Sensex, Nifty Extend Losses For Third Straight Day

Indian equity benchmarks extended losses for the third day after Brent Crude rose above $80 per barrel for first time since Nov. 2014 raising concerns about the country’s deteriorating macros.

The S&P BSE Sensex fell 0.67 percent or 238.76 points to 35,149.12 and the NSE Nifty 50 index declined 0.54 percent or 58.40 points to 10,682.70.

Ten out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Fast Moving Consumer Goods index's 0.9 percent drop. On the flipside, the S&P BSE Consumer Durables index was the top gainer, up 1.4 percent gain.

The mid- and small-cap shares outperformed their larger peers as the S&P BSE MidCap index rose 0.7 percent and the S&P BSE SmallCap index advanced 0.4 percent.

Brent Crude rose to $80 per barrel, its highest level since Nov. 2014.

Shares of the Pune-based consumer finance company rose as much as 8.79 percent to record high of Rs 2,088.80 after it best quarterly profit in over six years.

Shares of the Anil Ambani-led defence equipment maker surged 30 percent to Rs 16.60 on the back of heavy volumes.

Trading volume was 6.6 times its 20-day average.

Meanwhile, the BSE has sought clarification from the company regarding sudden surge in its share price for which the reply is awaited.

Shares of other Reliance Group companies were also trading higher:

• Reliance Communications up 50 percent
• Reliance Power up 6.31 percent
• Reliance Infrastructure up 2.95 percent
• Reliance Capital up 4.56 percent

Shares of the Gujarat-based drugmaker rose 4 percent to Rs 52.90 after it reported March quarter earnings.

Key earnings highlights:

• Profit up 10 percent at Rs 33.1 crore versus Rs 30.24 crore (YoY)
• Revenue down 7 percent at Rs 33.21 crore versus Rs 35.83 crore (YoY)

• I regret the alliance of INC-JDS to form a government despite being rejected by the people of Karnataka.
• We will not wait for 15 days for floor test. Wait till today or tomorrow.
• We are in talks with banks to provide farm loan waiver of Rs 1 lakh. Need 24 hours to finalise the same.
• Have asked Chief Secretary to provide a report on farm loan waiver within 24 hours in order to announce it as soon as possible.

Shares of the Pune-based consumer finance lender rose 2.7 percent to record high of Rs 1,971.70 after it reported best quarterly profit in over six years, surpassing average analyst estimates tracked by Bloomberg.

Key earnings highlights:

• Net Interest Income up 40 percent at Rs 2,365 crore versus Rs 1,686 crore (Estimate of Rs 2,257 crore)
• Net profit up 60 percent at Rs 720 crore versus Rs 449 crore (Estimate of Rs 606 crore)
• Gross NPA at 1.48 percent versus 1.67 percent (QoQ)
• Net NPA at 0.38 percent versus 0.53 percent (QoQ)
• Provisioning coverage ratio at 75 percent
• Loan losses and provisions for 04 FY18 were Rs 274 crore versus Rs 287 crore (YoY)

Shares of the Delhi-based government-owned lender wiped out gains after it informed exchanges of receiving a warning letter from Sebi regarding disclosures.

SEBI in its observations said:

• There were delays of 1-6 days in disclosures to stock exchanges.
• PNB did not make any provision/disclosure with respect to Rs 280 crore fraud in the financial statements for December 2017.

Source: Exchange Filing

Shares of the Gurugram-based tractor maker rose 1.11 percent to Rs 967 after it reported March quarter earnings.

Key earnings highlights:

• Net profit up 89 percent at Rs 112.54 crore versus Rs 59.48 crore (YoY)
• Revenues up 40 percent at Rs 1,436 crore versus Rs 1022 crore
• EBITDA up 132 percent at Rs 174.1 crore versus Rs 74.9 crore
• Margins at 12.1 percent versus 7.3 percent

Shares of the Anil Ambani-led telecom operator surged as much as 50 percent, the most in over 12 years, to Rs 15.75 after BTVI reported in a Twitter post that the wireless operator and Ericsson are in settlement talks, citing unidentified people.

RCom, Ericsson are said to have informed National Company Law Tribunal in Mumbai about their talks, news channel BTVI reported.

Trading volume was 6.2 times its 20-day average.

• Sheela Foam: The Ghaziabad-based mattress maker fell 1 percent to Rs 1,333. Trading volume was 81.4 times its 20-day average.
• Birla Corp: The Kolkata-based cement maker rose 5.12 percent to Rs 729.25. Trading volume was 36.2 times its 20-day average.
• AIA Engineering: The Gujarat-based chemical maker rose 4.3 percent to Rs 1,575. Trading volume was 21 times its 20-day average.
• Granules India: The Hyderabad-based drugmaker rose 9.26 percent to Rs 105.65. Trading volume was 8.6 times its 20-day average.

Shares of the Hyderabad-based hotel chain operator rose 5 percent to Rs 235 after it reported March quarter earnings.

Key earnings highlights:

• Net profit up 10 times at Rs 72.9 crore versus Rs 79 lakh (YoY)
• Revenue up 17 percent at Rs 83.34 crore versus Rs 71.28 crore (YoY)

Shares of the Mumbai-based power producer rose as much as 8.4 percent, the most in over a month, to Rs 36.10.

Reliance Power has transferred its entire shareholding in Jharkhand Integrated Power, a special purpose vehicle created for development of Tilaiya ultra mega power project (UMPP), to Jharkhand Urja Vikas Nigam for a total consideration of Rs 112.64 crore, the company said in an exchange notification.

• Indian equity benchmark extended losses dragged metal, pharma and banking shares.
• The NSE Nifty 50 index 0.4 percent or 43 points to 10,698 and the S&P BSE Sensex dropped 0.4 percent or 142 points to 35,245.
• The mid- and small-cap shares were outperforming their larger counterparts as the S&P BSE MidCap index rose 0.3 percent and the S&P BSE SmallCap index gained 0.2 percent.
• Ten out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal index's 1 percent drop. On the other hand, the S&P BSE Consumer Durables index was the top gainer, up 1.7 percent.
• The overall breadth was neutral as 1,173 shares were advancing while 1,177 were declining on the BSE.

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Addressing the media after becoming chief minister of Karnataka, BS Yeddyurappa said, “we are in talks with the banks to provide farm loan waiver of Rs 1 lakh. Need 24 hours to finalise the same”.

Have asked Chief Secretary to provide a report on this within 24 hours in order to announce farm loan waiver as soon as possible, he added.

Catch all the live updates here

Karnataka Chief Minister was confident that he will be able to prove a majority on the floor of the house. I have been given 15 days but I won’t take so long to prove the majority, Yeddyurappa told reporters in a press briefing.

Catch all the live updates here

Shares of the Gujarat-based fertiliser maker fell 7 percent, the most in over three months, to Rs 122.35 after its profit declined in March quarter.

Key earnings highlights:

• Revenue up 33 percent at Rs 2,055 crore versus Rs 1,542 crore
• Net profit down 17 percent at Rs 156 crore versus Rs 187 crore
• Tax credit of Rs 114.5 crore in base quarter
• EBITDA up 97 percent at Rs 227 crore versus Rs 115 crore
• Margins at 11.0 percent versus 7.5 percent

Shares of the Bengaluru-based real estate developer fell as much as 6.6 percent, the most in over two months, to Rs 240.30 after its net profit in March quarter dropped 75.64 percent.

Key earnings highlights:

• Net profit down 75.6 percent at Rs 18.05 crore versus Rs 74.10 crore (YoY)
• Revenue down 22 percent at Rs 433.54 crore versus Rs 553.74 crore (YoY)

Shares of the Delhi-based power trading company fell 7.45 percent to Rs 85.10 after it net profit missed Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Net profit at Rs 64.37 crore versus estimate of Rs 66.7 crore
• Revenue at Rs 3,924.85 crore versus estimate of Rs 4,280 crore
• Other income at Rs 83 crore versus Rs 110 crore

Senior lawyer Ram Jethmalani moved the Supreme Court in his personal capacity against the decision of the Karnataka Governor inviting BJP to form the government, news agency Press Trust of India reported.

• A bench headed by CJI Dipak Misra asks Jethmalani to mention his plea tomorrow before the bench concerned
• Governor's order is a "gross abuse" of Constitutional power, Jethmalani tells SC

Catch all the live updates here

Shares of the household products maker surged 12 percent, the most in a month, to record high of Rs 440.

The stock rose for second straight day after it reported strong March quarter earnings.

Key earnings highlights:

• Net profit at Rs 76 crore versus Bloomberg estimate of Rs 47.8 crore
• Revenue at up 15.8 percent at Rs 517 crore versus Rs 446.20 crore.
• EBITDA up 45.6 percent at Rs 8.4 crore versus Rs 60.7 crore (YoY)
• Board announced bonus issue of one share for every one share held

Shares of the Chennai-based two-wheeler maker fell as much as 4.49 percent to Rs 583.85 after brokerages maintained 'underperform' rating on the stock after it missed earnings estimates in March quarter.

Credit Suisse

• Maintained ‘Underperform’; cut price target to Rs 490 from Rs 510.
• Good execution on products, but double-digit margins seem to be a pipe dream.
• Management now refused to give any guidance on achieving double-digit margins.
• Raw materials, competition key headwinds in near term.

Macquarie

• Maintained ‘Underperform’; cut price target to Rs 540 from Rs 575.
• Margin improvement remains elusive.
• Think the valuation for TVSL is expensive at 25 times FY20E PER.

Shares of the Hyderabad-based drugmaker rose as much as 4.11 percent, the most in over a month, to Rs 1,213.

U.S. FDA has completed inspection at its Unit 1 manufacturing facility in Telangana with zero observations under Form 483, Divi's Labs said in an exchange filing.

Shares of the Hyderabad-based pharma company rose as much as 7.55 percent to Rs 104 after its subsidiary got approval for postpartum hemorrhage drug.

Granules Pharmaceuiticals Inc., a wholly owned subsidiary of Granules India, got approval from U.S. drug regulator for its Abbreviated New Drug Applications (ANDA) filed for Methylergonovine 0.2 mg Tablets, Granules India said in an exchange filing.

Methylergonovine is a semi—synthetic ergot alkaloid used for the prevention and control of postpartum haemorrhage, the exchange filing added.

Nifty Bank's 26,400 strike price call was most active on the NSE ahead of its weekly expiry.

Premium on the contract slumped 86 percent to Rs 3. Over 18 lakh shares were added to the open interest which stood at 24.48 lakh shares.

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The fourth quarter earnings have been ‘strictly okay’, not enough to get investors excited, according to Andrew Holland, CEO of Avendus Capital Alternate Strategies.

Key conversation highlights:

• Expect political noise to last for another 15 days or so
• Attractive yields in the U.S. could lead to bond market outflows from the emerging space
• Expect rupee to eventually hit 70 against the dollar
• I.T. and FMCG could prove good defensive bets
• Would buy FMCG stocks even at current price despite higher valuations

Shares of the Chennai-based petrochemicals maker jumped as much as 20 percent—the most in nearly four years—to Rs 41.45 after posting a fourfold rise in quarterly profit.

Key earnings highlights:

• Revenues up 26 percent at Rs 190 crore versus Rs 151 crore
• Net profit up 286 percent at Rs 27 crore versus Rs 7 crore
• EBITDA up 300 percent at Rs 44 crore versus Rs 11 crore
• Margins at 23.2 percent versus 7.3 percent

• Future Enterprises has 11.6 lakh shares change hands in a single block. Stock up 10.60 percent at Rs 43.30.

Buyers and sellers were not immediately known

Source: Bloomberg

Indian equity benchmarks edged higher led by Infosys, TCS and ITC. However, the gains were capped as HDFC, Reliance Industries and Yes Bank came under selling pressure.

The S&P BSE Sensex rose 0.1 percent or 36 points to 35,428 and the NSE Nifty 50 index gained 0.18 percent or 19 points to 10,762.

All sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty PSU Bank index's 0.7 percent gain.

The mid- and small-cap shares were outperforming their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indices rose 0.4 percent each.

• BS Yeddyurappa has been sworn in as the chief minister of Karnataka amidst protests by Congress MLAs outside the Vidhan Soudha.

Catch all the live updates

• Rupee opens higher at 67.65 per dollar against yesterday's close of 67.79.

Bond yields are expected to trade steady, after ending little changed on Wednesday, with traders focused on Rs 10,000 crore of debt purchases by the central bank.

The RBI plans to purchase four bonds through open market operations in a bid to inject liquidity and cool rising bond yields.

The benchmark 10-year rose 17 basis points this week to end at 7.90 percent on Wednesday with most of the rise coming after data on Monday showed consumer price inflation climbing more than expected. That bolstered expectations that the RBI may raise rates sooner than expected.

Yesterday, Standard Chartered became the last bank to change its call from a lengthy pause by the RBI and now expects two rates hikes -- one in June followed by August.

In the currency market, all eyes will be on the RBI which is suspected to have intervened heavily on Wednesday to pull up the rupee.

The local currency had fallen to 68.1425 per dollar on Tuesday, its lowest in 15 months, prompting the intervention.

Slowing foreign capital flows amid rising U.S. Yields and higher oil prices was causing the rupee to come under pressure, dealers said. It ended at 67.7950 on Wednesday.

Investec on Pharma

• Aurobindo Pharma and Cipla: Initiate coverage with a ‘Buy’ rating and price target of Rs 760 and 660 respectively.
• Sun Pharma, Lupin and Dr. Reddy’s: Initiate coverage with a ‘Sell’ rating and a price target of Rs 435, 665 and 2,030 respectively.
• Remain cautious on the sector as challenges in U.S. will persist.
• Prefer stocks not too reliant on large US products with stable base earnings.

On ITC

Edelweiss

• Maintained ‘Hold’ with a price target of Rs 320.
• Margins shine; recovery in cigarette volumes underway.
• Cigarette volumes fell 1‐2 percent on a yearly basis on a flat base.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 320.
• Cigarette volume decline of 2.5 percent was broadly inline.
• Key positive is the cigarette EBIT growth of 7.6 percent.
• Overweight rating is premised on the expectation of a steady cigarette tax policy.

On TVS Motor Co.

Credit Suisse

• Maintained ‘Underperform’; cut price target to Rs 490 from Rs 510.
• Good execution on products, but double-digit margins seem to be a pipe dream.
• Management now refused to give any guidance on achieving double-digit margins.
• Raw Materials, competition key headwinds in near term.

Macquarie

• Maintained ‘Underperform’; cut price target to Rs 540 from Rs 575.
• Margin improvement remains elusive.
• Think the valuation for TVSL is expensive at 25 times FY20E PER.

Who’s Meeting Whom

• DCM Shriram to meet Laburnum Capital on May 15
• MCX to meet ULJK Financial Services on May 15

Insider Trades

• Waterbase promoter Karam Chand Thapar & Bros. (Coal Sales) Ltd acquired 25,032 shares on May 10
• Bodal chemicals promoter Ankit S Patel acquired 3.14 lakh shares on May 11
• Kwality Ltd promoter Sanjay Dhingra acquired 5.96 lakh shares on May 11

Syngene International

• Promoter Biocon sold 15.56 lakh shares or 0.8 percent equity at Rs 612.1 each.

Shree Renuka Sugars

• Promoter Khandepar Investments Pvt Ltd. sold 3.16 crore shares or 1.6 percent equity at Rs 15.5 each.

Reliance Communication

• Sistema Shyam Teleservices sold 2.76 crore shares or 1 percent equity at Rs 10.57 each.

Saksoft Ltd.

• Promoter SAK Industries bought 94,400 shares or 0.9 percent equity at Rs 240 each.
• Ajit Thomas sold 1 lakh shares or 1 percent equity at Rs 240 each.

Uttam Galva Steel

• Neera Gupta bought 10 lakh shares or 0.7 percent equity at Rs 12.95 each.
• Lydia Construction Pvt Ltd bought 7.25 lakh shares or 0.5 percent equity at Rs 13.24 each.

Trading Tweaks

• Rain Industries and Ruchi Soya circuit filter revised to 10 percent
• Smartlink Network Systems ex-date to determine buyback eligibility

F&O Cues

• Nifty May Futures closed trading at 10,761 with premium of 20 points versus 16.8 points.
• All series-Nifty open interest down 2 percent and Bank Nifty open interest down 6 percent.
• India VIX ended at 13.4, up 2 percent.
• Max open interest for May series call at 11,000 strike price call option, open interest at 60.9 lakh, open interest down 4 percent.
• Max open interest for May series put at 10,500 strike price put option, open interest at 55.3 lakh, open interest down 9 percent.

• Bajaj Finance
• Bajaj Finserv

Other Results

• Alembic
• Balkrishna Industries
• Central Bank of India
• Coffee Day Enterprises
• Escorts
• JK Tyre & Industries
• Kei Industries
• Mcdowell Holdings
• SRF
• Taj GVK Hotels & Resorts
• Voltas
• Wabco India

Tata Steel (Q4 YoY)

• Revenues up 7 percent at Rs 36,132 crore versus Rs 33,856 crore
• Net profit of Rs 10,187 crore versus loss of Rs 725 crore
• Exceptional gain of Rs 11,376 crore in current quarter
• EBITDA down 7.5 percent at Rs 6,499 crore versus Rs 7,025 crore
• Margins at 18 percent versus 20.7 percent

JSW Steel (Q4 YoY)

• Revenues up 25 percent at Rs 20,817 crore versus Rs 16,656 crore
• Net profit up 2 times at Rs 2,996 crore versus Rs 1,014 crore
• EBITDA up 67 percent at Rs 5,290 crore versus Rs 3,164 crore
• Margins at 25.4 percent versus 19 percent

Prataap Snacks (Q4 YoY)

• Revenues up 30 percent at Rs 279.5 crore versus Rs 215 crore
• Net profit down 13 percent at Rs 10 crore versus Rs 11.5 crore
• Tax credit of Rs 7.8 crore in base quarter
• EBITDA up 75 percent at Rs 21 crore versus Rs 12 crore
• Margins at 7.5 percent versus 5.6 percent

Manali Petrochemical (Q4 YoY)

• Revenues up 26 percent at Rs 190 crore versus Rs 151 crore
• Net profit up 286 percent at Rs 27 crore versus Rs 7 crore
• EBITDA up 300 percent at Rs 44 crore versus Rs 11 crore
• Margins at 23.2 percent versus 7.3 percent

JK Lakshmi Cement (Q4 YoY)

• Revenues up 11 percent at Rs 897 crore versus Rs 806 crore
• Net profit up 62 percent at Rs 34 crore versus Rs 21 crore
• EBITDA up 40 percent at Rs 101 crore versus Rs 72 crore
• Margins at 11.3 percent versus 8.9 percent

Gujarat State Fertilizers (Q4 YoY)

• Revenue up 33 percent at Rs 2,055 crore versus Rs 1,542 crore
• Net profit down 17 percent at Rs 156 crore versus Rs 187 crore
• Tax credit of Rs 114.5 crore in base quarter
• EBITDA up 97 percent at Rs 227 crore versus Rs 115 crore
• Margins at 11.0 percent versus 7.5 percent

Birla Corp (Q4 YoY)

• Revenue up 16 percent at Rs 1651 crore versus Rs 1420 crore
• Net profit up 30 percent at Rs 131 crore versus Rs 101 crore
• EBITDA up 7 percent at Rs 252 crore versus Rs 236.5 crore
• Margins at 15.3 percent versus 16.7 percent

Muthoot Finance (Q4 YoY)

• Revenue from operations down 9.3 percent at Rs 1,551 crore versus Rs 1,710 crore
• Net profit up 40 percent at Rs 451 crore versus Rs 322 crore
• Other income at Rs 57 crore versus Rs 3.6 crore
• Provisions and write-offs at Rs 59.6 crore versus Rs 56.4 crore (QoQ), Rs 243 crore (YoY)

Tasty Bite Eatables (Q4 YoY)

• Revenue up 12 percent at Rs 79 crore versus Rs 70.5 crore
• Net profit down 5.5 percent at Rs 7.8 crore versus Rs 8.25 crore
• EBITDA up 3 percent at Rs 15 crore versus Rs 14.5 crore
• Margins at 19 percent versus 20.6 percent

Praj Industries (Q4 YoY)

• Revenue down 9 percent at Rs 274.5 crore versus Rs 302 crore
• Net profit up 17 percent at Rs 27 crore versus Rs 23 crore
• Other income at Rs 10 crore in current quarter
• EBITDA down 18 percent at Rs 31 crore versus Rs 38 crore
• Margins at 11.3 percent versus 12.6 percent

Dishman Carbogen Amcis (Q4 YoY)

• Revenue down 15 percent at Rs 451.5 crore versus Rs 534 crore
• Net profit up 19 percent at Rs 51 crore versus Rs 43 crore
• Other income of Rs 15.5 crore in current quarter
• EBITDA down 17 percent at Rs 121 crore versus Rs 146 crore
• Margins at 26.8 percent versus 27.3 percent

Zee Media (Q4 YoY)

• Revenue up 33 percent at Rs 180 crore versus Rs 135 crore
• Net profit down 44 percent at Rs 2.5 crore versus Rs 4.5 crore
• EBITDA down 43 percent at Rs 20 crore versus Rs 35 crore
• Margins at 11.1 percent versus 25.9 percent

Stocks To Watch: Divi’s Labs And TCI!

• Divi’s Labs says U.S. FDA completes inspection of unit 1 at Telangana with zero observations under Form 483.
• Transport Corporation to hive off cold chain unit.
• Adlabs Entertainment to consider issue of securities to QIP
• Cipla to consider issue of local, foreign currency securities on May 22.
• JSW Steel outlines $6 billion expansion plan after record profit.
• Tata Steel pegs capex at Rs 8,000 crore for current fiscal.
• Jaypee Infratech on life support as Supreme Court stays liquidation.

• CBI files charge sheet against Mehul Choksi, others
• Take a rest, Punjab National. You’ve done quite enough
• India’s biggest steelmakers plan record output on strong demand
• Bharti Airtel to lay off section of Telenor staff post merger
• Trump says ‘we’ll have to see’ if Kim summit goes on
• Macquarie is calling the end of the great bond bull market
• Malaysia scrapped GST. Here’s how it affects their finances
• Insolvency and bankruptcy code: One-year report card
• Stock market’s lifeboat may be sinking
• Investors’ unconditional love for emerging markets is fading
• Wee hour hearing leaves BJP’s Karnataka dream uninterrupted
• BJP trying to ‘bribe’ its way to power, says Kumaraswamy
• Five reasons why Karnataka was a trailer for the 2019 movie

Good Morning

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.3 percent to 10,778 as of 6:45 a.m.

Most stocks in Asia advanced on Thursday after solid American economic data buoyed U.S. shares and sent 10-year Treasury yields up to 3.1 percent. The pound rose on a report that Britain might have reached agreement on its approach toward European customs union.

Equities rose in Japan and Korea, while Hong Kong futures were higher after the S&P 500 Index rose above its 100-day average and the Russell 2000 Index hit an all-time high.

These are some key events to watch this week:

• Malaysian first-quarter GDP growth is expected to slow to 5.6 percent year-on-year, but remain comfortably above the 10-year average.
• Australian jobs are due Thursday.
• New Zealand’s budget is due Thursday.

Commodities

• West Texas Intermediate crude added 0.3 percent to $71.72 a barrel.
• Gold was steady at $1,291.56 an ounce, near the weakest in 20 weeks.
• LME copper rose 0.3 percent to $6,849 a metric tonne.