Sensex, Nifty Snap Two-Day Winning Streak Dragged By Banking, Metal Stocks

India's stock benchmarks snapped a two-day winning streak, after fluctuating between gains and losses for most of the session, dragged by the sharp decline in banking stocks in the final hour of trade. Losses in metal and power stocks offset the gains in healthcare stocks.

The S&P BSE Sensex fell 0.16% to 57,806.49. The 30-stock gauge reclaimed 58,000 mark in intraday trade after a gap of eight sessions. The NSE Nifty also declined by similar magnitude to 17,213.60.

ITC Ltd. had the largest drop, falling 1.5%. Today, 30 of 50 shares fell, while 20 rose.

The broader indices outperformed their larger peers with S&P BSE MidCap adding 0.13% and S&P BSE SmallCap gaining 0.5%. Twelve of the 19 sectoral indices compiled by BSE Ltd. declined with S&P BSE Metal shedding over 1%. On the flipside, S&P BSE Healthcare rose over 1.7%, aided by the emergency usage approval granted by DCGI for anti-viral drug Molnupiravir.

The market breadth was skewed in the favour of bulls. About 2,043 stocks advanced, 1,334 declined and 97 remained unchanged.

"Nifty swing between red and green ahead of monthly FNO expiry. It finally ended the day in red with losses. Broader market outperformed. Pharma stocks were in lime light with index gaining 1.7% after India approved Merck's COVID-19 pill and two more vaccines for emergency use", Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services wrote in a note and added "FIIs have turned buyer after a three months of constant selling. Markets are expected to remain sideways until the end of the year due to thin volume, lack of trigger and rising Omicron cases. Q3 results season and build up to the upcoming budget session would be key events that the market would be looking for in Jan 2022".

• Shares of Sharika Enterprises Ltd. rose 10% after the company received an order from Power Grid Corporation of India worth Rs 1.74 crore.

• The order pertains to the implementation of smart city project at Powergrid Township project.

Source: Exchange Filing

Shares of PVR Ltd. and Inox Leisure Ltd. declined after national capital New Delhi imposed curbs on public gathering amid rise in omicron-related covid-19 infections.

Keppel Land to buy 49% stake in Puravankara high-rise Grade A commercial office project in Bengaluru, India for Singapore $21.1 million, company says on SGX.

• Deal expected to be completed by Q22022.

• Deal not expected to have any material impact on EPS for current FY.

Source: Bloomberg

• Bajaj Auto options volume 2.3x the 20-day average, with 18,057 calls changing hands vs 3,710 puts.

• Dr Reddy's options volume 1.9x the average, with 25,196 calls vs 10,199 puts.

• Sun Pharma options volume 1.8x the average, with 42,070 calls vs 13,004 puts.

Source: Bloomberg

• BASF India's holding company BASF SE, Germany has reached an agreement to divest its manufacturing site in Quincy, Florida.

• In an exchange filing, the company said that associated attapulgite business will be sold to Clariant for $60 million.

• The transaction is expected to close in 2022, after approval by anti-trust authorities.

Shares of Inox Leisure Ltd. fell for the sixth straight day, on track for the longest losing streak since the period ended October 22, 2020.

• The stock has shed over 9% during the streak while the NSE Nifty index rose over 2.5%.

• Of the 22 analysts tracking the company, 20 maintained 'buy' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 40.1%.

• Home Affordability at decadal best in 2021.

• Affordability at historic best across cities in 2021.

• Mumbai emerges as biggest gainer on affordability since 2010.

• Ahmedabad and Pune are the most affordable Indian housing markets of 2021.

• Affordability ratio in Bengaluru and NCR improved by significant margin

Source: Knight Frank India Affordability Index

• Bajaj Auto Ltd. commences work at the new electric vehicles manufacturing unit for India and exports in Pune.

• First vehicle expected to be rolled out by June 2022.

• Vendors to invest additional Rs 250 crore

• Plant spread across half a million square feet, to employ about 800 personnel.

Source: Press Statement

Shares of CE Info Systems Ltd. (or MapmyIndia) rose nearly 10% in intraday trade to a record Rs 1,777 apiece.

• Over the past two trading sessions, MapmyIndia shares rose over 20%. Since its market debut on December 21, the stock has surged nearly 25%.

• MapmyIndia's stock got listed on December 21 at a 51.5% premium to its issue price of Rs 1,033. The stock has advanced in four of the six sessions since its debut.

Aether Industries Ltd. seeks to raise Rs 757 crore selling new shares in an IPO, while its founder plans to sell as many as 2.75 million secondary shares, according to its initial prospectus.

• The specialty chemical maker will consider a pre-IPO share sale to raise up to Rs 131 crore; new share issue in the IPO will be lower if the pre-IPO sale happens.

• HDFC Bank and Kotak Mahindra Capital are managing the IPO.

Shares of Macrotech Developers climbed 4.54%, the biggest intraday gain in four sessions, to Rs 1,269.75 apiece after Morgan Stanley initiated coverage on the stock with an 'equal-weight' recommendation.

Morgan Stanley

• Initiates coverage on the stock with an 'equal-weight' recommendation; target price set at Rs 1,312 per share; an implied return of 8.02%.

• Firm's focus on core residential business, new launches and joint ventures augur well for growth prospects.

• Monetisation of completed inventory, commercial assets and land banks earmarked for digital infrastructure projects provide good cash flow visibility and should aid in further deleveraging.

• Company aims to be net debt free in the couple of year, but the stock is trading at a discount.

• Deployment of Rs 3,000 crore QIP proceeds in asset-light joint development agreement/joint venture projects would be a defining theme for the company over the next six to eight quarters.

• Firm has a launch potential of 57 msf, largely in extended suburbs and 500 acres for digital infrastructure.

• Estimates two-year sales and EBITDA CAGRs of 15% and 18%, respectively for FY2023-24.

• Firm's sales target of Rs 9,000 crore could rise to Rs 20,000 crore over the next 4-5 years.

Of the 11 analysts tracking the company, nine maintained 'buy' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 2.6%.

India's stock benchmarks declined after fluctuating between gains and loss for most of the session, dragged by metals, power and realty stocks, amid rising concerns over the spread of omicron variant of covid-19 virus.

The S&P BSE Sensex fell 0.1% to 56,838.07. The NSE Nifty 50 index also declined by similar magnitude to 17,214.85. Tata Steel Ltd. had the largest drop, falling 1.4%. In midday trading, 33 of 50 shares fell, while 17 rose.

The broader markets outperformed their larger peers with S&P BSE MidCap little changed and S&P BSE SmallCap gaining 0.3%. Twelve of the 19 sectoral indices compiled by BSE Ltd. declined with S&P BSE Metal shedding over 1%.

The market breadth was skewed in the favour of bulls. About 1,968 stocks advanced, 1,298 declined and 118 remained unchanged.

Shares of PG Electroplast Ltd. rose nearly 7% in intraday trade after the company began manufacturing LED televisions for two customers at its Noida facility.

• The company has an installed capacity of 5 lakh units of TVs with 70 inch-screen sizes.

• The Noida facility is fully integrated with SMT lines for PCB assembly, clean room for LCM module and final product assembly and plastic moulding.

Source: Exchange facility

Shares of Coal India Ltd. declined after Kotak Institutional Equities maintained 'reduce' recommendation, but slashed target price to Rs 155

Kotak Institutional Equities on Coal India

• Firm's performance continues to be weak despite elevated coal prices, upward revision of raw coal prices and healthy volume profile.

• Shift towards renewable resources could weigh on long-term growth prospects.

• High capex intensity to sustain current volumes in the near-term is a drag on cash flows.

• Street expectations of a rapid improvement in e-auction realisations were possibly misplaced.

• Constantly rising wage bills have weighed on the earnings growth of the company.

• Rising preference for lower-cost renewable power is likely to pose a challenge both on volumes and pricing for conventional coal demand.

• Moderately trim the trajectory of improvement in realisations leading to a downward revision of earnings by 2.2-2.6% for FY2022-24E.

Coal India has appointed SK Mehta as CFO of the company from January 1, 2022. The appointment will be valid till the company appoints a regular director (Finance).

Shares of SBI Cards & Payment Services climb after Kotak Institutional Equities upgraded the stock from 'add' to 'buy' with an unchanged fair value.

Kotak Institutional Equities on SBI Cards

• Recent price correction offers a good entry point to investors.

• Company is well positioned to deliver strong revenue growth and return ratios.

• Leading players like SBI Cards are likely to take advantage of growth in credit card business in India

HIL Ltd. has said that the operations of Balasore plant in Odisha have been temporarily halted due to a strike that has been called.

• In an exchange filing, the company said that the processes are in place to ensure business continuity and minimise disruptions.

• Company also said that the situation is being closely monitored and steps are being taken to ensure resolution and normalcy.

Source: Exchange Filing

Ipca Laboratories: Choice Equity Broking initiated coverage of the stock with a recommendation of 'outperform'; price target set at Rs 2,401; an implied return of 15%.

• Aurionpro Solutions Ltd. has supplied and installed Automated Fare Collection systems in record time for the Kanpur Metro Project. The company was selected earlier this year as a partner by the State Bank of India for supply and installation of AFC for the Kanpur Metro Rail project.

• The project was inaugurated on Tuesday.

Source: Exchange Filing.

Most yields along the India sovereign yield curve fell, with 4-year bonds moving the most in Wednesday morning trading.

• The 4-year yield fell 1.4bps to 5.536%

• The 10-year yield fell 0.6bps to 6.471%

• The 20-year yield remained unchanged at 6.914%

• The 4-year-10-year yield spread was 93.5bps, vs previous close 92.7bps

Source: Bloomberg

Shares of GR Infraprojects Ltd. rose over 3% in intraday trade to Rs 1,700 apiece after the company emerged as L-1 bidder in financial bid for a tender invited by Noida Metro Rail Corporation.

• Total project cost is Rs 593 crore. The project is to be completed in 24 months.

• Tender pertained to design and construction of elevated viaduct and stations in Noida as part of metro rail project.

Source: Exchange Filing, Bloomberg

Shares of Mazagon Dock Shipbuilders rose over 2% in intraday trade after the company approved the declaration of interim dividend of Rs 7.10 per equity share aggregating to Rs 143.20 crore to be paid out of the profits of the company for FY2021-22.

In an exchange filing post market hours Tuesday, Mazagon Dock declared January 7, 2022 as the record date for reckoning eligibility of shareholders for the purpose of payment of interim dividend.

All three analysts tracking the company maintained 'buy' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 40.9%.

Foxconn Technology Group will revamp its management and operations in India after a labour protest forced the shutdown of a key smartphone plant in Tamil Nadu.

• We have been investigating recent issues at our Sriperumbudur facility in Tamil Nadu and have found that some offsite dormitory facilities do not meet the required standards.

• We are very sorry for the issue our employees experienced and are taking immediate steps to enhance the facilities and services we provide.

Foxconn Technology statement

Foxconn is the main assembler of Apple Inc.'s iPhones. It produces iPhone 12 handsets among other gadgets.

• Thermax raised to 'add' from 'sell' at Spark Capital Advisors; price target at Rs 1,829.

• Carborundum Universal cut to 'add' from 'buy' at Spark Capital Advisors; price target at Rs 960.

Source: Bloomberg

JB Chemicals and Pharmaceuticals Ltd. is set to launch Molnupiravir 200 mg for Indian market under the brand name Molunamax.

• This comes after the anti-viral drug received EUA for treatment of mild to moderate covid-19 from U.S. FDA.

• India's CDSCO has also recommended grant of permission to manufacture and market the Molnupiravir 200 mg capsule.

Shares of JB Chemicals & Pharmaceuticals rose nearly 3%, the biggest intraday gain in four sessions, to Rs 1,694.45 apiece. Of the seven analysts tracking the company, six maintained 'buy' and one maintained 'hold' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 23.7%.

NTPC seeks renewables unit investor before IPO next year, reports Bloomberg.

BLOOMBERG EXCLUSIVE

• NTPC is seeking a strategic investor in its renewables business prior to taking the unit public next year.

• NTPC Renewable Energy, a subsidiary, plans international roadshows in the next fiscal year to find a partner.

Source: Company official with knowledge of the matter

Shares of Computer Age Management Services Ltd. rose over 1.6%, the biggest intraday gain in a week to Rs 2,640.15 apiece after Haitong International initiated coverage on the stock with an 'outperform' rating.

• Price target set at Rs 3,100; an implied return of 19.32%

• Haitong International: CAMS is the best play on the AMC story in India

Haitong International

• Initiates coverage on the stock with 'outperform' rating; price target set at Rs 3,100, an implied return of 19.32%

• CAMS is India's largest MF RTA with aggregate market share of 70% as of September 2021.

• AAUM serviced by CAMS outperformed MF Industry AAUM growth during FY18-21, due to market share gain.

• CAMS is the best play on the AMC story in India as it is largely immune to market share movements between mutual funds.

• CAMS has been able to show high growth across key performance indicators like MF AAUM serviced, Unique Investor services and total transaction processed during FY15-H1FY22.

• High entry barriers in MF RTA industry a positive for the company. Key entry barriers include (a) high technology intensity, compliance requirements, (b) requirement of extensive branch network and (c) knowledge base acquired over years of experience.

• Target price of Rs 3,100 implies a FY24 PE ratio of 38x.

• Expect revenue CAGR of 16.6% on account of 15% growth in mututal based revenue and 30% growth in non-mutual fund based revenue for the period of FY21-24E.

• Key Risks: Changes in regulation, higher-than-expected yield compression and slower-than-expected AUM growth

Of the eight analysts tracking the company, six maintained 'buy' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 14.4%.

Indian bond traders will look forward to a Rs 20,000 crore ($2.7b) sale of Treasury bills after yields on 10-year sovereign bonds rose to the highest since April 2020.

• 10-year yields ended 1bp higher to 6.48% on Tuesday after rising to 6.50% intraday, on concerns of over supply of the securities.

• Global funds sold Rs 51 crore of sovereign bonds under limits available to foreign investors Tuesday, and withdrew Rs 724 crore of corporate debt.

  • State-run banks bought Rs 575 crore of sovereign bonds on Tuesday CCIL data. Foreign banks bought Rs 267 crore of bonds.

Source: Bloomberg

Shares of Amara Raja Batteries rose 2.3% in intraday trade to Rs 632 apiece after the company announced plans to invest in Europe-based InoBat Auto.

• InoBat is a manufacturer of premium innovative batteries for E-mobility.

• The investment is likely to give Amara Raja a foothold in European EV ecosystem.

• Investment is part of the company's 'Energy and Mobility' strategy that it unveiled earlier this year.

• InoBat specialises in manufacture of electric batteries to meet demand in automotive, commercial vehicle, motorsport and aerospace sectors.

• Of the 20 analysts tracking Amara Raja Batteries, 12 maintained 'buy', five maintained 'hold' and three maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 22.9%.

Source: Exchange Filing, Bloomberg

India's stock benchmarks opened lower, dragged by losses in banking and metal stocks, amid weak cues as U.S. market snapped their winning streak and rise in covid cases due to omicron strain.

The S&P BSE Sensex fell 0.12% to 57,827.52. The NSE Nifty 50 also declined by similar magnitude to 17,225.60.

The broader indices outperformed their larger peers with S&P BSE MidCap rising 0.2% and S&P BSE SmallCap adding 0.4%. Fifteen of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Energy gaining 0.5%.

The market breadth was skewed in the favour of bulls. About 1,890 stocks advanced, 502 declined and 73 remained unchanged.