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PremiumShare Market Updates: Indices ended flat-footed on Thursday as the highly weighted IT index dragged, while most other indices gained. Energy and Metal stocks shine.
Investors across the global markets were cautious amid the ongoing conflict between Israel and Palestinian group Hamas in the Middle East. However, analysts expect little effect on the overall market if the turmoil remains contained.
Asian shares rose on Thursday as markets wagered that U.S. rates have peaked after more dovish remarks from Federal Reserve officials, while traders awaited the U.S. consumer inflation report due later in the day for further monetary policy clues.
Indian shares were subdued on Thursday as a slide in information technology (IT) stocks on weak earnings by Tata Consultancy Services offset support lent by falling oil prices.
The NSE Nifty 50 index was down 17 pts to close at 19,794, and the S&P BSE Sensex fell by 60 pts to end at 66,408. A decline in the IT index kept markets subdued, despite 11 of the the 15 Nifty sectoral indexes logging gains.
TechM and HCL Tech shed around 3%, and TCS and Infosys around 2% each. Infosys and HCL Tech are scheduled to announce their quarterly earnings report later today. Apollo Hospitals was the only non-IT stock to feature in the bottom 5 list. Coal India, BPCL, and Maruti topped the charts as they drop around 1.5% each.
IT index shed 1.8%. Pharma and PSU Bank ended flat. Media climbed almost 3% and Oil & Gas 1% and topped the sectoral indices.
Japan's Nikkei share average jumped as investors scooped up beaten-down stocks following heavy sell-offs, with chip-related shares leading the charge. The Nikkei index rose 1.75% to its highest close since Sept. 25, and posted its third consecutive session of gains. The broader Topix rose 1.5%.
Chinese shares closed higher after a state fund increased its stakes in the country's biggest banks, following a slew of stimulus measures to revive the flagging stock market. China's blue-chip CSI 300 index ended the session up 1%, while the Hang Seng Index climbed 1.9%.
European stocks hit three-week highs on Thursday, supported by a fresh round of declines in government bond yields as investors took comfort from dovish views from Federal Reserve officials.
UK stocks rose tracking a rally in Asian markets buoyed by easing U.S. Treasury yields and hopes of fresh China stimulus, while Restaurant Group surged nearly 40% on agreeing to a takeover offer.
A lender-appointed receiver has taken steps to assume control of a Byju’s unit following months of failed restructuring negotiations and a loan default, according to people with knowledge of the matter.
The receiver, Kroll Pte. Limited, said in a statement Wednesday that it appointed two restructuring experts “to safeguard the charged assets" of Great Learning Education Pte. Ltd. and Byju’s Pte. Ltd. Lenders were told this week that Kroll placed Great Learning into receivership in Singapore and replaced certain Byju’s board members with representatives from Kroll, the people said. (Read More)
China stepped up its intervention in the stock market, with the sovereign wealth fund increasing its stake in the country’s biggest banks for the first time since 2015, a move seen as having a limited impact.
Central Huijin Investment Ltd. bought about $65 million of shares in four banks including Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. and committed to increase holdings over the next six months.
The sovereign wealth fund has a history of intervening during times of extreme turbulence, buying stocks after bubbles burst in 2008 and 2015. This time around, concern among investors isn’t sky high valuations but whether the government will do enough to support the economy. That means the buying may be insufficient to shore up the market without effective stimulus. (Bloomberg)
JM Financial, a brokerage house, has observed that the second quarter of the fiscal year 2024 (July-September) typically tends to be a quieter period for most internet companies, and they anticipate similar results this time. Many companies are expected to report sequential growth, with Nykaa's year-over-year (YoY) growth potentially experiencing a slight impact from the festive season.
Although there's an expectation of margin expansion due to operational leverage, this expansion is likely to occur at a slower rate than in previous quarters, especially for companies like Zomato and PB Fintech.
Furthermore, the brokerage emphasized that profitability continues to be a focal point in both the listed and private sectors of the internet industry. (Read More)
Indian Stock Market: Metals stocks remained in focus and Nifty metal index was up more than 1% with gains being led by NMDC share price that were up almost 6% . National Aluminium Company share price (NALCO) also gained more than 4% while Hindustan Copper share price was also up almost 2% .
The decision by the central government approving royalty rates of 3% each for lithium and niobium and 1% for Rare Earth Elements (REEs) lifted Street sentiments. (Read More)
Indian steel and cement industries, crucial for the nation’s economic development, will need ₹47 trillion in capital expenditure to achieve net-zero carbon emissions, according to a study by the Council on Energy, Environment and Water (CEEW) unveiled on Thursday.
These industries will also require ₹1 trillion in additional operational expenditure (OPEX) annually to achieve this net-zero transition, according to the study - a first-of-its-kind cost analysis for decarbonising these notoriously emission-intensive industries. (Read More)
HDFC Asset Management Company (HDFC AMC) announced a net profit of ₹436.5 crore in the quarter ending September 2023, reflecting a substantial 20% year-on-year (YoY) growth. This is an improvement from the net profit of ₹363.8 crore reported in the same quarter of the previous year.
HDFC AMC's revenue for Q2FY24 also displayed a strong performance, increasing by 18.1% to reach ₹643.1 crore compared to ₹544.7 crore in the corresponding period of the previous year.
As of 2 pm, HDFC AMC shares were trading at ₹2,736.00 apiece on the BSE, marking a slight decrease of 0.41% from their previous value. (Read More)
Tata Consultancy Services (TCS), India's largest IT services company, has decided to grant 100% variable pay to the majority of its employees for the quarter ending in September 2023.
During the post-earnings conference call, TCS' Chief Human Resources Officer, Milind Lakkad, revealed that 70% of the company's employee base will receive a full 100% variable pay in Q2FY24. The remaining employees will have their variable pay determined by the performance of their respective business units. This approach aims to align compensation with individual and unit performance within the organization. (Read More)
Zomato, a prominent player in the food delivery industry, reached its 52-week high of ₹113.25 in intraday trading on October 12, 2023, buoyed by a positive growth outlook provided by two brokerage houses, both of which anticipate an upside potential of up to 47%.
The stock has shown significant resilience this year, rebounding vigorously after a lackluster performance in the preceding year. Zomato's share price has surged by over 89% since the beginning of the current year. This impressive rebound comes after a challenging year in 2022 when the stock saw a sharp decline, resulting in a 57% reduction in investor wealth.
Moreover, Zomato's stock has demonstrated remarkable resilience, soaring by over 155% from its 52-week low of ₹44.35, which was recorded on January 25, 2023, underscoring its impressive recovery and upward trajectory. (Read More)
The Indian rupee on Thursday will be boosted by the pullback in oil prices and softer U.S. Treasury yields, while investors wait for the important U.S. inflation data due later in the day.
Non-deliverable forwards indicate rupee will open marginally higher than 83.1875 in the previous session.
Brent crude dipped in Asia to $85.40 per barrel, adding to Wednesday's 2% fall fuelled by the larger-than-expected rise in U.S. inventories.
Brent has surrendered a large part of the rally prompted by the military conflict in the Middle East and is now only about 1% higher than what it was prior to the crisis.
"The relief on oil makes it all the more likely that we will not see an upside breakout (on USD/INR)," a spot forex trader at a mid-sized private sector bank said. (Reuters)
Kotak Institutional Equities, a domestic brokerage firm, has reaffirmed its 'buy' rating on Sapphire Foods (SF) and adjusted its target price to ₹1,700 per share, up from the previous ₹1,615. This revised target price implies a potential upside of 18.63% for the stock from its most recent closing price.
Sapphire Foods has experienced relatively lackluster performance over the past 18-20 months, partly influenced by private equity (PE) exits, which led to a reduction in PE shareholding from 70% to 42%. Kotak anticipates a decrease in PE supply in the near future, which could contribute to improved prospects for the stock. (Read More)
Effective cooperation among the BRICS nations in striking the right balance between promoting sustainability and competition is pertinent to deal with complex challenges, NCLAT Chairperson Ashok Bhushan said on Thursday.
Emphasising the importance of having free and fair competition in the market place, he also said there is a need for robust mechanism to regulate digital markets.
He was delivering the keynote address at the eighth BRICS International Competition Conference 2023 in the national capital.
Strong anti-trust enforcement is an essential element of the overall public policy design governing the companies, he said. (PTI)
Japan's Nikkei share average jumped on Thursday as investors scooped up beaten-down stocks following heavy sell-offs, with chip-related shares leading the charge.
The Nikkei index rose 1.75% to 32,494.66, its highest close since Sept. 25, and posted its third consecutive session of gains.
The broader Topix rose 1.5% to 2,342.49.
"The market was firm overall. Investors bought back stocks that fell in recent sell-offs. They realized that the fundamental for Japanese economy has not changed," said Ikuo Mitsui, fund manager at Aizawa Securities. (REuters)
Amit Anwani - Research Analyst, Prabhudas Lilladher Pvt Ltd. on Siemens (SIEM IN) - Rating: ACCUMULATE | CMP: Rs3,559 | TP: Rs4,241
Analyst Meet Update – Focus on Digitalization & Decarbonization
We attended Siemens India's Innovation Day, where the management emphasized on digitalization and decarbonization as an emerging theme playing major role in the upcoming capex across sectors such as industries, power grids, mobility, buildings, data centers etc. India has a huge potential to adopt digitalization in manufacturing processes backed with government emphasis on increasing share of manufacturing in GDP from 15% to 25% over next 5 years and likely revival in private capex with capacity utilization levels reaching ~75%. Siemens sees opportunities arising though current trends such as 1) public capex, 2) private capex and 3) focus on decarbonization.
We remain positive on SIEM from a long-term perspective given 1) strong and diversified presence across industries through focus on electrification, digitization & automation products, 2) product localization, 3) strong balance sheet, 4) healthy public & private capex and 5) focus on cost efficiencies. The stock is currently trading at PE of 65.6x/59.7x/50.3x SY23/24/25E. We maintain ‘Accumulate’ rating on stock with TP of Rs4,241 (same as earlier), valuing it at PE of 60x SY25E.
Pharma Q2 result preview: Indian Pharmaceutical companies that saw a strong June quarter performance led by growth in the US markets may see the momentum continue in July-September 2023 quarter.
“We expect a healthy 12% and 9% year-on-year sales and Ebitda growth in 2QFY24 for our pharma coverage, led by US pricing stability, traction across most branded market" said analysts at Kotak Institutional Equities in their result preview report. (Read More)
Adani Ports and Special Economic Zone Ltd recently announced that, despite receiving offers amounting to approximately $213 million for its dollar bond buyback, the company will only proceed with the previously declared amount of $195 million.
In late September, the company initiated a tender offer to repurchase its outstanding 3.375% senior notes due in 2024, with a cash offer of up to $195 million. This move was intended to help Adani Ports partially prepay its forthcoming debt maturities, as detailed in the company's September exchange filing. (Read More)
The Sri Lankan government has confirmed that it has concluded a preliminary deal with China on the restructuring of its debts to Beijing, seen as a "big step" in the cash-strapped country's economic recovery.
In a statement issued on Wednesday, the Ministry of Finance said “The Government of the Democratic Socialist Republic of Sri Lanka is pleased to announce that it has reached an agreement on the key principles and indicative terms of a debt treatment with the Export-Import Bank of China.
China holds about 52 per cent of Sri Lanka's USD 46 billion external credit.
The agreement in principle covers approximately USD 4.2 billion of outstanding debt, it said adding that it constitutes “a key step towards restoring Sri Lanka’s long-term debt sustainability and will pave the way to a prompt economic recovery". (PTI)
Zaggle's share price experienced a substantial decline of nearly 6% during Thursday's trading session following the release of disappointing Q1FY24 earnings by the SaaS fintech company. Zaggle Prepaid Ocean Services disclosed its Q1 earnings for the quarter ending in June on Wednesday. The stock opened on the BSE at ₹205.10 per share on Thursday. However, by 10:54 IST, Zaggle's share price exhibited a slight recovery but still remained down by over 2%, trading at ₹209.30 per share.
According to the company's official exchange filing, the profit after tax (PAT) for the quarter ending in June dropped significantly by 67.4% year-on-year, falling to ₹2.06 crore from ₹6.3 crore in Q1FY23. Despite this decline in profitability, the revenue from operations for the same quarter saw a noteworthy increase, rising by 33.7% year-on-year to reach ₹118.5 crore. (Read more)
Grasim Industries share price rose over 2 per cent to hit its fresh 52-week high of ₹2,021.95 in morning trade on BSE, a day after the company informed the board of directors that the company will meet on Monday, October 16 to consider a fundraising. The stock opened at ₹1,994.95 against the previous close of ₹1,979.50 and rose 2.14 per cent to hit its 52-week high. (Read More)
Vivaa Tradecom Limited shares made a weak debut on BSE today. On BSE SME, Vivaa Tradecom Limited share price today was listed at ₹40.80 per share, 20% lower than the issue price of ₹51 . (Read More)
Sula Vineyards, the largest wine producer in India, saw a notable rise in its stock price, increasing by around 4% to reach ₹485 apiece in early trade on Thursday. This surge came in response to the company's strong Q2FY24 sales update.
In an exchange filing on Wednesday, the company said that its revenue growth (estimated) from its own brands rose by 14% YoY to ₹116.2 crore, while it reported the revenue growth (estimated) from its wine tourism business at ₹12.1 crore, a surge of 26% YoY. For H1FY24, the company posted a 22% YoY surge in revenue to ₹209.3 crore from its own brands and a 19% YoY improvement to ₹23.3 crore from wine tourism. (Read More)
Plaza Wires Listing Update: Plaza Wires saw a strong debut on the stock exchanges. On the NSE, the share price of Plaza Wires opened at ₹76 per share, reflecting a remarkable 40.7% premium over the issue price of ₹54. Similarly, on the BSE, Plaza Wires shares debuted at ₹84 per share.
To provide some context, the Plaza Wires IPO subscription window was open from Friday, September 29, to Thursday, October 5. The company had established a price band of ₹51 to ₹54 per equity share for its initial public offering. During this period, investors could bid for a minimum of 277 equity shares, with subsequent bids being in multiples of 277 equity shares. (Read More)
LKP Securities on SUPRAJIT ENGINEERING LIMITED | Initiating Coverage
Suprajit Engineering (SEL) is the market leader in domestic automotive cables, a leading player in global automotive and non-automotive cable space. The company has grown leaps and bounds through its organic and inorganic growth over the past years. We are positive on SEL due to (1) The positivity in the underlying domestic automobile industry, where SEL is a dominant player with market share in 2Ws (~75%) and 4Ws (~32%). (2) Synergies with LDC to help add new clients and products to its portfolio. This will lead to a significant jump in the financials within our time horizon. (3) New products to help drive content per vehicle. (4) Likely recovery in non-auto business (84% is Wescon) and product portfolio expansion. (5) The advantages of scale and India-based production helps SEL maintain cost leadership vis-a-vis its peers on the global platform thus growing the margin profile. Furthermore, SEL maintains a strong free cash flow generating model with nominal capex requirements along with a minimal net debt balance sheet. We are building in Revenue/ EBITDA CAGR of 12%/ 26% over FY23–25E along with RoE/ RoCE of 18.4%/ 21% for FY25E. We value SEL at 23x FY25E EPS (currently trading at 17x FY25E EPS) to arrive at a TP of ₹488.
Inflation in the United States likely eased again last month, though the decline might have slowed since summer, a reminder that the outsize price pressures of the past two years will take more time to cool.
Consumer prices are forecast to have risen 0.3% from August to September, according to economists surveyed by the data provider FactSet. Such a rise would be much slower than the previous month's 0.6% price increase but still too fast to match the Fed's 2% inflation target.
Excluding volatile food and energy costs, “core" prices likely also rose 0.3% in September, the same as in August. The Federal Reserve tracks the core figure in particular as a good indicator of the likely future path of inflation.
Thursday's inflation data could bolster — or undercut — the growing belief that the Fed can tame inflation through the series of 11 interest rate hikes it imposed beginning in March 2022 without causing a recession. (AP)
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: There are positive developments that can strengthen the rally in the market. Steadily declining trend in the dollar index and the US bond yields, declining crude and sharp dip in FII selling in the cash market are big positives for the market. If the US CPI inflation data expected tonight dips below 3.6 % that will be a shot in the arm for the bulls.
The concerns triggered by the Israel-Hamas conflict had resulted in the creation of big short positions in the market, and now these shorts are being covered pushing the markets up. Results of TCS is a mixed bag with the top line disappointing and the bottom line and margins coming good. The market will wait for the results of Infosys and HCL Tech due today for taking a view on the IT segment. The rally in banking stocks have more steam left.
In the September quarter, Tata Consultancy Services Ltd (TCS) posted a net profit of ₹11,342 crore, marking an impressive growth of 8.7% compared to ₹10,431 crore in the same period the previous year. On a sequential basis, the consolidated net profit increased by 2.4%, with TCS reporting a profit of ₹11,074 crore in the preceding June quarter.
According to analysts, although TCS fell short of revenue estimates, the company's improved operational performance was the driving force behind the better-than-expected net profits.
However, opinions among various brokerages regarding the outlook for TCS appear mixed, largely influenced by concerns over the global economic slowdown. (Read More)
Mandar Bhojane, Research Analyst, Choice Broking: The Sensex and Nifty indices are poised to open flat today, as indicated by GIFT Nifty trends, which are suggesting a gain of 2 points.
Major Wall Street indexes closed higher following the release of cautious Federal Reserve meeting minutes, fueling hopes of stable interest rates. Positive global cues and moderating US bond yields have bolstered domestic markets. Stable oil prices amid the Israel-Palestine conflict have shifted focus to the global macro-economy. If US Treasury yields remain stable, it could promote risk-on strategies in global equity markets.
In the daily chart, the Nifty index continues to exhibit a bullish trend, maintaining its position above the channel breakout level. The positive trend is expected to persist as long as the index remains above the 19,800 level. On the upside, there is potential for the index to extend its gains towards the 20,000 mark. However, if it falls below 19,550, we may witness a period of consolidation.
Foreign institutional investors (FII) offloaded shares worth ₹421.77 crore, while domestic institutional investors (DII) purchased ₹1,032.02 crore worth of stocks on October 11, according to provisional data from the National Stock Exchange (NSE).
With the absence of clear trends in both the Nifty and Bank Nifty, it is a good opportunity for market participants to exercise caution and adopt a more selective, stock-specific approach to their investments. This approach can lead to informed and strategic investment decisions in a potentially volatile market.
Rating agency ICRA on Wednesday said that it anticipates a favourable demand scenario for the road logistics sector in FY2024, aided by stable domestic consumption and investment demand.
It said the industry's revenue growth is pegged at 6-9 per cent in FY2024 on an elevated base of FY2023, driven primarily by demand from varied segments like e-commerce, FMCG, retail, chemicals, pharmaceuticals, and industrial goods.
"ICRA expects the outlook for the sector to remain stable," it said.
According to ICRA, downside risks to the estimates remain from any material tapering of demand due to elevated inflation and interest rates and global supply-demand shifts impacting the Indian economic scenario. (PTI)
Finance Minister Nirmala Sitharaman on Wednesday said India is well placed to contribute towards strengthening and diversifying supply chains.
Speaking at the launch of 'Partnership for Resilient and Inclusive Supply-chain Enhancement' on the sidelines of the World Bank-IMF Annual Meetings in Marrakech, Morocco, Sitharaman said India is undertaking some of the most robust climate actions through its Nationally Determined Contributions (NDCs).
This includes an ambitious programme for a transition to clean energy and the RISE partnership is completely in sync with India's domestic policy of prioritising Clean Energy. (PTI)
Infosys Ltd, the second-largest software services exporter, is scheduled to reveal its Q2 FY24 earnings today, October 12. Analysts anticipate a modest quarter-on-quarter (QoQ) revenue growth of approximately 1.7%, while net profit is projected to rise by 8% sequentially. The operating margin is expected to remain stable, primarily due to a weak topline growth and the absence of a wage hike in this quarter. Market observers will be closely watching the company's management commentary on deal pipelines and the progress in implementing recently secured contracts.
In the second quarter of fiscal year 2024 (Q2FY24), Tata Consultancy Services (TCS), a leading IT services company, disclosed a substantial 8.7% year-on-year surge in its consolidated net profit attributable to shareholders, reaching ₹11,342 crore. This marks a noteworthy increase from the ₹10,431 crore profit reported in the corresponding period of the previous year. Sequentially, the consolidated net profit also exhibited growth, rising by 2.4%. Nevertheless, TCS shares closed at ₹3,610.20 each on the BSE, showing a marginal 0.52% decline.
Additionally, TCS reported consolidated revenue from operations amounting to ₹59,692 crores for the quarter ending in September, reflecting a robust year-on-year growth of nearly 8% compared to ₹55,309 crores in Q2FY23. However, the sequential growth was more moderate, increasing by 0.5% from ₹59,381 crores in the previous quarter, Q1FY24. (Read More)
Aditya Birla Group’s flagship, Grasim Industries Ltd, announced that it will be holding a board meeting on Monday to consider a proposal to raise funds.
“A meeting of the Board of Directors of Grasim Industries Limited is scheduled to be held on Monday, 16 October 2023," it said in an exchange filing on Wednesday. “To consider the proposal for raising of the fund by way of equity shares or other securities through a rights issue, qualified institutions placement, preferential issue or any other method as may be permitted under the applicable law, subject to such regulatory/statutory approvals as may be required." (Read More)
JSW Steel on Wednesday said it has emerged as the preferred bidder for the Jaisinghpura North Block iron ore mine in Karnataka.
JSW Steel has received a communication from the Karnataka government in this regard, the company informed the exchanges.
"The Company has been declared as a preferred bidder vide communication dated October 11, 2023, received from the Office of the Director, Department of Mines and Geology, Government of Karnataka, for Jaisinghpura North Block, in the Auction held on August 2, 2023," the filing said.
The highest final offer price by the company to become a "Preferred Bidder" is 150.3 per cent of the value of the mineral dispatched. The projected iron ore resource is 17.66 in MMT (metric million tonnes). (PTI)
Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher recommends:
1] Hero Motocorp: Buy at ₹3100, target ₹3250, stop loss ₹3060;
2] Exide Industries: Buy at ₹263, target ₹277, stop loss ₹259; and
3] Minda Corp: Buy at ₹344, target ₹362, stop loss ₹338. (Read More)
Suzlon Energy share price will be in focus on Thursday after the company’s board of directors approved the conversion of 16.2 lakh partly paid-up shares into fully paid-up equity shares.
“The Board of Directors of the Company at its meeting held on 11th October 2023, approved conversion of 16,20,352 partly paid-up equity shares having a face value of ₹2.00 each with Re 1.00 paid-up in to fully paid-up equity shares having a face value of ₹2.00 each with ₹2.00 paid-up on receipt of First and Final Call aggregating to ₹40,50,880," Suzlon Energy said in an exchange filing on Wednesday. (Read More)
Indian insolvent airline Go First has received an expression of interest from Jindal Power Ltd, two banking sources and two people aware of the development told Reuters.
An expression of interest is the first step in the bidding process and may not result in a financial bid.
"Jindal Power was the sole successful applicant whose expression of interest was accepted by banks," said a banker with a state-run bank that has exposure to Go First. (Read More)
U.S. stocks drifted higher in a quiet day of trading Wednesday as yields were mixed in the bond market, which has been the main driver of Wall Street’s moves recently.
The S&P 500 rose 18.71, or 0.4%, to 4,376.95 for its fourth straight gain. The Dow Jones Industrial Average added 65.57 points, or 0.2%, to 33,804.87, and the Nasdaq composite gained 96.83, or 0.7%, to 13,659.68. All three indexes moved between small gains and losses through the day.
Wall Street has been mostly struggling since the summer as longer-term yields shoot higher in the bond market, weighing on prices for all kinds of investments. Some relief has come this week, and yields have eased after officials at the Federal Reserve suggested they may be done raising their main overnight interest rate.
The yield on the 10-year Treasury fell to 4.56% from 4.66% late Tuesday and from more than 4.80% last week, when it reached its highest level since 2007. Besides hurting prices for investments, high yields have jacked up rates for mortgages and other loans, which saps momentum from the economy. (AP)
