Sensex, Nifty End At Over One-Month High Led By Private Lenders

Indian equity benchmarks rose to their highest levels in over a month led by gains in private sector lenders.

The S&P BSE Sensex rose 0.34 percent or 119 points to 35,261 and the NSE Nifty 50 Index climbed 0.4 percent or 40 points to 10,617.

The Sensex and Nifty faced volatility in the first 90-minutes of trading. But gains in Kotak Mahindra Bank, HDFC twins, Axis Bank and ICICI Bank propelled the markets higher.

Eleven of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Consumer Durables Index's 1.6 percent gain. On the other hand, S&P BSE Telecom Index was the top loser, down 1.2 percent.

The Mumbai-based airline operator extended gains and rose as much as 30 percent, the most since January 2009, to Rs 334.

Jet Airways has clarified that the report of Tata weighing a potential all-stock merger of Jet Airways with its own local venture with Singapore Airline is purely speculative.

Reports earlier in the day suggested Tata Group is considering buying the cash-strapped carrier as the conglomerate looks to expand its footprint in the country’s growing aviation sector.

The Economic Times reported that Tata is weighing a potential all-stock merger of Jet Airways with its own local venture with Singapore Airlines Ltd. CNBC-TV18 television channel reported that Tata board will discuss the proposal Friday.

Shares of the Bengaluru-based innerwear maker was on track to post its worst single-day fall since August 2015.

Page Industries fell as much as 8.59 percent to Rs 25,500 a day after its profit missed Bloomberg consensus estimates in September quarter.

Key earnings highlights:

• Revenue up 10.4 percent at Rs 690.75 crore versus estimate of Rs 750 crore.
• Net profit up 10.2 percent at Rs 92.62 crore versus estimate of Rs 111 crore.
• Ebitda up 11 percent at Rs 142.7 crore versus Rs 128.5 crore (YoY).
• Margin at 20.7 percent versus 20.5 percent (YoY).

Ultratech Cement’s offer is more beneficial than Dalmia for Binani Cement’s lenders, Sameer Kaji, advisor to the Binani Group told BloombergQuint in an interview.

Key highlights of the conversation:

• Ultratech Cement’s offer is more beneficial than Dalmia for Binani lenders
• Ultratech is also paying interest to lenders post admission of Binani to NCLT
• Rather than getting into controversy, better to get a resolution
• UltraTech Cement’s offer is more beneficial than Dalmia for Binani lenders
• NCLAT's ruling indicates a 'no exit from insolvency proceedings' policy
• No related transactions would return to Binani owners

Shares of the country's second largest private sector lender rose as much as 1.6 percent to new record high of Rs 372.45.

In the last three trading sessions, ICICI Bank has surged 5.63 percent.

Nifty's 10,700 call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 11.4 percent to Rs 93.50. Over 4.46 lakh shares were added to the open interest which stood at over 31.19 lakh shares.

Indian equity benchmarks held on to gains led by Infosys, HDFC Bank, Kotak Mahindra Bank and Axis Bank.

The Sensex rose 0.48 percent or 168 points to 35,310 and the NSE Nifty 50 Index advanced 0.4 percent or 44 points to 10,620.

Fifteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Consumer Durables Index's 1.5 percent gain. On the flipside, S&P BSE Telecom Index was the top loser, down 0.7 percent.

Mid- and small-cap shares mixed as the S&P BSE MidCap Index rose 0.3 percent while the S&P BSE SmallCap Index was little changed.

• Adani Transmission: The Ahmedabad-based power generation company rose as much as 9.45 percent to Rs 208. Trading volume was 12 times its 20-day average.
• Monsanto India: The Mumbai-based agricultural chemical maker rose as much as 5.59 percent to Rs 2,685. Trading volume was 11 times its 20-day average.
• Shriram City Union Finance: The Chennai-based consumer loan provider rose as much as 5.6 percent to Rs 1,649. Trading volume was 7.4 times its 20-day average.
• PNC Infratech: The Agra-based construction company fell as much as 4.84 percent to Rs 140.50. Trading volume was nine times its 20-day average.

Shares of the Bengaluru-based non-banking finance company rose as much as 9.67 percent, the most in over a month, to Rs 238.65 after it turned profitable in September quarter.

Key earnings highlights:

• Net interest income up 33.8 percent at Rs 261.2 crore.
• Net Profit at Rs 44.3 crore versus net loss at Rs 12 crore.
• NIM at 12 percent versus 10.6 percent.
• Loan book up 24.7 percent at Rs 8,317 crore.
• GNPA at 1.9 percent versus 2.7 percent (QoQ).
• NNPA at 0.3 percent versus 0.3 percent (QoQ).

Dalmia Group firm moves Supreme Court challenging NCLAT nod for the sale of Binani Cement to UltraTech Cement.

Supreme Court agrees to early hearing of Dalmia's plea in the Binani Cement case.

Shares of the Mumbai-based airline operator jumped to a two-month high after reports the Tata Group is considering buying the cash-strapped carrier as the conglomerate looks to expand its footprint in the country’s growing aviation sector.

The stock climbed as much as 8.1 percent to 278.75 rupees on Thursday in Mumbai, their highest intra-day level since Sept. 11. The Economic Times reported that Tata is weighing a potential all-stock merger of Jet Airways with its own local venture with Singapore Airlines Ltd. CNBC-TV18 television channel reported that Tata board will discuss the proposal Friday.

Indian markets are not cheap, and it seems certain that growth is going to slow in India, Global Equity Strategist, Christopher Wood told BloombergQuint in an interview. He however, said that Indian real estate is the top investment idea for next five years.

Key highlights of the conversation:

• Top investment idea for next five years is Indian real estate sector
• Indian markets not cheap; seems certain that growth is going to slow in India
• U.S. tax reform and not economic growth is the key driver for world equity markets going ahead
• Oil remains the biggest concern for India over the next one year
• Material risk of oil moving significantly higher over the next one year
• Believe there is huge opportunity in property space in the long term
• Demonetisation, RERA and liquidity-led triple whammy presents an investment-opportunity for Indian realty
• Base case of U.S.-China Trade deal happening, will lead to market rally
• Not out of the risk aversion phase due to U.S. tightening scenario

Shares of the Delhi-based jewellery retailer fell as much as 19.19 percent to Rs 69.90 after the company cut its export sales target to Rs 2,000 crore in the financial year ending March 2019, compared with Rs 2,700 crore in FY18.

"The export business is a credit based business and the company wants to rationalize exports business as the credit availability is getting squeezed," the company said in a statement on Thursday.

Shares of the Uday Kotak-led private sector lender rose as much as 1.81 percent to Rs 1,150.30 after 1.27 crore shares changed hands in a block deal on the National Stock Exchange at Rs 1,130 per share in pre-market session.

BloombergQuint had reported yesterday that Kotak Mahindra Bank is likely to see block deals as ING Group had plans to sell its remaining stake in the bank worth about $1 billion.

Shares of the Mumbai-based private sector lender fell as much as 6.68 percent to Rs 207.55 after its Chairman Ashok Chawla stepped down with the immediate effect.

Chawla had been non-executive, independent, part-time chairman of the bank since Oct. 30, 2016. He has been on the board of the bank since March 2016.

In its statement, the bank said that Chawla was stepping down as the bank would need a chairman who can devote more time to the lender during the upcoming management transition. Rana Kapoor, chief executive officer of the bank, is set to step down by the end of January after the RBI declined him a third term.

Shares of the Madhya Pradesh-based Aditya Birla Group company fell as much as 9.09 percent, the most in two years, to Rs 796.70 after it reported surprise loss in second quarter of current financial year after paying a one-time non-cash exceptional item worth Rs 2,003 crore.

Net loss stood at Rs 1,446 crore in the July-September period versus the company’s Rs 525 crore profit in the year-ago period, the Aditya Birla-group said in an exchange filing. The exceptional loss is linked to the Vodafone-Idea merger, creating India’s largest telecommunications company. Vodafone Idea Ltd. ceased to be an associate of the company from Aug. 31, which led to Grasim excluding it as a part of its profit after tax.

Segmental Breakup (Year-on-Year)

• Chemical business revenue rose 38 percent to Rs 1,612 crore.
• Better realisation, higher sales volume led to 60 percent growth in Ebitda of the chemical business to Rs 456 crore.
• UltraTech Cement registered revenue of Rs 8,151 crore, a 20 percent rise.
• Cement sales volume grew 18 percent to 16.6 million tonnes per annum.

Indian equity benchmarks edged higher led by gains in Kotak Mahindra Bank after it saw 1.27 crore shares change hands in a block on the National Stock Exchange.

The S&P BSE Sensex rose 0.27 percent or 94 points to 35,236 and the NSE Nifty 50 Index advanced 0.27 percent or 28 points to 10,603.

Thirteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Information Technology Index's 0.9 percent gain. On the flipside, the S&P BSE Oil & Gas Index was the top loser, down 0.7 percent.

Indian rupee opened higher at 72.06 per dollar against yesterday's close of 72.31 after moved down further with sentiment also bolstered by the Reserve Bank of India's decision to buy securities from the open market.

The local unit rose as much 0.4 percent or 29 paise to 72.02 against the greenback.

Indian bonds are likely to extend a rally as crude prices move down further with sentiment also bolstered by the Reserve Bank of India's decision to buy securities from the open market.

The benchmark 10-year bond yield fell 3 basis points on Wednesday to end at 7.73 percent, having shaved off 4 basis points on Tuesday.

According to DBS Bank, yields are now 45 basis points below this year's peak and India's high absolute and real yields should draw investors back. Of course, investors will keep an eye on the current tensions between the RBI and the finance ministry, with an unnamed official telling reporters on Wednesday that the government hopes the RBI board will address tight liquidity conditions.

In the foreign exchange market, the rupee is seen opening stronger at 72.13 per dollar, having ended higher at 72.31 on Wednesday. In intra-day trade, the rupee rose to a peak of 71.9912, which was its highest since Sept. 21.

On M&M

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,050.
• September quarter’s Ebitda was below due to higher-than-expected model launch costs
• Mgmt. says industry tractor growth more likely to be closer to 12 percent.
• New utility vehicle models key for M&M market share reversal.

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,020.
• Soft but in line September quarter results; Marazzo seeing good initial response.
• Slight moderation in tractor growth outlook but overall commentary sanguine.
• Decent earnings growth outlook and an attractive valuation.

On Glenmark Pharma

CLSA

• Maintained ‘Buy’; cu price target to Rs 790 from Rs 840.
• September quarter results were above estimates; U.S. sales higher led by recent launches.
• Watch out for balance-sheet improvement in the second half of the current financial year.
• Cut FY20-21 EPS estimates to factor lower India sales and higher R&D spend.

Nomura

• Maintained ‘Buy’ with a price target of Rs 825.
• September quarter was a steady quarter, with some pick-up in the U.S. sales.
• Expect strong second half, driven by higher seasonal sales in emerging markets, pick-up in API sales and increased contribution from new launches in the U.S..

BofAML on Grasim

• Maintained ‘Buy’; cut price target to Rs 1,248 from Rs 1,405.
• September quarter’s Ebitda was in line; Standalone VSF and chemicals business strong.
• Higher input costs drag VSF profit; caustic realisation low.
• VSF business capacity expansion on track; to be commissioned by March 2021.

BofAML on Vodafone Idea

• Maintained ‘Underperform’ with a price target of Rs 40
• September quarter Review: Revenue miss; very weak Ebitda.
• Vodafone Idea vulnerable to market share loss.
• Expect more clarity on integration of merged entity and synergy benefits.

Deutsche Bank Research on NHPC

• Maintained ‘Buy’ with a price target of Rs 34.
• September quarter Review: Beat on better cost controls.
• Buyback much smaller, but will be ROE accretive.
• Regulations remain an overhang.

CLSA on Apollo Hospital

• Maintained ‘Buy’ with a price target of Rs 1,500.
• In line revenues, Ebitda and net profit ahead of estimates.
• Existing hospital growth tepid, but margins strong.
• Apollo announces segregation of front-end SAP business.

CLSA on Max Financial

• Maintained ‘Buy’; cut price target to Rs 550 from Rs 700.
• Healthy premium and VNB growth; investments may drag near-term margins.
• Extension in tie-up with Axis and smooth mgmt. transition is key.
• EV cut marginally for higher dividend and non-operating variances.

UBS on Motherson Sumi

• Maintained ‘Buy’; cut price target to Rs 230 from Rs 253.
• September Quarter Review: Disappointing quarter; profitability below expectations at SMP and India.
• Management confident on growth, but near term uncertainty has increased.
• Cut price target on lower valuation multiple given weaker outlook for EU and China.

Deutsche Bank Research on GAIL

• Maintained ‘Hold’ with a price target of Rs 395.
• Near-term risk to gas trading profitability.
• Sharp increase in the U.S. gas price to dent GAIL's gas trading segment.
• Believe stock factors in upside from gas volume growth.

Deutsche Bank Research on Thermax

• Maintained ‘Buy’ with a price target of Rs 1,320.
• Strong execution in September quarter.
• Industrials growth trend confirmed; strong energy and environment.
• Stock valuation looks attractive on correction post weak results in last two quarters.

• Nifty November futures closed trading at 10,605, premium of 29 points.
• Nifty November open interest down 1.3 percent; Nifty Bank November open interest up 6 percent.
• Max open interest for November series at 11,000 call option (open interest at 34.4 lakh shares)
• Max open interest for November series at 10,200 put option (open interest at 31.9 lakh shares)

Insider Trading

• Greaves Cotton promoter Karun Carpets acquired 2.1 lakh shares between Nov. 9-12.
• IDFC Bank promoter IDFC Financial Holding acquired 6 lakh shares on Nov. 14.

(As reported on Nov. 14)

Trading Tweaks

• Linde India, Vardhman Polytex and BC Power Controls price band revised to 10 percent.

Additions in ASM Framework:

• 8K Miles Software Services
• A2Z Infra Engineering
• Adlabs Entertainment
• Ashapura Intimates Fashion
• Arcotech
• Celestial Biolabs
• Excel Industries
• Gayatri Highways
• Godawari Power And Ispat
• Gravita India
• GTN Industries
• Indosolar
• Intrasoft Technologies
• KSK Energy Ventures
• Kwality
• Lasa Supergenerics
• Merck
• NELCO
• Optiemus Infracom
• Premier
• Rolta India
• Indiabulls Integrated Services
• Sanco Industries
• S.E. Power
• SKIL Infrastructure
• SORIL Infra
• Tree House Education & Accessories
• Visesh Infotecnics
• GPT Infraprojects
• Vakrangee
• Assam Company
• Tijaria Polypipes
• Empee Distilleries

• SREI Infrastructure Finance
• DCW
• Capri Global Capital

Grasim (Q2, YoY)

• Revenue up 23.8 percent at Rs 16,795 crore.
• Net loss at Rs 1,446 crore versus net profit at Rs 524.9 crore.
• Ebitda up 1 percent at Rs 2,552.9 crore.
• Margin at 15.2 percent versus 18.6 percent.
• Exceptional loss of Rs 2,276.8 crore in current quarter.

Vodafone Idea (Q2, Consolidated)

• Revenue at Rs 7,664 crore.
• Net loss at Rs 4,974 crore.
• Ebitda at Rs 461 crore.
• Margin at 6 percent.
• Average revenue per user at Rs 88.

(Vodafone Idea reported its first quarterly earnings as merged entity and hence the results are not comparable)

Ujjivan Financial Services (Q2, YoY)

• Net interest income up 33.8 percent at Rs 261.2 crore.
• Net Profit at Rs 44.3 crore versus net loss at Rs 12 crore.
• NIM at 12 percent versus 10.6 percent.
• Loan book up 24.7 percent at Rs 8,317 crore.
• GNPA at 1.9 percent versus 2.7 percent (QoQ).
• NNPA at 0.3 percent versus 0.3 percent (QoQ).

Thermax (Q2, YoY)

• Revenue up 38.2 percent at Rs 1,427.6 crore.
• Net profit up 30.2 percent at Rs 74.5 crore.
• Ebitda up 15.7 percent at Rs 110 crore.
• Margin at 7.7 percent versus 9.2 percent.

Future Retail (Q2, YoY)

• Revenue up 9.4 percent at Rs 4,928.5 crore.
• Net profit up 14.3 percent at Rs 175.1 crore.
• Ebitda up 17.2 percent at Rs 247.6 crore.
• Margin at 5 percent versus 4.7 percent.

Apollo Hospitals (Q2, YoY)

• Revenue up 15.3 percent at Rs 2,090.1 crore.
• Net profit up 11.4 percent at Rs 79 crore.
• Ebitda up 16.5 percent at Rs 257.8 crore.
• Margin at 12.3 percent versus 12.2 percent.

Indian Hotels (Q2, YoY)

• Revenue up 13.2 percent at Rs 964.5 crore.
• Net Loss at Rs 5.2 crore versus net loss at Rs 57.7 crore.
• Ebitda up 81.7 percent at Rs 99.2 crore.
• Margin at 10.3 percent versus 6.4 percent.
• Exceptional loss of Rs 45.3 crore in current quarter.

Infibeam Avenues (Q2, YoY)

• Revenue up 47 percent at Rs 134.8 crore.
• Ebitda gain at Rs 9.7 crore versus loss of Rs 3 crore.
• Ebitda Margin at 7.2 percent.
• Loss of Rs 4.5 crore versus loss of Rs 13.8 crore.
• Payment gateway charges surge 45 percent to Rs 107 crore.

United Breweries (Q2, Standalone YoY)

• Revenue up 21.5 percent at Rs 3,331.8 crore.
• Net profit up 74.6 percent at Rs 163.8 crore.
• Ebitda up 43.4 percent at Rs 318.2 crore.
• Margin at 9.6 percent versus 8.1 percent.
• Volume Growth at 17 percent for the quarter.

• Apollo Hospitals Enterprise board approved to demerge front-end retail pharmacy segment into a standalone pharmacy segment called Apollo Pharmacies. The company will be wholly owned subsidiary of Apollo Medicals Pvt, which will be held by Apollo Hospital Enterprise, Jhelum Investment Fund 1, Hemendra Kothari and ENAM Securities. The slump sale consideration will be worth Rs 527.8 crore and the transfer will be effective from Apr. 01.
• NHPC Board approved share buy-back of 21.4 crore shares, representing 2.09 percent of equity capital at Rs 28 per share aggregating to Rs 600 crore. The record date set for buy-back is Nov. 30.
• Alkem Laboratories received no observations on Form 483, as the U.S. FDA completed the inspection at the company’s Bioequivalence Facility at Taloja, Maharashtra.
• Sundaram Finance and Netherlands based Ageas Insurance along other with Indian shareholders signed an agreement, where by the Dutch company will acquire 40 percent stake in Royal Sundaram General Insurance for Rs 1,520 crore, Sundaram Finance proposes to divest 25.9 percent of its stake in insurance arm bringing down its holding from 75.9 percent to 50 percent for Rs 984.2 crore.
• Oil India said it was considering a share buy-back and issuance of debt securities on Nov. 19.
• IOL Chemicals & Pharma board approved enhancing of Metformin Unit for Rs 2.7 crore and completion of Clopidogrel Bisulphate and Fenofibrate for Rs 19.26 crore.
• Vodafone Idea’s board is said to be evaluating to raise Rs 25,000 crore via various options. Vodafone group would contribute Rs 11,000 crore and Aditya Birla Group would contribute Rs 7,250 crore in the capital raising scheme.
• Gujarat Fluorochemicals board approved a proposal to demerge chemical business of the company. The consideration for the resulting company will be 1:1.
• Kabra Extrusiontechnik announced the extension of its partnership with its German counterpart Battenfeld Cincinnati beyond 2026.
• TATA Power’s joint venture ‘Resurgent Power’ signed a share purchase agreement to acquire 75 percent stake and 27 crore preference shares in Prayagraj Power Generation for Rs 6,000 crore. In the Joint Venture, Tata Power arm owns 26 percent stake while the balance stake is held by ICICI Bank and other global investors.

• Dhanuka Agritech approved a buy-back of 13.12 percent of equity share capital at Rs 550 per share, aggregating to Rs 82.5 crore.
• Grasim and Hindalco in focus as Vodafone Idea looks to raise Rs 7,250 from Aditya Birla Group. Grasim and Hindalco own 11.55% and 2.61% stake in Vodafone Idea.

• SREI Infrastructure Finance
• DCW
• Capri Global Capital

• Ashok Chawla steps down as Yes Bank chairman
• U.K. PM Theresa May on the brink as Tories plot to kill her Brexit deal
• ING group to sell remaining $1-billion stake in Kotak Mahindra Bank
• Government expects resolution of NBFC, credit issues at RBI board meet
• Promoters to infuse funds as Vodafone Idea plans to raise Rs 25,000 crore
• Zee has received interest from tech firms for promoters’ stake: CEO
• Binani Cement insolvency resolution: Are financial creditors guardian angels?
• FMCG sector grows at fastest pace in five quarters, says Nielsen
• Drink that warmed World War I soldiers makes last stand in India
• KKR India is eyeing opportunities amidst uncertainty

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.13 percent or 13 points to 10,614 as of 7:21 a.m.

Asian stocks opened mixed after U.S. equities declined and Treasuries stabilized following gains amid a renewed bout of risk aversion in American markets. Oil fell after briefly snapping its record losing streak.

Japan equities fell, while Australia’s market was little changed. Futures were higher in China and Hong Kong. Earlier, financial and technology shares led the S&P 500 Index lower, when Treasuries rose with gold and the yen ticked higher as investors sought out havens.

Currencies

• The yen was steady at 113.60 per dollar.
• The offshore yuan was flat at 6.9446 per dollar.
• The Bloomberg Dollar Spot Index ticked higher.
• The euro traded at $1.1314.
• The British pound traded at $1.2990.
• The Aussie rose 0.4 percent to 72.60 U.S. cents.

Commodities

• West Texas Intermediate crude fell 0.5 percent to $55.96 a barrel.
• Gold traded at $1,210.55 an ounce.
• Natural gas futures surged 16 percent.