Nifty Clocks Smallest Gains In Three Years In Samvat 2074

Indian equity benchmarks were little changed ahead of Diwali as gains in Reliance Industries, TCS and ICICI Bank were offset by losses in State Bank of India, Axis Bank and Vedanta.

The S&P BSE Sensex rose 0.12 percent or 41 points to 34,992 and the NSE Nifty 50 Index rose six points to 10,530.

Investors will make ceremonial purchases in a one-hour trading session on Wednesday to mark Diwali and beginning of new Samvat.

In Samvat 2074, Nifty clocked least gains in three years as it rose 3.13 percent, data compiled by Bloomberg showed.

In today’s trade, eight of 11 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty PSU Bank Index’s 2.2 percent drop. On the flipside, the Nifty Media Index was the top gainer, up 0.9 percent.

National Companies Law Appellate Tribunal (NCLAT) will hear IndusInd Bank’s petition against IL&FS on Nov. 13, IndusInd Bank said in an exchange notification.

• Filed petition seeking amendment to NCLAT's October 15 order on IL&FS.
• Sought permission to appropriate amount already lying towards interest etc on October 31 & thereafter.
• NCLT asked IL&FS group to file reply in matter.
• IL&FS accounts classified as standard as of now.

Shares of the Mumbai-based air conditioner maker declined as much as 4.3 percent to Rs 517.20 despite beating Bloomberg consensus estimates in September quarter.

Key earnings highlights:

• Revenue up 37 percent at Rs 1,414.7 crore versus Rs 1,031.66 crore (YoY)
• Net profit up 9 percent at Rs 103 crore versus Rs 94.63 crore (YoY); Estimate of Rs 94.4 crore
• Ebitda at Rs 108.6 crore versus Rs 87 crore (YoY)
• Margin at 7.6 percent versus 8.4 percent (YoY)

Shares of the Mumbai-based clinical laboratories operator pared gains and was up 0.14 percent at Rs 888 after it reported September quarter earnings.

Key earnings highlights:

• Revenue up 14 percent at Rs 317.5 crore versus Rs 278 crore (YoY)
• Net profit up 13 percent at Rs 57 crore versus Rs 50.6 crore (YoY)

Indian equity benchmarks erased gains dragged by selling pressure in State Bank of India, Axis Bank, IndusInd Bank and Tata Steel.

The S&P BSE Sensex was little changed at 34,961 and the NSE Nifty 50 Index fell 0.12 percent or 12 points to 10,511. From the day's highs, Sensex fell as much as 263 points and the Nifty 50 Index dropped 94 points.

Eight of 11 sector gauges compiled by National Stock Exchange were trading lower led by the nifty PSU Bank Index's 2.6 percent decline.

Sharers of the Kolkata-based graphite electrode rose 1.5 percent to Rs 982 after its net profit rose oer ten times in September quarter.

Key earnings highlights:

• Net profit rose 10.8 times to Rs 1,113 crore versus Rs 103 crore (YoY)
• Revenue rose 4.4 times to Rs 2,345 crore versus Rs 528 crore (YoY)
• Ebitda up more than 11 times at Rs 1,640 crore versus Rs 144 crore
• Margin at 69.9 percent versus 27.2 percent
• Board announces dividend of Rs 20 per share

Shares of the Mumbai-based condom maker erased gains and fell as much as 5.6 percent to Rs 166.10 after its profit declined in September quarter.

Key earnings highlights:

• Revenue fell 8 percent to Rs 20.31 crore versus Rs 22.06 crore (YoY)
• Net profit declined 28 percent to Rs 4.33 crore versus Rs 5.95 crore (YoY)

Shares of the Delhi-based news broadcast company were locked in a five percent upper circuit at Rs 34.85 after it reported profit in September quarter.

Key earnings highlights:

• Consolidated revenue down 8.42 percent at Rs 93.48 crore versus Rs 102.08 crore (YoY)
• Consolidated net profit at Rs 1.17 crore versus loss of Rs 22 crore (YoY)

• Bank of Baroda has 10.8 lakh shares change hands in a block. Stock up 0.5 percent at Rs 112.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Mumbai-based real estate company held on to gains and rose as much as 5.57 percent to Rs 616 after its net profit in September quarter grew 49 percent.

Key earnings highlights:

• Revenue rose 9.2 percent to Rs 404.73 crore versus Rs 370 crore (YoY)
• Net profit up 49 percent at Rs 62.04 crore versus Rs 41.75 crore (YoY)

Shares of the Mumbai-based private sector lender fell as much as 2.95 percent after it filed an application at National Companies Law Appellate Tribunal (NCLAT) against Investment Leasing and Financial Services (IL&FS) after it defaulted on various debt obligations.

Lawyers involved in the matter told BloombergQuint:

• IndusInd Bank wants interest payments during moratorium to be allowed.
• Says interest of public depositors' is at stake
• Says RBI's provisioning norms will get triggered if interest payment not allowed.
• IndusInd Bank has an exposure of over Rs 2,000 crore to IL&FS.

Indian equity benchmarks held on to gains led by Reliance Industries, TCS, ICICI Bank and HDFC Bank as crude resumed decline.

The S&P BSE Sensex rose 0.4 percent or 140 to 35,091 and the NSE Nifty 50 Index advanced 0.3 percent or 30 points to 10,553.

Thirteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Energy Index's 1.1 percent gain. On the other hand, the S&P BSE Metal Index was top loser, down 1.65 percent.

Mid-and small-cap shares were witnessing buying interest as the S&P BSE MidCap and S&P BSE SmallCap Indices rose 0.4 percent each.

Markets have corrected but valuations are still are on the higher. In the near term there will be a slow-down in growth because of NBFC fiasco as a lot of consumer demand sectors will get hurt as NBFC cut back on lending, Jyotivardhan Jaipuria, founder and CEO of Valentis Advisors told BloombergQuint in an interview.

Key highlights of the conversation:

• Over last 10-15 days we were sitting on lot of cash
• We have been buyer in select sectors as valuations have come off and at the beginning of the years it was a challenge
• In next three years we will see earnings cycle recovery
• Even though valuations have come off but still on the higher end
• In short term we will see a slow-down in growth because of NBFC fiasco as a lot of consumer demand sectors will get a hurt bit as NBFC cut back on lending
• Elections will be an overhang on the markets for next 6-9 months
• Underweight on telecom and consumer staples because of very high valuations
• Overweight on capital goods and infrastructure space as margins at lower end
• Like corporate banks as bankruptcy code will be beneficial for them

Nifty Bank's 26,000 call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 82 percent to Rs 5.10. Over 14.65 lakh shares were added to the open interest which stood at over 24.69 lakh shares.

Shares of the country's largest pharmaceutical company rose as much as 2.5 percent to Rs 586 after its U.S. subsidiary Taro Pharma reported its quarterly earnings for the July-September period.

Key sales highlights (YoY)

• Net sales down 7 percent at $159 million.
• Net profit up 19 percent at $62.5 million.
• Operating profit down 11 percent at $78.7 million.
• Operating Margins at 49.5 percent versus 52.2 percent.

Cipla Ltd. expects its U.S. revenues to scale up to more than $120 million by the end of the current financial year, its Global Chief Financial Officer Kedar Upadhye told BloombergQuint in an interaction.

Key highlights from the conversation:

• The higher base of last year due to GST restocking and API sales impacted sales.
• Expect capacity rebalancing to be resolved by the end of March 2019.
• Performance in the private market was encouraging.
• Looking to resolve supply chain issue product by product due to US FDA norms.
• Need to balance both profitability and growth.
• Expect U.S. revenues to scale up to more than $120 million by the end of the year.
• May see flat profits in absolute terms for the second half of the current financial year.

Shares of the information technology company extended gains for the second day and rose as much as 2.1 percent to Rs 1,042.

The company tied up with Deutsche Bank to provide digital cheque processing platform to the bank, according to its stock exchange notification.

The analysts' consensus price target tracked by Bloomberg, is 14.1 percent higher than the current market price. The stock has returned 17 percent so far this year.

Shares of the automobile tires and tubes makers fell as much as 8.8 percent, the most since Sept. 21, to Rs 975. The company cut its volume guidance to 2.1-2.2 lakh MT for the current financial year from 2.25-2.3 lakh MT earlier.

Key earnings highlights (Q2, YoY):

• Revenue up 18.9 percent at Rs 1,325.5 crore.
• Net profit up 9.5 percent at Rs 222.3 crore.
• Ebitda up 9.1 percent at Rs 332.7 crore.
• Margin at 25.1 percent versus 27.4 percent.
• Other expenses at Rs 312.6 crore versus Rs 201.7 crore.

Trading Volume was 11.2 times its 30-day average, according to Bloomberg data. The stock fell 16.4 percent so far this year compared to a 4.4 percent advance in the Sensex.

Shares of the Jaguar Land Rover owner rose as much as 4.8 percent to Rs 198.90.

Sales of Jaguar rose 81.9 percent year-on-year to Rs 3,324 units in October, according to data shared by the U.K. Auto Body.

Shares of the housing finance company rose as much as 5.5 percent to Rs 927.60. The company’s profit rose 33 percent on a yearly basis during the quarter ended September.

Key earnings highlights (Q2, YoY)

• Net Interest Income up 31.8 percent at Rs 579.4 crore.
• Net profit up 33.1 percent at Rs 253 crore.
• Loan assets up 37 percent at Rs 66,792 crore.
• AUM at Rs 73,842 crore.
• GNPA at 0.45 percent versus 0.34 percent.

Indian equity benchmarks traded higher during the open. The S&P BSE Sensex Index rose as much as 0.51 percent to 35,128.07 and the NSE Nifty 50 Index rose as much as 0.53 percent to 10,579.65.

The market breadth, however, was tilted in favour of sellers. Ten out of 11 sectoral gauges compiled by National Stock Exchange advanced, led the NSE Nifty Realty Index's 1.1 percent gain. On the flipside, the NSE Nifty Pharma Index was the only sectoral loser, down 0.01 percent.

The Indian rupee opened marginally higher against the U.S. dollar. The home currency depreciated as much as 0.3 percent to trade at 72.91 a dollar.

F&O Cues

• Nifty October Futures closed trading at 10,551,  premium of 27 points
• Nifty November Open interest up 0.7 percent; Nifty Bank November open interest up 0.5 percent.
• Max open interest for November series at 11,000 strike value call option (open interest at 25.8 lakh shares).
• Max open interest for November series at 10,000 strike value put option (open interest at 49.5 lakh shares).

Put Call Ratio

• Nifty PCR at 1.58 from 1.63.
• Nifty Bank PCR at 1.31 from 1.30.

On SBI

CLSA

• Maintained ‘Buy’ with a price target of Rs 370, implying a potential upside of 25 percent from the last regular trade.
• Asset quality normalising; Deferral of provisioning on Essar Steel lifts earnings.
• Moderation in credit costs to support sharp recovery in profit from the next financial year.
• Casa uptick is key to support loan growth.

Macquarie

• Maintained ‘Neutral’; cut price target to Rs 265 from Rs 280, implying a potential downside of 10 percent from the last regular trade.
• Growth disappoints; Strong on asset quality.
• Mgmt. expects recoveries from NCLT List 1&2 in the second half of the current financial year.
• Key Catalyst: reduction in slippages, pick-up in loan growth.

Nomura

• Maintained ‘Buy’ with a price target of Rs 360, implying a potential upside of 22 percent from the last regular trade.
• September quarter performance was better on core pre-provisioning operating profit and in line on asset quality.
• Expect NIMs to improve from current levels with normalised credit costs in the next financial year.
• Valuation reasonable, given the improving pricing power and stable asset quality.

Deutsche Bank Research

• Maintained ‘Buy’ with a price target of Rs 365, implying a potential upside of 24 percent from the last regular trade.
• September quarter review: Turning the corner; expect better trends ahead.
• Asset quality trends improve; GNPA declines QoQ despite lower recoveries.
• Pace of recovery should sustain; expect credit costs to decline.

On GAIL

Deutsche Bank Research

• Maintained ‘Hold’; hiked price target to Rs 395 from Rs 365, implying a potential upside of 6 percent from the last regular trade.
• A strong boost from gas trading.
• Gas transmission and trading business report robust profitability.
• Concern over potential loss on the U.S. LNG contracts has receded.

CLSA

• Maintained ‘Buy’; hiked price target to Rs 465 from Rs 450, implying a potential upside of 25 percent from the last regular trade.
• Record quarter for gas transmission and trading; Petchem and LPG also ahead.
• Gas trading profit may stay high as US LNG and spot LNG arbitrage continues.
• Pending tariff hikes for key pipelines may be announced within three months.

On Cipla

CLSA

• Downgraded to ‘Outperform’ from ‘Buy’; cut price target to Rs 620 from Rs 800, implying a potential upside of 10 percent from the last regular trade.
• Disappointing September quarter results with an all-round miss.
• Weak near-term outlook drives 15-18 percent EPS cut.
• Still positive on Cipla due to improving outlook in the U.S. and strong India positioning.

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 658 from Rs 746, implying a potential upside of 17 percent from the last regular trade.
• Muted September quarter despite good U.S. sales traction; Guided for challenging for the second half of the current financial year.
• Challenges: sanctions/EM uncertainty, supply chain realignment, increased API prices and pressure in tender business.
• Cipla’s progress in the direct-to-market business is promising.

On Exide Industries

Citi

• Maintained ‘Buy’; cut price target to Rs 295 from Rs 320, implying a potential upside of 18 percent from the last regular trade.
• September quarter was below estimates as gross margins disappoint.
• Management notes healthy demand but mounting cost pressures.
• Expect margins to improve with diesel prices cooling off and stable lead prices.

Investec

• Maintained ‘Buy’; cut price target to Rs 285 from Rs 301, implying a potential upside of 14 percent from the last regular trade.
• Sharp rupee depreciation and crude rise poses a surprise.
• Market share story intact; Strong gains post GST implementation.
• Like industry structure and its potential to create long term shareholder value.

More Calls

CLSA on Power Grid Corp

• Maintained ‘Outperform’ with a price target of Rs 213, implying a potential upside of 15 percent from the last regular trade.
• September quarter’s net profit growth slows down as HVDC project scheduled for the second half.
• EPS slowdown ahead and capitalisation peaked in the previous financial year.
• Generation & green corridor capex pick-up—the key item to monitor.

Deutsche Bank Research on IGL

• Maintained ‘Buy’; cut price target to Rs 315 from Rs 320, implying a potential upside of 11 percent from the last regular trade.
• September quarter results were marginally below; volume growth steady.
• Price hike should improve margins in the third quarter.
• IGL well placed to benefit from expansion and focus on pollution control.

• Shalimar Paints ex-date for rights issue 3:2 at premium of Rs 62.5 per share.
• BHEL record date for buyback eligibility.
• Redington India buy back window opens till Nov. 22.
• Usha Martin price band revised to 10 percent.

• BEML: Reliance Strategic Investments sold 2.63 lakh shares (0.63 percent) at Rs 711.23 each.

NIIT Technologies:

• William Blair And Company LLC sold 4.04 lakh shares (0.66 percent) at Rs 1176.9 each.
• Matthews International Funds acquired 3.51 lakh shares (0.57 percent) at Rs 1176.9 each.

Power Grid Corporation (Q2, YoY)

• Revenue up 14.2 percent at Rs 8283 crore.
• Net profit up 7.9 percent at Rs 2309.5 crore.
• Ebitda up 7.7 percent at Rs 6972.4 crore.
• Margin at 84.2 percent vs 89.3 percent.

Also Read: Q2 Results: Power Grid Corporation’s Profit Meets Estimates Despite Narrow Margin

PNB Housing Finance (Q2, YoY)

• Net Interest Income up 31.8 percent at Rs 579.4 crore.
• Net profit up 33.1 percent at Rs 253 crore.
• Loan assets up 37 percent at Rs 66,792crore.
• AUM at Rs 73,842 crore.
• GNPA at 0.45 percent versus 0.34 percent.

Allcargo Logistics (Q2, YoY)

• Revenue up 12.3 percent at Rs 1,737.3 crore.
• Net profit down 3.1 percent at Rs 61.8 crore.
• Ebitda up 19.4 percent at Rs 125 crore.
• Margin at 7.2 percent vs 6.8 percent.
• Operating expenses at Rs 1,254.2 crore versus Rs 1,113 crore.

Godrej Agrovet (Q2, YoY)

• Revenue up 11.4 percent at Rs 1,588.4 crore.
• Net profit up 16.6 percent at Rs 99.1 crore.
• Ebitda down 3.7 percent at Rs 140.7 crore.
• Margin at 8.9 percent versus 10.2 percent.

Sheela Foam (Q2, YoY)

• Revenue up 10.2 percent at Rs 535.5 crore.
• Net profit down 28.9 percent at Rs 24.4 crore.
• Ebitda down 26.6 percent at Rs 42.4 crore.
• Margin at 7.9 percent vs 11.9 percent.

Phoenix Mills (Q2, YoY)

• Revenue up 9.2 percent at Rs 404.7 crore.
• Net profit up 48.3 percent at Rs 62 crore.
• Ebitda up 11 percent at Rs 198.1 crore.
• Margin at 48.9 percent versus 48.1 percent.

Balkrishna Industries (Q2, YoY)

• Revenue up 18.9 percent at Rs 1,325.5 crore.
• Net profit up 9.5 percent at Rs 222.3 crore.
• Ebitda up 9.1 percent at Rs 332.7 crore.
• Margin at 25.1 percent versus 27.4 percent.
• Other expenses at Rs 312.6 crore versus Rs 201.7 crore.
• Cut volume guidance to 2.1-2.2 lakh MT for FY19 from 2.25-2.3 lakh MT earlier

Fortis Healthcare (Q2, YoY)

• Revenue down 4.8 percent at Rs 1,139.9 crore.
• Net loss at Rs 166.7 crore versus net loss at Rs 45.7 crore.
• Ebitda down 39.8 percent at Rs 64.1 crore.
• Margin at 5.6 percent versus 8.9 percent.
• Exceptional loss at Rs 96.1 crore.

Inox Wind (Q2, QoQ)

• Revenue up 1.4 percent at Rs 436.7 crore.
• Net profit down 85.6 percent at Rs 1.5 crore.
• Ebitda down 14.6 percent at Rs 58.1 crore.
• Margins at 13.3 percent vs 15.8 percent.

• Aditya Birla Capital
• Automotive Axles
• Camlin Fine Sciences
• Dr. Lal Path Labs
• Graphite India
• Manappuram Finance
• Voltas
• Balmer Lawrie Investments
• Jtekt India
• Sanghi Industries
• Voltas

• The Government of India reduced its stake in Coal India by 3.19 percent to make its holding stand at 75.13 percent of the equity share capital of the company.
• Fortis Healthcare said the group was able to continue as going concern on positive cash flow. They also added that approvals were in place for the Rs 4,000 crore fund infusion from IHH Healthcare. (Bloomberg News)
• HCL Tech tied up with Deutsche Bank to provide digital cheque processing platform to the bank.
• Wipro tied up with Check Point Software to offer cloud solutions to the company.
• Jet Airways said that a media report on TATA buying stake in the company is speculative in nature. (Bloomberg News)
• Godrej Agrovet: Adi Godrej stepped down from non-independent director position citing personal reasons while Pirojsha Godrej gets appointed as additional director. Both actions were effective from Nov. 5.
• Bank of Baroda increased its MCLR by 10 basis points across various tenors with effect from Nov. 7. Overnight MCLR was at 8.15 percent and One Year MCLR at 8.65 percent.
• Indo Count Industries said that workers at its spinning unit in Maharasthra had resorted to illegal strike from Nov. 4 due to higher demand of bonus.
• Hindustan Construction board approved a rights issue of Rs 500 crore. The meeting to decide details of the rights issue will be undertaken by the Rights Issue Committee on Nov. 12.
• Natco Pharma board approved a share buyback of 8.22 percent of total paid-up equity capital at Rs 1,000 per share, aggregating to Rs 250 crore.
• Minda Industries board approved investment setting up of manufacturing plant of controller and telematics for two-wheelers and four wheelers in Maharashtra for supplies to OEMs. The total investment for this project is pegged at Rs 76.52 crore.
• Bodal Chemicals said that the majority of Dye Intermediate operations had restarted.
• Adani Gas plans to invest up to Rs 8,000 crore in five years.

• On Tuesday, U.S. mid-term elections will determine whether Republicans keep control of Congress, and set the stage for Trump’s 2020 re-election bid.
• Reserve Bank of Australia November policy decision Tuesday
• Federal Reserve policy makers are expected to leave the main interest rate unchanged Thursday at their penultimate gathering of 2018
• Trump plans to meet Russian President Vladimir Putin on the sidelines of Armistice Day celebrations Nov. 11

• West Texas Intermediate crude fell 0.4 percent to $62.86 a barrel.
• Brent crude traded 0.3 percent lower at $72.96 a barrel.
• Gold was little changed at $1,230.82 an ounce.

Shanghai Exchange:

• Copper snapped a three-day rally, down 0.5 percent.
• Zinc traded lower for the second day, down 0.1 percent.
• Steel halted its six-day decline, up 0.4 percent.
• Aluminium traded 0.3 percent higher.
• Rubber traded lower for the second day, down 0.1 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 10,593 as of 7:55 a.m.

Asian stocks eked out modest gains at the open after a mixed U.S. session ahead of midterm elections. Equities climbed in Japan, Australia and South Korea, while Hong Kong and China futures also tipped gains.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.