Closing Bell
Indian equity benchmarks advanced to a record for the third straight day, led by the gains in Coal India, Yes Bank and Wipro.
The S&P BSE Sensex Index rose 0.3 percent to 34,443.19 after 14 out of 31 stocks in the Index gained. The NSE Nifty 50 Index rose 0.1 percent to 10,637.
The market breadth was tilted in the favour of sellers. Ten out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Telecom Index's 1.3 percent decline. On the other hand, the S&P BSE Realty Index was the top sectoral gainer, up 2.8 percent.
Countdown
Stocks Moving On Heavy Volumes
Music Broadcast
- Stock rose as much as 12.2 percent to Rs 447.20.
- Trading volume was 55.9 times its 20-day average.
Federal-Mogul Goetze India
- Stock rose as much as 10.2 percent to Rs 583.30.
- Trading volume was 31.2 times its 20-day average.
Sarda Energy & Minerals
- Stock rose as much as 16 percent to Rs 604.40.
- Trading volume was 14.6 times its 20-day average.
Quick Heal Technologies
- Stock rose as much as 17.6 percent to Rs 377.
- Trading volume was 11.4 times its 20-day average.
South Indian Bank's Asset Quality Improves Slightly In Q3
Shares of the Kerala-based private sector lender fell 2 percent to Rs 33.15 after it reported December quarter earnings.
- Net profit came in at Rs 115 crore versus Rs 111 crore (YoY)
- Gross non-performing assets as a percentage of total advances came in at 3.4 percent versus 3.57 percent (QoQ)
- Net interest income came in at Rs 509 crore versus Rs 417 crore (YoY)
South Indian Bank Announces Share Issue
Jet Airways Falls After Crew Arrested For Smuggling Forex
Shares of the Mumbai-based airline operator fell 3.4 percent to Rs 835.90 after a female flight attendant of Jet Airways has been arrested by the Directorate of Revenue Intelligence (DRI) for allegedly trying to smuggle out $4,80,200 out of the country, according to an official statement.
The accused was intercepted by DRI officials when she was on a flight to Hong Kong yesterday, it said.
Power Lunch
H1B Relief For Indian Techies, US Says No Change In H-1B Extension Policy
In a relief for Indian techies, US authorities today said that the Trump administration is not considering any proposal that would force H-1B visa holders to leave the country.
The announcement by the US Citizenship and Immigration Services (USCIS) came days after reports emerged that the Trump administration was considering tightening H-1B visa rules that could lead to deportation of 7,50,000 Indians.
The reports had said it was mulling ending extensions for H-1B holders.
The USCIS "is not considering a regulatory change that would force H-1B visa holders to leave the United States by changing interpretation of section certain language in Section 104 C of the American Competitiveness in the 21st Century Act (AC21) statute that states that USCIS may grant the extensions," an official said.
PTI
Deepak Nitrite Surges After Edelweiss Initiates Coverage
Shares of the Vadodara-based chemical maker rose as much as 7 percent to Rs 294 after domestic brokerage Edelweiss initiated coverage on the stock with a 'buy' for target price of Rs 360. It expects revenue to double and margins quadruple going ahead.
#Ask BQ
Market Check
- Indian equity benchmarks came off record highs and were trading on a flat note as gain in Coal India, ITC and Reliance Industries were offset by losses in ICICI Bank, Hero MotoCorp and Bajaj AUto.
- The S&P BSE Sensex was little changed at 34,378 and the NSE Nifty 50 Index slipped 0.1 percent to 10,613. The broader markets were trading on a weak note as the S&P BSE MidCap Index fell 0.5 percent and the S&P BSE SmallCap Index declined 0.15 percent.
- From the Nifty 50 basket of shares, 34 were declining while 16 were advancing.
Top Nifty Gainers
- Coal India up 5.97 percent
- ITC up 1.15 percent
- Reliance Industries up 1.06 percent
- Yes Bank up o.84 percent
- Tata Motors up 0.70 percent
Top Nifty Losers
- Eicher Motors down 2 percent
- Hindalco down 1.77 percent
- Zee Entertainment down 1.70 percent
- Hindustan Petroleum down 1.39 percent
- HCL Technologies down 1.16 percent
Hot Money
Tata Motors Rises On Record JLR December Sales
Shares of the Mumbai-based auto maker rose as much as 2.2 percent to Rs 443.55 after Jaguar Land Rover reported a flat growth in vehicles sales in December but the British automaker’s tally for the full year was its best ever.
JLR sales increased by a percent to 55,697 cars in December as compared to the same month last year, the company said in a media statement. For the full year, sales rose 7 percent over last year to 6.2 lakh vehicles, a record for the carmaker.
Trend Spotting
Astron Paper And Board Locked In 5% Upper Circuit For Seventh Day
Shares of the newly listed Astron Paper & Board Mills were locked in 5 percent upper circuit for seventh day in a row.
Earlier this month, the stock made a stellar debut on stock exchanges wherein it junped over 140 percent on first trading day. The Gujarat-based kraft paper maker’s Rs 70 crore initial public offering saw overwhelming demand with bidders subscribing 243.29 times till the final day.
Electrosteel Steels Locked In 5% Upper Circuit
Shares of the Kolkata-based steel maker were locked in 5 percent upper circuit at Rs 6.75 after Vedanta submitted the highest bid to take over the bankrupt company, The Economic Times newspaper reported.
The bid made by the Anil Agarwal-led company was ahead of that made by the Tata Group, the report added two people aware of the matter.
Aarti Drugs Surges On Fixing Record Date Of Share Buyback
Shares of the Mumbai-based drug maker rose as much as 7.2 percent to record high of Rs 284.80 after its board fixed Jan. 19 as the record date of share buyback.
JP Associates, Jaypee Infratech Fall As RBI Asks SC To Start Insolvency Proceedings
Shares of Jaiprakash Associates and Jaypee Infratech fell 6.5 percent and 4 percent each respectively after Reserve Bank of India sought Supreme Court's permission to start insolvency proceedings against Jaiprakash Associates, The Mint newspaper reported.
Textile Makers Surge In Trade
Shares of textile makers were trading higher in trade today.
- Raymond rises 4 percent
- Arvind rises 4 percent
- Trident advances 3.11 percent
- Welspun India gains 2.51 percent
The F&O Show
SREI Infra Rises On Buzz Of Buying Sterling Port In Dahej
Shares of the Kolkata-based infrastructure finance company rose as much as 4 percent to Rs 107.30 after a consortium of SREI Infrastructure Finance and JSW Infrastructure is set to acquire upcoming Sterling Port in Dahej from its lenders, The Mint newspaper reported citing two people aware of the matter.
IndianOpen
Coal India Surges After Raising Thermal Coal Prices
Shares of the state-run coal producer rose as much as 6.5 percent to nine-month high of Rs 306.25 after it raised thermal coal prices.
Opening Bell
Indian equity benchmarks were hovering near record highs however the gains were minuscule as gains in Coal India, Wipro and ONGC were offset by losses in Yes Bank, Reliance Industries and Larsen & Toubro.
The S&P BSE Sensex was little changed at 34,373 and the NSE Nifty 50 Index was little changed at 10,625.
Fourteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal Index's 0.49 percent gain. On the other hand, the S&P BSE Capital Goods Index was the top sectoral loser down 0.2 percent.
Money Market Heads Up!
Investors will focus on debt sales by state governments for Rs 11,000 crore in a week that will see more issuances. Later this week the federal government will auction Rs14,000 crore of treasury bills and Rs 15,000 crore rupees of bonds on Friday. All of which are likely to keep bonds depressed.
The yield on the 10-year bond rose 6 basis points to 7.34 percent on Monday, with concerns about accelerating inflation and wider budget deficit weighing down on sentiment. The higher yields, of course, are attracting foreign buyers who snapped up Rs 6,666 crore of debt under a quota sale by the BSE. Buying by foreigners into Indian stocks has also helped the rupee soar to its highest since April 2015. The implied opening for the rupee is expected at around 63.4840 on Tuesday, up from 63.50 on Monday.
BQ Heads Up!
F&O Cues
- Nifty January futures trading at 10,631, premium of 8.5 points versus 14 points.
- January Series: Nifty open interest up 4 percent; Bank Nifty open interest up 18 percent.
- India VIX ended at 13.7, up 4.7 percent.
- Max open interest for January series at 11,000 Call (open interest at 45.2 lakh, up 4 percent).
- Max open interest for January series at 10,400 Put (open interest at 64.4 lakh, up 6 percent).
Bulk Deals
- Gitanjali Gems: Russell Investment Co PLC bought 9.18 lakh shares or 0.8 percent equity at Rs 77.27 each.
- Snowman Logistics: Norwest Venture Partners VII A Mauritius sold 42 lakh shares or 2.5 percent equity at an average of Rs 61.6 each.
- Sobha Ltd: Adawi Investments Holdings Ltd sold 41.60 lakh shares or 4.3 percent equity at an average of Rs 599.85 each.
- Sangam Industries: Mentor Capital bought 2 lakh shares or 0.5 percent equity at Rs 190 each.
- Monnet Ispat: Oswal Greentech sold 16.29 lakh shares or 0.8 percent equity at Rs 33.62 each.
- Coral India Finance: India Max Investment sold 6.75 lakh shares or 1.4 percent equity at Rs 44.1 each.
- Shah Alloys: United India Insurance sold 1 lakh shares or 0.5 percent equity at Rs 22.12 each.
Pennar Engineered Building Systems Ltd:
- Crest Capital & Investment bought 2.72 lakh shares or 0.8 percent equity at Rs 110.1 each.
- Ganesh Trading Investment bought 3 lakh shares or 0.9 percent equity at Rs 110.1 each.
- Zephyr Peacock India Fund sold 8.87 lakh shares or 2.6 percent equity at an average of Rs 110.2 each.
Menon Bearings
- Promoter Sucheta Menon sold 22.42 lakh shares or 4 percent equity at Rs 100.5 each.
- Astute Investments bought 22.16 lakh shares or 4 percent equity at Rs 100.5 each.
LP Securities
- New Berry Advisors sold 4.23 lakh shares or 0.6 percent equity at Rs 24.45 each.
- LKP Panday bought 7.48 lakh shares or 1 percent equity at Rs 24.45 each.
Stocks To Watch
- Gujarat NRE Coke employees move to Supreme Court to keep it afloat (Business Standard)
- IDFC Bank and Capital First in exploratory talks for a possible merge (CNBC TV18)
- Tata Motors’ Jaguar Land Rover sales in December rose 0.6 percent to 55,697 units. Full year sales up 6.5 percent to 6.2 lakh units.
- Government to sell 1.5 percent stake in NMDC through an offer for sale at floor price of Rs 153.50 per share.
- Aarti Drugs to buyback 2.75 lakh shares (1.15 percent) at Rs 875 each
- Bharti Airtel says payments bank has terminated some retailers.
- Sutlej Textiles and Industries to set up a plant in Jammu and Kashmir to manufacture polyester staple fibre. It also deferred plans of expanding its Baddi facility due to uncertain markets conditions in the yarn segment.
- Deep Industries incorporated subsidiary Deep International DMCC in Dubai on Jan. 7.
- Sun Pharma hiked stake in Ranbaxy Malaysia to 85.9 percent from 79.55 percent.
Brokerage Radar
Macquarie on ICICI Lombard General Insurance
- Initiated ‘Underperform’ with price target of Rs 565; implying a potential downside of 33 percent from yesterday’s close.
- A float business with unfathomable valuations.
- Large opportunity, but competition a big pain point.
- Suffers underwriting losses due to intense price competition.
- Industry has growth tailwinds.
- Large float of 3.5-4 times, coupled with high interest rates, make it to make profits.
- Float profits cross-subsidise underwriting losses.
- Expect growth in premium at a compounded rate of 21 percent over the financial years through March 2020; improving quality to be challenging.
- Proposed Motor Vehicle Act to boost underwriting profitability.
- Current valuations leave no upside.
Macquarie on Suprajit Engineering
- Aims to sustain revenue growth at 5-10 percent above auto industry production growth for next 5-10 years.
- Positives: rising share of business in India and globally, market share gains in aftermarket.
- Positives: entry into new non-automotive segments and expansion of its product portfolio.
- Management strategy: De-risk and grow profitably.
- Exports, aftermarket and non-auto are key growth drivers.
- High and steady profitability, return ratios across cycles.
- Management guiding for dividend payout ratio of 20-25 percent.
Macquarie on Endurance Tech
- Management focused on diversifying customer mix in India.
- Focus also on growing content in scooters and growing European business profitably.
- Technology content is increasing across product portfolio.
- Focused on customer diversification and growing content.
- Pursuing profitable revenue growth in European operations.
- Track record of prudent investments and high return on capital employed.
- Endurance to pursue strategic alliances and inorganic growth opportunities.
Jefferies on Oil & Gas
- Auto fuel prices up sharply but more needed to normalise marketing margins.
- Elevated Brent and busy political calendar to keep marketing margins under pressure.
- Lower marketing margins and softer refining margins to weigh on earnings.
- Like cheaper and more resilient Indian Oil to Bharat Petroleum or Hindustan Petroleum.
IDBI Capital on Larsen & Toubro Infotech
- Initiated ‘Buy’ with price target of Rs 1,300, implying a potential upside of 16.7 percent from yesterday’s close.
- LTI has all the ingredients of being a sustainable growth engines.
- Has strong presence in high growth digital solutions.
- Expect LTI to continue to outperform the sector.
- LTI to become more aggressive than before; To be most feared competitor.
- Momentum across – large clients + large deal wins + large deal pipeline to continue.
- Expect revenue in dollar terms and earnings per share to grow at a compounded rate of 14 percent and 13 percent respectively over the financial years through March 2020.
- Strong growth performance warrants premium valuation.
Prabhudas Lilladher on Zensar Technologies
- Initiated ‘Buy’ with price target of Rs 1,000, implying a potential upside of 13.6 percent from yesterday’s close.
- Increasing proportion of revenues from Digital SBU coupled with deal wins to revive revenue growth trajectory.
- Expect gradual recovery on the margin front.
- Revival in growth to drive SG&A leverage and margin expansion over the financial years through March 2020.
- Strong expertise in Oracle offerings remains the key proposition.
- Zensar now positioned to address complete value chain in Retail eCommerce
- EPS estimates for the current and next two financial years are Rs 52, Rs 65 and Rs 80 respectively.
- Dollar Revenue growth for the current and next two financial years estimated at 3.7 percent, 10.3 percent and 11 percent respectively.
- Valuations remain reasonable; Room for re-rating over two-year period.
Edelweiss Investment on Deepak Nitrate
- Initiated ‘Buy’ with a price target of Rs 360, implying a potential upside of 31 percent from yesterday’s close.
- New plant to revitalise business dynamics from April 2019 onwards
- Positives: improving product mix, efficiency to drive performance products business.
- Company set to reap benefits of capacities as well as performance products
- Expect spectacular revenue and margin spurt with higher utilisation levels and business expansion
- Revenue is expected to double and margins quadruple; Net profit to grow at a compounded rate of 38 percent over the financial years through March 2020.
- Debt funded capex to generate healthy returns.
- Debt-to-equity expected to soar two times; return on capital employed to expand to 17 percent by March 2020.
- Free cash flows from April 2019 with scope for forward integration.
- Low valuations for a strong cash flow generating business.
- Bull case price target of Rs 414.
Talking Points
- Jaguar Land Rover’s flat December sales growth couldn’t spoil 2017 party
- Trump Tower roof fire extinguished, one firefighter injured
- Ether tops Ripple to reclaim second spot in crypto rankings
- Tata Sons vs Mistry battle continues at NCLT
- Government looks to raise Rs 750 crore from NMDC stake sale
- Adani’s Australia port should refinance soon or face rating cut
- North Korea begins talks with Seoul on truce during Olympics
- Cryptocurrencies are selling off
Good Morning!
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.17 percent to 10,650.
Asian equities built on the best start to a year since 2006 as Japanese traders returned from a holiday following new all-time highs for U.S. shares. The dollar maintained gains and oil rose above $62 a barrel.
Here are some of the other main events to watch for this week:
- Australian retails sales numbers are due on Thursday.
- U.S. inflation data are forecast to show price pressures remain muted, giving hawks little reason to argue for faster tightening.
- St. Louis Fed bank President James Bullard and head of the New York Fed Bill Dudley are among central bankers scheduled to speak.
- China producer and consumer prices data come Wednesday, while a reading on the country’s money supply is expected in coming days.
- Talks between South Korea and North Korea are set to take place Tuesday.
Commodities
- Gold futures slid 0.2 percent to $1,318.08 an ounce.
- West Texas Intermediate crude rose 0.7 percent to $62.13 a barrel.
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