Stocks Radar: Adani Power, Dixon Tech, Infosys, Metropolis Healthcare, TCS
Here are the stocks moving the market in today’s trade.
Indian equity benchmarks opened higher, tracking gains in their Asian peers after earnings and Chinese economic data eased concerns about a slowdown in global growth. The Sensex and the Nifty traded 0.1 percent higher at 38,820 and 11,657.10, as of 10:00 am.
The market breadth was tilted in favour of buyers. 10 of the 11 sectoral gauges compiled by the National Stock Exchange rose, led by a 1.7 percent advance in the NSE Nifty Metal Index. The NSE Nifty Pharma Index was the only sectoral loser, down 0.25 percent.
Here Are The Stocks Moving The Market This Morning
Adani Power Falls Despite Regulator’s Relief
Shares of the power producer snapped its two-day gaining streak and slumped 3.8 percent to Rs 51.20 apiece.
Central Electricity Regulatory Commission allowed Adani Power Ltd.’s Mundra thermal power unit to pass on the higher cost of imported coal that had made the project unviable, according to its exchange filing. The Mundra unit will be allowed to increase the variable component of tariff to pass through the cost of fuel up to $110 per metric tonne.
The stock has more than doubled in the past 12 months compared to 13 percent gain in the Sensex.
Dixon Technologies Swings After Stake Buy In Phonemaker
Shares of the consumer electronics manufacturer fluctuated between gains and losses to trade at Rs 2,417.30 per share, as of 9:22 am.
Dixon Technologies (India) Ltd. acquired a 50 percent stake in Padget Electronics for Rs 27 crore, according to its exchange notification. The target company is into manufacturing of mobile phones. Dixon Technologies said this acquisition is a strategic investment decision and that it plans to accelerate growth in this business segment.
The trading volume was more than 13 times the 20-day average for this time of the day, Bloomberg data showed.
Dr. Reddy’s Gains After Inking Deal To Acquire 42 Drugs
Shares of the drugmaker rose close to a percent to Rs 2,829.80 apiece.
Dr. Reddy's Laboratories Ltd., in a exchange filing, said it entered into a definitive agreement to acquire a portfolio of 42 approved, non-marketed Abbreviated New Drug Applications in the U.S. These products could be launched within the next one to two years, it said, adding that the value of total addressable market for these products in the U.S. was approximately $645 million in 2018.
The stock traded at 27 times its estimated earnings per share for the coming year, according to Bloomberg data.
Lakshmi Vilas Bank Falls After Ratings Downgrade
Shares of the Chennai-based lender halted its two-day rally and declined as much as 2.4 percent to Rs 89.40 apiece.
Care Ratings Ltd. revised ratings on certain Lakshmi Vilas Bank Ltd.’s bonds downwards on “credit watch with negative implications”. Also, the company’s board deferred discussions on raising capital through additional tier-1 bonds but approved allotment of up to 1.68 crore shares, according to its exchange filing.
The stock traded 45 percent below the Bloomberg consensus one-year target price. Analysts raised the target by nearly 60 percent in the past 12 months.
Metropolis Healthcare Jumps On Stock Market Debut
Metropolis Healthcare Ltd. listed at a premium of 8.9 percent at Rs 958 per share on the National Stock Exchange, compared to its issue price of Rs 880 apiece.
The stock rose as much as 10.2 percent to Rs 939.90 thereafter. The healthcare services provider’s initial public offering was subscribed 5.83 times on the final day of bidding.
TCS Jumps, Infosys Drops After Q4 Results
Shares of Tata Consultancy Services Ltd. rose as much as 3.5 percent to Rs 2,084. The stock was the top performer on Sensex and Nifty.
The company continued to see steady growth in business even as profit remained flat and margin narrowed in the March quarter. (Read the full story here)
Meanwhile, Infosys Ltd. was the worst performer on the benchmark indices as the stock fell as much as 4.7 percent, the most in over six months, to Rs 712.60. This after it announced a steady revenue guidance for the year ending March 2020 compared to the previous year.
Key Earnings Highlights
TCS (Q4, QoQ)
- Dollar revenue up 2.8 percent to $5,397 million
- Revenue up 1.8 percent to Rs 38,010 crore
- Net profit up 0.3 percent to Rs 8,126 crore
- EBIT down 0.2 percent to Rs 9,537 crore
- EBIT margin at 25.1 percent versus 25.6 percent
- Declares dividend of Rs 18 per share
Infosys (Q4, QoQ)
- Revenue up 0.6 percent to Rs 21,539 crore
- Dollar revenue up 2.4 percent to $3,060 million
- Net profit (adjusted) up 2.2 percent to Rs 4,078 crore
- EBIT down 4.4 percent to Rs 4,618 crore
- EBIT margin at 21.4 percent versus 22.6 percent
- Revenue growth guidance: 7.5 percent to 9.5 percent for FY20 in constant currency terms
- Operating margins guidance: 21 percent to 23 percent for FY20
- Declares dividend of Rs 10.5 per share
Here’s what brokerages had to say after the companies announced their March quarter results:
On TCS
Macquarie
- Maintained ‘Outperform’; hiked price target to Rs 2,363 from Rs 2,291.
- Broad-based growth overall and finally, double-digit growth in BFSI.
- Margin defence despite currency has been solid.
- TCS is our top pick in the large cap Indian IT space (along with HCL Tech).
Investec
- Maintained ‘Hold’ with a price target of Rs 1,930.
- Inline quarter; margins steady ex-one off.
- Improving deal wins indicate strong H1FY20; macro begs caution for the second half.
- Weakening margins and headwinds to revenue growth aren’t a great combination for returns.
On Infosys
Investec
- Downgraded to ‘Hold’ From ‘Buy’; cut price target to Rs 750 from Rs 784.
- Q4 performance largely driven by large deal ramp up.
- Weak exit margin and cut in margin guidance leads to 4.9 percent and 4.2 percent EPS cut for the current and the next financial year respectively.
- Revenue growth guidance of 7.5-9.5 percent appears conservative.
Macquarie
- Maintained ‘Outperform’; hiked price target to Rs 810 from Rs 770.
- Margin recovery will happen earliest in 2020-21.
- Expect PE Ratio gap between TCS and INFO to rise to 20 percent.
- Cut FY20-21 EPS by 1-3 percent; Target price raised as rolled over.