D-St cheers drop in Covid cases; Sensex up 296 pts; pharma, metal stks gain

Topics MARKET WRAP | Markets | Sensex

Stock market updates: A sharp drop in daily Covid-19 cases perked up bulls on Dalal Street on Monday as investors hoped for sooner-than-expected taper down of the second wave. However, even though the new case count, at over 366,000 new infections and 3,754 deaths reported by the health ministry, were off a little from recent peak, it came on the back of 1.47 million tests for Covid-19 which were this month's lowest yet.

Nonetheless, domestic equity indices started gap-up and remained parked near day's high level for better part of the day. Among the frontline indices, the BSE barometer of 30-shares hit an intra-day high of 49,617 before ending the session at 49,502 levels, up 296 points or 0.6 per cent. About seven of the 30 constituents ended the day in the red including UltraTech Cement, Infosys, HCL Tech, Reliance Industries, Asian Paints, Bajaj Finserv, and Axis Bank. The stocks declined up to 1.3 per cent.

On the upside, L&T, Dr Reddy's Labs, Sun Pharma, NTPC, PowerGrid, and IndusInd Bank were the top index gainers, up between 2 per cent and 4 per cent.

On the NSE, the Nifty50 index reclaimed the crucial 14,900-mark and extended it rally to as high as 14,967 during the day. It ended the day at 14,942 levels, up 119 points or 0.8 per cent, riding on the back of gains in Coal India, UPL, Hindalco, Indian Oil Corporation, Tata Motors, L&T, and Divis Labs. These stocks rallied up to 8 per cent.

Sectorally, the Nifty Metal and Pharma indices zoomed 3 per cent each on the NSE with the Nifty Pharma index hitting an all-time high of 14,228 in the intra-day deals today. Since April, the Nifty Pharma index has outperformed the market by surging 15 per cent, as against a 1.7 per cent gain in the Nifty50 index. READ MORE

That apart, metal stocks ruled at the bourses today as Copper continued to breach record high levels across exchanges amid surge in demand. On the MCX, the metal surpassed the Rs800 levels whilst prices on the LME continued to hover near its all time high of $10,638. Consequently, MOIL, NMDC, Coal India, Hindalco, Nalco, Vedanta, and Tata Steel jumped up to 8 per cent on the NSE today.

Meanwhile, all other sectoral indices were up in the range of 0.02 per cent (Nifty IT index) to 1.6 per cent (Nifty Auto index).

Overall, the market breadth favoured bulls in the ratio of 2:1 aided by an outperformance in the broader markets. The S&P BSE MidCap and SmallCap indices gained 1 per cent each today.

Global markets
World stocks ticked up to new peaks on Monday on bets interest rates will remain low and the economies will continue their recovery. MSCI’s gauge of stocks across the globe hit a fresh record high and was up 0.1 per cent. 

Europe’s STOXX 600 regional benchmark was up 0.1 per cent in early deals, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent.

In the commodities market, however, oil prices rose after a cyber attack shut down a US pipeline operator that provides nearly half of the US east coast's fuel supply. Brent crude rose 0.5 per cent to $68.64 per barrel, while US crude ticked up 0.5 per cent to $65.23 a barrel.


MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities

Indian benchmark equity indices closed higher for the fourth straight session on May 10. Nifty opened gap up and remained largely in a 50 point band through the day. At close, the Nifty was up 119.20 points or 0.80% at 14,942.40.
Nifty has made another upgap in succession but ended with a doji for the second consecutive session, indicating partial profit taking towards the close especially as it approached 15,000. Investors are mindful of the market fallout as state after state locks itself down in India to contain the spread of the coronavirus as infections and deaths surge and hence keep taking profits rotationally. 15044-14863 is the band for the Nifty in the near term.  

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities

The short term trend of Nifty continues to be positive with range bound action. The lack of selling interest at the hurdle could mean more upside possibility in the short term. The upside momentum is likely to pick up on a sustainable move above 15100 levels and that could open potential upside targets of around 15700 levels in the coming weeks. Any failure to move above the hurdle could bring minor profit booking from the highs and formation of another higher bottom.

TECH VIEW :: Sumeet Bagadia, Executive Director at Choice Broking

Technically, the nifty index has faced resistance from the falling trendline as well as the upper band of Bollinger, which suggests crossing above the same can show an upside movement. Moreover, the index has given closing above the 21- Days Moving Average, which points out strength in the index. A momentum indicator RSI &MACD has indicated positive crossover, which supports the bullish trend for the near term. At present, the nifty index is holding support at 14760 levels while an upside resistance seems at 15000 levels.

TECH VIEW :: Rohit Singre, Senior Technical Analyst at LKP Securities

Index opened a day with good gap but traded range-bound throughout day and closed a day at 14942 with gains of nearly one per cent & formed a small bullish candle on the daily chart. Strong hurdle still at 15050 zones if managed to sustain above for a day or give any close above said levels then only we may see further upside otherwise some profit booking possible, support are shifted to 14900-14850 zone holding above said levels momentum good

MARKET CLOSING COMMENT :: Ajit Mishra, VP - Research, Religare Broking

Markets started the week on a firm note on the back of positive global cues. The Nifty index traded with a positive bias throughout the session and ended higher by 0.8% at 14,942 levels. The broader markets too witnessed healthy buying interest as both Midcap and Smallcap ended higher by 1% each. Amongst the sectors, except IT which ended with minor losses, all the other indices ended in the green wherein metals, capital goods and healthcare were the top gainers.
We remain cautiously optimistic on the back of rotational buying in select index majors amid the rising COVID cases. Besides, buoyant global cues are also helping in limiting the downside. Going forward, earnings announcement, macroeconomic data viz. IIP, CPI and WPI data along with COVID-19 updates would remain on participants' radar. Meanwhile, we suggest continuing with the "buy on dips" approach and focusing more on selection of stocks.

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

Domestic bourses continued to ride on its optimistic wave mirroring strong across-the-board buying with metals, auto and pharma stocks leading the rally. U.S job growth significantly slipped its April forecast signalling sluggish momentum in the labour market while a cyber attack hiked the US oil prices. Despite a decline in April auto sales numbers due to the impact of covid lockdowns, the auto sector managed to stay afloat owing to its long term positive outlook

BSE Snapshot :: M-cap of all BSE listed firms climbs above Rs 213-trillion mark

BSE Snapshot :: Top losers of the day

BSE Snapshot :: Top gainers of the day

Sector Watch :: IT index ends flat dragged by Coforge, LTI; Wipro, Tech M limit losses

Sector of the day :: Pharma stocks zoom; index hits record peak

Sector of the day :: Nifty Metal index extends rally

NSE Snapshot :: Top Nifty50 gainers today

L&T, financials top Sensex contributors today

Sectoral trends on the NSE

Sensex Heatmap at Close


Domestic equity indices started gap-up and remained park near day's high level for better part of the day. Among the frontline indices, the BSE barometer for 30-share hit an intra-day high of 49,617 before ending the session at 49,502 levels, up 296 points or 0.6 per cent. 
On the NSE, the Nifty50 index reclaimed the crucial 14,900-mark and extended it rally to as high as 14,967 during the day. It ended the day at 14,942 levels, up 119 points or 0.8 per cent.

Iron ore turns 'very hot' as 10% surge adds to commodities boom

While market participants struggled to pinpoint a trigger for Monday’s gains in iron ore, they cited several ongoing trends including optimism that central banks will retain supportive policies even as the global economy recovers. Expectations China will tighten environmental rules have added to the bull case for copper -- seen as vital to the green energy transition -- and fueled speculation that steelmakers may front-load iron ore purchases before new curbs kick in. READ MORE

MARKET COMMENT :: Narendra Solanki, Head- Equity Research (Fundamental) at Anand Rathi

Indian markets opened on a positive note following positive trade in Asian markets peers which traded broadly higher shrugging off the weaker-than-expected April U.S. jobs reports. During the afternoon session markets maintained its positive momentum with healthy buying observed in blue-chip stocks like Sun Pharma, Dr. Reddys Lab and ONGC along with mid and small cap stocks. Sentiments got a boost as Union Health Ministry stated that India is the fastest country globally to administer 17 crore COVID-19 vaccine doses. Traders also ignored report that foreign investors have pulled out Rs 5,936 crore from the Indian equities in the first week of May amid worries over the intense second wave of coronavirus infection and its fallout on the economy.”

The stock of this broking firm has zoomed 101% in a month

Shares of Angel Broking, on Monday, were locked in 10 per cent upper circuit at Rs 612.50 on the BSE, with only buyers seen on the counter. In the past one week, the stock has zoomed 61 per cent, after the company reported a healthy 39 per cent quarter-on-quarter (QoQ) jump in its consolidated net profit at Rs 102 crore in the March quarter (Q4FY21) on the back of strong operational income. READ MORE


LIC's holding in listed companies at all time low on profit booking

LIC's holding across 296 companies where its holding is more than 1 per cent slipped to an all-time low of 3.66 per cent as on March 31, 2021, down from 3.70 per cent as on December 31, 2020 and from all-time high of 5 per cent as on June 30, 2012, as per primeinfobase.com, an initiative of PRIME Database Group. According to Pranav Haldea, Managing Director, Prime Database Group, this was on account of profit booking by India's largest institutional investor. READ MORE

Why are domestic & foreign institutional investors gung ho on this insurer?

The growth prospects for the industry remain robust, underscored by the latest data.
In April, the insurance industry posted Annual Premium Equivalent (APE) growth - a measure of new business sales growth in the insurance industry growth - of 70 per cent YoY, coming off a low base with private insurers growing 80 per cent and LIC at 57 per cent. In terms of market share, SBI Life was the major gainer as it added around 300 bps YoY in APE market share during April, shows a report by JM Financial. READ MORE

Recovery from intra-day lows in today's trade

SPARC 187.40 221.75 221.75 18.33
GHCL 238.90 272.25 270.35 13.16
GMM Pfaudler 4048.25 4685.00 4550.00 12.39
Indbull.RealEst. 78.75 88.55 88.10 11.87
Click here for the full list

Sugar stocks extend rally; Dhampur, Dwarikesh soar over 70% in a month

Shares of sugar manufacturers and their allied companies continued their northward movement, ralling up to 75 per cent in the past one month on positive outlook, on Monday. The sugar industry, analysts say, is well poised to benefit from, both, global and domestic factors such as tight global demand-supply situation, favourable policies, push for higher ethanol blending in India and higher ethanol capacity addition. READ MORE


MARKET UPDATE:: HDFC, ICICI Bank, & Larsen & Toubro among top contributors to Sensex's gain today

Eli Lilly signs deals to boost supply of Covid-19 treatment in India

Eli Lilly and Co said on Monday it had signed licensing agreements with three Indian generic drugmakers to expand the availability of its arthritis drug baricitinib in the country for treating COVID-19 patients.
The agreements will bolster India's arsenal of drugs to battle its catastrophic second wave of the pandemic, which has led to an acute shortage of coronavirus medicines including remdesivir and tocilizumab. READ MORE

European markets check

(Source: Reuters)

March Quarter Results :: Zydus Wellness reports PAT at Rs 133 crore vs Rs 69 cr YoY

>> Consolidated revenue at Rs 605 crore vs Rs 477 cr YoY

>> Cons Ebitda at Rs 145 cr vs Rs 95 cr YoY

>> Ebitda margin at 24% vs 19.8% YoY

Sharp up move in Macrotech Developers

BUZZING STOCK:: SPARC hits 20% upper circuit

US backs TRIPS waiver: More to the story than just vaccine patents

The US has announced its limited support for the “TRIPS waiver”, a proposal to suspend intellectual property protections for products and technologies needed for the fight against COVID-19, including vaccines, for the duration of the pandemic.
This would involve a temporary suspension of certain rules set out in the TRIPS Agreement, the intellectual property treaty of the World Trade Organization (WTO). READ MORE

Insurance, MF players cut equity investments in Q4; LIC booked profits

Insurance behemoth LIC opted for profit-booking by selling its equity stakes in companies during the March quarter, a report said on Monday. The IPO-bound company's stakes in 296 companies where it holds over 1 per cent stake slipped to an all-time low of 3.66 per cent at the end of March as against 3.70 per cent in December, the report by Prime Database said. READ MORE

MFs continue buying spree, infuse Rs 5,526 cr in equities in April

Investment by mutual funds (MFs) in equities will continue in coming months seeing the increase in user growths as multiple fintech players are entering into this space, Kaushlendra Singh Sengar, founder and CEO at INVEST19, said.
Alok Aggarwala, Chief Research Officer, Bajaj Capital, is also of the view that this bullish stance to continue as valuations moderate somewhat post FY21 earnings and the consolidation provides investors with an opportunity to accumulate equities. READ MORE

Stocks that hit 52-week high on BSE today

Company PRICE(rs) 52 WK HIGH CHG(%)
Adani Transmissi 1162.00 1203.60 -1.23
Aurobindo Pharma 1053.00 1061.00 3.97
B H E L 62.95 63.40 8.82
Bajaj Finserv 11412.75 11547.90 0.86
Balkrishna Inds 1865.05 1898.00 1.76
» More on 52 Week High

Rupee gains under siege as coronavirus health crisis fuels lockdown fears

The Indian rupee’s recent gains could be short-lived as pressure grows on Prime Minister Narendra Modi’s administration to announce a nationwide lockdown to curb a deadly wave of coronavirus infections. The prospect of stricter curbs is reviving memories of last year when similar measures dragged India’s economy into its worst contraction in four decades. It’s also threatening to weaken the rupee, which is among Asia’s top three performers this month, thanks to heavy foreign inflows for initial public offerings, a dovish Federal Reserve and a glut of dollars at state-run banks. READ MORE

Nifty Pharma index hits all-time high; Sun Pharma scales 4-year high

Shares of pharmaceutical companies were on a roll at the bourses on Monday, with the Nifty Pharma index hitting an all-time high of 14,172, after rising 3 per cent on the National Stock Exchange (NSE) on the back of strong rally in stocks like Sun Pharmaceutical Industries, Torrent Pharma, Alkem Laboratories, Divis Laboratories, Lupin and Dr Reddys Laboratories. The pharma index surpassed its previous high of 14,020.70, touched in intra-day trade on April 7, 2015. READ MORE

Rs 1-trillion m-cap club now has 42 members with 13 new entrants

Thirteen companies have joined the Rs 1-trillion-plus market capitalisation club this year, so far. This even as the benchmark Sensex has gained less than 3 per cent on a year-to-date basis, underscoring the bullish undercurrent in the broader market. The trend shows a harsh second wave of Covid-19, subsequent lockdowns, and hit to the economic activity has made little dent into India Inc or shareholders’ wealth. At the start of the year, there were 29 companies with a market value of more than Rs 1 trillion. READ MORE


Relief to postpone financial stress from India's Covid surge: Fitch

Reserve Bank of India's Covid-19 relief package will provide some relief to financial institutions (FIs) in the next 12-24 months. However, it will largely be at the expense of postponing the recognition and resolution of underlying asset-quality problems, according to the rating agency Fitch. There are growing indications that India’s latest wave of Covid-19 infections will add to risks among financial institutions (FIs) by sapping near-term momentum from the economic recovery, Fitch Ratings said in a statement. READ MORE

Maruti Suzuki, Tata Motors: Auto stocks face major hurdles amid Covid surge

Centrum Broking said that April was anticipated to be a good month for two-wheelers on the back of mini-festivals at the regional level and marriage season demand in the rural areas, the OEM's had prepared their channels with stock. However, with the rising Covid cases, states like Maharashtra, Madhya Pradesh, Jharkhand, and Delhi started imposing lockdowns as a result of which, the wholesales of domestic two-wheelers got impacted especially. READ MORE

CSB Bank soars 10%, hits 52-week high on impressive Q4 numbers

Shares of CSB Bank hit a 52-week high as they soared 10 per cent to Rs 284.95 on the BSE in intra-day trade on Monday after the lender reported an impressive March quarter result (Q4FY21) with a net profit of Rs 42.89 crore as against a loss of Rs 59.7 crore in Q4FY20. READ MORE


Q&A | There's a weak link between economy and market, says Jitendra Gohil

The next trigger for a sell-off can be if we go into a nationwide lockdown to curb the virus, but the probability of such a measure is still low. Lawmakers most probably will take a middle path. The markets will not wait for India to bring Covid fully under control but will pre-empt the recovery. Our strategy is to buy the dips. READ FULL INTERVIEW HERE

MARKET CHECK :: Sensex hovers near day's high

ANALYSIS :: Should you buy, sell or hold Avenue Supermarts post Q4 numbers?

Muted sales expectations for FY22, fewer store openings, and a higher proportion of low-margin grocery (food) sales have led to sharp earnings downgrades for Avenue Supermarts or DMart for the current financial year. While the margin profile was improving as reflected in the March quarter performance and management commentary, given the lockdown in multiple states, the trend is expected to reverse. READ MORE


Fuel prices at record highs; petrol crosses Rs 100-mark in Maharashtra

Petrol and diesel prices on Monday hit record highs across the country after rates were increased for the fifth time in a week, following which Maharashtra joined Rajasthan and Madhya Pradesh in the league of states where petrol rates breached the Rs 100-a-litre mark.
Petrol price was hiked by 26 paise a litre and diesel by 33 paise per litre, according to a price notification by state-owned fuel retailers. READ MORE

Hindustan Copper scales over 8-year high, surges 25% in 3 days

Shares of Hindustan Copper (HCL) hit an over eight-year high and were locked in the upper circuit of 10 per cent at Rs 189.20 on the BSE in Monday's session on expectations of improved demand outlook. The stock of the state-owned copper company has rallied 25 per cent in the past three trading days. It was quoting at its highest level since November 2012. READ MORE

Second Covid-19 wave: Overseas investors' behaviour has a story to tell

The impact of the second Covid wave has led to several downgrades of growth prospects. The IMF says it will review its April 2021 forecast of 12.5 per cent GDP growth when it issues its July forecast. The IMF also noted that developments in India would have spill-over effects. S&P Global has cut its forecast to 9.8 per cent GDP growth, from an earlier projection of 11 per cent. The advisory said the projections assume lower consumption will mean less hiring, lower wages, and a second hit to consumption. READ MORE

Investors brace for market fallout as most of India's states lock down

Investors are bracing for market fallout as state after state locks itself down in India to contain the spread of the coronavirus as infections and deaths surge. More than two thirds of states are shut if assessed by their contribution to national output, analysts at Jefferies calculated last week. Tamil Nadu, which houses foreign manufacturers including BMW and Dell, will also close from Monday, while Delhi extended its lockdown for another week. The measures come as pressure builds on Prime Minister Narendra Modi to impose strict nationwide curbs as he did last year. READ MORE

Grindwell Norton surges 9%, hits record high on strong Q4 results

The company’s consolidated net profit grew 41.8 per cent year on year (YoY) to Rs 80.6 crore, on the back of higher revenue, partly aided by higher other income, which grew 28.6 per cent to Rs 12.4 crore, on a YoY basis. Revenues rose 39.1 per cent YoY at Rs 508.80 crore, primarily aided by a strong performance in ceramics & plastic segment. Overall, earnings before interest, taxes, depreciation, and amortization (EBITDA) margins came in at 22.2 per cent, which improved significantly by 570 basis points YoY. READ MORE

Rupee opening

Rupee opens higher at 73.35 per US dollar vs Friday's closing of 73.51/$

Bandhan Bank dips 4%, hits over 6-month low on weak March quarter results

Shares of Bandhan Bank hit an over six-month low of Rs 285.90, down 4 per cent on the BSE in intra-day trade on Monday after the bank reported a weak set of numbers for the quarter ended March 2021 (Q4FY21), with high provisioning and interest reversals hurting profitability. The stock was trading at its lowest level since October 30, 2020. It has corrected 34 per cent from its 52-week high level of Rs 430.25 touched on December 11, 2020. READ MORE


SECTOR WATCH:: Pharma stocks advance

Top gainers on the BSE at this hour

Company PRICE(rs) CHG(%)
Hindustan Copper 189.20 10.00
G M D C 73.95 9.39
Trident 16.40 7.47
NMDC 198.30 7.25
MOIL 188.00 6.85
» More on Top Gainers

MARKET VIEW | V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The resilience of the market in the midst of the tragic health crisis might appear irrational to most observers. But it is important to discern the cold economic/financial logic that drives markets. Markets focus on earnings, particularly future earnings. Trends indicate robust future earnings, particularly from segments like IT, pharma, leading financials and metals. Consumer discretionary is, however, on a sticky wicket. This segment, particularly autos, might witness earnings downgrades. The global economic backdrop is favourable with strong economic recovery led by US, China and most parts of Europe. In India, fresh Covid cases are declining in Maharashtra, Madhya Pradesh & Delhi. The market is likely to take cues from the positive data.

Most active stocks by volume

Company PRICE(rs) CHG(%) VOLUME
Solara Active 1600.00 2.23 1417157
Coforge 3271.35 -3.12 1320117
Trident 16.17 5.96 624050
HFCL 37.75 7.40 453459
S A I L 149.35 3.54 305583
» More on Most Active Volume

CSB Bank zooms 6% as bank turns profitable

Kerala-based CSB Bank on Saturday posted a net profit of Rs 42.89 crore for the March 2021 quarter as against a loss of Rs 59.68 crore in the year-ago period, largely helped by a write-back of standard asset provisioning and improvement in core income.

Result Impact :: IDFC First Bank trades in the red

The company reported a 78 per cent YoY jump in net profit at Rs 128 crore for the fourth quarter ended March 2021 as against a profit of Rs 72 crore during the corresponding January-March quarter a year ago.

Amara Raja Batteries advances over 1% on resumption of AP plant

The company has resumed operations at its plants at Nunegundlapalli and Karkambadi in Chittoor district with effect from May 8, after High Court of Andhra Pradesh granted an interim suspension of the orders passed by Andhra Pradesh Pollution Control Board (APPCB), Amara Raja Batteries said in a statement.

Maruti Suzuki trades flat on the upside

The automaker has extended the maintenance shutdown till May 16, keeping in view the current pandemic situation.

Hero MotoCorp trades flat as Co announces extension of plant shutdown

The two-wheeler maker said it has extended the shutdown at its manufacturing facilities across India, global parts centre and R&D facility in Jaipur till May 16. This is the third extension of the shutdown by Hero MotoCorp.

UltraTech Cement slips 1.6% as PAT declines in Q4

The company reported a 45.2 per cent YoY decline in consolidated net profit to Rs 1,774.13 crore for the fourth quarter ended March 2021 on account of reversal of deferred tax liabilities.

Avenue Supermarts gains around 1% post Q4 nos

The firm on Saturday reported an increase of 52.56 per cent YoY in its consolidated net profit to Rs 413.87 crore for the fourth quarter ended March 2021.

Sectoral trends on the NSE :: Metal index outperforms

Sensex Heatmap :: 27 stocks rally in early deals

Opening Bell :: Nifty reclaims 14,900

Opening Bell :: Sensex rises nearly 300 pts

Commodity prices in early deals

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

Markets at Pre-open

Markets at Pre-open

BROKERAGE VIEW :: HDFC Securities on DCB Bank

Reco: ADD | TP: Rs 136

DCB Bank’s (DCBB) 4QFY21 earnings were ahead of our expectations on account of lower-than-expected provisions. Asset mobilisation witnessed an uptick (2.4% YoY) after bottoming out in the previous quarter, while deposit mobilisation was largely driven by retail term deposits (+19% YoY). Asset quality remains along expected lines, although second wave of pandemic is likely to impair collection efficiency and slippages in the near term.

We revise our FY22/FY23E earnings estimates downwards by 2.4%/3.5%, due to higher credit costs and moderation in loan growth expectations. Maintain ADD with revised TP of INR136. Inexpensive valuations and the bank’s conservative approach to lending underpin our stance.

BROKERAGE VIEW :: HDFC Securities on Bandhan Bank

Reco: BUY | Tp: Rs 413

BANDHAN Bank’s 4QFY21 PPOP growth (14% YoY) was lower than our estimates, while lower-than-expected provisions drove the beat in earnings. Micro-credit (EEB) portfolio witnesses surge in slippages/write-offs during the quarter as Assam portfolio continues to witness deterioration.

We revise our FY22/FY23E earnings estimates downwards by 11.5/9.7%, on account of higher credit costs and moderation in loan growth expectations. Maintain BUY with revised TP of INR413. Low-cost deposit traction, along with BANDHAN’s strong RoAE potential, underpin our stance.

BROKERAGE VIEW :: HDFC Securities on Deepak Nitrite

Reco: SELL | TP: Rs 1,550

We believe, that (1) further growth in DPL is capped as the Phenol plant is already running at 115% utilisation since 2QFY21 and (2) IPA prices would fall as demand normalcy returns. Besides, DNL is entering into challenging chemistries vis-a-vis chemistries it is currently operating in.

The fluorination and photochlorination chemistries will pave the way to tap agrochemical and pharmaceutical customers for DNL. However, the company needs to demonstrate its competencies well over the period in these chemistries to seize business opportunities.

We downgrade DNL to SELL from ADD, with a revised target price of INR 1,550. EBITDA/APAT were 41/42% above estimates in 4QFY21, owing to 21% higher revenue, lower-than- expected operating expenses and interest costs, and higher-than-expected other income.

BROKERAGE VIEW :: HDFC Securities on Avenue Supermarts

Reco: SELL | TP: Rs 2,160

D-MART delivered largely an in-line performance across most KPIs in 4Q. Topline grew 18% YoY. GPM/EBITDAM expanded 117/170bp YoY to 14.4/8.4%. Topline remained essentials heavy, as expected. However, the rub lies beyond the FY21 print.

Management highlighted that the second COVID wave has been more painful as (1) ~80% of stores were operating at ≤4 hours/day or are shut down momentarily and (2) a more optimistic inventory plan post the unlock has led to a problem of excess inventory since the second lockdown.

While we taper down our FY22 recovery/profitability expectations, our FY23 EPS estimates remain largely unchanged (-3%). We maintain our SELL recommendation and DCF-based TP of INR 2,160/sh (implying 35x FY23 EV/EBITDA for std biz + 4x sales for e-comm business).

Top stocks to watch today

Earnings Today: Twenty-two firms are slated to post their March quarter numbers today such as Chambal Fertilizers & Chemicals, Venky's, JMC Projects and Zydus Wellness
Avenue Supermarts: The firm on Saturday reported an increase of 52.56 per cent YoY in its consolidated net profit to Rs 413.87 crore for the fourth quarter ended March 2021. READ MORE

Vaishali Parekh recommends buying Hero MotoCorp, United Spirits.

BUY HERO MOTOCO | CMP: Rs 2,860 | Target: Rs 3,200 | Stop Loss: Rs 2,700
The stock has been in consolidation, maintaining a good support base near 2,740 level and currently has picked up momentum to improve the bias. The RSI also has indicated a trend reversal, showing strength, and has signaled a 'buy' to suggest further upward movement in the coming days. We suggest to buy and accumulate the stock for an upside target of 3,200 keeping the stop loss of 2,700. READ MORE

Bulk deals on the NSE as on Friday

Bulk deals on the BSE as on Friday

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

Rupee check

Source: Bloomberg

Oil check

SGX Nifty alert

>> At 8:16 am, the index was at 14,996 levels, up 128 points.

Asian markets check

Asian stocks and US equity futures climbed after the S&P 500 hit a record on weak jobs data that added to the case for ongoing stimulus. Japan’s Topix index advanced 1.1%, Australia’s S&P/ASX 200 Index rose 1.1% and South Korea’s Kospi index added 1%.

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