MARKET WRAP: Indices gain for 3rd day; Sensex up 353 pts, reclaims 41,100

Topics Markets | MARKET WRAP

Encouraging macro data points, buying in metal, realty and financial counters and positive global cues helped benchmark indices to settle in the green for the third consecutive day on Wednesday.

The domestic services industry began 2020 in a buoyant mood as activity accelerated in January at the fastest pace in seven years on strong domestic demand, a private survey showed on Wednesday. READ MORE

Before this, Manufacturing PMI, too, hit an eight-year high in January, driven by a sharp rise in new business orders amid a rebound in demand conditions.

The S&P BSE Sensex today rallied 353 points or 0.87 per cent to reclaim the crucial 41,100 level to end at 41,143. Tata Steel (up nearly 5.5 per cent) emerged as the biggest gainer on the index, followed by Bharti Airtel, HDFC, and TCS. On the contrary, Hero MotoCorp, Maruti and Power Grid were among the biggest losers. 

In the broader market, the S&P BSE MidCap index climbed over 1 per cent to settle at 14,644 while the S&P BSE SmallCap index closed 99 points or 0.68 per cent higher at 14,644-mark.  

On the NSE, the benchmark Nifty50 index ended just shy away from the crucial 12,100 level at 12,089, up 106 points or 0.9 per cent. 

Sectorally, except media, all the other indices on the NSE settled higher. The Nifty Media index slipped 0.77 per cent to end at 1,768.50 levels. On the upside, metal stocks jumped the most with the Nifty Metal index ending over 3 per cent higher at 2,675 levels. 

BUZZING STOCKS

Shares of Bharat Petroleum Corporation (BPCL) gained for the third straight day on the BSE after reports said that Russia's largest oil producer Rosneft was keen to bid for the state-owned oil marketing company. The stock ended at Rs 501, up 4.7 per cent. 

Shares of Avenue Supermarts, which owns and operates the DMart supermarket chain entered the 20 most valuable company club in terms of market capitalisation (m-cap). Shares ended at Rs 2249, up  4.35 per cent. 

On the other hand, Zee Entertainment Enterprises (ZEEL) were under pressure for the second straight day on Wednesday. The stock fell over 7 per cent to Rs 227 on the BSE amid media report that the corporate affairs ministry has ordered an inspection of the financials of the company. 

GLOBAL MARKETS 

European stocks jumped sharply on reports that a Chinese university found a drug to treat people with the new coronavirus and researchers in the UK saying they made a “significant breakthrough” in finding a vaccine, several London-based traders said. US stock futures also turned positive, rising 0.5 per cent.

Earlier, Asian stocks steadied as Chinese shares moved higher on hopes of additional stimulus to cushion the economic blow from a coronavirus outbreak. 

In commodities, oil prices jumped by more than 3 per cent. 

 
(With inputs from Reuters)


4:09 PM IST Indian markets are mirroring the global markets and trading on a higher note powered by rate-sensitive stocks . With the overreaction on the budget being mostly done, the market’s focus will turn to how global events and Q3 results span out. Inflation being on the higher side there is no further room left for the central bank to tweak rates and is expected to follow an accommodative stance in the policy due tomorrow

3:44 PM IST

3:43 PM IST

3:41 PM IST The S&P BSE Sensex rallied 353 points or 0.87 per cent to end at 41,143 while NSE's Nifty ended at 12,089, up 110 points or 0.91 per cent. 

3:10 PM IST Since October 23, when the company reported its September quarter results (Q2FY20), the stock has underperformed the market by falling 13 per cent on the BSE. In comparison, the S&P BSE Sensex was up 5 per cent, while the sector S&P BSE Auto index gained 1 per cent during the same period. READ MORE

2:55 PM IST The company’s robust project pipeline, rapidly expanding project portfolio and tailwinds from RERA are key positives and will enable the stock to continue to trade at rich valuations. We maintain ‘BUY/SO’ with revised TP of Rs 1,268 per share (at par with NAV of Rs 1,268/share) as we roll forward valuations to June 2021E.

2:51 PM IST

2:35 PM IST Indian Railway Catering and Tourism Corporation (IRCTC): The counter has jumped over 50 per cent in just eight sessions. Although the continuous gap-up sessions indicate strong momentum, a jump of over 50 per cent normally witnesses profit booking. This stock now needs to consolidate after a sharp rally in order enter the next leg of an upside. Rather than buying this stock now that trades in overbought condition as per Relative Strength Index (RSI), one can wait for a healthy correction. READ MORE

2:26 PM IST

2:24 PM IST COMPANY PRICE(rs) 52 WK HIGH CHG(rs) CHG(%) AEGIS LOGISTICS 241.75 242.75 11.25 4.88 AMBER ENTERP. 1592.90 1639.20 -12.00 -0.75 AU SMALL FINANCE 1098.00 1142.95 46.65 4.44 AVENUE SUPER. 2252.00 2273.10 96.55 4.48 BAJAJ HOLDINGS 3859.10 3949.35 113.05 3.02 » More on 52 Week High

LIVE UPDATES

MARKET COMMENT | Vinod Nair, HoR, Geojit Financial Services

Indian markets are mirroring the global markets and trading on a higher note powered by rate-sensitive stocks . With the overreaction on the budget being mostly done, the market’s focus will turn to how global events and Q3 results span out. Inflation being on the higher side there is no further room left for the central bank to tweak rates and is expected to follow an accommodative stance in the policy due tomorrow

SECTOR WATCH | Top gainers and losers on the NSE


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


CLOSING BELL

The S&P BSE Sensex rallied 353 points or 0.87 per cent to end at 41,143 while NSE's Nifty ended at 12,089, up 110 points or 0.91 per cent. 

Hero MotoCorp tanks 5%, Co to announce December quarter result on Thursday

Since October 23, when the company reported its September quarter results (Q2FY20), the stock has underperformed the market by falling 13 per cent on the BSE. In comparison, the S&P BSE Sensex was up 5 per cent, while the sector S&P BSE Auto index gained 1 per cent during the same period. READ MORE

BROKERAGE RADAR | Edelweiss Securities on Godrej Properties

The company’s robust project pipeline, rapidly expanding project portfolio and tailwinds from RERA are key positives and will enable the stock to continue to trade at rich valuations. We maintain ‘BUY/SO’ with revised TP of Rs 1,268 per share (at par with NAV of Rs 1,268/share) as we roll forward valuations to June 2021E.

MARKET CHECK | Sensex nears 41,100-mark


IRCTC, Avenue Supermarts, YES Bank: Trading strategies for buzzing stocks

Indian Railway Catering and Tourism Corporation (IRCTC): The counter has jumped over 50 per cent in just eight sessions. Although the continuous gap-up sessions indicate strong momentum, a jump of over 50 per cent normally witnesses profit booking. This stock now needs to consolidate after a sharp rally in order enter the next leg of an upside. Rather than buying this stock now that trades in overbought condition as per Relative Strength Index (RSI), one can wait for a healthy correction. READ MORE

RESULTS UPDATE:: Adani Enterprises Q3 consolidated net profit at Rs 426 cr vs Rs 92.4 cr (YoY)


BSE500 stocks that hit 52-week high today

COMPANY PRICE(rs) 52 WK HIGH CHG(rs) CHG(%)
AEGIS LOGISTICS 241.75 242.75 11.25 4.88
AMBER ENTERP. 1592.90 1639.20 -12.00 -0.75
AU SMALL FINANCE 1098.00 1142.95 46.65 4.44
AVENUE SUPER. 2252.00 2273.10 96.55 4.48
BAJAJ HOLDINGS 3859.10 3949.35 113.05 3.02
» More on 52 Week High

NEWS ALERT | Bharti Airtel's talk with investors for share sale in Bharti Infratel put on hold: sources to CNBC TV18

>> PE investors pull out of talks

Alert: Bharti Airtel hasn't issued any statement regarding the same

Market check | Sensex decisively past 41,000-mark, up 300 pts


BROKERAGE RADAR | ICICI Securities on Firstsource Solutions

It was a strong quarter on all metrics. Further, easing of pressure in top client, strong deal wins (three new logos added in mortgage and two in healthcare provider), strengthening of leadership team and positive outlook for BFSI, healthcare provider & utilities segment are key positives. Firstsource is also expected to pare down its net debt by nearly Rs 140-210 crore in FY21E. Accompanied by healthy dividend yield (~4.7% in FY19) and attractive valuations (6.5x FY22E EPS) prompts us to maintain our BUY rating with a revised target price of Rs 53/share (8x FY22E EPS).

BROKERAGE RADAR | Anand Rathi on TTK Prestige

Based on the present scenario, we conservatively factor in only 10 per cent and 9 per cent CAGRs over FY20-22 in revenue and PAT respectively, resulting in constrained return ratios. As we roll over our valuations to FY22, we upgrade the stock to a Buy, at a higher target price of Rs 7,002 (35x FY22e EPS of Rs 200), earlier Rs 6,670.

Risks: Mounting competition from regional operators, who compete mainly on pricing.

BROKERAGE RADAR | HDFC Securities on Galaxy Surfactants

We remain constructive on the company as (1) 55% revenues come from MNCs, which ensures stickiness of business, (2) EBITDA margins are stable at >12% since fluctuations in RMC are easily passed through to customers, and (3) Return ratios are strong (RoE/RoIC of 22.0/20.0% in FY21 and 21.4/19.9% in FY22 respectively). Galaxy is a preferred supplier of surfactants to leading FMCG companies. Thus, it is important to value it against FMCG and chemical stocks at extreme ends. Since, its products are specialised but lack branding and pricing power, it should trade at a multiple closer to chemical and at a discount to FMCG companies. Our target price of Rs 1,811 is at 22x Dec-21x EPS (versus the consensus target price of Rs 1,593).

MARKET UPDATE:: Sensex regains momentum


Aim to manufacture, sell 1 mn 'green vehicles' over next few years: Maruti

Kicking off the Auto Expo here, MSI Managing Director and CEO Kenichi Ayukawa said the company has already sold a million green cars, comprising CNG and smart hybrids in the last decade.
 
Showcasing its concept Futuro-e, an electric SUV, he said the car is being shown for the first time globally here, reflecting the importance of Indian customers in Suzuki's business. READ MORE

Oil check

Oil prices rose on Wednesday, reversing out of a 1 per cent slump in the previous session, boosted by producers weighing further output cuts to counter a potential squeeze on global oil demand resulting from China’s fast-spreading coronavirus.
 
Brent crude oil futures were up 44 cents, or 0.8 per cent, to $54.40 a barrel by 0127 GMT, while US West Texas Intermediate (WTI) crude futures were up 42 cents or 0.9 per cent to $50.03 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, a group known as OPEC+, weighed the impact on global oil demand, and economic growth, of the coronavirus outbreak at a meeting on Tuesday, hearing from China’s envoy to the United Nations in Vienna. Producers are weighing further output cuts and moving a planned policy meeting to February rather than March.

(Reuters)

RESULTS UPDATE:: Apollo Tyres Q3 consolidated net profit at Rs 173.9 crore

-- Consolidated Q3 revenue at Rs 4,399 cr

-- Ebitda up 1% at Rs 532.9 cr

-- Ebitda argin at 12.1% vs 11.2% (YoY)

BPCL extends rally on reports of Rosneft's interest; surges 13% in 3 days

Shares of Bharat Petroleum Corporation (BPCL) were trading higher for the third straight day, up 4 per cent to Rs 500 on the BSE on Wednesday after reports said that Russia's largest oil producer Rosneft was keen to bid for the state-owned oil marketing company. BPCL has rallied 13 per cent in the past three trading days to hit its highest level since December 17, 2019. It hit an all-time high of Rs 550 in intra-day trade on November 21. READ MORE

Tata Motors in focus, surges nearly 8%; Nifty Auto index trades lower

Tata Motors surged nearly 8 per cent in the intra-day session on Wednesday. The auto major unveiled a series of cars and commercial vehicles at the Auto Expo 2020. The company launched the much-anticipated Harrier 2020 at an introductory price of Rs 13.69 lakh for Manual and Rs 16.25 lakh for Automatic. READ MORE

Maruti Suzuki pares gains, down 2%


Russia's largest oil producer Rosneft keen to bid for BPCL: Report

Russia's largest oil producer Rosneft is keen to bid for acquisition of Bharat Petroleum Corp Ltd (BPCL), sources said after the Russian firm's CEO Igor Sechin met Oil Minister Dharmendra Pradhan on Wednesday. Rosneft, which is the majority owner of India's second biggest private oil refinery, is keen to expand in the world's third largest and the fastest growing energy market. READ MORE

China's stuttering economy braces for impact of deadly Coronavirus

China's struggle to contain the deadly coronavirus is deepening concerns about the impact on the world's number-two economy, as factories stay closed and millions of consumers remain holed up at home. The epidemic, which has killed hundreds and infected more than 24,000, has led to sweeping travel restrictions across the country as well as the closure of popular tourist attractions, businesses, schools and entertainment venues. READ MORE

MARKET UPDATE:: Broader indices outperform


BUZZING STOCK | OMDC zooms 17%

  • Shares of Orissa Mineral Development Company (OMDC) zoomed 17 per cent to Rs 2,286 on the BSE on Wednesday after company received an extension of the validity period of mining lease for iron and manganese over an area of 1276.79 hectares.
  • The stock of state-owned mining company was trading at its highest level since November 8, 2017.
  • In the past one month, it rallied 80 per cent from level of Rs 1,273, as compared to 1 per cent rise in the S&P BSE Sensex

RESULT UPDATE:: Bosch Q3FY20 consolidated net profit down 43.3% to Rs 190.2 cr vs Rs 335.4 cr (YoY)

-- Revenue down 15.7% YoY to Rs 2,536.6 cr

-- One-time loss at Rs 207.4 cr

-- Ebitdadown 22.2% YoY to Rs 320.2 cr
 

NEWS ALERT | Russia's Rosnet keen to bid for acquiring BPCL: CNBC TV18


BROKERAGE RADAR | Emkay Global Financial Services on PNB

We cut FY21/FY22 earnings estimates by 35% each, factoring in lower growth/higher LLP. We maintain our Sell rating with a TP of Rs45/UW stance in EAP due to its weak asset quality, poor return ratios, weak internal controls and merger overhang with United Bank and OBC. 

BUZZING STOCK | REC climbs 7%


SRF rallies 6% after board approves capex plan worth Rs 238 crore

Shares of SRF hit a new high of Rs 3,962, rallied 6 per cent, on the BSE on Wednesday after its Board approved capital expenditure plan worth of Rs 238 crore. “The Board has approved a proposal to set up dedicated facilities to produce intermediates catering to the agro-chemicals segment at an aggregate cost around Rs 238 crore,” SRF said in exchange filing. READ HERE

Nifty sectoral indices at this hour


Hero MotoCorp off day's high, slides 3%


NEWS ALERT | Govt likely to launch EoI for CONCOR by month-end: CNBC TV18 quoting Agencies

>> Leased land issue, related conditions holding back EoI

>> Railway Board to take final call on CONCOR land lease by next week

Alert: EoI is Expression of Interest


RBI Policy Expectation :: Madan Sabnavis, chief economist, CARE Ratings

We believe that policy rates should remain unchanged given the rising retail inflationary concerns mainly on account of food inflation. However, given the economic growth concerns the RBI is likely to retain the monetary policy stance at ‘accommodative’.

MARKET UPDATE:: Sensex off day's high


Jan Auto Sales | Force Motors reports 28.1% YoY jump in total sales


Budget strikes right balance between growth push and fiscal discipline: CEA

Chief Economic Advisor Krishnamurthy Subramanian said the recent custom duty increases in the Budget were not protectionist, as they were aimed at finished goods and not raw material. Speaking to Arup Roychoudhury and Dilasha Seth, Subramanian said that financial year 2020-21 (FY21) targets were transparent and realistic. READ INTERVIEW HERE

STOCK WATCH:: Gayatri Projects locked in lower circuit for the 10 straight day; stock hits fresh 52-week low


BUZZING STOCK:: YES Bank surges over 10%


Zee Entertainment slips 7% amid reports govt to probe company's books

According to a Moneycontrol report, the ministry has ordered an inspection of financials of ZEEL following allegations of corporate governance lapses and after some independent directors quit recently.
 
In November 2019, Zee had announced the resignation of independent directors Sunil Sharma and Neharika Vohra, and non-independent director Subodh Kumar. READ MORE

STOCK ALERT :: Bharat Wire Ropes locked in 20% upper circuit

>> Motilal Oswal and Raamdeo Agrawal combined bought 1.88 million or 4.2% stake in the company via block deals on Tuesday



Bharti Airtel hits record high as ARPU improves in December quarter

Shares of Bharti Airtel hit an all-time high of Rs 529, up 2 per cent on the BSE on Wednesday after the telecom operator posted an 8.5 per cent year-on-year (YoY) increase in revenue for the quarter ended December 31, 2019 (Q3FY20), lifted by an improvement in average revenue per user (ARPU). The stock surpassed its previous high of Rs 527.39, touched on October 10, 2007. READ MORE

Tata Global hits record high post Q3 nos; analysts remain positive

At 10:27 am, the stock was quoting at Rs 404.2 apiece, up 6.4 per cent on the BSE. In comparison, the S&P BSE Sensex was ruling 0.48 per cent higher at 40,985.93 level. A total of 12.46 million shares have changed hands on the counter on the NSE and BSE till the time of writing of this report. So far in calendar year 2020, the stock has outperformed the benchmark index by surging 18.3 per cent till Tuesday, compared to a decline of 1.1 per cent in the Sensex. READ MORE

MARKET UPDATE:: Sensex extends gains; INDEX up 200 pts now


NEWS ALERT | January Services PMI at 55.5 vs 53.3 (MoM)

- Sees strongest upturn in 7 years

"The Indian service sector started 2020 on a strong footing, with surging demand underpinning the fastest increases in new orders and output for seven years. As a result, job creation was sustained and business optimism maintained. The uptick in growth was accompanied by an intensification of inflationary pressures, with input costs rising to the greatest extent since February 2013 and output charge inflation picking up to a near two-year high. Rising from 53.3 in December to 55.5 in January, the IHS Markit India Services Business Activity Index signalled the strongest upturn in output for seven years. The rebound largely stemmed from favourable market conditions and better underlying demand, according to survey participants." 

MARKET CHECK | Sensex nears 41,000-mark


Avanti Feeds plunges 15% as Q3 net profit declines 35% YoY to Rs 48 crore

Avanti Feeds plunged over 15 per cent on Wednesday after the company posted weak set of numbers for the quarter ended December 31, 2019. The company reported a 35 per cent decline in its consolidated net profit at Rs 47.85 crore against Rs 73.57 crore profit logged in the corresponding quarter of the previous fiscal. Profit before tax (PBT) declined 36 per cent to Rs 73 crore crore against Rs 114 crore profit in the year-ago period. READ MORE

Sebi seeks Franklin Templeton reply after investment markdown in Voda Idea

Markets regulator Sebi has sought a reply from Franklin Templeton after the fund house's markdown of its investment in second-largest telecom firm Vodafone Idea Ltd (VIL) that led to an erosion of investor wealth. However, Sebi Chairman Ajay Tyagi parried questions on whether such a move is illegal or if it hurts the broader cause of protection of investors' interests. READ MORE  


Commodity watch from Motilal Oswal Securities


ICICI Securities maintains buy rating on Hawkins Cookers

Revival in revenue growth and significant improvement in margin profile has led to a re-rating for Hawkins Cooker. Furthermore, the recent cut in corporate tax rate has been a big positive for Hawkins as it was hitherto a full tax paying company. Over the years, the company has consistently maintained healthy dividend payouts with average ratio of ~75%. With minimal capex requirements, we expect the benefit of the tax cut to be passed on to shareholders through higher dividend payouts. We continue to remain structurally positive on Hawkins owing to its robust balance sheet and good promoter pedigree.

Over the years, the company has maintained balance sheet prudence with controlled working capital cycle (15% of sales), non-leverage balance sheet and generating healthy RoCE of 50%+. We roll over our estimates to FY22E and build in revenue and earnings CAGR of 13% and 27%, respectively, in FY19-22E. Hawkins is trading at 25x, 22x EPS of Rs 185, | 208 for FY21E, FY22E, respectively. We reiterate our BUY rating on the stock with a revised target price of Rs 5300 (25x FY22E EPS) (earlier target price: Rs 4600).

Company update: Tata Chemical

Tata Chemical reported revenue growth of 2% YoY to Rs 2620 crore, impacted by poor volumes from Magadi (down 50% YoY). However, better realisation across geographies arrested the decline, to a certain extent. In terms of basic chemical sales volumes, Tata Chemical India’s volumes were down 5.6% YoY to 185 KT, while Tata Chemical Europe volumes fell 11.8% YoY to 97 KT.

(Source: ICICI Securities)

Stocks near all-time high

COMPANY LATEST ALL TIME HIGH PREV HIGH PREV DATE
AMBER ENTERP. 1615.25 1639.20 1639.00 31-JAN-2020
AVENUE SUPER. 2180.00 2190.30 2174.90 01-FEB-2020
BATA INDIA 1874.00 1887.50 1882.30 04-FEB-2020
BERGER PAINTS 593.90 594.10 593.85 04-FEB-2020
BHARTI AIRTEL 517.85 529.10 527.39 10-OCT-2007

Click here for the full list

Sector watch :: AUTO

COMPANY LATEST (rs) CHG (rs) CHG(%) VOLUME
TATA MOTORS 171.80 6.10 3.68 437245
ASHOK LEYLAND 80.55 1.55 1.96 63186
TVS MOTOR CO. 473.90 19.35 4.26 59424
TATA MOTORS-DVR 71.30 2.35 3.41 39107
ESCORTS 854.05 7.55 0.89 18037

                                                                                                     » More

is there a slim chance of a rate cut by the RBI tomorrow?

In the forthcoming monetary policy review (February 6), we expect the MPC to hold rates, especially if one goes strictly by the guidance in the previous policy. After all, inflation has only moved higher since then. Yet, we do believe there is an outside chance of a rate cut. 

First, the spike in vegetable prices (which was one of the primary reasons for RBI’s pause) has reversed. And, global crude oil prices are down 12% since December policy. Second, the government has abstained from fiscal profligacy and therefore RBI needs to step-up its response to the ongoing broad-based slowdown—incoming data still weak with December aggregate credit growing at multi-year low of 6%.

Finally, uncertainties pertaining to global growth outlook have increased owing to Coronavirus. Thus, MPC could undertake a proactive rate cut. But, even if not, we
maintain that rate easing will resume in the coming fiscal year.

(Source: Edelweiss Research)


Prabhudas Lilladher on Bayer Cropscience (BYRCS)

BYRCS reported robust numbers with topline/EBITDA/PAT growing by 10%/94%/114% driven by decent growth in both agrochemical and seeds segment. Supportive weather in November and December led to higher sales and liquidation across India.

Merger with Monsanto has been EPS accretive for BYRCS shareholders from Year1 itself. We introduce estimates for the combined entity after merger for FY21E & FY22E. We upgrade our ratings on Bayer to BUY with target price of Rs 5288 (Previous 4255) based on 33xFY22E EPS of Rs 160.

Anand Rathi on Majesco

Majesco’s reported Q3 revenue bettered our estimate; growth clocked in at 9.2% q/q, 5% y/y, to $37.2m. This followed the strong cloud revenues, which grew 9% q/q. The higher revenues flowed through to the EBIT margin, up 441bps q/q, flat y/y, of 8.4%. The $101.7m order book, up 1% q/q, 19% y/y, was also robust. We
introduce FY22e and raise our FY21e profit 8% on currency and better margin performance; and our target to Rs 480.

Anand Rathi on Godrej Properties

Limited contribution from the only launch in Q3 was made good by inventory liquidation at ongoing projects. Consequently, value bookings were reassuring. The performance on other monitorables, too, was healthy, but the most inspiring was CF from operations sufficing for the outlays, helping net debt stay put at the Q2 level.

The path ahead looks bright as sustenance bookings are likely to continue, and as these are supported by new launches. With the rising scale, operations ideally
should generate better CF but net debt movement would largely track land & approval-related spends.

Will the RBI cut repo rate on Thursday?

Even as there are expectations of a moderation in inflation from the elevated level of 7.35% in December 2019, the Monetary Policy Committee (MPC) of the RBI is likely to maintain the policy repo rate at 5.15% in the upcoming monetary policy meeting to be announced on 6 February 2020. We anticipate the slump in GDP growth has bottomed out to 5% in 2019-20 and expected to rebound in 2020-21 to 5.5-6%, aided by the government measures and the transmission of past rate cuts

(Source: Brickwork Ratings)

Mahindra & Mahindra up 2%


Jefferies on India Energy Exchange

India Energy Exchange (IEX) went through tough 9M from 4QFY19 to 3QFY20 as volumes declined 5.4% YoY. Fear of tepid volumes continuing in a weak demand environment led to stock underperformance, but reversed post 51% YoY volume rise in Dec'19. 3QFY20 profits were expectedly flat YoY as volumes only recovered in Dec'19. With volume growth continuing in Jan'20, we believe IEX’s story of benefitting from market size & market share growth is intact. Maintain Buy

Reliance Industries extends yesterday's gains


IT sector roundup

(Source: Motilal Oswal Securities report)



Motilal Oswal Securities on Titan

While Titan's revenue growth was in line with the guidance, the positive surprise from the result was the jewelry margin of 13% and the EBITDA margin of 12%. Despite 15% retail jewelry YoY sales growth in 3QFY20, TTAN has maintained its 2HFY20 guidance of 11-13% jewelry sales growth, considering Jan'20 sales growth of only 8%.
 
Our longer-term investment case in the stock remains strong, as the company is well placed to grow its share from current level of 9% in the largely unorganized Indian jewelry market. However fair multiples (56.1x FY21 EPS/43.5x FY22 EPS), tepid guidance for 4QFY20 and uncertainty of jewelry sales recovery in FY21 lead us to maintain Neutral rating on the stock.

MARKET UPDATE:: Nifty reclaims 12,000


IT companies trade weaker


Amara Raja Batteries gains 2%


TVS Motors surges 6%

>> TVS Motor Company on Tuesday reported a 20.7 per cent decline in consolidated net profit at Rs 156.84 crore for the third quarter ended on December 31, 2019, hit by lower sales during the period.


CSB Bank rises over 3%

>> Fairfax-backed CSB Bank's profi before tax (PBT) rose to Rs 42.4 crore during the third quarter of the current fiscal from Rs 1.6 crore, during the same period last year. The bank's net profit rose to Rs 28.1 crore from Rs 0.7 crore.


Thermax gains over 1%

>> Energy and environment solutions provider Thermax on Tuesday said its consolidated net profit rose 13 per cent to Rs 85 crore during December quarter 2019-20 on reduced expenses.


Avanti Feeds plunges 9%

>> The company posted net profit of Rs 47.85 crore for the quarter ended December 2019, down 35 per cent against Rs 73.57 crore in the year-ago quarter.


Zee Entertainment extends slide

>> ccording to media reports, the Ministry of Corporate Affairs (MCA) has directed its western region head to inspect the books of the company. The stock on Tuesday slipped over 4 per cent to end at Rs 245 apiece on the BSE. Later, ZEE clarified that all the points expressed by the directors were disclosed in the public domain, The Economic Times reported.


Tata Global Beverages trades in the green

>> Tata Global Beverages Ltd on Tuesday reported a 24.76 per cent increase in consolidated net profit at Rs 135.85 crore in the third quarter ended December, aided by higher sales and lower tax rate.


Sectoral trends at NSE during Opening trade


Top gainers and losers on S&P BSE Sensex during Opening trade


Market at Open


First Trade indicates tepid opening on profit booking


Weak financials, impairment charge ail GSK Pharma; stock falls over 12%

An impairment charge and weak financial performance led to an over 12 per cent fall in the GSK Pharmaceuticals stock on Tuesday. In addition, the company — as part of its strategic review — is looking at options including sale of its Vemgal facility in Karnataka.
 
The financial impairment was on account of a global voluntary recall of ranitidine (antacid) products, which include its top brand Zinetac in India. READ MORE

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


Market at Pre-open


Market at Pre-open


Rupee opening

Rupee opens stronger at 71.21/$ vs Tuesday's close of 71.27 against the US dollar

Coronavirus outbreak adds to Vedanta's woes as base metal prices fall

The impact on demand for base metals from China may put further pressure on realisations, impacting players such as Vedanta. The price of Brent crude oil, too, has corrected from about $70 a barrel to nearly $55 a barrel now. READ MORE

Stocks in focus :: Cipla, Berger Paints, Adani Enterprises

Bharti Airtel: Bharti Airtel on Tuesday posted a net loss of Rs 1,035 crore for the quarter ended December 31 (Q3), as it provisioned for the interest accrued on account of AGR (adjusted gross revenue) payment.
 
Banks: The Centre might approve the scheme for amalgamation of 10 public sector banks (PSBs) into four on Wednesday. The Union Cabinet, led by Prime Minister Narendra Modi, is scheduled to meet on Wednesday and is expected to approve the amalgamation of the PSBs. READ MORE

Sebi comes out with common application form for FPI registration

Markets regulator Sebi on Tuesday come out with a common application form for registration of foreign portfolio investors in order to enhance operational flexibility and ease of access to Indian capital market.
 
Depository participants have been asked to continue to accept in-transit FPI registration applications, for a period of 60 days, Securities and Exchange Board of India (Sebi) said in a circular. READ MORE

NEWS ALERT | Bank of Japan signals readiness to ease rates on coronavirus scare: Reuters

>> Risks surrounding Japan’s economy and prices remain high, Masazumi Wakatabe said, reiterating that the BOJ will not hesitate to ease monetary policy further if the economy’s momentum for hitting the bank’s 2% inflation target is threatened.

NEWS ALERT | China's services PMI growth hits three-month low of 51.8 in Jan: Reuters

>> Growth in China’s services sector slowed for a second straight month in January

>> The slowdown in growth suggests the services sector, which accounts for more than half of the economy, faces persistent challenges despite a flurry of stimulus and a US-China trade “Phase 1” deal.

NEWS ALERT | MCA asking to furnish certain info not related to the corporate governance issue: Zee Ent

>> Says Corp Affairs Min has asked co to furnish certain info under Section 206 of Companies Act. 
 
Alert: Section 206 of Companies Act mentions power to call for info, inspect books, conduct inquiries

(As reported by CNBC TV18)

Cabinet likely to approve mergers of 10 public sector banks into 4 today

The Centre might approve the scheme for amalgamation of 10 public sector banks (PSBs) into four on Wednesday, an official source said. The Union Cabinet, led by Prime Minister Narendra Modi, is scheduled to meet on Wednesday and is expected to approve the amalgamation of the PSBs. According to the scheme, which has been put up for the Cabinet’s approval, the merger of the balance sheets will be completed by April 1. READ MORE

10% TDS only on dividend payment by mutual funds, clarifies CBDT

The statement from the CBDT read: “A mutual fund shall be required to deduct TDS at 10 per cent only on dividend payment and no tax shall be required to be deducted on income which is in the nature of capital gains”. READ MORE

Titan's jewellery business braves economic slowdown storm in Q3

Recovery in growth of Titan’s jewellery business in the December quarter (Q3), despite the weak consumption scenario, was the key takeaway in the December quarter results. Therefore, despite a tad lower-than-expected Q3 numbers, the Titan stock surged 7.6 per cent to Rs 1,275.5 apiece on Tuesday. READ MORE

Weekly stock picks by Religare Broking: Buy Asian Paints, BPCL

Buy BHARAT PETROLEUM CORPORATION LIMITED
 
Last Close: Rs 478.50
 
Initiation range: Rs 470-474
 
Target: Rs 500
 
Stop loss: Rs 460
 
BPCL has been rebounding sharply after retesting the support zone of 200 EMA on the daily chart. It has formed a flag pattern (which indicates pause after a sharp move) on the weekly chart and is trading on the verge of a breakout from the same as well. We thus advise initiating fresh longs within the mentioned levels. READ MORE

Stock recommendation from Prabhudas Lilladher: Buy ACC, Cadila Health

BUY ACC | CMP: Rs 1,487.25 | TARGET: Rs 1,600 -1,620 | STOP LOSS: Rs 1,420
 
The stock has witnessed some erosion recently and has taken support near the strong base level of Rs 1,420. It has given a pull-back, which shows signs of an improving bias and the potential to rise further with the same momentum in the coming days. The RSI has singalled a trend reversal for a buy and with decent volume participation witnessed, we suggest to buy this stock for an upside target of Rs 1,600 keeping the stop loss near Rs 1,420 levels. READ MORE

Nifty forms Morning Star pattern, support shifted up to 11,783: HDFC Sec

Support for the Nifty shifted up to 11,783
 
Nifty recouped all the losses witnessed on the Budget day and closed on a strong wicket. The recovery from lower levels has resulted in to bullish “Morning Star” candlestick pattern on the daily charts. However, the range of 12,000-12,050 is a strong resistance zone for the Nifty, which should be taken out on a closing basis to negate the bearish trend. Nifty Support is now shifted upward to 11,783, the low registered on 4th Feb 2020. READ MORE

India appears better mkt amid coronavirus scare: Nomura's Saion Mukherjee

Attracting foreign capital, investment-led growth, and aggressive disinvestments are the key themes emerging out of the Budget, says Saion Mukherjee, India equity strategist, Nomura. In an interview with Samie Modak, Mukherjee says the Indian markets are once again looking relatively attractive as against some of the Asian peers hit by coronavirus. READ INTERVIEW HERE
Saion Mukherjee, managing director and head of India equity research at Nomura

Market Outlook :: Deepak Jasani, Head - retail research, HDFC Securities

>> Indian markets could open flat today following sharp gains in the US markets on Tuesday and largely positive Asian markets today.

>> The pullback rally continued at Dalal Street on Tuesday, after the sharp fall seen on Saturday, which was triggered due to lack of sufficient stimulus measures in the Union Budget. The gains came on the back of positive global cues and a slide in crude oil prices. The Nifty gained 271.75 points or 2.32% to close at 11,979.65.
 
>> Technically, while the Nifty has pulled back sharply, the underlying short term trend still remains down. Immediate supports to watch for resumption of weakness are at 11845. Upside resistances are at 12018
 
>> Among stocks under coverage, Bajaj fin, Dabur, Dr Reddys, Shree Cements, Westlife, Godrej Prop, Chola Fin, Hexaware, United Spirits, MGL could do well.

Bulk deals on BSE as on Tuesday

Bulk deals on NSE as on Tuesday

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


Rupee Check

Source: Bloomberg


Oil Check

>> The oil market looks set for at least four months of depressed demand because of China’s coronavirus outbreak, with a large crude surplus not expected to clear at least until August. According to reports, The Organisation of the Petroleum Exporting Countries is in discussions with China to discuss coronavirus and its impact on oil prices.

>> At 8:01 am, Brent Crude Futures were at $54.59 per barrel-mark

SGX Nifty

>> At 7:59 am, the Singaporean Exchange for Nifty Futures was at 11,950.50 level, down 22 points or 0.19 per cent.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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