Closing Bell
Indian equity benchmarks extended their record breaking run for second day after a report by World Bank showed that India made it easier to do business while better-than-expected corporate earnings also boosted the investor sentiment.
Gains in today’s session were led by Bharti Airtel, which rose most in over seven years and banking stocks like ICICI Bank and State Bank of India.
The S&P BSE Sensex rose 1.17 percent to 33,600 and the NSE Nifty 50 Index advanced 1 percent to 10,440.
Thirteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom Index's 3.9 percent surge. It was followed by the S&P BSE Bankex Index which rose 2 percent. On the flipside, the S&P BSE Consumer Durables Index was the top sectoral loser, down 0.6 percent.
The Mutual Fund Show
Countdown
Tech Mahindra Gains On Beating Estimates In Q2
Shares of the Pune-based IT company rose after it beat consensus Bloomberg estimates in September quarter.
- Net profit rises 6 percent sequentially to Rs 836 crore versus estimate of Rs 738 crore
- Other income at Rs 322 crore
- Dollar revenue up 3.6 percent at $1,179.2 million (QoQ)
- Consolidated revenue rises 3.7 percent to Rs 7,606 crore versus estimate of Rs 7,556 crore (QoQ)
- Ebitda at Rs 1,106 crore
- Margin at 14.5 percent versus 12.7 percent (QoQ)
JSW Energy Swings Post September Quarter Earnings
Shares of the Sajjan Jindal-led power generation company swung after September quarter earnings.
- Net profit rises 37 percent to Rs 297 crore versus estimate of Rs 216 crore
- Revenue rose marginally to Rs 2,049 crore versus estimate of Rs 2,123 crore
- Other income at Rs 170 crore
- Ebitda or operating profit up 8.4 percent at Rs 822 crore versus estimate of Rs 844 crore
- Consolidated margin at 43.1 percent versus 40.1 percent
- To set up new 36-megawatt thermal power plant
On Track To Meet Earnings Guidance, Says IRB InvIT
VK Menon, director of IRB InvIT Fund expects a growth rate of about 10-11 percent going forward, in line with their earlier projections.
Chart Check
- The stock is currently trading Rs 94 apiece, below its issue price of Rs 102. It is testing resistance at its 50-day moving average of 95.89.
Future Lifestyle Slips Post Q2 Earnings
Shares of the Mumbai-based department store operator declined 0.9 percent to Rs 349 after it missed consensus revenue estimates compiled by Bloomberg.
- Standalone net profit at Rs 23.39 crore versus estimate of Rs 21.9 crore
- Standalone revenue at Rs 1,020 crore versus estimate of Rs 1,110 crore
Dredging Corp Locked In 20% Upper Circuit On Stake Sale Buzz
Shares of the state-run dredging company staged a sudden up move and rose by its maximum daily limit of 20 percent to Rs 670.60 after the cabinet approved stake sale in the company, news channel CNBC TV18 reported.
Fertiliser Shares Gain As Cabinet Okays Subsidy Payment To Companies
Shares of fertiliser manufacturers rose after the Union Cabinet approved payment of outstanding subsidy payment of Rs 10,000 crore to fertilizer companies for the financial year 2016-17.
- Rashtriya Chemical and Fertiliser up 5.3 percent
- Zuari Agro Chemicals up 3.2 percent
- Fertilisers and Chemicals Travancore up 3.7 percent
- Southern Petrochemicals up 3.8 percent
European Shares Advance
IPO Watch
New India Assurance Company's Rs 9,600 crore initial public offering was 87 percent as of 12:00 p.m. on first day of subscription.
- Portion reserved for qualified institutional buyers (QIB) subscribed 1.79 times
- Retail portion subscribed 0.01 time
Tata Motors Rises Post October Sales
Shares of Tata Motors rose as much as 2.7 percent, the most since October 27, to Rs 439.95 after it reported October sales numbers.
- Domestic sales grew 5 percent to 48,886 units (YoY)
- Exports decline 32 percent to 4,311 units (YoY)
- Domestic commercial vehicle sales rise 7 percent to 32,411 units (YoY)
- Domestic passenger vehicle sales rise 1 percent to 16,475 units (YoY)
TVS Motor Meets Estimates in Q2; Shares Decline
Shares of the Chennai-based two-wheeler maker declined after it met Bloomberg consensus estimates in the September quarter.
- Revenues rose 18 percent to Rs 4,052 crore versus estimate of Rs 4,1254
- Net profit jumped 20 percent to Rs 213 crore versus estimate of Rs 210 crore
- EBITDA up 28 percent at Rs 351 crore versus estimate of Rs 330 crore
- Margin at 8.7 percent versus estimate of 8 percent
Power Lunch
IIFL Holdings Rises Most In Over Four Months On Fund Infusion In Broking Arm
Shares of the Mumbai-based financial services company rose as much as 10.45 percent to Rs 676 after its board decided to infuse Rs 150 crore by way of additional equity capital into India Infoline Limited, the broking subsidiary of the company to meet its business requirements, the company said in a stock exchange filing.
#Ask BQ
Capital First Meets Estimates In September Quarter
The Mumbai-based non-banking finance company's net profit met analysts' estimates in the second quarter of current financial year.
- Net profit rose 36 percent to Rs 78.3 crore versus Rs 57.6 crore (YoY)
- Net interest income rose 48 percent to 466 crore from Rs 315 crore (YoY)
- Fee income stood at Rs 98.3 crore, up 31 per cent (YoY)
- Retail loan book grew 32 per cent to Rs 21,328 crore
- Gross NPA stood at 1.63 percent
Speaking to BloombergQuint V Vaidyanathan, executive chairman at Capital First said the company is raising its guidance to 30 percent from 20-25 percent. He expects stable margins going ahead as yields have gone up.
GCPL Rises Most In Nearly Three Months On Q2 Beat
Shares of the household products maker rose as much as 6 percent, the most in nearly three months, to Rs 990 after it beat consensus Bloomberg estimates in September quarter.
- Net profit rises 12.6 percent to Rs 362 crore versus estimate of Rs 349 crore
- Revenue rises 2.5 percent to Rs 2,497 crore versus estimate of Rs 2,527 crore
- Operating profit or Ebitda at Rs 532 crore versus estimate of Rs 509 crore
- Operating profit margin at 21.2 percent versus estimate of 20.1 percent
- Domestic volume growth of 10 percent
Block Deal Alerts
- Crompton Greaves has 69.9 lakh shares (1.1 percent equity) change hands in a block
- Indiabulls Real Estate has 16.4 lakh shares change hands in a block
Buyers and sellers were not immediately known
Source: Bloomberg
Shoe Makers Gain On Report Of Tax Sops To Leather Industry
Shares of the shoe makers rose after the Department of Industrial Policy and Promotion (DIPP) secretary said that it is mulling financial and tax incentives for the leather industry, news agency Cogencis reported.
- Mirza International up 10.4 percent at Rs 172
- Shreeleather jumps 4.5 percent to Rs 193
- Liberty Shoes rises 5 percent to Rs 264
- Relaxo Footwears gains 13.2 percent to Rs 593
- Bata India up 2.7 percent at Rs 824
Syndicate Bank Surges 14% As Asset Quality Improves In Q2
Shares of the Bangalore-based lender jumped as much as 14 percent to Rs 94.15 after its asset quality improved in the September quarter.
- Net interest income up 6.8 percent at Rs 1649.5 crore
- Net profit rose 28 percent to Rs 105.24 crore
- Gross non-performing assets (NPA) as a percentage of total advances at 9.39 percent versus 9.96 percent (QoQ)
- Net NPAs at 5.76 percent versus 6.27 percent
- Provisions down 33 percent at Rs 891 crore (QoQ)
IIFL Holdings Q2 Net Profit Rises 25% To Rs 299 Crore
The Mumbai-based financial services company reported healthy September quarter earnings.
- Consolidated net profit rose 25 percent to Rs 229 crore versus Rs 183 crore (YoY)
- Consolidated revenue rose 30.57 percent to Rs 1,585.5 crore versus Rs 1,214.2 crore (YoY)
Speaking to BloombergQuint Prabodh Agrawal, group CFO at IIFL Holdings said all three businesses doing well and borrowing cost has been dropping. He added that the company saw fastest growth in wealth and AUM business and expects margins to sustain for next few years.
Eicher Motors Falls On Missing Sales Estimates In October
Shares of the Delhi-based two-wheeler maker fell 1.8 percent to Rs 31,649.95 after it missed consensus Bloomberg October sales estimates.
- Total sales rise 18 percent to 69,492 units versus estimate of 72,000 units
- October exports rise 98 percent to 1,478 units versus 748 units (YoY)
Market Check
- Indian equity benchmarks were trading close to record highs led by strong gains in banking and telecom shares
- Market sentiment got a boost after a World bank report showed that India made it easier to do business in the country
- Stronger than expected earnings by Indian companies also added to the sentiment
- From the Nifty 50 basket of shares 35 were advancing while 15 were declining
- Bharti Airtel was the top Nifty gainer, up 7.4 percent. ICICI Bank, State Bank of India, Axis Bank and Vedanta were also among the gainers
- The S&P BSE Telecom Index was the top sectoral gainer, up 3.85 percent. It was followed by the S&P BSE Bankex Index which rose over 2 percent
Dabur Rises Most in 18 Months; Court Extends Ban On Patanjali's Chyawanprash Ad
Shares of FMCG products maker rose as much as 8.4 percent, the most since May 2016, to Rs 360.85 after Delhi High Court extended its interim order in a case filed by Dabur India restricting Baba Ramdev's Patanjali Ayurved from airing an advertisement to promote its Chyawanprash brand.
Meanwhile, brokerage houses have hiked target price on the stock after it came out with earnings yesterday.
UBS on Dabur India
- Maintained ‘Buy’; hiked price target to Rs 400 from Rs 365.
- Robust recovery in domestic business; Worst over for international.
- Strategic shift towards volume growth; Rural recovery to aid.
- Management expects strong rural stimulus packages to be announced in the run-up to the 2019 elections.
- Increased visibility of volume growth in India business could rerate the stock.
Credit Suisse on Dabur India
- Maintained ‘Neutral’; hiked price target to Rs 350 from Rs 310.
- Toothpaste momentum drove domestic recovery in the previous quarter; International remains a drag.
- Expect improved volume growth in the second half of current financial year due to the lower base.
- International business decline likely to stem in the second half.
- Margins likely to remain range bound despite topline recovery as ad spends will go up.
Maruti Suzuki Slips As Sales in October Miss Estimates
Shares of the country's largest carmaker slipped 0.6 percent to Rs 8,160 after its October sales missed Bloomberg consensus estimates in the September quarter.
- October total sales up 9.5 percent at 1.46 lakh units versus estimate of 1.51 lakh units
- October exports rise 4.2 percent to 10,446 units (YoY)
- October domestic sales jump 9.9% to 1.36 lakh units (YoY)
India Manufacturing PMI Slips In October
The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, eased in October, pointing to a stagnation of activity in the manufacturing sector.
The composite indicator of manufacturing performance stood at 50.3 in October, down from 51.2 in September.
A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.
"Disappointingly, manufacturing production rose at the weakest pace in the current sequence of growth," said Aashna Dodhia, Economist at IHS Markit, which compiles the survey. "Inflows of new orders stagnated as the negative effects arising from the implementation of GST (goods and services tax) continued to dampen demand levels. Furthermore, overseas demand for Indian goods dipped to the greatest extent since September 2013," Dodhia said.
(Nikkei)
Rupee Rises To Highest In Six Weeks Against U.S. Dollar
Indian rupee rose as much as 0.27 percent to its highest level in six weeks to 64.56 against the U.S. dollar.
U.S. consumer confidence data and wages data showed robustness, which pushed Dollar Index a tad higher. However, the dollar-rupee pair seems to be cruising along nicely propped up by flows. I expect the trend to continue as the pair consolidates within a range of 64.7500-65.00.Bhaskar Panda, senior regional head (treasury advisory) group, HDFC Bank
The F&O Show
IndiGo Rises After Q2 Earings Beat Estimates In Q2
Shares of the Gurugram-based budget carrier rose as much as 4 percent to Rs 1,298.70 after it beat Bloomberg consensus estimates in July-September quarter.
- Profit rose over four-fold to Rs 552 crore versus estimate of Rs 321 crore
- InterGlobe Aviation received credit from Pratt & Whitney and Airbus which boosted earnings in Q2
- Passenger ticket revenue grew 25.7 percent to Rs 4,523.41 crore YoY.
- Available seat kilometer increased 13 percent to Rs 1,510 crore YoY.
- Revenue passenger kilometer rose 15.4 percent to Rs 1,268 crore YoY.
- Load factor expanded 180 basis points to 84 percent YoY.
- Technical dispatch reliability stood at 99.84 percent, while the flight cancellation rate was 0.37 percent.
- Total debt with the aircraft carrier fell 7.5 percent to Rs 2,536.8 crore YoY.
Bharti Airtel Surges To 10-Year High On Q2 Beat
Shares of the country's largest telecom service provider rose as much as 5 percent to Rs 522, also its highest level since December 2007, after it beat consensus Bloomberg estimates in July-September quarter. Meanwhile, the company is also evaluating selling majority stake in its tower arm Bharti Infratel to a few global investors.
Key Q2 Highlights:
- Revenue fell marginally to Rs 21,780 crore versus estimate of Rs 21,754 crore
- Average revenue per user fell 5.7 percent to its lowest ever at Rs 145
- Ebitda rose 2 percent to Rs 7,922 crore
- Ebitda margin rose to 36.4 percent versus 35.3 percent (QoQ)
- Net profit fell for the sixth straight quarter by 6.5 percent to Rs 343 crore versus estimate of Rs 351 crore
- The bottom line included an exceptional loss of Rs 179 crore on account of network upgrade spends
IndianOpen
Opening Bell
Indian equity benchmarks rose to record highs led by strong gains in Bharti Airtel which reported better than estimated September quarter and State Bank of India.
The S&P BSE Sensex rose 0.72 percent to 33,451 and the NSE Nifty 50 Index advanced 0.66 percent to 10,403.
All the sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom Index's 1.5 percent surge.
We have been observing a greater momentum outside of the index and expect that to continue going ahead. After persistent upside the immediate support for Nifty is seen at 10,310-mark, below which we may see it sliding down.Digesh Shah, CFA (ICFAI), equity research analyst, Veracity Financial Services
Money Market Heads-Up
It appears to be a mixed day for currencies with a number of key global events on the horizon. First, the U.S. Fed is likely to keep interest rates unchanged today paving the way for a December hike. But the big change will be announcement of Janet Yellen's successor that is scheduled on Thursday. Investors may take it light for a couple of days ahead of these announcements. A rangebound session is expected with the rupee staying in a range of 64.65-64.85 a dollar.
The sovereign bond market took a breather from two days of selling. Yield on the 10-year note fell 2 basis points in the last session. But in the absence of any major data cues, market expects a mundane session of trade. The good news to talk about is that the fiscal deficit data came pretty much in line with expectations and second, India jumped 30 places up in World Bank's ease of doing business list which is a sort of endorsement for the government's effort towards economic reforms. For bonds today, yield on the benchmark note may stay in a range of 6.83-6.90 percent in the day.
F&O Cues
- Nifty November futures closed at 10,388.4, premium of 33.5 points from 24.8 points
- November contracts: Nifty open interest up 1 percent, Bank Nifty open interest down 2 percent
- India VIX closed 2.7 percent higher at 12.44
- Max open interest for November series shifts at 10,400 Call (open interest at 32.4 lakhs)
- Max open interest for November series at 10,000 Put (open interest at 50.5 lakh, up 3 percent)
All You Need To Know
Results Today
- Hero MotoCorp
- Tech Mahindra
- Apollo Tyres
- Eclerx Services
- ENIL
- Godrej Consumer Products
- Greaves Cotton
- Hexaware Technologies
- JSW Energy
- Max India
- Shriram Transport Finance
- Tourism Finance Corporation Of India
- TVS Motor Company
Earnings Reaction To Watch
Bharti Airtel (Q2FY18, YoY)
- Revenue down 0.8 percent to Rs 21,777 crore
- Net profit down 6.6 percent to Rs 343 crore
- EBITDA up 2 percent to Rs 7,922 crore
- EBITDA margin at 36.4 percent versus 35.3 percent
- ARPU down 5.8 percent to Rs 145 from Rs 154
InterGlobe Aviation (Q2FY18, YoY)
- Revenue up 27 percent at Rs 5,291 crore
- Net profit up 294 percent at Rs 551.5 crore
- EBITDAR up 61 percent at Rs 1,557.5 crore
- Margins at 29.43 percent vs 23.23 percent
Syndicate Bank (Q2FY18, YoY)
- Net interest income up 6.8 percent at Rs 1649.5 crore
- Net profit up 27.4 percent at Rs 105 crore
- Provisions down 33 percent at Rs 891 crore (QoQ)
- GNPA at 9.39 percent from 9.96 percent (QoQ)
- NNPA at 5.76 percent from 6.27 percent (QoQ)
Swaraj Engines (Q2FY18, YoY)
- Revenue up 16.75 percent at Rs 209 crore
- Net profit up 23.68 percent at Rs 23.5 crore
- EBITDA up 20.68 percent at Rs 35 crore
- Margin at 16.74 percent from 16.2 percent
Cholamandalam (Q2FY18, YoY)
- Revenue from operations up 12 percent at Rs 1,313 crore
- Net profit up 36 percent at Rs 228 crore
- Net interest margin at 9.6 percent from 9.5 percent (QoQ)
IIFL Holdings (Q2FY18, YoY)
- Revenue up 31 percent at Rs 1585.5 crore
- Net interest income up 40 percent at Rs 933.5 crore
- Net profit up 25.1 percent at Rs 229 crore
VST Industries (Q2FY18, YoY)
- Revenue down 2 percent at Rs 219.5 crore
- Net profit up 41.9 percent at Rs 44 crore
- EBITDA up 39 percent at Rs 69.5 crore
- Margin at 31.6 percent from 22.3 percent
Sanofi India (Q2FY18, YoY)
- Revenue up 4.6 percent at Rs 667.5 crore
- Net profit up 50 percent at Rs 12 crore
- EBITDA up 32 percent at Rs 161 crore
- Margin at 24.11 percent from 19.12 percent
KPIT Technologies (Q2FY18, YoY)
- Revenue up 5.5 percent at Rs 916 crore
- Net profit up 8.2 percent at Rs 60 crore
- EBITDA up 13.2 percent at Rs 90 crore
- Margin at 9.8 percent from 9.15 percent
Blue Star (Q2FY18, YoY)
- Revenue down 6 percent at Rs 836 crore
- Net profit up 5 percent at Rs 21 crore
- EBITDA up 14.6 percent at Rs 47 crore
- Margin at 5.6 percent versus 4.6 percent
Zee Media Corporation (Q2FY18, YoY)
- Revenue up 23.8 percent at Rs 125 crore
- Net profit of Rs 1.8 crore from net loss of Rs 18 crore
- EBITDA down 4 percent at Rs 22 crore
- Margin at 17.6 percent from 22.77 percent
JSW Steel (Q2FY18, YoY)
- Net sales up 27.14 percent at Rs 16,818 crore
- Net profit up 29 percent at Rs 836 crore
- EBITDA up 3.51 percent at Rs 3,036 crore
- Margin at 18 percent from 22.2 percent
Divi’s Laboratories (Q2FY18, YoY)
- Revenue down 11 percent at Rs 890 crore
- Net profit down 7 percent at Rs 207 crore
- EBITDA down 5 percent at Rs 276 crore
- Margin at 31.0 percent from 28.9 percent
Sintex Plastics Technology (Q2FY18, QoQ)
- Revenue down 7.4 percent at Rs 1,433 crore
- Net profit down 62.3 percent at Rs 26 crore
- EBITDA down 17.4 percent at Rs 192 crore
- Margin at 13.39 percent from 15 percent
EIH Associated Hotels (Q2FY18, YoY)
- Revenue down 6 percent at Rs 46.55 crore
- Net loss of Rs 1.4 crore from a net profit of Rs 1.6 crore
- EBITDA down 76 percent at Rs 1.55 crore
- Margin at 3.3 percent from 13.1 percent
BQ Heads-Up
IPO Watch
- Mahindra Logistics Limited IPO continues on day 2. The issue was subscribed 0.4 times on day 1.
- New India Assurance Company IPO opens today with an issue price of Rs 770-800 per share
Circuit Revisions
- Circuit filter revised to 10 percent: IIFL Holdings and Women's Next Loungeries
- Circuit filter revised to 5 percent: Pioneer Distilleries, HEG & Bhansali Engineering Polymers
Bulk Deals
Cyient
- Birla Sun Life MF bought 15 lakh shares or 1.3 percent equity stake at Rs 525 each
- Fidelity Series Emerging Markets Debt Fund bought 17.62 lakh shares or 1.6 percent equity at Rs 525 each
- Reliance Capital Growth Fund bought 11.6 lakh shares or 1 percent equity stake at Rs 525.39 each
- Reliance Capital Opportunities Fund bought 15.4 lakh or 1.4 percent equity stake at Rs 525.39 each
- UBS Principal Capital Asia bought 12.52 lakh shares or 1.1 percent equity stake at Rs 525 each
- First Carlyle Ventures Mauritius sold its entire stake of 1.1 crore shares or 9.9 percent equity stake at Rs 525.16 each
Skipper
- Ocean Dial Gateway to India Mauritius Ltd bought 22.9 lakh shares or 2.2 percent equity stake at Rs 229.99 each
- Purushottam Distributors sold its entire stake of 13.55 lakh shares or 1.3 percent equity stake at Rs 230 each
Mawana Sugars
- Mentor capital bought 2.5 lakh shares or 0.6 percent equity stake at Rs 122.31 each
Prakash Industries
- BNP Paribas Arbitrage sold 15.90 lakh shares or 1 percent equity stake at Rs 147.57 each
Bhushan Steel
- EARC Trust SC sold 37.83 lakh shares or 1.7 percent equity stake at an average of Rs 67.4 each
Network18
- Network Group Senior Professional Trust sold 1.1 crore shares or 1.1 percent equity stake at Rs 49.41 each
Brokerage Radar
Macquarie on JSW Steel
- Maintained ‘Neutral’; hiked price target to Rs 262 from Rs 222.
- Lower iron ore availability in Karnataka and water shortage in Tamil Nadu marginally impacted volumes.
- Well placed with deflating raw materials.
- Maintain Neutral but preferred over Tata Steel to play the current steel upcycle.
- Expected weakness in steel prices in the next financial year.
IDFC Securities on JSW Steel
- Downgrade to ‘Underperform’ from Neutral; maintained target price at Rs 192
- H2FY18 outlook better than H1FY18, but largely factored in; stock looks expensive
- Expect EBITDA to grow at CAGR of 3 percent over FY17-19 due to absence of volume growth in FY19
- Next phase of volume growth will accrue from FY21, once it completes its expansion at Dolvi
- Net debt expected to remain high at Rs 36,800 crore at FY19
- Not factoring any probable acquisition of distress steel assets in India
UBS on InterGlobe Aviation
- Maintained ‘Sell’; hiked price target to Rs 930 from Rs 850.
- Previous quarter displayed impressive operational performance supported by compensation credits.
- Expect renewed pressure on yields from the final quarter of the current financial year as capacity growth accelerates.
- Raised EPS estimates for current and next financial year by 24 percent and 7 percent respectively, given better than expected performance.
- GST issues outstanding; Adding ATRs on owned basis
UBS on Dabur India
- Maintained ‘Buy’; hiked price target to Rs 400 from Rs 365.
- Robust recovery in domestic business; Worst over for international.
- Strategic shift towards volume growth; Rural recovery to aid.
- Management expects strong rural stimulus packages to be announced in the run-up to the 2019 elections.
- Increased visibility of volume growth in India business could rerate the stock.
Credit Suisse on Bharti Airtel
- The second quarter’s Ebitda surpassed on the back of Africa business.
- Raise EPS estimates by 5-6 percent for the current and next financial year to factor in better Africa margins.
- Being able to maintain margins in India in seasonally weak quarter with revenue decline is commendable.
- Trends in Africa are puzzling – with cut down on capex, network sites being shut and employee count falling.
Credit Suisse on Dabur India
- Maintained ‘Neutral’; hiked price target to Rs 350 from Rs 310.
- Toothpaste momentum drove domestic recovery in the previous quarter; International remains a drag.
- Expect improved volume growth in the second half of current financial year due to the lower base.
- International business decline likely to stem in the second half.
- Margins likely to remain range bound despite topline recovery as ad spends will go up.
Credit Suisse on JSW Steel
- Maintained ‘Outperform’; hiked price target to Rs 300 from Rs 265.
- Previous quarter matched expectations, standalone EBITDA was a beat
- Push back cost benefits to the next financial year from the second half of the current financial year.
- EPS estimamated to decline by 5 percent in the current financial year and 4 percent increase in the next financial year.
- Stay constructive on the steel cycle.
Credit Suisse on Info Edge (India)
- Maintained ‘Outperform’; hiked price target to Rs 1,300 from Rs 1,120.
- Continues to be a dominant player in recruitment, which has attractive cash flow.
- Zomato may continue to aggressively focus on growth.
- Expect slightly lower losses in 99 acres.
- Increased earnings estimates by 2-8 percent for the three financial till March 2020, reflecting higher margins in recruitment.
IDFC Securities on Shankara Building
- Initiated ‘Outperform’ rating with a price target of Rs 1,786.
- Shankara has successfully evolved into an integrated home improvement retailer.
- Shift to organised retail to accelerate with implementation of GST.
- Shankara best positioned to tap the massive $70 billion home improvement market.
- Expect revenue, EBITDA and net profit to grow at a compound annual growth rate of 11 percent, 17 percent and 29 percent over the three financial years till March 2020.
- Margins to improve by 100 basis points by March 2020.
Credit Suisse on Dr. Reddy’s
- Maintained ‘Underperform’ with a price target of Rs 1,950.
- Previous quarter was weak as sales remained weak across U.S., India and Russia.
- Gross margins were still in-line despite weak U.S. sales.
- Cut EPS estimates for the current financial year by 9 percent to reflect lower U.S. sales.
- EBITDA beat driven by low R&D; Only part of SG&A saving is sustainable.
Macquarie on Dr. Reddy’s
- Maintained ‘Neutral’ with a price target of Rs 2,500
- Uncertainty over U.S. FDA warning letter and potential impact on product approval timelines continues to be an overhang.
- Delayed timelines and reducing complex arbitrage could play spoilsport.
- Any delay in Copaxone 20mg approval poses risk to the U.S. growth estimate in the next financial year.
- Expect the stock to remain range-bound until clarity on the launch timelines.
October Auto Sales Estimates
Stocks To Watch
- Bharti Airtel to mull sale of controlling stake in Bharti Infratel
- Reliance Communications completed merger with Sistema Shyam Tele
- SBI cuts MCLR by 5 basis points
- Karnataka Bank to cut MCLR by 10 points
- Schneider top bidder for L&T’s electrical unit (Mint)
- GIC, CPPIB may join hands with Bain to buy 10 percent in Axis Bank (Mint)
Talking Points
- NYC terror attack with truck kills 8 on bike path; suspect held
- India’s fiscal gap narrows to 91.3% of full-year target in September
- Bharti Airtel to evaluate selling majority stake in tower arm
- A recipe to propel India into the top 50 in ease of doing business rankings
- Raghuram Rajan ideal to head U.S. Federal Reserve: Barron’s Magazine
- Grounded planes, delivery delays boost this airline’s profit
- Valuation wasn’t the only hurdle for IDFC deal: Shriram Group Founder
- Mylan top executive engulfed in alleged price-fixing conspiracy
- Credit card debt, personal loans spike on festive demand
- Three years of Fadnavis as Maharashtra chief minister: Hits and misses
- Docomo has its payday as Tata transfers arbitration award
Good Morning!
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.4 percent to 10,416.
Stocks in Asia started the month on a positive note, trading near all-time highs, as American consumer confidence data strengthened optimism in the growth outlook and investors shrugged off the latest turmoil in Washington. The New Zealand dollar soared as jobs data topped estimates.
Here are some other key upcoming events this week:
- The U.S. October payroll report comes out Friday.
- Trump starts an 11-day trip to Asia, his first as president, on Friday. Trade and security issues -- particularly North Korea -- will probably be in focus.
- A probable Bank of England rate hike on Thursday will be the first in a decade.
- The slew of earnings releases will culminate with Apple Inc. results.
Commodities
- West Texas Intermediate crude rose 0.5 percent to $54.64 a barrel.
- Gold lost 0.2 percent to $1,268.81 an ounce.
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