MARKETS: Metal, realty stocks shine in choppy trade; Sensex ends 163 pts up

Stock brokers (Photo credit: Kamlesh Pednekar)
Metal and realty stocks led from the front in trade on Wednesday - a day that was marked with volatility. India VIX - a guage of volatility on the NSE - ended nearly a per cent higher at 22.92 levels.

After a firm start that saw the Nifty50 reclaim the 12,000 mark, the benchmark indices succumbed to profit booking with the S&P BSE Sensex and Nifty 50 hitting an intra-day low of 40,150.48 levels and 11,775.75 levels, respectively. Both these indices had hit an intra-day high of 40,976.02 and 12,018.65, respectively on Wednesday.

At close, the benchmark indices settled higher for the fourth consecutive session. The S&P BSE Sensex was at 40,707 levels, up 163 points or 0.4 per cent with PowerGrid, Bharti Airtel, and Tata Steel ending the day as top gainers on the 30-share index. IT counters such as TCS and HCL, on the other hand, ended as top drags.

NSE's Nifty50, on the other hand, ended at 11,938 levels, up 41 points or 0.38 per cent.

"Indices managed to close in the Green today but not without its share of hiccups over rumours on waiver of interest on loans. Banks & Metals provided support even as we saw profit booking in several stocks during afternoon trade. Select PSU names were sought after by funds in todays volatile session," said S Ranganathan, head of research at LKP Securities.

Meanwhile, Sebi chairman Ajay Tyagi today said that it sees no merit in increasing the 10 per cent investment cap on a single stock for actively-managed mutual fund (MF) schemes.

“The 10 per cent cap is meant for diversification cap. Just because some scrip is outperforming doesn’t mean you raise the ceiling. For the sake of diversification, the 10 per cent ceiling is something which stays,” said Ajay Tyagi, chairman, Sebi while addressing the media at a market summit organized by industry body CII. READ ABOUT IT HERE

In the broader market, the S&P BSE MidCap index closed at 14,808.5 level, up 33 points or 0.23. The S&P BSE SmallCap index, on the other hand, closed at 14,900 level, up 5 points.

Stimulus package

The government, according to a Reuters news report, is reportedly working on the next stimulus package to support the economy amid positive signs of a fall in Covid-19 cases, a senior finance ministry official said on Wednesday.

The government has received suggestions from various ministries and sectors on needed measures, Tarun Bajaj, economic affairs secretary at the ministry of finance, told a virtual conference.

Meanwhile, Union Minister Prakash Javadekar said, "Union Cabinet has approved productivity linked bonus and non-productivity linked Bonus for 2019-2020. Over 30 lakh non-gazetted employees will benefit by this and total financial implication will be Rs 3,737 crores."

Global markets

Global stocks and bond yields rose on Wednesday as Washington moved closer to agreeing a coronavirus stimulus package, pinning the dollar at its lowest for a month.

The MSCI world equity index, which follows shares in nearly 50 countries, gained 0.1 per cent, buoyed by a 0.5 per cent gain for Asia-Pacific shares outside Japan.

(With inputs from Reuters)

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3:36 PM IST >> At close, the benchmark indices settled higher for the fourth consecutive session. The S&P BSE Sensex was at 40,707 levels, up 163 points or 0.4 per cent with PowerGrid, Bharti Airtel, and Tata Steel ending the day as top gainers on the 30-share index. IT counters such as TCS and HCL, on the other hand, ended as top drags.    >> NSE's Nifty50, on the other hand, ended at 11,938 levels, up 41 points or 0.38 per cent.

3:28 PM IST UltraTech’s consolidated net profit more than doubled at Rs 1,234 crore in Q2FY21, as against Rs 579 crore in Q2FY20. Net sales however, grew a modest 1 per cent to Rs 10,231 crore from Rs 9,486 crore in the corresponding quarter of the previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin improved to 27.7 per cent from 21.8 per cent. READ MORE

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3:01 PM IST Given the bank’s strong capitalisation, coverage and liquidity than its regional peers, it is better placed to withstand Covid’19-related stresses. However, with expected higher slippages, higher credit costs would keep the bank’s earnings weak in the medium term. We estimate a 0.4% RoA for FY21, and 0.9% for FY22.   Our Oct’21 sum-of-parts target price (0.7x FY22e book value, Rs8 a share for Fedfina and IDBI-Federal Life) works out to Rs60 a share. Risk: Lumpy slippages from the corporate book.

LIVE UPDATES

Market Statistics


Top Drag :: Nifty FMCG index settles nearly a per cent lower


Top Gainer :: Nifty Realty index outperforms markets


Sectoral trends at Close


Sensex Heatmap at Close


Closing Bell

>> At close, the benchmark indices settled higher for the fourth consecutive session. The S&P BSE Sensex was at 40,707 levels, up 163 points or 0.4 per cent with PowerGrid, Bharti Airtel, and Tata Steel ending the day as top gainers on the 30-share index. IT counters such as TCS and HCL, on the other hand, ended as top drags. 
 
>> NSE's Nifty50, on the other hand, ended at 11,938 levels, up 41 points or 0.38 per cent.

UltraTech Cement trades firm on strong operational performance in Q2

UltraTech’s consolidated net profit more than doubled at Rs 1,234 crore in Q2FY21, as against Rs 579 crore in Q2FY20. Net sales however, grew a modest 1 per cent to Rs 10,231 crore from Rs 9,486 crore in the corresponding quarter of the previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin improved to 27.7 per cent from 21.8 per cent. READ MORE

BUZZING STOCK:: Bharti Airtel at day's high, up 3%


MARKET UPDATE:: Sensex regains momentum


Anand Rathi on Federal Bank

Given the bank’s strong capitalisation, coverage and liquidity than its regional peers, it is better placed to withstand Covid’19-related stresses. However, with expected higher slippages, higher credit costs would keep the bank’s earnings weak in the medium term. We estimate a 0.4% RoA for FY21, and 0.9% for FY22.
 
Our Oct’21 sum-of-parts target price (0.7x FY22e book value, Rs8 a share for Fedfina and IDBI-Federal Life) works out to Rs60 a share. Risk: Lumpy slippages from the corporate book.

Jefferies on telecom sector

During 2QFY21, we expect Bharti Airtel's India mobile revenues to grow 3% QoQ on the back of better offline retail sales and better 4G adds, with slight margin expansion. While we expect Bharti Infratel's core revenues to remain muted, we think EBITDA will grow 4% QoQ due to a pick-up in energy margins. Timing of the next tariff hikes will be key for Bharti Airtel. Updates on merger and tenancy outlook will be key for Bharti Infratel.

Jefferies on OMCs

In 2QFY21, we expect HPCL to report the strongest marketing performance among the OMCs on the back of lower decline in marketing volume and sharply higher marketing margins y/y. IOCL's profitability should show the steepest jump boosted by inventory gains (inventory loss in base qtr). Recovery in refining margins from decade lows along with sustainability of strong marketing margins are key to stock price recovery from cyclical lows.

Elara Capital on HUL

We cut our earnings by 16% for FY21E, 13% for FY22E and 13% for FY23E, led by gross margin contraction of 157bp in FY21E. We expect sales growth to accelerate from 3-5% to 9% in FY22E, led by recovery in discretionary, OOH-related products (20% of sales) and distribution growth of Horlicks and Boost portfolio of ~20% YoY that will be executed in FY22 once systems are integrated. We downgrade to Reduce from Accumulate with a lower TP of INR 2,161 (down 9.5%) on 50x (unchanged) Q2FY23E EPS of Rs 43.

Centrum on Britannia’s Q2FY21

Britannia’s Q2FY21 revenues miss expectations, while margins surprise. Revenue/ EBITDA/ PAT grew 12.1%/ 37.2%/ 23.0% led by continuing tailwinds from in-home consumption portfolio. After a stellar reactive execution in Q1, the company has shifted its focus back to its strategic planks (1) rural distribution (2) innovation (3) cost cutting efforts and (4) adjacent business helped to deliver profitable growth. Its emphasis on rural markets helped in gaining market share in the Hindi speaking belt further.

On the margin front the company delivered all time high gross margin at 43.3% (+283bps), while the EBITDA Margin expansion was even higher at 361bps (19.8%) led by sustaining cost efficiencies from JQ’20 and lower ad spends.  We maintain our estimates and retain Buy rating with DCF-based target price of Rs4,273 (implying 51x FY22E EPS).

YES Securities on Bajaj Finance Q2FY21 nos

Operational results being better than expectations and credit cost moving in-line imply that earnings estimates may remain unchanged or marginal revised higher. We retain positive stance and believe that Management commentary on growth rebound would be most critical for incremental valuation re-rating

Nestle shrugs off Covid-19 impact thanks to pet food and health nutrition

Nestle raised its guidance for 2020 organic sales growth to around 3% after beating third-quarter expectations on Wednesday with 4.9% growth driven by strong demand for pet food, coffee and health products.
 
The world's biggest food group has weathered the COVID-19 pandemic better than some peers as its focus on high-growth categories helped offset a slump in food sales to restaurants and cafes. READ MORE

A missed opportunity: ITC could build India's digital, agri-business model

Formerly known as Imperial Tobacco of India, later renamed India Tobacco Company, and finally truncated to just ITC, the 110-year-old conglomerate is 29.4% owned by British American Tobacco Plc. About 28.5% is controlled by various Indian state-run insurance companies and a government-controlled bad bank. READ MORE

No merit in relaxing 10% cap on single stock investment: Sebi chief

“The 10 per cent cap is meant for diversification cap. Just because some scrip is outperforming doesn’t mean you raise the ceiling. That will be self re enforcing that a scrip has moved up and you are allowing higher investment in the same scrip. That doesn’t sound very logical. For the sake of diversification, the 10 per cent ceiling is something which stays,” said Ajay Tyagi, chairman, Sebi while addressing the media at a market summit organized by industry body CII. READ MORE

NEWS ALERT :: Colgate declares dividend of Rs 18/share


Sept Quarter Result | Colgate Palmolive's net profit comes in at Rs 274.2 crore

>> Revenue at Rs 1,286 crore

>> EBITDA at Rs 409 crore

Sept Quarter Result | UltraTech Cement posts profit of Rs 1,235 crore

>> Consolidated revenue at Rs 10,354 crore

>> Consolidated EBITDA at Rs 2,695 crore

>> EBITDA margin at 26%


Newgen Software zooms 20% on robust September quarter results

In Q2FY21, the company’s consolidated net profit jumped seven-fold at Rs 29. 2 crore, despite reporting flat operational revenue at Rs 155 crore over the previous year quarter. The IT consulting & software company had profit of Rs 4.2 crore in Q2FY20. READ MORE

Rupee Closing

Rupee ends weaker at 73.58 per US dollar vs Tuesday's close of 73.46/$

BROKERAGE VIEW :: Axis Securities on HUL

CMP: Rs 2,174 | Target price: Rs 2,455 | Reco: Buy

Overall Q2FY21 performance was modest beat vs our estimate on the back of a healthy recovery seen in discretionary portfolio led by Hair, Oral and essentials like Tea and Coffee which grew in double digits. Further with progressive easing of lockdown ahead of the festive season and increasing movement of people we expect the OOH business growth traction to improve sequentially thus driving growth in near term. From a medium term perspective we believe, HUVR has the right growth matrix like 1) broad based portfolio straddling across price-value matrix, 2) focus on cost savings 3) GSK-CH integration led growth and 4) execution prowess vs peers. We revise rating to BUY (earlier HOLD) and value the stock at 53x FY23E EPS.

BROKERAGE VIEW :: Axis Securities on Britannia

CMP: Rs 3,552 | Target price: Rs 4,170 | Reco: Buy 

Growth momentum expected to moderate from a near term perspective with easing of lockdown restriction and rising opportunities for consumers to order online. However, benign RM prices could keep GM steady in range of 41-41.5% in our view while EBITDA Margins could revert to its band of 18-19% on the back of normalizing A&P spends.We have marginally tweaked our estimates for FY21/22 given the modest growth commentary. Retain BUY with revised TP of Rs. 4,170 (Rs. 4,300 earlier) as we value the stock at 50x its FY22E EPS. Key downside risks to our estimates – faster adoption of out-of- home consumption and upside risk is onset of COVID-19 second wave.

Fall from intra-day high today

COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) FALL(%)
JUST DIAL 632.50 566.25 -9.25
AMBER ENTERP. 2539.85 2349.00 -7.34
RAJESH EXPORTS 475.00 448.45 -5.59
MINDTREE 1467.00 1382.65 -5.18
Click here for the full list

MARKET CHECK


Sept Quarter Result | Bajaj Finance

>> Net profit at Rs 965 crore

>> NII at Rs 4,165 crore

>> Gross NPA at 1.03%


Metal shares extend gain on demand recovery; Jindal Steel, Tata Steel up 4%

Shares of metal companies were trading higher at the bourses on Wednesday on expectation of higher demand due to recovery in global economic activity, and China's infrastructure spend. That apart, domestic steel demand improved notably in July-September quarter (Q2FY21) compared to April-June quarter (Q1FY21) with the opening up of the economy. This has aided capacity utilisation of domestic steel players. READ MORE

Land licence fee changes for Concor will remove major overhang

Container freight operator Container Corporation of India’s (Concor’s) stock has risen 9 per cent over the past two weeks on expectations of reduction in land licence fee (LLF), progress on privatisation, and improving freight volumes. The government is expected to announce a revised land licence policy soon, which could lead to halving of LLF from 6 per cent to 3 per cent. READ MORE

NEWS ALERT :: LIC increases stake in CONCOR from 2.05% to 4.45% in Q2


Faster profit upgrades put emerging markets ahead of US stocks

Initially, most emerging-market upgrades came from China, which is set to be the lone major economy posting growth this year. But Latin America has seen the fastest surge in profit expectations in the past two months, suggesting the economic recovery from the coronavirus pandemic is beginning to be more broad-based. READ MORE

Larsen & Toubro Infotech surges 6% on healthy September quarter results

Shares of Larsen & Toubro Infotech (LTI) were up 6 per cent to Rs 3,139 on the BSE in the intra-day trade on Wednesday after the company reported strong revenue growth numbers and healthy margin expansion in July-September quarter (Q2FY21). Besides, the board also declared first interim dividend for the financial year 2020-21 of Rs 15 per share of face value of Re 1 each. The company has already fixed October 28, 2020 as record date for the same. READ MORE

NEWS ALERT :: 10% cap on exposure to one stock is to ensure diversification of risk, says Ajay Tyagi

>> Increasing single stock cap, because one stock has higher weight, reinforces lack of diversification 

NEWS ALERT :: Have taken up with govt for setting up of backstop facility, says Sebi chief

>> It will be to reduce the impact of illiquidity in the debt market

BROKERAGE VIEW :: Phillip Capital on HUL

CMP: Rs 2,172 | Target price: Rs 2,600 | Reco: Buy

We believe HUL has right matrix to sail through such challenging times – (1) Broad product portfolio (2) Focus on premiumization through LUPs, (3) improving distribution means through digital means. We maintain High-conviction BUY with a target of Rs 2,600 (55x FY23 EPS) on back of TINA and further strengthening of
competitive positioning. Key risks: 1) integration related challenges for the GSK Consumer merger and 2) Consumer demand not picking even from 2HFY21 onwards.

BROKERAGE VIEW :: Phillip Capital on Hindustan Zinc

CMP: Rs 222 | Target price: Rs 225 | Reco: Downgrade to Neutral

Supply side adjustments and gradual opening up of user industries (predominantly in China) provided much needed support to prices. Henceforth; we expect zinc prices to remain range-bound on improving supplies and normalization of demand in China. Expect 1.2mn tonne production in FY23 only as COVID related delays will hinder faster rampup. Considering major portion of expected dividend is delivered, we do not foresee any major gain from current levels. Downgrading the stock to Neutral with target price of Rs 225 (6.5x FY22 EV/EBITDA).

Tata Teleservices (Maharashtra) zooms 72% in 3 days, hits 52-week high

Shares of Tata Teleservices (Maharashtra) (TTML) were locked in upper circuit for the third straight day, up 20 per cent at Rs 4.86 on the BSE on Wednesday on the back of heavy volumes. The stock of the Tata group telecom services company was trading at its 52-week high. It has zoomed zoomed 72 per cent in the past three days from the level of Rs 2.82 on Friday. READ MORE

NEWS ALERT :: SBI offers up to 20 bps interest concessions for loans above Rs 75 lakh based on CIBIL score

>> Bank also offers additional 5 bps concession for all home loans if applied through YONO

(Source: CNBC TV18)


NEWS ALERT :: I urge the independent directors, resigning due to corp governance, to flag the issues, says Ajay Tyagi

>> Sebi chairman's address ends.

NEWS ALERT :: Every stakeholder needs to play significant role to reform the markets, says Tyagi

NEWS ALERT :: Sebi's timely regulations have helped markets sustain during these gloomy times, says Sebi chief

>> We hve undertaken permanent reforms

NEWS ALERT :: Will be difficult to achieve govt's infra investment target without developing bond markets

NEWS ALERT :: Recovery in markets is broad-based, says Tyagi

>> Around 50 per cent of constituents on each large, mid, or small-caps have outpeformed markets 

Just Dial, Info Edge, IndiaMart: Trading strategies for buzzing stocks

Shares of Just Dial continued at their northward journey, ralling 14 per cent to Rs 574 on the BSE on Tuesday, on the back of heavy volumes. The stock traded higher for the fourth straight day, surging 40 per cent during the period. READ MORE

HUL: Higher costs, volume and market share focus could hit profitability

Hindustan Unilever’s Septe­mber quarter results were broadly in line with Street expectations of sequential recovery and volume/value growth in the 1-3 per cent range. What stood out was the 19 per cent uptick in the food and refreshment category, adjusted for the GSK Consumer Healthcare acquisition. READ MORE

Hindustan Zinc jumps 4% as board approves dividend of Rs 21.30 per share

Shares of Hindustan Zinc gained 4 per cent to Rs 232.25 on the BSE on Wednesday after the company said its board has approved interim dividend of Rs 21.30 per equity share i.e. 1,065 per cent on face value of Rs 2 per share for the financial year 2020-21, amounting to Rs 9,000 crore. The company has fixed October 28, 2020 as the record date for the purpose of determining the eligibility for payment of interim dividend. READ MORE

Diversified portfolio is the best antidote to help you beat inflation

Avoid the temptation of investing in instruments that promise a higher rate of return, unmindful of risks. Some smaller banks, for instance, offer higher interest rates than those offered by leading public- and private-sector banks. “It is true that deposits up to Rs 5 lakh are insured. But if a smaller bank goes belly up, you may receive the insurance money only after several years,” says Pankaj Mathpal, founder and managing director, Optima Money Managers. READ MORE

HDFC Bank rises 6% in 4 days, hits 8-month high on strong Q2 results

The private sector lender's stock was trading at its highest level since February 14, 2020. In the past four trading days, HDFC Bank has outperformed the market by gaining 6 per cent, as compared to 3 per cent rise in the S&P BSE Sensex. In the past month, it has rallied 18 per cent, against 8 per cent gain in the benchmark index. READ MORE

Rupee Opening

Rupee opens higher at 73.40 per US dollar vs Tuesday's close of 73.46/$

Nifty FMCG index trades lower in an otherwise firm market


Vedanta rallies 3%


Sensex surges 400 pts


ALERT :: Nifty reclaims 12,000-mark


NEWS ALERT :: L&T Construction bags contracts in the range of Rs 2,500-5,000 cr

Sector Watch :: PSU banks charge ahead


Ahead of Result | Colgate trades in the green


Bajaj Auto up over half a per cent


HDFC Bank up 1%


Nelcast rises over 4%


Result Reaction | Hindustan Zinc trades higher


Motherson Sumi gains 2%


Prabhat Dairy jumps over 10%


Reliance Industries up around a per cent in morning deals


Sectoral trends :: Banking, financial counters march ahead


Sensex Heatmap at Open


Opening Bell


Opening Bell


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


Markets at Pre-open


Markets at Pre-open


Top stocks to track today

Reliance Industries: Reliance Jio and Qualcomm Technologies Inc have expanded their efforts to develop 5G solutions in India and have achieved a speed of 1 Gbps during trials.
 
Prabhat Dairy: The Sebi has directed Prabhat Dairy to cooperate with the forensic auditor and deposit over Rs 1,292 crore in a nationalised bank within seven days, till the conclusion of the audit. READ MORE

Banks, FMCG stocks may outperform in near-term: HDFC Securities

Nifty is expected to move higher from the current levels. Banking and FMCG stocks are likely to outperform. Nifty has got strong support at 11,660 and the same can be kept as a stoploss in long positions. Upside targets for Nifty are seen at 12,250 and 12,430. The important development which gives the confidence that the markets would move up rather than down, is the technical setup of BankNifty, which has closed at the highest level since 28 August, 2020. READ MORE

Weekly stock picks by Religare Broking: Buy Bharat Forge, IndusInd Bank

Buy Amara Raja Batteries Limited
 
Last Close: 733.70
 
Initiation range: 728-733
 
Target: 785
 
Stop loss:700
 
Amara Raja has made a strong comeback after the slide in March month and has retested the previous swing high around 740 levels. Currently, it's hovering in a range and recently tested the support zone of the medium-term moving average(100 EMA) on the daily chart. Indications are in the favor of sharp rebound thus we advise creating longs in the given range. READ MORE

Bulk deals on BSE as on Tuesday

Bulk deals on NSE as on Tuesday

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


Oil falls after US inventory build feeds oversupply fears

-- Oil prices fell on Wednesday after a surprise climb in US crude stockpiles added to concerns about a global supply glut as a spike in global Covid-19 cases fuels demand fears and production returns in Libya.

-- Brent crude futures for December delivery were at $42.94 a barrel, down 22 cents, or 0.5 per cent

-- December US West Texas Intermediate (WTI) crude futures slipped 23 cents, or 0.7%, to $41.47 a barrel.

(Source: Reuters)

SGX Nifty

-- At 8:36 am, the index was trading at 11,937 level, up 37 points.

Asian markets check

(Source: Reuters)


Wall Street shares end higher on stimulus optimism

(Source: Reuters)


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