Sensex, Nifty Close Lower For Sixth Straight Session

Indian equity benchmarks closed lower in today’s trade, dragged down by losses in Zee Entertainment, Reliance Industries and auto stocks.

The S&P BSE Sensex ended 1.27 percent lower at 37,789.13 and the NSE Nifty 50 ended at 11,359.45 down 1.20 percent. The broader market index represented by the NSE Nifty 500 Index ended 1.17 percent lower.

The market breadth was tilted in favour of sellers. About 1,309 stocks declined and 449 shares advanced on National Stock Exchange. All sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Media Index’s 4.53 percent fall.

Shares of the financial services company gained as much as 7.4 percent to Rs 150.25 apiece.

The trading volume was almost three times the 20-day average for the time of the day, according to Bloomberg data. The stock traded 41 percent below the Bloomberg consensus one-year target price.

The company, in an exchange filing, clarified that news developments regarding the audit of the financial statements as rumours and said audit of accounts for the financial year 2018-19 was in progress.

Shares of the company pared losses as it traded at 3.7 percent lower at Rs 323.35 apiece. The stock fell as much as 12.4 percent in today’s trade.

Shares of the battery maker hit the lower circuit after it declined 10 percent intraday to Rs 90.35.

The market value of Kolkata-headquartered company plunged by two-thirds in 15 months as India’s largest maker of dry and flashlight batteries struggled to fend off competition from cheaper imports and its debt rose.

Shares of the tyremaker pared opening opening losses and rose nearly 2.7 percent to Rs 1,065 apiece. The company announced its fourth quarter earnings on Tuesday.

Key Highlights (YoY)

• Revenue up 4.4 percent to Rs 1,760.5 crore.
• Net profit down 16.6 percent to Rs 64.3 crore.
• Ebitda down 17.8 percent to Rs 162.4 crore.
• Margin at 9.2 percent versus 11.7 percent.
• Exceptional loss of Rs 40.5 crore versus exceptional loss of Rs 24.6 crore.
• Other income up 4.4 times to Rs 30.6 crore.
• Declares dividend of Rs 12 per share.

Fifteen out of the 25 analysts tracked by Bloomberg had a ‘Buy’ rating on the stock while five had recommended ‘Hold’ and five analysts recommended ‘Sell’.

NSE Nifty FMCG Index fell for the sixth straight session after it declined 0.76 percent in today’s trade, dragged down by losses in Marico and Dabur India.

Neogen Chemicals listed at a premium of 16.7 percent at Rs 251 per share on the National Stock Exchange, compared to its issue price of Rs 215 apiece. The stock was locked in the upper circuit thereafter as it rose 22.6 percent to Rs 263.55.

The healthcare services provider’s initial public offering was subscribed 41.2 times on the final day of bidding.

Shares of the country’s largest telecom operator slumped 5.7 percent intraday to Rs 14.70 apiece, its lowest on record since its listing in 2007.

Also, around 16.3 lakh shares changed hands in a single block in today’s trade on NSE, according to Bloomberg data. Buyers and sellers were not known immediately.

The trading volume was over six times the 20-day average for this time of the day, Bloomberg data showed. The stock declined 60 percent in the past 12 months compared with a 8 percent gain in the Sensex.

Shares of the mining conglomerate declined 4.1 percent intraday to Rs 156.80, its lowest since February 2019. The company announced its March quarter results on Tuesday.

Net profit for the January-March period was at Rs 2,615 crore, 46 percent lower on a yearly basis. Analysts tracked by Bloomberg had estimated the figure at Rs 1,413 crore. The company had reported exceptional gains of Rs 2,869 crore in the corresponding quarter last year.

The trading volume was almost eight times the 20-day average for this time of the day, Bloom erg data showed. The relative strength index on the stock was below 30, indicating it may be oversold.

Indian equity benchmarks opened lower in opening trade, mirroring their Asian peers.

The S&P BSE Sensex fell as much as 0.51 percent to 38,079 and the NSE Nifty 50 declined as much as 0.52 percent to 11435.75 as of 9:16 am. The broader market index represented by the NSE Nifty 500 Index fell as much as 0.56 percent higher.

The market breadth was tilted in favour of buyers. About 835 stocks fell and 523 shares advanced on National Stock Exchange.

All sectoral gauges compiled by NSE declined, led by the NSE Nifty FMCG Index

The Indian rupee opened lower against the U.S. dollar. The home currency weakened as much as 0.17 percent to 69.55 against the greenback.

Technical indicators show that rupee spot continues to consolidate under 69.73, the 50-day moving average. The rupee remained steady to close at 69.43 to the dollar in yesterday's trade.

Futures –May series

Nifty

• Nifty futures closed trading at 11,541.9, premium of 44 points versus 58 points.
• Nifty open interest down 1% sheds 1.5 lakh shares in open interest.

Bank Nifty

• Bank Nifty futures closed trading at 29,418.4, premium of 130 points versus 190 points.
• Bank Nifty open interest up 6%, adds 1 lakh shares in open interest.

Options

• Nifty PCR at 1.13 versus 1.30 (across all series).

Nifty Weekly Expiry 9 May

• Max open interest on call side at 11,800 (28.1 lakh shares).
• Max open interest at Put side at 11,500 (12 lakh shares).
• Max open interest addition seen at 11,600 Call (+16.6 lakh shares), 11,550 Call (+9 lakh shares).
• Max open interest shedding seen at 11,600 Put (-5.8 lakh shares), 11,700 Put (-3.4 lakh shares).

Nifty Monthly Expiry 30 May

• Max open interest on call side at 12,000 (15.8 lakh shares).
• Max open interest on Put side at 11,000 (23.2 lakh shares).

On Vedanta CLSA

• Maintained ‘Sell’; cut target price to Rs 135 from Rs 170.
• Q4 Ebitda ahead due to lower aluminium and zinc cost and higher zinc volume.
• Slow volume ramp-up in zinc and oil and increased costs in HZL are concerns.
• Zinc and oil businesses benefiting from recent uptick in commodity prices.
• Concerns on related party transaction and future use of cash to overshadow earnings outlook.

JPMorgan

• Maintained ‘Overweight’ with target price of Rs 300.
• Positive Q4 brings a tough FY19 to an end.
• For FY20, see more positive as key projects coming through.
• Zinc India and Zinc International—volume growth to pick up from here.

Morgan Stanley

• Maintained ‘Equal-weight’ with target price of Rs 176.
• Core Ebitda inline with estimates.
• Management focus remains on growth projects.
• Improved domestic coal availability and bauxite lend improved cost visibility.

JPMorgan on Embassy Office Parks

• Maintained ‘Overweight’ with target price of Rs 360.
• Steady low-risk compounding; yield+growth offers attractive IRR setup.
• REIT structure can deliver outperformance versus index.
• Expect dividend per share growth of 6 percent over FY20-23.

CLSA on Kansai Nerolac

• Industrial under severe pressure; outlook subdued at least for next two quarters.
• Decorative on good footing; management confident of double-digit volume growth in FY20.
• Volatility in crude and exchange rates remain a concern.

CLSA on Indian Media

• Zee network gains viewership share in April under new TRAI regime.
• Sun TV share has declined driven by lower share in Tamil.
• Pay channel viewership in rural markets is rising which could drive subscription revenues.
• Near-term ad revenues for broadcasters will likely be impacted, in longer run the new subscription regime will be beneficial.

CLSA on India Oil & Gas

• If current government comes back to power, expect it to take forward some unfinished policies.
• Expect policies to slash LPG subsidies further.
• Big reforms – gas pricing hub, GST and unified tariff – possible in gas sector.
• More PSU M&As, stake sales and excise duty hikes are possible overhangs.
• ONGC, Oil India and Gail are likely gainers from further reform.

Nifty Earnings To Watch

• Titan

Other Earnings To Watch

• Rain Industries
• Procter & Gamble Hygiene and Health Care
• Alembic Pharmaceuticals
• Axiscades Engineering Technologies
• Tata Communications
• Chennai Petroleum Corporation
• KEC International
• CroreeditAccess Grameen
• Dhanlaxmi Bank
• JMC Projects
• JK Paper
• JSW Holdings
• Dishman Carbogen Amcis
• EID Parry India
• Shree Renuka Sugars
• Emami Paper Mills
• Gillette India
• Indraprastha Medical Corporation
• Kokuyo Camlin
• KSB
• MAS Financial Services
• Saregama India
• Satin Creditcare Network
• Shriram Asset Management
• Shriram Transport Finance
• Srikalahasthi Pipes
• Kopran

Earnings Reaction To Watch

Vedanta (Q4 Consolidated, YoY)

• Revenue down 15 percent to Rs 23,468 crore.
• Net profit down 46 percent to Rs 2,615 crore.
• Ebitda down 20 percent to Rs 6,135 crore.
• Margin at 26.1 percent versus 27.8 percent.
• Exceptional Gain of Rs 2,869 crore in base quarter.

Ceat (Q4 Consolidated, YoY)

• Revenue up 4.4 percent to Rs 1,760.5 crore.
• Net profit down 16.6 percent to Rs 64.3 crore.
• Ebitda down 17.8 percent to Rs 162.4 crore.
• Margin at 9.2 percent versus 11.7 percent.
• RM as percent of sales at 58 percent versus 56 percent.
• Exceptional loss of Rs 40.5 crore versus exceptional loss of Rs 24.6 crore.
• Other income up 4.4 times to Rs 30.6 crore.
• Declares dividend of Rs 12 per share.

ABB India (Q1 Calendar year 2019, YoY)

• Revenue up 18.1 percent to Rs 1,850.3 crore.
• Net profit up 13.4 percent to Rs 116.2 crore.
• Ebitda up 62.6 percent to Rs 145.5 crore.
• Margin at 7.9 percent versus 5.7 percent.
• Finance cost down 87 percent to Rs 2.6 crore.

Essel Propack (Q4 Consolidated, YoY)

• Revenue up 10.4 percent to Rs 693.7 crore.
• Net profit up 17 percent to Rs 52.4 crore.
• Ebitda up 13 percent to Rs 131.5 crore.
• Margin at 19 percent versus 18.5 percent.

BSE (Q4 Consolidated, YoY)

• Revenue down 20 percent to Rs 115.7 crore.
• Net profit down 16.4 percent to Rs 51.9 crore.
• Ebitda loss to Rs 0.1 crore versus Ebitda gain of Rs 34.6 crore.
• Declares dividend of Rs 25 per share.

Brigade Enterprises (Q4 Consolidated, YoY)

• Revenue up 75.3 percent to Rs 760 crore.
• Net profit up 3.3 times to Rs 59.7 crore.
• Ebitda up 59.9 percent to Rs 215.4 crore.
• Margin at 28.3 percent versus 31.1 percent.
• Exceptional loss of Rs 11.5 crore in base quarter.
• Deferred tax payable to Rs 49.1 crore versus deferred tax reversal of Rs 13.2 crore.
• Real-estate segment revenue up 2 times to Rs 593.3 crore.
• Hospitality segment revenue up 37 percent to Rs 89.6 crore.
• Leasing segment revenue up 12 percent to Rs 86.5 crore.

Mahindra Logistics (Q4 Consolidated, YoY)

• Revenue up 13.7 percent to Rs 1,014.7 crore.
• Net profit up 14.4 percent to Rs 23.9 crore.
• Ebitda up 8.2 percent to Rs 40.9 crore.
• Margin at 4 percent versus 4.2 percent.
• Employee expenses up 19 percent to Rs 71.4 crore.

Gujarat Borosil (Q4, YoY)

• Revenue up 13.3 percent to Rs 62.1 crore.
• Net profit down 71 percent to Rs 0.9 crore.
• Ebitda up 11.3 percent to Rs 7.9 crore.
• Margin at 12.7 percent versus 13 percent.
• Exceptional loss of Rs 2 crore in base quarter.
• Deferred tax reversal at Rs 1.8 crore versus Rs 4 crore.

• Shares to start trading on BSE/NSE after IPO gets oversubscribed 41.2 times at Rs 215 apiece.

• Alembic Pharma entered into a joint venture contract with SPH Group and Adia to promote and sell pharma products for the Chinese markets. Subsequently, the JV plans to set up a manufacturing facility in China. The pharma company has a 44 percent stake in this arrangement.
• Biocon retained economic interest in global commercialization of Hulio, a biosimilar drug which is licensed by Mylan and will gain a share of profits from global markets.
• Essel Group said Zee Entertainment stake sale at advanced stage. (Bloomberg News)
• BSE board approved a buyback of 67.6 lakh shares, or 13.06 percent of total capital of the company at a price of Rs 680 per share aggregating to Rs 460 crore and appointed Justice Vikramjit Sen as the Chairman.
• IDBI Bank board to consider passing enabling resolution for equity issue on May 13.
• Dewan Housing Finance received the National Housing Bank’s nod to sell entire stake of 9.15 percent in Aadhar Housing Finance to Blackstone’s arm.
• India Grid Trust: Investment Manager approved preferential issue and allots 30 crore units at price of Rs 83.89 per unit aggregating to Rs 2,514 crore, to institutional investors.
• HUL: NCLT ordered meeting of shareholders and unsecured creditors on June 29 to consider and approve the amalgamation of the company and GlaxoSmithKline Consumer Healthcare.
• Mcleod Russel: ICRA revised the long term rating from ‘A’ to ‘BBB-‘
• FDC said that a fire incident occurred in its Maharashtra plant on May 3. The company said production was disrupted for a few hours and there will not be any significant impact on the operations of the company and it also has adequate insurance coverage.
• Bank of Maharashtra revised its MCLR across various tenors with effect from May 7. Base rate remains unchanged at 9.5 percent. One-month rate at 8.25 percent and one-year rate at 8.7 percent.
• Vakrangee announced alliance with Dish TV for distribution of subscription recharge and providing collection services.
• Ingersoll-Rand (India): Gardner Denver Holdings makes an open offer to acquire 82.07 lakh shares (26 percent stake) from public shareholders at Rs 592.02 per share (discount of 1.7% to CMP). Open offer made due to merger agreement between the promoter and Gardner Denver Holdings.

• Brent crude traded higher 0.14 percent to $69.98 per barrel. The Asian crude benchmark ended 1.9 percent lower yesterday.
• West Texas Intermediate added 0.2 percent to $61.54 a barrel, after touching the lowest level in more than five weeks Tuesday.
• Gold was steady at $1,285.20 an ounce.

London Metal Exchange

• Copper ended lower, down 0.90 percent.
• Aluminium ended higher, up 1.14 percent.
• Nickel ended lower, down 1.15 percent.
• Tin ended higher for the second consecutive trading session, up 0.4 percent.
• Lead halted a two-day rally, ended 2.34 percent lower.
• Zinc ended lower, down 2.85 percent.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell fell 0.5 percent to 11,478 as of 7:25 a.m.

Asian stocks dropped after the U.S. threat of higher tariffs on imports from China pushed American equities down the most since March. The yen held near a six-week high.

The brunt of equity declines was in Japan, with losses also seen in Australia and South Korea.

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