Sensex ends choppy trade 77 pts higher; Adani Group cos sink up to 9%

Topics MARKET LIVE | Markets | Sensex

Stock market updates: Market bulls made a smart comeback on Dalal Street on Monday as brisk buying in Reliance Industries, Bajaj twins, L&T, and Infosys helped benchmarks recoup losses. 

Indices started gap-down amid profit booking with the frontline S&P BSE Sensex and the Nifty50 dropping to lows of 51,936 and 15,606, respectively. However, positive cues from global peers, coupled with healthy buying in IT, PSU Bank, and select pharma and FMCG counters, helped the indices end the session in the positive territory.

The frontline Sensex index fluctuated 655 points before settling 77 points, or 0.15 per cent, higher from previous close at 52,551.5 levels. The Nifty50 index, meanwhile, settled at 15,812 levels, up 13 points or 0.08 per cent. India VIX index rose 4 per cent on the NSE today, suggesting high volatility in the markets.

In the broader markets, the BSE MidCap index ended the day in the red, down 0.7 per cent, amid steep losses in Adani Group stocks and BHEL while the BSE SmallCap index closed 0.2 per cent lower. 

Among individual stocks, shares of Adani Group companies rebounded from their respective intra-day lows on Monday after the company clarified that the demat accounts of three foreign funds-Albula Investment Fund, Cresta Fund and APMS Investment Fund holding shares in group Companies 'are not frozen'. READ MORE

Besides, shares of Bharat Heavy Electricals Limited (BHEL) slipped 18 per cent to Rs 62.55 on the BSE in intra-day trade on Monday after the company reported a lower-than-expected set of numbers for the quarter ended March 2021 (Q4FY21). READ MORE

Sectorally, the Nifty PSU Bank index ended the day as the top gainer on the NSE, up 1 per cent, while the Nifty Realty index closed as worst performer, down 1.4 per cent.

Global markets
European shares hit a record high on Monday as investors bet on global central banks sticking to an accommodative stance on monetary policy even as the post-pandemic economic recovery gathers pace.

The pan-European STOXX 600 was up 0.3 per cent, Germany's DAX hit an all-time high, while the UK's FTSE 100 scaled its highest since February 2020 ahead of a decision by the government on whether to delay England's reopening from a third national lockdown. 

In Asia, investors were seen taking a wait-and-see stance ahead of the Federal Reserve's meeting and economic indicators from the United States and China. Japan's Nikkei gained 0.74 per cent, and South Korea's Kospi added 0.09 per cent. China and Australian markets were shut for holidays.

Meanwhile, futures of all three main Wall Street indices indicated a positive start later in the day.


LIVE UPDATES

MARKET STRATEGY :: Buying is advisable if the market drops to 15,700

The market opened higher today but liquidation in the positions of Adani Group of companies triggered massive selling and dragged Nifty to the level of 15606. Later the markets witnessed a gradual recovery which pulled the market back to the highest level of the day. It was completely unexpected to recapture the levels of 15800 but gains in Reliance, Infosys and Bajaj Finance made it possible.

The formation of the market is suggesting a bullish continuation. However, for that, the market would consolidate between the levels of 15850 and 15700. Once the market starts trading and sustaining above the levels of 15,850 then it would not be difficult for the market to conquer the levels of 16000/16050. Buying is advisable if the market drops to 15700/15720 levels. The Bank-Nifty has formed a Dragonfly Doji, which is bullish for the sector and for the market.

Views by: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Sec

TECH VIEW :: Expect high volatility till Nifty doesn't cross 15,900

The short term trend of Nifty continuous to be positive and there is no indication of any reversal pattern unfolding at the highs. At the same time, the market is finding stiff resistance around 15800-15900 levels and sharp intraday profit bookings are triggering from the highs. Till Nifty decisively crosses above 15900 levels, the high volatility likely to be expected in the next 1-2 sessions. Immediate support is placed at 15670.

Views by: Nagaraj Shetti, Technical Research Analyst at HDFC Securities

TECH VIEW :: Sumeet Bagadia, Executive Director at Choice Broking

On the technical front, the Index has taken support from 100-HMA which is placed at 15637 and bounced from there, which suggests strength for upside in the counter. On a four-hourly chart, the Index has confirmed a hammer candlestick pattern which further adds strength for upside direction. Moreover, an oscillator Stochastic has also suggested positive crossover, which indicates bullish strength for the near term. At present, the nifty seems to have resistance at around 16000 levels while immediate support comes at 15600 levels.

MARKET OUTLOOK :: 15,737-15,890 seems to be the band for the near term

Indian equity benchmark indices recovered from their early losses in the second half of the session to close with small gains. The Nifty opened lower and fell to make an intra day low in the first twenty minutes of trade. Shares of some companies controlled by billionaire Gautam Adani plunged after a report said accounts of three Mauritius-based funds that own the group’s stocks have been frozen. The Nifty later started the slow recovery move up and ended the day in the positive. At close, the NSE Nifty 50 was up 12.9 points or 0.08% at 15,811.85.
 
Volumes on the NSE were in line with recent averages despite large amount of intra day volatility. Among sectors, Energy & IT gained the most while Realty and Power fell the most. BSE Midcap index fell 0.68%.
 
Nifty witnessed a massive intra day recovery from the lows suggesting that the upmove is not out of strength. However the intra day volatility was enough to prompt profit taking across the board resulting in a negative advance decline ratio. The street will now watch as to whether some more negative news will surface in the coming few days to prompt a more sustaining downmove. 15737-15890 seems to be the band for the near term. 

Views by: Deepak Jasani, Head of Retail Research, HDFC Securities

MARKET RECAP :: Vinod Nair, Head of Research at Geojit Financial Services

Though the domestic market opened on a negative note due to lack of positive cues, it recovered in the afternoon, led by heavyweights following positive global markets. WPI inflation for May rose to 12.94% reflecting a higher price of fuel and manufactured products along with a lower base. Fed policy meeting to be held on June 15-16 is expected to dominate investor behaviour in the coming days. Though the Fed is expected to keep its rates unchanged, the key focus of the market will be on its comment on inflation

TECH VIEW :: Rohit Singre, Senior Technical Analyst at LKP Securities

After a volatile session, the Nifty index closed a day at 15,812 with minimal gains and formed a hanging man candle pattern on the daily chart. Strong strength has been seen in The Nifty from lower levels which suggest bulls managed to grab the opportunity from lower levels. Going forward, immediate base is coming near 15,750-15,650 zone. Any dip near the said levels will be a buying opportunity for the overall target of 16,000-mark. That apart, the immediate hurdle is coming near 15,900-16,000 mark and investors can expect profit booking on the higher side.

IPO Alert :: Sona Comstar issue walks at snail pace

>> IPO subscribed 8% till 4:00 PM


IPO Alert :: Shyam Metalics and Energy IPO sails through on Day 1

>> Issue subscribed 100% till 3:50 PM


BHEL ends 12% lower as Q4 nos miss Street estimates


Adani Group stocks recover partially after Co issues clarification


Broader market :: BSE SmallCap index ends little changed, down 0.2%


Broader market :: BSE MidCap index ends 0.7% lower


NSE Snapshot :: Top Nifty50 gainers of the day


Stocks that helped Sensex recoup losses


Sectoral trends on the NSE :: PSBs, IT rally, realty stocks fall


Sensex Heatmap

Top gainers: RIL, Bajaj Finance, Power Grid

Top losers: Kotak Bank, HDFC, NTPC


CLOSING BELL

The frontline Sensex index fluctuated 655 points before settling 77 points, or 0.15 per cent, higher from previous close at 52,551.5 levels. The Nifty50 index, meanwhile, settled at 15,812 levels, up 13 points or 0.08 per cent. India VIX index rose 4 per cent on the NSE today, suggesting high volatility in the markets.

Rupee Closing

Rupee closes at 73.27 per US dollar vs Friday's close of 73.07/$

Navoday Enterprises' initial public offering to open on 14 June

Navoday Enterprises Ltd. will launch Rs. 460.80 Lakhs SME IPO on 14 June 2021. The IPO is proposed to be listed on BSE's SME platform. The company will make a fresh issue of Equity Shares.
 
Initial Public Offer is of 23,04,000 Equity Shares of the face value of Rs. 10 each of the Company for cash at Rs. 20 per Equity Share (including a share premium of Rs. 10 per Equity Share) aggregating up to Rs. 460.80 lakhs. READ MORE

Adani Enterprises recovers post clarification


NEWS ALERT :: Demat A/c of reported FPIs are not frozen, says Adani Group


Recovery from intra-day lows in today's trade

COMPANY DAY'S LOW(RS) DAY'S HIGH(RS) LATEST(RS) RISE(%)
Deepak Fertiliz. 337.00 456.40 442.50 31.31
Alok Industries 25.00 31.40 30.40 21.60
Future Consumer 8.51 10.55 10.11 18.80
Adani Enterp. 1201.10 1444.60 1424.40 18.59
CLICK HERE FOR FULL LIST

How banks were able to prove doomsday predictions wrong in a pandemic year

When the Coronavirus (Covid-19) pandemic broke out in March last year and a nationwide lockdown was imposed to restrict its spread, there were concerns all round over its impact on the banking sector. Bad loans were stabilising after a relentless rise for several years and there was a ray of hope for the banking sector after a long time with non-performing assets having crossed the hump. READ MORE


Greaves Cotton rallies 6% on heavy volumes; stock nears 52-week high

Greaves Cotton shares rallied 6 per cent to Rs 152.40 on the BSE in intra-day trade on Monday on the back of heavy volumes after the Central government increased the subsidy on electric two-wheelers by 50 per cent, under the second phase of the FAME India scheme, making them more affordable.
 
In the past one week, the stock of Greaves Cotton has soared 18 per cent, as compared to 0.41 per cent rise in the S&P BSE Sensex. It was trading close to its 52-week high price of Rs 158, touched on March 9, 2021. The trading volumes on the counter more than doubled with a combined 8.3 million shares changing hands on the NSE and BSE. READ MORE

Mid-cap information technology players may have hit valuation ceiling

Mid-cap information technology (mid-cap IT) companies have outperformed their large-cap peers over the past year, with returns of 138 per cent as compared to the IT big boys which enriched investor wealth by 77 per cent. The rerating in mid-cap plays has been sharper over the last six months with the difference stretching to over 121 percentage points. READ MORE

European markets check

(Source: Reuters)


Amara Raja Batteries to diversify into emerging energy opportunities

Amara Raja Batteries Ltd (ARBL) on Monday announced energy and mobility as its strategic focus going forward to capitalise on emerging opportunities. It announced expansion of lead acid batteries business and establishment of a new energy strategic business unit encompassing lithium cell and battery pack, EV chargers, energy storage systems, advanced home energy solutions and related products and services. READ MORE


Stocks that hit 52-week high on BSE today in an otherwise volatile market

Company PRICE(rs) 52 WK HIGH CHG(%)
Aarti Industries 1841.75 1887.65 1.45
Alkem Lab 3240.10 3257.75 1.39
Bajaj Finance 6197.50 6250.20 1.29
Caplin Point Lab 678.55 691.75 2.22
CARE Ratings 638.95 651.85 6.30
» More on 52 Week High

Godawari Power trades higher for seventh straight day; zooms 51% in 3 days

Shares of Godawari Power & Ispat hit a new high of Rs 1,489 after rallying 18 per cent on the BSE in intra-day trade on Monday, after the company’s shareholders approved the proposal for divestment of its shareholding in Godawari Green Energy (GGEL), a material subsidiary of the company. The stock was trading higher for the seventh straight day and has zoomed 51 per cent in the past three trading days. READ MORE


Sona Comstar IPO opens today: Should you subscribe to the issue?

On the financial front, over FY18-21, Sona Comstar's revenue/Ebitda/Adj. PAT grew at a robust CAGR of 36 per cent/37 per cent/39 per cent given its thrust in the global EV market while earnings before interest, tax, depreciation, and ammortisation (Ebitda) margins expanded 76bps to 28.2 per cent. "Its margins are much superior vis-a-vis peers, given its critical component products. The net D/E stood at 0.3x as of FY21, which post repayment, would reduce to zero. Return ratios are healthy with FY21 RoE/RoCE at 16.5 per cent/15.3 per cent," Motilal Oswal said in an IPO note. READ MORE


Shyam Metalics IPO: Growth outlook outweighs valuation concern, say experts

Shyam Metalics and Energy Ltd (SMEL), an integrated metal producing company with focus on long steel products and ferro alloys, has opened its Rs 909 crore initial public offer (IPO) at a time when the domestic steel firms are eyeing price hikes and investments worth Rs 76,500 crore. As domestic steel demand appears robust at 5-6 per cent CAGR through FY25, as per rating agency Crisil, most of the analysts recommend investors subscribe to the issue. READ MORE


Q&A | Broader market will be fairly directionless and sideways: Mark Matthews

The world stock market has doubled in value from its low in March last year, and we think it now reflects 90 per cent of the post-pandemic economic recovery. At the same time, there is no reason to expect a recession. This makes us believe the broader market will be fairly directionless and sideways. Developed and emerging markets have had the same returns since the beginning of last year and there is no reason to think that should change for the remainder of this year. If there is a correction, our first port of call in deploying more cash would be in the structural stories we like in Asia. READ FULL INTERVIEW HERE

Market Check :: Sensex wipes off morning losses, turns flat


IPO Update :: Shyam Metalics issue subscribed 50% so far on Day 1


BUZZING :: Bajaj Finance rebounds from day's low to hit new high


Mid-market view | Gaurav Garg, Head of Research at CapitalVia Global Research

In the morning session, Indian equity benchmarks remained in the red, owing to significant selling in prominent blue-chip stocks. Sentiments in the traders turned a little sceptical as former RBI Governor D Subbarao raised concerns about the country's economic recovery being " very uneven" and "sharpening inequities" between upper- and lower-income people. US stocks ended the last week marginally higher, with few market-moving triggers and ongoing concerns over whether current inflation increases will sustain, prompting the US Federal Reserve to tighten its dovish policies sooner than expected. Asian markets followed the global peers and are trading in green. The Indian Market has been negative in the first half and has made an attempt to sustain near the level of 15600.15500 will be an important level from a short-term perspective. Technical factors indicate a consolidated movement between 15500-15900 in the weeks to follow.

Tide Water, Easy Trip, Prozone Intu, RCom zoom over 100% in a month

Shares of Tide Water Oil (India), Prozone Intu Properties, Easy Trip Planners and Reliance Communications (RCom) are among few stocks that have seen their market price more than double in the past one month on the back of positive corporate announcements. Among individual stocks, Tide Water Oil was locked in the upper circuit for the second straight day, up 5 per cent at Rs 12,030.80 after the company announced a 1:1 bonus issue, dividend of Rs 200 per share, and a stock split from Rs 5 to Rs 2. The stock had hit a record high of Rs 12,991 on June 7, 2021, after the company, on May 26, announced the stock split and bonus issue plans. READ MORE


India's, Brazil's Q1 GDP data suggest strong post-pandemic rebound: Moody's

India's and Brazil's first-quarter 2021 real GDP data show a strong rebound in both economies following a contraction last year of 4.4 per cent in Brazil and 7.1 per cent in India, Moody's Investors Service said on Monday. Brazil's first-quarter GDP expanded 1.2 per cent from the previous quarter and 2.3 per cent from first-quarter 2020. India's first-quarter GDP rose 1.5 per cent quarter on quarter and year on year. READ MORE


GLOBAL MARKET CHECK

Top Sensex drags at this hour :: HDFC twins, ICICI Bank


Zydus Cadila gets USFDA tentative nod for epilepsy treatment drug

Zydus Cadila on Monday said it has received tentative approval from the US health regulator to market epilepsy treatment drug Brivaracetam tablets. Zydus Cadila has received tentative approval from the US Food and Drug Administration (USFDA) to market Brivaracetam tablets, in the strengths of 10 mg, 25 mg, 50 mg, 75 mg, and 100 mg, Cadila Healthcare said in a regulatory filing. Zydus Cadila is a part of the Cadila group. READ MORE

NEWS ALERT :: WPI inflation comes in at 12.94% in May

>> It was 10.49% in April

EXPERT TAKE :: Yash Gupta, Equity Research Associate at Angel Broking on Adani Group stocks

Adani group stocks have plummeted with, ADANIENT down by 20%, ADANIPORTS down by 15%, ADANI POWER down by 5% and Adani Total Gas Ltd down by 5%.
 
As per the different market news some of the mutual funds are holding very large quantities of Adani groups stocks and some complaints have been filed with SEBI also. From today four Adani group stocks have been shifted to T2T (Trade 2 Trade) which  means that intraday trading will not be permitted and investors need to take/give holding for any trade. We suggest investors be cautious on Adani group stocks, trading at very high valuations compared to peers. Buy on dips or averaging the buy position should be avoided for the time being

Is the bull run in Adani Group stocks over? Here's what charts suggest

All six listed Adani Group companies were either locked in or were trading close to their lower circuit bands on the bourses on Monday, after National Securities Depository Ltd (NSDL) froze accounts of three foreign funds that own stake in four of these group companies. READ MORE

eClerx Services rallies 45% in 3 days, hits new high post Q4 results

Shares of eClerx Services continued their upward movement and hit a new high of Rs 1,875 after rallying 16 per cent on the BSE in intra-day trade on Monday, on the back of heavy volumes, in an otherwise subdued market. In the past three days, the stock has zoomed 45 per cent after the company reported healthy March quarter numbers (Q4FY21) with revenues up 19.3 per cent quarter on quarter (QoQ) in constant currency terms and 19.7 per cent QoQ in reported terms. READ MORE


NEWS ALERT

Analysts turn cautious on Adani Group companies, suggest cutting exposure

Concerns had shot up on shares of Adani Group stocks after a report by Bloomberg last week showed signs of concentrated holdings in group share companies by select foreign portfolio investors (FPIs). Matters got worse when National Securities Depositories Limited (NSDL) froze the account of three of these FPIs, holding shares worth Rs 43,500 crore in four of the six group companies, turning the Street cautious on these stocks. READ MORE

Reliance Power, Reliance Infra: ADAG stocks on a roll. What's driving them?

Shares of Anil Dhirubhai Ambani Group (ADAG) companies have massively outperformed the market thus far in fiscal 2021-22 (FY22). Reliance Power, for instance, has surged a massive 192 per cent thus far in FY22 compared to 6 per cent rise in the S&P BSE Sensex during this period. The S&P BSE Mid-cap and the S&P BSE Small-cap indices have surged around 14 per cent and 22 per cent thus far in FY22, data show. READ MORE

BHEL slips 18% on lower-than-expected March quarter results

Shares of Bharat Heavy Electricals Limited (BHEL) slipped 18 per cent to Rs 62.55 on the BSE in intra-day trade on Monday after the company reported a lower-than-expected set of numbers for the quarter ended March 2021 (Q4FY21). In Q4FY21, BHEL reported a net loss of Rs 1,036 crore as against a loss of Rs 1,532 crore in the year-ago quarter. Revenues grew 42 per cent year-on-year (YoY) at Rs 7,171 crore on a low base, with some impact of execution headwinds and pandemic. READ MORE

Edelweiss MF turns against riskier debt after India's Covid-19 woes

The level of stress in the economy especially for small- and medium-sized enterprises is still unclear after states locked down to curb the spread of a second virus wave from March, said Dhawal Dalal, who oversees $4.8 billion of debt assets at Edelweiss Mutual Fund. Dalal, who manages one of the best-performing debt funds over the past year, has added only AAA rated corporate notes to his portfolio since March. READ MORE

Lupin dips 5% on USFDA warning letter for Somerset manufacturing unit

“The Company has received a warning letter from the United States Food and Drug Administration (USFDA) for the Company’s Somerset, New Jersey facility. The USFDA had inspected the Lupin Somerset site from September 10, 2020 to November 5, 2020,” Lupin said in exchange filing. READ MORE

MARKET UPDATE:: Sensex off day's low, down 200 pts


Zensar Tech continues to trade lower post block deal

>> Around 3.4 million shares have changed hands so far on the BSE

>> A block  deal involving 2.6 million shares, at Rs 293.6 apiece, occured at 9:16 AM on the BSE


Sterling and Wilson Solar in focus

>> Company appoints Amit Jain as the Global CEO

>> Jain will take over the global operations of the Company and report to the Board of Directors. 


Rupee opening

Rupee opens lower at 73.20/$ vs Friday's close of 73.07 against the US dollar

Top losers on BSE at this hour

Company PRICE(rs) CHG(%)
Adani Ports 692.80 -17.41
Adani Enterp. 1361.25 -15.00
B H E L 64.80 -14.96
Alok Industries 26.50 -7.83
Zensar Tech. 288.00 -7.48
» More on Top Losers

Most active stocks by volume

Company PRICE(rs) CHG(%) VOLUME
Vodafone Idea 9.55 -3.24 9000612
Alok Industries 26.00 -9.57 6604134
Future Consumer 8.90 -11.62 5101340
B H E L 64.80 -14.96 4434327
Zensar Tech. 284.50 -8.61 3188246
» More on Most Active Volume

MARKET STRATEGY :: Investors should be selective & cautious in investment

Market signals do not indicate clarity on the direction of the market. While increasing FII buying, selective high-quality buying by DIIs & enthusiastic retail activity are positives for the market, the froth building up in the broader market is an area of concern. Nifty Small-cap index trading at a premium to Nifty reflects the 'irrational exuberance' of retail investors. But exuberance may continue. Investors should be selective & cautious in investment preferring high-quality stocks to small caps.

Views by: Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

JK Cement slips 2%

JK Cement reported higher consolidated profit at Rs 214.3 crore in Q4FY21 against Rs 160.82 crore in Q4FY20, revenue jumped to Rs 2,134.14 crore from Rs 1,545.65 crore YoY.


Sun TV Network drops 3% despite higher profits in Q4

Sun TV Network reported sharply higher profit at Rs 449.88 crore in Q4FY21 against Rs 250 crore in Q4FY20, revenue increased to Rs 782 crore from Rs 735.16 crore YoY.


BHEL sinks 15%

BHEL's consolidated net loss narrowed to Rs 1,036.32 crore in the March 2021 quarter, mainly on the back of higher revenues. The company's consolidated net loss had stood at Rs 1,532.18 crore in the quarter ended on March 31, 2020.


ALERT :: Nifty holds 15,600


ALERT :: Sensex drops 500 pts


DLF declines nearly 6% amid profit booking post Q4 nos

DLF reported a 6.4 per cent year-on-year rise in its net profit for the January-March quarter at Rs 481 crore. During the period, its consolidated revenue from operations stood at Rs 1,713 crore, growing 1.1 per cent over the year-ago quarter.


Lupin skids over 3% on receiving US FDA's warning letter

Lupin on Sunday said it has received a warning letter from the US health regulator for its Somerset facility in the US.


Reliance Power rallies 3% on fund raising plan

Reliance Power Limited has announced it will raise Rs 1,325 crore by issuing preferential shares and warrants to its parent, Reliance Infrastructure.


Adani Group stocks nosedive on the bourses

Adani group shares are likely to be in focus today after an Economic Times report said that National Securities Depository Ltd (NSDL) has frozen the accounts of three foreign funds — Albula Investment Fund, Cresta Fund and APMS Investment Fund — which together own over Rs 43,500 crore worth of shares in four Adani Group companies.


Metal index underperforms; All 15 constituents in the red


Sector Watch :: Only 3 of 10 Nifty IT constituents trade in the green


Volatility Alert

>> India VIX jumps 4% to trade at 14.71 levels

BSE SmallCap index slips half a per cent


BSE MidCap index slips over 1%


Sectoral trends on the NSE :: All indices, barring IT, trade in the red


Sensex Heatmap :: Declines take lead in early deals


Opening Bell :: Nifty tests 15,750


Opening Bell :: Sensex slips over 100 pts


Top stocks to watch today

Results today: Coal India, Indian Overseas Bank, Kajaria Ceramics, Greenply Industries and Uttam Sugar Mills are among 50 firms slated to release their quarterly numbers today.
 
Adani group shares are likely to be in focus today after an Economic Times report said that National Securities Depository Ltd (NSDL) has frozen the accounts of three foreign funds — Albula Investment Fund, Cresta Fund and APMS Investment Fund — which together own over Rs 43,500 crore worth of shares in four Adani Group companies. READ MORE
 

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


Pre-open session


Pre-open session


BROKERAGE VIEW :: MOFSL on Sona Comstar

SBPFL started supplying differentiated gears/ assemblies in the global EV market since 2016/2018 and has garnered 5%/8.7% market share (as of CY20). These two products currently contribute 46% of revenues while balance 51% comes from starter motors (SM; both Hybrid and conventional). In SM it has 3% market share globally.

Apart from being well-diversified across products catering to all types of conventional and electrified powertrains, SBPFL is also diversified across geographies and
vehicle segments. It derives 68% revenue from PVs while CVs/off highway vehicles form 14%/17%. On the other hand, exports form 75% of revenue (across North America/Europe/China/others) while balance comes from India.

View: We like SBPFL given its presence in fast growing global EV market, diversified portfolio across categories and robust financials. The issue is valued at 74.1x FY21 P/E on post issue basis. Though the valuation appears fully priced in, given its thrust in fast evolving EV space both in India and globally, market would like to give premium to such emerging growth story. Hence, we recommend Subscribe for Long Term.

BROKERAGE VIEW :: 3 reasons why GEPL Capital suggests subscribing to Sona Comstar IPO

Despite the highly cyclical nature of the auto-ancillary industry, the company has been able to maintain ots margins in the 26 – 28% range. Sona Comstar has also spent a significant % of sales on R&D and plans to increase its focus on the precision EV space. It currently has 14% of its revenue from Battery EV’s and 27% of its revenues from Hybrid EV’s and plans to increase this number going ahead.

Considering the significant amount of R&D and existing customer relations we believe the company is well equipped to cater to the fast growing EV powertrain segment, which requires significant technical expertise.

The offer is priced at ~ 10.6 x Price to FY21 Sales. Although this seems higher than the industry average, we believe it is justified considering the opportunities and rapidly growing market share.

IPO Alert :: Sona Comstar's 3-day issue opens today


BROKERAGE VIEW :: Here's why Reliance Securities gave thumbs up to Shyam Metalics' IPO

The IPO is valued at 2.4x of 9MFY21 book value and 12.8x of FY21 annualized earnings, which look to be reasonably valued. However, considering improved visibility of demand recovery in domestic as well as international markets led by strong focus on infrastructure development and steady pricing scenario, financial performance of SMEL is expected to improve significantly in the coming quarters.

We believe domestic steel industry is witnessing a structural change with increasing commitment towards reduction in carbon emission by large producing countries like China. This essentially bodes well for the domestic steel makers. Further, strong balance sheet along with best-in class leveraging positioning offers an edge to SMEL.

Additionally, OCF yield at 8.4% as on 9MFY21 looks to be impressive and expected to improve further with higher cash flow generation in the ensuing quarters. 

BROKERAGE VIEW :: HDFC Securities on Shyam Metalics IPO

SMEL have a relatively better financial strength as compared to other companies operating in the long and intermediary steel sector. It had reported healthy operational as well as financial growth despite downturns in the industry.

The Company is also the least leveraged group among its peers. Its revenue from operations increased at a CAGR of 6.56% from Rs. 38,425.66 million in Fiscal 2018 to Rs. 43,628.86 million in Fiscal 2020 and was Rs. 39,330.84 million in the nine months ended December 31, 2020.As of March 31, 2018, 2019 and 2020 and as of December 31, 2020, its Gross Debt to Equity ratio was 0.30, 0.29, 0.47 and 0.27, respectively.

RoCE for Fiscals 2018, 2019 and 2020 and for the nine months ended December 31, 2020 was 19.58%, 24.69%, 9.49% and 13.30%, respectively.

IPO Alert :: Shyam Metalics and Energy IPO opens today

Source: Axis Securities


Results today :: A total of 50 companies are slated to post their quarterly numbers today

Rupee check

Source: Bloomberg


Oil check


SGX Nifty alert :: Indices eyeing weak start

>> At 8:40 AM, the index was quoting 60 points down at 15,764

Asian markets check

Asian stocks were mixed Monday in holiday-thinned trading as investors prepared for a key Federal Reserve meeting later in the week. Shares saw modest gains in Japan and slipped in South Korea. Trading volumes are expected to be light with a number of holidays in the region including in Australia, China and Hong Kong.
 
Japan’s Topix Index gained 0.1% and South Korea’s Kospi Index fell 0.2%. S&P 500 futures rose 0.1%.

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