Sensex, Nifty End Higher As TCS Leads Earnings Optimism

Indian equity benchmarks ended higher, led by the gains in Tata Consultancy Services Ltd., after the company’s profit beat estimates in March quarter.

The S&P BSE Sensex ended 0.36 percent higher at 38,905.84 and the NSE Nifty 50 ended at 11,690.35. The broader market index represented by the NSE Nifty 500 Index ended 0.43 percent higher.

The market breadth was tilted in favour of buyers. About 1,011 stocks advanced and 739 shares declined on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE ended higher, led by the NSE Nifty Metal Index’s 2.4 percent gain. On the flipside, the NSE Nifty Media Index was the top sectoral loser, down 0.5 percent.

KRBL

• Stock rose as much as 10 percent to Rs 353.
• Trading volume was more than seven times its 20-day average.

APL Apollo Tubes

• Stock rose as much as 3.2 percent to Rs 1,504.
• Trading volume was more than seven times its 20-day average.

MAS Financial Services

• Stock fell as much as 1 percent to Rs 591.
• Trading volume was more than seven times its 20-day average.

Rain Industries

• Stock rose as much as 13.7 percent to Rs 147.80.
• Trading volume was six times its 20-day average.

• ICICI Bank: About 36 lakh shares changed hands in a block deal.
• Nalco: About 10.7 lakh shares changed hands in a block deal.
• Max India: About 24 lakh shares changed hands in a block on BSE and NSE.
• NTPC: About 10 lakh shares changed hands in a single block.

Buyers and sellers were not known immediately
Source: Bloomberg

European shares held steady after a positive start to the week in Asia, while the banking sector added to Friday’s sharp rally ahead of quarterly results from a number of big U.S. lenders.

Network 18 Media & Investments Ltd.’s loss during the March quarter widened to Rs 91 crore from the loss of Rs 43.7 crore registered during the first three months of 2018, according to its stock exchange filing.

Key Earnings Highlights (Q4, YoY)

• Revenue up 49.2 percent at Rs 1230.9 crore.
• Net loss at Rs 91 crore versus Net loss of Rs 43.7 crore.
• Ebitda down 69 percent to Rs 11.3 crore.
• Margin at 0.9 percent versus 4.4 percent.
• Other Income of Rs 19.7 crore in the base quarter.
• Operational cost up 63 percent to Rs 615.8 crore.
• Finance cost up 84 percent to Rs 54.5 crore.

Shares of Tata Motors rose as much as 6.7 percent, the most in nearly two weeks, to Rs 230.40.

The stock has risen four times in five trading sessions and returned 14 percent during the period. The Relative Strength Index was above 70, indicating that the stock may be overbought, Bloomberg data showed.

Shares of TV18 Broadcast erased falls and fell as much as 3.8 percent to Rs 37.15 after announcing March quarter results.

Key Earnings Highlights (Q4, YoY)

• Revenue up 55.9 percent to Rs 1,181.5 crore.
• Net profit at Rs 28.2 crore versus Rs 2.8 crore.
• Ebitda up 14.4 percent to Rs 51.7 crore.
• Margin at 4.4 percent versus 6 percent.

• Ashok Leyland: About 10 lakh shares changed hands in a block deal.
• Crompton Greaves: About 12.9 lakh shares changed hands in a single block.

Buyers and sellers were not known immediately.
Source: Bloomberg

Indian equity Benchmark traded at day’s high. Sensex rose over 100 points and Nifty traded around 11,680.

Inflation based on wholesale prices stood at 3.18 percent in January from 2.93 percent, clocked in the preceding month and 2.74 percent clocked in March 2018.

Shares of Gillette India extended gains for the second consecutive trading session. The stock rose as much as 4.7 percent to hit an all-time high at Rs 7,635.

The Relative Strength Index was above 70, indicating that the stock may be overbought, Bloomberg data showed. The scrip advanced 15 percent in the past 12 months. That compared with a 15 percent gain in the Sensex.

• Alembic Pharma: Shares of the drugmaker rose as much as 1.1 percent to Rs 541. The pharmaceutical company received an approval from the U.S. drug regulator for Bimatoprost Ophthalmic Solution, used for the treatment of glaucoma, according to its stock exchange filing.
• Blue Star: Shares of the air conditioner manufacturer fluctuated between gains and losses to trade little changed at Rs 680.30. The company expanded its operations in the Middle East, inaugurated a new office and a flagship showroom in Dubai, according to its statement on the exchanges.
• Dish TV: Shares of the Direct to Home television service provider rose as much a 1.9 percent to Rs 39.40. About 10 lakh shares of the company changed hands in a single block, Bloomberg data showed. Buyers and sellers were not known immediately.

Nifty’s 11,700 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract fell 7.1 percent to Rs 42.65. Over 10.56 lakh shares were added to the open interest which stood at over 24.61 lakh shares.

Shares of Dixon Technologies fell as much as 1.3 percent to Rs 2,379.90 after fluctuating between gains and losses in the opening trade.

The company acquired a 50 percent stake in Padget Electronics for Rs 27 crore, according to its exchange notification. The target company is into manufacturing of mobile phones. Dixon Technologies said this acquisition is a strategic investment decision and that it plans to accelerate growth in this business segment.

The trading volume was more than 13 times its 20-day average, Bloomberg data showed.

Metropolis Healthcare Ltd. listed at a premium of 8.9 percent at Rs 958 per share on the National Stock Exchange, compared to its issue price of Rs 880 apiece. The stock rose as much as 10.2 percent to Rs 939.90 thereafter.

The healthcare services provider’s initial public offering was subscribed 5.83 times on the final day of bidding.

Shares of the power producer snapped its two-day gaining streak and fell as much as 3.8 percent to Rs 51.20.

Central Electricity Regulatory Commission allowed Adani Power’s Mundra thermal power unit to pass on higher cost of imported coal that had made the project unviable, according to its exchange filing. The Mundra unit will be allowed increase the variable component of tariff to pass through the cost of fuel up to $110 per metric tonne.

The stock more than doubled in the past 12 months compared to 13 percent gain in the Sensex.

Shares of Tata Consultancy Services rose as much as 3.5 percent to Rs 2,084. The stock was the top performer on Sensex and Nifty.

The company continued to see steady growth in business even as profit remained flat and margin narrowed in the March quarter. (Read the full story here)

Meanwhile, Infosys was the worst performer on the benchmark indices as the stock fell as much as 4.7 percent, the most in over six months, to Rs 712.60. This after it announced a steady revenue guidance for the year ending March 2020 compared to the previous year.

Key Earnings Highlights

TCS (Q4, QoQ)

• Dollar revenue up 2.8 percent to $5,397 million
• Revenue up 1.8 percent to Rs 38,010 crore
• Net profit up 0.3 percent to Rs 8,126 crore
• EBIT down 0.2 percent to Rs 9,537 crore
• EBIT margin at 25.1 percent versus 25.6 percent
• Declares dividend of Rs 18 per share

Infosys (Q4, QoQ)

• Revenue up 0.6 percent to Rs 21,539 crore
• Dollar revenue up 2.4 percent to $3,060 million
• Net profit (adjusted) up 2.2 percent to Rs 4,078 crore
• EBIT down 4.4 percent to Rs 4,618 crore
• EBIT margin at 21.4 percent versus 22.6 percent
• Revenue growth guidance: 7.5 percent to 9.5 percent for FY20 in constant currency terms
• Operating margins guidance: 21 percent to 23 percent for FY20
• Declares dividend of Rs 10.5 per share

Here’s what brokerages had to say after the companies announced their March quarter results:

On TCS

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 2,363 from Rs 2,291.
• Broad-based growth overall and finally, double-digit growth in BFSI.
• Margin defence despite currency has been solid.
• TCS is our top pick in the large cap Indian IT space (along with HCL Tech).

Investec

• Maintained ‘Hold’ with a price target of Rs 1,930.
• Inline quarter; margins steady ex-one off.
• Improving deal wins indicate strong H1FY20; macro begs caution for the second half.
• Weakening margins and headwinds to revenue growth aren’t a great combination for returns.

On Infosys

Investec

• Downgraded to ‘Hold’ From ‘Buy’; cut price target to Rs 750 from Rs 784.
• Q4 performance largely driven by large deal ramp up.
• Weak exit margin and cut in margin guidance leads to 4.9 percent and 4.2 percent EPS cut for te current and the next financial year respectively.
• Revenue growth guidance of 7.5-9.5 percent appears conservative.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 810 from Rs 770.
• Margin recovery will happen earliest in 2020-21.
• Expect PE Ratio gap between TCS and INFO to rise to 20 percent.
• Cut FY20-21 EPS by 1-3 percent; Target price raised as rolled over.

Indian equity benchmarks opened higher, tracking gains in their Asian peers.

The S&P BSE Sensex rose as much as 0.22 percent to 38,850.65 and the NSE Nifty 50 rose as much as 0.23 percent to 11,669.65. The broader market index represented by the NSE Nifty 500 Index rose as much as 0.28 percent higher.

The market breadth was tilted in favour of buyers. About 968 stocks advanced and 386 shares declined on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Metal Index’s 0.97 percent gain. On the flipside, the NSE Nifty IT Index was the only sectoral loser, down 0.16 percent.

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.19 percent to 69.04 against the greenback.

April Futures

• Nifty OI down 2 percent sheds 2.4 lakh shares in OI
• Bank Nifty OI up 8 percent adds 1.4 lakh shares
• Nifty futures premium at 60.4 points versus 72 points, closed trading at 11,703.8
• Bank Nifty futures premium at 124.5 points versus 159 points, closed trading at 30,063
• Options
• Nifty PCR at 1.54 versus 1.24 (across all series)

Nifty Weekly Expiry (April 18)

• Max OI at 11,600-Put (15.5 lakh shares) 11,700-Call (14 lakh shares), 11,500-Put (10 lakh shares)
• OI addition seen for 11,600-Put (8.1 lakh shares) and 11,500-Put (4.3 lakh shares)
• Nifty Monthly Expiry
• Max OI at 11000-Put (30 lakh shares) and 12,000-Call (29.5 lakh shares), 11,500-Put (29 lakh shares)
• OI addition seen for 11,500-Put (2.4 lakh shares), 11,700-Put (1.1 lakh shares)

Stocks In F&O Ban

• In Ban: Dewan Housing, DLF, IDBI, Jet Airways, Reliance Power, Wockhardt
• Out of Ban: PC Jeweller

On Infosys

Investec

• Downgraded to ‘Hold’ From ‘Buy’; cut price target to Rs 750 from Rs 784.
• Q4 performance largely driven by large deal ramp up.
• Weak exit margin and cut in margin guidance leads to 4.9 percent and 4.2 percent EPS cut for te current and the next financial year respectively.
• Revenue growth guidance of 7.5-9.5 percent appears conservative.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 810 from Rs 770.
• Margin recovery will happen earliest in 2020-21.
• Expect PE Ratio gap between TCS and INFO to rise to 20 percent.
• Cut FY20-21 EPS by 1-3 percent; Target price raised as rolled over.

On TCS

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 2,363 from Rs 2,291.
• Broad-based growth overall and finally, double-digit growth in BFSI.
• Margin defence despite currency has been solid.
• TCS is our top pick in the large cap Indian IT space (along with HCL Tech).

Investec

• Maintained ‘Hold’ with a price target of Rs 1,930.
• Inline quarter; margins steady ex-one off.
• Improving deal wins indicate strong H1FY20; macro begs caution for the second half.
• Weakening margins and headwinds to revenue growth aren’t a great combination for returns.

More Calls

Goldman Sachs on Fortis Healthcare

• Reinstated ‘Neutral’ with a price target of Rs 130.
• Expect lower utilization at key hospitals and slower offtake at SRL.
• Expect to see improvements in cost control in next 1-2 years.
• Open offer and ongoing audit remain an overhang.

Citi on IGL

• Maintained ‘Buy’; hiked price target to Rs 365 from Rs 350.
• Double digit volume growth should sustain in 2019-20.
• Gurgaon: Deal closure taking longer than expected.
• Margin comfort remains.

Equirus on Shankara Building

• Maintained ‘Add’ with a price target of Rs 403.
• Asset sale to improve liquidity and reduce working capital.
• Sale of asset looks distress as it is at lower valuation than peers.
• Total debt to come down to Rs 300 crore from Rs 420 crore.

Earnings To Watch

• Hathway Cable
• Network18 media
• Tata Metiliks
• TV18 Broadcast

Earnings Reaction To Watch

Infosys Q4 (QoQ)

• Revenue up 0.6 percent to Rs 21,539 crore
• Dollar revenue up 2.4 percent to $3,060 million
• Net profit (adjusted) up 2.2 percent to Rs 4,078 crore
• EBIT down 4.4 percent to Rs 4,618 crore
• EBIT margin at 21.4 percent versus 22.6 percent
• Revenue growth guidance: 7.5 percent to 9.5 percent for FY20 in constant currency terms
• Operating margins guidance: 21 percent to 23 percent for FY20
• Declares dividend of Rs 10.5 per share

TCS Q4 (QoQ)

• Dollar revenue up 2.8 percent to $5,397 million
• Revenue up 1.8 percent to Rs 38,010 crore
• Net profit up 0.3 percent to Rs 8,126 crore
• EBIT down 0.2 percent to Rs 9,537 crore
• EBIT margin at 25.1 percent versus 25.6 percent
• Declares dividend of Rs 18 per share

GTPL Hathway Q4 (YoY)

• Revenue up 14.9 percent to Rs 322.4 crore
• Net loss at Rs 27.7 crore versus Net profit at Rs 13.7 crore
• Ebitda up 5 percent to Rs 77.3 crore
• Margin at 24 percent versus 26.2 percent
• Exceptional loss of Rs 64.9 crore due impairment of receivables because of new regulatory framework made by TRAI
• Other Income up 3.6 times to Rs 26.3 crore

• Metropolis Healthcare shares to start trading on exchanges after IPO gets 5.83 times demand at Rs 880 per share.

• Dr. Reddy's Laboratories: Entered into a definitive agreement to acquire a portfolio of 42 approved, non-marketed Abbreviated New Drug Applications (ANDAs) in the U.S. The portfolio includes more than 30 generic injectable products. These products will require to be technology transferred and could be launched within the next one to two years. The value of total addressable market for these products in the U.S. is approximately $645 million in 2018.
• McLeod Russel India: Wholly owned subsidiary to sell remaining 50 percent stake in Pfunda Tea Company to Rwanda Tea Investments for $7.87 million (Rs 54.5 crore).
• Adani Power: India’s power regulator has allowed Adani Power’s Mundra thermal power unit to pass on higher cost of imported coal that had made the project unviable. The Mundra unit will be allowed increase the variable component of tariff to pass through the cost of fuel up to $110 per metric tonne, according to the order by Central Electricity Regulatory Commission. This increase will be offset by reduction in fixed cost by 20 paise/kilowatt for billionaire Gautam Adani-owned group company. The order pertains to just 2,000 megawatt capacity, of the total 4,620 MW plant, that is covered under the power purchase agreement between Adani Power and Gujarat Urja Vikas Nigam Ltd., the Gujarat state electricity board.
• Jet Airways: SBICAP Trustee has acquired 5.19 percent stake, or 58.96 lakh shares in the company after a pledge of shares via encumbrance on April 11. The company has also extended its international operations’ suspension till April 15, according to a PTI report. India’s Aviation Secretary said that Jet Airways will not to compromise on safety at any cost. The airline says it will fly six-seven planes on April 13 and about 40 domestic flight each day from April 13-15, according to a Bloomberg report.
• Dixon Technologies has acquired a 50 percent stake in Padget Electronics for Rs 27 crore. The target company is into manufacturing of mobile phones. Dixon Technologies said this acquisition is a strategic investment decision and that it plans to accelerate growth in this business segment.
• Lakshmi Vilas Bank: The company’s board deferred discussions on raising capital via additional tier 1 bonds but approved allotment of up to 1.68 crore shares. Also, Care Ratings revised ratings on certain Lakshmi Vilas Bank bonds downwards on “credit watch with negative implications”
• Dilip Buildcon arm’s HAM project in Maharashtra received financial closure on April 11.
• NIIT Tech: Tentative schedule of open offer released.
• Bharti Airtel clarifies that current in-principle approval of Department of Telecommunications for merger of Tata Tele unit with the company is subject to fulfillment of conditions.
• Apollo Tricoat Tube makes preferential allotment of 23 lakh shares aggregating to Rs 20.7 crore to promoter group Rahul Gupta.
• APL Apollo Tubes is set to acquire a production unit of Shankara Building Products’ arm in Hyderabad for Rs 70 crore. The plant has a production of 2 lakh tonnes per annum for steel and pipes. Shares and warrants worth Rs 92 crore have been allotted to promoter APL Infrastructure.
• Cosmo Films launched CPP High Barrier Films, which is used as a packaging application for eatables.

• GMM Pfaudler executed a definitive agreement for acquisition of the Industrial Mixing Solutions Division of Sudarshan Chemical Industries for Rs 29 crore.
• Eris Lifesciences says it has pre-paid the entire loan facility obtained from Axis Bank. The agreement for these loan facilities were entered on November 2017.
• Coffee Day Enterprises pledged 20 percent of its shares in Mindtree to IDBI Trusteeship.

• The Reserve Bank of Australia releases the minutes of its latest rate-decision meeting Tuesday.
• Wednesday brings China GDP, industrial production and retail sales data.
• Stock markets will be closed for Easter holidays in countries including the U.S., U.K. and Germany on Friday.
• April 15: India wholesale price inflation for March YoY
• April 15: India trade export-import data for March
• Wipro Ltd., Tata Steel Ltd., Reliance Industries Ltd. and HDFC Bank Ltd. will be reporting their quarterly results this week.

• Brent crude traded 0.36 percent lower at $71.29 per barrel.
• West Texas Intermediate crude slipped 0.5 percent to $63.56 a barrel.
• Gold was steady at $1,290.35.

London Metal Exchange

• Aluminium halted a two-day fall, ended 0.16 percent higher.
• Copper halted a two-day fall, ended 1.19 percent higher.
• Lead ended lower for the fourth day, ended 0.1 percent higher.
• Tin halted a two-day fall, ended 0.24 percent higher.
• Nickel resumed gains after a one-day blip, ended 0.35 percent higher.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,679.50 as of 8:15 a.m.

Asian stocks began the week on a mostly positive note after earnings and Chinese economic data eased concerns about a slowdown in global growth Friday.

Japanese shares posted the largest gain early Monday, with equities in South Korea also higher and Australia opening flat.

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