,115 crore (Bloomberg estimate stood at Rs 1,250 crore).
• Revenue up 36.3 percent at Rs 7,419.3 crore.
• Ebitda up 36.5 precent at Rs 1,281.3 crore.
• Margin at 17.3 percent versus 17.2 poercent.

The bench of three judges at Supreme Court, today, adjourned the hearing of cryptocurrency case to Sept. 11, Bloomberg reported.

Shares of the Mukesh Ambani-led firm rose as much as 2.3 percent to hit a new all-time high at Rs 1,130.

ABB India (Q2, YoY):

• Stock fell as much as 1.8 percent to Rs 1,137.
• Revenue up 21.5 percent at Rs 2,712.7 crore.
• Net profit up 36.1 percent at Rs 102.2 crore.
• Ebitda up 33 percent at Rs 195.9 crore.
• Margin at 7.2 percent versus 6.6 percent.

Shree Digvijay Cement (Q1, YoY):

• Stock fell as much as 4.9 percent to Rs 24.95.
• Revenue up 23.3 percent at Rs 117 crore.
• Net profit at Rs 6 crore versus Rs 1.5 crore.
• Ebitda at Rs 14.7 crore versus Rs 9.7 crore.
• Margin at 12.6 percent versus 10.2 percent.

Hatsun Agro Product (Q1, YoY):

• Stock rose as much as 3.9 percent to Rs 655.85.
• Revenue up 6 percent at Rs 1,235.7 crore.
• Net profit up 7.7 percent at Rs 37.9 crore.
• Ebitda up 18.9 percent at Rs 122.8 crore.
• Margin at 9.9 percent versus 8.9 percent.

Sagar Cements (Q1, YoY):

• Stock fell as much as 7.9 percent to Rs 733.60.
• Revenue up 6.2 percent at Rs 274.9 crore.
• Net profit down at Rs 5.8 crore versus Rs 10 crore.
• Ebitda down 14.4 percent at Rs 36.4 crore.
• Margin at 13.2 percent versus 16.4 percent.

About 48.9 lakh shares of Power Grid Corp changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Parliamentary debate on the no-confidence motion against Modi government begins.

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Shares of Wipro Ltd. halted a nine-day rally, its longest winning streak in two weeks. The stock fell as much as 0.6 percent to Rs 284.20, ahead of its earnings announcement.

The NSE Nifty IT Index resumed rally after a one-day blip. Infosys Ltd. and Tech Mahindra Ltd. led the index.

• Indian equity benchmarks gained after a volatile open.
• The S&P BSE Sensex Index traded 0.5 percent higher at 36,519 as of 10:15 a.m. and the NSE Nifty 50 Index reclaimed 11,000.
• The market breadth, however, was tilted in favour of sellers. About 819 stocks declined and 768 stocks advanced on NSE.

Shares of the construction company pared early losses and rose as much as 2.1 percent to Rs 192.

The company received orders worth Rs 2,759 crore for the development of Purvanchal Expressway in Uttar Pradesh, according to its stock exchange filing.

Trading volume was 6.1 times its 30-day average, according to Bloomberg data. the stock declined 13.4 percent so far this year, compared to a 8 percent advance in the Sensex.

Key highlights from the conversation:

• Growth in Q1 is secular and granular.
• SME lending made a come back after four-five quarters.
• The opportunity landscape in India remains very large.
• The company is better placed with respect to the risk than two-three years ago.
• Risk ratios to continue to fall despite growing balance sheet size.
• Most of the gap due to transition to Ind-AS to be seen in Q1 and Q3.
• NIM could see some compression in Q3 and Q4.
• Don't foresee an interest rate shock.
• The company will share detailed plans for Bajaj Housing Finance by year-end.

Omax Autos Ltd. swung to profit during April-June period, according to its stock exchange notification. However, its shares declined for the sixth consecutive day to trade at Rs 128.35.

Key earnings highlights (Q1, YoY):

• Revenue up 12.9 percent at Rs 277.1 crore.
• Net profit at Rs 0.5 crore versus net loss at Rs 23.2 crore.
• Ebitda at Rs 10.3 crore versus Ebitda loss at Rs 13.6 crore.

Shares of the gold financing company declined for the third consecutive trading session and fell as much as 3.1 percent to Rs 377.05.

About 14 lakh shares changed hands in a block deal on Bombay Stock Exchange, according to Bloomberg data. Buyers and sellers were not known immediately.

Muthoot Finance trades at 8.5 times trailing 12-month earnings per share and 8.7 times its estimates for the coming year, according to Bloomberg data.

Shares of the insurance company rose as much as 2 pecent to Rs 6,424.85. The company reported its quarterly results for April-June period in a regulatory filing.

Key earnings highlights (Q1, YoY):

• Revenue up 16.4 percent at Rs 8,770 crore.
• Net profit up 41.3 percent at Rs 825.8 crore.
• Asset Under Management up 35 percent at Rs 93,314 crore.

The stock returned 21 percent so far this year and gained 35 percent in the past 12 months.

Mizuho Bank expects the Indian rupee to depreciate further before stabilising, its Strategist Tirthankar Patnaik said.

“Global uncertainty and higher crude prices will weigh on the rupee,” Patnaik told BloombergQuint in an interaction, adding that the pressure on the local currency is fairly strong.

“Real effective exchange rate is still around 106-107 and one could expect more rupee depreciation based on that,” he added.

Shares of the drugmaker snapped five-day decline and rose as much as 2.6 percent to Rs 527.70.

The pharmaceutical company received EIR from U.S. FDA for API facility at Karakhadi, Gujarat, according to its stock exchange filing. All plants of the drugmaker are now FDA compliant, the statement added.

Trading volume was 12.1 times its 20-day average, Bloomberg data showed. The stock is 3 percent below the Bloomberg consensus one-year price target.

Indian equity benchmarks fluctuated in the open after gains in Reliance Industries Ltd. and Infosys Ltd. countered losses in HDFC Ltd.

The S&P BSE Sensex Index traded a little changed at 36,341.15 as of 9:18 a.m. and the NSE Nifty 50 Index traded at 10,969.60.

The market breadth was tilted in favour of sellers. Nine out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty PSU Bank Index's 0.6 percent decline. On the flipside, NSE nifty IT Index was the top sectoral gainer, up 0.6 percent.

The Indian rupee hit a new all-time low at 69.12 against the U.S. dollar. The 10-year bond yield opened a little changed at 7.78.

Bond traders in India will be keenly watching the rupee’s movement while an auction of Rs 12,000 crore of sovereign debt will also provide cues for next week.

The big trigger for the day was the sharp depreciation of the rupee in line with weakness in other emerging-market currencies, the report said quoting Edelweiss Securities’ note.

Given the bullish weekly close that spot seems poised for today, there is a real chance of 70.00 being breached. Conversely, a break under the July low allows for an immediate test of 50-DMA support that has held since February, Bloomberg’s Kartik Goyal wrote.

F&O Cues

• Nifty July futures closed trading at 10,973.5, premium of 16.4 points versus a discount of 1.8 points.
• July series: Nifty open interest down 2.5 percent; Bank Nifty open interest down 1.2 percent.
• India VIX ended at 13.5, down 0.6 percent.
• Max open interest for July series at 11,000 Call (open interest at 41.7 lakh, up 25 percent).
• Max open interest for July series at 10,800 Put (open interest at 46.2 lakh, up 6 percent).

F&O Ban

• In ban: Adani Enterprises, Adani Power

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

Put Call Ratio

• Nifty PCR at 1.63 versus 1.65
• Nifty Bank PCR unchanged at 0.85

IDBI Capital on DCB Bank

• Initiated ‘Buy’ with a price target of Rs 210.
• Balance sheet to double in next three years.
• Bulk of branch expansion is behind; Operational leverage to kick-in from 2018-19.
• Robust asset quality to support profitability.
• Loan book and net profit to witness a compounded annual growth rate of 25 percent and 31 percent respectively in the next two years.
• Premium valuation to sustain on improved fundamentals.

BofAML on Marico

• Maintained ‘Buy’; raised price target to Rs 420 from Rs 390.
• Copra prices on a likely cyclical downtrend.
• Expect healthy earnings revival.
• Positives: receding RM pressure, revival in rural demand & market share gains under GST.
• Marico better placed among staple in terms of valuation.

Brokerages On Hindalco

Macquarie on Hindalco

• Maintained ‘Outperform’ with a price target of Rs 305.
• Aleris is a strategic fit for Novelis.
• Deal valuation at 7.1-7.6 times EV/EBITDA CY19 estimate is similar to listed peers.
• Aleris Ebitda to see sharp growth, valuations in line with peers.
• Hindalco's balance sheet can easily digest the deal.

Kotak Securities

• Maintained ‘Buy’ with a price target of Rs 300.
• Bid for Aleris indicates preference to invest in the downstream business.
• Aleris—a growth story, especially of auto-body sheets and aerospace products.
• Aleris is loss making as large investments are yet to contribute to earnings.
• Aleris well positioned to capture growth opportunities.

Brokerages On Kotak Mahindra Bank

CLSA

• Maintained ‘Outperform’; raised price target to Rs 1,480 from Rs 1,360.
• March quarter’s net profit was lower due to lower topline and higher provisions.
• Slower loan repricing drags down NII growth to a multi-quarter low.
• Asset quality is stable but watch out for unsecured lending.
• Mixed performance of subsidiaries.

Credit Suisse

• Maintained ‘Neutral’; raised price target to Rs 1,230 from Rs 1,070.
• June quarter’s net profit miss on slower net interest income growth and treasury losses.
• Loan growth remained healthy led by corporate loans.
• Net interest margins remained under pressure as funding costs increased.
• With healthy capital, growth is likely to remain strong.

Brokerages On Bajaj Finance

Goldman Sachs

• Maintained ‘Buy’; raised price target to Rs 2,777 from Rs 2,548.
• Net profit beat estimates on the back of expansion of margins and lower opex.
• Strong momentum seen in business growth with continued traction in new client acquisition.
• Well positioned to deliver sector leading growth and returns.
• Expect 46 percent compounded annual growth rate in net profit over FY18-21 with best-in-class RoAs.

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 2,800.
• Solid earnings driven by loan growth and opex performance.
• INDAS transition impacts earnings and book value growth.
• Set to deliver another above 30 percent earnings growth for the year.
• Remains top pick in the NBFC space.

Brokerages On RBL Bank

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 500.
• June quarter’s EPS growth broadly inline with estimate.
• Continue to see strong growth and improving profitability.
• Remain equal-weight owing to valuation.
• Key risk is weak retail asset quality.

Kotak Securities

• Maintained ‘Sell’; raised price target to Rs 475 from Rs 450.
• Business in top gear; Trends maintained on all metrics.
• Building a solid retail business but skewed towards unsecured business.
• Business growth has tailwinds even as we see headwinds to valuation.
• Marginally revised estimates for FY19-21 reflecting better loan growth and NIM.

• GM Breweries, TV Vision and Dolat Investments placed under ASM framework.

• TCNS IPO subscribed 2.01 times on second day of bidding.
• Fosun is said to consider $500 million India IPO of Gland Pharma.

Nifty Earnings To Watch

• Bajaj Auto
• Wipro

Other Earnings To Watch

• Atul
• Bata India
• Ceat
• Havells India
• HDFC Standard Life Insurance
• Kansai Nerolac Paints
• L&T Finance Holdings
• MCX
• Zee Media Corporation

Earnings Reaction To Watch

Bajaj Finserv (Q1, YoY)

• Revenue up 16.4 percent at Rs 8,770 crore.
• Net profit up 41.3 percent at Rs 825.8 crore.
• Asset Under Management up 35 percent at Rs 93,314 crore.

ABB India (Q2, YoY)

• Revenue up 21.5 percent at Rs 2,712.7 crore.
• Net profit up 36.1 percent at Rs 102.2 crore.
• Ebitda up 33 percent at Rs 195.9 crore.
• Margin at 7.2 percent versus 6.6 percent.

Shree Digvijay Cement (Q1, YoY)

• Revenue up 23.3 percent at Rs 117 crore.
• Net profit at Rs 6 crore versus Rs 1.5 crore.
• Ebitda at Rs 14.7 crore versus Rs 9.7 crore.
• Margin at 12.6 percent versus 10.2 percent.

Omax Autos (Q1, YoY)

• Revenue up 12.9 percent at Rs 277.1 crore.
• Net profit at Rs 0.5 crore versus net loss at Rs 23.2 crore.
• Ebitda at Rs 10.3 crore versus Ebitda loss at Rs 13.6 crore.

Hatsun Agro Product (Q1, YoY)

• Revenue up 6 percent at Rs 1,235.7 crore.
• Net profit up 7.7 percent at Rs 37.9 crore.
• Ebitda up 18.9 percent at Rs 122.8 crore.
• Margin at 9.9 percent versus 8.9 percent.

Sagar Cements (Q1, YoY)

• Revenue up 6.2 percent at Rs 274.9 crore.
• Net profit down at Rs 5.8 crore versus Rs 10 crore.
• Ebitda down 14.4 percent at Rs 36.4 crore.
• Margin at 13.2 percent versus 16.4 percent.

• NCLT approved JSW Steel-Aion resolution plan for Monnet Ispat and Energy; written order is awaited.
• Fortis EGM on Aug 13 to seek shareholders nod for stake sale to IHH Healthcare.
• Alembic Pharma receives EIR from U.S. FDA for API facility at Karakhadi, Gujarat. All plants of the drugmaker are now FDA compliant.
• Andhra Bank clarified that exposure to Sterling group at Rs 1143.85 crore classified as NPA.
• Gujarat Sidhee Cement halted operations of Kiln and upstream equipment in cement factory due to heavy rainfall.
• Hatsun Agro Product proposed to set dairy manufacturing plant in Maharashtra, to be commissioned before Dec 2019.
• Parag Milk Food, Prabhat Dairy: Maharashtra government announced Rs 25 per litre as minimum rate of milk for dairy farmers.
• Reliance Communications to meet bond holders for a proposal relating to restructuring of bonds in London on Aug 10.

The Lok Sabha will debate the no-confidence motion against the Narendra Modi government. While the ruling coalition is expected to easily defeat the motion, the outcome will reveal which group has been more successful in pulling smaller and non-aligned parties into its fold.

• BRICS bank to boost South African loans by as much as $600 million.
• Return of India coalition politics threatens Modi ahead of polls.
• India likely to lose trade dispute with U.S., says Commerce Secretary.
• Who stands where is what the no-confidence vote will reveal.
• Mob Lynchings: WhatsApp at risk of being labelled “Abettor”
• Foreign tech workers face higher hurdles in Visa applications.
• Azim Premji says early investments in disruptive tech has yielded success.
• Copper dips below $6,000 as China sends metals into freefall.
• Comcast drops out of bidding war for Fox to focus on Sky.
• Microsoft sales top estimates with more clients signing up for cloud.
• Trump criticises the Fed, breaking another taboo.
• This man rewrites the genetic code of animals.
• The startup is selling generic Viagra and Rogaine to the Instagram crowd.
• Japan’s $150 chicken skewers are coming to New York City.

• West Texas Intermediate crude rose 0.9 percent to $69.32 a barrel.
• Brent crude traded 0.3 percent higher at $72.79 per barrel.
• Gold fell 0.4 percent to $1,222.75 an ounce, after reaching the weakest level in more than a year.

Shanghai Exchange:

• Steel snapped two-day winning streak; down 0.1 percent.
• Aluminium traded lower; down 0.4 percent.
• Zinc snapped two-day winning streak; down 0.4 percent.
• Copper traded lower; down 1 percent.
• Rubber traded lower for second day; down 0.4 percent.

Good morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 10,976 as of 8:35 a.m.

Stocks dropped in Asian trading after China weakened the yuan’s daily fixing by the most in more than two years. Other Asian currencies also retreated, and oil slumped.