Stock market updates: Domestic equity markets traded within a narrow range on Friday, fluctuating between gains and losses, as a slew of downgrades in the GDP growth forecasts for FY22 along with slowdown in the vaccination programme amid supply crunch kept investors indecisive about the market direction.
India recorded over 343,000 fresh Covid-19 infections on Friday, taking the caseload tally to little over 24 million. According to a government official, two billion doses of Covid-19 vaccines will be made available in the country between August and December, enough to vaccinate the entire population. This comes after Delhi, Maharashtra and Karnataka decided to suspend the vaccination for people in the 18-44 age group till further orders amid acute shortage of vaccines.
However, favourable global cues helped the indices to limit losses. In Europe, the pan-European STOXX 600 index rose 0.3 per cent, with banks and retail stocks leading the gains, following a healthy session in Asia.
Barring Singaporean shares, all other Asian stocks strengthened on reassurances from the US Federal Reserve that a spike in inflation was temporary, with China and South Korea shares advancing 1.7 per cent and 1.1 per cent, respectively. Singapore stocks, on the other hand, tumbled more than 3 per cent after the city-state's imposed strict Covid-19 curbs.
Against this backdrop, the BSE barometer of 30-shares culminated the session at 48,732.5 levels, adding 42 points or 0.09 per cent. During the choppy session, the index hit a high and low of 48,899 and 48,473, respectively.
On the NSE, the broader 50-share index defended the 14,650-mark to settle at 14,678 levels, down 19 points or 0.13 per cent.
Overall, 21 of the 30 shares on the Sensex and 34 of the 50 constituents of the Nifty ended the day in the red. Coal India, Hindalco, Tata Steel, Tata Motors, Grasim, and IndusInd Bank on the Nifty and M&M, SBI, ONGC, Dr Reddy's Labs, and NTPC on the Sensex ended the day as top laggards.
On a weekly basis, both, the Sensex and the Nifty50 indices slipped around 1 per cent each.
On the upside, Asian Paints, UPL, ITC, Nestle India, L&T, HUL, Britannia, PowerGrid, and Reliance Industries were the combined top gainers of the day.
Profit-taking in the broader markets was sharper than benchmarks. The S&P BSE MidCap and SmallCap indices lost 1.2 per cent each.
Sectorally, the Nifty Metal index nursed the steepest loss of around 4 per cent, followed the Nifty Realty index, down 3 per cent and the Nifty PSU Bank and Auto indices, down 2 per cent each. On the upside, only Nifty FMCG index ended in the green, up 2 per cent.
TECH VIEW :: Ashis Biswas, Head of Technical Research at CapitalVia Global Research
The market continues to witness a lack of momentum and stayed in the range between 14600 to 14750. As of now, the short-term technical condition of the market appears like a sideways correction is in the process. While it is subject to further price action evolution, It is prudent to wait for a decisive breakout above 14800 and technical factors to improve before going long in the market. The traders to refrain from building a fresh buying position until further improvement is seen and breakout above 14800.
TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities
The short term trend of Nifty is choppy with weak bias. The present market action signal chances of an upside bounce in the coming sessions. The confirmation of higher bottom at 14591 (Friday's Low) is expected to pull the market on upside. The next upper levels to be watched around 14900-15000 in the next one week. Immediate support is placed at 14590.
MARKET CLOSING COMMENT :: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Sec
The last week has been volatile for the traders, the week started on a positive note but due to extremely uncertain global cues index shed over 370/ 1100 points or nearly 1 percent.
Among Sectors, after a robust rally metal stocks witnessed profit booking, in this week alone the Metal index corrected over 4.5 percent.
Whereas, some buying was seen in PSU Banks and selective FMCG stocks. Technically, on daily charts the market has formed a lower top kind of formation, but at the same time the Nifty is hovering near 20 and 50 day SMA with modest volume activity.
We are of the view that, the broader texture of the market is still in to the bullish but due to weak global market conditions market may consolidate in the range of 14500 -14800/48200 - 49200 in the near future 14590/48470 should act as a strong support level for traders below the same correction wave likely to continue up to 14500/48200. Further down side may also continue which could drag in the index up to 14390/47800. On the flip side, 14800/49200 should be the sacrosanct level for the bulls above the same uptrend wave likely to continue up to 14950-15100. /49750-50100
MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities
Indian benchmark equity indices ended flat after a mildly volatile day on May 14. Nifty opened slightly higher but kept seeing repeated bouts of sell-offs followed by bounces through the day. At close, the Nifty was down 18.70 points or 0.13% at 14677.80.
After two weeks of gains, the Nifty ended the week 0.98% lower as coronavirus cases continue to surge, triggering concerns that a wider lockdown may be reimposed. Advance decline ratio was again negative suggesting continued profit taking in the broad market. The sell-off seen in The US markets on May 12 has unnerved a lot of investors as the likelihood of inflation/interest rate hike led sell-off across the globe is becoming stronger. However as the Nifty refuses to close at the intra day lows over the past two days, hopes of a short term upmove are still alive. 14506-14851 seems to be the new band for the Nifty for the near term.
MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services
Market swung between gains and losses in today’s volatile trade as gains in Consumer and Capital goods were countered by losses in Metals and Auto stocks. Owing to a decline in food prices, April’s retail inflation eased to 4.29% while Industrial production for March registered a growth of 22.4% supported by lower base. Global markets traded with optimism on Fed official comment stating that they are not much concerned about long-term inflation
TECH VIEW :: Rohit Singre, Senior Technical Analyst at LKP Securities
Index closed a week at 14678 with loss of nearly one per cent and formed a dark cloud cover sort of candle pattern on weekly chart which is bearish reversal candle by nature. Supports are still placed at 14600-14500 zone holding above said levels structure mildly bullish and we may see some extension in current pull back towards strong hurdle zone of 14800-14950 zone where one can lock in their profits
Markets this week :: Top losers on NSE
JSW Steel (6.6%)
Adani Ports (4.5%)
Axis Bank (4.4%)
Markets this week :: Top gainers on NSE
PSU Bank & PSU Index gain over 3% each for the week.
Individual gainers: Asian Paints (8.5%), UPL (7.5%), Power Grid (6.7%), IOC (6.7%), Coal India (4.3%)
Markets this week
Sensex, Nifty and MidCap indices lose 1% each
Nifty Metal slips after gaining for three weeks, falls over 4%.
Nifty Bank slides over 2%.
Rupee ends higher at 73.29 per US dollar vs Wednesday's close of 73.42/$
Sector Watch :: ITC, Emami, Nestle led FMCG index's outperformance
SECTOR WATCH :: Realty stocks underperform; DLF, IBREL slip up to 5.6%
Metal-heavy Nifty ends in the red amid heavy profit-booking in related stocks
>> Nifty Metal index slips nearly 4% today
>> Index slips 4.5% during the week
Stocks that supported the Sensex today
Sectoral trends on the NSE
Barring FMCG, all other indices end the day in the red
Sensex Heatmap at Close
Top gainers: Asian Paints, ITC, Nestle India
Top losers: IndusInd Bank, M&M, SBI
The BSE barometer of 30-shares culminated the session at 48,732.5 levels, adding 42 points or 0.09 per cent. During the choppy session, the index hit a high and low of 48,899 and 48,473, respectively.
On the NSE, the broader 50-share index defended the 14,650-mark to settle at 14,678 levels, down 19 points or 0.13 per cent.
PMC depositors allowed to withdraw up to Rs 5 lakh for Covid treatment: RBI
"It is the duty of Punjab Maharashtra Cooperative (PMC) to pay hardship amount to the eligible depositors as per directions of RBI and subject to availability of liquidity with that bank. To expedite the process, the authority for approving the payment under hardship grounds has also been delegated to the PMC Bank," states RBI reply in Delhi High Court. READ MORE
>> Cons PAT at Rs 14.35 crore vs loss of Rs 100 crore YoY
>> Cons Revenue at Rs 606 crore vs Rs 434 crore YoY
March Quarter Results :: Macrotech Developers clocks PAT of Rs 311 cr vs Rs 132 cr YoY
Roaring crypto cacophony drowns out rest of Wall Street in a wild week
Wild stock swings, spikes in Treasury yields, startling economic readings? Interesting, sure. But if you really want to get people’s attention right now, you need to tell them a story about crypto.
And there have been a lot of those. Even for a market that’s famous for its wild volatility and gimmicks, the past week’s cryptocurrency news set new records for jaw-droppers. READ MORE
ITC records sharpest intra-day gain in over three months; stock up over 4%
At 02:20 pm, the stock of the cigarettes, tobacco products company was trading 4.4 per cent higher at Rs 212.20, as compared to 0.03 per cent decline in the benchmark S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 55.38 million equity shares changing hands on the BSE and NSE.
ITC has not yet declared the date for the board meeting for consideration of financial results for the quarter and financial year ended March 31, 2021. Last year, the company declared its March quarter results on June 20, 2020. READ MORE
NEWS ALERT :: Moody's affirms Tata Motors' outlook from 'negative' to 'stable'
>> Rating reaffirmed as B1
European markets check
NEWS ALERT | L&T arm bags contracts worth Rs 2,500 crore-5,000 crore for Chennai Metro
Alembic Pharmaceuticals gets USFDA nod for bipolar depression drug
Drug firm Alembic Pharmaceuticals on Friday said it has received final approval from the US health regulator for Lurasidone Hydrochloride tablets, used to treat bipolar depression.
The approved product is therapeutically equivalent to the reference listed drug product (RLD) Latuda tablets of Sunovion Pharmaceuticals Inc. READ MORE
BSE Smallcap index underperforms Sensex, down over 1%
>> Here are the top gainers & losers from the pack
Akshaya Tritiya begins on sombre note; jewellers expect 10-15% sales
Akshaya Tritiya, a highly auspicious day to purchase gold, has started on a sombre note and jewellers are expecting only 10-15 per cent sales as the onset of the COVID-19 second wave, local restrictions and partial lockdowns have affected consumer sentiment.
"As most of the states are under lockdown to curb the infections there is almost no business activity. The day of Akshaya Tritiya has begun on a slow note and whatever booking or enquiries are happening it is only through tele or digital medium," All-India Gems & Jewellery Domestic Council (GJC) chairman Ashish Pethe told PTI. READ MORE
Prince Pipes soars 15%, hits fresh record high as Q4 profit grows 246% YoY
Shares of Prince Pipes and Fittings hit a new high of Rs 659.75, surging 15 per cent on the BSE in the intra-day trade on Friday, after the company reported a 246 per cent year on year (YoY) jump in its profit after tax (PAT) at Rs 97 crore for the fourth quarter of FY21 (Q4FY21) on the back of strong revenue growth. The company, engaged in integrated piping solutions & multi polymer manufacturers with seven strategically located plants across the country, had posted PAT of Rs 28 crore in the year-ago quarter. READ MORE
Fall from intra-day high in BSE500 stocks in today's session
Tata Motors board to meet next week to consider fund-raise proposal
Tata Motors on Friday said its board will meet next week to consider a proposal to raise funds through various means. The board meeting is scheduled to be held on Tuesday, May 18, 2021 to consider and approve the audited financial results for the quarter and financial year ended March 31, 2021. READ MORE
Nifty sectoral indices at this hour
NEWS ALERT :: Welspun India to start supplies again to Target Corp US
Welspun India has again signed agreement with US-based retailer Target Corp. Co says, until FY16, business with Target Corp accounted for 10% of overall biz
Platts cuts India's 2021 oil demand by 28%; sees crude topping $70
“Since the dramatic escalation of new cases in mid-to-late February, we have revised down India’s oil demand forecast by 135,000 b/d for 2021 – with downward adjustment of 175,000 b/d for April, 760,000 b/d for May, 830,000 b/d for June and 360,000 b/d for July – down from a forecast of 485,000 b/d made in February,” said Kang WU, head of global demand and Asia analytics at S&P Global Platts. READ MORE
This smallcap pharma stock has zoomed over 100% in a month
The stock of the smallcap pharmaceuticals company was trading at its 52-week high level. In the past two trading days, it has rallied 44 per cent after the company said its subsidiary Synbiotics has ramped up the manufacturing capacity to meet the requirement of its most effective anti-fungal antibiotic in the post-Covid crisis. In comparison, the S&P BSE Sensex was down 0.29 per cent at 48,551 points. In the past one month, the market price of Ambalal Sarabhai Enterprises has zoomed 111 per cent in comparison to a 0.10 per cent rise in the benchmark index. The stock is listed only on the BSE. READ MORE
Covid-19 vaccine update :: Russia's Sputnik V priced at Rs 1,000 per dose
>> RDIF’s COVID vaccine Sputnik V is presently priced at Rs 948 + 5% GST per dose, i.e. Rs 995.40
>> Prices will be lowered after local supply begins.
Alert: As part of a limited pilot, the soft launch of the vaccine has commenced and the first dose of the vaccine was administered in Hyderabad today on 14th May, 2021
Mid-market view | CapitalVia Global Research
Markets traded negatively after facing resistance at higher levels. Traders have taken a cautious route in the market after a lot of agencies revised their GDP growth target after the second Covid wave in India. With the lockdown in various parts of the country continuing to extend, the Retailers Association of India (RAI) said it is becoming increasingly difficult for retailers to retain employees and keep their companies alive, and that capital is needed to inject into the industry. This has added to the negative sentiments in the domestic markets. On Thursday, the US market ended sharply higher, bouncing back from three days of selling fueled by upbeat labor market results. Asian markets were mostly trading in the green, following the positivity in the global peers.
Nifty has continued to trade in a small range below the level of 14,750. The market is aligned to trade in a range between 14,500-15,050 in the coming week as well. If it breaks the level above 14,750 we can expect the market to trade till the level of 15,000-15,050.
March Quarter Results :: Dr Reddy's Labs net profit stands at Rs 560 crore
>> Revenue: Rs 4,728 crore
>> Ebitda: Rs 1,133 crore
>> Ebitda margin: 24%
>> Dividend: Rs 25/share
CEAT, Pricol: Auto ancillary stocks look set to rally further, charts show
Despite localised lockdows across states, shares of the auto ancillary firms have held their ground so far at the bourses over the past one month. Shares of Jay Bharat Maruti, for instance, are up 49 per cent over the past one month while those of Automotive Stampings and Assemblies, Motherson Sumi, Wabco India, JBM Auto, Hindustan Composites, Pricol, Minda Corporation, and Munjal Auto Industries are up between 10 per cent and 21 per cent, ACE Equity data show. READ MORE
RBI tells lenders to reconsider ties with crypto exchanges, traders
India's central bank is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry, three sources told Reuters. READ MORE
Investors should have 10% of their portfolio in gold, say analysts
While gold has rewarded investors richly over the past three years (compound annual return was 14.8 per cent), it has been in correction mode over the past six months (down 5.8 per cent). If you plan to buy gold jewellery or coins for religious or cultural purposes this Akshaya Tritiya, you may do so. But if you plan to buy the yellow metal for investment purposes, you should be informed about the factors that could have a bearing on its price in the near future. READ MORE
40 stocks take up three-fourths of institutional equity ownership in India
The equity ownership pattern of institutional investors for the quarter ended March 31 shows acute concentration of investments, with three fourths of their portfolios in just 40 stocks, a report by Kotak Institutional Equities observes. Forty stocks account for 75 per cent of FPIs’ equity portfolio in India, with HDFC Bank, Reliance Industries and HDFC being the top picks. READ MORE
Lupin shares slide 4% amid profit booking post March quarter results
Shares of Lupin were down 4 per cent to Rs 1,165.95 on the BSE in the intra-day trade on Friday on profit booking after the company's consolidated sales declined 0.8 per cent year on year (YoY) to Rs 3,759 crore for the quarter ended March 31, 2021 (Q4FY21), led by a YoY decline in US and in API (active pharmaceutical ingredient) sales. The pharmaceutical's company had posted sales of Rs 3,791 crore in the corresponding period of FY20. READ MORE
Sterlite Copper oxygen plant in TN hits 'technical snag', halts production
Vedanta Ltd owned Sterlite Copper Plant which recently, commenced production of medical oxygen at its facility in Tamil Nadu has faced a 'technical snag' in a cold box leading to a suspension of production, the company said on Friday. The facility began production of medical oxygen and the first set of medical oxygen tankers was dispatched to the beneficiaries on Thursday from the Tuticorin plant, located about 600 kms from here. READ MORE
Mphasis shares decline 2% on muted March quarter performance
Shares of mid-tier information technology (IT) firm Mphasis slipped 1.8 per cent in Friday's intra-day deals on the BSE to Rs 1,764 apiece after the company reported a muted set of numbers in March quarter of fiscal year 2020-21 (Q4FY21). At 11:00 AM, the stock was quoting 1.2 per cent down at Rs 1,776 per share on the BSE as against a 0.09 per cent rise in the benchmark S&P BSE Sensex. The S&P BSE IT index, meanwhile, eased 0.74 per cent. READ MORE
MARKET UPDATE:: Broader indices underperform benchmarks; India VIX up 4%
Indian stock market's reaction to Covid-19 crisis is surprisingly muted
India’s Covid-19 crisis has so far failed to spark a deep stock selloff like that seen last year, and some asset managers point to less stringent curbs on activity as one factor at least for now. Even as the nation reports more than 300,000 confirmed infections and over 4,000 deaths a day, India’s benchmark equity index has been moving in line with regional peers. The S&P BSE Sensex index has declined 6.6% from a mid-February peak, about as much as the MSCI AC Asia Pacific index. READ MORE
HG Infra Engineering soars 19% on robust March quarter results
The company’s revenue during the quarter under review increased 65 per cent to Rs 1,027.8 crore from Rs 622.9 crore in the corresponding quarter of previous year, clearly reflecting the sharp pickup in execution. Earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 64 per cent YoY to Rs 166.5 crore from Rs 101.40 crore in the year-ago quarter. READ MORE
Result today :: L&T Q4 PAT seen rising up to 18% YoY as margin pressures ease
Most analysts back Larsen and Toubro (L&T), in the large-cap space, to report healthy quarterly results on the back of nearly Rs 17,500 crore order book.
Company’ ability to hold on to margins amid higher raw-material prices and restored salaries/wage cuts through cost efficiencies and cost control, order pipeline, and commentary on FY22 guidance amid the Covid-19 second wave uncertainty are among the key monitorables for L&T, according to analysts. READ MORE
GoAir has filed a draft red herring prospectus for a share sale to raise Rs 3,600 crore, as it rebrands to become an "ultra-low-cost" airline. The Wadia group airline will use the proceeds to meet debt obligations, pay oil companies and for replacement of letter of credit to aircraft lessors for lease rental payment and future maintenance of aircraft. READ MORE
NEWS ALERT :: Tata Motors to consider raising funds on May 18
>> Funds to be raised by way of issue of one or more instruments including convertible securities of any description or debt securities, through preferential issue, private placements, rights issue or any other methods or combination thereof in the domestic and/or international markets.
Asian Paints surges 11% on strong revenue growth in Q4
The company’s profit after tax (PAT) during the quarter under review increased by 81 per cent YoY to Rs 870 crore. Earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 53.4 per cent YoY to Rs 1,318 crore. On the margin front, while no price hike in Q4 weighed on gross margins (down around 266 basis points (bps) YoY), savings in employee and other costs to the tune of 100 bps and 290 bps YoY, respectively, led to a 127 bps YoY increase in EBITDA margin. READ MORE
NEWS ALERT :: L&T Construction wins order in the range of Rs 2,500-5,000 cr
Rupee opens at 73.43 per US dollar vs Wednesday's close of 73.42/$
NEW LISTING :: PowerGrid InviT lists at Rs 104 on the BSE vs issue price of Rs 100/sh
Markets will digest dent on June quarter earnings as one-time hit: CLSA
The ongoing second wave of Covid infections and the ensuing lockdown across key economic hubs will dent corporate earnings in the June 2021 quarter (Q1FY22), but the markets will take this in their stride and digest them as a one-time hit look forward to growth as the economy normalises after this wave, believe analysts at CLSA. READ MORE
NEWS ALERT :: GoAir files for Rs 3,600 cr IPO with Sebi, says report
>> To use Rs 255 crore to repay IOCL for fuel
>> Company intends to repay debt of Rs 2016 crore
UPL jumps 5%, hits new high on healthy March quarter results
Shares of UPL hit a new high of Rs 728.80, up 5 per cent, on the BSE in intra-day trade on Friday after the company reported a healthy 72 per cent year-on-year (YoY) jump in its consolidated net profit at Rs 1,065 crore on the back of strong operational performance. The global provider of sustainable agriculture products and solutions had posted a profit of Rs 617 crore in the year-ago quarter. READ MORE
MORNING MARKET COMMENTARY :: Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
Worse-than-expected inflation data from US (4.2% in April YoY) led to sell-off in US markets with Dow, S&P and Nasdaq declining sharply by 2%,2.1% and 2.7% respectively on Wednesday. The US 10-year yield rose above 1.69%. But this victory for the bond bears proved to be short-lived as equity bulls came roaring back on Thursday. The market verdict, as of now, is that the high inflation print is transitory and, therefore, the Fed will continue on the ultra-loose monetary stance and the tapering of QE is far away. This is positive for markets globally. Back home Covid data continues to be grim and the consequent extensions of lockdowns in many states mean growth and earnings in Q1 FY22 will be lower than initial estimates. There is safety in IT, pharma, chemicals & high-quality financials. Consumer discretionary, particularly autos, will face rough weather
Tata Power declines nearly 4% on weak Q4 results
It posted a marginal rise of one per cent in consolidated net profit at Rs 481.21 crore for March quarter 2020-21. It had clocked a net profit of Rs 474.70 crore in the year-ago period.
Index check :: Nifty holds 14,600
Top gainers and losers on the S&P BSE Sensex as index decline 170 pts
Happiest Minds Tech slumps 5% amid profit-taking post stellar Q4 nos
The IT firm Happiest Minds Technologies has reported a manifold growth in consolidated net profit at Rs 36.05 crore in the March 2021 quarter. The company, which got listed on BSE and NSE last year, had posted a net profit of Rs 5.30 crore in the year-ago period.
TVS Motor trades mildly higher on appointment of new CEO of subsidiary
The company said it has appointed Robert Hentschel as the Chief Executive Officer (CEO) of iconic British brand Norton Motorcycle, which it acquired last year.
Result impact :: Pidilite Industries slides over 2%
The manufacturer of adhesives, sealants and construction chemicals reported a 96.43 per cent YoY increase in consolidated net profit to Rs 307.44 crore for the fourth quarter ended March 2021. It had posted a profit of Rs 156.51 crore in the January-March period a year ago.
Index check :: Sensex erases early gains
Eicher Motors slips in the red as Co decides to shut plants
Royal Enfield said it has decided to shut down its two manufacturing facilities between May 13-16 amid a second Covid wave
Asian Paints zooms 6% post March quarter results
Vedanta trades flat on the upside
The company reported a consolidated net profit of Rs 6,432 crore in the March quarter against a loss of Rs 12,521 crore in the corresponding period last year on the back of increased sales.
Street cheers UPL's Q4 nos
The firm on Wednesday reported a 73.59 per cent YoY growth in consolidated net profit at Rs 1,361 crore for March quarter 2020-21. The company's net profit stood at Rs 784 crore in the year-ago period.
Sectoral trends on the NSE :: PSBs outperform, IT stocks in the red
Top gainers: Asian Paints, Titan Company, ITC
Top losers: TCS, M&M, Tech M
Fuel price update :: Petrol price hiked by 29 paise & Diesel by 34 paise today
In last 10 days (since May 4), Petrol price has been raised by Rs 1.79/L & Diesel by Rs 2.04/L
Top gainers and losers on the S&P BSE Sensex in Pre-open
BROKERAGE VIEW :: ICICI Direct on Cadila Health
Reco: Hold | TP: Rs 640
Cadila Healthcare's wholly owned subsidiary, Zydus Animal Health and Investments (ZAHL), has entered into an agreement to sell its animal health (AH) business focused on India and certain other markets to a Multiples Alternate Asset Management led consortium (Canada Pension Plan Investment Board and RARE Enterprises).
The deal looks decent from a valuation point of view with implied EV/sales at 4.87x FY21E animal health business and implied EV/EBITDA multiple of 19.5x. This deal bodes well in the larger scheme of things as the company will increase focus on its core businesses such as India formulations, wellness and the niche franchisees of biosimilars and injectables in the US and other developed markets besides significant debt reduction.
That said, Moraiya warning letter resolution and US base business performance are some important aspects to watch in the near term. Given the recent run-up in the stock, we change our stance from BUY to HOLD and arrive at our target price of Rs 640 (vs. Rs 555 earlier) based on 26x FY23E EPS of Rs 24.7.
BROKERAGE VIEW :: ICICI Direct on Matrimony.com
Reco: Buy | TP: Rs 1,070
In the near term, we expect the company’s billing and revenues to be subdued QoQ due to lockdowns. However, we expect revenue and billing growth to improve from Q2FY22E onwards led by healthy subscriber growth, increasing market share in north and easing of lockdowns & vaccinations. In addition, introduction of new products (like IIMIIT matrimony) and inorganic opportunity (due to healthy cash) are expected to drive revenues in the long term.
Further, expectation of stable advertising expenses and operating leverage benefit are anticipated to lead to healthy margins. This, coupled with leadership in an underpenetrated online match making industry and strong cash flow generation prompt us to maintain BUY rating on the stock with a target price of | 1,070 (30x PE on FY23E EPS).
BROKERAGE VIEW :: ICICI Direct on KEC Iternational
Reco: Buy | TP: Rs 445
KEC delivered a steady Q4FY21 performance driven by strong growth in non-T&D segment amid challenges in T&D-SAE and commodity price impact. However, T&D is likely to rebound in the medium term providing further accelerated execution. Also, a backlog of Rs 19,109 crore, strong profitable traction in railways, civil business and focus on operational efficiencies would further de-risk its business model in the medium term.
We expect KEC to deliver revenue, EBITDA, PAT CAGR of 10.4%, 9.1%, 13.0%, respectively, in FY20-23E. We revise our target price to Rs 445/ share at 14x FY23E EPS and maintain our BUY rating.
BROKERAGE VIEW :: Antique Stock Broking on Firstsource Solutions
Reco: Buy | TP: Rs 155
FSOL reported 4QFY21 USD revenue growth of 8.2%/35.4% QoQ/YoY better than expectation. In YoY constant currency terms revenue was up 31.7% while in constant currency organic terms it was up 28.7%. Robust growth was driven on back of continued traction in mortgage business and rebound in top client and new business ramp up.
Management has guided FY22 revenue growth of 15-18% in cc terms and margins in the band of 11.8-12.3%.
We remain constructive on First source in medium to long term with ramping up of new deal wins, healthy growth in banking segment and pick up in non-banking verticals. We maintain our Buy rating on the stock on a forward PE multiple of 16x (unchanged) on FY23e EPS of INR 9.6 (vs INR 9.0 earlier) to arrive at target price of INR155 (vs INR 145 earlier).
Our valuation multiple is at discount of ~40% to Mid-cap IT services firms. We expect FSOL earnings to grow at low double digit in medium to long term and expect RoE improvement and balance sheet deleveraging (through cash generation) to drive multiple re-rating.
BROKERAGE VIEW :: Antique Stock Broking on KEC International
Reco: Hold | TP: Rs 430
KEC International (KEC) reported lower than expected EBITDA during the quarter, despite clocking better than expected revenue growth. The impact of rising commodity prices, particularly steel, is apparent. On the positive side, ordering remains encouraging. We believe that the while KEC will continue to benefit from planned T&D and infrastructure spend, there can be risk to margin and hence earnings given steep rise in prices of key commodities like steel, aluminum and others.
We have cut FY22e earnings by 5%, while retaining FY23e earnings. Given the risk to earnings in FY22 and limited upside, we downgrade the stock to hold, with target price of INR 430 (14x FY23e earnings, unchanged).
BROKERAGE VIEW :: Antique Stock Broking on Apollo Tyres
Reco: Buy | TP: Rs 280
Apollo Tyres (APTY) reported strong revenue growth and EBITDA margin performance in its Indian and European operations. Consolidated EBITDA grew 70% YoY to INR 8.1bn, which was 5% ahead of our expectations due to better than expected margin in European operations.
The company is well placed to leverage the demand recovery, with investments in capacities, R&D, brand building, rural distribution network, etc. APTY has gained 350bp market share in OTR and PCR segments and ~150bps in TBR segment in FY21, partly aided by restrictions on import of tyres into the country.
As Apollo is approaching the end of its capex cycle in FY22E, we expect it to generate positive FCF, de- leverage balance sheet and improve return ratios over the next three years.
We maintain BUY rating on APTY with a price target of INR280 based on 15x FY23E EPS taking in to account strong demand in India and margin improvement in European operations.
Key risks to our estimates are 1) higher than expected increase in raw material prices, particularly crude and rubber and 2) slower than expected ramp-up in economic activities due to Covid-19.
BROKERAGE VIEW :: Antique Stock Broking on Tata Power
Reco: Buy | TP: Rs 122
With transfer of renewable assets, TPWR has reassessed its deferred tax balance, including unrecognized deferred tax assets on capital losses and booked a gain of INR1.3bn. This coupled with lower finance charges yielded TPWR a net profit of INR3.93bn, down 2% YoY (estimate of INR2.2bn). Besides, better-than-expected RE segment and Odisha DISCOMs translated in overall beat.
The past capital allocation was driven by 39% in coal/CGPL, 32% in regulated business and 29% in renewables. The path ahead will have 49% of regulated business (with 31% coming from T&D) and 32% in renewables. Based on the current capital allocation, we use SOTP to value regulated, generation and other businesses at INR122/share till FY23E, by discounting FCFEs or PE multiples for asset-light business. Risks: Delay in debt restructuring/poor exit multiples in InvIT, and systemic slowdown in RE space.
BROKERAGE VIEW :: Antique Stock Broking on Jindal Steel & Power
Reco: Buy | TP: Rs 533
Steel profits would be aided by the ramp up of volumes at Angul and higher steel prices with a value added product mix of rails, plates and structural products. Leverage levels would continue to improve driven by operational free cash flows and calibrated capex outlay. Benefit of low cost iron ore inventory from Sarda mines would continue in 1QFY22 and captive iron ore from Tensa mines (~25% of requirement) would enable the company to capture the upside from higher steel prices. We increase our FY22/FY23 steel realization assumptions by 7-8% leading to a 11-12% increase in EBITDA estimate.
We maintain our BUY rating with a SOTP of Rs 533 per share (484 earlier) based on a multiple of 5.5x FY23E EV/EBITDA for the steel business and free cash flow to equity-based valuation for the power business.
Top stocks to keep on radar
Vedanta: The company reported a consolidated net profit of Rs 6,432 crore in the March quarter against a loss of Rs 12,521 crore in the corresponding period last year on the back of increased sales.
UPL: The firm on Wednesday reported a 73.59 per cent YoY growth in consolidated net profit at Rs 1,361 crore for March quarter 2020-21. The company's net profit stood at Rs 784 crore in the year-ago period. READ MORE
'Any level between Rs 45,000-Rs46,000 is ideal for investing in Gold'
Gold market is yet to rally on this news and will regain its shine when inflation risk resurfaces. Any level between Rs.45000- Rs.46000 is ideal for investing in physical gold. If prices gets lower around Rs.46650 during Akshaya Trithya 2021, we would recommend investors to buy. We expect gold prices to trend higher from here on. READ MORE
FII/FPI & DII trading activity on NSE, BSE and MSEI
Brent crude drops 0.5%
SGX Nifty alert
>> At 8:29 AM, the index was at 14,681, down 15 points from Wednesday's close.
Asian markets trade higher
The trend was firm among Asian indices as well. Japan's Nikkei shot up 1.3 per cent, while South Korea's Kospi and Australia's ASX 200 traded over half a per cent up in early Friday trade.
Wall Street ends higher on Thursday
Wall Street ended sharply higher at the close of a broad rally on Thursday, bouncing back from three straight days of selling on upbeat labor market data.
All three major US stock indexes notched solid gains, with the S&P 500 enjoying its biggest percentage gain in over a month. Overall, the Dow Jones rose 1.29 per cent, the S&P 500 gained 1.22 per cent, and the Nasdaq added 0.72 per cent.
Good morning, readers! Welcome to the Business Standard live blog.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.