Muhurat Trading: Sensex Ends Nearly 296 Points Up; Nifty Above 17,900

Strong start to Samvat 2078. Indian equity benchmarks advanced, aided by gains in auto, consumer durables and consumer discretionary stocks.

The S&P BSE Sensex index rose nearly 0.5% to 60,067.62. The NSE Nifty 50 Index advanced by similar magnitude to 17,916.80.

The broader indexes outperformed their larger peers with the S&P BSE MidCap index adding nearly 1% and the S&P BSE SmallCap index gaining 1.5%. All the 19 sectoral indexes compiled by BSE Ltd. advanced, with the S&P BSE Auto index rising nearly 1.5%

The market breadth was skewed in favour of bulls. About 2,579 stocks advanced, 527 declined and 158 remained unchanged.

For the week, both Nifty and Sensex rose, snapping the losing streak that lasted for two weeks. NSE Nifty Realty index was the top sectoral performer with nearly 10% gains.

Shares of Bata India Ltd. rose nearly 1.5% in intraday trade to Rs 2,064.9 apiece after the company's net income turned to profit in September quarter

Bata India Q2FY22 (Consolidated, YoY)

• Revenue up 67% at Rs 614.12 crore Vs Rs 367.87 crore

• Net profit of Rs 37.18 crore Vs Net loss of Rs 44.31

• Ebitda up 5.57 times at Rs 119.22 crore Vs Rs 18.14 crore

• Margins at 19.4% Vs 4.9%

Of the 16 analysts tracking the company, 10 maintained 'buy', two maintained 'hold' and four maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 7.4%

• Shares of Happiest Minds Technologies Ltd. rose over 4.6% in intraday trade, the biggest single-day gain in two months, to Rs 1,290 apiece.

• Trading volume was 26% above the 20-day average volume, for this time of the day.

• The company trades at 102 times its estimated earnings per share for the coming year.

• Analysts have two 'buy', no 'hold' and no 'sell' recommendations on the stock.

Shares of Gujarat State Petronet Ltd. shed over 3.7% in intraday trade, to Rs 312.8 apiece. The company reported net profit in the September quarter that beat the average analyst estimate, post market hours Wednesday.

Gujarat State Petronet Q2FY22 (Consolidated, YoY)

• Net sales up 37% at Rs 4,085.13 crore Vs Rs 2,980.43 crore

• Net profit down 20% at Rs 398.39 crore Vs Rs 498.57 crore

• Ebitda down 28% at Rs 805.15 crore Vs Rs 1,117.99 crore

• Margins at 19.7% Vs 37.5%
  

Of the 31 analysts tracking the company, 25 maintained 'buy', four maintained 'hold' and two maintaned 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 20%

Shares of Eicher Motors Ltd. rose nearly 7% in intraday trade to Rs 2,696.25 apiece after the company reported net income above average analyst estimate in the September quarter, post market hours Wednesday.

Eicher Motors Q2FY22 (Consolidated, QoQ)

• Revenue up 14% at Rs 2,249.56 crore Vs Rs 1,974 crore (BBG estimate: Rs 1,974 crore)

• Profit up 57% at Rs 373 crore Vs Rs 237 crore (BBG estimate: Rs 306 crore)

• Ebitda up 30% at Rs 469.87 crore Vs Rs 362.67 crore (BBG estimate: Rs 359 crore)

• Margins at 20.9% Vs 18.4% (BBG estimate: 18.2%)

Of the 46 analysts tracking the company, 19 maintained 'buy', 12 maintained 'hold' and 15 maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 7.2%

Analysts cite the easing supply constraints with respect to semiconductor as well as robust demand as key triggers for growth as they raised the target price.

Emkay

• Maintains 'buy' with the target price raised to Rs 3,100 from Rs 3,040 earlier, an implied return of 22.9%

• Improving chip supplies and healthy order book likely to aid swift volume recovery.

• Robust order book for new generation Classic 350cc augurs well for the company's prospects.

• Better-than-expected realisations, spare-part sales and accessory sales aided revenue growth.

• Expect RoE to expand from 18% in FY22E to 24% in FY24E

• Build in revenue/earnings CAGRs of 24%/42% over FY22-24E.

• Company's focus on new products and network expansion to drive growth.

Key Downside Risks: Weak macroeconomic environment, high competitive intensity and rise in commodity rates

Dolat Analysis

• Upgrades to 'buy' from 'sell' with the target price raised to Rs 3,154 from Rs 2,727, an implied return of 25.07%.

• Better than expected net ASP (price increase and geography mix) aided quarterly numbers.

• Semi-conductor and supply chain issues are easing off from mid September 2021, which is likely to lead to production ramp up in Q3.

• Strength in demand and strong order book augur well for the company.

• Recent price hikes have largely covered the entire cost inflation.

• Gross margin continues to remain strong as the mix is improving.

• Royal Enfield looks well placed to benefit from demand recovery in urban regions and increasing premiumisation trend.

• Success of 650 twins and Meteors reflects confidence in Royal Enfield's export strategy.

• VECV continued to delilver sustained growth momentum backed by recovery across segments.

• Change our rating factoring in the company's leadership in 2-Wheeler premium segment, strong product pipeline and network expanson.

Systematix Group

• Maintains 'hold' with the target price reduced to Rs 2,580 from Rs 2,800, an implied return of 2.31%

• EBITDA performance ahead of consensus aided by strong gross margin performance

• Management commentary on traction for new launches and supply constraints augur well for the company.

• Network expansion and improved product portfolio in export markets are yielding positive results.

India's stock benchmarks opened Samvat 2078 higher, aided by gains in auto, banking, power and consumer durables stocks. Today's session will be an hour-long and comes after the U.S. Federal Reserve announced that it would begin scale back the $120 billion monthly bond-buying programme this month.

The S&P BSE Sensex index rose 0.60% to 60,130.41. The NSE Nifty 50 Index advanced by similar magnitude to 17,936.05

The broader indexes almost mirrored their larger peers with the S&P BSE MidCap index and the S&P BSE SmallCap index adding nearly 1%. All the 19 sectoral indexes compiled by BSE Ltd. advanced, with the S&P BSE Auto, Consumer Durables, Power, Utilities indexes rising over 1%.

The market breadth was skewed in favour of bulls. About 2,222 stocks advanced, 375 declined and 103 remained unchanged.

Shankar Sharma, Veteran Investor

• It’s a great mahurat to invest and the only huge risk in the market is that one may have sold too soon. This is a great mahurat to invest. The real risk is to take money off the table.

• My personal view remains that India is a player in the overall equity landscape. We lagged the global markets, but now India has broken out. India will benefit due from the huge tailwinds coming through.

• Inflation is good for corporate earnings in India. Because that's what guides the overall prosperity of 70-80% of India. It's the real unloved factor in the overall scheme of things.

• Occasional dips will be there, but they will pass through. Market will go up substantially from here, incrementally

• In most part, they (new age companies) come in at a fairly aggressive pricing. Because the VCs had invested, and nobody thought Indian IPOs would open and give such great exits. Everybody was looking at NASDAQs, so because of that aggression, investors are not going to make much money from these IPOs .

• We turned bullish on it (commodity cycle), oil and steel bought, there is still some upside. The world will kill the commodity cycle soon, they can't survive the inflation, so make hay while the sun is shining.

• No clue about crypto. It's a huge tidal wave, can't ignore it, I have a position and I continue to like the space.

• Many things are promising (from a 24-month horizon). One is Real estate and derivates of RE all look good.

Sunil Singhania, Veteran Investor

• India is a long term buy market. Every mahurat is good day to invest. The only thing is that we are in a period after a great rally and to that extent, as long as our return expectations are rational, it's a good day to invest

• (In the) last 4-5 years, companies had capacity but demand wasn't robust. Suddenly demand has set in, companies are now operating at 75-80% utilisation. Companies have started to look at expansion. And acquisition targets are also gone. So corporates are announcing new capex now. First 6-8 months of this capex cycle isn't visible, but it's happening. In the 2nd or 3rd year, it's visible. To play that, companies are not cheap, but there are still good opportunities, in, for example, bearing, heavy machinery, cement companies.

• Only near-term headwind is capex costs have gone up.

• No harm in investing in steel, cement companies, but they are deep cyclical sectors. One must keep that in mind.

• The tech behind crypto is robust but I don't understand the application, how we are using it.

• Information Technology sector is a good space