Sensex, Nifty Pause After Record Close; Pharma Index At 3-Month High

Shares of the Hyderabad-based drugmaker rose as much as 4 percent, the most since October 5, to Rs 1,010 after it met Bloomberg consensus estimates in September quarter.

• Consolidated net profit up 27.5 percent at Rs 84.4 crore versus estimate of Rs 84 crore
• Revenue at Rs 427 crore versus estimate of Rs 429 crore
• Ebitda or operating profit up 16.3 percent at Rs 121.9 crore

• Ruchi Soya has 10 lakh shares change hands in a block.

Buyers and sellers were not immediately known

Source: Bloomberg

Hexaware: The Mumbai-based IT company rose as much as 14.58 percent, the most in over six years, to Rs 322 after it reported strong earnings.

• Nnet profit rose 16 percent to Rs 142 crore versus estimate of Rs 121 crore (QoQ)
• Revenue at Rs 993 crore
• Revenue in dollar term at $154 million
• Ebita rose 8 percent to Rs 157 crore (QoQ)
• Margin expanded 15.8 percent from 14.7 percent (QoQ)

Rain Industries: Shares of the Hyderabad-based cement and other related products maker rose as much as 10 percent to record high of Rs 287 after brokerage firm Motilal Oswal initiated coverage on the stock with a buy.

Motilal Oswal on Rain Industries

• Initiated ‘Buy’ rating with a price target of Rs 362; implying a potential upside of 33 percent from Wednesday’s close.
• Dual benefit of demand growth and supply shock driving CPC prices.
• Rain investing in high organic growth projects.
• Strong free cash flow generation to help deleverage its balance sheet.
• Expect Volume, Ebitda and net profit to grow at a compound annual growth rate of 4 percent, 24 percent and 50 percent over four year till December 2009.
• Rain has re-rated on visibility of margin expansion and growth.
• Although stock has run up sharply, the valuations are still reasonable.
• Bull Case target of Rs 615.

Dredging Corp: The stock rose as much as 17 percent, extending gains to second day after the cabinet approved stake sale of 73.47 percent in the company.

Solar Industries: The stock rose 6.51 percent after it bagged order worth Rs 1143 crore from Coal India for the supply of bulk explosives.

Shares of the Mumbai-based edible oil maker rose as much as 18 percent to Rs 33.75 after it signed an agreement with Devonshire Capital to sell 51 percent stake in the company for Rs 4,000 crore.

Shares of the Mumbai-based energy focused company fell as much as 7 percent, the most in over two months, to Rs 44.10. The company said monetisation of coal business is its stated strategy.

BloombergQuint had reported yesterday that company was in final stages of talks to sell its entire interest in Indonesian coal mines as it looks to reduce debt, two people aware of the negotiations.

The stock in yesterday’s session ended 3.7 percent higher at Rs 47.40.

Shares of the Chennai-based cement maker came off day's low after it beat Bloomberg consensus estimates in September quarter.

• Net profit fell 19 percent to Rs 168.5 crore versus estimate of Rs 134 crore
• Revenue declined 8 percent to Rs 1,029.3 crore versus estimate of Rs 975 crore

Shares of the Ahmedabad-based sanitary ware maker rose as much as 2.4 percent to Rs 3,292 after it beat Bloomberg consensus estimates in July-September quarter.

• Net profit rises 3.6 percent to Rs 27.27 crore versus estimate of Rs 26.33 crore
• Revenue rises 13 percent to Rs 296 crore versus estimate of Rs 270 crore
• Total costs at Rs 256 crore
• Other income at Rs 21.9 crore

Shares of the Ahmedabad-based drugmaker rose as much as 3.7 percent to Rs 515 after Zydus Pharma USA's subsidiary Nesher Pharma got U.S. drug regulator's nod for Dextoamphetamine Sulfate and Amphetamine Sulfate tablets, Cadila Healthcare said in a stock exchange filing.

The drug is used to treat Attention Deficit Hyperactivity Disorder (ADHD) and as per the IMS data it has sales of $416.5 million.

• Indian equity benchmarks edged lower owing to weakness in heavyweights like ITC, Reliance Industries and Hindustan Unilever.
• The S&P BSE Sensex declined 0.1 percent to 33,563 and NSE Nifty 50 Index declined 0.2 percent to 10,422.
• S&P BSE MidCap Index was outperforming Sensex as it rose 0.4 percent.
• Twelve out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE FMCG Index's 0.8 percent drop. On the flipside, S&P BSE Healthcare Index was the top sectoral gain, up 2 percent.

Shares of the Hyderabad-based cement and other related products maker rose as much as 10 percent to record high of Rs 287 after brokerage firm Motilal Oswal initiated coverage on the stock with a buy.

Motilal Oswal on Rain Industries

• Initiated ‘Buy’ rating with a price target of Rs 362; implying a potential upside of 33 percent from Wednesday’s close.
• Dual benefit of demand growth and supply shock driving CPC prices.
• Rain investing in high organic growth projects.
• Strong free cash flow generation to help deleverage its balance sheet.
• Expect Volume, Ebitda and net profit to grow at a compound annual growth rate of 4 percent, 24 percent and 50 percent over four year till December 2009.
• Rain has re-rated on visibility of margin expansion and growth.
• Although stock has run up sharply, the valuations are still reasonable.
• Bull Case target of Rs 615.

Shares of the Delhi-based two-wheeler maker declined as much as 2 percent, the most since September 27, to Rs 3,745 after it missed consensus Bloomberg estimates in September quarter.

• Net profit rose 0.6 percent to Rs 1,010 crore versus estimate of Rs 1,035 crore (YoY)
• Revenue rose 7.3 percent to Rs 8,362 crore versus estimate of Rs 8,815 crore (YoY)
• Operating profit or Ebitda rose 6 percent to Rs 1,456 crore
• Operating profit margin or Ebitda margin narrowed 20 basis points 17.4 percent

• Rupee opens higher at 64.53 per U.S. dollar against yesterday's close of 64.60

The U.S. Fed as expected kept interest rates unchanged but reinforced expectations for an increase in December. The odds of a December hike are close to 90 percent.

Meanwhile, U.S. President Donald Trump is said to name Jerome Powell as the next Fed chairman to succeed Janet Yellen. Amid all this, rupee has continued to strengthen in the last sessions. With the dollar index down today, we may see the local unit opening higher and trading with a lot of gusto against the greenback. A range of 64.45-64.60 a dollar is expected.

Sovereign bonds meanwhile continue to trade weak. The yield on the 10-year note is now at 6.89 percent. Along with a hawkish central bank view on inflation, higher crude oil prices have further clouded the outlook for interest rate cut. Yield is likely to stay in a range of 6.85-6.95 percent in the session.

• The NSE Nifty 50 Index has been forming higher top higher bottom formation on charts and it can head towards 10,550 while on the downside support is around 10,380 levels.
• Nifty Bank Index broke above its crucial level of 25,198 which indicates that next leg of rally can start which can take it towards 26,000 levels on the downside support is around 25,250-25,300 levels.

For a preview of other corporate earnings, click here

• Vedanta
• Power Grid Corporation
• Berger Paints
• Cera Sanitaryware
• Edelweiss
• Ge T&D India
• Glenmark Pharmaceuticals
• HCC
• ICRA
• Natco Pharma
• Shriram City Union Finance
• Ujjivan Financial Services
• Accelya Kale Solutions
• Akzo Nobel India
• Andhra Bank
• Bharat Road Network
• Borosil Glass Works
• CCL Products
• Deepak Fertilizers
• Orient Cement
• Sundram Fasteners
• Ramco Cements
• Transport Corporation Of India

#Q2WithBQ | Beat, in-line or miss? Here are companies that reported earnings after Wednesday's closing.https://t.co/nTAMDrR1cQ pic.twitter.com/zvzO3yBsWZ

— BloombergQuint (@BloombergQuint) November 2, 2017

Here's a quick look at corporate insider trades on Wednesday.https://t.co/nTAMDrR1cQ pic.twitter.com/yPnqRz5h6u

— BloombergQuint (@BloombergQuint) November 2, 2017

Khadim raises Rs 157 crore from anchor investors ahead of IPO.https://t.co/Nfsne241Ig pic.twitter.com/hIdFCt6vV7

— BloombergQuint (@BloombergQuint) November 2, 2017

• Circuit filter revised to 10 percent: Butterfly Gandhimathi Appliances and Kavveri Telecom
• Circuit filter revised to 5 percent: Indowind Energy

Crompton Greaves Consumer

• Franklin Templeton Investment Fund bought 46.36 lakh shares or 0.7 percent equity stake at Rs 217.5 each.
• TIAA CREF Institutional MF International Equity Fund sold 68.13 lakh shares or 1.09 percent equity stake at Rs 217.5 each.

JB Chemicals & Pharmaceuticals

• ICICI Lombard General Insurance bought 20 lakh shares or 2.4 percent equity stake at Rs 288 each.
• Ashish Dhawan sold 19.52 lakh shares or 2.3 percent equity stake at Rs 288.12 each.

Mayur Uniquoters

• Small Cap World Fund bought 2.48 lakh shares or 0.5 percent equity stake at Rs 460.43 each.

A2Z Infra Engineering

• IL&FS Financial Services sold 9.43 lakh shares or 0.65 percent equity stake at Rs 38.05 each.

Bharat Wire Ropes

• Mentor Capital bought 23.36 lakh shares or 5.2 percent equity stake at an average of Rs 94.99 each .
• Aardee Multitrade sold entire stake of 15.53 lakh shares or 3.5 percent equity stake at Rs 95.99 each.
• Cosmos Prime Projects sold entire stake of 7.92 lakh shares or 1.8 percent equity stake at Rs 94 each.

Bhushan Steel

• EARC Trust SC 283 sold 44.36 lakh shares or 1.34 percent equity stake at an average Rs 60.4 each ..

Cholamandalam

• Norwest Ventures Partners X FII Mauritius sold 20.92 lakh shares or 1.3 percent equity stake at an average of Rs 1200.21 each.

Sinclair Hotels

• MCCS Investment Holding sold 3.51 lakh shares or 6.32 percent equity stake at Rs 335.94 each.
• Prabhudas Lilladhar bought 34,969 shares or 0.6 percent equity stake at Rs 332.38 each.

For a complete list of stocks to watch, click here

Motilal Oswal on Rain Industries

• Initiated ‘Buy’ rating with a price target of Rs 362; implying a potential upside of 33 percent from Wednesday’s close.
• Dual benefit of demand growth and supply shock driving CPC prices.
• Rain investing in high organic growth projects.
• Strong free cash flow generation to help deleverage its balance sheet.
• Expect Volume, Ebitda and net profit to grow at a compound annual growth rate of 4 percent, 24 percent and 50 percent over four year till December 2009.
• Rain has re-rated on visibility of margin expansion and growth.
• Although stock has run up sharply, the valuations are still reasonable.
• Bull Case target of Rs 615.

CLSA on JSW Energy

• Maintained ‘Sell’; hiked price target to Rs 66 from Rs 57.
• Net profit led by one-offs; both M&A deals fell through—a positive.
• Negatives: lower ASPs, expiry of high-priced power purchase agreements and rise in sea-borne coal prices.
• Current rally unsustainable; Return on equity deterioration caps valuation.

CLSA on Hero MotoCorp

• Maintained ‘Sell’; hiked price target to Rs 3,000 from Rs 2,950.
• Operating performance impacted post implementation of GST.
• Expect current financial year to be a decent year for 2W, but growth to moderate in the next two financial years.
• Negatives: slowing industry growth, adverse demand profile shifts and multiple margin headwinds.
• Expect earnings per share to grow at a compound annual growth rate of 6 percent over the three financial years till March 2020.

Credit Suisse on Hero MotoCorp

• Maintains Neutral; hiked price target to Rs 3,560 from Rs 3,230.
• Significant change in accounting of Haridwar revenues and costs impacted line items.
• Reduce estimates for the current financial year to build in state excise incentives not coming through.
• Margins in the second half likely to be softer on higher raw material prices and other expenses.
• Expect traction in two-wheeler volumes in the send half; Product launches should help further.

CLSA on Tech Mahindra

• Maintained ‘Sell’; hiked price target to Rs 450 from Rs 380.
• Strong execution upgrades margin assumptions by 80-90 basis points for the current financial year, driving 8-10 percent upgrades in earnings per share during the period.
• Negatives: uncertain long-term growth prospects, risks from M&A and likely exhaustion of margin momentum.
• TechM needs to institutionalise several processes that appear to be centrally imposed on resource management.

Credit Suisse on Tech Mahindra

• Maintained ‘Outperform’; hiked price target to Rs 550 from Rs 520.
• Margin trajectory shaping up well.
• Telecom still weak, while enterprise remains solid .
• Valuations remain attractive with our estimated compound annual growth rate of 18 percent EBIT over the two financial years till March 2020.

Credit Suisse on TVS

• Maintains Underperform; hiked price target to Rs 490 from Rs 400.
• Delivers margins in the previous quarter, but double-digit margin during the final quarter still unlikely.
• Raised earnings per share estimates for the current financial year till Marc 2020 by 5-10 percent for higher scooter and export volumes, higher margins of 50 basis points and building in the BMW tie-up products in the financials.
• TVS has exhibit faster-than-market growth compared to peers.

CLSA on TVS Motor Company

• Maintained ‘Sell’; hiked price target to Rs 350 from Rs 315.
• During the previos quarter, margins remain range-bound despite strong volume growth.
• Volume outlook better driven by scooters and exports.
• Don’t see a case for meaningful margin expansion given rising commodity prices and regulatory cost pressures ahead.
• Need to deliver Ebitda margin of 17 percent in the next financial years to justify 10 percent upside.

CLSA on Shriram Transport Finance

• Maintained ‘Sell’; hiked price target to Rs 1,000 from Rs 950.
• Uptick in asset under management growth a positive, but stay cautious.
• Asset under management growth and net interest margin expansion aided topline growth.
• Watch out for moderation in commercial vehicle sales growth in October and weaker pipeline of used .commercial vehicles.
• Earnings forecasts raised to factor better topline and annulling of merger talks.

CLSA on Godrej Consumer

• Maintained ‘Sell’; hiked price target to Rs 1,025 from Rs 940.
• India volume growth strong while Indonesia getting better.
• Cost savings too helped in margin expansion.
• Godrej Consumer expects much better in the second half of this financial year helped by launches and a low base.

Credit Suisse on Godrej Consumer

• Maintained ‘Outperform’; hiked price target to Rs 1,125 from Rs 1,100.
• The previous quarter displayed a strongest domestic volume growth despite a high base, worst is over in Indonesia.
• Expect Indonesia to gradually recover on a low base.
• India innovation pipeline continues to be very strong.
• Godrej Consumer is the top pick in FMCG space.

Credit Suisse on Hexaware

• Maintained ‘Neutral’; hiked price target to Rs 265 from Rs 230.
• Management remains optimistic about sustaining the strong growth momentum.
• The last quarter may be soft due to seasonality and full quarter impact of client headwinds; Medium-term outlook positive.
• Raised earnings estimates by 4-7 percent, accounting for lower tax rate and slightly higher margins.

Jaitley to head panel for state-owned banks’ consolidation.https://t.co/NtIuef7npk pic.twitter.com/Lk5dkDirPo

— BloombergQuint (@BloombergQuint) November 2, 2017

Trump said to pick Powell as Fed Chairman, replacing Yellen.https://t.co/2f937ITHe9 pic.twitter.com/eiV30nt4Nc

— BloombergQuint (@BloombergQuint) November 2, 2017