MARKET WRAP: Indices gain for 3rd straight session; IT stocks underperform

Benchmark indices gained on Monday as a sharp drop in crude prices and a recovery in the rupee boosted sentiment

3:45 PM

Sun Pharma ends 6.55% up on NSE

3:42 PM

Nifty IT index ends 1.92% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
TECH MAHINDRA	675.25	702.75	-27.50	-3.91
HCL TECHNOLOGIES	894.50	916.00	-21.50	-2.35
TCS	3502.05	3585.80	-83.75	-2.34
TATA ELXSI	1208.30	1232.70	-24.40	-1.98
MINDTREE	1011.45	1023.60	-12.15	-1.19

3:38 PM

Nifty sectoral performers

3:36 PM

BSE Sensex: Sun Pharma gains 6.42% during the day, Power Grid, TCS among top losers

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 35,165, up 241 points while the broader Nifty50 index settled at 10,689, up 84 points.

3:28 PM

Nandan Denim, Lovable Lingerie fall over 10% on weak Q4 result

Shares of Nandan Denim and Lovable Lingerie have plunged over 10% in otherwise strong market after these companies reported a weak set of numbers for the quarter ended March 2018 (Q4FY18). READ MORE
 

3:12 PM

EARNINGS NTPC Q4 profit jumps 46%, beats estimates

 

NTPC reported a 46% jump in fourth-quarter profit on Monday, marginally beating analysts’ estimates.

 

Profit after tax from continuing operations was Rs 26.26 billion ($389.59 million) in the three months ended March 31, compared with Rs 17.95 billion a year earlier, the state-controlled company said.

3:00 PM

Fortis Healthcare gets approval from Hero-Burman to re-open bidding

 

Fortis Healthcare rose 1% on Monday after it said the consortium of Hero Enterprise Investment Office and Burman Family Office, which won a five-way bidding war for the Indian firm, has permitted re-opening the bidding process, amid shareholder concerns over the board’s choice of the underdog. READ MORE

2:46 PM

PSBs extend rally; Nifty PSU bank surges 13% in six days

Shares of public sector banks (PSBs) were trading higher for the sixth straight trading days with Nifty PSU Bank gaining more than 10% during the period on the back of expectations of an improvement in the asset quality going ahead. READ MORE
 

2:32 PM

So far so bad: Vedanta slid 25% this year, and then Thoothukudi hit

A troubled 2018 so far for billionaire Anil Agarwal’s Vedanta Ltd. may get worse amid concern that its key copper smelter in southern India could remain shut until 2019, further pressuring a stock that’s down 25 percent since the start of the year. READ MORE

2:16 PM

Just Dial zooms over 50% in one week post stellar Q4 results

Just Dial has rallied 23% to Rs 625, extending its past four day’s gain of over 20% on the BSE, after the company reported 53.6% year on year growth in its net profit at Rs 390 million in March 2018 quarter (Q4FY18). The operational revenue during the quarter under review grew 10% at Rs 2,005 million over the previous year quarter. READ MORE
 

2:02 PM

Market Check

S&P BSE Sensex	35,181.14		0.73%
Nifty 50	10,692.85		0.83%
S&P BSE 200	4,648.50		0.92%
Nifty 500	9,305.55		0.98%
S&P BSE Mid-Cap	16,107.24		1.28%
S&P BSE Small-Cap	17,397.57		1.44%

1:43 PM

Equirus on Triveni Turbine

Triveni Turbine (TRIV) delivered flat sales growth (+1%) yoy for FY18 while margins remained under pressure due to a higher share of domestic revenues. Order inflows rose 17% in FY18 to Rs 8.3bn, leading to a strong closing order book of Rs 7.1bn with a higher share of exports at ~48%. Domestic market declined by ~2% in FY18 even as enquiries improved. We expect the domestic market to remain under pressure in the near term while growth to be led by exports in FY19E/FY20E. With a healthy FY18 closing order book and a strong enquiries pipeline, we upgrade the stock to LONG

(from ADD) with a Mar’19 TP of Rs 129 (Rs 134 earlier) set at 35x TTM EPS.

1:32 PM

Edelweiss on Capacit’e Infraprojects

Capacit’e Infraprojects (Capacit’e) has etched a name for itself as a quality contractor in the buildings space since its inception in August 2012; today, it is working with almost all major real estate developers in the country. We believe it is in a sweet spot, due to: (1) RERA driven consolidation in the realty space; (2) improving work profile; (3) ability to bag repeat orders; and (4) better balance sheet (negative net debt) & leaner working capital cycle (~75 days) versus peers.

We expect robust order book (book-to-bill at 4.3x) and likely diversification into public sector space to translate into 31% EPS CAGR over FY18-20, along with improvement in return ratios. Initiate coverage with ‘BUY’ and target price of Rs 397.

1:31 PM

Rating action

ICRA has downgraded the long-term rating outstanding on the Rs. 2000.0 crore  NCD programme and Rs.490 crore term loans of IL&FS Transportation Networks Limited (ITNL)  to [ICRA]A- (pronounced ICRA A minus) from [ICRA]A. The rating is placed on watch with developing implications. 
 

ICRA has also downgraded the short-term rating outstanding on the Rs. 320.0 crore fund-based bank facilities and Rs.1000 crore commercial paper programme of ITNL to [ICRA]A2+ (pronounced ICRA A two plus) from [ICRA]A1. The rating is placed on watch with developing implications.

 

1:22 PM

Equirus Securities on Cipla

 

Cipla’s Q4FY18 earnings disappointed with a 27% EBITDA miss on below-expected domestic and US sales. While Q4 — which sees most yearly adjustments — is usually weak, we note the miss was sharp, even more on adjusting for one-offs (Rs 300 mn on net basis). While structural drivers remain intact, we feel margin expansion can be slower than expected, and accordingly cut FY19/FY20 EPS by 30%/22%. Assign ADD (Long earlier); Sep’19 target price (TP) of Rs 547 (vs. Mar’19 TP of Rs. 662) set at 22x.

1:15 PM

IPO market hots up as 3 dozen companies line up listings worth Rs 350 bn

 

The IPO lane seems to get busier as three dozen companies have lined up initial share sale plans worth Rs 350 billion in the coming months, largely to fund their expansion projects and working capital requirement.

 

These include six state-run entities -- Indian Renewable Energy Development Agency, Rail Vikas Nigam, IRCON International, RITES, Garden Reach Shipbuilders and Engineers and Mazagon Dock -- as the government intends to unlock the real value of such PSUs and bring in greater accountability. READ MORE

1:01 PM

RCom surges 11% after NCLAT fixes hearing against NCLT order for Tuesday

Shares of Reliance Communications (RCom) have moved higher by 11% to Rs 15.85 per share on the BSE in noon deal after the company said that the National Company Law Appellate Tribunal (NCLAT) fixed the appeals against the National Company Law Tribunal (NCLT) orders for hearing tomorrow i.e. Tuesday, May 29, 2018. READ MORE
 

12:47 PM

Airlines, tyre, OMC stocks gain as global oil prices ease

Shares of airlines, tyre and oil marketing companies (OMCs) have rallied by up to 15% on the BSE in intra-day trade after the global oil prices fell on Monday, extending a steep decline in Friday, on expectations major producers may ease output curbs.

 

SpiceJet, Jet Airways (India) and InterGlobe Aviation, the company that operates IndiGo, from the airlines were up in the range of 3% to 15% on the BSE. Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOCL) from the OMCs were up 5% each. READ MORE

12:32 PM

India's correlation with global markets goes down; reaches nearly 10-yr low

A shrinking correlation between financial markets in India and those in the rest of the world is one reason to buy its assets.

 

The weighted average correlation of India’s currency, bonds and stocks with those in other global economies fell to 0.32 last month, approaching a more than 10-year low of 0.29 set in November. The reading was as high as 0.68 in 2010, data compiled by Bloomberg show. Global investment managers say this divergence provides them with an asset class that can smooth out returns in their portfolios. READ MORE

12:16 PM

Manpasand Beverages tanks 20% after Deloitte resigns as auditor

Manpasand Beverages is locked in lower circuit of 20% at Rs 345, also its 52-week low on the BSE, after the company announced the resignation of statutory auditor Deloitte Haskins & Sells with effect from May 26, 2018.
 

The company said the board has appointed Mehra Goel & Co as statutory auditor of the Company with effect from May 27, 2018 to fill the casual vacancy. READ MORE

12:00 PM

Markets at noon

S&P BSE Sensex	35,108.21		0.53%
Nifty 50	10,672.20		0.63%
S&P BSE 200	4,642.23		0.78%
Nifty 500	9,290.20		0.81%
S&P BSE Mid-Cap	16,088.01		1.15%
S&P BSE Small-Cap	17,378.33		1.32%

11:45 AM

Cadila Healthcare launch pipeline points to healthy outlook, stock gains

 

The stock of Cadila Healthcare gained 7 per cent after the company reported better-than-expected March quarter (Q4) results. This was on the back of strong generic sales of limited-competition ulcerative colitis drug Lialda and anti-infective Tamiflu in the US market.

 

The 29 per cent jump in overall sales was largely on account of its performance in the US market, where sales were up 66 per cent over the year-ago quarter. READ MORE

11:30 AM

We will double our businesses in less than three years: Nirmal Jain

 

Over the years, IIFL (formerly India Infoline Limited), founded by NIRMAL JAIN, has spread its wings to include diverse businesses, such as wealth and asset management, broking, institutional equities etc. At a time when the group is planning to reorganise and restructure its businesses, Jain shares vision, challenges and opportunities. READ FULL INETERVIEW HERE

11:18 AM

Tech Mahindra falls 5% on profit booking post Q4 results

Shares of Tech Mahindra have dipped 5% to Rs 668 per share on the BSE in early morning trade on profit booking after the company reported a better than expected 29.6% quarter-on-quarter growth in its consolidated net profit at Rs 12.22 billion in March 2018 quarter (Q4FY18). READ MORE
 

11:03 AM

Street signs: PSU banks in demand, dip in Symphony stocks and more

PSU banks in demand

 

The Nifty PSU Bank index rose 11 per cent last week, its biggest weekly gain since October 2017 after the Centre had announced recapitalisation. The latest surge comes after the leader of the pack - State Bank of India (SBI) - suggested that the worst of bad loan could be over. The bank’s chairman said this fiscal will be the year of hope and the next fiscal could be one of happiness. The Nifty PSU index had dropped 60 per cent from its 2018 peak following the fraud at Punjab National Bank (PNB). The index has retraced 40 per cent of the losses, but is still down more than 40 per cent. Experts say the SBI commentary was the trigger investors were looking for to bring life back in the moribund sector. READ MORE

10:45 AM

Sun Pharma rallies 6% post Q4 results

Shares of Sun Pharmaceutical Industries have rallied 6% to Rs 496 per share on the BSE in early morning trade after the drug maker reported a net profit of Rs 13.08 billion in March 2018 quarter (Q4FY18) as against Rs 12.23 billion in the same quarter last year aided by one-time tax gain of Rs 2.59 billion. READ MORE

 

10:31 AM

Top gainers in BSE Oil & Gas:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
I O C L	171.70	163.60	8.10	4.95
B P C L	400.05	381.25	18.80	4.93
H P C L	309.15	295.10	14.05	4.76
OIL INDIA	223.85	218.30	5.55	2.54
GAIL (INDIA)	326.90	319.60	7.30	2.28

10:18 AM

How easing overloading restriction will affect Tata Motors and Volvo Eicher

The medium and heavy commercial vehicle (M&HCVs) segment, which saw volumes grow 25 per cent year-on-year in the March quarter and 20 per cent in FY18, could face a roadblock in the form of easing overloading restrictions.

 

Over the last few weeks, analysts say that overloading restrictions in states of Uttar Pradesh (UP) and Rajasthan have significantly eased. READ MORE

10:08 AM

ICICI Securities on Tech Mahindra

We raise FY19/FY20 EPS estimates by 5%/10% respectively given better than expected execution in Q4FY18 and USD/INR assumption of 67.5 vs 65 earlier. We expect revenue growth in FY19 to remain modest at 6.7% given an expectation of gradual improvement in telecom fundamentals and recent cross currency headwinds. Our target price of Rs786 is based on 15x FY20E EPS of Rs52.4.