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PremiumSensex Today | Market Closing Highlights: India's benchmark indices closed higher on Friday, after three days of losses, aided by a rebound in IT stocks and tracking gains in global peers. Broader markets, including midcaps and smallcaps, too, ended the day in the green.
The Sensex closed 496.37 points, or 0.70% up, at 71,683.23, and the Nifty closed 160.15 points, or 0.75% to at 21,609.50.
Benchmark indices, Sensex and Nifty, lost nearly 3% in the last three sessions, with the bulk of the decline led by top private lender HDFC Bank after it reported weak margins for the third quarter.
Asian shares bounced on Friday, buoyed by a rally in regional chipmakers.
Taipei-listed shares of Taiwan Semiconductor Manufacturing surged 5.0% after the chipmaking giant projected 2024 revenue growth of more than 20%. Its US shares soared nearly 10% overnight, fuelling a tech rally on Wall Street.
The main supplier of chips to Apple Inc. and Nvidia Corp. said it sees a return to solid growth this quarter as it moves ahead with plans for plants in Japan, Arizona and Germany.
Treasuries and the dollar steadied as investors paused following this week’s frenetic repricing of the outlook for Federal Reserve interest-rate policy. Traders see the prospect of a rate cut in March at little more than a coin toss, down from almost 80% at the end of last week after hawkish Fedspeak and data indicating the American consumer remains resilient.
Broadly, stock traders were unfazed by data underscoring US labour-market strength at a time when Fed officials are looking for signs of a slowdown as they contemplate cutting rates.
Coming off its best weekly winning streak in two decades, the S&P 500 has run into a roadblock in 2024, with its all-time closing record set two years ago remaining elusive. But a technical gauge that measures the momentum to buy or sell stocks signals that bulls are still stepping in to snap up shares.
Elsewhere, oil was steady after closing at a three-week high on escalating tensions in the Middle East, with the US and the Iranian-backed Houthis trading tit-for-tat strikes that have upended the global shipping market.
India's benchmark indices closed higher on Friday, after three days of losses, aided by a rebound in IT stocks and tracking gains in global peers. Broader markets, including midcaps and smallcaps, too, ended the day in the green.
The Sensex closed 496.37 points, or 0.70% up, at 71,683.23, and the Nifty closed 160.15 points, or 0.75% to at 21,609.50.
The dollar headed for a second weekly gain in a row, helped by a resilient U.S. economy and caution about when the U.S. Federal Reserve will begin cutting rates. The rethink in rate cut bets left gold on track for its worst week in six.
The MSCI All Country stock index was up 0.3% as a rally in semiconductor stocks, triggered by Taiwan's TSMC predicting strong growth, helped push the S&P 500 index on Wall Street to end near a record high on Thursday. The MSCI index, however, is down 1.4% this month after a near 20% jump in 2023.
Markets were pricing in a 57% chance of a U.S. rate cut in March, down from 75% a week ago.
In Europe, the STOXX index of 600 companies was up 0.3%, though it remains about 1.8% down for the month.
Treasuries held mostly steady in Asia but are also set for heavy weekly losses. The 10-year yield rose 2 basis points to 4.1456%, up 21 basis points for the week, while the two-year yield held at 4.3527% and up about 20 bps on the week.
U.S. crude futures were up 0.1% at $74.19 per barrel and Brent futures were at $79.17, up slightly on the day.
Spot gold eased 0.3% to $2,029 an ounce.
The company announced its December quarter results for FY24, reporting a rise of 17 percent in standalone net profit at ₹2,038 crore, compared to ₹2,157 crore in the year-ago period. EBITDA for the quarter stood at ₹3,560, down 4 percent, compared to ₹3,717 crore in the year-ago period.
At 3 pm, Sensex was up 468.66 points, or 0.66%, at 71,655.52, and Nifty was trading up 150.75 points, or 0.7%, at 21,613.
The company's board approved a fundraising proposal of ₹3,500 crore to be used for the acquisition of stakes in Capital Foods and Organic India. The funds will be raised through the issuance and allotment of Commercial Papers, it said in an exchange filing. The company will raise funds by way of issue of equity shares of face value ₹1 each, with the total not exceed ₹3,000 crore. The date is yet to be determined and is subject to approvals from the markets regulator.
With banking stocks under pressure, the index Nifty Bank was tracking red, down 85.45 points, or 0.19%, at 45,628.10.
The company's net profit rose 67% year-on-year to ₹1,775 crore, from ₹1,063 crore a year ago, while revenue increased 7.9% to ₹16,740 crore in the quarter ended December, it said in a regulatory filing.
Sebi Chairperson Madhabi Puri Buch on Friday said the capital markets regulator has found that three merchant bankers are frequently indulging in inflating subscriptions during share sales, and promised action against them.
Speaking at an annual convention organised by a lobby grouping of investment bankers here, Buch said the Sebi also has data and evidence on "mule accounts", wherein the credentials of an innocent person are used to typically front-run on stocks by those wanting to not leave a trace of trades.
There is also a tendency of "inflating the IPO application numbers to give an impression of high amount of subscriptions", Buch said, adding that Sebi has data and evidence on this.
"We are also seeing practices where there is a pattern of which kind of merchant bankers tend to be ... frequent names occurring in such malpractices. Therefore, in the interest of the investors, we will be required to both review policy as well as (start) enforcement actions," Buch said.
SAP announcement was long overdue and hence, the overhang is now behind. Post frequent changes in Ethanol Procurement Policy in the past two months and cane price increase, we do not expect any material negative policy changes or news/event marring the sector in the future (significant damage already done).
Between our prior report on BRCM dated 17 December 2023 and now, OMCs have increased the price of C-heavy & maize ethanol. And cane SAP has now been increased. The cumulative impact of these events may lead to further 16% dip in EBITDA and 19% decline in PAT for FY24E but 13% growth in EBITDA and 14% increase in PAT for FY25E.
We have also changed the valuation methodology from SoTP to blended EV/EBITDA as inter-segment transaction complexities have increased post granular changes in ethanol pricing. We reiterate Buy on BRCM with TP unchanged at INR 483, now valuing it at 9.5x FY26E blended EV/EBITDA.
Tata Consumer Products (TATACONS IN) is set to acquire Capital Foods (CF, Not Listed) and Organic India (OI, Not Listed), thereby expanding its product range and extending the total addressable market (TAM) by ~1.5x. With a valuation of INR 51bn at 6.8x FY24E sales, CF boasts robust umbrella platform brands, namely Ching’s Secret and Smith & Jones, which caters to fast-growing, in-home consumption of non-Desi cuisine with a market leadership across categories, such as Schezwan Chutney, Indian-Chinese blended masalas, sauces, ginger-garlic paste, and soups. OI, valued at INR 19bn based on 5.2x FY24E sales, is one of the strongest “Better For You" organic brands spanning Food & Beverages (F&B) and herbal & traditional supplements with significant presence in India and the US. We believe these acquisitions put TATACONS in the top quartile of sales growth in our coverage universe.
Growing footprints: huge potential to leverage distribution prowess
Despite its strong brand positioning, CF has a distribution gap with a mere ~0.4mn outlets in the domestic market, thereby presenting a huge opportunity to tap into TATACONS' extensive network of 3.8mn outlets as on Sep’23 and strong online presence. OI, with a domestic coverage of 24,000 outlets, also has the potential to leverage TATACONS' distribution & unlock its pharma channel and cross-sell brands, such as Soulfull, Tetley, and GoFit. These acquisitions would bolster exports potential via cross-synergies in distribution channels in India & abroad.
FY26E EPS neutral: 16.8% margin improvement from 14.4% now
The acquisition is likely to be funded via available cash reserves, debt (bridge-financing with short-term debt & commercial papers) and equity issuance via a rights issue. Both businesses are margin-accretive, and management expects significant margin improvement through rationalization of trade margin and cost optimization. For the acquired business, we expect a 20% revenue CAGR during FY24E-26E with margin expansion from the current mid-teens to ~24-25% by FY26E. Our FY26E EPS of INR 22.1 remains unchanged as a PAT hike of 2-3% would be offset by the rights issue (we assume an issue of INR 32bn at INR 1,100 per share).
Valuation: reiterate Accumulate with a higher TP of INR 1,246
We lower our PAT by 4.4% in FY25E and raise it by 6.2% in FY26E to factor in the effects from the acquisitions. We reiterate Accumulate with a higher SOTP-based TP of INR 1,246 from INR 1,030 as we assign 50.0x (from 48.0x) FY26E P/E to the standalone business & new acquisitions, 6.0x (from 5.0x) price/sales to NourishCo & Soulfull businesses, 2.5x (unchanged ) price/sales to the international beverages business and Eight O’Clock, and 1.0x price/sales to the Tata Coffee unbranded business as we roll forward to March 2026E.
“The current slug in the performance of the overall gems and jewellery exports is owing to external reasons leading to sluggish demand across international markets. With India and the USA, among 60 countries going for elections this year, and the geo-political scenario adding to the economic burden of various countries, leading to inflationary prices, has led to poor demand. However, the demand dynamics of gems and jewellery, across all variants and types are expected to make a gradual but steady shift towards improvisation and we are hopeful to see the sheen starting to reinstate from the 3rd quarter FY25 onwards. Studded jewellery has performed better with April to December exports specially from SEEPZ Mumbai being at the same level of ₹21,000 cr without any drop. This is a testament to the resilience of that category," said Colin Shah, MD, Kama Jewellery.
Wipro on Thursday said that it has signed a definitive agreement to subscribe to 14% equity share in Huoban Energy 11, for ₹3.17 crore. The transaction is expected to be completed before March 2024.
NMDC Ltd’s shares have risen by almost 60% in the last one year fuelled by factors such as the uptick in iron ore prices and healthy volume growth. The state-owned iron ore producer hiked prices of lumps and fines for the fourth consecutive time in January. The prices of lump ore and fines stand at Rs5,600 per tonne and Rs4,910 per tonne, respectively.
But prices may lose their momentum going ahead. For one, global iron ore price has started falling. Currently, the price of China iron ore fines is about $129 per tonne, down 7% from levels at the end of December, according to SteelMint.
Back home, domestic steel prices are on a weak footing. Iron ore is a key raw material used in steel production, and subdued demand for it means a ramp-up in iron ore prices can be ruled out. “We see downside to spot iron ore prices as the recent rally, mainly on optimism around Chinese stimulus, lacks fundamental grounds," said analysts at Kotak Institutional Equities in a report on 18 January.
At 12 pm, Sensex was up 429.56 points, or 0.60%, at 71,616.42, and Nifty was trading up 131.75 points, or 0.61%, at 21,594.
As part of its diversification plans, state-run Coal India plans to acquire rare earth and critical mineral mines including lithium, directly from the government, in addition to bidding for Jammu & Kashmir’s lithium reserves in upcoming auctions. The company would be able to apply for mines reserved for government companies or corporations. In both the Mines and Minerals (Development and Regulation) Act and Offshore Areas Mineral (Development and Regulation) Act, provisions have been made to grant mineral concessions without competitive bidding to government companies on payment of such amount as may be prescribed by the Centre for such reserved areas.
Tata Communications’ December quarter performance was mixed with a better-than-expected start for acquisitions alleviating major concerns; but steeper-than-expected deceleration in underlying revenue disappointed. However, it has fared well in holding profitability with peak investments behind. The company is confident of achieving >20% revenue growth in digital services, and doubling data revenue in the next four years. Acquisitions have started well with significant reduction in losses; Kaleyra turnaround is a positive surprise. "We upgrade TCom to ADD (from Hold) with a revised TP of INR 1,900 (PE: 25x FY26E)," the brokerage firm's research report stated.
The wires and cables manufacturer on Thursday reported a 15.3% YoY increase in consolidated net profit to ₹416 crore for the December quarter of FY24. Revenue from operations rose 17% YoY to ₹4,340.4 crore in Q3FY24.
Mukesh Ambani-led Reliance Industries Ltd will announce its December quarter (Q3FY24) results on 19 January, Friday. The oil-to-telecom conglomerate is expected to report a 9.3% year-on-year rise in consolidated net profit to ₹17,257 crore, aided by a steady performance of its digital and retail businesses. Consolidated revenue for Q3FY24 is likely to rise 5% YoY to ₹2.31 trillion. Sequentially, however, performance may be muted.
At 11 am, Sensex was up 537.12 points, or 0.75%, at 71,723.98, and Nifty was trading up 159.50 points, or 0.74%, at 21,621.75.
IndusInd Bank's NIM at 4.84% was 11bps ahead of PLe, asset quality was a miss due to higher slippages and buffer provisions were further utilized. Deposit franchise for the bank continues to improve as RTD share enhanced by 240bps YoY to 44.8%. To fund existing run-rate of asset growth, deposit accretion should scale up to 16-17% YoY. With the banking system witnessing liquidity squeeze, either loan growth for the bank will have to taper down or the bank would have to resort to wholesale funding, which may affect margins.
Poonawalla Fincorp posted a 76.3% year-on-year growth in net profit at ₹265.1 crore for Q3FY24. Revenue from operations during the period grew by 52.1% to ₹762.6 crore, while assets under management grew by 58% YoY, at ₹21,946 crore at the end of the December quarter.
At 10 am, Sensex was up 607.45 points, or 0.85%, at 71,794.31, and Nifty was trading up 180.35 points, or 0.84%, at 21,642.60.
Shaking off two days of decline, HDFC Bank shares were trading marginally up 0.37%, at ₹1,491.60 on NSE.
The company reported a 12.7% year-on-year (YoY) decline in net profit at ₹97.8 crore for the third quarter ended December 31, 2023, compared to a net profit of ₹112 crore in the corresponding quarter last year. The company’s revenue from operations grew 6.1% to ₹635.5 crore compared to ₹598.7 crore in the corresponding period of the preceding fiscal.
Indian shares opened higher on Friday, in line with gains in global peers.
At open, the Sensex was up 612.91 points at 71,799.77, and the Nifty rose 164.90 points to 21,627.20.
Coal India, Titan, Axis Bank, Tech Mahindra and TCS were the top gainers on Nifty, while IndusInd Bank, Apollo Hospital were the top losers in early trade.
In pre-open, the Sensex was up 596.90 points, or 0.84%, at 71,783.76, and the Nifty was up 152.95 points, or 0.71% to 21,615.20.
BANK NIFTY continued to underperform and failed to breach the resistance of 46,500 levels, which would act as the first line of resistance from current levels.
The 100-day average has moved higher to 45,300 levels at 45,280 and the hourly averages are oversold, suggesting some pullback from the lower range.
RSI has moved to the lower end of the range at 35 levels and oversold on daily and hourly charts.
Bank NIfty 46,000 CE has the highest OI while on the downside, 46,000 for the put OI for the monthly expiry.
NIFTY-50 traded volatile, with swift moves, tested the support of 21,300 levels, bounced and filled the gap to close down by 110 points.
The range of 21,300-21,600 will be observed over the next few days and crossover of 21,800 will trigger positive momentum in broader markets.
RSI is at the lower end of the range and we expect some bounce from the current 30 levels to the 65-70 band.
Highest call OI is at 21,800 strike, while on the downside, the highest put OI has moved higher to 21,500 for the monthly expiry.
The crisis in the Red Sea has hurt Jindal Stainless Steel's poses a risk to the company's export targets, managing director Abhudhay Jindal said. The company on Thursday reported a 35% YoY jump in consolidated net profit to ₹691 crore for the December quarter, while consolidated revenue was flat at ₹9,127 crore. The company anticipates a decline in Q4 exports, and has revised the target from 15% to around 12%, as per Jindal. Exports for the current quarter accounted for 12% of total sales.
13 stocks have been put under the F&O ban list. These are ABRFL, Ashok Leyland, Balrampur Chini, Bandhan Bank, Delta Corp, Hindustan Copper, IEX, Metropolis, NALCO, Polycab India, PVR INOX, SAIL, and ZEEL.
Reliance Industries, UltraTech Cement, RBL Bank, Hindustan Zinc, Atul, Central Bank of India, CESC, CreditAccess Grameen, Hatsun Agro Product, Sunteck Realty, Tejas Networks, and Websol Energy System will be in focus ahead of quarterly earnings on January 19.
Reliance Industries, Paytm, HUL, HDFC Bank, IndusInd Bank, are among the stocks that will be in focus today.
GIFT Nifty traded 15.50 points, or 0.07%, higher at 21,560.50, in early deals on Thursday, indicating a positive start for Indian benchmarks.
The Sensex touched a low of 70,655.50 during the day, but pared losses to close 313.90 points, or 0.44%, down at 71,186.86. Meanwhile, the Nifty 50 touched a low of 21,285.55, and closed at 21,462.25, down 109.70 points, or 0.51%.
Asian stocks were higher on Friday as shares of technology companies rallied, and as Taiwan Semiconductor Manufacturing Co.’s outlook l hopes for a global recovery in the sector.
Shares rose at the open in Japan and South Korea, and in Australia rallied. Hong Kong advanced. Contracts for US equities were little changed in Asia trading after the tech-heavy Nasdaq 100 index closed at an all-time high as TSMC’s earnings spurred the biggest rally in chipmakers in more than a month.
US stocks rallied on Thursday as robust labour market data offered evidence of economic strength despite the fact that it could prompt the Federal Reserve to hold off on lowering its key policy rate. All three major US stock indexes closed higher, with a solid rally in tech-related shares favouring the Nasdaq.
The Dow Jones Industrial Average rose 202.01 points to 37,468.68, the S&P 500 gained 41.73 points to 4,780.94 and the Nasdaq Composite added 200.03 points, to 15,055.65.
