Sensex, Nifty End Lower After Hitting New Highs

Indian equity benchmarks ended lower after hitting new lifetime highs in today’s trade.

The S&P BSE Sensex ended 0.34 percent lower at 39,140.28 and the NSE Nifty 50 fell 0.29 percent at 11,752.80. The broader market index represented by the NSE Nifty 500 Index ended 0.44 percent lower.

The market breadth was tilted in favour of sellers. About 1,241 stocks declined and 531 shares advanced on National Stock Exchange.

All sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Realty Index’s 2.54 percent fall.

Shriram City Union Finance

• Shares gained 1.5 percent intraday to Rs 1,798.35 apiece.
• The trading volume was more than 16 times its 20-day average for this time of the day, Bloomberg data showed.

Adani Green Energy

• Shares surged close to 8 percent to Rs 48.05 per share.
• The trading volume was eight times the 20-day average for this time of the day, Bloomberg data showed.

Chambal Fertilisers & Chemicals

• Shares declined 2.2 percent intraday to Rs 165 apiece.
• The trading volume was six times the 20-day average for this time of the day, according to Bloomberg data.

Shares of the private lender traded 1.2 percent lower at 199.60 per share after its March quarter results were announced today.

Results (Q4, YoY):

• Net Interest Income rose 14 percent to Rs 301 crore.
• Net profit shot up 50 percent to Rs 96.3 crore.
• Gross NPA stood at 1.84 percent versus 1.92 percent (QoQ)
• Net NPA stood at 0.65 percent to 0.71 percent. (QoQ)

Shares of the S&P’s local arm declined 7.2 percent, most since October 2018, to Rs 1,500 apiece.

The stock fell 21 times in the past 12 months compared with a 14 percent gain in the Sensex. The stock traded at 31 times its estimated earnings per share for the coming year.

Shares of the private lender fell as much as 1.8 percent to Rs 668.10 per share after its March quarter results were announced today.

Results (Q4, YoY):

• Net Interest Income rose 47.6 percent to Rs 738.72 crore.
• Net profit rose 38.8 percent to Rs 247.18 crore.
• Gross NPA stood at 1.38 percent.
• Net NPA stood at 0.69 percent.
• A dividend of Rs 2.70 per share announced.

The stock advanced 33 percent in the past 12 months compared to a 15 percent gain in the Sensex Index.

Nifty’s 11,800 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract fell 91.3 percent to Rs 42.65. Over 30.97 lakh shares were added to the open interest which stood at over 40.33 lakh shares.

Shares of the Bengaluru-based IT firm rose close to 11 percent, its highest intraday gain in six months, to Rs 728 per share.

The company’s board to consider a buy back proposal during its meeting scheduled on April 23, according to an exchange notification.

The trading volume was more than 19 times its 20-day average for this time of the day, according to Bloomberg data. The relative strength index on the stock was above 70, indicating it may be overbought.

Shares of Wipro advanced as much as 3.1 percent to Rs 289.55 after its March quarter results were announced on Tuesday.

The Bengaluru-based information technology company plans to buyback 32.31 crore shares, or 5.35 percent equity at a price of Rs 325 per share aggregating to Rs 10,500 crore. The buyback is at a premium of 16 percent from the last regular trade.

Besides, its quarterly profit met analyst expectations even as margin narrowed because of a stronger rupee.

Key Earnings Highlights (Q4, QoQ)

• Revenue up 0.7 percent to Rs 15,161 crore.
• Net profit down 1.1 percent to Rs 2,483.5 crore.
• Ebitda down 2.7 percent to Rs 2,700.7 crore.
• Margin at 17.8 percent versus 18.4 percent.

Here’s what analysts had to say about Wipro after the results announcement:

Investec

• Maintained ‘Hold’ with a price target of Rs 265.
• Reported a weaker than expected March quarter with lower revenue and margins.
• Weak revenue growth guidance for the first quarter to weigh on remaining 9MFY20.
• EBIT margin expected to improve in 2019-20, but already priced in.
• Buyback to keep stock elevated in the near term.

Morgan Stanley

• Maintained ‘Underweight’; hiked price target to Rs 255 from Rs 225.
• March saw weaker IT services revenue but better EBIT.
• Margin improvement was a key highlight in 2018-19.
• Expect second half of the current financial year’s growth to be better than the first half.

Mahindra & Ford India announce pact for development & supply of new midsize sports utility vehicle, according to Mahindra & Mahindra’s exchange filing.

• Ford, affiliate companies to incur Rs 680 crore development cost
• Pact will be for a period of 10 years
  

Shares of M&M traded flat at Rs 684.85 per share as of 11:08 am. The stock traded at 15 times its estimated earnings per share for the coming year, Bloomberg data showed.

Shares of the country’s largest airline gained for the sixth straight day and rose 4.3 percent intraday to a record high of Rs 1650 apiece.

The trading volume was almost seven times its 20-day average for this time of the day, Bloomberg data showed. The stock traded 352 times its estimated earnings per share for the coming year.

Shares of the Mukesh Ambani-led conglomerate rose 3.1 percent intraday to Rs 1,385 per share.

Here’s what analysts tracked by Bloomberg expect the company to report on a sequential basis:

Reliance Industries (Q4, QoQ)

• Net profit seen 4.9 percent lower at Rs 8,490 crore.
• Revenue seen 6.7 percent lower at Rs 93,357 crore.
• Ebitda seen 5.6 percent lower at Rs 13,693 crore.
• Margin seen at 14.7 percent versus 14.5 percent.

Reliance Jio (Q4, QoQ)

• Net Profit seen 17.1 percent higher at Rs 973 crore vs Rs 831 crore
• Revenue seen 9.6 percent higher at Rs 11,376 crore.
• Ebitda seen 10.6 percent higher at Rs 4,483 crore.
• Margin at 39.4 percent versus 39 percent.
• ARPU seen 0.8 percent down to Rs 129 vs Rs 130.

The stock traded at 21 times its estimated earnings per share, according to Bloomberg data. Twenty five analysts out of 37 tracked by Bloomberg had a ‘Buy’ recommendation on the stock. Eight had recommended ‘Hold’ while four had a ‘Sell’ rating.

Nifty Bank Index declined 0.2 percent as of 9:55 am after hitting a record high in intraday trade.
Axis Bank, ICICI Bank and HDFC Bank were the only gainers in the sectoral gauge.

Shares of the crash-strapped airline plummeted over 34 percent, its biggest intraday fall on record, to Rs 158.70 apiece.

The airline operator suspended operations after it failed to secure a bailout. The company took a decision to halt flights on a “temporary” basis from Thursday, it said in a statement late Wednesday, when the last service was scheduled to take place.

The stock fell 65 percent in the past 12 months compared to 15 percent gain in the Sensex.

Shares of the low-cost carrier rose as much as 15 percent to Rs 152.60, its highest since February 2018.

The shares gained 52 percent in the last five days. The trading volume was 14 times the 20-day average for this time of the day, Bloomberg data showed.

Also, Spicejet is set to add six more Boeing 737S to its fleet on dry lease, according to its exchange filing.

The S&P BSE Sensex rose as much as 0.37 percent to 39,430 and the NSE Nifty 50 rose as much as 0.32 percent to 11,827.30. The broader market index represented by the NSE Nifty 500 Index rose as much as 0.24 percent higher.

The market breadth was tilted in favour of buyers. About 838 stocks advanced and 518 shares declined on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Auto Index’s 0.38 percent gain. On the flipside, the NSE Nifty IT Index was the top sectoral loser, down 0.18 percent.

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.1 percent to 69.49 against the greenback.

Sovereign bond traders will await the release of Reserve Bank of India’s April 4 policy meeting minutes today, where it kept its policy stance as neutral while lowering the repo rate.

A Rs 17,000 crore sovereign debt sale by government today will also test investor appetite for debt. Yield on the most traded 2028 government debt fell one basis point to 7.53 percent on Tuesday. The Money market operations were shut Wednesday.

April Futures

• Nifty open interest up 1 percent, adds 1.9 lakh shares in open interest.
• Bank Nifty open interest up 5 percent adds 1 lakh shares.
• Nifty futures premium unchanged at 37 points, closed trading at 11,824.4.
• Bank Nifty futures premium at 74.2 points versus 83 points, closed trading at 30,605.5.

Options

• Nifty PCR at 1.82 versus 1.61 (across all series).

Nifty Weekly Expiry (April 18)

• Max open interest at 11,600 put (16.7 lakh shares) 11,700 put (15.1 lakh shares).
• Open interest addition seen for 11,750 put (10.9 lakh shares), 11,800 put (8.2 lakh shares).
• Open interest shedding seen for call strike 11,700 (-11.4 lakh shares).

Nifty Monthly Expiry

• Max open interest at 11,500 put (28.7 lakh shares), 12,000 call (24.8 lakh shares) and 11,7000 put (22.9 lakh shares).
• Open interest addition seen for put strikes 11,800 (+12.4 lakh shares) & 11,700 put (+5.7 lakh shares).
• Open interest shedding seen for call strikes 11,700, 11,800.

On Wipro

Investec on Wipro

• Maintained ‘Hold’ with a price target of Rs 265.
• Reported a weaker than expected March quarter with lower revenue and margins.
• Weak revenue growth guidance for the first quarter to weigh on remaining 9MFY20.
• EBIT margin expected to improve in 2019-20, but already priced in.
• Buyback to keep stock elevated in the near term.

Morgan Stanley on Wipro

• Maintained ‘Underweight’; hiked price target to Rs 255 from Rs 225
• March saw weaker IT services revenue but better EBIT.
• Margin improvement was a key highlight in 2018-19.
• Expect second half of the current financial year’s growth to be better than the first half.

More Calls

Investec on Eicher Motors

• Maintained ‘Buy’; cut price target to Rs 22,550 from Rs 24,750.
• Expect volume momentum for RE to sequentially improve from April
• Expect temporary market share loss because of higher non-ABS inventory.
• Expect Eicher’s volume growth return to double digits from April 2021.
• Cut EPS for the next two financial years by 8 percent and 11 percent respectively to factor in lower volume and margin.

CIMB on Indian Steel

• Global rally in steel prices is starting to wane now.
• In absence of global support steel prices set to soften further.
• Steel price decline is imminent as channel filling is over and global demand not picked up.

CIMB on Ambuja Cements

• Maintained ‘Add’; hiked price target to Rs 254 from Rs 246.
• Expansion on track; Volume growth to drive earnings.
• Expect company to report 7.7 percent sales volume CAGR in CY18-21.
• Balance sheet to remain strong; fundamentals to support valuations.

Edelweiss on Healthcare

• Ind AS 116 likely impact profitability, liabilities and valuations of hospital companies.
• HCG will see the maximum impact, capital employed to increase by 30 percent and Ebitda by 50 percent.
• Apollo Hospitals’ capital employed will rise 30 percent and Ebitda will jump about 40 percent.
• Diagnostic companies – No major impact.

Investec on Mindtree

• Downgraded to ‘Hold’ from ‘Buy’; hiked price target to Rs 1,012 from Rs 950.
• Mindtree guided mid-teen revenue growth and 120 basis points margins expansion for 2019-20.
• This is likely to leave investors wanting more in L&T’s open offer.
• Will L&T increase the open offer price or stay with what it already has is what one needs to consider for a BUY call at this stage.

HSBC on Reliance Industries

• Maintained ‘Buy’ with a price target of Rs 1,500.
• A possible stake sale could partly de-risk RIL’s energy business and accelerate deleveraging plans.
• If a potential deal is being discussed, it may be a logical step for RIL long-term.
• Deal valuations look broadly in line.

Morgan Stanley on JSPL

• Maintained ‘Buy’ with a price target of Rs 188
• March quarter reposed a solid production ramp-up; gives us comfort for 2019-20 volume estimate
• Expect realization to decline sequentially in March quarter.
• Strong volume to support operating leverage and Ebitda in March quarter.

Nifty Earnings To Watch

• Reliance Industries

Other Earnings To Watch

• ICICI Lombard General Insurance
• Jay Bharat Maruti
• RBL Bank
• Tata Sponge Iron
• DCB Bank
• Majestic Auto
• Uttam Galva Steels
• Spacenet Enterprises

• Mindtree will pay a total dividend of Rs 27 per share. The board approved an interim dividend of Rs 3 per share, and also proposed a final dividend of Rs 4 and a special dividend of Rs 20 apiece, subject to shareholder approval.
• Jet Airways India Ltd. suspended operations after it failed to secure a bailout. The company took a decision to halt flights on a “temporary” basis from Thursday, it said in a statement late Wednesday, when the last service was scheduled to take place.
• Wipro to buyback 32.31 crore shares, or 5.35 percent equity at a price of Rs 325 per share aggregating to Rs 10,500 crore. The buyback is at a premium of 16 percent from the last regular trade.
• Cipla’s South African arm signed an agreement to acquire 30 percent stake in Brandmed for ZAR 65 million and milestone payment to be paid over a period of three years. Deal is expected to close by May 31. (Alert: ZAR 65mn equals Rs 32.1 crore)
• Bandhan Bank said Competition Commission of India approved the merger scheme of the bank with Gruh Finance.
• DBS Bank to be excluded from Second Schedule of the Reserve Bank of India Act, 1934. (Source: RBI).
• Chalet Hotels: Board said the IPO proceeds have been fully utilized with objects in the Offer Document.
• Somany Ceramics CEO Tuljaram Maheshwari resigned from his post with effect from April 16 due to personal reasons.
• Indo Rama Synthetics appointed Umesh Agarwal as Chief Commercial and Financial Officer with effect from April 16.
• United Bank of India reduced MCLR by five basis points across various tenors. One-year MCLR at 8.8 percent and one month MCLR at 8.1 percent.
• HT Media increased its stake to 51 percent in Next Media Works, by holding 3.41 crore shares in the target company.
• Embassy Office Parks REIT to consider issuing NCDs on April 23.
• InterGlobe Aviation added 18 flights from Mumbai and Delhi, bookings to open with effect from April 16. (Source: Press Release).
• Sasken Technologies to consider share buyback on April 23.
• Food & Inns record date for bonus share issue set on May 2.
• Star Cement said that it has received Rs 174.5 crore towards its Freight Subsidy claims from the Central Government.
• JM Financial arm to open its NCD issue up to Rs 1,000 crore on April 22.
• RattanIndia Power appointed Hasmukhlal Darji as CFO with effect from April 15.
• Reliance Industries: Mitsui O.S.K. Lines Ltd. to acquire strategic stake in six group companies (each owning a Very Large Ethane Carrier) of the company.
• Hindalco: Subsidiary Novelis to supply aluminum sheets for Toyota RAV4.
• Ashoka Builcon: received an order worth Rs 443.23 crore from RVNL with a completion period of 36 months.
• Adani Enterprises: Rakesh Suryakant Shah, the CFO of the company has filed his resignation.
• Quess Corp: Company’s subsidiary CBSL to acquire Allsec Technologies. Company to buy promoter stake (35.35 percent) at Rs 320. Company to acquire First Carlyle Ventures stake (26 percent) at Rs 250. Company to also make an open offer at Rs 320 per share. Share prices of Allsec Tech trading at Rs 300.5 per share. The company will invest Rs 403 crore in CBSL (subsidiary of Quess) by subscribing to equity shares and compulsorily convertible debentures

• Earnings season rolls on this week, with reports due from American Express, Honeywell, Alcoa and Taiwan Semiconductor among others.
• A swathe of financial markets will close across the Western world for the Good Friday holiday, including in the U.S., U.K. and Germany.

• Brent crude fell 0.14 percent to $71.52 per barrel.
• West Texas Intermediate crude fell 0.1 percent to $63.68 a barrel.
• Gold was steady at $1,274.56 an ounce.

London Metal Exchange

• Aluminium ended 0.3 percent lower.
• Copper extended gains for the second consecutive trading session, closed 0.9 percent higher.
• Lead ended 1.35 percent higher.
• Tin extended declines for the third consecutive trading session, closed 0.46 percent lower.
• Nickel fell for the third consecutive trading session, ended 0.46 percent lower.
• Zinc halted a two-day fall, ended 0.34 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 11,844 as 7:45 a.m.

Asian stocks were mixed Thursday after the latest batch of corporate earnings did little to boost their U.S. counterparts. Shares in Japan and South Korea drifted, while those in Australia eked out gains.

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