MARKET: Maruti, HDFC help Sensex settle 127 pts higher; Nifty tops 11,900

The volatility index, India Vix, slipped over 3.5 per cent to 21.82 levels.
A healthy buying in auto, technology, and select bank stocks helped benchmark indices settle in the green on Friday. 

The S&P BSE Sensex settled 127 points, or 0.31 per cent higher at 40,686 levels while NSE's Nifty ended at 11,930, up 34 points, or 0.28 per cent. The volatility index, India Vix, slipped over 3.5 per cent to 21.82 levels. 

On a weekly basis, Sensex gained 1.75 per cent while Nifty added 1.42 per cent. 

Auto major Maruti (up over 4 per cent) ended as the biggest gainer on Sensex while UltraTech Cement (down over 2 per cent) was the top loser. 

The broader market continued to outperform frontline indices. The S&P BSE MidCap index gained 0.59 per cent while the S&P BSE SmallCap index rallied 0.7 per cent to 15,135 levels. 

Among sectoral indices, Nifty Auto gained nearly 3 per cent to 8,095 levels.

Global markets

Global stocks barely budged on Friday as investors tightened positions with less than two weeks to go before the US presidential election and awaited a breakthrough in stimulus talks in Washington.

Shares in Asia hardly moved, with MSCI’s broadest index of Asia-Pacific shares outside Japan flat while Japan’s Nikkei ticked up 0.2 per cent.

The CSI300 index of mainland China also edged up 0.2 per cent.

In commodities, oil steadied near $42 a barrel, heading for its first weekly drop in three, as surging coronavirus cases in the United States and Europe raise concerns about demand and Libyan output rises.

(With inputs from Reuters)

3:43 PM IST

3:42 PM IST

3:36 PM IST The S&P BSE Sensex gained 127 points, or 0.31 per cent to settle at 40,686 levels while NSE's Nifty ended at 11,930, up 34 points, or 0.28 per cent. 

3:28 PM IST YES Bank hit the upper circuit of 5 per cent at Rs 13.35 on the BSE ahead of the September quarter results on Friday. The board of directors of the bank is scheduled to meet on October 23, 2020 to consider and approve unaudited financial results of the bank for the second quarter ended September 2020 (Q2FY21).  READ MORE 

3:21 PM IST

3:10 PM IST

3:06 PM IST >> Delhi Metro SBI Card is a multipurpose card which functions as a credit card as well as a metro smart card >>  In addition to the benefits of a metro smart card, the Delhi Metro SBI Card will offer 10% discount on metro travel as well as 10X reward points on spend categories, such as, dining, grocery & departmental store, movies and utilities standing instructions.

3:01 PM IST TP: Rs 4,282 | Reco: Hold >> Backed by higher revenue from Glass Lined Equipment and its Proprietary business which grew 11.5% and 42% y/y respectively, GMM Pfaudler’s Q2 performance was robust. Margins too were better at 23.8% supported by an expanded gross margin and lower other expenses. The healthy order book (Rs3.5bn), commissioning of two gas furnaces at the Gujarat plant and the newly acquired Hyderabad plant is reassuring. Besides, the Pfaudler International (PI) acquisition provides several synergies like elimination of royalty outgo, no restriction on exports and access to PI’s global product portfolio, which will drive the growth. As guided by management, we consolidate PI financials with GMM from FY21. With this, we value the company at 35x FY23 earnings, arriving at a revised TP of Rs4,282.

2:59 PM IST CMP: Rs 4,630 | TP: Rs 5,073 | Reco: Accumulate >> Ultratech Cement (UTCEM) Q2FY21 EBITDA was higher than our / consensus estimate by 50% / 30%. Beat in the number is driven by a) volume which increased by 8% YoY versus our estimate of decline of 5% (incl. acquisitions) and b) Realization increased by 3% QoQ versus our estimate of decline of 2%. We have introduced FY23E estimate and increased EBITDA for FY21E/22E by 11% (exhibit 9). We roll forward our valuation to FY23 with revised TP of Rs5,073 (earlier Rs4393). We retain ACCUMULATE rating and TP is based on unchanged 13x FY23E EV/EBITDA multiple (which is average of last 10 years). Balance sheet deleveraging has continued, UTCEM consolidate net debt reduced QoQ by Rs22bn to Rs124bn. Company has set target of net debt/EBITDA of 1x vs 1.2x currently. Positive in UTCEM business is its leadership position and consistently gaining market share.

2:58 PM IST COMPANY DAY'S LOW(RS) DAY'S HIGH(RS) LATEST(RS) RISE(%) JK TYRE & INDUST 65.20 76.70 73.30 12.42 HIMATSING. SEIDE 134.10 147.50 147.50 9.99 ADITYA BIR. FAS. 150.00 178.80 164.20 9.47 SPICEJET 48.05 53.75 52.30 8.84 Click here for the full list

2:58 PM IST CMP: Rs 2,100 | TP: Rs 2,376 | Reco: Accumulate >> Asian Paints (APNT) above expectation result was driven by 11% volume growth in decorative coatings followed by meaningful recovery in home improvement (led by kitchen business). In International markets, except Nepal, all other regions witnessed strong volume growth supported by gradual unlocking of the markets. Stable input cost aided gross margin expansion. APNT forays into lighting, furnishing and furniture to strengthen its home décor and interior design business. Overall, it has been a strong performance. APNT has gained market share both from organized and un-organized players led by distribution reach/efficiency. We continue to maintain our bullish stance on the stock. We have introduced FY23E in our estimates. We maintain ACCUMULATE rating on the stock with a revised TP of Rs 2,376 (55x FY23E EPS).

2:56 PM IST CMP: Rs 3,006 | TP: Rs 3,976 | Reco: Buy >> Our positive stance is on account of: 1) volume recovery expected in domestic 2Ws with 18%/7% growth in FY22/23E, and 2) improving growth prospects in exports (over 50% of EBITDA), with expected growth of 23%/10% in FY22/23E. We have increased volume estimates by 5-8% over FY21-23E. In addition, valuations are inexpensive (15x/13x FY22/23E EPS) in comparison with historical multiples of 17.5x. We retain Buy with a revised TP of Rs3,976, based on 17x FY23E EPS (Sep22E earlier) and value of KTM at Rs102/share. In sector EAP, we have an EW stance. Key downside risks are lower-than-expected demand in key geographies, increase in competitive intensity and adverse currency/ commodity prices

LIVE UPDATES

SECTOR WATCH | Nifty Auto surges 3%


MARKET AT CLOSE | Gainers and losers on BSE Sensex


CLOSING BELL

The S&P BSE Sensex gained 127 points, or 0.31 per cent to settle at 40,686 levels while NSE's Nifty ended at 11,930, up 34 points, or 0.28 per cent. 

YES Bank, TTML, Suzlon among 282 stocks that hit upper circuit on BSE

YES Bank hit the upper circuit of 5 per cent at Rs 13.35 on the BSE ahead of the September quarter results on Friday. The board of directors of the bank is scheduled to meet on October 23, 2020 to consider and approve unaudited financial results of the bank for the second quarter ended September 2020 (Q2FY21).  READ MORE 


BSE Midcap index up over 0.6%


Top losers on the BSE at this hour


NEWS ALERT :: SBI Cards-DMRC launch contactless Delhi Metro SBI Card

>> Delhi Metro SBI Card is a multipurpose card which functions as a credit card as well as a metro smart card

>>  In addition to the benefits of a metro smart card, the Delhi Metro SBI Card will offer 10% discount on metro travel as well as 10X reward points on spend categories, such as, dining, grocery & departmental store, movies and utilities standing instructions.

BROKERAGE VIEW :: Anand Rathi on GMM Pfaudler

TP: Rs 4,282 | Reco: Hold

>> Backed by higher revenue from Glass Lined Equipment and its Proprietary business which grew 11.5% and 42% y/y respectively, GMM Pfaudler’s Q2 performance was robust. Margins too were better at 23.8% supported by an expanded gross margin and lower other expenses. The healthy order book (Rs3.5bn), commissioning of two gas furnaces at the Gujarat plant and the newly acquired Hyderabad plant is reassuring. Besides, the Pfaudler International (PI) acquisition provides several synergies like elimination of royalty outgo, no restriction on exports and access to PI’s global product portfolio, which will drive the growth. As guided by management, we consolidate PI financials with GMM from FY21. With this, we value the company at 35x FY23 earnings, arriving at a revised TP of Rs4,282.

BROKERAGE VIEW :: IDBI Capital on UltraTech Cement

CMP: Rs 4,630 | TP: Rs 5,073 | Reco: Accumulate

>> Ultratech Cement (UTCEM) Q2FY21 EBITDA was higher than our / consensus estimate by 50% / 30%. Beat in the number is driven by a) volume which increased by 8% YoY versus our estimate of decline of 5% (incl. acquisitions) and b) Realization increased by 3% QoQ versus our estimate of decline of 2%. We have introduced FY23E estimate and increased EBITDA for FY21E/22E by 11% (exhibit 9). We roll forward our valuation to FY23 with revised TP of Rs5,073 (earlier Rs4393). We retain ACCUMULATE rating and TP is based on unchanged 13x FY23E EV/EBITDA multiple (which is average of last 10 years). Balance sheet deleveraging has continued, UTCEM consolidate net debt reduced QoQ by Rs22bn to Rs124bn. Company has set target of net debt/EBITDA of 1x vs 1.2x
currently. Positive in UTCEM business is its leadership position and consistently gaining market share.

Recovery from intra-day lows in today's session

COMPANY DAY'S LOW(RS) DAY'S HIGH(RS) LATEST(RS) RISE(%)
JK TYRE & INDUST 65.20 76.70 73.30 12.42
HIMATSING. SEIDE 134.10 147.50 147.50 9.99
ADITYA BIR. FAS. 150.00 178.80 164.20 9.47
SPICEJET 48.05 53.75 52.30 8.84
Click here for the full list

BROKERAGE VIEW :: IDBI Capital on Asian Paints

CMP: Rs 2,100 | TP: Rs 2,376 | Reco: Accumulate

>> Asian Paints (APNT) above expectation result was driven by 11% volume growth in decorative coatings followed by meaningful recovery in home improvement (led by kitchen business). In International markets, except Nepal, all other regions witnessed strong volume growth supported by gradual unlocking of the markets. Stable input cost aided gross margin expansion. APNT forays into lighting, furnishing and furniture to strengthen its home décor and interior design business. Overall, it has been a strong performance. APNT has gained market share both from organized and un-organized players led by distribution reach/efficiency. We continue to maintain our bullish stance on the stock. We have introduced FY23E in our estimates. We maintain ACCUMULATE rating on the stock with a revised TP of Rs 2,376 (55x FY23E EPS).

BROKERAGE VIEW :: Emkay Global on Bajaj Auto

CMP: Rs 3,006 | TP: Rs 3,976 | Reco: Buy

>> Our positive stance is on account of: 1) volume recovery expected in domestic 2Ws with 18%/7% growth in FY22/23E, and 2) improving growth prospects in exports (over 50% of EBITDA), with expected growth of 23%/10% in FY22/23E. We have increased volume estimates by 5-8% over FY21-23E. In addition, valuations are inexpensive (15x/13x FY22/23E EPS) in comparison with historical multiples of 17.5x. We retain Buy with a revised TP of Rs3,976, based on 17x FY23E EPS (Sep22E earlier) and value of KTM at Rs102/share. In sector EAP, we have an EW stance. Key downside risks are lower-than-expected demand in
key geographies, increase in competitive intensity and adverse currency/ commodity prices

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


Left out of on-tap TLTRO benefits, NBFCs approach RBI for inclusion

Along with its monetary policy review, the RBI had earlier this month announced an on-tap TLTRO scheme to ensure that credit reaches the deserving sectors of the economy. While sectors including agriculture, MSME and retail are covered, NBFCs have not been included as a beneficiary of the facility, Finance Industry Development Council (FIDC) said in a communication to RBI. READ MORE


Top gainers on the BSE at this hour


Rupee Closing

Rupee settles lower at 73.62 per US dollar vs Thursday's close of 73.53/$ 

USFDA approves Remdesivir as first Covid-19 therapy amid WHO reservations

Even as the World Health Organisation (WHO) trial showed that remdesivir did not have any significant impact on hospitalised Covid-19 patients, the US drug regulator has now approved this drug from Gilead for treatment of Covid-19 requiring hospitalisation. This becomes the first treatment of Covid-19 that got FDA approval, but is unlikely to have any immediate impact on the prices of the drug. READ MORE  

 

Power Grid jumps over 3.5%


Tyre stocks on a roll. JK Tyre soars 27% in 2 days, Ceat hits 52-week high

Shares of tyre companies were on a roll for the second straight day with JK Tyre ralling 27 per cent in past two trading days, after the company reported a strong operational performance with margins hitting a four year high of 15.6 per cent in July-September quarter (Q2FY21). At 01:29 pm, JK Tyre & Industries was trading 10 per cent higher at Rs 76.70 on the BSE. Volumes jumped over five-fold. A combined 9.5 million equity shares have already changed hands on the counter on the NSE and BSE. In comparison, the S&P BSE Sensex was up 0.40 per cent at 40,721 points. READ MORE

BROKERAGE VIEW | IDBI Capital on Bajaj Auto

RATING: HOLD | TARGET PRICE: Rs 2,890

We cut our volume estimates for FY21/FY22 by 6%/4% factoring the slowdown in 2W/3W domestic market. We introduce our FY23 estimates and anticipate revenue and earnings to grow at ~4% and ~1% CAGR over FY20-FY23E with EBITDA margin of ~17%. We have arrived FY23E EPS at Rs192.5, factoring in volume growth/better realizations. We change our rating to HOLD (earlier REDUCE) and arrive at a TP of Rs 2,890 (earlier Rs 2,680) based on PER of 15x FY23E EPS.

Left out of on-tap TLTRO benefits, NBFCs approach RBI for inclusion

After being left out as a beneficiary of the on-tap targeted long-term repo operations (TLTRO), non-banking financial companies (NBFCs) have requested the Reserve Bank of India (RBI) to allow banks to use money drawn from this liquidity window for lending to them. Along with its monetary policy review, the RBI had earlier this month announced an on-tap TLTRO scheme to ensure that credit reaches the deserving sectors of the economy. While sectors including agriculture, MSME and retail are covered, NBFCs have not been included as a beneficiary of the facility, Finance Industry Development Council (FIDC) said in a communication to RBI. READ MORE

European indices open higher

(Source: Reuters)


Sept Quarter Result | IDBI Bank reports profit of Rs 320 cr vs loss of Rs 3,460 cr

>> Provisions decline from Rs 5,640 cr to Rs 580 cr


NEWS ALERT :: Surya Roshni bags orders worth Rs 137.1 cr from ONGC, HPCL & Gujarat Gas


Result Today :: Tech Mahindra's Q2 profit may slip up to 14.7% YoY

Tech Mahindra, the Pune-headquartered information technology (IT) services company, is expected to post up to 2.3 per cent quarter-on-quarter (QoQ) revenue growth in constant currency for the quarter ended September 30 (Q2FY21). Further, analysts expect up to 250 basis points (bps) increase in earnings before interest, and tax (Ebit) margin on a sequential basis owing to lower sub-contracting cost, easing of supply-side pressure, and cost rationalisation. The company is slated to announce its Q2 numbers on Friday, October 23. READ MORE

Indo Count Industries extends rally on strong September quarter results

Shares of Indo Count Industries were locked in upper circuit for the fourth straight day, up 5 per cent at Rs 163.50 on the BSE on Friday, after the company reported a strong set of July-September quarter (Q2FY21) numbers. The textiles company's stock was trading at its 52-week high level and has rallied 48 per cent in the past two weeks. READ MORE

Tata Elxsi hits fresh record high; stock surges 42% in one month

On October 14, 2020, Tata Elxsi had reported a strong 58.4 per cent year on year (YoY) growth in net profit at Rs 79 crore in the July-September quarter (Q2FY21). The company's operational revenues grew 11.5 per cent YoY at Rs 430 crore. The company's growth was driven by both its key businesses – Embedded Product Design (EPD) and Industrial Design & Visualisation (IDV). READ MORE

BUZZING STOCK :: SpiceJet soars 7%


IPOs come out of deep freezer as market revives, liquidity eases

Several firms that had filed their offer documents last year but given up on their listing plans due to disruptions caused by the pandemic are getting a new lease of life. The success of recent initial public offerings (IPOs) and the stability in the secondary market are propelling many firms and investment bankers to remove their IPO plans out of the deep freezer. READ MORE

Covid-19 Update :: India's active case count drops below 700,000 mark

Continuing its streak of daily net reduction in active coronavirus cases, India on Friday reported a decline of 20,303 cases, bringing the total active count below the 700,000 mark for the first time since August 22. At 695,509, number of active cases in the country now is only two-thirds of the September 18 peak of 1,017,754. READ MORE

BROKERAGE VIEW | ICICI Securities on Alembic Pharma

RATING: BUY | TARGET PRICE: Rs 1,170

Besides a strong show of results, with the aggressive R&D and capex, the management has signalled its long term strategy that includes a foray into niche areas like oncology, injectables, derma, etc. Although this is fraught with a new set of challenges, Alembic now looks in much better shape to withstand those challenges. We maintain BUY rating and arrive at a target price of Rs 1,170 based on 20x FY23E EPS of Rs 58.5.

Asian shares, US futures gain after last Trump-Biden presidential debate

Shares were mostly higher in Asia on Friday after President Donald Trump and his challenger former Vice President Joe Biden faced off in their second and final debate before the November 3 election. Stocks rose in Tokyo, Hong Kong and Shanghai but declined in Sydney. In their debate late Thursday, U.S. time, Trump and his Democratic challenger Biden largely avoided the disorganized rancor of their first face-off in a more substantive exchange highlighting their vastly different approaches to many challenges facing the nation. READ MORE

Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
AMBUJA CEMENTS 249.40 256.90 -1.75
CROMPTON GR. CON 310.35 328.45 8.34
HAVELLS INDIA 730.40 731.60 0.87
JSW STEEL 322.90 327.15 -0.87
PHILLIPS CARBON 152.55 153.35 1.63
» More on 52 Week High

NEWS ALERT :: Zydus Cadila receives final approval from US FDA for Albuterol tablets

>> Zydus Cadila has received final approval from the USFDA to market Albuterol Tablets in the strengths of 2 mg and 4 mg. Albuterol is a bronchodilator.

>> It helps open up the airways in your lungs to make it easier to breathe. This medicine is used to treat and to prevent bronchospasm. The drug will be manufactured at the group’s formulation manufacturing facility at the SEZ, Ahmedabad.
 

MARKET UPDATE:: Sensex off day's high but still in the green


Bernstein initiates coverage on Bharti Airtel with an 'outperform' rating

India remains an attractive market opportunity in the telecom sector and Bharti Airtel will be one of the two long term winners, said analysts at the foreign brokerage firm Bernstein Research. The brokerage has initiated the coverage on the stock with an "Outperform" rating and the target price of Rs 600. READ MORE


Tata Elxsi, JSW Steel: Trading strategies for stocks near 52-week high

On Friday, a number of stocks hit their fresh 52-week highs or were hovering around their one-year peaks in the morning deals. In comparison, the benchmark S&P BSE Sensex was quoting 0.28 per cent higher at 40,673.25 levels. Let's take a look at what charts indicate for some of the stocks that are trading around their 52-week highs. READ MORE 


Auto stocks in focus :: Nifty Auto index outperforms


Jet Airways hits upper circuit for 12th straight day, zooms 108% in 20 days

The stock has surpassed its previous 52-week high of Rs 50.25, touched on January 15, 2020. It has hit the upper circuit for the 12th straight trading day at the bourses. In the past 20 trading days, the stock has rallied 108 per cent from the level of Rs 24.60, on September 24, 2020. In comparison, the S&P BSE Sensex was up 8 per cent during the same period. READ MORE

How US presidential election outcome will impact global financial markets

A Democratic victory in the presidential poll, and a related takeover of Congress, according to Christopher Wood, global head (equity strategy) at Jefferies, will see pressure from the activist side of the party to embrace more formally policies aligned with Modern Monetary Theory. Such policies, he believes, would turn the US Federal Reserve (US Fed) into an instrument of fiscal policy obliterating any lingering sense of central bank independence. READ MORE

Aditya Birla Fashion to raise Rs 1,500 crore from Flipkart; stock jumps 4%

According to the deal terms, AB Fashion and Retail will issue 7,31,70,732 fully paid-up equity shares, at a price of Rs 205 per share (face value of Rs 10 each) aggregating to Rs 1,500 crore, ranking pari passu to the existing fully paid-up equity shares. The promoter and promoter group companies of ABFRL will hold about 55.13 per cent upon completion of the issuance. READ MORE

Top gainers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
SUZLON ENERGY 3.55 9.91
CROMPTON GR. CON 309.50 8.05
ORIENT ELECTRIC 203.35 7.00
SPICEJET 51.00 6.58
SHEELA FOAM 1344.60 5.70
» More on Top Gainers

Nestle India to announce Q3 numbers today; here's what to expect

Shares of Nestle India were trading flat with a positive bias in the morning deals on Friday ahead of its September quarter results due later in the day. Nestle India follows January-December fiscal year, hence it would be the third quarter numbers for the fast-moving consumer goods (FMCG) major. At 09:30 AM, the stock was trading 0.67 per cent higher at 16,018.25 levels as compared to a 0.46 per cent rise in the benchmark S&P BSE Sensex. The stock had hit an all-time high of Rs 18,301 on April 17, 2020. READ MORE

NEWS ALERT :: AB Fashion and Retail to sell 7.8% equity stake to Flipkart

>> To issue equity shares on preferential basis at Rs 205/sh

>> Total deal worth Rs 1,500 crore


NEWS ALERT :: AB Fashion enters into commercial agreement with Flipkart

>> Commercial agreement is for sale, distribution of various brands

>> Agreement provides for pre-emption rights & right of 1st refusal for 1-5 years

(Source: BSE filing)


Crompton Greaves Consumer surges 15% on healthy September quarter results

Shares of Crompton Greaves Consumer Electricals surged 15 per cent to Rs 328 on the BSE on Friday after the company reported 27.7 per cent year on year (YoY) growth in net profit at Rs 142 crore for the quarter ended September 2020 (Q2FY21). The household appliances company's stock was trading at its 52-week high level. READ MORE

SBI Cards tumbles 15% in 2 days as Q2 GNPA rises to 4.3%; should you sell?

In the three months to September, gross non-performing assets (NPAs) increased 196 bps to 4.3 per cent, compared to 2.33 per cent in Q2FY20. It has not declared accounts which were not NPA until August 31 due to the Supreme Court's interim order; had it had done so, its proforma gross NPAs would have increased to 7.46 per cent, and net NPAs would have been 2.7 per cent. READ MORE

Rupee opening

Rupee opens weaker at 73.64/$ vs Thursday's close of 73.53 against the US dollar

BUZZING STOCK:: Crompton Greaves surges over 11% post Q2 results


Cochin Shipyard leaps 5% after Radhakishan Damani picks up 0.5% stake

Shares of Cochin Shipyard (CSL) leaped 5 per cent to Rs 378 on the National Stock Exchange (NSE) on Friday after investor Radhakishan Damani acquired 0.53 per cent stake in the shipping company through open market. The stock has now surged 16 per cent in two trading days. On October 22, 2020, Radhakishan Damani acquired 694,646 equity shares, representing 0.53 per cent stake, in Cochin Shipyard at Rs 349.14 per share on the NSE, the bulk deal data shows. The name of seller was not ascertained immediately.

Telecom stocks trade higher in early deals

OMPANY LATEST(rs) CHG(%)
VODAFONE IDEA 9.06 2.03
BHARTI AIRTEL 432.85 0.51
TATA COMM 930.60 0.65
» More

Bhart infratel adds nearly 4% post Q2 results

>> Telecom tower company Bharti Infratel on Thursday announced a 24 per cent decline in its profit after tax at Rs 733 crore for the quarter ended September 30. The company had reported a profit after tax of Rs 964 crore in the same period last year.


BUZZING STOCK :: Taj GVK surges 5%


Coforge trades flat


Result Reaction | MphasiS gains over 2%

>> Gross Revenue grew 5.2 per cent QoQ and 12.9 per cent YoY on a reported basis. In constant currency, growth was 6 per cent QoQ and 6.7 per cent YoY. Net profit grew 9.5 per cent YoY to Rs 299.2 crore; EPS grew 9.3 per cent YoY to Rs 16.04.


Biocon slips marginally in early deals post Q2 nos


Cipla trades in the positive zone


ICICI Bank up over 1.5%


Sectoral trends at Open


Top gainers and losers on the S&P BSE Sensex at Open


Opening Bell


Opening Bell


US Presidential Elections 2020 :: Investors react to last Trump-Biden final debate

VASU MENON, SENIOR INVESTMENT STRATEGIST, OCBC BANK WEALTH MANAGEMENT, SINGAPORE:
 
"It was a slightly more civilised debate this time around, but Trump failed to make up for lost ground from the first debate. Biden came through better than Trump in this debate and this should help to cement his lead over Trump and may just help him to cross the final line with a win. Biden was more persuasive in the debate on COVID-19 and the stalemate with fiscal stimulus, which are critical issues for the American people and that should benefit him in the polls." READ MORE

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


Markets at Pre-open


Markets at Pre-open


BROKERAGE VIEW :: MOFSL on Coforge

CMP: Rs 2,456 | TP: Rs 2,460 | Reco: Neutral

>> Coforge’s revenue growth of 8.1% QoQ CC was better than expected (7% QoQ), driven by good broad-based recovery in verticals and geographies. Operational improvement supported EBITDA margin expansion by 174bp QoQ to 17.8%, ahead of our estimate of 17.2%.

>> Coforge reported a healthy order intake of USD201m. A robust deal pipeline, continued momentum in large deal wins (two deals in the quarter), and executables of USD489m (in 12 months; 21% YoY) indicate an optimistic outlook.

>> We see good growth in the Travel vertical (on the back of client wallet share gains) and a continued positive outlook as encouraging.

>> Management has indicated industry-leading organic growth of 6% YoY for FY21. It also expects to maintain the FY20 EBITDA margin (pre-RSU) of 17.8% in FY21. This indicates a good sequential growth outlook for the coming quarters and the ability to maintain 1HFY21 margins in 2HFY21 as well.
 
>> We upgrade our estimates for FY21/FY22E by 5%/3%. Our TP implies 25x FY22 EPS. Maintain Neutral on fair valuations

BROKERAGE VIEW :: MOFSL on Alembic Pharma

CMP: Rs 1,010 | TP: Rs 1,120 (+11%) | Reco: Neutral

>> Alembic Pharma (ALPM) delivered a beat on earnings for 2QFY21, led by strong traction in the Non-US/API segment and a superior product mix. India Domestic Formulations (DF) is back on the growth trajectory. ALPM also remains on track to start filing oncology injectables for the US market in 2HFY21.

>> On a high base of FY20, we expect a PAT CAGR of 11% over FY20–23, led by a 22%/18%/14% sales CAGR in the Non-US/API/US segment.

>> We raise our PAT estimate by 18% for FY21, factoring in increased momentum in the Non-US/API segment, a better growth outlook for the DF segment, robust
traction in the US, and controlled cost driving overall profitability. However, we also factor in higher opex from new facilities expected to begin commercialization in FY22; thus, we maintain our PAT estimate for FY22. We also introduce FY23 estimates. We value ALPM on a 20x 12M forward earnings basis to arrive at price target of INR1,120. Maintain Neutral.
 

Stocks in focus today

Tech Mahindra: The company is slated to announce its Q2 numbers on Friday, October 23. Deal pipeline in telecommunication & enterprise segment, opportunities in 5G, margin improvement in portfolio companies, long term growth opportunity, attrition level, and increment /promotion cycle will be the key things to watch out for. 
 
Mphasis: Gross Revenue grew 5.2 per cent QoQ and 12.9 per cent YoY on a reported basis. In constant currency, growth was 6 per cent QoQ and 6.7 per cent YoY. Net profit grew 9.5 per cent YoY to Rs 299.2 crore; EPS grew 9.3 per cent YoY to Rs 16.04.
 
Earnings today: Besides Tech Mahindra, 37 other companies are expected to release their quarterly numbers today. The list includes names such as Nestle India, JSW Steel, YES Bank, and ICICI Lombard General Insurance Company. READ MORE  


BROKERAGE VIEW :: MOFSL on Ambuja Cement

CMP: Rs 254 | TP: Rs 235 (-7%) | Reco: Neutral

>> Ambuja Cements’ (ACEM) 3QCY20 results highlight the strong rebound in volumes and benefits of fixed cost reduction. EBITDA grew 55% YoY (on a low base), with EBITDA/t of INR1,200/t – the highest reported over the last 10 years in the seasonally weak 3Q.

>> ACEM announced interim dividend of INR17/share amounting to INR33.8b (~60% of cash pile), implying 7% dividend yield. However, this is only a onetime dividend. We expect dividends to revert to usual level of ~INR3/share.

>> While commissioning of Marwar-Mundwa capacity (in 2QCY21) should aid volume growth from 2HCY21, we expect ACEM’s volume growth to lag industry over the next two quarters due to capacity constraints.

>> Despite the expansion, we estimate CY19-22E CAGR of only 5% in volume and 8% in PAT (partly due to lower cash-pile post the high dividend payout).

>> We value ACEM at INR235/share based on 9x CY22E EV/EBITDA, but take a 10% holding company discount for its stake in ACC. We maintain Neutral.

BROKERAGE VIEW :: MOFSL on Bajaj Auto

CMP: Rs 3,009 | TP: Rs 3,300 (+10%) | Reco: Neutral

>> Bajaj Auto (BJAUT)’s operating performance was impacted by the reversal of 1QFY21 MEIS incentives, adjusted for which performance was in-line. BJAUT has levers for both the near term (3W recovery) and long term (premiumization and exports), which are fairly reflected in the current valuations.

>> BJAUT would benefit from a) the premiumization trend and b) good growth opportunity in exports. While domestic 3W recovery may be delayed, it is vulnerable to possible disruption from electrification.

>> Valuations at 19.1x/15.2x FY21/FY22E consol. EPS largely capture the strong recovery from 2HFY21 and beyond. Maintain Neutral, with TP of INR3,300.
 

BROKERAGE VIEW :: MOFSL on Asian Paints

CMP: Rs 2,100 | TP: Rs 1,980 (-6% ) | Reco: Neutral

>> Asian Paints (APNT) witnessed consistent MoM demand improvement in 2QFY21. This augurs well for growth in 2HFY21 unless a second wave of Covid plays spoilsport. With stable material cost as well as currency, elevated margins also appear likely to sustain over the next few quarters.

>> However, valuations of 58.4x FY22E EPS appear to be fully capturing the growth revival. This is despite assuming 20% PBT growth and 21.5% PAT growth in FY22E, nearly 3x the PBT CAGR over FY16-FY21E. Maintain Neutral.
 

BROKERAGE VIEW :: MOFSL on IT sector

>> 2QFY21 IT results reinforce our OW stance on the sector. We have been raising IT weights in the model portfolio since 4QFY20, with the latest revision in July’20. 2QFY21 has seen sustained earnings momentum in IT, resulting in a healthy earnings upgrade for the second consecutive quarter. Management commentaries remained upbeat across the board. Lastly, a fresh round of dividends and buybacks provide a strong cushion for sustained re-rating, in our view.

>> Therefore, we continue to maintain the OW stance in the model portfolio, and after the sharp run-up, we now replace Wipro with HCL Tech. We had recently downgraded Mindtree post its stellar outperformance in CY20.

>> With business tailwinds and improvements in the deal pipeline, IT continues to offer solid and visible earnings growth with superior FCF generation and continued elevated capital returns via dividends/buybacks. This stands out against the otherwise tepid earnings growth seen in broader markets. IT management teams have indicated that this may mark the beginning of a multiyear technology upgrade cycle by enterprises, providing decent visibility for the sector’s earnings. Thus, we maintain the OW stance.

Pharma in focus :: USFDA approves first coronavirus treatment drug - antiviral remdesivir

The drug, which California-based Gilead Sciences Inc. is calling Veklury, cut the time to recovery by five days from 15 days to 10 on average in a large study led by the US National Institutes of Health. READ MORE

Anand Rathi's Nilesh Jain on Adani Gas

BUY ADANI GAS | TARGET: Rs 206 | STOP LOSS: Rs 188
 
The stock is on the verge of a major breakout from a symmetrical triangle formation on the daily chart. The breakout is placed at 196 levels and above that, we can expect the conservative target of around 206. It also surpassed its short term 21-DMA and long term 200-DMA which indicates strength in the counter. A fresh buy crossover can be seen in MACD on the daily chart whereas RSI is also moving higher from its oversold territory. READ MORE

Here's a Bull Spread Strategy on L&T

Bull spread Strategy on Larsen & Toubro
 
Buy L&T 940 Call at Rs 17 & simultaneously sell 980 Call at Rs 5
 
Lot Size 550.
 
Breakeven Point Rs 952 READ MORE

Bulk deals on BSE as on Thursday

Bulk deals on NSE as on Thursday

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


Rupee on Thursday

Source: Bloomberg


Oil steady as Russia holds out prospect of output cut extension

>> Oil prices held on to gains made on the previous session on Friday, after Russian President Vladimir Putin indicated he would be prepared to extend record supply cuts in the face of the Covid-19 pandemic.
 
>> Brent crude was off 1 cent at $42.45 a barrel having risen 1.7% on Thursday, while US oil was 2 cents lower at $40.62, following a 1.5% gain in the previous session. Both contracts are heading for their first weekly loss in three.

(Source: Reuters)

SGX Nifty update

>> At 8:26 am, the index was at 11,908 levels, up 16 points

Asian stocks flat

Source: Reuters


Wall Street closes higher, trade choppy as US stimulus talks eyed

Source: Reuters


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