Stock market updates: Market bulls were back on Dalal Street on Monday, reversing the steep losses logged in the morning, amid broad-based buying. Barring the auto and IT pack, investors bought stocks from across sectors as bond yields in the US fell to 1.35 per cent while US stock futures indicated at a healthy session on Wall Street later in the day.
Around 3 PM, Dow Jones Futures were up over 200 points, or 0.6 per cent, suggesting a positive start on Wall Street after sharp decline in the past week. The S&P 500 Futures and Nasdaq Futures, too, were up 21 points and 81 points, respectively.
That said, global mood elsewhere was subdued. The pan-European STOXX 600 index erased early losses to trade flat on the day while Britain’s FTSE 100 was off 0.05 per cent in Euro zone.
In Asia, Japan’s Nikkei led declines with a 3.6 per cent drop and dipped below 28,000 for the first time in a month, and MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.4 per cent. Chinese blue chips lost 0.7 per cent.
Given weak Asian cues, the benchmark S&P BSE Sensex and the Nifty50 indices hit the day's low of 51,740 and 15,506, respectively in early morning trade. However, low-level buying emerged quickly to recoup losses. By close, the Sensex index was at 52,574 levels, up 230 points or 0.44 per cent. On the NSE, the Nifty50 index was at 15,746 levels, up 63 points or 0.4 per cent.
Adani Ports (up 5 per cent) was the top Nifty gainer today, trailed by NTPC, Titan, SBI, Tata Steel, Bajaj Finserv, Grasim, and HDFC. On the downside, UPL (down over 4 per cent), Wipro, Hindalco, Tata Motors, TCS, Maruti Suzuki, and Tech Mahindra were the top laggards.
Broader markets, meanwhile, outperformed the large-caps today with the BSE MidCap and SmallCap indices gaining 0.8 per cent each.
Sectorally, the Nifty PSU Bank index ended 4 per cent higher amid reports that Central Bank of India and Indian Overseas Bank might be privatised. The two lenders might see 51 percent sale in the first phase of disinvestment, a report by TV channel CNBC Aawaz said.
Individually, the two banks hit their respective 20 per cent upper circuits while Jammu & Kashmir (J&K) Bank and Punjab & Sind Bank from the index rallied 20 per cent and 18 per cent, respectively. Bank of Maharashtra, Union Bank of India, Bank of India and Uco Bank were up in the range of 6 per cent to 8 per cent.
Besides, the Nifty Realty index was up 2 per cent and the Nifty Metal, Private Bank, Bank, and FMCG indices gained up to 1 per cent each. On the contrary, the Nifty IT and Auto indices slipped 0.2 per cent and 0.36 per cent, respectively.
MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities
Nifty showed another spectacular recovery from the opening lows after a similar show on Friday. Lack of large volumes on such days reflect that only fringe players are getting panicky and action otherwise keeps rotating among stocks – both large and midcaps. While rising however indices may be slow in the absence of positive triggers. Nifty seems to have made a minor bottom in the 15451-15505 band. On rises 15770-15812 could be the resistance in the near term.
Trade set-up for Tuesday :: Important levels to watch on Sensex and Nifty
The market once again strongly resisted going below 15,500/51700. With 15500/51700 levels holding support for second day in a row, the market saw a strong short covering trend today. After Friday's indication, the market has formed a bullish continuation formation today and according to that 15800/52800 will be a big hurdle. However, if indices manage to close above 15800/52800, it could reach 16000/16050 (53400/53500) star.
On Tuesday, 15800/52800 and 15650/52400 could be the trading range of the market. The Bank-Nifty moved from 33900 to close at 34900, which is remarkable and looks appropriate considering the yield of the bond.
Views by: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Sec
TECH VIEW :: Sumeet Bagadia, Executive Director at Choice Broking
On the technical front, the Index has taken support from 21-EDMA which is placed at 15569 and bounced from there, which suggests strength for upside in the counter.
Furthermore, the Index has formed a Bullish Marabozu candlestick pattern which further adds strength for upside direction. Moreover, an Hourly Oscillator Stochastic has also suggested positive crossover, which indicates bullish strength for the near term.
At present, the nifty seems to have resistance at around 15900 levels while immediate support comes at 15500 levels.
TECH VIEW :: Technical evidence is aligned to support the bullish case scenario
The market witnessed some swift recovery from its short-term support around the Nifty50 Index level of 15500 in the market today. The market expected level should range between 15500-15900, and it is going to be crucial for the short-term market scenario to sustain above 15500. Technical evidence is aligned to support the bullish case scenario. As such, investors to buy on intraday correction and look for exit around 15900 levels in the short term. The market observed that the momentum indicators like RSI and MACD start showing positive divergence, indicating the recovery is most likely to continue and the market to test the 15900 level.
Views by: Ashis Biswas, Head of Technical Research at CapitalVia Global Research
TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities
The short term trend of Nifty has turned up after a dramatic fall and a swift upside bounce of the last two sessions. A sustainable move above 15800 levels is likely to pull the market into new all-time highs in the next few sessions. Any weakness could find support around 15650-15600 levels
MARKET STRATEGY :: Use correction to go long
We’re seeing consolidation in the index on the expected lines. However, the buying interest on every dip clearly shows the market mood. We reiterate our advice to utilise intermediate correction to go long in quality counters until we see some sign of trend reversal. Having said that, it’s not easy to identify performers at the record high and the risk of false breakout is also there. We thus recommend limiting the naked leveraged bets and maintaining strict risk management rules.
NIFTY OUTLOOK :: Here's what tech charts say about the index post today's recovery
Nifty opened on a very weak note on account of global cues but managed to witness smart recovery finally closing near the high point of the day. This is the second consecutive time where nifty made a strong comeback reflecting the strength in the markets. However, on an hourly basis, it is just about closing near Ichimoku cloud support. For Nifty to inch toward 16000 level, it has to give hourly closing above 15780-15800 levels.
Views by: Gaurav Bissa, AVP Derivatives & Technicals at LKP Securities.
MARKET RECAP :: Vinod Nair, Head of Research at Geojit Financial Services
The domestic market opened on a weak note due to the hawkish monetary policy of the U.S Federal Reserve. But the market clawed back above day’s low and closed in the green as the market expects a faster economic recovery owing to the PM's announcement on free inoculation for all citizens. PSU Bank was the top sectoral performer on reports of the government finalizing Central Bank of India and Indian Overseas Bank for privatization
NSE Snapshot :: Top Nifty50 gainers of the day
Broader market :: BSE SmallCap index gains 0.8%
Broader market :: BSE MidCap index outperforms
Sectoral trends on the NSE
Sensex Heatmap at Close
Top gainers: NTPC, Titan Company, SBI
Top losers: Tech M, Maruti Suzuki, TCS
CLOSING BELL :: Indices recoup losses
The benchmark S&P BSE Sensex and the Nifty50 indices hit the day's low of 51,740 and 15,506, respectively in early morning trade. However, low-level buying emerged quickly too recoup losses.
By close, the Sensex index was at 52,574 levels, up 230 points or 0.44 per cent. On the NSE, the Nifty50 index was at 15,746 levels, up 63 points or 0.4 per cent.
Sensex at this hour
Reliance, Tata superapps gear up for battle royale in e-commerce space
This comes at a time when RIL’s e-commerce revenues are set to grow by 35 per cent to $15 billion within four years and its core retail revenue is expected to grow at the same pace to $44 billion, as per a forecast by Goldman Sachs. "The Tata vs JioMart war will be the next big corporate battle to watch. While Tata has an upper hand like in-house products and brands, RIL has the backing of global biggies like Google, Facebook and Microsoft," said head of a rating firm asking not to be quoted. READ MORE
State-owned banks likely to see lower gains in bond book in FY22: Icra
Public sector Banks, which reaped windfall treasury gains in FY21, are likely to see much lower gains in their bond portfolios in FY22 due to limited headroom for yields to decline further, according to Icra. The rating agency said public sector banks in India reported net profits in FY21 after five straight years of losses, supported by windfall treasury gains. PSBs booked profits of Rs 31,600 crore from this source compared to overall profit Before Tax (PBT) of Rs 45,900 crore in FY21. READ MORE
Nifty PSU Bank index gains 4%; Central Bank of India, IOB surge 20%
The Centre has shortlisted Central Bank of India and Indian Overseas Bank for divestment, according to a report by TV channel CNBC Awaaz. The two lenders might see 51 percent sale in the first phase of disinvestment, the report said. READ MORE
Oil prices firm on summer demand as Iran nuclear deal revival talks drag
Oil prices edged higher on Monday, underpinned by strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could lead to a resumption of crude supplies from the OPEC producer.
Brent crude for August gained 23 cents, or 0.3%, to $73.74 a barrel by 0825 GMT. U.S. West Texas Intermediate (WTI) crude for July was up 29 cents, or 0.4%, at $71.93 a barrel. READ MORE
Four of six Adani Group shares locked in 5% upper circuit limit
Shares of Adani group companies were in focus in Monday's session as four out of the six listed stocks were locked in the upper circuit of 5 per cent, bouncing back up to 11 per cent from their respective intra-day lows on the BSE. Adani Green Energy (Rs 1,115.85), Adani Transmission (Rs 1,297.65), Adani Total Gas (Rs 1,321) and Adani Power (Rs 120.60) were locked in 5 per cent upper circuit on the BSE. Adani Ports and Special Economic Zone (APSEZ) and Adani Enterprises rallied 7 per cent and 6 per cent, respectively, in intra-day trade. READ MORE
Reliance Home Finance takes up resolution plan approved by lenders
Lenders selected Authum Investment and Infrastructure Ltd as the successful bidder to acquire all assets of RHF through a competitive bidding process after several rounds of negotiations between the bidders and lenders.
Authum had reportedly submitted a bid of Rs 2,911 crore (which includes Rs 24 crore as deferred interest) to financial creditors. READ MORE
Higher capex spends likely to impact tyre maker Ceat's return ratios
Tyremaker Ceat has announced an ambitious plan to boost its market share and take leadership positions in multiple categories over the next five years. The company is eyeing a market share of 30-35 per cent in the two- and three-wheeler segments as compared to 28-30 per cent now, while targeting 20 per cent from 13-15 per cent now in passenger car radials. READ MORE
Mubadala group to put up Abu Dhabi's first IPO since 2017, more to follow
Satellite operator Yahsat has filed for a listing in Abu Dhabi in what would be the first initial public offering on the emirate’s stock exchange since 2017. Al Yah Satellite Communications Co., fully owned by Abu Dhabi’s $243 billion sovereign fund Mubadala Investment Co., plans to offer a stake of as much as 40% next month, according to a statement. The company offers satellite communications solutions in over 150 countries. READ MORE
Gold set to snap six-day losing streak as US bond yields slide
Gold prices rose on Monday, following sixth straight sessions of losses, as a drop in U.S. Treasury yields bolstered the non-yielding metal's appeal. Spot gold climbed 0.7% to $1,776.10 per ounce by 0732 GMT, while U.S. gold futures rose 0.4% to $1,775.5 per ounce. The real yields are falling, helping gold prices to stabilise and attempt a rebound, said Margaret Yang, a strategist at DailyFX, adding "investors are also taking this as an opportunity to buy the dip in view of rising inflationary pressure." READ MORE
European indices flat-to-negative in early deals
HCL Tech appoints leaders to expand in South Korea, Taiwan and Vietnam
HCL Technologies has made three appointments in Asia to strengthen its presence in South Korea, Taiwan and Vietnam. It has named Joonho Moon in South Korea, Terry Tai in Taiwan and Nguyen Ha Tuan in Vietnam to lead and drive growth in these geographies. Prior to joining HCL, Joonho spent more than two decades at Samsung SDS in various leadership positions in sales, business development, corporate marketing, and product strategy. READ MORE
United Breweries rallies 6 per cent on heavy volumes, hits 52-week high
The trading volumes on the counter doubled with a combined 2.6 million shares changing hands on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.40 per cent at 52,136 points at 12:06 pm. In the past one month, the stock has rallied 14 per cent, as compared to 3 per cent rise in the benchmark index. READ MORE
Mid-market view | Likhita Chepa, Senior Research Analyst, CapitalVia Global Research
On the back of negative global cues, Indian market indices pared some losses but remained in negative territory in morning sessions. Sentiments remained negative as Care Ratings warned that credit growth for the current financial year (FY22) is projected to stay in the low double digits. Losses have been limited as a UN report projected that India received $64 billion in foreign direct investment in 2020, making it the world's fifth-largest beneficiary of inflows. After comments from Federal Reserve that the US central bank would raise interest rates sooner than previously predicted frightened investors, US markets closed substantially lower on Friday, with the Dow and S&P 500 having their worst weekly performances in months. Asian markets were trading in the negative territory following the negative sentiments in the global markets.
The Market opened with a gap down following the global cues and again took the support near 15500. The market is aligned to trade in the range of 15500-15750 in the following trading days. If the market breached the level of 15750, we expect the market to reach the level of 15950-15980.
Higher flows and rich valuations push cash levels of mutual funds
The surge in flows into equity schemes in the past few months and rich valuations may have propped up their non-equity holdings that include cash and cash equivalents, as well as investments in debt instruments. The BSE Sensex and the Nifty50 have risen 9.4 per cent and 12 per cent year to date (YTD), respectively.
Nearly 51 per cent, or 236 of the 465 equity schemes that were considered have seen their non-equity holdings rise in the past year, the data from Value Research shows. READ MORE
NEWS ALERT :: Zydus and Bayer announce continuity of their successful Joint Venture
Bayer (South East Asia) Pte Ltd and Cadila Healthcare Limited have announced the extension of their Joint Venture by three years from June 2021.
The companies first entered into an agreement on January 28, 2011 to set up the Joint Venture - Bayer Zydus Pharma Private Limited for the sales and marketing
of pharmaceutical products in India.
NEWS ALERT :: Route Mobile ties up with Truecaller for enterprise services
>> Route Mobile Limited and Truecaller announed a technology partnership to enable enterprises to enhance trusted communication with the Truecaller Verified Business Caller ID
MARKET UPDATE:: S&P BSE MidCap index turns green
Will the Chairman of Saudi Aramco join RIL's board? Wait for mega AGM
An announcement of Al-Rumayyan’s induction on the RIL board or the board of the newly carved oil-to-chemical (O2C) unit may come as early June 24 at the company’s annual shareholder meeting.
“RIL’s annual general meeting (AGM) has historically been a keenly watched event (previously attended by 3,000 shareholders when held in physical format and last year saw 300,000 concurrent viewers of the virtual AGM across 42 countries and 468 cities), given that it has been one of the top 3 companies by market capitalisation in India, has a large free float, and a large public shareholding (more than 3 million non-institutional shareholders),” brokerage HSBC Global Research said in a report. Expectations are already built up for the AGM. READ MORE
Stocks that hit 52-week high on BSE today in an otherwise weak market
Centre to increase pace of Covid-19 vaccination in July-August: Amit Shah
Union Home Minister Amit Shah on Monday said the central government has decided to increase the pace of vaccination against COVID-19 in July and August. Talking to reporters after visiting a vaccination centre here, Shah said with Prime Minister Narendra Modi's decision to provide free vaccine against COVID-19 to people aged 18 and above, "we will fast achieve the goal of inoculating almost everyone". READ MORE
We will continue to actively look for acquisitions: ITC CMD Sanjiv Puri
"The second wave impacted sentiments quite severely, both in rural and urban centres. There has been a surge in cases in rural India this time and therefore rural sentiment has been under some pressure too. So, there may be a tendency to conserve. However, monsoons are expected to be good and given the fact that most manufacturing did not shut down this time, the loss of non-agricultural income could be lower than that of last year. With the pace of vaccination increasing, case-loads coming down and increasing mobility, consumers will increasingly gain more confidence and the economy will progressively recover." READ MORE
BUZZING STOCK:: GMR Infra zooms 10%
Centrum Capital hits 52-week high as arm gets RBI nod to set up SFB
Shares of Centrum Capital rallied 16 per cent and hit a 52-week high of Rs 58.50 on the BSE in intra-day trade on Monday after Centrum Financial Services Limited (CFSL) received an “in-principle” approval from the Reserve Bank of India (RBI) to set up a Small Finance Bank (SFB). CFSL is step down subsidiary of Centrum Capital. Centrum Group, on Friday, said it has also received approval from the RBI to take over the troubled cooperative lender Punjab and Maharashtra Co-operative Bank Limited (PMC Bank). READ MORE
These 5 stocks are indicating positive breakout on charts. Do you own any?
On Monday, the Indian benchmark indices clawed their way out of the early lows but were still trading half a per cent down. The weakness, however, can be seen as an opportunity by investors as major medium-term supports are not broken, technical charts suggest. Here is the list of stocks showing positive momentum. READ MORE
India Inc goes for price hikes again as input cost pressures increase
Companies across categories such as durables, paint, and consumer staples are raising product prices by 2-5 per cent as input cost pressures increase. While palm oil, used to make soaps, has come off its peak and metal prices are showing signs of cooling off in the past month, crude oil continues to remain volatile. READ MORE
Adani Ports gains 10% in 2 days after promoter buys shares via open market
Shares of Adani Ports and Special Economic Zone (APSEZ) were up 3 per cent at Rs 714 on the BSE in intra-day on Monday, rising 10 per cent in the past two trading days, after the promoter bought nearly 2 million shares of the company via the open market. On June 17, 2021, Infinite Trade and Investment Ltd, the promoter group of the company, purchased 1.93 million shares, representing a 0.09 per cent stake, worth Rs 126.81 crore of the company via the open market, according to disclosure made by APSEZ on June 19, 2021. READ MORE
MARKET UPDATE:: Broader indices outperform benchmarks; India VIX up 7%
Asian markets skid on jitters over future US Federal Reserve action
Asian markets skidded on Monday, with Japan's Nikkei 225 index down 3.4%, after a sell-off Friday on Wall Street gave the S&P 500 its worst weekly loss since February. Investors are still recalibrating their moves after the Federal Reserve's signal last week that it may raise current ultra-low rates sooner than had been expected. That gave the Dow Jones Industrial Average its worst weekly loss since last October. READ MORE
NEWS ALERT :: Maruti Suzuki to increase prices to pass on rise in input costs
Market direction hinges on corporate earnings growth, bond yields
The benchmark Nifty is up 12 per cent this year. Where the index goes from here hinges on how corporate earnings growth and valuation multiples pan out. Broking firm UBS says if earnings of Nifty50 companies grow at 25 per cent this year and 17 per cent each in the next two financial years, the benchmark index may move towards 17,000.
However, if earnings growth disappoints and the markets get de-rated, the index can even drop to 13,000. READ MORE
March Quarter Results :: Info Edge
Revenue at Rs 290 cr vs Rs 329 cr YoY
Net Profit at Rs 67 cr vs Rs 41 cr
PNB Housing hits 5% lower circuit as Sebi halts deal with Carlyle
Till 10:11 am, a combined around 37,000 shares had changed hands and there were pending sell orders for 260,000 shares on the NSE and BSE combined. In comparison, the S&P BSE Sensex was down 0.53 per cent at 52,069 points.
The housing finance firm was planning to issue shares and warrants on a preferential basis to private equity firm Carlyle Group and associates, which were reported to be investing Rs 4,000 crore to acquire a controlling stake of over 50 per cent in the Delhi-based mortgage lender. READ MORE
MARKET VIEW | Time to exercise safety & caution
The Fed's latest statement, though only mildly hawkish, appears to be impacting global stock markets more seriously than thought earlier. Market volatility has spiked and more volatility is in the offing. When valuations are high, corrections can be sharp. The strengthening dollar ( Dollar Index has spiked to 92.29) is a clear emerging market negative. A lot will depend on what FIIs will do in the coming days. Also, retail investment activity has to be watched. If there is a sharp correction in the market, the mid-small caps are likely to be impacted more. There is safety in strong performing large-caps. This is the time for safety and caution.
-- Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
MARKET UPDATE :: Sensex off day's low, reclaims 52K
HUL stock hits 52-week high in a weak market amid demand recovery hopes
Shares of Hindustan Unilever hit a fresh 52-week high of Rs 2,522.25, up nearly 2 per cent on the BSE, in intra-day trade on Monday after the management said the outlook from June’21 onwards is likely to stay positive, barring the emergence of a third Covid-19 wave. The stock of the fast moving consumer goods (FMCG) giant, which was trading higher for the fifth straight day, surpassed its previous high of Rs 2,504.30, touched on April 13, 2021. READ MORE
Rupee opens weaker at 74.23/$ vs Friday's close of 73.86 against the US dollar
Bandhan Bank up 7% as Assam govt inks pact with MFIs for stress borrowers
Also, as an incentive to good borrowers who did not default, the government will repay for each account Rs 25,000, or the loan amount, whichever is lower, to the MFIs. The total cost for the government will be a maximum of Rs 8,250 crore. The agreement was inked with Micro Finance Institutions Network (MFIN), the Business Standard reported. READ MORE
NEWS ALERT :: PNB moves SAT against Sebi order
>> In a rare regulatory move, Sebi had restrained PNB Housing Finance from going ahead with shareholders' voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.
The company has commissioned 8 MW power plant at Mundra, in Gujarat.
Srei Infra rallies 6% in a weak market
Srei Equipment Finance, subsdiary of Srei Infrastructure Finance, on Saturday said it has received investment interest of Rs 2,000 crore from US-based Arena Investors LP (Arena) led consortium. A day earlier, the company had received a Rs 2,200 crore investment proposal from Singapore based Makara Capital Partners Pte Ltd (Makara).
Centrum Capital hits 52-week high on RBI's nod to Group to take over PMC Bank
Diversified financial services player Centrum Group on Friday said it has received an in-principle approval from the Reserve Bank of India (RBI) to take over the troubled cooperative lender PMC Bank and re-launch it as a small finance bank.
UCO Bank declines 1%
The lender said its board will meet next week to consider raising up to Rs 500 crore as tier-II capital.
Result impact :: NTPC rises 1% in a weak market
The company posted nearly three-fold jump in consolidated net profit to Rs 4,649.49 crore for March quarter 2020-21 on the back of higher revenues. The consolidated net profit of the company in the year-ago period was Rs 1,629.86 crore.
PNB Housing Finance hits 5% lower circuit as Sebi halts Rs 4,000-cr fund infusion
In a rare regulatory move, Sebi has restrained PNB Housing Finance from going ahead with shareholders' voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.
BSE SmallCap index down 0.94%
BSE MidCap index slips 1.4%
Sectoral trends on the NSE :: Metals, PSBs underperform
Sensex Heatmap :: 28 of 30 constituents start with a downtick
Opening Bell :: Nifty tests 15,500
Opening Bell :: Nifty tests 15,500
Opening Bell :: Nifty tests 15,500
Opening Bell :: Sensex falls 500 pts
Commodity prices in early deals
Top gainers and losers on the S&P BSE Sensex in Pre-open
Markets at Pre-open :: 48 counters decline on Nifty
Markets at Pre-open :: Sensex down 400 pts
Stocks to watch today
RIL: Saudi Aramco chairman and Governor of the Kingdom's wealth fund Public Investment Fund, Yasir Al-Rumayyan, may be inducted on the board of Reliance Industries (RIL) a precursor to a USD 15 billion deal, reports said.
PNB Housing Finance: In a rare regulatory move, Sebi has restrained PNB Housing Finance from going ahead with shareholders' voting on the proposed Rs 4,000 crore-deal with Carlyle group and directed the company to carry out the valuation process as per the relevant legal provisions.
NTPC: The company posted nearly three-fold jump in consolidated net profit to Rs 4,649.49 crore for March quarter 2020-21 on the back of higher revenues. The consolidated net profit of the company in the year-ago period was Rs 1,629.86 crore. READ MORE
Kotak Institutional Equities has Sell call on Timken. Here's why
Reco: Sell | TP: 940
Timken India reported 4QFY21 EBITDA of Rs869 mn (-7% yoy), 22% above our estimate led by better-thanexpected revenue growth.
The company’s growth prospects remain strong due to pickup in industrial and CV segment demand, a strong order book in exports and steady demand in railways, however, we believe valuations are very expensive even after baking in strong growth prospects.
We have fine-tuned our FY2023 EPS earnings estimates. We have cut our FY2022 EPS estimates on lower EBITDA margin assumptions due to RM headwinds.
Valuations are very expensive at 32X FY2023E EPS even after building in strong revenue growth and improvement in profitability
Kotak Institutional Equities on NTPC
Reco: Buy | TP: Rs 125
NTPC reported its best ever quarterly performance in 4QFY21 with 13% yoy growth in adjusted PAT to Rs38.3 bn leading to an all-time high adjusted PAT of Rs142.2 bn (+17% yoy) in FY2021. The earnings performance of the conventional business has been stable, however, the ambitious renewable capacity target of 60 GW by FY2032 (from 1.34 GW currently) will be the key to earnings growth going forward.
Maintain BUY rating with unchanged Fair Value of Rs125/share, noting inexpensive valuations at 0.8X P/B and 7X on P/E on FY2023E earnings. In our view, renewed aggression for solar capacities is a positive for the company, and helps them to diversify away from its current concentration in coal-based capacities, we will be watchful of the return profile in the same. We have marginally revised our earnings estimates downwards by 1.7%/1.9% for FY2022E/23E
Kotak Institutional Equities raises target price on Power Grid
Reco: Buy | TP: Rs 260
Power Grid reported PAT of Rs35.2 bn (+24% yoy) in 4QFY21 and Rs 380 bn (+5% yoy) in FY2021 led by (1) asset capitalization of Rs195 bn (+28% yoy) with commissioning of Raigarh-Pugalur and, (2) higher other income on account of higher dividend of Rs6.5 bn (+120% yoy) from JVs/subsidiaries as well as late payment surcharge. New project wins under competitive bids partially address investor concerns on long-term growth.
We remain positive on Power Grid on account of (1) attractive valuations at 8X P/E and 1.4X P/B and dividend yield of 5%, (2) visibility on earnings growth trajectory as the company will capitalize on projects aggregating Rs446 bn over the next three years that will yield 8% CAGR in earnings up to FY2024E, and (3) incremental opportunities in intra-state and inter-state transmission. We have revised earnings for FY2022E by 3% primarily to factor higher other income on account of surcharges as well as marginal adjustments of core business earnings
Sharekhan on Tech Mahindra
Reco: Buy | TP: Rs 1,250
Management indicated that the impact of weak seasonality in Comviva business would be lower in Q1FY2022 compared to earlier years. Margin would be impacted by wage revision, visa hike, and weak seasonality.
We expect Q1FY2021 deal win TCVs to be around 1.5x-2x higher than average quarterly deal win TCVs ($400 million - 500 million), but it would be lower compared to Q4FY2021 ($1.04 billion). The deal pipeline continues to remain healthy.
Management remains confident on delivering double-digit revenue growth in FY2022 due to strong growth in communication, BFSI, and manufacturing verticals. The company expects EBIT margin at 15%+ despite wage revision and return of travel expenses in 2HFY2022.
Goldman Sachs on Bandhan Bank
Assam accounts for 12% of Bandhan Bank's overall MFI portfolio as of Mar'21. We calculate that should the above proposal be formalized, it could result in:
(1) Around Rs41bn worth of incentives to standard borrowers who have been regularly making payments, implying c.7% reduction in overall book.
(2) About Rs7bn from the pool that has turned delinquent post Jan'21, implying that about 1% of overall loan portfolio could get waived off.
(3) Bandhan had written off about Rs7.7bn of loans in the state of Assam in 4QFY21 and if the above proposal goes through, the bank could see significant recoveries from written off accounts amounting to 8% of FY22E PPOP/19% of FY22E LLP. However, while recovery of full amount is typical, we acknowledge that the amount recovered could also be lower.
Vaishali Parekh is bullish on HUL, Piramal Enterprises
The stock has maintained a good support base near 2330 levels and recently has improved the bias with a strong move past the significant 50EMA level of 2360 and is anticipated for further upward move in the coming days. The RSI has given a decent momentum pickup, indicating strengthen and is well placed to support and justify our positive bias. We suggest to buy and accumulate this stock for an upside target of 2700-2800 keeping the stop loss of 2340. READ MORE
Nifty outlook by Sameet Chavan
If we take a glance at the weekly chart of Nifty, we can see two back to back small body candles and this week's formation resembles a ‘Hanging Man’ pattern. Such a pattern requires confirmation in the form of breaking its low. Hence, it would be interesting to see how things pan out in the first half of this week. As far as levels are concerned, 15,820 – 15,880 can be seen as immediate resistances whereas, on the lower side, 15,550 – 15,450 – 15,400 are to be seen as support levels. READ MORE
>> SGX Nifty traded over 200 points or 1.3% lower at 15,545 around 8.30 am
Oil edges up as Iran nuclear talks drag on
>> Oil prices nudged up on Monday, underpinned by strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could indicate a delay in resumption of supplies from the OPEC producer. Brent crude futures for August gained 30 cents, or 0.4%, to $73.81 a barrel, while US West Texas Intermediate (WTI) crude for July was at $71.96 a barrel, up 32 cents, or 0.5%.
>> Both benchmarks have gained for the past four weeks amid optimism over the pace of global vaccinations and a pick up in summer travel. The rebound has already pushed up spot premiums for crude in Asia and Europe to multi-month highs.
Asian stocks drop
>> Asian stocks dropped on Monday as investors mulled the implications of a surprise hawkish shift last week by the U.S. Federal Reserve, while the Treasury yield curve flattened further with 30-year yields dropping below 2%.
>> Japan's Nikkei led declines with a 3.3% drop and dipped below 28,000 for the first time in a month, while MSCI's broadest index of Asia-Pacific shares outside Japan fell 1% in early trading. Chinese blue chips opened 0.4% lower, and Australia's benchmark slid 1.8%.
US stocks ended lower on Friday
US stocks ended sharply lower on Friday, with the Dow and S&P 500 posting their worst weekly performances in months, after comments from Federal Reserve official James Bullard that the US central bank might raise interest rates sooner than previously expected spooked investors. On Friday, the Dow Jones Industrial Average fell 533.37 points, or 1.58%, to 33,290.08, the S&P 500 lost 55.41 points, or 1.31%, to 4,166.45 and the Nasdaq Composite dropped 130.97 points, or 0.92%, to 14,030.38.
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