Sensex, Nifty Gain For Fourth Session As Metals, Private Lenders Lead; Pharma Drags
Catch all live updates on share prices, index moves, corporate announcements and more from the Sensex and Nifty, today.
KEY HIGHLIGHTS
Closing Bell
Indian equity benchmarks extended their gains to a fourth straight session as investors weighed the prospect of business recovery against the pace of new coronavirus infections.
The S&P BSE Sensex climbed 0.6% to 38,407 while the NSE Nifty 50 Index closed 0.4% higher at 11,318. Ten of the 19 sectoral indices on the BSE advanced led by the 1.5% rise in S&P BSE Metal Index. The S&P BSE Healthcare & S&P BSE Telecom were the worst performing indies, down nearly 1.5%.
The broader market underperformed with the S&P BSE SmallCap and S&P BSE MidCap indices losing 0.2% each.
Foreign investors have bought net $1.3 billion of local shares this month through August 7 as inflows continue into a fourth month. Still, a steady increase in new coronavirus infections continues to curb business activity, with the economy on course for its first contraction in 40 years.
As earnings continue, 24 of the 37 Nifty 50-member companies that have announced results so far have beaten or matched estimates.
Rupee Settles 12 Paise Higher At 74.78/$
The rupee appreciated 12 paise to close at 74.78 (provisional) against the U.S. dollar tracking weakness in the greenback and gains in the domestic equity market.
At the interbank forex market, the local unit opened at 74.83 against the US dollar, then gained further ground and finally settled at 74.78, up 12 paise over its previous close of 74.90 against the American currency.
During the session, the domestic unit witnessed an intra-day high of 74.77 and a low of 74.86 against the greenback.
Forex traders said gains in the domestic currency were supported by foreign fund inflows into domestic equity and debt markets. Market participants will track Index of Industrial Production (IIP) numbers scheduled to be released later in the day for further cues, they said.
Source: PTI
India July Passenger Vehicle Sales Fall 3.9% YoY: SIAM
Passenger vehicles sales in domestic market in July plunged by 3.86% year-on-year to 1,82,779 units, according to data released by SIAM.
The three-wheeler sales was at 12,728 units in July, compared to 55,719 units year-on-year.
The two-wheeler sales was 12,81,354 units in July vs 1,511,717 units in the same period year ago.
“After a few consecutive of months of plummeted sales in a post-covid scenario, there are signs of green shoots in passenger vehicles and two-wheelers where the year-on-year de-growth is much lesser than in the previous months,” SIAM President Rajan Wadhera said in a statement on Tuesday. “The sales in August will indicate if this is a sustainable demand and not just pent-up.”
Yes Bank Extends Its Winning Streak
Yes Bank jumps nearly 5% to Rs 15.50 apiece.
The Mumbai-based private lender’s stock is higher for the seventh straight day, on track for the longest winning streak since the period ended Nov. 9, 2018.
The stock has gained a total of 30% during the streak while the Sensex Index increased 2.3%.
Stocks Moving On Heavy Volume
- IRCTC gains nearly 3% to Rs 1,361 apiece.
- Chambal Fertilisers rises 6.4%, the most in three months, to Rs 161.
- IDFC up 7.5%, most in five weeks, to Rs 22.30 apiece.
- Alkem Labs down 6.6%, most in almost five months, to Rs 2782 apiece.
Bloomberg Intelligence Report On IndiGo
IndiGo's Rs 4,000 crore equity raise could extend its cash buffer to 15 months from 10 as its liquidity rises to Rs 13,500 crore. Yet this could dilute earnings per share by 13% if the issue price is discounted 30% vs. Monday's close, similar to discounts seen at other airlines' equity raisings. This could also boost book value per share by 45%.
Low-cost carrier InterGlobe Aviation (IndiGo) may record a 64% capacity cut this fiscal year ending March due to the pandemic, missing its original 20% growth target amid aircraft underutilization as it continues to take deliveries through to at least September. High maintenance costs that plagued the airline last year may normalize, as its last 40 troubled engines are replaced. Rival Jet Airways’ exit boosted IndiGo’s domestic market share to 48% but also put smaller competitors on a stronger footing, intensifying competition. In the longer term, IndiGo’s cost structure could improve as older A320ceos are replaced by more efficient A320/321neos, which may also position it for international expansion.Bloomberg Intelligence Report
HDFC Raises Rs 10,000 Crore Allotting Shares at Rs 1,760 Each
The mortgage lender alloted 5.68 crore shares to investors including Government of Singapore and Invesco Oppenheimer Developing Markets Fund, according to an exchange filing.
It also issued 1.71 crore warrants convertible into shares to investors; also approves allotment of non-convertible bonds to raise Rs 3,693 crore, the filing said.
ICICI Bank Sets Floor Price For Rs 15,000-Crore QIP
Private sector lender ICICI Bank Ltd. on Monday set the floor price at Rs 351.36 per share for its proposed share sale to raise up to Rs 15,000 crore.
The floor price for the qualified institutional placement of shares is at a discount of over 3% to Monday's close of Rs 363.60 on the BSE.
The bank will be joining a slew of lenders, including mortgage lender HDFC which raised Rs 14,000 crore last week, and also others like its peer Axis Bank and Kotak Mahindra Bank, who have raised capital as the system braces for a loan impairment impact.
Bosch Q1 Net Loss Widens Due To Exceptional Losses
Q1 (Standalone, YoY)
- Revenue down 64% at Rs 991.5 crore vs Rs 2,755.1 crore
- Net loss at Rs 120.5 crore vs net profit at Rs 280 crore
- Ebitda loss at Rs 102.2 crore vs Ebidta gain at Rs 484.4 crore
Exceptional loss of Rs 197.2 crore due to provisioning towards various structural and transformational projects.
Bajaj Electricals Pares Gains After Q1 Earnings
Bajaj Electricals operating numbers turn negative for the first time in over five years
Q1 (Consolidated, YoY)
- Revenue down 53.2% at Rs 608.3 crore vs Rs 1,300.7 crore
- Net loss at Rs 15.9 crore vs net loss at Rs 1.1 crore
- Ebitda loss at Rs 21.8 crore vs Ebidta gain at Rs 37.3 crore
Exceptional gain of Rs 28.4 crore on de-recognition of its existing investment in the manufacturing undertaking of Hind Lamps which was demerged in current quarter.
Motherson Sumi Swings After Q1 Mixed Bag
Motherson Sumi reported revenue for the first quarter that beat the average analyst estimate.
- Q1 revenue Rs 8,503 crore, -49% y/y, estimate Rs 8,016 crore (range Rs 3981crore to Rs 9,919 crore as per Bloomberg consensus)
- Net loss Rs 810 crore vs profit Rs 332 crore YoY, estimate loss Rs 539 crore (range loss Rs 236 crore to Rs 948 crore
- Ebitda loss at Rs 630 crore vs Ebidta gain of Rs 1,254.9 crore (estimate Ebidta loss Rs 113 crore)
- Total costs Rs 9,958 crore, -39% YoY
- Other income Rs 48.06 crore
Strides Pharma Falls After Biggest Single-Day Jump In Over 3 Months
The drugmaker declined as much as 6% to Rs 572 apiece, making it the third-worst performing stock on the S&P BSE Healthcare Index.
The scrip had risen over 16%, the most since April 29, on the previous trading session. Total return is 60.0% YTD vs -6.1 for Sensex Index.
Relative strength index at 74; stock may be overbought.
Invesco Mutual Fund View
Market Check: Sensex, Nifty Extend Gain As Metals, Banks Lead
The Sensex gained 0.8% to 38,492.13 as of 1:55 p.m. in Mumbai, set for its longest stretch of gains in three weeks. The NSE Nifty 50 Index also advanced 0.8%.
Fourteen of the 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a gauge of metal companies.
Foreign investors have bought net $1.3 billion of local shares this month through August 7 as inflows continue into a fourth month. Still, a steady increase in new coronavirus infections continues to curb business activity, with the economy on course for its first contraction in 40 years.
As earnings continue, 24 of the 37 Nifty 50-member companies that have announced results so far have beaten or matched estimates. Adani Ports & Special Economic Zone Ltd. and Motherson Sumi Systems Ltd. are among companies announcing results today.
Metals Shine Bright In Trade
Minda Industries’ Rights Issue Priced At Rs 250/Share
Shares the company rose over 1.7% after it announced details of its right issue.
The company will issue one rights issue share for 27 held. The rights issue was priced at Rs 250 apiece.
The scrip is down nearly 20% YTD vs 6% for the Sensex. Analyst consensus price target (Rs 312.69) is 10.7% above current price, Bloomberg data showed.
KEC International Jumps After Q1 Earnings
Shares of power transmission company as much as 8% after the company announced its first quarter earnings.
The company reported an 8.4% year-on-year drop in its revenue at Rs 2,207 crore against Rs 2,412 crore in Q1FY20. While revenue was impacted significantly due to Covid-19 disruption. However, numbers for May and June were better than the corresponding months of last year.
The stock is trading close to its 12-month consensus estimates
Here’s a HDFC Securities report on the road ahead for KEC.
Rupee Strengthens in Opening Trade
The rupee strengthened 0.1% to 74.8325 per U.S. dollar, while the yield on 10-year government bonds was little changed at 5.90%.
JSW Steel July Crude Steel Production 1.25M Tonnes, Rises 9% MoM
JSW Steel Ltd. produced about 1.25m tonnes of crude steel last month compared with 1.14m tonnes in June, it said in an exchange filing.
- Output was still lower than the 1.32m tons produced during July 2019
- JSW produced 940,000 tonnes of flat rolled products last month and 240,000 tonnes of long products
- Average capacity utilization in July at 83% vs 76% in June
Drugmakers Under Selling Pressure
Dr Reddy's Launches Generic Ciprodex In U.S. Market
Dr. Reddys Laboratories Ltd announced the launch of a generic version of Ciprodex Otic Suspension in the American market, following approval from the U.S. Food and Drug Administration.
Ciprodexis used in adults and children 6 months of age or older to treat certain types of infections caused by certain germs called bacteria. The brand had U.S. sales of approximately $453 million MAT (moving annual turnover) for the most recent 12 months ending in June 2020 , the drug maker said, quoting market data.
The drugmaker’s stock swung between gains and losses in early trade. It is up over 60% YTD and its RSI indicates the stock may be overbought at current levels. Around 56% of the analysts tracking the scrip have maintained a ‘buy’ call on the pharma major.
Large Trades Alert
- Tech Mahindra has 10 lakh shares change hands in a pre-market trade.
Affle India Jumps Over 8.5% To Highest In Six Months
Shares of the tech company rose as much as 9.5% to Rs 2,220 apiece on heavy trading volume.
The stock has climbed for eight days in a row and its Relative Strength Index is now in overbought zone. It has gained nearly 40% year-to-date.
The company's June quarter profit rose 42.3% on a yearly basis to Rs 18.77 crore. It's profit in the year-ago quarter was Rs 13.19 crore. PAT margin during the quarter expanded by 2.7% YoY.
Shree Cement Top Nifty Loser After Q1 Letdown
Shares of the cement maker fell as much as 4.8 percent after its first quarter operational performance missed analysts’ expectations.
Antique Stock Broking says
- Hold rating maintained
- Price target raised to Rs 19,200 from Rs 18,220
- Operational performance below estimates unlike peers
- Continue to like company's leadership position in key markets
- Attractive unit costsand sturdy balance sheet
- Current valuations factor in strong fundamentals
CLSA says
- Sell rating maintained
- Price target of Rs 20,300
- Higher volumes offset weak realisations
- May have to forego pricing to maintain higher growth
- Better return profile is more than priced in at current levels
- Tweak FY21-23CL Ebitda estimates by -1% & +3% respectively
- See better opportunities elsewhere in the sector
JPMorgan says
- Neutral rating maintained
- Price target raised to Rs 19,250 from Rs 18,000
- In-line quarter unlikely to enthuse markets after a series of beats from peers
- Scope to cut costs meaningfully from current levels is limited
- Expect Ebitda per tonne to remain rangebound
- Remain neutral as we struggle to find upside at current demanding valuations
HSBC says
- Reduce rating maintained
- Price target of Rs 14,800
- Ebitda missed estimates due to lower than expected realisations
- Only major cement producer to report a YoY decline in Ebitda per tonne
- Find expensive valuations unjustified
Titan Slides After Posting First Quarterly Loss Since At Least 2010
Shares of the Tata group company slid as much as 3.8% after reporting a Rs 270 crore first quarter loss due to Covid-19 triggered disruptions.
Net loss of India’s largest branded jewellery maker stood at Rs 270 crore compared with a profit of Rs 370.73 crore a year ago, according to an exchange filing on Monday. Analysts tracked by Bloomberg had pegged the loss at Rs 117 crore.
CLSA says
- Sell rating maintained
- Price target raised to Rs 931 from Rs 855
- Expect margins to remain under pressure in the short-term
- To benefit from consolidation in the long-term
- Reinstate target multiple back to 50 times, though we would recommend a better entry point
- Higher exposure to impulse consumption, rise in competition and the need to support franchisees may lead to earnings downgrades
UBS says
- Sell rating maintained
- Price target of Rs 850
- Sell rating on uncertain near-term demand outlook
- Key is whether July's recovery can be sustained
- On-ground jewellers facing multiple near-term headwinds on both supply & demand side
- Expect overall jewellery demand to be muted in FY21
- Can be a key beneficiary of potential regulatory changes in the medium-term
- Earnings uncertainty may impact the stock in the near-term
Opening Bell: Sensex, Nifty Open Higher Inline With Asian Peers
Indian equity benchmarks opened on a firm note inline with Asian peers and as investors switched their attention toward business resilience despite a steady rise in new coronavirus infections.
The S&P BSE Sensex climbed as much as 0.9% to 38,528 while the NSE Nifty 50 Index rose nearly 0.5% to 11,322. All sectoral indices advanced led by 2% jump in the NSE Metal Index.
The broader market too gained with the NSE Smallcap and Midcap indices advancing over 0.5% each. The overall market breadth was firmly in favour of the bulls with 1216 stocks gaining while 387 declines on the NSE in Mumbai trading.
Stocks To Watch: Adani Ports, Shree Cement, Titan And More!
- ICICI Bank: Launches QIP issue at Rs 351.36 per share. As per SEBI guidelines, it may offer a discount of not more than 5% on the floor price. The floor price is a 3.4% discount to Monday's closing. As per the term sheet accessed by Bloomberg, the bank looks to raise as much as Rs 15,000 crore between Rs 355-358 per share. The price range is a 1.5-2.3% discount to Monday's closing.
- Kotak Mahindra Bank: Stated in a press release that it has achieved compliance with promoter shareholding reduction requirement as per RBI’s directives, and within the timeline prescribed by the RBI.
- Axis Bank: QIP issue closed at Rs 420.1 per share which is a 5% discount to the floor price of Rs 442.2 per share. The bank has raised Rs 10,000 crore from the QUP issue
- HDFC: Raises Rs 10,000 crore through its QIP issue. To issue 5.68 crore equity shares at Rs 1,760 per share. The price is a 4.3% discount to the floor price.
- Hexware Technologies: De-listing proposal gets nod from public institutional shareholders. For public institutional shareholders, 92.64% of equity shares were voted on, out of which 95.69% voted in favour of de-listing the company while for public non-institutional shareholders, 18.97% of shares were voted on for which 60.85% votes were in favour of de-listing.
- InterGlobe Aviation: Board approved raising up to Rs 4,000 crore through an issue of equity shares by way of a QIP. The fund raise is subject to shareholder and regulatory approval.
- Titan: Forms a commodity trading unit called Titan Commodity Trading. It will register as a member of the commodity exchanges.
- Bank of Baroda: Overnight MCLR lowered by 15 basis points to 7% from August 12.
- Cupid: Gets received U.S. FDA approval for four additional variants of the company’s male contraceptives to market them in the U.S. market.
- Triveni Engineering: Board approves buyback of 61.9 lakh shares or 2.5% of the total equity worth Rs 65 crore. The buyback price of Rs 105 per share is a 48% premium to Monday's close. August 28 is the record date for the buyback.
- Gufic Biosciences: Entered into a loan license agreement with Hetero Labs to manufacture and supply Remdesivir Lyophilised Powder for injection on loan license basis to Hetero for its sale in various countries including India. Both afore-mentioned entities have a combined capacity of 50 million vials per annum.
- Prestige Estates Projects: Clarified that it regularly evaluates various opportunities for restructuring, investments or divestments in the course of its business.
- CSB Bank: Appointed Madhavan Aravamuthan as part-time chairman of the bank till June 2022.
- Bank of India: Board to consider raising capital via issue of share and bonds on August 13.
- Nifty Earnings Today: Adani Ports & SEZ
- Non-Nifty Earnings Today: Bajaj Electricals, Bosch, KRBL, Metropolis Healthcare, Minda Industries, Motherson Sumi, Prataap Snacks, RITES, RCF, Symphony
Watch | Trade Setup With Niraj Shah
Indian ADR And Fund Flow Check
Nifty Futures Indicate A Positive Opening For India Stocks
Good Morning!
Indian equity markets ended off the highest point of the day on Monday but managed to hold on to gains. Futures are indicating another positive start to today's session.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.4% at 11,366 as of 8:10 a.m.
Nifty 50 constituents like Titan, Shree Cement and Power Grid will react to their earnings reported late on Monday.
Non-index names like Bank of Baroda, HEG, Ujjivan Financial Services among others will react to their quarterly results.
Apart from Adani Ports, which will be the only Nifty constituent reporting numbers today, the list of non-index names includes Bajaj Electricals, Bosch, Metropolis Healthcare, Motherson Sumi, Prataap Snacks, RITES, Symphony among others.
Fund raising announcements from Axis Bank, HDFC, ICICI Bank & IndiGo will also keep these stocks in focus.
Asian markets have risen the most in a week led by Japanese benchmarks which are trading with gains of over 2%. Shares advanced in Australia & South Korea as well.
Crude oil prices extended gains while the U.S. Dollar was trading near a one-week high.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.