Sensex, Nifty Close At Record After Logging Gains For The Fifth Day

Infosys Ltd. reported net income for the September quarter that beat the average analyst estimate.

Second Quarter Results

• Net income at Rs 5,428 crore vs estimate of Rs 5,288 crore (Bloomberg Consensus)

• Revenue at Rs 29,602 crore vs estimate of Rs 29,365 crore

• Financial services revenue at Rs 9,566 crore vs estimate of Rs 9,607 crore

• Retail segment revenue at Rs 4,330 crore vs estimate of Rs 4,331 crore

• Manufacturing segment revenue at Rs 3,219 crore vs estimate of Rs 2,950 crore

• Life sciences segment revenue at Rs 2,103 crore vs estimate of Rs 1,979 crore

• Total costs at Rs 22,678 crore vs Rs 21,342 crore QoQ

• Operating margin at 23.6% vs estimate of 22.9%

• Dividend per share: Rs 15

2022 Forecast

• Infosys sees revenue growth in the range of 16.5-17.5%, revised upwards from the earlier band of 14-16%

• Infosys expects operating margin in the range of 22-24%, vs estimated 23.3%

Commentary & Context

• Revenue guidance for FY22 revised upwards.

• Margin guidance for FY22 retained

Wipro Ltd. reported net income for the second quarter that beat analyst estimate.

September Quarter Results (Consolidated, QoQ)

• Net income at Rs 2,930.5 crore vs estimate of Rs 2,875 crore (Bloomberg Consensus)

• Revenue at Rs 19,667.4 crore vs Rs 18,252.4 crore QoQ

• Total costs at Rs 16,416.1 crore vs Rs Rs 15,172.7 crore QoQ

• Other income at Rs 504.7 crore vs Rs 577.9 crore

• Wipro sees sequential revenue growth of 2-4%

India’s equity benchmarks closed at record and rose for the fifth consecutive session, aided by gains in auto, power, metal and information technology stocks.

The S&P BSE Sensex index rose 0.75% to 60,737.05, a record close for the 30-stock index. The 30-stock index hit a record 60,836.63 in intraday trade. The NSE Nifty 50 Index also advanced by a similar magnitude to close at 18,161.75, a record close for the index. The 50-stock gauge hit a record 18,197.80 in intraday trade.

The S&P BSE MidCap index outperformed its broader peers with gains over 1.6%, while the S&P BSE SmallCap index mirrored Sensex and Nifty, rising 0.63%. Barring S&P BSE Realty index, all the other 18 sectoral indexes compiled by BSE Ltd. advanced, with the S&P BSE Auto index gaining nearly 3.5%.

The market breadth was skewed in favour of bulls. About 1,766 stocks advanced, 1,569 declined and 141 remained unchanged.

Shipping Corporation: Niti Aayog concurs to the proposal of incorporation of subsidiary company to hive off non-core assets of the company.

Source: Exchange Filing

• Central Warehousing Corporation will be listed after seeking approval of cabinet.

• Listing will help raise funds for government as well as the company.

Source: People Familiar With The Matter

Central Warehousing Corporation provides warehousing and logistics solutions.

The government has proposed to monetize 39% of it by 2025 as part of its recently unveiled asset monetization plan.

Shares of Thomas Cook India Ltd. rose nearly 9% in intraday trade to Rs 85.5 apiece, after the company inked a strategic deal for 3 years with Air Arabia to curate and distribute, Air Arabia holidays in India.

• Thomas Cook said in an exchange filing that it will deliver customisable, air-inclusive holidays through a technology platform built by Thomas Cook India and its group company SOTC Travel Ltd.

• The partnership also expands Thomas Cook's reach with access to Air Arabia's customer base in India.

• Air Arabia operates in 12 Indian cities and has an extensive network of over 170 international tourist destinations.

Source: Exchange Filing

Shares of Grasim Industries Ltd. rose over 4.6% to Rs 1,713.25 apiece, after the company executed supplemental share subscription agreement with Renew Green Energy Solutions Pvt Ltd. & Renew Surya Uday Pvt. Ltd. and a power purchase agreement with Renew Surya Uday Pvt. Ltd.

In an exchange filing, Grasim Industries said that the reason for entering into the agreement is to operate and maintain 16.68 Mega Watt Wind-Solar Hybrid power plant in Gujarat. The power developed in the plant will be supplied exclusively to Grasim under the captive rules and the plant will be operated by Renew Surya Uday Pvt. Ltd.

Grasim will hold 26% of the share holding while Renew Green Energy will have 74%, meaning that Grasim will contribute Rs 29.82 crore of the total capital of Rs 114.70 crore while Renew will contribute Rs 84.88 crore.

Source: Exchange Filing

Tata Chemicals Ltd. informed the exchanges that CARE Ratings has reaffirmed the credit ratings of the company and reduced the rated amount based on the company's request.

• In an exchange filing, Tata Chemicals said that CARE Ratings maintained CARE AA+ Stable (Double A Plus; Outlook: Stable) on the Long Term Bank Facilities for an amount of Rs 1,300 crore (Rs 1,897 crore earlier).

• The credit rating on the Short Term Bank Facilities of Rs 2,000 crore has been reaffirmed as CARE A1+ (A One Plus).

Shares of Tata Chemicals rose nearly 18% in intraday trade to Rs 1,144.3 apiece. Tata Groups stocks advanced in Wednesday's session following TPG's Rs 7,500 crore in the EV-arm of the Tata Motors.

• High Court directs Invesco to file a reply by October 20.

• Zee had approached high court with a plea to declare the requisition notice sent by Invesco, OFI as “illegal and invalid.

• Matter to come up for hearing on Oct 21.

Shares of Karur Vysya Bank Ltd. rose 1.96% in intraday trade to Rs 49.4 apiece, after the Reserve Bank of India authorised the lender to collect direct taxes on behalf of Central Board of Direct Taxes (CBDT).

In an exchange filing, Karur Vysya Bank said that it initiated the integration process with CBDT. Upon completion of the process, customers of the bank can remit their direct taxes through any branch, net banking and DLite (mobile app of Karur Vysya Bank).

Of the 12 analysts tracking the company, 10 maintained 'buy', one maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 36.6%

Shares of Sun Pharma Advanced Research Co. rose for the fifth straight day, extending the longest winning streak since the period ended April 16, 2020.

Sun Pharma Advanced has gained a total of 5.9% during the streak while the S&P BSE Sensex Index increased 2.7%.

• Shares of Hindustan Zinc Ltd. rose nearly 7% in intraday trade to Rs 341 apiece.

• Trading volume on the stock was 35% above the 20-day average for this time of the day.

• Hindustan Zinc trades at 13 times its estimated earnings per share for the coming year.

• Analysts have 'five' buy, eight 'hold' and nine 'sell' recommendations on the stock.

Coal India Ltd.'s supplies to power plants rise as the company accelerates shipments to avert an energy crisis

Shipments to power stations surpassed 1.6 million tonnes a day on Monday, compared with 1.5 million over each of the previous four days, according to a company spokesperson

Source: Bloomberg

Shares of ABB India Ltd. and JSW Steel Ltd. rose after ABB India was commissioned by JSW Steel to provide to provide complete electrification at the world's longest conveyor system at their plant in Bellary, Karnataka.

In an exchange filing, ABB India said that it will provide automation solutions for the conveyor systems through its 'Made in India' products.

India's stock benchmarks advanced to record, aided by gains in auto, metal, industrial stocks as they shrugged off the mixed global cues.

The S&P BSE Sensex rose 0.69% to 60,697.36. The 30-stock index hit a record 60,751.12 in intraday trade. The NSE Nifty 50 gained by a similar magnitude to 18,141.50. The 50-stock gauge hit a record 18,162.70 in intraday trade.

The broader indices almost mirrored their larger peers with both S&P BSE MidCap and S&P BSE SmallCap indexes rising over 0.75%. Barring S&P BSE Realty index, all the other 18 sectoral indices compiled by the BSE Ltd. advanced, with S&P BSE Auto index adding over 3%.

The market breadth was skewed in favour of bulls. About 1,862 stocks advanced, 1,374 declined and 155 remained unchanged.

Shares of Brahmaputra Infrastructure Ltd. surged 20% to Rs 34.55 apiece, on the BSE, after the company said that it received a Letter of Acceptance for a contract worth Rs 293.88 crore.

The contract, won along with Brahmaputra's JV partner, was awarded by Assam Skill Development Mission, and pertained to the design and construction of ASU campus, facilities, specialised laboratory buildings and special service facility buildings, among others.

Source: Exchange Filing, BSE

• Shares of Angel Broking Ltd. rose 10.27% in intraday trade, the most in over two months, to Rs 1,592.75 apiece.

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

• The relative strength index on teh stock was above 70, indicating it may be overbought.

• Angel Broking trades at 26 times its estimated earnings per share for the coming year. Analysts have two 'buy', no 'hold' and no 'sell' recommendations on the stock.

India’s automobile manufacturers and component makers are mostly higher after Tata Motors agreed to sell as much as a 15% stake in its electric-vehicle business to a TPG fund and other investors. 

Tata Motors leads rally, rising as much as 20%; followed by Ashok Leyland Ltd. and Mahindra & Mahindra Ltd.

Shares of some Tata Group companies also rose as the the salt-to-software conglomerate plans to localize its EV supply chain with participation from its units

Ultratech Cement Ltd. has announced signing a non-binding MoU with Punjab Renewable Energy Systems Pvt. Ltd (PRESPL), as part of the company's plans to decarbonize its operations.

PRESPL is India's largest biomass aggregation and densification company.

In an exchange filing, Ultratech Cement said that PRESPL will aid the company in replacing coal-based systems with biomass-based processes. Biomass-based projects will be executed at three of Ultratech's units. The implementations of the three projects is estimated to generate annual carbon savings of 1,50,000 tonnes of carbon dioxide.

PRESPL will also build a supple chain of agricultural waste to be utilized as biomass energy in the kilns of Ultratech's integrated units.

Shares of Ultratech Cement Ltd. rose over 1.6% to Rs 7,369 apiece in intraday trade. Of the 44 analysts tracking the company, 36 maintained 'buy', six maintained 'hold' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 11.6%

• IIFL has cut the recommendation on PNB Housing Finance Ltd. to 'add' from 'buy'

• Price target at Rs 670 from Rs 850 earlier, with an implied return of 3.37%

• Of the 15 analysts tracking the company, nine maintained 'buy', four maintained 'hold' and three maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 2.3%

Source: Bloomberg

SecureKloud Technologies Ltd., a cloud solutions provider, has announced approval to list its step-down subsidiary, Healthcare Triangle Inc. in NASDAQ.

Through this IPO, Healthcare Triangle plans to raise up to a total $15 Million including an over-allotment of $2 Million. The IPO proceeds will be utilised for potential acquisitions, working capital and R&D, the company said in an exchange filing.

• India’s rupee is set to gain for the first day in four amid a rally in stocks that are headed for new record highs. Bonds advanced after a report late Tuesday showed retail inflation eased. 

• USD/INR falls 0.1% to 75.4350 on Wednesday after rising to its highest since July last year on Tuesday

• 10-year yields fall by 1bp to 6.32% on Wednesday

Source: Bloomberg

Most maturities along the India sovereign yield curve were little changed, while 5-year yields fell in Wednesday morning trading.

• The 3-year yield was little changed at 4.99%

• The 10-year yield fell 0.7bps to 6.319%

• The 14-year yield fell 0.8bps to 6.824%

• The 3-year-10-year yield spread was 132.9bps, vs previous close 133.5bps

Shares of airlines stocks, SpiceJet Ltd. & InterGlobe Aviation Ltd. rose after the Ministry of Civil Aviation allowed airlines to operate at 100% of their scheduled capacity from October 18, in an order Tuesday.

Airlines are operating at 85% capacity right now.

Shares of Power Grid Corp of India Ltd. rose nearly 3% in intraday trade to Rs 199 apiece after the company's board gave investment nod for setting up of EV charging state in Navi Mumbai at an estimated cost of Rs 14.23 crore. In an exchange filing post market hours Tuesday, Power Grid confirmed approving the incorporation of wholly owned subsidiary to undertake telecom and technology business of Power Grid.

Of the 28 analysts tracking the company, 20 maintained 'buy', six maintained 'hold' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 2.9%. The relative strength index on the stock was 73, suggesting that it may be overbought. Trading volume on the stock was 1.8 times the 30-day average volume for this time of day.

RattanIndia Enterprises Ltd. backed Revolt, market leader in electric motorcycles, will expand dealership network ahead of the festive season. New dealerships will be opened in three major cities, Bengaluru (October 18), Jaipur (October 25) and Surat (October 28). In an exchange filing, RattanIndia said it will expand its network further in the coming months.

• There will additional incentives for customers in Surat and Jaipur because Gujarat and Rajasthan have announced incentives for EV customers.

• Customers get rebates upto Rs 20,000 on electric bikes in Gujarat.

• Customers get incentives upto Rs 10,690 and refund of 2.5% state GST in Rajasthan.

Hero MotoCorp Ltd. has partnered with Gilera Motors Argentina to reinvigorate and expand its operations in the South American country.

As part of the agreement, Gilera Motors will be the exclusive distributor for the sale and service of Hero MotoCorp motorcycles and scooters in the country, according to an exchange filing by Hero MotoCorp.

The two companies have expansion plans to scale up sales and service network, including a flagship store in Buenos Aires.

Hero MotoCorp will launch a range of new motorcycles in Argentina, including Xpulse 200 and Hunk 160R.

Shares of Minda Industries Ltd. rose nearly 6% in intraday trade, the most in over seven weeks to Rs 814 apiece. Trading volume was quadruple the 20-day average volume for this time of day.

• The relative strength index on the stock was above 70, indicating it may be overbought.

• Minda Industries trades at 58 times its estimated earnings per share for the coming year.

• Analysts have 15 'buy', five 'hold' and two 'sell' recommendations.

The rise in shares of the automotive supplier to OEMs comes amid TPG investing Rs 7,500 crore in Tata Motors EV arm.

Shares of other component suppliers like Motherson Sumi, Bosch, Sona BLW have risen in trade as well

Shares of Centrum Capital Ltd. rose nearly 20% in intraday trade to Rs 47.9 apiece after the RBI issued a Small Finance Bank license to a consortium of Centrum Financial Services Ltd. and Resilient Innovations Pvt Ltd. (BharatPe). Centrum Financial Services is the small business lending arm of the Centrum group.

In an exchange filing post market hours Tuesday, Centrum Capital said that the new SFB has been incorporated as 'Unity Small Finance Bank'. Centrum's successful MSME and Micro Finance Businesses shall be merged into Unity Small Finance Bank.

This is the first time a new bank license has been issued by the RBI after a gap of nearly six years.

Trading volume on the stock was 21 times the 30-day average volume for this time of the day. The relative strength index on the stock was above 75, suggesting it may be overbought.

India's stock benchmarks opened higher and hit record highs, aided by gains in auto and banking stocks, amid mixed global cues as investors U.S. CPI report to assess the impact of elevation inflation on economic recovery.

The S&P BSE Sensex rose 0.36% to 60,503.69. The NSE Nifty 50 advanced by a similar magnitude to 18,068.75. Both the indices hit record highs in morning trade.

The broader indices almost mirrored their larger peers with the S&P BSE MidCap and S&P BSE SmallCap gaining over 0.5%. Barring S&P BSE Oil & Gas and S&P BSE Metal indexes, all the other 17 sectoral indices compiled by the BSE Ltd. advanced, with S&P BSE Auto index gaining over 2.3%.

The market breadth was skewed in favour of bulls. About 1,794 stocks advanced, 580 declined and 68 remained unchanged

India’s automobile manufacturers and component makers will be in focus after Tata Motors agreed to sell as much as a 15% stake in its electric-vehicle business to a TPG fund and other investors.

In Focus: Passenger vehicle makers led by Tata Motors, Maruti Suzuki, Mahindra, Ashok Leyland

Component suppliers: Motherson Sumi, Bosch, Sona BLW, Bharat Forge, Tube Investments, Minda Industries, Wabco India, Suprajit Engineering, Mahindra CIE

Indian government bonds may open higher after a report late Tuesday showed retail inflation grew at the slowest pace in five months. Traders also await a Rs 20,000 crore ($2.6b) auction of Treasury bills.

• Consumer prices rose 4.35% in September YoY, lower than 4.5% predicted in a Bloomberg survey and 5.3% in August

• 10-year yields fell 2bps to 6.33% on Tuesday

• USD/INR rose 0.2% to 75.5150 on Tuesday

Global funds sell net Rs 278 crore of India Stocks Tuesday: NSE

They sold Rs 70 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 93 crore of corporate debt

State-run banks sold Rs 355 crore of sovereign bonds on Oct. 12: CCIL data. Foreign banks bought Rs 152 crore of bonds

Nomura

• Upgrades Tata Motors to 'buy' from 'neutral', with the target price raised to Rs 547 from Rs 314 earlier, with an implied return of 29.98%

• Tata Motors needs to invest heavily in new technology to achieve its EV ambitions.

• Capital raise lends confidence of an investment-led growth path in the future.

• While the PV business would get fully captured in EV business in the long run, the PV ICE business still has potential to gain share.

• Raise our target EV/EBITDA multiple for JLR to 2x and add Rs 152 for the EV business to arrive at the higher target price of Rs 547.

Implications For Other Stocks

• Tata Motors' EV push could catalyse (i) capital infusion in EV business of other OEMs, (ii) electricification in India.

• Valuation potential will be realized by OEMs that are leaders in their segments.

• Mahindra & Mahindra plans to launch 2 EVs over the next 12 months. Maruti Suzuki India Ltd. may need to accelerate EV investments.

• Market share loss in the India CV market is a key downside risk

Morgan Stanley

• Tata Motors had 71% market share in India EVs in FY21.

• Tata Group (Tata Motors & group companies) can collectively make an impact in EV space, as passenger EVs, unlike electric two-wheelers, need heavy investment in platforms and charging infrastructure.

• Tata Motors expects India's public fast charging network to rise from 1,000 units in CY2021 to 45,000-50,000 units in CY2026.

• Tata Motors' EV company will leverage all existing investments and capabilities of Tata Motors and channel future investments in EVs, BEV platforms, advanced automotive technologies, charging infrastructure and battery technologies.

• Tata Motors expects that EVs will have a double-digit share in PV mix and EVs will have 20% share in sales in five years.

• EV company has sales up to Rs 600 crore currently and should reach EBITDA breakeven next year.

• EV subsidiary to be asset-light business as it (i) uses existing manufacturing capacity of PVs, (ii) uses existing PV brands and IP and (iii) uses Tata Motors' administrative infrastructure.

Reliance Retail is close to finalizing a deal to become the India franchisee for U.S.-based international clothing retailed Gap Inc., the Economic Times newspaper reported, citing people it did not identify.

Gap has been looking for a partner in India after its agreement with Arvind Fashions ended in 2020: Economic Times.

Reliance Retail did not respond to the newspaper's email, while Gap declined to comment on "rumours or speculation".