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The broader indexes underperformed their larger peers with the S&P BSE MidCap index and the S&P BSE SmallCap declining 1%. Fifteen of the 19 sectoral indexes compiled by BSE Ltd. declined, with the S&P BSE Metal index falling nearly 3%
The market breadth was skewed in favour of bears. About 1,327 stocks advanced, 1,967 declined and 154 remained unchanged
Shares of Hindustan Zinc Ltd. declined over 7.5% to Rs 315.7 apiece after the company reported net income below average analyst estimates in the quarter ended September.
Second Quarter Earnings (Consolidated, QoQ)
Net income up 1.7% QoQ at Rs 2,017 crore vs estimate of Rs 2,200 crore (Bloomberg consensus)
Revenue down 6.6% at Rs 5,958 crore vs estimate of Rs 6,260 crore
Total costs at Rs 3,571 crore vs Rs 3,723 crore in Q1
Other income at Rs 311 crore vs Rs 349 crore in Q1
Of the 22 analysts tracking the company, five maintained 'buy', eight maintained 'hold' and nine maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 5%
India sold Rs 24,000 crore ($3.2b) of bonds at a weekly auction as planned, the Reserve Bank of India said in a statement.
India sold Rs 2,000 crore of 4.26% 2023 bonds at a 4.4057% cutoff yield vs. 4.37% est.
India sold Rs 6,000 crore of 5.63% 2026 bonds at a cutoff yield of 5.7296% vs. 5.74% est.
India sold Rs 9,000 crore of 6.67% 2035 bonds at a cutoff yield of 6.8479% vs. 6.86% est.
India sold Rs 7,000 crore of 6.67% 2050 bonds at a cutoff yield of 7.1175% vs. 7.13% est.
Shares of LIC Housing Finance Ltd. fell nearly 8.3% in intraday trade to Rs 403.6 apiece. The company reported decline in NII and Net profit in the second quarter, post market hours Thursday.
LIC Housing Finance Q2FY22 (Consolidated, YoY)
NII down 5% at Rs 1,212.5 crore Vs Rs 1,277.48 crore
Net profit down 68% at Rs 249.74 crore Vs Rs 789.55 crore
CLSA
Maintain buy with a target price of Rs 540 apiece
Loan growth in home loans improved toa multi-quarter high of 15% YoY, off a low base.
Asset quality surprised positively with 170bps improvement in stage 2 and 3 loans.
Shrinkage in spread led to the decline in net interest income.
Company expected to benefit from lower incremental cost of funds.
Cut spreads estimates 15bps to factor in yield compression even the growth estimates are adjusted 100-200bps.
Asset quality trends remain the key monitorable, as it is the biggest driver of potential re-rating of the stock.
Kajaria Ceramics Ltd. reported net income for the September quarter that beat the average analyst estimate.
Second Quarter Results (Consolidated)
Net income up 188% QoQ to Rs 119.07 crore vs estimate of Rs 91.70 crore (Bloomberg Consensus)
Revenue up 73.33% QoQ to Rs 973.55 crore vs estimate of Rs 833 crore
Total costs at Rs 823.93 crore vs Rs 510.78 crore QoQ
Ebitda at Rs 180 crore vs estimate of Rs 145 crore (range from Rs 117 to Rs 175 crore)
Of the 32 analysts tracking the company, 24 maintained 'buy', seven maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 3.2%
HDFC Life Insurance Co Ltd. reported net income for the second quarter that missed the average analyst estimate.
Second Quarter Results
Net income at Rs 275.91 crore vs estimate of Rs 459 crore (Bloomberg Consensus)
Net investment income at Rs 8,873.38 crore vs Rs 6,318.81 crore YoY
Other income at Rs 45.02 crore vs Rs 43.11 crore YoY
Net Commission at Rs 509.89 crore vs Rs 424.74 crore YoY
Of the 39 analysts tracking the company, 27 maintained 'buy', 11 maintained 'hold' and one maintained 'sell' recommendation. The overall consensus price of analysts tracked by Bloomberg implied an upside of 14.8%
Shares of KEC International Ltd. rose over 10.6% in intra-day trade to a record Rs 514.05 apiece after the company bagged orders worth Rs 1,829 crore across its various businesses.
In an exchange filing, the company said that its transmission and distribution business secured orders of Rs 656 crore in Europea and Americas, while railways business won orders worth Rs 144 crore in emerging metro segments in India. The Civil business won order of Rs 935 crore for infra works in the water pipelines and industrial segments in India and the cables business secured Rs 94 crore order.
Maruti Suzuki cut to 'accumulate' at KR Choksey, Price target: Rs 8,000
Balkrishna Industries cut to 'accumulate' at KR Choksey; Price target: Rs 2,700
Bajaj Auto cut to 'accumulate' at KR Choksey; Price target: 4,325
Source: Bloomberg
Siemens Ltd. has executed a Power Purchase Agreement and entered into a share subscription and shareholders agreement for the subscription of 26% of paid-up equity share capital of Sunsole Renewables Pvt Ltd. The acquisition cost is Rs 1.6 crore, the company said in an exchange filing.
Siemens intended to procure renewable energy to reduce its carbon footprint in its manufacturing facility in Kalwa in Maharashtra. Post-acquisition, Sunsole will be an Associate of Siemens Ltd.
Ramkrishna Forgings Ltd. has opened offices in Russia & Europe to expand its global footprints and ensure smooth functioning of its exports business.
In an exchange filing, the company said that it is eyeing North America, South America, Europe and CIS countries for growth opportunities.
Second Quarter Earnings (Consolidated)
Net profit at Rs 487.99 crore vs Rs 315.70 crore YoY (Bloomberg Estimate: Rs 396 crore)
Gross NPA at 3.24% vs 3.50% QoQ
Interest income at Rs 3,566.27 crore s Rs 3,621.88 crore YoY
Total costs at Rs 3,092.34 crore vs Rs 3,086.51 crore YoY
Net profit at Rs 225.50 crore in Q2 FY22 versus Rs 129 crore in Q2 FY21, up 74% (Bloomberg Estimate: Rs 119.3 crore).
Net interest income at Rs 1,512 crore in Q2 FY22 versus Rs 1,973.37 crore in Q2 FY21, down 23%.
Gross NPA ratio at 14.97% in Q2 FY22 vs 15.60% in Q1 FY22.
Net NPA ratio at 5.55% in Q2 FY22 vs 5.78% in Q1 FY22.
The broader indices underperformed their larger peers with S&P BSE MidCap and S&P BSE SmallCap indexes declining over 1%. Barring S&P BSE Finance, S&P BSE Bankex and S&P BSE Teck indexes, all the other 16 sectoral indexes compiled by the BSE Ltd. declined, with S&P BSE Metal index falling over 3%.
The market breadth was skewed in favour of bears. About 1,325 stocks advanced, 1,848 declined and 158 remained unchanged.
Shares of Biocon Ltd. shed nearly 5% in intraday trade, to Rs 328.05 apiece after the company reported net income below average analyst estimate in the September quarter.
Biocon Q2FY22 (Consolidated, QoQ)
Net profit up 64% to Rs 138.3 crore Vs Net profit of Rs 84.4 crore (Bloomberg estimate : Rs 144.9 crore Profit)
Revenue up 5% at Rs 1,840.4 crore Vs Rs 1,760.6 crore (estimate : Rs 1,885.1 crore)
EBITDA at Rs 445.8 crore Vs Rs 389.3 crore, up 15% (estimate : Rs 438.9 crore)
Margins at 24.2% Vs 22.1% (estimate: 23.3%)
Of the 22 analysts tracking the company, 11 maintained 'buy', five maintained 'hold' and six maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 21.2%
Indian government bond yields inched higher ahead of Rs 24,000 crore weekly auction, while the currency advanced for a third straight day.
10-year yields rose by 1bp to 6.35% on Friday.
USD/INR fell 0.1% to 748250 on Friday.
Source: Bloomberg
J Kumar Infraprojects Ltd. received Letter of Acceptance from City and Industrial Development Corporation of Maharashtra Ltd. to design and construct connecting road from Khargahr to Nerul in Navi Mumbai.
The order is worth Rs 205.49 crore, J Kumar Infraprojects said in an exchange filing.
JSW Steel Q2 Review: Brokerages Cut Target Prices Citing Margin Pressure
Shares of TVS Motor Co Ltd. rose over 9.5%, the most in nearly six months, to Rs 632.85 after it posted second quarter net income that beat average analyst estimate.
TVS Motor Company Q2FY22 (Consolidated, YoY)
Revenue up 23% at Rs 6,483.42 crore Vs Rs 5,254.36 crore
Net profit up 35% at Rs 242.17 crore Vs Rs 179.93 crore
Ebitda up 17% at Rs 739.79 crore Vs Rs 633.44 crore
Margin at 11.4% Vs 12.1%
Of the 43 analysts tracking the company, 25 maintained 'buy', six maintained 'hold' and 12 maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 3.2%.
The relative strength on the stock was 74, suggesting it may be overbought.
Trading volume on the stock was 17.7 times the 30-day average volume, for this time of the day.
Shares of TVS Motor crossed above 200-day simple moving average, indicating potential upward price momentum.
Zee Vs Invesco: Bombay High Court Proposes To Allow EGM, But...
LIC Housing Finance leads declines in shares of Indian companies focusing on mortgage loans after the company’s second-quarter earnings missed estimates
Yields rose across the India sovereign yield curve in Friday morning trading.
The 5-year yield rose 1.6bps to 5.73%
The 10-year yield rose 1.4bps to 6.352%
The 14-year yield rose 1.7bps to 6.846%
The 5-year-10-year yield spread was 62.2bps, vs previous close 62.4bps
With scale-based regulations there will not be any additional regulatory cost for the regulated entities
Fundamental premise of giving operational freedom to NBFCs to conduct their business will continue
One size fits all approach is not suitable for the NBFC sector
Regulatory framework for NBFCs has remained work in progress and continues to be so
Several NBFCs have grown to become as big as the largest cooperative banks or regional rural banks, some have even matched in size with new generation private banks
NBFCs have become more and more interconnected with the financial system
Financial innovation should not become a reason to cut corners on regulatory compliance
During the pandemic saw a surge in digital credit delivery methods
Benefits accruing from this system is not debated, but the business conduct issues and governance standards have shaken the trust in digital lenders
Have been inundated with complaints from users
Governance requirements for NBFCs have been less rigorous than banks.
Governance is more of a cultural issue, than a regulatory issue
Good governance is good for long term regulatory efficiency and existence of the entity
M Rajeshwar Rao, Deputy Governor, RBI
Source: CII NBFC Summit
Welspun Corporation Ltd. signed a MoU with BP India Pvt Ltd. on October 18, the company said in an exchange filing. The MoU pertained to exploring carbon emission mitigation and reduction opportunities in Welspun Corp's energy, logistics, mobility and waste management activities.
The company reiterated its commitment to net-zero carbon emissions with an aim to lower carbon footprint in core operations.
Adani Green Energy Ltd.'s wholly-owned subsidiary Adani Renewable Energy Holding Fifteen Ltd. received the Letter of Award to set up 450 Mega Watt Wind Power Project after it won the tender issued by Solar Energy Corporate of India Ltd. for 1,200 Mega Watt ISTS-connected project.
The fixed tariff for this project capacity is Rs 2.70 per kilowatt hour for a period of 25 years.
Adani Green Enery now has a total renewable energy project portfolio of 20,284 MWac capacity.
Source: Exchange Filing.
FSN E-Commerce Ventures, Nykaa’s operator, to open its initial public offering from Oct. 28 to Nov. 1.
Nykaa to sell shares worth up to Rs 630 crore in IPO
IPO also includes an offer for sale of up to 4.19 crore shares
Source: Nykaa’s red herring prospectus
Shares of Indian Energy Exchange Ltd. rose 10% to Rs 833.7 apiece after the company reported growth in net income and revenue in the September quarter, post market hours Thursday.
Indian Energy Exchange Q2FY22 (Consolidated, YoY)
Revenue up 56% at Rs 110.37 crore Vs Rs 70.91 crore
Net profit up 75% at Rs 77.72 crore Vs Rs 44.33 crore
Ebitda up 71% at Rs 95.03 crore Vs Rs 55.44 crore
Margin at 86.1% Vs 78.2%
Recommended the bonus issue of equity shares in the proportion of two shares of Re 1 each for every one share of Re 1 each.
Of the 15 analysts tracking the company, eight maintained 'buy', five maintained 'hold' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 28.7%. Trading volume on the stock was 3.1 times the 30-day average volume, for this time of the day.
Analysts expected the high material cost inflation to impact margins adversely in the near term, while also deeming the valuations expensive
Of the 41 analysts tracking the company, 19 maintained 'buy', eight maintained 'hold' and 14 maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 4.1%
The broader indexes almost mirrored their broader peers with the S&P BSE MidCap index and the S&P BSE SmallCap gaining over 0.5%. Barring S&P BSE Metal and S&P BSE Information Technology indexes, all the other 17 sectoral indexes compiled by BSE Ltd. advanced, with the S&P BSE Realty index adding nearly 2%.
The market breadth was skewed in favour of bulls. About 1,653 stocks advanced, 650 declined and 93 remained unchanged.
Future Retail Ltd. said that its advocates received the decision from Singapore International Arbitration Centre dated October 21, to vacate the interim award of the Emergency Arbitrator.
Future Retail would decide on the future course of action based on legal advise and available remedies in law.
Source: Exchange Filing.
The Singapore tribunal rejected Future Retail's plea to lift interim stay on its asset sale to Reliance Retail, on Thursday
Asian Paints raised to 'reduce' at Asian Markets; Price target: Rs 2,848
Gateway Distriparks raised to 'buy' at ICICI Securities; Price target: Rs 332
JSW Steel cut to 'reduce' at ICICI Securities; Price target: Rs 625
Source: Bloomberg
Indian government bond traders will monitor a speech by Prime Minister Narendra Modi scheduled for 10 a.m in Delhi ahead of a Rs 24,000 crore ($3.2b) weekly bond auction.
10-year yields fell 4bps to 6.34% on Thursday.
USD/INR little changed at 74.8600 on Thursday.
Global funds sell net Rs 2,820 crore of India stocks Thursday: NSE.
They sold Rs 641 crore of sovereign bonds under limits available to foreign investors and withdrew Rs 6 crore of corporate debt.
State-run banks sold Rs 315 crore of sovereign bonds on October 21: CCIL data. Foreign banks bought Rs 71.12 crore of bonds.
Source: Bloomberg
Shares of firms focusing on mortgage loans may move after LIC Housing Finance Ltd. reported net income below average analyst estimate, in the September quarter, post market hours Thursday.
In Focus: HDFC, LIC Housing, Repco, Aptus Value, Indiabulls Housing, PNB Housing, Aavas
Biocon Q2FY22 (Consolidated, QoQ)
Net profit up 64% to Rs 138.3 crore Vs Net profit of Rs 84.4 crore (Bloomberg estimate : Rs 144.9 crore Profit)
Revenue up 5% at Rs 1,840.4 crore Vs Rs 1,760.6 crore (estimate : Rs 1,885.1 crore)
EBITDA at Rs 445.8 crore Vs Rs 389.3 crore, up 15% (estimate : Rs 438.9 crore)
Margins at 24.2% Vs 22.1% (estimate: 23.3%)
Asian Paints cut to 'underweight' at Morgan Stanley; Price target: Rs 2,505
L&T Finance cut to 'add' at Axis Capital; Price target: Rs 98.
Tatva Chintan Pharma rated new 'buy' at JM Financial; Price target: Rs 2,650.
Krsnaa Diagnostics rated new 'buy' at JM Financial; Price target: Rs 1,030.
Source: Bloomberg
Cyclical upside earnings catalysts are falling into place for India’s state-owned banks and improved balance sheets are likely to end a trend of declining book value per share, Morgan Stanley says, raising price targets of four lenders.
Bank of Baroda and State Bank of India appear “better placed” on asset quality and profitability, increasing targets by 23% and 7% to Rs 135 and Rs 640, respectively.
Book value per share for state-owned banks excluding SBI has declined by 15%-70% from the peak owing to weak asset quality, deteriorating pre-provision operating profit and frequent capital raising.
The pandemic affected asset quality for retail and small business loans, but expects “moderation from 2HF22” assuming no further severe outbreaks; higher interest rates should improve margins.
Price targets of Canara Bank and Punjab National Bank raised by 39% and 11%, respectively.
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