Sensex, Nifty Scale Fresh Record Highs Amid Earnings Pick Up

Apollo Micro Systems: The Hyderabad-based electronic components maker made a stellar debut on stock exchanges. The stock surged 74 percent to Rs 478 against its issue price of Rs 275. The Rs 156 crore IPO saw huge demand for its shares as the issue was subscribed 248.51 times.

GNFC: The fertiliser maker rose as much as 7.8 percent to Rs 534 on the back of strong December quarter earnings.

• Net profit up 235 percent at Rs 228 crore versus Rs 68 crore (YoY).
• Revenue up 39.7 percent at Rs 1,590 crore versus Rs 1,137.5 crore (YoY).
• EBITDA up 110 percent at Rs 427.4 crore versus Rs 203 crore (YoY).
• Margin At 26.9 percent versus 17.9 percent (YoY).

J Kumar Infra Projects: The Mumbai-based infrastructure construction company rose as much as 7.7 percent to Rs 345 after it won contract from Delhi Metro Rail Corporation worth Rs 57 crore.

Pricol: The Coimbatore-based auto parts maker rose as nearly 8.5 percent to Rs 127 after the company said it plan launch electric water pumps in pact with China-based company.

Shares of the Mumbai-based non-banking finance company rose 2 percent to Rs 624.75 after it announced December quarter earnings.

Key earnings highlights:

• Net profit at Rs 306 crore versus Rs 245 crore (YoY)
• Revenue at Rs 2,631.6 crore versus Rs 2,361.5 crore (YoY)
• Finance cost at Rs 1,894 crore versus Rs 1,800 crore (YoY)

Shares of the Noida-based electrical appliances maker rose 1.48 percent to Rs 555.70 after it reported December quarter earnings.

Key earnings highlights:

• Standalone net profit at Rs 194 crore versus Bloomberg estimate of Rs 168 crore
• Standalone net profit up 26.8 percent At Rs 194 crore versus Rs 153 crore (YoY)
• Profit includes one-time gain of Rs 20.98 crore
• Standalone revenue at Rs 1,966 crore versus Bloomberg estimate of Rs 1988 crore
• Standalone revenue up 30.5 percent At Rs 1966 crore versus Rs 1506 crore (YoY)
• Standalone EBITDA at Rs 261.8 crore versus Bloomberg estimate of Rs 261 crore
• Standalone EBITDA up 37.3 percent at Rs 261.8 crore versus Rs 190.63 crore (YoY)
• Standalone margin at 13.3 percent versus Bloomberg estimate of 13.1 percent
• Standalone margin at 13.3 percent versus 12.7 percent (YoY)

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Shares of the Gujarat-based fertiliser maker rose 3.6 percent to Rs 513 after it announced December quarter earnings.

Key earnings highlights:

• Net profit up 235 percent at Rs 228 crore versus Rs 68 crore (YoY).
• Revenue up 39.7 percent at Rs 1,590 crore versus Rs 1,137.5 crore (YoY).
• EBITDA up 110 percent at Rs 427.4 crore versus Rs 203 crore (YoY).
• Margin At 26.9 percent versus 17.9 percent (YoY).

Shares of the Mumbai-based paint maker fell 1.58 percent to Rs 1,171 ahead of its October-December quarter earnings.

What to expect in Q3:

• Consolidated net profit seen up 20.2 percent at Rs 560 crore versus Rs 466 crore (YoY).
• Consolidated net sales seen up 15.6 percent at Rs 4553 crore versus Rs 3937 crore (YoY).
• Consolidated EBITDA seen up 14.2 percent at Rs 887 crore versus Rs 776.5 crore (YoY).
• Consolidated margin seen at 19.5 percent versus 19.7 percent (YoY).

Shares of India's sixth largest private sector lender by market cap were trading on a flat note ahead of December quarter earnings which will be declred later in the day. The stock was little changed at Rs 591.

What to expect from Axis Bank In Q3:

• Standalone net profit seen up 41.1 percent at Rs 818 crore versus Rs 579.6 crore (YoY).
• Standalone NII seen up 8.3 percent at Rs 4,695 crore versus Rs 4,334 crore (YoY).
• Standalone loan growth seen at 20 percent on account of lower base.

Shares of the Gujarat-based oil exploration company rose as much as 11.28 percent, the most in over two months, to Rs 147 after it reported strong earnings in October-December quarter.

Key earnings highlights:

• Revenue up 141 percent at Rs 13.3 crore (YoY).
• Profit at 206 percent to Rs 12.8 crore versus Rs 4.18 crore (YoY)
• EBITDA at Rs 12.9 crore from Rs 1.9 crore.
• EBITDA margin at 97 percent from 34.5 percent.
• Exceptional item of Rs 4.4 crore.

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Shares of the Mumbai-based infrastructure construction company rose as much as 7.7 percent to Rs 345 after it won contract from Delhi Metro Rail Corporation worth Rs 57 crore.

• For the past 20 years, Budgets have never had significant impact on markets
• Not seeing an expansionary budget
• Not seeing too much maneuvering in taxes this budget
• Don't have much scope for fiscal tinkering
• Market hypothesis is just not made on one long term capital gains tax
• Enough opportunities in large caps also despite rally
• Seeing strong earnings growth next year
• Would not say valuations stretched assuming earnings pick up
• Very bullish on corporate facing banks
• Not very bullish on NBFC space
• Stretched valuations, interest rates key factors for not being over bullish on NBFC space
• Hold a contrarian view on insurance sector
• Life insurance is over penetrated product in India
• Better opportunities in financial sector other than insurance

Shares of Hyderabad-based maker of electronic components made a strong debut on stock exchanges. The stock surged 74 percent to open at Rs 478 compared against its issue price of Rs 275 per share.

Apollo Micro Systems' Rs 156-crore initial public offer saw huge demand for its shares as its issue was oversubscribed 248 times.

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Shares of the Ahmedabad-based mortgage lender fell as much as 9 percent to Rs 625, on account of profit-booking, after it announced October-December quarter earnings. In the run up to earnings, the stock rose as much as 36 percent within one week to earnings.

Key earnings highlights

• Net profit rose 28.3 percent to Rs 82.16 crore versus Rs 64.04 crore (YoY)
• Revenue rose 12.45 percent to Rs 428.47 crore versus Rs 381.02 crore (YoY)

In focus today will be India's plan to auction Rs 9,475 crore of corporate debt quota to foreigners. With yields still high, market expects a higher cutoff at the auction. Also, the big merger announcement of oil major HPCL with ONGC could impact the markets as it may help improve the government finances.

Yield on the new 10-year bond climbed 4 basis points to 7.29 percent in the last session and till the budget, a range of 7.25-7.35 percent is expected.

In the currency markets, weak Asian indexes may weigh on emerging market currencies. The rupee has been little changed in the last two sessions and a Bloomberg dollar index is trading flat. The rupee may open lower and trade in a range of 63.70-64.20 a dollar in the day.

Here’s how foreign and local funds played the market on Friday.https://t.co/As70WwHhVg pic.twitter.com/xSAk6t5d3n

— BloombergQuint (@BloombergQuint) January 22, 2018

• Dewan Housing Finance
• GNFC
• Havells India
• Justdial
• Rallis India
• Sasken Technologies
• Vakrangee
• V-Guard Industries
• Tinplate

Reliance Industries Q3 (QoQ)

• Revenue up 7 percent at Rs 73,256 crore.
• Net profit up 2 percent at Rs 8,454 crore.
• EBITDA up 6 percent at Rs 13,744 crore.
• Margin at 18.8 percent versus 18.9 percent.

Reliance Jio Q3 (QoQ)

• Revenue up 12 percent to Rs 6,879 crore.
• EBITDA up 82 percent to Rs 2,627 crore.
• EBITDA margin at 38.2 percent versus 23.5 percent.
• Net profit of Rs 504 crore versus net loss of Rs 271 crore.
• ARPU of Rs 154 versus Rs 156.

Wipro Q3 (QoQ)

• Revenue up 2 percent at Rs 13,669 crore.
• Net profit down 12 percent at Rs 1,931 crore.
• EBIT down 13 percent at Rs 1,959.5 crore.
• Margins at 14.3 percent versus 16.8 percent.
• Q4 IT services revenue seen in the range of $2.03 billion to $2.07 billion.

HDFC Life Q3 (YoY)

• Net premium income up 19 percent at Rs 5,420 crore.
• Net profit up 14.6 percent at Rs 207 crore versus Rs 180.6 crore.

Chennai Petroleum Corp Q3 (QoQ)

• Revenue up 15 percent at Rs 8,587 crore.
• Net profit up 22.5 percent at Rs 386 crore.
• EBITDA up 31 percent at Rs 834 crore.
• Margin at 9.7 percent versus 8.5 percent.

GNA Axles Q3 (YoY)

• Revenue up 48 percent at Rs 167 crore.
• Net profit up 57 percent at Rs 12.7 crore.
• EBITDA up 37 percent at Rs 26 crore.
• Margins at 15.6 percent versus 16.9 percent.

DCM Shriram Q3 (YoY)

• Revenue up 30 percent at Rs 1,783.7 crore.
• Net profit up 56 percent at Rs 213 crore.
• EBITDA up 75 percent at Rs 329.8 crore.
• Margin at 18.5 percent versus 13.8 percent.

Godawari Power Q3 (YoY)

• Revenue up 57.6 percent at Rs 672 crore.
• Net Profit at Rs 72 crore versus Rs 10 crore loss.
• EBITDA up 87.8 percent at Rs 168.62 crore.
• Margin at 25.1 percent versus 21.1 percent.

HOEC Q3 (YoY)

• Revenue up 141 percent at Rs 13.3 crore.
• Profit at Rs 12.8 crore.
• EBITDA at Rs 12.9 crore from Rs 1.9 crore.
• EBITDA margin at 97 percent from 34.5 percent.
• Exceptional item of Rs 4.4 crore.

CDSL Q3 (YoY)

• Income from operations up 37 percent at Rs 51.5 crore.
• Profit up 25 percent at Rs 25.4 crore.
• EBITDA up 58 percent at Rs 31.6 crore versus Rs 20 crore.
• EBITDA margin at 61.4 percent versus 53.3 percent.

Lux Industries Q3 (YoY)

• Revenues from operations up 28 percent at Rs 296 crore versus Rs 231 crore.
• Profit up 30 percent at Rs 18.4 crore versus Rs 14.1 crore.
• EBITDA up 28 percent at Rs 35.7 crore versus Rs 27.9 crore.
• EBITDA margin at 12.1 percent versus 12.1 percent.

JP Associates Q3 (QoQ)

• Revenue up 50 percent at Rs 1,109 crore.
• Net loss at Rs 148 crore versus Rs 186 crore.
• EBITDA up 269 percent at Rs 140.7 crore.
• Margin at 12.7 percent versus 5.17 percent.

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• Amber Enterprises India subscribed 165 times on final day.
• Apollo Micro Systems lists today. Issue was subscribed 248 times. Base price Rs 275 per share.

Sunteck Realty

• Fidelity Emerging Markets Funds bought 47.05 lakh shares or 3.2 percent equity at an average of Rs 404.95 each.
• Sri Gopikrishna Trust sold 39 lakh shares or 2.7 percent equity at an average of Rs 405.8 each.

GSS Infotech

• Aspire Emerging Fund bought 8 lakh shares or 4.7 percent equity at Rs 33.28 each.

Emco Ltd

• India Nivesh Capitals bought 4.2 lakh shares or 0.6 percent equity at Rs 20.18 each.

Shah Alloys

• United India Insurance sold 1.30 lakh shares or 0.7 percent equity at Rs 18.5 each.

• Nifty January futures trading at 10,810.8, discount of 6.2 points from a premium of 3.3 points.
• January Series: Nifty open interest unchanged; Bank Nifty open interest down 1 percent.
• India VIX ended at 13.9, up 0.7 percent.
• Max open interest for January series at 11,000 Call (open interest at 62.2 lakh, up 24 percent).
• Max open interest for January series at 10,500 Put (open interest at 70 lakh, down 12 percent).

IDFC Securities on ONGC-HPCL

• Lower premium a key positive for ONGC.
• Price would set fair value benchmark; Positive for the stock.
• Transaction to spur further consolidation in oil & gas space.
• Expect IOCL to merge its subsidiary (CPCL), and/or buy government stake in Oil India.
• Deal is EPS accretive for ONGC but leverage to increase.
• Long term prospects for ONGC remain robust.
• ONGC + HPCL to help price hedging objectives, but only partially.
• Expect ONGC to see some near-term pressure, unless it decides to monetise stake in IOCL.

BOB Capital Markets on ONGC-HPCL

• Expects deal to be entirely funded through debt.
• Consolidated debt-to-equity ratio to increase to only 0.4 times versus 0.2 times.
• Acquisition to give access to 26 percent return on capital employed business.
• Expect no merger or operational synergies as HPCL will be an independent entity.
• Acquisition to merely contribute as investment value.
• Deal valuation well within fundamental parameters.
• Deal creates a convenient template for other potential public-sector stake divestments.

Motilal Oswal on Reliance Industries

• Maintained ‘Buy’ with price target of Rs 1,069.
• Petchem drives standalone profitability; RJio turns profitable.
• Lower throughput impacts refining performance.
• Robust volume growth and healthy deltas drive profitability.
• ARPUs to hover at Rs 144 in current quarter, led by recent cut.
• Expect competitive intensity to remain high over 2-3 quarters.

IDBI Capital on Reliance Industries

• Maintained ‘Buy’; raised price target to Rs 1,100 from Rs 1,004.
• Positive surprises continue.
• December quarter results were better than expectation led by robust performance in petchem, retail and Jio.
• Petchem profit drove the show; Jio continues to surprise positively.
• Petcoke gasifiers to start from current quarter; outlook remains positive .

CLSA on Reliance Industries

• Maintained ‘Buy’; raised price target to Rs 1,125 from Rs 1,080.
• Big beat on Jio and standalone EBIT with a stellar December quarter from retail.
• Jio: Neat beat on revenue and operating income.
• 2018 may turn out to be the year of monetisation.
• Positives: full utilisation of Off Gas crackers, stabilisation of gasification project, ramp-up of JioPhone and start of broadband.

Credit Suisse on Jubilant Foodworks

• Maintained ‘Outperform’; raised price target to Rs 2,750 from Rs 2,140.
• Exceptionally strong on all fronts and expect it to sustain.
• Jubilant has been seeing a fundamental turnaround.
• Strong SSSG driven by orders even adjusted for GST.
• EBITDA margins spike but cost and productivity initiatives have more headroom.
• Management to refocus on growth in the next financial year.

CLSA on Jubilant Foodworks

• Maintained ‘Buy’; raised price target to Rs 2,800 from Rs 2,300.
• Beating the most bullish estimate, SSSG of 17.8 percent is a huge positive.
• Power of operating leverage played to its best.
• Management sounded fairly positive in its outlook.
• Expect earnings to grow at a CAGR of 38 percent over FY18-20.

Macquarie on HDFC Bank

• Maintained ‘Outperform’; raised price target to Rs 2,676 from Rs 2,589.
• Reported “boringly” consistent 20 percent YoY net profit growth.
• Growth momentum strong, led by retail loans.
• No challenges on divergences visible.
• Structural shift in credit costs upwards.
• Bank expects to gain market share from the bond market.
• HDFC Bank is strong, powerful compounding story with no asset quality issues.
• Expect strong earnings visibility and consistent high return ratios.

Morgan Stanley on HDFC Bank

• Maintained ‘Overweight’ with price target of Rs 2,500.
• Results show strong revenue/PPoP growth.
• Steady asset quality trends.
• CASA deposits grew given higher base following the spurt in deposits post demonetisation.

Credit Suisse on HCL Technologies

• Maintained ‘Outperform’; raised price target to Rs 1,100 from Rs 1,050
• Strong revenue growth in previous quarter; In-line margins
• Continuing softness in infra but better outlook in the next financial year.
• Continuing strength in engineering, and recovery in application services.
• Good growth in financial services.
• Expect reasonable growth, steady margins and attractive valuations.
• Stock is well placed for 2018 as growth should be in line-to-ahead of peers.

Edelweiss on HCL Technologies

• Maintained ‘Buy’; raised price target to Rs 1,125 from Rs 1,041.
• Growth led by America, engineering, research and development (ER&D); telecom among key drags.
• Infrastructure management services down for second consecutive quarter.
• Investments in IP partnership sustain.
• Long-term prospects bright; ER&D to drive revenue.
• See bright prospects in IMS though it has been weak.

Jefferies on ITC

• Maintained ‘Buy’; raised price target to Rs 320 from Rs 302.
• December quarter results was a mixed bag.
• Cigarettes, volumes soft with resilient margins.
• FMCG showed strong all-round show.
• Other businesses, hotels take the lead.
• Expect gradual recovery in ITC cigarette volumes.
• Expect better recovery in other businesses led by other FMCG.

Deutsche Bank on ITC

• Maintained ‘Buy’; raised price target to Rs 350 from Rs 325.
• December quarter was another in-line quarter.
• Cigarette volume declines 4 percent YoY, but flat QoQ.
• FMCG-others reported healthy sales growth of 16 percent.
• High probability of rational tax increase in Feb 2018 is a potential re-rating event.

Nomura on Kotak Mahindra Bank

• Maintained ‘Neutral’; raised price target to Rs 1,150 from Rs 1,070.
• Q3FY18 stable quarter with in-line net profit.
• Bank continues to deliver on extracting cost efficiency.
• Growth momentum steady; PPOP growth hit by weaker margins.
• Excellent performance by capital market subsidiaries.
• Prefer HDFC Bank to Kotak given undemanding valuations.

Macquarie on Kotak Mahindra Bank

• Maintained ‘Neutral’; raised price target to Rs 1,111 from Rs 1,090.
• Steady performance for the bank.
• Subsidiaries post robust performances, especially securities and life insurance businesses.
• Positive on bank’s business and the quality of management.
• Valuations leave limited potential for upside.

Edelweiss on Wipro

• Maintained ‘Hold’; raised price target to Rs 320 from Rs 280.
• December quarter earnings came below estimates.
• BFSI strengthening; client-specific issues in utility key drag.
• Digital ticket size expanding.
• Wipro’s revenue outlook has improved.
• Sector in turnaround mode, but Wipro expensive.

Macquarie on Wipro

• Maintained ‘Neutral’; cut price target to Rs 290 from Rs 300.
• Mixed bag performance in previous quarter in segments.
• Results continue to highlight volatility in growth.
• Still some time away from reaching industry level growth.
• EBIT Margin steady; Growth remains choppy.

Nomura on HDFC Standard Life

• Maintained ‘Buy’ with price target of Rs 450.
• Steady performance; Protection mix surprises.
• Continues to improve on its leadership in protection business.
• Embedded Value of Rs 14,400 crore and core RoEV of above 20 percent as of 9MFY17.
• HDFC Life gained share in current fiscal after a loss in share in previous fiscal.
• Expect steady performance to continue, given balanced product mix.

Deutsche Bank on ICICI Prudential Life

• Maintained ‘Buy’; raised price target to Rs 500 from Rs 490.
• Strong uptick in margins in December quarter; APE growth slow.
• Strong margin improvement but growth muted due to demonetisation base.
• Higher margin should be sustained; Focus on increasing protection share.
• Better placed to benefit from sector tailwinds.

Nomura on ICICI Prudential Life

• Maintained ‘Buy’; raised price target to Rs 540 from Rs 490.
• Big surprise on VNB margins.
• More legroom for margin expansion.
• ULIPs to remain unaffected by expected regulatory change.
• Expect current fiscal margins at 14.7 percent and increase our long-term margin expectations to 16-16.5 percent.
• ICICI Pru Life preferred insurance pick.

#BQOpinion | What Blackstone’s Vice Chairman John Studzinski wants PM Modi to tell the world at #Davos #IndiaAtDavos #WEF2018https://t.co/FBlq5oPcam pic.twitter.com/VLZ4kzkybx

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Oil’s rout is over, hail the return of $100 crude! Maybe. (via @gadfly)https://t.co/xwyw8D4cJ4 pic.twitter.com/g2493VGqoK

— BloombergQuint (@BloombergQuint) January 21, 2018