MARKET WRAP: Sensex settles over 37,600 ahead of RBI rate meet; RIL up 3%

Among sectoral indices, the Nifty IT index ended over 1% higher led by a rise in Tech Mahindra and MindTree.

3:56 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

The market trend in the near term will be dictated by tomorrow’s RBI monetary policy outcome. Considering the recent spike in the inflation rate, the fears of interest rate hike has increased. However the commentary on the future outlook of interest rates/inflation would hold importance. Further with on-going corporate earnings season stock specific volatility is likely to remain high. Hence, we would advise investors to stick to fundamentally sound companies and traders to remain cautious and keep their positions hedge

3:44 PM

Nifty IT index ends 1.16% higher. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
TECH MAHINDRA	680.30	655.45	24.85	3.79
MINDTREE	936.45	915.50	20.95	2.29
HCL TECHNOLOGIES	966.35	947.15	19.20	2.03
INFOSYS	1369.10	1351.00	18.10	1.34
WIPRO	276.75	273.15	3.60	1.32

3:42 PM

Nifty sectoral gainers and losers of the day

3:41 PM

BSE Sensex: RIL settles 3% higher, Axis Bank slips over 3%

3:38 PM

Market at close

The S&P BSE Sensex settled at a record high of 37,607, up 112 points, while the broader Nifty 50 index settled at a new high of 11,356, up 37 points.

3:26 PM

Adani Power, Adani Green, Adani Enterprises zoom over 70% in July

Shares of Gautam Adani led- Adani Group Companies were on a roll with three stocks – Adani Green Energy, Adani Power and Adani Enterprises – ralliying more than 70% in the month of July 2018. READ MORE

3:13 PM

GDP may moderate from 7.8% to 7.2% in second half of 2018: Nomura

The Indian economy is likely to have witnessed solid economic growth in the April-June quarter but leading indicators suggest a slowdown in the coming months, says a Nomura report. READ MORE

3:03 PM

Dabur India surges 9% as domestic FMCG biz posts 21% volume growth in Q1

Shares of Dabur India have surged 9% to Rs 429 per share, also their new high on the BSE in intra-day trade, after the company reported a better-than-expected domestic volume growth of 21% in June quarter (Q1FY19). Analysts had expected volume growth in the range of 10% to 15% for the quarter. READ MORE

2:51 PM

Global IPO kitty at $94.3 bn in Jan-June: Report

A total of 660 initial public offerings raised a cumulative USD 94.3 billion globally during January-June 2018 and the IPO activity looks rosy in the second half as well, says a report.

 

According to an EY report, at USD 94.3 billion the IPO proceeds for the first half of 2018 were the highest since January-June 2015 when 704 IPOs had raised USD 110.1 billion. READ MORE

2:31 PM

HEAT MAP S&P BSE Sensex

2:30 PM

Bank of India June-quarter profit rises 8.4 per cent on tax write-back

Bank of India Ltd said on Tuesday quarterly profit rose 8.4 per cent as the state-run bank recomputed tax provisions made a year earlier. Net profit was 951.1 million rupees ($13.86 million) for the three months ended June, compared with 877.1 million rupees a year earlier, it said in a statement. READ MORE

2:28 PM

Elara Capital on Heritage Foods

We cut our PAT estimates for FY19/20e by -18%/-22% led by -12% /-14% cut in sales due to lower than expected growth in pouch milk (5% in FY19 vs 15% earlier), VAD (15% in FY19 vs 30% earlier). We expect HFL to post a sales/EBITDA/PAT CAGR of 8%/+26%/21% in FY18-20e period.

We value the company on weighted average basis of 17.5x (Earlier 15x) EV/EBITDA and 1.4x P/Sales (Earlier 1.2x) on FY20 estimates, to arrive at a revised target price of Rs 825 (Earlier Rs 870). We maintain our BUY rating on the stock

2:27 PM

Centrum on Axis Bank

We retain HOLD on Axis Bank with target price revised  upwards to Rs540 (vs. Rs520 earlier). Q1’19 results were ahead of our estimates on revenue front; however with weak core operating profit growth and higher provisions, earnings  declined 46% YoY. The trend in new NPA addition is stabilizing; accelerated pace of recovery will see overall NPAs reduce.

Share of vulnerable pool has reduced to 2.5% of customer assets (vs 4.9% YoY). Growth has gathered pace; and is backed with strong capital position. Valuation at 2.1x FY20E ABV for an exit RoE of 14% offers limited near term upside. Prefer ICICI Bank in the private banking space

2:25 PM

MARKET COMMENT Three Reasons why the RBI may take a breather on rates

First: Headline CPI inflation is tracking the RBI’s forecast range of 4.8%-4.9%in 1HFY19. Crude oil prices have also softened slightly over the past couple of weeks, while the cut in Goods and Services Tax or GST rates is also likely to be mildly disinflationary.

Second: The neutral stance was maintained at the last meeting, indicating that the RBI is not on an aggressive rate hiking cycle and suggesting that the probability of back-to-back rate hikes is low. Any pause will also provide room to ensure that the recovery is well entrenched.

Third: We are not denying the inflationary impact from the recent increase in minimum support prices or MSP for kharif crops. We anticipate that the increase in MSP could push up inflation by about 50bps. Consequently, an upward revision in the inflation forecast for 2HFY19 is likely. However, we expect the RBI to watch for more data before taking further action.  We expect one more 25bps rate hike by the RBI, most likely in 2HFY19

(Source: Nirmal Bang report)

2:23 PM

Edelweiss on Interglobe Aviation

Despite awaiting the resolution for engine issues, IndiGo expects industry-leading FY19 capacity addition of 25%, which would reinforce its dominant position. Management believes the current low-yield environment is unsustainable in a high-fuel cost environment. However, industry-leading cost structure (CASK ex-fuel 20% lower than SJ) and a strong balance sheet (USD2bn net cash) provide cushion against short-term stress. We are revising down FY19/20E EBITDAR by 18%/9% and thus lowering the target price to Rs 1,194 (Rs 1,441 earlier)

1:59 PM

Market Check

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	37408.12	37494.40	-86.28	-0.23
	15244.64	15264.35	-19.71	-0.13
	15984.76	15961.10	23.66	0.15
	16546.26	16540.44	5.82	0.04
	4383.48	4391.48	-8.00	-0.18

1:47 PM

Shree Cement Q1 profit falls 37%: Why analysts remain positive on the stock

After a significant improvement in profitability reported by ACC and Ambuja Cements, and with UltraTech maintaining the metric despite weak realisations and cost pressures, Shree Cement’s reported numbers — below expectations — initially stumped the Street. READ MORE

1:30 PM

Vedanta Chairman Anil Agarwal offers $1 billion to take miner private

Vedanta Resources Plc Chairman Anil Agarwal's family trust on Tuesday offered about $1 billion in cash to take the London-listed miner private. Volcan, which currently holds about 67 percent of Vedanta, offered $10.89 or 825 pence per share to buy the rest of the stake. READ MORE

1:17 PM

RIL becomes India's most valued firm again; surpasses TCS in market cap

Reliance Industries on Tuesday regained the status of the country's most valued firm in terms of market valuation, surging past information technology (IT) giant Tata Consultancy Services (TCS) in intra-day trade.
 

At 01:02 PM; RIL market capitalisation (m-cap) stood at Rs 7.48 trillion, more than TCS' of Rs 7.40-trillion valuation, as per BSE data. READ MORE

12:59 PM

Have a cryptocurrency company? Bermuda, Malta and Gibraltar want you

Hedge funds go to the Cayman Islands to incorporate. Big companies are generally domiciled in Delaware. And online poker companies often set up their bases in Gibraltar and Malta. READ MORE

12:50 PM

Edelweiss on Godrej Consumer Products (GCPL) 

 

Going ahead, we believe the building blocks are in place in terms of innovation and the launch pipeline (refer note: Well-fortified to scale the growth curve), which will bolster positioning and spur market share gains. All in all, we are raising the target multiple to 50x (from 45x) that yields a revised target price of Rs 1,540 (earlier Rs 1,435). Maintain ‘BUY’.

12:48 PM

Prabhudas Lilladher on L&T

L&T delivered good set of numbers in 1QFY19 with PAT at Rs12.1bn up 14% YoY ahead of ours as well as street estimates. Beat was led by surprise on both, better execution and margins. The company continues to focus on its strategic plan of achieving profitable growth and improving RoE in medium term. We Maintain BUY on L&T given its strong business model, diverse skill sets, strong execution capabilities and relatively healthy/large balance sheet with revised target price of Rs1566

12:39 PM

TOP BSE LOSERS TODAY

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
INTERGLOBE AVIAT	920.45	-83.80	-8.34	808455
CAN FIN HOMES	334.05	-29.90	-8.22	225335
SPICEJET	99.20	-5.75	-5.48	2266709
IDEA CELLULAR	55.35	-3.10	-5.30	2111572
GENERAL INSURANC	358.00	-18.75	-4.98	26914

12:38 PM

CARE Ratings on RBI policy preview

As usual there is wide spread speculation on what the RBI will do tomorrow. With a single inflation target being the anchor, the story is invariably built on other supporting factors such as what the Fed does, how the currency moves, what the government does on MSP and so on. Given that the core inflation rate has peaked there is definitely a strong case to argue for a rate hike.

However, there have been some significant mitigating factors such as oil prices coming down and more importantly GST rates being reduced which will affect core inflation the most. More importantly we believe that the MSP case should not be stretched as while the rates have been increased anecdotally it has been observed that strong supplies can still moderate prices when there is no procurement. Keeping all these factors in mind we believe that there will be: 1) Status quo this time; 2) A hawkish stance taken; 3) There could be more than one MPC member who will vote for a rate hike

 

12:29 PM

Avenue Supermarts hits new high on strong Q1 results

Shares of Avenue Supermarts, which owns and operates D-Mart supermarket chain, hit a new high of Rs 1,664, up 4.5% on the BSE in intra-day trade, after the company reported a better-than-expected 43% year on year (yoy) growth in net profit at Rs 2.51 billion in June quarter (Q1FY19). It had a profit of Rs 1.75 billion in year-ago quarter. READ MORE

12:19 PM

HEG hits record high ahead of June quarter results

Shares of graphite electrode manufacturer HEG have hit a record high of Rs 4,250 per share, up 3.3% on the BSE in intra-day trade on Tuesday, ahead of June quarter (Q1FY19) results on Wednesday, August 1, 2018. READ MORE

12:01 PM

Markets at noon

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	37322.47	37494.40	-171.93	-0.46
	15218.79	15264.35	-45.56	-0.30
	15972.01	15961.10	10.91	0.07
	16541.05	16540.44	0.61	0.00
	4374.54	4391.48	-16.94	-0.39

11:44 AM

HDFC Q1 net profit jumps 53.7%: Surge in NPA ratio not worrisome

 

Housing Development Financial Corporation (HDFC)’s June quarter (Q1) results, at first glance, may startle investors given the surge in its non-performing assets (NPA or bad loan) ratio. But, as analysts say, it is due to change in accounting.

 

Nevertheless, its provisioning coverage ratio (PCR), too, is at comforting levels and operating performance remains healthy. Thus, most analysts remain positive on the stock, and see any correction as an entry opportunity. READ MORE

11:29 AM

HNIs' bets on HDFC MF IPO will pay off if shares list at over 35% premium

 

Leveraged bets riding on the maiden offering of HDFC Mutual Fund will only be profitable if shares of the asset manager list at over 35 per cent premium during the debut next week. Cumulative bets worth over Rs 700 billion from high-net-worth individuals (HNIs), who have borrowed at a rate between 12 per cent and 14 per cent per annum, have been placed on the company.

 

HDFC MF's Rs 28-billion initial public offering (IPO), which closed on Friday, was oversubscribed more than 80 times. The issue garnered total bids worth Rs 1.7 trillion, the second-most for a domestic IPO after Coal India. READ MORE
 

11:15 AM

MUST READ Ease grip over lenders or risk slowly killing off sector: BoB Chief to govt

The head of one of India’s largest state-run banks says the government needs to ease its grip over the lenders or risk slowly killing off the sector.

 

Tight government control makes it hard to attract talent or take the tough decisions needed to address the bad debts weighing down the banks, according to Ravi Venkatesan, the outgoing chairman of Bank of Baroda. Government-controlled lenders need to consolidate if they are to avoid losing yet more market share to private-sector peers, but this is better achieved after the banks get stronger rather than merging weak banks, he said READ MORE HERE

Bank of Baroda