MARKET WRAP: Indices rally for 5th straight day, Sensex ends 187 pts higher

NSE's Nifty closed at 10,799.65 points, up 36 points or 0.33 per cent.
Extending its gaining streak into the fifth straight session, the domestic stock market ended in the green on Tuesday, supported by buying in financial and IT counters. 

The S&P BSE Sensex ended at 36,675, up 187 points or 0.51 per cent with Bajaj Finance (up around 8 per cent) being the top gainer and Power Grid (down 3 per cent) the biggest loser.

NSE's Nifty closed at 10,799.65 points, up 36 points or 0.33 per cent.

Financial stocks rallied up to 20 per cent on the BSE after Bajaj Finance said its assets under management (AUM) under moratorium declined from 27 per cent, at the end of April 2020, to about 15.5 per cent at the end of June 2020. Bandhan Bank, too, reported healthy loan and deposit growth in the April-June quarter on a yearly basis despite nationwide Covid-19-induced lockdown. READ MORE

 
Shares of IT companies also gained in the trade ahead of the announcement of their June quarter (Q1FY20) results. Tata Consultancy Services will kickoff the earnings season by announcing its numbers on Thursday, July 9. The Nifty IT index rose over 2 per cent to 15,785 levels. 

In the broader market, the S&P BSE MidCap index gained 0.58 per cent while the S&P BSE SmallCap index added 0.57 per cent.

Global stocks

The Chinese share market extended its positive run on Tuesday, in line with the mainland government’s push for a stronger market, while the rest of the region turned cautious on equities. 

MSCI’s broadest index of Asia-Pacific shares outside Japan see-sawed during the local session and was down 0.2 per cent, after it briefly traded in positive territory.

Eurpean shares fell as surging US coronavirus cases and forecasts for a deeper-than-feared recession in the euro zone dimmed optimism around a post-pandemic rebound.

In commodities, oil prices declined amid concerns that a surge in new coronavirus cases, especially in the United States, will hamper any recovery in fuel demand.

(With inputs from Reuters)

4:05 PM IST Benchmark indices were volatile in trading today, after swinging from losses to end the day flat, with a positive bias. This was in spite of negative global cues, due to renewed uncertainty regarding economic recovery and delay in a complete opening up of economies from lockdowns. These uncertainties regarding the sustainability of the market rally were visible in the Indian markets also but were offset by gains in IT and Financials Index. Any impact seen on momentum, which has been driving the market along with liquidity, can lead to nervousness in the markets, and investors are advised to watch out for the same.

3:43 PM IST

3:42 PM IST

3:36 PM IST The S&P BSE Sensex gained 187 points or 0.51 per cent to settle at 36,674.52 levels while NSE's Nifty ended at 10,799.65, up 36 points or 0.33 per cent. 

3:28 PM IST

3:17 PM IST

3:12 PM IST An officer said an Enforcement Case Information Report (ECIR), which is equivalent to police first information report, has been filed under Section 3 of Prevention of Money Laundering Act (PMLA). The section deals with concealment of proceeds of crime where the accused shall be guilty of money laundering. READ MORE

3:01 PM IST Shares of financial firms, mainly non-banking financial companies (NBFC) were in focus on Tuesday. The stocks rallied up to 20 per cent on the BSE after Bajaj Finance said its assets under management (AUM) under moratorium declined from 27 per cent, at the end of April 2020, to about 15.5 per cent at the end of June 2020. Bandhan Bank has reported healthy loan and deposit growth in the April-June quarter on a yearly basis despite nationwide Covid-19-induced lockdown. READ MORE

2:55 PM IST

2:52 PM IST

2:49 PM IST Last month, the Securities and Exchange Board of India (Sebi) gave a three-month window to unlisted bond issuers to get their securities listed.   The fund house is also working on getting the schemes under wind-up listed on exchanges, as required by Sebi’s new norms, so that investors with urgent need of liquidity can use this facility. READ MORE

2:41 PM IST The Mahindra & Mahindra stock has gained 46 per cent since mid-May, outperforming the BSE Auto Index which was up 32 per cent during the same period. The outperformance was due to expectations of higher growth for tractors, better-than-expected operating performance in the March quarter and improving capital allocation policies. READ MORE

LIVE UPDATES

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

Benchmark indices were volatile in trading today, after swinging from losses to end the day flat, with a positive bias. This was in spite of negative global cues, due to renewed uncertainty regarding economic recovery and delay in a complete opening up of economies from lockdowns. These uncertainties regarding the sustainability of the market rally were visible in the Indian markets also but were offset by gains in IT and Financials Index. Any impact seen on momentum, which has been driving the market along with liquidity, can lead to nervousness in the markets, and investors are advised to watch out for the same.

SECTOR WATCH:: Nifty Metal cracks over 1.7%


MARKET AT COSE:: Gainers and losers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex gained 187 points or 0.51 per cent to settle at 36,674.52 levels while NSE's Nifty ended at 10,799.65, up 36 points or 0.33 per cent. 

MARKET CHECK


MARKET CHECK:: NTPC slips over 3%


ED files charges against GVK group, promoters for Mumbai airport 'scam'

An officer said an Enforcement Case Information Report (ECIR), which is equivalent to police first information report, has been filed under Section 3 of Prevention of Money Laundering Act (PMLA). The section deals with concealment of proceeds of crime where the accused shall be guilty of money laundering. READ MORE


Financials in focus; Bajaj Finance, M&M Financial, Bandhan Bank up over 5%

Shares of financial firms, mainly non-banking financial companies (NBFC) were in focus on Tuesday. The stocks rallied up to 20 per cent on the BSE after Bajaj Finance said its assets under management (AUM) under moratorium declined from 27 per cent, at the end of April 2020, to about 15.5 per cent at the end of June 2020. Bandhan Bank has reported healthy loan and deposit growth in the April-June quarter on a yearly basis despite nationwide Covid-19-induced lockdown. READ MORE

MARKET UPDATE :: Metal stocks drag; Nifty Metal index down nearly 2%


BUZZING STOCK:: Bajaj Finance extends gains, rises as much as 10% intraday


Franklin MF in talks with bond issuers to list unlisted debt on bourses

Last month, the Securities and Exchange Board of India (Sebi) gave a three-month window to unlisted bond issuers to get their securities listed.
 
The fund house is also working on getting the schemes under wind-up listed on exchanges, as required by Sebi’s new norms, so that investors with urgent need of liquidity can use this facility. READ MORE

Further re-rating of M&M depends on UV, capital allocation outcome

The Mahindra & Mahindra stock has gained 46 per cent since mid-May, outperforming the BSE Auto Index which was up 32 per cent during the same period. The outperformance was due to expectations of higher growth for tractors, better-than-expected operating performance in the March quarter and improving capital allocation policies. READ MORE

Maruti Suzuki India partners with Axis Bank for easy vehicle financing

Under the partnership, Axis Bank will offer a variety of options to customers, including 100 per cent on-road funding for salaried customers for eight years, step-up EMI scheme starting at Rs 1,250 per lakh and balloon EMI scheme with final EMI being 25 per cent of loan amount, the company said in a statement. READ MORE 


Reliance, Sterlite, TechM set to power next-gen 5G telecom networks

Three Indian giants — Anil Agarwal-run Sterlite Technologies, Reliance Industries-controlled Radisys, and Tech Mahindra — are developing software, manufacturing, and systems integration capabilities to power the building of the next-generation of ‘virtualised’ 5G telecom networks. The move entails moving from the current hardware-dependent networks to ones that will be software-centric with hardly any dependency on the underlying hardware. READ MORE

MARKET CHECK:: Bajaj Finance extends gains, up 7%


Race for next Sebi chief hots up again as Tyagi tenure ends next month

The government had narrowed down on some of these names in February, before Tyagi’s three-year tenure was set to end on February 28. However, he was granted a six-month extension to ensure continuity at Sebi amidst the Covid-19 crisis. READ MORE

Rupee Closing

Rupee ends weaker at 74.94 per US dollar vs Monday's close of 74.67/$

MARKET CHECK:: Rain Industries jumps over 12%


Bosch trades highest since March 2020, surges 13% in range-bound market

Bosch shares hit a four-month high of Rs 13,556, ralling 12 per cent in the intra-day trade, on the BSE on Tuesday in an otherwise range-bound market, and were trading at their highest level since March 4, 2020. At 01:29 pm, the stock of the auto ancillary company was trading 11 per cent higher at Rs 13,358 as compared to 0.38 per cent rise in the S&P BSE Sensex. READ MORE

BROKERAGE VIEW:: Edelweiss Securities on Escorts

We believe Escorts will be in a better position to reap benefits of this upcycle like never before. We estimate 18% earnings per share (EPS) CAGR during FY20-23E, and further improvement in cash flow and return on capital employed (RoCEs) from these levels as well, which will continue to support the stock’s valuation. The stock is currently trading at 16x/19x (adjusting to treasury share/without treasury shares) FY22E EPS. We initiate coverage with a BUY rating with a target price of Rs 1,332 per share, valuing at 20x/24x (adjusting to treasury share/without treasure shares) on FY22E EPS.

European indices trade higher in early deals

(Source; Reuters)


MARKET CHECK:: Top 5 gainers on the BSE at this hour


MARKET UPDATE :: S&P BSE Bankex index sees sharp recovery


MARKET UPDATE :: S&P BSE FMCG index trades weak


Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
ALKYL AMINES 2315.30 2345.00 0.66
BHARAT DYNAMICS 433.70 454.25 1.55
ESCORTS 1091.25 1096.35 1.73
HIND.AERONAUTICS 1003.70 1028.00 5.51
IDBI BANK 50.45 55.75 -4.99
» More on 52 Week High

Financials dominate large- and mid-cap universe of equity mutual funds

Stocks in the financial space dominate the large- and mid-cap universe of equity mutual funds (MFs). According to an analysis done by Edelweiss, financial stocks account for 28 per cent of the market cap of the top 100 stocks (large-caps), followed by consumer stocks at 18 per cent, technology at 14 per cent, and oil & gas at 13 per cent. READ MORE

MARKET VOICE :: Shyam Sekhar

BROKERAGE VIEW :: Edelweiss on Sobha

Sobha’s Q1FY21 new sales volume decreased to 0.65msf (down 39% YoY, 28% QoQ) stalled by the covid-19-induced lockdown. Given the lockdown during April and May 2020, this is a reasonable performance in our view. By value, sales (company’s share) were at INR3.9bn (down 40% YoY, 29% QoQ). Average realisation is largely stable at ~ Rs 7,500/sft. The company managed to reduce net debt for the second consecutive quarter. Enquiries in Bengaluru have returned to pre-covid-19 levels. While the health crisis may disrupt H1FY21 operations, we expect the sales momentum to improve riding the robust 14.6msf launch pipeline. Maintain ‘BUY’ with an SoTP-based target price of Rs 291

BROKERAGE VIEW :: Sushil Finance on Arvind Ltd

COVID-19 has an extensive impact on the textile sector with lower volumes, tepid demand and disrupted supply chain. However, the management is confident that the sector will turn around by Q2FY21 with plants already ramping up to Capacity utilization of 45-50%. Hence, we have revised our estimates and expect the company to report sales of Rs. 8,339 Cr in FY22 with PAT & EPS of Rs.250.9 Cr and Rs.9.7.  We have assigned a PE of 5.5X and have arrived with a target price of Rs.53 (+~61%) within an investment horizon of 16-20 months.

BROKERAGE VIEW :: LKP on Cochin Shipyard


BROKERAGE VIEW :: Edelweiss on IT sector

We estimate the top-5 Indian IT players—Infosys, TECHM, HCLT, TCS and Wipro—to report 3.7-7.5% QoQ revenue decline in Constant Currency in Q1FY21. A weakening GBP/ROW versus USD is likely to further negatively impact USD growth 50–80bps, in our view. We expect margins of the top-5 companies to decline 20-110bps QoQ despite the USD/INR benefit.

We believe Q1FY21 is the peak pain quarter as already lockdowns have been relaxed to a certain extent in India and abroad as well. While new deal wins will be challenging until economies open up completely, we believe Q2FY21 onwards revenue growth will stabilise and Q3/Q4 will probably be quarters of recovery and that too stronger than historical averages.  We will keep an eye on: i) demand commentary on new deal wins; ii) digital growth; and iii) commentary on cloud migration opportunity. Maintain ‘BUY’ on HCLT, Infosys, TECHM & TCS and ‘HOLD’ on Wipro

BROKERAGE VIEW :: IIFL on gas utility companies

During online interactions with investors, DK Sarraf – Chairman PNGRB, shared his perspective on the need to introduce a common carrier (competition) in CGDs and also heard out investor concerns. Mr Sarraf plans to publish draft regulations in Jul-20 and believes all legal impediments are behind. Investors requested the PNGRB to focus more on infrastructure development vs introducing untimely competition in the sector.

We are less worried about the introduction of competition, as: 1) it is limited only to 10-20% of the network capacity, and CGDs will be compensated by open access tariffs; 2) competition typically gets introduced on a level playing field, to avoid cherry picking; 3) risk of competition forces incumbents to improve efficiency, for ensuring minimum revenue loss. Rather, we are concerned about the execution challenges and faster penetration of alternatives (e.g. EVs) that can derail the volume growth trajectory & compress valuation multiples. Any correction in CGD stocks − on news flow on open access etc − would be a good entry point.

BROKERAGE VIEW :: IIFL on Persistent Systems

We upgrade Persistent Systems (PSYS) to BUY, with a 12-mth target price of Rs830, implying 27% potential upside. We believe the combination of improved revenue visibility, steady margin improvement over the next three years and attractive valuations makes it a compelling story. After years of underperformance, PSYS’ turnaround is firmly in place, driven by the new management whose services-focused and large deal-driven strategy is bearing fruit in the form of improved revenue visibility, even in these uncertain times. PSYS is trading at 10.6x FY22 P/E, at a 20% discount to mid-cap peers, offering 20% EPS Cagr over FY20-23ii. Net cash balance of Rs14.8bn (~30% of M-Cap) offers valuation support. PSYS is now one of our top mid-cap picks.

Multiple risks may cap uptick in TVS Motor stock as Covid, crude weigh

The TVS Motor stock has gained about 33 per cent since its lows in mid-March on a better-than-expected operating performance in Q4FY20, rising dispatches and recovery in export markets. Some of the optimism is reflected in two-wheeler sales in June. Total two-wheeler sales at 191,000 units have now reached about 67 per cent of the year-ago levels. READ MORE

United Breweries' outperformance unlikely to sustain in the near term

While there is little doubt that volume recovery would be challenging for the liquor segment, investors seem to be in favour of beer than whiskey if the stock performance of the two listed alcoholic beverage companies has anything to go by. The stock of United Breweries (UBL) has gained 4 per cent in the last one month versus 0.5 per cent rise in the stock of United Spirits (UNSL). READ MORE

Bandhan Bank, Bajaj Auto, PVR: Trading strategies for news-driven stocks

Benchmark indices, S&P BSE Sensex and Nifty50, were trading flat in the intra-day session on Tuesday; however, a number of stocks were trading actively in the trade, owing to their respective business and corporate developments. For instance, Bajaj Finance rallied 4 per cent post its quarterly update while Bandhan Bank advanced over 5 per cent after the lender reported healthy loan and deposit growth in the April-June quarter on a yearly basis despite a nationwide Covid-19-induced lockdown. READ MORE

Covid-19 hit Chinese economy on a slow path to recovery, says UBS

While two-thirds of respondents reported income decline and 62 per cent reduced consumption in the past three months, 61 per cent expected income to rise and 58 per cent expect consumption to increase in the next three months. For the next 12 months, 60 per cent of respondents expect salary to increase with an average increase of 4.7 per cent, the UBS report said. READ MORE

Top losers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
INDRAPRASTHA GAS 418.85 -5.11
IDBI BANK 50.45 -4.99
SUZLON ENERGY 5.33 -4.99
FUTURE RETAIL 123.30 -4.97
OMAXE 93.00 -4.96
» More on Top Losers

Hotel stocks gain as Maharashtra govt eases lockdown restrictions

Shares of companies engaged in hotels and restaurants business rallied by up to 20 per cent on the BSE on Tuesday after the Maharashtra government allowed hotels to reopen from Wednesday. Kamat Hotels (India) shares were locked in upper circuit of 20 per cent at Rs 35.03 on the BSE while Royal Orchid Hotels, Speciality Restaurants, Chalet Hotels, EIH Associated Hotels, and Indian Hotels were up by more than 6 per cent on the BSE. READ MORE

Investors advised caution, shouldn't be gung-ho about banks' Q1 updates

The June quarter (Q1) updates of three private banks — HDFC Bank, IndusInd Bank, and Federal Bank — announced in the last few days enthused investors on Monday. With 2-3 per cent gains in stock prices, HDFC Bank and IndusInd Bank were among the top gainers on the Nifty Bank Index, which was up 1.6 per cent on Monday, while Federal Bank was up 1.4 per cent. READ MORE

BROKERAGE VIEW:: Axis Securities on Minda Industries

RATING: BUY |  TARGET PRICE: Rs 318

Minda industries has a superior product suit catering to most industry trends. Indigenization and anti-China rhetoric will also benefit the company (esp. alloy wheels and sensor business) while its traditional products (switches, lighting, acoustics) are on a strong footing and have long term visibility. Further, its long term strategy to focus on building integrated solutions that support a connected and autonomous vehicle augurs well for its long term growth.

We recommend Buy with target price of Rs 318.

BROKERAGE VIEW:: HDFC Securities on Auto & Transportation

While capex has been cut by 30-70% across the board, companies have also allocated capital better by exiting loss-making global segments and seeking alliances with partners for sub-scale businesses. The NIFTY AUTO index has, resultantly, rallied ~50% from its lows due to the above and a pick-up in volumes for entry-level and rural-centric products (tractors, 2Ws and ‘A’ segment cars). We have a BUY on Maruti, Hero and Escorts and are cautious on CVs (Ashok Leyland) and premium discretionary (Eicher).

BROKERAGE VIEW:: Geojit Financial Services on GAIL (INDIA)

GAIL(India) Limited
 
Rating: Buy | CMP: Rs 104 | Target Price: Rs 119
 
GAIL India’s Q4FY20 standalone revenue declined 5.4% YoY to Rs. 17,755cr, impacted by weaker pricing and nationwide lockdown. EBITDA rose 47.0% YoY to Rs. 2,475cr, along with expansion of EBITDA margin by 497bps YoY to 13.9%. EBITDA growth was majorly driven by lower operating costs. Reported PAT grew 168.9% YoY to Rs. 3,018cr, further helped by deferred tax reversal of Rs. 1,588cr. We expect commodity price and economy revival post lockdown to pick up along with the withdrawal of claim by DoT. Given current upside potential, we upgrade our rating to BUY on the stock with a revised target price of Rs. 119 based on SOTP valuation

BROKERAGE VIEW:: ICICI Securities on Prism Johnson

Prism Johnson (PRSMJ) has announced the divestment of its entire 51% stake in Raheja QBE General Insurance Company for an aggregate consideration of Rs 2.9 bn by Mar’21. The divestment of loss-making subsidiary would result in increased consolidated EBITDA from FY22E and lower debt. The company was able to reduce standalone net debt by Rs2.7bn during Q1FY21 backed by improved collections across all three businesses. Factoring lower growth in TBK/ RMC, we cut our FY21E EBITDA by 18%, while we raise FY22E EBITDA by 9% owing to divestment of loss making insurance subsidiary and increase our target price to Rs 52/share (earlier: Rs 37) based on 6xFY22E EV/E also aided by lower debt. Maintain ADD.

BROKERAGE VIEW:: ICICI Securities on JSW Steel

RATING: ADD | TARGET PRICE: Rs 214

We downgrade JSW Steel (JSWS) to ADD from BUY given the run-up in the stock price (~35% from Mar, ’20 end). Highlights from the company’s FY20 annual
report: i) Increasing support from standalone business to help overseas subsidiaries, as many of them continue to incur losses, ii) related-party transactions are limited – some support extended to JSPL, while JSW International Tradecorp is helping JSWS with receivables, iii) captive iron ore mines are adding to integration while increasing other expenses – royalty from Karnataka mines is ~Rs6.5bn in FY20, iv) JSWS is focused on setting up pipe conveyor to transport ore from the recently won Odisha mines; pipe conveyor in Karnataka helped dispatch 3.39mnte in FY20, v) significant capex remains in the pipeline; ND/EBITDA expanded to 4.5x and vi) Bhushan Power acquisition hearings are yet to complete in the Supreme Court.

City gas distribution companies under pressure; MGL, IGL decline up to 5%

Shares of city gas distribution (CGD) companies such as Mahanagar Gas (MGL) and Indraprastha Gas (IGL) were under pressure on Tuesday. The shares slipped up to 5 per cent in the intra-day trade on the BSE on Tuesday after Petroleum and Natural Gas Regulatory Board (PNGRB) said the regulation for allowing competition in CGD areas will be notified in the next one to one and a half months. READ MORE

MARKET UPDATE:: Sensex turns negative


Bharat Bond ETF NFO: A decent investment if you are holding till maturity

Radhika Gupta, chief executive officer (CEO), Edelweiss Mutual Fund says: “This series will see two more new ETFs maturing in 2025 and 2031 — namely Bharat Bond ETF April 2025 and Bharat Bond ETF 2031. The product contours remain the same as the first Bharat Bond ETF series. We see healthy demand from investors for these ETFs in the current environment where safety is paramount.” While equities are rock stars of a portfolio, as times get tough, bonds are seen as better bets, especially those with sovereign backing. READ MORE

NBCC up 11% despite a 68% fall in standalone net profit for March quarter

Shares of NBCC (India) climbed as much as 11 per cent on the BSE on Tuesday, a day after the company announced its March quarter results for the financial year 2019-20 (FY20). At 09:58 am, the stock was trading around 7 per cent higher at Rs 26.95 on the BSE. In comparison, the S&P BSE Sensex was trading flat at 36,544.52 levels, up just 0.16 per cent. READ MORE

Bandhan Bank jumps 5.5% post Q1FY21 biz update; Analysts maintain 'buy'

Shares of Bandhan Bank jumped as much as 5.5 per cent to Rs 376.75 on the BSE on Tuesday after the bank reported healthy loan and deposit growth in the April-June quarter on a yearly basis despite nationwide Covid-19-induced lockdown. The Kolkata-headquartered bank saw its deposits growing 35 per cent year-on-year (YoY) to Rs 60,602 crore at the end of Q1FY21, compared to Rs 44,796 crore in Q1FY20. Sequentially, deposits grew 6 per cent from Rs 57,082 crore seen in Q4FY20. READ MORE

IT shares gain ahead of Q1 earnings; TCS hits all-time high, Infosys up 4%

Shares of information technology (IT) companies were in focus on Tuesday with the Nifty IT index gaining more than 1 per cent ahead of the announcement of their June quarter (Q1FY20) results. Tata Consultancy Services will kickoff the earnings season by announcing its numbers on Thursday, July 9. Shares of TCS hit an all-time high of Rs 2,303, up 1.8 per cent on the National Stock Exchange (NSE) in Tuesday's trade. The stock surpassed its previous high of Rs 2,296, touched on September 3, 2019. READ MORE

Rupee opening

Rupee opens lower at 74.70/$ vs Monday's close of 74.67 against the US dollar

MARKET UPDATE:: Sensex continues to trade in the green


BUZZING STOCK:: Camlin Fine surges as much as 10% in early deals


Most active stocks by volume

COMPANY PRICE(rs) CHG(%)
VODAFONE IDEA 9.72 -1.02
B H E L 43.10 -1.03
IDBI BANK 50.45 -4.99
TATA MOTORS 111.45 2.25
TATA POWER CO. 50.60 0.40
» More on Most Active Volume

SECTOR WATCH:: Nifty IT index trades 1% higher in an otherwise flat market


Hotel and restaurant stocks jump as Maharashtra govt allows them to function

COMPANY NAME LATEST HIGH LOW CHG
(rs)
CHG(%) VALUE
(rs CR)
VOLUME
LEMON TREE HOTEL 24.85 24.85 23.70 1.15 4.85 0.94 379658
INDIAN HOTELS CO 83.60 84.55 83.35 2.20 2.70 0.52 62328
KAMAT HOTELS 33.40 34.05 32.00 3.95 13.41 0.12 36080
ROYAL ORCH.HOTEL 63.15 63.50 61.95 3.70 6.22 0.16 26071

Sterlite Technologies trades flat


BGR Energy Systems jumps 19%


HUL trades mildly higher

>> In an interim relief to Hindustan Unilever (HUL), which recently dropped the word 'Fair' from its skin cream for men and renamed it 'Glow & Handsome', the Bombay High Court on Monday said FMCG firm Emami, that has its own 'Glow and Handsome' cream, shall give HUL seven days prior notice before initiating legal proceedings ontrademarks.


PVR trades flat with negative bias

The company's board has approved the issue of equity shares of face value of Rs 10 each by way of a rights issue to the eligible shareholders for an amount aggregating up to Rs 30,000 lakhs. The price of rights issue is set at Rs 784 apiece. The issue will open on July 17 and close on July 31.


Bandhan Bank advances 4% on healthy deposit growth in Q1


Bajaj Finance trading in the green post Q1 biz update


Sectoral trends on NSE at Open


Sensex Heatmap at Open


Opening Bell


Opening Bell


NEWS ALERT :: Sun Pharma’s arm Taro Pharma gets US FDA nod for Butalbital, Acetaminophen & Caffeine Capsules

>> Acetaminophen helps to decrease pain from headache, caffeine helps increase effects of acetaminophen & Butalbital, a sedative helps to decrease anxiety & cause sleepiness & relaxation

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


Markets at Pre-open


Markets at Pre-open


NEWS ALERT :: Alkem Labs gets US FDA approval for Deferasirox tablets

>> These tablets are oral iron chelator, which are used to reduce chronic iron overload during blood transfusions

BROKERAGE VIEW :: Motilal Oswal Financial Services on Alembic Pharma

CMP: Rs 897 | TP: Rs 975 (+9%) | Reco: Neutral

>> We raise our earnings estimate by 8%/7% over FY21/FY22 to factor new launches and better traction from approved products. We also raise our PE multiple to 20x from 17x to factor increased dosage offerings in US Generics and the benefit of renewed strategy in the DF segment. Accordingly, we revise our price target to INR975 (from INR705 earlier) on a 20x 12M forward basis. The stock has appreciated by ~60% over the past six months and captures a lot of near-term positives; hence, we await a better entry point. Maintain Neutral.

BROKERAGE VIEW :: Motilal Oswal Financial Services on AU Small Fin Bank

CMP: Rs 567 | TP: Rs 675 (+19%) | Reco: Buy

>> AUBANK reported a steady operating performance for FY20, even as COVID-19 provisions dented earnings. Although asset quality remains stable, trends in
collection efficiency remain key to assessing the overall impact of moratorium, which would keep asset quality under watch. Deposit growth, however, has held strong, enabling the bank to maintain strong surplus liquidity. We estimate loan growth trends to remain soft at 15% in FY21, while credit cost could increase to
1.7% in FY21E (in addition to 52bp of COVID-19 provisions made in 4QFY20) as we build-in higher slippages. Maintain Buy, with TP of INR675 (3.5x FY22E BV). 
Sanjay Agarwal, MD & CEO, AU Small Finance Bank. Photo: Kamlesh Pednekar

BROKERAGE VIEW :: Motilal Oswal Financial Services on Shriram Transport

CMP: Rs 698 | TP: Rs 925 (+33%) | Reco: Buy

>> Like other vehicle financiers, SHTF has also witnessed meaningful improvement in collections, partially driven by the strategy of aggressively following up on taking part collections. SHTF’s targeted segments – Used CV and Driver-cum-operators – are relatively less impacted at present, aided by the BS-VI transition and migrant labor issues at large fleet operators.

>> SHTF is well-placed in terms of liquidity, with 9–10% of the balance sheet being liquid assets. A rights issue of INR15b would improve the leverage ratio and provide confidence to debt investors and rating agencies. On a large base, near-term AUM growth is likely to be muted, led by moderation in disbursements. We reiterate Buy, with TP of INR925 (1x PBV).

Stocks to watch: PVR, HUL, Bajaj Finance, Godrej Consumer Products, NBCC

HUL, Emami: In an interim relief to Hindustan Unilever (HUL), which recently dropped the word 'Fair' from its skin cream for men and renamed it 'Glow & Handsome', the Bombay High Court on Monday said FMCG firm Emami, that has its own 'Glow and Handsome' cream, shall give HUL seven days prior notice before initiating legal proceedings ontrademarks.
 
PVR Ltd: The company's board has approved the issue of equity shares of face value of Rs 10 each by way of a rights issue to the eligible shareholders for an amount aggregating up to Rs 30,000 lakhs. The price of rights issue is set at Rs 784 apiece. The issue will open on July 17 and close on July 31.
 
Bajaj Finance: In its quarterly update, Bajaj Finance has said, its asset under management (AUM) under moratorium has reduced to 15.5 per cent at the end of June quarter of FY21 from 27 per cent at the end of April 30. New loans booked by the financier plummeted 76.3 per cent to 1.7 million in Q1FY20 compared to 7.3 million in Q1FY20. READ MORE 


BROKERAGE VIEW :: Motilal Oswal Financial Services on Bandhan Bank

CMP: Rs 357 | TP: Rs 350 (-2%) | Reco: Buy

>> As economic activity picks up in India, we are seeing steady improvement in collection trends. Bandhan’s collection efficiency has improved to ~70% in the MFI portfolio and ~84% in the Non-MFI portfolio. Thus, the incidence of moratorium availed has been declining. Furthermore, the bank has created COVID-19-related provisions of INR6.9b to deal with higher delinquencies in the near term. LGD should remain lower (v/s that of peers) due to Bandhan’s strong market share and higher unique customer base. We maintain a Buy rating, with unchanged TP of INR350 (2.6x FY22E); however, we would review our target price in our preview estimates. 

BROKERAGE VIEW :: Motilal Oswal Financial Services on Godrej Consumer Products

CMP: Rs 708 | TP: Rs 675 (-5%) | Reco: Neutral

>> Over FY10-20E, GCPL posted healthy growth on all fronts. However, domestic sales slowdown in recent years and continued inability to scale up margins and improve weak RoCEs in the international business have adversely affected GCPL’s pace of earnings growth. Apart from the COVID-19 led lockdown challenges, which is more of a short-term phenomenon, the loss of dominance in Hair Color, the advent of unorganized incense stick players in HI and weak execution in the Africa business remain points of worry.

>> Also, based on the management commentary above, there is no indication that pace of earnings will improve vis-à-vis the past five years. Given the weak earnings outlook and inferior RoCE v/s peers, valuations of 44x FY22E EPS appear fair.

BROKERAGE VIEW :: Motilal Oswal Financial Services on Bajaj Finance

CMP: Rs 3,110 | TP: Rs 3,000 (-4%) | Reco: Neutral

>> The sharp reduction in morat. is a big positive in disclosures. Better performance in asset quality would result in big delta to earnings via lower credit cost / margin compression. While QoQ decline in AUM is in line with our expectation, a pickup in economic activities should lead to better AUM growth going forward. On the other hand, BAF is likely to benefit from lower cost of funds from bank loans as well as market borrowings.

>> While we have baked in NIM compression of 90bp, there is room for a surprise. BAF is also aggressively looking to cut the flab in the system and improve opex to assets (we bake in a 100bp YoY drop) to counter pressure on the topline. Overall, we have upgraded our earnings estimates by ~15% for FY21/FY22 to factor better AUM growth, a reduction in credit cost, and slightly better margins. Maintain Neutral, with TP of INR3,000 (4.2x FY22E BVPS; implied 25x PE FY22).

BROKERAGE VIEW :: Morgan Stanley on Shriram Transport

Maintains 'Overweight', Target price: Rs 940

>> Lower leverage may put pressure on RoE

>> RoE pressure to be mitigated by better access to funding

>> Valuation support expected

BROKERAGE VIEW :: Macquarie on Bandhan Bank

Maintains 'Outperform', Target price: Rs 300

>> MFI collections resume, non-MFI collections drag

>> MFI-AUM under moratorium down to 30% as on July 3

>> Cumulative Repayment Rate will be key monitorable when the company will report its earnings

>> Deposits continue to remain healthy

Defensive traders should refrain from aggressive bets on Nifty: Nilesh Jain

BUY NIFTY | TARGET: 10,850 | STOP LOSS: 10,680
 
The Nifty index continued its up move and also filled a gap that was placed at 10,800. Nifty has also reclaimed its 61.8 per cent retracement levels of 10,550 on the closing basis. The momentum indicators and oscillators are very well in the buy mode on a weekly scale which hints that bulls are tightening the grip and current pullback is likely to extend further. The volatility index, IndiaVIX, fell by 2.6 per cent and ended at a 4-month low of 25.1 levels. READ MORE

Bulk deals on BSE as on Monday

Bulk deals on NSE as on Monday

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


Rupee check

Source: Bloomberg


Oil prices inch higher on output cut support, but US coronavirus spike caps gains

>> Oil prices cautiously rose in early trade on Tuesday with major producers sticking to supply cuts, but gains were capped as US coronavirus cases surged, potentially hampering a recovery in fuel demand.
 
>> US West Texas Intermediate (WTI) crude futures climbed 13 cents, or 0.3%, to $40.76 a barrel, recouping a 2 cent loss from Monday.
 
>> Brent crude futures rose 7 cents, or 0.2%, to $43.17, adding to a 0.7% gain on Monday.

(Source: Reuters)

SGX Nifty hints at lower opening

>> At 8:00 am, the index was down 43 points, or 0.40 per cent, at 10,723 level.

Asian stocks trade mixed

Source: Reuters


Wall Street jumps on strong services sector, hopes of China recovery

Source: Reuters


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