Nifty Closes At A Record High For Fourth Day In A Row

Indian equity benchmarks rose to new all-time closing highs led by Reliance Industries, ONGC, ICICI Bank and State Bank of India.

The S&P BSE Sensex rose 0.6 percent or 222 points to 37,888 and the NSE Nifty 50 index climbed 0.53 percent or 61 points to 11,450.

The Nifty rose to an all-time closing high for a fourth session in a row.

If 11,300 is not broken on the Nifty on the downside, rally looks intact, AK Prabhakar, head of research at IDBI Capital Market told BloombergQuint over phone.

Twelve out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Energy index's 1.9 percent gain. On the other hand, the S&P BSE Healthcare index was top loser, down 0.3 percent.

Shares of the Mumbai-based drugmaker rose after its profit beat Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Net profit up 10.4 percent at Rs 451 crore versus 408.82 crore (YoY); Estimate of Rs 384 crore
• Consolidated revenue up 11.7 percent at Rs 3,939 crore versus Rs 3,525 crore (YoY); Bloomberg estimate of Rs 4,027 crore
• Consolidated Ebitda up 12.4 percent at Rs 726.3 crore versus Rs 646.4 crore (YoY)
• Margin at 18.4 percent versus 18.3 percent (YoY)

Shares of state-run oil refiner and retailer fell as much as 2.8 percent to Rs 383.15 after fire broke out at its Chembur plant in Mumbai, news agency ANI reported.

Shares of the Mumbai-based government-owned lender rose 0.7 percent to Rs 62.40 after government gave its no objection for reducing stake in the bank below 50 percent.

The government also gave no objection to relinquishment of management control and acquisition of controlling stake in IDBI Bank by Life Insurance Corporation of India as promoter, IDBI Bank said in an exchange filing.

Shares of the Bengaluru-based defence equipment maker fell as much as 4.78 percent to Rs 827.10 after its loss widened in June quarter.

Key earnings highlights:

• Revenue down 28 percent at Rs 455 crore versus Rs 632 crore (YoY)
• Net loss at Rs 160 crore versus loss of Rs 85 crore (YoY)

Shares of the Kolkata-based sugar manufacturer swung between gains and losses after it reported June quarter earnings.

Key earnings highlights:

• Revenue down 7 percent at Rs 1,002.5 crore versus Rs 1,078.4 crore (YoY)
• Net Profit down 38.8 percent at Rs 73.5 crore versus Rs 120 crore (YoY)
• Ebitda down 37.4 percent at Rs 129.3 crore versus Rs 206.6 crore (YoY)
• Margin at 12.9 percent versus 19.2 percent (YoY)

Shares of the Mumbai-based drugmaker fell as much as 2.6 percent to Rs 844 after its profit missed Bloomberg estimates in June quarter.

Key earnings highlights:

• Revenue down 0.4 percent at Rs 3,856 crore versus Rs 3,870 crore; Estimate of Rs 4,092 crore
• Net profit down 44 percent at Rs 202 crore versus Rs 358 crore; Estimate of Rs 347 crore
• Ebitda down 32 percent at Rs 527 crore versus Rs 769 crore; Estimate of Rs 745 crore
• Margin at 13.7 percent versus 19.8 percent (YoY)

Lupin in press release said:

• Latin America sales down 1 percent at Rs 125.6 crore (YoY)
• EMEA sales up 22.2 percent at Rs 276 crore (YoY)
• APAC sales up 1.5 percent at Rs 607.7 crore (YoY)
• North America sales down 26 percent at Rs 1,185.8 crore (YoY)
• Plan for resolving warning letter issues on track

Future Group will partner with dairy group Fontera and is looking at products that people consume 3-4 times a day, Kishore Biyani, chairman & CEO of Future Group said.

Key highlights:

• We were fortunate to form the partnership with Fonterra.
• We are looking at products that people consume 3-4 times/day.
• 10-12 percent of our sales come from dairy; looking to expand that.

European shares slipped on Wednesday, following a mixed session in Asia, as earnings misses and concern over global trade put a damper on markets. The dollar fell and China’s yuan gained after it central bank was said to seek currency stabilization.

Shares of the Mumbai-based packaged food company fell as much as 5.5 percent to Rs 46.50 after it reported second consecutive quarter of loss.

Key earnings highlights:

• Consolidated net loss at Rs 5.91 crore versus loss of Rs 8.85 crore (YoY)
• Consolidated revenue up 27 percent at Rs 841 crore versus Rs 663 crore (YoY)
• Margin at 2.4 percent versus 1.3 percent (YoY)
• Ebitda up 2.6 times at Rs 20 crore versus Rs 8.6 crore (YoY)

• Blue Dart Express: The Mumbai-based courier services provider fell as much as 1.66 percent to Rs 3,551. Trading volume was 53.7 times its 20-day average.
• Sunteck Realty: The Mumbai-based real estate developer fell as much as 6 percent to Rs 411.20. Trading volume was 26.2 times its 20-day average.
• Shoppers Stop: The Mumbai-based department store chain operator fell as much as 1.4 percent to Rs 559.50. Trading volume was 54.1 times its 20-day average.
• Kalpataru Power: The Mumbai-based transmission line tower maker fell as much as 3.13 percent to Rs 370.15. Trading volume was 45.1 times its 20-day average.

Shares of the Bengaluru-based pharma company fell as much as 4 percent to Rs 376.60 after it reported loss in June quarter.

Key earnings highlights:

• Revenue up 0.9 percent at Rs 663.4 crore versus Rs 657.7 crore (YoY)
• Net loss at Rs 5.9 crore versus Rs 56 lakh Profit (YoY); One-time loss at Rs 4.9 crore
• Margin at 12.2 percent versus 10.8 percent (YoY)
• Ebitda up 13.5 percent At Rs 80.7 crore versus Rs 71 crore (YoY)

• India's NSE Nifty 50 index rose to new all-time high paced by gains in Tata Motors, Tata Steel, ONGC and Bajaj Finance.
• The NSE Nifty 50 index rose as much as 0.4 percent or 46 points to an all-time high of 11,435.90 and the S&P BSE Sensex climbed 0.42 percent or 159 points to 37,825.
• Nine out of 11 sector gauges compiled by National Stock Exchange were trading higher led by the Nifty Media index's 1 percent gain. On the flipside, the Nifty Pharma index was top loser, down 0.3 percent.
• The overall market breadth was positive as 1,391 shares were advancing while 984 were declining on the BSE.

Microfinance lender CreditAccess Grameen launched its public offering today as the promoters look to pare part of their stake. Meanwhile, speaking to BloombergQuint, Udaya Kumar Hebbar, MD & CEO of CreditAccess Grameen said that company's loan book has grown at over 50 percent and customer addition has risen by 40 percent in last few years.

Key highlights of the conversation:

• Have no banking aspirations
• Will continue to be a pure-play rural microfinance player
• Promoter intention is not to bring down stake below 75 percent
• Aim to bring down GNPA to sub-0.5 percent
• Continue to expand business outside Karnataka
• No district contributes more than 5 percent to our assets under management
• Do not expect Andhra Pradesh like issues to impact MFIs anymore
• Aim for 20 percent ROE in the next 2 years

Shares of the south India-based private sector lender rose as much as 1.47 percent to Rs 176.50 after it reported stable asset quality in June quarter.

Key earnings highlights:

• Net interest income up 9.6 percent at Rs 375 crore versus Rs 342 crore (YoY)
• Net profit up 15 percent at Rs 162 crore versus Rs 140 crore (YoY)
• Gross non-performing assets as a percentage of total advance at 3.02 percent versus 3.03 percent (QoQ)
• Net non-performing assets as a percentage of total advance unchanged at 1.70 percent (QoQ)

• Reliance Communications has 11.6 lakh shares change hands in a single block. Stock up 2.7 percent at Rs 17.10.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Gujarat-based trading company fell as much as 5.86 percent to Rs 179 after its profit declined in June quarter.

Key earnings highlights:

• Revenue down 6.9 percent at Rs 7,953.8 crore.
• Net profit up 6.3 percent at Rs 169.4 crore.
• Ebitda up 38.3 percent at Rs 650.4 crore.
• Margin at 8.2 percent versus 5.5 percent.
• Exceptional expense of Rs 185.5 crore.

Shares of the Mumbai-based construction company surged as much as 17.45 percent to Rs 51.50 after it won worth Rs 2,400 crore focused on hydro power sector.

The company has won two hydro projects and a tunnel project, Patel Engineering said in an exchange filing.

Shares of multiplex operators rose after the Maharashtra government in an affidavit at the Bombay High Court saying that it will direct multiplexes and cinema halls to provide drinking water free of charge and sell food and beverages at a price not exceeding the maximum retail price, The Times of India reported.

Although carrying own food may create chaos and may lead to security issue as per the opinion of Director General of Police, the affidavit, filed by Venkatesh Bhatt, deputy secretary, home department, said.

The stance by the Maharashtra government is positive for multiplexes and reiterates the unavailability of allowing outside food and beverages. Also, this would provide a strong reference point to other state governments, IDBI Capital analyst Urmil Shah wrote in a note.

Following this development PVR shares rose as much as 5 percent and Inox Leisure climbed 8 percent.

Deven Choksey of KR Choksey Securities told BloombergQuint that he is staying away from companies with lower return on capital employed in the infra space.

Highlights of the conversation:

• Positive on private sector life insurance companies like HDFC Life and Bajaj Finserv.
• Uncomfortable investing in pharma in general.
• Staying away from companies with lower return on capital employed in the infra space.
• Expect couple of quarters of more pain for Suzlon and Inox Wind.
• Staying away from telecom stocks now.
• Jio appears more promising from investor return point for view.

Shares of the Aditya Birla Group aluminium and maker rose as much as 2.7 percent to Rs 224.90 after its U.S.-based subsidiary Novelis reported strong earnings in June quarter.

Novelis'adjusted Ebitda per tonne rose to highest level of $417 aided by better scrap spreads.

Indian equity benchmarks edged higher led by Hindalco, GAIL and UltraTech Cement but gains were capped as HDFC, Infosys and ICICI Bank declined.

The NSE Nifty 50 index rose 0.1 percent to 11,398 and the S&P BSE Sensex advanced 0.1 percent or 36 points to 37,702.

Fourteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal index's 0.8 percent gain. On the other hand, the S&P BSE Realty index was top loser, down 0.3 percent.

The mid- and small-cap shares were in line with their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes rose 0.1 percent.

• Rupee opened higher at 68.66 per dollar against yesterday's close of 68.68.

Indian sovereign bonds may continue to remain weak with crude oil holding gains and overnight rise in the U.S. Treasury yields.

The RBI's auction of Rs 18,000 crore of T-bills today will be closely watched.

Bank of America Merrill Lynch said yields are capped by market expectation of large scale RBI OMO – of about $50 billion – after October and the drying up of foreign flows.

The Rupee recovered yesterday, but it continues to face headwinds in the form of the U.S.-China trade war. Tariffs on an additional $16 billion of Chinese imports to the U.S. will start later this month. Beijing has vowed to retaliate, with state media suggesting Apple may be targeted.

Motilal Oswal on Punjab National Bank

• Maintained ‘Neutral’ with a target price of Rs 85.
• Asset quality stabilizes marginally.
• Weak performance continues.
• Recoveries and upgrades increased sharply.
• Expect PNB to come back to profitability from April 2019.

Citi on TVS Motor

• Maintained ‘Sell’; cut target price to Rs 475 from Rs 490.
• June quarter reported weak gross margins, high tax rate hit profits.
• TVS will not be taking price cuts.
• Sharp increase in margins will be difficult in current environment.

Citi on AU Small Finance

• Maintained ‘Sell’ with a target price of Rs 590.
• June quarter review: Strong AUM growth sustains; Capital raise boosts Tier 1.
• Pre-provisioning operating profit below estimates; Net profit inline.
• Disbursements remains strong.

Brokerages On Hindalco

UBS

• Maintained ‘Buy’ with a target price of Rs 330.
• Novelis June quarter’s operating income was ahead of estimates.
• Quarter had a tailwind in terms of better scrap spreads.
• Expect investors to react positively to the solid performance at Novelis.

IDFC Securities

• Maintained ‘Outperform’ with a target price of Rs 346.
• Novelis June quarter review: On a firm footing.
• Key positives: favourable scrap spread, Ebitda per tonne of $417; S&P Credit rating upgrade to BB- from B+.
• Improved financial performance of Aleris also bodes well for the stock.

Brokerages On Motherson Sumi

Citi

• Maintained ‘Sell’ with a target price of Rs 280.
• June quarter review: Parent/SMP disappoints; PKC ahead of estimates.
• Lower minority interest was offset by higher tax rate.
• PKC margins are expected to improve further from current levels.

UBS

• Maintained ‘Buy’ with a target price of Rs 380.
• June quarter review: Miss on India; Accounting change impacts India and SMP revenues.
• Overall business momentum remains robust.
• Capex phase coming to an end; Margin improvement to continue.
• Setting up for a strong 2019-2020 finish.

Brokerages On M&M

UBS

• Maintained ‘Buy’ with a target price of Rs 1,000.
• June quarter review: Strong Ebitda growth helped by strong quarter for tractors.
• Tractor inventory remains substantially below industry; Auto inventory remains inline.
• Current quarter is likely to be flattish for tractors due to a delayed festive season.

Citi

• Maintained ‘Buy’; raised target price to Rs 1,060 from Rs 1,010.
• June quarter was another steady quarter.
• Growth outlook for tractors and utility vehicles unchanged for now.
• Management thinks dealer network can support three new launches.
• M&M is a key buy in the auto sector.

Who’s Meeting Whom

• ACC to meet Northern Cross, USA on Aug. 08.
• Mahindra Logistics to meet White Oak Capital, Goldman Sachs and other investors from Aug. 8-14.

Insider Trades

• Chambal Fertilisers & Chemicals promoter acquired 40,000 shares on Aug. 03.

(As reported on Aug. 8)

Bulk Deals

Techno Electric and Engineering Co.

• ECAP Equities acquired 35 lakh shares or 3.1 percent equity at Rs 279.1 each.
• JP Financial Services Pvt sold 35 lakh shares or 3.1 percent equity at Rs 279.1 each.

F&O Cues

• Nifty August Futures ended at 11,418, with a premium of 29 points versus 27 points.
• August series-Nifty open interest (OI) up 1 percent and Bank Nifty OI up 3 percent.
• India VIX ended at 12.5, up 0.1 percent.
• Max OI for August series call at 11,500 strike price call option, OI at 38.5 lakh shares, up 11 percent.
• Max OI for August series put at 11,000 strike price put option, OI at 51.1 lakh shares, up 1 percent.

Nifty Earnings To Watch

• BPCL
• Cipla
• HPCL
• Lupin

Other Earnings To Watch

• BEML
• Blue Star
• Future Consumer
• Phoenix Mills
• PNB Housing Finance
• Siemens
• Strides Shasun
• Thermax
• Trent

Earnings Reactions To Watch

Inox Wind (Q1, YoY)

• Revenue up 4.6 times at Rs 430.5 crore.
• Net profit up at Rs 10.4 crore.
• Ebitda at Rs 68 crore.

Butterfly Gandhimati Appliances (Q1, YoY)

• Revenue up 43.8 percent at Rs 124.4 crore.
• Net profit at Rs 1.3 crore.
• Ebitda at Rs 9.3 crore.

SRF (Q1, YoY)

• Revenue up 34.6 percent at Rs 1,741.3 crore.
• Net profit up 28.9 percent at Rs 133.8 crore.
• Ebitda up 64.6 percent at Rs 326.6 crore.
• Margin at 18.8 percent versus 15.3 percent.

Mphasis (Q1, QoQ)

• Revenue up 4.3 percent at Rs 1,820.2 crore.
• Net profit up 8.7 percent at Rs 258.3 crore.
• EBIT up 3.3 percent at Rs 297.6 crore.
• Margin at 16.3 percent versus 16.5 percent.

Future Supply Chain Solutions (Q1, YoY)

• Revenue up 49.9 percent at Rs 227.9 crore.
• Net profit up 37.7 percent at Rs 17.9 crore.
• Ebitda up 34 percent at Rs 32.3 crore.
• Margin at 14.2 percent versus 15.9 percent.

Edelweiss Financial Services (Q1, YoY)

• Revenue up 17 percent at Rs 2,435.5 crore.
• Net Profit up 31 percent at Rs 264 crore.

Glaxosmithkline Consumer Healthcare (Q1, YoY)

• Revenue up 12.3 percent at Rs 1,107.1 crore.
• Net profit up 51.6 percent at Rs 200.4 crore.
• Ebitda up 38.1 percent at Rs 230.3 crore.
• Margin at 20.8 percent versus 16.9 percent.

Prataap Snacks (Q1, YoY)

• Revenue up 19.2 percent at Rs 268.6 crore.
• Net profit up 6.1 percent at Rs 10.4 crore.
• Ebitda down 9 percent at Rs 18.1 crore.
• Margin at 6.7 percent versus 8.8 percent.

Birla Corporation (Q1, YoY)

• Revenue up 13.5 percent at Rs 1,655.8 crore
• Net profit up 94.2 percent at Rs 83.9 crore.
• Ebitda up 2.5 percent at Rs 246.5 crore.
• Margin at 14.9 percent versus 16.5 percent.
• Exceptional expense of Rs 12.5 crore. in base quarter.

Adani Enterprises (Q1, YoY)

• Revenue down 6.9 percent at Rs 7,953.8 crore.
• Net profit up 6.3 percent at Rs 169.4 crore.
• Ebitda up 38.3 percent at Rs 650.4 crore.
• Margin at 8.2 percent versus 5.5 percent.
• Exceptional expense of Rs 185.5 crore.

Dhampur Sugar Mills (Q1, YoY)

• Revenue down 13.6 percent at Rs 734.4 crore.
• Net profit down 49.4 percent at Rs 31.7 crore.
• Ebitda down 35.9 percent at Rs 91 crore.
• Margin at 12.4 percent versus 16.7 percent.
• Other expense up 82 percent at Rs 75.9 crore.
• Off season gain of Rs 17.2 crore in base quarter.

Lovable Lingerie (Q1, YoY)

• Revenue down 9.3 percent at Rs 54.9 crore.
• Net profit down 33.9 percent at Rs 4.1 crore.
• Ebitda down 27.4 percent at Rs 5.3 crore.
• Margin at 9.7 percent versus 12.1 percent.

Mirza International (Q1, YoY)

• Revenue up 3.8 percent at Rs 261.8 crore.
• Net profit down 11.3 percent at Rs 18.1 crore.
• Ebitda down 2.5 percent at Rs 43.1 crore.
• Margin at 16.5 percent versus 17.5 percent.

Thomas Cook (Q1, YoY)

• Revenue down 7.5 percent at Rs 2084.5 crore.
• Net profit up 6.5 percent at Rs 70.6 crore.
• Ebitda down 49.9 percent at Rs 82.8 crore.
• Margin at 4 percent versus 5.8 percent.

• Mphasis board approved Rs 988.3 crore buyback of up to 73.3 lakh shares (3.79 percent equity) at Rs 1,350 each.
• Glenmark Pharma gets U.S. FDA approval for ANDA of methadone hydrochloride 5 mg and 10 mg tablets.
• Patel Engineering bagged two hydroprojects and tunnel projects order worth Rs 2,400 crore.
• Gujarat High Court dismisses tax demand petition filed by Gujarat Sales Tax department against GAIL.
• Dhanlaxmi Bank revised its MCLR across various tenors.
• GOCL Corporation arm got explosives order worth Rs 203.09 crore from Singareni Collieries.
• Butterfly Gandhimati Appliances CEO Prakash Iyer resigned.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 11,435 as of 7:16 a.m.

China’s yuan extended gains triggered by further moves to stabilize the currency, while Asian equities pushed higher as markets opened Wednesday after U.S. stocks approached a fresh all-time high.

Equity benchmarks in Japan, Australian and South Korea ticked higher, and futures pointed to gains for stocks in Hong Kong and China.

Currencies

• The yen was at 111.34 per dollar, up less than 0.1 percent.
• The offshore yuan climbed 0.2 percent to at 6.8073 per dollar after rising 0.7 percent.
• The euro bought $1.1604, up less than 0.1 percent.
• The Bloomberg Dollar Spot Index dipped less than 0.1 percent.

Commodities

• West Texas Intermediate crude rose 0.1 percent to $69.23 a barrel.
• Gold gained 0.1 percent to $1,212.19 an ounce.

Here are some key events coming up this week:

• Samsung Electronics unveils its next Galaxy Note smartphone.
• U.S. consumer prices probably rose in July, consistent with a pickup in inflation that’s projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday’s release.