Sensex slips 477 pts from day's high, ends 63 pts lower; IT stocks decline

Topics Markets | HDFC | Bharti Airtel

Photo: Kamlesh Pednekar
Shedding all its morning gains, the domestic equity market ended in the negative territory on Tuesday amid sell-off in IT stocks and telecom major Bharti Airtel.

The S&P BSE Sensex slipped 477 points from day's high to settle at 30,609.30, down 63 points or 0.21 per cent. Bharti Airtel ended nearly 6 per cent lower at Rs 559 apiece on the BSE after its promoter, Bharti Telecom, sold 2.75 per cent stake in the telecom services provider through open market deals today. READ MORE

NSE's Nifty ended at 9,029.05, down 10 points or 0.11 per cent. Volatility index, India VIX, dropped over 3 per cent to 31.37 levels. 
Broader market, however, outperformed the frontline indices. The Nifty Midcap100 index surged over 1.3 per cent to 12,836 points and the Nifty SmallCap index added 0.76 per cent to 3,880-mark. 

On the sectoral front, IT and pharma stocks declined while auto and metal stocks advanced. The Nifty IT index fell nearly 2 per cent to 13,575 levels. The Nifty Metal index, on the other hand, gained 2.7 per cent to 1,756. 

Buzzing stocks

Avenue Supermarts, the D-Mart retail chain operator, declined 5 per cent on the BSE on profit-booking after the company’s January-March quarter (Q4FY20) results disappointed investors on the margin front. Earnings before interest, tax, depreciation and amortization (EBITDA) margin contracted 68 basis points to 6.67 per cent in Q4FY20 from 7.35 per cent in Q4FY19, hit by higher depreciation and employee costs. READ MORE 

ITC ended nearly 3 per cent higher after the company announced it had entered into an agreement with the spices major Sunrise Foods to acquire a 100 per cent stake in the company. READ MORE

Global markets

Asian shares climbed on Tuesday while US stock futures breached a major chart barrier as investors brushed past Sino-US trade tensions to more stimulus in China and a re-opening world economy.

Japan’s Nikkei took the lead with a rise of 1.7 per cent to its highest since early March when the economic impact of the coronavirus was just becoming clear. MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.6 per cent, while South Korea rose 1.5 per cent.

Chinese blue chips firmed 0.8 per cent after the country’s central bank said it would strengthen economic policy and continue to push to lower interest rates on loans.

Further, E-Mini futures for the S&P 500 climbed 2% to clear the 3,000 chart level. European stocks, too, traded higher. 

In commodities, oil prices rose, supported by growing confidence that producers are following through on commitments to cut crude supplies while fuel demand picks up with more cars back on the road as coronavirus lockdowns ease.

(With inputs from Reuters)

4:15 PM IST Nifty continued to show lackluster movement today and closed the day on a slightly negative note. A small negative candle was formed that placed beside the similar type of candle of Friday's session. This action indicates a range movement in the last three sessions, after a sharp upside bounce of May 20. Currently, Nifty is placed at the key overhead resistance of 9,150-9,180 levels in the last few sessions and we observe an emergence of intraday weakness from near the resistance. On the daily chart, we notice a formation of consistent lower highs within a larger range bound movement. Currently, Nifty is making an attempt to form another lower high formation above 9,150 levels. The formation of hammer type candle pattern on the weekly chart signal that any minor weakness from here could be a buying opportunity in the short term. Immediate supports to be watched at 8,950. A sustainable move above 9,150-9,180 is likely to lift Nifty towards 9,500 levels in the short span of time.

4:04 PM IST After opening up by more than 1%, benchmark indices pared gains to close flat, with a negative bias. However, global market cues were positive, on the back of additional stimulus measures and slow reopening of economies globally. The unabated rise of infections continues in India, which throws up further uncertainties with regards to extension of lockdown measures. Globally, commodity markets were strong and the metal index outperformed in today’s trade. This was driven partly due to measures announced to support the Chinese economy, which accounts for a major portion of the global demand for metals.

3:48 PM IST

3:45 PM IST

3:36 PM IST The S&P BSE Sensex slipped 63 points or 0.21 per cent to end at 30,609 while NSE's Nifty ended at 9,029, down 10 points or 0.11 per cent.

3:20 PM IST Shares of Astec LifeSciences hit a 52-week high of Rs 719, up 8 per cent on the BSE on Tuesday after the rating agency ICRA reaffirmed the long-term and short-term outstanding rating of Rs 455 crore line of credit (LOC) of the agrochemicals company. Godrej Agrovet, which is the promoter of the company, currently holds 61.18 per cent stake in the company. READ MORE  

3:07 PM IST COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) LATEST(RS) FALL(%) CERA SANITARY. 2595.00 2165.00 2213.55 -14.70 I O B 8.10 7.10 7.17 -11.48 SADBHAV ENGG. 41.65 37.75 37.75 -9.36 ORIENT REFRAC. 145.85 132.50 134.50 -7.78 ZYDUS WELLNESS 1340.00 1234.00 1237.25 -7.67 Click here for the full list

2:59 PM IST  

2:55 PM IST Maintains 'Sell'; Target price: Rs 1,750 4Q performance was certainly un-DMARTesque as one would’ve hoped D- MART to benefit from excessive hoarding of essentials by consumers during the Covid-19-led lockdown. Bigger disappointment was on the gross margin front as skew of lower margin Food/Non-Food FMCG increased by 670bp to 77.7% (implied) in 4Q. (Signficantly high given just 9 days of lockdown), Adj. EBITDA grew 4.7% to Rs. 3.94bn as lower GM impact trickled down the P&L. Despite this, APAT grew 43% YoY to Rs. 2.9bn.    GMs/EBITDAM are likely to remain under pressure as essentials remain high in revenue mix till June-end (Per channel checks). To add to the woes, DMART may also have to contend with rising cost of retailing as 1. Contract labour comes at a premium and 2. Lower margin DMART Ready sales may inch up during the pandemic. We have cut our FY21 EPS by 11% to factor in lower GMs, we largely maintain FY22 estimates and our SELL recommendation with a DCF-based TP of Rs. 1,750/sh, implying ~35x FY22 EV/EBITDA. Stock currently trades at 77/52x FY21/F22 EV/EBITDA

2:50 PM IST COMPANY PRICE(rs) 52 WK LOW CHG(%) BAJAJ FIN. 1842.40 1838.00 -2.82 DCB BANK 62.20 58.10 2.89 INDIABULLS INTEG 32.00 32.00 -4.76 NESCO 392.40 381.10 0.62 POWER FIN.CORPN. 75.05 74.60 0.20 » More on 52 Week Low

2:45 PM IST

2:43 PM IST Maintains 'Add'; Target price: Rs 460 Trent, like peers will go through its COVID19 blues, however, its ability to navigate the crisis is strongest in peer set as the retailer remains well capitalized (Rs. 7.24bn of cash/eq). Ergo it remains best-placed to gain market share in the aftermath of the crisis. Note: Trent has already utilized ~Rs. 8/9.5bn raised recently (via Tata Sons). We maintain our ADD RECO with an SOTP-based TP of Rs. 460/sh (earlier: Rs. 490/sh). FY21/22 EBITDA cuts aren’t comparable as we have moved to IND-AS 116 accounting.

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Technical view by Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty continued to show lackluster movement today and closed the day on a slightly negative note. A small negative candle was formed that placed beside the similar type of candle of Friday's session. This action indicates a range movement in the last three sessions, after a sharp upside bounce of May 20.

Currently, Nifty is placed at the key overhead resistance of 9,150-9,180 levels in the last few sessions and we observe an emergence of intraday weakness from near the resistance. On the daily chart, we notice a formation of consistent lower highs within a larger range bound movement. Currently, Nifty is making an attempt to form another lower high formation above 9,150 levels.

The formation of hammer type candle pattern on the weekly chart signal that any minor weakness from here could be a buying opportunity in the short term. Immediate supports to be watched at 8,950. A sustainable move above 9,150-9,180 is likely to lift Nifty towards 9,500 levels in the short span of time.

MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services

After opening up by more than 1%, benchmark indices pared gains to close flat, with a negative bias. However, global market cues were positive, on the back of additional stimulus measures and slow reopening of economies globally. The unabated rise of infections continues in India, which throws up further uncertainties with regards to extension of lockdown measures. Globally, commodity markets were strong and the metal index outperformed in today’s trade. This was driven partly due to measures announced to support the Chinese economy, which accounts for a major portion of the global demand for metals.

SECTOR WATCH | Auto, metal stocks rally


MARKET AT CLOSE | Losers and gainers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex slipped 63 points or 0.21 per cent to end at 30,609 while NSE's Nifty ended at 9,029, down 10 points or 0.11 per cent.

Astec Life hits 52-wk high as ICRA reaffirms ratings, zooms 84% in 1 month

Shares of Astec LifeSciences hit a 52-week high of Rs 719, up 8 per cent on the BSE on Tuesday after the rating agency ICRA reaffirmed the long-term and short-term outstanding rating of Rs 455 crore line of credit (LOC) of the agrochemicals company. Godrej Agrovet, which is the promoter of the company, currently holds 61.18 per cent stake in the company. READ MORE  



Fall from intra-day high today in BSE500 stocks

COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) LATEST(RS) FALL(%)
CERA SANITARY. 2595.00 2165.00 2213.55 -14.70
I O B 8.10 7.10 7.17 -11.48
SADBHAV ENGG. 41.65 37.75 37.75 -9.36
ORIENT REFRAC. 145.85 132.50 134.50 -7.78
ZYDUS WELLNESS 1340.00 1234.00 1237.25 -7.67
Click here for the full list

NEWS ALERT :: Maruti Suzuki partners with ICICI Bank to offer flexible EMI financing schemes

 

BROKERAGE VIEW :: HDFC Institutional Equities on Avenue Supermarts

Maintains 'Sell'; Target price: Rs 1,750

4Q performance was certainly un-DMARTesque as one would’ve hoped D- MART to benefit from excessive hoarding of essentials by consumers during the Covid-19-led lockdown. Bigger disappointment was on the gross margin front as skew of lower margin Food/Non-Food FMCG increased by 670bp to 77.7% (implied) in 4Q. (Signficantly high given just 9 days of lockdown), Adj. EBITDA grew 4.7% to Rs. 3.94bn as lower GM impact trickled down the P&L. Despite this, APAT grew 43% YoY to Rs. 2.9bn. 
 
GMs/EBITDAM are likely to remain under pressure as essentials remain high in revenue mix till June-end (Per channel checks). To add to the woes, DMART may also have to contend with rising cost of retailing as 1. Contract labour comes at a premium and 2. Lower margin DMART Ready sales may inch up during the pandemic. We have cut our FY21 EPS by 11% to factor in lower GMs, we largely maintain FY22 estimates and our SELL recommendation with a DCF-based TP of Rs. 1,750/sh, implying ~35x FY22 EV/EBITDA. Stock currently trades at 77/52x FY21/F22 EV/EBITDA

Stocks that hit 52-week low on BSE today

COMPANY PRICE(rs) 52 WK LOW CHG(%)
BAJAJ FIN. 1842.40 1838.00 -2.82
DCB BANK 62.20 58.10 2.89
INDIABULLS INTEG 32.00 32.00 -4.76
NESCO 392.40 381.10 0.62
POWER FIN.CORPN. 75.05 74.60 0.20
» More on 52 Week Low

MARKET CHECK | Top 5 gainers on the BSE at this hour


BROKERAGE VIEW :: HDFC Institutional Equities on Trent

Maintains 'Add'; Target price: Rs 460

Trent, like peers will go through its COVID19 blues, however, its ability to navigate the crisis is strongest in peer set as the retailer remains well capitalized (Rs. 7.24bn of cash/eq). Ergo it remains best-placed to gain market share in the aftermath of the crisis. Note: Trent has already utilized ~Rs. 8/9.5bn raised recently (via Tata Sons). We maintain our ADD RECO with an SOTP-based TP of Rs. 460/sh (earlier: Rs. 490/sh). FY21/22 EBITDA cuts aren’t comparable as we have moved to IND-AS 116 accounting.

India's first quarter GDP growth likely to be weakest since 2012: Poll

India's economy is likely to have expanded at its slowest pace in at least eight years in the January-March quarter, partly as a result of the coronavirus clampdown. Asia's third-largest economy began slowing last year, but a countrywide lockdown implemented by Prime Minister Narendra Modi on March 25 halted economic activity completely, the Reuters reported. READ MORE

NEWS ALERT :: Vakrangee announces corporate agency tie up with LIC


SECTOR ALERT :: Pharma stocks under pressure; Index slips 1%

>> Piramal, and Cadila Health, down 3% each, were top laggards on the index.

>> Sun Pharma, Cipla, Aurobindo Phaema, meanwhile, were down 2% each


Domestic mutual funds increase ownership of Nifty companies in Q4

By March-end, the ownership was marginally lower by 4 bps, at 6.22 per cent. It is 33 bps higher on a YoY basis. Foreign institutional investors (FIIs) have pulled out $1.7 billion from equity markets in the past fortnight, amid disappointment over the Rs 20-trillion stimulus package. READ MORE

MARKET CHECK :: Sensex turns negative, slips over 100 pts


Crompton Consumer: Cost control, market share gains lend comfort

Crompton Greaves Consumer Electricals' (Crompton Consumer) March 2020 performance, too, showed the impact of Covid-19 led supply disruption. However, profit margin maintained its strong trajectory, improving sequentially due to significant cost control and superior sales-mix. While sustenance of this trend will be eagerly watched, analysts believe Crompton Consumer is better placed compared to peers. READ MORE

Delay in projects to impact profitability in FY21, says Cochin Shipyard

There were no production activities from March 23, 2020, to May 5, 2020. There has been reduced scale of production in outsourced manpower to a certain extend due to reduced migrant labour availability and restricted work arrangements which has reduced the scale of production.  READ MORE


STOCK ALERT | Bajaj Finance hits fresh 52-week low of Rs 1,846, down 3% on the BSE


States' deficit, market borrowings to increase to 4.5% of GDP: Ind-Ra

Ind-Ra said it evaluated the revised estimates for FY20 and FY21 budget estimates of 20 states. Since these states presented their budgets before the Covid-19 induced nation-wide lockdown, the nominal gross state domestic product (GSDP) growth projected for FY20 by respective state governments is mostly upwards of 10 per cent, which in Ind-Ra's opinion is aggressive and unlikely to be realised. READ MORE

Cement shares rally on gradual pick-up in demand; Birla Corp surges 11%

Birla Corporation, JK Lakshmi Cement and UltraTech Cement were up between 5 per cent and 11 per cent, while Ramco Cements, HeidelbergCement India, ACC, Dalmia Bharat and India Cements were up in the range of 3 per cent to 4 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.60 per cent at 30,856 points at 12:45 pm. READ MORE

Lockdown extensions economically disastrous, says Anand Mahindra

Mahindra Group Chairman Anand Mahindra on Monday said lockdown extensions are not just economically disastrous but also create another medical crisis.
 
While acknowledging that choices are not easy for policy makers, he said a lockdown extension will not help. READ MORE

European indices open higher


Sebi okays use of shares in depository account as margin until Aug 31

The markets regulator in February came out with framework on margin obligation to be given by way of pledged or repledged shares in the depository system. READ MORE

NEWS ALERT :: Reliance Power wins a lawsuit in Indonesian court

>> Reliance Power Netherlands BV, a wholly owned subsidiary of Reliance Power Limited, has won a lawsuit in the Central Jakarta district court in Indonesia, challenging the validity of Singapore arbitration award favouring Reliance Power.

>> As per the said Singapore arbitration award, arbitrators had ordered Kokos Jiang (earlier Known as Kokos Leo Lim) and Prestige Capital Holdings Limited, Seychelles to pay Reliance Power Netherlands BV a sum of US $ 43.2 Million along with default interest. 

>> The total dues payable by Kokos Jiang and Prestige Capital stand at  $68 million. Reliance Power is on track to execute the award for a sum of US$ 68 Million (Rs. 510 Crore) during FY 2020-21. 

(Via BSE filing)

SECTOR ALERT :: Nifty IT index trades weak; TCS, NIIT Tech top drags


BROKERAGE RADAR:: Edelweiss Securities on Essel Propack

Essel Propack (EPL) reported a slight contraction of 0.7% YoY in Q4FY20 revenue (5% below estimates) owing to the COVID-19 impact in China and India. But Europe continued its strong showing, up 15.7% YoY. The overall margin improvement continues with EBITDA margin improving 114bps YoY to 22.2%, leading to 5% YoY EBITDA growth. For FY20, revenue rose 2% (pro forma up 3.9%) and EBITDA 10.8%. In line with its mission of capital efficiency, EPL turned in a 138bps YoY increase in RoCE to 18.4%. However, with the AMESA and EAP regions in the grip of the slowdown, we are cutting FY21/22 sales growth by 9%/10% and EPS by 14/9%. That said, taking cognisance of sustainable margin improvement across geographies with capital-efficient growth, we retain the target 9.2x Q2FY22E EV/EBITDA, yielding a TP of Rs 170 (Rs186 earlier). Maintain ‘HOLD’, as we await a revival of momentum in overall sales. 

From Nestle India to Maruti Suzuki, impact of Covid-19 on earning estimates

The coronavirus pandemic has spared none, not even the best. But, a look at the manufacturing and services sector companies that are a part of S&P BSE 200 index, and which have declared their March quarter results so far, shows that a handful have in fact seen their earnings estimate for 2020-21 getting upgraded by analysts, or have seen a marginal cut. READ MORE

HNIs turn to low-return products; tax-free bonds, FDs preferred choices

Risk-averse wealthy investors, who have pulled out money from credit-risk funds, are looking at a number of alternatives in the debt segment, notwithstanding the lower post-tax returns.
 
The options range from tax-free bonds, bank fixed deposits, and RBI 7.75 per cent savings bonds for the ultra-conservative to gilt funds, corporate bond funds, banking and PSU funds, and sovereign bond funds for others. READ MORE

Crompton Consumer: Cost control, market share gains lend comfort

Crompton Greaves Consumer Electricals' (Crompton Consumer) March 2020 performance, too, showed the impact of Covid-19 led supply disruption. However, profit margin maintained its strong trajectory, improving sequentially due to significant cost control and superior sales-mix. READ MORE

Negative price trading on MCX: Brokers approach Sebi with alternatives

After a month of controversial settlement of crude oil contract at a negative price or price quoted in minus, the MCX has enabled its software-system to quote and trade at negative (minus) price or price below rupee one and that is applicable for all commodities. However, the controversy that started with the first settlement announced on April 21, is refusing to die down. READ MORE

BUZZING STOCK | ACC trades over 2.5% higher


MARKET UPDATE | TVS Srichakra extends rally, jumps 16% today

>> The stock has zoomed 54% in the past three trading days

GMM Pfaudler dips 14% on profit booking post March quarter results

Shares of GMM Pfaudler dipped 14 per cent to Rs 3,335 on the BSE on Tuesday after the company reported 13 per cent year on year (YoY) decline in consolidated net profit at Rs 11.6 crore for the quarter ended March 2020 (Q4FY20), due to lower revenue. The company -- a leading supplier of process equipment to the pharmaceutical and chemical industry segment -- had profit of Rs 13.3 crore in the year-ago quarter. READ MORE

Metal stocks shine amid strong global cues; JSPL, JSW Steel jump up to 10%

At 11:15 am, the S&P BSE METAL index was trading over 2.7 per cent higher at 6,362 points with all the constituents in the green. Jindal Steel and Power (JSPL) was leading the charge with around 10 per cent jump at Rs 105.90 apiece, followed by JSW Steel (up 6 per cent), and Tata Steel (up 3 per cent). READ MORE

NEWS ALERT :: Kolte-Patil Developers records sales booking of 2.5 million square feet between Jan-March

>> Kolte-Patil Developers Ltd. (KPDL) has recorded sales booking of 2.5 million square feet, which is in line with the management’s guidance for the year. In Q4FY20, KPDL’s sales bookings were at 0.67 msf, up 6% on y-o-y basis.

>> Strong momentum from Q3 had continued for most of Q4 as well despite the CoVID-19 scenario unfolding in China, and globally, and its progressively increasing impact on the India consumer sentiment. 

>> However, the lockdown due to Novel Covid-19 pandemic was imposed in India from second half of March, which impacted bookings since then.

(Via BSE filing)


MARKET CHECK


Why ITC's Sunrise Foods deal is positive but unlikely to push up valuation

ITC’s acquisition of Kolkata-based Sunrise Foods — a market leader in eastern India in the spices category — is in line with the cigarette major’s focus on expanding its non-cigarette FMCG business. While the deal value was not revealed, some analysts peg it at around Rs 1,500-2,500 crore. READ MORE

STOCK ALERT :: Eicher Motor surges as board to mull stock split

>> Eicher Motors gains 4% as board to mull sub-division/split of the equity shares of face value of Rs 10 to lower denomination on June 12, 2020.


Dmart stock to hit margin roadblock: Low footfall, high cost to dent profit

Avenue Supermarts (DMart) has been one of the biggest gainers among retail firms since the beginning of the lockdown, appreciating 33 per cent. The company’s ability to achieve higher-than-industry growth, margins, and return ratios, coupled with a strong balance sheet have aided stock gains. READ MORE

ITC, HDFC, Airtel, Avenue Supermarts: Trading strategies for stocks in news

ITC Ltd (ITC): The counter is well placed with a breakout of 'Double Bottom' as per the daily chart. It did see sell-off at 50-days moving average (DMA), but soon conquered the selling pressure. Now, with stability returning since the past few sessions, the stock is moving towards the next resistance of 100-DMA placed at Rs 196 levels. READ MORE

NEWS ALERT | FM to chair Financial Stability and Development Council (FSDC) meeting on May 28: CNBC TV18

-- All financial sector regulators to attend the meeting

-- FM to take stock on economy post stimulus announcement during the meeting

BROKERAGE RADAR:: Centrum Broking on VST Industries

We believe strong tailwinds for DSFT segment will help VST to gain market share through its strong franchise coupled with Total/Charms portfolio, which could help to recover part of lost sale. However, considering net revenue loss due to COVID-19 issue (50 days), we have cut our revenue/PAT for FY21E/FY22E by 10.5%/9.3% and 14.5%/11.6%, respectively. Further, the company has declared final dividend of Rs 103/ share resulting in 3.3% dividend yield. We maintain Buy rating with revised DCF-based target price of Rs 3,698, implying 17.7x FY22E EPS. Risks to our call include sharp increase in any form of taxation and disruption in supply chain due to prolonged lockdowns.

BROKERAGE RADAR:: Edelweiss Securities on agri inputs

We perceive the government’s recent draft notification to ban 27 generic products (contribute 25-30% to INR180bn domestic agrochem industry and ~20% to exports sales) as untimely (given the COVID-19 challenge) and likely to be strongly contested by the industry. In our view, if strictly implemented, this policy will negatively impact farmers and adversely affect domestic manufacturing. This will be contrary to the government’s Make in India and Aatmanirbhar Bharat vision. Hence, we expect the draft notification to undergo significant changes (as was the case in the past)--- many products to be taken off the list and exports to continue. Having said that, we believe the government’s agenda is clear in terms of moving towards new-age products in the future and companies (Dhanuka (BUY) and PI (HOLD)) with access to new age molecules  will benefit.

BROKERAGE RADAR:: Prabhudas Lilladher on HDFC

Rating: ACCUMULATE | CMP: Rs 1,516 | TP: Rs 1,992

While steady spreads at 3.4% cushioned earnings, same could come under tad pressure with competition intensifying (lending rates pared down by 15bps vs 75bps by SBI). We, therefore, forecast NPA estimates higher to 2.45% (earlier 1.8%) but maintain growth estimates at 7%; EPS trim by 11% for FY21. We confide in HDFC’s customer quality (80% salaried), strong CAR (17%Tier I) and liquidity sufficiency. However, we buildin LRD/corporate loan stress into our growth estimates (14%YoY; earlier 17%) yet expect better operating profit for FY22. Our SOTP metrics value mortgage business at 2.3x PBV FY22e (earlier 2.4x); subsidiaries at Rs1116 arriving at TP of Rs 1,992 (earlier Rs 2,201). Maintain Accumulate.

BROKERAGE RADAR:: ICICI Securities on IDFC First Bank

Restructuring of b/s underway has continued with rise in run rate of low cost deposits. Prudent approach providing adequately for lumpy stress adds to confidence. However, in current scenario, substantial exposure to SME segment makes it prone to near asset quality concerns. Capital raised provides improved ability to absorb any near term shocks but delays return ratio target. Revising earnings estimate by factoring the current scenario, we value the bank at ~0.75x FY22E ABV with a revised TP of Rs 23. Maintain BUY.
 
 

BROKERAGE RADAR:: ICICI Securities on DCB Bank

Business momentum is expected to remain slow though the bank remains a beneficiary of the credit guarantee scheme announced by GoI. However, given substantial exposure to MSME & LAP, we remain cautious in the current environment. Focus on containing opex does provides cushion but lower business growth & expected asset quality woes are seen keeping RoE lower at 8-11% in FY20-22E. Hence, we maintain HOLD rating with a revised target price of Rs 59, valuing the business at ~0.5x FY22E ABV.

BROKERAGE RADAR:: Anand Rathi Shares on JK Lakshmi Cement

With a dedicated 50% of the fleet of vehicles required, capacity utilisation has been ramped up to 65% currently. This would dip in Q2 FY21, management said, due to the expected acute shortage of labour and the monsoon starting. The per-bag price hikes in the East and North (of Rs 10) and of Rs 15 in the Central region post lockdown implementation is expected to keep realisation/ton firm, though the huge number of covid cases in the West (Gujarat, Maharashtra) would squeeze demand. We expect volumes to dip 8% in FY21, and grow 9% in FY22. We retain our Buy recommendation, with a target of Rs 325, on 7x FY22e EV/ EBITDA.

Risks: Extension of the lockdown; rise in fuel prices.

BUZZING STOCK:: Eicher Motors shoots up 4%


Diversify your investments beyond bank FDs to counter declining rates

In the wake of the 40-basis-point rate cut by the central bank, which has brought the repo rate to 4 per cent, banks may slash their FD rates further. Within the banking space, park a part of your money with small finance banks (SFBs).  READ MORE

Metal stocks advance, led by Jindal Steel and JSW Steel


Gold Outlook | Hareesh V, Head Commodity Research at Geojit Financial Services

Lingering geopolitical tensions like the US - China cold war and Iran-Venezuela oil trade amid US sanctions are likely to boost the yellow metal prices. Meanwhile, reopening the global economy and gains in equities are likely to offset major rallies in the counter.
 
Technical Outlook (London spot): As long as prices stay above $1710 broad trend will remain on the positive side. However, a direct drop below $1665 is a signal of weakness.

HDFC advances over 3% as Q4 earnings beat Street expectations

The profit before tax (PBT), meanwhile, came in at Rs 2,692 crore, dented by higher provisioning for uncertainties due to the Covid-19 pandemic. Its PBT was Rs 3,691 crore in the same period a year ago. After fair value adjustments, profit on sale of investment, dividend, and provisioning, the profit before tax for the quarter grew 15 per cent at Rs 3,535 crore, as against Rs 3,064 crore in the year-ago period, the lender said. READ MORE

Bayer CropScience surges 10% on strong Q4 results; stock nears record high

Shares of Bayer CropScience surged 10 per cent to Rs 4,875, also its fresh 52-week high, on the BSE on Tuesday after the company reported profit before exceptional items and tax (PBET) of Rs 54.3 crore for the quarter ended March 2020 (Q4FY20), on the back of strong operational performance. The agrochemicals company had posted a loss before exceptional items and tax of Rs 95 crore in the corresponding quarter of the previous year. READ MORE

Rupee opening

Rupee opens higher at 75.68/$ vs Friday's close of 75.95 against the US dollar

ITC shares surge 5% as Co to acquire spice major Sunrise Foods for Rs 2K cr

Fast-moving consumer goods (FMCG) major ITC shares surged as much as 4.6 per cent to Rs 194.95 apiece on the BSE on Tuesday after the company announced it had entered into an agreement with the spice major Sunrise Foods to acquire a 100 per cent stake in the company. The share-purchase agreement was completed after the lockdown was enforced and the final deal is likely to be signed soon. READ MORE

BUZZING STOCK:: JSW Steel leaps 5% post March quarter results announcement


Bharti Airtel slips 5% after promoters sell 2.75% stake via block deals

Shares of Bharti Airtel dropped 5.4 per cent to Rs 561 on the BSE on Tuesday after its promoter, Bharti Telecom, sold some stake in the telecom services provider through open market deals today. At 09:15 am; around 155.71 million equity shares representing 2.85 per cent of total equity of Bharti Airtel changed hands on the BSE, the exchange data shows. The names of the buyers are not ascertained immediately. READ MORE

Avenue Supermarts declines 5% as Q4 EBITDA margin contracts 68 bps YoY

The management said margins have seen erosion as regulations did not permit them to sell any apparel and general merchandise products. "The trend rapidly deteriorated in April during which more than half of the D-Mart stores remained closed for operations or operated for extremely restricted hours. As some of the restrictions continue, the company is seeing reduced sales and lower than usual footfalls in its stores," it added. READ MORE

HDFC Bank up 3%, top contributor to Sensex's up move


Result Impact | IDFC First Bank jumps over 5%


Result Impact | Avenue Supermarts tanks over 3%


HDFC rises over 1% post Q4 results


ITC acquires Sunrise Foods; stock jumps 4%


LARGE TRADE :: 3.12% equity changes hands


Sectoral trends on NSE at open


Sensex Heatmap at Open


Opening Bell


Opening Bell


Huge scam in YES Bank for many years, says Enforcement Directorate

An ED chargesheet quoted Gill as saying that the private lender on March 31, 2019, had put out a credit watchlist naming several large corporates/borrowers. These included Reliance Group, Essel Group, Cox & Kings, Dewan Housing Finance, Omkar Group, Radius Developer and others. “In this watchlist, the bank took a contingency provision of Rs 2,000 crore as a measure of prudent accounting and transparency,” said the ED chargesheet. READ MORE

Top gainers and losers on S&P BSE Sensex at Pre-open


Market at Pre-open


Market at Pre-open


NEWS ALERT | China to strengthen policy adjustments, guide loan rates lower: PBOC Governor

>> China will strengthen its economic policy and counter-cyclical adjustments and continue to push to lower interest rates on loans, central bank Governor Yi Gang said.

>> Yi, in an interview published by the central bank on Tuesday, said China’s economic fundamentals are unchanged despite many uncertainties and reiterated that the central bank’s prudent monetary policy will be more flexible.

(As reported by Reuters)


India first quarter GDP growth likely to be weakest since 2012: Poll

>> India’s economy is likely to have expanded at its slowest pace in at least eight years in the January-March quarter, partly as a result of the coronavirus clampdown, a Reuters poll predicted.

>> The poll of 52 economists, taken May 20-25, indicated India’s economy grew at 2.1% in the March quarter from a year ago, its weakest since comparable records began in early 2012, and sharply slower than 4.7% in the prior three months.
 
>> Forecasts for gross domestic product (GDP) data, due to be released on May 29 at 1200 GMT, ranged between +4.5% and -1.5%, underscoring the widespread uncertainty on the impact of the coronavirus on the economy at that stage.

Stocks to watch: Avenue Supermarts, Bharti Airtel, IDFC First Bk, HDFC, ITC

Here's a look at the stocks that may trade actively in today's trading session -
 
Earnings today: A total of 19 companies including Deepak Nitrite, Max Financial and Torrent Pharma are scheduled to announce their March quarter results.
 
Bharti Airtel: Bharti Telecom, promoter of Bharti Airtel, is expected to raise $1 billion, or more than Rs 7,600 crore, by selling a small stake in the telecom giant. The sale is expected to be through block deals on Tuesday on the stock exchanges, and is essentially to pare the promoter’s debt. READ MORE

Promoter to sell 2.75% stake worth $1 bn in Bharti Airtel via block deals

Bharti Telecom, promoter of Bharti Airtel, is expected to raise $1 billion, or more than Rs 7,600 crore, by selling a small stake in the telecom giant.

The sale is expected to be through block deals on Tuesday on the stock exchanges, and is essentially to pare the promoter’s debt. READ MORE

Banking counters holding Nifty back: Sameet Chavan of Angel Broking

Nifty holds 9000 despite some hiccups
 
We had a positive start last week, citing the cheerful mood in Asian markets and a good bump up in Dow Futures early in the morning. However, it was merely a formality as we saw markets taking a complete nosedive in initial trades. Within a blink of an eye, we not only broke the sheet anchor of 9,000 but also hastened towards the 8,800 mark. After seeing such a knock, markets recovered gradually throughout the remaining part of the week. However, due to some sell off post the ad hoc press conference by RBI on Friday, markets came off a bit from the morning highs. Fortunately, the damage at the close was not so big and hence, Nifty concluded the week with a marginal cut of a percent. READ MORE

Nifty's major support at 9,000 for weekly expiry: Gaurav Garg of CapitalVia

Indices failed to move higher despite Repo Rate reduction of 40 bps; Nifty defends 9,000
 
Markets traded on Friday in a range and with weakness. Sell-off was witnessed in financial and banking stocks. But, the Nifty managed to somehow defend the 9,000-mark. Nifty managed to close at 9,039.25, slashing 67 points. IT, media and pharma indices closed on a positive note, but financial services and banking stocks closed in the red mark. Nifty bank closed at 17,278.20, slashing 456.20 points from the previous day’s closing. READ MORE

Bulk deals on NSE as on Friday

Bulk deals on BSE as on Friday


FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee check

Alert: Rupee as on Friday

Source: Bloomberg



Oil climbs as suppliers stick to output cuts, coronavirus lockdowns ease

>> Oil prices rose on Tuesday on clear signs that producers are sticking to commitments to cut crude supply as more cars get back on the road with coronavirus lockdowns easing around the world.
 
>> US West Texas Intermediate (WTI) crude  futures gained 2.3%, or 75 cents, to $34.00. Meanwhile, Brent crude futures inched up 0.7%, or 23 cents to $35.76.

(Via Reuters)

SGX Nifty update

>> At 8:24 am, the index was at 9,130.50 level, up nearly 90 points from Friday's close of 9,039.

Japan shares hit 10-week peak, S&P 500 tests 3,000

Source: Reuters


Wall Street ends mixed on Friday as China-U.S. tensions weigh

Wall Street had been shut on Monday, while E-Mini futures for the S&P 500 were up just over 1 per cent early today.

Source: Reuters
 
 

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