PremiumThe Indian equities markets benchmark Sensex slumped over 500 points on Tuesday dragged by selling pressure in auto, IT and metal stocks. Maruti Suzuki slumped by around four per cent erasing the gains made in Monday's rally. UltraTech Cement dipped by more than 3.6 per cent.
Benchmark indices closed in the red on Tuesday. The Sensex lost 554 points to close at 60,754. Meanwhile, Nifty ended the session 195 points lower at 18,113. Broader markets also dragged. All the sectoral indices were in the red with auto, IT, metal, pharma, FMCG down 1-2 per cent. BSE midcap and smallcap indices were down 1-2%.
On the Sensex, just seven stocks advanced, while 23 stocks declined. Axis Bank, HDFC Bank, ICICI Bank, and Kotak Bank were the top gainers, while Maruti, Ultratech Cement, Tech Mahindra, and HCL Tech were top drags. Nifty saw six advances and 43 declines.
Benchmark oil prices climbed to their highest level since 2014 on Tuesday as possible supply disruption after attacks in the Mideast Gulf added to an already tight supply outlook.
Brent crude futures rose $1.02, or 1.2%, to $87.50 a barrel by 0924 GMT, while U.S. West Texas Intermediate (WTI) crude futures jumped $1.36, or 1.6%, to $85.18 a barrel. Trade on Monday was subdued as it was a U.S. public holiday.
Both benchmarks touched their highest levels since October 2014 on Tuesday.
Stocks fell Tuesday amid a jump in global bond yields as investors girded for the removal of central bank support to quell high inflation.
Europe’s Stoxx 600 Index declined, with all sectors in the red. Technology shares led the retreat as and Nasdaq 100 futures deepened losses to 2% before the market reopens later from a holiday. Asian shares struggled.
Reliance Retail Ventures Ltd, the retail unit of Reliance Industries Ltd, has acquired 54% stake in Addverb Technologies for $132 million ( ₹983 crore approximately).
India-based Addverb will continue to operate independently and will use the fresh funds received from RIL to expand business overseas as well as set up one of the biggest robotic manufacturing facilities in Noida, which will be completely automated, Sangeet Kumar, Addverb Technologies co-founder and CEO, said.
Car dealership chain Landmark Cars is looking to file a draft red herring prospectus (DRHP) on Tuesday with markets regulator Securities and Exchange Board of India (Sebi, people aware of the development told Mint
EKI Energy Services Limited (EKI Energy), a developer and supplier of carbon credit, today announced its results for the third quarter and 9 months period ending December 31, 2021 for FY 21-22.
9M FY2022 Performance Highlights:
Revenues from operations of Rs. 1,325 crores (Rs. 191 crores for full year FY2021)
EBITDA of Rs. 370 crores; margins expanded to 27.9 % (Rs. 25 crores for full year FY2021)
PAT of Rs. 278 crores with margins of 21.0% (Rs. 19 crores for full year FY2021)
Q3 FY2022 Performance Highlights:
Revenues from operations of Rs. 688 crores
EBITDA of Rs. 213 crores; margins 31.0%
PAT of Rs. 161 crores with margins of 23.4%
European shares fell on Tuesday, with tech stocks coming under pressure as a rise in two-year U.S. Treasury yields reflected ramped-up bets for a U.S. policy rate hike as soon as March.
The pan-European STOXX 600 index dropped 0.9%, with tech stocks declining 1.5% after U.S. Treasuries fell along the curve. Two-year yields, which track short-term rate expectations, crossed 1% for the first time since February 2020.
Oil stocks were the only ones in positive territory, jumping 0.4% as crude prices rose to their highest in more than seven years on worries about possible supply disruptions after Yemen's Houthi group attacked the United Arab Emirates.
Kotak Investment Advisors Limited (KIAL) on Tuesday announced that it has closed its maiden Kotak Pre-IPO Opportunities Fund by raising ₹2,000 crore. The Pre-IPO Fund will invest in a range of India focused late-stage new-age businesses with a strong moat of technology.
Piyush Arora will be the new Managing Director of Skoda Auto Volkswagen India Private Limited. He will take charge from March 1 as he succeeds Gurpratap Boparai. He will be responsible for expanding the Volkswagen Group’s business in India, including the recent INDIA 2.0 project of the brands Volkswagen and Skoda. SAVWIPL oversees the India operations of five Volkswagen Group brands; Skoda, Volkswagen, Audi, Porsche and Lamborghini.
Shares of telecom gear maker HFCL plunged as much as 9% to ₹88 apiece on the BSE in Tuesday's session after the company posted 4.7% decline in consolidated profit for the third quarter ended December 31, 2021. The company had posted a profit after tax of ₹85 crore in the year-ago period.
AGS Transact Technologies Ltd. derives majority of its revenues by providing various services to the banking sector. The company derived 60% & 15% of its revenues from the cash management & digital services in the first 5 months of FY2022. There is no comparable company in the listed space which is exclusively engaged in the portfolio of business similar to the company. However CMS Infosystems Ltd. is engaged in cash management services which accounted for 60% of AGS Transact’s revenues. At the higher end of the price band AGS Transact would be trading at P/E multiple of 38.5xFY21 EPS which is at a premium to CMS Infosystems. Moreover AGS has high client concentration with top three customers accounting for 33.6% of revenues and has reported a loss for the first five months of FY2022. Given premium valuations, high client concentration and losses in 5MFY2022 we have a NEUTRAL recommendation on the IPO.
Radiant Cash Management Services Ltd, backed by Ascent Capital, has received approval from markets regulator Securities and Exchange Board of India (Sebi) to raise funds through an initial public offering (IPO).
Supply chain company Delhivery has received capital markets regulator Sebi's approval to raise ₹7,460 crore through an initial public offering (IPO).
The IPO comprises fresh issuance of equity shares worth ₹5,000 crore and an offer for sale (OFS) component of ₹2,460 crore by existing shareholders, according to the draft red herring prospec
Vinyl Chemicals share price is in an intermediate uptrend as it has been making higher tops and higher bottoms for the last several months, highlighted domestic brokerage and research firm HDFC Securities.
HDFC Bank Limited:
Stable Quarter
CMP : 1545 | Target: 1985 | Upside : 28.5%
· Financial Performance: HCL Technologies Ltd (HCL Tech) Q3FY22 performance stood above our expectations and beat our estimate on all fronts. The company reported revenues of ₹22,331 Cr, up 8.1% QoQ and 15.7% YoY. While operating profits stood at ₹5,242 Cr, registering a growth of 8.3% QoQ, the operating margin remained stable at QoQ at 23.4%. Net profit for Q3FY22 stood at ₹3,442 Cr, up 5.4% QoQ.
· Operating Performance: On the vertical front, the BFSI and Technology & Services verticals grew by 6.3% and 14% QoQ respectively. While the Retail & CPG vertical advanced by 11.5% QoQ, Life Sciences & Healthcare verticals delivered a marginal growth of 0.9% QoQ. The Manufacturing vertical improved by a robust 5.7% QoQ.
· Outlook & Valuation: HCL Tech has built a resilient business model by securing multiple and high-value long-term contracts with the world’s leading brands. Furthermore, a strong deal pipeline and superior service mix will help the company attain leading growth in FY22 as well as in FY23. We recommend a BUY on the stock and assign a 24x P/E multiple to its FY24E earnings of ₹67.4/share which gives a TP of ₹1,600/share, indicating an upside of 20% from CMP
HCL Technologies Limited:
Stellar Performance; Outlook Continues To Be Robust
CMP : 1337 | Target: 1600 | Upside : 20%
· Financial Performance: HCL Technologies Ltd (HCL Tech) Q3FY22 performance stood above our expectations and beat our estimate on all fronts. The company reported revenues of ₹22,331 Cr, up 8.1% QoQ and 15.7% YoY. While operating profits stood at ₹5,242 Cr, registering a growth of 8.3% QoQ, the operating margin remained stable at QoQ at 23.4%. Net profit for Q3FY22 stood at ₹3,442 Cr, up 5.4% QoQ.
· Operating Performance: On the vertical front, the BFSI and Technology & Services verticals grew by 6.3% and 14% QoQ respectively. While the Retail & CPG vertical advanced by 11.5% QoQ, Life Sciences & Healthcare verticals delivered a marginal growth of 0.9% QoQ. The Manufacturing vertical improved by a robust 5.7% QoQ.
· Outlook & Valuation: HCL Tech has built a resilient business model by securing multiple and high-value long-term contracts with the world’s leading brands. Furthermore, a strong deal pipeline and superior service mix will help the company attain leading growth in FY22 as well as in FY23. We recommend a BUY on the stock and assign a 24x P/E multiple to its FY24E earnings of ₹67.4/share which gives a TP of ₹1,600/share, indicating an upside of 20% from CMP.
India's third covid wave peak may come within 2-3 weeks if districts such as Bengaluru, Pune arrest the rise of the new infections, according to a research report by SBI.
Rising demand for compressed natural gas (CNG) has remained a key growth driver for city gas distribution (CGD) companies. Favourable cost dynamics of CNG compared to other auto fuels such as petrol and diesel have led to regular growth in CNG sales. Pollution concerns in Delhi NCR have also been key reasons for consumers opting for CNG and purchasing CNG vehicles.
Gaming and sports media company Nazara Technologies on Tuesday announced that it has entered an agreement to acquire a 55% stake in programmatic advertising and monetization company Datawrkz valuing the company up to ₹225 crore linked to CY 22 EBITDA performance.
Tata Motors plans an aggressive 2022 for its portfolio of cars in India. The new 2022 portfolio will include petrol variants, and the most searched, electric cars as well. Tata Nexon remains an impressive driver for the homegrown auto major last year. Nexon became so hit that company also introduced an EV variant as well. News reports suggest that this year Tata Motors may launch a new Nexon EV with a larger battery pack and of course, mileage.
Here is the expected list
Domestic brokerage house ICICI Securities believes, key moving parts for Tata Motors are set to turn favourably from FY23E post impacting cashflows negatively in YTDFY22. Tata Group's auto subsidiary Tata Motors is among ICICI Securities' top stock picks in the auto sector along with Ashok Leyland and TVS Motors.
Commercial vehicle financier Shriram Transport Finance Company (STFC) has partnered with Skill India to train 1,000 drivers to ensure seamless and accident-free transportation of oxygen tankers.
The rupee declined by 18 paise to 74.43 against the US dollar in opening trade on Tuesday, as strong American currency and elevated crude oil prices weighed on investor sentiments.
Forex traders said muted domestic equities and dollar buying by banks on behalf of importers also dragged the local unit down.
At the interbank foreign exchange, the rupee opened weak at 74.36 against the US dollar, then fell further to 74.43 against the greenback in early deals, registering a decline of 18 paise from the last close.
The government received a bumper ₹7,839 crore as dividend from Nuclear Power Corporation of India Limited (NPCIL), Power Grid Corporation of India Limited, NMDC, GAIL among others, taking the total proceeds from dividend from public sector enterprises to over ₹39,936 crore for FY22 so far.
"The markets are taking a bit of a breather this morning. While it is facing some resistance at 18350, the trend continues to remain positive and the Nifty should be able to achieve 18600. A strong support lies at 18100 and hence any market drop can be used to accumulate long positions."
Tier-1 IT services provider Tech Mahindra Ltd which is on an acquisition spree has bought an East European IT services company Com Tec Co IT (CTC) for EUR310 million, which caters to clients in the insurance vertical.Tech Mahindra has also purchased a minority stake of 25% in two insurance technology platforms called SWFT and Surance for for EUR20 million.
In a call with the analysts, the management said that CTC has industry-leading earnings before interest and tax ( Ebit) margin and will be accretive on an earnings per share, free cash flow and return on equity basis. In CY18/CY19/CY20, CTC had a revenue of EUR36.6/EUR57.6/EUR71.3, respectively, the management said.
This acquisition and it's stake in two platforms are poised to boost Tech Mahindra's presence in the insurance vertical. But the Street is not too enthused about it. Reacting to this development, shares of company fell by around 1.2% on the NSE in Tuesday's opening trade.
The initial public offering (IPO) of AGS Transact Technologies will open for subscription on Wednesday, January 19. The price band of the three day initial share-sale has been fixed at ₹166-175 a share. The bidding for anchor investors will open on January 18 and the issue will conclude on Friday, January 21.
GMP, key things to know before you subscribe
HFCL Ltd today reported a consolidated net profit of ₹81 crore for the December quarter, down 5% over a year ago. It was ₹85.11 crore in the same quarter last year.
Here is the list of the top 10 stocks that are likely to be in focus on Tuesday.
From bankers in Mumbai to bureaucrats in Delhi, India's Aramco moment decoded.
Vodafone Idea, metal stock Steel Authority of India (SAIL), Indiabulls Housing Finance, and auto stock Escorts that were part of the ban in the previous sessions, continue to be among five stocks that have been put under the ban for trade on Tuesday, 18 January 2022 under the futures and options (F&O) segment by the National Stock Exchange (NSE).
Tech Mahindra Ltd said on Monday it has agreed to buy Com Tec Co IT Ltd (CTC), a software solutions and service provider with development centres in Latvia and Belarus, for €310 million (around ₹2,620 crore).
Gold steadied after its best week in two months as traders weigh the outlook for monetary policy against the threat posed by a fresh coronavirus wave in the US.
Facing pressure from Congress and the public to tackle the hottest inflation since the 1980s, a chorus of Federal Reserve officials this month floated raising rates in March and the potential need to hike as many as five times this year, marking a clear shift in projections from just a few weeks ago.
The rupee declined by 10 paise to close at 74.25 against the US currency on Monday, declining for the second straight day due to high dollar demand and forex outflows.
Treasury yields rose Tuesday after cash trading resumed following a holiday, while most Asian stocks advanced as investors weighed the economic recovery from the pandemic.
The drop in U.S. government bonds saw the two-year yield jump past 1% for the first time since February 2020. Investors are girding for a series of interest-rate hikes by the Federal Reserve to quell high inflation.
Shares climbed in Japan and Australia but wavered in South Korea. Nasdaq 100 and S&P 500 futures were broadly steady. U.S. markets will reopen later following a holiday.
Nifty pushes beyond 18300 gradually, but stocks on a roll
Today morning, the global markets looked a bit nervous but as we approached our opening time, the SGX Nifty recovered to some extent and as a result, the week kick started the week marginally in red. Market did not take much of a time to enter the positive terrain and then remained within a slender range throughout the remaining part of the session. Although there was no real momentum in key indices, Nifty managed to reclaim the 18300 mark at the close.
Since last 3 – 4 trading sessions, the benchmark index has lost its sheen because heavyweight banking space continues to sulk a bit. But we must construe this as an index balancing because we have already seen a massive recovery and now approaching record highs when the mega event budget is around the corner. So this has applied brakes on the momentum in key indices but all this whist, if we look at the overall activity in market meticulously, there is no shortage of action in individual themes. In such times, it’s advisable not to focus on index, rather keep concentrating in stock specific moves that are likely to provide better trading opportunities. As far as levels are concerned, 18350 – 18400 are to be considered as immediate resistances; whereas on the flipside, 18200 – 18150 is to be treated as key supports now.
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