Financials Help Sensex, Nifty End At Record High

• Sagarmala project could turn fortunes for infra companies on the back of fresh orders and faster execution
• Companies with highly leveraged balance sheets will take time to turnaround
• Top 5-6 companies in infra space will benefit
• Infra shares have been under-owned

• DEN Network: The Delhi-based cable television company rose as much as 12.38 percent, the most in over a month, to Rs 94.4. Trading volume was 18.5 times its 20-day average.
• GE T&D: The Noida-based power equipment maker rose as much as 15 percent, the most in over three months, to Rs 460. Trading volume was 16.3 times its 20-day average.
• Ujjivan Financial Services: The Bangalore-based lender rose as much as 10 percent, the most in over two months, to Rs 377. Trading 9.6 times its 20-day average.
• CCL Products: The Andhra Pradesh coffee powder maker fell as much as 2.6 percent, the most since October 31, to Rs 330. Trading volume was 9.9 times its 20-day average.

• Punjab National Bank: Shares of the Delhi-based state-run lender gained as much as 7.4 percent to Rs 212 on reporting better-than-expected September quarter earnings.
• Steel Strips Wheels: The Chandigarh-based steel wheel maker's stock rose as much 3.48 percent to Rs 878 after it bagged export order worth 3.9 million euros for truck wheels.
• Royal Orchid Hotels: The Bangalore-based hotel chain operator rose as much as 7.3 percent to Rs 152.85, its highest level in over nine years after it partnered with UK-based Bespoke Hotels, the company said in a stock exchange filing.
• Hindustan Copper: The Kolkata-based copper producer's shares rose as much as 6.9 percent to Rs 88.20, its highest level in over three years after it increased copper cathode and rods prices by over four percent.

The shares of the Mumbai-based aluminium producer were trading marginally lower after its net profit declined in September quarter because of a one-time loss but matched estimates.

• Standalone net profit fell 10.5 percent to Rs 393 crore versus estimate of Rs 495 crore
• Profit dropped because of one-time loss of Rs 105.5 crore versus a gain of Rs 84.9 crore (YoY)
• Revenue rose 14 percent to Rs 10,308 crore (YoY)

Shares of the Mumbai-based real estate developer fell as much as 2.7 percent after it missed consensus Bloomberg estimates in July-September quarter.

• Net profit rises 88 percent to Rs 44 crore versus estimate of Rs 54.5 crore
• Revenue at Rs 492 crore
• Other income at Rs 43.76 crore
• Total costs at Rs 461 crore

Shares of the Delhi-based state-run lender rose as much as 5.5 percent, the most since October 30, to Rs 208.40 after its net profit beat Bloomberg consensus estimates in September quarter.

• Net profit rises 2 percent to Rs 560.58 crore versus estimate of Rs 387 crore
• Gross non-performing assets as a percentage of total advances at 13.31 percent versus 13.66 percent (QoQ)
• Net non-performing assets at 8.44 percent versus 8.67 percent (QoQ)
• Net interest income up 3.5 percent at Rs 4,015 crore versus Rs 3,880 crore

Shares of the Mumbai-based financial services firm were up 0.8 percent at Rs 303.8 after it reported July-September quarter earnings.

Net profit rises 45 percent to Rs 209 crore versus Rs 144 crore (YoY)

Revenue from operations rise 26 percent to Rs 2,014 crore versus Rs 1,596 crore (YoY)

Shares of the Chandigarh-based steel wheel rim maker rose as much as 3.5 percent, the most since October 16, to Rs 877.9 after it won export order worth 3.9 million euros from Europe for its truck wheels plant in Chennai, the company said in a stock exchanges notification.

Shares of the Ludhiana-based textile maker fell as much as 5.1 percent, the most in over a month, to Rs 95.8 after its net profit fell on an annual basis.

• Net profit declined 36 percent to Rs 50.9 crore versus Rs 80 crore (YoY)
• Revenue declined 0.4 percent to Rs 1,155 crore versus Rs 1,160 crore (YoY)

Khadim India's Rs 543 crore initial public offer was subscribed 19 percent as of 11:00 a.m.

• Portion reserved for qualified institutional buyers unsubscribed
• Portion for non-institutional bidders subscribed 63 percent
• Retail portion subscribed 37 percent

New India Assurance's Rs 9,600 crore IPO was fully subscribed as of 11:00 a.m.

• Portion reserved for qualified institutional buyers subscribed 2.16 times
• Portion for non-institutional bidders subscribed 4 percent
• Retail portion subscribed 6 percent
• Portion reserved for employees subscribed 10 percent

Source: Company PR

Shares of the Noida-based power equipment maker rose as much as 15 percent, the most in over three months, to Rs 460 after it reported strong earnings in July-September quarter post market hours yesterday.

• Revenue up 4.2 percent at Rs 870 crore
• Net profit up 131.7 percent at Rs 47.5 crore
• EBITDA up 130 percent at Rs 80.5 crore
• Margin at 9.3 percent versus 4.2 percent

Shares of Unichem Labs advanced 2.5 percent while Torrent Pharma rose 1 percent. Torrent Pharmaceuticals is likely to announce the acquisition of Unichem Laboratories' domestic business for about Rs 3,500 crore after market hours today, Business Standard newspaper reported.

The Nikkei India Services Purchasing Managers' Index rose to 51.7 in October from September's 50.7 due to greater inflows of new business.

"Service providers retained an optimistic outlook regarding business activity over the coming 12 months, while the labor market was further reinforced as firms raised their payroll numbers over the month," Aashna Dodhia, an economist at IHS Markit said.

"On the price front, the service sector experienced further upward cost pressures as the rate of inflation quickened to the joint-fastest since April 2016."

A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

(Nikkei)

Shares of the Mumbai-based construction company came off day's low after falling as much as 6 percent after its joint venture bagged an order worth Rs 497 crore from Pune Metro.

HCC-Al FARA was awarded Rs 497 crore order for construction of nine stations of Pune Metro.

• Expect to see some correction in consensus earnings estimates
• Seeing 15 percent earnings growth for FY19
• Improvement in banks to come in 12-18 months after the recap happens
• Bank recap will help GDP growth to come through
• Infra cycle will be first driven by roads and railways
• Currently no capex plans for private sector
• Market has been concerned about price competition from Jio
• Probably back to old days with telecom leading the market
• Expect aviation sector to do well, provided oil hovers near $65/barrel
• L&T may double in next 3 years
• IT is the dark horse for, stocks may surprise with 100 percent returns
• Indian consumption story is evergreen
• NBFCs have had a great run, would stay away from them
• India will be the largest consumer of data after china
• Telecom would be critical in the coming 3-5 years, would suggest buying afresh
• Prefer private sector banks over PSU banks
• IT pecking order would be HCL Technologies followed by Infosys and TCS
• Have upgraded IT based on valuations, would bet on large-cap IT companies
• Cautious on pharma sector, can't time regulatory moves
• Commodities cycle has legs for 6-9 months more
• Taking money out of commodities and bet on IT would be the plan of action

Shares of Bharat Forge and RK Forgings rose as much as 3.9 and 5.2 percent each respectively after North America Class 8 truck sales for October came in at 35,700 units versus 13,674 last year, up 161 percent year-on-year.

Both the companies earn significant amount of revenues from Class 8 trucks in the U.S.

Shares of the Kolkata-based chemical maker rose as much as 5.2 percent, the most since October 26, to Rs 176.90 after its profit more than doubled in September quarter.

• Revenue up 37.2 percent at Rs 468 crore.
• Net profit up 168.4 percent at Rs 51 crore.
• EBITDA up 83.9 percent at Rs 103 crore.
• Margin at 22.00 percent versus 16.4 percent.

Shares of the Madhya Pradesh graphite electrodes maker rose as much as 5 percent to record high of Rs 1,840.75 after it announced strong earnings in July-September quarter.

• Revenue more than doubled to Rs 409.5 crore.
• Net profit came in at Rs 114 crore versus net loss of Rs 14 crore.
• EBITDA or operating profit rose over 9 times to Rs 189.5 crore.
• Operating profit margin came in at 46.3 percent versus 9.5 percent.

Shares of the Pune-based casino chain operator fell as much as 4.8 percent, the most in nearly one month, to Rs 260 after well-known investor Rakesh Jhunjhunwala's Rare Enterprises sold 12.5 lakh shares in the open market on Oct. 31 and Nov. 1.

• Coal India has 11 lakh shares change hands in a block
• Bharti Airtel has 18.47 crore shares (4.6 percent equity) change hands at Rs 543 per share in a block.

Buyers and sellers were not immediately known

Source: Bloomberg

Indian equity benchmarks edged higher led by gains in Bharti Airtel, Axis Bank and Dr. Reddy's Labs.

The S&P BSE Sensex rose 0.2 percent to 33,654 and the NSE Nifty 50 Index advanced 0.26 percent to 10,450.

All the sector gauges were trading higher led by the S&P BSE Telecom Index's 2.4 percent gain.

• Rupee opened higher at 64.55 per U.S. dollar against yesterday's close of 64.61

It is the end of the week and we have the scheduled bond auction for Rs 15,000 crore of debt. This includes Rs 6,000 crore of the benchmark bond. Underwriting fee for the auction suggests a robust demand. The yield on the 10-year note dropped 3 basis points in the last session but is still up 5 basis points for the week. Today, market participants expect yields to stay in a range of 6.82-6.90 percent.

Meanwhile, the Indian rupee is likely to advance in line with other Asian peers after the proposed U.S. tax reforms were seen to disappoint dollar bulls. The local unit has risen 0.7 percent so far, this week and may add more to its gains against the dollar. A range of 64.40-64.70 a dollar is seen.

• Markets are looking at large caps as risk-reward is attractive for them
• Mid-cap stocks are witnessing profit-booking
• Stock specific activity will continue
• FY18 will be strong for graphite electrode makers as China has stopped production

• Hindalco Industries
• BSE
• Edelweiss Financial
• Godrej Agrovet
• Godrej Properties
• PNB
• Power Finance Corporation
• Sheela Foam
• SCI
• Sical Logistics
• Siti Networks
• Tata Power
• Titan
• Torrent Pharmaceuticals
• UCO Bank
• Union Bank Of India
• Vrl Logistics
• Zensar Technologies

Glenmark (Q2FY18, YoY)

• Revenue up 1.4 percent at Rs 2256 crore.
• Net profit down 7.0 percent at Rs 204 crore.
• EBITDA down 13.6 percent at Rs 389 crore.
• Margin at 17.2 percent versus 20.2 percent.

Ujjivan Financial (Q2FY18, YoY)

• Net Interest Income down 12.5 percent at Rs 164.6 crore.
• Net loss of Rs 11.95 crore versus loss of Rs 75 crore (QoQ).
• Net loss of Rs 11.95 crore versus profit of Rs 73 crore.
• Gross NPA at 4.99 percent versus 6.16 percent (QoQ).
• Net NPA at 1.38 percent versus 2.30 percent (QoQ).

Hathway Cables & Datacom (Q2FY18, YoY)

• Revenue down 60 percent at Rs 131.15 crore.
• Net Profit at Rs 14.01 crore versus Net Loss of Rs 40.44 crore.
• EBITDA down 1.2 percent at Rs 52.7 crore.
• Margin at 40.2 percent versus 16.6 percent.

Note: Company demerged its Cable TV businessinto a wholly owned subsidiary called Hathway Digital in Q1. Base numbers include both cable & broadband numbers.

Deepak Fertilizer (Q2FY18, YoY)

• Revenue up 34 percent at Rs 1231.5 crore.
• Net profit up 70 percent at Rs 46 crore.
• EBITDA up 56.5 percent at Rs 144 crore.
• Margin at 11.7 percent versus 10.0 percent.

GE T&D (Q2FY18, YoY)

• Revenue up 4.2 percent at Rs 870 crore.
• Net profit up 131.7 percent at Rs 47.5 crore.
• EBITDA up 130 percent at Rs 80.5 crore.
• Margin at 9.3 percent versus 4.2 percent.

Transport Corp (Q2FY18, YoY)

• Revenue up 15.55 percent at Rs 520 crore.
• Net profit up 29 percent at Rs 25.5 crore.
• EBITDA up 15.11 percent at Rs 49.5 crore.
• Margin at 9.5 percent versus 9.55 percent.

HEG (Q2FY18, YoY)

• Revenue up 111 percent at Rs 409.5 crore.
• Net profit of Rs 114 crore versus Net loss of Rs 14 crore.
• EBITDA up 924 percent at Rs 189.5 crore.
• Margin at 46.3 percent versus 9.5 percent.

Jay Bharat Maruti (Q2FY18, YoY)

• Revenue up 20.7 percent at Rs 438 crore.
• Net profit up 24.8 percent at Rs 16.6 crore.
• EBITDA up 22.35 percent at Rs 41.6 crore.
• Margin at 9.5 percent versus 9.4 percent.

KSB Pumps (Q2FY18, YoY)

• Revenue up 24.5 percent at Rs 200.5 crore.
• Net profit up 33.33 percent at Rs 11.6 crore.
• EBITDA up 48 percent at Rs 21.6 crore.
• Margin at 10.77 percent versus 9.06 percent.

Himadri Speciality Chemicals (Q2FY18, YoY)

• Revenue up 37.2 percent at Rs 468 crore.
• Net profit up 168.4 percent at Rs 51 crore.
• EBITDA up 83.9 percent at Rs 103 crore.
• Margin at 22.00 percent versus 16.4 percent.

Power Grid (Q2FY18, YoY)

• Revenue up 16 percent at Rs 7253 crore.
• Net profit up 14.36 percent at Rs 2141 crore.
• EBITDA up 15.5 percent at Rs 6475 crore.
• Margin at 89.3 percent versus 89.6 percent.

Vedanta (Q2FY18, YoY)

• Revenue up 36 percent at Rs 21,590 crore.
• Net profit up 46.8 percent at Rs 2,091 crore.
• EBITDA up 21.3 percent at Rs 5,669 crore.
• Margin at 26 percent versus 29 percent.

Berger Paints (Q2FY18, YoY)

• Revenue up 12 percent at Rs 1282 crore.
• Net profit down 20 percent at Rs 111 crore.
• EBITDA up 12.35 percent at Rs 200 crore.
• Margin at 15.6 percent versus 15.5 percent.

Andhra Bank (Q2FY18, YoY)

• Net Interest Income grew 10.4 percent to Rs 1,501 crore.
• Net loss of Rs 385 crore versus profit of Rs 51.4 crore.
• Gross NPA at 13.27 percent versus 13.33 percent (QoQ).
• Net NPA at 7.55 percent versus 8.09 percent (QoQ).

Accelya Kale (Q2FY18, YoY)

• Revenue up 5 percent at Rs 98 crore.
• Net profit down 16 percent at Rs 23 crore.
• EBITDA unchanged at Rs 39 crore.
• Margin at 39.8 percent versus 41.9 percent.

Shriram City Union Finance (Q2FY18, YoY)

• Net Interest Income up 18.7 percent at Rs 872.5 crore.
• Net profit down 3 percent at Rs 198 crore.
• Gross NPA at 6.91 percent versus 6.76 percent (QoQ).
• Net NPA at 1.83 percent versus 1.77 percent.

HCC (Q2FY18, YoY)

• Revenues up 6.6 percent at Rs 971 crore.
• Net profit down 50 percent at Rs 11.6 crore.
• EBITDA down 23 percent at Rs 150 crore.
• Margin at 15.4 percent versus 21.4 percent.

Dalmia Bharat Sugar and Industries (Q2FY18, YoY)

• Revenue up 22.6 percent at Rs 521 crore.
• Net profit down 26 percent at Rs 37 crore.
• EBITDA down 22.6 percent at Rs 65 crore.
• Margin at 12.5 percent versus 19.76 percent.

Akzo Nobel (Q2FY18, YoY)

• Revenue up 2.7 percent at Rs 704.5 crore.
• Net profit down 7 percent at Rs 39 crore.
• EBITDA down 6 percent at Rs 63.6 crore.
• Margin at 9.0 percent versus 9.9 percent.

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• 8K Miles’ circuit filter was revised to 10 percent.
• Alok Industries’ circuit filter was revised to 5 percent.

• A2Z Infra Engineering: Il&FS Financial Services sold 22.50 lakh shares or 1.5 percent equity stake at Rs 38.22 each.
• JB Chemicals & Pharmaceuticals: Ashish Dhawan sold 4.72 lakh shares or 0.6 percent equity stake at Rs 289.54 each.
• Sri Adhikari Bros: State Bank of India sold 2.91 lakh shares or 0.8 percent equity stake at Rs 31.12 each.

Vishal Fabrics

• Asia Investment Corporation Mauritius bought 2.63 lakh shares or 1.2 percent equity stake at Rs 245 each.
• Devkinandan Corporation LLP sold 2.63 lakh shares or 1.2 percent equity stake at Rs 245 each.

Elara Capital on Credit Rating Agencies

• Small and medium-sized enterprises rating to get boost from government focus.
• Crisil, ICRA and CARE dominate revenue share at 82 percent.
• Triggers:- Bank loan rating, corporate bonds, dual rating if commercial papers, structured finance, SME and MSME conundrum and non-rating revenue.

Elara on CRISIL

• Initiated ‘Accumulate’ with a price target of Rs 2,083; potential upside of 16 percent from yesterday’s close.
• Diversified business supports higher than industry growth.
• Expect revenue to grow at a compound annual growth rate of 12 percent over four years till December 2019. Expect CRISIL to sustain a superior return on capital employed of 49 percent during the period.

Elara on CARE Ratings

• Initiated ‘Accumulate’ with price target of Rs 1,712; Potential upside of 14 percent from yesterday’s close.
• CARE remains a pure-play on macro revival.
• Expect revenue to grow at a CAGR of 11 percent over three years till March 2020.
• With absence of a promoter CARE is key acquisition target thereby improving pricing power for the industry.
• Trigger: Scale-up non-rating business and possibility of buyback.

Elara on ICRA

• Initiated ‘Sell’ with a price target of Rs 3,526; potential downside of 10 percent from yesterday’s close.
• Best placed in terms of bond market.
• Expect revenue to grow at a compound annual growth rate of 8 percent over three years till March 2020.
• Subdued non-rating business an overhang
• Premium valuations not justified with lower profitability

CLSA on Ramco Cements

• Maintained ‘Sell’; hiked price target to Rs 645 from Rs 625.
• Results in the previous quarter was a beat on all parameters, with unit Ebitda strong at Rs 1,200 a tonne
• Expect margins to remain fairly steady in the second half despite seasonality
• Benefits of higher pricing should be offset by increased energy costs

Deutsche Bank on Power Grid Corporation

• Maintained ‘Hold’ with price target of Rs 220.
• Project pipeline likely the key driver.
• Expect capitalisation rate to be sustained at Rs 28,000-30,000 crore annually till March 2020.
• Expect net profit to decline 22 percent, 13 percent and 11 percent for three financial years till March 2020 each. Expect return on equity of 16 percent.
• Power Grid remains among the cheapest transmission stocks globally.
• Prefer NTPC given improving growth prospects.

CLSA on Power Grid Corporation

• Maintained ‘Buy’; Cut price target to Rs 260 from Rs 265.
• Capitalisation in the previous quarter was led by large high voltage direct current (HVDC) lines.
• Strong capitalisation over two financial years till March 2019 would sustain earnings growth, enhance cash flow and double dividend.
• Expect 40 percent rise in regulated equity in three financial years till March 2020.
• Expect earnings to grow at a compound annual growth rate of 15 percent over three financial years till March 2020.

CLSA on Vedanta

• Maintained ‘Buy’; Hiked price target to Rs 405 from Rs 380.
• Previous quarter was a was strong quarter, but Ebitda was just below estimates
• Earnings growth outlook remains strong given the on-going ramp-up of projects and the strong rally in commodity prices
• Expect operating income and earnings per share to grow at a compound annual growth rate of 18 percent and 44 percent over three financial years till March 2020.
• Expect return on equity to double and net debt to fall to near-zero by March 2020.

Morgan Stanley on Vedanta

• Maintain ‘Overweight’ with price target of Rs 391
• Previous quarter was in-line with positive surprise from zinc segment
• Cost for aluminum will remain elevated in the current quarter owing to higher coal and alumina prices, before potentially easing in the next quarter.
• Gross and net debt of the company continues to decline with loan repayment.

Macquarie on Vedanta

• Maintained ‘Outperform’; Hiked price target to Rs 372 from Rs 345.
• Zinc shines but Aluminum drags in the last quarter.
• Raw material cost inflation more than offset strong aluminum prices and impacted margins .
• Higher costs and a short alumina position drives 5-6 percent in earnings per share cut till March 2019.
• Expect lower risk of aluminum oversupply.

UBS on Hindalco (Novelis)

• Maintained ‘Neutral’ with price target of Rs 240.
• Good volume quarter for Novelis; Raised guidance.
• Expect positive reaction to strong results and upward revision to the current financial year’s operating income.
• Management did not give any comment about potential inorganic growth.
• Management to make an announcement about North America automotive capacity expansion in next quarter.

Macquarie on Hindalco (Novelis)

• Maintained ‘Outperform’; hiked price target to Rs 330 from Rs 280.
• Novelis upgrades guidance with five year high margins.
• Raised earnings per share estimates by 9 percent, 15 percent and 10 percent each for the three financial years till March 2020.
• Cost inflation partially offsets strong aluminum prices.
• Hindalco’s net long alumina position places it better than peers.
• With comfortable leverage, it is in the final stages of announcing its organic expansion plans.

Credit Suisse on PNB Housing Finance

• Initiated ‘Outperform’ with a price target of Rs 1,780.
• One of the fastest growing housing finance company.
• Should be able to sustain strong growth via geographical expansion and unique hub and spoke model
• Expect return on equity of 18 percent by March 2020.
• Expect loan book, revenue and net profit to grow at a compound annual growth rate of 40 percent, 50 percent and 51 percent over the three financial years till March 2020.

• Bharat Forge: North America Class 8 truck sales for October at 35,700 vs 13,674 last year (up 161% YoY and up 62% QoQ).
• Hindalco subsidiary Novelis reported better than expected results.
• Dr. Reddy’s launched Azacitidine injection in the Canadian market.
• Lupin launched antibiotic gActiclate Tablets, which has a market size of $263 million in U.S.
• Bharat Road Network takes balance stake in Guruvayoor Infrastructure for Rs 97 crore.
• AU Small Finance Bank gets RBI nod for Scheduled Commercial Bank.
• Himadri Speciality Chemical approved capacity expansion of 30,000 MTPA for manufacturing carbon black.
• VST Tillers said overall tractors sales in October increased 14.4 percent to 2,577 units.
• Adani In Talks With Chinese Firm For Carmichael Project Financing (Mint).
• North America Class 8 truck sales for October at 35,700 versus 13,674 last year (up 161 percent (YoY) and up 62 percent (QoQ)
• Adani in talks with Chinese firm for Carmichael project financing (Mint)

Long lines are back at Apple retail stores for the iPhone X.https://t.co/4hpEutzfUo pic.twitter.com/jKqES63y8T

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