MARKET WRAP: Sensex gains 131 pts, Nifty ends at 10,802; banks, pharma rise

The S&P BSE Sensex gained 131 points or 0.36 per cent to settle at 35,981 with Sun Pharma (up 4 per cent) being the top gainer and Kotak Mahindra Bank (down over 1 per cent) the worst performer.

3:53 PM

Top sectoral gainers and losers on NSE

3:52 PM

Top gainers and losers on S&P BSE Sensex

3:34 PM

Market at close
 

The S&P BSE Sensex added 131 points or 0.36 per cent to settle at 35,981 while the broader Nifty50 index of NSE closed at 10,802, up 30 points or 0.28 per cent. 

3:16 PM

EARNINGS PREVIEW | Motilal Oswal Financial Services on Auto

 

Auto Universe is expected to report a 9% YoY PAT decline on a strong base (44% YoY growth in base quarter) – a third consecutive quarter of PAT decline. Excluding Tata Motors, the Auto Universe is expected to post flattish profits. We expect EBITDA margin to shrink by 100bp YoY to 12%, impacted by weak operating leverage (volumes softened across the board in 3QFY19), a weak INR and heightened competitive intensity in two-wheelers. 

2:55 PM

Nifty PSU Bank index hits 4-month high; SBI, Canara Bank up 3%

Shares of public sector undertaking (PSU) banks continued their upward journey with Nifty PSU Bank index hitting a four-month high on Tuesday on the expectation of decline in bad loans. Nifty PSU Bank index, the largest sectoral gainer, was up 2.6% at 3,192 levels, trading at its highest level since September 6, 2018, on the National Stock Exchange (NSE). In comparison, the Nifty Bank and Nifty Private Bank index were up 0.6% each, while the benchmark Nifty 50 index was up 0.32% at 02:19 pm. Read more

2:39 PM

CLSA on Cement sector

 

Over the past decade, the cement industry has witnessed a decline in utilisation rates, despite which, cement prices have held up fairly well. FY19 is likely to end with near double-digit demand growth, which will also take up utilisation. This much-anticipated event, however, has been a big disappointer as prices did not see any benefit and in fact, unit Ebitda margins contracted in FY19. 

 

Lower energy prices are a relief but cement prices are the key, and uncertainty prevails here, which is quite counter-intuitive in the context of rising utilisation rates. We yet again trim our FY19-21 EPS estimates for the major players by 3%-15%. We now have a SELL rating on UltraTech, Grasim, India Cements (downgraded from BUY), and downgrade Shree & Ambuja from BUY to O-PF and Dalmia from BUY to U-PF. Ramco and ACC remain BUYs.

2:29 PM

YES Securities on Roads sector

 

The Roads sector has faced rough weather in FY19 owing to:  

a) overall weakness in project awarding; 

b) delays in financial closure for Hybrid Annuity projects; and 

c) poor response to second bundle of Toll Operate Transfer (TOT) projects. 

 

Although most decent-sized road contractors have achieved financial closure for their projects, other issues yet remain as industry woes. FY18 ended on a strong note of hope with order awards aggregating a whopping 17,055 kms and construction of 9,829 kms. FY19 thus promised a lot, especially being the pre-election year. However, only 2,105 kms have been awarded in first eight months of FY19 with construction of 5,759 kms. With FY19 targets of awards set at 20,000 kms, there’s too much for the Ministry to catch up in the last four months.

2:26 PM

Oil prices steady on trade talk hopes and OPEC cuts, but slowdown looms

Oil prices were stable on Tuesday, supported by hopes that talks in Beijing between US and Chinese officials might defuse trade disputes between the world's biggest economies, while OPEC-led supply cuts also tightened markets. International Brent crude futures were at $57.42 per barrel, up 9 cents, or 0.2 per cent from their last close. Read more

2:16 PM

Top gainers on BSE500

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
H F C L	23.20	1.95	9.18	2411912
TEJAS NETWORKS	216.00	15.20	7.57	5771
SREI INFRA. FIN.	35.10	2.00	6.04	361896
ASHOKA BUILDCON	133.00	6.35	5.01	16440
SYNDICATE BANK	41.20	1.45	3.65	198665

2:07 PM

Ashoka Buildcon, Sadbhav Engineering gain up to 6% in range-bound market

Shares of infrastructure companies – Ashok Buildcon and Sadbhav Engineering rallied by up to 6% on BSE in an otherwise range-bound market on Tuesday.

Sadbhav Engineering soared 6% to Rs 230 apiece, after the company said it received an appointment letter dated January 5, 2019 for road contract worth of Rs 1,620 crore of Maharashtra Samruddhi Mahamarg. The stock was trading at its highest level since October 22, 2018 on the BSE. Read more

 

2:00 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,921.34	+71.18	+0.20
S&P BSE SENSEX 50	11,281.61	+24.15	+0.21
S&P BSE SENSEX Next 50	32,615.91	+35.97	+0.11
S&P BSE 100	11,070.41	+22.01	+0.20
S&P BSE Bharat 22 Index	3,472.65	+4.31	+0.12

1:45 PM

JM Financial Securities on aviation sector

 

In a low PLF (passenger load factor) scenario, movement in yields will be a key monitorable to maintain a sustainable revenue per available seat-kilometer (RASK). Decline in crude oil (USD 57/bbl) and INR appreciation (INR/USD below 70) in the past month are a welcome relief. Sensitivity of EBITDAR and fair value for Indigo/SpiceJet are outlined in this report (exhibits 26 to 29). We currently have a BUY rating on SpiceJet and a HOLD rating on Indigo. 

1:30 PM

Derivatives and Quantitative Outlook by ICICI Direct Research

 

• In the ongoing market consolidation, banking stocks have taken the lead. The Bank Nifty/Nifty price ratio has moved to lifetime high levels also indicating the same. Apart from sectoral heavyweights, the midcap banking space is also witnessing buying traction. We believe that while the Nifty may continue its consolidation in the range of 10500-11000, midcap banking stocks like DCB Bank may witness good upsides on the back of fresh long additions.
• The open interest in DCB Bank has remained muted since August 2018 as the stock remained under pressure along with the market. However, a sharp increase of almost 30% in open interest was seen in the stock in the last couple of sessions as it moved to four-month high levels. This activity suggests fresh long accumulation in the stock

1:11 PM

IT services firms likely to show strong Q3 growth on deal momentum

Investors would be looking forward to the final guidance for FY19, as IT major Tata Consultancy Services (TCS) kick-starts the December quarter earnings season for the IT industry this Thursday, and Infosys follows suit on Friday. They would also be keenly watching the macroeconomic outlook, especially on the US economy, Brexit, and the deteriorating US-China relationship and its impact. Read more

 

1:04 PM

NEWS ALERT | Tata Elxsi Q3 net profit falls around 20 per cent on quarter-on-quarter basis.

12:59 PM

Top gainers and losers on S&P BSE Sensex

12:48 PM

ICICI Bank hits an all-time high on hopes of strong Q3 numbers

Shares of ICICI Bank hit a record high of Rs 375.40 apiece on BSE, up 2 per cent in the intra-day trade on Tuesday. The stock surpassed its previous high of Rs 375.25 touched on November 16, 2018, in an otherwise subdued market today. During the past four weeks, the stock of private sector lender has outperformed the market by surging 9.5 per cent on hopes of strong earnings in October-December quarter (Q3FY19). In comparison, the S&P BSE Sensex gave 2 per cent return during the same period. Read more

12:32 PM

Web Exclusive What does the merger say for Bandhan Bank and Gruh Fin on technical chart?

Bandhan Bank on Monday agreed to acquire housing finance firm Gruh Finance through a share swap deal. Under the merger cooperation agreement, shareholders of Gruh Finance will get 568 shares of Bandhan Bank for every 1,000 shares held. The opening deals on Tuesday indicated negative sentiment for Gruh Finance as the stock was trading over 10 per cent lower after a gap down opening. Even, Bandhan Bank saw a gap down start with the shares falling up to 6 per cent. However, the stock recovered later and was trading above the opening levels of Rs 482. Read more

12:13 PM

GST cut, new launches, revamped products to fuel Bata's revenue growth

A slash in goods and services tax (GST) rate in July last year, besides a robust performance in the April-September 2018 (H1FY19), has helped Bata India (Bata) India stock gain about 24 per cent since August. The stock has outperformed the BSE Fast Moving Consumer Goods index, which fell over 2 per cent during this period. However, the rally is not yet over for Bata. Some analysts foresee 12-13 further upside in the stock. Read more

12:00 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,802.82	-47.34	-0.13
S&P BSE SENSEX 50	11,243.09	-14.37	-0.13
S&P BSE SENSEX Next 50	32,539.71	-40.23	-0.12
S&P BSE 100	11,034.37	-14.03	-0.13
S&P BSE Bharat 22 Index	3,457.99	-10.35	-0.30

11:51 AM

Web Exclusive Q3 earnings outlook: Here's how different sectors are expected to perform

The quarter ended September 2018 was one of the best quarters in recent times, with 16.2% growth in net profits for Indian companies. This growth was largely aided by lower input costs and better traction on sales. There was also the base effect, since the corresponding quarter in 2017 was a relatively tepid one with stock markets still recovering from the twin effects of demonetisation and the implementation of the Goods and Services (GST). How will the quarter ended December 2018 be? Click here to read more
 

11:41 AM

HDFC Securities on Indian Hume Pipe

 

Given a robust order book position of > Rs 4,000 cr (as on Dec-18), we believe that the current momentum will accelerate further and expect revenues to witness 9.5% CAGR over the next two years. Margins are expected to improve, while short-term debt is expected to marginally reduce owing to the execution of orders currently categorised as work in progress, resulting in an improvement of the interest coverage ratio. We arrive at TP of Rs 445 based on 18.5x FY20E EPS. Moreover, any positive developments on land development would further add value to the company.

11:35 AM

Motilal Oswal on Financials– Banks (3QFY19 Preview)

 

Margin cycle set to recover, treasury performance to improve significantly

-- We expect banking system earnings to pick up sharply, led by stable/expanding NIMs, moderate credit costs, gains on treasury/corporate bond portfolio and likely reversal of MTM provisions.

-- Margin cycle is set to recover as the loan book re-prices over 2HFY19, offsetting the impact of higher cost of funds. We expect private banks to report ~25% YoY PAT growth, led by a pick-up in NII and moderation in credit costs.

--We expect private banks to record NII growth of 20.3% YoY, led by stronger growth in mid-sized private banks–IIB (around 25% YoY), YES (around 39% YoY) and RBL Bank (around 38% YoY). Among PSUs, SBI/INBK are expected to report strong  around 15%/12% YoY growth in NII, while BoB and PNB are likely to report modest growth. 

11:34 AM

YES Securities on Bandhan Bank-Gruh Finance merger

 

While in the near term, the deal could be earnings dilutive for Bandhan, the realization of synergies would ensure that it turns accretive thereafter. Importantly, it will bring down the promoter's (Bandhan Financial Holding Ltd.) stake to 61% from current 82%, thus possibly impressing the regulator just enough to relax the current requirement of new branch approvals and restriction on MD and CEO's salary.

 

In our view, most minority shareholders will not have an objection to the merger given that share swap has been proposed at fair valuation and in view of substantial complementarities that could enrich shareholder value in the longer run. Still one cannot rule out that few may want to immediately exit being wary of the near-term uncertainty.

11:21 AM

Reliance Securities on NBCC  

 

Rating: Buy 

Target Price: Rs 90 

 

NBCC surged around 4% in yesterday’s trade on the expectation of healthy earnings in ensuing quarters and higher dividend by the company. NBCC continues to be a robust growth story owing to its PWO status and niche presence in redevelopment of government’s old colonies. NBCC’s current order book (ex-taxes) stands at Rs 800bn (13.5x FY18 revenue), which is unmatched by any company and provides robust growth visibility, going ahead. We understand that likely resolution of issues pertaining to Delhi redevelopment projects will propel the stock to witness sharp upmove in the near term. Further, a debt-free balance-sheet and superior return ratios augur well for the company. We expect 17% CAGR in NBCC’s earnings through FY18-FY20E backed by robust order book and execution pick-up in recently bagged projects. We maintain our fundamental BUY rating on the stock with a target price of Rs 90.  

11:16 AM

5paisa Capital hits four-month high; zooms 72% in nine trading sessions

Shares of 5paisa Capital locked in upper circuit for the eight straight trading days, up 5% at Rs 329 on BSE, surging more than 70% in the past nine days after the promoter increased stake in the company. The stock was trading at its highest level since August 30, 2018. Since December 26, the stock of 5paisa Capital has rallied 72% from Rs 191 after Nirmal Bhanwarlal Jain, the promoter of the company had purchased an additional 50,000 equity shares through an open market purchase. In comparison, the S&P BSE Sensex was up 1% during the same period. Read more

 

11:00 AM

Top gainers and losers on S&P BSE Sensex

10:45 AM

Election time is the moment to pick quality stocks: Credit Suisse

The markets are expected to remain in a volatile phase till the general elections this year. However, certain foreign brokerages see this phase as an opportunity for investors to start adding quality stocks to their portfolio with a long-term view. Global brokerage house Credit Suisse, in a recent client note, said, "The government's strong push to create infrastructure over the past four years could start showing results in the next couple of years as landmark projects — freight corridors, metro rail projects, highways, railway electrification, and airports — start getting commissioned in a phased manner." Read more

10:33 AM

Momentum Picks by ICICI Direct Research

10:13 AM

Gruh Finance tumbles 14%, Bandhan Bank 6% post merger deal

Shares of Gruh Finance tanked as much as 14.36 per cent to Rs 262.20 apiece on Tuesday after it announced amalgamation with Bandhan Bank in an all-stock deal. At 10:08 am, the stock was trading at Rs 267 apiece on BSE, down nearly 13 per cent.

 

According to the share swap ratio, for every 1,000 shares of Gruh Finance shareholders will get 568 shares of Bandhan Bank. This is at nearly eight per cent discount to the closing price of Gruh Finance as of Monday (January 7, 2019) and at nearly 2.5 per cent premium to the last six months average price, according to a report by Motilal Oswal Financial Services. Read more