Other Asian markets were trading mixed, as relief US-led strikes on Syria looked unlikely to escalate was tempered by concerns at Russia’s potential reaction to new sanctions from Washington.
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02:31 PMSupreme Court asks Jaiprakash Associates to deposit Rs 1 bn by May 10The Supreme Court today directed realty firm Jaiprakash Associates Limited (JAL) to deposit Rs 1 billion with its Registry by May 10.The bench headed by Chief Justice Dipak Misra also directed the Insolvency Resolution Professional (IRP) to consider the representation of JAL on revival plans as per law.Meanwhile, the counsel for the firm told the apex court that it had already deposited Rs 1 billion on April 12 in pursuance of an earlier order. READ MORE
02:16 PMCan RBI press for open currency?The Reserve Bank of India’s (RBI’s) decision to lower the boom on crytocurrency will have multiple repercussions. Some of those may be unforeseen and unpleasant. The RBI has decreed that banks and non-banking financial companies must stop services and support to cryptocurrency exchanges, and to any entity for the purpose of cryptocurrency trading.In effect, this cuts bitcoin and its siblings off the formal banking system. Does that mean that cryptocurrency trading will stop? No. All legitimate and legal trading in crypto will stop. READ MORE
Markets at 2 pm
S&P BSE Sensex 34,277.79 0.25% Nifty 50 10,506.60 0.25% S&P BSE 200 4,620.61 0.34% Nifty 500 9,292.30 0.27% S&P BSE Mid-Cap 16,688.38 0.06% S&P BSE Small-Cap 18,047.13 0.36%
01:46 PMBorrowing plan: States edge out corporates from bond marketRising state government borrowing has depressed sentiment in the market with investors staying away from investing in central government securities for fear of rising valuation-linked losses.The supply of state paper, considered high-quality because of government backing, is raising yields across bonds. It has pushed up sovereign bond yields and, as a result, threatens corporate bond yields. Incessant supply means the private sector is elbowed out from the market by states. At a time when banks are not lending freely to companies, such crowding out does not augur well for them. READ MORE
01:31 PMCoinsecure’s search for stolen bitcoins begins, writes to 42 exchangesDelhi-based cryptocurrency exchange Coinsecure’s search for stolen bitcoins has begun. The firm has written to 42 global exchanges and roped in US-based blockchain investigative firm Chainalysis to track the movement.Last week, Coinsecure reported to the police 438 bitcoins worth Rs 190 million were siphoned off to an unknown address on the internet, blaming one of its top executives for the heist. READ MORE
01:17 PMThis stock rallied over 40% in two days after tepid market debutShares state-owned Mishra Dhatu Nigam (Midhani) rallied more than 40% in past two trading sessions on back of heavy volumes.The trading volumes on the counter jumped nearly three-fold with a combined 11.69 million equity shares representing 6% of total equity have changed hands on the NSE and BSE so far, the exchanges data shows. READ MORE
01:00 PMTop BSE500 losers
COMPANY PRICE() CHG() CHG(%) UCO BANK 20.55 -1.80 -8.05 VAKRANGEE 126.00 -6.60 -4.98 JBF INDS. 106.15 -5.55 -4.97 TATA MOTORS-DVR 193.00 -9.80 -4.83 TATA MOTORS 339.50 -17.15 -4.81
12:47 PMTata Motors falls for second straight session; stock down 4%Tata Motors dipped 4% to Rs 341 on Monday, extending Friday’s 0.4% decline on the BSE. Tata Motors was the largest loser among the S&P BSE Sensex and Nifty 50 index. The benchmark indices were down less than 1% at 34,111 and 10,465, respectively.According to PTI report, Tata Motors- owned Jaguar Land Rover (JLR) is planning to cut jobs as it scales back production at some of its UK sites amid what it termed as “headwinds” impacting the automotive industry. READ MORE
12:30 PMSBI MF re-classifies, categorise schemes; gives exit option to unit holdersSBI Asset Management Company has re-classified and categorised its several schemes, a move that will reduce clutter and make it simple to compare performance of various other mutual fund schemes.Besides, the fund house has given the exit option to existing investors.The move is part of the fund house effort to comply with markets regulator Sebi’s directive. READ MORE
Export growth accelerated to 9.8% YoY for F2018, from 5.2% in F2017 and a contraction of 15.5 in F2016. We continue to expect that export growth will hold up well, considering that the starting point of global demand is strong. While the possibility of trade protectionism is a risk factor, our base case view is that negotiations are still the likely outcome.
Robust import growth reflects continued strength in domestic demand conditions, which is consistent with other high-frequency indicators. We continue to expect these favorable consumption and exports conditions to drive the recovery and help pave the way for a private capex recovery this year.
(Source: Morgan Stanley)
NEWS WATCH March WPI Inflation at 2.47% Vs 2.48% (MoM)
Markets at noon
S&P BSE Sensex 34,115.80 -0.22% Nifty 50 10,462.05 -0.18% S&P BSE 200 4,600.80 -0.09% Nifty 500 9,254.65 -0.14% S&P BSE Mid-Cap 16,654.36 -0.14% S&P BSE Small-Cap 17,976.82 -0.03%
Nifty IT losers
COMPANY LATEST PREV CLOSE LOSS() LOSS(%) INFOSYS 1130.05 1171.45 -41.40 -3.53 INFIBEAM INCORP. 169.05 172.30 -3.25 -1.89 KPIT TECH. 226.45 229.55 -3.10 -1.35 TATA ELXSI 1061.00 1073.60 -12.60 -1.17 WIPRO 291.10 294.15 -3.05 -1.04
11:48 AMAlarmed by active bidders, Jaypee Infratech tries to reclaim firmAs multiple bidders, starting with Sudhir Valia of Suraksha Asset Reconstruction Company to Adani Group, eye taking over beleaguered real estate biggie Jaypee Infratech (JIL), fears of the valuation of the company being slashed to less than half are making the promoters rush to the Supreme Court (SC) to reclaim the company.While the bidders are making offers ranging between Rs 70 billion and Rs 80 billion, sources close to JIL said that the valuation of the company was not less than Rs 160 billion. “The company has over 3,300 acres, lying unused. That itself is worth over Rs 100 billion. The rest in assets makes the valuation of the firm to Rs 160 billion,” a source close to the company said. READ MORE
Stocks at 52-week low
COMPANY LATEST 52 WK LOW PREV LOW PREV DATE B P C L 402.60 400.00 400.17 27-JUN-2017 BALRAMPUR CHINI 72.80 72.00 72.05 13-APR-2018 BLUE DART EXP. 3781.50 3579.00 3674.00 09-APR-2018 IDEA CELLULAR 71.10 70.75 71.50 10-OCT-2017 UCO BANK 20.55 19.15 19.40 13-MAR-2018
11:15 AMGruh Finance gains 6% post Q4 results; 1:1 bonus issueGruh Finance has rallied 6% to Rs 652 on the BSE in intra-day trade after the board of directors recommended the issue of bonus shares in the ratio of 1:1 i.e. one equity share for every one equity share held on the record date.The board also recommended dividend of Rs 3.30 per equity share of face value of Rs 2 each for the financial year ended March 31, 2018. READ MORE
11:06 AMIDEA: DOT awaits foreign direct investment clearance for Vodafone merger approvalReportedly, the department of telecom (DOT) is awaiting the approval from the department of industrial policy and promotion (DIPP) for Idea Cellular (IDEA)’s raising of foreign direct investment limit to 100% before approving the merger of Vodafone India and sale of towers to ATC. Additionally reports suggest that the DOT is has insisted that IDEA and Vodafone pay in total Rs 188.7b towards disputed license fees and spectrum usage charge for excess spectrum. This dispute is now being fought in the Supreme Court. We have SELL on IDEA with target price of Rs 72
(Source: Maybank Kimeng Securities report)
10:58 AMHero MotoCorp: Expectations of normal monsoon to keep up rural demandThe Hero MotoCorp stock has gained nearly 10 per cent since its March-end lows on expectations of strong volume growth in FY19 led by robust rural demand. Given the positive rural sentiment following a good rabi season, higher minimum support prices for crops, and forecast of normal monsoon, brokerages, industry body SIAM and the company’s management predict that the current fiscal year should see a double-digit increase in for two-wheelers/motorcycles volumes. READ MORE
STOCK CONTRIBUTION TO SENSEX TODAY
COMPANY LATEST CHG(RS) CHG(%) CONTRIBUTION
COAL INDIA 284.95 -0.40 -0.14 -0.85 BHARTI AIRTEL 376.60 -1.20 -0.32 -2.83 GAIL (INDIA) 323.00 -3.65 -1.12 -3.43 TATA STEEL 589.80 -5.50 -0.92 -6.20 O N G C 180.95 -1.55 -0.85 -6.92 ST BK OF INDIA 249.70 -1.50 -0.60 -7.84 AXIS BANK 535.65 -6.25 -1.15 -17.51 RELIANCE INDS. 931.85 -7.00 -0.75 -20.99 TATA MOTORS 347.00 -9.65 -2.71 -31.43 INFOSYS 1134.90 -34.10 -2.92 -114.72
Nomura expects Infosys to slip furtherWe look for USD revenue/EPS CAGR of 6.6%/6.1%, and EBIT margins falling to 23% (vs 24.3% in FY18) over FY18-20F. We reset USD-INR assumptions to 65.25 (vs 64.5 earlier) and incorporate a buyback of $1.6 billion in 4QFY19 at Rs 1,300 per share. We raise our target price to Rs 1,020, implying 13% downside, on roll forward to Mar-20, based on 14x FY20F EPS of INR72.8. We believe the stock should trade at a discount to historical valuation on slowing growth and weakening margins
10:44 AMUCO Bank plunges 14% after CBI books former CMD in Rs 6.21 billion fraudUCO Bank plunged 14% to Rs 19.15 on the BSE in early morning trade after the media report suggested that the Central Bureau of Investigation (CBI) has booked former chairman-cum-managing director of the bank’s Arun Kaul and others in connection with an alleged Rs 6.21 billion loan fraud.The stock was trading at its lowest level since September 7, 2006. It touched an all-time low of Rs 14.30 on July 19, 2006 on the BSE in intra-day trade. READ MORE
10:30 AMRight execution of strategy to decide Infosys chief Salil Parekh’s futureSalil Parekh has been at the helm at Infosys for a little over four months. And he is set on laying a strong foundation for growth instead of focusing on short-term gains.Within these few months, Parekh has attempted and mostly succeeded in instilling a sense of confidence among employees, laying out the growth strategy and clearing the mess around two past acquisitions. The most important achievement, perhaps, was winning the trust of the board and to a certain extent that of the co-founders or promoter group, which was seen lacking in the regime under Vishal Sikka. READ MORESahil Parekh
10:19 AMFrom ICICI Securities to Bandhan Bank, MFs load up on banks amid crashWith benchmark indices coming off close to 10 per cent from their 2018 peak in March, equity mutual funds (MFs) had a hectic time rebalancing their portfolios. Taking advantage of the sharp slide, money managers invested in several banking stocks, including State Bank of India (SBI) and ICICI Bank.The top-most buy for March was Tata Consultancy Services (TCS), where fund managers pumped in nearly Rs 40 billion amid a six per cent drop in the stock. ICICI Securities and Bandhan Bank, which came out with their initial public offerings (IPOs) in March, were among top three buys.
RESULT PREVIEW: Nomura on TCS
Any sign of improvement in the BFSI outlook where the company expects clarity after couple of quarters and continuation of strength in Retail (where it expects double-digit growth in FY19F). Also traction in other verticals, which have been growing at double-digit rates, is key to watch. We see tempering of the margin outlook with possible downplaying of the 26-28% EBIT margin aspiration in light of the steady INR and possible dilution due to large deals. We see risks to consensus estimates on both growth and margins here.
IDFC Securities on GMR InfraWhile GMR’s earnings do look weak over FY18-20E, superior performance in airports business and viability of operating assets provide a sanguine outlook on the stock. We maintain our Outperformer rating with a revised-SoTP-based target price of Rs28.
S&P BSE Sensex 34,082.83 -0.32% Nifty 50 10,464.45 -0.15% S&P BSE 200 4,597.70 -0.15% Nifty 500 9,260.05 -0.08% S&P BSE Mid-Cap 16,688.31 0.06% S&P BSE Small-Cap 17,971.27 -0.06%
RESULT PREVIEW: FINANCIALS
Financials’ Q4 FY18 earnings would recount the saga of several preceding quarters, that of steady and superior operating performance from private retail banks compared to private and public corporate banks. The performance gap would be even more glaring this time, given that stiffened RBI regulations governing standard stressed loans have upfronted provisioning requirements.
Now corporate lenders also need to quickly cleanse their balance sheets. Thankfully, some respite comes in the form of fag-end softening of bond yields and the regulatory allowance to spread H2 FY18 treasury loses over four quarters. We expect robust results from HDFC Bank, IndusInd Bank, RBL Bank, Mahindra Finance, Cholamandalam Investment & Fin and Bajaj Finance
STOCK VIEW: GRUH Finance Limited
Over the past two years, opportunity in affordable housing finance attracted a host of new players. At the same time, lack of opportunities in corporate lending resulted in banks upping their ante too. However, we are still a few quarters away from a pick-up in affordable housing. As such, we expect 23% loan book CAGR for GRUH over FY18-20e.
Current valuations at 40x FY20e earnings factor in a strong revival in loan book growth. While we are confident on GRUH’s ability to deliver 25%+ RoEs, the current pace of progress in affordable housing makes us believe that we are unlikely to see growth rates in excess of 25%. As such, we maintain our HOLD rating on the stock and value it at INR600 per share (40x earnings)
(Source: Antique Stock Broking)
MARKET COMMENT Sanjeev Zarbade, Vice-president-PCG Research at Kotak Securities
Projection of a normal monsoon in CY2018, pickup in investment cycle, industrial capex and improving demand are some of the positives. However, election-related uncertainty, rising crude basket, tepid GST revenues and talks of global trade disruptions are key challenges. In this backdrop, we expect FY2019 to be a volatile year for Indian markets. The investment themes that we like include stocks dependent on rural demand, travel and leisure stocks and consumer plays
MUST READ Market’s fate rests on floatersJudging retail attitude is tricky and involves a lot of data interpretation. One variable is breadth. Institutions focus on the top 500 stocks. If there’s positive breadth (advances exceeding declines) and activity in smaller scrips, retail sentiment is upbeat. We can also compare net index movements versus net institutional attitude business-standard