Sensex, Nifty Rise On Expiry Day; Yes Bank Surges 8% On Q4 Beat

Indian equity benchmarks rose led by Yes Bank after it beat Bloomberg consensus estimates in March quarter on expiry day of April F&O contracts.

The S&P BSE Sensex rose 0.62 percent or 212 points to 34,713.60 and the NSE Nifty 50 index gained 0.45 percent or 47 points to 10,617.80.

For most part of the day, the Sensex and Nifty traded in a narrow range amid pressure of F&O expiry. However, they staged a sharp upmove after Yes Bank rose the most in two years on beating estimates in March quarter.

In the April series, Nifty rose 4.98 percent and Sensex advanced 5.29 percent, posting best their derivative series in three months.

Seven out of 11 sector gauges compiled by National Stock Exchange ended higher led by the Nifty FMCG index's 1.18 percent gain. On the flipside, Nifty PSU Bank index was the top sectoral loser, down 1.17 percent.

IDFC: The Mumbai-based commercial finance company staged a sharp upmove and rose as much as 7.15 percent, the most in over six months, to intraday high of Rs 56.29. IDFC is in talks to sell its asset management and stock broking units, The Economic Times reported citing unidentified people familiar with the discussions.

Shaily Engineering: The Gujarat-based plastic products maker rose as much as 8 percent to record high of Rs 1,510 after HDFC Mutual Fund bought stake in the company.

Hathway Cable and Datacom: The Mumbai-based digital cable TV service provider snapped its 5-day losing streak, rising 8.3 percent to Rs 35.20.

Shah Alloys: The Ahmedabad-based steel products maker rose as much as 6 percent to Rs 41.55 after it signed settlement pact with ARCIL.

• Indian equity benchmarks staged a sharp up move led by Yes Bank, ITC, TCS and Infosys amid expiry of derivative contracts for the month of April.
• The S&P BSE Sensex rose 0.65 percent or 225 points to 34,725 and the NSE Nifty 50 index gained 0.48 percent or 51 points to 10,3622.
• The overall market breadth was negative as 1,082 shares were advancing while 1,492 were declining.

Shares of the Anil Ambani-led telecom company fell 4.5 percent to Rs 16.85.

The Supreme Court has ordered Reliance Communications to pay spectrum dues of Rs 774 crore to the telecom department by May 2 after the company moved the top court seeking more time to clear dues, The Economic Times reported.

Shares of the Mumbai-based private sector lender rose as much as 4.53 percent to Rs 340 after its asset quality improved and net profit beat Bloomberg consensus estimates in March quarter.

Key earning highlights:

• Net profit at Rs 1,179.44 crore versus Rs 914.12 crore (YoY); Bloomberg estimate of Rs 1,090 crore.
• Net interest income up 31.3 percent at Rs 2,154.24 crore versus Rs 1,639.70 crore (YoY)
• Net interest margin at 3.4 percent versus 3.5 percent (QoQ)
• Gross non-performing assets (NPA) as a percentage of total advances at 1.28 percent versus 1.72 percent (QoQ)
• Net NPA as a percentage of total advances at 0.64 percent versus 0.93 percent (QoQ)
• Entire mark to market loss recognized in respective quarters
• Yes Bank did not avail option to spread bond losses to different quarters
• Board approves re-appointment of Rana Kapoor as MD & CEO for 3 years starting Sep. 1, 2018
• Board approves raising $1 billion in capital
• Total capital adequacy at 18.4 percent with total capital funds at Rs 46,975.7 crore
• Retail banking advances grew by 99.1 percent (YoY) to 12.2 percent of total advances
• Advances up 53.9 percent at Rs 2.03 lakh crore (YoY)

Shares of the Bangalore-based design software developer pared losses after after it beat Bloomberg consensus estimates in March quarter.

Key earnings highlights:

• Net profit at Rs 70.29 crore versus estimate of Rs 64.4 crore
• Revenue at Rs 375 crore versus estimate of Rs 364 crore

Shares of the Mumbai-based plastic products maker rose as much as 1.6 percent to Rs 1,261.80 after it reported March quarter earnings.

Key earnings highlights:

• Revenue up 14.7 percent at Rs 1,471 crore versus Rs 1,282 crore (YoY)
• Net profit up 23 percent at Rs 179 crore versus Rs 146 crore (YoY)
• EBITDA up 19 percent at Rs 286.5 crore versus Rs 240 crore
• Margin at 19.5 percent versus 18.7 percent

Shares of the Mumbai-based hair care products maker rose 1.8 percent to Rs 470 after it reported March quarter earnings post market hours yesterday.

Key earnings highlights:

• Net profit at Rs 211.08 crore versus Rs 218.24 crore
• Revenue at Rs 809.11 crore versus 794.84 crore

Bajaj Corp On Q4 To BloombergQuint

• Gross margins can reduce by 50-100 basis points because of rising crude prices
• For smaller SKUs grammage reduction was done
• For higher SKUs prices were hiked
• On average prices were hiked by 3-4 percent
• Q1 to see the actual impact of rising crude prices
• Prices were hiked to limit the impact of rising crude prices
• Because of rising crude prices there was pressure on margins
• Volume growth for Bajaj Almond Drop was more than 7 percent
• Volume growth was 5.86 percent in Q4

• NESCO: The Mumbai-based maker of engineering products for railways rose 5 percent to Rs 585. Trading volume was 12.3 times its 20-day average.
• Birla Corp: The Kolkata-based cement maker rose 0.58 percent to Rs 741. Trading volume was 9.6 times its 20-day average.
• Gujarat Pipavav: The Mumbai-based shipping port operator rose 4.75 percent to Rs 147.90. Trading volume was 9.1 times its 20-day average.
• Alembic Pharma: The Vadodara-based drug maker fell 0.6 percent to Rs 517. Trading volume was 7.2 times its 20-day average.

Shares of the Delhi-based packaged food company fell 8.5 percent to Rs 338, on top of yesterday's 16 percent drop after it reported weak march quarter earnings on Tuesday.

Shares of the Mumbai-based digital cable TV service provider snapped its 5-day losing streak, rising 8.3 percent to Rs 35.20.

In the last five trading sessions, the stock fell as much as 20 percent after it saw a slew of large block deals in the course of last five trading sessions.

Shares of the Mumbai-based commercial finance company staged a sharp upmove and rose as much as 7.15 percent, the most in over six months, to intraday high of Rs 56.29.

IDFC is in talks to sell its asset management and stock broking units, The Economic Times reported citing unidentified people familiar with the discussions.

The Economic Times report said:

• Company is in talks with IndusInd Bank, Yes Bank, Bain Capital and Warburg Pincus for sale of its mutual fund business for about Rs 4,000-4,500 crore.
• Separately, company is in talks with Yes Bank to sell IDFC Securities for Rs 1,500-2,000 crore.

Shares of the Gujarat-based plastic products maker rose as much as 8 percent to record high of Rs 1,510 after HDFC Mutual Fund bought stake in the company.

HDFC Mutual Fund bought 99,134 shares or 1.2 percent equity at Rs 1,300 each, according to data available on the stock exchanges.

• Opportunity for vertical specialists would become relevant in the battle of behemoths like Amazon and Flipkart
• Re-alignment between online and offline retail would happen over the next few years
• Believe companies like Future Group missed out on the great Indian retail boom
• Market in India has been so static, that disruption would succeed
• Don't see to many innovating companies in India
• Betting on disruptors as opposed to innovators in the consumption game
• Depth in Indian consumer markets, hitherto absent, will now be visible
• Fear of challenging distribution of big companies led to duopolies in Indian consumer markets
• Distribution opening up will see opening up of brands not seen in India until now
• Very positive of values created in the Indian consumer business
• Consumer segment is 25-30 percent of global market cap while infra is just 2-5 percent of global market cap.
• Largest components of global market cap are consumer names, but not in India
• Decadel changes in consumer habits make studying, investing in consumer companies interesting
• Don't believe liquidity is an issue in private, unlisted companies
• Any consumer business will need capital not more than twice in the life cycle

Nifty 10.600 strike price call was among the most active option contracts on the NSE.

Premium on the contract fell 18.71 percent to Rs 13.25. Over 7 lakh shares were added to open interest which stood at 43.2 lakh shares.

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Shares of the Delhi-based jeweller fell for fifth straight day, declining as much as 15 percent, to Rs 207.75.

In the last five trading sessions the stock has slumped as much as 31.33 percent.

The company in clarification regarding the sharp fall in stock price informed exchanges on Wednesday that, “none of the promoters of the company have sold any shares in the market. However, one of its promoters, Padam Chand Gupta has gifted some of his shares to his family members through an off-market transaction.”

The Delhi-based stainless-steel products maker fell as much as 8.4 percent, the most in over two months, to Rs 93.95 after its net profit fell in March quarter.

Key earnings highlights:

• Revenue up 38 percent at Rs 3,173 crore.
• Net profit down 29 percent at Rs 115 crore.
• Ebitda up 24 percent at Rs 388 crore.
• Margin at 12.2 percent versus 13.6 percent.

Shares of the defence equipment maker fell as much as 19.3 percent to Rs 18.4, the most since July 2012 after company auditors raised doubts over its ability to “continue as a going concern.”

The stock fell eight times in the last nine trading sessions, and entails a relative strength index of 15, indicating that it may be oversold. The stock declined 61 percent so far this year, compared to 1.6 percent gain in Sensex.

Auditors of the debt-laden company noted that Reliance Naval’s current liabilities are substantially higher than its assets and winding up petitions being filed by few operating creditors to raise doubts.

Shares of the real estate developer extended gians for the third straight trading session and rose as much as 10 percent to Rs 224 after reporting its strong March quarter earnings.

Key earnings highlights (Q4, YoY)

• Revenue up 364 percent at Rs 2,028 crore.
• Net profit up 1960 percent at Rs 1,648 crore.
• Ebitda up 1,281.3 percent at Rs 1,961.5 crore.
• Margin at 96.7 percent versus 32.5 percent.

Shares of the healthcare product maker rose as much as 7.3 percent, the most in over three months to Rs 1,204.

The company said in a stock exchange filing that it plans to consider bonus shares and a dividend at a board meeting on May 3.

Trading volume was 14.7 times its 20-day average. Emami trades at 78.8 times trailing 12-month earnings per share and 53 times its estimates for the coming year, Bloomberg data showed.

Key highlights form the conversation:

• The macro situation has become adverse in the last six months.
• Weakness in domestic flows could dent the market.
• Investors should expect single digit return from the market going ahead.
• Risk-reward unfavourable, expecting a single-digit return in the market for the next 12 months.
• Stock market investors want same government in 2019.
• Seeing oil prices going up, will keep an eye on ECB stance for next two months.
• Housing recovery theme looks interesting.
• Real estate developers, housing finance, building companies like cement look interesting.
• Housing market recovery will be a multi-year theme going forward.
• Consumer staples looking good, will play in auto in the discretionary segment.
• Rural sentiment revival will be another theme to watch out for.
• QSR (Quick Serving Restaurants) stocks look interesting segment to invest.

Shares of the information technology company fell as much as 4.6 percent to Rs 274, after weak March quarter earnings missed estimates widely.

Net profit of the country’s third-largest software services firm declined 6.6 percent to Rs 1,803 crore on a sequential basis, Wipro said in its filings with the stock exchanges. That’s less than the Rs 2,127 crore estimated by analysts tracked by Bloomberg. (More details here)

The stock was the worst performer on both Sensex and Nifty. The scrip declined 12 percent so far this year.

Indian equity benchmarks opened higher, led by the gains in Reliance Industries and Infosys.

The S&P BSE Sensex Index opened 0.1 percent higher at 34,532, while the NSE Nifty 50 Index began trading at 10,586.50, up 0.2 percent.

The market breadth was tilted in favour of buyers. Eight out of 11 sectoral gauges compiled by NSE advanced, led by NSE Nifty Realty Index's 1.2 percent gain. On the flipside, NSE Nifty Bank Index was the top sectoral loser, down 0.05 percent.

The rupee is seen opening steady at around its weakest in nearly 14 months at 66.8950 per dollar, pressurised by foreign fund outflows and rising oil prices.

ANZ, Standard Chartered and Maybank are among a spate of foreign bank and brokerages that have lowered their forecasts for the rupee amid worries about a widening current account deficit.

India imports two-thirds of its crude requirements and the spurt in oil prices has coincided with the slowdown in capital inflows. On Wednesday, it dropped 0.8 percent, marking its worst drop in two months.

Meanwhile, the rupee's weakness is likely to fan inflationary expectations, keeping the appetite for bonds rather muted. Deutsche Bank said in a note that rising oil prices could see the RBI hike rates as early as June.

The benchmark 10-year bond yield climbed five basis points on Wednesday to 7.74 percent, having surged from this year’s low of 7.12 percent on April 5. A 120 billion rupee bond sales will test appetite amongst investors today.

• Nifty April futures closed trading at 10,569 with discount of 1.5 points versus premium of 3.6 points.
• Nifty May futures trading at 10,591.7 with premium of 21 points versus 27.7 points.
• Nifty rollover at 45 percent, Bank Nifty rollover at 49 percent.
• All series: Nifty open interest up 3 percent, Bank Nifty open interest up 7 percent.
• India VIX ended at 12.3, up 4.2 percent.
• Max open interest for April series at 10,700 (open interest at 40.5 lakh, down 10 percent).
• Max open interest for April series shifts to 10,500 (open interest at 44.9 lakh, down 9 percent).

F&O Ban

• In ban: Balrampur Chini, Dewan Housing, GMR Infra, Raymond, Wockhardt.
• New in ban: Raymond.

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.

Put-Call Ratio

• Nifty PCR at 1.61 versus 1.70.
• Nifty Bank PCR at 1.11 versus 1.32.

CLSA on Bharti Infratel

• Maintained ‘Outperform’ with a price target of Rs 364.
• Indus Towers valued at par with Bharti Infratel on EV/EBITDA.
• Indus Towers valued at 12 percent discount to Bharti Infratel on EV/tower.
• Bharti Infratel’s capital structure to be sub-optimal most merger.
• Bharti Airtel and Vodafone holdings will be a stock overhang.
• Merger is positive and creates a dominant tower company.

Nomura on Cummins

• Upgraded to ‘Buy’ from ‘Neutral’; cut price target to Rs 890 from 898.
• Stock correction provides buying opportunity.
• Expect turnaround from current lows in powergen and exports.
• Outsourcing to group companies has no impact on growth/margins.
• Cummins trades at a discount to sector despite better RoE.

Citi on Maruti Suzuki

• Maintained ‘Buy’; cut price target to Rs 10,800 from Rs 11,600.
• Previous fiscal estimates cut due to volatility in other income.
• Volume estimates for the current and the next financial cut due to lower industry volume outlook.
• Expect market share to increase given strong model line-up.
• Expect revenue, operating income and net profit to rise 14 percent, 31 percent and 25 percent respectively in the previous quarter.

Morgan Stanley on Oberoi Realty

• Maintained ‘Overweight’ with a price target of Rs 549.
• March quarter results were inline with estimates.
• Revenue driven largely by Esquire project.
• Net profit beats largely due to lower tax rate.
• New sales down largely due to lower contribution from high-value Worli.

Nomura on Wipro

• Maintained ‘Reduce’ with a price target of Rs 270.
• Missed estimates on revenue margins and current quarter guidance front.
• Growth dragged by India and APAC geographies.
• BFSI/Manufacturing led growth; communications and consumer declined.

Investec on Wipro

• Maintained ‘Hold’; cut price target to Rs 290 from Rs 304.
• Disappointing March quarter with IT services revenues lower than expectations.
• Revenue growth guidance for current quarter was also weak.
• Client specific issues continue to haunt.
• Margins likely to improve in the current financial year.
• Valuations likely subdued versus peers.

Nomura on Ultratech Cement

• Maintained ‘Buy’ with a price target of Rs 5,150.
• March quarter results were strong; revenue/EBITDA ahead of estimates
• JPA capacity fully integrated in just nine months; PBT break-even due by June 2020.
• Volume growth to get better ahead of 2019 elections.
• Continue to believe that cement sector is on the cusp of a cyclical upturn.
• UltraTech appears best geared for upturn.

• Reliance Naval and Engineering Limited to be excluded from F&O from June.

• Shaily Engineering: HDFC MF bought 99,134 shares or 1.2 percent equity at Rs 1,300 each.
• Hathway Cable: CLSA Global Markets Pte sold 4.75 crore shares or 5.7 percent equity at an average of Rs 33.8 each.
• AVG Logistics: Girik Wealth Advisors bought 3.99 lakh shares at Rs 117 each.

Uniply

• Malabar Value Fund bought 1.65 lakh shares or 0.7 percent equity at Rs 425 each.
• Malabar India Fund bought 8.35 lakh shares or 3.5 percent equity at Rs 425.04 each.
• Promoter Keshav Kantamneni sold 10 lakh shares or 4.2 percent equity at Rs 425 each.

Wipro Q4 (QoQ)

• Revenue up 0.7 percent at Rs 13,769 crore.
• Profit down 6.7 percent at Rs 1,800 crore.
• EBIT down 3.9 percent at Rs 1,883 crore.
• Margin at 13.7 percent versus 14.3 percent.

Also Read: UltraTech Cement’s Profit Misses Estimate On One-Time Stamp Duty Provision

ICICI Lombard Q4 (YoY)

• Gross domestic premium up 10 percent at Rs 2,926 crore.
• Profit up 18 percent at Rs 212 crore.
• Combined ratio at 99.5 percent versus 97.1 percent.

Indiabulls Real Estate Q4 (YoY)

• Revenue at Rs 2,028 crore versus Rs 437 crore.
• Net profit at Rs 1,648 crore versus Rs 80 crore.
• EBITDA at Rs 1,961.5 crore versus Rs 142 crore.
• Margin at 96.7 percent versus 32.5 percent.

Mahindra & Mahindra Financial Services Q4 (YoY)

• Income from operations grew 12.8 percent to Rs 2,060 crore.
• Net profit grew 81 percent to Rs 424 crore.
• Provisions at Rs 157 crore versus Rs 199 crore (QoQ).

Future Supply Chain Q4 (YoY)

• Revenue up 50 percent at Rs 222 crore.
• Net profit up 6 percent at Rs 18 crore.
• Ebitda up 31.2 percent at Rs 31.5 crore.
• Margin at 14.2 percent versus 16.2 percent.

Syngene International Q4 (YoY)

• Revenue up 40.5 percent at Rs 409 crore.
• Net profit up 8 percent at Rs 84 crore.
• Ebitda up 28 percent at Rs 128 crore.
• Margin at 31.3 percent versus 34.4 percent.

Jindal Stainless Q4 (YoY)

• Revenue up 38 percent at Rs 3,173 crore.
• Net profit down 29 percent at Rs 115 crore.
• Ebitda up 24 percent at Rs 388 crore.
• Margin at 12.2 percent versus 13.6 percent.

Wendt Q4 (YoY)

• Revenue up 7 percent at Rs 40.5 crore.
• Net profit at Rs 5 crore versus Rs 3 crore.
• Ebitda at Rs 16.5 crore versus Rs 12 crore.
• Margin at 40.7 percent versus 31.6 percent.

Agro Tech Foods Q4 (YoY)

• Revenue up 4 percent at Rs 214 crore.
• Net profit up 7 percent at Rs 7.5 crore.
• Ebitda up 7 percent at Rs 15 crore.
• Margin at 7 percent versus 6.8 percent.

Other Earnings To Watch

• AU Small Finance Bank
• Biocon
• Parag Milk Foods
• Rallis India
• Reliance Capital
• SBI Life Insurance Company
• Shriram City Union Finance
• Tata Elxsi
• Accelya Kale
• Aditya Birla Money
• Artson Engineering
• Automotive Stampings
• Coromandel Engineering
• Essel Propack
• HIL
• Indian Energy Exchange
• JL Morison
• Jindal Stainless (Hisar)
• Kirloskar Pneumatic
• Oil Country Tubular
• Supreme Industries
• Tata Metaliks

• Wipro to sell hosted data center service operations for $450 million to Ensono.
• Kitex Garments will form two new subsidiaries and invest Rs 200 crore in each of them.
• Future Retail says NCLT’s Mumbai bench approves scheme of arrangement with Hypercity.
• Indoco Remedies gets statement of GMP non-compliance from UK-MHRA for Goa plant-1.
• Emami to consider bonus issue on May 3.
• Soril Holdings & Ventures approves issue of shares worth up to Rs 330 crore to FPIs including Steadview Capital Mauritius, ABG Capital and LTR Focus Fund.
• Shah Alloys signs settlement pact with ARCIL.
• Airtel to transfer core network infra assets to unit Nxtra Data and sell submarine cables to Network i2i.
• Cadila Healthcare says Zydus gets final approval from U.S. FDA for Methylprednisolone.
• Fortis says Manipal-TPG sought to impose onerous conditions on the company that would cap ability for competitive bid process.
• Renuka Ramnath resigned from Expert Advisory Committee of Fortis Healthcare formed for evaluating binding offers.
• Uniply to allot 45.14 lakh equity shares at a premium of Rs 400.85 per share on a preferential basis to non-promoters. It will also allot 96.28 lakh convertible warrants at a premium of Rs 400.85 per warrant on a preferential basis.

• Making sense of the Bharti Infratel-Indus Tower merger.
• Why is the Indian Rupee so weak right now?
• Netflix loving kids are killing cable television.
• BQ Opinion: Modi finally confronts India’s age-old oil dilemma.
• Productivity in U.K. was last this bad during the industrial revolution.
• Mumbai is all set to grow vertically, get more land for development.
• Tata Motors is betting on its new 'Ultra' trucks to drive a turnaround.
• Meet the stylish Husqvarna Svartpilen 401 motorcycle.

• West Texas Intermediate crude rose 0.2 percent to $67.94 a barrel.
• Brent Crude traded 0.7 percent higher at $74.48 per barrel.
• Gold declined 0.6 percent to $1,322.76 an ounce.
• Aluminium snapped four-day decline and ended 0.9 percent higher at $2,244.50 per metric tonne.
• Copper traded 0.1 percent higher at $3.13 per pound.
• Sugar ended lower for the fourth day, down 2.5 percent to 10.86 cents per pound.

Equities were mixed across the Asia Pacific as gains in technology shares were offset by declines in financials.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded traded flat at 10,550 as of 8:30 a.m.

Here are some key events coming up this week:

• U.S. GDP data are due Friday.
• Earnings season continues, with Amazon.com among those due to report.
• The European Central Bank has a rate decision on Thursday. Investors will watch for any sign that officials are preparing a shift in stimulus plans for their June meeting.
• The Bank of Japan announces its latest policy decision Friday and releases a quarterly outlook report.
• The leaders of North and South Korea meet Friday.