Sensex, Nifty End Flat; Gains In Infosys, RIL Offset By Losses In HDFC, ITC

Indian equity benchmarks were little changed as gains in Infosys, Reliance Industries and ICICI Bank were offset by losses in HDFC, ITC and Kotak Mahindra Bank.

The S&P BSE Sensex rose 0.01 percent or 3 points to 36,321 and the NSE Nifty 50 Index advanced 0.03 percent or 3 points to 10,890.

Twelve of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Oil & Gas Index's 0.7 percent gain. On the flipside, S&P BSE Fast Moving Consumer Goods Index was top loser, down 0.7 percent.

The small-cap stocks outperformed their larger peers as the S&P BSE SmallCap Index rose 0.14 percent.

• HDFC Bank has 21.2 lakh shares changed hands in a block on BSE. Stock down 0.1 percent at Rs 2,120.25.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Mumbai-based private sector lender fell as much as 1.15 percent to Rs 181 after its profit rose 51 percent in December quarter.

Key earnings highlights:

• Net profit up 51 percent at Rs 86.10 crore versus Rs 57.01 crore (YoY)
• Net interest income up 17 percent at Rs 293 crore versus Rs 251 crore (YoY)
• Net non-performing assets as a percentage of total advances at 0.71 percent versus 0.70 percent (QoQ)
• Gross non-performing assets as a percentage of total advances at 7.92 percent versus 1.84 percent (QoQ)
• Fresh slippages at Rs 110 crore versus Rs 100 crore (YoY); Rs 97.2 crore (QoQ)

• ITI: The Bengaluru-based telecommunications products maker rose as much as 12 percent to Rs 105.80. Trading volume was more than 13 times its 20-day average.
• Gujarat Pipavav Port: The Mumbai-based shipping port operator rose as much as 5.68 percent to Rs 95. Trading volume was 14 times its 20-day average.
• Coffee Day Enterprises: The Bengaluru-based cafe chain operator rose as much as 4.78 percent to Rs 297. Trading volume was 12 times its 20-day average.
• Hindustan Aeronautics: The Bengaluru-based aircraft maker rose as much as 1.45 percent to Rs 784. Trading volume was more than seven times its 20-day average.

Shares of the Mumbai-based restaurants operator were locked in a 20 percent upper circuit at Rs 98.40 after its profit surged manifold in December quarter.

Key earnings highlights:

• Revenue up 24.2 percent at Rs 98.5 crore versus Rs 79.30 crore (YoY)
• Net profit at Rs 8.4 crore versus Rs 67 lakh (YoY)
• Ebitda at Rs 12.5 crore
• Margin at 12.7 percent

Stocks in Europe climbed alongside U.S. index futures as investors assessed prospects for global policy makers to arrest a slowdown in growth. The U.K.’s equity benchmark underperformed and the pound fluctuated before a no-confidence vote in Prime Minister Theresa May’s government.

India’s largest lender State Bank of India (SBI) has put on sale its total loans to Essar Steel Ltd. worth Rs 15,431 crore, as per information on its auction website.

The minimum reserve price for the loans has been set at Rs 9,587 crore and the bank has disclosed that as per the ArcelorMittal resolution plan, approved by Essar Steel’s committee of creditors, the minimum recovery amount on these loans is Rs 11,313 crore.

Shares of the Delhi-based media company erased gains and fell as much as 4.10 percent to Rs 45.60 after its profit declined sharply in December quarter.

Key earnings highlights:

• Revenue declined 3.3 percent to Rs 589 crore versus Rs 609 crore (YoY)
• Net profit fell 69 percent to Rs 43 crore versus Rs 137 crore (YoY)

Indian rupee depreciated for fourth day in a row against the dollar.

The local unit in last four sessions has declined 1.1 percent to 71.17 tracking overnight surge in crude oil prices.

Brent crude rose as much as 3.2 percent to $60.86 per barrel in yesterday's session.

Shares of the Kolkata-based carbon black maker rose as much as 5.24 percent to Rs 213.95 after its profit nearly doubled in December quarter.

Key earnings highlights:

• Revenue rose 53 percent to Rs 946 crore versus Rs 615 crore (YoY)
• Net profit jumped 91 percent to Rs 109 crore versus Rs 57 crore (YoY)
• Board approves interim dividend payout of Rs 3.5/share

• Dish TV has 42.3 lakh shares change hands in two blocks. Stock up 1.1 percent at Rs 36.55.

Buyers and sellers were not immediately known

Source: Bloomberg

BloombergQuint spoke to Citi Research Team on how the third quarter earnings season will pan out for corporate India. Below are the key highlights of the conversation:

• Both ACC and Ambuja trade at replacement costs
• Like ACC and Ambuja Cement, downside seems to be limited
• Improving utilisation rates with better demand can push up cement prices
• Fall in crude, pet coke prices may benefit cement companies
• Cement demand growth can outpace cement supply in India
• Comfortable with current valuations of Infosys
• Need to be quite selective in mid-cap IT Space, top pick L&T Infotech
• U.S. visa situation is challenging currently for the IT companies
• Margin pressure quite evident in IT sector
• Have neutral rating on Sun Pharma, no clarity on whistle blower report
• Phase of margin expansion will continue for Apollo Hospitals
• Aurobindo, Apollo Hospitals, Cadila expected to report strong Q3 results
• Retail housing sales slowdown will impact housing financing companies
• Expect NPA recoveries, growth momentum to aid earnings for ICICI Bank
• Expect banks to report stable asset quality
• Expect 30-40 basis point interest margin drop for NBFCs in Q3

Indian equity benchmarks were trading flat as gains in ICICI Bank, Reliance Industries and Infosys were offset by losses in ITC, HDFC and Kotak Mahindra Bank.

The Sensex rose 0.14 percent or 52 points to 36,370 and the Nifty 50 Index advanced 0.14 percent or 15 points to 10,902.

Fifteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Utilities Index's 1 percent gain. On the flipside, S&P BSE Fast Moving Consumer Goods Index was top loser, down 0.65 percent.

Small-cap shares were outperforming their larger peers as the S&P BSE SmallCap Index rose 0.4 percent.

Shares of the Kolkata-based railway coach and components maker rose as much as 2.54 percent to Rs 60.50 after it won two orders worth Rs 262 crore.

Texmaco Rail & Engineering won order worth Rs 110 crore for for design, manufacture, supply, installation, testing and commissioning of Automatic Fare Collection System from Mumbai Metro Rail Corporation, the company said in an exchange filing.

Further, the company has received letter of intent (LOI) for 12 rakes of BLC type wagons valuing Rs 152 crore, the filing added.

Reliance Industries Ltd. is planning to issue as much as Rs 2,500 crore of bonds with in three weeks, according to people familiar with the matter.

• Proceeds from the planned issuance likely to be used for refinancing, and capital expenditure the people said, who are not authorized to speak publicly and asked not to be identified.
• A Reliance spokesman did not immediately respond to an email seeking comment.
• Company raised Rs 20,500 crore through rupee bonds in 2018, data compiled by Bloomberg showed.

Source: Bloomberg

Shares of the Mumbai-based airline operator fell as much as 7.47 percent, the most in over a month, to Rs 271.75 after Etihad Airways PJSC seeks exemption from markets regulator Sebi on norms related to open offer and preferential pricing for investing more in cash-strapped Jet Airways India Ltd., CNBC-TV18 reports, citing people it didn’t identify.

• Etihad is in touch with Sebi on exemption; wants written permission from the regulator.
• The Abu Dhabi-based carrier, which holds 24% in Jet Airways, wants State Bank of India to speak to civil aviation ministry on exemptions, CNBC reports.
• Etihad will invest in Jet Airways only at a price of Rs 150 per share.

Shares of the Pune-based IT services company fell as much as 6.42 percent to Rs 198.25 after its profit declined in December quarter.

Key earnings highlights (QoQ Consolidated):

• Revenue down 6.6 percent at Rs 563.7 crore.
• Net profit down 22 percent at Rs 63.9 crore.
• EBIT down 29.2 percent at Rs 65.2 crore.
• Margin at 11.6 percent.

Shares of the Gujarat-based tiles maker rose as much as 8.62 percent to Rs 162.

GMO Emerging Dom Opportunities Fund sold 3.21 lakh shares or 1.07 percent equity at Rs 130.09 each.

Shares of the graphite electrode makers rallied over 10 percent in today's trade after Japanese graphite electrodes producer — Tokai Carbon raised electrode contract prices by about $3,700 million tonnes for the first half of 2019, according to Steel Mint.

Shares of Info Edge India Ltd. extended gains for the fourth day. The stock rose as much as 3.4 percent to hit a new all-time high at Rs 1,737.

The stock has returned 22.3 percent over the last 12 months compared to a 6.1 percent advance in the Sensex.

Shares of Godrej Agrovet rose as much as 5.7 percent, the most since October, to Rs 523.20.

Trading volume was 61.2 times its 30-day average, Bloomberg data showed. The stock traded at 30.9 times its estimated earnings per share compared to a 35.2 times for the two-year historical average.

Shrimp stocks rallied in today’s trade after India’s shrimp exports to U.S. rose in terms of volume and value in October 2018.

• India exported 2,78,60,983 kg of shrimp to U.S. at $247.9 million in October 2018
• Realisations rose 5 percent to $8.9 per kg from $8.49 per kg last month.
• Total shrimp export increased by 11.5 percent in terms of volume and 16.8 percent in terms of value compared to last month.
• Shrimp prices in international market have risen for second consecutive month.

Shares of Zee Entertainment rose as much as 4.2 percent, the most in 20 percent to Rs 475.90

The Company's quarterly profit during October-December period rose the most in over a year (More details here)

Key earnings highlights (Q3, YoY)

• Revenue up 18 percent at Rs 2,167 crore.
• Net profit up 51 percent at Rs 563 crore.
• Ebitda up 27 percent at Rs 753 crore.
• Margin at 34.8 percent versus 32.3 percent.

Here's what analysts had to say about Zee Entertainment after the company announced its results:

CLSA

• Maintained Buy with a price target of Rs 670.
• Q3 Review: Results were ahead of estimates; Encouraging ZEE5 ramp-up.
• Strong advertising and subscription outlook.
• Upgrade forecasts by 1-4 percent and expect Zee to deliver 19 percent earnings CAGR over FY19-21.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 564 from Rs 556.
• Q3 addressed investor concerns on margins and progress of ZEE5.
• Strongly believe Zee is among the most attractive media assets in emerging markets.
• Catalyst: Clarity on promoter stake sale, sustained ramp-up of ZEE5.

Indian equity benchmarks extended gains for the second day. The S&P BSE Sensex Index rose as much as 0.3 percent to 36,428.76 and the NSE Nifty 50 Index rose as much as 0.27 percent to 10,915.85.

The market breadth was tilted in favour of buyers. About 861 stocks advanced and 519 shares declined on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Media Index's 1.45 percent gain. On the flipside, the NSE Nifty FMCG Index was the top sectoral loser down 0.07 percent.

The Indian rupee fluctuated between gains and losses after depreciating in the last three sessions against the the U.S. dollar. The home currency appreciated 0.13 percent to 70.93 after depreciating to 71.10 at the open against the greenback.

An overnight surge in crude oil prices is likely to weigh on the bond markets today as investors fear inflationary pressures may resurface.

Yield on the most traded 2028 bond climbed four basis points in the last session while that on the new 10-year rose three basis points. For today, the 2028 bond yields should stay in a range of 7.45-7.50 percent.

F&O Cues

• Nifty January futures closed trading at 10928, premium of 42 points.
• Max open interest for January series at 11,000 Call (open interest at 40.5 lakh shares).
• Max open interest for January series at 10,500 Put (open interest at 40.9 lakh shares).

Stocks In F&O Ban

• Adani Power
• Jet Airways

Put-Call Ratio

• Nifty PCR at 1.51 versus 1.35.
• Nifty Bank PCR at 1 versus 0.84.

Macquarie on Life Insurance

• Positives: opportunity size, improvement in operations, persistency and margins.
• Negatives: cyclicality, reliance on intermediaries, regulatory and tax rate roadblocks.
• Prefer ICICI Prudential on cheap valuations, low risk from product regulation and sticky partners
• HDFC Life: Initiated ‘Neutral’ with a price target of Rs 400.
• SBI Life: Initiated ‘Underperform’ with a price target of Rs 555.
• ICICI Prudential: Initiated ‘Outperform’ with a price target of Rs 415.

UBS on Bharat Forge

• Maintained ‘Sell’; cut price target to Rs 480 from Rs 580.
• Muted earnings growth outlook to drive further de-rating.
• Remain cautious on truck cycle into 2020-2021.
• Sharper decline in truck markets and general industrial slowdown remains downside risk.

JPMorgan on GAIL

• Maintained ‘Neutral’ with a price target of Rs 375.
• Potential transmission tariff increase a meaningful positive but timing unknown.
• Non-transmission business facing stress from sharply lower crude prices.
• See risk reward more attractive in IOCL and BPCL versus GAIL on a relative basis.

Morgan Stanley on MCX

• Maintained ‘Equal-weight’ with a price target of Rs 870.
• Q3 beat driven by higher other income.
• Transaction revenue was in line with expectations.
• Investment income higher due to sharp decline in yields.

On Zee Entertainment

CLSA

• Maintained Buy with a price target of Rs 670.
• Q3 Review: Results were ahead of estimates; Encouraging ZEE5 ramp-up.
• Strong advertising and subscription outlook.
• Upgrade forecasts by 1-4 percent and expect Zee to deliver 19 percent earnings CAGR over FY19-21.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 564 from Rs 556.
• Q3 addressed investor concerns on margins and progress of ZEE5.
• Strongly believe Zee is among the most attractive media assets in emerging markets.
• Catalyst: Clarity on promoter stake sale, sustained ramp-up of ZEE5.

• Gujarat Gas record date for stock split from Rs 10 to Rs 2 per share.

• Pitti Engineering: Bank of Baroda sold 2.25 lakh shares or 0.67 percent equity at Rs 61.67 each.
• Asian Granito Tiles: GMO Emerging Dom Opportunities Fund sold 3.21 lakh shares or 1.07 percent equity at Rs 130.09 each.

Earnings To Watch

• 5Paisa Capital
• DCB Bank
• HT Media
• Mindtree
• Motilal Oswal Financial Services
• Phillips Carbon Black
• Sagar Cements

Also Read: All You Need To Know Going Into The Third Quarter Earnings Season

Earnings Reactions To Watch

Zee Entertainment (YoY)

• Revenue up 18 percent at Rs 2,167 crore.
• Net profit up 51 percent at Rs 563 crore.
• Ebitda up 27 percent at Rs 753 crore.
• Margin at 34.8 percent versus 32.3 percent.

Also Read: Q3 Earnings: Zee Entertainment’s Profit Beats Estimates

MCX (YoY)

• Revenue up 22.5 percent at Rs 76.9.
• Net profit at Rs 42 crore.
• Ebitda up 35.7 percent at Rs 20.9 crore.
• Margin at 27.2 percent.

Speciality Restaurants (YoY)

• Revenue up 24.2 percent at Rs 98.5 crore.
• Net profit at Rs 8.4 crore.
• Ebitda at Rs 12.5 crore.
• Margin at 12.7 percent.

Den Networks (YoY)

• Revenue down 6 percent at Rs 308.4 crore.
• Net loss at Rs 32.4 crore.
• Ebitda down 38.8 percent at Rs 48.2 crore.
• Margin at 15.6 percent.

Jay Bharat Maruti (YoY)

• Revenue up 5.3 percent at Rs 458 crore.
• Net profit down 20 percent at Rs 11.2 crore.
• Ebitda up 5.9 percent at Rs 39.2 crore.
• Margin at 8.6 percent.

KPIT Technologies (QoQ)

• Revenue down 6.6 percent at Rs 563.7 crore.
• Net profit down 22 percent at Rs 63.9 crore.
• EBIT down 29.2 percent at Rs 65.2 crore.
• Margin at 11.6 percent.

• Dr. Reddy’s Laboratories received four Form 483 observations from U.S. FDA inspection on formulations plant in Andhra Pradesh.
• Bharat Petroleum clarified on the news item that the company will raise $500 million from overseas bond sale that quantum and rate of the unsecured notes is not final yet and the issuance of these instruments is subject to the market conditions. The company will be holding investor meetings in Singapore, Hong Kong and London from Jan. 14 for this issue.
• ICICI Lombard General Insurance clarified that various employee emails are being circulated in the media and being presented with malafide intentions. The company says it will examine allegations to ascertain employee expenditures from 2014 and before to check for any discrepancies if any.
• KPIT Technologies board approved allotting 7.7 crore equity shares to National Engineering Industries and Central India Industries in 9:22 ratio. On Nov. 29 NCLT had approved merger of KPIT Engineering, KPIT Technologies into Birlasoft. The record date has been fixed as Jan. 25 for the amalgamation scheme which is effective from yesterday.
• Indo Rama Synthetics’ board approved allotment of 8.3 crore equity shares worth Rs 299 crore to promoter group Indorama Ventures and 1.72 crore equity shares to Siam Stock Holdings which is valued at Rs 62 crore. The company said that the fund will be used for long term working capital and future growth requirements.
• Century Plyboards incorporated an arm in South Africa with the objective of manufacturing and trading in timber and other wood-based products.
• Punjab & Sind Bank revised its MCLR across various tenors. One month MCLR at 8.35 percent and one-year MCLR at 8.85 percent.
• SKF India buyback period from Jan. 23- Feb. 5
• Orient Electric launched new ceiling fan in the premium range.
• Fortis Healthcare draws loan from Citi Bank worth Rs 1,100 crore for financing the contractual commitments and strategic objectives of the company.
• DHFL: Rakesh Jhunjhunwala reduces his stake in the company by 0.73 percent to 2.46 percent, as reported in the exchanges. He sold 22.7 lakh shares aggregating to Rs 51 crore as per current market price from the last quarter ending September 2018.

Also Read: Jet Airways’ Lenders To Meet On Jan. 16 To Flesh Out Restructuring Plan

Media Reports

• Adani Transmission to raise upto Rs 3000 crore via QIP (Financial Express).
• Indoco Remedies in initial discusstion to sell part of local business (Oxipod) for Rs 600 crore to investors such as Zydus Cadila, Lupin and PE funds like TPG Capital and Temasek Holdings. (Economic Times).
• Mindtree promoters in dilemma to decide whether to cede control or decide against selling. VG Siddhartha along with two firms have decided to sell their stake within a month’s time. (Mint).

Also Read: Morgan Stanley Turns Cautious On Indian IT Stocks, Rejigs Top Bets

• A confidence motion vote will take place at 7 p.m. in London as the opposition Labour Party tries to force a general election.

• West Texas Intermediate crude dipped 0.6 percent to $51.81 a barrel after climbing 3.2 percent.
• Brent crude halted a two-day decline, ended 2.8 percent higher at $60.64 per barrel.
• Gold was flat at $1,290.05 an ounce.
• The Bloomberg Commodity Index rose 0.3 percent Tuesday.

London Metal Exchange

• Aluminium ended 0.93 percent higher.
• Lead declined for the second day, down 0.76 percent.
• Copper ended 0.39 percent higher.
• Tin ended higher for the sixth day, its longest winning streak since July 31.
• Zinc ended lower for the second day, down 1.13 percent.
• Nickel ended 2.46 percent higher.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.09 percent to 10,933 as of 8:10 a.m.

Asian equities dropped from a six-week high and the yen advanced as investors assessed prospects for global policy makers to arrest a slowdown in growth.

The pound retreated with U.K. stock futures in advance of a no-confidence vote in British Prime Minister Theresa May following the resounding defeat of her Brexit deal. Japanese equities led declines in Asia, with Hong Kong shares also notably lower.

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