Stocks Radar: Dr. Reddy’s, Tech Mahindra, Coal India, Tata Motors
Indian equities were set for their worst two-month decline since December 2011 amid a widening rift between the government and the RBI.
The S&P BSE Sensex fell as much as 0.9 percent to 33,587 while the NSE Nifty dropped 0.9 percent as well to 10,105.
The market breath was titled in favour of the declines by 2:1. Nine of the 11 sectoral gauges declined led by the Nifty Metal Index 2.84 percent slump. The Nifty IT Index was the bucked the trend by gaining 1.61 percent.
Here Are The Stocks Moving The Market This Morning
Tech Mahindra Gains After Q2 Results
Shares of the BPO operator rose as much as 4.2 percent to Rs 714 apiece after the company’s September-quarter profit met estimates backed by higher margins.
Net profit rose 18.5 percent quarter-on-quarter to Rs 1,064.3 crore in the July-September period, according to its exchange filing. That compares with the Bloomberg consensus estimate of Rs 1,013 crore.
Other Highlights: (Quarter-On-Quarter)
- Revenue rose 4 percent to Rs 8,630 crore.
- EBIT up 23 percent to Rs 1,325 crore.
- Margin stood at 15.3 percent against 13 percent.
- Dollar revenue down 0.5 percent to $1,218 million.
Brokerages upgrade their recommendation on Tech Mahindra:
- Upgrades to ‘Outperform’ from ‘Neutral’; raised price target to Rs 830 from Rs 820, implying a potential upside of 30 percent from the last regular trade.
- September quarter results lower than estimates at revenue level but better at EBIT margin level.
- New deal wins running high; 5G capex still sometime away.
- Raises EPS by 1-2 percent; upgrade on cheap valuations.
- Upgrades to ‘Outperform’ from ‘Underperform’; maintains the price target at Rs 790, implying a potential upside of 16 percent from the last regular trade.
- Revenue miss led by enterprise as telecom recovers.
- Margin continues to recover.
- Upgrade on improved demand environment and forex support.
Other Stocks Reacting To Earnings
Cummins India (Q2, Year-on-Year)
- Stock rose as much as 14.3 percent to Rs 769.40 apiece.
- Revenue up 28.9 percent at Rs 1,486.9 crore.
- Net profit up 38.4 percent at Rs 211.6 crore.
- Ebitda up 49.8 percent at Rs 250.9 crore.
- Margin stood at 16.9 percent against 14.5 percent.
- Other income at Rs 78.5 crore versus Rs 53.6 crore.
Motilal Oswal Financial (Q2, YoY)
- Stock declined 7.4 percent to Rs 585 apiece.
- Revenue down 15 percent at Rs 682 crore.
- Net profit down 98 percent at Rs 4.2 crore.
- Loss on fair value change impacted September quarter.
- Net loss on fair value change of Rs 84 crore versus net gain of Rs 99 crore.
- Other expenses include bad debt written-off of Rs 116 crore related to Aspire Home Finance Corp.
Bank of Baroda (Q2, YoY)
- Stock gained 4.6 percent to Rs 115.05 apiece.
- Net interest income up 20.7 percent at Rs 4,492.5 crore.
- Net profit up 19.7 percent at Rs 425.4 crore.
- Net interest margin at 2.61 percent versus 2.34 percent.
- Provisions for NPA at Rs 1,466.6 crore versus Rs 1,759.7 crore in the preceding quarter.
- Gross NPA at 11.78 percent versus 12.46 percent in the June quarter.
- Net NPA at 4.86 percent versus 5.40 percent in the previous quarter.
- Fresh slippages at Rs 2,281 crore—the lowest in seven quarters.
(as of 9:35 a.m)
Dr. Reddy’s Slumps Most In Three Months After U.S. FDA Observations
Shares of the drugmaker fell to their lowest level since July after the company said its plant in Andhra Pradesh received eight observations from the U.S. health regulator. The stock declined nearly 6.6 percent to Rs 2,423.05 apiece.
Dr. Reddy’s on Tuesday said its plant in Duvvada, Andhra Pradesh, was audited by the U.S. Food and Drug Administration following which it received eight observations. The company, in an exchange filing, said it’s addressing the issues.
The stock trades 42.8 times trailing its 12 months earning per share and 25 times its estimates for the coming year, Bloomberg data showed.
Page Industries Fluctuates After Goldman Sachs Starts Coverage
Shares of the Jockey brand distributor erased early gains and fell as much as 2.1 percent to trade at Rs 28,440 apiece.
Goldman Sachs initiated a coverage on the stock with a ‘Neutral’ rating. Its price target of Rs 28,695 implies a potential downside of 1 percent from the last regular trade. The investment firm said it’s positive on medium-term revenue and margin prospects of Page Industries.
The stock gained 14 percent so far this year and 46 percent in the past 12 months, according to data compiled by Bloomberg.
Coal India Falls On Government’s Stake Sale Plan
Shares of the state-run miner fell as much as 4.4 percent to Rs 263.80 apiece.
The government on Tuesday said it will sell a 3 percent stake in Coal India with an over subscription option of selling additional 6 percent as an offer-for-sale to public, according to an exchange notification. The floor price is set at Rs 266 apiece. The amount to be raised would be around Rs 14,861 crore, including a green shoe option. The offer will open today and end on Nov. 1.
The stock’s trading volume was 17.7 times the 20-day average, Bloomberg data showed.
Tata Motors Skids Ahead Of Earnings Announcement
Shares of the carmaker pared opening gains and fell nearly 1.7 percent to Rs 174.20 apiece.
Q2 Earnings Preview (YoY)
- Revenue seen to rise 3.2 percent to Rs 72,980 crore.
- Ebitda expected to fall Rs 6,560 crore.
- Net loss expected at Rs 874 crore versus a profit of Rs 1,992 crore.
- Margin seen to decline 9 percent versus 12.7 percent.
The stock is 48 percent below the Bloomberg consensus one-year target price.
Other Stocks Buzzing Ahead Of Earnings
L&T Q2 Preview (YoY)
- Stock fell as much as 1.6 percent to Rs 1,251.30 apiece.
- Revenue expected to rise 10 percent to Rs 29.247 crore.
- Net profit seen to decline 10 percent to Rs 1,649 crore.
- Ebitda expected to rise 13 percent to Rs 3,346 crore.
- Margin seen at 11.4 percent versus 11.2 percent
Vedanta Q2 Preview (YoY)
- Stock fell close to 2 percent to Rs 207.15 a share.
- Revenue seen to fall 5 percent to Rs 20,605 crore.
- Ebitda seen to decline 2 percent to Rs 5,777 crore.
- Ebitda margin at 28 percent versus 26 percent.
- Net profit expected to fall 35 percent to Rs 1,359 crore.