PremiumIndian markets managed to end higher today, with both Sensex and Nifty posting third straight record closing highs. The Sensex ended 66 points higher at 39,749 while Nifty ended marginally higher at 11,928. Gains in heavyweights like RIL (1.2%) and Infosys (2.5%) helped support the benchmark indices. Other top gainers in the Sensex pack included Yes Bank (4%), Coal India (2.7%), PowerGrid (1.9%), Vedanta (1.7%) and TCS (1%).
Auto stocks saw some selling pressure with M&M, Bajaj Auto and Hero MotoCorp among top losers.
The Nifty Bank index today hit a new high but could not sustain gains. PNB fell 3.5% after the lender reported a loss over 4,700 crore in Q4. Bank of Baroda, Axis Bank and Kotak Mahindra Bank were among the other top losers.
InterGlobe Aviation Ltd, which owns India's largest carrier IndiGo, gained as much as 3% to hit a new high of ₹1,716, before ending flat.
Industry rival SpiceJet Ltd rose 2% after it posted a 22% jump in Q4 net profit.
"After two straight sessions of strong gains, the Indian equity benchmark indices took a breather, ending the session on a flat note, thus indicating some consolidation," Jayant Manglik, president of retail distribution at Religare Broking.
"While the market gains could extent in the coming sessions, we prefer to remain cautious at higher levels. Indian benchmark indices are trading near peak valuations and at a meaningful premium to other emerging markets, which warrants some caution," he added.
SpiceJet reported a 22% jump in net profit for the March quarter despite grounding of Boeing MAX aircraft. The airline reported a profit of ₹56.3 crore for the quarter ended March 31st, 2019 as against ₹46.2 crore in the same quarter last year. Its capacity (in terms of seat kilometer) was up by 21% while average fare rose 11%.
A bunch of cement stocks like ACC Ltd, Ultratech Cements Ltd, Shree Cement Ltd and midcaps such as JK Cement Ltd, JK Lakshmi Cement Ltd, and The Ramco Cements Ltd touched their respective 52-week highs in the last two trading sessions.
Government-owned GIC Housing Finance has registered a net profit of ₹50.99 crore for the quarter ending March 31. For the entire fiscal 2018-19, the company clocked a net profit of ₹171.85 crore
Airtel Africa Ltd, a subsidiary of India's Bharti Airtel Ltd, said on Tuesday it was considering a stock market flotation in London to reduce existing debt.
Shares of SpiceJet hit a fresh 52-week high of ₹153 when they rose 5%. The airline will announce its earnings later in the day. Rival IndiGo had on Monday reported a five-fold jump in its Q4 profit.
Punjab National Bank (PNB) today reported a loss ₹4,750 crore for the March quarter, bettering its performance from a year ago when it reported a loss of 13,417 crore. Fall in provisions, indicating better recovery, ample provisions already made and improving assets, helped narrow the loss. PNB’s provisions declined to ₹7,611 crore in Jan-Mar, from ₹12,970 crore. Shares were flat in afternoon trade.
Shares of Colgate Palmolive, which had declared its earnings on Monday, were trading marginally higher at ₹1184.85. Edelweiss has maintained "hold" on the stock. "We expect Colgate’s innovation funnel and brand investments to keep flowing, which should help it arrest market share loss. However, rising promotional intensity is a variable. Rolling forward, we continue to value Colgate at a 25% discount to HUL, which yields a target price of ₹1,350," Edelweiss said in a note. For Colgate, volumes grew 5% YoY in the March quarter.
"We are initiating coverage on Titan Company with a 'hold' recommendation and a target Price of ₹1,304. Revenue growth momentum is driven by jewellery division gaining market share from the unorganised players and aggressive store expansion. At current prices, the stock trades at a premium valuation multiple of 48x of FY21E, which we believe to sustain owing to strong net earnings growth visibility to compound at 22% CAGR for FY19-21E. We value the stock at 50x of FY21E earnings to arrive at our target price," Reliance Securities said in a note.
BofAML has maintained its forecast Nifty ending the year at 11,300, which is 5% lower than its close on Monday. Slowing consumption, NBFC crisis, weak earnings and elevated multiples will weigh on Indian markets, says the brokerage. (Read: Sell the rally in India markets, says BofAML)
"With international expansion taking off, we expect IndiGo to maintain 25% growth in FY20 despite slowdown in the domestic industry’s growth. As fuel costs fall while non-fuel cost inflation remains benign due to operational efficiencies, we estimate 18 times jump in FY20 EPS," said brokerage Motilal Oswal, which maintains "buy" on the stock with target price of ₹1,890. (Read: Billionaire founders of IndiGo differ over 'one issue')
The index for banking stocks Nifty Bank hit a new high of 31,712 in early trade but it later fell on profit-taking. Bank of Baroda, SBI, PNB, Kotak Bank and Federal Bank were down between 1% and 2%.
InterGlobe Aviation, which operates IndiGo, on Monday reported a five-fold surge in net profit, beating analysts’ estimates, as yields rose and the airline carried more passengers amid the collapse of rival Jet Airways. Results were announced after Monday's market hours. IndiGo shares hit a fresh 52-week high of ₹1,705 on BSE after they gained nearly 2%.
BofAML maintains a cautious stance on Indian markets despite the key indices hitting new highs after BJP won a resounding mandate. “The market is likely to quickly revert to near-term concerns: slowing consumption and a brewing non-bank finance company crisis; the combination of weak corporate earnings and elevated multiples," Sanjay Mookim, India equity strategist at Bank of America Merrill Lynch Ltd. wrote in a report Friday. “We don’t see election results changing these bottom-up concerns."
Asian markets were mostly higher today as Monday's gains in European markets improved sentiment. After US President Donald Trump met Japanese Prime Minister Shinzo Abe on Monday, he told reporters he expected the two countries to be "announcing some things, probably in August, that will be very good for both countries" on trade. Trump is currently on a state visit to Japan. The Wall Street was closed on Monday.
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