Sensex, Nifty Resume Drop After One-Day Breather

Indian equity benchmarks resumed declines after a one-day breather.

The S&P BSE Sensex ended 203 points or 0.55 percent lower at 37,114.88 after a volatile trade and the NSE Nifty 50 ended at 11,157, down 0.58 percent. The broader market index represented by the NSE Nifty 500 Index ended 0.57 percent lower.

The market breadth was tilted in favour of sellers. About 1,084 stocks fell and 659 shares advanced on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE declined, led by the NSE Nifty Metal Index’s 2.1 percent fall. On the flipside, the NSE Nifty Realty Index was the top sectoral gainer, up 0.32 percent.

Shares of Lupin fell as much as 2.9 percent to Rs 786.30 after announcing its March quarter results.

Key Earnings Highlights (Q4, YoY)

• Revenue up 9 percent to Rs 4,406 crore.
• Net profit at Rs 289 crore versus loss of Rs 783 crore.
• Ebitda up 23 percent to Rs 872 crore.
• Margin at 19.8 percent versus 17.6 percent.

Shares of Zee Entertainment Enterprises Ltd. recovered after falling 10 percent intraday. The stock is currently trading 4.5 percent lower.

The company clarified in a statement that the rumours pertaining to the resignation of one of its Board of Directors, are ‘completely baseless’ and ‘not true’.

Trading volume was almost quadruple its 20-day average, Bloomberg data showed.

About 20 lakh shares of Time Technoplast changed hands in two block deals, Bloomberg data showed. Buyers and sellers were not known immediately.

The National Stock Exchange imposed penalty and issued notices to more than 250 companies for non-compliance with certain provisions of SEBI, according to its statement.

The companies include Adani Ports & Special Economic Zone Ltd., Bharat Petroleum Corporation Ltd., Bharti Infratel Ltd., InterGlobe Aviation Ltd., Manappuram Finance Ltd. among others.

Shares of Jubilant FoodWorks rebounded and rose as much as 3.2 percent to Rs 1,239.95 after announcing its March quarter results.

Key Earnings Highlights (Q4, YoY)

• Net sales up 10.9 percent to Rs 865 crore.
• Net profit up 9 percent to Rs 74 crore.
• Ebitda up 15 percent to Rs 147 crore.
• Margin at 17 percent versus 16.4 percent.
• Exceptional loss of Rs 7.9 crore.
• Exceptional loss owing to subsidiary in Sri Lanka over closed stores.
• Same-store sales growth at over 6 percent.

Indian equity benchmarks erased gains, dragged by Yes Bank Ltd. and Hindustan Unilever Ltd.

About 10 lakh shares of ICICI Bank changed hands in a single block, Bloomberg data showed. Buyers and sellers were not known immediately.

Shares of Karur Vysya fell as much as 2.8 percent to Rs 77.60 after its asset quality weakened in March quarter.

Key Earnings Highlights (Q4, YoY)

• Net profit at Rs 60.02 crore.
• Net interest income down 4 percent to Rs 619.23 crore.
• Gross NPA at 8.79 percent versus 8.49 percent (QoQ).
• Net NPA at 4.98 percent versus 4.99 percent (QoQ).
• Provisions at Rs 352.34 crore versus Rs 440 crore (QoQ); Rs 394.17 crore (YoY)

Shares of Merck extended gains for the fourth consecutive trading session and rose as much as 2.9 percent to hit an all-time high.

The Relative Strength Index was above 70, indicating that the stock may be overbought, Bloomberg data showed.

Nifty’s 11,300 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract rose 28.23 percent to Rs 39.75. Over 10.63 lakh shares were added to the open interest which stood at over 28 lakh shares.

The NSE Nifty IT Index rose 0.8 percent, led by the rally in Infibeam Avenues Ltd. and Tata Elxsi Ltd.

• ITC: About 29.5 lakh shares of ITC changed hands in two block deals.
• Vodafone Idea: About 12.6 lakh shares changed hands in a single block.

Buyers and sellers were not known immediately
Source: Bloomberg

The Government of India plans to divest 15 percent stake in RITES Ltd., according to a Bloomberg report.

Shares of RITES fell as much as 2.8 percent to Rs 235.05.

Nestle India (Q1CY19, YoY)

• Stock rose as much as 2.2 percent to Rs 10,240.
• Revenue up 8.9 percent to Rs 3,003 crore.
• Net profit up 9.3 percent to Rs 463.3 crore.
• Ebitda up 5.9 percent to Rs 737.8 crore.
• Margin at 24.6 percent versus 25.3 percent.

Pidilite Industries (Q4, YoY)

• Stock fell as much as 3.9 percent to Rs 1,095.
• Revenue up 10.3 percent to Rs 1,638.9 crore.
• Net profit down 3.7 percent to Rs 235.1 crore.
• Ebitda up 1.8 percent to Rs 278.8 crore.
• Margin at 17 percent versus 18.4 percent.
• Employee costs up 25 percent to Rs 217.1 crore.
• Exceptional loss of Rs 11 crore.
• Declares dividend of Rs 6.5 per share.

Endurance Technologies (Q4, YoY)

• Stock rose as much as 2.9 percent to Rs 1,179.
• Revenue up 9.5 percent to Rs 1,900.3 crore.
• Net profit up 27.6 percent to Rs 148.6 crore.
• Ebitda up 26.1 percent to Rs 324.5 crore.
• Margin at 17.1 percent versus 14.8 percent
• Declares dividend of Rs 5.5 per share.

Union Bank of India (Q4, YoY)

• Stock fell as much as 7.4 percent to Rs 73.45.
• Net interest income up 18.6 percent to Rs 2,601.5 crore.
• Net loss of Rs 3,369.2 crore versus net loss of Rs 2,583.4 crore.
• Provisions up 3 percent to Rs 5,783.1 crore.
• GNPA at 14.98 percent versus 15.66 percent. (QoQ)
• NNPA at 6.85 percent versus 8.27 percent (QoQ)

Hindustan Oil Exploration Company (Q4, QoQ)

• Stock rose as much as 6.5 percent to Rs 132.
• Revenue up 8.2 percent to Rs 71.4 crore.
• Net profit up 37.9 percent to Rs 48 crore.
• Ebitda up 19.9 percent to Rs 52.4 crore.
• Margin at 73.4 percent vs 66.2 percent.

IIFL Holdings (Q4, YoY)

• Stock rose as much as 2.5 percent to Rs 448.80.
• Revenue down 17 percent to Rs 1,411.5 crore.
• Net profit up 20 percent to Rs 274.3 crore.
• Net profit higher due to exceptional gain, lower tax and higher other income.
• Exceptional gain of Rs 104.6 crore from sale of vehicle financing business.
• Other income of Rs 43.8 crore versus other expense of Rs 8.2 crore.
• Tax rate at 22.3 percent versus 30 percent.
• Loan assets under management in the NBFC business stood at Rs 34,904 crore, up 29 percent.
• Wealth assets stood at Rs 1.69 lakh crore, up 28 percent.

Shares of the pipe maker fell for the third-straight trading session and declined as much as 6.8 percent to Rs 127.

The company’s board approved buyback of its shares at a price of Rs 140 apiece, aggregating of up to Rs 390 crore. The buy back was at a premium of 7.6 percent to the previous close.

The stock traded at 24 times its estimated earnings per share for the coming year, Bloomberg data showed.

Shares of Jet Airways declined for the third consecutive trading session and fell as much as 6.9 percent to Rs 120.

The company’s Chief Executive Officer Vinay Dube resigned, hours after his deputy and Chief Financial Officer Amit Agarwal quit, according to its stock exchange filing.

The Relative Strength Index on the stock was 28, indicating that the stock may be oversold.

Shares of Yes Bank fell as much as 4.8 percent to Rs 148.30, the lowest since Nov. 29, 2018.

The Reserve Bank of India appointed R Gandhi, a former deputy governor of the central bank, on the board of private lender, a rare decision usually taken when a lender needs close regulatory supervision. (Read the full story here)

The stock was the worst performer on Sensex and Nifty. Trading volume was almost five times its 20-day average, Bloomberg data showed. The Relative Strength Index on the stock was below 30, indicating that the stock may be overbought.

Indian equity benchmarks opened higher, extending gains for the second consecutive trading session.

The S&P BSE Sensex rose as much as 0.59 percent to 37,539.05 and the NSE Nifty 50 rose as much as 0.47 percent to 11,274.30. The broader market index represented by the NSE Nifty 500 Index rose as much as 0.44 percent.

The market breadth was tilted in favour of buyers. About 928 stocks advanced and 500 stocks declined on National Stock Exchange. Nine out of 11 sectoral gauges compiled by NSE advanced, led the NSE Nifty Realty Index’s 0.95 percent rally. On the flipside, the NSE Nifty PSU Bank was the top sectoral loser, down 0.06 percent.

The Indian rupee opened higher against the U.S. dollar.

The home currency appreciated as much as 0.2 percent to 70.30 against the greenback. The pair may stay in a range of 70.20-70.90 a dollar in the day.

Sovereign bonds are set to gain after the central bank late Tuesday announced it will buy back up to Rs 12,500 crore of bonds on Thursday. Yield on the benchmark bond fell one basis points to 7.38 percent in the last session. The OMO cheer could further help ease yields and dealers see it trading between 7.35-7.40 percent in the session.

Futures –May series

Nifty

• Nifty futures closed trading at 11,241.6, premium of 20 points versus 33 points.
• Nifty open interest down 5 percent, sheds 7.7 lakh shares in open interest.

Bank Nifty

• Bank Nifty futures closed trading at 28,917, premium of 88 points versus 113 points.
• Bank Nifty open interest down 3 percent sheds 47,000 shares in open interest.

Options

• Nifty PCR at 1.28 versus 1.18 (across all series).

Nifty Weekly Expiry 16 May

• Max open interest on call side at 11,500 (18.9 lakh shares).
• Max open interest on Put side at 11,000 (21.3 lakh shares).
• Max open interest addition seen at 11,000 Put (+7.1 lakh shares), 11,100 Put (+6.9 lakh shares).
• Max shedding seen at 11,300 Call (-5.5 lakh shares).

Nifty Monthly Expiry 30 May

• Max open interest on call side at 12,000 (26.6 lakh shares).
• Max open interest on Put side at 11,000 (26.2 lakh shares).
• Max open interest addition seen at 12,000C (+4.4 lakh shares).

Credit Suisse on Aarti Industries

• Initiated ‘Outperform’ with a price target of Rs 2,000.
• To benefit from the structural upcycle underway in the Indian chemicals industry.
• Strong track record makes it a preferred partner for clients.
• Higher volumes from the several capex initiatives to drive EBIT.

Credit Suisse on PI Industries

• Initiated ‘Outperform’ with a price target of Rs 1,300.
• Order backlog unwinding to be a key driver.
• Increased R&D activity to result into revenue.
• Tailwinds for a key product Pyroxasulfone.

CLSA on Westlife Development

• Maintained ‘Buy’; cut price target to Rs 450 from Rs 550.
• March quarter earnings were slightly ahead on better than expected margins.
• SSSG at 5.6 percent was the key disappointment.
• Cut estimates for the current and the next financial year on growth concerns and lower SSSG.

UBS on SRF

• Maintained ‘Neutral’; hiked price target to Rs 2,760 from Rs 2,560.
• Strong comeback by chemical segment.
• Headwinds in packaging and technical textile segment.
• Increase estimates on better specialty chemical division.

Morgan Stanley on Edelweiss

• Maintained ‘Overweight’ with a price target of Rs 235.
• Net profit was in-line with estimates.
• Credit business – some sequential pickup in asset growth, stable bad loans and likely drop in impairment costs.
• Franchise & advisory businesses – moderation in growth.

On Pidilite Industries

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,474.
• Growth moderation in domestic market.
• Gross margin continues to remain under pressure.
• Expect recovery in sales growth in domestic market post elections.

JPMorgan

• Maintained ‘Neutral’ with a price target of Rs 1,100.
• Significant earnings miss on weak volume.
• Subdued near-term demand concerns pose significant earnings downside.
• Consumer & Bazaar products registered 4% volume growth & industrial volume declined 1 percent.

On Nestle India

CLSA

• Maintained ‘Outperform’ with a price target of Rs 11,750.
• March quarter results were below estimates; weak margins.
• Decent domestic revenue growth.
• Gross margins contracted to 6-quarter low signaling input cost pressures.

Jefferies

• Maintained ‘Buy’ with a price target of Rs 12,000.
• March quarter review: In line numbers, not calling a slowdown yet.
• Margin contraction will be taken care of with price hikes.
• Recent stock correction bodes well.

• Emami promoter group pledged 8.2 lakh shares on May 10.
• Mindtree: Larsen & Toubro acquired 1,168 shares on May 14.

Hawkins Cookers

• Equity Intelligence India sold 26,800 shares or 0.51 percent equity to Rs 3057.76 each.
• Alert: Equity Intelligence India is promoted by Porinju Veliyath.

Mangalam Cement

• LTS Investment Fund acquired 2 lakh shares or 0.75 percent equity to Rs 247.5 each.
• New Berry Capitals sold 2 lakh shares or 0.75 percent equity to Rs 247.5 each.

Earnings To Watch

• Lupin
• Jubilant FoodWorks
• Aarti Drugs
• Manappuram Finance
• KPIT Technologies
• Torrent Power
• KRBL
• Adani Green Energy
• Petronet LNG
• Aditya Birla Fashion and Retail
• Alembic
• Amara Raja Batteries
• Phoenix Mills
• Apollo Finvest
• Balaji Amines
• Waterbase
• Welspun Enterprises
• Wonderla Holidays
• Zuari Agro Chemicals
• Central Bank of India
• Coromandel Engineering
• Karur Vysya Bank
• Kesoram Industries
• Cosmo Films
• Dishman Carbogen Amcis
• Gujarat Pipavav Port
• Gulf Oil Lubricants India
• Himachal Futuristic Communications
• Indo Rama Synthetics
• Jammu & Kashmir Bank
• Magma Fincorp
• Maharashtra Scooters
• Mahindra Holidays & Resorts
• Majesco
• Navneet Education
• Newgen Software Technologies
• PG Electroplast
• SKF India
• Taj GVK Hotels & Resorts
• Seamec

Earnings Reaction To Watch

Nestle India (Q1CY19, YoY)

• Revenue up 8.9 percent to Rs 3,003 crore.
• Net profit up 9.3 percent to Rs 463.3 crore.
• Ebitda up 5.9 percent to Rs 737.8 crore.
• Margin at 24.6 percent versus 25.3 percent.

Pidilite Industries (Q4, YoY)

• Revenue up 10.3 percent to Rs 1,638.9 crore.
• Net profit down 3.7 percent to Rs 235.1 crore.
• Ebitda up 1.8 percent to Rs 278.8 crore.
• Margin at 17 percent versus 18.4 percent.
• Employee costs up 25 percent to Rs 217.1 crore.
• Exceptional loss of Rs 11 crore.
• Declares dividend of Rs 6.5 per share.

Endurance Technologies (Q4, YoY)

• Revenue up 9.5 percent to Rs 1,900.3 crore.
• Net profit up 27.6 percent to Rs 148.6 crore.
• Ebitda up 26.1 percent to Rs 324.5 crore.
• Margin at 17.1 percent versus 14.8 percent
• Declares dividend of Rs 5.5 per share.

Union Bank of India (Q4, YoY)

• Net interest income up 18.6 percent to Rs 2,601.5 crore.
• Net loss of Rs 3,369.2 crore versus net loss of Rs 2,583.4 crore.
• Provisions up 3 percent to Rs 5,783.1 crore.
• GNPA at 14.98 percent versus 15.66 percent. (QoQ)
• NNPA at 6.85 percent versus 8.27 percent (QoQ)

Hindustan Oil Exploration Company (Q4, QoQ)

• Revenue up 8.2 percent to Rs 71.4 crore.
• Net profit up 37.9 percent to Rs 48 crore.
• Ebitda up 19.9 percent to Rs 52.4 crore.
• Margin at 73.4 percent vs 66.2 percent.

IIFL Holdings (Q4, YoY)

• Revenue down 17 percent to Rs 1,411.5 crore.
• Net profit up 20 percent to Rs 274.3 crore.
• Net profit higher due to exceptional gain, lower tax and higher other income.
• Exceptional gain of Rs 104.6 crore from sale of vehicle financing business.
• Other income of Rs 43.8 crore versus other expense of Rs 8.2 crore.
• Tax rate at 22.3 percent versus 30 percent.
• Loan assets under management in the NBFC business stood at Rs 34,904 crore, up 29 percent.
• Wealth assets stood at Rs 1.69 lakh crore, up 28 percent.

• Jet Airways’ Vinay Dube resigned as the CEO with immediate effect, citing personal reasons.
• NTPC won 100MW of Solar capacities in SECI’s 250MW tender in Maharashtra, at a levelized tariff of Rs 2.91 per unit, applicable for 25 years. This project will be set up by NTPC under EPC mode and will add to the installed capacity of NTPC.
• Vodafone Idea board approved the amalgamation of its arms Vodafone India Digital and Idea Telesystems with the company.
• Dr. Reddy’s said its U.S. arm specifically named as a defendant with respect to five generic drugs for an alleged "overarching conspiracy'' to fix prices and to allocate bids and customers in the U.S. in the sale of generic drugs. The company said it will vigorously defend against these allegations and is in the process of filing response with the District Court of Connecticut, U.S. and does not foresee any material impact on operations.
• Wockhardt clarified on the news that U.S. states have filed lawsuit against generic drug firms stating that they have already made the disclosure in the annual report. The company said a class action was initiated against various pharma companies including Wockhardt. This anti-trust action relates to price hikes of various generic drugs. The pharma company also stated is defending itself against the matter and doesn’t anticipate this matter will have a material impact in the company.
• Glenmark denied all allegations against lawsuit filed by U.S. states against generic drug firms. The company said that it is currently reviewing the second lawsuit and expects to file papers with Federal Court in due course denying the accusations. The pharma company says given the early nature of the matter, it does not anticipate material impact.
• Sun Pharma clarified that the lawsuits made against pharma companies is against Taro and its U.S. arms and the company is not named in the afore-mentioned litigations. The company said that the allegations in lawsuit are without merit and concerned subsidiaries will vigorously defend them, and the matter is not expected to have any material impact on the company’s operations.
• Tata Sons is set to transfer all its branded food businesses to Tata Global Beverages from Tata Chemicals according to people with knowledge of the matter, as India’s biggest conglomerate streamlines its corporate structure. (Bloomberg News)
• Mangalore Chemicals & Fertilizers shut down Ammonia, Urea and ABC plants in Mangalore City with effect from May 14, due depletion of reservoir level at Thumbe dam and delay in pre-monsoon showers. The company said production will resume once the water is available.
• L&T Financial Services: Board approved issue of non-convertible preference shares worth Rs 195 crore.
• NDTV: Delhi High Court grants stay on all tax and penalty demands as well as prosecution for assessment year 2009-10. Board approved acquiring preference shares worth Rs 5.74 crore in Mobikwik.
• Tata Steel: Thyssenkrupp remains open for deals in EU steel after JV with Tata Steel failed, says CEO Guido Kerkhoff. The company sees a stronger result in second half of calendar year 2019 as profit Margin in elevator business improve. (Bloomberg News)
• Datamatics Global Services acquired balance 18.91 percent stake in Datamatics Digital for Rs 10.4 crore.
• Religare Enterprises: Board of directors withdrew the scheme of merger of Religare Commodities with Religare Broking with effect from May 13.
• Fortis Healthcare has informed the Delhi High Court that the SEBI has asked to recover Rs 403 crore from former Ranbaxy Laboratories Ltd promoters Malvinder and Shivinder Singh, who allegedly diverted funds of the company and its subsidiary Fortis Hospital. (Press Trust of India)
• Muthoot Finance to raise Rs 1,000 crore via NCDs.
• India Glycols to consider raising funds via issue of equity on May 21.
• BLS International Services signed agreement with Embassy of Lebanon to provide attestation and legal services in India.
• Future Supply Chain Solutions to sell up to 100 percent stake in its arm Vulcan Express.

• Brent crude fell 0.56 percent to $70.84 a barrel.
• West Texas Intermediate crude climbed 1.1 percent to $61.70 a barrel.
• Gold fell 0.3 percent to $1,297.70 an ounce.

London Metal Exchange

• Copper ended 0.27 percent lower.
• Aluminium ended higher for the fourth consecutive trading session, up 1.96 percent.
• Nickel ended 1.14 percent higher.
• Lead halted a three-day fall, closed 0.98 percent higher.
• Tin ended 2.4 percent higher.
• Zinc ended 1.05 percent higher.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade little changed at 11,263 as of 7:30 a.m.

Asian stocks were mixed Wednesday after the escalation in the trade war left sentiment frail amid some signs the sell-off in equities is easing.

Equities in Hong Kong, South Korea and Australia edged higher after a number of indicators tallied up to suggest the run of declines in Asia was due for a pause. Stocks in Japan dropped.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

With inputs from Bloomberg.