Private Banks Help Sensex, Nifty Recoup Monday’s Losses

Indian equity benchmarks ended higher and recovered from yesterday’s losses.

The S&P BSE Sensex ended 0.62 percent or 238.69 points higher at 38,9839.22 and the NSE Nifty 50 ended at 11,671.95, up 0.58 percent. The broader market index represented by the NSE Nifty 500 Index ended 0.45 percent higher.

The market breath, however, was tilted in favour of sellers.

Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty PSU Bank Index’s 1.4 percent gain. On the flipside, the NSE Nifty Media Index was the only sectoral loser, down 0.2 percent.

Linde India

• Stock rose as much as 10 percent to Rs 516.05.
• Trading volume was more than eight times its 20-day average.

Lakshmi Vilas Bank

• Stock fell as much as 5 percent to Rs 92.55.
• Trading volume was more than five times its 20-day average.

Firstsource Solutions

• Stock rose as much as 6.7 percent to Rs 51.90.
• Trading volume was more than five times its 20-day average.

Coromandel International

• Stock fell as much as 5.1 percent to Rs 434.20.
• Trading volume was more than four times its 20-day average.

European shares fluctuated, amid a lasting deadlock on Brexit, and weakness on Wall Street amid scant detail on the U.S. and China finalising a trade pact.

Tech Mahindra Ltd.’s board approved acquisition of 18 percent stake in Infotek Software for Rs 13 crore, according to its stock exchange filing.

Shares of the company rose 0.9 percent to Rs 794.25 after the announcement.

Shares of Sterlite Technologies fell as much as 12.6 percent to trade at over a 12-month low at Rs 188.70.

Moody’s Investors Service withdrew Sterlite Technologies’ B1 corporate family rating and the stable outlook on the rating, according its statement. Moody’s said that it had decided to withdraw the rating for its own business reasons.

Trading volume was almost triple its 20-day average, Bloomberg data showed. The Relative Strength Index was below 30, indicating that the stock may be oversold.

Nifty’s 11,600 put option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract rose 7.96 percent to Rs 50.20. Over 4.71 lakh shares were added to the open interest which stood at over 17.4 lakh shares.

• Coal India: Shares of the coal producer rose as much as 1.5 percent to Rs 236.50. About 17.2 lakh shares changed ands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.
• JSW Steel: Shares of the steel producer fell as much as 1.6 percent to Rs 285.65. The company’s steel production fell 3 percent on a yearly basis during the fourth quarter to 41.7 lakh tonnes, according to its stock exchange notification.
• Ramco Systems: Shares of the enterprise solutions provider fluctuated between gains and losses to trade little changed at Rs 247. The company received an order for payroll modernisation from one of Australia and New Zealand’s telecom providers, it said in a statement on the exchanges.

Shares of Power Grid Corp fluctuated between gains and losses to trade little changed at Rs 198.50.

About 14.9 lakh shares changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

The stock traded at 11 times its estimated earnings per share for the coming year.

Shares of the casino-chain operator fluctuated between gains and losses to trade little changed at Rs 262.70 after the company announced its fourth quarter results yesterday.

Key Highlights (YoY)

• Net profit up 25.2 percent to Rs 56.7 crore.
• Ebitda rose 30.6 percent to Rs 88 crore.
• Gaming operations revenues up 21 percent to Rs 198 crore.
• Licensing fees up 2.5 times to Rs 24.2 crore.
• Exceptional gain of Rs 4.3 crore.
• Margin at 43.1 percent versus 39.3 percent.
• All the six analysts tracked by Bloomberg had a ‘Buy’ recommendation on the stock.

Shares of ITI rose as much as 9.4 percent, the most since Jan. 21, 2019, to Rs 106.90.

The company reported a turnover of Rs 2,051.59 crore during 2019-20, an increase of 20 percent from the year ago period, according to its stock exchange filing.

Trading volume was almost 30 times its 20-day average, Bloomberg data showed. The stock returned 12.5 percent so far this year and fell 17.4 percent in the past 12 months.

Shares of the paintmaker fell as much as 2.9 percent to Rs 1,470.

The company said a fire broke out in its Vishakhapatnam facility in Andhra Pradesh, in an exchange filing. The company said it was in the process of assessing the extent of damage and manufacturing operations of the plant were affected.

Besides, Brokerage and research firm CLSA downgraded the stock rating to ‘Sell’ from ‘Outperform’ and cut price target to Rs 1,400 from Rs 1,565, implying a downside of 4.3 percent from the current market price.

Here’s what CLSA had to say:

• Rising concerns on macro and weak consumer sentiments.
• Crude oil prices have risen sharply, increasing concerns on margins.
• Stock trading at significant premium to its own history.

Shares of Infosys extended gains for the second consecutive trading session and rose as much as 0.75 percent to hit an all-time high at Rs 773.

The stock advanced 36 percent in the past 12 months compared to a 15 percent gain in the Sensex. Infosys traded at 21 times its estimated earnings per share for the coming year, Bloomberg data showed.

Indian equity benchmarks fluctuated between gains and losses during the open after a mixed trade in their Asian peers.

The S&P BSE Sensex traded 0.15 percent lower at 38,643 and the NSE Nifty 50 traded below 11,600 after declining 0.2 percent. The broader market index represented by the NSE Nifty 500 Index also swung between gains and losses to trade 0.2 percent lower.

The market breadth was tilted in favour of sellers. About 793 stocks advanced and 627 shares declined on National Stock Exchange. Seven out of 11 sectoral gauges compiled by NSE declined, led by the NSE Nifty Auto Index’s 0.43 percent fall. On the flipside, the NSE Nifty PSU Bank was the top sectoral gainer, up 0.27 percent.

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.14 percent to 69.57 against the greenback.

April Futures

• Nifty open interest down 1 percent sheds 1.7 lakh shares in open interest.
• Bank Nifty open interest up 2 percent, adds 36,000 shares in open interest.
• Nifty futures premium at 70.4 points versus 94.8 points, closed trading at 11,674.9.
• Bank Nifty futures premium at 165.56 versus 231.9 points, closed trading at 30,010.9.

Options

• Nifty PCR at 1.38 versus 1.61 (across all series).

Nifty Weekly Expiry (April 11)

• Max open interest at 11,700 Call (21.6 lakh shares), 11,800 Call (17.2 lakh shares) and 11,600 Put (12.6 lakh shares).
• Open interest addition seen at 11,700 Call strike, adds 10.7 lakh shares in open interest.
• Open interest shedding seen at 11,600 Put strike, sheds 6.4 lakh shares in open interest.

Nifty Monthly Expiry

• Max open interest at 12000 Call (27.8 lakh shares) and 11,000 Price (27.1 lakh shares).
• Max open interest addition seen at 12,000 Call (+4.5 lakh shares) and 11,700 Call (+2.3 lakh shares).

Stocks In F&O Ban

In Ban:

• Adani Power
• DLF*
• IDBI
• Jet Airways
• PC Jeweller*
• Reliance Power
• Wockhardt*

Out of Ban:

• Dewan Housing

*New in ban.

CLSA on Asian Paints

• Downgraded to ‘Sell’ From ‘Outperform’; cut price target to Rs 1,400 from Rs 1,565.
• Rising concerns on macro and weak consumer sentiments.
• Crude oil prices have risen sharply increasing concerns on margins.
• Stock trading at significant premium to its own history.

UBS on ONGC

• Maintained ‘Buy’ with a price target of Rs 240.
• ONGC due for rerating as clarity on subsidy sharing mechanism imminent.
• Improving visibility on higher gas output as key projects near completion.
• Domestic gas price hike with increasing output to improve gas revenue mix.

Nomura on Va Tech Wabag

• Maintained ‘Buy’; cut price target to Rs 520 from Rs 761.
• Stock weak due to miss on order inflows/execution and rise in debtor.
• Namami Gange scheme to provide Rs 8400 crore worth opportunities in 2019-20
• Stuck receivables to partly be resolved by end of the current financial year and fully by March 2021.

HSBC on Vedanta

• Maintained ‘Hold’; hiked price target to Rs 205 from Rs 200.
• Ramp-up at Gamsberg progressing well.
• Gamsberg phase 2 could add another 200 KT.
• Raise estimates on better than expected ramp-up at Gamsberg.

Nomura on HCL Tech

• Maintained ‘Buy’ with a price target of Rs 1,235.
• Strong deal wins to propel growth for 2019-20.
• Expect guidance of 7-9 percent and 14-16 percent CC organic and overall revenue growth respectively.
• Valuation attractive and at discount to peers despite similar or better EPS growth.

Morgan Stanley on OMCs

• Oil marketers have slowed down fuel adjustments, but still raised prices to reflect the move in oil.
• Unlike past OMCs continue to show healthy margins on petrol.
• Petrol fuel margins remained healthy, diesel margins declined in recent past.

Edelweiss on Jet Airways

• Downgraded to ‘Reduce’ from ‘Hold’; cut price target to Rs 177 from Rs 229.
• 3/4th fleet grounded, flight cancellations dent franchise and slots are being relinquished.
• Expect dismal March quarter due to cut in capacity.
• Soaring yields aid industry; switch over to IndiGo/SpiceJet.

HSBC on Container Corp

• Maintained ‘Reduce’; hiked price target to Rs 450 from Rs 448.
• Growth story overappreciated and partly misunderstood.
• Volume growth has slowed; recovery outlook is not strong.
• Competitive intensity is set to increase; Return ratios expected to remain low.

• Bajaj Healthcare ex-date for bonus issue at 1:1.
• HT Media ex-date for demerger.
• IVRCL, CESC Ventures to move into short term ASM Framework.

• Sun Pharma promoter group Shanghvi Finance created pledge of 2.13 crore shares on April 4.
• Zee Media Corporation promoter 25FPS Media created pledge of 2.37 crore shares from March 29-30.
• Dish TV promoter Direct Media Distribution Ventures created pledge of 33.8 lakh shares and released pledge of 18 lakh shares from March 29-30.
• Astra Microwave Products promoter B Malla Reddy invoked pledge of 10,200 shares on April 3.

• HPL Electric & Power: EQ India Fund acquired 3.27 lakh shares or 0.51 percent equity at Rs 60.22 each.

DLF

• Societe Generale acquired 2.09 crore shares or 1.17 percent equity at Rs 191 each.
• Government of Singapore sold 6.8 crore shares or 3.81 percent equity at Rs 191.01 each .(aggregated to Rs 1,300 crore).
• GIC has reduced its stake from 4.11 percent to 0.3 percent, as per the exchanges.

Religare Enterprises

• LAKHP Merchant Financing acquired 60 lakh shares or 2.77 percent equity at Rs 31 each.
• India Horizon Fund sold 60 lakh shares or 2.77 percent equity at Rs 31 each.

Earnings Reaction To Watch

Delta Corp (Q4 YoY)

• Revenues up 19.1 percent at Rs 204.3 crore.
• Net profit up 25.2 percent at Rs 56.7 crore.
• Ebitda up 30.6 percent at Rs 88 crore.
• Margins at 43.1 percent versus 39.3 percent.
• Gaming Operations Revenues up 21 percent at Rs 198 crore.
• Licensing Fees up 2.5 times at Rs 24.2 crore.
• Exceptional Gain of Rs 4.3 crore.

Earnings To Watch

• Bajaj Consumer Care

• Polycab over-subscribed 1.94 times.

• Linde India: SEBI appointed an independent chartered accountant firm to determine the fair price of equity shares of Linde India for the purpose of open offer. This is after the company had seen at least a couple of failed open offer made by an acquirer The BOC Group.
• Sun Pharmaceutical Industries said its wholly owned subsidiary Sun Pharma Distributors Ltd. will commence distributing its formulation products in India from this month in a phased manner on the same terms as was with Aditya Medisales Ltd. This phased transition is expected to be fully completed by the first quarter of 2019-20.
• Panacea Biotec: Piramal Enterprises and Bain Capital backed India Resurgence Fund to invest Rs 992 crore in the company. The company said investment proceeds will be used for one-time settlement with existing lenders, general working capital and growth requirements of the company. The fund will acquire 10.4 percent stake in the company.
• DLF bulk deal: Government of Singapore (GIC) sold 3.8 percent stake in the company worth Rs 1,300 crore. It reduced its stake from 4.11 percent to 0.3 percent, as per exchanges. Societe General acquired 1.17 percent stake. Lee Kok Sun, Chief Investment Officer at GIC Real Estate said that it will strengthen its partnership with DLF to tap investment opportunities in India. DLF CEO, Ashok Tyagi also stated that GIC’s current investment in DLF is worth $1.8 billion and the latest sale is possibly due to portfolio churning. (Bloomberg News)
• Coffee Day Enterprises: Japan based-Impact HD to invest up to $15 million for 49 percent stake in the company’s arm Coffee Day Consultancy Services.
• Fortis Healthcare has started looking for buyers to purchase its 27.8 percent stake in Singapore based arm RHT Health Trust. The company has also stated that these decisions are preliminary in nature and no proposal has been received. Board appoints Vivek Kumar Goyal as CFO with effect from April 8.
• Indian Overseas Bank decreased its MCLR by 5 basis points across various tenors. One-year MCLR at 8.7 percent and three-year MCLR at 8.9 percent.
• Quess Corp said that its staffing business has added 23,000 associates with effect from April 1. Post the complete execution of these contracts, the Staffing business shall have an associate strength of over 2.15 lakh employees and this active deal conversion is expected to benefit he company across its core operating and financial metrics, as stated in the press release.
• Indo-Rama Synthetics: Board appointed Maganti Narayan Sudhindra Rao as CEO for three years with effect from April 8.
• Asian Paints: Fire broke out in Andhra Pradesh manufacturing facility. The company says manufacturing operations have been affected and this event will not have any impact on the operations.
• Majesco’s U.S. arm appointed Wayne Locke as new CFO.
• 5paisa Capital to consider raising capital via NCDs on April 16.
• Voltas signed a distribution agreement with Japanese based textiles machines manufacturer ‘Shima Seiki’ for sales and marketing of the latter’s products in India.
• Yes Bank: Board to consider raising capital via debt on April 26.
• InterGlobe Aviation: IndiGo strengthened Mumbai as a key travel hub with three new international and 20 additional domestic flights. With effect from April 15, the airline will also introduce 20 additional domestic flights from Mumbai connecting different cities across India.
• Prabhat Telecom entered into a distribution agreement with Hong Kong based ‘Xmi’ for distributing telecom accessories as manufactured products in 12 states in India to specific retailers on Non-Exclusive Basis.
• Usha Martin: Rohit Nanda resigned as the CFO with effect from April 9. Board has appointed Anirban Sanyal as the new CFO.
• Wockhardt clarified on the news of its plans to demerge its formulations business stating that it won’t comment on market rumours or speculations.
• Karda Constructions: Commenced construction of residential and commercial project in Nashik. Expected sale proceeds form this project will be around Rs 21.19 crore and the project will be completed by November 2022. (Alert: Company has a market cap of Rs 233 crore)

• U.S. banks begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo.
• Israel votes in an election Tuesday.
• The annual Spring Meetings of the World Bank Group and the IMF begin in Washington Tuesday.
• The ECB will probably leave its key interest rates unchanged Wednesday. Investors will be looking for further details on TLTRO.

• Brent crude extended gains for the fourth consecutive trading session, traded 0.1 percent higher at $71.18 a barrel.
• West Texas Intermediate crude rose 0.3 percent to $64.59 a barrel, the highest in five months. It rose 2.1 percent Monday.
• Gold was little changed at $1,296.92 an ounce.

London Metal Exchange

• Aluminium ended lower for the third consecutive trading session, ended 1 percent lower.
• Copper halted a two-day fall, ended 1.16 percent higher.
• Lead halted a two-day decline, ended 0.28 percent higher.
• Tin ended lower for the fifth consecutive trading session, down 0.83 percent.
• Zinc ended 0.55 percent lower.
• Nickel ended a two-day fall, closed 0.85 percent higher.

Good morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 11,689 as of 8:30 a.m.

Asian stocks traded mixed Tuesday after the threat of new tariffs on European goods from President Donald Trump damped risk appetite. Treasuries steadied alongside the dollar.

Shares slipped in Japan and China and were little changed in Hong Kong and Australia. S&P 500 Index edged lower after the benchmark eked out a gain in thin volumes Monday, rising to just over a percent from its all-time high.

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