Sensex, Nifty End At Record Highs On Earnings Optimism

The ministry of finance and and power are discussing a plan to sell government’s stake in hydro-power producer NHPC Ltd. to its state-run peer NTPC Ltd., the nation’s biggest electricity generator by capacity, Bloomberg reported, quoting people familiar with the matter.

Indian equity benchmarks rose for a third day in a row to close at record highs as investors expect Indian companies to perform well in the June quarter.

The S&P BSE Sensex rose 0.3 percent or 106 points to 36,825 and the NSE Nifty 50 index climbed 0.45 percent or 50 points to 11,134.

Sensex and Nifty hit fresh highs on earnings optimism, AK Prabhakar, head of research at IDBI Capital, told BloombergQuint over phone.

For instance, ACC surprised positively after its June quarter numbers, which showed there was no margin pressure, he said.

Eight out of 11 sector gauges compiled by National Stock Exchange ended higher led by the Nifty Metal index’s 3 percent gain. On the flipside, Nifty Private Bank index was top loser, down 0.3 percent.

Mid- and small-cap shares outperformed larger peers as the Nifty Midcap 100 index surged 1.3 percent and the Nifty Smallcap 100 index rallied 2.3 percent.

• L&T Technology Services: The Vadodara-based engineering services provider rose as much as 13.80 percent, the most in over five months, to Rs 1,488.05 after it reported better than expected June quarter earnings.
• IZMO: The automotive e-retailing solutions provider rose as much as 8.1 percent to Rs 74.40 after it bagged a multi-crore order from a leading original equipment manufacturer in Mexico for its car visualiser product, according to its regulatory filing.
• Idea Cellular: The Kumar Mangalam Birla-led company surged as much as 18 percent to Rs 62 after Vodafone and Idea Cellular have deposited Rs 7,200 crore in cash and bank guarantee with telecom department for one-time spectrum charge and spectrum liberalisation charges, Business Standard newspaper reported citing a source in Department of Telecom.
• India Cements: The Chennai-based cement maker rose as much as 10 percent following a rally in cement stocks after ACC earnings.

• India's S&P BSE Sensex which briefly dipped into the negative territory resumed rally to record run led by Larsen & Toubro, Infosys, HDFC and Maruti Suzuki.
• The S&P BSE Sensex rose 0.4 percent or 134 points to 36,850 and the NSE Nifty 50 index climbed 0.5 percent or 51 points to 11,136.
• Eight out of 11 sector gauges compiled by National Stock Exchange were trading higher led by the Nifty Metal index's 3.2 percent gain. On the other hand, the Nifty Private Bank index was top loser, down 0.3 percent.
• The overall breadth was extremely positive as 1,406 shares were advancing while 694 were declining on the BSE.

Shares of the Mumbai-based chemical maker fell as much as 6.7 percent to Rs 1,351 after its profit declined in June quarter.

Key earnings highlights:

• Net profit at Rs 31.3 crore versus 33.2 crore
• Revenue at Rs 258 crore versus Rs 298 crore

Minister of State for Finance gave a detailed exposure of public sector banks to the Nirav Modi scam said.

MoS Finance To Parliament (Based On RBI's Inputs)

• PNB: Rs 6,820 crore
• Syndicate Bank: Rs 125 crore
• Corporation Bank: Rs 110 crore
• OBC: Rs 94 crore
• UCO Bank: Rs 60.75 crore
• Andhra Bank: Rs 29.84 crore
• United Bank of India: Rs 18.54 crore

Maker of Magic Moments Vodka, 8 PM Whisky, Morpheus Brandy and Contessa Rum told BloombergQuint that it expects sales volumes to grow in double digits going forward.

Below are the highlights of Dilip Banthiya, CFO of Radico Khaitan’s conversation:

• Performed well across all categories
• 30 percent plus growth coming from premium segment which contains brands like Magic Moment, Morpheus
• 14 percent growth coming from popular segment which has brands like 8PM whiskey
• Magic Moment vodka has 50 percent plus market share across the country
• Morpheus brandy also growing at a good pace
• 1965 Rum launched in defence segment
• Launched 8PM black whiskey in UP
• Gained market share in whiskey, vodka and brandy segment
• Flagship Contessa rum has done well
• Continuous cost optimisation improving profit margin

Shares of the Delhi-based ceramic tile maker rose 2.4 percent to Rs 430 after it reported June quarter earnings.

Key earnings highlights:

• Net profit down 7.2 percent at Rs 45.37 crore versus estimate of Rs 53.5 crore.
• Revenue down 6 percent at Rs 657 crore versus estimate of Rs 667 crore.
• Margin at 14.7 percent versus 16.6 percent (YoY)
• EBITDA up 7 percent At Rs 96.7 crore versus Rs 104.2 crore (YoY)

Shares of the Delhi-based liquor maker rose as much as 4.35 percent to Rs 379 after its profit nearly doubled in April-June quarter.

Key earnings highlights:

• Revenue rose 25 percent to Rs 516 crore versus 416 crore (YoY)
• Net profit rose 84 percent to Rs 47.37 crore versus Rs 25.68 crore (YoY)
• Margin at 18 percent versus 16.1 percent (YoY)
• Ebitda up 40 percent at Rs 93.7 crore versus Rs 67 crore (YoY)

Shares of the Noida-based website operator rose as much as 5.5 percent to 1,415 after it reported June quarter earnings.

Key earnings highlights:

• Margin at 32.5 percent versus 31.6 percent (YoY)
• EBITDA down 20 percent at Rs 84.3 crore versus Rs 70.3 crore (YoY)
• One-time loss at Rs 16 crore
• Revenue at Rs 259.5 crore versus Rs 222.4 crore (YoY)
• Net profit down 2 percent at Rs 63 crore versus Rs 64.2 crore (YoY)

India's S&P BSE Sensex came off record highs as heavyweights like Kotak Mahindra Bank, TCS and Reliance Industries came under selling pressure.

The S&P BSE Sensex was little changed at 36,745 and the NSE Nifty 50 index rose 0.1 percent to 11,103.

Shares of the Delhi-based fertiliser maker rose as much as 3.8 percent to Rs 150.05 after it reported April-June quarter earnings.

Key earnings highlights:

• Net profit at Rs 155 crore versus Rs 140 crore (YoY)
• Revenue at Rs 2,190 crore versus Rs 1,970 crore (YoY)
• Margin at 10.5 percent versus 9.6 percent (YoY)
• Ebitda up 21.8 percent at Rs 229.2 crore versus Rs 188.2 crore (YoY)

ICICI Bank intervened in Daiichi versus Singh brothers matter in Delhi High Court and claimed Rs 250 crore dues from Malvinder and Shivender Singh.

Earlier Yes Bank and Axis Bank had also intervened in the case.

After this development, ICICI Bank shares were trading in a narrow range while Fortis Healthcare fell 0.4 percent to Rs 132.35.

Shares of the cement manufacturers were rallying in trade today after ACC reported strong set of April-June quarter earnings.

• TI Financial Holdings: The Chennai-based metal products holding company fell as much as 1.9 percent to Rs 608.05. Trading volume was 19.1 times its 20-day average.
• Gulf Oil Lubricants: The lubricating oil maker fell as much as 0.86 percent to Rs 855.35. Trading volume was 10.1 times its 20-day average.
• Birla Corp: The Kolkata-based cement manufacturer rose as much as 11 percent to Rs 770.95. Trading volume was 17.4 times its 20-day average.
• L&T Finance Holdings: The Mumbai-based financial services company rose as much as 8.25 percent to Rs 185. Trading volume was 9 times its 20-day average.

Shares of the automotive e-retailing solutions provider rose as much as 8.1 percent to Rs 74.40 apiece.

The company bagged a multi-crore order from a leading original equipment manufacturer in Mexico for its car visualiser product, according to its regulatory filing.

Nifty 11,100 strike price put option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 37 percent to Rs 32.70. Over 19 lakh shares were added to the open interest which stood at over 31.96 lakh shares.

Click here to see the complete options chain

Shares of the Bengaluru-based communications equipment maker rose as much as 10.9 percent to Rs 288.95 after its profit more than doubled in June quarter.

Key earnings highlights:

• Revenue up 16.9 percent at Rs 235.8 crore.
• Net profit at Rs 45 crore versus Rs 20.4 crore.
• Ebitda up 38.9 percent at Rs 62.5 crore.
• Margin at 26.5 percent versus 22.3 percent.

Shares of the Pune-based two-wheeler maker rebounded from two days of losses and rose as much as 1.2 percent to Rs 2,717.

Bajaj Auto shares fell amid investor worries that Bajaj Auto Ltd.’s push to gain a bigger slice of the low-cost market will increase competition and hurt industry margins.

Shares of the Vadodara-based engineering services provider rose as much as 13.80 percent, the most in over five months, to Rs 1,488.05 after it reported June quarter earnings.

Key earnings highlights:

• Revenues up 40 percent at Rs 1,152 crore versus Rs 823 crore
• Net profit up 101.5 percent at Rs 197.5 crore versus Rs 98 crore
• Ebitda up 56 percent at Rs 195.5 crore versus Rs 125.5 crore
• Margins at 17 percent versus 15.2 percent

Shares of the textile manufacturer were locked in a five percent upper circuit at Rs 30.55 after a bulk deal in the previous session.

IFCI sold 4.3 lakh shares or 0.52 percent equity at Rs 29.1 each.

Shares of the Kumar Mangalam Birla-led company surged as much as 7.4 percent to Rs 56.45 on getting a step closer to merger according to a report.

Vodafone and Idea Cellular have deposited Rs 7,200 crore in cash and bank guarantee with telecom department for one-time spectrum charge and spectrum liberalisation charges, Business Standard newspaper reported citing a source in Department of Telecom.

With the financial dues out of the way, the merger of Vodafone and Idea Cellular is likely to be approved in the next few days, the report added.

India's S&P BSE Sensex extended record run while the NSE Nifty 50 index was 40 points away from its record high of 11,171.55 hit on Jan. 29.

The gains in today's session were led by Maruti Suzuki, ITC, Infosys and Vedanta.

Meanwhile, the overall market breadth was extremely positive as 1,130 shares were advancing compared with over 330 stocks declining on the NSE.

Shares of the Mumbai-based paint manufacturer fluctuated between gains and losses to trade 0.9 percent higher at Rs 1,446.95 as of 9:20 a.m. ahead of its quarterly results announcement.

Here’s what analysts polled by Bloomberg expect Asian Paints to report in June quarter:

• Revenues seen up 10.4 percent at Rs 4,433.5 crore versus Rs 4,015 crore (YoY)
• EBITDA seen down 5 percent at Rs 823 crore versus Rs 865.5 crore (YoY)
• Margins seen at 18.6 percent versus 21.6 percent (YoY)
• Net profit seen up 21 percent at Rs 517 crore versus Rs 427 crore (YoY)

Shares of the Delhi-based state-run lender rose as much as 1.1 percent to Rs 79.80. The fraud-hit bank received Rs 2,816 crore capital infusion from the Indian government, according to its stock exchange notification.

The stock declined 53.9 percent so far this year compared a 15.2 percent advance in the Sensex.

Shares of the Mumbai-based cement manufacturer rallied as much as 12.5 percent, the most in over nine years, to Rs 1,475 after its profit beat Bloomberg consensus estimates in April-June quarter.

ACC's net profit rose 1 percent to Rs 325.5 crore compared with Bloomberg estimate of Rs 239 crore on revenue of Rs 3,848 crore.

Meanwhile, brokerages have maintained their stance on the stock. Here is what brokerages made of ACC’s earnings:

Macquarie

• Maintained ‘Neutral’ with a target price of Rs 1,640.
• Strong quarter but, remain cautious.
• ACC should start underperforming on volume growth in absence of capacity additions.
• Valuations have corrected, but triggers for a re-rating are lacking.
• Expect costs to ease in coming quarters.

CLSA

• Maintained ‘Buy’; cut target price to Rs 1,900 from Rs 2,150.
• June quarter was strong with Ebitda and net profit ahead of estimates.
• Surprisingly strong realisations and modest cost inflation.
• Cut earnings estimates by 10-12 percent as lower realisations expected in second half of 2018 and 2019.

JPMorgan

• Maintained ‘Neutral’; cut target price to Rs 1,500 from Rs 1,680.
• Adjusted Ebitda a big beat driven by realisation and cost controls.
• Delivered meaningful improvement in operating trends over the last six quarters.
• ACC’s valuation is cheap, and earnings surprise could drive a sharp rally.
• Clarity on new capacity expansion/M&A will be key.

Morgan Stanley

• Maintained ‘Overweight’ with a target price of Rs 1,887.
• Earnings surprise led by better realisation owing to geography and mix channel.
• Expect margin expansion to drive earnings as utilisation and volume growth at peak.
• Expect freight cost to remain stable at these levels in ensuing quarters.

India's S&P BSE Sensex extended its record-breaking run led by HDFC twins, Maruti Suzuki and Larsen & Toubro.

The S&P BSE Sensex rose as much as 0.41 percent or 150.74 points to 36,869 and the NSE Nifty 50 index climbed 0.3 percent or 32 points to 11,117.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Basic Materials index's 2 percent gain.

The mid- and small-cap shares were outperforming their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes rose 0.6 percent each.

The rupee weakened by 15 paise to 69.01 against the US dollar today, hurt by fresh demand for the American currency from importers.

Traders said besides fresh demand of the US currency from importers, dollar's firmness against some currencies overseas weighed on the domestic unit. However, a higher opening of the stock market capped the rupee's fall.

The local currency had lost 2 paise at 68.86 against the US currency on stray dollar demand from importers.

Source: Press Trust of India

CLSA on L&T Tech

• Maintained ‘Buy’ with a target price of Rs 1,750.
• June quarter witnessed a stellar revenue growth but margin miss.
• Large deals ramping up, pipeline healthy and client mining strong.
• Secular growth and cyclical recovery story intact.

CLSA on ICICI Securities

• Maintained ‘Buy’; cut target price to Rs 480 from Rs 520.
• June quarter’s profits tad below estimates.
• Slower growth in broking revenues offset by healthy growth in distribution/corporate finance.
• Lower participation from retail clients was the key drag.
• Uptick in retail trading volumes will be key to profitability.

Brokerages On United Spirits

Emkay

• Maintained ‘Reduce’ with a target price of Rs 600.
• June quarter’s results reported disappointing numbers
• Overall volume grew by 1 percent compared to our expectations of above 14 percent.
• Gross margin improved by due to price hikes in key states and better product mix.

Macquarie

• Maintained ‘Underperform’ with a target price of Rs 443.
• June quarter’s adjusted net profit below estimates because of higher Ad and other spends.
• Volume growth in-line with our estimates.
• Expect advertisement spend to remain high on higher competitive intensity.
• Expect significant downgrades to consensus.

Morgan Stanley

• Maintained ‘Equal-weight’ with a target price of Rs 650.
• Weak volume growth and sharp increase in costs affected June quarter’s margins.
• See low visibility on earnings growth, especially after weak June quarter.
• Stock to trade lower on continuing overhang of GST uncertainty.

Brokerages On Hindustan Zinc

Macquarie

• Downgraded to ‘Neutral’ from ‘Outperform’; cut target price to Rs 276 from Rs 316.
• Adjusted June quarter’s Ebitda was in-line on the back of strong prices.
• With upcoming mine supply, zinc prices to remain under pressure.
• Expect inconsistent dividend payout, price headwinds and back-ended volume growth.
• Premium valuation difficult to justify.

Credit Suisse

• Maintained ‘Neutral’; cut target price to Rs 295 from Rs 325.
• June quarter’s Ebitda missed on the back of lower volumes and long-term wage settlement.
• Below EBITDA, lower-than expected other income led to net profit miss.
• Cut FY19 volumes and increase costs to incorporate higher coal costs and wages.

Who’s Meeting Whom

• VRL Logistics to meet Five Rivers Portfolio Management on July 24.
• MCX to meet Julius Baer Wealth Advisors on July 24.

Insider Trades

• IDFC Bank promoter IDFC Financial Holding Company acquired 48 lakh shares from July 17-19.
• Asian Granito India promoter sold 6,300 shares from July 17-20.

(As reported on July 23)

Bulk Deals

• JBF Industries: IFCI sold 4.3 lakh shares or 0.52 percent equity at Rs 29.1 each.
• Rajratan Global Wire: Renaissance Advanced Consultancy sold 37,100 shares (0.85 percent) at Rs 745.14 each.

Trading Tweaks

• Indo Amines and Adani Green Energy circuit filter revised to 10 percent.
• Polaris Consulting last trading day before delisting.

F&O Cues

• Nifty July futures ended at 11,099.4, with a premium of 14.7 points.
• Across series: Nifty open interest (OI) up 2 percent; Bank Nifty open interest down 6 percent.
• Rollover: Nifty at 21 percent, Bank Nifty at 14 percent.
• India VIX ended at 13, down 4 percent.
• Max open interest for July series at 11,100 strike price call (open interest at 34.1 lakh, down 10 percent)
• Max open interest for July series put shifts to 11,000 strike price put from 10,800 (open interest at 57.6 lakh, up 21 percent)

• Asian Paints
• Century Plyboards
• Chambal Fertilisers
• Glaxosmithkline Pharmaceuticals
• Hexaware Technologies
• ICICI Prudential Life Insurance
• Info Edge India
• Inox Leisure
• Kajaria Ceramics
• KRBL
• Music Broadcast
• Network18 Media
• Radico Khaitan
• Power Grid Finance Corp.
• Symphony
• Teamlease Services
• TV18 Broadcast

Earnings Reaction To Watch

ACC (Q1, YoY)

• Revenue up 11.5 percent at Rs 3,848.3 crore.
• Net profit up 1.1 percent at Rs 325.5 crore.
• Ebitda down1.8 percent at Rs 623.9 crore.
• Margin at 16.2 percent versus 18.4 percent.

Also Read: Q2 Results: ACC’s June Quarter Profit Beats Estimate On Higher Volumes

L&T Technology Services (Q1, QoQ)

• Revenue up 9.2 percent at Rs 1,152.2 crore.
• Net profit up 24.4 percent at Rs 197.5 crore.
• Ebit up 43.8 percent at Rs 169.7 crore.
• Margin at 14.7 percent versus 11.2 percent.

Alicon Castalloy (Q1, YoY)

• Revenue up 50.4 percent at Rs 296.7 crore.
• Net profit at Rs 12.3 crore versus Rs 6.1 crore.
• Ebitda up 56.2 percent at Rs 32.5 crore.
• Margin at 11 percent versus 10.5 percent.

Tejas Networks (Q1, QoQ)

• Revenue up 16.9 percent at Rs 235.8 crore.
• Net profit at Rs 45 crore versus Rs 20.4 crore.
• Ebitda up 38.9 percent at Rs 62.5 crore.
• Margin at 26.5 percent versus 22.3 percent.

V-Mart Retail (Q1, YoY)

• Revenue up 14.6 percent at Rs 361.2 crore.
• Net profit up 11.2 percent at Rs 24.9 crore.
• Ebitda up 16.4 percent at Rs 43.2 crore.
• Margin at 12 percent versus 11.7 percent.

Balaji Amines (Q1, YoY)

• Revenue up 30 percent at Rs 260.2 crore.
• Net profit up 48.2 percent at Rs 33.8 crore.
• Ebitda up 44.6 percent at Rs 58.7 crore.
• Margin at 22.6 percent versus 20.3 percent.

Indiabulls Ventures (Q1, YoY)

• Revenue up 118.9 percent at Rs 344.6 crore.
• Net profit up 94.9 percent at Rs 87.7 crore.
• Ebitda at Rs 212.7 crore.
• Margin at 61.7 percent versus 48 percent.

Linde (Q1, YoY)

• Revenue up 11.5 percent at Rs 549.6 crore.
• Net profit at Rs 5.2 crore versus net loss at Rs 2.2 crore.
• Ebitda up 7.7 percent at Rs 85.4 crore.
• Margin at 15.5 percent versus 16.1 percent.

L&T Infotech (Q1, QoQ)

• Revenue up 7.7 percent at Rs 2,155.7 crore.
• Net profit up 24.8 percent at Rs 361.3 crore.
• EBIT up 49 percent at Rs 381.4 crore.
• Margin at 17.7 percent versus 12.8 percent.

Delta Corp (Q1, YoY)

• Revenue up 45.6 percent at Rs 187.3 crore.
• Net profit up 85.7 percent at Rs 41.4 crore.
• Ebitda up 44.6 percent at Rs 65.5 crore.
• Margin at 35 percent versus 35.2 percent.

Granules India (Q1, YoY)

• Revenue up 20.1 percent at Rs 453.2 crore.
• Net profit up 40.8 percent at Rs 51.8 crore.
• Ebitda down 4.6 percent at Rs 72.5 crore.
• Margin at 16 percent versus 20.1 percent.

ICICI Securities (Q1, YoY)

• Revenue up 8.6 percent at Rs 435.9 crore.
• Net profit up 13 percent at Rs 133.8 crore.

United Spirits (Q1, YoY)

• Revenue up 13 percent at Rs 2,012 crore.
• Net profit up 29 percent at Rs 81.3 crore.
• Ebitda up 23 percent at Rs 193 crore.
• Margin at 9.6 percent versus 8.8 percent.

Rane Engine Valve (Q1, YoY)

• Revenue up 15.88 percent at Rs 102.5 crore.
• Net loss at Rs 4.4 crore versus net loss at Rs 2.7 crore.
• Ebitda at Rs 2.8 crore versus Rs 4.1 crore.
• Margin at 2.7 percent versus 4.6 percent.

• Syngene International extended R&D Agreement with Baxter Healthcare till 2024.
• IZMO bagged multi-crore order from a leading OEM in Mexico for its car visualizer product.
• PNB received Rs 2,816 crore capital infusion from Indian government.
• Allahabad Bank received Rs 1,790 crore capital infusion from Indian government.
• Fitch revised UPL outlook from stable to negative.
• Essel Propack started first phase of commercial production of laminated tubes in Assam.
• Indian Energy Exchange to consider stock-split on Aug. 9.
• Vedanta: Ground water around the company’s copper plant contaminated (Bloomberg)

• Inter-creditor agreements to focus on mid-sized accounts for resolution
• Barclays considers a return to consumer banking in India
• RCom gets temporary reprieve from telecom tribunal
• Government sets up committee to curb mob violence, lynching
• Oil demand outlook clouded by emerging economies’ currency pain
• Beware WhatsApp group administrators, or you could end up in jail
• Bad news for iPhone fans
• Trump attacks Jeff Bezos and Washington Post
• How James Bond’s legacy is saving Jamaica

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 11,094 as of 7:27 a.m.

Asian stocks climbed Tuesday as rising yields boost financial shares. The yuan tumbled to the lowest against the dollar in about a year on further signs of a shift by China toward monetary expansion.

Equity benchmarks in Tokyo, Sydney, Hong Kong and China advanced. Financial stocks as a group were among the biggest gainers on the MSCI Asia Pacific Index.

Currencies

• The Japanese yen rose 0.2 percent to 111.17 per dollar.
• The offshore yuan fell 0.5 percent to 6.8398 per dollar.
• The euro traded at $1.1693.
• Bloomberg Dollar Spot Index was steady.

Commodities

• West Texas Intermediate crude lost 0.3 percent to $67.71 a barrel.
• Gold fell 0.2 percent to $1,221.86 an ounce.

Here are some key events coming up this week:

• Earnings season continues with the following tech companies among those reporting: Facebook, AT&T, Amazon.com, Twitter, Advanced Micro Devices, Qualcomm and Intel. They are joined by global financial giants Deutsche Bank, UBS, Nomura and Visa. Others include Halliburton, Michelin, Boeing, Lockheed, Nissan and Shell.
• Pakistan holds national elections Wednesday.
• European Central Bank’s policy decision Thursday.
• U.S. gross domestic product probably increased by about 4 percent at an annualized rate in the second quarter, the most since 2014, economists forecast ahead of Friday’s data.