MARKET WRAP: Sensex ends 142 pts up, Nifty settles at 10,790; metals shine

All that happened in the markets on Thursday

3:35 PM

Sectoral gainers and losers of the day on NSE

3:34 PM

Gainers and losers of the day on S&P BSE Sensex

3:33 PM

Market at close

The S&P BSE Sensex ended at 35,898, up 142 points or 0.4 per cent, while the broader Nifty50 index settled at 10,790, up 54 points or 0.5 per cent.

3:19 PM

Top gainers on BSE500

COMPANY	PRICE(rs)	CHG(rs)	CHG(%)	VOLUME
SUZLON ENERGY	4.52	0.87	23.84	6627867
RELIANCE NIP.LIF	187.05	31.15	19.98	289377
CORPORATION BANK	29.65	4.15	16.27	646243
S H KELKAR & CO.	161.00	22.35	16.12	19844
JP ASSOCIATES	5.93	0.74	14.26	4702263

2:59 PM

Barclays income boost cheers investors, makes Brexit provision

Barclays reported a lower than forecast attributable profit of 3.5 billion pounds ($4.56 billion) for 2018, as it set aside cash to cushion against Brexit losses and its trading business weathered a difficult fourth quarter.

 

Barclays did show signs of progress in its under-pressure investment bank, where profit for the full year increased 15 percent to 2.6 billion pounds as its equities trading unit saw income rise 25 percent. READ MORE

2:44 PM

Karvy Stock Broking on KNR Constructions

Recommendation: BUY

CMP: Rs 203

Target Price: Rs 260

 

KNR Construction is trading at 11.6x to FY20E standalone EPS. Considering the order book and execution rates, we value the EPC business at 12x to its FY20E EPS to arrive at the value of Rs. 209 per share. We also value the BOT assets at 1x BV & HAM opportunity at 1x BV of the equity investment and arriving at a value of Rs. 260.

2:28 PM

Reliance Capital offers to sell stake in asset management JV to Nippon Life

Anil Ambani-led Reliance Capital (RCap) on Thursday said it has invited Nippon Life Insurance to acquire up to 42.88 per cent, which is its entire stake, in Reliance Nippon Life Asset Management Ltd (RNAM). Japan's Nippon Life Insurance Co. Ltd. already holds 42.88 per cent stake in RNAM. "Reliance Capital Ltd has invited its partner, Nippon Life Insurance Co Ltd to make an offer to acquire up to 42.88 per cent stake held by Reliance Capital in Reliance Nippon Life Asset Management Ltd," Reliance Capital said in a regulatory filing. READ MORE

2:09 PM

First-time investors should tweak their portfolio, reassess stocks

Sharook Sayeed, 26, a final-year MBA student at Christ University, opened an account with Zerodha last September. His fledgling portfolio holds six stocks. Currently, only two of them are trading above his purchase price, while the rest are all in the negative zone. Some have even hit 52-week lows. Faced with his first equity-market downturn, Sayeed is worried but says he will weather it by holding on to his portfolio for the long term. According to data from the Securities and Exchange Board of India (Sebi), 40 lakh demat accounts were opened in 2018, the highest in a decade. READ MORE

1:58 PM

MARKET CHECK

1:45 PM

NEWS ALERT | Som Distelleries' board to consider conversion of warrants into equity shares at Rs 271.55 per share on March 2

1:42 PM

Top gainers on BSE500

COMPANY	PRICE(rs)	CHG(rs)	CHG(%)	VOLUME
CORPORATION BANK	29.20	3.70	14.51	452233
RELIANCE NIP.LIF	172.80	16.90	10.84	160257
TEJAS NETWORKS	167.05	14.85	9.76	89336
SUZLON ENERGY	3.97	0.32	8.77	2240882
RELIANCE CAPITAL	157.00	11.95	8.24	2224967

1:23 PM

Web Exclusive | CG Power, Kwality: Promoters pledge 100% holding in December quarter

CG Power and Industrial, Kwality, Reliance Naval and Engineering, IL&FS Transportation Networks and Sterlite Technologies are the five companies from the BSE-500 index, whose promoters have pledged over 95 per cent of their holdings in the December quarter of financial year 2018-19 (Q3FY19), suggests a recent report by Kotak Securities. Among them, promoters of CG Power and Industrial, Kwality and Reliance Naval pledged 100 per cent of their holdings, the report says. READ MORE
 

1:01 PM

ADAG stocks in focus; Reliance Nippon, Reliance Capital up over 5%

Shares of Anil Dhirubhai Ambani Group (ADAG) companies have moved higher by 16 per cent in intra-day trade on Thursday, erasing most of their Wednesday’s losses on the BSE. The rally comes on the back of a Reliance Communications (RCom) statement where the company said that it is confident of paying entire Rs 550 crore and interest thereon with four weeks as directed by the Supreme Court (SC). READ MORE

12:57 PM

RCom asks lenders to allow release of Rs 260 crore directly to Ericsson

Reliance Communications (RCom) said on Thursday it has urged its lenders to allow release of Rs 260 crore ($36.55 million) directly to telecom equipment maker Ericsson. RCom said it had received the sum as income tax refunds and is lying in its bank account. READ MORE

12:51 PM

Karvy Stock Broking on H.G. Infra Engineering

Recommendation: BUY

CMP: Rs 174

Target Price: Rs 240

 

HG Infra is trading at 6.8x PE to its FY20E EPS. In view of the robust order book outstanding coupled with its execution capabilities, we are of the positive view about the company’s future performance. However, excessive order book concentration & dependence on subcontracting remains key things to watch for. We assign a conservative 9x to its FY20E EPS (25% discount to peer average) for its core operations. We factor the HAM investments in Haryana at 1xBV and arrive at a SoTP based target price of Rs. 240 with a “BUY” rating.

12:39 PM

TVS Motor hits 20-month low; stock falls 15% in one month

Shares of TVS Motor Company slipped to a 20-month low of Rs 456 apiece, down 2 per cent on the BSE on concerns of a likely rural slowdown and lower exports.

The stock of the two-wheeler (2W) company was trading at its lowest level since April 7, 2017. It underperformed the market by falling 15 per cent in the past one month, as compared to a 2 per cent decline in the benchmark index S&P BSE Sensex. READ MORE

12:22 PM

This single bond bet involving Warren Buffet cost Deutsche Bank $1.6 bn

Deutsche Bank AG racked up a loss of $1.6 billion over nearly a decade on a complex municipal-bond investment that it bought in the runup to the 2008 financial crisis, and failed to confront head-on even as markets were upended and regulations tightened.

 

The loss, which hasn’t previously been reported, represents one of Deutsche Bank’s largest ever from a single wager—roughly quadruple its entire 2018 profit—and ranks as one of the banking industry’s biggest soured bets in the last decade. READ HERE

12:09 PM

Reliance Securities bets on Asian Paints and ITC

The Consumer sector reported solid numbers with solid operating metrics. The companies managed their margin performance reasonably well considering the significant input cost pressure during the quarter led by rising crude oil prices. Both consumer staples and discretionary reported very healthy operating performance. The biggest positive surprise for the quarter was >20%volume growth by Asian Paints and revenue growth by Titan Company.

On the flip side, margin compression in Nestle was a negative surprise. Though the sector heavyweight, ITC reported lower-than-expected growth in operating profit, the Company registered improving operating performance with higher cigarette volume and margin improvement in FMCG others business. Our Top-picks: ITC and Asian Paints

12:08 PM

Reliance Securities on L&T

We are positive on L&T led by strong execution in core E&C business with robust order inflow momentum led by strong performance of key segments i.e. Infrastructure and Hydrocarbon. f The plan to exit part of development assets especially monetisation of Hyderabad metro in a longterm is positive, in our view. Expect revenue and earnings to clock 13% and 16% CAGR, respectively over FY18-21E. At CMP, the stock trades at 16.6xFY20E and 14.5xFY21 earnings. Maintain BUY recommendation and an SOTP-based target price of Rs 1,763

12:06 PM

MARKET CHECK

12:06 PM

STATUS CHECK :: ADAG stocks

COMPANY	LATEST	PREV CLOSE	GAIN(Rs)	GAIN(%)	VOLUME
RELIANCE CAPITAL	148.65	145.05	3.60	2.48	1014756
REL. COMM.	5.90	5.80	0.10	1.72	4130168
RELIANCE INFRA.	119.75	119.40	0.35	0.29	733059

11:56 AM

PhilipCapital on Aarti Industries

Aarti Industries' stock price has already corrected 23% over last 13 trading sessions despite healthy Q3 results (53% yoy jump in earnings) possibly due to concern over softening product prices. We believe the large part of price softening is due to sharp crude correction recently and that would result in improved margin scenario consequently. Additionally, supported by the multiyear customized/exclusive supply agreements with global companies, supply disruption in China and timely capacity expansions; we estimate 30% earning CAGR over FY18-21 to Rs 89/share in FY21. We continue to value Aarti Industries at 2,000 i.e., 14x FY21 EBITDA. Maintain conviction BUY with TP of Rs 2,000.

11:50 AM

IPOs show no sign of capex revival, fresh issue component below 20%

A turn in the capex cycle may not be around the corner if primary market activity is any indication. Fresh capital through initial public offerings (IPOs), typically used to fund expansion and capex, continues to remain sluggish. For the second financial year in a row, fresh equity issuances have accounted for less than a fifth of total IPOs. While the fresh issue portion of IPOs has been going down over the years, this financial year has been abysmally low at only Rs 2,663 crore, 82 per cent lower compared to the last financial year. READ MORE

11:40 AM

Top gainers and losers on S&P BSE Sensex

11:36 AM

MARKET COMMENT :: Jefferies

Nearing the US-China trade deadline (1st March), the US equity markets have benefited from a sea-change in risk appetite with the long end of the bond market slipping back toward 2.6%. Equally, US Stocks that have a high revenue exposure to China have also rallied sharply suggesting that investors have discounted a positive outcome to the discussions. While a trade deal will probably be sealed, it is not the end of the bilateral conflict

11:29 AM

Tech Mahindra hits new high as board approves buyback at Rs 950 per share

Shares of Tech Mahindra hit an all-time high of Rs 832 apiece, rising 2.5 per cent on the BSE in an otherwise subdued market after the company's board approved share buyback at a price of Rs 950 per share through a tender offer. The stock surpassed its previous high of Rs 824 recorded on February 8, 2019, in the intra-day trade.

The trading volumes on the counter nearly doubled with a combined 3.94 million equity shares changing hands on the NSE and BSE till 10:59 am. The S&P BSE Sensex was up 0.10 per cent at 35,790 points. READ MORE

11:11 AM

Geojit Financial on Bata India

·         Bata India Ltd (BIL) is the largest retailer and leading manufacturer of footwear in India with ~1300 retail stores as on Dec 2018. 

 

·         BIL reported strong earnings growth of 51%YoY and revenue growth of 16%YoY. EBITDA margin expanded 450bps to 21%. 

 

·         EBITDA margin expansion was aided by improvement in gross margin on account of increase in premium brands in the mix. 

 

·         Rent expense as % of sales declined by 60bps YoY. Store additions via franchisee route will control fixed costs. 

 

·         Strong initiatives to increase footfalls along with acceleration in store additions will aid for strong revenue growth going forward. 

 

·         We expect BIL’s revenue/earnings to grow at 13.2%/26.3% CAGR over FY18-21E. 

 

·         Strong outlook on earnings aided by premiumisation & cost control measures will support valuations.

·         We increase our target to Rs1,404 by valuing at 40x on FY21 EPS and upgrade to Accumulate. 

Photo: Sanjay K Sharma

 

11:07 AM

Aarti Industries gains 8% on signing Rs 900 crore multi-year deal

Shares of Aarti Industries have rallied 8 per cent to Rs 1,418 apiece on the BSE in intra-day trade after the company announced that they have signed a $125 million (Rs 900 crore) supply contract with a leading global chemical conglomerate. The contract entails the supply of a high-value specialty chemical intermediate for a period of 10 years. The plant is expected to commission in Q4 FY2021, with average annual revenue of $ 12.5 million. READ MORE

11:02 AM

SPECIAL REPORT :: PLEDGED SHARES

Our analysis of pledged holdings of BSE-500 stocks shows that the percentage of pledged promoter (majority shareholder) holdings was steady in the December 2018 quarter in comparison to the September quarter. The percentage of pledged promoter holdings was at 6.7% in the December quarter similar to that of September 2018.

Outstanding promoters pledged shares were Rs1.96 tn, which is about 1.47% of the total BSE-500 Index’s market capitalization in December 2018. Promoters of 116 companies pledged their holdings among BSE-500 Index stocks compared to 114 companies in September 2018 quarter. Six companies had more than 90% of their promoter holdings pledged. We clarify that pledging of shares does not necessarily imply that a company or a promoter is under financial stress; banks (lenders) could have sought additional security in the form of promoter shares

(Source: Kotak Securities)

10:54 AM

STOCK IMPACT | Tech Mahindra up 2% as board approves share buyback at Rs 950/share