Sensex, Nifty Resume Record Run As Economic Survey Sees Growth Reviving

Avenue Supermarts: The Mumbai-based department store operator rose as much as 9 percent, the most in over four months, to Rs 1,263 after it reported strong earnings in December quarter.

Key earnings highlights:

• Revenues up 23 percent at Rs 4095 crore versus Rs 3,339 crore
• Net profit up 66 percent at Rs 252 crore versus Rs 152 crore
• EBITDA up 47 percent at Rs 422 crore versus Rs 287.5 crore
• Margins at 10.3 percent versus 8.6 percent

KSB Pumps: The Mumbai-based pumps and industrial valves maker rose as much as 6.6 percent to record high of Rs 929.80 after it received order of around Rs 413 crore.

Mphasis: The Bangalore-based IT and BPO service provider rose as much as 12.28 percent to record high of Rs 925 after broking firm Antique upgraded the stock buy from hold and raised its target price to Rs 965 from Rs 710.

Suven life Sciences: The Hyderabad-based manufacturer and exporter of pharma products gained for fifth day in a row, rising as much as 16.6 percent to Rs 250.80 on the back of heavy volumes. Trading volumes was 18.8 times its 20-day average.

Shares of the submersible water pump exporter rose as much as 9.24 percent to record high of Rs 582 after it reported strong earniongs in December quarter.

Key earnings highlights:

• Net profit surges 141 percent to Rs 15.30 crore versus Rs 6.34 crore (YoY).
• Revenue came in at Rs 141 crore versus Rs 98.29 crore (YoY).

Shares of the Vadodara-based movie theatre operator rose as much as 3.89 percent to Rs 278 after it reported October-December quarter earnings.

Key earnings highlights:

• Consolidated revenue at Rs 325.8 crore versus Rs 298 crore (YoY).
• Consolidated net profit at Rs 13.17 crore versus Rs 3.7 crore (YoY).
• Consolidated EBITDA at Rs 46.4 crore versus Bloomberg estimate of 45.1 crore

Shares of the Mumbai-based generic drug maker fell 2.7 percent, the most since Jan. 18, to Rs 481.50 after it reported loss in December quarter.

• Loss at Rs 58 crore versus loss of Rs 66 crore (YoY).
• Revenue at Rs 19.4 crore versus Rs 23 crore (YoY).

Shares of the country's largest mortgage lender rose 2.7 percent to record high of Rs 1,959.

Housing Development Finance Corporation Ltd.’s quarterly profit rose more than threefold surpassing analyst estimates as the mortgage lender made a one-time gain by selling part of its stake in the initial public offering of its life insurance arm.

Key earnings highlights:

• Net profit rose 233 percent to Rs 5,970 crore versus Bloomberg estimate of Rs 4,556 crore.
• One-time gain of Rs 3,675 crore on selling stake in HDFC Standard Life.
• Net interest income rose 9.6 percent to Rs 3,122 crore.

Shares of the Bangalore-based drug maker rose as much as 5 percent to Rs 828 after its subsidiary Strides Pharma Global received approval for Tenofovir Disoproxil Fumarate Tablets, 300 mg from the U.S drug regulator, the company said in a stock exchange filing.

The drug is used for treatment of HIV and has a market of $750 million in the U.S., Strides added in the exchange filing.

• Finance Minister Arun Jaitley tabled the Economic Survey 2017-18 in the Lok Sabha.

• Federal Bank has 22 lakh shares change hands in a block.

Buyers and sellers were not immediately known

Source: Bloomberg

The Finance Ministry has cautioned against ambitious deficit target, people familiar with the matter told Bloomberg News on the condition of anonymity as the information isn’t public.

The FY18 GDP growth is seen at 6.75 percent, the people said, citing a report on the Indian economy prepared by the ministry. The chief economic advisor has projected FY19 GDP growth at 7-7.5 percent, they said.

They say the ministry sees stable interest rate if inflation is steady. The risk to growth seen from high oil prices. The cash to GDP ratio is expected to stabilise, they added.

Shares of the Delhi-based steel maker and power producer fell as much as 4.14 percent, the most since Jan. 24, to Rs 268.60 after it reported loss in October-December quarter.

Key earnings highlights:

• Revenue up 21 percent at Rs 6,993 crore.
• Net loss of Rs 266 crore versus net loss of Rs 407 crore.
• Ebitda up 26 percent at Rs 1,607 crore.
• Margins at 23 percent versus 22.1 percent.

Shares of the Chandigarh-based wheel rim maker rose as much as 5 percent, the most since Jan. 24, to Rs 1,155 after it won order for supply of 17,000 steel wheels from Europe's caravan market, the company said in an exchange filing.

The steel wheels will be shipped from its plant in Chennai in March 2018.

Indian equity benchmarks rose to fresh record highs led by gains in Maruti Suzuki, HDFC, ICICI Bank and TCS.

The NSE Nifty 50 Index rose 0.72 percent or 80 points to 11,150 and the S&P BSE Sensex advanced 0.9 percent or 321 points to 36,373.

The mid-cap and small-cap shares were underperforming their large-cap counterparts as the S&P BSE MidCap Index was up 0.1 percent and the S&P BSE SmallCap Index rose 0.2 percent.

Thirteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE IT Index's 1.6 percent gain. On the other hand, the S&P BSE Telecom Index was the top sectoral loser, down 2 percent.

Top five Nifty gainers

• Eicher Motors up 4.27 percent
• Maruti Suzuki up 3.95 percent
• Indiabulls Housing Finance up 2.98 percent
• TCS up 2.69 percent
• Zee Entertainment up 2.46 percent

Top five Nifty losers

• Dr. Reddy’ Labs down 4.48 percent
• GAIL India down 2.81 percent
• Bharti Airtel down 2.75 percent
• Lupin down 1.70 percent
• ITC down 1.69 percent

Shares of the Mumbai-based pumps and industrial valves maker rose as much as 6 percent, the most in over three months, to Rs 925.10 after it received orders worth Rs 413 crore from Nuclear Power Corporation of India (NPCIL) for supply of primary coolant pumps and electric motor along with auxiliaries and accessories for their Gorakhpur Haryana Anu Vidyut Pariyojna, the company said in an exchange filing.

Shares of debt-laden steel maker — Bhushan steel rose as much as 10 percent to Rs 65.95 after Sajjan Jindal-led JSW Steel is expected to double its bid for Bhushan Steel to Rs 30,000 crore setting the stage for a bidding war with rivals like Tata Steel Ltd. and ArcelorMittal, news agency Press Trust of India reported citing a source privy to the development said.

JSW Steel was trading 3 percent higher at Rs 299.80.

Newgen Software Technologies made a quiet debut on stock exchanges the stock opened 3.26 percent higher at Rs 253 and rose as much as 7.2 percent to Rs 262.70 against its issue price of Rs 245.

Company's Rs 425-crore initial public offering was subscribed 7.86 times on the final day of bidding on Jan. 18.

Shares of the Gurugram-based logistics company rose as much as 4.39 percent, the most since Jan. 17, to Rs 550 after ICICI Direct initiated coverage on the stock with a buy for target price of Rs 660.

• Extremely bullish on the banking space.
• Expect 19 percent earnings growth for next year.
• Expect GST revenue to look better going ahead.
• Crude remains a risk for India.
• Not Worried About Global Macro In 2018.
• Bond yields will start impacting growth in near future.
• Market would probably give lower returns going ahead.

Shares of the country's largest car maker rose as much as 3.37 percent, the most in over a month, to Rs 9,591 after it revised the royalty calculation terms with its Japanese parent Suzuki Motor favourably. It will lower royalty payments for new models starting with the Ignis, the company said in its filing.

Shares of the Mumbai-based department store chain operator rose as much as 5.58 percent, the most in over three months, to Rs 1,224 after its net profit beat consensus Bloomberg estimates in October-December quarter.

Key earnings highlights:

• Revenue up 23 percent at Rs 4,095 crore.
• Net profit up 66 percent at Rs 252 crore.
• Ebitda up 47 percent at Rs 422 crore.
• Margins at 10.3 percent versus 8.6 percent.

Divestment is the biggest ace that the Finance Minister has, says @EdelweissFin's @rasheshshah.
Watch: https://t.co/F820gWtVTQ pic.twitter.com/By0qS4anMI

— BloombergQuint (@BloombergQuint) January 29, 2018

Sovereign bonds in Asia's worst bond market are likely to stay under pressure in the run up to the budget this week. Rising oil prices and potentially wider fiscal deficit remains big concerns.

It is important to note here that the new benchmark bond has fallen every week since being issued earlier this month. Goldman Sachs expects the FY18 deficit to be at 3.5 percent of GDP while FY19 it may narrow to 3.3 percent. Yield on the 10-year note stands at 7.31 percent and may trade in a range of 7.25-7.35 percent till the budget. It has risen 22 bps since its issuance.

In the currency market, a stronger dollar may weigh on the local currency. The closely tracked South Korean won is down 0.2 percent and the rupee too is expected to open lower. A range of 63.45-63.75 a dollar is expected for today.

Here's a quick look at corporate insider trades reported last Thursday.https://t.co/g0dYf1gwvt pic.twitter.com/BVbFW3yjCN

— BloombergQuint (@BloombergQuint) January 29, 2018

Other Earnings To Watch

• Astra Microwave Products
• Astron Paper
• Century Textiles
• Emami
• Emkay Global
• Himadri Speciality Chemical
• IDFC
• Inox Leisure
• Laurus Labs
• Nava Bharat Ventures
• Reliance Communications
• Sun Pharma Advanced Research
• Wockhardt

Maruti Suzuki Q3 (YoY)

• Net sales up 14.2 percent at Rs 19,283 crore.
• Ebitda up 22.1 percent at Rs 3,038 crore.
• Profit up 3 percent at Rs 1,799 crore.
• Margins at 15.8 percent versus 14.7 percent.

Avenue Supermarts Q3 (YoY)

• Revenue up 23 percent at Rs 4,095 crore.
• Net profit up 66 percent at Rs 252 crore.
• Ebitda up 47 percent at Rs 422 crore.
• Margins at 10.3 percent versus 8.6 percent.

Shriram Transport Finance Q3 (YoY)

• NII up 21.1 percent at Rs 17,42.2 crore.
• Net profit up at Rs 495.6 crore.

APL Apollo Tubes Q3 (YoY)

• Revenue up 39 percent at Rs 1,314 crore.
• Net profit up 24 percent at Rs 36 crore.
• Ebitda up 18 percent at Rs 88 crore.
• Margins at 6.7 percent versus 7.9 percent.

Kokuyo Camlin Q3 (YoY)

• Revenue up 13 percent at Rs 143.5 crore.
• Net profit of Rs 5 crore versus net loss of Rs 3 crore.
• Ebitda up 525 percent at Rs 12.5 crore.
• Margins at 8.7 percent vs 1.6 percent.

Sharda Cropchem Q3 (YoY)

• Revenue up 34 percent at Rs 325.5 crore.
• Net profit down 43 percent at Rs 10 crore.
• Ebitda up 11 percent at Rs 35.5 crore.
• Margins at 10.9 percent versus 13.2 percent.

South Indian Paper Mills Q3 (YoY)

• Revenue up 2 percent at Rs 52 crore.
• Net profit up 17 percent at Rs 3.4 crore.
• Ebitda down 35 percent at Rs 6.5 crore.
• Margins at 12.5 percent versus 19.6 percent

Jindal Steel & Power Q3 (YoY)

• Revenue up 21 percent at Rs 6,993 crore.
• Net loss of Rs 266 crore vs net loss of Rs 407 crore.
• Ebitda up 26 percent at Rs 1,607 crore.
• Margins at 23 percent versus 22.1 percent.

Shriram City Union Finance Q3 (YoY)

• Net Interest Income up 20 percent at Rs 916 crore.
• Net profit up 43 percent at Rs 225.5 crore.

LIC Housing Finance Q3 (YoY)

• Revenue from operations grew 6.4 percent to Rs 3,738 crore.
• Net profit fell 1.7 percent to Rs 491 crore.
• Provisions at Rs 48.5 crore versus Rs 57.8 crore (QoQ).

Tata Coffee Q3 (YoY)

• Revenue down 8 percent at Rs 377 crore.
• Net profit up 45 percent at Rs 43 crore.
• Ebitda down 6 percent at Rs 75.5 crore.
• Margin at 20.0 percent versus 19.5 percent.

Bhageria Industries Q3 (YoY)

• Revenue up 18 percent at Rs 90 crore.
• Net profit up 128 percent at Rs 14.6 crore.
• Ebitda up 143 percent at Rs 25 crore.
• Margin at 28 percent versus 13.6 percent.

Future Supply Chain Q3 (YoY)

• Net profit up 37 percent at Rs 16.8 crore.
• Revenue up 36.4 percent at Rs 195 crore.
• Ebitda up 60.5 percent at Rs 32.9 crore.
• Margin at 16.9 percent versus 14.3 percent.

Divi’s Laboratories Q3 (YoY)

• Revenue up 8 percent to Rs 1,038 crore.
• Net profit down 16 percent to Rs 225 crore.
• Ebitda down 9 percent to Rs 342 crore.
• Margin at 33 percent versus 39 percent.

Persistent Systems Q3 (QoQ)

• Revenue up 4 percent to Rs 792 crore.
• EBIT up 26 percent to Rs 98 crore.
• EBIT margin at 12.4 percent versus 10.2 percent.
• Net profit up 11 percent to Rs 92 crore.

ICICI Direct on TCI Express

• Initiated ‘Buy’ with price target of Rs 660.
• GST, e-way bill - structural impetus to organised segment.
• Specialist logistics services like express delivery to gain momentum.
• Sorting centres to provide better efficiencies.
• Positives: low leverage, robust growth trajectory and high return ratios.
• Reduction in rental expense, efficiencies to drive operating income
• Expect revenue, operating income and net profit to compound at 16 percent, 29 percent and 29 percent respectively over the financial years through March 2020.
• Return ratios to remain one of the best in the industry.
• Healthy cash flow to internally fund capex requirements.
• Expect TCI Express to command premium valuations.

Axis Securities on IG Petrochemicals

• Initiated ‘Buy’ with price target of Rs 860.
• Market leadership in PhthalicAnhydride industry in India; 49 percent market share.
• Domestic PAN industry expected to grow at 6-8 percent per annum over the next few years.
• Acquisition of new business and capacity expansion to help in volume growth.
• Capacity expansion to address demand supply mismatch.
• Capacity utilisation to be above 90 percent over the financial years through March 2019.
• Expect revenue and net profit to grow at a compounded rate of 13 percent and 32 percent respectively over the financial years through March 2019.
• Strong financials, to improve further.
• Expect return ratios to reduce a bit due to ongoing expansion plans.

Jefferies on Maruti Suzuki

• Maintained ‘Buy’; raised price target to Rs 10,720 from Rs 9,245.
• Positive surprise on margin during December quarter drives operating income beat.
• Lower royalty on new models.
• Revise up near- and long-term margin estimates.
• Revised to factor in marginally higher revenue, better margins and lower other income.
• Maruti remains best way to play large long-term PV opportunity in India.

Credit Suisse on Maruti Suzuki

• Maintained ‘Neutral’; raised price target to Rs 9,800 from Rs 9,400.
• December quarter showed strong operational performance.
• Lower other income impacted reported numbers.
• Decline in royalty rates going forward the key positive.
• Low-double-digit growth possible in the next financial year.
• Facelift of showrooms to pick up pace in coming years.

Nomura on Maruti Suzuki

• Maintained ‘Buy’; raised price target to Rs 11,245 from Rs 9,843.
• December quarter was strong driven by cost control and lower promotion expenses.
• High growth visibility, premiumisation and royalty reduction to drive profitability.
• Expect revenue and earnings per share to compound at 17 percent and 19 percent respectively over the financial years through March 2020.
• Expect free cash flow generation to continue to rise sharply.
• Maruti Suzuki remains top pick.

Deutsche Bank on Dr. Reddy’s

• Maintained ‘Hold’; cur price target to Rs 2,163 from Rs 2,310.
• Testing times as key U.S. launches are delayed.
• Should test existing investor optimism on stock.
• Strong pipeline but timelines have been delayed.
• Base business price erosion will stabilise in a few quarters, says management.
• Favourable outcome on impending re-inspection at Duvvada, a key monitorable.

Goldman Sachs on Dr. Reddy’s

• Maintained ‘Neutral’; cut price target to Rs 2,360 from Rs 2,450.
• December quarter results were broadly in-line.
• Higher-than-expected U.S. sales offset weaker-than-expected India sales.
• Pipeline updates indicated that key products likely to see delay in launch.
• Lower operating income estimates by 2-6 percent.

Credit Suisse on Dr. Reddy’s

• Maintained ‘Underperform’ with price target of Rs 1,865.
• US sales increased sharply QoQ but margins disappointed.
• US sales in current quarter should be significantly lower than previous quarter
• India and Russia growth weaker than expected.
• Cut current fiscal’s earnings per share estimates by 9 percent due to competition in key U.S. products.
• Copaxone opportunity delayed by a year.

CLSA on UPL

• Maintained ‘Buy’ with price target of Rs 960.
• December quarter posted weak revenues due to pricing pressure and delayed planting season
• Price growth remained negative, but volume growth remains robust.
• UPL to benefit from improving industry dynamics this year.
• UPL well positioned to benefit from recovery in market.

Deutsche Bank on UPL

• Maintained ‘Buy’; cut price target to Rs 940 from Rs 960.
• Previous quarter was Operationally lower; Tax writeback leads to PAT beat.
• Rising cost of production in China is improving the prospects for UPL.
• Market share gains to continue, driven by launches of new formulations.
• Reiterating Buy on robust EPS growth and reasonable valuation.
• Correction a buying opportunity.

Edelweiss on UPL

• Maintained ‘Buy’; raised price target to Rs 1,023 from Rs 963.
• December quarter volumes jumped 12 percent; Currency impact persists.
• Debt remained stable; Working capital reduced.
• Fall in interest cost and tax write-back drive net profit.
• Expect stable growth.
• Significant reduction in debt can lead to improved valuations.

HSBC on Avenue Supermarts

• Upgraded to ‘Buy’ from ‘Hold’; raised price target to Rs 1,600 from Rs 900.
• Avenue’s December quarter’s profits were significantly ahead of expectations.
• Revenue growth momentum and margin expansion led to beat.
• D-Mart business model is formidable, scalable and a winning proposition.
• Avenue will be able to capture value from structural growth ahead of competition.
• Valuation not ahead of long term fundamentals.

Edelweiss on Avenue Supermarts

• Maintained ‘Hold’ with price target of Rs 1,290.
• December quarter numbers were robust.
• Benefit of gross margin coupled with operating leverage helped D-Mart.
• Store expansion seems to have slowed; Will be key monitorable going forward.
• Expect revenue, operating income and net profit to grow at a compounded rate of 25.5 percent, 31.8 percent and 41.2 percent respectively over the financial years through March 2020.
• We perceive limited upside on the stock.
• D-Mart is a play on the Indian retail story.

Credit Suisse on Jindal Steel & Power

• Maintained ‘Neutral’ with price target of Rs 150.
• December quarter beat across all divisions.
• Beat driven by higher EBITDA/unit.
• Shadeed continues to post strong operating income.
• Net debt was flattish QoQ.
• Await details on Angul.

HSBC on Mphasis

• Maintained ‘Hold’; raised price target to Rs 730 from Rs 680.
• Strong quarterly revenue growth in December quarter; Margins improve despite wage hike.
• Growth was broad-based with both HP/DXC and Direct up.
• Stock valuations factor in this optimism.
• Expect revenue and operating income to grow at a compounded rate of 10 percnet and 12 percent respectively over the financial years through March 2020.

Nomura on LIC Housing Finance

• Maintained ‘Buy’; raised price target to Rs 720 from Rs 660.
• December quarter results were operationally in-line with expectations.
• Near-term PPOP growth likely to remain weak.
• Remain cautious on incremental mortgage spreads.
• Large part of the de-rating is done and valuations have bottomed out.
• Spreads pressure now priced in; Maintain Buy on reasonable valuations.

Kotak on Shriram City

• Upgraded to ‘Add’ from ‘Reduce’; raised price target to Rs 2,275 from Rs 2,200.
• Signs of turnaround seen after several quarters of weak performance.
• Strong NII and decline in provisions lift net profit.
• Positives: strong growth in business loans, reduction in GNPL ratio and provision and lower borrowing costs.
• Expect business trajectory to improve hereon.
• Expect near-term performance to remain strong.

Morgan Stanley on Shriram City

• Maintained ‘Equal-weight’ with price target of Rs 2,300.
• Improvement across metrics in line with expectations.
• NPL formation moderated but remains elevated.
• NIM improved despite high NPL formation.
• AUM and disbursements growth picked up.
• Valuation is attractive, but asset quality and growth have been volatile.

Kotak on Tata Motors

• Maintained ‘Buy’; cut price target to Rs 525 from Rs 535.
• Factoring in recent production cut announcement by JLR.
• JLR announced production cuts in first quarter of next fiscal due to low demand.
• Demand for new models will continue to drive growth for JLR.
• Changes to estimates led by currency changes and JLR volume cuts.

Credit Suisse on Hindalco

• Maintained ‘Outperform’ with price target of Rs 310.
• Novelis on path to deleveraging despite capex announcement.
• Net debt/Ebitda to stay low going ahead.
• Remain constructive on Hindalco.

HSBC on Pheonix Mills

• Maintained ‘Buy’; raised price target to Rs 720 from Rs 580.
• Next fiscal to be year of strong cash flow generation.
• Expect strong cash flow as stake purchases completed and under construction properties ready.
• Current holding structures to open-up value unlocking and monetisation options.
• Lower cost of capital mean falling debt cost.
• Expect weak residential sales momentum.

• Government nod to Reliance Industries, BP acquiring Niko's 10 percent stake in gas block.
• Idea Cellular seeks government nod for raising FDI limit to 100 percent.
• Bharat Forge sets up unit in Israel.
• APL Apollo Tubes terminates JV with One to One Holdings PTE.
• Kokuyo Camlin to wind up Camlin International.
• Sanghi Industries to raise Rs 400.17 crore via QIP. To issue 3.10 crore equity shares at Rs 129 each.
• Ganesh Housing to sell 51 percent stake in Shaily Infrastructure.
• Prataap Snacks signs new pact for third party manufacturing of potato chips at 3 places.
• Raymond to buy 26 percent in Shahane solar power.
• FDC gets GMP nod from U.K. regulators for its Ophthalmic manufacturing facility at Waluj, Aurangabad.
• Havells to set up a new facility to manufacture consumer durables in Rajasthan for a total investment of Rs 360 crore.
• Amrutanjan Health to consider stock split on Feb. 13.
• Hindustan Copper to consider raising funds via QIP.
• Avenue Supermarts to acquire additional 4.35 crore shares or 50.79 percent in Avenue E-Commerce for Rs 49.2 crore.
• Fiem Industries says plant, machinery damaged in fire incident at Hosur unit.

• Indo Count Industries’ and JSW Energy’s circuit filter revised to 20 percent.

All you need to know about Galaxy Surfactants’ IPO.https://t.co/FcM8DK4Ryk pic.twitter.com/kR6RTKGQtp

— BloombergQuint (@BloombergQuint) January 29, 2018

• PC Jewellers: Vakrangee bought 20 lakh shares or 0.5 percent equity at Rs 561.71 each.
• IDFC: Balanced Fund - ICICI Prudential AMC sold 86 lakh shares or 0.5 percent equity at Rs 56.6 each.

P-Notes investments hit six-month high of Rs 1.5 lakh crore in December. https://t.co/zbyPEGO09w pic.twitter.com/GAxjPTaHsi

— BloombergQuint (@BloombergQuint) January 28, 2018

Commodities

• West Texas Intermediate crude gained 0.1 percent to $66.19 a barrel, the highest in more than two years.
• Gold advanced 0.2 percent to $1,352.21 an ounce.