MARKET WRAP: Indices end flat on the last day of Samvat 2074; PCJ tanks 12%

For Samvat 2074, the S&P BSE Sensex recorded a gain of over 7 per cent

4:22 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

In a volatile trading session, the equity benchmark indices started on a positive note led by supportive global cues. However, it witnessed stiff resistance at higher levels and the index ended flat at 10,530 levels. The broader markets witnessed mixed trend. While BSE Midcap underperformed the benchmark ending lower by 0.6%, the Smallcap index ended on a flat note. On the sectoral indices front, Consumer Durables, Metals and Banking were the top losers whereas, sectors like IT and Realty ended the day in green. Amongst the global markets, Asian indices traded on a mixed note whereas European indices were trading lower.

 

While there have been some encouraging news for Indian equities with correction in crude oil prices and reversal in USD/INR, we remain cautiously optimistic in the near term given the headwinds which persist both on domestic as well on the global front. The liquidity concerns in the NBFC sector is likely to keep investors on the edge. On the global front, US midterm elections and US FOMC meet is also likely to be on market radar. Further, with more results to be announced in 1-2 weeks, we expect stock specific volatility to continue. Thus, we would advise maintaining stock specific trading approach and focus more on position management

 

3:54 PM

Top sectoral gainers and losers on NSE

3:54 PM

S&P BSE Sensex: Top gainers & losers

3:36 PM

Market at close

The S&P BSE Sensex ended at 34, 992, up 41 points, while NSE's Nifty50 index ended just 6 points higher at 10,530.

3:08 PM

SAMVAT 2075 | Top stock picks by Kotak Securities 

3:02 PM

ICICI Securities on Bata India

 

To maintain profitable growth, the management is expected to maintain a subtle balance between volume and realisation growth with enhanced share of premium products aiding margin improvement. We roll our estimates to FY21E and expect revenue, EBITDA to grow at a CAGR of 14%, 20%, respectively in FY18-21E. Bata has a robust balance sheet having virtually debt free status, healthy return ratios (RoCE: 20%+) and negative working capital cycle. We reiterate our BUY rating on Bata with a revised target price of Rs 1,160 (35.0x FY21 EPS of Rs 33.1).

2:57 PM

Bank stocks slip

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)	VOLUME
AXIS BANK	607.00	624.30	-17.30	-2.77	1006649
ST BK OF INDIA	287.15	295.30	-8.15	-2.76	2034204
INDUSIND BANK	1476.20	1491.70	-15.50	-1.04	84201
BANK OF BARODA	110.60	111.35	-0.75	-0.67	1314770
FEDERAL BANK	80.10	80.35	-0.25	-0.31	408334

2:54 PM

Anand Rathi on Alkem Labs

Driven by its focus on brand leadership in the acute segment, the rising contribution from the chronic segment and a ramp-up in its US business, we expect revenue and earnings CAGRs over FY18-21 of respectively 15% and 28% for Alkem. We retain our Buy rating, with a revised price target of Rs 2,392

2:45 PM

STOCK ALERT: PC Jeweller tanks 12%

2:30 PM

Jhunjunwala takes his biggest hit in 10 quarters: Here's a look at his bets

A smallcap focus may be weighing on Rakesh Jhunjhunwala’s portfolio in this downturn. The disclosed value of his portfolio showed a double-digit decline in the three month ending September. This is the biggest fall in at least the past ten quarters. The portfolio was worth Rs 123.33 billion at the end of June 2018. READ MORE

2:14 PM

Gold prices little changed before US midterm elections

Gold prices were little changed on Tuesday ahead of the US midterm elections that may fuel interest in the metal as a hedge against risk if the result sparks volatility in the wider financial markets.

 

Spot gold was largely unchanged at $1,231.20 per ounce, while US gold futures were up 0.1 per cent at $1,233.8 per ounce. READ MORE

1:54 PM

S&P BSE Sensex top gainers and losers

1:39 PM

Jet Airways up 15% in two days amid reports Tata Group to buy 51% stake

 

Shares of Jet Airways (India) moved higher by 5% to Rs 264 on Tuesday, extending its Monday’s 10% surge on the BSE, after the media reports suggest that Tata Group is in talks to buy a majority stake in beleaguered carrier and its loyalty programme. Tata Group aims to buy the 51% stake in the airline owned by Jet Airways founder, Naresh Goyal, and Etihad Airways' 24% stake; the Reuters report suggested. Read more

1:20 PM

Fund mobilisation by Indian firms through share issue falls 81% in H1

 

Fund mobilisation by Indian companies through issuance of shares to institutional investors declined 81 per cent to nearly Rs 70 billion during the first half of the financial year 2018-19. The firms had raised Rs 366.53 billion during the corresponding period of the previous financial year. Read more

1:03 PM

71 stocks beat market returns in last three Samvat years

 

71 stocks have outperformed the market in the past three consecutive Samvat years. Of these 24 stocks has recorded returns of more than 30% in each between Samvat years 2072 and 2074. The benchmark S&P BSE Sensex has gained 8% in Samvat 2074 (till November 6, 2018, at 11 AM), as compared to 8.54% return in 2072, followed by 16.6% in last Samvat 2073. Read more

1:01 PM

FOMC meeting preview

The upcoming FOMC policy is unlikely to be a surprise for the market as the committee is widely expected to leave its current 2.0-2.25% target range unchanged for the fed funds rate. This week’s policy will see no new interest rate forecast “dots” and there will be no scheduled press conference, so focus will be on the post-meeting statement.

We think there will be minimal changes from the upbeat tone in September policy in the policy document amid strong GDP data, PCE inflation around 2% handle and robust labor market report (seeing wage growth at surging at 3.1%) in recent weeks. Fed is likely to reiterate that risks to growth and inflation “roughly balanced” and that the Committee will continue to expect “further gradual increases” in the funds rate. Essentially, the November policy will be placed as a prepping ground for the December rate hike of 25bps

(Source: Edelweiss report)

12:50 PM

FPIs, MFs chase fewer stocks amid distorted valuations, regulatory changes

 

Distorted valuations and regulatory changes have prompted institutional investors to go after fewer stocks in the last one year or so, indicating polarisation among equities. Numbers for the September quarter show that the percentage of investments by foreign portfolio investors (FPIs) in the top 20 stocks vis-a-vis other stocks on the NSE stood at 55.15 per cent. This is the highest since September 2013, data from Prime Database shows. Read more

12:44 PM

Despite softening of 10-year G-secs, time not ripe for taking duration bets

 

The 10-year government bond yield has softened from its 52-week high of 8.23 per cent to 7.81 per cent currently. Due to this, the three-month returns of long-term gilt funds (1.75 per cent) and long-duration funds (1.73 per cent) are looking better than those of other debt fund categories. A number of factors have contributed to the softening of the 10-year G-Sec yield. Read more

12:23 PM

Motilal Oswal on ONGC

 

CMP: Rs 155 

TARGET PRICE: Rs 208  

RATING: Buy

 

1H standalone EPS stands at Rs 11.2. We estimate full-year standalone EPS at Rs 25.4. The stock is trading at 4.7x FY20E consolidated EPS of Rs 34.1. We value the standalone segment at 8.0x FY20 adj. EPS of Rs 22.5 and add value of investments to arrive at target of Rs 208. Reiterate Buy.

12:19 PM

ALERT

 

Stock markets would remain closed on Wednesday and Thursday for 'Diwali Laxmi Pujan' and 'Diwali Balipratipada'. The BSE and NSE will conduct a special 'Muhurat' trading session on Wednesday, November 7 between 5:00 pm and 6:30 pm, the stock exchanges had said on Friday. Join us for the LIVE Muhurat trading session on https://www.business-standard.com/ starting 4pm on November 7. We wish our readers a prosperous Samvat 2075

Diwali Samvat 2075 logo

12:02 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,090.06	+139.14	+0.40
S&P BSE SENSEX 50	11,032.38	+28.59	+0.26
S&P BSE SENSEX Next 50	31,951.86	+22.31	+0.07
S&P BSE 100	10,828.44	+24.95	+0.23
S&P BSE Bharat 22 Index	3,448.52	-17.23	-0.50

11:42 AM

Fortis Healthcare Q2 net loss widens to Rs 1.6 bn; IHH deal gets CCI okay

 

Fortis Healthcare’s (FHL’s) net loss widened to Rs 1.67 billion for the September quarter, though the hospitals and diagnostics entity showed an improvement in margins from the June quarter. In the September quarter (the second one or Q2 of the financial year) of 2017-18, the net loss was Rs 459 million. Read more

11:30 AM

Prabhudas Lilladher on Sonata Software

 

RATING: BUY  

CMP: Rs 313 

TARGET PRICE: Rs 410

 

Sonata continued focus on “Platformation” strategy within its focused verticals (Retail/CPG and Travel). Sonata’s IP offering include Rezopia, Brick and Click platform, Retina Platform, Halosys are aiding the company get traction into new accounts. Digital contributed to 35% of total revenues as on 2QFY19. Sonata has been recently named as a member of Inner circle for Microsoft Dynamics. This further strengthens Sonata’s positioning in Microsoft Dynamics which can enable further deal wins from Enterprises implementing Dynamics.

11:19 AM

Cipla hits five-month low on weak outlook; down 12% in two days

 

Shares of Cipla hit a five-month low of Rs 534, down 5% on Tuesday, extending its Monday’s 7% decline on the BSE, due to the weak outlook for the second half of the current fiscal (H2FY19). The pharmaceuticalmajor said there was pressure on the tender business, supply disruptions, commodity inflation and business impact from countries hit by sanctions. Read more

10:57 AM

ALERT

Stock markets would remain closed on Wednesday and Thursday for 'Diwali Laxmi Pujan' and 'Diwali Balipratipada'. The BSE and NSE will conduct a special 'Muhurat' trading session on Wednesday, November 7 between 5:00 pm and 6:30 pm, the stock exchanges had said on Friday. Join us for the LIVE Muhurat trading session on https://www.business-standard.com/ starting 4pm on November 7. We wish our readers a prosperous Samvat 2075

10:41 AM

Elara Capital on ONGC

We reiterate Buy rating as we believe ONGC would outperform with rising gas supply and increase in gas prices. We lower ONGC target price to Rs 196 from Rs 232, as we rollover to FY21E estimates but increases cost of equity to 14% from 11.3% earlier and lowers long term net crude realization at $50/bbl from $55/bbl as conservatively assuming higher subsidy burden. We incorporate weaker INR benefit (to Rs 74/USD from Rs 68/USD). Our implied value of proved reserves is at USD 3.32/boe and OVL reserves at USD 2.4/boe

10:40 AM

Anand Rathi on Khadim India

We maintain our Buy rating, with a revised target price of Rs 911 valued at 14x FY21e EV/EBITDA (previously `976 on 16x FY20e). At 9.4x FY21e EV/EBITDA, we believe the company will turn around once the margin expands and cash generation picks up. The stock trades at a ~52% discount to peers (Bata, Relaxo). Risks: Intensifying competition, large non-regulated market, heavily dependent on eastern India

10:39 AM

Prabhudas Lilladher on Cadila Healthcare

 

RATING: ACCUMULATE 

CMP: Rs 359 

TARGET PRICE: Rs 371

 

The delay in launches of key generics in US and lower than expected growth in India formulations led to the underperformance of CDH in Q2FY19. CDH launched gAsacol HD and gToprol XL in mid-August FY19, while its sales from the exclusive generic of Lialda impacted due to foray of new generics in Q2FY19. The GST-led higher base of India formulations also impacted as it achieved flat growth YoY. Aided by forex benefits, other operating income and headline margins were higher. Ebitda margin was 23.2% vs estimates of 22.5%. CDH accounted Rs581m on forex benefits above Ebitda, of which Rs463m are included in other operating income. Total forex benefits above Ebitda were Rs1.3bn in H1FY19.

10:39 AM

Nomura on upcoming state polls

Going into the state election results, opinion polls suggest that the BJP will manage to retain Madhya Pradesh; lose Rajasthan; and remain competitive in Chhattisgarh i.e. results will be a mixed bag. On the face of it, the BJP’s prospects for the 65 parliamentary seats (of the 543 in the Lok Sabha) suggest that two out of these three states will vote for the BJP in general elections regardless of their state election outcome. At the same time, the state elections will also reflect the mood of the nation, and the extent to which the BJP has been able to distance itself from the electoral issues of low farm incomes and broader rural distress.

Illustration by Binay Sinha

10:36 AM

Prabhudas Lilladher on State Bank of India

 

RATING: BUY 

CMP: Rs 295 

TARGET PRICE: Rs 355

 

SBI reported PAT of Rs 9.4bn (PLe: Rs9.7bn) which was marginally below our estimates with lower provisioning was offset by much lower other income despite having gains of Rs 15.0bn from stake sale in subs. NII was up 12% YoY and flattish QoQ adjusting to one-off from large interest recovery in NCLT a/c in Q1FY19. Slippages have been coming down for SBI and all corporate banks and with NCLT showcasing resolutions with bank having good PCR we expect decent delta from lowered credit cost but challenges on core NIM improvement remains and fee income has to improve to see core profitability improve materially. We retain BUY with revised TP of Rs 355 (from 348) based on 1.4x Sep-20 ABV & SOTP of Rs 84 from subs.