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Indian benchmark equity indices closed higher in a volatile trade on Thursday lead by healthy buying in banks, financials post AGR hearing.
In the afternoon trade, Sensex clawed back over 800 points from day’s low to close 2% higher at 34,208. Nifty settled up 209 points or 2.1% at 10,091. BSE Bankex, and BSE Finance, closing 3-4% higher, were the top sectoral gainers followed by BSE Metal, up 3%.
Bajaj Finance, surging over 5%, was the top Sensex gainer followed by Kotak Bank, SBI and Power Grid Corp. HUL, Bharti Airtel and TCS were among the laggards. Of 30 Sensex shares, 8 closed in the red.
Shares of Manappuram Finance rose as much as 6.47% after the company said its board approved raising up to ₹350 crore through private placement of non-convertible debentures.
"The 5% contraction in the Indian economy expected by CRISIL this fiscal – wrought by the covid-19 pandemic – will significantly hurt micro, small and medium enterprises (MSMEs) across sectors.
The pain will radiate as India Inc heads towards ~15% decline in revenue and ~25% fall in earnings before interest, taxes, depreciation and amortisation (Ebitda). For MSMEs, the fall in revenue will be steeper at 17-21%, while Ebitda margin will shrink 200-300 basis points to 4-5% as weak demand gnaws away gains from lower commodity prices."
Shares of state-owned telecom equipment company ITI jumped over 19% on Thursday after the government asked state-owned telecom operators BSNL and MTNL not to use Chinese telecom gear in its 4G upgradation.
The rupee settled on a flat note, registering a rise of just 2 paise to 76.14 (provisional) against the US dollar on Thursday, tracking weak US dollar and gains in the domestic equity market.
The rupee opened at 76.17 against the US dollar, and finally settled for the day at 76.14 against the US dollar, up 2 paise over its previous close.
It had settled at 76.16 against the greenback on Wednesday.
The Asian Development Bank said Indian economy will contract by 4% in FY21 as the economy came to a standstill for more than two months because of a nationwide lockdown. In April, ADB has projected India’s economy to grow at 4% in FY21.
In FY22, the development bank expects Asia’s third largest economy to bounce back to grow at 5% as economic activity normalizes gradually. (Full report)
Shares of GAIL, Oil India Power Grid jump 1-3% after Centre informed the Supreme Court that the Department of Telecommunications (DoT) has decided to withdraw 96% of the ₹4 lakh crore demand for AGR related dues raised against non-telecom PSUs.
Shares of Muthoot Finance Ltd (MFIN) gained as much as 16.47% on Thursday after it reported a 52.4% jump in consolidated net profit at ₹835.78 crore due to higher demand for gold loans. At 02:05 pm, Muthoot Finance was trading at ₹1163.15 up 16.29% from its previous close.
Manappuram Finance had earlier raised ₹250 crore by issuing bonds on a private placement basis.
The Financial Recourse and Management Committee of the company's board, on 12 June, had approved allotment of 2,500 secured redeemable NCDs of face value of ₹10 lakh each aggregating to ₹250 crore on a private placement basis, it said in a regulatory filing.
Motilal Oswal has maintained 'buy' rating on Hindustan Petroleum Corporation Ltd with a target price of ₹300. "The stock trades at 4.6x FY22E EPS of INR47 and 0.9x FY21E BV of INR231. The company made a strong dividend payout of ~80% in FY20, with dividend yield at 4.6%. However, owing to higher capex, FCF generation for the company is forecasted to remain negative. We value HPCL at 1.3x (20% discount to FY15–18 post the reform period, factoring heavy capex and project execution risk) FY22E PBV to arrive at TP of INR300. Maintain Buy," the brokerage said.
The brokerage has maintained 'neutral' ratings on Indraprastha Gas with a target price of ₹485. "The aforementioned changes have led to downward EPS revision of ~30%/~12% for FY21/22E (to INR10.9/INR17.9), with EBITDA/scm of INR6.6 (unchanged) v/s INR6.4 in FY20, as companies would benefit from lower APM and spot LNG prices. The board has recommended final dividend of INR2.8/share (up from INR2.4 in FY19). We value the company at 24x FY22E adj. EPS of INR17.7, and add value from JV to arrive at a target price of INR485 (from earlier INR530). Maintain Neutral," Motilal Oswal said in a note.
In a big push for reforms by allowing commercial coal mining in the country, Prime Minister Narendra Modi on Thursday launched the auction process for 41 coal mines.
Ending seven decades of policy restriction by making the private sector a stakeholder to help kickstart economic growth, these auctions formalises the Cabinet Committee on Economic Affairs’ (CCEA) last month’ decision of a new process for awarding coal and lignite blocks on revenue sharing basis.
These coal mines will require an investment of around ₹33,000 crore, with the auction process serving as a template for the allocation of natural resources in India.
RBL Bank says RBI approves re-appointment of Prakash Chandra as non-executive part time chairman.
“The telecom companies are going to file their replies to the Supreme Court’s questions today as the Court in their last hearing had directed telecom companies to provide details with respect to the roadmap and timeline for payment of AGR due and security they can provide to guarantee payment. While Bharti Airtel and Vodafone will bat for a timeline of 20 years we believe that the Supreme Court may agree to a shorter tenure which would put Vodafone Idea in a weak position given that it has so far paid only INR 6,854 crore out of total demand for INR 58,254 crore by the DoT. Bharti Airtel is in a much better position given that they have already paid INR 18,004 crore out of their total dues of INR 43,980 crore and has a relatively stronger balance sheet as compared to Vodafone Idea and therefore better placed to provide guarantees."
The brokerage has upgraded its ratings on Can Fin Homes to 'buy' with a target price of ₹415. "Upgrade rating to BUY from ADD. Can Fin remains the safest bet in HFC space due to its strong balance sheet construct (least risky among all HFCs), robust liquidity position (see lenders offering funding at even finer rates) and thus better growth prospects when demand recovers (also supported by lower base and strong distribution in Tier 2-4 markets). The traction in NIM could continue and will offset the likely spike in credit cost cushioning return ratios. Estimate avg. RoA/RoE at 1.8%/16.5% without considering equity raise. Stock trades at 1.6x P/ABV and 10x P/E on FY22 basis," Yes Securities said in a note.
The company told SC that it is not in a position to give bank guarantees as losses are over ₹1 lakh crore.
SC allows more time to DoT to consider telcos' proposal till July third week. The apex court has asked telcos to file their financial statements before it and fixes AGR related dues case against them for hearing in July.
No personal guarantee by promoters of the Voda Idea to be looked at for now.
Vodafone Idea's counsel Mukul Rohtagi to SC: Allow us 2 weeks to confer with the management, and we will get back.
DoT seeks time from SC to respond to Telcos replies on payment of AGR related dues by them.
Mukul Rohtagi appearing for Vodafone Idea before SC: "I have not made any profits for the past many quarters. After servicing debts, paying off debt, I continue to make losses. Most of my assets are with banks as guarantees, even towers are with Banks as guarantees."
DoT files affidavit explaining reason for raising ₹4 lakh crore demand of AGR related dues against PSUs earlier.
SG Tushar Mehta, appearing on behalf of DoT, told the apex court that the government has received affidavits from respective telecom operators.
Senior Counsel Abhishek Manu Singhvi appearing for Bharti Airtel tells the Supreme Court that out of the ₹21,000 crore, the company has paid over ₹18,000 crore.
SG Tushar Mehta, appearing on behalf of DoT, says PSUs are not in the business of providing that service and thus government has decided to withdraw the demands.
The Court had pulled up DoT for demanding AGR dues from PSUs observing that the judgment passed in October 2019 was silent on PSUs.
The company has clarified that news reports of Radhakishan Damani considering to acquire controlling in India Cements Ltd are factually incorrect.
The company posted around 9% increase in its consolidated net profit to ₹170.24 crore in the March quarter compared to the same period last year. Cummins India had reported a consolidated net profit of ₹156.31 crore in the quarter ended on March 31, 2019.
India’s largest CNG distribution company reported a 12% rise in March quarter net profit on the back of higher gas sales. Net profit of ₹252.63 crore in January-March compared with ₹224.72 crore in the same period a year back, IGL said in a statement.
Tata Consultancy Services and IBM have expanded their global alliance to help clients accelerate their digital and cognitive enterprise transformations to IBM public cloud using IBM Cloud Paks. As part of this relationship, TCS will establish an IBM Enterprise Cloud Architecture Unit, which will include technical professionals from both companies.
"Revenue from operations declined by 5.8% to ₹1,544.7 crore in Q4FY20 as compared with ₹1,639.3 crore in the same period of 2018-19. EBITDA margin was up by 247bps YoY to 19.48%. Net profit was down by 33.0% to ₹157.5 crore as the company made a one time provision for impairment loss on plant and machinery at Dahej Elastomer Project amounting to Rs. 33 Cr in the current quarter. Adj PAT for the quarter stood at 253.4 Cr vs expectation of 277.2 Cr. Q4 performance was significantly impacted by the lockdown due to the Covid-19 pandemic as well as related disruptions in supply chain. While top line growth was subdued, margins have improved substantially, primarily due to softer input costs. The Q4FY20 numbers were broadly in line with street estimates."
India stocks fluctuated as a surge in new coronavirus cases raised concerns over business recovery, while a border conflict with China’s military has raised tensions.
The S&P BSE Sensex rose 0.3% at 33,611.52 as of 10:29 am, after initially falling as much as 0.4%. The NSE Nifty 50 Index climbed 0.5% to 9,926.65 points.
What should cheer investors is also the factors behind this net profit surge. The southern India-based lender’s asset under management grew 22% year-on-year and a 15% fall in provisions helped boost net profit. The fall in provisions is a fallout of a drop in bad assets. (Full report)
IRB Infrastructure Developers Ltd has tied up ₹6,600 crore (about $867 million) of debt financing for acquiring tolling rights of the Mumbai-Pune Expressway, which it won through a bidding process in February, said two people aware of the development. (Full report)
Fitch revises India's outlook to negative, affirms ratings at 'BBB-'.
Expects economic activity in India to contract 5% in FY21.
Medium-term GDP growth outlook may be negatively impacted by asset quality issue.
The lender said that the amount in overdue categories, where the moratorium was extended as on March 31, 2020 was ₹1,908.08 crore. As on May 31, 2020, it was reduced to less than ₹710 crores.
The state-owned lender said that the profitability of the bank may be impacted in the first two quarters of the current fiscal due to slowdown in economy caused by the nation-wide lockdown imposed to contain the spread of coronavirus.
India may restrict Chinese portfolio investments into its equity markets as part of an economic response it is contemplating after 20 Indian soldiers were martyred in a violent face off with troops from the neighbouring country along the border in Ladakh. (Full report)
The company reported a 52.4% jump in consolidated net profit at ₹835.78 crore in the last quarter of the fiscal ended March 2020 due to higher demand for gold loans. It had posted a net profit of ₹548.56 crore during the corresponding January-March quarter of fiscal ended March 2019.
The Supreme Court will hear the adjusted gross revenue (AGR) matter today. The apex court had earlier asked telecom operators to file affidavits regarding the roadmap to clear the dues.
Indian benchmark equity indices opened lower on Thursday tracking weak cues from global peers. Sensex dropped 136 points to open at 33,371.52, while Nifty opened 14 points lower at 9,863.25.
Indian stocks were in the red in the pre-opening session on Thursday. At 9:06 am, Sensex was 110 points or 0.33% down at 33,397. Nifty fell 13 points or 0.13% to 9,868.
Vodafone Idea, Bharti Airtel, Muthoot Finance, housing finance comapnies, Cummins India are among top stocks that could be in focus on Thursday.
U.S. West Texas Intermediate (WTI) crude futures dropped 2.1%, or 80 cents, to $37.16 a barrel at 0138 GMT, adding to a loss of 42 cents.
Brent crude futures fell 1.5%, or 61 cents, to $40.10 a barrel. The benchmark contract declined 25 cents.
Indian benchmark equity indices closed in the red in a volatile trading session on Wednesday as investors weighed the consequences of Indo-China border conflict.
After swinging between gain of as much as 1% and losses of as much as 0.8%, Sensex settled 97 points or 0.3% lower at 33,507. Nifty closed 36 points or 0.4% lower at 9,877.
Asian stocks were set to dip on Thursday after a choppy Wall Street session as spiking coronavirus cases and prospects of new lockdowns erased earlier confidence about a global economic recovery.
Australia ASX All Ordinaries fell 1.55%
China's Shanghai SE Composite Index slipped 0.16%
Hong Kong's Hang Seng retreated 0.91%
Singapore's SGX Nifty dropped 0.7% indicating a weak opening for Indian stock markets.
The S&P 500 closed lower on Wednesday as news of spiking pandemic data and the prospect of a new round of economic lockdowns dampened investor optimism over signs of economic recovery.
The S&P 500 and the Dow reversed earlier gains to snap a three-day winning streak. Tech shares led the Nasdaq to a modest gain.
The Dow Jones Industrial Average fell 170.37 points, or 0.65%, to 26,119.61, the S&P 500 lost 11.25 points, or 0.36%, to 3,113.49 and the Nasdaq Composite added 14.67 points, or 0.15%, to 9,910.53.
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