MARKET WRAP: Sensex ends 40 pts up, Nifty at 10,787 ahead of US-Korea meet

Bharti Airtel gained 3.5% on the BSE today, while Sun Pharma rose 1.1%. Tata Steel lost 2.1%

3:47 PM

Nifty Pharma index ends 0.50% higher. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
SUN PHARMA.INDS.	535.70	528.25	7.45	1.41
GLENMARK PHARMA.	564.40	556.75	7.65	1.37
CADILA HEALTH.	368.45	364.35	4.10	1.13
DR REDDY'S LABS	2083.20	2062.90	20.30	0.98
AUROBINDO PHARMA	576.45	572.35	4.10	0.72

3:40 PM

Sectoral Trend

3:36 PM

NEW FUND OFFER

 

Invesco Mutual Fund launched a new fund - Invesco India Equity & Bond Fund, (an open ended hybrid scheme investing predominantly in equity and equity related instruments). The fund seeks to generate capital appreciation and current income by investing predominantly in equity & equity related instruments as well as debt securities.

 

The minimum investment amount during the NFO is Rs 5000 and in multiples of Re. 1/- thereafter. For SIP investments, the minimum application amount is Rs 500 under the monthly SIP option for minimum 12 installments and Rs 1500/- under the quarterly SIP option and in multiples of Rs. 1 thereafter. 

 

An exit load of 1% will be payable on investments redeemed/switched out on or before one year from the date of allotment. The new fund offers Growth, Dividend Payout and Dividend Reinvestment options. The fund is benchmarked against CRISIL Hybrid 35+65 – Aggressive Index.

3:36 PM

BSE Sensex: Bharti Airtel, Sun Pharma among top gainers of the day, Tata Steel top loser

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 35,483, up 40 points while the broader Nifty50 index settled at 10,787, up 19 points.

3:14 PM

Investors divided over plans to raise $47 bn fund for tech IPOs in China

Asset managers began fundraising for six Chinese "unicorn" funds on Monday, offering retail investors a new investment channel but potentially straining tight market liquidity.

 

The 300 billion yuan ($47 billion) they seek to raise in the coming week stands to top all the equity funds raised in China last year, and the money will be used to fund mainland listings of homegrown tech firms such as smartphone maker Xiaomi and e-commerce giant Alibaba Group Holding. READ MORE

3:00 PM

PSBs may see Rs 180-200 billion mark-to-market losses in Q1FY19

In the March 2018 quarter, many public-sector banks (PSBs) reported disastrous performance due to the recognition of high bad loans, following the directive by the Reserve Bank of India, through its February 12, 2018 circular. READ MORE

 

2:46 PM

Buzzing Stock

 

Natco Pharma rose 3.6% as company has launched a generic version of Posaconazole Injection, 300 mg/16.7ml, under its brand POSANAT. This is the first time an injection version of this drug available in India.

2:33 PM

COMMENT

Scepticism dominates hope over the scheduled historic summit between the US President Donald Trump and North Korean leader Kim Jong-un in Singapore on 12 June. Trump hurt US’s relations with its allies at the G7 Summit over trade issues and refused to sign the final G7 communique. Looking beyond trade and geopolitical tensions and rising US rates/oil prices, Asia ex Japan currencies remain vigilant against emerging market volatility i.e. a new record low for the Argentinian peso despite the IMF deal. 

 

The Fed hike expected at the FOMC meeting on 13 June will renew the greenback’s appreciation if it lifts the US 10Y bond yield above 3% again. To do so, the Fed will need to affirm its view for inflation to sustain at/above its 2% target. At its last FOMC meeting in May, the Fed expects inflation to be symmetric around 2%. Consensus is looking for US CPI inflation, which will be released on 12 June, to rise to 2.7% YoY in May from 2.5% in the previous month. Fed Chairman Powell is likely to signal, at his post-FOMC press conference, the Fed’s intention to roll back its forward guidance because monetary policy is moving from loose towards neutral.

(Source: DBS Bank report)

2:32 PM

Prabhudas Lilladher on Sun Pharma

With SUNP's withdrawal of 15 ANDAs in Q3FY18, we indicated the event was a precursor of pending resolution as it has been observed in many cases of FDA with multiple companies. While many approvals are expected in near term, we believe majority of those ANDAs will be irrelevant as older molecules are crowded with strong competition and price erosion.

Given the company's track record, it will not pursue/launch majority of the molecules as management to pursue only 'profitable growth' as it was observed in the case of withdrawal of co-pay arrangement of Absorica in US. We find gVenofer (Iron Sucrose, mkt: US$350m) will be one of the few major approvals in FY19E from Halol due to its complex chemistry. We remain cautious on the real opportunities of upcoming approvals and maintain earnings estimates for FY19E-20E. We maintain Reduce' and retain target price at Rs 447

2:31 PM

Kotak on Berger Paints

We estimate that branded paint demand will remain robust in a country like India where per capita consumption is very low and 30% paint market is still unorganised. Management of Berger also indicated that the volume trends remain strong for the company and expect the trend to continue in medium term.

For Berger, we estimate 9% volume CAGR over FY18 - FY20E with stable margins and ROE of ~22% and ROCE of ~28.7% for FY20E. However, the valuations at the current price and factoring growth prospects is stretched. Recommend SELL with an increased target price of Rs 280 (from Rs 265) at 44x FY20E earnings in line with valuation of peers.

2:30 PM

BSE Small-cap index gains; Top gainers in the pack

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)	VOLUME
ALEMBIC PHARMA	521.80	434.85	86.95	20.00	51068
63 MOONS TECH.	85.90	72.45	13.45	18.56	593185
ALEMBIC	48.80	41.65	7.15	17.17	1006439
ANDREW YULE & CO	29.65	25.65	4.00	15.59	2048171
JAI CORP	142.00	123.90	18.10	14.61	1261161

2:16 PM

Alembic Pharma zooms 20% as USFDA gives nod for anti-depression drug

 

Shares of Alembic Pharmaceuticals are locked in upper circuit of 20% at Rs 522 per share on the BSE after the company said that it has received approval from the US drug health regulator for anti-depression drug.

 

“The company has received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Bupropion hydrochloride tablets USP, 75 mg and 100 mg,” Alembic Pharma said in a press release. READ MORE

2:01 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,688.56	+244.89	+0.69
S&P BSE SENSEX 50	11,349.11	+79.06	+0.70
S&P BSE SENSEX Next 50	33,204.69	+192.24	+0.58
S&P BSE 100	11,156.29	+75.85	+0.68
S&P BSE Bharat 22 Index	3,543.99	+17.20	+0.49

(Source: BSE)

1:46 PM

India's gold import is likely to fall at least 15% in 2018

After a steep rise last year, gold import is likely to fall at least 15 per cent in 2018. This might come as a relief for policymakers and the Reserve Bank of India (RBI). In the monetary policy review presented on June 6, the central bank had said a significant decline in import of gold, pearls and precious stones had offset the impact of rising crude oil prices in April. READ MORE

1:31 PM

Nifty Consumption index nears record high; Nestle India shares cross Rs 10k

Shares of consumption related companies are in focus with Nifty Consumption index trading close to its all-time high after more than 1% gain in stocks like United Breweries, ITC, Marico and Titan Company. READ MORE
 

1:16 PM

Videocon case: Sebi can't demand Chanda Kochhar's resignation, says report

 

ICICI Bank chief Chanda Kochhar, who is under the lens of several Indian and foreign agencies for alleged irregularities in her dealing with certain borrowers, faces a maximum penalty of Rs 250 million from Securities and Exchange Board of India (SEBI) if found guilty, according to a report.

 

The market regulator is probing if she and her bank violated its disclosure norms. READ MORE

1:12 PM

Maruti Suzuki speeds up to claim 55% share in the Indian car market

If you thought Maruti Suzuki’s 50 per cent share in the Indian car market is abnormally high, more surprise is in store for you. After expanding its share from 45 per cent in 2014-15 to 50 per cent in 2017-18, the car major has not lost speed. The recent numbers show that the Suzuki-owned company is now inching towards a 55 per cent share as rivals struggle to keep pace READ MORE

1:03 PM

MUST READ For loss-making companies, 2017-18 was the worst year in a decade

 

Even as 1,794 companies reported a combined net profit of Rs 4.42 trillion in financial year 2017-18, India Inc’s performance was pulled down by loss-making companies. In FY18, 344 companies reported a combined loss of Rs 1.8 trillion – more than double the number in FY17, and the highest in at least a decade.

 

Loss-making companies have now cumulatively lost Rs 4.85 trillion in the past five years, and 76 per cent of that has come in the past three years. READ MORE

Photo: Shutterstock

12:44 PM

Top BSE500 gainers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
ALEMBIC PHARMA	521.80	86.95	20.00	49262
PC JEWELLER	148.70	11.95	8.74	3197319
TIMKEN INDIA	784.00	62.80	8.71	21429
CORPORATION BANK	32.50	2.55	8.51	35825
GATEWAY DISTR.	186.00	11.25	6.44	17019

12:31 PM

SECTOR RESEARCH Ferrous - Best yet to come

 

Q4 FY18 proved remarkable for the steel sector as companies thrived on strong domestic steel prices and domestic demand. Blended steel realisations sequentially rose 10-14% during the quarter led by an outperformance in long products. Revenue growth was impacted by shutdown of plants at SAIL and Tata Steel. For all players, margins expanded following higher spreads but were impacted by the jump in one-off costs. Combined operating profit of four large players touched decade-high levels.

Our expectations of lower Q4 operating profit was negated by six consecutive price hikes by domestic players. We believe the coming Q1 would outdo Q4 as the complete impact of price hikes during Q4 would come about only then. With benign raw material prices in Q1, margins would expand sequentially by Rs.1,500-2,500/ton in Q1. Though we expect spreads to shrink from Q2 levels given the onset of a seasonally weak quarter and expected surge in Chinese output, FY19 spreads should remain healthy given relatively steady domestic demand.

Domestic demand-supply balance is improving with the gradual recovery in steel demand. We reckon the recent correction in stock prices provides a good opportunity given the sustained triumphs on the earnings front. Maintaining our positive stance on the sector, we pick Tata Steel as our best bet

(Source: IIFL report)

 

12:31 PM

Sharp recovery ahead for SBI, Sun Pharma, Tata Motors, Apollo Hospitals

 

In a year when the S&P BSE Sensex has gained 13 per cent, four sector leaders have underperformed the markets as well as their peer indices. In fact, barring the State Bank of India (SBI), which has been a laggard in recent times, all other sector leaders such as Sun Pharma, Apollo Hospitals, and Tata Motors have been wealth destroyers every year over the last five years.

 

However, things could change in FY19 for shareholders as these companies have chalked out strategies to improve their performance. READ MORE

12:23 PM

HDFC Securities on PNC Infratech

We have derived SOTP based target of Rs 248. We value the (1) Standalone EPC business at Rs 192 (10x one‐year forward Mar‐20E EBIDTA), (2) BOT projects at Rs 33/share, and (3) HAM FY18-20E cumulative equity investment at Rs 23/share. We recommend PNC Infratech as BUY at a CMP of Rs. 172 add on a decline of Rs 150 or the Target Price of Rs. 250 in a time frame of five - six quarters.

12:21 PM

COMMENT Edelweiss on healthcare sector

Lately, there has been lot of noise in the media about heightened government sensitivity towards healthcare and pharma practices, both at the centre and in states. This implies an imminent risk of: i) price control or cap on medicines, diagnostic tests and procedures in the short term; and ii) a shift from branded to generic medicines over the long term. In our view, the government is trying to impose regulatory controls to raise the quality of healthcare and bring transparency in pricing to bring in affordability.

Though the process will be a challenging in the short term and can impact the earnings and valuations, in the long term this will accelerate the shift from the unorganized to organized. Healthcare providers, especially hospitals, will thus shift towards a service led model, while pharma companies reduce their sales and marketing spends. We believe these reforms will drive consolidation in long term.

12:19 PM

NEW LAUNCH Mirae Asset Global Investments (India) launches Mirae Asset Healthcare Fund

Mirae Asset Healthcare Fund is an open ended equity scheme investing in healthcare and allied sectors. The Scheme will be investing in Indian equities and equity related securities of companies that are likely to benefit either directly or indirectly from Healthcare and allied sectors.

The investment strategy of this scheme endeavors to maintain a concentrated portfolio of 30-40 stocks.Healthcare is a broad secular theme that includes Pharma, Hospitals, Diagnostics, Insurance and other allied sectors. The fund will have the flexibility to invest across markets capitalization and style in selecting investment opportunities within this theme. Mr.Vrijesh Kasera will be managing this fund along with Mr. Neelesh Surana.

12:17 PM

Reliance Securities on Aurobindo Pharma

We expect US business to clock 11% CAGR over FY18-20E led by new launches (30-40 in FY19 including few niche products) and ramp-up in injectable biz. With double-digit margin in European business, we expect further improvement in margin led by transfer of products from Europe to Indian units for manufacturing (transferred 83 products out of planned 112).

Led by strong US product pipeline (117 ANDAs pending for approvals), comfortable leverage position, healthy return ratios (RoE/ RoCE at 17%/19% by FY20E) and attractive valuation (>20% discount to its peers), ​​we maintain our fundamental BUY recommendation on the stock with Target Price of Rs712

12:15 PM

PSU banks extend gain; PNB, Corporation Bank up over 4%

 

Shares of public sector undertaking (PSU) banks were quoting higher for the fourth straight trading sessions with Nifty Bank surging 6.5% as compared to 2% rise in the benchmark Nifty 50 index.

 

State Bank of India (SBI), Punjab National Bank (PNB), Bank of India, Bank of Baroda, Oriental Bank of Commerce, Canara Bank, Corporation Bank, Uco Bank, Dena Bank and Vijaya Bank were up 2% to 6% on the National Stock Exchange (NSE). READ MORE

12:01 PM

Markets at noon

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	35593.53	35443.67	149.86	0.42
	14851.68	14768.92	82.76	0.56
	16130.95	16022.37	108.58	0.68
	17037.31	16887.13	150.18	0.89
	4212.61	4191.25	21.36	0.51

11:45 AM

Investor wealth of Rs 15.8 billion riding on stocks under Sebi lens

 

Sebi's decision to move over 100 stocks to additional surveillance measure (ASM) is being termed as harsh by market players. Investors' wealth amounting to Rs 15.8 billion is riding on these stocks.

 

Among individual stocks, mutual funds (MFs) have high stakes in names like Graphite India, Dilip Buildcon and Radico Khaitan. ALSO READ: GVK Group may file DHRP with SEBI for its airport vertical IPO next month. READ MORE

11:30 AM

Monsoon effect: Farm input companies seen improving performance

 

The financial performance of agri input companies is likely to improve during the first half of 2018-19 owing to forecasts that the monsoon this year will be normal.

 

Their sales and profits were under pressure in the fourth quarter of 2017-18 because of a sharp increase in the prices of raw material and weak lean season demand.

 

Companies such as Dhanuka Agritech, PI Industries and Rallis India posted declines in their sales and profits during January-March 2017-18. READ MORE