Sensex slips 291 pts amid weak global cues; pharma, PSB stocks rally

Topics MARKET WRAP | Markets | Sensex

Stock market updates: After clocking one-way rally over the past two days, domestic indices took a breather on Wednesday to digest news flow around record Covid-19 fatalities in the country along with global inflation fears. 

India's daily virus cases rose marginally on Wednesday with over 267,000 fresh cases. With this, the new infection count has remained below the 300,000-mark for the third consecutive day.  However, the country reported a national record of 4,529 new deaths which, analysts say, remains a cause of concern. The country has been reporting over 4,000 deaths per day for over a week now.

Globally, stocks dipped and cryptocurrencies extended losses on Wednesday as uncertainties over inflation prompted investors to reduce exposure to riskier assets for now. Investors concerned about rising inflation will be keeping a close eye on the Federal Open Market Committee as it publishes the minutes from its April meeting later today.

In Europe, the pan-European STOXX 600 index fell 1.1 per cent in early deals while in Asia, Japan's Nikkei erased 1.3 per cent, China's CSI300 slipped 0.3 per cent, and Australia's S&P/ASX 200 index tumbled 2 per cent.

With these dual concerns in mind, domestic investors booked profit, marjorly in large-caps, on Dalal Street. After a gap-down start, the BSE barometer of 30-shares managed to eke out slim gains in the intra-day deals but tumbled nearly 450 points from the day's high to hit a low of 49,831. The index settled the day at 49,903 levels, down 291 points or 0.58 per cent.

On the NSE, the Nifty50 index defended the crucial 15,000-mark and closed at 15,030 levels, down 78 points or 0.52 per cent. Earlier today, it hit a low of 15,008.

Coal India, Cipla, Sun Pharma, UPL, Nestle India, Indian Oil Corporation, Tech M, Axis Bank, and SBI Life were the top gainers of the day, up between 1 per cent and 4 per cent, while Tata Motors, HDFC, M&M, JSW Steel, Bajaj Finserv, Bharti Airtel, and Kotak Bank were the top laggards, down up to 5 per cent.

In the broader market space, the S&P BSE MidCap and SmallCap indices ended 0.53 per cent and 0.35 per cent higher, respectively. 

Sectorally, the trend was largely mixed. The Nifty Financial Services index declined 1 per cent, followed by 0.9 per cent loss each in the Nifty Private Bank and Metal indices. On the upside, the Nifty Realty index zoomed over 2 per cent while the Nifty Pharma index added 1 per cent.

Buzzing stocks
Shares of Tata Motors dipped 6 per cent to Rs 312.95 on the BSE in intra-day trade on Wednesday on account of profit booking in the counter even as the firm reported a strong operational performance for the quarter ended March 2021 (Q4FY21), led by its UK subsidiary Jaguar Land Rover (JLR) and its India business. It also narrowed consolidated loss, which was mainly on account of exceptional items. READ MORE

Shares of Birla Corporation traded higher for the eight straight days, up 7 per cent at Rs 1,289.65 on the BSE in Wednesday's intra-day trade, after reporting a strong set of numbers for the quarter ended March 2021 (Q4FY21). It was trading close to its all-time high level of Rs 1,290, touched on January 8, 2018. READ MORE

Shares of Ujjivan Small Finance Bank tumbled 8.1 per cent to hit an intra-day low of Rs 28 apiece on the BSE on Wednesday after the lender's asset quality worsensed in the March quarter. Gross non-performing asset (GNPA) ratio rose from 0.97 per cent last year and 0.96 per cent (4.8 per cent as per pro-forma) in Q3FY21 to 7.1 per cent in the quarter ended March 2021 which worried Street. READ MORE

Gland Pharma shares hit a new high of Rs 3,266, up 7 per cent on the BSE, in intra-day trade on Wednesday. In the last two days, the scrip has surged 17 per cent after the company reported a healthy 34 per cent year-on-year (YoY) rise in its consolidated net profit to Rs 260.4 crore in the March 2021 quarter (Q4FY21) on robust sales. READ MORE

LIVE UPDATES

MARKET CLOSING COMMENT :: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Sec

The market remained completely calm in the first session of the trading session, however, we witnessed a vertical decline in the second half due to a sudden fall in US stock futures. The Nifty fell by 77 points while the Sensex fell by 290 points. Shares of Finance and Metals were among the losers, while pharmaceutical and realty stocks rose marginally. The Nifty has formed a classic inverted hammer after hitting a major level at 15140. It can be either bearish or bullish continuation for the market. If the market falls below 14980, the chances of hitting 14900/14850 levels would be brighter. On the other hand, the refusal to come down to the level of 14980 would be positive for the market. Resistance would be at 15150 and 15250 levels. Technically, we feel this is a temporary break that the market has taken after rallying for 700 points. After completing the corrective consolidation, we could see upward move in the market

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

The profit booking has emerged in the market from the highs as anticipated and one may expect further weakness for the next 1-2 sessions to form a new higher bottom. At the lower side, 14900 is expected to act as a crucial lower support and the market is expected to bounce back from the lows

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

Technically, the nifty index has faced resistance from the upper band of Bollinger, which indicates downside movement for the upcoming session. Moreover, the recent candle also formed like a Shooting Star Candlestick on the daily chart, which is a sign of some correction. Hourly Oscillator Stochastic has indicated negative crossover, which supports the short-term correction in the near term. At present, the nifty index is holding support at 14940 levels while an upside resistance seems at 15200 levels.

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

ndian benchmark equity indices gave up some of the previous session gains and the Nifty ended 0.52 percent lower at 15030 on May 19. Nifty opened lower, made a few attempts to rise and stay in positive territory, but failed.  
 
Volumes on the NSE were a little below the recent averages. Among sectors, Realty, Power and Healthcare were the main gainers while Telecom, Metals, Banks and Auto were the main losers. BSE Midcap and smallcap indices ended in the green.
 
Nifty made a double top – the same as the previous day and later fell to enter the upgap area. Lower volume on May 19 suggests absence of enthusiasm on the part of traders at these levels especially in the face of the negative inflation and commodity price data and release of US Fed minutes. 14938-14967 will be the support for the Nifty while 15137 will act as a resistance. 

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

The recent sharp rally has triggered some caution for the near-term. The global market was tentative ahead of the announcement of Fed minutes, this was mirrored in the domestic market, though it is not expected to hawkish. Optimism gained from declining covid cases resisted a sharp correction in domestic market

BSE Snapshot :: 309 stocks hit 52-week highs on the BSE today


Sector Watch :: Nifty Metal index turns volatile after one-way rally over the past 2 months


Sector Watch :: 14 of the 20 constituents on the Financial Services index end in the red


Sector Watch :: Nifty Pharma index adds 1%


Sector Watch :: Nifty Realty gains 2%; Oberoi Realty jumps 8%


Broader market :: S&P BSE SmallCap index ends off highs


Broader market :: S&P BSE MidCap index holds gains, ends half a per cent higher


NSE Snapshot :: Top Nifty50 gainers today


Top drags on the Sensex today


Sectoral trends on the NSE


Sensex Heatmap at Close

Top gainers: Sun Pharma, Nestle India, Bajaj Auto

Top losers: M&M, Bajaj Finserv, HDFC


Rupee Closing

Rupee ends weaker at 73.16 per US dollar vs Tuesday's close of 73.05/$

CLOSING BELL

After a gap-down start, the BSE barometer of 30-shares managed to eke out slim gains in the intra-day deals but tumbled nearly 450 points from the day's high to hit a low of 49,831. The index settled the day at 49,903 levels, down 291 points or 0.58 per cent.
 
On the NSE, the Nifty50 index defended the crucial 15,000-mark and closed at 15,030 levels, down 78 points or 0.52 per cent. Earlier today, it hit a low of 15,008.
 

Sensex at day's low


LARGE TRADE :: Coforge plunges 4% as 3.1 million shares change hands on BSE

>> 3,124,352 shares change hands at Rs 3,266/share


Foreign currency deposits lose sheen due to stable rupee

Flow of deposits from non-resident Indians hit a four-year low in the financial year 2020-21 mainly due to contraction in foreign currency deposits, latest data released by the Reserve Bank of India (RBI) showed.
 
The flow of total NRI deposits during the financial year 2020-21 was $7.3 billion as compared to $8.6 billion in FY20. This was the lowest flow of NRI deposits since 2016-17 when these deposits contracted by $12.3 billion. READ MORE

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


NCLT asks DHFL administrator to place Kapil Wadhawan's offer before CoC

The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday asked the administrator of the beleaguered mortgage lender Dewan Housing Finance Limited (DHFL) to place resolution plan of its erstwhile promoter, Kapil Wadhawan, before the Committee of Creditors (CoC). The tribunal has asked the CoC to convene in 10 days and consider the proposal put forward by Wadhawan. The matter will be next heard on May 31. READ MORE

March Quarter Results :: Indian Oil Corp reports net profit of Rs 8,781 crore

>> Revenue: Rs 1.24 trillion

>> Ebitda: Rs 13,501 crore

>> Ebitda margin: 10.9%

>> Final dividend: Rs 1.5 per share

>> FY21 Average GRM: $5.64/ BBL vs $0.08/ BBL Y/Y

Eicher Motors in focus :: Royal Enfield to recall 236,966 units of Classic, Bullet, Meteor models

Nifty Realty index rises over 2% in an otherwise weak market


Vedanta restarts medical oxygen production at Sterlite Copper plant

Oxygen production at Vedanta Ltd's copper smelter plant or Sterlite Copper located in Thoothukudi was restarted on Wednesday, said a company official.
 
According to Vedanta, the disruption in the oxygen plant has been rectified, and has now resumed production.
 
"The oxygen generated is being stored at our onsite facilities and will be distributed as per the directions of the State government and concerned nodal officers," the company said. READ MORE

Sensex Heatmap at this hour


Retail investors miss rally in Gland Pharma; stock up 118% over IPO price

Retail investors on Dalal Street have missed the rally in Gland Pharma as the stock of the drug firm hit a new high of Rs 3,266, up 7 per cent on the BSE, in intra-day trade on Wednesday. In the last two days, the scrip has surged 17 per cent after the company reported a healthy 34 per cent year-on-year (YoY) rise in its consolidated net profit to Rs 260.4 crore in the March 2021 quarter (Q4FY21) on robust sales. READ MORE


Bank of Baroda Q4 result preview: Here is what leading brokerages expect

HSBC
 
The research and brokerage house expects BoB’s operating profit to stay muted at Rs 5,000.4 crore in Q4FY21, down 2 per cent on a yearly basis from Rs 5,120.8 crore reported in Q4FY20. On a sequential basis, this would mean an 11 per cent cut from Rs 5,590.6 crore reported in the December quarter of FY21.

However, moderation in credit cost and low base should drive the lender’s net profit growth up 41 per cent year-on-year (YoY) to Rs 715.5 crore from Rs 506.6 crore. On a QoQ basis, PAT may decline 33 per cent from Rs 1,061.1 crore. READ MORE

Financial Services index top drag on the NSE at this hour


MARKET CHECK :: Sharp downtick in Sensex


Vedanta restarts medical oxygen production at Sterlite Copper plant

Oxygen production at Vedanta Ltd's copper smelter plant or Sterlite Copper located in Thoothukudi was restarted on Wednesday, said a company official. According to Vedanta, the disruption in the oxygen plant has been rectified, and has now resumed production. "The oxygen generated is being stored at our onsite facilities and will be distributed as per the directions of the State government and concerned nodal officers," the company said. READ MORE
 

Bitcoin is the most crowded trade globally, says BofA Fund Manager Survey

An overall total of 216 panelists with $625 billion in assets under management (AUM) participated in the survey between May 7 and 13. 194 participants with $592 billion in AUM responded to the Global FMS questions, while 78 participants with $133 billion in AUM responded to the Regional FMS questions, BofA Securities said. READ MORE

NEWS ALERT | Happiest Minds partners Coco Cola Bottling Company United in their Robotic Automation journey


Over half of BSE 500 stocks trade below their all-time highs

Analysts ascribe the underperformance of a bulk of BSE 500 stocks to a classic case of polarisation, where investors are lapping up stocks of sectors that are likely to do well going ahead. While at a broader level, retail investors are one of the key drivers of this momentum besides foreign investors in the large- mid-and-small caps space, they too, are being selective in their purchases, analysts say. READ MORE

Dr Reddy's in talks with RDIF to sell Sputnik V in other countries

Dr Reddys Laboratories, which is in a pact with Russian Direct Investment Fund to sell 125 million people doses (250 million vials) of COVID-19 vaccine Sputnik V in India, is holding parleys with RDIF for acquiring rights for more countries, a senior official of the Indian drug maker said. Dr Reddy's which had received over two lakh vaccines from RDIF, recently soft-launched Sputnik V and tied up with Apollo Hospitals for piloting the vaccine. READ MORE

Birla Corp rallies 31% in 2 weeks post Q4 results; stock nears record high

Shares of Birla Corporation were trading higher for the eight straight days, up 7 per cent at Rs 1,289.65 on the BSE in Wednesday's intra-day trade after reporting a strong set of numbers for the quarter ended March 2021 (Q4FY21). It was trading close to its all-time high level of Rs 1,290, touched on January 8, 2018. The stock of the cement & cement products company hit a fresh 52-week high today, and has zoomed 31 per cent in the past two weeks. In comparison, the S&P BSE Sensex was up 4 per cent during the same period. READ MORE


Westlife Development: Patient investors may consider for growth post FY22

The Westlife Development stock has been under pressure since its March highs of Rs 535 as multiple states have extended their lockdowns. Westlife runs the McDonald’s chain in the western and southern regions where severe restrictions have hampered the dine-in segment revenues.
 
After a robust March quarter (Q4), the ongoing April-June period is unlikely to be good due to these lockdowns impacting demand. READ MORE

S&P revises outlook on Tata Motors to stable on improving underlying demand

S&P Global Ratings has affirmed B ratings on Tata Motors and revised outlook to stable on improving underlying demand. S&P said the company's sales for the fourth quarter of fiscal 2021 indicate a material improvement in underlying demand for both commercial vehicles and passenger cars. The commercial vehicle business reported its strongest quarterly sales since fiscal 2019 while the passenger car business continued to gain market share. READ MORE

PI Industries dips 6%


NEWS ALERT | Karnataka CM announces Rs 1,250 cr Covid relief package

-- Rs 3,000 each for auto/taxi drivers & construction workers, Rs 2,000 for workers in the unorganised sector

-- Rs 10,000/hectare for floriculture farmers

Should you buy stocks on a dip? Here's what technical indicators suggest

"We believe investors will continue to take comfort from receding fresh daily cases. This indicates that the assumption of the second Covid-19 wave daily caseload peaking by the end of May or mid of June holds, and the adverse impact of the second wave should not be felt beyond Q1FY22," Binod Modi, head of strategy at Reliance Securities, said. However, the rising death toll, slow roll-out of vaccination, and Covid spreading to rural areas may keep the upside in contained. READ MORE


SECTOR WATCH:: Pharma stocks hold gains in a volatile market


Top drags on Sensex at this hour: HDFC twins, ICICI Bank


Aarti Industries under pressure


Stocks that hit 52-week high on BSE today in an otherwise volatile market

Company PRICE(rs) 52 WK HIGH CHG(%)
Adani Enterp. 1306.00 1350.50 -1.73
Adani Transmissi 1323.60 1323.60 5.00
Advanced Enzyme 483.00 503.00 2.04
Aegis Logistics 342.25 352.25 -1.48
Balkrishna Inds 2136.55 2209.00 0.89
» More on 52 Week High

Bitcoin slides below $40,000 on China crypto restrictions, ether tumbles

Bitcoin's volatile week-long slide saw it tumble to below the $40,000 mark on Wednesday as news of further restrictions on cryptocurrency transactions in China added to earlier concerns sparked by Tesla boss Elon Musk's tweets. Bitcoin, the world's biggest and best-known cryptocurrency, fell about 9% to as low as $38,940.04, even slipping below a key 200-day moving average. It is now down 40% from the year's high of $64,895.22 on April 14. READ MORE


Minda Corp jumps 7% on stellar March quarter results, dividend bounty

Minda Corporations' shares advanced 6.7 per cent to Rs 118, also ita fresh 52-week high, on the BSE in Wednesday's intra-day deals after the automobile component maker reported a consolidated net profit of Rs 12.92 crore for the March quarter of FY21 as against a loss of Rs 299.78 crore in the year-ago period. The stock suprassed its previous high of Rs 104.7, touched on April 28, 2021. READ MORE

Oil prices fall on rising Covid-19 infections in Asia, inflation fears

Oil prices fell for a second day on Wednesday on renewed demand concerns as coronavirus cases in Asia rise and on fears of rising inflation might lead the US Federal Reserve to raise interest rates, which could limit economic growth. Brent crude futures fell 73 cents, or 1.1%, to $67.98 a barrel at 0452 GMT. It settled 1.1% lower on Tuesday after briefly climbing above $70 earlier in the session. READ MORE


Torrent Pharma shares rise 6% post March quarter results

Shares of Torrent Pharmaceuticals, on Wednesday, gained 6 per cent at Rs 2,891.55 in intra-day trade on the BSE after the drug firm reported a 3.18 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 324 crore for the quarter ended March 31, 2021, mainly on the back of continued India business recovery momentum, and cost control.
 
Consolidated revenue from operations of the company stood at Rs 1,937 crore for the quarter under consideration. It was Rs 1,946 crore for the same period a year ago, Torrent Pharma said in an exchange filing, on Tuesday. READ MORE

Street concerned over Ujjivan SFB's asset quality hit in Q4; stock sinks 8%

Shares of Ujjivan Small Finance Bank tumbled 8.1 per cent to hit an intra-day low of Rs 28 apiece on the BSE on Wednesday after the lender's asset quality worsensed in the March quarter. Gross non-performing asset (GNPA) ratio rose from 0.97 per cent last year and 0.96 per cent (4.8 per cent as per pro-forma) in Q3FY21 to 7.1 per cent in the quarter ended March 2021 which worried Street. Net NPA ratio, meanwhile, deteriorated from 0.2 per cent (Q4FY20) and 0.05 per cent (Q3FY21) to 2.93 per cent. READ MORE

Jindal Stainless (Hisar) scales 52-week high on robust Q4 show

Shares of Jindal Stainless (Hisar) Ltd (JSHL) jumped nearly 7 per cent to hit a 52-week high of Rs 192.95 on the BSE in Wednesday's intra-day trade following a strong performance in the March quarter. The company reported an over three-fold jump in its consolidated net profit at Rs 350.65 crore for the quarter ended March 31, 2021, mainly on account of increased income, as against Rs 108.35 crore posted in the same quarter last fiscal. READ MORE

Top losers among BSE500 stocks at this hour

Company PRICE(rs) CHG(%)
P I Industries 2574.95 -6.05
Aarti Industries 1659.00 -5.00
Tata Motors 318.00 -4.32
VRL Logistics 249.00 -3.86
Ujjivan Fin.Ser. 209.25 -3.33
» More on Top Losers

PSBs Q4 preview: Bond yields may dent treasury income; asset quality eyed

Public sector banks (PSBs) may surprise the Street with a healthy March quarter (Q4FY21) numbers as muted earnings in the previous year, lower provisioning in this quarter, and resolution of key accounts may support the earnings, say analysts. However, relative to their private peers, PSBs may have to take a sharper knock as regards the refund of interest on interest (loan moratorium case), which may dent their net interest income (NII), they fear. READ MORE



Mid-cap stocks on a tear but beware of valuations, say analysts

Smaller stocks continue to shine at the bourses. The BSE MidCap index is up 18 per cent since the beginning of January this year against a 5 per cent rise in the Sensex during the period. With the current rally, the mid-cap index has doubled in value since the end of March 2020 against a 70 per cent rally in the Sensex during the period. On Tuesday, the mid-cap index closed at 21,232, as compared to 17,941 at the end of December 2020. READ MORE

Rupee Opening

Rupee opens at 73.03 per US dollar vs Tuesday's close of 73.05/$

Tata Motors dips 6% on profit booking post March quarter results

Shares of Tata Motors dipped 6 per cent to Rs 312.95 on the BSE in intra-day trade on Wednesday on account of profit booking in the counter even as the firm reported a strong operational performance for the quarter ended March 2021 (Q4FY21), led by its UK subsidiary Jaguar Land Rover (JLR) and its India business, and narrowing of consolidated loss, which was mainly on account of exceptional items. READ MORE

MORNING MARKET COMMENTARY :: Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The trend of low daily Covid cases and high recoveries has the potential to sustain the ongoing 'hope trade' in the market. But since the bulls are sitting on good profits, corrections caused by profit-taking are due anytime. Global support to markets is likely to continue since the consensus is that the Fed is likely to ignore the recent spurt in inflation dismissing it as transitory. A positive development is FIIs turning buyers with a net buy figure of Rs 618 cr yesterday.
 
The consensus pre-second Covid wave GDP growth rate of around 11% for FY22 is getting revised to around 9%. Earnings estimates for FY 22 also will take a hit. But it appears that the market is looking through this downward revision and is focussing on the post- second wave scenario

MARKET CHECK :: Sensex turns positive


Most active stocks by volume

Company PRICE(rs) CHG(%) VOLUME
Vodafone Idea 8.59 0.23 1886453
Infosys 1339.85 -0.01 757343
Tata Motors 315.55 -5.05 645187
Punjab Natl.Bank 36.30 -2.81 494812
Trident 16.97 0.41 258279
» More on Most Active Volume

Minda Corp hits 52-week high post Q4 results

Auto components maker Minda Corporation reported a consolidated profit after tax of Rs 12.92 crore for the March quarter against a loss of Rs 299.78 crore in the year-ago period.


Blue Star up 1% on incorporation of new subsidiary

Cooling products maker Blue Star Ltd on Tuesday said it has incorporated a new wholly-owned subsidiary “Blue Star Climatech” to carry out manufacturing and deal in line with the mainline of business of the company.


Anupam Rasayan hits fresh 52-week high on bagging new orders

The company has bagged orders worth Rs 560 crore from 2 MNCs


Ujjivan SFB declines 3% as asset quality weakens in Q4

GNPA ratio increased to 7.1% from 4.8% (pro forma) QoQ mainly due to the relapse from restructured pool


Adani Green Energy hits 5% upper circuit for 3rd day on acquisition of SB Energy

Adani Green, earlier today, said it will acquire SB Energy's 5 GW India renewable power portfolio for a fully completed EV of USD 3.5 billion - India's largest renewables M&A transaction


Tata Motors slumps over 5% on surprise net loss in Q4

Auto major Tata Motors reported a surprise consolidated net loss of Rs 7,605 crore for the quarter ended March 31, 2021, mainly on account of asset write downs in subsidiary Jaguar Land Rover (JLR). According to a consensus estimate of Bloomberg, Tata Motors was expected to report a net profit of Rs 2,774.10 crore.


Broader markets outperform in early deals


Sectoral trends mixed on the NSE


Sensex Heatmap

Top gainers: Power Grid, L&T, UltraTech Cement

Top losers: M&M, ONGC, Kotak Bank


Opening Bell


Opening Bell


NEWS ALERT :: Anupam Rasayan bags Rs 540 Cr order from two leading MNCs

Anupam Rasayan has received and signed contracts amounting to Rs. 540 Crores from two renowned multinational companies dealing in the fields of life sciences chemicals. The tenure of the contract is for five years where life sciences related specialty chemicals will be provided to them by the Company. 

Commodity prices in early deals


Pre-open session :: Nifty holds 15,000


Pre-open session :: Sensex slides 100 pts


BROKERAGE VIEW :: HDFC Securities on Torrent Pharma

Reco: Add | TP: Rs 2,905

Torrent’s Q4 results were largely in line with estimates as strong trends in India (+10 YoY) and Germany (+23% YoY) offset weak US (-5% QoQ, price erosion, lack of new launches). While US business bottomed out in Q4, it is likely to witness only modest growth, given key plants of Dahej and Indrad remain impacted by OAI/WL issues with limited visibility on resolution timelines.

The outlook for other key markets remains healthy as they continue to outperform the industry growth. Torrent continues to generate high FCF (INR17bn in FY21) and has repaid debt of INR9bn in FY21 (guides for similar reduction in FY22). Its strong India franchise (chronic focused portfolio) and superior ROCE profile (19%+ in FY23e vs. 13%+ for peers) justifies premium valuations.

We marginally tweak estimates by -1%/0% in FY22/23e and revise TP to INR2,905 based on 16x FY23e EV/EBITDA. Maintain ADD.

BROKERAGE VIEW :: HDFC Securities on Tata Motors

Reco: Buy | TP: 380

Driven by a global recovery and launch of new models, the management expects sales to grow in healthy double digits in FY22E. The OEM has been able to lower its breakeven point to 400k units (vs 600k earlier) due to its restructuring initiatives. JLR is reducing its product platform to 3 from 6 as it prepares for an EV led transition. Charge+ program comes to an end after delivering GBP 2.1bn savings in FY21 and 6bn in its lifetime. The Defender is reaching 6k-7k units/month and has an order book of 20k+ units (worth ~3 months of sales).

Tata Motors’ market share in CVs has improved 350bps over the quarter to 42.4%. CV recovery is led by MHCV and ICV. Segment EBITDA expanded 110bps QoQ to 9.1%.

PV revenue is up 160% YoY as the company has gained market share in this segment (8.2% vs 4.8% in FY20). The segment has reported the highest-ever EBITDA margin of 4.9%, driven by an improved product portfolio, which includes Electric Vehicles.

BROKERAGE VIEW :: Emkay Global on Ujjivan SFB

Reco: Sell | TP: Rs 25

GNPA ratio increased to 7.1% from 4.8% (pro forma) in Q3 mainly due to the relapse from restructured pool. Overall recognized stress pool is now 11.8% (11.1% in Q3) of loan book (GNPA 7.1% and Restructured loans 4.7%). Restructured MFI loans are now 6.8% of MFI loans (4.7% of overall loans), down from 8.5% in Q3, due to NPA recognition and partial recovery. However, the bank wrote off just Rs740mn in FY21 (0.5% of loans) unlike aggressive write-off by peers (Bandhan at 2.5% of loans). Collection efficiency stood lower at 94% in Mar’21 for overall loans due to continued stress in Assam, WB, Maharashtra and Punjab, cumulatively contributing 29% of portfolio.

We believe that the bank’s long-term prospects hinge on the ramp-up of its liability pool and asset-side product diversification away from MFI (vulnerable to shocks such as Covid-19, waivers and natural calamities). These factors structurally weigh on margins. We estimate the bank’s RoA/RoE to improve but remain moderate at 1.3-1.7%/9-15% over FY22-24E. We retain Sell on Ujjivan SFB and cut the TP to Rs25 as we reduce the earnings/multiple to 1.3x (vs. 1.6x). On Ujjivan Fin Services (holdco), we retain a Hold rating with a TP of Rs222 (assuming 25% holding co discount). Key risks to our call: Better than-expected asset-quality experience and liability mobilization leading to better margins.

BROKERAGE VIEW :: Nirmal Bang on Mindspace Business Parks REIT

Reco: Accumulate | TP: Rs 294

Mindpsace Business Parks REIT (MBPR) reported revenue of Rs4,341mn for 4QFY21, up 1% QoQ from Rs4,301mn in 3QFY21. The collections remained strong at 99%+ of gross rentals in 4QFY21. The management expects tenant uncertainty over future lease commitments and demand to remain subdued for some quarters.

We note the decline in occupancy QoQ and expect it to increase with the expiry of lease for 2.3mn sq ft in FY22, 1.7mn sq ft in FY23 and 1mn sq ft in FY24. As per the company’s presentation, of the total area expiry of 3.6mn sq. ft. in FY21, the area re-leased in FY21 is only 1.8mn sq ft. Further, we note that for the area released in FY21, the re-leasing spread is only 19.1%.

We maintain our Accumulate rating on MBPR with a revised target price (TP) of Rs294 (earlier Rs335) based on SOTP + NDCF distribution valuation.

'Nifty on course to hit fresh record peak'

Nifty has surpassed the crucial resistance of 15,000, which was derived from the downward sloping channel on the daily chart. This breakout has resulted in an end to the consolidation that was there for the last three months. Nifty has confirmed the higher top and higher bottom formation on the daily chart. The immediate target for the index is seen above the all-time high of 15,432 odd levels. The support has shifted up to 14,900. READ MORE

BROKERAGE VIEW :: Antique Stock Broking on Jyothy Labs

Reco: Buy | TP: Rs 183

Jyothy Lab's (JYL) 4QFY21 optical performance was below our expectations with FMCG sales growth at 27% YoY led by 24% volume growth. Notably, the sales growth was impacted by 8-10% due to reduction in channel inventory on implementation of Continuous Replenishment System (CRS), excluding which sales performance was in-line with our estimate.

The volume growth was broad based except post wash fabric care, which continues to witness slow recovery due to lack of out of home mobility. In terms of profitability, despite raw material price inflation gross margin remained unchanged due to calibrated price hikes (2-3%) and reduction in trade schemes. EBITDA margin expanded 400bps YoY to 14.3% due to lower-thanexpected overheads.

We believe post easing of lockdown, JYL will witness steady growth led by 1) revival of fabric care (post wash) 2) further recovery in modern trade & CSD and 3) market share gains led by product innovation, distribution expansion and higher media spends. We have reduced our FY22e EPS by 3% (factoring near term headwinds due to lockdown and raw material price inflation), while maintaining our FY23e estimates. 

BROKERAGE VIEW :: Antique Stock Broking on Tata Motors

Reco: Buy | TP: Rs 425

We expect significant improvement in operating performance and financial deleveraging across all three businesses over the next three years. CV business is poised for a cyclical upturn, PV business turnaround is led by success of its new models and JLR business will benefit from volume growth and lower incentives in
key markets, improving model cycle and cost reduction efforts.

We expect strong FCF generation over the next three years, resulting in significant reduction in Tata Motors' automotive debt. We maintain BUY rating and SOTP based price target of INR 425.
 

BROKERAGE VIEW :: Kotak Institutional Equities on Tata Motors

Reco: Sell | TP: Rs 205

The company reported a strong operational performance in the standalone business, whereas JLR operating performance was below our expectations due to lower-than-expected ASPs in 4QFY21. We believe JLR launches in the BEV space are pretty late than competition and coupled with lower investments, could lead to market share loss going forward. JLR is trading at significantly higher multiple as compared to BMW, which is not justified in our view

Top stocks to watch today

Tata Motors: Auto major Tata Motors reported a surprise consolidated net loss of Rs 7,605 crore for the quarter ended March 31, 2021, mainly on account of asset write downs in subsidiary Jaguar Land Rover (JLR). According to a consensus estimate of Bloomberg, Tata Motors was expected to report a net profit of Rs 2,774.10 crore. 
 
Axis Bank: The government will sell nearly 2 per cent stake in Axis Bank held through Specified Undertaking of the Unit Trust of India (SUUTI), a move that’s expected to fetch around Rs 3,969 crore to the exchequer in divestment receipts. The government will sell its 1.21 per cent stake or 36 million shares in Axis Bank with the floor price set at Rs 680 a share. READ MORE

Trading calls by Ajit Mishra of Religare Broking

Buy HDFC Bank Limited
 
Target: Rs 1,550
 
Stop loss: Rs 1,430
 
Rationale: Banking has started seeing traction for the last couple of sessions and private banking majors are leading from the front. Among the top counters, HDFC Bank has also rebounded sharply and surpassed the resistance zone of moving averages ribbon on the daily chart. Indications are in the favor of prevailing momentum to continue. Thus, we advise creating fresh longs in the mentioned zone. READ MORE

Bulk deals on the NSE as on Tuesday

Bulk deals on the BSE as on Tuesday

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


Rupee check

Source: Bloomberg


Oil prices ease 1%


SGX Nifty alert

>> At 8:17 am, the index was at 15,075, down 85 points.

Wall Street ends lower for second day

In the overnight session, US stocks declined for a second day with losses steepening in the final 15 minutes of trading as investors weighed the rush to reopen the economy against inflationary pressure from a rise in commodity prices.
 
The Dow Jones Industrial Average fell 0.78%, the S&P 500 lost 0.85% and the Nasdaq Composite dropped 0.56%.

Asian markets trade weak

Asian stocks tracked US markets to trade lower with Japan’s Topix index retreating 0.7%, Australia’s S&P/ASX 200 index shedding 1.9% and China’s Shanghai Composite index losing 0.5%.

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