Sensex, Nifty Close Higher Aided By Pharma & Banking Stocks

India's stock benchmarks advanced in trade and recovered from morning lows, aided by gains in pharma, consumer durables and select banking stocks.

The S&P BSE Sensex rose 0.52% to 57,420.24. The 30-stock gauge fell 1% to 56,543.08 in intraday before recovering nearly 900 points. The NSE Nifty 50 index also rose by similar magnitude to 17,086.25. Tech Mahindra Ltd. had the largest increase, rising 3.6%. Today, 38 of 50 shares rose, while 12 fell.

The broader indices almost mirrored their larger peers with S&P BSE MidCap gaining nearly 0.3% and S&P BSE SmallCap adding over 0.5%. Fifteen of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Healthcare gaining nearly 1.5%.

The market breadth was skewed in the favour of bulls. About 2,153 stocks advanced, 1,319 declined and 148 remained unchanged.

"Today Bank Nifty hit a 6 month low but we still maintain a positive outlook on the Indian Banking sector and see a better risk reward ratio looking at the current valuation. Over the past few quarters, banks have strengthened their balance sheet through higher provisioning, fundraising, cautious lending and strengthened risk metrics", Mohit Nigam, head - PMS, Hem Securities wrote in a note. He added "recovery post Covid-19 disruption has been good and the capital levels are at all-time highs. Overall asset quality started improving, which will be reflected in the GNPA levels in the coming quarters. We believe banking stocks are at the start of another growth phase from H2FY22".

Shares of Paras Defence & Space Technologies rose over 8%, the biggest intraday gain in over two months, to Rs 742.9 apiece.

Paras Defence chosen by DRDO to handle the technology of Border Surveillance Systems.

These systems are developed by Instruments Research & Development Establishment and DRDO and will provide all weather surveillance for day and night monitoring of the border areas. It consists of radar, EO sensors, mounted on Pan Tilt platforms.

Source: Exchange Filing, Bloomberg

Shares of Ashoka Buildcon Ltd. rose nearly 11%, the biggest intraday gain in nearly 11 weeks, to Rs 102.4 apiece.

In an exchange filing on Saturday, the company said that its subsidiary Ashoka Concession Ltd. entered into share subscription and share purchase agreements with Galaxy Investments II Pvt.

Galaxy Investments is an affiliate of funds, vehicles and entitites managed or advised by Kohlberg Kravis Roberts & Co. The share subscription and share purchases agreements were done for the sale of entire share capital held in the subsidiaries

• Ashoka Highways (Bhandara) Ltd.,

• Ashoka Highways (Durg) Ltd.,

• Ashoka Belgaum Dharwad Tollway Ltd.,

• Ashoka Sambalpur Baragarh Tollway Ltd. and

• Ashoka Dhankuni Kharagpur Tollway Ltd., for an aggregate consideration of Rs 1,337 crore.

Of the 18 analysts tracking the company, 17 maintained 'buy' and one maintained 'hold' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 54.7%.

Source: Exchange filing, Bloomberg

• Vedanta Ltd. has approved offering for subscription, on a private placement basis, up to 10,000 secured, rated, listed, redeemable, non-convertible debentures of face value of Rs 10 lakh each aggregating up to Rs 1,000 crore.

• In an exchange filing, the company said that the tenure of the instrument is three years from the deemed date of allotment.

Source: Exchange Filing

Shares of Natco Pharma Ltd. rose over 4.9%, the biggest intraday gain in over two weeks, to Rs 888.65 apiece. Trading volume was about the same as the 20-day average, for this time of the day.

• Natco Pharma trades at 36 times its estimated earnings per share for the coming year. It trades at 37 times trailing EPS.

• Analysts have eight 'buy', four 'hold' and three 'sell' recommendations on the stock. The overall consensus price of analysts tracked by Bloomberg implied an upside of 16.5%.

MSTC Ltd. has approved investment by way of equity share capital contribution of Rs 6 crore in its joint venture company, Mahindra MSTC Pvt Ltd. for expansion of recycling and vehicle scrapping business.

Source: Exchange filing

Gateway Distriparks Ltd. has fixed January 6 as the record date for the purpose of determining the shareholders of the company who has be entitled to receive shares of Gateway Rail Freight Ltd.

In an exchange filing, the company said that it took on record the copy of order dated Dec. 2, 2021, passed by NCLT sanctioning the scheme of amalgamation amongst Gateway Distripark, Gateway East India Pvt Ltd. and Gateway Rail Freight.

The board of directors approved filing of requisite form to make the scheme effective.

• Bayer CropScience raised to 'buy' from 'accumulate' at Prabhudas Lilladher; price target at Rs 5,700.

• PI Industries raised to 'buy' from 'accumulate' at Prabhudas Lilladher; price target at Rs 3,470.

• UPL raised to 'buy' from 'hold' at Prabhudas Lilladher; price target at Rs 910.

Source: Bloomberg

Shares of Navin Fluorine International Ltd. rose over 4.3% in intraday trade to Rs 4,166 apiece on the back of positive commentary from analysts due to the rising opportunities in fluorination space.

Brokerage Motilal Oswal noted that the deep fluorination expertise of Navin Fluorine augured well for the company's growth prospects in a note dated Dec. 24. Motilal Oswal expected fluoro-agrochemical intermediate to gain attention and awaited right entry points on dips.

Analysts at Nirmal Bang expressed optimism over the opportunities in front of India's pure-play fluorine companies, but picked out Navin Fluorine as a frontrunner given its presence in patented molecules through the CRAMS vertical, in a note dated December 23.

Motilal Oswal

• Maintains 'neutral' on the stock with the target price unchanged at Rs 4,195; implied return of 5%.

• Navin Fluorine intends to leverage its R&D capabilities and deep fluorination expertise to partner with global companies to unlock growth potential.

• Entry into a five-year contract with a large firm for manufacturing and supply of key fluoro-agrochemical intermediate could aid growth as fluoro-agrochemicals segment is likely to receive increased attention in the near future.

• Values the company at 40xFY24 EPS to arrive at target price of Rs 4,195.

• Awaits a right entry point on dips, due to optimism on the growth prospects due to fluorination chemistry.

Nirmal Bang

• India has the relevant skillsets to become a big player in organic fluorospeciality space.

• U.S., European Union and Japan are looking at India as an alternative supply destination to China.

• Pure-play fluorine companies like Navin Fluorine, SRF and Gujarat Fluorochemicals are preferred options in the space, when fluorination is the core chemistry.

• Navin Fluorine has an edge over others due to its presence in patented molecules through the CRAMS vertical.

Of the 22 analysts tracking the company, 12 maintained 'buy', six maintained 'hold' and four maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 7.5%

India's stock benchmarks erased 1% losses in intraday trade and advanced, aided by gains in pharma and information technology stocks, amid weak global cues due to rise in covid-19 cases due to omicron variant.

The S&P BSE Sensex rose nearly 0.3% to 57,282.23. The 30-stock gauge near rose over 700 points from session's low. The NSE Nifty also advanced by similar magnitude to 17,047.05. Tech Mahindra Ltd. had the largest increase, rising 2.9%. In midday trading, 29 of the 50 shares rose, while 21 fell.

The broader indices almost mirrored their larger peers with S&P BSE MidCap gaining 0.15% and S&P BSE SmallCap adding 0.45%. Fourteen of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Healthcare rising 1%.

The market breadth was skewed in the favour of bulls. About 2,058 stocks advanced, 1,286 declined and 168 remained unchanged.

• Adani Group says it is ready to begin first coal exports from the controversial Carmichael mine in Australia's Galilee Basin.

• It has been over a decade since Adani Group took over the project.

• First shipment of high-quality coal from the Carmichael mine is being assembled at the North Queensland export terminal: Adani Group.

• Carmichael project has faced stiff opposition and legal challenges by climate activists.

Source: Bloomberg

Shares of Ajanta Pharma Ltd. rose nearly 3.5% to Rs 2,195 apiece. The company will consider the proposal to buy-back equity shares of face value of Rs 2 each, on Tuesday.

• Over the past two sessions, shares of Ajanta Pharma jumped over 6%.

• All 12 analysts tracking the company maintained 'buy' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 19.3%.

Campus Activewear Ltd., a maker of sports and athleisure footwear, seeks approval for an initial public offering in which the existing shareholders will sell 51 million shares.

• Founders Hari Krishan Agarwal, Nikhil Agarwal will sell shares in the IPO. Investors TPG Growth III SF Pte and QRG Enterprises will also sell shares.

• The company is not selling any new shares in the IPO.

• Campus Activewear made a profit of Rs 26.86 crore for the year ended March on a revenue of Rs 710 crore.

• JM Financial, BofA Securities, CLSA India and Kotak Mahindra Capital are managing the issue.

Source: Bloomberg

• Number of weekly average daily fliers stood at 3,67,000 in the week-ended December 25, 2021 vs 3,60,000 in the week ended December 18.

• Average daily fliers remain steady amidst festive demand and omicron fears.

Sector Highlights

• Air France - KLM and Indigo entered into a codeshare agreement. This agreement allows both the airlines to sell seats on the others' flights.

• Rakesh Jhunjhunwala backed Akasa Air unveiled its brand logo.

• Indian rupee edges lower, poised to snap a seven-day winning streak, amid rising covid-19 cases.

• USD/INR rose 0.2% to 75.1413.

• 10-year yields down 1bp to 6.46%.

Source: Bloomberg

• Shares of Bandhan Bank Ltd., IndusInd Bank Ltd, AU Small Finance Bank Ltd., IDFC First Bank Ltd. and Federal Bank Ltd. declined as sentiment was sapped following the RBI's intervention into RBL Bank Ltd.

• Analysts believe that the bank's explanation for the RBI action 'unsatisfactory'.

Shares of Greenpanel Industries Ltd. rose as much as 2.39% to Rs 414.8 apiece after the company resumed manufacturing operations at its MDF plant in Rudrapur, Uttarakhand.

• The refiner was repaired and defective components were changed.

• The normal operations have now been restored and the plant is running at full capacity.

• The loss incurred due to the breakdown of refiner and shut down of the plant are covered under insurance policy.

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 11.5%

Source: Exchange Filing.

Maturities across Indian sovereign yield curve were little changed in Monday morning trading.

• The 5-year yield fell 0.7bps to 5.814%.

• The 10-year yield fell 0.5bps to 6.457%.

• The 20-year yield remained unchanged at 6.91%.

• The 5-year-10-year yield spread was 64.3bps, vs previous close 64bps.

Source: Bloomberg

• HFCL Ltd. has been recognised as the 'trusted source' by NSCS, a part of National Security Council.

• HFCL is now a trusted source for all Indian telecom service providers for sourcing their telecom active network products.

Source: Exchange Filing

• Foxconn's plant near Chennai in India will stay shut for three more days after it was set to end a week-long closure.

• The week-long closure was prompted by workers' protests over conditions, reports Reuters, citing an unidentified senior government official.

Shares of GMR Infrastructure Ltd. rose nearly 2% to Rs 43.45 apiece after the company's step down subsidiary GMR Airports Netherlands B.V. signed a shareholders' agreement and share subscription agreement with Angkasa Pura II (AP II) for the development and operation of Kualanamu International Airport in Medan, Indonesia.

The project scope include operation, development and expansion of the airport over a period of 25 years.

Of the seven analysts tracking the company, one maintained 'buy' and six maintained 'hold' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 4.7%.

• IndusInd bank has partnered the National Payments Corporation of India (NPCI) to offer real-time cross-border remittances to India using UPI IDs, for its Money Transfer Operator partners.

• IndusInd Bank is the first Indian bank to go live on UPI for Cross Border Payments/NRI remittances.

Source: Exchange Filing

Shares of Kabra Extrusiontechnik Ltd. surged over 13% in intraday trade to a record Rs 403.7 apiece, after the company announced plans to raised Rs 300 crore in debt and equity to expand its battery division Battrixx.

According to a company statement, the board has approved raising Rs 100 crore through the issuance of warrants to promoters and foreign investors and Rs 200 crore in borrowings to shore up working capital.

The funds will help Battrixx to ramp up its production to 7,00,000 packs per year by the end of FY2024 from 1,00,000 packs per year right now. The ramp up in production is done to meet the demand of batteries for the EV industry and energy storage applications.

Trading volume on the stock was 5.3 times the 30-day average volume, for this time of the day. The relative strength index on the stock was at 72, suggesting it may be overbought.

• PI Industries raised to 'buy' from 'accumulate' at Prabhudas Lilladher; price target at Rs 3,470.

• UPL raised to 'buy' from 'hold' at Prabhudas Lilladher; price target at Rs 910.

• Bayer CropSciencce raised to 'buy' from 'accumulate' at Prabhudas Lilladher; price target at Rs 5,700.

Source: Bloomberg

Shares of Lupin rose over 2% after the company received approval from the U.S. FDA for its abbreviated new drug application (ANDA) Sevalamer Carbonate for Oral suspension, 0.8 gram and 2.4 gram packets. In an exchange filing on Saturday, Lupin said it received the nod to market generic equivalent of Renvela.

• Sevalamer Carbonate had an estimated annual sales of $51.7 million in the U.S., according to IQVIA.

• The drug is used to control phosphorous levels in patients with chronic kidney disease.

• The product will be manufactured at Lupin's Goa facility.

Of the 42 analysts tracking the company, 21 maintained 'buy', 11 maintained 'hold' and 10 maintained 'sell' recommendations. The overall consensus price of analysts tracking by Bloomberg implied an upside of 8.7%.

HP Adhesives Ltd.'s pre-market discovery price at Rs 319 vs issue price of Rs 274

Source: Bloomberg

India's stock benchmarks opened lower, dragged by losses in banking, realty and oil and gas stocks, amid rising concerns over the economic impact of omicron variants as cases surge globally.

The S&P BSE Sensex fell 0.78% to 56,678.32. The NSE Nifty 50 declined by similar magnitude to 16,878.65.

The broader indices almost mirrored their larger peers with S&P BSE MidCap shedding 1% and S&P BSE SmallCap slipping 0.75%. Barring S&P BSE Healthcare, S&P BSE Utilities and S&P BSE Power, all the other 16 sectoral indices compiled by the BSE Ltd. decline with S&P BSE Realty shedding over 1.8%. S&P BSE Finance and S&P BSE Banked fell over 1%.

The market breadth was skewed in the favour of bears. About 1,070 stocks advanced, 1,411 declined and 114 remained unchanged.

• Essel Group Founder Subhash Chandra is likely to lose his bungalow located in Delhi and his family's control of Dish TV amid a legal battle with Yes Bank over unpaid loans, Mint newspaper reported, citing court orders.

• Chandra had pledged his bungalow located close to India's top court in addition to pledging his family's 25% holding in Dish TV to borrow money from Yes Bank.

Indian bonds may continue to remain under pressure as the central bank continued to sell notes in the secondary market and it asked underwriters to rescue a bond sale on Friday.

• RBI to hold Rs 2 lakh crore 3-day reverse repo auction on Monday.

• USD/INR fell 0.3% to 75.0188 on Friday, fell 1.4% last week, the most since August 2020.

• 10-year yields little changed at 6.46% on Friday, rose 5bps last week.

• Global funds sell net Rs 715 crore of India stocks Friday: NSE

• They sold Rs 110 crore of sovereign bonds under limits available to foreign investors and withdrew Rs 331 crore of corporate debt.

• State-run banks bought Rs 121 crore of sovereign bonds on December 24: CCIL data. Foreign banks sold Rs 2,030 crore of bonds.

Source: Bloomberg

• Apollo Hospitals downgraded to 'hold' from 'add' by ICICI Securities; price target at Rs 4,994 apiece.

• Thyrocare Technologies upgraded to 'buy' from 'hold' by ICICI Securities; price target at Rs 1,231 apiece.

Source: Bloomberg

• Balkrishna Industries: Centrum Broking initiated coverage of the stock with a 'buy'; price target at Rs 2,631 apiece.

• RBL Bank downgraded to 'sell' from 'hold' by ICICI Securities; price target at Rs 130.

• Aster DM Healthcare upgraded to 'buy' from 'add' by ICICI Securities; price target at Rs 226.

Source: Bloomberg

• JK Cement downgraded to 'add' from 'buy' by Spark Capital Advisors; price target at Rs 3,525.

• CEAT: Centrum Broking initiated coverage of the stock, with a 'buy'; price target at Rs 1,270.

• Apollo Tyres: Centrum Broking initiated coverage of the stock with a 'buy'; price target at Rs 272.

Source: Bloomberg

• Shares of India's small private banks may be active after the central bank appointed a new director on RBL Bank's board.

• In focus: DCB, City Union Bank, Karnataka Bank, Karur Vysya Bank, Federal Bank.

• Billionaire investors Rakesh Jhunjhunwala and Radhakishan Damani approached the RBI to buy a 10% stake in RBL Bank, CNBC-TV18 reported, citing people it did not identify.

Most Asian stocks fell on Monday, while U.S. equity futures rose, amid rise in coronavirus cases due to omicron variant and a pledge of greater economic support from China’s central bank.

Shares in Japan retreated, while South Korea fluctuated. S&P 500 and Nasdaq 100 contracts gained following an all-time high for U.S. stocks on Thursday before the Christmas break.

The Singapore-traded SGX Nifty, an early indicator of India's Nifty 50 Index's performance, fell 0.24% to 16,957.50, as of 6:55 a.m.

The U.S. 10-year Treasury yield, crude oil and gold slipped. A dollar gauge edged up, and Bitcoin was trading at about $51,000 after a steady weekend.

Stocks To Watch

• RBL Bank: The RBI appointed an additional director on RBL Bank's board, and MD and CEO Vishwavir Ahuja went on 'medical leave'. Bank says the events are not a reflection of its financial performance. Interim MD and CEO Rajeev Ahuja says the regulator had full faith in bank's management and its financial position.

• GMR Infrastructure: GMR Airports Netherlands, a step-down subsidiary of GMR Airports Ltd. signed the shareholders’ agreement and share subscription agreement with Angkasa Pura II for the development and operation of Kualanamu International Airport in Medan, Indonesia.

• Adani Transmission: Awarded 400 KV Karur transmission project for evacuation of renewable power at estimated capex of Rs 200 crore. Received letter of intent for the acquisition of a renewable energy evacuation system under Khavda-Bhuj Transmission Ltd. at an estimated capex of Rs 1,200 crore.

• Dish TV, Yes Bank: Promoters of Dish TV filed a petition seeking SEBI to refrain Yes Bank from voting in Dish TV's AGM.

• HP Adhesives: To list on the bourses on Monday. The issue was subscribed 20.96 times.