Nifty, Sensex Gain After Volatile Session; Banking, Tech Stocks Advance
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Nifty, Sensex Gain After Volatile Session; Banking, Tech Stocks Advance
India’s key equity benchmarks edged higher, after swinging between gains and losses in the session with banking and I.T. stocks offsetting losses in metal and telecom stocks.
The S&P BSE Sensex closed with gains of 0.23% at 54,402.85. The 30-stock index rose 0.57% and fell 0.28% in intraday trade. The NSE Nifty 50 Index added 0.12% to 16,258.25 after trading between 16,200 and 16,300 for the bulk of the session.
The broader markets underperformed the larger peers. The BSE MidCap shed over 1% while the BSE SmallCap declined nearly 0.75%. Fifteen out of the 19 sectoral indices compiled by the BSE Ltd. declined with metal index falling over 1.5% and BSE Telecom shedding 1.34%
The market breadth was skewed in favour of bears. About 1,291 stocks advanced, 2,045 declined and 140 remained unchanged on the BSE.
"After a sharp rally last week, the Nifty is consolidating in the range of 16,300-16,150 level. However, the larger breakout continuation texture is still in the positive side and could continue in the short run. For the day traders, the 16,180/16,150 level would be the strong support, and as long as it's trading above the same the uptrend is intact. On the other hand, the 16,300 level would be the immediate hurdle for Nifty and above the same the continuation formation is likely to continue up to 16,350-16,375 levels", Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities Ltd. wrote in a note.
Balrampur Chini Pares Losses On Nod For Share Buyback
Shares of Balrampur Chini Mills pared most of their losses after it announced a share buyback.
The company's board approved a Rs 215.26 crore share buyback at a price not exceeding Rs 410 per equity share.
Meanwhile, the sugar maker's net profit declines 67.25% QoQ in the June quarter.
June Quarter numbers (Consolidated, QoQ)
Net profit at Rs 76.92 crore vs Rs 235.50 crore
Revenue at Rs 1,140.44 crore vs 1,019.35 crore
Total expenses at Rs 1,048.83 crore vs Rs 724.51 crore
Other income at Rs 5.24 crore vs Rs 7.89 crore
Piramal Enterprises Gains For The 10th Consecutive Session
Shares of Piramal Enterprises Ltd. gained 7.19% to Rs 2,858 apiece, extending the gaining streak for the tenth consecutive session. Piramal Enterprises reported sequential uptick in net income in the first quarter on Friday.
June Quarter Results (Consolidated, QoQ)
Net income at Rs 533.79 crore vs net loss of Rs 510.39 crore
Revenue at Rs 2,908.68 crore vs Rs 3,401.56 crore
Total costs at Rs 2,492.97 crore vs Rs 2,705.46 crore
Other income at Rs 102.92 crore vs Rs 164.42 crore
Motilal Oswal
Maintains ‘buy’ with the target price hiked to Rs 3,100 from Rs 2,150
Meaningful decline in debt and progressively lower cost of borrowings aided earnings.
Financial Services asset quality remained largely stable.
Robust growth in pharma segment driven by Complex Hospital Generics (CHG) and India Consumer Products (ICP) businesses.
Healthy momentum in Contract Development and Manufacturing Organisation (CDMO) on the back of favourable demand in API/Sterile Fill-Finish space.
Company has strengthened its balance sheet by running down its wholesale loan book and reduced the top exposures.
Expect the company to make meaningful inroads into retail.
ICICI Securities
Downgrades to ‘hold’ from ‘buy’ with the target price raised to Rs 2,797 from Rs 2,230 earlier.
June quarter performance surprised positively on stable stress pool.
Strong performance in pharma sector a major positive.
Improving visibility towards building a diversified book coupled with stable stress in wholesale segment, has triggered re-rating of financials services business.
Key risks
Deferment of integration of DHFL.
Integration uncertainties and challenges including higher mark downs.
CITI
Maintain ‘buy’ with the target price raised to Rs 3,100.
Stable GS3 assets, minimal incremental stress, drop in cost of funds remain the key positives.
Pharma revenue and margin declined qoq largely due to seasonality.
DHFL acquisition is at an attractive valuation and will transform the business.
Of the 5 analysts tracking the company, 4 maintained ‘buy’ and 1 analyst maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 0.9%
Indian Equity Funds See Highest Inflows In At Least 2 Years: AMFI
Inflows into Indian equity funds climbed to at least a two-year high in July, data from the Association of Mutual Funds in India show.
Net inflows into stock funds totaled Rs 22,583.5 crore.in July compared with inflow of Rs 5,988.2 crore in June
Multi-cap funds: Inflow of Rs 164.6 crore vs inflow of Rs 209.5 crore in June
Large-cap funds: Inflow of Rs 593 crore vs inflow of Rs 547.3 crore in June
Mid-cap funds: Inflow of Rs 1,487.9 crore vs inflow of Rs 1,729.1 crore in June
Small-cap funds: Inflow of Rs 1,778.7 crore vs inflow of Rs 705.1 crore in June
Sona Comstar Hits Record High As Nomura Initiates Coverage With A 'Buy' Recommendation
Shares of Sona BLW Precision Forgings Ltd. jumped to a record high after Nomura initiated coverage on the auto parts maker with a ‘buy’, saying it has one of the highest growth rates and return on equities among global peers that supply to electric vehicles, and large potential opportunity with rising electrification in both India and across the world.
Mid-Market Update
India's key stock benchmarks pared most of their morning gains as decline in metal producers offset the advance in auto and bank stocks.
The S&P BSE Sensex added 0.10% to 54,334.27. The NSE Nifty 50 Index was also almost unchanged at 16,250.85. Both the indices were up over 0.5% earlier.
The broader markets underperformed their larger peers with both the BSE MidCap and BSE SmallCap shedding over 0.6%. Thirteen out of the 19 sectoral indices compiled by the BSE Ltd. declined with BSE Telecom and BSE Utilities indices leading the losses.
The market breadth was skewed in favour of bears. About 1,307 stocks advanced, 1,923 declined and 134 remained unchanged on the BSE.
MRF Gains Nearly 2% On June Quarter Beat
Shares of MRF Ltd. gained nearly 2% to Rs 79,200 apiece after reporting net income for the first quarter that beat the average analyst estimate.
June Quarter Results (Consolidated, QoQ)
Net income at Rs 165.58 crore vs estimate of Rs 151 crore (Bloomberg Consensus)
Revenue at Rs 4,183.96 crore vs estimate of Rs 4,020 crore
Total costs at Rs 4,054.24 crore vs Rs 4,425.21 crore
Other income at Rs 92.62 crore vs Rs 57.74 crore
Of the 11 analysts tracking the company, 5 maintained ‘buy’, 2 maintained ‘hold’ and 1 analyst maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 4.2%.
India Said To Probe Parsvnath Developers On Allegations Of Fraud
The corporate affairs ministry is investigating the accounts of Parsvnath Developers Ltd. for alleged financial irregularities, fraudulent practices, default on bank deposits and siphoning of funds, people with knowledge of the matter said.
The developer defaulted about 25 billion rupees ($340 million) to banks, financial institutions and home buyers from whom the company had taken advances, the people said asking not to be identified as the matter is under investigation.
The serious fraud investigation office will also probe the contingent liability of 35 billion rupees on the books of the company which, the people said, is abnormally high.
The government last year inspected the books of accounts of the company after receiving complaints from beleaguered home buyers.
A spokesperson for the corporate affairs ministry did not answer calls made to his mobile phone while a mail sent to the company remained unanswered.
CarTrade, Nuvoco Vistas IPOs See Weak Investor Interest On Launch
The initial public offerings of CarTrade Tech Ltd. and Nuvoco Vistas Corp. Ltd. launched today but saw subdued interest across all reserved portions.
The IPOs were subscribed 0.32 and 0.13 times when the markets closed Monday, in stark contrast to the four IPOs last week whose retail portion was fully subscribed within the first two hours.
Follow the subscription updates live:
Torrent Power Declines The Most In 15 Weeks
Shares of Torrent Power Ltd. slipped 6.04%, the steepest decline in 16 weeks, to Rs 446.35 apiece, after reporting net income for the first quarter that missed the average analyst estimate post market hours Friday.
June Quarter Numbers
Net income at Rs 207.78 crore vs estimate of Rs 339 crore (Bloomberg Consensus)
Revenue at Rs 3,098.91 crore vs estimate of Rs 3,094 crore
Other income at Rs 35.32 crore vs Rs 32.41 crore QoQ
Total costs at Rs 2,862.30 crore vs Rs 2,661.26 crore QoQ
Of the 13 analysts tracking the company, 7 maintained ‘buy’, 4 maintained ‘hold’ and 2 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg hinted at an upside of 0.2%.
Divi’s Slips Post Q1 Miss Even As Most Brokerages Stay Optimistic
Shares of Divi’s Laboratories Ltd. shed 1.73% after it reported net income for the first quarter that missed the average analyst estimate on saturday.
June Quarter Numbers (Consolidated, QoQ)
Net income at Rs 557.11 crore vs estimate of Rs 582 crore (Bloomberg Consensus)
Revenue at Rs 1,960.64 crore vs estimate of Rs 2,001 crore
Total expenses at Rs 1,182.13 crore vs Rs 1,142.22 crore QoQ
Other income at Rs 35.97 crore vs Rs 23.52 crore QoQ
Here’s what the brokerages made out of Divi’s Laboratories Q1 numbers
Jefferies
Recommends ‘buy’ with the price target increased to Rs 5,624 from Rs 5,295.
Focus on backward integration and cost efficiencies continue to aid margins.
Most of the capex for six future growth engines of Divi’s Laboratories is already done.
Gradual reduction of China dependence and capabilities in Molnupiravir drug to drive growth in subsequent quarters.
Company to start work on the Kakinada project which is also expected to drive growth.
Motilal Oswal
Reiterates ‘buy’ with the target price raised to Rs 5,750 from Rs 5,260.
In-line June quarter earnings led by strong off-take in the Custom Synthesis segment.
Back integration efforts over the past 2-3 years led to better profitability in June quarter.
Company well poised in terms of both product development and manufacturing capacity to sustain superior return ratios over the next 4-5 years
Remain positive on the company due to its strong chemistry skill sets and continued cost reduction in production driving market share and profitability.
ICICI Securities
Downgrades to ‘hold’ from add with the target price raised to Rs 4,916 from Rs 4,436 earlier.
Growth driven primarily by custom synthesis business with generics declining due to volatility.
Company confident of maintaining strong growth in APIs, carotenoids and custom synthesis business.
Key Risks: Higher competition in API space and regulatory hurdles.
Of the 20 analysts tracking the company, 15 maintained ‘buy’, 3 maintained ‘hold’ and 2 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 1.9%.
Rolex Rings Debuts At 38.2% Premium Over IPO Price
Shares of Rolex Rings gained on debut after its initial public offering witnessed strong investor interest. The stock listed at Rs 1,244 apiece on the National Stock Exchange, a 38.2% premium to its issue price of Rs 900.
Future Group Stocks Extend Decline Post Apex Court Verdict
Future group extended decline after the Supreme Court ruled in favour of Amazon and restrained the Reliance Retail-Future Retail deal on Friday.
Shares of Future Retail Ltd. declined 9.99% to Rs 47.30 apiece while Future Consumer and Future Enterprises shed over 15% and 10% respectively. Future Lifestyle Fashions and Future Supply Chain also tumbled nearly 10%.
Future Retail has said that the judgement addressed two limited points related to enforceability of the Emergency Arbitrator’s order and not the merits of the dispute. The company confirmed that it will seek remedies available in law.
Nomura: Future Court Order To Delay But Not Derail Reliance Deal
Indian top court’s order on Friday halting the purchase of Future Retail by Reliance industries will likely delay the deal’s progress but not derail it, Vishal Kulkarni, an analyst at Nomura International, wrote in a note.
Nomura expects the approvals from the Indian authorities for the deal will be on hold until further clarity emerges from the Singapore International Arbitration Centre, and any follow-up steps in the Indian courts.
Even if the SIAC stops the deal, the matter will still be debated in the Indian courts and the final decision from the Indian courts will eventually decide the fate of the Reliance deal, according to Kulkarni.
Given the potential loss of employment and exposure of the Indian banks involved, the Indian courts could request Amazon to provide an alternative plan to sustain Future Retail’s operations and capital structure.
Nomura expects the company to pay its semi-annual coupon on its dollar bonds due 2025 within the grace period. It’s neutral on the bonds as it sees the risk-reward as fairly balanced at this moment.
Nalco Slips 9% Post June Quarter Miss
Shares of National Aluminium Company Ltd. shed 8.70% to Rs 86 apiece after reporting net income for the first quarter that missed the average analyst estimate post market hours on Friday.
Nalco Q1FY22 (Consolidated, QoQ)
Net profit at Rs 347.48 crore vs estimate of Rs 441 crore (Bloomberg consensus).
Revenue at Rs 2,474.55 crore vs estimate of Rs 2,580 crore.
Ebitda at Rs 580.78 crore Vs Rs 944.01 crore.
Margin at 23.5% Vs 33.5%.
Motilal Oswal
Recommends ‘buy’ with the target price increased to Rs 107 from Rs 94.
Higher-than-expected costs and miss on volumes dragged Q1 numbers.
With the rise in spot LME aluminium prices rising, the near-term profitability outlook is strong.
Expect higher aluminium prices to absorb the cost shock and lead to improved margin in subsequent quarters.
With integrated mining operations, Nalco is the best play on higher LME prices.
Kotak Institutional Equities
Maintains 'sell' with the target price raised to Rs 80 from Rs 70.
Lower volumes and higher cost weighed on Ebitda.
High cost structure and uncertain capital allocation likely to continue to remain a drag on value creation.
Aluminum margins were flat QoQ and failed to reflect sequentially higher metal prices.
Of the 10 analysts tracking the company, 6 maintained ‘buy’, 1 maintained ‘hold’ and 3 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 4.9%.
Mukand Has 15% Of Equity Change Hands In 7 Block Deals
Mukand Ltd. had about 21.4 million shares ( or 15% equity) change hands in seven large trades on NSE, according to data compiled by Bloomberg.
The stock gained 1.16% to Rs 153.25 apiece and extended gains to second day.
Buyers, sellers not immediately known.
So far this year, the stock is up over 130% compared to 14.9% gains for the Sensex. The company will report the June quarter earnings on Wednesday.
Opening Bell: Sensex, Nifty Edge Higher, Future Group Stocks Extend Decline
India’s equity benchmarks headed for fresh records, after closing at new highs on three days last week, helped by gains in information technology stocks.
The S&P BSE Sensex gained 0.34% to 54,462.75. The NSE Nifty advanced by a similar magnitude and hovered around the 16,300 mark.
The BSE MidCap index shed 0.24% while BSE SmallCap almost mirrored its larger peers. Fourteen of the 19 sectoral indices traded with gains with BSE Realty adding nearly a percent.
The market breadth was skewed in favour of the bulls. About 1,680 stocks advanced, 903 declined and 99 remained unchanged.
SGX Nifty Slips Amid Weak Asian Trade
Asian stocks drifted and precious metals tumbled Monday as traders weighed Friday’s strong employment data that fueled expectations the Federal Reserve will move closer to pulling back stimulus.
Shares fluctuated in Hong Kong and China, and were little changed in South Korea. U.S. futures declined. Japanese markets are closed for a holiday.
India’s SGX Nifty 50 Index futures for Aug. delivery fell 0.2% to 16,240.00, while MSCI Asia Pacific Index little changed. The NSE Nifty 50 Index fell 0.4% Friday to 16,238.20.
Gold slumped to the lowest since March as the prospect of higher rates makes bullion less attractive relative to other assets. Silver dropped to its lowest since November.
Crude oil extended last week’s decline -- its worst since October -- on concern the delta virus strain will hamper demand growth. Commodity currencies like the Australian dollar underperformed.
The dollar edged higher. On Friday, data showed U.S. job growth accelerated in July by the most in almost a year and the unemployment rate declined, illustrating momentum in a labor market grappling with hiring challenges.
The U.S. 10-year Treasury yield climbed to about 1.3% Friday. Cash Treasuries won’t trade in Asia because of the holiday in Tokyo. Chinese bond yields gained after inflation data came in above expectations.
Elsewhere, Bitcoin traded near $43,000 after hitting the highest since May over the weekend.
Back home, Bank of Baroda, Zee, DCB Bank, Divi’s Lab, Ujjivan Small, Tata Power, SAIL, Bharat Electronics may react as the companies reported quarterly results after the market closed Friday. Shree Cement, MRF, Indian Hotels, Gujarat Petronet are among the companies scheduled to report earnings Monday. Hindustan Zinc, Shree Cement, Astrazeneca India are holding their annual shareholders’ meetings.
Rolex Rings to debut after IPO. Foreign investors sold net Rs 543 crore of stocks on Aug. 5, according to NSDL website.