Sensex ends 92 points higher; Nifty just shy of 14,600; Indusind Bank, TCS gain19 min read . Updated: 14 Jan 2021, 03:50 PM IST
- Sensex and Nifty opened in the red on Thursday on profit booking but pared losses later in the day to close in the green. The Nifty IT recouped some losses but still ended in the red, while Pharma, FMCG and Auto led the gains
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Sensex, Nifty end in the green
Sensex and Nifty opened in the red on Thursday on profit booking but pared losses later in the day to end marginally higher amid volatility. Trade was largely flat through the day.
Sensex closed at 49,584, up 92 points, after hitting an intra-day high of 49,664 and a low 49,182. Nifty ended just below 14600. While Pharma, Auto and FMCG sectors outperformed, IT and bank remained the laggards.
TCS, and Indusind Bank were among the best gainers, while Axis Bank and HCL tech were the prominent laggards.
SAIL tanks 10%, HAL up 9%
Member of SC-appointed committee to mediate with farmers recuses himself
Bhupinder Singh Mann, one of the four members of the committee appointed by the Supreme Court to mediate and hold a dialogue with protesting farmers over the three contentious farm laws, recused himself on Thursday.
"In view of the prevailing sentiments and apprehensions amongst the farm unions and the public in general, I am ready to sacrifice my position offered or given to me so as not to compromise the interests of Punjab and farmers of the country," Mann, who is the national president of the Bartiya Kisan Union, said in a statement. (Full report)
Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers on market performance
“Indian markets opened on a negative note tracking mixed global market peers. However, the negativity couldn't last for long as markets recovered in afternoon trades with buying seen in Energy, Industrials and Capital Goods. Traders also took support after India’s inflation based on wholesale price index (WPI) eased to 1.22% (provisional) for the month of December 2020 as compared to 2.76% during the corresponding month of the previous year. On sectoral front, Pharma, FMCG and Auto led the gains while Metals dragged the markets lower."
Dixon Technologies up 2.5%; to consider sub-division of shares
Adani Enterprises wins ₹1,838 crore highway project from NHAI in Kerala
Adani Enterprises Limited (AEL) on Thursday said it has won a ₹1,838-crore highway project from the National Highways Authority of India (NHAI) in Kerala.
The project, under hybrid annuity mode (HAM), is a part of Bharatmala Pariyojna.
Indigo Paints IPO to launch on 20 Jan with ₹1488– ₹1490 price band
Pune-based Indigo Paints Limited will open its initial public offering (IPO) on 20 January to raise around ₹1490 crore. The price band has been set at ₹1488– ₹1,490 per equity share for the three-day share sale that will end on 22 January.
The IPO comprises a fresh issuance of equity aggregating to ₹300 crore by the company and an offer for sale of up to 5,840,000 shares by Sequoia Capital India Investments IV and SCI Investments V and promoter Hemant Jalan.
Shares rise globally
European shares rose for a third straight session on Thursday, as hopes of a large stimulus under incoming US President Joe Biden and upbeat Chinese export data boosted sentiment.
The pan-European STOXX 600 index rose 0.3%, while Germany's DAX index was up 0.3%. London's FTSE 100 index gained 0.1%.
Japan's Nikkei 225 and Hong Kong's Hang Seng closed 0.9% higher. Australia's ASX gained 0.4%, while Shanghai's Composite ended 0.9% lower.
PFC to launch ₹5,000 crore public NCD issue 15 Jan
Power Finance Corporation (PFC) Ltd will launch its maiden public issue of taxable, secured, redeemable non-convertible debentures (NCDs) on 15 January. The base issue size is ₹500 crore, with an option to retain oversubscription of up to ₹4,500 crore aggregating up to 5,000 crore.
The NCDs have a face value of ₹1,000 each. The first tranche is scheduled to close on 29 January, with an option of early closure or extension as decided by PFC’s board of directors.
Nifty Pharma and FMCG up around 1%; IT pares losses to turn green
Wholesale dispatches of passenger vehicles rise 13.5% in December
Domestic wholesale of passenger vehicles and two-wheelers increased for the fifth consecutive month in December as vehicle manufacturers increased inventory at dealerships after better than expected retail sales during the festival season in November depleted stocks.
Advanced Enzyme Technologies up 1%
The company has completed the acquisition of controlling stake of 51% in SciTech Specialities Private Ltd. The acquisition is by way of subscription to the issue of 492,630 shares of SSPL and purchase of 27,778 equity from a few shareholders of SSPL. Accordingly, SSPL has become a subsidiary of the company, effective 11 January.
Wipro recovers from day's low, up 1%
After a 6% plunge on profit booking, Wipro bounced back to trade 1% higher.
HDFC Securities says "We maintain ADD on Wipro, following a strong revenue performance (the best in nine years) and better-than-expected margin performance. Revenue growth of 3.4% QoQ CC was broad-based and 4Q growth guidance of +1.5- 3.5% indicates continued growth momentum. The deal pipeline remains strong and the company won 12 deals of TCV greater than USD 30mn."
The brokerage says, that Wipro under the new structure will be more agile and will focus on accelerating growth, supported by large deal wins, leveraging partner ecosystem, and higher investments in talent. Key positives include (1) strong guidance, (2) pick-up in deal wins, (3) robust cash generation (OCF of ~149% of net income), and, (4) 246bps QoQ improvement in IT services margin.
HDFC Securities has set the target price at ₹470, based on 20x Dec-22E EPS (~20% discount to INFY). The stock is trading at 23.2/20.8x FY21/22x EPS.
Indigo Paints IPO: Yash Gupta, Equity Research Associate, Angel Broking
As per different market news grey market premium of Indigo Paints has increased from ₹400 to RS 800 in the last couple of days. Indigo Paints is coming up with the IPO on 20 Jan to 22 Jan and the expected price range is ₹1480-1500.
Indigo paints is one of the fastest growing paint company in India, listed players have grown in between 5-12% and company able to grow by more than 15.8% in last 3 years and outperformed the listed players. Indigo paints is the 5th largest company in the decorative paint industry.
In FY2020 Indigo paints reported sales growth of 16.6% and peers reported sales growth of 3-5% even though some of the peers have reported negative sales growth. Indigo paints reported ROE of 24.3% in FY20 which is slightly lower than the Asian and Berger paints but better than Kansai Nerolac and Akzonobel.
Indigo paints have doubled its PAT margins from 3.2% in FY2018 to 7.7% in FY20 while peers like Asian paints and Berger paints are able to increase margins by 2.5% and 3.4% respectively.
Currently Asian paints and Berger paints trading at PE of 111 and 148 respectively and Indigo paints reported EPS of 10.49 valuing IPO at 149 at higher price band. We expect the GMP premium of Indigo paints to consolidate in a couple of days. We have a positive outlook towards the IPO.
Higher dividend payout, decent Q3, powers CESC stock
Shares of CESC Ltd have increased by about 6% in the past two days. A couple of factors are contributing to the positive sentiment. On Wednesday, the company, engaged in electrical distribution with an embedded generation facility, announced an interim dividend of Rs45 per share. This is better than expectations. Analysts from Motilal Oswal Financial Securities Ltd point out the dividend indicates payout ratios of about 50% (versus 20–25% payout historically), significantly higher than the broking firm’s estimate of Rs23 per share for financial year 2021. “This is a positive surprise and highlights the company’s willingness to return excess cash to shareholders," wrote Motilal Oswal analysts in a report on 13 January.
Its consolidated net profit increased by nearly 25% year-on-year to ₹328 crore. This is at a time when standalone net profit growth was much slower at around 3%. Strong growth in consolidated other income helped. Further, subsidiaries have performed well, contributing to consolidated profit growth. Particularly, the turnaround at its 600MW Chandrapur project is noteworthy.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking:
“Despite SGX Nifty indicating a flat start early in the morning, our markets opened with a decent upside gap at record highs well above 14600. In the initial trade, Nifty marked a new high of 14653.35 and then consolidated for some time. However, post the midsession, the selling augmented in the market and within a span of few minutes, Nifty was well off morning high. Fortunately, we witnessed a smart recovery towards the fag end to conclude the day on a flat note.
Since last couple of days, although the broader market kept buzzing, we observed profit booking in individual stocks. Yesterday, the profit booking mode was seen in so many counters, which weighed down heavily on the market and thus market had a decent decline during the day. But similar to recent trend, 2.30 factor once again played out well in the market, which helped the market erase its losses completely. Overall it was a day with some decent roller-coaster move and fortunately due to sheer outperformance from few banking heavyweights, markets are back to safe terrain. This is what we have been referring since few days, it’s not going to be easy ride anymore for traders and one needs to be prepared for such higher volatility.
With yesterday’s move, 14650 has become an immediate resistance; whereas on the lower side, last two day’s low of 14430 has now become a crucial point. Any sustainable move below this level would provide first sign of weakness. Also, we would like to highlight some typical behaviour of the market. Since last few days, we are seeing some intraday dips and those declines are getting comfortably bought in the last one and half hours of strong buying mode. Whenever we see this behaviour reversing, traders should immediately lighten up longs."
IndusInd Bank gains 4% after promoters get Sebi nod for residual capital infusion
Sebi has granted an additional two weeks to promoters of the bank for infusion of residual capital in lieu of conversion of warrants issued to them worth over ₹2,695.26 crore.
The earlier deadline was 4 February.
IndusInd Bank had issued convertible warrants to its promoters IndusInd International Holdings (IIHL) and its subsidiary IndusInd on 6 July 2019 under the composite scheme of arrangement for a total amount of ₹2,695.26 crore for 1,57,70,985 share warrants. The promoters had paid ₹673.82 crore towards subscription of 25% warrants at ₹1,709 per share.
Adani Green Energy up 5%
Adani Trading Services LLP, a promoter entity sold 2 crore shares of the company worth over ₹1,840 crore through open market transactions. Adani Trading Services had divested 2,00,96,000 scrips of the company in the price range of ₹906 to 916.15.
Centrum likely to submit formal offer for PMC Bank next week
Financial services firm Centrum group is exploring the option of placing a formal bid for the troubled Punjab and Maharashtra Cooperative (PMC) Bank next week, after submitting an expression of interest (EoI) along with payments company BharatPe in December.
Centrum chairman Jaspal Bindra told Mint that the group is studying the challenges and capital requirements if it were to make a formal bid. (Full report)
SAIL OFS subscribed 20% on opening, stock down 9%
The government's sale of its 5% shareholding in the steelmaker was subscribed by over 20% in early hours of trade on Thursday.
Over 4.13 crore shares were sought in the first three hours of trade on BSE, stock exchange data showed.
The government has proposed to sell 206.5 million shares of the company via offer for sale. It also has a greenshoe option to sell up to 20.65 crore additional shares in the company. The floor price has been set at ₹64 per share. The OFS for non-retail investors opens on Thursday, while for retail investors, it will start on Friday.
Indusind Bank up 3%; top gainer on Sensex at this hour
HDFC Securities' top pharma stock picks
Analysts see several growth catalysts across key markets and product categories (inhalers, biosimilars, complex injectables) playing out over the next 2-3 years for Indian pharma companies. "The investments made over the last few years leave them well placed to capitalise on these opportunities. With cost bases pruned and operating leverage benefits, the sector is poised to grow at ~21% earnings CAGR and witness ROCE improvement of 430bps to 15% over FY20- 23e. This, coupled with strong balance sheets (near debt-free), should support valuations, in our view," says a report by HDFC Securities.
Mutual funds net sellers in 82% Nifty stocks in December
Mutual funds were net sellers of 82% Nifty stocks in December, at a time when the benchmark index rose nearly 8%, as per data sourced from Association of Mutual Funds in India (Amfi) and NAV India analysed by Motilal Oswal Financial Services Ltd. This assumes significance as equity mutual funds have been under constant redemption pressure for the past six months.
The review includes India’s top 20 domestic mutual fund houses which command nearly 97% of the industry in terms of assets under management (AUM).
Sensex contributors: Reliance, TCS, HDFC
SAIL share prices rally hits a speed bump
Steel Authority of India Ltd has given up a significant portion of strong gains it had seen during the recent past. With an offer for sale (OFS) kick-starting, the stock was down more than 8% on Monday.
The Government of India, which holds 75% of stakes in the company, is to sell up to 10% of its holding through the OFS route. Though initially only 20.65 crore shares, or 5% of government holdings, are being offered, the option has been kept open to offload another 5% stakes through greenshoe option.
The floor price of Rs64 for the OFS remains about 14% lower than the closing price of Rs74.70 on Wednesday. The stock thereby was bound to correct in-line. The fact that there will be a higher number of shares available for trading on the exchange post the completion of OFS, the pressure on stock prices is expected to remain. (Full report)
Nifty broad market at midday
WPI inflation at 1.22% in December vs 1.55% in November
Sensex flat at noon amid volatility
Q3 may bring some cheer to NBFCs as loan offtake recovers; HDFC to shine
After a gruelling two quarters due to the coronavirus pandemic, India’s non-banking financial companies (NBFC) may find some succour in the December quarter because of proactive provisioning by some. But investors should not let their guard down, yet.
Two big trends in the past three months have given confidence to investors on NBFCs. Improving collection efficiencies and a pick-up in loan disbursements for most lenders have brightened the outlook. Indeed, NBFCs have been able to get back their money from borrowers easier than before with collections efficiencies showing an increase every month. (Full report)
TCS recovers from day's low, up 1.6%
Oil prices dip on virus worries
Crude oil prices eased for a second day on Thursday as mounting coronavirus cases globally raised demand concerns, although a drawdown in U.S. crude stocks for a fifth straight week and robust data from China capped losses.
Brent crude oil futures fell 18 cents, or 0.3%, to $55.88 a barrel, while U.S. West Texas Intermediate (WTI) slipped by 11 cents, or 0.2%, to $52.80 a barrel.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments on markets
There is a clear indication that markets have resisted from the 14600-14650 levels. In the short term, 14300-14400 is good support and if we break that, 14000-14100 could be the next pit stop for the Nifty. On the upside, a close above 14600 could lead us to 14750-14800.
JK Tyres rises 4% on robust earnings of subsidiary
Shares of JK Tyre & Industries Ltd rose almost 4% on Wednesday after its subsidiary Cavendish Industries Ltd reported robust earnings performance.
Cavendish Industries clocked a profit of ₹46.87 crore in the quarter ended December. This compares with a loss of ₹4.51 crore in Q3 FY20. The improvement in earnings performance was aided by higher capacity utilisation and better sales. According to the company's press release, sales during the quarter rose grew 30% year-on-year basis from ₹607.51 crore to ₹788.37 crore.
Sensex off day's low
L&T up 2%; co receives multiple orders in domestic market
Infrastructure company Larsen & Toubro (L&T) on Thursday said its construction arm has received multiple orders across its business segments in the domestic market.
The company did not disclose the value of the contracts but said the orders fall under the "significant" category, which ranges between ₹1,000 crore and ₹2,500 crore, according to the classification of contracts.
FMCG stocks gain led by Dabur which rose 11%
The rupee was 3 paise lower at 73.18 against the US dollar in opening trade on Thursday tracking muted opening in domestic equities.
At the interbank forex market, the domestic unit opened at 73.18 against the US dollar, registering a fall of 3 paise over its previous close.
On Wednesday, the rupee had settled at 73.15 against the American currency.
M&M up 0.5%
The automaker’s North American unit, Mahindra Automotive North America has shed some jobs to make the company leaner and optimize performance and productivity. A Reuters story claimed MANA had cut over half its workforce owing to covid-19 related challenges.
Infosys earnings: Jyoti Roy, DVP, Equity Strategist, Angel Broking
Infosys reported numbers which were significantly ahead of street estimates. Company reported a 6.16% qoq growth in revenues to USD 3516mn driven by digital which grew by 12.3% qoq. In rupee terms revenue grew by 5.5% qoq to ₹ 25,927 crore while gross profits grew by 4.0% qoq to ₹9,150 crore. Gross margins contracted by 52bps qoq to 35.3% as increase in utilization rates were negated by rupee appreciation and wage hikes during the quarter. Continued tight cost control in the form of reduced SG&A expenses led to a 6bps qoq expansion in operating margins to 25.41% while operating profits grew by 5.8% qoq to ₹6,589 crore. Net profit for the quarter grew by 7.3% qoq to ₹5,197 crore.
While the Q1FY21 numbers were significantly above street expectations on all counts, the company reported record new deal wins of USD 7.13bn for the quarter which is higher than deal wins of USD 4.9bn in 1HFY21 and points to continued strong demand environment. The management has also increased their revenue growth guidance to 4.5-5.0% from 2-3% growth in constant currency terms for FY2021. Post the Infosys numbers we continue to maintain our positive stance on the sector and believe that this is the start of a multiyear uptick in growth rates for the sector driven by greater adoption of digital technologies.
Steel Authority of India down 8%
The government has proposed to sell 206.5 million shares of the company via offer for sale. It also has an greenshoe option to sell up to 20.65 crore additional shares in the company. The floor price has been set at ₹64 per share. The OFS for non-retail investors opens on Thursday, while for retail investors, it will start on Friday.
Petrol prices at record high for 2nd straight day, selling for Rs84.7/ltr in NCR
Domestic petrol prices have continued to scale higher, with oil marketing companies raising prices again on Thursday. The fuel sold for ₹84.70 a litre--an all-time high--in the national capital.
Retail prices of petrol and diesel were raised by 25 paise per litre on Thursday. Diesel sold for ₹74.88 per litre in Delhi.
Petrol prices in Delhi in the new year so far have risen by 99 paise per litre, including today's increase. The previous all-time high was of ₹84 a litre on 4 October, 2018, in Delhi. Diesel price had touched a record high of ₹81.94 a litre on 30 July, 2020.
Market breadth negative with midcap and smallcap stocks lower
Wipro down 4%
The IT major reported nearly 21% rise in consolidated net profit to ₹2,967 crore for the quarter ended December. Revenue rose 1.3% to ₹15,670 crore. In dollar terms, revenue grew 3.9% to $2.07 billion from the preceding three months. Wipro forecast revenue growth in the March quarter to be in the range of 1.5-3.5%.
HAL up 8%
A Cabinet panel has cleared the ₹48,000-crore purchase of 83 light combat aircraft (LCA-Tejas) from the state-run company, in the biggest contract awarded to India’s homegrown military aviation industry. HAL is to deliver 73 fighters and 10 trainers by 2026.
Infosys down 3%
The company recorded better-than-expected earnings performance in the third quarter with revenues rising 12% to ₹25,927 crore, while profit increased 16.6% to ₹5,197 crore. Infosys raised FY21 revenue growth guidance to 4.5%-5.0% in constant currency, while increasing operating margin guidance to 24.0%-24.5%.
Nifty IT down 2.3% on profit booking; Wipro, HCL Tech down 4%
HCL Tech, Infy and Wipro drag Nifty lower
Sensex flat with negative bias
At 0926 am, Sensex was 68 points lower at 49,423, while Nifty was a tad lower at 14,550. IT stocks were down with Infosys and Wipro dragging the pack. ITC and IndusInd Bank were the top gainers.
Markets open down
Sensex and Nifty were mildly lower at open amid profit booking in IT stocks.
Market in the green at pre-open
Indices were in the positive zone in pre-opening session with Sensex at 49,538, up 45 points, while Nifty was at 14,589, up 24 points.
ESIC may invest corpus in equities, MFs, bonds
A chunk of the ₹91,000 crore corpus that the Employees’ State Insurance Corporation (ESIC) keeps in ultra-safe, but low-yielding fixed deposits (FDs) could find its way into stock markets and corporate bonds, with the Union government considering an expansion in its investment scope.
The move could open up new investment avenues such as mutual funds, corporate bonds, commercial papers of leading private banks, and even equities, two government officials aware of the plan said on condition of anonymity.
Stocks to Watch: Wipro, Infosys, SAIL, M&M, Hindustan Aeronautics, NHPC
Among the top ten stocks that may be in news on Thursday are Wipro, Infosys, SAIL, M&M, Hindustan Aeronautics, NHPC, Power Grid.
Companies that will announce their Q3 earnings include Den Networks,
Reliance Industrial Infrastructure, and Tata Steel Long Products.
Markets seen firm
Indian stock markets are expected to be firm on Thursday following global cues. Trends on SGX Nifty suggest a positive opening for domestic benchmark indices. On Wednesday, indices closed flat with BSE Sensex ending at 49,492, and Nifty at 14,564.85. Infosys, Wipro and Steel Authority are some of the companies that will be in focus today.
Asian shares gain
Asian equities made early trading gains on Thursday after a mixed session on Wall Street buoyed by expectations of a US stimulus package even as political events in Washington culminated in the impeachment of President Donald Trump.
Nikkei was up nearly 1%, Australian S&P/ASX 200 rose 0.5% in early trading, while Hong Kong's Hang Seng rose 0.3%.
Wall Street ends mixed
Stocks on Wall Street notched modest gains Wednesday following another choppy day of trading, leaving the market near its recent record highs.
The Dow Jones Industrial Average fell 0.03%, the S&P 500 gained 0.23%, and the Nasdaq Composite added 0.43%.