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PremiumIndian equities opened at record highs on Tuesday tracking Asian stocks. Sensex hit an all-time high of 62,245, and Nifty rose above 18,600 for the first time. However, trade turned choppy later in the day, with Sensex closing in the red after touching a low of 61,594. Nifty fell to 18,377 intraday
Benchmark indices snapped the seven-day gaining streak on Tuesday to end lower in choppy trade. Sensex failed to hold on to the record 62,000-peak scaled earlier in the day. The 30-share index closed at 61,716, down 50 points, after hitting a high of 62,245 intraday. Nifty closed 0.3% lower at 18,418.75 after touching an all-time high of 18,604. Midcap and small-cap stocks were the worst hit in trade today. Most sectoral indices ended in the red, with Nifty Realty slipping more than 4%. Nifty IT was the outlier, finishing 2% higher.
Tech Mahindra and L&T ruled on both indices through the day, while ITC was the biggest laggard. HUL ended lower despite reporting a 9% rise in profit for the September quarter.
Bitcoin hit a six-month high and was within striking distance of a record on Tuesday as traders bet an anticipated listing of a futures-based U.S. exchange traded fund could herald investment flows into bitcoin and cryptocurrency assets.
Bitcoin, the world's biggest cryptocurrency by market value, rose as far as 1.5% during the Asia session to $62,991, its strongest level since the record peak of $64,895 in April. (PTI)
Telecom operator Bharti Airtel on Tuesday announced its Video Platform as a Service offering and said it is chasing $100 million dollar target for this new offering 'Airtel IQ Video'.
The company has already signed up three early customers, and is looking to onboard 50 customers more that are in the pipeline.
Nomura has downgraded Reliance Industries to neutral from buy rating due to delays in telecom tariff hikes and steep valuations. The Japanese brokerage firm said that outlook for key businesses of RIL has improved but valuations look rich after the recent run-up.
“While the outlook for each of its key operating business has been improving, and we view RIL’s new energy forays positively, we believe that after the recent strong upward movement valuations are becoming expensive. We downgrade RIL to Neutral on our expectation of limited near-term upside," Anil Sharma and Aditya Bansal, analysts, Nomura said in a note on 18 October. (Read more)
Asian markets rose Tuesday, extending a Wall Street rally as optimism over corporate earnings provided some respite from long-running worries about inflation, central bank tightening and signs of a slowing economic recovery.
Japan's Nikkei 225 ended 0.7% higher, Hong Kong's Hang Seng closed up 1.5%. China's Shanghai - Composite settled with 0.7% gains.
The asset management company has launched an open-ended index exchange-traded fund that tracks Nifty India Consumption Index.
ICICI Prudential Consumption ETF, which will close for subscription on 25 October, will look to provide exposure to a diversified portfolio of companies representing domestic consumption. Kayzad Eghlim and Nishit Patel would be fund managers to the scheme.
Gold prices inched higher in Indian markets today as a decline in the US dollar and US bond yields provided some support to the precious metal.
On MCX, gold futures were up 0.1% to ₹47,319 per 10 grams. In the previous session, gold prices fell by ₹741 to ₹47,384 per 10 grams tracking a sharp fall on Friday in global markets.
After acquiring a 66% stake in Thyrocare Technologies for ₹4,546 crores in June 2021, Pharmeasy has been eyeing an IPO. As per different market news, PharmEasy has raised ₹2,600 crores in a Pre-IPO placement at valuations of $5.6 billion. It includes primary funding as well as a secondary share sale. Earlier in June 2021 at the time of acquiring a stake in Thyrocare, PharmEasy was valued at $4 billion and now after pre-IPO, its valuations have jumped to $5.6 billion. It is expected that in the current year PharmEasy will be filing its DRHP for approval to regulators.
The packaged consumer goods company Procter & Gamble (P&G) has set up a P&G Rural Growth Fund that will see the maker of Tide detergent and Head & Shoulders shampoo allocate ₹500 crore to partner with start-ups and small businesses to develop media outreach and go-to-market solutions like tech-enabled selling, increasing distribution and last-mile delivery.
Canara Bank: The earnings profile of Canara Bank was severely impacted over the last few years primarily because of high credit costs, though, the same has seen an improvement in since FY21, the brokerage said. For the overall industry, with the arrival of the festive season, the credit growth is likely to improve in coming months, driven by retail and agriculture while industry and services continue to be slow. It expects healthy recoveries and upgrades in next two years.
“We feel investors can buy Canara bank at LTP of ₹193.6 and add more at Rs.169 for the base case fair value of ₹216.5 and for the bull case fair value of ₹228.5 over the next two quarters," HDFC Securities note stated.
Prince Pipes and Fittings: Prince Pipes and Fittings (PPFL) is India's 6th largest plastic pipe manufacturer with a strong track record of industry leading volume growth, as per the brokerage.
It expects PPFL to benefit from consolidation in the plastic piping industry on back of it’s robust balance sheet, tighter working capital norms (receivable days has come down from 86 in FY16 to 40 in FY20 and 62 in FY21, vast pan India distribution and manufacturing network and diversified product portfolio.
“We feel investors can buy the stock in the band of ₹740-750 and further add on dips at Rs. 663 for a base case fair value of Rs. 825 and bull case fair value of ₹885 for a time horizon of 2 quarters," HDFC Securities added.
Gold demand in India is likely to face challenges from a declining household savings rate and lower agricultural wages, according to the World Gold Council.
Rising income is one of the biggest drivers of gold demand, suggesting that as India’s economy grows, sales of the precious metal should increase, the WGC said in a report. However, “households are saving proportionately less than they used to, which may reduce the amount of capital they allocate to gold," it said. (Bloomberg)
Ashok Leyland Ltd is one of the leading player in India CV industry with a 32% market share in the MHCV segment. The company also has a strong presence in the fast growing LCV segment. Demand for MHCV was adversely impacted post peaking out due to multiple factors including changes in axel norms, increase in prices due to implementation of BS 6 norms followed by sharp drop in demand due the ongoing Covid-19 crisis. While demand for the LCV segment has been growing smartly post the pandemic, demand for the MHCV segment has also started to recover over the past few months before the 2nd lockdown. We believe that the company is ideally placed to capture the growth revival in the CV segment and will be the biggest beneficiary of the Government’s voluntary scrappage policy and hence rate the stock a BUY.
Dr. Reddy’s Laboratories on Tuesday said the US FDA gave final approval for its Abbreviated New Drug Application (ANDA) for lenalidomide capsules. The FDA approved the capsules in 2.5 mg and 20 mg strengths, and gave tentative approval for 5 mg, 10 mg, 15 mg, and 25 mg strengths.
Tata Coffee reported a 26.5% jump in consolidated net profit for the September quarter.
The company's unit Padget Electronics has commenced manufacturing of mobile phones for US-based Orbic at its Noida plant
The company will consider a proposal for declaration of bonus issue of equity shares
Moody’s Investors Service has revised the outlook for the Indian banking system to stable from negative. Moody's expects India's economy to continue recover in the next 12-18 months, with GDP growing 9.3% in the fiscal year ending March 2022 and 7.9% in the following year. The pickup in economic activity is expected to drive credit growth, which Moody's forecasts to be 10%-13% annually.
Key takeaways from Q2FY22: (1) Hatsun registered strong revenue growth of 23.2% YoY and we believe it is largely volume led, (2) steady launches of new products and geographical expansion of HAP outlets continued during the quarter and (3) EBITDA margin declined 180bps YoY due to higher input prices, increase in freight costs and likely increase in ad-spend. Hatsun is on track to complete its expansion at its three plants, which are likely to be completed during FY22. Power purchase agreements with Swelect will lead to cost savings. We model Hatsun to report PAT CAGR of 24% over FY21-24E with: (1) high single-digit growth in milk procurement, (2) commencement of three plants and (3) lower effective tax rate in FY22E. We remain structurally positive on Hatsun due to its competitive advantages and strong growth opportunity in South India. However, post 97% stock price performance in past six months, we downgrade the stock to HOLD with a DCF-based TP of Rs1,450 (66x FY24E).
India added 13,058 new coronavirus infections taking the total tally of cases to 3,40,94,373, while the active cases declined to 1,83,118, the lowest in 227 days, according to the Union Health Ministry data updated on Tuesday.
The death toll climbed to 4,52,454 with 164 fresh fatalities, according to the data updated at 8 am.
"The Index is facing stiff resistance around the 18600 level. If the markets would like to correct or consolidate, this is the place from where it would do that. The next rally-up will only happen post a closing above 18600. Until then traders should be vigilant and patient. 18200 is good support for the Nifty and till that does not break, the overall trend remains positive and dips can be utilized to accumulate long positions."
In a seasonally not so strong quarter, Larsen & Toubro Infotech (LTI) impressed with robust (~8.9% QoQ, CC) and broad-based growth – across verticals, geographies and service lines. What differentiates LTI from most other IT companies is the strong growth despite a tall base in FY21 [Sep-19 to Sep-21 revenue (USD) CAGR (YoY) = 18% vs 14% of Mindtree, 12% of Infosys, 7% of TCS and 6% of HCLT]. Share of offshore effort increased 90bps QoQ to 83.6% driving margin resilience in a post wage hike quarter. Management expects the offshore effort share to stay elevated on the back of the ‘Great Resignation’ theme playing out globally – across economies and industries. This is also guided to be a key driver of demand over the medium term. Good client additions across key buckets is commendable. Typical seasonality of H2 being better than H1 is expected to continue in FY22. If LTI is able to achieve such exit-rate in H2, revenue growth in FY23E too will remain robust (24% YoY, USD) even if demand moderates during FY23. Confident commentary and stable margin outlook despite the impending cost pressures are encouraging. We upgrade our FY22E-FY24E EPS by up to 11% on back of the strong beat and solid outlook. LTI remains our top midcap BUY and we value it at ~40x Sep’23E EPS.
UTCEM’s capacity addition of 19.5MTPA to help encash the strong cement demand and boost the volume growth over FY23‐24E. Thus, we believe UTCEM volume to grow at 10%CAGR over FY22‐23E. However, inflated fuel/diesel cost is expected to pass on with a potential price hikes. Increasing WHRS/green power, higher blending ratio and improving efficiency would further aid to maintain the strong EBITDA/te of +Rs1,400/te in FY22/23E. Thus, over strong operating profit we expect robust FCF generation of Rs150bn over FY22‐23E despite ongoing CAPEX. Net Debt/EBITDA continue to remain at a bottom low of 0.47x in Q2FY22 v/s 0.44x in last quarter. At the CMP stock trades at 17/14.9x of EBITDA on FY22E/FY23E. Thus, we retain our ‘BUY’ recommendation with a TP of Rs8,600 valuing the stock at 16x EV/EBITDA on FY23E.
The IT company reported a 20.8% increase in consolidated net profit to ₹551.7 crore for the quarter ended September. The company's revenue grew 25.6% to ₹3,767 crore in the quarter.
The company will consider sub-division/split of shares of face value of ₹10 each on 27 October.
Indian Railway Catering and Tourism Corporation Ltd has become ninth public sector firm to join the elite club of ₹1 trillion market cap with its shares surging over 300% so far this year. The stock hit a record high of ₹6287.95 with gaining as much as 7.1%. At 9.20am, the scrip was trading at ₹6283 on BSE, up 7% with its mcap stood at ₹1.01 trillion.
Earlier, PSU stocks like State Bank of India, Coal India, NMDC Ltd, Indian Oil Corp Ltd, Power Grid Corp Ltd, SBI Life Insurance, Bharat Petroleum Corp and SBI Cards have achieved this milestone.
