MARKET WRAP: Sensex slides 464 points; NBFCs plunge, India VIX surges 11%

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3:51 PM

Sectoral gainers & losers on NSE

3:50 PM

S&P BSE Sensex: Top gainers & losers on BSE

3:39 PM

Market at close
 

The S&P BSE Sensex ended 464 points or 1.33 per cent down at 34,316 while NSE’s Nifty50 index ended at 10,304, down 150 pts, or 1.43 per cent.

3:15 PM

Buzzing Stock

Lakshmi Vilas Bank jumps 16%

2:45 PM

HDFC Securities on DCB Bank 

 

DCBB’s 2Q results were impressive, particularly, the stable asset quality (esp. in the mortgage business) on account of lower slippages, sustained business momentum (+27%), controlled costs (core C-I improved ~360bps) and further decline in provisions (even as PCR inched up). RWA remained constant even as the loan book grew 4% QoQ. While the CASA ratio dipped QoQ, 30% SA growth was promising. 

 

While we have marginally tweaked our estimates, our assumptions on opex growth (18% CAGR) and NIMs (3.7% over FY18-21E) provide enough cushion to our earnings. Maintain BUY with a TP of 209 (2x Sept-20E ABV of Rs 104).

2:19 PM

Buzzing stocks

IT shares trade weak; TCS hits 3-mth low, Infosys, HCL Tech down 4% each
 

The Trump administration has said it is coming out with new proposals to not only revise the definition of speciality occupations under H-1B visas, but also the definition of employment under this foreign work visa category which is popular among Indian companies, the PTI report suggested. READ MORE

2:17 PM

Top losers today

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
PNB HOUSING	722.90	-144.65	-16.67	158193
MINDTREE	830.00	-148.95	-15.22	390784
INDIABULLS HOUS.	673.25	-115.60	-14.65	2443856
PIRAMAL ENTERP.	1885.35	-213.60	-10.18	168920
REPCO HOME FIN	307.00	-34.40	-10.08	173737

2:09 PM

Centrum Broking on ACC

During Q3CY18, ACC delivered 10% YoY volume growth aided by strong demand – mainly in east and south markets.  However, realisation fell 1.7% QoQ amid aggressive competition and seasonal weakness. ACC’s productivity improvement muted inflationary impact of slag, energy and diesel price inflation. Consolidated EBITDA/PAT growth of 8%/17% YoY came is lower than estimated, owing to higher than estimated other expenses.

We believe ACC’s focus on cost controls to keep cost inflation in check, going forward. While ACC’s volume growth would moderate during CY19-20E due to lack of new expansions, its profitability should benefit from price recovery going forward and increased cost controls. We upgrade to BUY from HOLD, with a revised target price of Rs1820

2:08 PM

YES Bank, RIL among top Sensex losers

2:02 PM

Markets plunge

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	34218.47	34779.58	-561.11	-1.61
	13670.73	13887.26	-216.53	-1.56
	14048.42	14214.23	-165.81	-1.17
	14040.55	14271.16	-230.61	-1.62
	3974.77	4040.67	-65.90	-1.63

2:00 PM

Kotak Securities on cable providers

RIL’s acquisition of Hathway and Den paves the way for the accelerated rollout of Jio’s FTTH broadband + IPTV. Jio can potentially add 15 mn FTTH subs in the next three years. Key implications: (1) acceleration in TV-to-OTT shift led by proliferation of ultra-high-speed fixed-line internet, (2) deceleration in broadcasters’ subscription revenue growth due to consolidation of distributors, ARPU-dilutive churn of subs to Jio from DTH, (3) risk to subscriber and ARPU growth of DTH in urban markets. We cut Dish TV’s FY2020-21E EBITDA by 5-10% and target price to Rs70 (from Rs90); ADD.

1:59 PM

SMC Global on Bajaj Corp

With good cash on hand and zero debt, the company is gaining in its light hair oil category which is premium hair oil. It has increased number of distributors in rural areas. Actions done in the past such as increase in distribution and direct dealer network have resulted in increase in volumes better than the industry.

The management of the company aims to continue to launch new products. Immediate launches will be in hair oil and skin care. Currently it has new launches in related category products and aims to use cash for acquisition to leverage the strong distribution. Thus we expect the stock to see a price target of Rs 450 in 8 to 10 months time frame 2 year average P/Ex of 27.84 and FY19 (E) earnings of Rs16.17.

1:58 PM

SMC Global on NIIT Technologies

On the back of strong order pipeline, experienced senior management team and energised sales force, it is expected that the momentum of robust performance will continue. Over the past few years, the company has been shifting gears and in recent quarters, it has transformed completely to engage with the emerging.

The business from digital has been accelerating and has grown 38% YoY and represents 28% of overall revenue. Thus, it is expected that the stock will see a price target of Rs.1458 in 8 to 10 months time frame on a target P/E of 24x and FY19 (E) earnings of Rs.60.76.

1:57 PM

Anand Rathi on Cyient

Cyient's Q2 revenue was $169m (up 4.9% q/q, 12.5% y/y). Services grew 3.5% q/q in CC (2.6% org.) and 2.1% in dollar terms, with growth driven by the non-top10 accounts. Some ramp-ups were delayed to Q3; FY19?s 10%+ growth target retained. DLM held to high, 45%y/y, growth.

The EBITDA margin was up 152bps q/q to 13.7%, though down 90bps y/y, incl. the NBA impact. No change in revenue guidance but margin guidance raised 50bps for currency (`72/$) and on the expected higher contribution from services in H2. No meaningful change in estimates (excl. GoI incentives in other income). Target revised to Rs 820 (16x FY21e, from 18x FY20e).

1:56 PM

Centrum on DCB Bank

We retain BUY on DCB Bank (DCBB) with target price at Rs205. Q2’19 results were strong on many counts – robust loan growth, healthy core operating profit, limited slippages and higher than expected NII / PAT. NIM (reported) declined 7bps QoQ; we expect trend in NIM to reverse in H2FY19. Cost / asset ratio declined further to 2.6% (vs. 2.9% for FY18) and re-affirms our thesis of improved branch productivity.

Continued traction will aid in increased profitability. Capital position remains strong; management has guided for prudent capital consumption with greater focus at risk-adjusted RoEs. Valuations at 1.6x FY20E ABV for an exit RoE of ~14% by end-FY20E remain attractive. Retain BUY

1:55 PM

HDFC Securities on MindTree

We  maintain  positive  view on Mindtree based on: Continued traction in Digital (48.1% of rev and 35% YoY) with larger deals (highest quarterly TCV in  Digital  at  $162mn, vs $426mn in FY18); Strong deal momentum and visibility in Travel & Hospitality, Retail & CPG (to recover in 3Q) and Technology and Media verticals; Stable top accounts (marginal pricing increase in top ac) with secular growth ahead across top-20 (vs top account skew  earlier); Margin accretion with pyramid rationalization (800 fresher intake in 2H) and delivery optimization (automation)

1:45 PM

MFs pump Rs 110 bn in equities in a fortnight, FPIs stance remains bearish

 

Mutual fund houses have made investments of over Rs 110 billion in domestic equities in the first two weeks of this month despite volatility in the stock markets, even as foreign investors pulled out a massive Rs 190 billion. This comes following a net infusion of Rs 116 billion in equities by the fund managers and a net withdrawal of Rs 108.25 billion from stocks by FPIs in September, latest data available with the markets regulator Securities and Exchange Board of India (Sebi) and depositories showed. Read more

1:30 PM

NEWS ALERT
Ratings agency downgraded us due delay in interest payment. Have good liquidity; cash flow of around Rs 400 cr in last qtr, says R K Arora of SuperTech to ET Now

1:29 PM

NEWS ALERT
No default to any banker or NBFC; only delayed interest payment by 15 days. Have asked rating agency to clarify as to why co rated as Default, says R K Arora of SuperTech to ET Now

1:27 PM

Indian banks now have the advantage over crisis-hit NBFCs, say analysts

 

For banks, one man’s loss may prove to be another’s gain. The liquidity crunch faced by the NBFC sector is expected to give banks an upper hand in terms of broad-basing their presence in the retail space and expanding their loan base. Analysts factor 15 -20 per cent loan growth for private banks and 8-10 per cent growth for public sector banks. However, the trend in other income could remain shaky for most of FY19. Read more

1:15 PM

Oil and gas stocks: High crude prices, weakening rupee pull down sentiment

 

Thanks to rising crude oil prices and rupee depreciation, public sector oil and gas companies have seen heightened concerns on profitability, leading to a 7-19 per cent fall in their stock prices. The government’s recent decision asking the OMCs to absorb a part of retail price reduction (Rs 1 a litre impact on marketing margins of OMCs) has been looked by the street as a reversal of its stand on free pricing mechanism for petrol and diesel. Read more

1:00 PM

FMCG stocks trip on high valuations; analysts see further correction

 

Usually, when markets fall, fast moving consumer goods (FMCG) stocks are seen as safe havens. However, this time around, FMCG stocks were among top losers as markets fell, mainly due to their pricey valuations. Being amongst the few attractive sectors, FMCG stocks had remained in the sweet spot. In just eight months ending August, the index had rallied over 19 per cent. Read more

12:45 PM

Cement stocks: Street hopeful of a better future driven by pricing gains

 

Cement stocks have taken a significant beating in a seasonally soft quarter affected by monsoon. Realisations have remained subdued, while cost pressures continue unabated.

 

The start of October, too has not seen significant uptick in prices with Kotak Institutional Equities’ channel checks suggesting that all India cement prices are down in the current month by Rs 2 per 50 kg bag compared to September as pricing weakness continued in FY19. The pressure on the cost front, however continues to rise. READ MORE

12:30 PM

Mindtree tanks 18% on revenue miss, cautious outlook; analysts mixed

 

Shares of the mid-tier IT company Mindtree tumbled as much as 17.6 per cent in the intra-day trade on Friday after the company reported subdued revenue growth for the September quarter. The sentiment was also hit on the cautious macro commentary by the management.

 

The IT firm on Wednesday posted a 65.4 per cent rise in its consolidated net profit at Rs 2.06 billion, on the back of sound growth in travel & hospitality and hi-tech & media verticals. However, it disappointed Street with muted constant-currency (CC) revenue growth of 2.4 per cent in a seasonally strong quarter. READ MORE

12:15 PM

NBFCs fall; DHFL, Indiabulls Housing, PNB Housing tank over 40% in 1-month

 

Shares of non-banking financial companies (NBFCs) including housing finance companies (HFCs) and select private banks were continued under pressure for the second straight day with Dewan Housing Finance Corporation (DHFL), Indiabulls Housing Finance and PNB Housing Finance falling more than 10% on Friday on concern of overall credit growth likely to suffer due to the liquidity crisis. Read More

 

12:00 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	34,455.48	-324.10	-0.93
S&P BSE SENSEX 50	10,826.10	-107.60	-0.98
S&P BSE SENSEX Next 50	30,351.08	-209.96	-0.69
S&P BSE 100	10,574.46	-100.31	-0.94
S&P BSE Bharat 22 Index	3,332.01	-0.46	-0.01

11:46 AM

Nifty IT index trading 2.62% lower weighed by Mindree

11:30 AM

Rupee fall, Kerala floods hit auto cos

 

Led by Maruti, the sector has lost about 20 per cent of its market value since the highs at the end of August. India's largest passenger vehicle (PV) maker is perhaps a good reflection of the problems that beset the sector. At the heart of the street’s worries is slowdown in volumes. Maruti, for example, reported flat volumes for September as compared to 10 per cent growth for the fiscal year-to-date period. READ MORE

11:15 AM

Non-bank MFs forge special ties with distributors to gain market share

 

Non-bank fund houses are looking to enter into special arrangements with distributors to expand their asset base. Essel Mutual Fund (MF) recently gave a token stake in its business to NJ India Invest, the country’s largest distributor in terms of commission.

 

Reliance MF and Vakrangee entered into a tie-up in July to distribute the former's mutual fund products in under-served areas. READ MORE

11:00 AM

Sebi, staffers at odds over transfers, promotions and external appointments

 

Dissatisfaction has arisen among staffers at the Securities and Exchange Board of India (Sebi) over recent transfer orders and the policy in this regard. A letter on Wednesday from the Sebi Employee Association (SEA) to chairman Ajay Tyagi says the staffers "are collectively feeling let down". A e-mail from this publication to the Sebi management was not answered. Read more