Traders at a securities brokerage look at changing stock prices. (Photographer: Jerome Favre/Bloomberg)

Stocks Radar: Avenue Supermarts, Bandhan Bank, HUL, Natco Pharma, United Breweries

Indian equities declined on Monday as a rebound in global equities saw no traction at the start of the week.

The S&P BSE Sensex slipped 0.4 percent to 34,588 while the NSE Nifty 50 Index fell as much as 0.45 percent to 10,425 as of 10:40 a.m. The market breadth was tilted in favour of the buyers.

Eight of the 11 sectoral gauges compiled by the National Stock Exchange Ltd. fell, led by the NSE Nifty Auto Index's 1.3 percent drop. The NSE Nifty IT Index gained the most, up 1 percent.

Here Are The Stocks Moving The Market This Morning

Bandhan Bank Rises After SEBI Relief

Shares of the private sector bank rose as much as 3.9 percent to Rs 486 per share.

After being reprimanded by the Reserve Bank of India, the promoters of Bandhan Bank Ltd. have secured an exemption from the markets regulator on a rule which restricts the sale of promoter shares for one year after a company goes public.

Stocks Radar:  Avenue Supermarts, Bandhan Bank, HUL, Natco Pharma, United Breweries

The stock has lost over 17 percent since the central bank restrictions. It is 27 percent below the Bloomberg consensus one-year target price.

HUL Worst On Nifty After Q2 Earnings

Shares of the FMCG company fell 3 percent intraday to Rs 1,522.35 per share.

The company’s net profit stood at Rs 1,525 crore in the quarter ended September, slightly above the Bloomberg consensus estimate of Rs 1,418 crore. Revenue increased 11 percent year-on-year to Rs 9,234 crore during the quarter.

Key Q2 Highlights

  • Operating profit increased 20 percent to Rs 2,012 crore.
  • Margin expanded 170 basis points to 21.8 percent.
  • Volume growth stood at 10 percent.
  • Board declared an interim dividend of Rs 9 apiece.
  • Leo Puri appointed independent director on board.

Brokerage View

CLSA

  • Maintained ‘Outperform’; cut price target to Rs 1,750 from Rs 1,950, implying a potential upside of 12 percent from the last regular trade.
  • Strong homecare and pick-up in personal care.
  • Recent surge in crude oil prices and rupee depreciation risk margins.
  • Cut price target due to margin risk and market correction.

Morgan Stanley

  • Maintained ‘Underweight’ with a price target of Rs 1,260, implying a potential downside of 12 percent from the last regular trade.
  • September Quarter Review: Strong operating margin and expansion continues.
  • Continue to expect gradual recovery in underlying volume growth in 2018-19.
  • Valuation and potential disruption from small brands a concern.

Avenue Supermarts Plunges After Q2 Results

Shares of the owner of retail chain D-Mart fell as much as 7.5 percent, the most in over a month, to Rs 1,306.

The company missed profit estimates for the September quarter

Key earnings highlights (Q2, YoY):

  • Net profit up 18 percent at Rs 226 crore versus Bloomberg estimate of Rs 244 crore.
  • Revenue up 38 percent at Rs 4,872 crore versus estimate of Rs 4,460 crore
  • Ebitda up 22 percent at Rs 389 crore.
  • Margin at 7.9 percent versus 9 percent

The stock traded at 103 times trailing its 12-month earnings per share and 80 times its estimates for the coming year, Bloomberg data showed.

Info Edge Surges After Zomato Fund Raising

Shares of the Internet company rose nearly 6.7 percent to Rs 1,583.40 per share.

Subsidiary Zomato, a restaurant discovery and food ordering portal, signed a definitive agreement to raise $210 million from existing shareholder Ali Baba Group’s Alipay Singapore Holding, according to Info Edge’s exchange filing.

Info Edge said that its stake in Zomato reduced to 27.68 percent from 30.91 percent post funding.

The stock returned 12.1 percent so far this year, compared to 2.9 percent advance in the Sensex index.

Nalco Swings After Buyback Approval

Shares of the state-run aluminium manufacturer erased early gains and fell 3.8 percent to Rs 64.40 apiece.

Nalco board approved share buy back of 67.3 crore equity shares representing 3.48 percent of the equity paid-up share capital at a price of Rs 75 apiece, according to an exchange filing. The company said it will spend a maximum of Rs 504.8 crore in the buy back.

The stock’s trading volume was 3 times the 20-day average, Bloomberg data showed.

Also read: Nalco Says Supreme Court’s Order Allowing Petcoke Imports Not Enough

United Breweries Gains After Non-Alcoholic Beverage Foray

Shares of the Bengaluru-based company rose nearly 2.3 percent to Rs 1,199.80.

United Breweries forayed into non-alcoholic beverages segment with launch of ‘Kingfisher Radler’. The company has invested Rs 12 crore in setting up the carbonated malt based non-alcoholic beverage business, according to its exchange notification

Besides that, it confirmed that officers from the Director General’s Office of Competition Commission of India visited the company seeking certain business-related information on Oct. 10. The company said that it is currently reviewing its legal risks and potential implications.

The stock returned close to 40 percent in the last one year. Analyst consensus price target of Rs 1317 is 12.6 percent above current market price, Bloomberg data showed.

Adani Enterprises Gains After Report Of Stake Sale In Projects

Shares of the mining conglomerate rose nearly 2.9 percent to Rs 147.95 apiece.

French energy giant Total is in talks to buy up to half of Adani Group's stake in LNG projects in Gujarat and Odisha, according to a PTI article. The group will also buy stake in an under-construction LPG import facility and in its city gas projects.

The stock has returned 43 percent so far this year and has almost doubled in the past 52 weeks, according to data compiled by Bloomberg.

ICICI Securities Halts A Six-Day Decline

Shares of the broking firm snapped a seven-day decline, its longest losing streak since Aug. 27. The stock rose as much as 13.6 percent, the most in over five months, to Rs 260.

The Anup Bagchi and Pramod Rao were appointed as non-executive additional directors on the board of the company, according to its exchange filing.

The stock traded at 9.9 times its last reported book value compared to 13.2 times for a two-year historical average, Bloomberg data showed.

Natco Surges After Teva Loses Appeal Over Copaxone Patents

Shares of the drugmaker rose as much as 6.1 percent after the U.S. Court of Appeals retained a prior decision to invalidate Teva Pharmaceutical Industries Ltd.’s four patents on multiple sclerosis drug Copaxone.

Decisions are important milestones as we continue to focus our efforts on meeting the needs of multiple sclerosis patients in the U.S.
Natco Statement