Sensex, Nifty Resume Decline After One-Day Spike

Indian equity benchmarks ended lower pressured by heavy selling in final hour of trade and losses in metal stocks.

The S&P BSE Sensex ended 0.83 percent lower at 38,730.86 and the NSE Nifty 50 was 11,641.80 at close, down 0.72 percent. The broader market index represented by the NSE Nifty 500 Index ended 0.61 percent lower.

The market breadth was tilted in favour of sellers. About 963 stocks declined and 777 shares advanced on National Stock Exchange. Ten out of 11 sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Metal Index’s 1.83 percent fall. On the flipside, the NSE Nifty Realty Index was the only sectoral gainer, up 0.32 percent.

Indian equity indices fell in the final hour of today’s session. Sensex declined nearly 1 percent to 38,676.40 while Nifty fell 0.80 percent to 11,631.10.

Shares of the country's largest carmaker erased losses and gained 1.8 percent to Rs 7144 apiece.

The company's net profit stood at 1,795 crore, down 4.6 percent compared to same period last year. The revenue rose 1.4 percent to Rs 21,459 crore. Editda margin fell 360 basis points to 10.6 percent on a yearly basis.

The stock declined 22 percent in the past 12 months compared with a 13 percent gain on Sensex.

Shares of oil marketing companies gained for the second session in a row. Also, Brent crude touched the $75 per barrel mark, after nearly six months, in today’s trade.

• Indian Oil gained a percent intraday to Rs 155.35 apiece.
• BPCL rose 2.6 percent to Rs 357.90.
• HPCL gained 2.8 percent to 276.35.

Shares of the Mukesh Ambani-led conglomerate rose for the third day in a row and gained nearly 1.7 percent to Rs 1,412.40 apiece.

The stock advanced 45 percent in the past 12 months compared to 14 percent gain in the Sensex. The stock traded at 18 times its estimated earnings per share for the coming year.

• Tech Mahindra: About 18.2 lakh shares changed hands in a block deal on NSE.
• Power Grid: About 11.6 lakh shares changed hands in a block deal on NSE.

Buyers and sellers were not known immediately
Source: Bloomberg

Shares of the country’s largest telecom operator fell 3.5 percent intraday to Rs 16.55 apiece.

Vodafone Idea Ltd.’s rights issue to raise Rs 25,000 crore was oversubscribed before it closed on Wednesday, according to two people privy to the information. Malaysia-based Axiata, one of the large public shareholders in Vodafone Idea, renounced its shares in favour of 20 foreign investors on April 11-12, said the source quoted earlier.

The stock traded 16 percent below the Bloomberg consensus one-year target price.

Shares of the drugmaker rose as much as 2.3 percent to Rs 987.60.

Ipca Laboratories plans to acquire Ramdev Chemical for Rs 108.5 crore, according to an exchange filing. The target company is engaged in the business of manufacturing and marketing of advanced drug intermediates, fine chemicals, custom synthesis molecules and APIs, the filing said.

The stock advanced 41 percent in the last 12 months compared to a 14 percent gain in the Sensex.

Shares of the cement maker rose 2.6 percent intraday to 4,510 apiece, its highest on record. The company reported its fourth quarter earnings on Wednesday.
Trading in the company's call options totalled 12,360 contracts, compared with the average of 2,531 over the past 20 days.

Here’s what brokerages had to say on the stock:

HSBC on UltraTech Cement

• Maintained ‘Reduce’; hike target price to Rs 3,200 from Rs 3,140.
• Volumes in-line, better-than-expected cost efficiencies resulted in meaningful beat.
• Ramp up of UNCL assets has been progressing well; Ebitda/tonne breached Rs 1,000-mark after six quarters.
• Low return ratios and stretched valuations are not comforting.

CLSA on UltraTech Cement

• Maintained ‘Buy’; hike target to Rs 5,270 from Rs 5,025.
• Strong Q4 results; focus now on reducing debt.
• Optimistic outlook; higher prices improves near-term outlook.

The relative strength index on the stock was above 70, indicating it may be overbought. The stick traded 38 times its estimated earnings per share for the coming year, Bloomberg data showed.

Shares of the telecom tower operator declined as much as 4.7 percent to over a two-month low of Rs 287.35 apiece. The company reported its March quarter results on Wednesday.

Brokerage firm CLSA downgraded ts recommendation on the stock to ‘Sell’ from ‘Outperform’. It also lowered the price target to 285 per share, indicating a potential downside of 2.5 percent from last close.
Here are the other highlights from the brokerage firm:

• Q4 below estimates; tenancy outlook remains muted.
• Network optimisation by Vodafone Idea and slowdown in new tenancies by Jio slowed tenancy adds.
• Cut EPS estimates for FY20-21 by 2-4 percent.

The trading volume was 18 times the 20-day average for this time of the day, Bloomberg data showed. The stock traded at 22 times its estimated earnings per share.

Indian equity indices fluctuated between gains and losses in opening trade.

The S&P BSE Sensex traded flat at 39,074.10 and the NSE Nifty 50 rose as much as 0.15 percent to 11,746.10 as of 9:20 am. The broader market index represented by the NSE Nifty 500 Index rose as much as 0.09 percent.

The market breadth was tilted in favour of buyers. About 882 stocks advanced and 581 shares declined on National Stock Exchange. Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Realty Media Index’s 0.60 percent gain. On the flipside, the NSE Nifty Auto Index was the only sectoral loser, down 0.24 percent.

The Indian rupee opened lower against the U.S. dollar. The home currency depreciated as much as 0.21 percent to 70.02 against the greenback.

A continued strength in dollar and a decline in emerging market currencies may remain a drag on the rupee for another session. For the session today, dealers see the dollar trading in a range of 69.90-70.30 rupees.

Sovereign bonds rallied in the last session after the RBI announced it will resume its open market operations to buy bonds from next month. Yield on the benchmark bond dropped 5 basis points in the session. For today, the positive momentum is likely to continue and yields may trade in a range of 7.40-7.45 percent.

Futures Across All Series

• Nifty open interest up 12 percent, adds 23 lakh shares in open interest
• Bank Nifty open interest up 13 percent, adds 2.8 lakh shares in open interest
• Nifty Rollover 58 percent, Bank Nifty Rollover 56 percent

Options

• Nifty PCR at 1.65 versus 1.30 (across all series)

Nifty Options Expiry April 25

• Max open interest at 11,500P (27.4 lakh shares), 11,600P (27.2 lakh shares) and 11,800C (27.1 lakh shares)
• Open interest addition seen for Put strikes 11,700 (+11.6 lakh shares), 11,650 (+8.3 lakh shares)
• Open interest shedding seen for call strikes 11,700 (-35.7 lakh shares), 11,600 (-14.5 lakh shares)

Stocks In Ban

• In ban: Adani Power, DLF, IDBI, Idea, Jet Airways, Reliance Power
• Out of ban: PC Jewellers

CLSA on Bharti Infratel

• Downgraded to ‘Sell’ from ‘Outperform’; cut target price to Rs 285 from Rs 300.
• Q4 below estimates; tenancy outlook remains muted.
• Network optimisation by Vodafone Idea and slowdown in new tenancies by Jio slowed tenancy adds.
• Cut EPS estimates for FY20-21 by 2-4 percent.

Macquarie on Hexaware

• Maintained ‘Outperform’; hike target price to Rs 460 from Rs 440.
• Decent start to CY19 despite seasonal factors.
• Margin levers to be gradual in CY19.
• M&A to be focused on existing strategy.

CLSA on ICICI Prudential Life

• Maintained ‘Buy’; hiked target price to Rs 475 from Rs 450.
• Uptick in premium growth and rebound in persistency were encouraging.
• Protection business scale up to improve profitability and reduce volatility.
• With valuations at a discount to HDFC Life, see scope for re-rating.

Morgan Stanley on Indiabulls Housing

• Maintained ‘Underweight’ with target price of Rs 600.
• Q4 in-line; liability growth remains a challenge.
• Focus on liquidity and ALM continues.
• Ability to expand will be key for growth.
• Loan sell-downs cannot drive sustainable earnings growth.

Macquarie on Indiabulls Housing

• Maintained ‘Outperform’ with target price of Rs 836.
• Q4 numbers optically bad; Company slammed the breaks hard to conserve cash.
• Given India’s liquidity scenario, growth and profitability metrics should be ignored for few quarters.
• Q4 results don’t matter; RBI approval single most important variable.

Morgan Stanley on M&M Finance

• Maintained ‘Overweight’ with target price of Rs 545.
• Q4: strong showing in tough environment.
• Collections were strong which is key; disbursements ex-SME was healthy.
• Among the best positioned NBFCs with parentage and vintage.

JPMorgan on M&M Finance

• Maintained ‘Underweight’ with target price of Rs 390.
• Q4: NPL and coverage reduction aids earnings.
• Quality of beat is low; NIMs largely flat despite higher funding cost.
• Trades at a mark premium to peer group.

HSBC on UltraTech Cement

• Maintained ‘Reduce’; hike target price to Rs 3,200 from Rs 3,140.
• Volumes in-line, better-than-expected cost efficiencies resulted in meaningful beat.
• Ramp up of UNCL assets has been progressing well; Ebitda/tonne breached Rs 1,000-mark after six quarters.
• Low return ratios and stretched valuations are not comforting.

CLSA on UltraTech Cement

• Maintained ‘Buy’; hike target to Rs 5,270 from Rs 5,025.
• Strong Q4 results; focus now on reducing debt.
• Optimistic outlook; higher prices improves near-term outlook.

UBS on Havells India

• Maintained ‘Sell’; hike target price to Rs 685 from Rs 540.
• Lloyd ramp-up into a mass premium brand may take a while.
• Higher valuations led to hike in target price.
• Stock is pricing in high level of optimism.
  

HSBC on ICICI Lombard

• Maintained ‘Reduce’; Cut target price to Rs 810 from Rs 830.
• Q4 results were weak and offer several medium-term directional insights.
• Company focusing on motor insurance.
• Third-party motor insurance to drive investment float.

Nifty Results

• Axis Bank
• Maruti Suzuki India
• Tata Steel

Other Results

• Aditya Birla Money
• Biocon
• Cyient
• GHCL
• Multi Commodity Exchange of India
• Oriental Hotels
• Rallis India
• SBI Life Insurance

Earnings Reaction To Watch

Bharti Infratel (Q4 Consolidated QoQ)

• Revenue down 1.1 percent to Rs 3,600 crore
• Net profit down 6.3 percent to Rs 608 crore
• Ebitda up 1.4 percent to Rs 1,534 crore
• Margin at 42.6 percent versus 41.6 percent
• Declared dividend of Rs 7.5 per share

Indiabulls Housing Finance (Q4 Consolidated YoY)

• Net interest income down 1.1 percent to Rs 1,835.1 crore
• Net profit down 6.9 percent to Rs 1,001.4 crore
• Gross NPAs at 0.88 percent versus 0.79 percent (QoQ)
• Net NPAs at 0.69 percent versus 0.59 percent (QoQ)

Mahindra & Mahindra Financial Services (Q4 Standalone YoY)

• Net Interest Income up 26.7 percent to Rs 1,267 crore
• Net profit up 87 percent to Rs 588 crore
• Impairment gain of Rs 114.5 crore

Agro Tech Foods (Q4 Standalone YoY)

• Revenue down 6.6 percent to Rs 200.2 crore
• Net profit up 10.7 percent to Rs 8.3 crore
• Ebitda down 6.4 percent to Rs 14.7 crore
• Margin flat at 7.3 percent

Shriram City Union Finance (Q4 Standalone YoY)

• Net Interest Income up 9.2 percent to Rs 937.9 crore
• Net profit up 11.4x times to Rs 251.3 crore
• ICICI Prudential Life Insurance Company (Q4 Consolidated YoY)
• Net premium income up 16.2 percent to Rs 10,056.3 crore
• Net profit down 23.3 percent to Rs 261 crore

Syngene International (Q4 Consolidated YoY)

• Revenue up 30.5 percent to Rs 533.9 crore
• Net profit up 18.5 percent to Rs 100.1 crore
• Ebitda up 71 percent to Rs 167.9 crore
• Margin at 31.4 percent versus 24 percent
• Forex gain of Rs 30.9 crore

• Indiabulls Real Estate clarified on the news of stake sale stating that company has engaged in its business reorganisation exercise for quite some time in the past. In respect of such reorganisation of the company’s businesses many informal discussions are taking place and the company will not comment on speculations.
• RBI asked banks to disclose exposure to IL&FS accounts separately. Banks have been asked disclose quantum of loans to IL&FS classified as NPA under income recognition rules and provisions made against these accounts. This disclosure will be made separately in notes to accounts.
• Oil India: Board approved proposal for giving its employees an opportunity to exercise the option to contribute towards the Employee Pension Scheme on the basis of actual salary, having a financial impact of approximately Rs 1,788 crore to the company.
• FDC said its non-sterile manufacturing facility in Maharashtra has undergone an inspection by PIC/S Malaysia and it continues to be approved. The company says it will continue to export oral liquid, oral powder and external powder products in its press release.
• IPCA Lab to acquire Ramdev Chemical for Rs 108.5 crore. The target company is engaged in the business of manufacturing and marketing of advanced drug intermediates, fine chemicals, custom synthesis molecules and APIs.
• Jet Airways clarified on the news of a British entrepreneur’s offer to take control in the aviation company stating that an unsolicited email was received. The company says that the sender has been advised to formally engage with SBI Caps, who are leading the biding process under the resolution plan initiated by consortium of domestic lenders led by State Bank of India.
• Oriental Hotels to consider raising funds via debt securities on April 25.
• Bank of Maharashtra to consider raising capital via various sources on April 29.
• Tata Elxsi appoints Manoj Raghvan as CEO and MD of the company with effect from October 2.
• L&T issues NCDs aggregating to Rs 1,500 crore on April 18.
• Allahabad Bank allots 162.5 crore shares worth Rs 6,900 crore to Government of India in a preferential basis.
• SBI: Board approves raising $2.5 billion via different routes for financial year 2020.

• Brent crude fell 0.24 percent to $74.39 per barrel.
• West Texas crude fell 0.5 percent to $65.58 a barrel.
• Gold fell 0.2 percent to $1,273.59 an ounce.

London Metal Exchange

• Aluminium ended 0.32 percent higher.
• Copper ended higher after a two-day fall, up 0.64 percent.
• Tin ended lower for the sixth day, down 0.96 percent.
• Lead ended higher after a two-day blip, up 0.42 percent.
• Nickel snapped its five-day losing steak, up 0.13 percent.
• Zinc ended lower for the third day, down 0.22 percent.

Asian shares traded mixed Thursday after U.S. equities retreated from a record high as investors assessed corporate earnings and economic data.

Stocks saw modest gains in Japan and slipped in Korea. Australian markets were closed for a holiday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.11 percent lower at 11,724.50 as of 8:15 a.m.

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