Sensex Logs Longest Losing Streak In Over A Month

Indian equity benchmarks fell for the third-straight session, driven by losses in HDFC twins.

The S&P BSE Sensex closed 0.80 percent lower at 38031.13 and the NSE Nifty 50 ended at 11,346.20, down 0.64 percent. The broader market index represented by the NSE Nifty 500 Index closed 0.61 percent lower. Bajaj Finserv, HDFC twins were among the worst performers in the session.

“Time has come that HDFC Bank has come under radar for bad assets which the economy is grappling with,” said Umesh Mehta, head of research at Samco Securities.
“Higher provisions and management commentary of further pain combined with a decade high valuation price-earning multiple leaves enough room for the bears to pounce.”

The market breadth was tilted in favour of sellers. About 1,192 stocks declined and 557 shares advanced on National Stock Exchange.

Six out of 11 sectoral gauges compiled by NSE closed lower, led by the NSE Nifty Financial Services Index’s 2.57 percent fall. On the flipside, the NSE Nifty Media Index was the top sectoral gainer, up 1.75 percent.

Shares of the drugmaker rose as much as 3.5 percent intraday to Rs 1,214.40 each. The company reported its first quarter results today.

Key Highlights (Q1, YoY)

• Revenue up 7.1 percent to  Rs 788 crore.
• Net profit up 35 percent to  Rs 113.5 crore.
• Ebitda up 21.8 percent to  Rs 165.3 crore.
• Margins at 21 percent versus 18.4 percent.

The shares have fallen 14 percent in the past 12 months compared with a 4 percent gain in the Sensex.

State-run Oriental Bank Of Commerce swung to profit during the three months ended June, according to its stock exchange filing.

Key Highlights (Q1, YoY)

• Net profit at Rs 112.68 crore versus net loss of Rs 393.21 crore.
• Net interest income up 39 percent to Rs 1,371.62 crore.
• Provisions fall 19.9 percent to Rs 842.43 crore (QoQ)
• Gross NPA at 12.56 percent versus 12.66 percent (QoQ).
• Net NPA at 5.91 percent versus 5.93 percent (QoQ).

Shares of New Delhi-based publishing company rose as much as 14 percent to Rs 93.40 each. The company announced its first quarter results today.

Key Highlights (Q1, YoY)

• Net profit rose 3 times to Rs 39.7 crore.
• Revenue fell 4 percent to Rs 217.9 crore.

The trading volume was nearly 40 times the 20-day average for this time of the day, according to Bloomberg data.

Indian equity benchmarks witnessed a sharp fall in the afternoon trade.

The S&P BSE Sensex fell as much as 1.07 percent to 37,927 and the NSE Nifty 50 declined close to a percent to 11,312.85. The broader market index represented by the NSE NIfty 500 Index fell nearly 0.90 percent.

The market breadth was tilted in favour of sellers in the ratio of 3:1. Six out of 11 sectoral gauges compiled by NSE declined, led by the NSE Nifty Financial Service Index’s 2.75 percent fall. On the flipside, the NSE Nifty Pharma Index was the top sectoral gainer, up 1.30 percent.

Nifty’s 11,400 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the weekly contract which is set to expire this Thursday fell 61.4 percent to Rs 29.60. Over 26.4 lakh shares were added to the open interest which stood at over 33.74 lakh shares.

Shares of the country’s largest airline operator rose as much as 4.2 percent to Rs 1,524, the highest in nearly two weeks. The company reported its highest-ever quarterly profit on Friday.

Key Highlights (Q1, YoY)

• Revenue up 45 percent at Rs 9,420 crore.
• Net profit up 43 times at Rs 1,203 crore.
• Ebitdar up 3.3 times at Rs 2,656 crore.
• Ebitdar margin at 28.2 percent versus 12.2 percent.

The shares advanced 43 percent in the past 12 months compared to a 4 percent gain in the Sensex.

Shares of the Hyderabad-based drug maker pared losses and traded flat at Rs 348.50 apiece. The stock fell 3.1 percent intraday.

The company, in an exchange filing, said received final U.S.FDA approval for pregabalin pills—used in the treatment of nerve infection in diabetes patients. The company also plans to launch the drug in eight different variants in the U.S., the filing said.

The stock traded 31 percent below the Bloomberg consensus one-year target price.

India’s competition regulator may probe dominance of the ‘Big 4’ audit firms and check whether they are impeding fair competition, one person aware of the development told BloombergQuint.

Read the full article here.

Shares of the private bank declined nearly 3.3 percent to Rs 1,448.80 apiece. The lender is scheduled to announce its first quarter results today.

Q1 Preview (YoY)

• Net interest income expected to rise 22.7 percent to Rs 3,168 crore.
• Profit after tax seen to rise 40 percent to Rs 1,434 crore.
• Pre-provision operating profit seen to rise 17 percent Rs 2,398 crore.

Trading in the company's call options totaled 7,932 contracts, compared with the average of 6,591 over the past 20 days, Bloomberg data showed. Trading in the company's put options totaled 9,889 contracts, compared with the average of 3,960 over the same period.

Shares of the graphite electrode maker declined as much as 8.6 percent to Rs 921.50 apiece. The stock has slumped over 23 percent in the last four sessions.

The trading volume was nearly thrice the 20-day average for this time of the day, according to Bloomberg data.

Shares of the private lender declined for the second day in a row after it fell 3.3 percent to Rs 2,296.60 each. HDFC Bank reported its June quarter results on Saturday.

Key Highlights (Q1,YoY)

• Net Interest Income rose 22.9 percent to Rs 13,294.3 crore.
• Net Profit up 21 percent to Rs 5,568.16 crore.
• Provisions up 60.4 percent to Rs 2,613.7 crore (Rs 1889.2 cr QoQ)
• GNPA at 1.4 percent versus 1.36 percent (QoQ)
• NNPA at 0.43 percent versus 0.39 percent (QoQ)

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

Investors need to tread cautiously and park funds in specific stocks during the current market sell off. That’s according to AK Prabhakar, head of research at IDBI Capital.

“Nifty could recover after correcting another 100-200 points as markets breadth has already shown shoots of getting better,” said Prabhakar, adding that markets may revive after expiry of July F&O series. He picked Larsen & Toubro, NTPC as being “attractive” to enter at current levels.

Indian equity benchmarks extend their decline for the third session in a row.

The S&P BSE Sensex fell as much as 0.73 percent to 38,058.50 and the NSE Nifty 50 declined close to 0.62 percent to 11,348.40. The broader market index represented by the NSE NIfty 500 Index fell as much as 0.62 percent.

The market breadth was tilted in favour of sellers. About 1,224 stocks declined and 358 shares advanced on National Stock Exchange.

Six out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Auto Index’s 1.19 percent gain. On the flipside, the NSE Nifty Financial Index was the top sectoral loser, down 1.98 percent.

Shares of the drugmaker declined close to 2 percent to Rs 526.20-- the lowest since April.

The U.S. Food and Drug Administration conducted a routine inspection at the manufacturing facility in Virgonangar, Bengaluru and found seven observations, the company said in an exchange filing.

Trading volume was more than quadruple the 20-day average for this time of the day. The stock trades 23 times its estimated earnings per share for the coming year.

About 12.6 lakh shares of the bio-technology company changed hands in a block deal on National Stock Exchange, Bloomberg data showed. Buyers and sellers were not known immediately.

The stock traded 31 percent below the Bloomberg consensus one-year target price. Fifteen out of the 23 analysts tracked by Bloomberg had a ‘Buy’ recommendation on the stock.

Shares of the Mukesh Ambani-led conglomerate snapped its three-day fall and rose 1.4 percent intraday to Rs 1,266.35. The company reported its June quarter results on Friday.
Reliance Industries (Q1, QoQ)

• Revenue up 5.6 percent to Rs 88,263 crore.
• Net profit up 5.6 percent to Rs 9,036 crore.
• Ebitda down 0.5 percent to Rs 13,640 crore.
• Ebitda margin at 15.5 percent versus 16.4 percent.
• Gross revenue margin down 1.2 percent to $8.1 a barrel.

Reliance Jio (Q1, QoQ)

• Revenue up 5 percent to Rs 11,679 crore.
• Net profit up 6 percent at Rs 891 crore
• Ebitda up 8 percent to Rs 4670 crore vs Rs 4326 crore (Est Rs 3683cr)
• Ebitda margin at 40 percent versus 39 percent.
• ARPU down 3 percent to Rs 122.

Here’s what the brokerages had to say on the stock:

BofAML

• Maintained 'Buy'; Hiked to Rs 1,560 from Rs 1,515.
• Q1 beat across division; hike FY21/22 EPS estimates by 2-3 percent.
• Retail revenue growth continued to surprise despite seasonally slow quarter.
• Expect clarity on FTTH launch date in AGM.

UBS

• Maintained 'Buy' with target price of Rs 1,500.
• Reliance performs in tough environment yet again.
• Timing of tower InvIT positive for deleveraging.
• Reliance has maintained an upbeat outlook on expansion in refining margins.

Credit Suisse

• Maintained ‘Neutral’ with target of Rs 1,350.
• Sharp decline in Jio ARPU and core retail growth moderates.
• Ebitda beat largely driven by Jio’s accounting related beat due to IND AS 116 adoption.
• Petrochemical margin suppressed as both polyester and polymers are weak.

The stock gained as much as 11 percent in the past 12 months compared to a 5 percent gain in the Sensex.

Indian equity benchmarks opened lower, driven by losses in Bajaj Finance and private lenders.

The S&P BSE Sensex fell as much as 0.53 percent to 38,151 and the NSE Nifty 50 fell as much as 0.50 percent to 11,360.85. The broader market index represented by the NSE NIfty 500 Index fell as much as 0.65 percent.

The market breadth was tilted in favour of sellers. About 783 stocks declined and 541 shares advanced on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Realty Index’s 1.64 percent fall. On the flipside, the NSE Nifty Metal Index was the only sectoral gainer, up 0.12 percent.

The Indian rupee opened lower against the U.S. dollar. The home currency weakened as much as 0.14 percent to 68.91 against the greenback.

Most Asian indexes have slipped in the red with riskier currencies under pressure. Dealers see the pair in a range of 68.80-69.30 a dollar in the day.

F&O Cues

Futures

• Nifty futures closed at 11,421.8, premium of 3 points versus 7 points.
• Nifty futures open interest down 3 percent, sheds 4.8 lakh shares in open interest.
• Bank Nifty futures closed at 29781.3, premium 11 points versus 18 points.
• Bank Nifty futures open interest down 12 percent, sheds 2 lakh shares in open interest.

Options

• Nifty PCR at 1.04 versus 1.24(across all series)

Nifty Monthly Expiry 25-July

• Max open interest on call side at 11,600 (35.1 lakh shares)
• Max open interest on put side at 11,300 (30.4 lakh shares)
• Max open interest addition seen in 11,500C (+24 lakh shares), 11,600C (+17.5 lakh shares), 11,400P(+7.6 lakh shares)

Stocks In F&O Ban

In Ban:

• DHFL
• IDBI Bank
• Reliance Capital
• Reliance Infra

Out Of Ban

• Tata Elxsi

Nifty Earnings Reaction To Watch

HDFC Bank (Q1, YoY)

• Net Interest Income rose 22.9 percent to Rs 13,294.3 crore.
• Net Profit up 21 percent to Rs 5,568.16 crore.
• Provisions up 60.4 percent to Rs 2,613.7 crore (Rs 1889.2 cr QoQ)
• GNPA at 1.4 percent versus 1.36 percent (QoQ)
• NNPA at 0.43 percent versus 0.39 percent (QoQ)

Reliance Industries (Q1, QoQ)

• Revenue up 5.6 percent to Rs 88,263 crore.
• Net profit up 5.6 percent to Rs 9,036 crore.
• Ebitda down 0.5 percent to Rs 13,640 crore.
• Ebitda margin at 15.5 percent versus 16.4 percent.
• Gross revenue margin down 1.2 percent to $8.1 a barrel.

Reliance Jio (Q1, QoQ)

• Revenue up 5 percent to Rs 11,679 crore.
• Net profit up 6 percent at Rs 891 crore
• Ebitda up 8 percent to Rs 4670 crore vs Rs 4326 crore (Est Rs 3683cr)
• Ebitda margin at 40 percent versus 39 percent.
• ARPU down 3 percent to Rs 122.

Other Earnings Reaction To Watch

InterGlobe Aviation (Q1, YoY)

• Revenue up 45 percent at Rs 9,420 crore.
• Net profit up 43 times at Rs 1,203 crore.
• Ebitdar up 3.3 times at Rs 2,656 crore.
• Ebitdar margin at 28.2 percent versus 12.2 percent.

L&T Finance Holdings (Q1, YoY)

• Net Interest Income up 20.1 percent to Rs 1,389.9 crore.
• Net profit up 7.5 percent to Rs 578.8 crore.
• Lending Book up 16 percent to Rs 99,904 crore.

Mahindra CIE Automotive (Q1, YoY)

• Revenue up 3 percent at Rs 2,141.9 crore.
• Net profit down 9.1 percent to Rs 126.2 crore.
• Ebitda down 7.3 percent to Rs 261.5 crore.
• Margin at 12.2 percent versus 13.6 percent.
• Depreciation up 13 percent to Rs 84. 4 crore.

L&T Technology Services (Q1, YoY)

• Revenue up 17 percent at Rs 1,347.5 crore.
• Net profit up 3.2 percent to Rs 203.9 crore.
• Ebitda up 39.1 percent to Rs 272.7 crore.
• Margin at 20.2 percent versus 17 percent.
• Depreciation up 65 percent to Rs 42.8 crore.

ICICI Lombard General Insurance (Q1, YoY)

• Gross written premium down by 7.7 percent to Rs 3,560.7 crore.
• Net profit up 7.1 percent at Rs 309.8 crore.
• Combined ratio at 100.4 percent vs 98.8 percent.
• Solvency ratio at 2.20 versus 2.04.

Avanti Feeds (Q1, YoY)

• Revenue up 5.1 percent to Rs 1,093.5 crore.
• Net profit up 12.7 percent to Rs 101.5 crore.
• Ebitda up 3.6 percent to Rs 136.8 crore.
• Margin at 12.5 percent versus 12.7 percent.

Kirloskar Pneumatic (Q1, YoY)

• Revenue up 34.4 percent to Rs 180.1 crore.
• Net profit up 70.4 percent to Rs 3.5 crore.
• Ebitda up 177.9 percent to Rs 9.7 crore.
• Margin at 5.4 percent versus 2.6 percent.

Amara Raja Batteries (Q1, YoY)

• Revenue up 2 percent to Rs 1,814.9 crore.
• Net profit up 24.7 percent to Rs 140.9 crore.
• Ebitda up 26.8 percent to Rs 279.2 crore.
• Margin at 15.4 percent versus 12.4 percent.
• Results above estimates helped by softer lead prices and strong replacement market
• Nomura: Margin to sustain on lower lead prices and favourable mix
• Morgan Stanley: Underlying volume trends were strong in auto replacement, exports, and industrial UPS

Future Lifestyle Fashions (Q1, YoY)

• Revenue up 16.8 percent to Rs 1,540.3 crore.
• Net profit down 6.8 percent to Rs 24.54 crore.
• Ebitda up 133.2 percent to Rs 262.64 crore.
• Margin at 17.1 percent versus 8.5 percent.

Nifty Earnings To Watch

• Kotak Mahindra Bank

Other Earnings To Watch

• DHFL (Q4)
• Can Fin Homes
• Just Dial
• TVS Motor
• GlaxoSmithKline Pharmaceuticals
• Hindustan Media Ventures
• ICICI Securities
• Coromandel International
• Allsec Technologies
• Apollo Tricoat Tubes
• Aptech
• Lakshmi Machine Works
• Mastek
• Oriental Bank of Commerce
• Srikalahasthi Pipes
• United Spirits
• Wendt
• Kirloskar Ferrous
• Jiya Eco-Products

• Tata Steel said that it is in the process of raising $600 million for refinancing and it is not in talks with anyone for European operations, according to a Bloomberg report.
• Reliance Industries: Brookfield plans to acquire stake in Tower Infrastructure Trust - Reliance Jio lnfratel Private Limited – for Rs 25,215 crore. The proceeds from the investment by Brookfield will be used to repay certain existing financial liabilities and for acquiring 49 percent of equity share capital currently held by Reliance Industries. Besides, the board approved the merger of its wholly owned arms Reliance Holdings USA and Reliance Energy Generation and Distribution with the company, to simplify the corporate structure.
• Jet Airways’ lenders approved resolution to raise interim finance and key terms for the eligibility criteria for the prospective resolution applicants.
• IOL Chemicals & Pharma said that they have made a prepayment of Rs 15.39 crore due to banks on July 19 and a totally prepaid Rs 84.18 crore of loans to reduce debt of the company.
• Cox & Kings: Brickwork Ratings revised ratings of NCDs worth Rs 50 crore to BWR D from BWR C, due to delay in servicing of debt obligations.
• Grasim Industries: Board of Aditya Birla Idea Payments Bank has approved the voluntary winding up of the company, as unanticipated developments in business landscape has made the economic model unviable.
• Gruh Finance: Board approved to increase total shareholding of all registered FPIs/FIIs from 24 percent to 40 percent.
• Genus Power Infra clarified that the news of the company coming under the scanner of IT Department is baseless and false.
• Edelweiss Financial Services: CRISIL has re-affirmed the credit rating of 'CRISIL A1+' assigned to the short term borrowing programmes of the company.
• Strides Pharma: Announced successful completion of the U.S. FDA inspection at its flagship facility in Bangalore.
• CG Power: Bagged contract for a 400 MW wind farm in Saudi Arabia.
• Cipla: U.S. FDA inspection at the company’s facility in Virgonagar, Bangalore ended with seven observations.
• Vodafone Idea: Approved the voluntary winding up of the associate company Aditya Birla Idea Payments Bank Limited. This  decision has been taken due to unanticipated developments in the business landscape that have made the economic model unviable.
• Dr Reddy’s: Announced closure of the transaction with Upsher-Smith Laboratories, LLC.
• Godawari Power and Ispat: CARE revised the ratings on its long term bank facility to BBB+ and reaffirmed the short term bank facility to CARE A3+.
• Reliance Communications: Mr Rakesh Gupta has been appointed as the company secretary and compliance officer of the Company with effect from 20 July, pursuant to the resignation of Mr Prakash Shenoy.
• NHB asks housing finance companies to desist from financing subvention schemes. The circular applies prospectively action follows several complaints from customers and even alleged frauds by developers.
• BHEL secured order worth Rs 486 crore for erection work from Nuclear Power Corporation of India.
• InterGlobe Aviation: Board to increase its capacity up to a maximum of 10 members, which include 4 independent directors.
• Bosch: To suspend all manufacturing operations in company’s Gangaikondan plant in Tamil Nadu from July 23-27 to adjust production to meet the demand and avoid unnecessary buildup of inventory.

Air Passenger Data For June 2019

• Industry passenger growth at 6 percent—the highest in last five months
• SpiceJet’s passenger growth at 37 percent—the highest in last 38 months
• InterGlobe Aviation’s passenger growth at 23.6 percent
• SpiceJet’s market share at 15.6 percent, near five year high
• IndiGo’s market share at 48.1 percent, fell from its peak of 50 percent

• U.S. stocks extended weekly losses amid mounting tension in the Persian Gulf and as investors speculated the Federal Reserve will limit a rate cut to a quarter-point.
• The S&P 500 fell 0.6 percent to 2,976.61.
• Stocks in Asia kicked off the week on a cautious note as traders dialed back expectations on the size of Federal Reserve easing later this month.
• Oil rose in early Monday trading ahead of an emergency meeting by U.K. officials to discuss the security of shipping in the Persian Gulf after Iran seized a British oil tanker last week.

For a detailed global markets wrap, click here.

Stocks in Asia kicked off the week on a cautious note as traders dialled back expectations on the size of Federal Reserve easing later this month.

Japanese and Australian shares dipped after soaring Friday, while South Korean equities were little changed. Futures on the S&P 500 Index were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.25 percent to 11,400 as of 8:25 a.m.

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

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