Stocks Radar: Avenue Supermarts, HCL Tech, Indiabulls Housing, IRB Infra, Tata Steel

Indian equity benchmarks fluctuated in opening trade, ahead of the Reserve Bank of India’s monetary policy decision later today.

The S&P BSE Sensex and NSE Nifty 50 traded flat at 37,008 and 10,951, respectively, as of 10 a.m. The broader market represented by the NSE Nifty 500 Index rose as much as 0.18 percent.

The market breadth was tilted in favour of buyers. About 1,093 stocks advanced and 490 declined on the National Stock Exchange. Nine of the 11 sectoral gauges traded higher, led by the NSE Nifty Media Index’s 2.4 percent gain. The NSE Nifty Metal Index was the top loser, down 1.1 percent.

A look at the stocks in news moving the markets today.

Bank Stocks Mixed Ahead Of RBI Policy

The NSE Nifty Bank Index, comprising 12 lenders, represented mixed sentiments ahead of the RBI’s monetary policy. While shares of Yes Bank Ltd. rose more than 5 percent and IndusInd Bank Ltd. gained nearly 2 percent, Axis Bank Ltd. and Kotak Mahindra Bank Ltd. were the worst performers.

RBI Policy Guide:

• India’s Monetary Policy Committee is set to cut interest rates for a fourth time in a row on Wednesday.
• 36 economists polled by Bloomberg expect the MPC to cut repo rate by 25 basis points to 5.50 percent—the lowest in nearly a decade.
• The 75 basis points in rate cuts announced this year also marks the steepest reduction in interest rates in recent years, with the exception of the period following the global financial crisis. In June, the MPC cut rates by 25 basis points to 5.75 percent.

Read to get up to speed:

• Why there’s room for another rate cut.
• Anatomy of a growth slowdown and policy implications.
• Finance Minister seeks ‘significant’ rate cuts from the RBI.

Catch all the updates on monetary policy here.

D-Mart Shares Fall After Promoter Plans To Cut Stake

Shares of Avenue Supermarts Ltd., the operator of D-Mart stores, fell as much as 4.7 percent—the biggest intraday decline in a month—to 1,421.05 apiece.

This came after the company said its promoter Radhakishan Damani will divest up to 1 percent stake, or 62.3 lakh shares, in the open market to meet the market regulator’s minimum shareholding norms, according to an exchange filing. The stake sale will start from Aug. 8 and go on till Sept. 14. After the divestment, the promoter’s holding will come down to 80.2 percent from 81.2 percent.

The stock traded at 77 times its estimated earnings per share for the coming year, according to Bloomberg data.

Tata Steel Falls After Terminating Sale Of Southeast Asian Business

Shares of Tata Steel Ltd. fell as much as 3.7 percent to Rs 386.60 a share.

Tata Steel terminated the sale of stake in its Southeast Asian business to HBIS Group as the Chinese company could not procure approvals from the government in Hebei. The company will now look for another partner for the business.

The stock’s trading volume was almost three times its 20-day average, Bloomberg data showed. The Relative Strength Index was below 30, indicating the stock may be ‘Overbought’.

IRB Infra Gains For Second Straight Session

Shares of IRB Infrastructure Developers Ltd. extended gains for the second straight session. The stock rose as much as 7.6 percent to Rs 104.90 apiece.

IRB Infra will sell stake in its road business to the Government of Singapore for Rs 4,400 crore, according to its exchange filing. It will transfer nine of its build-operate-transfer assets into a private infrastructure investment trust in which it will hold a 51 percent controlling stake.

Besides, the company announced its results for the quarter ended June.

IRB Infra Q1 Results2019-20: Key Highlights (YoY)

• Revenue rose 15.3 percent to Rs 1,773 crore. (estimate Rs 1,844 crore)
• Net profit fell 17.4 percent to Rs 206.6 crore. (estimate Rs 211 crore)
• Ebitda rose 14.6 percent to Rs 855.3 crore. (estimate Rs 768 crore)
• Margin at 48.2 percent versus 48.5 percent.
• Finance cost jumped 46 percent to Rs 362.2 crore.

HCL Tech Swings Ahead Of Q1 Results Announcement

Shares of the HCL Technologies Ltd. fluctuated between gains and losses to trade at Rs 2,219 ahead of its June quarter results announcement.

HCL Tech Q1 Results 2019-20: Preview (YoY)

• Dollar revenue expected to rise 1.5 percent to $2,312 million.
• Net profit expected to fall 7.4 percent to Rs 2,378 crore.
• Rupee revenue may rise 1 percent to Rs 16,154 crore.
• EBIT may fall 5.2 percent to Rs 2,882 crore.
• EBIT margin seen at 17.8 percent against 19 percent.

Indiabulls Housing Worst Performer On Nifty

Shares of Indiabulls Housing Finance Ltd. fell as much as 8.4 percent to Rs 470.10. The stock was the worst performer on the Nifty. The company announced its quarterly results for the three months ended June on Tuesday.

Indiabulls Housing Finance Q1 Results 2019-20 (YoY)

• Net revenue fell 12 percent to Rs 1,522 crore. (estimate Rs 1,544 crore)
• Net interest income fell 12.7 percent to Rs 1,475 crore.
• Net income fell 24 percent to Rs 801 crore. (estimate Rs 998 crore)
• Gross NPAs at 1.47 percent versus 0.88 percent in the quarter ended March.
• Net NPAs at 1.1 percent versus 0.69 percent in the January-March period.

Other Stocks Reacting To Q1 Results Announcements

Hindalco Industries (Novelis (Q1, YoY))

• Stock fell as much as 1.3 percent to Rs 178.30.
• Net sales fell 5.6 percent to $2,925 million.
• Net income fell 7.3 percent to $127 million.
• Net income (adjusted) rose 26.1 percent to $145 million.
• Adjusted Ebidta rose 11.4 percent to $372 million.

Zensar Technologies (Q1, QoQ)

• Stock rose as much as 4.1 percent to Rs 227.95.
• EBIT was down due to higher other income in base quarter.
• Revenue rose 1.3 percent to Rs 1,071 crore. (estimate Rs 1,074.3 crore)
• Net profit fell 9.9 percent to Rs 74.5 crore. (estimate Rs 82.1 crore)
• EBIT fell 2.7 percent to Rs 91.2 crore. (estimate Rs 101 crore)
• Margin at 8.5 percent versus 8.9 percent.
• Other income slumped 42 percent to Rs 14.6 crore.

Lakshmi Vilas Bank (Q1, YoY)

• Stock fell as much as 5 percent to Rs 40.85.
• Net interest income fell 5.1 percent to Rs 123.6 crore.
• Net loss widened to Rs 237.3 crore from Rs 123.9 crore.
• Provisions were at Rs 211.7 crore versus Rs 161.5 crore. (Rs 478.8 crore QoQ)
• Gross NPA at 17.3 percent versus 15.3 percent (QoQ)
• Net NPA at 8.3 percent versus 8.49 percent (QoQ)

JK Lakshmi Cement (Q1, YoY)

• Stock rose as much as 1.9 percent to Rs 980.
• Revenue rose 12.8 percent at Rs 1,041.9 crore. (estimate Rs 976 crore)
• Net profit jumped nearly threefold at Rs 39.4 crore. (estimate Rs 65 crore)
• Ebitda jumped 81 percent to Rs 169.8 crore. (estimate Rs 164 crore)
• Margin at 16.3 percent versus 10.2 percent. (estimate 16.8 percent)
• Transportation and forwarding expenses down 13 percent at Rs 213 crore.
• Exceptional loss of Rs 30 crore.

Nilkamal (Q1, YoY)

• Stock rose as much as 1.3 percent to Rs 945.90.
• Revenue fell 8.3 percent to Rs 536.5 crore.
• Net profit fell 7.7 percent to Rs 31 crore.
• Ebitda rose 24.4 percent to Rs 70.8 crore.
• Margin at 13.2 percent from 9.7 percent.
• Tax as percent of PBT was at 34 percent versus 24 percent.
• Depreciation jumped 66 percent to Rs 21.2 crore.
• Finance cost surged 84 percent to Rs 5.9 crore.

Metropolis Healthcare (Q1, YoY)

• Stock rose as much as 1.8 percent to Rs 1,064.
• Revenue increased 15.6 percent to Rs 203.3 crore.
• Net profit rose 11.7 percent to Rs 26.8 crore.
• Ebitda rose 24.1 percent to Rs 55.1 crore.
• Margin stood at 27.1 percent versus 25.2 percent.
• Exceptional loss of Rs 6.9 crore due provision for impairment in investment of securities in IL&FS and certain old reconciled balances.