Sensex, Nifty Close Lower For Third Day Dragged By I.T., Metal Stocks

Indian equity benchmarks closed lower for the third consecutive day, dragged by losses in information technology, metals, energy and telecom stocks.

The S&P BSE Sensex index shed 0.55% to 60,923.50. The NSE Nifty 50 Index declined by similar magnitude to close at 18,178.10. Both the benchmarks slipped as much as 1% in intraday trade.

The broader indexes almost mirrored their broader peers with the S&P BSE MidCap index shedding 0.4% and the S&P BSE SmallCap declining 0.7%. Eleven of the 19 sectoral indexes compiled by BSE Ltd. declined, with the S&P BSE Information Technology index falling 2.3%.

The market breadth was skewed neither in favour of bulls nor bears. About 1,610 stocks advanced, 1,676 declined and 140 remained unchanged.

• Paytm is mulling scrapping its proposed Rs 2000-crore pre-IPO share sale.

• Deal could be called off over valuation differences

Source: People familiar with the development

UPL said its step down subsidiary, UPL Global Ltd. has entered into a definitive agreement for acquisition of 80% stake in equity share capital of PT Excel Meg Indo- Indonesia.

In an exchange filing, UPL said that PTE has a good presence in Indonesia and wide range of agro-chemical offers. UPL hoped the acqusition to provide market access and access to product portfolio of PTE.

UPL intended to complete the acquisition of 80% stake by December 31, 2021. PTE has been valued at an enterprise value of $25 million.

India’s paint, adhesive and specialty-chemicals manufacturers fell after Asian Paints Ltd. posted second-quarter net income that missed the average analysts’ estimate. 

The nation’s largest paint company by market cap slipped as much as 6.6%, the most in over six months

• A fresh order by Commissioner, CGST Nashik has dropped a long pending excise demand on M&M.

• Order has totally discharged the notices and the demand for Rs. 337 crore in entirety.

• M&M would be entitled to a refund of Rs 40 crore paid earlier.

• Contingent liability of approx. Rs. 781 crore to be deleted from books of M&M.

• M&M believes it has "strong case on merits" should tax department appeal against the Commissioner's order.

Source: Company filing

KPIT Technologies Ltd. has announced partnership with ZF Group, a global tech firm supplying systems for passenger cars and commerical vehicles.

In an exchange filing, KPIT Technologies said they two companies will cooperate for joint development for a middleware solution for the mobility ecosystem.

• Fund aimed at providing working capital loans to small businesses.

• Businesses wanting to digitise and recover from pandemic can access funding.

• Fund to help new to credit borrowers exclusively, with at least 50% women borrowers.

Source: HDFC Bank statement

Shares of Asian Paints Ltd. shed over 6.3% in intraday trade, to Rs 2,969.7 apiece after the company reported net income that missed the average analyst estimate, in the September quarter.

Second Quarter Numbers (Consolidated, QoQ

• Net income rose 5% to Rs. 605.17 crore Vs Rs. 574.30 crore (Bloomberg estimate : Rs 879.09 crore)

• Revenue at Rs 7,096.01 crore vs estimate of Rs 6,680; up 27% vs Rs 5,585.36 crore QoQ

• Total costs at Rs 6,418.17 crore vs Rs 4,893.87 crore QoQ

• Other income at Rs 138.20 crore vs Rs 89.61 crore QoQ

• EBITDA down 1% to Rs 904.45 crore Vs Rs. 913.55 crore (Bloomberg estimate : Rs 1,325.76 crore)

• Margins at 12.75% vs 16.36% (Bloomberg estimate : 19.8%)

Commentary & Context

• Company to consider further price increase to mitigate high inflation.

• Company confident of turning around its performance strongly in the coming quarter.

• Steep inflation seen in raw material prices has impacted gross margins across all business in the quarter.

Of the 40 analysts tracking the company, 19 maintained 'buy', nine maintained 'hold' and 12 maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 2.9%.

Shares of Angel Broking Ltd. shed over 11% in intraday trade to Rs 1,240 apiece after the company reported its September quarter earnings, post market hours Wednesday.

Angel Broking (Consolidated, QoQ)

• Gross addition in client base by 1.3 million clients vs 1.2 million clients in Q1FY22

• Total Income up 13.4% at Rs 538.2 crore vs Rs 474.5 crore

• EBITDA up 10.6% at Rs 183.9 crore vs Rs 166.3 crore

• PAT up 10.6% at Rs 134.3 crore vs Rs 121.4 crore

Trading volume was double the 20-day average, for this time of the day.

Angel Broking trades at 21 times its estimated earnings per share for the coming year.

Analysts have two 'buy', no 'hold' and no 'sell' recommendations.

Sterlite Technologies Ltd. reported net income for the second quarter that missed the average analyst estimate.

September Quarter Results (Consolidated, QoQ)

• Net income down 4.57% to Rs 105.67 crore vs Rs 105.70 crore QoQ (estimate of Rs 117 crore (Bloomberg consensus)),

• Revenue up 15% to Rs 1,507.53 crore vs vs Rs 1,309.23 crore (estimate: Rs 1,513 crore)

• Total costs at Rs 1,376.06 crore vs Rs 1,196.64 crore

• Other income at Rs 6.24 crore vs Rs 6.53 crore

India's stock benchmarks declined after a volatile start, dragged by losses in information technology, energy, metal and realty stocks.

The S&P BSE Sensex shed 0.82% to 61,259.66. The NSE Nifty 50 index also declined by similar magnitude to 18,144.10. Reliance Industries Ltd. contributed the most to the index decline, decreasing 2.7% and Dr. Reddy's Laboratories Ltd. had the largest move, decreasing 2.9%. In midday trading, 37 of 50 shares fell, while 13 rose.

The broader indices almost mirrored their larger peers with S&P BSE MidCap little and S&P BSE SmallCap indexes declining over 0.5%. Thirteen of the 19 sectoral indexes compiled by the BSE Ltd. declined, with S&P BSE ‌Information Technology index falling over 2.2%.

The market breadth was skewed in favour of bears. About 1,470 stocks advanced, 1,680 declined and 154 remained unchanged.

Indian government bond yields fell, extending their drop from an 18-month high, as traders assess whether the recent rise in yields will prompt the central bank to intervene. The rupee gained to a two-week high. 

10-year yields fell 3 bps to 6.34%, the most since September 15

USD/INR falls as much as 0.2% to 74.6938, weakest since October 6

Source: Bloomberg

Shares of Supreme Petrochem Ltd. shed 7.47% in intraday trade to Rs 677 apiece after the company reported in September quarter numbers, post market hours Wednesday.

Supreme Petrochem Q2FY22 (Standalone, YoY)

• Revenue up 72% at Rs 1,190.76 crore Vs Rs 694.05 crore

• Net profit up 47% at Rs 127.07 crore Vs Rs 86.15 crore

• Ebitda up 51% at Rs 176.01 crore Vs Rs 116.4 crore

• Margin 14.8% Vs 16.8%

• Company declared interim dividend of Rs 4 per equity share

Trading volume on the stock was 6.7 times the 30-day average volume, for this time of the day.

Shares of Supreme Petrochem crossed below the 50-day simple moving average, indicating potential downward price momentum.

• Rallis India raised to 'buy' at IIFL; Price target: Rs 335

• Alembic Pharma cut to 'hold' at KR Choksey; Price target: Rs 804

Source: Bloomberg

Shares of Shoppers Stop Ltd. rose nearly 20% in intraday trade to Rs 336 apiece after the company reported growth in revenue in the September quarter.

Shoppers Stop Q2FY22 (Consolidated, YoY)

• Revenue up 1.16 times at Rs 642.07 crore Vs Rs 296.98 crore

• Net loss at Rs 3.58 crore Vs Rs 97.70 crore

• Ebitda gain of Rs 72.32 crore Vs Ebitda loss of Rs 38.15 crore

Of the 13 analysts tracking the company, eight maintained 'buy', four maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 11.2%.

The relative strength index on the stock was 80, suggesting it may be overbought. Trading volume on the stock was 28.7 times the 30-day average volume, for this time of the day.

• Most yields along the India sovereign yield curve fell, with 10-year bonds moving the most in Thursday morning trading.

• The 3-year yield fell 1.1bps to 5.071%

• The 10-year yield fell 2.2bps to 6.351%

• The 14-year yield fell 1.2bps to 6.848%

• The 3-year-10-year yield spread was 128bps, vs previous close 129.1bps

Source: Bloomberg

• Shares of Biocon Ltd. rose nearly 2% in intraday trade to Rs 347.9 apiece after the company announced that its subsidiary Biocon Biologics Ltd.'s interchangeable biosimilar Insulin Glargine will be listed as preferred glargine brand on the national preferred formulary of Express Scripts.

• The national preferred formulary of Express Scripts, a pharmacy benefit management organisation in the U.S., included nearly 3 crore people.

• Biocon Biologics co-developed the Insulin Glargine biosimilar with Viatris.

• Bank of Baroda Ltd. has 5.15 million shares change hands in two bunch trades.

• Details of buyers and sellers were not immediately known.

Source: Bloomberg

• Shares of Polycab India Ltd. shed 6.72% in intraday trade, the most in 19 months, to Rs 2,140 apiece. The company is scheduled to report its earnings for the September quarter on Friday.

• Trading volume was double the 20-day average volume for this time of the day.

• Polycab India trades at 35 times its estimated earnings per share for the coming year.

• Analysts have 21 'buy', five 'hold' and no 'sell' recommendations on the stock.

Shares of Syngene International Ltd. shed over 4% in intraday trade to Rs 580 apiece after the company reported sequential decline in net profit in September quarter, post market hours Wednesday.

Second Quarter Earnings (Consolidated, QoQ)

• Net profit down 14% at Rs 66.7 crore vs Rs 77.3 crore

• Revenue from operations up 3% at Rs 610.2 crore vs Rs 594.5 crore

• EBITDA up 7% at Rs 190.3 crore vs Rs 177.3 crore

• Total costs at Rs 432.8 crore vs 429.5 crore

• Other income at Rs 12.9 crore vs Rs 12.3 crore

Of the ten analysts tracking the company, eight maintained 'buy' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 16.4%. Trading volume on the stock was 2.7 times the 30-day average volume, for this time of the day.

India's stock benchmarks opened higher, aided by gains in metal, power and banking stocks, amid mixed global cues.

The S&P BSE Sensex rose 0.30% to 61,445.06. The NSE Nifty 50 advanced by a similar magnitude to 18,336.90.

The broader indexes outperformed their broader peers with the S&P BSE MidCap index and the S&P BSE SmallCap gaining over 0.5%. Barring S&P BSE Telecom and S&P BSE Consumer Durables indexes, all the other 17 sectoral indexes compiled by BSE Ltd. advanced, with the S&P BSE Realty, S&P BSE Metal and S&P Power indexes adding over 1%.

The market breadth was skewed in favour of bulls. About 1,681 stocks advanced, 576 declined and 68 remained unchanged.

Traders will weigh the continued impact that high crude oil prices could have on Indian bonds and the currency, as crude prices remaining above $85 a barrel represent a key risk for the world’s third biggest importer of the commodity.

• USD/INR falls 0.6% to 74.8750 on Wednesday

• 10-year yields fell 1bp to 6.37% on Wednesday

• Global funds sell net Rs 1,840 crore of India stocks Wednesday: NSE

• They sold Rs 116 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 342 crore of corporate debt

• State-run banks sold Rs 656 crore of sovereign bonds on Oct. 20: CCIL data. Foreign banks bought 1.52 billion rupees of bonds

Source: Bloomberg

• Oberoi Realty cut to 'neutral' at Goldman; Price target: Rs 875

• Jubilant Food cut to 'hold' at Jeferries; Price target: Rs 4,100

• Rallis India cut to 'hold' at Antique Stock Broking; Price target Rs 300

Source: Bloomberg

• Indian Energy Exchange cut to 'sell' at Axis Capital; Price target: Rs 517.

• Tata Power cut to 'add' at Axis Capital; Price target: Rs 255

• Navin Fluorine raised to 'add' at Equirus Securities; Price target: Rs 3,612.

Source: Bloomberg

Furniture marketplace Pepperfry is planning to file for an initial public offering in the first half of 2022, Mint reported, citing Ashish Shah, co-founder and chief operating officer of the company. 

• The company also will raise a pre-listing funding round by the year-end.

• Pre-IPO round will be between $50 million and $100 million.