Sensex, Nifty Resume Decline After One-Day Rebound

Indian equity benchmarks resumed decline after a rebound in the previous session dragged by energy and metal stocks.

The S&P BSE Sensex fell 0.52 percent or 176 points to 33,891 and the NSE Nifty 50 Index declined 0.51 percent or 52 points to 10,198.

Twelve of 19 sector gauges compiled by BSE ended higher. The S&P BSE Energy Index was the top sectoral loser, down 2.7 percent. On the other hand, the S&P BSE Information Technology Index was top gainer, up 1.7 percent.

Mid- and small-cap shares outperformed their larger peers as the S&P BSE MidCap and S&P BSE SmallCap Indices rose 0.9 percent each.

Tech Mahindra's net profit rose 18.5 percent quarter-on-quarter to Rs 1,064.3 crore for the quarter ended September, the company said in an exchange filing today. That compares with the Bloomberg consensus estimate of Rs 1,013 crore.

Revenue rose 4.3 percent on a sequential basis to Rs 8,629.8 crore during the three-month period. That was also above the Rs 8,609 crore forecast. Revenue in dollar terms fell 0.5 percent from the last quarter to $ 1,218 million.

Shares of the Kolkata-based beauty and healthcare products maker swung between gains and losses after its profit missed Bloomberg consensus estimates in September quarter.

Key earnings highlights:

• Net profit down 16.2 percent at Rs 82.67 crore versus estimate of Rs 121 crore (YoY)
• Revenue at Rs 628 crore versus Rs 627.93 crore (YoY)
• Ebitda down 5.91 percent at Rs 189.4 crore versus Rs 201.3 crore
• Margins at 30.2 percent versus 32.1 percent

• VRL Logistics: The Hubli-based logistics company swung between gains and losses. Trading volume was 19 times its 20-day average.
• Unichem Labs: The Mumbai-based drugmaker rose 4.4 percent to Rs 219.35. Trading volume was 10 times its 20-day average.
• Rallis India: The Mumbai-based agricultural chemicals maker rose 0.7 percent to Rs 169. Trading volume was 7 times its 20-day average.
• Ipca Labs: The Mumbai-based drugmaker rose 2 percent to Rs 660. Trading volume was 7 times its 20-day average.

Shares of the state-run lender rose nearly 20.8 percent, its biggest intraday gain since June 2006, to Rs 20.78 per share after announcing its September quarter results.

Key earnings highlights:

• Net profit at Rs 27 crore versus Rs loss of Rs 23.24 crore (YoY)
• Net interest income up 4.15 percent at Rs 1,003 crore versus Rs 963 crore (YoY)
• Gross non-performing assets as a percentage of total advances at 18.64 percent versus 21.18 percent (QoQ)
• Net non-performing assets as a percentage of total advances at 10.61 percent versus 12.20 percent (QoQ)

Shares of the Ahmedabad-based air cooler maker fell as much as 4.6 percent to Rs 913 after its profit declined in September quarter.

Key earnings highlights:

• Net profit fell 38 percent to Rs 31 crore versus Rs 50 crore (YoY)
• Revenue at Rs 223 crore versus Rs 212 crore (YoY)

Indian equity benchmarks declined dragged Reliance Industries, HDFC twins, ITC and IndusInd bank.

The S&P BSE Sensex fell 0.2 percent or 52 points to 34,015 and the NSE Nifty 50 Index declined 0.17 percent or 17 points to 10,233.

Mid- and small-cap shares were outperforming larger peers as the S&P BSE MidCap and S&P BSE SmallCap Indices rose over a percent each.

The overall market breadth was positive as 1,515 shares were advancing while 866 were declining on the BSE.

Shares of the Pune-based company snapped its snapped its longest losing streak in over three months. the stock rose as much as 3.3 percent to Rs 854 apiece.

The company terminated 236 employees with effect from Oct. 26-27 for going on mass leave from Dec. 02, 2017 till Jan. 19 without any prior intimation and sufficient cause, according to its stock exchange filing.

The government is examining options including an outright sale of Infrastructure Leasing & Financial Services Ltd., a person with knowledge of the matter told Bloomberg.

A plan to be presented to a bankruptcy court tomorrow by the state-appointed board of the lender includes selling the entire stake to a financially strong investor and ensure business continuity, the person told Bloomberg, asking not to be identified as the matter is private.

More details here

Shares of Info Edge fell as much as 3.6 percent to Rs 1,533.15 apiece after it announced its quarterly results for the July-September period.

Key earnings highlights (Q2, YoY):

• Net profit at Rs 78 crore versus Rs 63 crore.
• Revenue at Rs 265 crore versus Rs 259.5 crore.

About 13.6 lakh shares of CG Power changed hands in a block deal, according to Bloomberg data. Buyers and sellers were not known immediately.

Shares of the information technology company rose as much as 3.3 percent to Rs 686 ahead of its quarterly results announcement. The analysts surveyed by Bloomberg are forecasting its net profit at around Rs 1,013 crore.

Tech Mahindra earnings preview (Q2, QoQ):

• Revenue seen 4.1 percent higher at Rs 8,609 crore.
• Net profit seen 12.8 percent higher at Rs 1,013 crore.
• EBIT seen 14.1 percent higher at Rs 1,217 crore.
• EBIT Margins seen at 14.1 percent versus 12.9 percent.

Nifty Bank's 25,500 strike price call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 36 percent to Rs 58.30. Over 2.30 lakh shares were added to the open interest which stood at over 10.03 lakh shares.

Shares of the Mumbai-based local search engine operator rose as much as 12 percent to Rs 509 after it reported September quarter earnings.

Key earnings highlights:

• Revenue up 13.6 percent at Rs 221 crore.
• Net profit up 29 percent at Rs 48.4 crore.
• Ebitda up 44.9 percent at Rs 57.4 crore.
• Margin at 26 percent versus 20.4 percent.

Shares of the Mumbai-based airline operator rose as much as 5 percent to Rs 224.80 per share.

The company clarified reports that it did not default on payment of lease rentals, according to an exchange filing. Meanwhile, Financial Express reported that U.S.-based Delta Airlines was in talks to acquire stake in the debt-laden airline.

Shares of the sugar manufacturing companies rose for second straight day after Indian Sugar Mills Association said on Monday that sugar output will likely drop this year from a record high in 2017-18 as adverse weather and pest attacks hurt cane yields in some main growing areas.

• Dhampur Sugar Mills was locked in upper circuit after rising 10 percent to Rs 171.20 apiece.
• Balrampur Chini Mills rose as much as 3 percent to Rs 111.60 per share.
• Shree Renuka Sugars rose 2.6 percent to Rs 13.75 per share.

Shares of the Mumbai-based state-run lender rose as much as 2.51 percent to Rs 71.45 after it swung to profit in September quarter.

Key earnings highlights:

• Net interest income up 7.4 percent at Rs 2,493.1 crore.
• Net profit at Rs 139 crore versus net loss at Rs 1,530.7 crore.
• Net NPA at 8.42 percent versus 8.70 percent (QoQ).
• Provisions for NPAs at Rs 1,710 Crore versus Rs 1,803.2 crore (QoQ).
• Gross NPA at 15.74 percent versus 16 percent. (QoQ).

Shares of the parent of luxury carmaker Jaguar Land Rover rose as much as 3.2 percent to Rs 180.95 as China is considering a tax cut to revive its flagging automotive market, Bloomberg reported citing people familiar with the matter.

Tata Motors earns sizeable amount of revenue by selling Jaguar Land Rover cars in China.

Shares of the state-run oil marketing company fell as much as 4.2 percent, the most in over a week, to Rs 265.75 after its profit nearly halved and missed Bloomberg consensus estimates in July-September quarter.

BPCL's net profit came in at Rs 1,218.7 crore compared with profit of Rs Rs 2,293.26 crore during the previous quarter. Analysts estimates compiled by BloombegQuint had estimated it to report net profit of Rs 1,796 crore.

• Revenue rose 0.9 percent to Rs 72,345.8 crore.
• Operating profit fell 37.6 percent to Rs 2,419.5 crore.
• Operating margin stood at 3.3 percent from 5.4 percent earlier.

BPCL’s gross refining margin—the amount it earns for converting a barrel of crude to fuel—fell to $5.6 from $7.9 in the previous quarter. The decline in refining margin was also due to lower inventory gains.

Indian equity benchmarks edged lower paced by losses in oil retailers after Bharat Petroleum's net profit nearly halved and missed Bloomberg consensus estimates in September quarter.

The S&P BSE Sensex fell 0.3 percent or 101 points to 33,965 and the NSE Nifty 40 Index dropped 0.26 percent or 25 points to 10,226.

Ten of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Oil & Gas Index's 1 percent drop. On the flipside, the S&P BSE Telecom Index was top gainer, up 0.3 percent.

Indian rupee opened lower at 73.49 per dollar against yesterday's close of 73.45.

The local unit fell as much as 0.2 percent or 14 paise to 73.58 against the greenback.

Sovereign bonds may extend yesterday’s gain as crude oil prices eased. The demand for debt will be watched at a Rs 6,600 crore sale of state bonds today.

Brent oil is headed for the steepest monthly decline since July 2016.

The Rupee may open positive tracking the latest comments from U.S. president Donald Trump to Fox News. He predicted a great deal with China, signaling a truce in the ongoing trade war.

Some of the major data points keenly watched this week include PMIs for services, composite and manufacturing.

Jefferies on Colgate

• Maintained ‘Hold’ with a price target of Rs 1,225.
• September quarter result review: Inline quarter; Volumes show pick-up.
• Volume growth better than expected due to rural growth and market share stabilising.
• Concerned on high competitive intensity in oral care and margins peaking out.

Motilal Oswal on BPCL

• Maintained ‘Buy’ with a price target of Rs 397.
• Adjusted Ebitda below estimates due to lower GRMs and higher opex.
• Core GRM was lower at both Kochi and Mumbai refineries.
• Kochi expansion in next few quarters to expand GRM by $2 a barrel.

Citi on Tata Power

• Maintained ‘Neutral’ with a price target of Rs 77.
• September quarter’s results were average; Supreme Court order is positive.
• Believe CERC decision will be subject to being contested in the APTEL and Supreme Court.
• Do not build in any positive impact in our numbers currently.

Citi on Cipla

• Maintained ‘Buy’ with a price target of Rs 690.
• Toprol XL – Another good approval.
• Company has received several approval in last few months which would lead to earnings growth.
• Cipla’s US business is at inflection point; Ramp up to be a key catalyst .

On PI Industries

Investec

• Maintained ‘Buy’; raised price target to Rs 950 from Rs 880.
• September quarter’s net profit was inline.
• Encouraging to see strong revenue momentum across businesses.
• Not overly concerned on margins as raw material pass through to come in.

Citi

• Maintained ‘Buy’; cut price target to Rs 989 from Rs 1,000.
• September quarter as healthy as demand improves.
• Revenue growth aided by recovery in both domestic and exports business.
• Price target cut to factor in margin pressure due to higher crude and weaker rupee.

• Nifty October futures closed trading at 10284, premium of 24 points
• Nifty Nov open interest down 0.3 percent; Nifty Bank Nov open interest down 5.6 percent
• Maximum open interest for November series at 10,800 strike value call option, (open interest at 18.8 lakh shares)
• Maximum open interest for November series at 10,000 strike value put option, (open interest at 38.8 lakh shares)

Who’s Meeting Whom

• Shriram Transport Finance to meet Marshall Wace, Wardferry and other investors from Oct. 30 to Nov. 2.

Bulk Deals

Ujjivan Financial Services: Franklin Templeton MF acquired 10.5 lakh shares (0.87 percent) at Rs 184.44 each.

Insider Trades

• Axis Bank promoter LIC sold 13.2 lakh shares on Oct. 26.
• Sobha promoter group sold 4,500 shares on Oct. 26.

(As reported on Oct. 29)

BPCL (Q2, QoQ)

• Revenue up 0.9 percent at Rs 72345.8 crore.
• Net profit down 46.9 percent at Rs 1218.7 crore.
• Ebitda down 37.6 percent at Rs 2419.5 crore.
• Margins at 3.3 percent versus 5.4 percent.

LIC Housing Finance (Q2 ,YoY)

• Net interest income up 9.2 percent at Rs 1059.9 crore.
• Net profit up 11.5 percent at Rs 573.2 crore.

Union Bank of India (Q2, YoY)

• Net interest income up 7.4 percent at Rs 2493.1 crore.
• Net profit at Rs 139 crore versus Net loss at Rs 1530.7 crore.
• Net NPA at 8.42 percent versus 8.70 percent (QoQ).
• Provisions for NPAs At Rs 1710 Crore versus Rs 1803.2 crore (QoQ).
• Gross NPA at 15.74 percent Versus 16 percent. (QoQ).

Just Dial (Q2, YoY)

• Revenue up 13.6 percent at Rs 221 crore.
• Net profit up 29 percent at Rs 48.4 crore.
• Ebitda up 44.9 percent at Rs 57.4 crore.
• Margin at 26 percent versus 20.4 percent.

Thirumalai Chemicals (Q2, Consolidated YoY)

• Revenue up 16.7 percent at Rs 363.4 crore.
• Net profit up 14.7 percent at Rs 53.1 crore.
• Ebitda up 12.2 percent at Rs 88 crore versus Rs 78.4 crore.
• Margin at 24.2 percent versus 25.2 percent.

DCM Shriram (Q2, Consolidated YoY)

• Revenue up 5.9 percent at Rs 1700.1 crore.
• Net profit down 1.9 percent at Rs 168.7 crore.
• Ebitda up 2.1 percent at Rs 296.3 crore.
• Margin at 17.4 percent versus 18.1 percent.

HDFC AMC (Q2, YoY)

• Revenue up 11.7 percent at Rs 480.4 crore.
• Net profit up 14.5 percent at Rs 205.9 crore.
• EBIT up 10.9 percent at Rs 262.4 crore.
• Margin at 54.6 percent versus 55 percent.

Granules India Consolidated (Q2, YoY)

• Revenue up 48 percent at Rs 580.9 crore.
• Net profit up 49.6 percent at Rs 60.3 crore.
• Ebitda up 30.7 percent at Rs 100.5 crore.
• Margin at 17.3 percent versus 19.6 percent.

Nilkamal Standalone (Q2, YoY)

• Revenue up 32.1 percent at Rs 613.7 crore.
• Net profit down 10.4 percent at Rs 24.9 crore.
• Ebitda down 14.5 percent at Rs 49 crore.
• Margin at 8 percent versus 12.3 percent.
• Cost of material up 72.7 percent at Rs 251.6 crore.

Mahindra Holiday & Resorts (Q2, Standalone YoY)

• Revenue down 12.8 percent at Rs 209.4 crore.
• Net profit down 54.3 percent at Rs 14.5 crore.
• EBITDA down 57.5 percent at Rs 23.1 crore.
• Margin at 11 percent versus 22.6 percent.

Sun Pharma Advanced Research (Q2, YoY)

• Revenue up 4 times at Rs 61.4 crore.
• Net loss at Rs 2.6 crore versus Net loss at Rs 62.6 crore
• Ebitda loss at Rs 5.1 crore versus Ebitda loss at Rs 61.4 crore

HSIL (Q2, Standalone YoY)

• Revenue up 17.2 percent at Rs 622.7 crore.
• Net profit down 80 percent at Rs 4.7 crore.
• Ebitda down 28.6 percent at Rs 51.5 crore.
• Margins at 8.3 percent versus 13.6 percent.
• Cost Material at Rs 147.2 crore versus Rs 103.8 crore.

Nifty Earnings To Watch

• Tech Mahindra

Other Earnings To Watch

• Bank of Baroda
• ABB, Container Corporation of India
• Cummins India
• Dalmia Bharat
• Info Edge
• IRB Infrastructure Developers
• Manpasand Beverages
• Pidilite Industries
• Prestige Estates Projects
• Tata Global Beverages
• TeamLease Services
• Ramco Cements
• Torrent Power
• Unichem Laboratories

• BHEL board approved buyback of 18.93 crore shares at Rs 86 apiece, aggregating to Rs 1,628.3 crore. The record date is set for Nov. 6.
• Jet Airways clarified that it had not defaulted on lease rentals and was continuously updating its partners on efforts undertaken by the company to improve its liquidity.
• Bharti Airtel clarified that Airtel Africa IPO preparations were proceeding as per plan and there was no change in plans. The new board is in place with new investor’s representatives.
• Redington India proposed buyback of 1.1 crore equity shares at Rs 125 each, aggregating to Rs 139 crore.
• The Reserve Bank of India approved reappointment of Aditya Puri as MD and CEO of HDFC Bank till October 2020.
• Rane Holdings approved divestment of 48.97 percent stake in its JV ‘JMA Rane Marketing.’
• Cadila Healthcare acquired 51 percent stake in Windlas Healthcare.
• Biocon along with its partner Mylan received a positive CHMP opinion from European Medicines Agency’s Committee for recommending approval of Ogivri. This opinion will be considered by the European Commision with decision expected at the end of the year.
• Allahabad Bank increased its MCLR by five basis points across all tenors. Overnight MCLR at 8.05 percent and one year MCLR at 8.55 percent.
• HSIL signed a distribution agreement with Formenti E Giovenzana of Italy, giving exclusive distribution rights to the company for India and other territories as may be mutually agreed, for distribution of kitchen and furniture functional hardware fitting products manufactured by the Italian company.

• U.S. plans more China tariffs if Trump-Xi meeting fails
• Bharti Airtel delays IPO of $8 billion Africa business
• China regulator to propose 50% cut to car purchase tax
• Acharya’s comments were long overdue: RBI employees’ union
• India signs currency swap pact with Japan to stabilise rupee
• Why winter brings deadly smog to India’s capital
• Piramal’s mortgage lender to seek foreign cash amid India squeeze
• Here’s why veteran Mark Mobius thinks India is a ‘great’ investment option
• The mystery of the new Boeing jet that plunged into the sea
• Paytm mall spent nearly Rs 5 crore per day to play catch-up
• Ruia offer for Essar Steel is bigger but is it better?
• Merkel’s likely successor: Nobody in particular

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.4 percent to 10,235 as of 7:31 a.m.

Asian stocks traded mixed Tuesday as investors reacted to the prospect of U.S. tariffs on all Chinese imports that weighed on American equities. The dollar and Treasuries were steady.

Equities rose in Japan as the yen dipped and also in South Korea as S&P 500 Index futures climbed. Chinese shares fluctuated while Hong Kong and Australian stocks underperformed.

Earlier, the S&P 500 pared a drop in the final minutes of trading, after flirting with a correction. The tech-heavy Nasdaq 100 Index tumbled to the lowest level since May.

Currencies

• The Japanese yen fell 0.2 percent to 112.54 per dollar.
• The offshore yuan increased less than 0.05 percent to 6.9749 per dollar.
• The euro rose less than 0.05 percent to $1.1374.
• The Bloomberg Dollar Spot Index rose 0.1 percent to 1,205.75.

Commodities

• West Texas Intermediate crude fell 0.3 percent to $66.84 a barrel.
• Gold fell 0.1 percent to $1,227.86 an ounce.
• LME copper fell 0.4 percent to $6,137.50 per metric ton.

Here are some key events coming up this week:

• Highlights from earnings season will include: Facebook, Komatsu, Ping An Insurance, PetroChina, Macquarie, Apple, Alibaba, China Telecom, Fanuc, GE, Airbus, Credit Suisse, Exxon Mobil, Shell and BP.
• Monetary policy decisions are due in Japan and the U.K.
• On Friday, the final U.S. jobs report before the November midterm elections may show hiring improved as payrolls rose about 190,000, and the unemployment rate held at a 48-year low of 3.7 percent, analysts forecast.