MARKETS ON MONDAY: Sensex ends 162 pts up, Nifty at 10,379 on Asian cues

All that happened in the markets today.

4:30 PM

MARKET COMMENT

With a broader view, we would reiterate that worse is not over yet for our markets. What we saw on Monday was just a relief rally and hence, one needs to keep booking timely profits and ideally should stay light on positions

(Source: Angel Broking)

3:50 PM

Allegations against ICICI Bank pose reputational risks: Fitch

An investigation into allegations that India's ICICI Bank (BBB-/Stable/bbb-) extended a loan with a potential conflict of interest raises questions over the bank's governance and creates reputational risks, says Fitch Ratings. Other regulatory sanctions are also possible, depending on the outcome of the investigation.

 

The allegation relates to a $500 million loan to Videocon Group, whose controlling shareholder co-founded a separate company with the spouse of ICICI's CEO. A significant portion of the loan has since become non-performing. ICICI's board has denied any wrongdoing, highlighting that the loan was underwritten in accordance with the bank's credit standards and was extended as part of a consortium involving over 20 banks.

The bank has stressed that it has not given any credit to the borrower group outside of the consortium. Nevertheless, the presence of the bank's CEO on this credit committee - and the bank's reluctance to support an independent probe - have, in our opinion, created doubts over the strength of its corporate governance practices. 

(Source: Fitch release)

3:40 PM

Top gainers in Nifty Bank index:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
AXIS BANK	517.40	500.20	17.20	3.44
PUNJAB NATL.BANK	105.10	102.15	2.95	2.89
FEDERAL BANK	99.50	97.25	2.25	2.31
INDUSIND BANK	1860.10	1824.15	35.95	1.97
BANK OF BARODA	153.25	150.40	2.85	1.89

3:39 PM

Top gainers in the Nifty FMCG index:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
MARICO	327.35	320.65	6.70	2.09
ITC	265.50	260.85	4.65	1.78
TATA GLOBAL	277.25	272.70	4.55	1.67
HIND. UNILEVER	1391.00	1374.80	16.20	1.18
JUBILANT FOOD.	2449.35	2430.35	19.00	0.78

3:37 PM

Sectoral Trend

3:35 PM

BSE Sensex: top gainers and losers of the day

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 33,788, up 162 points while the broader Nifty50 index settled at 10,379, up 48 points.

3:20 PM

NEWS WATCH RInfra wins Rs 1,081 cr contract for Kudankulam Nuclear Power Proj

Reliance Infrastructure Ltd (RInfra) today said it has won a Rs 1,081 crore contract from Nuclear Power Corporation of India Ltd (NPCIL) for works pertaining to two units of the Kudankulam project in Tamil Nadu. The company said its engineering, procurement and construction (EPC) division has won the contract amidst competition from leading players like BHEL, Larsen & Toubro, Tata Projects and BGR. READ MORE

RInfra stock quote:

2:59 PM

Tata Motors reclaims top spot in light commercial vehicles after two years

The previous financial year (FY18) belonged to Tata Motors in more ways than one. The country’s biggest commercial vehicle maker reclaimed leadership position in the light commercial vehicle (LCV) space from rival M&M after a gap of two years. Besides, the Mumbai-headquartered company also overtook Japanese car maker Honda to occupy the fourth spot in the domestic passenger vehicle market. READ MORE

2:58 PM

ICICI board is said to be divided over CEO Chanda Kochhar's future

The board of India’s ICICI Bank Ltd., which less than two weeks earlier expressed full faith in Chief Executive Officer Chanda Kochhar, is divided over whether to ask her to step down as federal authorities investigate allegations of impropriety over loans made to Videocon group, people with knowledge of the matter said. READ THE FULL ARTICLE HERE

2:57 PM

MOST ACTIVE STOCKS IN BSE 500 BY VOLUME

COMPANY NAME	LATEST	CHG ( )	CHG(%)	VALUE (  CR)	VOLUME
ICICI BANK	282.20	1.60	0.57	865.71	30677222
IDBI BANK	73.65	0.55	0.75	45.69	6204134
REL. COMM.	24.00	-0.35	-1.44	11.92	4965597
JP ASSOCIATES	20.50	0.05	0.24	9.47	4620748
PUNJAB NATL.BANK	104.40	2.40	2.35	35.22	3373227
GMR INFRA.	20.55	0.40	1.99	5.51	2681292

2:54 PM

Morgan Stanley on Titan Company

We forecast 15% revenue growth and 42% EBIT growth for jewellery. Based on our estimates, Titan will report F18 revenue growth of 25%, which underscores our view on rapid market share gains for Titan's jewellery business from the unorganized jewellery segment. The watch segment is likely to report 10% revenue growth and 5x EBIT growth off a weak base. Overall, we estimate revenue, operating profit,and adjusted net profit growth of 16%, 63%,and 55%, respectively, for Titan in 4QF18.

2:36 PM

Company Update: Finolex Cables

We recently met the top brass of Finolex Cables (FCL). Key takeaways include: 1) FCL posted lower revenue growth versus peers in past two-three years, largely owing to weak housing demand where the company has major (~60% of revenues) presence compared to peer-set; 2) management seemed upbeat on communication cables segment (we estimate the unit to log ~25% CAGR over FY17-20) given burgeoning demand for optic fiber cables (to lay 35-40mn km annually over next two-three years) as India remains highly under fiberised (~40-45%) to meet the complete 4G roll out; and 3) with FCL’s new PVC switches unit coming up at Goa, it is targeting INR2bn revenues from fans and switchgears by FY20. Notwithstanding the real estate slow-down, we expect 15%/20% earnings/OCF growth over FY17-20 on strong growth in non-housing segments. We maintain ‘BUY’ with TP of Rs 800, based on 25x FY20E PE

(Source: Edelweiss Research)

2:31 PM

TOP CONTRIBUTORS TO SENSEX'S GAIN

COMPANY	LATEST	CHG(RS)	CHG(%)	CONTRIBUTION (POINTS)
ITC	265.40	4.80	1.84	59.04
HDFC BANK	1938.80	16.10	0.84	48.46
AXIS BANK	518.70	18.00	3.59	45.91
H D F C	1842.70	13.10	0.72	31.67
LARSEN & TOUBRO	1327.70	16.60	1.27	23.67

2:29 PM

FY18 fiscal deficit to be below revised target as govt gets RBI, FCI boost

The government’s fiscal deficit at the end of March 2018 may have been slightly below its 2017-18 revised estimate of Rs 5.95 trillion, clawing back from a Rs 1.2-trillion overshoot at the end of February, Business Standard has learnt.

 

This was achieved partly as the Reserve Bank of India (RBI) transferred an additional Rs 100 billion in surplus to the central coffers, and the Food Corporation of India (FCI) returned nearly Rs 500 billion in allocation to the finance ministry 

2:28 PM

MARKET COMMENT Motilal Oswal Research

As we step into FY19, the clamor for an earnings recovery has become louder. This is particularly because the last three years were characterized by a muted earnings performance due to macro disruptions and several policy changes pertaining to asset quality in the banking sector. Although we expect Nifty earnings to grow by a decent 11% in FY18, it is much below our FY18-beginning estimate of +17% – this can be mainly attributed to the drag from corporate banks (ICICI Bank, Axis Bank and SBI, which together accounted for 62% of the cut in Nifty PAT estimate in a span of a year). 

 

Overall, we expect FY19 to kick-start earnings recovery for India, although the market is likely to be distracted by several macro factors along the way, such as the ongoing global trade conflict, the US Fed rate increase cycle, domestic equity flows and, last but not the least, the domestic political developments in an election-heavy year. Although the path to earning revival is more like a game of snakes-and-ladders than a straight line, we expect more encouraging ladders than slippery snakes in FY19. Also, after the recent correction in the markets and the softening of bond yields, we believe valuations offer enough bottom-up stock-picking opportunities.

2:26 PM

Sharekhan on Pharmaceuticals

We anticipate a weak quarter for pharma companies owing to continuing regulatory and pricing challenges in the US and 4% rupee appreciation. US business will continue to remain under pressure as increased competition and sustained pricing challenges will impact growth. Within our coverage universe, we prefer Aurobindo Pharma, Cadila, Cipla, and Biocon as investment options

2:24 PM

MARKET COMMENT (Sharekhan)

The consensus earnings estimates are factoring a 20% plus annual growth rate in Sensex earnings over FY2018 to FY2020. Though the revision in earnings of some banks and other adjustment could lead to some downward revision in estimates going forward, the healthy growth in earnings would definitely support equity markets.
 

More importantly from an investor’s perspective, the year ahead would be more of a stock picker’s market rather than an all out rally as seen in 2017. Thus, one needs to carefully select quality companies with specific growth stories. We, at Sharekhan, have a track record of giving quality research ideas along with outperforming research-based investment products designed for investors with varied risk profiles and needs.

2:21 PM

Global IT Spending to Grow 6.2% in 2018: Gartner

Worldwide IT Spending Forecast (USD billion)

	2017 Spending	2017 Growth (%)	2018 Spending	2018 Growth (%)	2019 Spending	2019 Growth (%)
Data Center Systems	181	6.3	188	3.7	190	1.1
Enterprise Software	352	8.8	391	11.1	424	8.4
Devices	663	5.1	706	6.6	715	1.3
IT Services	933	4.4	1,003	7.4	1,048	4.6
Communications Services	1,392	1.3	1,452	4.3	1,468	1.1
Overall IT	3,521	3.8	3,740	6.2	3,846	2.8

Source: Gartner (April 2018)

2:18 PM

CALL SUCCESS & UPDATE: Dilip Buildcon Ltd

 

Reco Price (Rs) 983, Previous Target (Rs) 1,193, Return Achieved 21%, New Target (Rs) 1,294, Expected Return 10%

 

We had reiterated a BUY on Dilip Buildcon Ltd (DBL) and upgraded our target to Rs.1,193 in our sector report dated November 29, 2017. The target has been achieved in Friday’s trading session with the stock delivering a return of ~21% from our sector report and generating a cumulative return of ~91% from our initiating coverage report dated October 05, 2017.

The outlook continues to remain bright as the company has received massive orders of ~Rs.190 bn in the past two months, and has more than doubled its order book to ~Rs.320 bn as of FY18 end. The order pipeline continues to remain strong with large number of projects likely to be awarded by the Government under the recently announced Bharatmala programme. We remain bullish on DBL’s growth prospects and recommend investors to HOLD the stock for revised target of Rs.1,294

(Source: IIFL)

2:17 PM

Sector watch Cement

Even as demand for cement  has picked up from Q3 FY2018 and the trend is expected to continue in Q4 FY2018, with the  growth  expected at around 5% in FY2018 and FY2019, expectation of higher petcoke, coal and diesel prices are likely to put pressure on the profitability margins and debt metrics of the cement companies in the coming quarters.

(Source: ICRA)

2:12 PM

NEWS IMPACT

State-run Bharat Petroleum Corporation Ltd (BPCL) is planning to hive off its gas business into a separate wholly-owned subsidiary, reports Mint. By hiving off this business as a separate subsidiary, the company intends to sharpen its focus and bring all natural gas-related businesses into one fold, the report says.

BPCL stock quote:

2:00 PM

Market Check

 

S&P BSE Sensex	33,813.15		0.55%
Nifty 50	10,383.35		0.50%
S&P BSE 200	4,572.85		0.48%
Nifty 500	9,206.15		0.37%
S&P BSE Mid-Cap	16,630.96		0.21%
S&P BSE Small-Cap	17,948.58		0.37%

1:44 PM

Nitesh Estates advances after dispute settlement

Nitesh Estates rose 1.38% to Rs 12.50 on BSE after the company said that it has settled the dispute in respect of the lease rights of land situated at Chennai. The announcement was made after market hours on Friday, 6 April 2018. READ MORE

1:30 PM

IndusInd Bank, Escorts, Shakti Pumps among 18 stocks that hit new highs

The private sector lenders, IndusInd Bank, Kotak Mahindra Bank and Shiram Transport Finance, the consumer discretionary goods & services sector companies such as Avenue Supermarts (owner of D-Mart), Jubilant FoodWorks, Titan Company and Britannia Industries were among 18 stocks that hit their respective new highs on the BSE on Monday. Century Plyboards, Dilip Buildcon, Apollo Tyres, Escorts, Excel Industries, HIL, KEI Industries, Pidilite Industries, Power Mech Projects, Shakti Pumps (India) and SRF too hit record highs in intra-day trade today. READ MORE

1:15 PM

Geojit on NATCO Pharma

NATCO Pharma (NATCO) is a R&D focussed, vertically integrated pharmaceutical company with an experienced management team and presence across multiple speciality therapeutic segments. We expect EBITDA margin to remain stable at 40% over FY18-20E led by new launches in US & India and improvement in operational efficiency.
 

Consolidated Revenue/PAT to grow at 17%/13% CAGR over FY18 - 20E led by prime molecules such as Tamiflu, Copaxone, Doxorubicin and Lanthanum and better growth in domestic market. We value Natco at 19x on FY20E EPS and arrive at a target price of Rs 908 and recommend ‘Buy’ rating.

1:00 PM

Infosys Q4FY18 results: Here's what leading brokerages expect

Infosys is set to announce its fourth-quarter numbers on April 13. On a year-to-date basis, the stock has rallied around 10 per cent and has outperformed the Nifty IT index that gained around 9 per cent during this period. By comparison, the Nifty50 index slipped around 2 per cent YTD.

 

Analysts expect information technology (IT) firms to report an improvement in earnings before interest and taxes (EBIT) margins in Q4FY18, aided by currency, operational efficiency and automation. Key monitorables for the Street include FY19E revenue guidance/outlook, along with sustainable margin trends. For Infosys, analysts are also keeping a tab on the strategy roadmap by the new chief executive (CEO), Salil Parekh. READ MORE

12:47 PM

Dubai-based firm issues gold-backed cryptocurrency to draw Muslim investors

In Dubai's decades-old Gold Souk, customers from around the world haggle over bangles and necklaces. Elsewhere in the emirate, the region's top centre for gold trade, bullion is playing a new role in financial engineering.

 

A local start-up company founded last year, OneGram, is issuing a gold-backed cryptocurrency - part of efforts to convince Muslims that investing in cryptocurrencies complies with their faith. READ MORE

12:32 PM

Apollo Tyres stock: Higher volume, steady raw material prices are positives

Apollo Tyres has hit fresh 52-week highs over the last week, gaining six per cent on expectations of improvement in profitability in the coming quarters, led by steady rubber prices, improving volume growth and anti-dumping duty on the truck and bus radial (TBR) segment tyres.

 

Further, stabilisation in its Hungarian operations and gradual increase in contribution from the OEM (original equipment manufacturer) segment would likely to push its profitability further. READ MORE

12:19 PM

COMMODITY WATCH: Gold

The underlying commodity repeatedly tagging upper Bollinger band signals a possibility of a sharp upside momentum in coming months (possible widening of bands by resumption of spurt in upside volatility). Hence, there is a higher possibility of upside breakout in the Gold prices.

MCX Gold Fut is moving within an upward sloping channel (orange parallel trend lines), and also facing resistance at down sloping intermediate trend line ~31,000-31,100 levels (blue dashed down trend line, connecting previous tops)

(Source: HDFC Securities)