MARKETS ON THURSDAY: Nifty ends at 10,717, Midcaps slip; Realty stocks hit

The S&P BSE Sensex ended at 35,246, down 73 points. Realty stocks were among the top losers, followed by pharma scrips.

3:38 PM

Sectoral losers of the day

3:36 PM

BSE Sensex: ONGC, Bharti Airtel among top gainers of the day, Dr. Reddy top loser

3:34 PM

Market at close

 

The S&P BSE Sensex ended at 35,246, down 73 points while the broader Nifty50 index settled at 10,717, down 25 points.

3:20 PM

Edelweiss on Mahindra Holidays

Mahindra Holidays & Resorts’ (MHRL) Q4FY18 performance surpassed our estimate—member addition flat at ~6,300 (estimate 4,990) and EBITDA beat on cost optimisation. Another key highlight was improvement in Holiday Club Resorts (HCR)—PAT jumped ~3x to EUR7.4mn.

The company’s overall cash balance also continued to improve. In FY18, MHRL focused on quality member addition and cash accumulation, which impacted member addition growth (down 2%). Going forward, given the underpenetration in vacation ownership segment, we estimate member growth to bounce back, which will be key monitorable. We value the standalone business on DCF basis leading to target price of Rs 429. Maintain ‘BUY

3:09 PM

MARKET CHECK

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,260.16	-59.19	-0.17
S&P BSE SENSEX 50	11,223.05	-18.58	-0.17
S&P BSE SENSEX Next 50	33,298.95	-538.93	-1.59
S&P BSE 100	11,055.31	-42.81	-0.39
S&P BSE Bharat 22 Index	3,582.90	-21.97	-0.61

(Source: BSE)

3:08 PM

COMMODITY INSIGHT: OIL

Given the current environment, we could experience volatility in the oil market in the near term. We are in a situation where geopolitical premium is overshadowing the fundamentals of crude oil and driving prices higher. The extent to which U.S. sanctions would impact Iranian oil exports remains to be seen.

Although the markets were expecting such an action and had been factoring the same into oil prices, more upside from current levels cannot be ruled out. Over the medium term WTI crude oil could find support at $67-65 range and could extend the current rally towards 74-76 zone.

(Source: Motial Oswal report)

2:51 PM

Prabhudas Lilladher on ABB

ABB continues to focus on introduction of new products and tailor the technology to meet Indian requirement. ABB also continue to collaborate with customers, deploy solutions from digital portfolio and support the new era of growth through smarter, greener grids, electrification of transport and digitalizing industries for greater efficiency and productivity. We expect stock to deliver 20% earnings CAGR over CY16‐19E. We maintain ‘Accumulate with target price of Rs1,533

2:47 PM

MARKET COMMENT

India Ratings and Research (Ind-Ra) believes India’s trade deficit will widen to a four-year high of 6.4% of GDP in FY19 ($178.1 billion). In FY18, merchandise trade deficit stood at $156.8 billion (6.0% of GDP) on account of a rise in oil and gold imports. Widening trade deficit, escalation in commodity prices, particularly oil, coupled with the expectation of the US Federal Reserve raising its rate further, is exerting pressure on the rupee. Even other emerging market currencies are facing headwinds. Rupee has depreciated below 67/USD mark in May 2018 from the high of Rs 63.35/USD in January 2018

2:46 PM

MARKET COMMENT Gautam Chhaochharia, head of India research at UBS Securities

Rural-exposed stocks should continue to do well, irrespective of whether the rural/agri tilt is real or just rhetoric. Any major populism/stimulus would likely drive bond yields higher and possibly hurt the currency. We remain neutral on SOE banks. Our end-2018 Nifty base/ upside/downside scenarios of 10,500/11,900/8,800 imply an unattractive risk-reward for the market overall

Gautam Chhaochharia Head of India research, UBS Securities

2:31 PM

Walmart has a lot riding on Flipkart

For most, $16 billion might seem like a huge amount, but for Bentonville-based Walmart Inc it is a small price to pay as it looks to take on global e-commerce giant Amazon, which is now making rapid moves in offline retail.

 

For the money it is spending on acquiring a 77 per cent stake in Bengaluru-based online marketplace firm Flipkart, Walmart hopes to finally prop up a formidable opponent against the Jeff Bezos-run juggernaut that is out to create a one-stop solution for possibly every problem in the world. READ MORE

2:13 PM

BJP's spending analysis: Not populist in the election year

How does one judge the performance of the government amid the clamour of paid reports, favoured opinions, generation bias, media management, and political fights? An unbiased approach, free from even personal opinions, is important. I choose data analysis precisely for this reason – data does not lie, and data is impartial. I have examined the government’s spending, both centre and state, on various sectors for the last five years in order to gauge its performance. READ MORE

1:59 PM

Market Check

 

S&P BSE Sensex	35,344.82		0.07%
Nifty 50	10,731.25		-0.10%
S&P BSE 200	4,675.38		-0.27%
Nifty 500	9,378.20		-0.43%
S&P BSE Mid-Cap	16,330.90		-1.21%
S&P BSE Small-Cap	17,899.25		-1.03%

1:49 PM

Analysis: Starbucks deal gives Nestle more punch in fight with JAB

Nestle's $7 billion licensing deal for Starbucks' retail business gives it a much-needed boost in its battle against JAB, the privately owned investment firm stirring up the coffee industry with a string of deals.

JAB, the family office of Europe's billionaire Reimann clan, has built up the world's second-largest coffee business over the past five years. READ MORE

1:32 PM

Asian Oilfield tanks 20% as unit gets termination notice from Koral Energy

Shares of Asian Oilfield Services are locked in lower circuit of 20% at Rs 134 per share, also their 52-week low on the BSE, after the company said that its unit Asian Oilfield & Energy Services DMCC allegedly got termination notice from Koral Energy International. READ MORE

1:16 PM

Gold little changed amid firm dollar; Iran tensions support

Gold traded sideways in a tight range on Thursday as the dollar held firm near its 2018 peak on strong US bond yields, with investors also keeping an eye out for any further impact from US President Donald Trump's decision to pull out of a nuclear deal with Iran. Spot gold was nearly unchanged at $1,311.82 per ounce. READ MORE

1:00 PM

Jindal Steel & Power falls 8% on profit booking post Q4 results

Shares of Jindal Steel & Power (JSPL) have declined 8% to Rs 241 per share on the BSE in noon deal trade on profit booking after the company reported a consolidated net loss of Rs 4.26 billion for the last quarter of financial year 2017-2018 (Q4FY18). This is over four times the net loss of Rs 983 million reported by the company in the corresponding quarter of financial year 2016-2017 (Q4FY17). READ MORE

12:43 PM

MANAGEMENT SPEAK We are on a good wicket; have home-grown advantage: MD, Sundram Fasteners

81-year-old Suresh Krishna recently stepped down as the Managing Director of Sundram Fasteners, part of $7.5 billion TVS Group, paving way for his two daughters Arathi Krishna and Arundathi Krishna, as MD and JMD respectively, to take over the day-to-day affairs of the Rs 39 billion auto components major.

 

In their first interview, the sisters spoke to Gireesh Babu and T E Narasimhan of Business Standard about their vision and strategy. READ MORE

12:36 PM

ICICI Securities on Federal Bank

We believe federal Bank is headed in the right direction with focus on building retail business (planning to launch retail unsecured and CV) and improving CASA ratio. During the past few years, it has invested heavily on technology and people, which we believe should give positive results in coming years in terms of higher-than-industry growth and improved core fee income. We maintain BUY with revised target price of Rs140 valuing the stock at 2.0x FY20E BV.

12:35 PM

ICICI Securities on ABB India

Strong order book provides growth visibility and base order traction is expected to continue driven by F&B, cement, steel and state utilities. Hence, we maintain ADD rating with a revised target price of Rs1,378 (Rs1,362 earlier).

12:34 PM

Anand Rathi on Phillips Carbon Black

Carbon black volume growth will be largely in line with the tyre industry growth, ie ~8-10%. In specialty carbon, the company has increased capacity to ~24,000 tons and expects to raise that to 56.000 by end-FY19. This should help it generate sales of up to ~27,000 tons in FY19. We expect specialty carbon volumes to grow further in FY20, to ~45,000-50,000 tons.

The greater revenue from specialty carbon will allow the company to reduce the cyclical nature of its profitability. We expect earnings to clock a 44.5% CAGR over FY18-20. We maintain a Buy with a revised target of Rs 407 (10x EV/EBITDA – FY20e)

12:32 PM

Realty stocks trade weak

12:30 PM

Pension funds are fleeing emerging markets: Mark Mobius

You wouldn’t expect pension funds to sell in a hurry. But that’s exactly what they’re doing now in emerging markets, according to Mark Mobius. Patient as they are, pension funds are also famously risk-averse, said the 81-year old investor who set up Mobius Capital Partners LLP after leaving Franklin Templeton Investments this year. That’s pushed them to cut risk all around, selling in both developed and developing countries, he said in a phone interview. READ MORE

12:13 PM

High base effect catching up with Eicher

Eicher Motors’ March 2018 quarter (Q4) results were largely on expected lines, except for a one-time loss of Rs 1.9 billion due to closure of its joint venture, Eicher Polaris. Thus, consolidated net profit came flat year-on-year (y-o-y) at Rs 4.62 billion.

 

However, excluding the loss, net profit surged 38 per cent y-o-y in Q4, a tad ahead of estimates, supported by a 53 per cent jump in profit of VE Commercial Vehicle (VECV), a joint venture of Eicher with the Volvo Group. READ MORE

12:01 PM

Market Check

 

S&P BSE Sensex	35,375.07		0.16%
Nifty 50	10,747.25		0.05%
S&P BSE 200	4,683.11		-0.11%
Nifty 500	9,401.15		-0.19%
S&P BSE Mid-Cap	16,394.17		-0.82%
S&P BSE Small-Cap	17,989.85		-0.53%

11:45 AM

Ambuja Cements hits 52-week low, falls 11% so far in May

Shares of Ambuja Cements hit a 52-week low of Rs 222 per share, down 1%, falling 11% thus far in the month of May in otherwise firm market. The S&P BSE Sensex was up nearly 1% so far in the current month.
 

In past one week, the stock declined 7% after the company reported lower than expected 3% year on year (YoY) volume growth in March quarter (Q1CY18) against industry volume growth at 8% YoY. READ MORE

11:32 AM

Lights turn dimmer at JSW Energy

The JSW Energy stock has given up most of the 19 per cent gains it saw from the March low, following a weak March quarter (Q4) performance and worry over a surge in capital expenditure (capex). Earlier, a spurt in merchant power demand and rates had boosted sentiment on the power producer, which sells a large chunk of its output in the short-term market.

 

In Q4, as rising energy costs affected profit, low utilisation (plant load factor or PLF) has brought back focus on unused capacity. This is leading to uncertainty on earnings, and keeping analysts bearish on the stock. READ MORE

11:17 AM

Future group shares in focus; Future Consumer surges 9%

Shares of Kishore Biyani-led Future Group companies have rallied by up to 9% after the world's biggest retail company Walmart Inc sealed a deal worth $16 billion for a majority of stake of 77% in India's e-commerce giant Flipkart on Wednesday. Future Consumer has surged 9% to Rs 61.95 on the BSE on back of three-fold jump in trading volumes. READ MORE

11:05 AM

Nalco to cut aluminium cost by 25% after Utkal D block becomes operational

State-owned National Aluminium Company (Nalco), which made windfall gains from booming metal prices at LME, is looking to improve its profitability further after a captive coal block allotted to it starts operation shortly.

 

With energy cost accounting for 40 per cent of the aluminium production cost, use of coal from captive mine is estimated to cut costs by a whopping 25 per cent with savings of $500 around Rs 35,000) per tonne of aluminium churned out at Nalco’s 0.46 million tonne smelter at Angul. READ MORE

10:50 AM

Share of MF assets under direct plans drops for the first time since 2013

The proportion of mutual fund (MF) assets held under direct plans dropped at the end of 2017-18 for the first time since 2013, when the mandatory direct category was introduced.

 

Data from MF tracker Value Research reveals the share of direct assets, up from 15 per cent to 40 per cent between FY13 and FY 17, had dropped to above 38 per cent. READ MORE

10:38 AM

Federal Bank plunges 10% on weak Q4 results

Federal Bank has plunged 10% to Rs 90.65 on the BSE in early morning trade, after the private sector lender reported weak set of numbers with assets quality worsens in March 2018 quarter (Q4FY18). The stock was trading close to its 52-week low of Rs 87.50 touched on February 6, 2018 on the BSE in intra-day trade.
 

The bank’s net profit during the quarter under review fell by 43.5% to Rs 1.44 billion on higher provisioning for bad loans. It had posted a net profit of Rs 2.56 billion for quarter ended March 2017 (Q4FY17). READ MORE