Stock market updates: Indian equities stayed firm at record high levels during Monday's trading session a as strong kick-start to Q3 earnings, decision to roll out Covid-19 vaccine in the country as early as January 16, and hopes of a greater stimulus package in the US pushed the benchmark S&P BSE Sensex above the 49,000-mark for the first time. The Nifty50, too, inched closer to 14,500 in the intra-day session.
Frontline Sensex hit a record peak of 49,304 in the intra-day deals today before settling 486.8 points, or 1 per cent, higher at 49,269.32 levels. On the NSE, the Nifty50 ended at record closing peak of 14,484.75 levels, adding 137.5 points or 0.96 per cent today. Earlier today, the index touched lifetime high of 14,498.
IT stocks led from the front and remained top gainers on the indices today. HCL Technologies, Infosys, TCS, and Tech Mahindra surged between 2 per cent and 6 per cent on the BSE today, contributing the most towards Sensex's gains. On the sectoral front, Nifty IT index hit fresh record high of 27,096, ending 3.3 per cent higher at 27,027.7 levels today.
Auto sector, too, buzzed at the bourses today. The Nifty Auto index advanced 3 per cent on the NSE to hit an intra-day high of 10,028.75, its highest level since September 27, 2018. Among individual stocks, Tata Motors rallied 13 per cent to Rs 211 on the NSE. Ashok Leyland, TVS Motor Company, Mahindra & Mahindra, Bharat Forge, MRF and Bajaj Auto from the auto index were up 2 per cent to 4 per cent. The index settled 2.6 per cent higher.
Other individual gainers included HDFC, Maruti, M&M, and ONGC, up in the range of 2 per cent to 3 per cent on the Sensex, while losses in L&T, Bajaj Finance, Reliance Industries, and Bajaj Finserv capped gains.
Further, profit-booking was seen in the broader markets after the previous week's outperformance. The S&P BSE MidCap index closed 0.08 per cent lower at 19,124.3 levels, while the S&P BSE SmallCap index ended at 18,876 levels, down 0.17 per cent.
European stocks slipped from over 10-month highs on Monday as investors booked profits after a strong week, while surging coronavirus cases across the continent and mainland China dragged down energy and mining stocks.
The pan-European STOXX 600 index fell 0.1 per cent, with Germany's DAX index shedding 0.4 per cent and France's CAC 40 down 0.2 per cent.
Nifty started the week with gap up opening but in first half of the session saw some profit booking as it made an intraday low at 14383. But later, a sharp recovery was seen as the benchmark index closed at 14484.75 with a gain of 138 points while Bank Nifty didn’t performed well and closed the session at 31998.90 with a moderate loss of 85 points. Nifty Auto and IT has showed good momentum but Metal, Energy and media showed profit booking. Tatamotors, Hcltech, Infy were among the top gainers while Tatasteel, Bajajfinsv , Reliance among the top losers. Index has been trading in Higher high and Higher Bottom Formation which suggest bull trend for upcoming session As the benchmark index has been trading above 21 HMA which also points out strength in the index. Now, the Nifty has a strong support at 14350 levels while upside resistance may come around 14565 levels.
TECH VIEW :: Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The upside momentum continued in the market for the second consecutive session on Monday post upside breakout of small range of Friday at 14250 and the Nifty closed the day higher by 137 points. After opening on a positive note on Monday, the market shifted into a consolidation in the early part of the session. It later showed a gradual upmove with range in the later half and finally closed near the all time high. The opening upside gap remains partially filled.
A small body of positive candle was formed with long lower shadow. Technically this pattern indicate buy on intraday dips opportunity in the market. The long bull candles of Friday and Monday signal an upside breakout of the small range at 14250 levels. New all time high was formed at 14498 levels.
The short term trend of Nifty continues to be positive. There is a possibility of some more upmove or range movement for the next 3-4 sessions, before showing sharp one day of decline from the new highs. The next upside levels to be watched at 14600-14800. Immediate support is placed at 14380.
MARKET CLOSING COMMENT :: Shrikant Chouhan, Executive VP, Equity Technical Research at Kotak Securities
Another day with tremendous gains for the market. Markets closed higher for the day, led by auto, IT, pharmaceuticals and selected FMCG stocks. During the day, the market fell three times to 14400/48950 levels, but found huge support at those levels to scale higher. Today the market closed at the highest point of the day despite the weakness in US stock futures, rise in the dollar index, and crude prices are at an alarming level of $55. It seems that the market has gained momentum due to the bright possibilities of bold announcements in the forthcoming Union Budget.
Technically, the market has left an Exhaustion gap between today's lows and yesterday's highs. It is an indecisive candlestick pattern at the top of the current movement and traders should take some profit at current levels until the Nifty / Sensex crosses do not cross the 14520/49370 level. Support exists at 14440/49000 and 14380/48900. One should be careful when adding long positions at high level.
Nifty started the week on a positive note and closed up by 1%. Rally was led by auto stocks due to strong demand for vehicles and IT stocks due to better than expected result of TCS for Q3FY21. Nifty and Nifty IT continues its trend of making new all time high. Sectoral indices were mixed. Global cues were negative: Dow Futures, Nasdaq Futures and FTSE were down by 0.7% , 0.5% and 0.5% respectively. We are bullish on the market. Although after the sharp rally, we are concerned about the valuation of the market. We advise investors to book profit in a small portion of their portfolio.
MARKET CLOSING COMMENT :: Deepak Jasani, Head of Research, HDFC Securities
Indian equity Benchmark indices ended at fresh record closing highs on Jan 11. The Nifty opened gap up and after a minor correction, closed almost at the opening highs. At close, the Nifty was up 137.50 points or 0.96% at 14,484.80. Over the past two months Nifty has risen almost 20%.
Volumes on the NSE were on the higher side compared to recent averages. Among sectors, IT, Auto. FMCG and Pharma were the main gainers while Metals and PSU Bank were the main losers.
Nifty has closed the day with another almost 1% gain on Jan 11. In the process Indian markets were among the best performing markets globally on Jan 11. Positive newsflow including results are pushing indices and stocks higher. A negative advance decline ratio however is a sign of caution after such a steep rise. Typically distribution happens in such times of euphoria, which gets noticed a few days later.
We are witnessing a reversal in the dollar index, while political stability in the U.S. and the probability of a further fiscal stimulus package has pushed the long-term US yields higher. Moreover, there is a possibility that the Fed may reduce its bond buying plan towards the end of this year, which could further push US yields higher and consequently hurt the rupee. Back home, with RBI mopping up dollar inflows, the local currency can test 73.80 to 74 levels in the coming sessions.
We expect the rupee to trade in a broad range of 73 to 74.20 levels for the rest of this month.
TECH VIEW :: Rohit Singre, senior technical analyst at LKP Securities
Index opened a day with gap and managed to hold the bullish stream for a day and closed a day near good hurdle zone of 14500 with gains of nearly one per cent forming a dragonfly kind of Doji candle pattern on the daily chart. Going forwards index has shifted its support to 14400-14300 zone if managed to hold above-said levels we may see the index to march towards 14550-14600 zone which is immediate hurdle on the higher side
Markets started the week on a robust note led by positive global cues and strong earnings from IT behemoth TCS. Despite a tepid show by banking stocks, the Nifty managed to end with gains of 1% to close just shy of 14,500 levels. The broader markets underperformed wherein both Midcap and Smallcap ended flat. On the sector front, IT and Auto were the top outperformers in today’s trade whereas Metal, Capital Goods and Oil & Gas ended with losses.
The anticipation of better than expected earnings season combined with supportive global cues aided the upbeat start. Going forward, stock-specific volatility would remain high as earnings season would gain pace. Further, key macro data like CPI, WPI and IIP would also be actively tracked by investors. Amid all, we reiterate our positive yet cautious stance on markets and advise aligning positions according to the prevailing trend.
MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services
Improved outlook for 3rd quarter earnings along with strong global cues helped Sensex to breach 49,000 mark. The rally in the market was led by the IT sector backed by firm earnings results, however, small and mid-cap stocks were under pressure. Hopes of a new US stimulus to be unveiled this week created an upbeat movement in Wall Street while profit booking is seen in the European markets. This ongoing rally is being fueled by strong Q3 earnings preview, foreign fund inflow and optimism around Union Budget 2021
Indian markets opened on a positive note despite subdued cues from its Asian market peers and maintained their upward momentum following gains in IT, TECK and FMCG stocks. Healthy buying was observed in blue-chip stocks like Infosys, HCL Tech and HDFC. During the afternoon session the sentiments continued to remain upbeat as India’s exports grew 16.22% YoY to $6.21 billion in the first week of January, mainly driven by healthy growth in pharmaceuticals, and engineering sectors, reflecting signs of revival. Imports during January 1-7 too increased by 1.07% to $8.7 billion as against $8.6 billion in the same period of 2020. Some support also came as Fitch Ratings expects India's economy to contract by a record 9.4% in the current fiscal year ending March 2021 (FY21) amid the shock from coronavirus pandemic but this represents a 1.1% point improvement from its previous forecast, reflecting a stronger-than-anticipated rebound in 3Q 2020. On sectoral front, today's rally was mainly driven by IT, Auto, FMCG and Pharma stocks while laggards were Metals and Banking stocks
Market stats :: Market breadth marginally tilts towards declines
Index contributors today :: IT, HDFC duo lift index
SECTOR OF THE DAY :: Nifty Auto index hits 28-month high
SECTOR OF THE DAY :: IT stocks log stellar rally, Nifty IT settles over 3% higher
Sectoral trends on NSE at Close :: Financials slip on profit-booking; auto, IT shine
Sensex Heatmap at Close :: HCL tech zooms 6%, Infosys 5% after TCS's strong Q3 nos
Frontline Sensex hit a record peak of 49,304 in the intra-day deals today before settling 486.8 points, or 1 per cent, higher at 49,269.32 levels.
On the NSE, the Nifty50 ended at record closing peak of 14,484.75 levels, adding 137.5 points or 0.96 per cent today. Earlier today, the index touched lifetime high of 14,498.
Tata Motors soars 13%
Metal stocks dip in a firm market
Bright outlook: Sun Pharma to Cipla, drug firms set for Q3 health boost
Domestic drug sales in December indicated that the third quarter of the ongoing financial year is going to result in earnings growth recovery for the sector. Analysts expect earnings growth to be in the range of 30-40 per cent for drug firms owing to both domestic recovery as well as strong export opportunities. READ MORE
Nifty Auto index at over 2-year high on hopes of strong Q3 earnings growth
Among individual stocks, Tata Motors rallied 6 per cent to Rs 211 on the National Stock Exchange (NSE). Ashok Leyland, Maruti Suzuki India, TVS Motor Company, Mahindra & Mahindra, Bharat Forge, MRF and Bajaj Auto from the auto index were up 2 per cent to 4 per cent. READ MORE
MARKET UPDATE:: Sensex at day's high
RIL drags, down over 1%, in an otherwise firm market
Lupin, Tata Consumer, Colgate Palmolive, ACC lead among Nifty Next 50 pack
Strong gains in IT stocks, HDFC twins help Sensex hold 49,000
NEWS ALERT :: Dr Reddy's Labs launches Febuxostat tablets in the US
>> The tablet is a therapeutic equivalent generic version of Uloric (Febuxostat) Tablets approved by the US Food and Drug Administration (USFDA).
>> The Uloric brand and generic had US sales of approximately $108 million MAT for the most recent twelve months ending in October 2020 according to IQVIA Health.
(Source: BSE filing)
BROKERAGE VIEW :: HDFC Securities on FMCG Sector
>> FMCG sector has underperformed Nifty by 42% since our cautious stance in April '20 initiation. Valuation premium for select stocks has narrowed down to reasonable levels and looks particularly attractive compared to richly valued (~80x forward PE) consumer discretionary segments (Paints, QSR, Jewellery, and Retail). While absolute PE-rating still looks unlikely, we see a more balanced risk-reward now for the FMCG sector for FY22/FY23 with earnings led stock price returns.
>> Outlook: Sector has witnessed growth divergence in 1HFY21 with essential and packaged food categories growing significantly. We expect growth divergence to largely normalise in FY22. Essential categories are cooling off from elevated levels while weaker performing categories (QSR, BPC, Cigarette, etc.) are expected to recover in FY22. RM inflation is high, particularly crude-led; thereby price hikes and lower promotions are expected in FY22. Earnings growth will be largely topline led with stable to modest increase in margins. Health, hygiene and packaged foods have multi-year growth tailwinds, given low penetration levels and changing lifestyles.
>> View: We expect that, with stability in trade channel, supply chain and consumption trend, companies' initiatives will play a key role in driving growth in FY22/FY23. Companies like DABUR, MARICO and GCPL are taking several initiatives to help lift growth in the medium term. Thereby, we are upgrading them from REDUCE to ADD. Sector bellwethers HUL and NESTLE continue to execute well but still do not offer absolute upside in our base case and, thus, we maintain REDUCE on them.
BHEL secures Rs 450 crore order for steam and power plant from NALCO
-- State-run engineering firm BHEL on Monday said it has bagged an order worth Rs 450 crore for a steam and power plant from National Aluminium Corporation Limited (NALCO).
-- The Rs 450 crore order has been placed on BHEL by NALCO for its 5th Stream Alumina Refinery Expansion Project at Damanjodi, Odisha, Bharat Heavy Electricals Limited (BHEL) said in a statement.
-- BHEL's scope in the contract includes design, engineering, manufacturing, supply, erection, testing and commissioning of 1x300 TPH Coal Fired Boiler, 18.5 MW Steam Turbine Generator and associated auxiliaries, including Flue-gas desulfurization (FGD) and selective catalytic reduction (SCR). (Text Source: PTI)
Adani Green commissions 25 MW solar plant in Chitrakoot
Adani Green Energy Ltd (AGEL) on Monday said it has commissioned a 25 MW solar power plant in Chitrakoot, Uttar Pradesh. Adani Solar Energy Chitrakoot One Ltd, a step-down subsidiary of AGEL, has commissioned the solar power plant, a company statement said. This plant has a power purchase agreement with Noida Power Company Ltd (NPCL) at Rs 3.08/KWh. With this commissioning, AGEL's total operational renewable capacity has grown to 2,975 MW. (Text Source: PTI)
Passenger vehicle retail sales increase 24% in December: FADA
Automobile dealers' body FADA on Monday said passenger vehicle (PV) retail sales in December witnessed a year-on-year increase of 23.99 per cent to 2,71,249 units. According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,270 out of the 1,477 regional transport offices (RTOs), PV sales stood at 2,18,775 units in December 2019. READ MORE
Apollo Micro shares zoom 20% on orders worth Rs 50 crore from BEL
Apollo Micro Systems operates in electromechanical components and systems and allied components and services. The company designs develops and sells high-performance mission and time critical solutions to defence Space and home land security for Ministry of Defence government controlled public sector undertakings and private sectors. The company's customised solutions are developed using common hardware and software technology IP's which can be re-configured to suit the end application and domain requirements of end customer. READ MORE
SECTOR WATCH :: Nifty IT index hovers at record high, up 2.64%
Budget 2021: Protectionist ways not enough, need infra push, say experts
As India goes increasingly protectionist to make the country self-reliant, experts have cautioned that the Budget should not look inwards by introducing measures such as Customs duty hikes, but instead boost infrastructure for domestic manufacturing.
At a time when India prepares its Budget, which, Union Finance Minister Nirmala Sitharaman has said, will be one like “never before”, there are apprehensions the Centre may resort to further duty hikes, like in the past, and, at the same time, shore up its coffers when the pandemic has dwindled its revenues. READ MORE
Exchanges and depository stocks surge since March lows, shows data
The share price of BSE, Multi Commodity Exchange of India (MCX), and Central Depository Services (CDSL) have gained between 95 per cent and 190 per cent since the last week of March. Analysts said investors are betting on stocks which had little or no disruption in their business activity after the onslaught of Covid-19. READ MORE
BSE Auto index at day's high; Tata Motors, Ashok Leyland among key gainers
SECTOR WATCH:: Metal stocks under pressure
Off day's high | Amara Raja Batteries sees profit-taking after hitting 52-week high
MARKET UPDATE:: S&P BSE MidCap index underperforms
Q&A | Market rally in 2021 to be much more broad-based, says ICICI Pru AMC's S Naren
We are of the view that the Indian equity market is in the midst of a bull market, driven by central banks of the developed world. We are positive on equities, in general, till inflation makes a comeback in the western world. When that happens, central banks, especially the US Fed, is likely to withdraw liquidity support, which has been the cause of the current rally. We don’t see this happening anytime soon, at least not in the next six months. For those averse to market volatility, the optimal approach is to invest through dynamically managed asset allocation schemes. READ MORE
S NAREN, Executive director & CIO, ICICI Prudential AMC
Despite Sensex at record high, advance-decline ratio at 3:4
HUL, ITC, Tata Consumer: FMCG sector on verge of breakout; stay invested
Shares of Hindustan Unilever and ITC from the FMCG pack actively participated in Monday's stellar rally at the bourses amid reports that consumer goods' firms, which are facing inflationary pressure on their key raw material inputs, are considering marginal hike on their products price to offset it. Some FMCG companies like Marico and others have already gone for price hike, while some which include Dabur, Parle and Patanjali are closely monitoring the situation. READ MORE
Tata Motors climbs 4%, hits 52-week high on improved earnings outlook
Shares of Tata Motors hit a 52-week high of Rs 205.20, up 4 per cent, on the BSE in Monday's session, surpassing its previous high of Rs 201.80, touched on January 15, 2020. The stock of the Tata group commercial vehicles company outperformed the market on the expectation of improved earnings. In the past three months, Tata Motors stock has rallied 47 per cent as against a 21 per cent rise in the S&P BSE Sensex, while in the last six months, it has added 89 per cent as compared to a 34 per cent gain in the benchmark index. READ MORE
After strong performance in Q3, near-term margin worries for Dmart
After two quarters of double digit revenue decline, Avenue Supermarts returned to the growth trajectory posting better than expected performance in the December quarter. Led by festival-led sales in October and November, the company posted a 10 per cent growth in Q3 over the year ago quarter. While the company indicated that overall sales and mix are moving towards the pre-Covid levels, the December month was a disappointment with same store sales declining 4 per cent for stores two years and older. READ MORE
BUZZING STOCK :: CARE Ratings jumps 4%
The company on Sunday informed exhchanges that T. N. Arun Kumar, Executive Director & Chief Rating Officer (CRO) and Bharat A Adnani, Chief Financial Officer have tendered their resignation on account of personal reasons, which have been accepted by the Board and they will be relieved from the services of the Company with effect from 28th February, 2021 and 27th February, 2021, respectively.
NEWS ALERT :: Sadbhav Engineering receives Letter of Acceptance from GMRC for a contract value of Rs 779.73 cr
>> Authority: Gujarat Metro Rail Corporation (GMRC)
Vedanta dips 3% after promoters announce open offer at Rs 160 per share
Shares of Vedanta dipped 3 per cent to Rs 175 on the BSE on Monday after the company’s promoter group launched open offer to buy 10 per cent stake in the company at price of Rs 160 per share. Vedanta promoters announced an open offer for acquisition of up to 371.75 million equity shares, representing 10 per cent of fully diluted voting share capital of Vedanta, from the public shareholders by Vedanta Resources together with Twin Star Holdings, Vedanta Holdings Mauritius and Vedanta Holdings Mauritius II (the promoter group & person acting in concern). READ MORE
IT stocks rally post TCS Q3 results; Nifty IT index scales record high
Shares of information technology (IT) companies continued their upward march in Monday's session, with Nifty IT index rising 2 per cent to scale a fresh record high on the National Stock Exchange (NSE), after sector giant Tata Consultancy Services (TCS) posted better-than-expected results for the quarter ended December 2020 (Q3FY21). The IT index hit a fresh record high of 26,808 in intra-day trade. In the past two months, it has outperformed the market by surging 26 per cent, as compared to a 14-per cent gain in the benchmark index. READ MORE
Nifty Bank slips into the red, Axis, IDFC First Bank down over 1%
India VIX surges over 9% to 22.5
- India VIX is the volatility indicator
Q3 earnings preview: Nifty profit growth pegged at 10%, best in 5 quarters
After a good July-September quarter (second quarter, or Q2) that saw profit growth return to positive territory, brokerages now expect double-digit growth in the combined net profit of Nifty50 companies in the October-December 2020 period (third quarter, or Q3) of 2020-21 (FY21). This growth is led by a big jump in the net profit of commodity producers in sectors such as metals and mining, crude oil, refining, and cement, among others. READ MORE
Avenue Supermarts surges 5% on healthy revenue recovery in December quarter
D-Mart reported 20 basis points (bps) EBITDA (earnings before interest, taxes, depreciation, and amortization) margin improvement at 9.1 per cent in Q3FY21, possibly due to easing price competition, even as sales of margin accretive Apparels and Consumer Discretionary remain low. It posted increase of 16.39 per cent in its consolidated net profit at Rs 447 crore for the quarter under review. READ MORE
>> Rupee opens lower at 73.47 per US dollar vs Friday's close of 73.24/$
On fire :: TCS m-cap crosses Rs 12 trillion for the first time
Shares of TCS hit a fresh record high of Rs 3,224; up 3 per cent on the BSE in early morning trade after brokerages maintained ‘buy’ rating on the stock. The company’s Q3FY21 numbers were above analysts' estimates on all fronts. The company said it could return to a double-digit growth trajectory next year. On the National Stock Exchange (NSE), the stock hit fresh all-time high of Rs 3,230, up 3.5 per cent. READ MORE
BROKERAGE VIEW :: Morgan Stanley on TCS
Upgrades to Overweight | TP: Rs 3,750
>> Management alludes to a multi-year growth cycle driven by rising cloud adoption and accelerated digital transformation (DX) spending due to Covid-19: Enterprises had embarked on their DX journeys a few years back, and Covid-19 has significantly accelerated that process. The first two quarters of F21 were affected by delayed decision making, smaller project sizes, and some supply-side constraints, but most of that is now being reversed with healthy deal pipelines, improving deal conversions (with larger deals beginning to convert now), and market share gains for larger vendors. Management sounded confident in its ability to return to double-digit revenue growth in F22 on the back of large deal signings (such as Postbank Systems and Pramerica), significant improvement in the BFSI and North American market (uptick in TCV), a sharp focus on driving business with hyperscalers (as cloud adoption accelerates), and unleashing margins to aggressively chase demand opportunities. We believe all of these factors could drive higher market confidence in revenue growth in F22-23.
>> Valuation: We believe demand is inflecting and TCS is well positioned to benefit from it. Slight increases in our F21-23 EPS estimates, higher long-term forecasts, rolling our valuation forward to Mar-23 (from Sep-22), and a higher bull case probability boost our price target by 32% to Rs3,750 (implying 33x our F23e EPS estimate). This now puts it at par with the target multiple for Accenture, which we view as justified given its best-in-breed positioning
Snowman Logistics jumps 7% amid reports of a deal with Amazon
Snowman Logistics and Amazon have signed a deal under which Snowman will set-up facilities at three locations, namely Delhi, Mumbai and Coimbatore, according to a media report. The report added that the company is in talks with Pharma and FMCG companies as well and other big announcements are expected in near future.
Q3 shareholding pattern :: Butterfly Gandhimathi
>> Dolly Khanna’s name appears with 1.5% stake in December shareholding
BUZZING :: ITD Cementation hits 52-week high of
MRF scales fresh peak of Rs 82,373 apiece
>> Stock surpasses previous high of Rs 81,423, touched on April 30, 2018
Tata Steel slides 2% in a strong market
>> Union minister Nitin Gadkari, over the weekend, accused cement and steel firms of cartelisation in a bid to increase prices
Persistent Systems leaps 4%
Bharti Airtel rises 2% on appointment of new CIO
>> The company announced the appointment of Pradipt Kapoor as its Chief Information Officer (CIO). Kapoor takes over from Harmeen Mehta, the company said in a statement.
Vedanta dips 0.5% after promoters' open offer
>> Promoter group launches open offer to buy 10 per cent stake in the company. The parent has offered to buy up to 37.17 crore shares from public shareholders at Rs 160 apiece, which is a 12% discount to Friday's closing price.
Avenue Supermarts scales fresh 52-week peak post Q3 nos
>> Avenue Supermarts, which owns and operates retail chain D-Mart, on Saturday reported an increase of 16.39 per cent in its consolidated net profit at Rs 446.95 crore for the third quarter ended December 2020.
HDFC Bank advances 1%
Sentiment buying :: Wipro hits new peak
>> In another development, Wipro's buyback offer will close today
TCS gains over 1% post stellar Q3 nos
>> Information technology stocks would remain under investor radar on Monday after IT major Tata Consultancy Services on Friday posted a 7.18 per cent year-on-year (YoY) rise in its December quarter (Q3FY21) profit at Rs 8,701 crore. TCS also announced third interm dividend of Rs 6 per share.
Sectoral trends on NSE at Open
Sensex Heatmap :: Infosys, HCL Tech, TCS lead from the front
First Trade :: Nifty over 1,4400 in early deals
First Trade :: Sensex hits record high
Currency Outlook :: Reliance Securities
>> The Rupee could likely open around 73.41-73.46 per dollar compared with 73.24 at close on Friday.
>> Meanwhile, NDF is at 73.39 this Monday morning vs a close of 73.25 on Friday.
>> Technically, the USDINR Spot pair took a resistance near the 21-Daily Moving Average which is placed at 73.45 levels below which could see some consolidation.
>> However, above the level could push the pair towards 73.60 levels. Support is at 73.22-73.10 levels. Resistance is at 73.55-73.60 levels
>> The USDINR Spot pair could trade in a range of 73.15-73.60 levels in the coming session.
Commodity Heatmap :: Gold, silver extend decline
Top gainers and losers on S&P BSE Sensex at Pre-open
Markets at Pre-open :: Nifty surpasses 14,500
Markets at Pre-open :: Sensex tops 49,000-mark
BROKERAGE VIEW :: Reliance Securities on Oil and Gas sector
>> India’s Oil & Gas sector has witnessed transition from recovery mode to growth phase, which is evident from: (1) complete recovery in gas consumption with YoY growth of 5%/2% in Oct/Nov’20 on the back of strong LNG import and rebound in gas demand by the industrial and fertiliser units; and (2) near normalcy (99% of normal level) in consumption of oil products with YoY growth of 6%/5%/8% in petrol/LPG/naphtha consumption in 3QFY21.
>> As per our calculation, the OMCs earned supernormal marketing margin of Rs1.4/Rs2.4/litre on petrol/diesel in 3QFY21. In addition to the above, we expect sectoral earnings to be impacted in 3QFY21 due to: (1) rise in Brent crude prices to US$44.6/bbl (5% QoQ); (2) improvement in gross refining margin (GRM) and Singapore benchmark GRM (US$1.2/bbl vs. zero in 2QFY21); and (3) gain in crude inventory.
>> We expect lower APM gas prices to aid EBITDA/unit of CGD players (Indraprashtha Gas and Mahanagar Gas). However, rise in crude and spot LNG prices is
likely to drag gross margin of industrial PNG segment. We expect GAIL to be the biggest beneficiary of rise in crude and gas prices.
BROKERAGE VIEW :: Sharekhan on Titan
CMP: Rs 1,549 | TP: Rs 1,710 | Reco: Buy
>> We maintain a Buy on Titan Company (Titan) with a revised PT of Rs. 1,710; expected strong recovery in FY2022 and robust return profile make it a better play in retail space.
>> Jewellery sales grew by 15% in Q3,as festive demand uptick sustained during rest of the quarter. Watches and Eyewear businesses recovered to 88% and 92% in Q3 and are expected to fully recover by Q4.
>> Better operating leverage would help margins to recover q-o-q and stand at ~11% in Q3; FY2022, OPM is expected to be 12.5-13%.
>> Higher wedding demand, share gains from small players and improvement in discretionary spends would help jewellery business achieve good growth in FY22/23. Watches to see strong recovery as wearable and bands gaining strong traction.
Top stocks to watch today
TCS: Information technology stocks would remain under investor radar on Monday after IT major Tata Consultancy Services on Friday posted a 7.18 per cent year-on-year (YoY) rise in its December quarter (Q3FY21) profit at Rs 8,701 crore. TCS also announced third interm dividend of Rs 6 per share.
Avenue Supermarts: Avenue Supermarts, which owns and operates retail chain D-Mart, on Saturday reported an increase of 16.39 per cent in its consolidated net profit at Rs 446.95 crore for the third quarter ended December 2020. READ HERE
BROKERAGE VIEW :: Sharekhan on TCS
CMP: Rs 3,120 | TP: Rs 3,590 | Reco: Buy
>> We maintain a Buy on TCS with a revised PT of Rs. 3,590, given its differentiated positioning and deep relationships with large global enterprises.
>> Q3FY21 was the second consecutive quarter of strong all-round performance, led by robust demand, market share gains and deal ramp-ups. FCF generation, deal win TCVs and net employee addition remained strong.
>> Owing to end-to-end capabilities, deep domain expertise, contextual knowledge and excellent product and platform offerings, TCS is well-placed to tackle competition.
>> TCS’ revenue and earnings to clock a 11%/15% CAGR over FY2021-23E; we prefer TCS on account of its full-service business model, preferred partner for clients’ transformation journey and higher payout policy.
BROKERAGE VIEW :: Amsec on TCS
CMP: Rs 3,120 | TP: Rs 3,355 | Reco: Accumulate
>> We maintain that TCS stands to benefit in this phase of heightened technology investments, given its unmatched capabilities and strong portfolio. Our numbers see an upgrade due to a strong 3Q show and we now expect flat revenues in FY21E vs 2% decline built in earlier. For FY22E, we have increased our USD revenue growth estimate to 12.5%. We now build in 110 bps yoy improvement in FY21E margins to 25.7%. We build in slight moderation in margins in FY22E and FY23E to 25.4% and 25.1% respectively.
>> On these revised assumptions, our EPS estimates for FY21E, FY22E and FY23E see an upward revision of ~2% each to Rs 89.5, Rs 100.8 and Rs 111.8. We
maintain our ACCUMULATE rating on the stock with a revised target price of Rs 3,355, valuing the stock at 30xFY23E EPS.
BROKERAGE VIEW :: Edelweiss Securities on Vedanta
CMP: Rs 182 | TP: Rs 170 | Reco: Hold
>> We are downgrading Vedanta (VEDL) to ‘HOLD/SP’ (from ‘BUY/SO’) as the stock has achieved our fair value of INR170. In light of the unattractive open offer price of INR160 apiece, we believe upside potential is limited despite our positive view on the commodity cycle.
>> The promoter group is making attempts to increase its stake in the company at an unattractive price; we argue this is not in the best interest of minority shareholders. That said, we believe the current dividend yield of 8–10% is sustainable given parent’s cash requirements and Zinc India’s stable cash flow. Our target price remains unchanged at INR170, implying FY22E EBITDA of 3.2x.
BROKERAGE VIEW :: Edelweiss Securities on Avenue Supermarts
CMP: Rs 2,968 | TP: Rs 2,864 | Reco: Hold
>> Avenue Supermarts (DMart) got back on growth track in Q3FY21 with 9% growth (14% above estimate, Q2FY21: -11%). Other key highlights: a) Strong opex control: Other expenses fell 7% YoY despite the revenue growth, driving EBITDA margin to multi-quarter high. b) Stepped-up ecommerce aggression: In addition to opening fulfilment centres and entering Pune, DMart entered three more cities during the quarter.
>> We believe the aggression on e-commerce along with potential market share gains in modern trade channel bodes well for long-term growth sustenance and thus raise target multiple to 60x EV/EBITDA and TP to INR2,864. We still maintain ‘HOLD’. Continued aggression and overall performance will drive further rerating.
>> We expect DMART to deliver FY20-23E revenue/EBITDA CAGR of 23%/23%, factoring in 18%/44% SSSG (two-year SSG over the low base of FY21) and 40
store additions each in FY22E/FY23E. Unlike other retailers, grocery retailers like DMART have seen a swift recovery to almost pre-COVID levels. A further improvement in product mix could improve margin.
>> The strong recovery to nearly pre-COVID levels has led to the sharp rally in the counter. The stock is trading at 48x/77x FY23E EV-to-EBIDA/FY23E P/E.
>> Expensive valuations, coupled with risk of growth moderation owing to strong traction in online retailers in a post-COVID world and prominence of deep pocket players like Amazon and Reliance Retail, restrict near-term upside in our view.
>> We roll over our valuation to FY23E, valuing DMART at FY23E EV-to-EBITDA of 45x, (which is a ~20% discount to its three-year average multiple of ~55x). We
retain our Neutral recommendation, but raise our TP to INR2,850 per share (v/s INR2,100 earlier)
>> We believe IT Services has entered into a technology upcycle, led by cloud- and data-driven deals coming onto the market
>> Given TCS’ size, capabilities, and portfolio stretch, it is rightly positioned to leverage expected industry growth.
>> Additionally, TCS has consistently maintained its market leadership and shown best-in-class execution. This gives the company continued room to increase its
margins, along with demonstrating industry-leading return ratios.
>> We increase our EPS estimate for FY21/FY22/FY23E by 3%/4%/6% on account of a strong beat in 3Q.
>> Our TP implies 25x FY23E EPS on our revised estimates. While we remain positive on the company, we remain Neutral given the rich multiples
Two trading ideas by Vaishali Parekh of Prabhudas Lilladher
BUY CAN FIN HOMES | CMP: Rs 503 | Target: Rs 550 | Stop Loss: Rs 475
The stock has been slowly and steadily picking up momentum with improving bias looking promising for further upside. The RSI also has indicated a trend reversal with potential to rise further in the coming days. We suggest to buy and accumulate this stock for an upside target of Rs 550, keeping the stop loss of Rs 475. READ MORE
FII/FPI & DII trading activity on NSE, BSE and MSEI
Oil prices fall on renewed coronavirus concerns
>> Oil prices fell on Monday on renewed concerns about global fuel demand amid strict coronavirus lockdowns in Europe and new movement restrictions in China, the world’s second-largest oil user, after a jump in cases there.
>> Brent crude oil futures fell 42 cents, or 0.8%, to $55.57 a barrel after earlier climbing to $56.39, its highest since Feb. 25, 2020. Brent rose in the previous four sessions.
>> US West Texas Intermediate (WTI) slipped 22 cents, or 0.4%, to $52.02 a barrel. WTI rose to its highest in nearly a year on Friday.
SGX Nifty Update
>> At 8:10 am, the index was at 14,431 levels, up 55 points or 0.37 per cent.
Wall Street on Friday
The Dow Jones Industrial Average rose 56.84 points, or 0.18 per cent, to 31,097.97. The S&P 500 gained 20.89 points, or 0.55 per cent, to 3824.68 and the Nasdaq Composite added 134.50 points, or 1.03 per cent, to 13,201.98
>> Asian indices were largely higher on Monday after US President-elect Joe Biden said he will deliver a plan costing "trillions" of dollars next week as economic relief for Americans from the coronavirus pandemic.
>> Korea's Kospi surged 2.7 per cent and Hang Seng was up 0.3 per cent in early deals while Australia's ASX 200 slipped 0.6 per cent.
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