Stocks Radar: ICICI Bank, Indiabulls Housing, Maruti Suzuki, Sheela Foam, Vodafone Idea

Indian equity benchmarks had a tepid start to the week on Monday after they closed higher on Friday. As of 9:51 a.m., the S&P BSE Sensex traded 0.12 percent lower and the NSE Nifty was 0.33 percent down at 37,837.14 and 11,247.55.

The market breadth was tilted in favour of sellers. Eight out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Metal Index’s 2.36 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 0.72 percent.

Here’s a look at the stocks in news that are moving the markets today:

Indiabulls Housing Falls As Much As 8%

Shares of Indiabulls Housing Finance Ltd. slumped 7.90 percent to Rs 575.

The housing finance company has rejected Bharatiya Janata Party leader Subramanian Swamy's allegations that it has embezzled more than Rs 1 lakh crore from the National Housing Bank. Loans outstanding as on date from NHB to Indiabulls Housing is zero, it said in an exchange filing. Indiabulls Housing Finance, in its history, has never taken any loan or refinancing facility from NHB, it added.

The stock trades 62 percent below Bloomberg consensus one-year target price. It trades 5.5 times its estimated earnings per share for the coming year.

Sheela Foam Falls After Board Approves Takeover of Spanish Firm

Shares of Sleepwell mattress maker Sheela Foam Ltd. declined for a third straight session, falling as much as 1.18 percent to Rs 1,260.05.

The company’s board has approved acquisition of Spain-based company Interplasp SL for €42 million, it said in an exchange filing. The company is engaged in manufacturing and marketing of polyurethane foam for mattresses. The acquisition will give Sheela Foam a presence in Europe, the world's largest polyurethane foam market, the company added.

The company trades at 35 times its estimated earnings per share for the coming year.

Maruti Suzuki At Over Two-Year Low

Shares of India's largest carmaker Maruti Suzuki India Ltd. fell as much as 3 percent to Rs 5,630.25 apiece, its lowest since January 2017, after its June quarter results.

Maruti shares have fallen 40 percent in the past 12 months compared with 1.6 percent gain in the Sensex. The stock traded at 23 times below its estimated earnings per share for the coming year.

Here’s what brokerages had to say after Maruti Suzuki Q1 Results:

Kotak Securities

• Maintains ‘Reduce’ and cuts target price to Rs 5,200 from Rs 6,000.
• Q1 Ebitda higher than estimates due to lower other expenses and higher average selling price.
• Volume trajectory to remain a challenge for Maruti Suzuki in FY20.
• Earnings estimates cut by 10-18 percent over FY20-22, mainly driven by 6-9 percent cut in volume estimates.

Nomura

• Maintained ‘Neutral’ and cut target price to Rs 6,290 from Rs 6,717.
• Demand conditions remain tough, regulatory costs adding to margin pressure.
• Company gave no volume guidance given the severe auto sector slowdown.
• Lower our volume growth estimates to -3 percent to 9 percent for FY20-21.

ICICI Bank Gains After Improvement In Asset Quality

Shares of ICICI Bank Ltd. rose 4.71 percent to Rs 435.35 apiece after its first-quarter profit met estimates as its asset quality improved and provisions fell.

Trading volume was more than 30 times the 20-day average for this time of the day. The bank’s stock trades 20 times its estimated earnings per share for the coming year.

ICICI Bank Q1 Results 2019-20: Key Highlights

• Net profit was at Rs 1,908 crore in Q1, in line with Rs 1,976-crore consensus estimate of analysts tracked by Bloomberg. The bank posted a loss of Rs 119.6 crore a year earlier.
• Net interest income, or the core income of the bank, rose 27 percent year-on-year to Rs 7,737.4 crore in the quarter ended June—matching the Rs 7,480-crore estimate.
• The net interest margin stood at 3.61 percent compared with 3.72 percent in previous quarter.
• ICICI Bank’s gross non-performing assets ratio fell to 6.49 percent from 6.7 percent in the previous quarter.
• Net bad loans contracted to 1.77 percent sequentially from 2.06 percent.
• Provisions also fell to Rs 3,495.7 crore sequentially from Rs 5,451 crore.
• Domestic loan growth at 18 percent year-on-year, driven by retail portfolio.

Vodafone Idea At An All-Time Low

Shares of Vodafone Idea Ltd. declined as much as 24.32 percent to Rs 7.00, the lowest since Idea Cellular listed on the bourses.

The telecom firm’s core operating profit turned negative in the quarter ended June as revenue declined and costs rose amid an unabated tariff war in India’s telecom market.

The stock trades 57 percent below Bloomberg consensus price target. The relative strength index on the stock was below 30, indicating it may be oversold.

Vodafone Idea Q1 Results 2019-20: Highlights (quarter-on-quarter)

• Revenue fell 4.3 percent to Rs 11,270 crore versus Rs 11,775 crore. Analysts’ estimate was Rs 11,741 crore.
• Average revenue per user rose 3.9 percent to Rs 108 versus Rs 104 against the estimate of Rs 112.
• Churn ratio improved to 3.7 percent versus 7.2 percent.
• Company achieved 70 percent of synergy target.
• Capex stood at Rs 2,840 crore, capex for FY20 will be Rs 16,800 crore.
• Net debt reduced by only Rs 19,130 crore to Rs 99,260 crore despite fund raise of Rs 25,000 crore.