Sensex, Nifty End At Over One-Month Low

Uniphos Enterprises

• Stock rose as much as 19.9 percent to Rs 120.75.
• Trading volume was 21.3 times its 20-day average.

Bajaj Hindusthan Sugar

• Stock rose as much as 9.8 percent to Rs 11.20.
• Trading volume was 26.1 times its 20-day average.

Investment Trust of India

• Stock rose as much as 13 percent to Rs 285.
• Trading volumne was 5.1 times its 20-day average.

Balrampur Chini Mills

• Stock fell as much as 14.5 percent to Rs 81.85.
• Trading volume was 4.6 times its 20-day average.

Praj Industries

• Stock fell as much as 11.1 percent to Rs 102.75.
• Trading volume was 2.3 times its 20-day average.

Shares of Gujarat Gas rose as much as 3.7 percent to Rs 745.

The company received authorisation for local natural gas distribution for the Narmada district in Gujarat from PNGRB, according to its stock exchange notification. The gas distributor has been granted infrastructure exclusivity till 2043 and marketing exclusivity till 2026.

The proposed gas distribution network will cover a geographical area of 2,817 square kilometres, the statement added.

Gujarat Gas traded at 33.9 times trailing 12-months earnings per share and 20 times its estimates for the coming year, according to Bloomberg data.

Catch all the live AGM updates here

Shares of the Jaguar Land Rover owner fell as much as 1.5 percent to Rs 256.30.

The Jaguar Land Rover, on Monday, confirmed a cut in its production schedule at the Castle Bromwich plant in the West Midlands region of England due to “continuing headwinds” impacting the British automobile industry, according to a PTI report.

The stock fell 36.2 percent so far this year, compared to a 17.4 percent advance in the Sensex.

Government Announces Merger Of Bank of Baroda, Dena Bank And Vijaya Bank

Indian equity benchmarks fluctuated between gains and losses during the opening trade. The S&P BSE Sensex Index traded 0.23 percent higher at 37,667.86 and the NSE nifty 50 Index traded at 11,3967.55, up 0.19 percent.

The market breadth was tilted in favour of buyers. Nine out of 11 sectoral gauges compiled by NSE advanced, led by NSE Nifty FMCG Index's 0.6 percent gain. On the flipside, the NSE Nifty PSU Bank Index was the top sectoral loser, down 0.8 percent.

The consolidation of the three state-run PSU banks will improve the credit growth, Vijaya Bank's Managing Director and Chief Executive Officer told BloombergQuint in an interaction.

Key highlights from the conversation:

• The merger will aid deposits and credits for the combined entity.
• The consolidation process may take about four to six months.

The merger of the state-run PSU banks will create synergy benefits for all the three lenders, Dena Bank's Executive Director Ramesh Singh told BloombergQuint in an interaction.

Key highlights from the conversation:

• The merger is not a bailout package for Dena Bank.
• Dena Bank is strong in Gujarat, Maharashtra and Chhatisgarh.
• The government will decide merger ratio in due course of time.

Here's a lineup of all major corporate meetings over the next few days. 🤝

Read: https://t.co/a5Uef0JqPP pic.twitter.com/4yxWs1wyBJ

— BloombergQuint (@BloombergQuint) September 18, 2018

Rupee Weakens As Government’s Measures To Curb Fall Seen Inadequate

F&O Cues

• Nifty September futures closed trading at 11,408, premium of 30 points.
• Nifty September open interest down 0.9 percent; Nifty Bank September open interest up 4.5 percent.
• Max open interest for September series at 11,800 Call (open interest at 41 lakh shares).
• Max open interest for September series at 11,400 Put (open interest at 36.8 lakh shares).

F&O Ban

• In ban: Adani Enterprise
• Out of ban: Balrampur Chini

Put-Call Ratio

• Nifty PCR at 1.28 versus 1.38
• Nifty Bank PCR 0.84 versus 1.02

Kotak on Bajaj Auto

• Maintained ‘Sell’; raised price target to Rs 2,700 from Rs 2,500, implying a potential downside of 5.5 percent from the last regular trade.
• Rupee depreciation to aid margins but medium-term concerns stay.
• Rupee depreciation to improve operating margin as well as competitiveness in export markets.
• Retain ‘Sell’ due to deterioration in profitability and absence of scooters in portfolio.

HSBC on Titan

• Maintained ‘Buy’; cut price target to Rs 1,050 from Rs 1,100, implying a potential upside of 27 percent from the last regular trade.
• Correction due to wavering revenue growth guidance and fear of regulations amid growing CAD.
• Positives: good studded jewellery promotion, low base in the third quarter and own scheme to spur growth.
• Valuation remains compelling post current sell-off.

PhillipCapital on Jubilant Foodworks

• Maintained ‘Buy’ with a price target of Rs 1780, implying a potential upside of 31.5 percent from the last regular trade.
• Believe Jubilant is poised to deliver strong second quarter.
• Channel checks suggest more than 18 percent SSSG in July-August 2018.
• Expect 44 percent and 59 percent in operating income and net profit respectively in the second quarter.

UBS on Indian Pharma

• Pharma stock valuations towards the high end of 10-year average.
• Rupee weakening likely to translate to earnings upgrades.
• Emerging Market exposure is a negative.
• Cipla remains top pick; Also like Sun Pharma.

Macquarie on Yes Bank

• Maintained ‘Outperform’ with a price target of Rs 425, implying a potential upside of 33 percent from the last regular trade.
• Management expects divergence to be benign.
• Not alarmed about pace of growth; Lending done to quality customers.
• The growth of 25 percent is sustainable without equity capital raising.

Brokerages On Hindustan Unilever

CLSA

• Maintained ‘Outperform’ with a price target of Rs 1,950, implying a potential upside of 22 percent from the last regular trade.
• Management commentary pre-quarter close remains positive.
• Increase in crude and rupee depreciation to be offset by lower palm oil prices and price hikes.
• Outlook for demand remains fairly positive; May get further fillip from pre-election spending.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,870, implying a potential upside of 17 percent from the last regular trade.
• Price increases to offset margin pressure due to rupee depreciation.
• No incremental competitive intensity in Laundry care.
• GST-related rationalization and cost savings continue to boost margin.

BofAML

• Maintained ‘Buy’ with a price target of Rs 1,900, implying a potential upside of 18.5 percent from the last regular trade.
• Healthy volumes and better profitability to mark stable second quarter.
• Steady compounder with strong execution capability.
• Expect healthy earnings per share with a compounded annual growth rate of 18 percent to back premium valuations.
• Recent correction offers attractive buying opportunity.

Brokerages On PSU Banks Merger

IDFC Securities on Bank of Baroda

• Downgraded to ‘Neutral’ from ‘Outperform’; cut price target to Rs 130 from Rs 180, implying a potential downside of 4 percent from the last regular trade.
• Believe BoB is in for a de-rating with merger announcement.
• Integration issues and higher NPLs post-merger are key concerns.
• Proforma numbers of merged entity indicate no material change in financial parameters.
• Based on current market price, post-merger shares will be 19 percent higher than BoB’s current shares.

JPMorgan

• Merger of Bank of Baroda, Dena and Vijaya Bank an incremental positive for the sector.
• Immediate share price action should be negative for BoB, given further integration risks.
• Additional provisioning requirements is likely negative for BoB’s incremental earnings outlook.

CLSA

• Bank of Baroda to acquire to smaller PSUs; Not a material dilution of the franchise.
• Deal valuation may be at a tad discount to BoB.
• Risk from clean-up post-merger announcement; Synergy could take 1-2 years.
• PSU consolidation is a long-term positive but a near-term overhang.

UBS

• Big overhang is behind; See no major impact over medium term.
• Believe this merger would be different from a SBI merger.
• Tier-1 of merged entity similar to BOB, while Provision Coverage Ratio bit lower.
• Believe merger would offer operating cost and cross sell synergies over medium term.

Citi

• Merger neutral for Bank of Baroda.
• Strong financials of Vijaya Bank could offset weak financials of Dena.
• Cultural issues significant, technology not as much.

• Promoter Sapna Pennam sold 2.56 lakh shares or 0.93 percent equity at Rs 390.01 each.
• Infina Finance Private Limited acquired 2.55 lakh shares or 0.93 percent equity at Rs 390 each.

Bank Of Baroda, Vijaya Bank Shares May Face Pressure 

• South Korean President Moon Jae-in visits Pyongyang for a summit with Kim Jong Un Tuesday.
• Japanese trade-flow numbers are due on Wednesday.
• The Bank of Japan holds its policy meeting on Wednesday.
• Britain releases inflation data on Wednesday
• European PMIs are due on Thursday
• The Organization of Petroleum Exporting Countries and its allies meet in Algiers this weekend.

• West Texas Intermediate crude fell 0.5 percent to $68.56 a barrel.
• Brent crude traded 0.4 percent lower at $77.77 a barrel.
• Gold fell 0.2 percent to $1,199.10 an ounce.

Shanghai Exchange

• Steel traded higher for third day; up 0.8 percent.
• Aluminium traded lower for second day; down 0.4 percent.
• Zinc traded higher; up 0.2 percent.
• Copper traded higher; up 0.7 percent.
• Rubber traded lower for third session; down 1 percent.