Nifty Logs Another Record Close On Longest Stretch Of Gains In Six Months

India’s stocks gained, with a key benchmark posting another record close, led by Reliance Industries Ltd. even as investors await the release of the country’s economic growth data for the fiscal year ended March later today.

The S&P BSE Sensex climbed 1% to 51,937.44, the highest since Feb. 17. Seventeen of the 19 sector sub-indices compiled by BSE Ltd. gained, led by a gauge of energy companies.

The NSE Nifty 50 Index advanced 1% as well, making it the sixth straight of gains, to 15,582 -- a record close. The index touched an all-time high of 15,606 during the session.

India is due to release GDP data for the quarter. It will also release data for the fiscal year ending March, in which the economy is expected to have contracted 7.5%, according to a Bloomberg survey. The outlook for growth remains a cause for concern for both the government and the central bank.

India’s earnings season for the March quarter has been mixed with 23 of the 43 Nifty 50 companies that have posted quarterly results, missing analysts’ estimates. Eighteen companies have reported numbers ahead of or in line with analysts estimates, according to data compiled by Bloomberg.

India’s Solar Industries Ltd., a manufacturer of explosives, climbed 11% to touch a record high after upgrades by brokerage KR Choksey Shares and Securities Pvt Ltd. and ICICI Securities Ltd.

• “We like Solar Industries’ business model with established client base and good order book visibility coupled with a stable margin profile despite Covid-related uncertainties,” Parvati Rai, KR Choksy analyst said in a note
  • Upgrades stock to accumulate and raised PT to 1,602 rupees vs 1,350 rupee
  • Company’s January-March revenues jumped 45% led by strong performance in coal, housing and infra companies along with exports segments
• ICICI Securities raises recommendation to add from hold
• “There are umpteen revenue and profitability triggers yet to be captured in the overseas business segment. New capex plan for packaged explosives across three greenfield sites highlights future growth potential,” Abhijit Mitra, ICICI Securities analyst said in note

The Indian rupee reversed early gains to trade lower amid speculation state-run banks bought dollars probably on behalf of the central bank.

• USD/INR +0.2% to 72.5875 after falling to 72.3463 earlier in the day
• NOTE: Rupee has gained 2.1% month-to-date in Asia’s best performance
• “State-run banks likely bought dollars for the RBI from 72.35 levels,” says Amit Pabari, managing director at CR Forex in Mumbai

Gujarat Gas Ltd. rose 4.2%. Trading in the company's call options was double the average. Trading volume was triple the average for this time of day.

• The stock was the best performer among its peers.
• Trading volume was 1.77 million shares, triple the 20-day average of 654,533 shares for this time of day.
• Trading in the company's call options totalled 794 contracts, compared with the average of 373 over the past 20 days. Trading in the company's put options totalled 66 contracts, compared with the average of 171 over the same period.
• Gujarat Gas trades at 30 times its estimated earnings per share for the coming year. It trades at 31 times trailing EPS.
• Analysts have 23 buy, five hold, and four sell recommendations on the stock.
• The price target of Rs 548.76 represents a 3.1% increase from the last price

Aurobindo Pharma reported net income for the fourth quarter that missed the average analyst estimate.

• Net income Rs 802 crore, -7.2% YoY, estimate Rs 833 crore
• Revenue Rs 6000 crore, -2.6% YoY, estimate Rs 6366 crore
• Total costs Rs 5,010 crore, -2% YoY
• Other income Rs 78.1 crore vs. Rs 32.59 crore YoY
• Ebitda Rs 1270 crore, -5.2% YoY, estimate Rs 1338 crore
• Ebitda margin 21.2% vs. 21.8% YoY
• R&D expenses Rs 457 crore
• Europe sales Rs 1550 crore, -6.1% YoY, estimate Rs 1683 crore
• U.S. revenue Rs 2,860 crore, -4.3% YoY

COMMENTARY AND CONTEXT

• Received final approval for 9 ANDAs from USFDA including 3 injectables

The existing shareholders of the company also participating in the fundraise. Salisbury Investments Pvt. Ltd., the family investment vehicle of Aditya Puri, Senior Advisor for Carlyle in Asia, will also invest in the capital raise.

Puri is expected to be nominated to the PNB Housing Finance Board as a Carlyle nominee director in due course, according to the company’s notification to the exchanges.

Divi’s Labs Q4 Review - On A Stellar Growth Trajectory: Motilal Oswal

CLSA’s Take

• Maintains ‘buy’ rating, raises target price from Rs 125 to Rs 130
• Bank’s Q4 surprised positively with less than 50 bps of slippage and strong adjusted net interest income performance.
• Corporate and overseas slippages were high but with the cycle turning, corporate slippage will likely come down leading to the partial normalisation of its return on equity.
• While the risk from the second wave of Covid-19 remains for its retail book and a true picture of SME stress will be reflected in 2HFY21, the corporate cycle is clearly turning
• While we prefer SBI, which has a more structural story, Bank of Baroda’s current <0.55x FY23 book valuation is undemanding.

M&M Q4 Review: Analysts Bullish On Growth Plans, Cost Cuts Despite Supply-Chain Woes; Stock Slumps

India’s earnings season for the March quarter has been mixed with 23 of the 43 Nifty 50 companies that have posted quarterly results, missing analysts’ estimates. Eighteen companies have reported numbers ahead of or in line with analysts estimates, according to data compiled by Bloomberg.

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