MARKET WRAP: Indices end flat, Nifty above 10,650; ICICI Bank gains 5%

The S&P BSE Sensex ended at 35,591, down 1.25 points while NSE's Nifty50 index closed 0.40 points lower at 10,651.80.

3:41 PM

Indices at close

3:38 PM

Closing Bell

The S&P BSE Sensex ended at 35,591, down 1.25 pts while Nifty50 ended 0.40 points lower at 10,651.80.

3:37 PM

Markets at close

3:20 PM

Elara Capital on Axis Bank

Adequate core capital sustained credit growth, gradual moderation in credit cost and high coverage ratios would improve financial performance of the bank. We expect a ROE of 12.0% for FY20E and 16.3% for FY21E. Hence, we reiterate Accumulate with a revised target price of Rs 783 from Rs 648 based on a SOTP method, with the bank entity valued at Rs 729 at 2.5x (from 2.1x) FY20E P/ABV and subsidiaries excluding parent bank’s investments at Rs 54 (unchanged).

3:19 PM

NEWS ALERT

Coal India to consider share buyback on February 4

3:18 PM

Gold demand falls as traders move to silver, imports seen subdued

Gold demand and import in India witnessed a sharp fall in the December 2018 quarter – a trend that is likely to continue going ahead. According to analysts tracking the sector, traders preferred to swap gold with silver resulting in the higher domestic supply of the yellow metal. The arbitrage was due to high prices of gold and low prices of silver during the last few months. As gold prices are around Rs. 33,000 and a tad away from their all-time high, the subdued trend in gold demand will continue READ MORE HERE

3:17 PM

Finance ministry says it will be 'interim' budget, rejects 'confusion'

Amid speculation over the shape of the Narendra Modi government’s last Budget before the Lok Sabha polls, the finance ministry on Wednesday clarified that it will be called ‘Interim Budget 2019-20’.

 

“This Budget will be called Interim Budget 2019-20 and, therefore, don't have any confusion on this issue,” a finance ministry spokesperson told reporters. The spokesperson’s statement referred to what the Budget speech and documents will officially be titled READ MORE

3:15 PM

Stock Alert: ICICI Bank gains 6% ahead of December quarter results

Shares of ICICI Bank moved higher by 6 per cent to Rs 368 apiece on BSE on hopes of strong earnings in October-December quarter (Q3FY19). The private sector bank is scheduled to announce its Q3 results after market hours today. READ MORE

2:57 PM

Fed likely to hold rates steady as it navigates data blind spots

In the six weeks since a confident US Federal Reserve raised interest rates in response to a "strong" US economy, consumer confidence dropped, wholesale prices weakened, financial markets wobbled and home sales fell. Further afield, China tried to boost lending for its slowing economy, the European Central Bank acknowledged ebbing growth in the euro zone, and the International Monetary Fund cut its world economic growth forecast and warned that global trade had nosedived as major nations squabbled about tariffs. READ MORE

2:46 PM

Bajaj Auto third-quarter profit jumps nearly 16%

Bajaj Auto Ltd posted a higher profit on Wednesday, exceeding analysts' expectations, as the company sold more motorcycle units during the quarter. Profit rose to 11.02 billion rupees ($154.72 million) for the three months ended Dec. 31, compared with 9.52 billion rupees a year earlier. That compared with analysts' average estimate of 10.54 billion rupees, according to Refinitiv data. Sales volume surged 26 percent, helping total revenue from operations jump 16 percent to 74.09 billion rupees, the company said in a statement. 

2:43 PM

Shares of DHFL are trading over 5% lower

2:31 PM

Top gainers and losers on S&P BSE Sensex

2:18 PM

Indian Oil Corp third-quarter profit plunges about 91 percent

Indian Oil Corp Ltd (IOC) reported nearly 91 percent slump in quarterly profit on Wednesday, as a plunge in global crude prices took a toll on margins of oil refiners and marketing companies. The three public sector companies - IOC, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd - were forced to take a price cut in October, hurting their margins as the government wanted to cushion the impact of high crude oil prices on consumers.

(Source: Reuters)

2:05 PM

Earnings Impact

2:02 PM

NEWS ALERT

Bajaj Auto reports Q3 net profit at Rs 1,101.9 crore; Revenue at Rs 7,409 crore, EBITDA Rs 1,246 crore, EBITDA margin at Rs 16.8%

2:00 PM

Novartis sees 2019 growth as it sheds eyecare unit, narrows focus

Swiss drugmaker Novartis sees mid-single-digit sales growth from its core businesses in 2019 as it sheds its Alcon eyecare unit and a U.S. generics pills business to focus on newer high-tech drugs. Fourth-quarter core operating profit rose to $3.39 billion, the company said on Wednesday, compared to the average $3.44 billion in a poll of analysts by Reuters. Sales rose to $13.3 billion, matching the average forecast in the poll. Read more

1:50 PM

EARNINGS IMPACT

1:48 PM

NEWS ALERT

Indian Oil reported Q3 standalone net profit at Rs 716 crore vs Rs 3,247 crore on QoQ

1:45 PM

ICICI Bank is trading over 4.5% higher ahead of its December quarter earnings

1:41 PM

Index watch

1:40 PM

BUDGET EXPECTATIONS

We believe that the Government will stick to the fiscal deficit target of 3.3% of GDP in FY19 for the time being. For FY20, fiscal deficit is likely to be Rs 6.72 lakh crore or 3.2% of GDP, assuming a modest 11.7% of nominal GDP growth. However, such fiscal deficit numbers might be optical as of now, as indirect tax collections and even disinvestment receipts are much below target. We expect a cut in capital expenditure by Rs 50,000 crore and postponing Rs 30,000 crore of revenue expenditure to the next year.

 

For the next year, for Centre, we are assuming a Gross market borrowing of Rs 6.50 lakh crore and a Net market borrowing of Rs 4.13 lakh crore (less than FY19 estimate of Rs 4.20 lakh crore). In case of states, for FY20, gross borrowings are likely to be around Rs 5.5 lakh crore (10% growth in borrowing normally occurs) and net borrowing at Rs 4.1 lakh crore.

(Source: SBI Ecowrap report)

1:35 PM

Elara Capital on Ceat

We remain watchful of the replacement growth trajectory as the slowdown in Nov’18 and Dec’18 in replacement market is a cause of concern. Market share gains in OEM tyre segment has been a savior for volume growth for CEAT in a softening OEM demand scenario. With RM softening we expect margins to bounce back in Q4FY19 and more so in Q1FY20, thereby setting a favorable base for FY20 margins (assuming RM remains stable).

The capex guidance cut is a much needed relief in the current weak environment. We reduce our FY19-21E EPS by 6-10% owing to volume cuts. We reiterate Buy with a new TP of INR 1,361 on 13x (unchanged) weighted avg FY20-21E P/E as we roll forward

1:35 PM

Top gainers on BSE500

COMPANY	PRICE(rupees)	CHG(rupees)	CHG(%)	VOLUME
GRAPHITE INDIA	514.15	46.70	9.99	441293
HEG	2150.00	175.40	8.88	113283
FORCE MOTORS	1462.10	117.30	8.72	35048
DCM SHRIRAM	329.50	24.65	8.09	46510
ADANI GREEN	37.25	2.45	7.04	50379

1:34 PM

Edelweiss on consumer goods sector

Rural distress hogs limelight these days, so much so that it was the main plank on which the recent state elections were fought. Consequently, various state governments have proposed / doled out farm loan waivers to direct transfers (DBTs) to gain favour among rural voters. While this is a godsend for the distressed rural lot, we smell in such sops an opportunity brewing for staple companies – rural growth of 18.5% YoY in Q3FY19 (as per Nielsen), 400bps higher than urban growth rate, is testimony of buoyancy in rural growth.

Staples are, understandably, among the very first beneficiaries of any the spike in disposable incomes – Nielsen too expects sector growth to be 11-12% YoY for CY2019. We argue that these sops would perk up rural incomes and in turn volume growth at consumer staples companies. We prefer players with superior execution capabilities, disruptive innovation, distribution expansion and market leadership and, therefore, retain HUL, Britannia, Nestle and Dabur as top picks in the consumer staple space

1:25 PM

NDA got more taxes from individuals than UPA

The National Democratic Alliance (NDA) government under Narendra Modi has presented five Budgets so far. How do they compare with those presented by the United Progressive Alliance (UPA) government under Manmohan Singh in two stints? UPA-I had five Budgets from Palaniappan Chidambaram and UPA-II had four Budgets from Pranab Mukherjee and one from Mr Chidambaram READ MORE HERE

Illustration by Binay Sinha

1:15 PM

Reliance Securities on HCL Tech

Trimming our EPS estimates slightly for forward years on lower other income, we maintain our BUY recommendation on the stock with a revised Target Price of Rs1,195 (from Rs1,220 earlier).

 

1:12 PM

BUDGET EXPECTATIONS

ICICI Securities

As the thrust of spending moves towards revenue expenditure in the form of farm relief expenditure or tax relief for the EWS of the society, capex growth is likely to remain stagnant given the budget constraints. The above spending pattern of the government going ahead augurs well for consumption stocks with large rural footprint while it is negative for stocks driven by hopes of a capex revival. Our budget picks include companies benefitting from the likely pick-up in rural consumption: HUL and Dabur

1:09 PM

Market Check

12:54 PM

HCL Technologies gains 5% on better-than-expected Q3 earnings

Shares of HCL Technologies were up 5 per cent to Rs 1,035 apiece on BSE in the intra-day trade after the company reported a better-than-expected net profit of Rs 2,611 crore for the quarter ended December 2018 (Q3FY19) over the September quarter. Revenue grew 5.6 per cent at Rs 15,699 crore sequentially. The company delivered a solid industry leading 5.6 per cent sequential growth in constant currency (CC) at stable 19.6 per cent EBIT (earnings before interest and tax) margin. The growth was driven by services across verticals and geographies led by mode-2 services that grew 13.1 per cent, Mode-3 6.2 per cent and Mode-1 3.9 per cent. READ MORE

12:44 PM

Despite tough operating climate, Bajaj Finance's Q3 net profit jumps 54%

At a time when the market conditions are just not conducive for non-banking financial companies, Bajaj Finance seems to stand out. Its net interest income (NII) grew 46 per cent in the December quarter (Q3), and net profit expanded by 54 per cent to Rs 1,060 crore. Aided by a late push in festive season demand, consolidated assets under management (AUMs) grew by 41 per cent year-on-year in Q3. This allowed results to exceed expectations on all parameters. READ MORE