Sensex, Nifty End Little Changed After Rallying For Five Days

Indian equity benchmark ended a little changed after rallying for five days.

This comes after RBI’s 25-basis-point rate-cut came in as a surprise as only eight of 38 economists surveyed by Bloomberg had expected a cut in rates to 6.25 percent.

The S&P BSE Sensex Index and the NSE Nifty 50 Index ended a little changed at 36,971.09 and 11,069.40 respectively.

Seven out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Media Index's 2.5 percent gain. On the flipside, the NSE Nifty PSU Bank Index was the top sectoral loser, down 0.37 percent.

Shares of Tata Motors extended gains for the second day and rose as much as 3.6 percent to Rs 185 ahead of its quarterly results announcement.

Here’s what analysts tracked by Bloomberg expects the company to report for December quarter on a yearly basis.

• Revenue seen 6 percent higher at Rs 78,750 crore.
• Ebitda seen 2.8 percent lower at Rs 8,300 crore.
• Profit seen 28 percent lower at Rs 772 crore.
• Margin seen at 10.5 percent versus 8.1 percent.

Bajaj Electricals

• Stock rose as much as 9.1 percent to Rs 519.85.
• Trading volume was more than 16 times its 20-day average.

Manappuram Finance

• Stock rose as much as 9.2 percent to Rs 105.80.
• Trading volume was more than 11 times its 20-day average.

Reliance Infrastructure

• Stock fell as much as 30.5 percent to Rs 107.25.
• Trading volume was almost 15 times its 20-day average.

Welspun Corp

• Stock rose as much as 12.5 percent to Rs 114.90.
• Trading volume was almost quadruple its 20-day average.

Grasim Industries quarterly profit during October-December period rose 28 percent year-on-year, according to its stock exchange filing.

Key earnings highlights (Q3, YoY)

• Revenue up 21 percent to Rs 5292 crore.
• Net profit up 28 percent to Rs 608 crore.
• Ebitda up 19 percent to Rs 1052 crore.
• Margins to 19.8 percent versus 20.1 percent.

Shares of the company rose as much as 2.7 percent to Rs 753.50 after the results announcement.

Shares of Raymond fell as much as 11.7 percent to Rs 627.70.

A BloombergQuint investigation has found four years of curious transactions between public listed textile and branded apparel company Raymond Ltd. and an entity owned by its promoter Gautam Singhania.(Catch the full details here)

Trading volume was 4.3 times its 30-day average, Bloomberg data showed. The stock traded at 18.6 times estimated forward earnings per shred compared to a 29.4 times for the two-year historical average.

Shares of Cadila Healthcare rose as much as 5.2 percent to Rs 334.50 after its quarterly profit in the three months ended December topped street estimates.

Key earnings highlights (Q3, YoY)

• Revenue up 10 percent to Rs 3,578 crore.
• Net profit down 6 percent to Rs 511 crore.
• Ebitda down 1 percent to Rs 841 crore.
• Margin at 23.5 percent versus 26.3 percent.

• Indian equity benchmarks recovered after erasing gains following RBI's rate cut.
• The S&P BSE Sensex Index rose 0.2 percent to 37,043 and the NSE Nifty 50 Index rose 0.17 percent to 11,081.

Shares of MRF fell as much as 1.56 percent to Rs 59,425.85 after its December quarter's profit missed estimates.

Key Earnings Highlights (Q3, YoY)

• Revenue up 6.2 percent to Rs 4,033.8 crore.
• Net profit down 18 percent to Rs 279.3 crore.
• Ebtida down 21.5 percent to Rs 551.8 crore.
• Margin at 13.7 percent versus 18.5 percent.
• Inventory write off Rs 244.8 crore in the current quarter.
• Other income of Rs 125.8 crore in the current quarter.

Arvind Ltd.’s quarterly profit fell nearly 50 percent on a yearly basis during the three months ended December.

Shares of the company erased gains and fell as much as 4.7 percent to Rs 79.40.

Key earnings highlights (Q3, YoY)

• Revenue down 0.6 percent to Rs 1,680.3 crore.
• Net profit down 49.2 percent to Rs 40.1 crore.
• Ebitda down 12 percent to Rs 149.6 crore.
• Margin at 8.9 percent versus 10.1 percent.

India’s central bank proposed rationalisation of Interest Rate Derivative to encourage better management of interest rate risks, it said in a statement.

• At present, there are several facilities like Interest Rate Swap, Forward Rate Agreement, amongst others.
• But activity in these instruments is scant, except for the Overnight Indexed Swaps.
• Draft guidelines will be issued by end of March 2019.

The Reserve Bank of India relaxed regulations on bank exposures to NBFCs in order to facilitate flow of credit to well-rated firms, according to its statement.

• Under the current regulations, bank exposures to all NBFCs are uniformly risk-weighted at 100 percent.
• Risk-weights of bank exposure to NBFCs will now be in-line with the ratings assigned by credit rating agencies.
• This is not applicable to NBFC-Core Investment Companies, risk-weight exposures to CICs will remain at 100 percent.

Here's what RBI governor Das said on NBFCs:

• Definition of bulk deposits is now considered as Rs 2 crore and above versus Rs 1 crore earlier.
• Establishing umbrella organisation for urban cooperative banks.
• Merging three categories of NBFCs: asset finance, loan companies and investment companies.
• Merged NBFC category to be called NBFC Investment & Credit Company.

The GDP growth for 2019-20 is projected at 7.4 percent – in the range of 7.2-7.4 percent in the first half, and 7.5 percent in the third quarter– with risks evenly balanced, RBI Governor Shaktikanta Das said.

Growth outlook is likely to be influenced by the following factors:

• Aggregate bank credit and overall financial flows to the commercial sector continue to be strong, but are yet to be broad-based.
• Slowing global demand could pose headwinds. In particular, trade tensions and associated uncertainties appear to be moderating global growth.

The Indian rupee pared loss and appreciated as much as 0.19 percent to 71.42 against the U.S. dollar.

The RBI took good decision by reducing the rate now instead of April given the sensitivities during elections, Dalton Capital Advisors’ UR Bhat said.

“There was a good case to cut interest rates given the current levels of inflation and expectations thereof along with the need to boost investments. The markets would certainly be cheerful of this decision,” Bhat told BloombergQuint in an interaction.

Shares of the lenders rallied, led by IDFC First Bank after the Monetary Policy Committee voted to pare the repo rate by 25 basis points to 6.25 percent.

Indian equity benchmarks traded at day's high after the country's central bank cuts repurchase rates by 25 basis points.

The S&P BSE Sensex Index rose as much as 0.53 percent to 37,172.18 and the NSE Nifty 50 Index rose as much as 0.50 percent to 11,118.10.

Nifty’s 11,200 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract rose 2.8 percent percent to Rs 94.35. About 1.05 lakh shares were added to the open interest which stood at over 22.17 lakh shares.

IGL (Q3, YoY)

• Stock swung between gains and losses to trade 1.3 percent lower at Rs 303.60.
• Revenue up 27.4 percent at Rs 1,508 crore.
• Net profit up 19.3 percent at Rs 198 crore.
• Ebitda up 20.8 percent at Rs 318 crore.
• Margin at 21.1 percent versus 22.2 percent.
• EBIDTA/scm up 7.7 percent at Rs 5.85.

Entertainment Network (Q3, YoY)

• Stock rose as much as 5.7 percent to Rs 570.
• Revenue up 35.8 percent at Rs 200.9 crore.
• Net profit up 22 percent at Rs 16.1 crore.
• Ebitda up 13.5 percent at Rs 40.4 crore.
• Margins at 20.1 percent versus 24.1 percent.
• Production expenses up 75 percent at Rs 80.7 crore.
• Other income of Rs 4.4 crore.

Cummins India (Q3, YoY)

• Stock fell as much as 3.6 percent to Rs 772.45.
• Revenue up 11 percent at Rs 1,503.8 crore.
• Net profit up 8.7 percent at Rs 187.1 crore.
• Ebitda up 15.3 percent at Rs 226.7 crore.
• Margins at 15.1 percent versus 14.5 percent.
• Declares dividend of Rs 7 per share.

Chalet Hotels Ltd. listed at a premium of 5 percent to Rs 294 apiece on National Stock Exchange, compared with its issue price of Rs 280. The hotel chain operator, however fell as much as 6.8 percent further.

Shares of the pharmaceutical company extended gains for the second day and rose as much as 15 percent, the most since July 11, 2018, to Rs 1,849, after the company swung to profit in December quarter.

Here are the key earnings highlights (YoY):

• Revenue up 67.5 percent at Rs 215.2 crore.
• Net profit at Rs 29.9 crore versus net loss of Rs 10.34 crore.
• Ebitda at Rs 41.8 crore versus Ebitda loss of Rs 10.4 crore.
• Inventory write off was Rs 42.6 crore in base quarter.

Shares of Vodafone Idea Ltd. fluctuated between gains and losses to trade at little changed at Rs 29.85 after it continued to post loss for the second straight quarter. (More details here)

Key earnings highlights (Q3, QoQ)

• Revenue down 2.2 percent at Rs 11,765 crore.
• Net loss at Rs 5,005 crore versus net loss at Rs 4,974 crore.
• Ebitda up 16.3 percent at Rs 1,137 crore.
• Margins at 9.66 percent versus 8.13 percent.
• ARPU down 1.14 percent at Rs 89.

Q3 is the first full quarter of Vodafone Idea, post-merger completion. Q2 numbers are restated for comparison purpose.

Here’s what UBS had to say after the December quarter results announcement:

• Maintained ‘Neutral’ with a price target of Rs 38.
• Better than expected December quarter.
• Saw improvement in 4G subs, but lower compared to Bharti.
• EBITDA beat driven by lower than expected opex.

Shares of the Bengaluru-based software developer extended gains for the second day and rose as much as 0.8 percent to hit a fresh high at 769.15.

The stock traded at 21 times its estimated earnings per share for the coming year, Bloomberg data showed. The scrip advanced 38 percent in the past 12 months compared to an 8.1 percent advance in the Sensex.

Shares of Sun Pharmaceutical Industries Ltd. were the top performer on Sensex and Nifty. The stock rose as much as 3.2 percent to Rs 430.

The drugmaker’s U.S. subsidiary, Taro Pharma reported its quarterly results for the three months ended December.

Here are the key earnings highlights (YoY):

• Net sales at $176.4 million, up 13 percent.
• Net profit at $93.5 million, up 422 percent.
• Operating profit at $78.9 million, up 29 percent.
• Operating margin at 44.7 percent versus 39.7 percent.

Indian equity benchmarks traded higher after fluctuating between gains and losses in the open, ahead of RBI monetary policy. The benchmark indices are poised for their longest winning streak in over seven weeks.

The S&P BSE Sensex Index rose as much as 0.35 percent to 37,105.55 and the NSE Nifty 50 Index rose as much as 0.30 percent to 11,095.65. The broader market Index, NSE Nifty 500 Index advanced 0.29 percent.

The market breadth was slightly tilted in favour of buyers. About 779 stocks advanced and 692 shares declined on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Pharma Index's 1.3 percent rally. On the flipside, the NSE Nifty Realty Index was the top sectoral loser, down 0.27 percent.

The Indian rupee weakened in the opening trade after rallying for two days ahead of RBI monetary policy. The home currency depreciated as much as 0.27 percent intraday to 71.75 against the U.S. dollar.

F&O Cues

• Nifty February futures closed trading at 11,090, premium of 28 points.
• Max open interest for February series at 11,000 Call (open interest at 33.7 lakh shares)
• Max open interest for February series at 10,700 Put (open interest at 34.5 lakh shares)

Stocks In F&O Ban

In Ban

• IDBI
• DHFL
• Jet Airways
• Reliance Capital

New in Ban

• Reliance Infrastructure

Put-Call Ratio

• Nifty PCR at 1.82 versus 1.68.
• Nifty Bank PCR at 1.1 versus 1.04.

HSBC on Siemens India

• Maintained ‘Hold’; hiked price target to Rs 1,040 from Rs 1,020.
• December quarter’s execution as well as profitability was strong; order inflows muted.
• Large orders continue to be elusive.
• Focus remains on energy efficiency and digitisation driven base orders.

UBS on Vodafone Idea

• Maintained ‘Neutral’ with a price target of Rs 38.
• Better than expected December quarter.
• Saw improvement in 4G subs, but lower compared to Bharti.
• EBITDA beat driven by lower than expected opex.

On Cipla

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 548.
• December quarter was a miss; expect gradual recovery.
• U.S. sales to improve sequentially in March quarter; domestic business to see double digit growth.
• Cost and forex pressure could hurt overall profit growth this year.

Edelweiss

• Maintained ‘Reduce’ with a price target of Rs 490.
• December quarter’s numbers missed estimate; top-line growth will remain A challenge.
• Progress in the U.S. offsets stagnant domestic, tender businesses.
• Investments to rise; margin expansion levers exhausted.

On IGL

UBS

• Maintained ‘Neutral’ with a price target of Rs 300.
• In-line quarter; Ebitda/scm higher due to price hikes.
• Expect margin to recover to Rs 6.1/scm in 2019-20.
• Stock already run up and leaves limited upside potential.

Prabhudas Lilladher

• Maintained ‘Buy’ with a price target of Rs 360.
• Volume traction remain intact; remains play on rising pollution concerns.
• Expanding reach and increased vehicle conversion and addition to drive earnings.
• Expect spreads to remain healthy supported by benign domestic gas prices.

On Adani Ports

Jefferies

• Maintained ‘Buy’; hiked price target to Rs 425 from Rs 370.
• Operational results in-line, net profit beat due to lower tax rate.
• Believe management delivering on promises of reducing group deposits.
• Generating free cash flow and divesting LNG terminal by March 2019 were key highlights.

HSBC

• Maintained ‘Buy’ with a price target of Rs 446.
• Ports’ Ebitda was higher led by growth in all cargoes; profit growth fuelled by forex.
• Management sounded confident to exceed FY19 guidance; Expect Dhamra port to lead growth in the next financial year.
• Stock attractively valued at low end of historical range

On Lupin

Edelweiss

• Maintained ‘Buy’ with a price target of Rs 1,050.
• One-offs dent in-line numbers; outlook strong.
• U.S. erosion stabilises; performance improves sequentially.
• Investments in specialty, respiratory and biosimilars to bear fruits.

UBS

• Maintained ‘Buy’ with a price target of Rs 1,010.
• Operating earnings tad above estimates, one-offs impacted reported numbers.
• India business growth improved in Q3, Japan picked up sequentially.
• Cost-cutting and niche launches to aid margins; operational performance to improve from March quarter.

On JSW Steel

Prabhudas Lilladher

• Maintained ‘Buy’ with a price target of Rs 360.
• Beat on domestic operations; margins to rebound in First quarter of the next financial year.
• Weaker than expected volumes offset by better than expected realisations and lower costs.
• Aggressive acquisition strategy could delay stock returns in the near term.

Investec

• Maintained ‘Buy’; cut price target to Rs 300 from Rs 349.
• Strong operational performance.
• Bhushan Power and balance sheet to take centre stage.
• Cut Ebitda estimates for the current and the next financial year by 3-12 percent to factor spread contraction and overseas losses.

On Cummins India

Nomura

• Maintained ‘Buy’ with a price target of Rs 890.
• December quarter review: Domestic execution remains strong, exports weakened seasonally and margins weaker.
• Management remains optimistic on domestic growth but cautions on election related volatility.
• Clarity on gross margin and export demand trend are key to monitor.

Morgan Stanley

• Maintained ‘Underweight’ with a price target of Rs 620.
• December quarter review: Ebitda missed estimates; Revenue beats but margins disappoint.
• Commentary on margins and revenue growth key to watch.

• HEG, Shanthi Gears ex-date for share buyback.

In ASM Framework:

• Religare Enterprises
• Leel Electricals
• Vipul
• Everest Organics
• IL&FS Transportation Networks
• Mishtann Foods
• Navkar Corporation
• Shankara Building Products
• Vikas Proppant & Granite

Price Band Revision

(From Feb. 7)

From 10 percent to 20 percent:

• Adani Gas
• Adani Green Energy,
• Adani Transmission
• Monnet Ispat & Energy
• Avadh Sugar & Energy
• TVS Electronics
• V-Mart Retail
• Butterfly Gandhimathi Appliances
• Central Bank of India
• Cerebra Integrated Technologies
• Edelweiss Financial Services
• EIH Associated Hotels
• Hindusthan National Glass & Industries
• Indiabulls Real Estate
• Ind-Swift Laboratories
• Jubilant Industries
• Kingfa Science & Technology
• Merck
• Mahanagar Telephone Nigam
• NRB Industrial Bearings
• Nitco
• Opto Circuits
• Praxis Home Retail
• Shree Renuka Sugars
• RattanIndia Infrastructure
• Solara Active Pharma Sciences
• Talwalkars Better Value Fitness

From 5 percent to 20 percent

• Bombay Dyeing
• Bharat Road Network
• Excel Industries

From 10 percent to 5 percent

• Siti Networks

From 20 percent to 10 percent

• Reliance Naval and Engineering

From 5 percent to 10 percent

• 5Paisa Capital
• Dhanlaxmi Bank
• Dwarikesh Sugar Industries
• Goa Carbon
• Indiabulls Integrated Services
• Jaiprakash Power Ventures Limited
• Rain Industries
• Vakrangee

• Trust Investment Advisors acquired 1.7 lakh shares at Rs 65.9 each.
• Ram Fund acquired 1.76 lakh shares at Rd 64.75 each.
• GP Emerging Markets Strategies LP sold 8.75 lakh shares at Rs 65.9 each.
• University of Notre Dame DU LAC sold 2.66 lakh shares at Rs 65.9 each.

Nifty Earnings To Watch

• Grasim Industries
• Tata Motors

Other Earnings To Watch

• 20 Microns
• Adani Enterprises
• Adani Green Energy
• Apex Frozen Foods
• Arvind
• Aurobindo Pharma
• Bajaj Electricals
• Balmer Lawrie & Company
• Borosil Glass Works
• Britannia Industries
• Cadila Healthcare
• Coffee Day Enterprises
• Elecon Engineering
• Elgi Rubber
• Endurance Technologies
• Eros International Media
• Esab
• Gammon
• Gillette
• Gravita
• Gujarat Borosil
• Healthcare Global Enterprises
• Hinduja Global Solutions
• Hindustan Construction Company
• IG Petrochemicals
• Indo Tech Transformers
• Ircon International
• JSW Holdings
• Khadim India
• Majesco
• Mangalam Cement
• Minda Corporation
• MRF
• NR Agarwal Industries
• Nava Bharat Ventures
• Odisha Cement
• Pitti Engineering
• Precision Camshafts
• Pricol
• Procter & Gamble Hygiene and Health Care
• Rane Holdings
• Sanghvi Movers
• Shipping Corporation Of India
• Shree Pushkar Chemicals & Fertilisers
• Shreyas Shipping & Logistics
• Shriram EPC
• Steel Authority of India
• Sterling Tools
• The Phoenix Mills
• Timex Group
• Timken
• Tourism Finance Corporation of India
• TVS Electronics
• Sandur Manganese & Iron Ores
• Hinduja Ventures
• Gallantt Metal
• Andhra Petrochemicals

Earnings Reaction To Watch

Vodafone Idea (Q3,QoQ)

• Revenue down 2.2 percent at Rs 11,765 crore.
• Net loss at Rs 5,005 crore versus net loss at Rs 4,974 crore.
• Ebitda up 16.3 percent at Rs 1,137 crore.
• Margins at 9.66 percent versus 8.13 percent,
• ARPU down 1.14 percent at Rs 89.

Q3 is the first full quarter of Vodafone Idea, post-merger completion. Q2 numbers are restated for comparison purpose

Taro Pharma (Sun Pharma’s subsidiary) (Q3, YoY)

• Net sales at $176.4 million, up 13 percent.
• Net profit at $93.5 million, up 422 percent.
• Operating profit at $78.9 million, up 29 percent.
• Operating margins at 44.7 percent versus 39.7 percent.

IGL (Q3, YoY)

• Revenue up 27.4 percent at Rs 1,508 crore.
• Net profit up 19.3 percent at Rs 198 crore.
• Ebitda up 20.8 percent at Rs 318 crore.
• Margin at 21.1 percent versus 22.2 percent.
• EBIDTA/scm up 7.7 percent at Rs 5.85.

Entertainment Network (Q3, YoY)

• Revenue up 35.8 percent at Rs 200.9 crore.
• Net profit up 22 percent at Rs 16.1 crore.
• Ebitda up 13.5 percent at Rs 40.4 crore.
• Margins at 20.1 percent versus 24.1 percent.
• Production expenses up 75 percent at Rs 80.7 crore.
• Other income of Rs 4.4 crore.

AstraZeneca Pharma (Q3, YoY)

• Revenue up 67.5 percent at Rs 215.2 crore.
• Net profit at Rs 29.9 crore versus net loss of Rs 10.34 crore.
• Ebitda at Rs 41.8 crore versus Ebitda loss of Rs 10.4 crore.
• Inventory write off Rs 42.6 crore in base quarter.

Cummins (Q3, YoY)

• Revenue up 11 percent at Rs 1,503.8 crore.
• Net profit up 8.7 percent at Rs 187.1 crore.
• Ebitda up 15.3 percent at Rs 226.7 crore.
• Margins at 15.1 percent versus 14.5 percent.
• Declares dividend of Rs 7 per share.

• Chalet Hotels’ shares to start trading on BSE/NSE after IPO got 157 percent demand.

• GAIL offloaded pipeline laying contract of Bokaro-Durgapur Section from IL&FS due to poor project progress. The contract has been retendered and awarded to three contractors.
• Andhra Bank reduced its base rate and Benchmark Prime Lending Rate (BMPLR) by 5 basis points with effect from February. Base rate is now at 9.5 percent and BMPLR is at 13.9 percent.
• Jubilant Group said that all three listed companies will not pay brand royalty to promoter company Jubilant Enpro. They state that the decision for payment of brand royalty was taken to protect, maintain, promote and enhance the corporate brand name ‘Jubilant’ which is owned by Jubilant Enpro.
• DHFL: American based Prudential Financial said it will seek a local partner for India life insurance venture. The company will also work and facilitate stake sale in DHFL in DHFL Pramerica.
• Seamec withdrew from demerger of EPC and Vessel Division of HAL Offshore into the company citing that intended synergies on which the demerger was planned, have been diluted. The company also stated that it will move this application to NCLT.
• Prabhat Dairy: Board rescheduled to Feb 13 to consider December quarter earnings and other matters.

The Monetary Policy Committee will announce its decision today, amid expectations that the panel will soften its view on inflation risks in the economy.

The changed view could either result in a reversal of stance from ‘calibrated tightening’ to ‘neutral’ or a cut in interest rates, though most economists expect rates to remain unchanged.

The Indian government has its thumb on the side of the scale with the minority of analysts who anticipate a 25 basis point cut. Eight of 38 economists polled by Bloomberg expect a 25 basis point cut in rates to 6.25 percent. Most believe that a change in stance is more likely.

The policy meet is Shaktikanta Das’ maiden meeting after he took change as the RBI governor in December.

Read these to get up to speed:

• If not cut now, when?
• Why the RBI should bite the rate cut bullet
• Did India pick the right inflation target?
• The mismatch between what MPC says and what RBI does

• The Bank of England sets policy.
• China, Taiwan, Hong Kong, Vietnam are closed.

• Brent crude halted a two-day decline, ended 1.15 percent lower at $62.69 per barrel.
• West Texas Intermediate crude slid 0.2 percent to $53.90 a barrel.
• Gold added less than 0.1 percent to $1,307 an ounce.

London Metal Exchange

• Aluminium ended lower after a two-day rally, down 0.78 percent.
• Nickel ended lower for the second day, down 0.88 percent.
• Zinc ended lower for the second day, down 1.35 percent.
• Copper ended higher for the third day, up 0.74 percent.
• Lead ended lower for the second day, down 0.57 percent.
• Tin ended higher for the second day, up 0.72 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.28 percent to 11,074 as of 8:35 a.m.

Stocks in Asia traded mixed Thursday after U.S. shares slipped amid disappointing earnings in the technology sector.

Japanese shares fell amid a raft of corporate earnings, while Australian shares rose for a fourth day, showing little signs of exhaustion as the benchmark index climbed further into technically overbought territory.

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