Stocks Radar: Dr Reddy’s Labs, Tata Steel, SBI, Eicher Motors
Indian equity benchmarks opened lower for the second straight session, mirroring their Asian peers. The S&P BSE Sensex traded 0.57 percent lower at 36,328.50 and NSE Nifty 50 declined 0.72 percent to 10,865.10, as of 9:55 a.m.
The market breadth was tilted in favour of sellers. Ten out of 11 sectoral gauges compiled by the NSE were trading lower led by the NSE Nifty Auto’s 1.82 percent fall. On the other hand, the NSE Nifty IT Index was the only gainer, up 0.17 percent.
Here Are The Stocks Moving The Market This Morning:
Dr. Reddy’s Slumps After U.S. FDA Inspection
Shares of the drugmaker fell as much as 4 percent to Rs 2,660.10 per share.
The company received a Form 483 with 11 observations from the U.S. FDA after the inspection of Formulations Manufacturing Plant in Hyderabad, according to an exchange filing. The company said they will address the above issue comprehensively within the stipulated time. Form 483 is used by the drug regulator to document and communicate concerns discovered during plant inspections.
The stock has gained 26 percent in the past 12 months compared to a 7.5 percent gain in the S&P BSE Sensex Index.
Bharti Airtel Swings After Kenya Merger
Shares of the telecom operator swung between gains and losses to trade at Rs 313.20 apiece as of 9:40 am.
Bharti Airtel Ltd.’s Kenya arm signed an agreement with Telkom Kenya to combine operations and will be called “Airtel-Telkom”, according to its exchange notification. Both companies will merge their mobile, enterprise and carrier services. The company says that finalisation and closure of the transaction is subject to approval by the relevant authorities.
The stock traded 22 below the Bloomberg consensus one-year target price.
SBI Falls After Cutting Interest Rates
Shares of the country’s largest lender declined nearly 1.2 percent to Rs 282.75 apiece.
State Bank of India reduced its interest rates on home loans up to Rs 30 lakh by 5 basis points. The moves comes after Reserve bank of India lowered repo rate by 25 basis points to 6.25 percent in its bi-monthly meet last week.
The stock traded 42 times its estimated earnings per share for the coming year, Bloomberg data showed.
Tata Steel Tops Nifty Q3 Performance
Shares of the steelmaker rose close to 2.6 percent to Rs 480.80 per share after it announced its third quarter results on Friday.
Net profit rose 76.5 percent over last year to Rs 2,284.1 crore in the December quarter, according to its stock exchange filing. Analyst estimates tracked by Bloomberg had expected profit at Rs 2,231.3 crore.
Other Key Highlights (YoY)
- Revenue rose 23.2 percent to Rs 41,220 crore.
- Operating profit increased 18 percent to Rs 6,723.4 crore.
- Margin narrowed 70 basis points to 16.3 percent.
Here’s what brokerages had to say on the stock:
- Maintained ‘Buy’; cut price target to Rs 739 from Rs 787.
- Operationally in-line; Thyssen JV – on track.
- Cut estimates to reflect cost inflation and remove SEA operations.
- Reiterate Tata Steel as preferred ferrous proxy.
- Maintained ‘Overweight’; cut price target to Rs 880 from Rs 980.
- December quarter was in-line but should improve further.
- Higher iron ore and European JV not priced in.
- Rising iron ore prices bodes well for Tata Steel.
Eicher Motors Falls Ahead Of Q3 Results
Shares of the maker of Royal Enfield bikes declined as much as 2.5 percent to Rs 20,335.80 apiece ahead of the company’s results announcement for the December-ended quarter.
Q3 Preview (YoY)
- Revenue seen flat at Rs 2,266 crore.
- Ebitda expected to fall 4 percent to Rs 680 crore.
- Net profit seen to fall 1 percent to Rs 524 crore.
- Operating margin seen at 30 percent versus 31.1 percent.
26 out of 41 analysts tracked by Bloomberg have a ‘Buy’ rating on the stock, while the seven recommended ‘Hold’ and eight had a ‘Sell’ rating.