Sensex, Nifty Halt Five-Day Rally

Indian equity benchmarks snapped their five-day winning streak paced by losses in Vedanta, Mahindra & Mahindra and Tata Steel.

The S&P BSE Sensex fell 0.37 percent or 134 points to 36,445 and the NSE Nifty 50 Index declined 0.36 percent or 39 points to 10,923.

Fourteen of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Metal Index's 2.3 percent decline. On the flipside, S&P BSE Healthcare Index was top gainer, up 1.2 percent.

Small-cap shares also witnessed selling pressure as the S&P BSE SmallCap Index fell 0.5 percent.

Shares of the Bengaluru-based medical devices maker rose as much as 7.57 percent to Rs 9.95 after its board of directors approved allotment of 1.31 crore shares at Rs 15 per share on preferential basis to non-promoters, Opto Circuits said in an exchange filing.

Asian Paints Ltd.’s profit rose 15 percent on a yearly basis to Rs 636 crore during October-December period, according to its stock exchange filing.

Key earnings highlights (Q3, YoY)

• Revenue up 24 percent at Rs 5,294 crore.
• Net profit up 14.6 percent at Rs 636 crore.
• Ebitda up 17 percent at Rs 1,043 crore.
• Margin at 19.7 percent versus 20.9 percent.
• Shares of Asian Paints fell as much as 3.1 percent to Rs 1,378 after the results announcement.

Shares of the Vadodara-based drugmaker rose as much as 4 percent to Rs 614 after its profit rose 30 percent in December quarter.

Key earnings highlights:

• Revenue up 21 percent at Rs 1,018 crore versus Rs 840 crore (YoY)
• Net profit up 30 percent at Rs 170 crore versus Rs 131 crore (YoY)

Shares of the Kolkata-based cement maker came off intraday low levels after its profit surpassed Bloomberg estimates in December quarter.

Key earnings highlights:

• Revenue up 19 percent at Rs 2,781 crore versus Rs 2,303 crore. (YoY)
• Net profit declines 10 percent to Rs 300 crore versus estimate of Rs 232 crore.
• Announces dividend of Rs 25 per share.
• EBITDA up 25 percent at Rs 710 crore versus Rs 570 crore (YoY)

Shares of the Noida-based electrical wires and switchgear maker declined 0.5 percent to Rs 674 after its profit met Bloomberg consensus estimates in December quarter.

Key earnings highlights:

• Net profit at Rs 196 crore versus estimate of Rs 193 crore.
• Revenue at Rs 2,520 crore versus estimate of Rs 2,260 crore.
• EBITDA up 12.4 percent at Rs 295 crore versus Rs 262 crore (YoY)

Shares of the Chennai-based two- and three-wheeler maker recovered from intraday low levels and rose as much as 2.55 percent to Rs 552 after its profit beat Bloomberg consensus estimates in December quarter.

Key earnings highlights:

• Revenue rose 26 percent to Rs 4,664 crore versus Rs 3,699 crore (YoY); Estimate of Rs 4,550 crore.
• Net profit rose 15.57 percent to Rs 178.39 crore versus estimate of Rs 169 crore.

Shares of the Anil Ambani-led company traded 0.4 percent lower at Rs 13.05 after National Companies Law Appellate Tribunal deferred pleas by Ericsson and HSBC to Feb. 25.

• GE T&D: The Noida-based power transmission equipment maker fell as much as 2.34 percent to Rs 300.95. Trading volume was more than 20 times its 20-day average.
• Finolex Cables: The Pune-based telecom and electrical cable maker fell as much as 1.78 percent to Rs 431.25. Trading volume was 13 times its 20-day average.
• Sundram Fasteners: The Chennai-based nuts and bolts maker fell as much as 1.27 percent to Rs 515. Trading volume was 12 times its 20-day average.
• Sun Pharma Advanced Research: The Mumbai-based advanced pharmaceutical ingredients maker rose as much as 7 percent to Rs 187. Trading volume was nine times its 20-day average.

Nifty's 10,900 put option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 23 percent to Rs 102.65. Over 1.76 lakh shares were reduced from the open interest which stood at over 30.50 lakh shares.

Click here to see the complete options chain

Shares of the Mumbai-based paint maker declined as much as 1.1 percent to Rs 1,406 ahead of December quarter earnings.

Here's what to expect from Asian Paints in December quarter (Bloomberg median estimates):

• Revenue seen rising 14.7 percent to Rs 4,886 crore versus Rs 4,260.5 crore (YoY)
• EBITDA seen advancing 9.4 percent to Rs 975 crore versus Rs 891.5 crore (YoY)
• Margin seen at 20 percent versus 20.9 percent (YoY)
• Net profit seen climbing 11.5 percent to Rs 619 crore versus Rs 555 crore (YoY)

Gauge of metal shares on the National Stock Exchange was the top sectoral loser led by losses in JSW Steel, Vedanta and Tata Steel.

Nifty Metal Index declined 2.4 percent to 2,877.

Shares of the Secunderabad-based fertilizers and pesticides maker fell as much as 6.59 percent to Rs 411.15 after its profit declined in December quarter.

Key earnings highlights:

• Revenue up 11.5 percent at Rs 3,049.5 crore.
• Net profit down 14.5 percent at Rs 154.3 crore.
• Ebitda down 7.2 percent at Rs 303.9 crore.
• Margin at 10 percent versus 12 percent.
• Other Expenses up 51 percent at Rs 245.7 crore.

Local Indian airlines carried 13.9 crore passengers between January-December 2018, DGCA data showed.

• IndiGo's December market share at 43.2 percent
• Jet Airways December market share at 13.9 percent
• Air India December market share at 12.4 percent
• SpiceJet December market share at 12.3 percent

Shares of the Raigad-based alloy steel maker rose as much as 2.54 percent to Rs 499 after National Companies Law Tribunal (NCLT) approved resolution plan for acquisition of United Seamless Tabulaar Private Limited under the Corporate Insolvency Resolution Process, Maharashtra Seamless said in an exchange filing.

Indian equity benchmarks were trading lower with the mid- and small-cap shares underperforming the benchmarks.

The S&P BSE Sensex fell 134 points to 36,444 and the NSE Nifty 50 Index declined 44 points to 10,917.

Mid- and small-cap indices declined 0.5 percent underperforming the larger peers for second day in a row.

Sixteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal Index's 1.85 percent decline. On the flipside, S&P BSE Energy Index was top gainer, up 0.7 percent.

Overall market breadth was negative as 1,279 shares were declining while 658 were advancing on the BSE.

Shares of the Pune-based software developer fell as much as 6 percent, the most in nearly two months, to Rs 219.80 after its profit declined in December quarter.

Key earnings highlights:

• Dollar Revenue up 4 percent at $143.7 million.
• Revenue up 6.9 percent at Rs 1,035.6 crore.
• Net profit down 40.8 percent at Rs 55.3 crore.
• EBIT down 16.6 percent at Rs 75.8 crore,
• Margin at 7.3 percent versus 9.4 percent.
• Other income of Rs 41.3 crore in base quarter.

Shares of Ashok Leyland extended declines for the fourth day and fell as much as 3.6 percent to trade at its lowest levels since May 26, 2017.

The Relative Strength Index was at 21, indicating that the stock may be oversold, Bloomberg data showed. The stock has declined 6.5 percent in the past five days and fell 17 percent in the past 30 days.

Shares of Just Dial extended gains for the second day and rose as much as 3.4 percent to Rs 490.45.

The company’s profit jumped 100.3 percent on a yearly basis to Rs 57.3 crore during October-December period, according to its stock exchange filing.

Key earnings highlights (Q3, YoY)

• Revenue up 15.2 percent at Rs 226.8 crore.
• Net profit up 2 times at Rs 57.3 crore.
• Ebitda up 18.7 percent at Rs 55.2 crore.
• Margin at 24.3 percent versus 23.6 percent.
• Other income of Rs 34.1 crore.

Here’s what Macquarie had to say after the company announced its quarterly results:

• Maintained ‘Neutral’ with a price target of Rs 500.
• December quarter’s performance mixed with improved top-line growth but lower than expected operating margin.
• Huge jump in other income led to net profit doubling.
• Paid campaigns see impressive traction; realisations were flat on a sequential basis.

Shares of Page Industries declined for the sixth day fell as much as 3.9 percent to Rs 22,055.

About 1.7 lakh shares or 1.5 percent equity of the company changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Trading volume was almost seven times its 20-day average, according to Bloomberg data. The stock advanced 4.1 percent in the past 12 months compared to a 3 percent advance in the Sensex.

Shares of the country’s largest pharmaceutical company rose as much as 4.8 percent to Rs 417.50.

The drugmaker issued clarifications over alleged corporate governance lapses against the company that led to a selloff in its shares.

The stock traded at 19.2 times estimated forward earnings per share compared to a 25.1 times for the two-year historical average, Bloomberg data showed. The scrip was the best performer on Sensex and Nifty.

Shares of Prabhat Dairy rose as much as 20.4 percent, the most since August 2016, to Rs 111.65.

The company entered into an definitive agreement with French dairy multinational Groupe Lactalis to sell its milk-processing business for about Rs 1,700 crore through a slump sale. (more details here)

Trading volume was almost 140 times its 20-day average, Bloomberg data showed. The Relative Strength Index was at 76, indicating that the stock may be overbought.

Indian equity benchmarks opened lower after rallying for five trading sessions.

The S&P BSE Sensex Index fell as much as 0.29 percent to 36,474.31 and the NSE Nifty 50 Index fell as much as 0.37 percent to 10,921.60.

The market breadth was tilted in favour of sellers. About 825 stocks declined and 569 shares advanced on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE fell, led by the NSE Nifty Metal Index’s 0.71 percent decline. On the flipside, the NSE Nifty Pharma Index’s 1.08 percent.

The Indian rupee opened higher after depreciating for the last two trading sessions against the dollar. The home currency appreciated as much as 0.1 percent to 71.17 against the greenback.

Indian bond traders will be focusing on a sale of 77.5 billion rupees of securities by the state governments. On Monday, India Ratings warned state finances will be under pressure due to increased farm support in an election year.

The yield on the most-traded 10-year bond fell three basis points to 7.57 percent on Monday on a Bloomberg News report that said the additional annual expenditure for India’s federal government to roll out a farmers’ relief program will probably be about $9.8 billion annually. There has been speculation that the amount would be much larger and a smaller amount came as a relief to bond investors.

F&O Cues

• Nifty January futures closed trading at 10902, premium of 60 points.
• Max open interest for January series at 11,000 call (open interest at 32.6 lakh shares.
• Max open interest for January series at 10,700 put (open interest at 36.3 lakh shares)

Stocks In F&O Ban

• Adani Power
• Jet Airways

Put-Call Ratio

• Nifty PCR at 1.59 versus 1.56.
• Nifty Bank PCR at 1.18 versus 1.14.

On Kotak Mahindra Bank

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,500.
• Stronger CASA franchise aids bank’s earnings.
• Asset quality trends were stable along with improved coverage.
• Believe the bank can deliver healthy 21 percent earnings CAGR over FY18-21.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 1,450 from Rs 1,325.
• In-line numbers and a stable quarter; sound balance sheet.
• Key Highlights: stable asset quality and CASA ratio, decent loan growth and improving margins.
• Loan growth driven by CVs, personal loans and corporate banking.

Edelweiss

• Maintained ‘Buy’; hiked price target to Rs 1,446 from Rs 1,413.
• Growth momentum sustains; visibility improves.
• Asset quality steady despite uncertainties.
• Liability franchise continues to impress, best among peers.

On Union Bank

CLSA

• Maintained ‘Buy’ with a price target of Rs 105.
• Slippage stays elevated due to stress in corporate and SME portfolios.
• Slower loan growth will help preserve capital and CASA franchise.
• Earnings to normalise from 2019-20 onwards.

Edelweiss

• Maintained ‘Hold’; cut price target to Rs 90 from Rs 110.
• Business momentum continues to be soft.
• Asset quality steady, outlook cautious.
• Believe dilution risks and structural challenges would persists.

On Hindustan Zinc

Macquarie

• Maintained ‘Underperform’; cut price target to Rs 230 from Rs 240.
• December quarter was in line, but project delays suggest lower volume growth
• Commodity prices to remain unfavourable.
• Premium valuations difficult to justify given attractive alternates.

Edelweiss

• Maintained ‘Buy’ with a price target of Rs 312.
• Performance in line; volume uptick imminent.
• Dividend yield of 7 percent looks sustainable.
• Likely to hit mined metal capacity of 1.2 MTPA by September.

More Calls

Macquarie on Nestle

• Initiated ‘Outperform’ with a price target of Rs 12,994.
• Best way to play packaged goods space.
• Market-share wins in core categories have led to strong volume growth.
• Premium valuations to sustain on strong earnings, ROE.

CLSA on Ashok Leyland

• Maintained ‘Sell’; cut price target to Rs 75 from Rs 85.
• Truck industry likely to enter into a downturn after five years of up-cycle.
• New axle load norms hurting industry mix too; scrappage policy unlikely.
• Competition likely to intensify; Stock expensive for a looming downturn.

Motilal Oswal on MRPL

• Upgraded to ‘Buy’ from ‘Neutral’; maintained price target at Rs 86.
• Expect better refining margins.
• Upgraded to ‘Buy’ on higher margins and attractive valuations.
• Post expansion, MRPL’s GRMs to be at a premium of $2-3/bbl over Singapore complex GRM.

Macquarie on Just Dial

• Maintained ‘Neutral’ with a price target of Rs 500.
• December quarter’s performance mixed with improved top-line growth but lower than expected operating margin.
• Huge jump in other income led to net profit doubling.
• Paid campaigns see impressive traction; realisations were flat on a sequential basis.

• KG Denim, IOC buyback period opens till Feb. 4.
• Excel Industries price band revised to 5 percent.

• Xelpmoc Design to sell shares at Rs 62-66 each in IPO starting Jan 23.

• EID Parry: Ardhya Investors sold 9.83 lakh shares or 0.56 percent equity at Rs 200.09 each.

Nifty Earnings To Watch

• Asian Paints

Other Earnings To Watch

• Agro Tech Foods
• Alembic Pharmaceuticals
• Aurionpro Solutions
• Cupid
• Confidence Petroleum
• Havells
• HDFC Standard Life Insurance
• ICICI Prudential Life Insurance
• Kirloskar Industries
• Oberoi Realty
• Reliance Nippon Life Asset Management
• Sadhana Nitrochem
• Shree Cement
• TVS Motor
• Genus Power Infrastructures
• Dolat Investments
• Rane (Madras)
• Syngene International

Earnings Reaction To Watch

HDFC AMC (Q3,YoY)

• Revenue up 2 percent at Rs 477.1 crore.
• Net profit up 24.7 percent at Rs 243.3 crore.
• EBIT up 21.3 percent at Rs 312.5 crore.
• Margin at 65.5 percent versus 55.1 percent
• Other Income up 2.1 times at Rs 55.9 crore.
• Total AUM up 12 percent at Rs 3,29,100 crore (QoQ)
• Actively Managed Equity AUM up 4 percent at Rs 1,53,500 crore (QoQ)

Zensar Technologies (Q3, QoQ)

• Dollar Revenue up 4 percent at $143.7 million.
• Revenue up 6.9 percent at Rs 1,035.6 crore.
• Net profit down 40.8 percent at Rs 55.3 crore.
• EBIT down 16.6 percent at Rs 75.8 crore,
• Margin at 7.3 percent versus 9.4 percent.
• Other Income of Rs 41.3 crore in base quarter.

L&T Finance Holdings (Q3 Consolidated, YoY)

• Net interest income up 55.1 percent at Rs 503.4 crore.
• Net profit up 80.8 percent at Rs 579.9 crore.
• Other Income of Rs 272.4crore
• NIMs plus fees at 6.79 percent versus 5.62 percent.
• Lending business book up 23 percent at Rs 93,708 crore.

Coromandel International (Q3 Consolidated, YoY)

• Revenue up 11.5 percent at Rs 3,049.5 crore.
• Net profit down 14.5 percent at Rs 154.3 crore.
• Ebitda down 7.2 percent at Rs 303.9 crore.
• Margin at 10 percent versus 12 percent.
• Other Expenses up 51 percent at Rs 245.7 crore.

IRB Invit Fund (Q3, YoY)

• Revenue up 2 percent at Rs 306.2 crore.
• Net profit down 18.6 percent at Rs 52.2 crore.
• Ebitda down 10.7 percent at Rs 87.2 crore.
• Margin at 28.5 percent versus 32.5 percent.
• Project management expenses up 80 percent at Rs 34.8 crore.
• Trust declares distribution of Rs 3.1 per unit held.

Bhageria Industries (Q3, YoY)

• Revenue up 23.6 percent at Rs 112 crore.
• Net profit up 7.1 percent at Rs 15.1 crore.
• Ebitda flat at Rs 25.7 crore.
• Margin at 22.9 percent versus 28.7 percent.
• Raw materials as percent of sales at 64 percent versus 54 percent.
• Declares dividend of Rs 3.75 per share

Pondy Oxides & Chemicals (Q3, YoY)

• Revenue up 7.2 percent at Rs 255.2 crore.
• Net profit up 40 percent at Rs 11.2 crore.
• Ebitda up 30.3 percent at Rs 20.2 crore.
• Margin at 7.9 percent versus 6.5 percent

Sundaram Finance Holdings (Q3, YoY)

• Revenue up 80.4 percent at Rs 25.8 crore.
• Net profit up 54.5 percent at Rs 17.3 crore.

Sasken Technologies (Q3, QoQ)

• Revenue up 7.3 percent at Rs 121.4 crore.
• Net profit up 7.1 percent at Rs 18.1 crore.
• EBIT down 6 percent at Rs 11 crore.
• Margin at 9.1 percent versus 10.3 percent
• Revenue from top five consumers at 52.2 percent.

Just Dial (Q3, YoY)

• Revenue up 15.2 percent at Rs 226.8 crore.
• Net profit up 2 times at Rs 57.3 crore.
• Ebitda up 18.7 percent at Rs 55.2 crore.
• Margin at 24.3 percent versus 23.6 percent.
• Other income of Rs 34.1 crore.

• IDBI Bank’s board approved to reinitiate divestment process of the bank’s stake in IDBI Federal Insurance.
• Sanwaria Consumer board approved raising $100 million via equity shares on a preferential basis by various methods including ADRs/GDRs and share warrants.
• Power Grid Corporation appointed director Ravi Singh as CMD with effect from Jan. 21 till a regular appointment is made for the post after outgoing CMD S. Jha gets released by Power Ministry post his appointment as the member of Central Electricity Regulatory Commission.
• Canara Bank said that it started inviting bids to offload its equity stake in NSDL, NSDL e-Governance Infra and Small Industries Development Bank of India.
• UFO Moviez: National Company Law Tribunal dismissed amalgamation scheme of the company with Qube Cinemas and other three entities. The company said it that it is currently under the process of exploring its options resultant to the order passed by NCLT.

• Earnings season is in full swing: Johnson & Johnson, IBM, UBS, United Technologies, Texas Instruments, and Ford are among companies posting results this week.
• The World Economic Forum, the annual gathering of global leaders in politics, business and culture, opens in Davos, Switzerland on Tuesday.
• There are monetary-policy decisions for the Bank of Japan (Wednesday), the Bank of Korea and the European Central Bank (both Thursday).

• West Texas Intermediate crude climbed 0.2 percent to $53.90 a barrel.
• Brent declined after a two-day rally, down 0.75 percent to $62.27 per barrel.
• Gold fell 0.1 percent to $1,280.31 an ounce.

London Metal Exchange

• Aluminium ended 0.96 percent lower.
• Tin ended lower for the second day, up 0.12 percent.
• Nickel ended 0.17 percent lower.
• Copper halted a four-day rally, down 1.17 percent.
• Lead ended higher for the second day, up 0.75 percent.
• Zinc ended higher for the fourth day, up 0.31 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade at 10,961 as of 7:45 a.m.

Asian stocks and U.S. futures dropped Tuesday as investors mulled the latest batch of headlines on global growth and trade, while Treasury yields edged lower.

Without any direction offered from American markets that were shut for a holiday Monday, shares declined from Tokyo and Sydney to Shanghai and Seoul.

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