Vinod Nair, Head of Research, Geojit Financial Services: Blue-chips have been consolidating in the last one month in line with the havoc in global market and outflows in FII money. But undercurrent is strong as shown by the positive return & outperformance of Mid & Small cap. The underline is that market is hoping for a strong pick-up in earnings growth by H2FY18, which is the fillip to go beyond current level.
3:52 PM Nifty FMCG was the only sector that ended in negative, dragged mainly by ITC
3:52 PM Sectoral Trend: Nifty metal was the top sectoral gainer, up 1%
3:38 PM Top gainers and losers on BSE Sensex
3:34 PM Markets at close
The markets ended flat amid mixed global cues tracking Asian markets after US President Donald Trump and congressional leaders agreed to raise the government debt limit until December, eliminating the risk of a government shutdown for now.
The S&P BSE Sensex ended ar 31,662, up 1 point while Nifty 50 index was ruling at 9,929, up 13 points
3:23 PM BUZZING STOCK
Eicher Motors, the maker of Royal Enfield motorbikes, rose 2.5% after the Economic Times reported the company is set to make a binding takeover bid for Italian motorcycle manufacturer Ducati for $1.8 billion-$2 billion.
3:18 PM Asia Check
Asian shares bounced back after US President Donald Trump and congressional leaders unexpectedly agreed to raise the government debt limit until December, eliminating the near-term risk of a government shutdown.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3% while Japan's Nikkei rose 0.2%.
South Korea's KOSPI, which has been burdened by tensions over North Korea, jumped 1.2%, on course to mark its biggest gain in four months.
'Actual beneficiaries' of shell firms next on Modi govt's hit list
The government on Wednesday said directors or authorised signatories of deregistered companies who try to siphon off money from the firms' bank accounts can face up to 10 years imprisonment.
Besides, the directors of shell companies that have not filed their returns for three or more years would be disqualified from holding such position in any other firm.
The government has also identified chartered accountants, company secretaries and cost accountants associated with shell firms in certain cases.
READ FULL REPORT HERE
Bajaj Finance hits new high
Bajaj Finance hit a new high of Rs 1,950, up 5%, extending its previous day’s 4% gain on the BSE, after the company launched a qualified institutional placement (QIP) offering up to Rs 4,500 crore from institutional investors.
Bajaj Finance on Tuesdayin a regulatory filing said that the company may offer a discount of not more than 5% on the floor price of Rs 1,771.90 calculated for the QIP. READ MORE
Market breadth, indicating the overall health of the market remained positive. There were 1,420 advances against 1,092 declines, while 156 stocks remained unchanged.
ICICI Lombard IPO to hit market on Sept 15
ICICI Lombard General Insurance Company's estimated Rs 6,000-crore initial public offer (IPO) will open for subscription on September 15. CLICK HERE FOR DETAILS
2:20 PM Buzzing stock
Religare Enterprises hit a new low of Rs 38.15, down 5% on the National Stock Exchange (NSE) on Thursday, extending its past one month fall, on the back of heavy volumes. READ MORE
1:59 PM Top five gainers on Nifty
IPO watch: Centrum Wealth advises against investment in Dixon Technologies
Low margin Business: We do not find anything wrong with the business model but we are not comfortable recommending investors to invest in such low single digit EBITDA margin business (3.7% in FY17). Although, the company has an asset light, scalable business model (high growth industry) with high RoEs of >30%.
High valuation: At the same time, valuation looks stretched for such kind of low margin business. At the higher price band of Rs1,766, the stock is valued at 39.7 P/E on FY17 basis (post dilution).
Better investment opportunities in the market: In our view there are many listed opportunities with better financials available at lower and comfortable valuation.
90% of the issue is Offer for Sale: Even if money raised at such valuations was flowing into the company, it would have ultimately belonged to shareholders. However, in this case it may be noted that 90% of the money raised is going to the selling shareholder (PE investor, Promoter and other existing shareholders) and not into the company.
The BSE Midcap and the BSE Smallcap indices continued to outperform by rising 0.7% each in noon deals.
Emkay Global on cement sector
Average cement price declined by 3.2% MoM in August'17 due to price decline across regions, although the fall was higher in West, South and East regions (3-5%). Cement price was more resilient in Central and North regions with a decline of 1-2% MoM.
Cement dealers expect price hikes in few cities in the West (Mumbai) and South regions. In the South, price hike of Rs30-35/bag is expected in Andhra Pradesh and Rs10-30 per bag in the trade/non-trade segment in Chennai.
Cement demand continues to be affected by GST transition pangs, flood like situation in many parts of the country and sand availability issues in few regions like Bihar, Uttar Pradesh, West Bengal and Tamil Nadu.
Q2FY18 average pan-India price is down 3.1% QoQ with 5% QoQ decline in the North, Central and East markets. Average price in the West region is up 1.9% QoQ/ 13.5% YoY. In the South region, average price is down 2.5% QoQ
HDFC Securities on Skipper
Skipper’s 1QFY18 results came in ahead of our estimates on back of dispatches of undelivered inventory in the Engineering segment, held at the beginning of the quarter. Polymer segment registered a mere 3% growth on the back of GST transition. EBITDA margins stood at 12.9%.
The company benefits not only from the Power T&D spend but its low-cost integrated operation enables it to earn better margins/bid competitively. While GST impact was witnessed in the Polymer segment, the outlook looks promising with industry growth of ~15% and a shift from unorganised to organised.
With ROEs consistently over 20%, valuations look attractive on a relative basis. Reiterate BUY with target price of Rs 245/share (15/15/25x Jun-19E EPS for Engineering / Infrastructure / Polymer business).
At 1:50 pm, the Sensex was trading at 31,693, up 32 points, while the broader Nifty50 was ruling at 9,939, up 23 points.
ICRA on hotel industry
The domestic hotel industry continues to grow at a slow pace despite the strong demand growth for rooms. According to an ICRA note, Pan-India average occupancy and Average Room Rate (ARR) in the industry witnessed a marginal improvement of 1-2% (y-o-y) driving Revenue per Available Room (RevPAR) for Q1 FY2018 up by ~3%. The RevPAR has been growing on a y-o-y basis for the past 12 quarters.
Despite the continued occupancy traction and the marginal improvement in ARRs, a healthier traction in ARR is necessary over the coming quarters to generate adequate returns, considering the significant capital investments undertaken by the industry.
Reliance Securities on ABB
ABB India was among the earliest players to tap solar opportunity in India via range of solar inverters (50% market share) and power evacuation solutions. We expect ABB to see 34.5% CAGR in earnings through CY16-18E, while RoE is expected to improve to 15.4% in CY18E from 11.5% in CY16.
On the back of strong presence in power T&D space, we expect ABB would continue to command higher multiple, going forward. Valuing at 50x CY18E (15% discount to its mean multiple of 60x (2005-15) earnings of Rs32.1/share, we have BUY recommendation with a Target Price of Rs1,607.
Mid, small-cap rally to continue even as indices hit new high
Mid-and small-cap stocks continue to find favour with investors with the S&P BSE Mid-cap and S&P BSE Small-cap indices hitting a fresh high on Wednesday. Thus far in calendar year 2017 (CY17), both these indices have rallied around 31% and 35% respectively, as compared to 19% gain in the frontline S&P BSE Sensex. READ FULL STORY
Edelweiss on PVR
We recently interacted with Mr. Nitin Sood, CFO, PVR, to gain insights about the company’s ad growth, movie line-up and local body tax (LBT), among others. Management estimates 11.0% revenue growth with EBITDA margin at 18% for FY18, marginally impacted by weak consumer sentiment and movie line-up to-date.
On Hollywood content, management stated past few quarters were one of the worst patches globally in the past 6 years (5% YoY dip versus 2% YoY growth). However, PVR anticipates relatively better ad growth going ahead on strong content (stars-led movies like Secret Superstar); we peg FY18/19E ad growth at 18.0% each. Though LBT and rental cost (due to aggressive bidding, especially by Inox, our view: 8.0% YoY rise in rental cost in FY18 versus 5.0% YoY in previous years) will be key monitorables, the structural story (screen expansion) remains intact. Maintain ‘BUY’.
Higher aluminium prices spell good news for Vedanta, Hindalco
Vedanta and Hindalco, which have seen a sharp rally on the bourses, seem set for more gains. The two companies are expected to benefit from rising aluminium prices (Vedanta will also gain from rises in other base metals), which should reflect positively on their earnings as well. READ MORE
12:58 PM Up to 10 yrs jail if deregistered shell firms' directors siphon funds: Govt
The government on Wednesday said directors or authorised signatories of deregistered companies who try to siphon off money from the firms' bank accounts can face up to 10 years imprisonment. READ MORE
Mutual fund investors continue to shun gold funds
Mutual fund schemes investing in gold are struggling to attract investments with investors' preference shifting towards equity-oriented funds. In 2013, assets of gold funds stood at nearly Rs 12,000 crore amid weakness in the equity markets. Since then, overall assets in the gold fund category have seen a decline of 55% to Rs 5,098 crore in July 2017. READ MORE
Equity MFs see record Rs 20,000 crore inflows in August
Equity mutual funds received a staggering Rs 20,000 crore in net investor flows in August, while the overall assets under management (AUM) topped the Rs 20-lakh crore mark. These are highest-ever monthly equity flows and AUM recorded by the domestic asset management industry. READ MORE
Shares of Eicher Motors rose over 2% on reports that the company was revving up to make a binding offer to acquire the iconic Italian superbikes Ducati for $1.8 billion-$2 billion. CLICK HERE FOR DETAILS
Punj Lloyd extends gains
Punj Lloyd surged as much as 17.8% to Rs 22 on reports that a Punj Lloyd JV has won Rs 1,177-crore project in Myanmar from the National Highways Authority of India (NHAI). The Exchange has sought clarification from the company with reference to the same news.
At 11:00 am, the Sensex was trading at 31,720, up 58 points, while the Nifty50 was ruling at 9,939, up 23 points.
More pressure ahead for Sun Pharma
There could be more downside for the stock. CLSA, which has cut its target price to Rs 370, indicating a 22 per cent downside from the current level, believes the stock trades at an expensive 25 times of its FY19 earnings estimate and does not capture the concerns. CLICK HERE FOR FULL ANALYSIS
10:30 AM Buzzing stock
Himachal Futuristic Communications Limited (HFCL) is locked in upper circuit for the second straight day, up 10% at Rs 28.15 on the National Stock Exchange (NSE), after Grantham Mayo Van Otterloo (GMO) - Emerging Markets Quality Fund bought more than 10 million shares of the company through open market. CLICK HERE FOR MORE
BS GST Round Table
The days of leniency may be numbered in the good and services tax (GST) regime. Cautioning industry against incomplete and late filing of the GST returns, Revenue Secretary Hasmukh Adhia on Wednesday said, “Right now, we are not touching you. But the tax authorities will find out, and then you will be subject to penalties.” READ MORE
BS GST Round Table
Businesses not passing on the benefits of lower tax incidence under the goods and services tax (GST) may be in for trouble, with the government notifying the standing committee to receive complaints on profiteering.
“If you have got any complaints, you can send it to the standing committee or state-level screening committee,” said Revenue Secretary Hasmukh Adhia at the Business Standard GST Round Table. READ MORE
Punj Lloyd rallied nearly 10% to Rs 21 after the company's joint venture with Varaha Infra has won a Rs 1,177-crore project in Myanmar from the National Highways Authority of India. CLICK HERE FOR FULL REPORT
Reliance Industries hits new high
Reliance Industries (RIL) hit a new high of Rs 832.70 on BSE in early morning trade, surpassing its previous high of Rs 832.50 (adjusted to bonus shares) touched on August 3, 2017 in intra-day trade. The stock is trading ex-bonus in the ratio of 1:1 with effect from today. READ MORE
Wadia urges Sebi to take action against 3 Tata firms' directors
Nusli Wadia, chairman of the Wadia group of companies, has urged the Securities and Exchange Board of India (Sebi) to take action against three independent directors of the Tata group companies who he alleges made wrong declarations in annual reports. READ MORE
Nifty oulook by Angel Broking
The intraday trading range is getting shrunk day-by-day; indicating possibility of a breakout on either side soon. Till then traders are advised to keep concentrating on selective midcaps that are showing excellent buying interest. For the Thursday's session, 9,963-9,988 would be seen as immediate resistances; whereas, 9,882-9,861 should be considered as a key support zone.
9:23 AM Top Sensex gainers and losers
The BSE Midcap and the BSE Smallcap indices outperformed to gain nearly 1% each.
9:21 AM Markets check
At 9:20 am, the Sensex was trading at 31,782, up 120 points, while the Nifty50 was ruling at 9,957, up 41 points.
Biggest month for IPOs in 7 years
September is likely to be the biggest month for initial public offerings (IPOs) in seven years, with six deals cumulatively worth Rs 14,100 crore expected to hit the market. IPOs of Dixon Technologies and Bharat Road Network, worth Rs 600 crore each, opened on Wednesday, while that of Capacite's Infra and Matrimony.com will hit the market next week. CLICK HERE FOR GRAPHIC
9:07 AM Oil prices
Oil prices held steady on Thursday, supported by rising demand from the United States where Gulf Coast refineries are restarting in the wake of Hurricane Harvey. But three more hurricanes in the Caribbean and Atlantic were threatening more disruption.
US West Texas Intermediate (WTI) crude futures were at $49.08 barrel, 8 cents below their last settlement, but not far off their highest in more than three weeks, reached in the previous session.
Brent crude futures, the benchmark for oil prices outside the United States, dipped 9 cents to $54.11 a barrel, though still not far from May highs reached the previous day.
Stocks in news
Reliance Industries, Petronet LNG, Tata group stocks, ITC, HCL Technologies, Nestle India etc
Markets witnessed a gap-up start in pre-open trade. Nifty reclaimed its crucial 10,100 mark, while Sensex surged above 32,400.
8:59 AM Technical calls
Buy Escorts with a target of Rs 905, says Prabhudas Lilladher. CLICK HERE FOR MORE TRADING CALLS
Today's picks by Devangshu Datta
Nifty outlook and top trading ideas
Tradebulls Securities suggests buying Mahanagar Gas and ICICI Prudential Life Insurance. CLICK HERE FOR DETAILS
Fed's Vice Chair Stanley Fischer announces resignation
US Federal Reserve Vice Chair Stanley Fischer, a veteran central banker who helped set the course for modern monetary policy, said on Wednesday he will step down from his position in the middle of October. READ MORE
Wall Street update
Wall Street climbed on Wednesday, boosted by energy shares and helped by news of an agreement to extend the debt limit, as stocks bounced back from a day-earlier selloff.
The Dow Jones Industrial Average rose 54.33 points, or 0.25% to 21,807.64, the S&P 500 gained 7.69 points, or 0.31% to 2,465.54 and the Nasdaq Composite added 17.74 points, or 0.28% to 6,393.31.
Asian markets were trading higher. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3% while Japan's Nikkei rose 0.6%. Hong Kong's Hang Seng was up 0.2%, but China's Shanghai Composite bucked the trend to lose 0.3%.
8:45 AM Good Morning!
Welcome to Business Standard's market liveblog.
First Published: Thu, September 07 2017. 15:30 IST