MARKET WRAP: Sensex slips 149 pts in volatile trade; mid, small-caps shine

NSE's Nifty50 index slipped 41 points, or 0.35 per cent to 11,896 levels
The domestic equity market ended Thursday's volatile session in the red, dragged by banks, and information technology (IT) stocks.

The S&P BSE Sensex ended 149 points, or 0.37 per cent lower at 40,558 levels while NSE's Nifty50 index slipped 41 points, or 0.35 per cent to 11,896 levels. IndusInd Bank (down 3 per cent) was the top Sensex loser, followed by ICICI Bank, Infosys, and Titan Company.

The Nifty sectoral indices were largely in the red, with the Nifty Pharma index, down nearly 1 per cent, leading the list of losers.

In the broader market, the S&P BSE MidCap index gained 0.54 per cent to 14,888 levels and the S&P BSE SmallCap index ended 0.85 per cent higher at 15,028 points. 

Global markets

World shares slid to a two-week low on Thursday, and oil steadied after another heavy fall, as a surge in global Covid-19 cases and fractious US stimulus talks kept financial markets cautious.

In the currency markets, the dollar was a modest 0.1 per cent higher against the yen at 104.66, while the euro’s dip saw it notch down 0.12 per cent to $1.1847.

Gold eased as the dollar edged up. 

(With inputs from Reuters)


3:43 PM IST

3:42 PM IST

3:36 PM IST The S&P BSE Sensex traded 149 points, or 0.37 per cent lower at 40,558 levels while NSE's Nifty ended at 11,896, up 41 points, or 0.35 per cent. 

3:25 PM IST

3:21 PM IST Shares of Chennai Petroleum Corporation were locked in the 20 per cent upper circuit band at Rs 81.35 on the BSE on Thursday after it reported a consolidated net profit of Rs 291 crore for September quarter (Q2FY21). The company, engaged in petroleum sector, had posted a loss of Rs 213 crore in Q2FY20. READ MORE

3:15 PM IST Tyre stocks were in a roll in an otherwise weak market on Thursday. While CEAT traded around 1 per cent higher, Goodyear India was up nearly 0.5 per cent. JK Tyre, on the other hand, was ruling around 8 per cent higher after the company reported a strong operational performance for the quarter ended September 30. READ MORE  

3:08 PM IST Stocks of pharmaceutical and fast moving consumer goods (FMCG) companies found favour with ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala in the July – September 2020 quarter of the current fiscal (Q2FY21). The duo bought additional shares in pharmaceutical companies Lupin and Jubilant Life Sciences, along with Agro Tech Foods and NCC during Q2FY21, as per shareholding pattern filed by 28 companies till October 21, 2020. READ MORE

2:58 PM IST >> Revenue increases to Rs 2,413 crore

2:53 PM IST >> Revenue from ops stood at Rs 5,350 crore

2:46 PM IST

2:29 PM IST

LIVE UPDATES

SECTOR WATCH | Nifty Metal gains 0.7%


MARKET AT CLOSE | Gainers and losers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex traded 149 points, or 0.37 per cent lower at 40,558 levels while NSE's Nifty ended at 11,896, up 41 points, or 0.35 per cent. 

MARKET CHECK


Chennai Petroleum freezes in 20% upper circuit on healthy Q2 results

Shares of Chennai Petroleum Corporation were locked in the 20 per cent upper circuit band at Rs 81.35 on the BSE on Thursday after it reported a consolidated net profit of Rs 291 crore for September quarter (Q2FY21). The company, engaged in petroleum sector, had posted a loss of Rs 213 crore in Q2FY20. READ MORE

MRF, CEAT, JK Tyre: Should you bet on tyre stocks? Here's what charts say

Tyre stocks were in a roll in an otherwise weak market on Thursday. While CEAT traded around 1 per cent higher, Goodyear India was up nearly 0.5 per cent. JK Tyre, on the other hand, was ruling around 8 per cent higher after the company reported a strong operational performance for the quarter ended September 30. READ MORE  


Rakesh Jhunjhunwala rejigs portfolio in Q2; ups stake in Lupin, Tata Motors

Stocks of pharmaceutical and fast moving consumer goods (FMCG) companies found favour with ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala in the July – September 2020 quarter of the current fiscal (Q2FY21). The duo bought additional shares in pharmaceutical companies Lupin and Jubilant Life Sciences, along with Agro Tech Foods and NCC during Q2FY21, as per shareholding pattern filed by 28 companies till October 21, 2020. READ MORE

Sept Quarter Result | SBI Card's profit declines 46% YoY to Rs 206 cr

>> Revenue increases to Rs 2,413 crore


Sept Quarter Result | Asian Paints report consolidated net profit at Rs 851.9 crore

>> Revenue from ops stood at Rs 5,350 crore

Infosys, HDFC Bank, and ICICI Bank contribute the most to Sensex's 300-point fall


Heatmap: S&P BSE Sensex gainers and losers at this hour


Stocks that hit 52-week high on BSE in an otherwise subdued session today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
ACC 1625.50 1633.55 0.29
AMBUJA CEMENTS 252.05 255.45 -0.53
CERA SANITARY. 2786.00 2825.00 5.51
HAVELLS INDIA 719.60 722.50 1.10
JSW STEEL 324.45 326.25 0.50
» More on 52 Week High

Rupee Closing

Rupee ends at 73.53 per US dollar vs Wednesday's close of 73.58/$

Vedanta gains 6% as board to consider interim dividend on Saturday

Shares of Vedanta moved higher by 6 per cent at Rs 107.75 on the BSE in intra-day trade on Thursday after the company said the board of directors is scheduled to meet on Saturday, October 24, 2020, to consider the first interim dividend. "The board of directors of the Company on Saturday, October 24, 2020, will consider and approve first interim dividend on equity shares, if any, for the financial year 2020-21 (FY21)," Vedanta said in an exchange filing. READ HERE

NEWS ALERT :: Govt decides to make graded relaxation in visa & travel restrictions

>> Govt to permit all OCI & PIO card holders and all other foreign nationals intending to visit India for any purpose, except on a Tourist Visa to enter by air or water routes through authorised airports and seaport immigration check posts


IPO ALERT :: Equitas Small Fin Bank IPO subscribed 1.7x till 1:30 pm on Day 3


ALERT :: S&P BSE SmallCap index up 0.22%


Bajaj Auto Q2 PAT dips 27% YoY at Rs 1,194 crore; margin expands

Two-wheeler major Bajaj Auto on Thursday reported consolidated net profit of Rs 1,193.7 crore for the July-September quarter of FY21 (Q2FY21), down 27.5 per cent, from a profit of Rs 1,523 crore in the year-ago period. Sequentially, however, the profit surged 202 per cent from Rs 395.51 crore posted in the June quarter of FY21. READ MORE

Bharti Airtel up over 2%


Colgate Palmolive: Weak macros, competition from HUL key overhang on stock

Analysts believe the company needs to "adopt more aggressive strategy to accelerate growth in segments like handwash and sanitizers to be able to compete with firms like Hindustan Unilever and Dabur READ MORE

Sept Quarter Result | Bajaj Auto

>> Net profit at Rs 1,138 crroe

>> Revenue at Rs 7,156 crore

>> EBITDA at Rs 1,266 crore


SEPTEMBER QUARTER RESULTS | Sterlite Tech cons revenue up 32% QoQ at Rs 1,160 crore

-- Consolidated net profit at Rs 58 cr vs Rs 6 cr QoQ
 
-- Consolidated Ebitda margin at 18% vs 15% (QoQ)

Q2 RESULTS | UCO Bank Q2 net profit at Rs 30.1 crore vs loss of Rs 892 cr (YoY)

-- Net NPA at 3.63 per cent vs 4.95 per cent (QoQ)
 
-- Gross NPA at 11.62 per cent 
 
 

MARKET UPDATE:: Sensex at day's low


FPIs prune exposure in tobacco stocks over high taxes, greater ESG focus

According to the shareholding pattern filed with the exchanges for the quarter ending September, FPI holding in ITC stood at 12.96 per cent (down by 2.68 per cent year-on-year), in Godfrey Phillips, it was at 10.80 per cent (down 1.59 per cent) and in VST Industries at 3.57 per cent (down by 4.27 per cent) READ MORE

Indian economy set for a near double-digit contraction this fiscal: Poll

The Indian economy will suffer its deepest contraction on record this fiscal year and recent government stimulus does not go far enough to significantly boost activity depressed by the coronavirus pandemic, according to economists polled by Reuters. With over 7.6 million coronavirus infections, India is the second worst hit country in the world after the United States and the spread shows no signs of abating. READ MORE

NEWS ALERT | Ashok Leyland launches Boss LE and LS trucks with i-Gen6 BS-VI technology


NEWS ALERT | Dr Reddy's issues clarification after a cyber attack this morning, says it is anticipating all services to be up within 24 hours

-- The company does not foresee any major impact on operations due to the incident

Asian Paints slips over 1.5% ahead of Q2 result; here's what to expect

Shares of Asian Paints slipped as much as 1.53 per cent to Rs 2,082 apiece in the morning trade on the BSE ahead of its September quarter result due later in the day. At 10:31 AM, the stock was trading nearly a per cent lower at Rs 2,095 against Tuesday's close of Rs 2,114.35. In comparison, the S&P BSE Sensex was trading 190 points, or 0.47 per cent lower at 40,517 levels. READ MORE 


Bajaj Fin: Worst case scenarios play out as stress builds across portfolios

Bajaj Finance’s results in the September quarter (Q2), the third consecutive quarter of weak performance, suggest that recovery may be pushed to FY22. Despite the Street’s muted expectation, the 36 per cent net profit decline (worst since FY15) marred by elevated provisioning was a huge let-down. READ MORE

Strong deal pipeline to sustain L&T Infotech's growth trajectory

The L&T Infotech stock gained over 4 per cent on Wednesday after the company posted better than expected revenue performance and record margins in the September quarter. India’s sixth largest software services firm posted revenue growth of 2.3 per cent in constant currency terms, much ahead of the street’s 1-1.5 per cent expectation. READ MORE
 

HDFC Bank m-cap tripled in 6 yrs. But this rare bear on the stock still made money

After a 63% rebound from its March low, HDFC Bank’s stock is too expensive given the risks related to management change and asset quality, as Indian lenders face “one of the most challenging phases” amid Covid-19 and the nation’s prolonged credit crisis, Agarwal, an analyst at Ambit Capital Pvt, said in an interview. He has had a sell rating on HDFC Bank since 2014 save a brief upgrade to buy earlier this year, Bloomberg-compiled data show. READ MORE

Top losers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
AUROBINDO PHARMA 761.35 -5.46
SYNGENE INTL. 524.00 -5.12
KPIT TECHNOLOGI. 106.10 -4.97
THYROCARE TECH. 1053.85 -3.93
DELTA CORP 108.35 -3.77
» More on Top Losers

Aurobindo Pharma declines 6% on USFDA warning letter for Dayton facility

"The AuroLife Pharma LLC, a wholly owned stepdown subsidiary of the Company, has received a warning letter from the US Food and Drug Administration (USFDA) for its oral solid manufacturing facility situated at Dayton, New Jersey," Aurobindo Pharma said in exchange filing. READ MORE

Upasana Chachra :: Inflation is a key risk to India's V-shaped economic recovery

Limited fiscal space has meant that monetary policy has done the heavy lifting. Indeed, compared to key developed market and emerging market economies, India’s discretionary fiscal stimulus is relatively low. But the government has managed to respond with targeted fiscal spending focusing on the vulnerable and the rural economy, coupled with liquidity enhancing measures and structural reforms such as new farm and labour laws. READ MORE

Dr Reddy's slips 4% on report co shuts all key plants globally

>> According to a report by ET Now, there has been a mega data breach at Dr Reddy's, resulting in the shutting down of key unit.

>> Data breach affected units at US, UK, Russia, India and Brazil

>> Incident happened between 4-5 pm US time

>> Management yet to respond to queries.



Hemisphere Properties shares locked in 5% lower circuit on debut

HPIL was formed as part of the disinvestment exercise carried out by the Government of India in respect of its holdings in the erstwhile VSNL (currently known as Tata Communications). In 2002, the Government of India conducted a disinvestment exercise in respect of 25 per cent of its shareholding in the equity share capital of VSNL, wherein in terms of the bid for the disinvestment required a separate value to be ascribed to lands to be retained with VSNL and to exclude the value of certain surplus lands, held by VSNL. READ MORE

Result Today :: Bajaj Auto's Q2 PAT may dip 10- 26% YoY dip, margin expansion likely

According to the company's monthly auto sales data, Bajaj Auto sold 10.53 lakh units during Q2FY21, down 10.2 per cent on year-on-year (YoY) basis as compared to 11.73 lakh units sold in Q2FY20. It comprises the sale of 5.73 lakh units and 4.79 lakh units in the domestic market and export, respectively. On a quarter-on-quarter (QoQ) basis, however, Bajaj Auto has reported 137.7 per cent growth in volumes from 4.43 lakh in Q1FY21. READ MORE

Sagar Cements surges 8%, hits 52-week high on robust Q2 results

Revenue from operations grew 23 per cent year on year (YoY) at Rs 326 crore against Rs 265 crore in the corresponding quarter of previous fiscal. The revenue growth was led by 20.8 per cent YoY increase in realisations and 1.7 per cent YoY growth in volumes. Ebitda (earnings before interest, taxes, depreciation, and amortization) margins doubled to 32.1 per cent in Q2FY21 from 16 per cent in Q2FY20 on lower production costs. READ MORE

Rupee Opening

Rupee opens weaker at 73.76 per US dollar vs Wednesday's close of 73.58/$

NEW LISTING :: Hemisphere Properties hits 5% lower circuit after listing at Rs 106/sh on BSE


NEWS ALERT :: Granules receives nod from US FDA for Potassium Chloride Extended Release Tablets

Granules announced that it has received marketing approval from the US FDA for Potassium Chloride Extended Release Tablets USP, 10 mEq (750 mg) and 20 mEq (1500 mg) for the treatment of patients with hypokalemia. Granules’ tablet product is bioequivalent to the reference listed drug (RLD), K-Dur.
 

JK Tyre gains 9% on strong operational performance in September quarter

Shares of JK Tyre & Industries gained 9 per cent to Rs 66 on the BSE in the early morning trade on Thursday after the company reported a strong operational performance with margins hitting a four year high of 15.6 per cent in July-September quarter (Q2FY21). In Q2FY21, the company reported PBIDT (profit before interest depreciation and tax) of Rs 367 crore against Rs 303 crore in the corresponding quarter of the previous fiscal year. READ MORE


JK Tyre surges 6%


Grasim dips 0.5%


KPIT Tech declines 3.5%

>> KPIT Technologies on Wednesday posted a 22.5 per cent fall in its consolidated net profit to Rs 27.8 crore for the quarter ended September 2020. The company had reported a net profit (attributable to owners of the company) of Rs 35.9 crore in the year-ago period, KPIT Technologies said.


Nestle dips 0.6%

>> Swiss food and beverages giant Nestlé recorded strong mid-single-digit growth in India during the July-September 2020 quarter


Result Reaction | GMM Pfaudler trades a per cent higher

>> GMM Pfaudler's consolidated net profit jumped 29.14 per cent to Rs 26.85 crore on 21.69 per cent increase in revenue from operations to Rs 186.25 crore in Q2 September 2020 over Q2 September 2019.


Hindustan Copper adds 1%

>> Hindustan Copper on Wednesday said its board will next week consider raising funds by issue of shares via qualified institutional placement (QIP).


Vedanta rises 3%

>> Vedanta is set to trade actively today after the company said its board of directors is scheduled to meet on October 24 to consider and approve first interim dividend for FY21. The record date for the same is fixed as October 31.


UltraTech Cement over half a per cent higher


ZEEL trades over 1.5% higher in a subdued market

>> Private broadcaster Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday unveiled a major strategic restructuring involving its key talent and integrated various business and content verticals with a focus on revenue maximisation and entering newer territories.


Sectoral trends at Open


Sensex Heatmap at Open


Opening Bell


Opening Bell


Commodity Heatmap


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


Markets at Pre-open


Markets at Pre-open


BROKERAGE VIEW :: Nirmal Bang on Bajaj Finance

Target Price: Rs 3,564 | Reco: Accumulate

>> We have revised our estimates and expect the company to deliver 10.6%/18.9%/22.2% ROE over FY21/22/23E. The company is confident of regaining market share and reach 70% among the OEMs in the near term on the back of enhanced volume push and new customer acquisitions. We continue to like the structural play Bajaj Finance has to offer on India’s consumerism. Balance sheet is one of the strongest in the NBFC sector. Expected near term pressure on profitability (due to high credit costs) and asset quality risks could keep the stock under pressure. Hence, we retain our ACCUMULATE rating on the stock with a target price of Rs3,564, based on 4.5x 1HFY23E ABV. Per se, on the key P&L items, BAJF posted NII growth of 4% YoY at Rs39,815mn, PPOP growth of 15% YoY at Rs30,059mn and PAT decline of 36% YoY at Rs9,649mn.

BROKERAGE VIEW :: HDFC Securities on Colgate Palmolive

CMP: Rs 1,427 | Target Price: Rs 1,529 | Reco: Add

>> Colgate reported a healthy 2QFY21 with 5% net revenue growth (HSIE 4.5%) and 7% domestic growth. Volume and price have equally contributed to the revenue growth. Toothpaste recovery was healthy (no sequential divergences) while toothbrush exit recovery was encouraging. Dental cream and Max fresh
posted encouraging recovery. Naturals toothpaste continue to outperform (even as an industry) although the growth gap has gone down. Market share was stable during the quarter. GM expanded sharply (339bps YoY) owing to (1) price hike, (2) soft raw material and (3) favourable mix (lower revenue share of toothbrush and exports and higher share of larger pack size). We expect gradual growth recovery with healthy margin expansion in 2HFY21 and increase our estimates for FY21/22 by 6/1%. We value Colgate at 40x P/E on Sep-22E EPS and derive a target price of Rs 1,529. Maintain ADD.

BROKERAGE VIEW :: HDFC Securities on UltraTech Cement

CMP: Rs 4,632 | Target Price: Rs 5,670 | Reco: Buy

>> During 2QFY21, UTCEM reported solid earnings beat, driven by strong cost controls, healthy realisation and strong retail demand. Consolidated net sales/ EBITDA/APAT surged 8/41/113% YoY to Rs 103.54/26.95/12.34bn respectively. Working capital reduction and lower Capex further drove a 42% YoY fall in net debt. Management has guided that non-trade demand is recovering well, which should boost sales hereon. Continued cost controls should further support UTCEM’s strong margins. In line with our view, UTCEM continues to deliver margin expansion, asset sweating, and debt reduction. We maintain BUY with a higher Target Price of Rs 5,670/share (15x Sep’22E consolidated EBITDA). 

BROKERAGE VIEW :: HDFC Securities on Bajaj Finance

CMP: Rs 3,233 | Target Price: Rs 3,647 | Reco: Add

>> While BAF’s 2QFY21 operating performance was in line with estimates, earnings were lower on account of higher than expected provisions. The management was prudent in its approach to growth and provisioning. Even as we build higher provisions, our earnings estimates remain largely unchanged as we factor in a slight improvement in cost metrics. Our outlook on the company’s long-term prospects remains positive. We continue to believe that current valuations do not fully capture BAF’s high RoAE potential. We maintain ADD with a target price of Rs 3,647.

BROKERAGE VIEW :: Kotak Institutional Equities on L&T Infotech

CMP: Rs 3,100 | Target price: Rs 3,350 | Reco: Add

>> LTI reported sharp margin expansion driven by operational improvements and rollback of select customer rebates. The company announced a large deal, has a strong deal pipeline and remains well-placed to report significantly better than peer growth. LTI’s business model is scalable with a good play in core transformation. We raise FY2021-23E EPS estimates by 4-6% and Fair Value to Rs 3,350 (Rs2,800 earlier), valuing the stock at 25X December 2022E EPS. ADD.

Stocks to watch today

Bajaj Auto: Bajaj Auto is scheduled to announce its September quarter earnings on Thursday and analysts expect the automaker to report strong sequential recovery, albeit lower on a year-on-year (YoY) basis, on both the revenue and bottom-line front while margins are set to expand.
 
Earnings today: Besides Bajaj Auto, 47 other companies are expected to release their September quarter results later in the day. The list includes names such as Asian Paints, Biocon, Bharti Infratel, Mphasis, Coforge, SBI Cards, and HDFC AMC. READ MORE

BROKERAGE VIEW :: Kotak Institutional Equities on Bajaj Finance

CMP: Rs 3,233 | Target Price: Rs 3,000 | Reco: Reduce

>> Bajaj Finance’s performance seems to be broadly tracking its guidance with likely bottoming out of loan book, building adequate buffers for the year and control over expenses. The company may be well-placed for a normalized FY2022E unless slippages disappoint. All the positives, however, are already reflected in the current valuations, prompting us to await better entry points. REDUCE; FV Rs3,000; prefer Bajaj Finserv (BUY, FV Rs7,600).

BROKERAGE VIEW :: MOFSL on Mahindra CIE

CMP: Rs 137 | TP: Rs 165 (+20%) | Reco: Buy

>> Mahindra CIE (MACA)’s adverse operating performance in 3QCY20 was attributable to weaker revenue in India and restructuring cost in EU. While it is focusing on new orders / exports in India, it is also cutting cost to reduce breakeven points for the EU business.

>> We marginally cut our CY21E EPS to factor in lower revenue growth. Maintain Buy, with TP of ~INR165 (13x Sep’22 consol EPS).

BROKERAGE VIEW :: MOFSL on Info Edge

CMP: Rs 3,482 | TP: Rs 3,620 (+4%) | Reco: Neutral

>> We foresee a halt in near-term momentum, led by expectation of billing decline in the recruitment/real estate segments for 1HFY21. However, given the market
positioning of its entities, multi-dimensional growth can be expected for INFOE in the medium-to-long term, backed by recruitment, real estate, Zomato (its biggest investee company) and PolicyBazaar.

>> For FY21, we expect 9% decline in revenue, largely driven by ~50% drop in collection for 1QFY21. With expectations of more jobs coming in (on pent-up demand) and pressure on real estate developers to sell off inventory, we expect 20% revenue growth for FY22E. Margin should expand 100bp over FY20-22E on lower advertisement expenses, partially offset by higher employee cost.  

>> Valuations are elevated with 1-year forward multiples exceeding 100x. However, we believe that INFOE provides a good entry point for the start-up ecosystem with higher risk being moderated from its relatively stable standalone operating business.

>> We have individually valued INFOE’s group entities using DCF-based valuation. Our SOTP-price target stands at INR3,620/share. Maintain Neutral.

BROKERAGE VIEW :: MOFSL on L&T Infotech

CMP: Rs 3,095 | TP: Rs 3,480 (+12%) | Reco: Buy

>> L&T Infotech (LTI)’s 2QFY21 revenue growth of 2.3% QoQ CC was better than expected. It was led by sharper recovery in some verticals (BFS and Manufacturing) and geographies (Europe).

>> More impressively, LTI expanded its EBIT margin (+250bp QoQ) for the fourth quarter in a row, aided by better operational efficiencies. Management reinstated guidance of 14–15% PAT margin for FY21, broadly in line with our expectation.

>> Large deal wins in 1HFY21 have been lower than the typical run-rate. However, LTI has a strong deal pipeline (+22% YoY) and expects certain large deal closures in 3Q, which should aid FY22 revenue growth. FY22 should also benefit from the strong exit of FY21.

>> We upgrade our FY21/FY22 EPS estimates by 7%/11% as we adjust to the margin surprise in the quarter. As digital becomes mainstream, we expect LTI to benefit from continued investments in digital capabilities, strong client additions, and mining abilities. Our TP implies 25x Sep’22 EPS (10% discount to TCS valuation).

BROKERAGE VIEW :: MOFSL on Colgate Palmolive

CMP: Rs 1,425 | TP: Rs 1,720 (+21% ) | Reco: Buy

>> We maintain Buy on CLGT given that (a) the nature of the category (98% of sales from oral care) offers less uncertainty currently, (b) it has best-of-breed balance sheet, (c) valuations are moderate at 38x FY22E EPS, close to its 10-year average, and (d) there is a spark of an incipient market share recovery under the new Managing Director. We arrive at a TP of Rs 1,720 (target multiple of 40x Sep’22E EPS, close to 5-year average)

BROKERAGE VIEW :: MOFSL on Bajaj Finance

CMP: Rs 3,233 | TP: Rs 3,350 (+4%) | Reco: Neutral

>> BAF reported an in-line quarter on all fronts. A cautious stance on disbursements led to flattish AUM on a sequential basis. While this stance would continue for certain products going forward, we expect disbursements to see healthy improvement MoM from 3QFY21 with the onset of the festive season. We factor in 20%/25% YoY AUM growth in FY22/FY23. Performance on spreads is encouraging and expected to improve in FY22 as COF would decline and the impact of negative carry on excess liquidity would start abating. Performance on fee income surprised in 1HFY21, and with an expected uptick in disbursements, we expect continued performance.

>> On the asset quality front, management is very clear that the company would take all the possible asset quality impacts in FY21 itself. Hence, it should revert to run-rate credit costs of 1.7–1.8% in FY22. We reduce our FY22 credit cost estimate to 2.2% (from 3.3%), resulting in an upgrade in FY21/FY22E EPS estimates by 6%/15%. Maintain Neutral, with target price of INR3,350 (4.2x Sep’ FY22 BV).
 

BROKERAGE VIEW :: MOFSL on UltraTech Cement

CMP: Rs 4,629 | TP: Rs 5,600 (+21%) | Reco: Buy

>> UTCEM has a strong pan-India distribution network and preferred supplier status for key infrastructure projects. This places it in a good position to tap into expected growth in both retail and institutional (non-trade) cement demand in India.

>> The company is ramping up its under-utilized acquired capacities (Binani, Century). On the other hand, it also has a strong pipeline of projects and brownfield expansion potential, which offers visibility on long-term growth.

>> We estimate 13%/27% CAGR in consolidated EBITDA/PAT over FY20–22E, driven by a 5% CAGR in volumes and lower operating/interest costs.

>> The valuation is reasonable at 11.7x FY22E EV/EBITDA and USD177/t capacity, a ~25% discount to its past five-year average and ~15% discount to its past 10-
year average. The stock is also trading 30% cheaper v/s peer Shree Cement against the historical average of 10%. We value UTCEM at 14x FY22E EV/EBITDA to arrive at TP of Rs 5,600. Reiterate Buy.

Trading strategy for copper

Buy Copper | TGT: 550 | Stoploss: 525
 
Copper, which was trading in range of 510-532, has given breakout. It is already trading above its important moving average of 20 and 50 DMA but the breakout from the range has given new direction to Copper. Momentum oscillator RSI_14 is trading at 60 with no divergence on daily scale. So we recommend long position with expected target of 550 and stoploss of 525 READ MORE

CapitalVia Global Research on IGL

Buy Indraprastha Gas Limited (Above Rs 384)
 
Target: Rs 406
 
Stop loss: Rs 369

The stock is witnessing a breakout from its bullish flag pattern. Further buying momentum would be witnessed if the stock moves above 384. Breakout from the level of 384, which is immediate resistance, can lead the stock to higher levels. Considering the technical evidence discussed above, we recommend buying the stock above Rs 384 for the target of Rs 406, keeping a stop loss at Rs 369 on closing basis. READ MORE

Bulk deals on BSE as on Wednesday

Bulk deals on NSE as on Wednesday

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


Rupee check

Source: Bloomberg


Oil check


SGX Nifty update

>> At 8:19 am, the index was at 11,898 level, down around 19 points or 0.16 per cent.

Asian investors prepare for choppy trade

Source: Reuters


S&P ends choppy session lower as US stimulus talks drag on

Source: Reuters


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