Nifty Closes Above 16,000 For First Time; Sensex At Record High

India's key stock benchmarks closed at all-time high on hopes of economic revival after a slew of positive data.

The S&P BSE Sensex gained 1.65% to 53,823.36. The index reclaimed the 53,000-mark after 5 sessions. The NSE Nifty 50 Index rose 1.55% to 16,130.75. The index hit an intraday all-time high of 16,146.90. This was the first time the 50-share index had crossed 16,000-mark.

Housing Development Finance Corp. contributed the most to the index gain, increasing 3.8%. Titan Co. had the largest increase, rising 3.9%.

The broader markets underperformed the larger peers. Both the S&P BSE MidCap and the S&P BSE SmallCap rose 0.2%. Barring S&P BSE Metal Index, all the other 18 sectoral indices compiled by the BSE Ltd. gained with S&P BSE FMCG Index climbing 1.61%

The market breadth was skewed in favour of bulls. About 1,732 stocks advanced, 1,508 declined and 136 remained unchanged on the BSE.

“Intensifying asset quality worry for banks and non-bank finance companies, especially after June quarter earnings reported by large private banks, is likely to ease with the reopening of the complete economy and faster job creation,” Binod Modi, head of strategy at Mumbai-based Reliance Securities Ltd., wrote in a note.

Shares of Adani Ports and Special Economic Zone Ltd. gained 3.32% to Rs 714.95 apiece after the reporting net income for the first quarter that beat the average analyst estimate.

June Quarter Results

• Net Income at Rs 1,307 crore vs estimate of Rs 1,223 crore (Bloomberg consensus)

• Revenue at Rs 4,557 crore vs estimate of Rs 3,748 crore

• Ebitda 15% at Rs 2,620 crore Vs estimate of Rs 2,303 crore

• Total costs at Rs 3,464.88 crore vs Rs 2,526.91 crore QoQ

• Other Income at Rs 381.62 crore vs Rs 464.52 crore QoQ

In an exchange filing, Adani Ports & SEZ said it is fully compliant with applicable SEBI regulations and has made full disclosure to specific information requests from them in the past

Out of the 26 analysts tracking the company, 21 maintained ‘buy’, 1 maintained ‘hold’ and 4 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg suggested an upside of 18.4%. Shares of Adani Ports & SEZ have added nearly 50% in 2021 so far.

Shares of Godrej Properties Ltd. pared 2% intraday gains to trade at Rs 1,655.50 apiece after reporting the first quarter numbers.

June Quarter Results (Consolidated)

• Net Income at Rs 17.01 crore vs loss of Rs 191.62 crore QoQ

• Revenue at Rs. 86.16 crore vs Rs 432.64 crore QoQ

• Ebidta at Rs 82 crore vs estimate of Rs 43.2 crore (Bloomberg Consensus)

• Other Income at Rs 175.83 crore vs Rs 143.44 crore QoQ

• Total Expenses at Rs 196.48 crore vs Rs 632.77 crore QoQ.

In an exchange filing, the company said that delay in closure of business development deals and pending regulatory approvals due to covid would be completed in subsequent quarters.

Out of the 20 analysts tracking the company, 6 maintained ‘buy’, 7 maintained ‘hold’ and 7 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 21%. The relative strength index is 73 suggesting that the stock may be in overbought territory.

Shares of Dabur India gained 3.16% to Rs 618 apiece after the company reported quarterly earnings above analysts' consensus estimate.

June Quarter Numbers (Consolidated)

• Net income at Rs 437.30 crore vs estimate of Rs 402 crore (Bloomberg consensus)

• Revenue at Rs 2,611.54 crore vs estimate of Rs 2,385 crore

• Total costs at Rs 2,128.32 crore vs Rs 1,969.54 crore (QoQ)

• Other income at Rs 84.84 crore vs Rs 84.98 crore (QoQ)

Out of the 40 analysts tracking the company, 24 maintained ‘buy’, 13 maintained ‘hold’ and 3 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 3.7%.

Shares of Dabur India have added 12.9% in 2021 so far. The relative strength index is 70, suggesting that the stock may be in overbought territory.

Shares of Ashok Leyland gained 5.75% to Rs 142.55 apiece, the highest level since June 2018. Trading volume was 19.9 million shares, 72% above the 20-day average for this time of the day.

The company reported 81% sales growth at 8,650 units in July before market hours on Monday. Vehicle sales rose 81% YoY while local sales grew by 90%YoY.

Out of the 47 analysts tracking the company, 34 maintained ‘buy’, 9 maintained ‘hold’ and 4 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 1.7%.

Shares of Ashok Leyland added 48.66% in 2021 so far as compared to 11.80% for NSE Nifty Auto index. Relative Strength Index is 75 suggesting that the stock may be in overbought territory.

Shares of Housing Development Finance Corporation Ltd. jumped as much as 3.36% even as the housing financier saw its net profit dip marginally because of one-off items and higher provisions in the June quarter.

Here’s what the brokerages made of HDFC’s Q1.

Jefferies

• Maintains ‘buy’ rating and target price of Rs 3,300, implying an upside of over 35%.

• HDFC’s performance was stable and its profit was a tad above expectation, led by higher mark to market-gains.

• While HDFC’s asset growth moderated to 8% year-on-year due to lockdowns, asset quality has held up better than other NBFCs with a 30 basis points-sequential rise in stage 3 loans to 2.6%, helping keep credit cost in check.

Motilal Oswal

• Maintains ‘buy’ rating and target price of Rs 3,290, implying an upside of over 34%.

• Strong disbursement growth (on a low base) of 181% year-on-year, 26 basis point-sequential deterioration in gross NPA to 2.24%, and an increase of 30 basis points quarter-on-quarter in Stage 2 assets were some of the operational highlights for the quarter.

• The recovery in disbursements was much stronger than expected at the start of the second Covid wave. July 2021 disbursements were the third highest ever and the highest ever in a non-quarter month-end.

• With declining cost of funds and a reduction in excess liquidity on the balance sheet, margins should be stable despite pressure on retail lending yield due to continued aggression from banks in the mortgage space.

Shares of Bank of India pared nearly 2% of intraday gains to Rs 74.80 apiece after reporting its Q1 numbers

June Quarter Numbers (Consolidated)

• Net income at Rs 735.37 crore vs Rs 845.78 crore YoY

• Interest Income at Rs 9,374.32 crore vs Rs 10,286.76 crore YoY

• Gross NPA at 13.51% vs 13.77% QoQ

• Net NPA at 3.35% vs 3.35% QoQ

• Provisions at Rs 1,712.95 crore vs Rs 1,515.69 crore YoY

Out of the 7 analysts tracking the company, 2 maintained ‘buy’, 1 maintained ‘hold’ and 4 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg hinted at a downside of 0.6%. Shares of Bank of India have added 53.4% in 2021 so far as compared to 41.18% gains for NSE Nifty PSU Bank index.

Cartrade Tech Ltd. has set a price band of Rs 1,585-1,618 a share for an initial public offering that could raise as as much as Rs 2,999 crore ($403 million).

Shareholders of the online platform for used as well as new cars are selling as many as 18.53 million shares in the IPO, which opens August 9 and closes August 11.

• The offer-for-sale includes 2.26 million shares by CMDB II, 8.41 million shares by Highdell Investments, 5.08 million shares by Macritchie Investments Pte., 1.77 million shares by Springfield Venture.

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

• Investors can bid for minimum 9 shares of face value 10 rupee each in the sale.

• Axis Capital, Citigroup Global Markets India, Kotak Mahindra Capital and Nomura Financial Advisory are managing the sale.

• The company’s shareholders had earlier planned to sell up to 12.35 million share, according to its initial filing with the regulator.

Shares of Adani Ports & Special Economic Zone jumped over 2% after Credit Suisse upgraded its rating on the stock citing the company’s “strong outlook” and “reasonable valuation”.

Adani Ports was upgraded to ‘outperform’ from neutral based on strong growth outlook (22% CAGR till FY25), likely participation in positive economic growth cyclicality driving positive surprise, strong FY25 guidance, reasonable valuations and recent underperformance, said Credit Suisse in a note.

It also noted several key risks to the stock such as Adani Ports’ large share in sector (25% of total cargo and 40% of containers) which could limit growth outperformance to sector and diversification in logistics and other geographies, which could be dilutive. The risk of coal volumes (30% of total) and concession extension at Mundra also persist, it said.

Credit Suisse said its preference order is L&T, Ultratech, Embassy ahead of Adani Ports. “We prefer ADSEZ ahead of Concor on valuations,” it added. It also raised its target price on the stock from Rs 710 to Rs 800, implying a potential upside of 18.5%.

Shares of the company jumped as much as 2.1% to Rs 706.5 apiece in morning trade. The stock then pared some of its gains to trade at Rs 703.1 apiece, up 1.6%.

The company is scheduled to announce its quarterly earnings later in the day.

Shares of Steel Strips Wheels Ltd. hit 10% upper circuit after the company crossed Rs 300 crore monthly sales for the first time ever.

• Exports segment volume rose by 164% YoY as sales crossed Rs 100 crore -- it's highest on record.

• PV segment volume grew by 66% YoY

• Tractor volumes rose by 21% YoY

• Commercial vehicles segment volumes increased by 188% YoY

• 2 & 3 Wheelers segment volume grew by 89% YoY

Shares of Steel Strips Wheels advanced over 225% in 2021. The relative strength index is 86 suggesting that the stock may be in overbought territory.

Shares of NCC added 3.29% to Rs 89.50 apiece after the company said it bagged four orders worth Rs 1,679 crore (exclusive of GST) in July.

• Out of the total orders, one order valuing Rs 732 crore pertained to Building Division.

• Two orders valuing Rs 730 crore pertained to Water & Environment Division.

• One order valuing Rs 217 crore pertained to Electrical Division.

'The orders are received from state government agencies and do not include any internal orders’, AAV Ranga Raju, Managing Director of NCC was quoted as saying in the exchange filing.

Out of the 18 analysts tracking the company, 16 maintained ‘buy’ and 2 maintained ‘hold’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 24.4%. The company is scheduled to report its June quarter earnings on Thursday.

Shares of Balaji Amines Ltd. gained 9.06% to hit a new record high of Rs 3,619 apiece after the company reported sequential growth in revenue and net profit in the June quarter.

June Quarter Numbers (Consolidated)

• Net profit at Rs 97.40 crore vs Rs 88.80 crore QoQ.

• Revenue from operations at Rs 450.68 crore vs Rs 414.03 crore QoQ.

• Total expenses at Rs 320.46 crore vs Rs 297.36 crore QoQ.

• Other income at Rs 1.26 crore vs Rs 3.60 crore QoQ.

All the four analysts tracking the company have maintained a ‘buy’ recommendation. The overall consensus price of analysts tracked by the company implied a downside of 8.6%. Shares of Balaji Amines have gained over 270% in 2021 so far. The relative strength index is 72 suggesting that the stock may be in overbought territory.

Shares of Britannia Industries Ltd. gained as much as 1.76% in early trade after foreign brokerage Jefferies upgraded its rating from ‘hold’ to ‘buy’ citing the food company’s “decent revenue performance” in Q1 and its stock’s correction that has underperformed several of its peers.

The company’s revenue rose 8.7% sequentially to Rs 3,403.5 crore, while profit attributable to owners was up 6.9% sequentially to Rs 389.6 crore in the quarter ended June, according to its exchange filing. Ebitda margin remained flat at 16.3% compared with 16.1% in the preceding quarter.

Jefferies said that while margins have started to normalise, revenue trend has been better in the quarter. “Focus remains on growth and gross margin is close to bottoming-out, with likely product price hikes in coming quarters. Pandemic did impact progress on launches but ambition of being 'total food company' stays intact,” it said.

It added that Britannia's stock has corrected more than 10% from its peak last year, underperforming several of its peers. “After an earnings-per-share decline in FY22 due to a high revenue base & margin normalisation, Britannia is likely to see 15% CAGR in earnings-per-share over the next couple of fiscal years,” it said in a note.

The brokerage also raised its target price on the biscuits manufacturer from Rs 3,800 to Rs 4,150, implying a potential upside of around 21.3%.

Shares of Titan Company Ltd. rose 4.71% to Rs 1,854.95 apiece. Trading volume was 6,68,412 shares, five times the 20-day average of 1,47,516 shares for this time of the day.

The rise in shares of Titan comes a day before the company is slated to reports its June quarter numbers.

Out of the 33 analysts tracking the company, 17 maintained ‘buy’, 10 maintained ‘hold’ and 6 analysts maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 8.6%. The relative strength index on the stock is 73 suggesting that the stock may be in overbought territory. Shares of Titan have gained 17.5% in 2021 so far.

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Shares of Shree Renuka Sugars Ltd. hit 5% lower circuit after it reported net loss of Rs 241 crore in June quarter. Revenue from operations also declined to Rs. 829.6 crore vs Rs 1,299.2 crore in quarter ended March.

First Quarter Earnings

• Net loss at Rs 241 Crore vs Rs 44.9 crore QoQ

• Revenue from operations at Rs 829.5 crore vs Rs 1,299.2 crore QoQ

• Other income at Rs 5.4 crore vs Rs 7.3 crore QoQ

• Total expenses at Rs 107.78 crore vs 122.25 crore QoQ

Shares of Shree Renuka Sugars have added over 160% in 2021 so far.

Shares of Fairchem Organics Ltd. gained as much as 10% to hit a new high of Rs 2,128.25 apiece. The stock had risen 10% for the previous two sessions as well, though it pared almost of the gains on Friday.

The stock has gained advanced over 27% in three days after reporting its first quarter earnings.

• Revenue from operations at Rs 139.1 crore vs Rs 159.3 crore QoQ

• Net income at Rs 22.31 crore vs Rs 18.83 crore QoQ

• Total expenses at Rs 109.6crore vs Rs 135.57 crore QoQ

• EBITDA at Rs 32.8 crore vs Rs 27.4 crore QoQ

• EBITDA margin at 23.58% vs 17.20% QoQ

The relative strength index on the stock is nearly 87 indicating that it may be in overbought territory. Shares of Fairchem Organics have climbed over 236% in 2021 so far as compared to a 12.2% gain for the S&P BSE Sensex.

Indian equity benchmarks climbed amid weak regional trade as certain economic indicators pointed to a revival this week.

The S&P BSE Sensex gained as much as 0.5% to 53,201.17 while the NSE Nifty 50 Index rose by a similar magnitude to 15,951.60. Both key gauges are set to close at new peaks after posting a two-week losing streak.

Housing Development Finance Corp. contributed the most to the index gain, increasing 1.4%. Titan Co. had the largest increase, rising 2.7%.

The broader markets kept up pace with their larger peers. The S&P BSE MidCap index rose 0.3% whilt the S&P BSE SmallCap climbed 0.4%. Fourteen of the 19 sector indices compiled by the BSE Ltd. advanced, led by a gauge of consumer durables companies.

The S&P BSE Metal was the worst performing sectoral index, down 0.5%.

“Intensifying asset quality worry for banks and non-bank finance companies, especially after June quarter earnings reported by large private banks, is likely to ease with the reopening of the complete economy and faster job creation,” Binod Modi, head of strategy at Mumbai-based Reliance Securities Ltd., wrote in a note.

India’s quarterly earnings season has been muted so far, with 19 of the 31 Nifty companies that have reported missing analyst estimates. Bharti Airtel Ltd., the nation’s second largest telecom service provider is scheduled to announce results in the day.

Indian bond traders are awaiting an auction of Rs 12,500 crore ($1.7 billion) of state debt, while the rupee may remain rangebound ahead of Friday’s monetary policy review.

• 10-year yields little changed at 6.2% on Monday

• USD/INR fell 0.1% to 74.3450 on Monday

  • Implied opening from forwards suggests spot may start trading around 74.33

• “While this MPC meeting is widely expected to be a non-event status quo, the market will be keenly watching for forward guidance on future policy normalization,” said Churchil Bhatt, executive vice-president of debt investments at Kotak Mahindra Life Insurance

  • Any RBI action on fine-tuning banking system liquidity and further steps toward ongoing “orderly evolution of yield curve” will be key determinants for interest rates going forward

FSN E-Commerce Ventures Ltd., which operates Nykaa, is seeking to raise as much as Rs 525 crore ($70.6 million) by selling new shares in an initial public offering, according to a copy of its draft red herring prospectus.

• Shareholders of Nykaa, India’s top e-commerce company for beauty, will sell as many as 43.1 million shares in the IPO

• Kotak Mahindra and Morgan Stanley are global co-coordinators and book-running lead managers for the IPO; other bookrunners are BofA Securities, Citigroup, ICICI Securities and JM Financial

Asian stocks fell Tuesday and Treasury yields held a retreat amid concerns the economic recovery from the pandemic is losing momentum.

Equities slipped in Japan, Hong Kong and China, where stocks remain under a cloud due to Beijing’s clampdown on a range of private industries. Tencent Holdings Ltd., one of the Chinese technology giants caught up in the upheaval, slumped as much as 9.3%. S&P 500 and Nasdaq 100 contracts fluctuated.

The Singapore-traded SGX Nifty, an early indicator of India's Nifty 50 Index’s performance, fell 0.24% at 15,887 as of 8:50 a.m.

The spread of the delta Covid-19 variant and signs of robust but softer U.S. manufacturing growth contributed to an overnight S&P 500 dip. The 10-year U.S. Treasury yield remained below 1.20% after falling as low as 1.15%. The real yield on 10-year Treasuries -- which strips out the expected impact of inflation -- was close to a record low.

Oil held a plunge as the virus and indications of a slower Chinese economic rebound dented the outlook for consumption. A gauge of the dollar was little changed.

Back home, Punjab National Bank, RBL Bank may react as the companies reported quarterly results after the market closed on Monday. Bharti Airtel, Dabur and Adani Ports are among companies that are scheduled to announce results on Tuesday.

Foreign investors sold net Rs 2,560 crore of stocks on July 30, according to NSDL website.