Stocks Radar: Asian Paints, HCL Technologies, ITD Cementation, Omax Autos
Indian equity benchmarks fell for the fourth straight session and are poised for their longest losing streak in a month amid a sell-off in equities in Asian stocks and a slide in U.S. futures. The S&P BSE Sensex and the NSE Nifty 50 Index are trading nearly 0.4 percent down at 34,003.58 and 10,197.50, respectively, as of 10:03 a.m.
The market breadth was tilted in favour of sellers. Six of the 11 sectoral gauges compiled declined, led by a 1.72 percent decline in the NSE Nifty IT Index. The NSE Nifty Realty Index was the biggest gainer, up 0.54 percent.
Here Are The Stocks Moving The Market This Morning
HCL Tech Falls Ahead Of Earnings Announcement
Shares of the information technology company fell as much as 1.5 percent to Rs 965.65 apiece.
The company is scheduled to announce its September quarter results today. The analysts tracked by Bloomberg estimate net profit of the company to be around Rs 2,433 crore in the July-September period .
Earnings preview (Quarter-On-Quarter):
- Dollar revenue is expected to rise 2 percent to $2,096 million.
- Profit likely to go up 1.2 percent to Rs 2,433 crore.
- Income from operations likely to rise 6.3 percent to Rs 14,748 crore.
- EBIT expected to rise 6.9 percent to Rs 2,916 crore.
- EBIT margin seen at 19.8 percent against 19.7 percent.
The stock trades at 12.9 times its estimated forward earnings per share compared to 13.6 times for the two-year historical average, Bloomberg data showed.
Asian Paints Worst performer On Sensex, Nifty After Q2 Results
Shares of the country’s largest paintmaker declined for the fourth session in a row. The stock fell as much as 5.8 percent, the most since Sept. 21, to trade at over a six-month low at Rs 1,131.15 apiece. It is also the worst performer on the Sensex and the Nifty.
The company’s net profit for the quarter ended September missed estimates due to rising cost of raw materials (more details here).
Earnings highlights (Q2, YoY):
- Revenue up 8.8 percent to Rs 4639 crore.
- Net profit down 14.4 percent to Rs 493 crore.
- Ebitda down 2.1 percent to Rs 784 crore.
- Margin stood at 16.9 percent against 18.8 percent.
Here’s what brokerages had to say about Asian paints after Q2 results:
- Maintains ‘Neutral’ with a price target of Rs 1,300, implying a potential upside of 8 percent from the last regular trade.
- September quarter result was below estimates due to higher raw material prices.
- Decoratives volume growth continues in double digits of 11-12 percent.
- Margin pressure evident; Recent price hikes to alleviate some pressure.
- Maintains ‘Neutral’ with a price target of Rs 1,400, implying a potential upside of 17 percent from the last regular trade.
- September quarter was operationally weak on adverse mix and high cost inflation.
- Adverse mix weighs on value growth even as domestic volume growth was low.
- Believes there is need for more price hikes to offset high cost inflation.
- Maintains ‘Buy’ with a price target of Rs 1,650, implying a potential upside of 37 percent from the last regular trade.
- Healthy volume, but bottom line miss on weak margins.
- Lower margin due to delay in price hikes led to a miss.
- Recent dealer checks suggest surging optimism for the second half of the ongoing financial year.
ITD Cementation Gains After Bagging Multiple Orders
Shares of the construction company rose as much as 3.8 percent to Rs 114.80 apiece.
The company bagged multiple orders worth over Rs 1,066 crore, according to its exchange filing.
The stock is 38 percent below the Bloomberg consensus one-year target price. The scrip fell 48 percent so far this year.
Lakshmi Machine Works Falls The Most In Nearly Two Years
Shares of the textile machinery maker declined as much as 7.1 percent, the most since November 2016, to Rs 5,700 apiece.
The company said it will buy back 2.66 lakh shares at Rs 6,000 each at a discount of 2.2 percent to current market price, according to its exchange notification. The company also announced its quarterly results for the July-September period.
Earnings highlights (Q2, YoY):
- Revenue up 35 percent at Rs 772 crore.
- Profit down 13 percent at Rs 40.4 crore.
- Ebitda up 43 percent at Rs 90.3 crore.
- Margin stood at 11.7 percent compared with 11 percent.
The stock’s trading volume was 19.4 times its 30-day average, Bloomberg data showed. The stock fell 3.6 percent over the past year compared to a 5.6 percent advance in the Sensex.
Other Stocks Reacting To Earnings Announcement
Oberoi Realty (Q2, YoY)
- Stock swung between gains and losses to trade at Rs 382.
- Revenue up 95 percent at Rs 592 crore.
- Profit up 105 percent at Rs 214 crore.
- Ebitda up 81 percent at Rs 295.8 crore.
- Margin stood at 50 percent versus 54 percent.
Welspun India (Q2, YoY)
- Stock fell as much as 5.8 percent to Rs 56.50 apiece.
- Revenue up 11 percent at Rs 1,780 crore.
- Net profit up 19 percent at Rs 115 crore.
- Ebitda up 2.2 percent at Rs 289.5 crore.
- Margin stood at 16.3 percent against 17.6 percent.
- Margin impacted due to higher raw material cost and higher other expenses.
- Net profit growth aided by a lower tax rate.
- The company said the full impact of the exchange rate will be evident in the next financial year.
Schaeffler India (Q2, YoY)
- Stock fell as much as 0.8 percent to Rs 4,831.35 apiece.
- Revenue up 19 percent at Rs 1,191.5 crore.
- Net profit down 5 percent at Rs 91 crore.
- Ebitda up 19 percent at Rs 200 crore.
- Margin stood at 16.8 percent versus 16.7 percent.
- Exceptional expense of Rs 39 crore booked related to the merger.
Omax Autos (Q2, YoY)
- Stock fell as much as 9.9 percent to Rs 87.15 apiece.
- Revenue up 7 percent at Rs 309 crore.
- Ebitda down 30 percent at Rs 10 crore.
- Margin stood at 3 percent versus 4.8 percent.
- Net loss at Rs 1.5 crore versus a profit of Rs 3.3 crore.
- Higher cost of raw material impacted financials.
- Higher tax outgo versus tax refund led to higher losses.
Can Fin Homes (Q2, YoY)
- Stock rose as much as 5.5 percent to Rs 238.20 apiece.
- Net interest income up 2 percent at Rs 130.4 crore.
- Net profit up 7.5 percent at Rs 76.8 crore