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PremiumSensex Today | Market Close Highlights : UK equities gained on Thursday, buoyed by a fall in government bond yields after the latest economic data showed the British economy was in recession, building the case for the Bank of England to ease its monetary policy.
The exporter-heavy FTSE 100 and the mid-cap FTSE 250 index rose 0.3% each, as of 0846 GMT.
Data showed Britain's economy entered a recession in the second half of 2023 after it shrank by a worse-than-expected 0.3% in the three months to December. It also contracted by 0.1% between July and September.
Asian equities rose on Thursday, powered by chip stocks, with the Nikkei breaching a new 34-year peak, while the dollar took a breather near a three-month high as markets assess when the Federal Reserve is likely to start its easing cycle.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7%, with the IT index surging nearly 3%. Taiwan stocks soared to a record high, with chipmaker TSMC up nearly 8%.
Japan's Nikkei closed 1.2% higher, climbing as high as 38,188.74 during the session, its firmest since January 1990, inching closer towards its record high last seen in December 1989.
Gold prices on Thursday declined ₹58 to ₹61,385 per 10 grams in futures trade as speculators reduced their positions.
On the Multi Commodity Exchange, gold contracts for April delivery traded lower ₹58 or 0.09 per cent at ₹61,385 per 10 grams in a business turnover of 13,762 lots.
Analysts attributed the fall in gold prices to weak global cues. Globally, gold was trading 0.04 per cent higher at USD 2,005.10 per ounce in New York.
Oil prices fell on Thursday after a larger-than-expected jump in U.S. crude inventories raised doubts about the strength of demand in the world's largest economy and top oil consumer.
Brent crude futures fell 38 cents, or 0.5%, to $81.22 a barrel at 0837 GMT, while U.S. West Texas Intermediate crude futures declined 43 cents, or 0.6%, to $76.21 a barrel.
In a day marked with choppy trading, Indian benchmark indices climbed sharply near the end of the trading session to end higher.
At close, Sensex was up 227.55 points, or 0.32%, at 72,050.38, and Nifty was up 70.70 points, or 0.32%, at 21,910.75.
Sensex had opened lower at 72,061.47, and fallen to a low of 71,644.44. Nifty had opened at 21,906.55 and fallen to a low of 21,794.80, but closed higher.
The borader market also ended in the green, with the Smallcap and Midcap indices up over 1%, each.
Across sectors, PSU Bank and Oil & Gas indices ended as leader of the charts, up over 3.27% and 2.46%, respectively, while the Auto index ended up 1.35%.
Meanwhile, the FMCG, Pharma and Healthcare indices were in the red.
Automaker Mahindra & Mahindra's share price hit a high of 1,783.80, in the days trade, but climbed off the high to close at 1,769.
After a brief pause, PSU Banks resumed their winning streak, marking the third consecutive session of gains in Thursday's trading. All 12 constituents of the Nifty PSU Bank index are currently trading positively. Bank of India and UCO Bank lead the pack, with returns of 4.8% and 4.3%, respectively, as of 2:30 p.m. (Read the full story here.)
Across sectors, PSU Bank and Oil & Gas indices were leading the charts, up over 2.5% each, while the Auto index was up over 1%. FMCG, Healthcare and Pharma indices were in the red.
In the broader markets, the Midcap and Smallcap indices were up over 1% in today's trading.
M&M stocks touched its all-time highs in today's session.
Mahindra & Mahindra, NTPC, Power Grid Corp., SBI and HDFC Bank were the top gainers, while Axis Bank, ITC, HUL, Nestle and Sun Pharma were the biggest loser in the Sensex index.
Utilities and Energy indices were the biggest gainers on the BSE.
The SmallCap index was up over 1% in the broader market.
In a day marked with choppy trading, Indian benchmark indices climbed sharply near the end of the trading session.
At 3 pm, Sensex was up 214.43 points, or 0.30%, at 72,037.26, and Nifty was up 65.65 points, or 0.3%, at 21,905.70.
The borader market was in the green, with the Smallcap and Midcap indices up over 1%.
Across sectors, PSU Bank and Oil & Gas indices were leading the charts, up over 2.5% each, while the Auto index was up over 1%.
Meanwhile, the FMCG, Pharma and Healthcare indices were in the red.
Rating: ACCUMULATE
Target Price : INR 2057
Upside : 5%
CMP : INR 1950 (as on 14 February 2024)
Cenexi disappoints
Q3FY24 margins miss on poor performance by Cenexi
Cenexi – A case of capital mis-allocation?
Cenexi was projected to be a business yielding 9-10% EBITDA margin, when acquired. However, it has posted EBITDA losses in the past two quarters that saw full consolidation. Also, management commentary does not entail any major pick-up in the near-term either. Thus, in hindsight, the acquisition seems to be a case of capital mis-allocation.
Upcycle in US generics could continue to help
With a large, expanding product basket of injectables, GLAND is well-positioned to capitalize on the pricing upcycle that we are seeing in the US generics market. We believe that this macro tailwind will likely sustain for the next 2-3 years.
Valuations: Maintain Accumulate; TP raised to INR 2,057
We lower our FY24E core EPS by 9%, but maintain FY25E/26E core EPS estimates. GLAND trades at 32.9x FY25E core EPS. High valuation does limit the upside. We raise TP from INR 1,764 to INR 2,057, which is 31x FY26E core EPS plus cash per share. Any reversal in the business momentum in the developed markets is the key risk.
BUY (Maintained)
CMP: INR 5,342
Target Price: INR 6,151 (INR 6,050)
Info Edge
Internet
Solid performance in a difficult quarter in recruitment; sequential profit improvement in others
Q3FY24 did not present tangible data to showcase improvement in IT hiring, however anecdotally management spoke of increasing manpower utilisation across IT firms. This is a departure from FY23 when companies over-hired post pandemic. In our view this is a lead indicator for IT recovery. Also, IT hiring slowdown started from Q4FY23, which implies a lower base hereafter. Non-IT hiring remained strong >10%YoY. Real estate business continued on its path to profitability aided by strong tailwinds in the underlying sector. We think 99acres should turn profitable by Q1FY25E. Cash burn in Jeevansathi is also likely to remain contained as they work on improving monetisation and keep marketing spends in check. The education business improved cash generation. Maintain BUY.
BUY (Maintained)
CMP: INR 213 Target Price: INR 300
BHEL
Capital Goods
The old order book changeth, yielding place to new
BHEL is shedding its old order book and replacing with new orders. Its order book was Rs.910bn at end of FY23. It has won an order inflow of approx. Rs.600bn in FY24E till date (vs Rs.230bn in FY23E). Note that a large part of the new order has been won under limited competition. We expect a similar order inflow from the thermal power plants in next fiscal. We estimate new orders to constitute 80% of the FY25E order book. As a result, we expect the new orders to start contributing meaningfully to revenues from FY26E giving fillip to profitability in medium term. During the quarter, it reported revenues worth Rs.53bn, EBITDA loss of INR 629m and loss of INR 1.6bn. Reiterate our BUY with target price of INR 300/share valuing the stock at 35x FY26E EPS of INR 8.5/share
BUY (Maintained)
CMP: INR 3,854
Target Price: INR 4,512 (INR 4,074)
Automotives
Steady performance; portfolio expansion to add to growth
Eicher Motors’ (EIM) Q3FY24 standalone EBITDAM came in at 27.5% (down 40bps QoQ) vs. our estimate of 26.5%. EBITDA/unit was up 2% QoQ, at ~INR 49k, despite RE’s volumes being down 1% QoQ, at ~228k units.
We are building in ~0.94mn/1.03mn units for FY24E/FY25E with mean EBITDAM of ~27% to arrive at a revised DCF-based target price of INR 4,512 (earlier INR 4,074), implying ~25x FY26E consolidated EPS. We maintain BUY. Change in TP is driven by 100bps improvement in margin outlook and earnings rollover.
In a day marked with choppy trading, Indian benchmark indices climbed sharply in afternoon trading.
At 2 pm, Sensex was up 337.70 points, or 0.47%, at 72,160.53, and Nifty was up 107.90 points, or 0.49%, at 21,947.95.
BUY (Maintained)
CMP: INR 177
Target Price: INR 215
Defence
Impressive order inflow continues
Taking cognizance of the duration of recently received orders and sustained inflow, we see no risk to our revenue growth estimate of 16% YoY for FY25. Maintain BUY at an unchanged TP of INR 215 based on 32x FY26E EPS.
BEL’s FY24 order inflow has surpassed our estimate of INR 300bn for FY24 post receipt of additional orders in Feb’24.
In FY25’s interim budget, we note that FY24’s revised expenditure (RE) for Other Equipment (for the navy) is 60% higher compared to BE, as orders were fast-tracked in-line with the delivery schedule of the shipyards. The execution of its current order book with the shipyards is expected to peak in FY25 and FY26; hence, we believe that the orders were fast-tracked to negate any delays that may arise owing to the general elections to be held.
Outlook: Sustained order inflow a big positive; maintain BUY
Among all the DPSUs under our coverage, BEL has received the highest order inflow thus far in FY24. Going by the interim budget allocation for FY25, we believe that spending is expected to stay steady, resulting in order accretion of almost INR 300bn in FY25 as well. We maintain BUY and our TP of INR 215 based on 32x FY26E EPS.
BUY (Upgrade from ADD)
CMP: INR 510
Target Price: INR 620
Up 22%
Robust fundamentals; earnings growth in sight
Hindalco’s (HNDL) Q3FY24 performance was ahead of our/consensus estimates by 6-7%. HNDL’s India business is likely to post stable performance as management aims to expand downstream capacity.
At Novelis, the improving profitability shall likely sustain across the cycle with net debt/EBITDA of less than 3x.
In our view, the sharp correction in HNDL’s stock price provides a good entry point. Our TP of INR 620 (6.5x FY26E EBITDA) implies an upside of 22%. We upgrade the HNDL to BUY (from Add).
Mukesh Ambani's Reliance Industries (RIL) is in talks to acquire a 29.8% stake in Tata Play, the satellite TV and streaming service currently owned by Walt Disney. This move, if finalized, would mark a significant expansion for RIL into the television distribution sector, potentially creating a major media powerhouse in India, according to a report by Business Standard.
Currently, Tata Sons, the holding company of the Tata group, holds a majority stake (50.2%) in Tata Play. The remaining shares are owned by Disney and Singapore-based investment firm Temasek, the report added. (Read the full story here.)
In a day market with choppy trading, Indian benchmark indices were off the days lows and trading marginally up.
At 1 pm, Sensex was up 6.74 points, or 0.01%, at 71,829.57, and Nifty was up 12.15 points, or 0.06%, at 21,652.20.
In the borader market, the Smallcap and Midcap indices were up around 1%, while across sectors, O&G and PSU Bank indices had pulled ahead with a nearly 2.5% lead.
Meanwhile, the Private Bank index was in the red, down 0.15%.
Rating: SELL
Target Price : INR 720
Upside : 11%
CMP : INR 811 (as on 14 February 2024)
Execution falls short of expectations
Revenue rises 32% in Q3FY24
Garden Reach Shipbuilders & Engineers’ Q3 revenue rose 32% YoY to INR 9.2bn, 17% below our estimates.
Pipeline robust but large next-gen corvette orders deferred
GRSE's pipeline is supported by many upcoming naval projects, such as the request for proposal (RFP) for an oceanography & survey ship for Defence Research and Development Organisation (DRDO) at ~INR 7.5-10.0bn.
Valuation: reiterate Sell with a higher TP of INR 720
We cut FY24E EPS by 11% on lower-than-expected execution in the past six months, leading to margin compression. But we raise our FY25E/26E EPS by 5%/4% on execution ramp-up. We raise our TP to INR 720 from INR 695, on SOTP, assuming core shipbuilding value of INR 577 at 16x (unchanged) December 2025E P/E, in-line with defence shipbuilding P/E multiple, and a cash value of INR 144 at 8x (unchanged) P/E as we roll forward to December 2025E earnings.
We maintain Sell, due to deferment of a large order in NGC to CY24 (from FY24), which may defer revenue growth beyond FY26, and given 11% stock outperformance versus the Nifty index in the past six months. We expect an EPS CAGR of 38% in FY23-26E and improvement in ROE/ ROCE by 940bps to 27% and by 880bp to 25% in FY24-26E, respectively.
Shares of Mufin Green Finance are one of the multibagger stocks that the Indian stock market has delivered in the past year. The stock has delivered more than 450% returns to its positional investors in the last one year. However, it seems that the NBFC stock still has some upside potential.
Mufin Green Finance share price today opened upside and went on to touch an intraday high of ₹250 apiece on BSE, touching a 5 percent upper circuit within a few minutes of the opening bell on Thursday. While locking in a 5 percent upper circuit during Thursday deals, the multibagger stock went on to touch the upper circuit for the second straight session. After climbing to its existing lifetime high of ₹273.10 apiece on 8th February 2024, this NBFC stock has remained one of the circuit-to-circuit stocks of the Indian stock market. (Read the full story here.)
The carmaker's share price continued its positive run for the second consecutive session as it jumped almost 5% in morning trade on BSE on Thursday, a day after declaring its December quarter results. Mahindra and Mahindra share price opened at ₹1,683.10 against the previous close of ₹1,657.60 and jumped 4.7 per cent to the level of 1,734.70. Around 10:55 am, the stock traded 3.78 per cent higher at ₹1,720.30 on the BSE. (Read the full story here.)
Across sectors, the Oil & Gas, PSU Bank indices were up over 2.5%, while the Private bank index was red. Auto and Realty indices were the other sectors performing well on the NSE, up nearly 1% at noon.
The broader market was up at noon, with the Smallcap index trading over 1% higher, and the Midcap index up 0.8% .
Private bank and FMCG stocks were under pressure on the Nifty index at noon.
Private bank stocks were under selling pressure at noon, while automaker Mahindra & Mahindra had gained a lead of over 5%.
Indian benchmark indices were off the days and trading marginally up at noon.
At 12 pm, Sensex was up 34.35 points, or 0.05%, at 71,857.18, and Nifty was up 17.85 points, or 0.08%, at 21,857.90.
In the borader market, the Smallcap index was up over 1%, while the Midcap index was up around 0.8%.
Meanwhile, across sectors, O&G and PSU Bank had pulled ahead with a 2.6% lead, while the Private Bank index was in the red, down 0.03%. Auto and Realty indices were also up around 1%.
Shares of State Bank of India (SBI), the nation's largest public sector bank, gained sharply in February, even as the bank reported a weak set of numbers in Q3, affected by higher wage provisions and soft other income.
The stock has soared nearly 17% this month so far, marking its largest monthly gain since January 2022. Since December, it has risen approximately 33%, demonstrating robust growth in less than three months.
Going forward, the stock is likely to maintain its upward trajectory, according to the projections made by the domestic brokerage firm Motilal Oswal. In its latest report, the brokerage highlights State Bank of India's (SBI) consistent strong performance for the past few years, achieving new profitability milestones such as surpassing ₹500 billion in PAT in FY23. (Read the full story here.)
Optimism around India’s growth prospects, sound fundamentals, robust earnings and policy continuity led to FIIs returning to India, which, with greater domestic participation helped fuel the 20% rally for the Nifty 50 in CY23. This has pushed market valuations to peak levels and our proprietary framework ‘What’s in Price? (WSIP)’ is now capturing in extreme optimism, with 45% of the stocks within BSE200 universe trading in 75-100% Long Term Growth Value (LTGV) bucket.
Markets attributing LTGV in peak range…
We expect the market to remain range-bound in the near-term, with intermittent bouts of volatility amid profit-taking.
…but Nifty better placed
The Nifty appears more favorably positioned, with its LTGV at 61%, lower than both BSE200 and Nifty Midcap 100, suggesting lesser speculation priced in. Value distribution in the LTGV also favors Nifty, with 26% of the companies in value zone (<50 LTGV bucket) versus 22% in BSE200.
Energy in sweet spot; Banks baking in long-term earnings
Energy’s LTGV has expanded into positive territory after being negative for the past four years. Tailwinds such as: (a) favorable government policies, (b) beneficial global market dynamics and (c) shift towards sustainable energy suggest strong outlook.
Conversely, we see Banks to continue facing challenges in the near term, including profitability pressures and declining margins. The sector’s current valuations include significant long-term expectations, which given the sectoral headwinds and low margin of safety might lead to a cautious outlook.
PSUs – Cautious optimism
Historical trends suggest potential pre-election gains, but peak valuations warrant caution. Strategic disinvestments could unlock further value, offering a cautiously optimistic outlook with selective opportunities post-elections.
Real estate developers have topped the list of businesses facing consumer complaints for suspected goods and services tax (GST)-related profiteering, data from the Competition Commission of India (CCI) showed.
Since last May, when it regained its full quorum after a brief spell of vacant positions, CCI has issued around 44 orders on complaints of businesses allegedly pocketing the benefits of GST rate reduction or tax credits meant for consumers. (Read the full story here.)
Eight months after it pulled up some alternative investment funds for pledging shares in investee companies to facilitate financing for the latter, markets regulator Securities and Exchange Board of India (Sebi) is readying to ease its rule on indirect borrowing. The regulator published a consultation paper on lifting prohibitions on AIFs pledging shares they hold in infrastructure companies earlier this month. The proposal is seen as a measure to accelerate infrastructure development in the country.
Sebi currently considers pledging securities of portfolio companies by AIFs to enable investee businesses to avail bank finance as indirect borrowing and prohibits category I and II AIFs from entering into such arrangements. (Read the full story here.)
Indian benchmark indices were trading flat.
At 11 am, Sensex was down 2.07 points at 71,820.76 and Nifty was up 19.25 points, or 0.09%, at 21,859.30.
Fineotex Chemical shares have been on an uptrend for the last one week. However, it seems that the chemical stock still possesses some upside potential. In early morning deals on Thursday, Fineotex Chemical share price opened upside and went on to touch an intraday high of ₹421.30 apiece on NSE, which turned out a new lifetime high for this Ashish Kacholia-backed chemical stock. (Check the details here.)
Indian Pharma market growth in January 2024 at 7.9% remained slightly soft, with acute range of products growing at a slower pace compared to chronic range of products, as per reports.
While the chronic range of products saw 11% year on year growth, the acute range of products could grow at 6% YoY during the month.
The growth in chronic range of products has remained strong for past few months, while acute range of products are growing at a slightly softer pace.
Analysts at Kotak Institutional Equities, said “We note that while chronic growth has recovered from single digits over the past couple of months, the acute slowdown phenomenon is yet to be completely addressed".
Nifty Oil & Gas was the biggest gainer among sector indices on NSE, up 2.3%
· The index has undergone slower pace of retracement as over past eight sessions it retraced 61.8% of preceding seven sessions up move (21137–22126), highlighting robust price structure. This makes us confident to reiterate our positive stance and expect index to challenge the life highs of 22,124 in the coming month. The bottom up approach of Nifty 50 component highlights robust price structure that bodes well for next leg of up move. Thereby, we advise to adopt buy on dips strategy which has been faring well
· The formation of lower high-low on the weekly chart indicates short term corrective bias that makes us revise support base at 21100 as it is confluence of:
· 61.8% retracement of mid Dec-Jan rally (20508-22124)
· January 2024 low is placed at 21,137
Share price of Senco Gold jumped over 7% after the jewellery retailer reported its December quarter earnings. Its shares rallied as much as 7.32% to ₹818.05 apiece on the BSE.
The retailer reported a consolidated net profit of ₹109.32 crore for the quarter ended December 31, up 5.8% from ₹103.35 crore during the corresponding quarter of the previous fiscal. The company’s revenue from operations in Q3FY24 rose 23.3% to ₹1,652.20 crore from ₹1,339.63 crore, year-on-year (YoY), led by strong 17% SSG and 11% increase in average store count. (Read the full story here.)
The battle for Religare Enterprises Ltd (REL) has taken a new turn, with the market regulator seeking the views of its insurance counterpart on REL’s insurance unit issuing hefty stock options to Rashmi Saluja, who chairs both companies.
On 4 January, the Securities and Exchange Board of India (Sebi) wrote to the Insurance Regulatory and Development Authority of India (Irdai) for its detailed views and comments on the grant of Care Health Insurance Ltd stock options to Saluja. The letter from Sebi’s corporate finance department stated the matter is of high importance given the amount involved for incentivizing a single employee; and the Burman family’s planned takeover of Religare. (Read the full story here.)
Indian benchmark indices erased early morning gains to slip into the red.
At 10 am, Sensex was down 158.87 points, or 0.22%, at 71,663.96 and Nifty was down 30.35 points, or 0.14%, at 21,809.70.
Glenmark Pharma share price jumped over 6 per cent in early trade on the BSE on Thursday, February 15, a day after the company reported its December quarter earnings.
Glenmark Pharma share price opened at ₹766.65 against the previous close of ₹796.30 and rose 6.4 per cent to the level of ₹847.30. Around 9:20 am, the stock traded 5.22 per cent up at ₹837.90.
The pharma company reported a standalone loss of ₹20.40 crore in Q3FY24, compared to ₹430.53 in the corresponding quarter previous year Q3FY23, the company said in a stock exchange filing. Glenmark's revenues declined 38.4 per cent YoY to ₹1,304.16 crore, compared to ₹2,118.99 crore in the corresponding quarter last year. Ebitda stood at ₹144.4 crore this quarter against ₹474 crore in the previous corresponding quarter.
The Reserve Bank of India (RBI) has halted businesses from paying each other via credit cards, by ordering card networks Visa and Mastercard to stop all such payments.
Businesses typically pay their vendors by bank transfers or commercial credit cards, sometimes mediated by fintechs. The latter are called Business Payment Service Provider (BPSP) transactions, now suspended by RBI.
While the exact reason for the abrupt move is not known, Arpit Ratan, co-founder and chief business officer of Signzy, a digital banking infrastructure provider, said that RBI’s concern seems to come from the fact that certain recipients of card transactions may not be registered merchants, something that is not allowed by the KYC regime. KYC stands for know your customer. (Read the full story here.)
Across sectors, the PSB index was leading the charts, up more than 1.5%, while Realty, IT and Auto indices were also up over 1% in early trades.
Across the broader markets, both Smallcap and Midcap indices were up more than 1%.
Bank stocks were under pressure in early trades.
Mahindra & Mahindra was leading the charts, up more than 4%, on Sensex following a robust showing in Q3FY24 results.
Indian benchmark indices opened in the green on Wednesday, following a rebound in global stocks.
At opening bell, Sensex was up 238.64 points, or 0.33%, at 72,061.47 and Nifty was up 63.05 points, or 0.29%, at 21,903.10.
Indian benchmark indices were in the green at pre-open on Thursday, following a rebound in global stocks.
Sensex was up 238.64 points, or 0.33%, at 72,061.47 and Nifty was up 66.50 points, or 0.3%, at 21,906.55 during pre-open.
Bank Nifty has once again bounced from its 200 day average support and witnessed a quick recovery of 1000 points from the day’s low indicating strength.
We believe the up move could extend near to 46,800 levels as multiple bottoms are being made near the average and 200 day average has moved higher to 44,900 levels.
RSI has crossed its average line accelerating the up move as expected and other indicators are also moving in tandem.
Bank Nifty highest call OI is at 46,500 levels while on the downside put OI will has moved higher to 45,500 levels.
NIFTY-50 has managed to hold its support of 50 day average despite negative global cues and closed near the high point of the day led by broader positive momentum.
We expect a extended up move to 22,100 levels near to the all time high and on the downside 21,450 will be the trend reversal levels.
RSI is piercing upwards crossing its average line and other key technical indicators are poised for an up move.
Highest call OI is at with 22,000 strike while on the downside the highest put OI has moved higher to 21,800 for the weekly expiry.
Domestic benchmark equity indices Nifty 50 and Sensex recovered from the Wednesday's low and ended in green, supported by buying in banking stocks.
Analysts pointed out that public sector banks (PSB) were drawn to the government's ongoing emphasis on fiscal prudence and improving asset quality, but questions remained about their high valuations. Favourable inflation data from the UK added to the confidence and helped spark an overall recovery. (Read the full story here.)
Posting a strong recovery from morning lows aided by recovery in bank stocks, the Indian stock market ended higher on Wednesday. The Nifty 50 index finished 96 points higher at the 21,840 level, the BSE Sensex surged 267 points and closed at the 71,822 mark while the Bank Nifty index ended 405 points up at the 45,908 level.
In the broader market, both small-cap and mid-cap indices outperformed Nifty even as the advance-decline ratio recovered sharply to 1.95:1. Oil & Gas, and Metal stocks also witnessed heightened activity in the previous session. (Read the full story here.)
