MARKET WRAP: HDFC twins lift indices; Sensex up 601 pts, Nifty tops 11,650

The trend among Nifty sectoral indices was largely positive, led by the Nifty Financial Services index, up over 3 per cent.
The Indian stock market ended over one per cent higher on Tuesday, led by healthy buying in counters such as HDFC, HDFC Bank, ICICI Bank, Infosys, and Asian Paints.

The S&P BSE Sensex gained 601 points, or 1.54 per cent to settle at 39,575 levels and the Nifty50 index ended above the 11,650 mark at 11,662, up 159 points, or 1.38 per cent. 

 
HDFC (up over 8%) and IndusInd Bank (up over 3%) were the top Sensex gainers, followed by M&M (up 3%), and Asian Paints (up 3%). On the other hand, Tata Steel (down over 1 per cent) ended as the biggest loser on the index.

The trend among Nifty sectoral indices was largely positive, led by the Nifty Financial Services index, up over 3 per cent.

In the broader market, the S&P MidCap and SmallCap indexes ended 0.59 per cent and 0.55 per cent higher, respectively. 

Global markets

Asian stock markets advanced to a more than two-week high on Tuesday after US President Donald Trump was discharged from hospital following treatment for Covid-19, and as prospects for a fresh US stimulus package appeared to brighten.

In Europe, stocks eased from a two-week high as a slide in technology and healthcare stocks along with mixed corporate updates took some shine off equities. 

In commodities, oil prices gained due to fears that refineries could be hit by a storm brewing in the Gulf of Mexico. Gold, on the other hand, eased as equities gained. 

(With inputs from Reuters)

LIVE UPDATES

Sectoral gainers and losers on the NSE


MARKET AT CLOSE | Gainers and losers on the BSE Sensex


CLOSING BELL

The S&P BSE Sensex rallied 601 points, or 1.54 per cent to settle at 39,575 while NSE's Nifty ended at 11,662, up 159 points, or 1.38 per cent.

MARKET CHECK


Tata Motors up over 8%


AU Small Finance Bank trades 10% higher


MARKET CHECK | BSE Midcap index up 0.6%


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


Tata Steel slips nearly 2%


MARKET UPDATE:: HDFC twins, ICICI Bank contribute the most to Sensex's 500-point surge today


JSPL clocks highest-ever quarterly standalone sales of 1.93 mn tonnes in Q2

With the revival of domestic steel demand, JSPL recorded 29 per cent y-o-y growth in standalone steel sales with 1.93 million tonnes Q2 FY21 as compared to 1.49 million tonnes in Q2 FY20. READ MORE

Market at 2:30 pm :: Sensex at day's high


Swift economic recovery key to limit loan losses for Indian banks: Fitch

Swift economic recovery will be critical in limiting loan losses for Indian banks in what is likely to be a protracted period of weakness in the asset-quality cycle, says Fitch Ratings. Indian lenders face a tough operating environment in the near term, as stressed loans and write-offs increase as a result of the economic fallout of the coronavirus pandemic. READ MORE

MARKET CHECK | Top losers on the BSE at this hour


Thyrocare surges 15% on healthy revenue growth in September quarter

“Q2FY21 has witness a motivating numbers and increased turnover of COVID PCR and COVID Antibody testing, and the aggregate revenue for the quarter, has increased by about 37 per cent compared to Q2FY20. The low revenue in Q1FY21 has bounced back in Q2FY21 with a very healthy growth of 171 per cent over trailing quarter,” Thyrocare Technologies said in statement. READ MORE

Rupee Closing

Rupee ends at 73.45 per US dollar vs Monday's close of 73.29/$

Raining returns: Long-only AIFs beat long-short strategies in August

Long-only alternative investment funds (AIF) strategies outperformed long-short funds in August. The former gave average category returns of 4.3 per cent, in comparison to 0.2 per cent for the latter, shows data from PMS Bazaar. Of the 16 long-only funds, 14 managed to beat the Nifty50 returns of 2.8 per cent during the month, while all seven of the long-short funds underperformed the benchmark. For a 1-year period, Girik Multicap Growth Equity Fund has been the best performer, with returns of 21.5 per cent.

Srikalahasthi Pipes, Electrosteel Castings dip up to 18% post nod to merger

The stock of SPL tanked 18 per cent to Rs 109.50 on the BSE in intra-day trade and was trading close to its 52-week low price of Rs 90.35 touched on March 25, 2020. Shares of ECL, on the other hand, slipped 11 per cent to Rs 20.60 in the intra-day trade. In comparison, the S&P BSE Sensex was up 0.85 per cent at 39,305 points at 01:17 pm. READ MORE

Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
ADVANCED ENZYME 363.45 368.65 6.69
ASIAN PAINTS 2078.00 2090.00 2.51
BERGER PAINTS 606.05 609.05 2.61
BIOCON 460.05 469.00 0.33
BLISS GVS PHARMA 176.00 181.25 -1.65
» More on 52 Week High

European indices open largely flat


Axis Bank joins India's top private lenders to offer pay hikes up to 12%

Axis Bank Ltd. will increase staff salaries between 4% and 12% from Oct. 1 based on performance, according to people with knowledge of the plans. The Mumbai-based lender, which has about 76,000 employees, also paid bonuses to its staff, the people said, asking not to be identified because the matter is private. READ MORE


HDFC, HDFC Bank, HDFC AMC: Here's how to trade HDFC group stocks?

Shares of HDFC group have been on a roll since the past few sessions. On Tuesday, too, the HDFC twins were leading the charge among the S&P BSE Sensex scrips, with HDFC rising over 6 per cent. READ MORE

BROKERAGE VIEW | Prabhudas Lilladher on Dr Reddy's

Rating: ACCUMULATE | CMP: Rs 5,160 | TP: Rs 5,648

We anticipate Kuvan to remain a three-player market and DRRD may likely capture gradually 20-40% market share with 50-80% price erosion from the branded market and may reach its peak sales up to US$45m. This leads to an EPS contribution of Rs 2.0/9.90/7.30 for FY21/22/23E. With limited information on the co-pay program and strategy to gain Rx traction for gKuvan, we wait for further clarity on their strategy (profitability in co-pay program) for US and EU (market size US$80-100m) before discounting in our earnings estimates. We have an Accumulate rating with TP of Rs 5,648 based on 24x(PE) of FY23E and Rs 262/share benefit from gRevlimid (using NPV method) over FY23-26E.

BROKERAGE VIEW | Prabhudas Lilladher on Britannia Industries

Rating: BUY | CMP: Rs 3,830 | TP: Rs 4,279

We estimate EBIDTA CAGR of 19% and PAT CAGR of 13.8% due to lower other income and higher interest. FCF/Adj PAT at 63% (38.5% in FY18) is rising, although its lower than 83% for NEST, largest foods player. We cut target price from Rs 4,316 (SOTP based on 46xSept22 EPS) to Rs 4,279 (46xFY23 EPS). BRIT at 41.4xDec22 consol EPS trades at 22% discount to NEST. Retain Buy

BROKERAGE VIEW | Emkay Global on HDFC Bank

RATING: BUY | TARGET PRICE: Rs 1,300

Overall business momentum for HDFCB remains healthy compared to the industry, but we believe that the asset quality trend and management transition will be the key things to watch out for in the near-to-medium term. Currently, we have a Buy rating on the stock with a TP of Rs 1300, given its strong stress management capability across cycles and superior return ratios.

BROKERAGE VIEW | Nirmal Bang Securities on Marico

RATING: ACCUMULATE | TARGET PRICE: Rs 400
 
Within the domestic business, consumer demand in the core categories, which contribute more than 90% to the business, registered robust volume growth. International business clocked mid single digit growth in constant currency (cc) terms, led by double-digit growth in Bangladesh. The company expects to deliver healthy earnings growth in 2QFY21, led by robust volume growth and cost saving initiatives despite witnessing inflationary trends in key raw materials and ad spends going back to pre-Covid levels. The stock currently trades at 43.3x/37.5x/33.6x FY21/FY22/FY23 EPS. We value the company at nearly 38x Sept‘22 EPS, giving us a target price (TP) of Rs 400 (Rs 395 earlier). Maintain Accumulate rating.
 
 

TCS Q2 preview: Ebit margin to see sharp expansion; buyback details eyed

Tata Consultancy Services (TCS) will kickstart the September quarter earnings of the fiscal year 2020-21 (Q2FY21) for the information technology (IT) companies as the firm is slated to announce its numbers on Wednesday, October 7. That apart, the IT major will also consider share buyback on the same day. On Monday, TCS' market capitalisation surged past the Rs 10 trillion mark for the first time and it became the second Indian firm after Reliance Industries (RIL) to achieve this milestone. The stock of the company hit a fresh record high of Rs 2,727 on the BSE in the intra-day trade READ MORE

MARKET CHECK


M&M shares gain 4% as bookings for All-New Thar SUV cross 9,000 mark

Shares of Mahindra & Mahindra (M&M) moved higher by 4 per cent to Rs 633 on the BSE in the intra-day trade on Tuesday after the company’s All-New Thar crossed 9,000 bookings in four days. The stock of cars and utility vehicles company was the second highest gainer among S&P BSE Sensex, which was up 0.76 per cent at 39,296 points at 11:50 am. READ MORE 


UTI AMC IPO: Check your allotment status here

Applicants who applied for the Rs 2,160 crore-initial public offer (IPO) of UTI AMC (asset management company) can check their allotment status on either BSE website or Link Inktime website. The allotment status will be announced around October 7 or October 8, ahead of the expected listing on October 12. An applicant tracking BSE website (link here) can check on "Equity" box and select his/her "Issue Name" in the dropdown menu (UTI AMC). After that, the person needs to type his/her "Application Number" in the box, "Permanent Account Number (PAN No.)" and click on "Search" button. READ MORE

MARKET UPDATE:: Sensex holds early gains


BROKERAGE VIEW | Anand Rathi on Amara Raja Batteries

RATING: BUY | TARGET PRICE: Rs 907 

We expect revenue to grow 29% in FY22 and the margin to expand to 16.7%.Accordingly, we expect strong, Rs7bn, earnings, leading to an EPS of Rs 41.2. We upgrade the stock to a Buy, with a target price of Rs 907 (22x FY22e EPS). Risks: Lower growth in the replacement market in FY22.

BROKERAGE VIEW | ICICI Securities on Bharti Infratel

RATING: BUY | TARGET PRICE: Rs 245 

In worst case of VIL shutdown, the fair value of BHIN dips to Rs 130-150 per share. However, the probability of VIL shutting down has been reducing with staggered AGR payment and the company’s efforts to raise fresh capital. Further, any tariff hike, which is imminent, will increase confidence among investors. The new scheme of arrangement also provides additional security in terms of merged entity share pledge by Vodafone Plc. We believe 5G will open up new business opportunities such as higher core rentals, and small cell and fiber business. Reiterate BUY with an unchanged target price of Rs 245.

SECTOR WATCH:: IT stocks trade under pressure in an otherwise firm market


Sobha leaps 14% as Q2 sales volume jumps 37% QoQ; stk up 77% so far in FY21

"During Q2FY21, we have achieved a total sales volume of 891,700 square feet valued at Rs 6.90 billion, with a total average realization of Rs 7,737 per square feet. This performance was achieved despite lockdown being imposed in Bengaluru in the month of July, no new launch during the quarter, uncertain macro-economic outlook and tough real estate sector scenario," the company said in a statement. READ MORE

Paint stocks in focus; Asian Paints, Berger Paints hit record highs

Shares of paint companies were in focus at the bourses on Tuesday, with Asian Paints and Berger Paints hitting their respective record highs on the BSE on expectation of healthy revenue recovery and operating margins. Asian Paints gained 3 per cent to Rs 2,090, surpassing its previous high of Rs 2,087.75, hit on September 10, 2020. Berger Paints, too, rose 3 per cent to Rs 607.80, also its all-time high on the BSE. READ MORE

Nifty sectoral indices at this hour


Top gainers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
CARE RATINGS 378.50 8.27
SOBHA 257.80 7.80
TATA MOTORS 143.65 7.28
LAK. MACH. WORKS 3810.00 6.79
H D F C 1898.10 6.32
» More on Top Gainers

BROKERAGE VIEW | Axis Securities on Hero MotoCorp

RATING: BUY | TARGET PRICE: Rs 3,450 

HMCL is in a sweet spot as  strong rural-led recovery plays to its strength in the Economy–Executive category in the Motorcycles segment. With an apt  product portfolio for the rural market, the highest brand recall, and a strong distribution network, it is best placed to benefit  from the ongoing momentum in the rural economy (50% of the company’s domestic volumes is derived from rural India).  Wholesale dispatches for the company are expected to be healthy in the near term given low channel inventory ahead of the  Festive season. The channel filling to build up inventory will drive volumes in the near term.

TCS buyback to boost cash utilisation, return on equity by 150-200 bps

The buyback announcement by TCS led to a 7.3 per cent jump in its share price to an all-time high on Monday. TCS’ announcement was looked at in positive light by the Street, given that it is expected to improve the firm’s return ratios, reward shareholders, and enable it to use cash more efficiently. READ MORE

Infibeam Avenues shares hit 5% upper circuit on pact with Jio Platforms

Shares of Infibeam Avenues were locked in the upper circuit limit of 5 per cent at Rs 82.55 on the BSE on Tuesday after the company entered into a definitive agreement with Jio Platforms and its affiliates. The stock of the leading global financial technology (Fintech) solutions provider was trading close to its 52-week high level of Rs 84, touched on September 16, 2020. READ MORE

NEWS ALERT | IHS Markit India September Services PMI at 49.8 vs 41.8 in August

The seasonally adjusted India Services Business Activity Index rose for the fifth straight month in September, from 41.8 in August to 49.8. The latest reading was indicative of broadly stable output across the sector. Monitored companies that observed growth commented on the reopening of business units amid the loosening of lockdown rules. Firms that reported a contraction mentioned the damaging impact of the pandemic on demand.

Tata Motors jumps 7% as JLR's Q2 sales grow 53% QoQ; CLSA maintains 'Buy'

Shares of Tata Motors jumped 7 per cent to Rs 143 on the BSE on Tuesday after Jaguar Land Rover's retail sales in the September quarter grew over 50 per cent from sales in the preceding quarter. Retail sales for the quarter ending September 30, 2020 were 113,569 units, up 53.3 per cent from sales of 74,067 in the prior quarter. READ MORE

'Enthusiasm over recent IPOs reflects excess liquidity, improved sentiment'

"The enthusiasm with recent IPOs clearly reflects excess liquidity and improved investor sentiment. We think investors should focus on the company prospects, its fundamentals and valuations and not be concerned with primary or secondary issue. Retail investors should consider all these aspects meticulously before applying for the IPOs and avoid investing blindly." READ MORE

HDFC gains 5% on improvement in business volumes in September quarter

Shares of Housing Development Finance Corporation (HDFC) jumped 5 per cent to Rs 1,874 on the BSE on Tuesday after the housing finance company said the individual loan business saw see a sequential month-on-month improvement in the period July to September 2020 (Q2FY21). The quarter witnessed a strong recovery with individual loan disbursements reaching 95 per cent of pre-Covid levels. READ MORE 


Rupee opening

Rupee opens higher at 73.16/$ vs Monday's close of 73.29 against the US dollar

Volumes sustain in September despite new margin, share pledge norms

The cash market turnover remained strong in September despite the introduction of norms on new margin collection and share-pledging by the Securities and Exchange Board of India (Sebi). The average daily turnover value (ADTV) in the month stood at Rs 58,697 crore, down 10 per cent month-on-month (MoM) but up a sharp 47 per cent year-on-year (YoY). READ MORE

BROKERAGE VIEW | Prabhudas Lilladher on Kansai Nerolac

Rating: BUY | CMP: Rs 481 | TP: Rs 550 

Nerolac continues to achieve above market growth in decorative paints led by structural drivers like shift towards organized sector, housing push in Tier2/3 cities and shorter painting cycle. Kansai is diversifying its presence in emerging segments like coil coatings, rebar, pipe coatings, floor and Infra coatings. It has entered high growth segments like Adhesives, Construction chemicals and Wood coatings which will diversify sales and boost growth. We estimate 3.5% sales growth and 17.9% EBIDTA growth in 2Q on a low base. We estimate 14.8% PAT CAGR over FY20-23 and 26.3% PAT CAGR over FY21-23.

Majesco freezes at 5% upper circuit, hits record high on buyback plan

Shares of Majesco were locked in the upper circuit limit of 5 per cent at Rs 858.95, also its record high, on the BSE in the early morning deals on Tuesday after the company said it has scheduled a meeting on Thursday, October 8, 2020, to consider a buyback proposal. The stock of the IT consulting and software company surpassed its previous high of Rs 846, touched on September 24, 2020. READ MORE

NEWS ALERT :: M&M's All-New Thar Crosses 9,000 bookings

>> Mahindra & Mahindra Ltd. (M&M) announced that its legendary SUV, the All-New Thar has already crossed 9,000 bookings, since its launch on October 2, 2020

>> The All-New Thar becomes the only SUV in the 4X4 lifestyle category to record this booking milestone in such a short span of time.


Tata Motors gains 6% on improved JLR sales


Gujarat Pipavav Port dips 1%

>> The company on Monday released operational data for the quarter and half year ended September 30.


Infibeam Avenues freezes at 5% upper circuit

>> The company has entered into a definitive agreement with Jio Platforms Limited and its affiliates ("JPL"), to license, customise, maintain and access our Enterprise E-commerce Software and Payments Platform for their business use.


CreditAccess Gramin trades in the red

>> The company has opened QIP issue with the floor price of Rs 707.69 per share. The Committee will approve the issue price at its meeting scheduled to be held on 08 October 2020.


HDFC Bank off highs

>> In a regulatory filing, the lender said that its advances aggregated to approximately Rs 10,370 billion as of September 30, 2020, a growth of around 16 per cent as compared to Rs 8,970 billion as of September 30, 2019 and a growth of around 3 per cent as compared to Rs 10,033 billion as of June 30, 2020.


HDFC leaps 4% post Q2 update

>> Housing finance major HDFC Ltd on Monday said its individual loan disbursements in the second quarter of 2020-21 reached 95 per cent of the level in the year-ago period and September saw the strongest recovery since the outbreak of COVID-19 pandemic, suggesting business is returning to pre-crisis levels.


Majesco locked at 5% upper circuit on buyback proposal

>> The company will consider a proposal for share buyback in its board meeting scheduled to be held on October 8 (Thursday).


Sectoral trends :: IT stocks dip on profit booking


Sensex Heatmap :: Financials leading from the front


Opening Bell :: Nifty tops 11,600


Opening Bell :: Sensex up nearly a per cent


BROKERAGE VIEW :: Kotak Institutional Equities on Sobha

CMP: Rs 239 | Fair Value: Rs 400 | Reco: Buy

>> Sobha reported another resilient quarter with gross sales values increasing 1% yoy to Rs6.9 bn along with sales volume of 0.9 mn sq. ft (-14% yoy) in 2QFY21.
We highlight this is the second quarter of resilient sales performance amid Covid-19 for Sobha, taking total sales in 1HFY21 to 1.54 mn sq. ft (-26.5% yoy) even as the sector continues to reel under weaker demand. Sobha trades at 0.8X P/B on FY2022E, steep discount to long-term average of 1.3X P/B (1-year forward). Maintain BUY; FV of Rs400.

BROKERAGE VIEW :: Kotak Institutional Equities on TeamLease Services

CMP: Rs 2,258 | Fair Value: Rs 2,450 | Reco: Add

>> The newly approved labor codes on industrial relations, social security and occupational safety will reduce compliance requirements and aid formal sector employment. Staffing companies such as TeamLease will benefit from reduced license requirements, higher coverage of workers by social security and eventual demand for formal staffing solutions. We roll forward to September 2022 and reduce our WACC assumption to arrive at a new FV of Rs2,450 (Rs2,000 earlier).

BROKERAGE VIEW :: Kotak Institutional Equities on TCS

CMP: Rs 2,706 | Fair Value: Rs 2,320 | Reco: Reduce

>> The TCS board will consider buyback of equity shares on October 7, 2020. Tax arbitrage exists between dividend and buyback depending on the recipient. Buyback through the tender route is essentially an alternative form of dividend distribution; hence the discussion on EPS dilution due to buyback is not relevant. The maximum quantum of buyback through board and shareholder approval route is Rs89/220 bn. The buyback has taken a few by surprise given expectations of supply of TCS stock from the principal shareholder to fund buyout of Shapoorji Pallonji (SP) Group’s stake in Tata Sons. Stock valuations are punchy; maintain REDUCE.

Commodity Heatmap


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


Markets at Pre-open


Markets at Pre-open


Stocks to watch out for today

HDFC: Housing finance major HDFC Ltd on Monday said its individual loan disbursements in the second quarter of 2020-21 reached 95 per cent of the level in the year-ago period and September saw the strongest recovery since the outbreak of COVID-19 pandemic, suggesting business is returning to pre-crisis levels.
 
CreditAccess Grameen: The company has opened QIP issue with the floor price of Rs 707.69 per share. The Committee will approve the issue price at its meeting scheduled to be held on 08 October 2020.
 
Infibeam Avenues: The company has entered into a definitive agreement with Jio Platforms Limited and its affiliates ("JPL"), to license , customise, maintain and access our Enterprise E-commerce Software and Payments Platform for their business use. READ MORE 


BROKERAGE VIEW :: CLSA on Tata Motors

Maintains 'Buy' | Target price: Rs 220

>> JLR turns FCF positive in Q2 as retail volumes grow

>> JLR's Q2 retails sales in-line with estimates

>> Sequential volume recovery should lead to strong FCF generation

BROKERAGE VIEW :: CLSA on HDFC

Maintains 'Outperform' | Target Price: Rs 2,100

>> Pick-up in growth is stronger than expected

>> Increase in mortgage spread is positive for NII & PPoP growth

>> Over Rs 40,000 cr in Builder loan moratorium key overhang 

BROKERAGE VIEW :: CLSA on Adani Ports

Upgrades to 'Buy' | Target price: Rs 425 (from Rs 386)

>> Krishnapatnam Port acquisition to solidify position its hold over East Coast

>> Co aims to double KPCL's EBITDA in 3 years

>> Acquisition will likely improve its earnings

BROKERAGE VIEW :: CLSA on Marico

Maintains 'Buy' | Target price: Rs 350

>> Commentary suggests operations are returning to pre-Covid level

>> Co likely to register mid-single digit groth in India

>> International biz likely to see 5% constant currency growth

>> Cost-savings initiatives likely to aid earnings growth at 11% 

BROKERAGE VIEW :: MOFSL on IndusInd Bank

CMP: Rs 602 | TP: Rs 700 (+16%) | Reo: Buy

>> Overall, we expect loan growth to remain moderate, led by a weak environment amid the current challenges. The bank reflects better traction in garnering retail deposits. On the asset quality front, expect higher delinquency in the MFI, CV, and certain corporate accounts; thus, we expect credit costs to remain elevated at 3.7% for FY21E as it aims to strengthen provision coverage to >70%. Maintain Buy, with TP of INR700 (1.3x FY22E ABV)

BROKERAGE VIEW :: MOFSL on Tata Motors

CMP: Rs 134 | TP: Rs 226 (68%) | Reco: Buy

>> JLR’s 2QFY21 retail volumes (incl CJLR) declined ~11.9% YoY to ~113.6k units, with ~26.7% decline in Jaguar retails and ~5.9% decline in LR retails. JLR sales
saw significant improvement sequentially (+53.3% QoQ) but continue to be impacted by Covid 19.

>> The new RR Evoque retails were down by ~2% in 2QFY21 and the new Land Rover Defender clocked 9.8k (with 4.5k unit only in September) units restricting LR retail decline to ~5.9%.

>> China retails grew ~3.7% YoY, driven by CJLR retails growth of ~10% YoY. UK retails declined ~3% YoY, whereas North America declined ~16%, Europe declined ~20% and RoW declined ~30%. 

>> We are estimating ~12% YoY decline in 2QFY21E wholesale (incl JV) to 118.5k. The stock trades at 12.2x FY22E consol. EPS and 0.9x P/B. Maintain Buy with a target price of INR226 (Sep’22 SOTP-based).

BROKERAGE VIEW :: MOFSL on Marico

CMP: Rs 377 | TP: Rs 440 (+17%) | Reco: Buy

>> MRCO’s resilient product portfolio has seen an uptick across categories as consumer sentiment improved across the country. Growth in Parachute amid the current environment is highly encouraging. The foods and edible oils portfolio is likely to continue its growth momentum with higher consumer focus on health, hygiene and immunity boosting products. Riding this tailwind, the company is also launching new products in these categories, the success of which will be critical for medium-term growth (though there has been limited success so far).

>> Rebound in VAHO is a positive surprise and further commentary needs to be watched out for. Outlook for the international business is getting better. Furthermore, while material costs may see mild inflation, the company is well placed to offset it through higher growth and cost optimization. Valuations at 38.6x FY22E EPS appear comfortable for a business that has better earnings visibility over peers. We maintain Buy rating with TP of Rs 440 (40x Sep’22E EPS).

BROKERAGE VIEW :: MOFSL on HDFC

CMP: Rs 1,785 | Reco: Buy 

>> HDFC remains among our top picks in the sector. The Real Estate sector is seeing a gradual turnaround and HDFC is well-poised to benefit from the same. In addition, with muted competitive pressure from other NBFCs, HDFC is likely to gain profitable market share in the Financing space. Business volumes have largely normalized on the Retail Lending side – we expect the company to deliver disbursement growth in 2HFY21. Corporate Lending is likely to be opportunistic. Incremental cost of funds has declined meaningfully – the company is able to raise three-year money from NCDs at sub-6%. This is likely to keep spreads largely stable in the wake of lower home loan yield. The company has over INR120b worth of provisions on the balance sheet v/s ~INR100b Stage 3 assets; this is sufficient to cover any potential asset quality issues from the erstwhile moratorium book. Lastly, subsidiaries are performing well; their share in SOTP has increased to 53%. 

BROKERAGE VIEW :: MOFSL on HDFC Bank

CMP: Rs 1,114 | TP: Rs 1,280 (+15%) | Reco: Buy

>> HDFCB has delivered strong business growth despite weak economic trends and consumer sentiment. The bank has also reflected strong deposit trends, led by CASA. Thus, we expect HDFCB’s strong liability franchise and the fixed rate nature of the book to continue to support the margin trajectory. On the asset quality front, slippages are likely to pick up in 2HFY21 due to the COVID19 disruption, which could keep credit costs elevated. However, higher provisioning buffers should limit the overall impact on earnings. Maintain Buy, with TP of Rs 1,280 (3.0x FY22E ABV).

Stock calls by Nilesh Jain of Anand Rathi

BUY BHARAT FORGE | TARGET: Rs 485 | STOP LOSS: Rs 450
 
The stock has formed a strong base and has started making a higher top and higher bottom formation on the daily chart. It has also provided a breakout from a modified head and shoulder pattern on the hourly chart. The volumes were also higher than average which also supports the breakout. The momentum indicator RSI has breached the falling trend line and MACD provided a fresh buy crossover on the daily chart which hints of further positive momentum in the counter. READ MORE

Bulk deals on BSE as on Monday

Bulk deals on NSE as on Monday

FIIs/FPIs turn net buyers on Monday


Rupee check

Source: Reuters


Oil prices up 0.3%


SGX Nifty update

>> At 8:15 am, the index was at 11,566 level, up 42 points or 0.36 per cent, indicating a positive start for the markets

Asian stock markets track Wall Street gains

Source: Reuters


Wall Street gains as Trump leaves hospital, investors hope for stimulus

Source: Reuters


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