Stocks Radar: Asian Paints, Havells, Jubilant Foodworks, UPL, Wipro
Indian equity benchmarks advanced after the government slashed taxes on a slew of products and Prime Minister Narendra Modi defeated a no-confidence vote in the parliament.
The S&P BSE Sensex gained as much as 0.2 percent to 36,560.74 while the NSE Nifty 50 Index rose as much as 0.4 percent to 11,026.9 as of 10.30 am.
The market breadth was tilted in favour of buyers. Nine of the 11 sectoral gauges compiled by the National Stock Exchange declined, the NSE Nifty Auto Index’s 0.8 percent slump. The NSE Nifty FMCG Index gained the most, up 2.2 percent.
Here Are The Stocks Moving The Market This Morning
UPL Gains On Arysta Buy
Shares of the agrochemical maker gained as much as 7.93 percent to Rs 571 apiece after the company inked a $4.2-billion deal to acquire Arysta LifeScience Inc., a unit of William Ackman-backed Platform Specialty Products Corporation.
The deal will make UPL the world’s fifth-largest crop protection company, according to international research firm CLSA. The buyout will be funded by a combination of newly issued equity and debt. (More details here)
Trading volume was at 12.3 times the 20-day average, according to Bloomberg data.
Wipro Falls To Two-Year Low Even As Earnings Beat Estimates
Shares of the IT company fell as much as 6.94 percent to Rs 270.65 apiece after it missed June quarter margin estimates for some brokerages.
Net profit rose 16.3 percent over the previous quarter to Rs 2,094 crore in the April-June period, according to the company’s exchange filing. That compares with Rs 1,975 crore estimated by analysts tracked by Bloomberg.
- June quarter missed estimates at margin level; revenue at higher end range.
- Struggle in verticals extended from healthcare to manufacturing; BFSI remains strong.
- Expect Wipro to post weakest growth amongst large cap Indian IT names in 2018-19.
- Wipro is cheap; triggers for re-rating remain amiss.
- Maintained ‘Neutral’ with a price target of Rs 300.
- June quarter’s margins and guidance miss expectations.
- Guidance for September quarter suggests flattish growth at midpoint of the range.
- Except for BFSI, none of the other segments provide comfort.
- Maintained ‘Neutral’ with a price target of Rs 260.
Havells Surges On Earnings, Merger Plans
Shares of the electric equipment maker gained as much as 8.7 percent to Rs 595.45 apiece after its first quarter earnings beat analysts’ estimates.
Credit Suisse on Havells
- June quarter was very strong on the back of good revenue growth and margin expansion.
- Main positive was the strong pick-up in switchgears.
- Lloyd growth positive, especially weak air conditioner season.
- Maintained ‘Outperform’; raised price target to Rs 725 from Rs 670.
Besides, the company announced plans to merge all its India-based subsidiaries with itself. The stock gained the most since December 2016, and trades at 56.3 times its 12-month earnings per share.
Consumer, Paint Stocks Rally After GST Cuts
Shares of Asian Paints Ltd., Berger Paints Ltd., Relaxo Footwears, Bata India all climbed to a record after a panel on Saturday reduced goods and services tax on more than 50 products.
The S&P BSE Consumer Durable Index rose 0.7 percent.
IMP Powers Snaps Eight-Day Losing Streak
Shares of the electric equipment maker snapped an eight-day losing streak after they rose nearly 9 percent to Rs 70.80 apiece.
The company, in an exchange filing, announced the commissioning of two small hydro projects in Kargil and Drass under the Prime Minister’s Ladakh Renewable Energy Initiative.
Jubilant Foodworks Swings After Profiteering Report
Shares of the Dominos chain operator in India dropped as much as 7.1 percent to Rs 1,375 apiece before recovering some of the losses.
The company received a report for India’s anti-profiteering body saying it didn’t pass on the benefit of GST cuts to customers. Jubilant believes it passed on the benefit and will represent its case before the body, it said in its exchange filing.
The stock trades at 96.6 times its 12-month earnings per share and was 2.8 percent above the Bloomberg consensus one-year target price.