Stocks Radar: ITC, Maruti Suzuki, Nestle India, Reliance Industries

The Indian stock markets were trading lower today, following declines in Asian peers.

The S&P BSE Sensex fell as much as 675 points or 1.82 percent to 36,443.41. The NSE Nifty 50 fell as much as 1.9 percent to 10,788.60.

The broader market index, represented by the NSE Nifty 500 Index, fell as much as 2 percent. The 50-stock index has declined over 10 percent from its record high and has erased 2019 gains.

The market breadth waas tilted in favour of sellers. About 1,378 shares declined and 300 stocks advanced on National Stock Exchange. All the 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty PSU Bank Index’s 3.9 percent fall.

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

RIL Falls On Credit Suisse Downgrade

Shares of Reliance Industries Ltd. fell as much as 3.4 percent, the most since May 9, to Rs 1,143.55 after brokerage and research firm Credit Suisse Group AG downgraded the RIL stock to ‘Underperform’ from ‘Neutral’ and cut price target price to Rs 995 from Rs 1,350.

Here’s what Credit Suisse had to say on RIL

• Cautious on refining and petrochemical cycle due to high supply pressure.
• RIL is likely to be Free Cash Flow negative for FY20-21; incorporate higher liabilities from crude payables, JioPhone financing and East West pipeline.
• Slow enterprise rollout and weak Jio ARPU in June quarter.

Maruti Suzuki Falls On Reports Of Employees Sent On Leave

Shares of Maruti Suzuki India Ltd. fell as much as 2.8 percent to Rs 5,528 apiece.

The carmaker has sent on leave, without pay, nearly 10 percent of its contract work force at its Gurugram plant, according to a person aware of the decision, as its sales tumbled the most in seven years last month.

Of the shares traded, 31 percent were at the ask price and 37 percent were at the bid. The stock traded at 22 times its estimated earnings per share for the coming year, Bloomberg data showed.

PSU Banks Decline After RBI Imposes Penalty

Shares of nine public sector banks, including that of Bank of Baroda, Bank of India and Punjab National Bank, declined after the Reserve Bank of India imposed penalty on eight PSU banks.

Nestle India Gains After Q2 Results

Shares of Nestle India Ltd. rose as much as 4.7 percent to Rs 11,490 after the company announced its quarterly results for the three months ended June.

Nestle India Q2 Results: Key Highlights (YoY)

• Revenue up 11.2 percent to Rs 3,000.9 crore (estimate Rs 2,923 crore)
• Net profit up 10.8 percent to Rs 437.8 crore (estimate Rs 437 crore)
• Ebitda up 8.1 percent to Rs 697.3 crore (estimate Rs 705 crore)
• Margin at 23.2 percent versus 23.9 percent (estimate 24.1 percent)
• Interim dividend of Rs 180 per share, annual dividend of Rs 23 per share

On August 2, Nestle India announced that it’s setting up a new Maggi plant in Sanand near Ahmedabad—its ninth in the country. The unit will see an initial investment of Rs 700 crore over the next two years.

Key Stocks Reacting To Results Announcements

ITC (Q1, YoY)

• Stock fell as much as 2.3 percent to Rs 258.50.
• Revenue up 5.8 percent to Rs 11502.8 crore (estimate Rs 11,759 crore)
• Net profit up 12.6 percent to Rs 3173.9 crore (estimate Rs 3,154 crore)
• Ebitda up 8.7 percent to Rs 4565.6 crore (estimate Rs 4,622 crore)
• Margin at 39.7 percent versus 38.6 percent (estimate 39.3 percent)

Tata Communications (Q1, QoQ)

• Stock rose as much as 10.5 percent to Rs 516.90.
• Revenue down 1.8 percent to Rs 4,168.6 crore
• Net profit at Rs 76.6 crore versus net loss of Rs 198.8 crore
• Ebitda up 20.5 percent to Rs 825.6 crore
• Margin at 19.8 percent versus 16.1 percent
• Other expenses down 22 percent to Rs 865.9 crore

Bata India (Q1, YoY)

• Stock fell as much as 1.9 percent to Rs 1,284.
• Revenue up 10.6 percent to Rs 882.1 crore
• Net profit up 21.9 percent to Rs 100.7 crore
• Ebitda up 84.4 percent to Rs 243.1 crore
• Margin at 27.6 percent versus 16.5 percent

Union Bank of india (Q1, YoY)

• Stock fell as much as 4.3 percent to Rs 61.90.
• Net interest income down 4.1 percent to Rs 2,518.2 crore
• Net profit up 73.3 percent to Rs 224.4 crore
• Provisions at Rs 1,431.1 crore versus Rs 1,803.2 crore
• GNPA at 15.18 percent versus 14.98 percent (QoQ)
• NNPA at 7.23 percent versus 6.85 percent (QoQ)