Bulls back on D-Street; Sensex settles 750 pts up; PSU, auto stocks rally

Topics MARKET WRAP | Markets | Sensex

Stock market updates:Equity shares rebounded on Monday amid a broad-based buying after the benchmark indices suffered their biggest one-day drop on Friday. The lacklusture trade turned mildly volatile in the noon deals yet ended in the day's-high territory.

Riding on the back of gains in HDFC, HDFC Bank, ICICI Bank, Infosys, Asian Paints, L&T, and Reliance Industries the headline S&P BSE Sensex settled at 49,850 levels, up 750 points or 1.5 per cent. The previously-mentioned stocks contributed nearly 366 points towards the total gain.

In percentage terms, Power Grid, ONGC, UltraTech Cement, Asian Paints, and Titan Company, up between 3 per cent and 6 per cent, were the top gainers on the BSE barometer. On the downside, only Bharti Airtel, down 4.5 per cent, ended the day in the red.

On NSE, the broader Nifty50 index closed above the 14,750-mark on the back of 232 points, or 1.6 per cent, gains. The index was quoting at 14,761 levels at 3:30 PM. 

Meanwhile, the volatility index, India VIX, cooled-off 9 per cent to end near 25.6 levels.

In the broader markets, the S&P BSE SmallCap index closed at 20,475 levels, up 1.6 per cent. The S&P BSE MidCap index, on the other hand, closed at 20,257 levels, up 1.4 per cent.

The advance to decline ratio favoured bulls as nearly 2 stocks rose for every 1 stock that declined on the BSE.

On the sectoral front, stocks of PSU Enterprises and automobile firms traded firmly at the bourses. While the Nifty PSE and CPSE indices closed 3 per cent and 4 per cent higher, respectively on hopes for speedy privatisation, the Nifty Auto index jumped over 2 per cent on the back of healthy sales figures for the month of February. 

Individually, Maruti Suzuki reported 12 per cent YoY growth in total sales, while Tata Motors clocked a 54 per cent YoY jump in domestic sales and 51 per cent increase in total sales. M&M, on the other hand, reported 11.4 per cent YoY improvement in total sales. As regards two-wheelers, Bajaj Auto and TVS Motors reported 6 per cent and 18 per cent YoY growth, respectively. These shares ended up in the range of 1.5 per cent and 3.5 per cent.

That apart, the Nifty Metal index closed 1.8 per cent higher while the Nifty Bank, Pharma, and Realty indices ended 1 per cent higher each. 

Global markets

European shares jumped on Monday and the bond market calmed, with yields dropping from their recent spikes, while optimism about US fiscal stimulus sent oil prices higher.

European share indexes opened higher, with the STOXX 600 up 1.7 per cent. London’s FTSE 100 up 1.8 per cent and Germany’s DAX was up 1.3 per cent.

The MSCI world equity index, which tracks shares in 49 countries, was up 0.5 per cent, recovering from the previous session’s multi-week low.


MARKET CLOSING COMMENT :: Sumeet Bagadia, Executive Director, Choice Broking

The Nifty index jumped over 1.5% on Monday after a positive GDP growth data, while progress in the U.S. stimulus package also lifted the market sentiments. The benchmark index closed at 14761.55 levels with a gain of 240 points while Bank Nifty rose more than 500 points in a day to close at 35296 levels. All the sectoral indices traded on a green note with an average gain of over 1% for the day, while Nifty Auto and Nifty Metal were in focus. On the stock front, ONGC, Grasim, UPL were the top gainers while Bharti Airtel, Cipla were the prime laggards. On the technical chart, the Nifty index has been trading in Higher Highs & Higher Lows formation since past many days with the good support of 50 days Simple Moving Averages. Moreover, the benchmark index is also forming a kind of Bullish Harami Candlestick pattern which may confirm its breakout in the next trading session. At present, the Nifty has immediate resistance at 14950 levels while downside support comes at 14450 levels.

MARKET CLOSING COMMENT :: Neeraj Chadawar, Head - Quantitative Strategy, Axis Securities

Indian market rebound on Monday by 1.6% after a major sell-off in a Friday’s trading session. Positive sentiments were seen in the broader market where market breadth was trending upward. India VIX has been recovered by 9%, shows the overall improvement of investor sentiments. Multiple data points supported the market ranging from positive GDP numbers published on Friday after the market hours, Steady growth in PMI manufacturing data, and launch of the next phase of COVID vaccination in India, favoring equities. Global cues were also supported after approval of the USD 1.9 trillion package by the US house of representatives which led to some pause on US bond yields which were trending upward. However, rising bond yields will remain a key risk in the short term in the anticipation of higher inflation. As the economy is reviving, the uptrend in the corporate earnings cycle is more likely to sustain in the forthcoming quarters. We strongly believe that the market will do well in the earnings upgrade cycle

MARKET CLOSING COMMENT :: Shrikant Chouhan, Executive VP, Equity Technical Research at Kotak Securities

Today, the market remained volatile moving in a narrow range of 100 points, between 14680 and 14780. It came down from the expected highs but managed to survive at a lower level. It could be due to the massive trading activity on Friday. The market remained bullish in the previous day’s trading range and created a bullish “harami pattern” on the daily chart. Tomorrow may be an important day for the market as the dismissal of 14830 would be extremely positive for the market and the dismissal of 14600 would be negative. 

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

Indian equity benchmark indices staged a bounce on March 01, starting the new week and new month on a positive note. Nifty opened higher and rose in the early part of the day. A sell-off was witnessed between 1040 Hrs and 1230 Hrs post which the Nifty once again resumed its uptrend. Finally the Nifty ended almost at its intra day high. At close the NSE Nifty 50 gained 1.6% or 232 points to end at 14,761.
Nifty has made an inside bar after the sell-off seen on Friday. While this is a mildly positive signal, it needs to soon fill the downgap between 14,919-15,065 to nullify the recent weakness. 

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

Markets started the week on an optimistic note and posted decent gains. The progress on the US stimulus package and stability in bond yields triggered a rebound in early trade, followed by range-bound movement till the end. Besides, participants also reacted to the GDP numbers, which showed marginal growth after seeing a contraction in the last two quarters.  Healthy buying was witnessed across the board wherein auto, metals and power were among the top gainers. On the benchmark front, the Nifty index ended near day’s high with strong gains of 1.6% to close at 14,762 levels. The broader markets too ended higher, in line with the benchmark.
Markets will continue to take cues from global peers, in absence of any major domestic event. Besides, bond yields and the COVID situation in India would remain on investors’ radar. We thus suggest limiting naked leveraged positions and using further decline to add quality stocks.

TECH VIEW :: Rohit Singre, senior technical analyst at LKP Securities

Index opened a day with good gains and managed to hold the bullish stream throughout the day. The index closed a day at 14782 with gains of nearly two percent and formed a bullish harami sort of candle pattern on the daily chart which represents a change in immediate trend so if managed to hold the previous week low index is good to go northwards. Index has formed immediate support near 14640-14580 zone and good resistance is coming near 14810 zone any break above said levels can push index towards 15k mark again.

TECH VIEW :: Ashis Biswas, Head of Technical Research, CapitalVia Global Research

The Market witnessed some lackluster movement. Nifty 50 Index is still trading below the resistance level of 14850. The breakout above 14850 is critical for the market to regain its upside momentum. While it is subject to further price action evolution. It is prudent to wait for a decisive breakout above 14850 and technical factors to improve before going long in the market. We retain our cautious stance and advise the traders to refrain from building a new buying position until we see further improvement.

MARKET CLOSING COMMENT :: S Ranganathan, Head of Research at LKP Securities

Positive global cues and US yields retreating from highs led to a strong opening today with Indices sustaining gains throughout the day. The broader markets saw energetic buying momentum across PSU basket and sectors like Paints & Speciality Chemicals.

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

Domestic markets kick-started the month on a strong footing with increased optimism led by GDP reaching positive numbers, improving auto numbers and steady PMI manufacturing data. The auto sector was in focus today as the sales numbers for February were in favour of manufacturers. Global markets were on its upward rally owing to the much-anticipated US stimulus package being approved and reports regarding the progress in the vaccines.


>> Index ends 9% down at 25.6 levels

SECTOR ALERT :: Nifty CPSE index gains 4%

SECOR WATCH :: Auto stocks in fast lane on healthy Feb sales

BUZZING STOCK :: Bharti Airtel ends as the only loser on Nifty50 index

Fertilsier stocks in focus :: 3 of top 5 gainers on the BSE are from the sector

STOCK OF THE DAY :: RailTel Corporation locked in 20% upper circuit

Sectoral trends on NSE at Close :: PSU Banks buck the trend

Sensex Heatmap :: Only 1 stock ended in the red


Riding on the back of gains in HDFC, HDFC Bank, ICICI Bank, Infosys, Asian Paints, L&T, and Reliance Industries the headline S&P BSE Sensex settled at 49,850 levels, up 750 points or 1.5 per cent. The previously-mentioned stocks contributed nearly 366 points towards the total gain.
On NSE, the broader Nifty50 index closed above the 14,750-mark on the back of 232 points, or 1.6 per cent, gains. The index was quoting at 14,761 levels at 3:30 PM. 

NEWS ALERT :: Vehicle Scrappage Policy to be unveiled within a week, says Road Secy

>> Says, Ministry will release notifications on scrappage centres & incentives

SECTOR WATCH :: PSU stocks outperform at the bourses

NEWS ALERT :: RITES bags order worth Rs 93 crore

1) Turnkey order of signalling works from Ministry of Railways amounting to Rs. 67.18 crores.

2) Extension of general consultancy work for Nagpur Metro rail project and GEC positions from Gujarat Metro Rail Corporation amounting to Rs. 26 crores. 

Economy reviving, but renewed surge of Covid-19 infection poses risk: RBI

Economic activity is gaining steam, but considerable uncertainty surrounds the outlook owing to the renewed surge of the coronavirus infection, the Reserve Bank of India (RBI) said in its state of the economy report.
“Considerable uncertainty surrounds the outlook, although on balance, the gathering strength of the recovery and its broadening ambit hold out optimism and the will to survive and revive," the report, which is part of the RBI bulletin, said. In India, economic activity is gaining steam as Covid-19 incidence recedes and the ongoing vaccine rollout releases pent-up optimism. READ MORE

BSE Telecom sole sectoral loser, down over 3%

> Here's a look at top gainers & losers from the index

European stocks rebound on signs from bond market, vaccination-led optimism

European stocks bounced on Monday after sharp losses last week as a selloff in bond markets eased, while optimism over Covid-19 vaccination programme and US stimulus package further aided sentiment. The pan-regional STOXX 600 index rose 1.6 per cent by 08:11 GMT following strong gains in Asian stocks despite weaker-than-expected manufacturing activity data out of China. READ MORE

HDFC Sec says tech glitch resolved, probe on to find root cause; ops normal

Leading stock exchanges NSE and BSE on Monday said all their operations are functioning in a normal manner after HDFC Securities flagged that confirmations were not received for orders placed in the NSE cash segment due to a "technical glitch".
After mentioning about the technical glitch in a tweet at 10.01 am, HDFC Securities, at around 11.53 am, issued a statement saying the issue "got resolved at 9.50 am" and that investigation is going on to find out the root cause. READ MORE

Can Nestle's rural push turn around its fortunes? Here's what analysts say

The shares of the FMCG major have underperformed the market with a 12 per cent decline on a year-to-date (YTD) basis. During this period, the Nifty has jumped 3 per cent while the Nifty FMCG index has dipped 5 per cent, as per ACE Equity data.
Going ahead, however, the fortunes are expected to look up as Nestle, at its analyst meet, unveiled a strategy to aggressively pursue expansion in the rural areas, increase capacity and focus on new product launches. READ MORE

Bonds are not the place to be these days, warns Warren Buffett

In his annual letter to investors, Warren Buffett bemoaned fixed income as an investment, saying that "bonds are not the place to be these days." The income from a 10-year U.S. Treasury bond fell 94% from a 15.8% yield in September 1981 to 0.93% at the end of 2020. Benchmark Treasury yields have jumped since but are still low by historic measures.
"Fixed-income investors worldwide - whether pension funds, insurance companies or retirees - face a bleak future," the letter said. READ MORE

Sector Watch :: All sectoral indices on NSE trade in the green

Analysts see limited impact of JioPhone 2021 on Bharti Airtel, Voda Idea

Reliance Jio’s new bundled offer – JioPhone 2021 – giving customers a handset, up to two years of unlimited voice calls, and 2 GB data per month for one-time payment of Rs 1,999 may not be enough to scare completion, feel analysts. A one-year plan from RJio with similar benefits is available for Rs 1,499. For existing users, the plan is priced at Rs749 with one year validity, with similar voice and data allowance. READ MORE

Different strokes: New series leading to diverging trends in GDP, GVA

The gross domestic product (GDP) and the gross value added (GVA) seem to be giving conflicting signals on economic recovery during FY21. This happens because of the definition of these two numbers. For instance, GDP was projected to fall by 8 per cent in fiscal year 2020-21 (FY21) by the second advance estimates (AE), sharper than 7.7 per cent by the first one. READ MORE

MARKET UPDATE:: All the stocks in the S&P BSE Sensex index, barring Airtel, trade in green

Q&A | Market may need new catalysts to rise meaningfully, says Jigar Shah

Earnings expectations are running high, especially with the positive surprise in the December quarter, where profits zoomed despite weak sales. All this is factored in the one-year forward price-to-earnings ratio (P/E) of the Nifty at 21-22x, which is at a significant premium to the long-term average.
The markets may need new catalysts/earnings drivers to rise meaningfully from here. There is a good possibility of a time-wise correction, with a range-bound market. If inflation picks up as the bond yield spike suggests, the price correction can also come up sooner-than-expected. READ INTERVIEW HERE
JIGAR SHAH, Chief executive officer, Kimeng Securities India

Pharma stocks may hold ground as volatility grips global markets

Stock market experts are of the opinion that pharma stocks may prove safer bets in the long term, given their steady business prospects. The Nifty Pharma index was down 1.76 per cent on Friday compared to a 568-point or nearly 3.8 per cent slide in the Nifty50 on weak global cues.
So far, in CY21, the Nifty Pharma index has slipped 7.6 per cent, against a 3.9 per cent gain in the Nifty50, as investors booked profit post a stupendous 60 per cent rally in CY20, compared with a 15 per cent rally in Nifty50. READ MORE

Stocks that hit 52-week high on BSE today

Company PRICE(rs) 52 WK HIGH CHG(%)
Aditya Birla Cap 128.90 129.75 4.25
Aegis Logistics 318.45 320.50 3.24
APL Apollo Tubes 1069.00 1124.95 -0.12
Astral Poly Tech 2186.90 2220.00 2.89
B H E L 48.40 49.60 1.57
» More on 52 Week High

Feb Auto Sales :: Tata Motors' domestic sales jump 54% YoY to 58,473 units

Feb Auto Sales :: TVS Motor clocks 18% YoY growth in sales at 297,747 units vs 253,261 units in February 2020

Total two-wheeler sales grew by 21% recording 284,581 units in February 2021 as against 235,891 units in February 2020. Domestic two-wheeler sales grew by 15% registering 195,145 units in February 2021 as against 169,684 units in February 2020.

Three-wheeler of the Company registered sales of 13,166 units in February 2021 as against 17,370 units in February 2020.

The Company's total exports grew by 23% registering 101,789 units in the month of February 2021 as against 82,877 units in February 2020. Two-wheeler exports registered a growth of 35% with 89,436 units in February 2021 as against 66,207 units in February 2020. 

Bitcoin's long-term value doubted due to ESG, tighter regulation

Bitcoin is nursing losses after its worst weekly plunge in almost a year and on one view its longer term outlook could be even worse because of environmental concerns and tightening regulations. The sheer amount of energy needed to mine Bitcoin and the prospect that governments will create more obstacles for the largest cryptocurrency point to the token losing “most of its value over time,” BCA Research Inc. said. READ MORE

Feb Auto Sales :: Eicher Motors reports 10% YoY decline in exports

NEWS ALERT :: SBI cuts home loan rate to 6.7% and zero processing fee till March 31

>> For home loan over Rs75 lakh, interest rate 6.75%.

Fall from intra-day high in BSE500 stocks in today's session

TVS Srichakra 2184.00 1864.00 1929.35 -11.66
Bank Of Maha 25.10 22.85 23.20 -7.57
PNB Housing 474.00 437.95 438.45 -7.50
Jagran Prakashan 67.70 62.25 62.75 -7.31
Click here for the full list

Sterlite Tech in focus :: Co reaches highest-ever order book

>> Wins new order worth $100 million in Middle East and Africa

Feb Auto Sales :: Mahindra’s Farm Equipment Sector sells 27,170 units

Feb Auto Sales :: Mahindra Auto Sector sells 28,777 vehicles in February

Feb Auto Sales :: Ashok Leyland's sales improve 20% YoY

Sovereign Gold Bond scheme opens today. Should you subscribe?

The last tranche – twelfth in the series – of Sovereign Gold Bond (SGB) for financial year 2020-21 (FY21) opened for subscription on Monday. Priced at Rs 4,662/gram, investors applying online will be eligible for a discount of Rs 50/gram. The tenor of the bond is 8 years and with a fixed interest of 2.50 per annum, which will be credited semi-annually in the investor’s bank account. READ MORE

Sun Pharma, ITC: Bet on these 5 defensive stocks to ride market volatility

ITC Ltd (ITC): The upside bias may remain unaffected as long as the stock doesn't breach below the Rs 200 levels decisively, daily chart shows. On the higher side, resistance of Rs 225 needs to be firmly conquered to see further buying momentum. The immediate resistance comes at Rs 212 levels. The Moving Average Convergence Divergence (MACD) has broken the zero line downward, illustrating weakness in the stock. READ MORE

IMD says

- March-May temperatures seen warmer than normal over most of India
- La Nina conditions expected to continue over March-May

(Source: TV Flash)

BOC Aviation signs purchase-leaseback agreements with Indigo

BOC Aviation Limited has signed purchase-and-leaseback agreements with InterGlobe Aviation Ltd (IndiGo) for eight new Airbus A320NEO aircraft. "The addition of these eight A320NEO aircraft demonstrates our confidence in the future growth of the aviation market in India," said Riyaz Peermohamed, Chief Aircraft Acquisition & Financing Officer, IndiGo.

(Text Source: PTI)

India VIX cools off 5.5% to 26.5

> VIX is a measure of volatility

Market Check :: Sensex off day's high, up 500 points

NEWS FLASH :: Time has come to increase pvt sector participation in agriculture sector, says PM Modi

> Must expand India's agri sector in the global market for processed food

Fertiliser shares jump; RCF, National Fertilizers zoom up to 68% in a week

Shares of fertiliser companies extended their winning streak at the bourses amid a broad-based rally in the markets on Monday. Most of the stocks from the sector were outperforming today even as they have surged up to 68 per cent on the BSE over the past one week.
Sentiment turned optimistic in the sector after rating agency ICRA reaffirmed credit ratings of the Rashtriya Chemicals and Fertilizers (RCF’s) instruments and revised outlook to 'positive' from 'stable'. READ MORE

Market breadth in favour of buyers

>> Advance-decline ratio at nearly 2:1 on the BSE in late morning session

Godrej Properties emerges as highest bidder for two plots in Navi Mumbai

Godrej Properties (GPL)  on Monday announced that it has emerged as the highest bidder in the CIDCO e-auctioning process with the total bidding value of Rs 166 crore for the two adjacent plots in Sanpada area of Navi Mumbai. Spread over nearly 1.5 acres, this project will offer approximately 400,000 square feet of development potential comprising primarily of premium residential apartments of varied configurations with a small amount of high street retail at the base of the development. READ MORE

RailTel rallies 17% on institutional buying, up 52% over issue price

Shares of RailTel Corporation of India (RailTel) rallied 17 per cent to Rs 142.45 on the National Stock Exchange (NSE) in intra-day trade on Monday after the institutional investors bought a stake in the company via open market on its debut day on Friday.
The stock of the state-owned telecom infrastructure provider made a strong debut on the bourses as it got listed at a 28 per cent premium at Rs 120.60. With today’s rally, it has zoomed 52 per cent from its issue price of Rs 94. READ MORE


NEWS ALERT :: Manufacturing PMI slips marginally in Feb, stands at 57.5

> The data point came in at  57.7 in January

>> The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) highlighted a strong improvement in operating conditions that was broadly similar to that recorded in January (57.7). The headline figure remained above its long-run average of 53.6.

NEWS ALERT :: All the segments are working fine, says BSE CEO Ashish Chauhan

NSE denies any glitch

NEWS ALERT :: HDFC Securities complains of tech glitch on NSE

Feb Auto Sales :: Maruti Suzuki reports total sales of 164,469 units, up 11.8% YoY

Bond Market Alert

10-year benchmark bond yield opens at 6.21% vs 6.23% previous close

Bitcoin extends retreat from record high to hit lowest in 20 days

Bitcoin dropped 6.39% to $43,165.78 on Sunday, losing $2,944.20 from its previous close. Bitcoin, the world’s biggest and best-known cryptocurrency, has fallen 26% from the year’s high of $58,354.14 on Feb. 21 when it soared amid increasing confidence that it will become a mainstream investment and payments vehicle. 

(Source: Reuters)

APL Apollo, Apollo Tricoat Tubes surge up to 10% on board nod to merger

Shares of APL Apollo Tubes (APL Apollo) and Apollo Tricoat Tubes (Apollo Tricoat) rallied up to 10 per cent to hit their respective all-time highs on the BSE in intra-day trade on Monday after their boards approved the merger of Shri Lakshmi Metal Udyog and Apollo Tricoat with APL Apollo.
The stock of APL Tricoat rallied 10 per cent to Rs 1,020, while APL Tubes gained 5 per cent to Rs 1,125. In comparison, the S&P BSE Sensex was up 1.2 per cent at 49,693 points at 09:25 am. READ MORE

Equitas Holdings gains 1%

>> UK's development finance institution CDC Group has pruned its stake in Equitas Holdings by 2.61 per cent through sale of over 89 lakh shares in open market last week, according to a regulatory filing.

Most active stocks by volume

Company PRICE(rs) CHG(%)
Ashok Leyland 132.95 3.14
Rail Vikas 32.65 2.67
Tata Coffee 134.70 3.82
L&T Fin.Holdings 104.80 0.00
Aditya Birla Cap 127.80 3.36
» More on Most Active Volume

Market Check :: Sensex jumps 700 pts, at day's high

MARKET COMMENT :: V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The massive sell-off last Friday which saw the Nifty crash by 568 points indicates the market's vulnerability to negative triggers at high valuations. The massive FII selling of Rs 8295 crores is indeed a  serious concern even though DIIs have turned buyers. Also, FIIs unwinding their longs and opening fresh shorts is a negative signal. The positive factor is the US 10-year yield settling at 1.41%, falling from a high of 1.61%. Stability in bond yields will calm markets. It is also important to appreciate the fact that the rise in yields also indicates a revival of economic growth. In this excessively volatile market, investors may wait for consolidation. Dips may be used to buy quality stocks in segments like financials & IT. Meanwhile, India is technically out of recession with the Q3 GDP data turning positive with 0.4% growth

DLF trades marginally higher

>>  Realty firm DLF plans to raise up to Rs 395 crore through issue of debentures. In a regulatory filing, the company informed that the proposal will be discussed on March 3 at a meeting of the finance committee of the board of directors.

Maruti Suzuki hits 2-million exports milestone

>> The country's largest carmaker Maruti Suzuki India, on Saturday, said it has achieved the milestone of 20 lakh cumulative exports.

Axis Bank rules 2% higher

>> The board of Axis Bank has approved a proposal to reclassify United India Insurance Company Ltd (UIICL) as a public shareholder category investor in the bank from promoter category.

Feb Auto Sales :: Bajaj Auto reports weakness in domestic CV sales

RailTel Corporation zooms 17%

>> Goldman Sachs India Fund bought 37.09 lakh equity shares in the company at Rs 113.57 per share on the NSE. Nippon India Mutual Fund bought 20 lakh shares at Rs 116.13 per share.

Escorts up 0.6% post healthy February sales figures

Reliance Industries trades over half a per cent higher

>> Reliance Strategic Business Ventures, a wholly-owned subsidiary of Reliance Industries (RIL), has acquired an additional equity stake in its investee company skyTran Inc. for a consideration of $26.76 million.

Sectoral trends on NSE :: All key indices bounce back after last week's crash

Sensex Heatmap :: Only 1 stock trading in the red

Opening Bell :: Nifty tests 19,700 at open

Opening Bell :: Sensex up 1% in early deals

Feb Auto Sales :: Escorts reports highest-ever February sales of 11,230 units

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

Markets at Pre-open

Markets at Pre-open

BROKERAGE VIEW :: MOFSL on Piramal Enterprises

CMP: Rs 1,829 | TP: Rs 2,170 (+19%) | Reco: Buy

>> Over the last 1-2 years, PIEL has curtailed disbursements in Wholesale Lending and reduced exposure to its top 10 clients by over 25%. This cautious stance is likely to continue for the next few quarters too, while the company looks to ramp up its Retail Lending business. The DHFL acquisition is value-accretive and will offer it a ready platform to expand its Retail Lending products.

>> While it is still early days, the initial asset quality outcome, post lifting of the moratorium on term loan EMIs, has been positive. As the economic scenario gets better, asset quality is likely to improve – this will have a second-order impact on availability and cost of debt capital.

>> The company is well-placed to deliver consistent mid-teens sales CAGR over FY21-23E in the Pharma segment. Strategic inorganic acquisitions would boost sales growth further as and when it is executed, subject to appropriate valuations. We value PIEL on a SoTP basis (Exhibit 12) to arrive at our TP of INR2,170. Reiterate Buy.


CMP: Rs 16,098 | TP: Rs 17,500 (+9%) | Reco: Neutral

>> Milk & Nutrition and Chocolates & Confectionary continued their healthy growth momentum seen in recent years. Though the 11.4% growth in Prepared Dishes
(Maggi) in CY20 was healthy, it was lower than our earlier estimate due to in-home consumption getting a boost during COVID. Performance was likely affected by a slower resumption in manufacturing as Nestlé does not outsource production. Beverage sales were flattish in CY20 due to significant out of home (OOH) component, which is only now normalizing.

>> The management also provided additional details on the INR26b capex plan to be spread over 3-4 years. Capacity expansion in Maggi Noodles in Sanand will be part of the first phase in CY21, followed by Coffee in Nanjungud and Chocolate investment in Ponda and Tahliwal. Since the expansion will be in phases, it does not expect any significant impact of the capex on operating margin.

>> We maintain our Neutral rating on the stock. While the structural investment case is strong, valuations at 55x CY22E EPS do not offer any material upside potential from a one-year perspective


CMP: Rs 323 | TP: Rs 400(+24%) | Reco: Buy

>> 'Reimagine' strategy sets forth roadmap for the future by simplifying business, making it more agile and focusing on profits over volumes. This strategy revolves
around a) making brands and products more exciting, aspirational and desirable, b) making architectures electrified as well as simple and flexible, c) collaborations with the Tata group and other partners, d) rightsize and repurposes its operational infrastructure and e) refocus on quality, sales, costs and digital transformation.

>> 'Refocus' program is expected to contribute 3pp to EBIT margin by FY24, driven by reduction in variable marketing expenditure (VME), material cost, warranty cost etc. Further, it expects consolidation of architectures to drive >3pp EBIT margin addition by FY26 (expect benefits to start reflecting from 2HFY23). With focus on profits over volume, it would reduce its manufacturing capacity by 25% over next 5 years. Also, GBP1b write-off of investments (due to discontinuation of two models under development) will result in lower depreciation by GBP150m p.a (or 50bp EBIT margin).

>> It expects capex to sustain at GBP2.5b p.a till FY24 and increase gradually to GBP3b by FY26. Unlike in the past (where capex was based on aspiration of 1m unit volumes), it doesn't need to invest in creating capacities and physical infrastructure. Its guided capex estimates are after factoring in for the planned collaborations. It is also looking for a partner for Jaguar BEV.

>> We are upgrading our consol. EPS estimates by 15%/9% for FY22/23, as we factor in for the restructuring/reorganization cost of GBP1.5b in 4QFY21 (and impact of GBP0.5b on cashflows in FY22) and its subsequent benefit on lower depreciation and amortization. Maintain Buy with a TP of INR400/share (Mar'23E SOTP)

Top stocks to watch today

Auto stocks: Auto sales figures would start trickling in from March 1 onwards. Car and tractor makers are likely to report a strong set of auto sales numbers for the month of February, but growth in two-wheeler sales may not be as strong, according to analysts. Stock-specific action is expected in the auto companies on the back of these numbers.
RIL: Reliance Strategic Business Ventures, a wholly-owned subsidiary of Reliance Industries (RIL), has acquired an additional equity stake in its investee company skyTran Inc. for a consideration of $26.76 million. READ MORE

Bulk deals on the BSE as on Friday

Bulk deals on the NSE as on Friday

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

Rupee check

Source: Bloomberg

Oil prices climb after progress on huge US stimulus bill

 Oil prices rose more than $1 on Monday on optimism in the global economy thanks to progress in a huge US stimulus package and on hopes for improving oil demand as vaccines are rolled out.
Brent crude futures for May rose $1.07, or 1.7%, to $65.49 per barrel. The April contract expired on Friday. US West Texas Intermediate (WTI) crude futures jumped $1.10, or 1.8%, to $62.60 a barrel.

(Source: Reuters)

SGX Nifty Update

>> At 8:25 am, the Nifty futures on SGX were trading 201 points higher at 14,726 levels

Asian market check

Asian shares firmed on Monday as some semblance of calm returned to bond markets after last week’s wild ride, while progress in the huge US stimulus package underpinned optimism about the global economy. Also helping sentiment was news deliveries of the newly approved Johnson & Johnson COVID-19 vaccine should start on Tuesday.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%, after shedding 3.7% last Friday. Japan’s Nikkei rallied 2.0%, while NASDAQ futures bounced 0.8% and S&P 500 futures 0.7%.

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