Sensex, Nifty Extend Record Closing Spree As ICICI Bank, RIL Lead

Indian equity benchmarks extended record closing spree on the back of better-than-expected June quarter earnings from Indian companies.

The S&P BSE Sensex rose 0.42 percent to 37,494.40 and the NSE Nifty 50 index climbed 0.37 to 11,319.55.

Gains in today's session were led by Reliance Industries after it reported strong June quarter earnings while ICICI Bank rose despite a loss as brokerages maintained their buy call on the stock.

Fifteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom index's 2.85 percent gain. On the other hand, the S&P BSE IT index was 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 index rose 0.3 percent and the S&P BSE SmallCap index advanced 0.5 percent.

• Schneider Electric: The Vadodara-based power equipment maker were locked in a 20 percent upper circuit at Rs 107 after it reported profit of Rs 8 crore compared with net loss of Rs 23.5 crore.
• GATI: The Hyderabad-based logistics company rose as much as 19 percent, the most in over three months, to Rs 117 as TVS Logistics in talks to buy controlling stake in GATI for Rs 1,500 crore, The Economic Times reported citing multiple sources close to negotiations.
• Thyrocare: The Mumbai-based diagnostic lab operator rose as much as 6.8 percent, the most in three months, to Rs 630 after it informed exchanges that its board will meet on Aug. 4 to discuss share buyback proposal.
• Canara Bank: The Bengaluru-based government owned bank rose for eighth straight day. In the last eight trading sessions the stock has surged 27 percent.

• SH Kelkar & Company: The Mumbai-based chemical maker rose as much as 1.7 percent at Rs 202.35. Trading volume was 16.7 times its 20-day average.
• KPR Mill: The Coimbatore-based apparel maker rose as much as 3.9 percent to Rs 660. Trading volume was 4.3 times its 20-day average.
• Thyrocare Technologies: The Mumbai-based diagnostic lab operator rose as much as 7.6 percent to Rs 635. Trading volume was 13 times its 20-day average.
• Narayana Hrudalaya: The Bengaluru-based hospital chain operator rose as much as 2.8 percent to Rs 259. Trading volume was 12.4 times its 20-day average.

Shares of the tractor maker snapped its six-day gain streak, its longest in over a year. The stock fell as much as 3.3 percent in today's trade.

The company announced its quarterly results for April-June period.

Key earnings highlights (Q1, YoY):

• Net profit at Rs 120.7 crore versus 62.6 crore.
• Revenue at Rs 1,511.3 crore versus 1,142.3 crore.
• Ebitda up 90.3 percent at Rs 185.4 crore.
• Margin at 12.3 percent versus 8.5 percent.

Shares of housing finance company parred early losses after the company's profit jumped 54 percent during April-June quarter. The stock was trading little changed at Rs 2,048 as of 2:25 p.m.

Key earnings highlights (Q1, YoY):

• Net profit up 53.7 percent at Rs 2,190 crore.
• Revenue up 19.7 percent at Rs 9,883.6 crore.
• NII up 41 percent at Rs 3,531 crore.
• Provisions at Rs 19.7 crore versus Rs 163.6 crore.

Shares of the Mumbai-based active pharmaceutical ingredient maker came off intraday highs and was up 0.6 percent after it reported loss in June quarter.

Key earnings highlights (Q1, YoY):

• Net loss at Rs 64.48 crore versus loss of Rs 78.84 crore.
• Revenue at Rs 16.81 crore versus 23.39 crore.

Shares of the Kolkata-based cement maker rebounded and rose as much as 0.55 percent to Rs 17,181.55, after its profit missed Bloomberg consensus estimates in June quarter.

Key earnings highlights Q1, YoY):

• Margin at 18.7 percent versus 24.7 percent.
• Ebitda down 19.4 percent at Rs 575 crore versus Rs 713.2 crore.
• Net Profit down 36.5 percent at Rs 279.5 crore versus Rs 440 crore.

Shares of the specialty pharma company rose 1 percent to Rs 2,676 after it reported June quarter earnings.

Key earnings highlights:

• Net loss at Rs 68.94 crore versus profit of Rs 302 crore (YoY)
• Revenue at Rs 2,902 crore versus Rs 2,254 crore (YoY)
• One-time loss of Rs 450 crore

• Future Consumer has 20 lakh shares change hands in two blocks. Stock up 1.5 percent at Rs 47.15.

Buyers and sellers were not immediately known

Source: Bloomberg

• Indian equity benchmarks edged higher led by ICICI Bank, State Bank of India and Reliance Industries.
• The S&P BSE Sensex rose 0.3 percent or 104 points to 37,448 and the NSE Nifty 50 index advanced 0.2 percent or 21 points to 11,899.
• Sixteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom index's 1.6 percent gain. On the other hand, the S&P BSE IT index was top loser, down 0.5 percent.
• The overall breadth was positive as 1,540 shares were advancing while 932 were declining on the BSE.

Shares of the Mumbai-based textile maker rose as much as 1.8 percent to Rs 959 after it reported June quarter earnings.

Key earnings highlights:

• Net profit up 35.6 percent at Rs 162.66 crore versus Rs 120.24 crore (YoY)
• Revenue down 6.3 percent at Rs 2,070 crore versus Rs 2,209 crore (YoY)
• Margin at 19.8 percent versus 17.5 percent (YoY)
• Ebitda up 19.4 percent at Rs 434 crore versus Rs 363.7 crore (YoY)

Shares of the Mumbai-based general insurance company rose as much as 8.12 percent to Rs 297 after it reported June quarter earnings.

Key earnings highlights:

• Income from investments at Rs 942.7 crore versus Rs 833.7 crore (YoY)
• Net premium at Rs 5,784.6 crore versus Rs 5,305.7 (YoY)
• Gross NPA at 0.25 percent versus 0.28 percent (QoQ)
• Net profit at Rs 635.2 crore versus Rs 499.4 crore (YoY)

Shares of the Mumbai-based household products maker rose as much as 3 percent after its net profit beat Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Consolidated net profit up 80 percent at Rs 405 crore versus estimate of Rs 295 crore.
• Consolidated revenue up 8 percent at Rs 2,448.52 crore versus estimate of Rs 2,413 crore.
• Ebitda up 27.1 percent at Rs 444 crore
• Ebitda margin at 17.9 percent versus 16.0 percent (YoY)
• Other income Rs 30.95 crore
• Deferred tax gain of Rs 114 crore
• Volume growth at 14 percent
• Company announces bonus issue in ratio of one bonus share for every two shares held
• Declares dividend of Rs 2 per share

Shares of the Hyderabad-based pharmaceutical company rose as much as 2.8 percent to Rs 607.80 after it received U.S. drug regulator's nod to market and manufacture Bivalirudin injection, 250 mg/vial.

The approved abbreviated new drug application (ANDA) is a generic equivalent to the reference listed drug (RLD) product Angiomax injection of The Medicines Company, Aurobindo Pharma said in an exchange filing.

The estimated market size of Bivalirudin injection is $ 101 million for the twelve months ended May 2018 according to IQVIA and will be launched in September this year, the filing added.

Shares of the Mumbai-based drug maker rose as much as 3.2 percent to Rs 836.10 after it received European drug regulator's approval for its Mandideep facility.

Lupin received EDQM Attestation of Inspection from EDQM (European Directorate for the Quality of Medicines) for its Mandideep facility. The unit was inspected by EDQM during March 2018. The inspection was focused on the application for certificate of suitability for the dossier of Cefaclor along with facility inspection for quality management systems based on cGMP as laid under European Union rules governing medicinal products, Lupin said in a press release.

Nifty Bank 27,800 strike price call was among the most active option contracts on the National Stock Exchange.

The premium on the contract rose 9 percent to Rs 101.20. As many as 2.84 lakh shares were added to the open interest which stood at over 5.44 lakh shares.

Click here to see the complete options chain

Shares of the Ahmedabad-based drug maker recovered from intraday low levels and rose as much as 1.6 percent to Rs 379.40 after it received U.S. drug regulator's nod for an erectile dysfunction treatment drug.

Zydus Cadila received U.S. FDA approval to market Vardenafil Hydrochloride Tablets in the strength of 2.5 mg, 5 mg, 10 mg and 20 mg, the company said in an exchange notification.

The drug is an erectile dysfunction agent that works by blocking a certain enzyme (phosphodiesterase—PDES) used to treat erectile dysfunction (impotence). It will be manufactured at the group’s formulations manufacturing facility at SEZ, the notification added.

Shares of the Hyderabad-based logistics company rose as much as 19 percent, the most in over three months, to Rs 117 as TVS Logistics in talks to buy controlling stake in GATI for Rs 1,500 crore, The Economic Times reported citing multiple sources close to negotiations.

TVS Logistics is negotiating to buy the entire promoter holding of around 23 percent. In addition, it will buy out some of the existing public investors such as Goldman Sachs, the report said.

Shares of the Delhi-based women apparel retailer made a subdued listing as it got listed at Rs 715 against its issue price of Rs 716.

The stock swung between gains and losses just after getting listed on exchanges. It rose as much as 1.25 percent to Rs 725 but shortly fell to below issue price to Rs 701.

TCNS Clothing Company raised about Rs 1,125 crore by selling 1.6 crore equity shares at Rs 716 apiece between July 18-20 as promoters pared part of their stake.

Shares of the Mumbai-based textile maker was locked in a 5 percent lower circuit for a second straight day at Rs 30.40.

ECL Finance sold 4.98 lakh shares or 0.6 percent at Rs 32.15 each.

Shares of the Mumbai-based diagnostic lab operator rose as much as 6.8 percent, the most in three months, to Rs 630 after it informed exchanges that its board will meet on Aug. 4 to discuss share buyback proposal.

Shares of the Mukesh Ambani-led oil-to-telecom conglomerate rose as much as 2.4 percent to a record high of Rs 1,157.30 after it met Bloomberg consensus estimates in April-June quarter.

Reliance Industries Ltd.’s profit grew in the June-ended quarter, helped by its petrochemicals and consumer businesses.

The company’s standalone net profit rose 1.4 percent sequentially to Rs 8,820 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 8,525-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue rose 8.5 percent over the previous quarter to Rs 91,159 crore—higher than the Rs 88,503 crore estimated.
• Operating profit grew 12.9 percent to Rs 15,154 crore.
• Margins expanded 60 basis points to 16.6 percent.
• Gross refining margin fell to $10.5 per barrel

Reliance's telecom venture reported its third straight profit beating estimates as average revenue per user fell less than expected.

Net profit for the telecom firm rose almost 20 percent quarter-on-quarter to Rs 612 crore in the three months ended June. That’s higher than the Rs 551-crore consensus estimate of analysts polled by BloombergQuint.

• Operating profit rose 16.8 percent to Rs 3,147 crore.
• Operating margin expanded 101 basis points to 38.8 percent.

Shares of the country's second largest private sector lender rose as much as 3.5 percent to Rs 303.60 despite reporting a loss in June quarter as brokerages maintained their 'buy' rating on the stock.

ICICI Bank reported a surprising net loss for the quarter ended June 2018 as the lender chose to set aside more money to cover for bad loans. This is the first quarterly loss reported by the private sector bank since at least 2001, according to Bloomberg.

The bank reported a net loss of Rs 119.55 crore in the April-June quarter compared with a profit of Rs 2,049 crore in the same quarter last year, according to its filing with the stock exchanges. Analysts polled by Bloomberg had forecast a net profit of Rs 1,306 crore.

Meanwhile, the brokerages have maintained their buy call on the stock. Here's what brokerages said:

Kotak

• Maintained ‘Buy’ with a target price of Rs 400.
• Most metrics show improving trends.
• Internals of results broadly suggest a gradual recovery.
• No new negative surprises under new management.
• High provisions result in a loss; New disclosures not too worrisome.

Goldman Sachs

• Maintained ‘Buy’ with a target price of Rs 375.
• Bank reported pick-up in core operating profit growth.
• Accelerated balance sheet clean up by increasing provisioning charge.
• Fresh NPL slippages were much lower than expectations.
• Multiple catalysts to drive stock performance.

Indian equity benchmarks extended record breaking run for a sixth day in a row led by ICICI Bank and Reliance Industries after they reported June quarter earnings after market hours on Friday.

The S&P BSE Sensex rose as much as 0.43 percent or 160 points to 37,496.80 and the NSE Nifty 50 index climbed as much as 0.27 percent or 31 points to 11,309.35.

Twelve out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Energy index's 1.2 percent gain. On the other hand, the S&P BSE Telecom index was top loser, down 0.4 percent.

The broader markets were mixed as the S&P BSE MidCap index was little changed while the S&P BSE SmallCap index advanced 0.3 percent.

Indian rupee edged lower to 68.73 per dollar against Friday's close of 68.66 as the currency market focuses on the Reserve Bank of India's decision on Wednesday.

Markets as well as most economists in a Bloomberg News Survey are expecting a quarter percentage rate hike in the repo rate. That will take the repo rate to 6.5 percent, which is the highest in two years.

The hike will come amid inflation expectations building in the economy with inflation running above 5 percent and wholesale price index showing growing pipeline pressures.

Edelweiss on Bank of Baroda

• Maintained ‘Buy’ with a target price of Rs 180.
• Impressive June quarter with improvement in asset quality and stable core.
• Revenue build-up on track; Sustenance key.
• Expect growth with quality momentum to gain traction.
• Expect stock to rerate as visibility on earnings delivery improves.

JPMorgan on NTPC

• Maintained ‘Overweight’ with a target price of Rs 190
• June quarter’s net profit was below analyst estimates
• Expect healthy EPS growth in 2018-19 off the reported base of 2017-18.
• Lower under-recovery of capacity charge and partial absorption of wage hike provisions to boost EPS.

JPMorgan on M&M Financial Services

• Maintained ‘Underweight’ with a target price of Rs 435
• June quarter reported a higher loan growth offset on credit cost increase
• Ind-AS shift increases F18 net income by above 20 percent.
• Reduction in credit losses will be key towards improving ROA.
• Remain underweight as valuations are at a sharp premium.

CLSA on JSW Energy

• Maintained ‘Sell’; cut target price to Rs 63 from Rs 69.
• Low water levels in Satluj river hurt Hydro generation in peak season.
• Dark spreads contract on rising coal and U.S. dollar.
• Weak core and risk to ROE from long-gestation capex to cap valuation.

CLSA on Westlife Development

• Maintained ‘Buy’; raised target price to Rs 550 from Rs 475.
• Strong same-store sales growth leading to double-digit operating margins.
• Gross margin expansion led by menu innovations and better mix.
• Key beneficiary of recovery in urban discretionary consumption.

Brokerages On Reliance Industries

Edelweiss

• Maintained ‘Buy’; raised target price to Rs 1,457 from Rs 1,201.
• Another robust petchem show; Gasifier stabilization underway.
• Jio – Surprisingly steady ARPUs; Retail - revenue & margins surge.
• With commissioning of mega core projects, expect FCF to turnaround.
• At current price, stock trades at an undemanding.

Motilal Oswal

• Maintained ‘Buy’; raised target price to Rs 1,301 from Rs 1,211.
• Petchem drives standalone profitability; Jio surprises again.
• Consolidated Ebitda exceeded estimates on the back of Jio and retail operational performance.
• Positively surprised by Jio’s stellar ARPU despite aggressive pricing.

Nomura

• Maintained ‘Buy’ with a target price of Rs 1,220.
• Strong June quarter results – Petchem/Jio/Retail gets better; Refining in line
• Jio continues to surprise with strong numbers.
• Expect consolidated operating income and net profit to grow at a compounded annual growth rate of 34 percent and 27 percent respectively over FY18-20.
• Expect pace of capex to slow in coming quarters.

Brokerages On ICICI Bank

Kotak

• Maintained ‘Buy’ with a target price of Rs 400.
• Most metrics show improving trends.
• Internals of results broadly suggest a gradual recovery.
• No new negative surprises under new management.
• High provisions result in a loss; New disclosures not too worrisome.

Goldman Sachs

• Maintained ‘Buy’ with a target price of Rs 375.
• Bank reported pick-up in core operating profit growth.
• Accelerated balance sheet clean up by increasing provisioning charge.
• Fresh NPL slippages were much lower than expectations.
• Multiple catalysts to drive stock performance.

Brokerages On HCL Technologies

Investec

• Maintained ‘Buy’; raised target price to Rs 1,100 from Rs 1,048.
• June quarter was disappointing with an organic revenue growth of 0.7 percent.
• See negligible impact to EPS estimates for the current financial year.
• Buyback and lower ETR offset lower revenue growth impact.
• Large deal wins drive visibility.

Goldman Sachs

• Maintained ‘Neutral’; raised target price to Rs 1,039 from Rs 1,025.
• June quarter’s revenue and EBIT margins below estimates.
• Expect renewal rates in IMS (36 percent of revenues) remain under pressure.
• See limited visibility on pick-up in organic growth in medium to longer term.

Who’s Meeting Whom

• Hindalco to meet GIC, Nomura and other investors on July 30.

Insider Trades

• Leel Electricals promoter Fedders Sales acquired 43,566 on July 25 – 26.
• Man Infra promoter Vatsal Shah acquired 17,884 shares on July 26.
• GTPL Hathway promoter Gujarat Digi Com Private Limited acquired 40,000 shares on July 26.

(As reported on July 27)

Trading Tweaks

• The rupee dollar weekly F&O to be introduced on BSE.
• Shilpi Cable and Seamec placed under ASM framework.
• JMT Auto circuit filter revised to 10 percent.

Bulk Deals

• Max India: WF Asian Reconnaissance Fund bought 39.41 lakh shares or 1.5 percent at Rs 82.4 each.
• Mahindra CIE: Prudential Management & Services Pvt. Ltd sold 47.84 lakh shares or 1.3 percent equity at Rs 258 each.
• JBF Industries: ECL Finance sold 4.98 lakh shares or 0.6 percent at Rs 32.15 each.
• Shilpi Cable: Emerging Markets Opportunities Fund sold 6 lakh shares or 0.5 percent at Rs 3.05 each.

Trading Tweaks

• The rupee dollar weekly F&O to be introduced on BSE.
• Shilpi Cable and Seamec placed under ASM framework.
• JMT Auto circuit filter revised to 10 percent.

F&O Cues

• Nifty August Futures ENDED at 11,306.7, with a premium of 28 points versus 34 points.
• August series-Nifty open interest (OI) up 10 percent and Bank Nifty OI up 11 percent.
• India VIX ended at 12.3, up 2.3 percent.
• Max OI for August series call at 11,500 strike price call option, OI at 27.5 lakh shares, up 15 percent.
• Max OI for August series put at 11,000 strike price put option, OI at 38.5 lakh shares, up 19 percent.

• HDFC AMC IPO issue subscribed 83.05 times on last day. Offer price at Rs 1,100 a share.
• TCNS Clothing to start trading on BSE/NSE. IPO was subscribed 5.2 times at Rs 716 a share.
• Jubilant Life Sciences’ unit Jubilant Pharma to consider raising funds via IPO. May offer up to 5 percent stake for sale.
• PNB MetLife India Insurance filed IPO papers with SEBI.

• Pioneer Distilleries received order from Maharashtra Pollution Control Board to stop all manufacturing activity at one of its units.
• Select Energy Systems partnered with U.S.-based Zero Mass water to provide drinking water solution.
• Godrej Consumer to consider a proposal for issue of bonus shares.
• TVS Logistics in talks to acquire Gati for Rs 1,500 cr ; agreement likely in a few weeks (Economic Times).

• Animal spirits suggest India’s world-beating growth has momentum.
• India logs a record $98 billion in deals this year.
• Panel to look at ways to resolve power sector stress.
• A ‘modern and informal’ Bombay House reopens.
• Storm of news to hit global economy this week before August calm.
• Major car exporters said to plan meeting amid U.S. tariff threat.
• Paytm payments bank looking for new CEO.
• Why Imran Khan is unlikely to break the India-Pakistan stalemate.
• Understanding the men and women of India’s monetary policy committee.
• Constant threat of losing the right to work in U.S.
• Time is ripe for second India rate hike.
• Three reasons a ‘khichdi’ coalition in 2019 could be a political delicacy.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.1 percent to 11,329 as of 7:52 a.m.

Asian stocks opened on a soft note on Monday as the ongoing reporting season raised concerns about lofty expectations for earnings and traders prepare for key policy meetings from the world’s biggest central banks. The yen steadied ahead of a crucial week for the Bank of Japan.

Equity benchmarks in Japan, Australia and South Korea edged lower, while futures indicated modest declines in Hong Kong.

Currencies

• The yen rose 0.1 percent to 110.94 per dollar.
• The offshore yuan was steady at 6.8235 per dollar.
• The euro was flat at $1.1660.
• The Bloomberg Dollar Spot Index was flat.

Commodities

• West Texas Intermediate crude increased 0.4 percent to $69 a barrel.
• Gold was little changed at $1,222.71 an ounce.

Here are some key events coming up this week:

• Earnings season continues with Apple, Berkshire Hathaway, Barclays, Tesla, Toyota, BMW, and Rio Tinto among companies reporting results.
• Central banks in the U.S., Japan, the U.K., Brazil and India all meet this week. The BOJ may tweak its yield-curve control policy and cut its CPI forecasts, while the Bank of England is expected to hike even amid Brexit gloom. The Fed is seen standing pat, as is Brazil’s central bank. The RBI will probably raise its benchmark.
• U.S. personal spending and income data for June -- coming Tuesday -- may be steady. Then it’s the jobs report on Friday, which is predicted to show a healthy labor market, with 193,000 new jobs, and an unemployment rate slipping back to 3.9 percent.
• China’s PMIs probably edged down in July, analysts say, buffeted by a deleveraging agenda and a trade war.