Sensex, Nifty End Little Changed; Small Caps Outperform

Indian equity benchmarks were little changed in a highly volatile session as gains in ICICI Bank, Axis Bank and State Bank of India were offset by losses in HDFC twins, Reliance Industries and Kotak Mahindra Bank.

The S&P BSE Sensex was unchanged 35,591.25 and NSE Nifty 50 Index was flat at 10,652.

Eleven of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Metal Index’s 1.9 percent gain. On the flipside, S&P BSE Telecom Index was top loser down 1.3 percent.

Mid- and small-cap shares outperformed their larger peers as the S&P BSE MidCap Index rose 0.2 percent while the S&P BSE SmallCap Index climbed 0.8 percent.

Shares of the country's largest mining company rose as much as 2.45 percent to Rs 228 as its board will meet on Feb. 4 to discuss and approve shares buyback proposal, Coal India said in an exchange filing.

Shares of the Madhya Pradesh-based graphite electrodes maker rose as much as 10 percent to Rs 2,172 after it fixed Feb. 9 as the record date for the purpose of share buyback.

Shares of the country's second largest two-wheeler maker fell 1.51 percent to Rs 2,582 after its profit declined in December quarter.

Key earnings highlights:

• Revenues up 16 percent at Rs 7,409 crore versus Rs 6,387 crore (YoY); Estimate of Rs 7,467 crore.
• Net profit up 16 percent at Rs 1,102 crore versus Rs 952 crore (YoY); Estimate of Rs 1,047 crore.
• Ebitda down 7 percent at Rs 1,156 crore versus Rs 1,250 crore (YoY); Estimate of Rs 1,203 crore.
• Margin at 15.6 percent versus 19.5 percent (YoY); Estimate of 16.1 percent.

Shares of the country's largest state-run oil refiner came off intraday low levels after it reported surprise profit in December quarter against expectations of a loss.

Key earnings highlights:

• Revenue at Rs 1.60 lakh crore versus Rs 1.51 lakh crore (QoQ)
• Net profit down 78 percent at Rs 717 crore versus Rs 3,247 crore (QoQ); Estimate of loss of Rs 680 crore
• Ebitda down 47 percent at Rs 3,609 crore versus Rs 6,762 crore (QoQ)
• Margin at 2.58 percent versus 5.12 percent (QoQ)
• Average gross refining margin for April-December 2018 at $5.83 per barrel

• Edelweiss Financial Services has 13.5 lakh shares change hands in a single block. Stock down 0.64 percent at Rs 154.40.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Domino's Pizza chain operator rose as much as 3.09 percent to Rs 1,232.70 after its profit beat Bloomberg consensus estimates in December quarter.

Key earnings highlights:

• Net profit up 46 percent at Rs 96.50 crore versus Rs 66.02 crore (YoY); Estimate of Rs 84.2 crore.
• Revenue up 17 percent at Rs 929 crore versus Rs 795.16 crore (YoY); Estimate of Rs 916 crore.
• Ebitda up 24.7 percent at Rs 170.70 crore versus Rs 136.9 crore (YoY)
• Margin at 18.4 percent versus 17.2 percent (YoY)
• Domino's same store sales growth at 14.6 percent (YoY)
• 35 new Domino's Pizza stores opened in December quarter; Total store count at 1,200.

Indian equity benchmarks rebounded from intraday low levels led by rally in ICICI Bank, Axis Bank and Larsen & Toubro.

The Sensex rose 0.32 percent or 112 points to 35,705 and the NSE Nifty 50 Index advanced 0.18 percent or 18 points to 10,671.

Twelve of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Bankex Index's 1.5 percent gain. On the flipside, S&P BSE Fast Moving Consumer Goods Index fell 0.8 percent.

The overall market breadth was positive as 1,256 shares were advancing while 990 were declining on the BSE.

Shares of the Mumbai-based personal care products maker fell as much as 7.72 percent, the most in over three months, to Rs 693.20 after its profit declined in December quarter.

Key earnings highlights (YoY):

• Revenue rose 3.5 percent to Rs 2,722 crore.
• Net profit declined 1.5 percent to Rs 423.5 crore.
• Ebitda gained 3 percent to Rs 616 crore.
• Operating margin contracted 20 basis points to 22.6 percent.
• Branded volume growth of 1 percent.

Shares of the Ahmedabad-based financial services provider rose as much as 3.61 percent to Rs 559.20 after its profit rose 50 percent in December quarter.

Key earnings highlights:

• Revenue rose 35 percent to Rs 158.03 crore versus Rs 116.66 crore (YoY)
• Net profit up 50 percent at Rs 45.45 crore versus Rs 30.11 crore (YoY)

• Hatsun Agro Products: The Chennai-based dairy products maker fell as much as 5.64 percent to Rs 642. Trading volume was 90 times its 20-day average.
• Gillette India: The Mumbai-based personal grooming products maker fell as much as 0.60 percent to Rs 6,454. Trading volume was more than 20 times its 20-day average.
• DCM Shriram: The Delhi-based agricultural products maker rose as much as 11.22 percent to Rs 339. Trading volume was more than 13 times its 20-day average.
• Prestige Estates: The Bengaluru-based real estate developer rose as much as 1.50 percent to Rs 204. Trading volume was 11 times its 20-day average.

Shares of the Bengaluru-based auto parts maker rose 1.5 percent to Rs 18,699.

Its board approved buyback of 3.36 percent equity at Rs 21,000 per share aggregating to Rs 2,156.91 crore, Bosch said in an exchange notification.

Shares of the country's second largest private sector lender rose as much as 4.71 percent, the most in over three months, to Rs 363.20 ahead of its December quarter earnings.

Here is what to expect from ICICI Bank in December quarter (Mean Bloomberg estimates YoY):

• Net interest income seen rising 19 percent to Rs 6,768 crore versus Rs 5,705.
• Net profit seen at advancing 19 percent to Rs 1,965 crore versus Rs 1,650 crore
• Expect margins to be stable at around 3.3 percent
• Fee income is expected to grow more than 15 percent
• Expect slippages at Rs 3,000 crore mainly from watch list/existing impaired loans
• Coverage on overall stressed loans should continue to increase

Shares of the country's largest state-run oil refiner fell as much as 1.42 percent to Rs 135.40 ahead of its December quarter earnings.

Key earnings highlights (Standalone sequential BloombergQuint estimates):

• Revenue seen declining 6 percent to Rs 1,23,995 crore versus Rs 1,32,035 crore.
• Ebitda seen declining 82 percent to Rs 1,240 crore versus Rs 6,762 crore.
• Ebitda Margin seen at 1 percent versus 5.1 percent.
• Net loss estimates at Rs 680 crore versus profit of Rs 3,247 crore.
• Core gross refining margins seen at $2.4 per barrel versus $3.5 per barrel.

Nifty's 10,700 call option contract was among the most active Nifty option contracts on the National Stock Exchange.

Premium on the contract plunged 44 percent to Rs 25.60. Over 12.76 lakh shares were added to the open interest which stood at over 39.51 lakh shares.

Click here to see the complete options chain

About 20 lakh shares changed hands in a block deal on National Stock Exchange, Bloomberg data showed, Buyers and sellers were not known immediately.

• Indian equity benchmarks erased gains after rallying in the opening trade.
• The S&P BSE Sensex Index fell 0.17 percent to 35,533 and the NSE Nifty 50 Index fell 0.24 percent to 10,626.25.
• The market breadth, however, was tilted in favour of buyers. About 893 stocks advanced and 725 shares declined on National Stock exchange.

Bajaj Finserv (Q3, YoY)

• Stock rose as much as 2.2 percent to Rs 6,368.80.
• Revenue up 39.2 percent at Rs 11,141.6 crore.
• Net profit up 16.4 percent at Rs 850.5 crore.

Bank of Baroda (Q3, YoY)

• Stock rose as much as 4 percent to Rs 118.30.
• Net Interest Income up 7.9 percent at Rs 4,743.2 crore.
• Net profit up 4.2 times at Rs 471.3 crore.
• Provisions at Rs 3416 crore versus Rs 3,155.3 crore.
• GNPA at 11.01 percent versus 11.78 percent. (QoQ)
• NNPA at 4.26 percent versus 4.86 percent. (QoQ)

Bharat Financial Inclusion (Q3, YoY)

• Stock rose as much as 1.4 percent to Rs 936.90.
• Net interest income up 9.8 percent at Rs 609.8 crore.
• Net profit up 23.8 percent at Rs 288.4 crore.
• AUM at Rs 16,561 crore.
• Loan disbursements up 45 percent at Rs 6,822 crore.

Granules (Q3, YoY)

• Stock rose as much as : 8.5 percent to Rs 96.
• Revenue up 53.8 percent at Rs 631.8 crore.
• Net profit up 72.3 percent at Rs 60.3 crore.
• Ebitda up 53.1 percent at Rs 113.3 crore.
• Margins at 17.9 percent versus 18 percent.

Crompton Greaves Consumer Electricals (Q3, YoY)

• Stock rose as much as 2 percent to Rs 219.20.
• Revenue up 9.8 percent at Rs 1,030.3 crore.
• Net profit up 14.7 percent at Rs 79.7 crore.
• Ebitda up 8.3 percent at Rs 126.1 crore.
• Margins at 12.2 percent versus 12.4 percent.
• Electrical consumer durables segment revenue up 16 percent at Rs 711.5 crore.

Mahanagar Gas (Q3, YoY)

• Stock rose as much as 1.2 percent to Rs 931.35.
• Revenue up 29.1 percent at Rs 824.3 crore.
• Net profit up 19.6 percent at Rs 148.3 crore.
• Ebitda up 10.3 percent at Rs 239.1 crore.
• Margins at 29 percent versus 34 percent.
• Cost of natural gas up 42 percent at Rs 383.6 crore.
• Volumes at 272.5 SCM million versus 272.3 SCM million (QoQ)
• Declares dividend of Rs 9.5 per share.

Tata Coffee (Q3, YoY)

• Stock fell as much as 4.1 percent to Rs 87.15.
• Revenue up 23.4 percent at Rs 465.4 crore.
• Net profit down 73.9 percent at Rs 11.2 crore.
• Ebitda down 26.8 percent at Rs 55.2 crore.
• Margins at 11.9 percent versus 20 percent.
• Expenses up 35 percent at Rs 437.1 crore.

KEC International (Q3, YoY)

• Stock rose as much as 2.9 percent to Rs 244.05.
• Revenue up 10 percent at Rs 2,646.6 crore.
• Net profit up 0.5 percent at Rs 112.4 crore.
• Ebitda up 15.2 percent at Rs 281.4 crore.
• Margins at 10.6 percent versus 10.2 percent.

Apar Industries (Q3, YoY)

• Stock fell as much as 1.8 percent to Rs 609.95.
• Revenue up 41.4 percent at Rs 2,119.1 crore.
• Net profit down 12.2 percent at Rs 34.7 crore.
• Ebitda up 19.2 percent at Rs 113.5 crore.
• Margins at 5.4 percent versus 6.4 percent.

Tata Steel BSL (Q3, YoY)

• Stock fell as much as 4.5 percent to Rs 29.
• Revenue up 11 percent to Rs 4,889 crore.
• Ebitda up 65 percent to Rs 1,008 crore.
• Margin at 20.6 percent versus 13.8 percent.
• Net loss at Rs 240 crore versus Rs 1,607 crore.

Welspun Enterprises (Q3, YoY)

• Stock rose as much as 6.9 percent to Rs 106.
• Revenue up 49 percent to Rs 446 crore.
• Ebitda up four times to Rs 46.3 crore.
• Margin at 10.4 percent versus 3.9 percent.
• Net profit up 2.8 times to Rs 43 crore.
• Exceptional gain of Rs 18 crore on stake sale in Dewa Bhopal Corridor.
• Lower cost of material, subcontracting charges and other expenses aided Ebitda.
• Current EPC Order Book at Rs 5,752 crore with HAM portfolio of seven projects.

Shares of the housing-finance company fell for the second day and declined as much as 9.5 percent to Rs 153.50 apiece, its lowest since February 2016.

DHFL said that the CobraPost exposé alleging the company of siphoning over Rs 30,000 crore, was done with a mala fide intention, according to its clarification on the stock exchanges. The company said it is confident of meeting any scrutiny on any aspect of operations.

The trading volume was almost 30 times the 20-day average for this time of the day, Bloomberg data showed.

Key highlights from DHFL conference call:

• Cobrapost allegations baseless and unfounded and malicious.
• Cobrapost allegation is based on Vikas Shekhar complaint who is not shareholder nor borrower.
• Cannot share all information as the matter is subjudice.
• Some of the names of parties mentioned by Cobrapost is right, but the way it has been shown is incorrect.
• We are getting into the complete details of the allegations and will give fair share of response soon
• All lending done by company is inline with the company policy.
• Such allegations could hamper our capital raising plans.
• DHFL has never lend to shell companies.

Shares of HCL technologies Ltd. rose as much as 4.7 percent, the most since Nov. 16, to Rs 1,035. The stock was the second best performer on Sensex and Nifty. The scrip is set to post its best six-day rally since July.

The software developer's quarterly profit met estimates despite facing cross-currency headwinds. (more details here).

Key Earnings Highlights (Q3, YoY)

• Dollar revenue up 4.9 percent at $2.20 billion.
• Constant currency growth at 5.6 percent.
• Revenue up 5.6 percent at Rs 15,699 crore.
• Net profit up 2.8 percent at Rs 2,605 crore.
• Ebit up 3.9 percent at Rs 3,036 crore.
• Margin at 19.3 percent versus 19.7 percent.

Here’s what analysts had to say after the company announced its quarterly results:

CLSA

• Maintained ‘Buy’; hiked price target to Rs 1,380 from Rs 1,350.
• Sharp revenue beat, organic growth rebounds.
• Margins soft as management continues to trade margins for growth.
• Buy for rebounding organic growth, IP value and cheap valuations.

Prabhudas Lilladher

• Maintained ‘Accumulate’; hiked price target to Rs 1,170 from Rs 1,100.
• Strong Quarter; solid beat on revenues.
• Dollar revenue growth guidance was downgraded to 7.9-9.9 percent owing to cross currency headwinds.
• Valuations remain cheap.

Shares of Axis Bank rose as much as 5.9 percent to hit a new all-time high at Rs 699.80. The stock was the best performer on Sensex and Nifty.

The lender’s quarterly net profit surpassed estimates aided by a jump in other income to Rs 4,001 crore. (Read the Full story here).

Key Earnings Highlights (Q3, YoY)

• Net interest income up 18.4 percent at Rs 5,602.9 crore.
• Net profit up 2.3 times at Rs 1,680.9 crore.
• Provisions at Rs 3,054.5 crore versus Rs 2,927.4 crore.
• GNPA at 5.75 percent versus 5.96 percent (QoQ).
• NNPA at 2.36 percent versus 2.54 percent (QoQ).

Here’s what analysts had to say after the bank announced its quarterly results:

CLSA

• Maintained ‘Buy’; hiked price target to Rs 840 from Rs 800.
• Strong top-line aids operating profit.
• Slippage a tad higher but recoveries stronger.
• Improvement in return on equity and a stable earnings rise will be key to a further rerating.

Prabhudas Lilladher

• Maintained ‘Accumulate’; hiked price target to Rs 745 from Rs 681.
• Strong deposit traction; Loan mix was broadly stable.
• Stress on balance sheet is coming off with incrementally lower intensity of downgrades.
• Strategy unveiled to lead towards 18 percent return on equities by March 2022.

Macquarie

• Maintained ‘Neutral’; hiked price target to Rs 620 from Rs 540.
• December quarter performance was driven by lumpy recoveries and one-offs.
• Negligible divergences for 2017-18; loan book looks transparent now.
• Stock has already rallied thus prices in most of the positives.

Indian equity benchmarks opened higher after declining for three consecutive trading sessions.

The S&P BSE Sensex index rose as much as 0.72 percent to 35,850 and the NSE Nifty 50 Index rose as much as 0.54 percent to 10,710.20.

The market breadth was tilted in favour of sellers. About 884 stocks advanced and 449 shares declined on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Private Bank Index's 1.2 percent advance. On the flipside, the NSE Nifty Realty Index was the only sectoral loser, down 0.04 percent.

The Indian rupee opened lower against the U.S. dollar. The home currency depreciated as much as 0.38 percent to 71.38 against the greenback.

F&O Cues

• Nifty January futures closed trading at 10,668, premium of 16 points.
• Max open interest for January series at 11,000 Call (open interest at 44.5 lakh shares).
• Max open interest for January series at 10,500 Put (open interest at 27.0 lakh shares).

Stocks In F&O Ban

In Ban:

• Adani Enterprises Ltd.
• Adani Power
• Jain Irrigation

New in Ban:

• Bank Of India
• DHFL

Put-Call Ratio

• Nifty PCR at 1.22 versus 1.23.
• Nifty Bank PCR at 0.77 versus 0.78.

On HDFC

CLSA

• Maintained ‘Buy’ with a price target of Rs 2,360.
• Divergent growth for retail and corporate loans.
• Top-line and treasury drive earnings beat and asset quality manageable.
• Maintain HDFC among our top picks across NBFCs.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 2,400 from Rs 2,050.
• Loan growth slowed down from 17 percent to 15 percent due to corporate book.
• Minor blip in asset quality driven by non-individual loan book.
• Not much impact from liquidity crisis in the NBFC sector.

On Axis Bank

CLSA

• Maintained ‘Buy’; hiked price target to Rs 840 from Rs 800.
• Strong top-line aids operating profit.
• Slippage a tad higher but recoveries stronger.
• Improvement in return on equity and a stable earnings rise will be key to a further rerating.

Prabhudas Lilladher

• Maintained ‘Accumulate’; hiked price target to Rs 745 from Rs 681.
• Strong deposit traction; Loan mix was broadly stable.
• Stress on balance sheet is coming off with incrementally lower intensity of downgrades.
• Strategy unveiled to lead towards 18 percent return on equities by March 2022.

Macquarie

• Maintained ‘Neutral’; hiked price target to Rs 620 from Rs 540.
• December quarter performance was driven by lumpy recoveries and one-offs.
• Negligible divergences for 2017-18; loan book looks transparent now.
• Stock has already rallied thus prices in most of the positives.

On HCL Tech

CLSA

• Maintained ‘Buy’; hiked price target to Rs 1,380 from Rs 1,350.
• Sharp revenue beat, organic growth rebounds.
• Margins soft as management continues to trade margins for growth.
• Buy for rebounding organic growth, IP value and cheap valuations.

Prabhudas Lilladher

• Maintained ‘Accumulate’; hiked price target to Rs 1,170 from Rs 1,100.
• Strong Quarter; solid beat on revenues.
• Dollar revenue growth guidance was downgraded to 7.9-9.9 percent owing to cross currency headwinds.
• Valuations remain cheap.

On Godrej Consumer

CLSA

• Maintained ‘Underperform’; cut price target to Rs 800 from Rs 835.
• Big miss in consolidated December quarter earnings; miss was primarily revenue-led.
• Just 1 percent volume growth in India; Management is taking measures to revive growth.
• Cut EPS estimates by 5-7 percent over the next two financial years.
• We believe that the stock will remain range-bound.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 952 from Rs 907.
• Expect growth run-rate to improve meaningfully both in India and international.
• Recovery in HI business hinges on success of Power Activ+ refill.
• Recent underperformance provides a good entry point.

More Calls

Macquarie on Compton Greaves Consumer

• Maintained ‘Outperform’ with a price target of Rs 268.
• Lighting – Better show in margins than revenues.
• Need clarity on the PPP lighting project.
• Earnings growth steady; valuation looks attractive.

• Sadhana Nitrochem ex-date for stock split from Rs 10 to Rs 5 per share.
• Siti Networks, Zee Learn, SMS Lifesciences to move into short term ASM Framework.
• Graphite India, Zee Media Corporation price band revised to 10 percent.

• Persistent Systems: Saif India IV FII Holdings sold 11.5 lakh shares or 1.44 percent equity at Rs 580 per share.

• Chalet Hotels IPO get 5 percent demand on first day sale; offer closes on Jan. 31.

• Yes Bank’s Madhu Kapur Group and Rana Kapoor Group have agreed to nominate one representative director each on the bank's board, subject to the completion of the necessary documentation. The announcement will be made at the next scheduled board meeting in April.
• L&T proposed to sell up to 30 lakh shares or 2.89 percent of its equity stake in L&T Technology Services, with an option of oversubscribing another 2.49 percent through stock exchange mechanism. This move has been undertaken by L&T to meet the minimum 25% public shareholding norms laid down by SEBI.
• DHFL said that the CobraPost exposé alleging the company of siphoning over Rs 30,000 crore, was done with a mala fide intention. The company said it is confident of meeting any scrutiny on any aspect of operations.
• Asian Paints said that the commercial production of its Andhra Pradesh paint factory started from Jan. 29. The initial capacity of this facility is three lakh KL per annum.
• Coromandel International said that a fire accident occurred in its Gujarat unit which manufactures crop protection chemicals. The company says that it has insurance coverage and the accident won’t have any significant impact on company’s operations.
• HG Infra Engineering received financial closure from NHAI for HAM project in Gurgaon worth Rs 606 crore.
• NCLT rejected Essar Steel founders Ruia’s application for settlement. (Bloomberg News)
• Cyient: Board to consider share buyback proposal on Feb. 01.
• Coal India to get Rs 1,065 crore cash from three of its wholly owned subsidiaries as they approve buyback.

• Chinese President Xi Jinping’s top economic aide, Vice Premier Liu He, will meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday and Thursday.
• Wednesday Fed Chairman Jerome Powell holds a news conference after the FOMC rate decision.

• The Bloomberg Commodity Index increased 0.8 percent.
• West Texas Intermediate crude gained 2.3 percent to $53.17 a barrel.
• Brent crude ended 2.32 percent higher at $61.32 per barrel. It fell below $60 a barrel on Monday.
• Gold climbed 0.6 percent to $1,311.23 an ounce, the highest since May.

London Metal Exchange

• Aluminium ended 1.34 percent higher.
• Nickel resumed rally after a one-day blip, ended 2.5 percent higher.
• Tin ended 0.12 percent higher.
• Lead ended 0.14 percent lower.
• Copper ended 0.8 percent higher.
• Zinc halted a four-day rally, ended 0.9 percent lower.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains adn losses to trade a little changed at 10,697.50.

Stocks in Asia struggled for traction on Wednesday as the earnings season rolled on and investors awaited the Federal Reserve’s policy meeting.

Equities in Japan and Hong Kong slipped, while shares in Australia and South Korea held steady.

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