Sensex up 273 pts; Bharti Airtel up 7%, Voda Idea dips 13% post AGR verdict

All that happened in the markets today

4:15 PM

EXPERT COMMENT:: Vinod Nair, Head of Research at Geojit Financial Services

"Indian markets exhibited heightened volatility today following the publishing of GDP data and SC ruling in the AGR case for telecom companies. Global cues were positive following Chinese factory data which indicated demand increasing. Liquidity, driven by high FII inflows in August, has provided good support for the markets, in spite of general concern regarding high valuations in some sectors and stocks. The market is expecting a slow uptick in economic activity which has resulted in stock-specific moves, where there is earnings visibility. Investors need to be prepared to handle volatility in the near term."

3:43 PM

SECTOR WATCH:: Nifty IT slips over 0.6%

3:42 PM

MARKET AT CLOSE:: Gainers and losers on the S&P BSE Sensex

3:36 PM

CLOSING BELL

The S&P BSE Sensex ended 273 points or 0.7 per cent higher at 38,901 levels while NSE's Nifty ended at 11,470, up 83 points or 0.73 per cent. 

3:26 PM

India's power output falls for sixth straight month in August, show data

India's electricity generation fell for the sixth straight month in August, provisional government data showed, driven by a slump in power use in industrial western states such as Maharashtra and Gujarat in the second half of the month. August power generation fell 0.9%, a Reuters analysis of daily load despatch data from federal grid operator POSOCO showed, slower than the 1.8% decline seen in July. READ MORE

3:19 PM

MARKET CHECK:: Top 5 losers on the BSE at this hour

3:10 PM

Videocon Industries promoters seek debt recast package from lenders

In a last ditch effort to save the company from going to liquidation, the promoters of Videocon Industries have sought a debt restructuring package which would result in banks getting back Rs 33,400 crore from the company over the next few years. The company was sent to the National Company Law Tribunal (NCLT) for debt resolution in December 2017 and has almost shut operations. READ MORE

3:01 PM

Expert View :: Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities on AGR Verdict

The AGR verdict is quite positive for Bharti Airtel as it has got 10 years to pay the spectrum charges out of which it needs to pay only 10% upfront. Bharti has already provided for Rs 47,000 cr in its books hence there should no negative impact on P&L going forward. Impact if any could be positive on any reversal of provision. As per our estimates the company should be generating healthy free cash flows from FY21 onwards and in this context annual AGR payment of Rs 4400-4700 cr should not be an issue. We remain quite optimistic on Bharti Airtel with a price target of Rs 710

The Supreme Court verdict is not as beneficial to Vodafone Idea as it is to Bharti Airtel. Vodafone was looking forward for a 20 year payment cycle which has now reduced to 10 years. Out of the total AGR dues of Rs 58,000 cr Vodafone Idea has paid only Rs 7,900 cr till now. Considering the high annual interest, depreciation and amortization cost the annual AGR dues could put further strain on the cash flows of the company. However, if there is across the board increase in tariffs by the three players then it could provide reprieve to Vodafone Idea in future.

In regards to the spectrum obligation of insolvent companies the Supreme Court has referred the matter to NCLT. In worst case there could be further liability on Reliance Jio and Bharti Airtel who have taken the spectrum from Reliance Communication, Videocon and Aircel. After the Supreme Court verdict the hangover of AGR case is removed and going forward we need to watch how telecom operators increase tariffs.

2:56 PM

Power consumption almost at normal, slump narrows to just 0.85% in Aug

The slump in overall power consumption has narrowed to just 0.85 per cent in August at 110.57 billion units (BU) amid considerable rise in economic activities and raised hopes that it would surpass normal level this month. READ MORE

2:47 PM

Future Retail hits 10% lower circuit after rallying 38% in 3 sessions

The world’s largest sovereign wealth fund The Government Pension Fund Global sold 9.5 million shares, representing 1.75 per cent stake of Future Retail at Rs 158.61 per share on the NSE, bulk deal data show. The sovereign wealth fund held 12.35 million shares, or 2.28 per cent stake in the company at the end of June, shareholding pattern data revealed. The name of the buyers was not ascertained immediately. READ MORE

2:38 PM

MARKET CHECK:: Top 5 gainers on the BSE at this hour

2:31 PM

Pricey valuation pull down P&G Hygiene stock despite strong Q4 results

Procter & Gamble Hygiene & Health Care’s (P&G Hygiene) June 2020 quarter (Q4) results surprised the Street with strong profits, despite Covid-led disruptions. Yet, the stock has shed 1.2 per cent since the result was announced on Tuesday last week. READ MORE

2:16 PM

Voda Idea in danger of becoming a 'zombie' telco; may just about survive

The Supreme Court order brings some clarity to the telecom sector. The telcos will have to pay their AGR dues over a period of 10 years with the payment being made every February. The stock market reaction so far has been positive in terms of the Bharti Airtel stock rising, and negative for the Vodafone Idea stock, which has fallen sharply. READ MORE

2:07 PM

Rupee Closing

Rupee ends stronger at 72.86 per US dollar vs Monday's close of 73.61/$

1:59 PM

Decoded: Why Sebi's new margin pledge norms have rattled brokerages

Many are expecting the trading volumes to come down in the cash segment. This has less to do with the new pledging system and more to do with the new margin norms. Under the new margin norms, Sebi has virtually put an end to excessive leverage trades. The regulator has directed brokers to collect higher margins from their client. READ MORE

1:50 PM

NEWS ALERT :: PNC Infratech signs concession agreement for a HAM project worth Rs 1,412 cr with NHAI

1:46 PM

HAL extends decline after govt's 15% stake sale; stock tanks 26% in 4 days

Shares of Hindustan Aeronautics (HAL) were under pressure for the fourth straight day, down 6 per cent to Rs 871 on the BSE in the intra-day trade on Tuesday after the government sold nearly 15 per cent stake in the aerospace and defence company through a public offering of shares (OFS). READ MORE 

1:39 PM

AUGUST AUTO SALES | Eicher Motors total Royal Enfield sales down 5% YoY at 50,144 units

1:37 PM

IDFC First, IndusInd Bank: AGR verdict will not dent earnings, say experts

The Supreme Court on Tuesday allowed Vodafone Idea and Bharti Airtel 10 years time to pay their outstanding adjusted gross revenue (AGR) dues, starting April 2021. The apex court asked telcos to pay 10 per cent of their dues as "upfront payment" by March 31, 2021. Remaining instalments will need to be paid on February 7 every year. READ MORE

1:27 PM

SC to decide on extending moratorium on repayment of loans tomorrow

The Centre and the Reserve Bank of India informed the Supreme Court on Tuesday that the moratorium on repayment of loans is extendable to two years in certain conditions, and that the sectors most distressed by the economic slowdown are being identified. "We are in the process of identifying the distressed sectors to vary benefits as per the impact of the hit they have taken,” the Solicitor General Tushar Mehta told the three-judge bench, headed by Justice Ashok Bhushan. READ MORE

1:13 PM

Expert View :: V K Vijaya Kumar, Chief Investment Strategist at Geojit Financial Services on AGR Verdict

The SC verdict giving a ten year time frame for payment of AGR dues with 10 percent upfront payment can be regarded as reasonably fair.  Since the SC has not said anything about the dues of R Com, Aircel and Videocon, this is certainly very positive for Reliance Jio and Bharti Airtel.  However, the 10-year time frame puts a question mark on the survival of Vodafone. Indian telecom industry moving to a virtual duopoly is not a desirable development. 

 

For the stock market the verdict is mixed. Since it is positive for Bharti and RIL these two heavy weight stocks are likely to remain resilient, supporting the markets. Vodafone’s woes, apart from impacting the stock, will also impact the stocks of banks which have lent to Vodafone

1:12 PM

AUGUST AUTO SALES | Ashok Leyland reports total sales of 6,325 units, down 31% YoY

-- Domestic sales at 5,824 units, down 30% YoY

-- M&HCV sales dip 52% YoY to 2,589 units

1:05 PM

STOCK UPDATE:: Bharti Infratel erases day's losses

12:56 PM

MARKET UPDATE:: Sensex at day's high

12:45 PM

AUGUST AUTO SALES | M&M reports auto segment sales of 30,426 units, down 16% YoY

-- M&M's August tractor sales at 24,458 units, up 65% YoY

12:40 PM

Voda Idea slips 25% from day's high; Airtel up 6% post SC AGR verdict

Shares of Vodafone Idea (VIL) slipped 20 per cent to Rs 8.16, down 25 per cent from intra-day’s high of Rs 10.95 on the BSE after the Supreme Court (SC) allowed 10 years for staggered payment of adjusted gross revenue (AGR) dues. The stock trades in the futures & option (F&O) segment, which has no circuit limits.At 12:11 pm, it was trading 18 per cent lower at Rs 8.39, as compared to 0.80 per cent rise in the S&P BSE Sensex. READ MORE

12:30 PM

Voda Idea, Bharti Airtel: Strategies for telecom stocks post AGR verdict

BSE Telecom Index: Until the telecom index does not conquer its first resistance levels of 1,270 levels, the upside is capped. The daily chart shows a “Lower high, lower low” formation, which reflects a sell on rise strategy. The next resistance is 1,310 for the index and looks difficult to cross as things stand. Over the next few sessions, there are chances that the index may drift towards 1,170 levels as the overall sentiment in the telecom sector remains subdued. READ MORE

12:25 PM

SC gives telcos 10 yrs to clear AGR dues, NCLT to decide on spectrum sale

The Supreme Court in its judgment in the matter of adjusted gross revenue allowed telcos to pay their outstanding dues in 10 years. Telcos can pay 10 per cent of their dues by March 31, 2021, and the remaning instalments by 7 February every year. Any default will accrue interest and non-payment will also invite contempt of court proceedings, said the SC in its verdict. The companies have been ordered to keep adjusting bank guarantees alive till the time the payment is made. READ MORE

12:18 PM

Heatmap: S&P BSE Sensex gainers and losers at this hour

12:17 PM

BROKERAGE VIEW:: HDFC Securities on Banks

While non-food credit growth sustained at 6.7% YoY (6.7% in June), its drivers changed significantly. Industrial credit growth slowed to 0.8% YoY, from 2.2% in June, and personal loan growth increased to 11.2% YoY (vs. 10.5% YoY in June). Service credit growth dipped 60bps from June levels to 10.1% YoY. Agri credit growth improved 300bps MoM to 5.4% YoY. The slight increase in personal loan growth and sustenance of the pace of service credit growth are promising, but it remains to be seen whether these trends are sustainable, especially after repayments/ collections increase as the moratorium ends.