Sensex, Nifty End At Over Six-Month Low Dragged By IT, Pharma Stocks

We do have exposure to IL&FS to the tune of Rs 225 crore and the loan is for two commercial properties in GIFT City, Rajeev Jain, MD at Bajaj Finance told BloombergQuint in an interview.

Key highlights of the conversation:

• Liquidity was much worse in 2013 due to taper tantrum
• Bond markets were frozen for 50-55 days in 2013
• Current freeze is much better than it was in 2013
• CP markets are active and bond markets are beginning to come through
• Have exposure to IL&FS to the tune of Rs 225 crore through loan against property
• Loan is for two commercial properties in GIFT City and asset as of now is standard
• We do see interest cost go up in near term
• Committed to clock net income growth at 20-23 percent
• Credit profile at comfortable level

BSE will introduce weekly futures and options contracts on Sensex 50 index from Friday.

The bourse will introduce 7 weekly futures and options contracts expiring on every Thursday of the week, excluding monthly expiry week, BSE -- formerly known as Bombay Stock Exchange -- said in a circular.

Shares of the Mumbai-based airline operator rose as much as 4 percent to Rs 220 after it approached banks for a moratorium on loans and asked for fresh funds to ease a cash crunch, Bloomberg reported citing people with direct knowledge of the matter.

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• BHEL has 27.8 lakh shares change hands in two block deals. Stock up 1.2 percent at Rs 74.85.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Gautam Adani-led company rose 0.4 percent to Rs 316 ahead of its July-September quarter earnings which are due to be announced later in the day. Analysts polled by Bloomberg are estimating its net profit for the period at around Rs 767 crore.

Adani Ports and SEZ earnings preview (Consolidated; YoY)

• Revenue seen down 5 percent to Rs 2,571 crore versus Rs 2,706 crore
• Ebitda seen down 19.5 percent to Rs 1,500 crore versus Rs 1,863 crore
• Ebitda margin seen at 58.3 percent versus 68.8 percent
• Net profit seen down 23 percent to Rs 767 crore versus Rs 992 crore

• Den Networks: The Delhi-based cable television service provider rose as much as 4.92 percent to Rs 71.45. Trading volume was 11 times its 20-day average.
• Advanced Enzyme Technologies: The Thane-based specialty chemical maker rose as much as 2.15 percent to Rs 190.30. Trading volume was 3 times its 20-day average.
• Linde India: The Kolkata-based chemical maker rose as much as 3 percent to Rs 420. Trading volume was 6 times its 20-day average.
• TTK Prestige: The Bengaluru-based pressure cooker maker fell as much as 1.31 percent to Rs 5,966.55. Trading volume was 6.5 times its 20-day average.

Shares of the Coimbatore-based textile machinery maker fell as much as 7.14 percent, the most in nearly two years, to Rs 5,700 after its profit declined in September quarter.

Meanwhile, the company also announced that it will buy back 2 lakh shares at Rs 6,000 each was at a discount of 2.2 percent against its yesterday's closing price.

Key earnings highlights:

• Revenue up 35 percent at Rs 772 crore.
• Profit down 13 percent at Rs 40.4 crore.
• Ebitda up 43 percent at Rs 90.3 crore.
• Margin at 11.7 percent versus 11 percent.

Shares of the Mumbai-based construction company rose as much as 3.8 percent to Rs 114.80.

The company bagged multiple orders worth over Rs 1066 crore, according to its notification on the exchanges.

Shares of the country's largest paint maker fell as much as 6.11 percent, the most since November 2.16, to Rs 1,128 after its profit missed Bloomberg consensus earnings estimates in September quarter on higher raw material cost.

Key earnings highlights:

• Revenue up 8.8 percent at Rs 4639 crore.
• Ebitda down 2.1 percent at Rs 784 crore.
• Margin at 16.9 percent versus 18.8 percent.
• Net profit down 14.4 percent at Rs 493 crore.

Indian rupee opened lower at 73.70 per dollar against yesterday's close of 73.56.

The local unit fell as much as 0.31 percent or 23 paise to 73.79.

Bond traders will be focusing on Rs 9,600 crore of debt sales by state governments and will also be watching out for announcement of bond purchases by the central bank through its open-market operations.

The Reserve Bank had earlier said it will conduct auctions in the second, third and fourth week of October and buy Rs 36,000 crore of securities in a bid to ease the liquidity squeeze in the money market.

The yield on the benchmark 10-year bonds rose 1 basis point on Monday to end at 7.93 percent, having dropped to as low as 7.89 percent in the intra-day trade. Global funds sold a net $20.5 million of rupee-denominated bonds on Oct. 19, according to exchange data. That took outflows for the month to $1.6 billion.

Those outflows could weigh on the rupee. The implied opening from forwards suggests pair may start trading around 73.7603, having ended at 73.5625 per dollar on Monday.

Oil was trading steady on Tuesday, although global risk aversion is likely to keep investors away from high-yielding currencies like the Indian rupee. Other emerging market currencies were also lower against the dollar.

On Oil Marketing Companies

Nomura

• With strong oil prices and weaker rupee, there are high risk of further populist measures.
• Regaining marketing margins looks unlikely at least in the near term.
• Expect OMCs to share subsidy burden due to strong financials.
• Stake sales by Government another overhang.
• IOCL: Cut to ‘Neutral’ from ‘Buy’; cut price target to Rs 140 from Rs 220, implying a potential upside of 8 percent from the last regular trade.
• BPCL: Cut to ‘Neutral’ from ‘Buy’; cut price target to Rs 310 from Rs 555, implying a potential upside of 14 percent from the last regular trade.
• HPCL: Cut to ‘Neutral’ from ‘Buy’; cut price target to Rs 230 from Rs 415, implying a potential upside of 9 percent from the last regular trade.

On Asian Paints

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 1,300, implying a potential upside of 8 percent from the last regular trade.
• September quarter was below estimates due to higher raw material prices.
• Decoratives volume growth continues in double digits of 11-12 percent.
• Margin pressure evident; Recent price hikes to alleviate some pressure.

JPMorgan

• Maintained ‘Neutral’ with a price target of Rs 1,400, implying a potential upside of 17 percent from the last regular trade.
• September quarter was operationally weak on adverse mix and high cost inflation.
• Adverse mix weighs on value growth even as domestic volume growth was low.
• Believe there is need for more price hikes to offset high cost inflation.

BofAML

• Maintained ‘Buy’ with a price target of Rs 1,650, implying a potential upside of 37 percent from the last regular trade.
• Healthy volume, but bottom-line miss on weak margins.
• Lower margin due to delay in price hikes led to a miss.
• Recent dealer checks suggest surging optimism for the second half of the current financial year.

On Kansai Nerolac

CLSA

• Downgraded to ‘Underperform’ from ‘Outperform’; cut price target to Rs 400 from Rs 550, implying a potential upside of 3 percent from the last regular trade.
• September quarter results was slightly below estimates.
• Expect margin pressure and subdued growth for industrial segment.
• Cut EPS estimates by 13-17 percent on lower growth/margin forecasts.

Deutsche Bank Research

• Maintained ‘Buy’; cut price target to Rs 525 from Rs 575, implying a potential upside of 35 percent from the last regular trade.
• September quarter results were below estimates on all counts.
• Expect margins to improve on price hikes.
• Volume growth to sustain on aggressive growth strategies and festive sales.

On Hindustan Zinc

JPMorgan

• Maintained ‘Neutral’ with a price target of Rs 290, implying a potential upside of 3 percent from the last regular trade.
• September quarter was in-line quarter with both Ebitda and net profit declining sharply.
• Large dividend declared – a strong positive, in our view.
• Expect second half to be materially stronger than the first half of the current financial year.

Edelweiss

• Maintained ‘Buy’; cut price target to Rs 312 from Rs 327, implying a potential upside of 10 percent from the last regular trade.
• Performance in line; Outlook benign on favourable volumes.
• Expect Ebitda growth led by volume ramp-up, lower haulage cost and better grades.
• Cut price target to adjust for higher than expected interim dividend.

Citi

• Maintained ‘Neutral’; cut price target to Rs 270 from Rs 285, implying a potential downside of 4.5 percent from the last regular trade.
• September quarter was impacted due to higher cost, lower realisations and volumes.
• See costs at peak; Expect improvement in the second half.
• Cut price target to factor in higher costs.

On Glaxo Pharma

IDFC Securities

• Maintained ‘Underperform’ with a price target of Rs 1,185, implying a potential downside of 14 percent from the last regular trade.
• Positives: Higher revenue, inline employee and other costs; Negatives: Lower gross margins.
• Glaxo begun to show signs of turning the corner by clocking double digit revenue growth.
• Rich valuations and limited near-term triggers to cap upside.

Citi

• Maintained ‘Sell’ with a price target of Rs 1,340, implying a potential downside of 2 percent from the last regular trade.
• September quarter numbers were marginally ahead of estimates.
• Business is clearly recovering, but do not see margins back at over 30 percent range.
• Current valuations leave very little buffer for any potential risks.

More Calls

Macquarie on IndusInd Bank

• Maintained ‘Outperform’ with a price target of Rs 1,975, implying a potential upside of 37 percent from the last regular trade.
• Stock fell as IL&FS rights issue postponed.
• Investors expect overall exposure to IL&FS group to be higher.
• Bank has strong loan growth and earnings power.
• Remain positive on the bank.

Macquarie on Jubilant Life Sciences

• Maintained ‘Outperform’; cut price target to Rs 1,038 from Rs 1,192, implying a potential upside of 59 percent from the last regular trade.
• Life Science Ingredients still recovering; Pharma business continues to deliver.
• Management expects second half to be better than first half for both segments.
• Remain bullish on Jubilant; Top mid-cap pharma pick.

Macquarie on ICICI Lombard

• Maintained ‘Underperform’ with price target of Rs 585, implying a potential downside of 27 percent from the last regular trade.
• September quarter’s net profit was ahead of estimates led by recoveries of written off dues.
• Corporate group health premium picked up.
• Positives already priced in; Trades at high valuations in a highly competitive industry.

CLSA on Inox Leisure

• Maintained ‘Buy’ with a price target of Rs 275, implying a potential upside of 27 percent from the last regular trade.
• Poor content, partial non-presence on BookMyShow impact footfalls.
• Steady advertising revenue growth; Strong screen additions.
• Management reiterated that Inox is open to any inorganic expansion.

Bulk Deals

• DHFL: Jasmine Capital sold 71.2 lakh shares at Rs 197.77
• Hathway Cable: Rajasthan Global Securities bought 55.7 lakh shares at Rs 29.27. Ashish Dhawan sold 80.6 lakh shares at Rs 29.04
• Trident Limited: Trident Group bought 15.7 lakh shares at Rs 63.85; Asian Cotspin seller.

Trading Tweaks

• Included in T to T segment: Raj Television Network, Shree Rama Newsprint, Subex
• Indiabulls Real Estate circuit filter changed to 5 percent.
• In ASM: Kwality, Hathway Cable.

Insider Trading

• Nandan Denim promoter buys 45,000 shares from open market on Oct. 17.