Sensex ends 134 pts lower, Nifty settles at 11,505; Nifty Pharma jumps 5%

Topics Markets | Dr Reddys | ICICI Bank

India VIX fell nearly a per cent to 19.93 levels. (Photo credit: Kamlesh Pednekar)
Erasing all their morning gains, the benchmark indices ended in the negative territory on Friday due to selling in the financial counters.

The S&P BSE Sensex ended 134 points, or 0.34 per cent lower at 38,846 with HDFC Bank (down over 2 per cent) being the biggest loser and Bharti Airtel (up around 4 per cent) the top gainer. HDFC Bank, HDFC, Infosys, and Hindustan Unilever (HUL) were among the major contributors to the index's loss. 

NSE's Nifty settled at 11,505, up 11 points, or 0.10 per cent. India VIX fell nearly a per cent to 19.93 levels. 

On a weekly basis, both Sensex and Nifty ended flat. 

Meanwhile, pharma stocks gained big in the trade. The Nifty Pharma index jumped 5 per cent to 12,321 levels with all the 10 constituents advancing. Dr Reddy's hit a record high of Rs 5,496.95 during the trade after the company said it has settled its patent litigation with Celgene for the latter's cancer drug capsules. The stock settled at Rs 5,306, up 10 per cent on the NSE. READ MORE

On the other hand, financial stocks declined. The Nifty Bank index ended over 1 per cent lower at 22,031 levels while the Nifty PSU Bank index lost 1.62 per cent to 1,386.60 levels. READ MORE

In the broader market, the S&P BSE MidCap index ended 0.26 per cent higher at 15,048 while the S&P BSE SmallCap index ended 0.32 per cent lower at 15,300. 

Global markets

Stocks struggled on Friday as worries about a resurgence in coronavirus cases and lingering disappointment that central banks merely affirmed their monetary support this week, without promising new stimulus, kept investors wary.

In Asia, China stocks staged a strong finish. The blue-chip CSI300 index ended up 2.3 per cent at 4,737.09, while the Shanghai Composite Index rose 2.1 per cent to 3,338.09.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.5 per cent. Stocks in China made their strongest gains in three weeks, with the CSI300 index adding 2.2 per cent, a move led by financial companies. The US-heavy MSCI world shares index was up 0.1 per cent, heading for its first weekly gain in three weeks.

In commodities, oil prices rose for a fourth day in a row, putting crude on track for a weekly gain of about 10 per cent, after Saudi Arabia pressed allies to stick to production quotas and banks including Goldman Sachs predicted a supply deficit.

(With inputs from Reuters)

4:27 PM IST "Indian benchmark indices, after trading in the green for most of the day, succumbed to a round of selling in the last hour of trading, to close the day on a flat note, with a slight negative bias. Global cues were mostly mixed after the US Fed Reserve failed to come out with an immediate stimulus measure and also due to a resurgence in virus infections in some countries. On a weekly basis, the benchmark indices closed flat, although it was characterised by high volatility, fluctuating between gains and losses."   WEEK AHEAD "Markets have been trading with uncertainty and the clear lack of direction to either side was visible in this week’s trades. The worry was visible as investors would have cleared their positions heading into the weekend. Due to the lack of any fresh triggers for the market, the current uncertainty is expected to continue. But any news with regards to the border tensions with China, or global events can impact the markets on the downside. As such, investors need to be cautious and watch for news-specific movements."

3:43 PM IST

3:42 PM IST

3:36 PM IST The S&P BSE Sensex slipped 134 points, or 0.34 per cent to settle at 38,846 while NSE's Nifty ended at 11,505, down 11 points, or 0.11 per cent.

3:29 PM IST

3:23 PM IST

3:14 PM IST

3:06 PM IST COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) LATEST(RS) FALL(%) STERLING & WILS. 239.00 217.10 219.90 -7.99 DISHMAN CARBOGEN 179.15 163.00 165.50 -7.62 INDOCO REMEDIES 289.90 266.85 269.20 -7.14 GLAXOSMI. PHARMA 1785.45 1661.25 1668.00 -6.58 Click here for the full list

3:05 PM IST Bandhan Bank, RBL Bank, HDFC Bank, and IDFC First Bank were down 3 per cent, while Federal Bank, State Bank of India (SBI), Punjab National Bank, and IndusInd Bank from the index were down in the range of 1 per cent to 2 per cent on the National Stock Exchange (NSE). READ MORE

2:58 PM IST

2:52 PM IST At 02:17 pm, Dr Reddy's Labs market cap stood at Rs 90,348 crore, while that of Divi's Laboratories was Rs 89,119 crore, BSE data shows. Both these stocks hit their respective highs on Friday. Sun Pharma is the most valued listed company of India with market cap of Rs 1.26 trillion. READ MORE

2:47 PM IST COMPANY PRICE(rs) 52 WK HIGH CHG(%) ADVANCED ENZYME 249.00 254.00 1.08 APOLLO HOSPITALS 1814.70 1871.00 2.10 BIOCON 454.85 463.55 2.88 BIRLASOFT LTD 200.55 206.40 3.46 CADILA HEALTH. 415.15 422.80 5.31 » More on 52 Week High

LIVE UPDATES

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

"Indian benchmark indices, after trading in the green for most of the day, succumbed to a round of selling in the last hour of trading, to close the day on a flat note, with a slight negative bias. Global cues were mostly mixed after the US Fed Reserve failed to come out with an immediate stimulus measure and also due to a resurgence in virus infections in some countries. On a weekly basis, the benchmark indices closed flat, although it was characterised by high volatility, fluctuating between gains and losses."
 
WEEK AHEAD

"Markets have been trading with uncertainty and the clear lack of direction to either side was visible in this week’s trades. The worry was visible as investors would have cleared their positions heading into the weekend. Due to the lack of any fresh triggers for the market, the current uncertainty is expected to continue. But any news with regards to the border tensions with China, or global events can impact the markets on the downside. As such, investors need to be cautious and watch for news-specific movements."

SECTOR WATCH | Nifty PSU Bank index slips over 1.6%


MARKET AT CLOSE | Losers and gainers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex slipped 134 points, or 0.34 per cent to settle at 38,846 while NSE's Nifty ended at 11,505, down 11 points, or 0.11 per cent.

Top 5 gainers on the BSE at this hour


Bharti Airtel surges around 4%


Sensex recovers from the day's low, still down over 100 pts


Fall from intra-day high today

COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) LATEST(RS) FALL(%)
STERLING & WILS. 239.00 217.10 219.90 -7.99
DISHMAN CARBOGEN 179.15 163.00 165.50 -7.62
INDOCO REMEDIES 289.90 266.85 269.20 -7.14
GLAXOSMI. PHARMA 1785.45 1661.25 1668.00 -6.58
Click here for the full list

Nifty Bank index falls 2%; RBL, Bandhan, HDFC Bank down over 3%

Bandhan Bank, RBL Bank, HDFC Bank, and IDFC First Bank were down 3 per cent, while Federal Bank, State Bank of India (SBI), Punjab National Bank, and IndusInd Bank from the index were down in the range of 1 per cent to 2 per cent on the National Stock Exchange (NSE). READ MORE

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


Dr Reddy's reclaims spot as India's 2nd most valuable pharma company

At 02:17 pm, Dr Reddy's Labs market cap stood at Rs 90,348 crore, while that of Divi's Laboratories was Rs 89,119 crore, BSE data shows. Both these stocks hit their respective highs on Friday. Sun Pharma is the most valued listed company of India with market cap of Rs 1.26 trillion. READ MORE

Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
ADVANCED ENZYME 249.00 254.00 1.08
APOLLO HOSPITALS 1814.70 1871.00 2.10
BIOCON 454.85 463.55 2.88
BIRLASOFT LTD 200.55 206.40 3.46
CADILA HEALTH. 415.15 422.80 5.31
» More on 52 Week High

MARKET CHECK


MARKET CHECK :: Financials drag indices lower


BROKERAGE VIEW | Kotak Institutional Equities on Cipla, Lupin

We believe both Lupin and Cipla have nearly 10 million device capacities, with Teva and GSK the only other players having large capacities (each in excess of 20 mn). Given Perrigo’s exit, we expect a prolonged steady pricing scenario for albuterol. We believe Cipla has now scaled up to full capacity at US$10-12/device pricing, and expect Lupin to fully scale-up over the next quarter.

SECTOR WATCH :: Sharp slide in banking counters; HDFC Bank dips 3%, PNB 2%


BUZZING STOCK :: Dr Reddy's extends gains, up over 13%


NEWS ALERT :: Shilpa Medicare Board approves to establish wholly-owned subsidiary in Malaysia


Rupee Closing

Rupee ends stronger at 73.45/$ vs Thursday's close of 73.65 per US dollar

Surya Roshni surges 25% in 8 days after winning orders worth Rs 287 crore

On September 8, 2020, the company said it received two separate orders worth Rs 287.45 crore from Indian Oil Corporation and Bharat Gas Resources. The company received an order worth Rs 152.31 crore from Indian Oil Corporation for supplying API grade pipes for LPG pipe line project in Uttar Pradesh. The order is to be executed in 10 months. The company also received an order worth Rs 135.14 crore from Bharat Gas Resources for supplying API grade pipes for pan-India city gas distribution. The order is to be executed in 12 months. READ MORE  


BROKERAGE VIEW | Emkay Global Financial Services on Lupin, Cipla

Assuming Perrigo remains out of market for the next six months and a shift of incremental US$30mn sales to each Cipla and Lupin, our rough calculation indicates an 8-9% upgrade for Cipla and around 13-14% for Lupin in FY21 earnings. There will not be any change in FY22/23 EPS as Perrigo may re-enter the market by then. We have a Buy rating on Cipla with a TP of Rs 800 and Hold on Lupin with a TP of Rs 905. Currently, Cipla is an overweight in EAP while Lupin is underweight.

Market share gains, pick up in ad growth to help Zee Entertainment

Rise in viewership of general entertainment channels for the second consecutive month, improvement in market share, and expected gains in revenue from advertising are positives for Zee Entertainment. Analysts at Elara Securities say the broadcaster reported strong performance in August and was able to gain market share across general entertainment and regional genres over the previous month. READ MORE

European indices mixed in early deals


Global automobile sales forecast to fall by 20% this year, says S&P

"We project global vehicle sales to expand 7 to 9 per cent both in 2021 and 2022, meaning that light vehicle sales two years from now will still be 6 per cent below 2019 volumes."
 
Any upside to our sales scenario will stem mainly from the Chinese market, the most dynamic but least predictable among the main global auto markets, said Ferraris adding that China may be the only market to catch up with 2019 volumes by the end of 2022. READ MORE

Real estate stocks in focus; Oberoi Realty, DLF advance over 5%

Shares of real estate companies were in focus with the Nifty Realty index gaining 3 per cent on Friday. Oberoi Realty and DLF rallied 8 per cent and 6 per cent, respectively, on the National Stock Exchange (NSE). Brigade Enterprises, Sobha, Godrej Properties, Sunteck Realty, and Indiabulls Real Estate were up in the range of 1 per cent and 3 per cent. READ MORE

SECTOR WATCH:: Auto stocks trade higher

COMPANY LATEST(rs) CHG(%)
ASHOK LEYLAND 82.10 4.85
TATA MOTORS 149.10 1.02
M & M 643.60 1.01
TATA MOTORS-DVR 66.05 1.15
ESCORTS 1277.70 2.71
» More

344 stocks in Nifty 500 index are indicating a bullish trend, shows MACD

The moving average convergence divergence (MACD) is a technical indicator that helps to understand the changes in the strength, momentum, and direction of any stock/security. The relationship between two moving averages helps to determine the buy or sell signal with the assistance of a 'signal line'. READ MORE

India VIX cools off 3%


India Inc looks to raise more than Rs 50,000 crore from IPOs in FY21

According to data made available by Geojit Financial Services, as many as 80 firms have approached the regulator Securities and Exchange Board of India (Sebi) to get the necessary approvals for tapping the primary market through the rest of the current fiscal. READ MORE

Top gainers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
NATCO PHARMA 916.20 18.00
DR REDDY'S LABS 5251.45 8.80
SUDARSHAN CHEM. 531.00 8.69
CIPLA 810.10 7.72
LUPIN 1110.20 6.96
» More on Top Gainers

MARKET UPDATE


Sebi asks MFs to put in place policy on trade execution, allocation

Markets regulator Sebi on Thursday asked mutual fund houses to put in place a policy specifying role of several teams engaged in fund management and back office with regard to execution of order and allocation of trade among various schemes.
 
The policy will ensure that all the schemes and its investors are treated in a fair and equitable manner, the Securities and Exchange Board of India (Sebi) said in a circular. READ MORE

Ashok Leyland shares near 52-week high, surge 61% in 2 months

Shares of Ashok Leyland climbed 6 per cent to Rs 83.10 on the BSE on Friday, on expectation of demand revival. The commercial vehicles maker's stock is trading close to its 52-week high level of Rs 87.50, touched on January 24, 2020. In the past two months, the stock has rallied 61 per cent, as compared to 5.3 per cent rise in the S&P BSE Sensex. READ MORE

NEWS ALERT :: ICRA upgrades Escorts' Long-term rating from AA- to AA

>> ICRA has removed the long-term rating from 'Rating Watch with Developing Implications', and upgraded the same from [ICRA]AA- to [ICRA]AA.

>> The long-term rating has a 'stable' outlook.

>> ICRA has also reaffirmed a short-term rating of [ICRA]A1+ for the captioned LOC.
 

Axis Bank's multi-year low valuations a worry for investors

Axis Bank is among the few lenders to have closed two successful rounds of capital raise (approximately Rs 25,000 crore) in less than a year, as well as grow its business at 13 per cent in the June quarter (Q1). However, the Street doesn’t seem to have been too enthused, which reflects in its 41 per cent year-to-date price erosion, and multi-year low valuation of 1.3x its FY22 estimated book. READ MORE

Vinati Organics extends rally into fifth straight day, soars 36% in 1 week

The Company's products find application across various sectors such as pharmaceutical, water treatment, oil and gas, agrochemicals and personal care. For FY21, there is some pressure on the oil related application but demand for pharma, water treatment and others is expected to continue growing. READ MORE

Bank Nifty weekly option report

(Source: Axis Securities)

BUZZING STOCK:: Natco Pharma hits 20% upper circuit


NEWS ALERT :: Cadila Health receives US FDA nod for Potassium Chloride

>> Zydus Cadila has received final approval from the USFDA to market Potassium Chloride ExtendedRelease Tablets (US RLD: K-Dur Extended-Release Tablets) in the strengths of 10 mEq (750 mg) and 20 mEq (1500 mg).

>> The medication is a mineral supplement used to treat or prevent low amounts of potassium in the blood and will be manufactured at the group’s formulation manufacturing facility at the SEZ, Ahmedabad.

>> The group now has 301 approvals and has so far filed over 390 ANDAs since the commencement of the filing process in FY 2003-04.
 

Escorts rallies 18% in September on hopes of good tractor sales

Shares of Escorts hit a fresh record high of Rs 1,280, up 3 per cent on the BSE on Friday. Thus far in September, the commercial vehicles company's stock has outperformed the market by surging 18 per cent on expectation of good tractor sales. In comparison, the S&P BSE Sensex was up 1 per cent during this period. The market sentiment continues to be highly positive with good monsoons, better Kharif sowing, crop prices holding up well, and good supply of retail finance. READ MORE

NEWS ALERT :: India Ratings and Research revises outlook on banking sector to Negative for 2HFY21 from Stable

>> This is in view an expected spike in stressed assets, higher credit costs, weaker earnings on account of interest reversals and lower fee income, and muted growth prospects in the wake of the measures taken to contain the spread of Covid-19.
 
>> As per Ind-Ra’s bear case, the spike in stressed assets due to pandemic is expected to double the credit costs for banking system than estimated pre-Covid-19 levels for FY21.
 
>> Negative Outlook on PSBs: The agency has revised the rating outlook on PSBs to Negative for 2HFY21 from Stable. PSBs’  modest capital buffers are expected to deplete further in FY21, due to provisioning requirements. Also, pre-COVID profitability expectations for FY21 would be belied and most banks are likely to  report net losses. They may also need to continue to build-up their provision cover in FY22 for restructured assets as  some of the restructured assets could turn NPA in FY23. PSBs’ could require INR350 billion-550 billion in 2HFY21 for Tier 1 ratio of 10%. Covid-19 / contingent provisions are much lower than that for private banks. 
 
>> Stable Outlook for Private Banks: Ind-Ra has maintained a Stable outlook for private banks, as they are better placed to withstand the challenges presented by the pandemic. Most large banks have strengthened their capital buffers, built contingent provisions and have been proactive in managing the loan portfolio. While the system’s credit growth could remain anaemic, and short-term financial performance could deteriorate modestly, large banks may benefit from credit migration. As opportunities arise, these banks are in a position to gain substantial franchise growth in the medium term, given that they have also added to their capital buffers over the past few months.
 

Big firms become even bigger; market polarisation worries Street

In the last five years, bulk of the gains in the broader market has come from a select few stocks, while majority continue to languish. The five biggest index stocks, in terms of index weight, accounted for 62 per cent of the incremental rise in the Nifty since end-December 2014.  READ MORE

MARKET UPDATE:: Sensex off day's high


Essel Propack sinks 6% as nearly 24% equity changes hands via block deal

Shares of Essel Propack tanked up to 6.2 per cent to Rs 256 on the BSE on Friday after 83.2 million shares changed hands on the NSE and BSE. At 9:15 am, 74.55 million shares, representing 23.63 per cent stake in the company, changed hands on the BSE at Rs 260 per share, data show. READ MORE

BSE Healthcare index hits record high; Laurus Labs, Dr Reddy's at new highs

Shares of pharmaceutical companies were on a roll at the bourses on Friday, with the S&P BSE Healthcare index surging nearly 3 per cent to hit its record high on the back of positive news flow. Laurus Labs, Dr Reddy’s Laboratories and Apollo Hospitals from the index hit their respective record highs, while Lupin, Stride Pharma, Neuland Labs, Lincoln Pharma and Hikal scaled their respective 52-week highs on the BSE. READ MORE

BROKERAGE VIEW | ICICI Securities on Dr Reddy's

RATING: ADD | TARGET PRICE: Rs 5,214

DRL has settled ongoing patent litigation with Celgene over Revlimid launch in US. This development provides certainty to launch and a material earnings accretion over FY23-FY26. We estimate DRL to generate cumulative sales and PAT of US$2.5bn and US$1.6bn respectively over this shared exclusivity period. We value this opportunity at Rs 514/share for DRL considering annual market size of US$8bn and gradual market share increase to 18% in FY26. Maintain ADD.

BROKERAGE VIEW | ICICI Securities on Federal Bank

RATING: BUY | TARGET PRICE: Rs 70

Federal Bank has revised some fees and charges upwards in various banking services effective 1st Oct’20 to ensure further balance stickiness, discipline and We see two-fold effect of this development: Firstly, it would further strengthen the liability franchise with improved balance stickiness and discipline. 
 
Secondly, it supports traction in non-interest income particularly from services (currently contributes ~25% to core fee income, up from ~20% since last revision in charges in Sep’19). Strength and resilience of its liability franchise reflects in 13bps improvement in deposit market share over past two years.
 
Valuations at 0.7x FY22E offer favourable risk-reward. Maintain BUY.realigning with market dynamics. 

BROKERAGE VIEW | Edelweiss Securities on Metals and Mining

Domestic steel prices continue to edge up with HRC prices at a 15-month high. Major domestic players are expecting volume gains in a typically strong second half (of the year). The recent uptick in coking coal prices notwithstanding, we see adjusted spreads at a far improved level hereon. Besides, European and Far East prices are trending up. That said, the dip in iron ore and HRC futures in China has brought weakness in demand to the fore. This may potentially drive down regional pricing down, not to mention the dampening of export prospects for Indian players. We are keeping close tabs on downstream demand indicators in China. All in all, we reiterate a positive outlook on the ferrous space; Tata Steel (‘BUY/SO’) is our top pick.

Rupee opening

Rupee opens stronger at Rs 73.47/$ vs Thursday's close of 73.65 against the US dollar

MARKET UPDATE:: Sensex off opening highs, but still trading with gains


Most active stocks by volume

COMPANY PRICE(rs) CHG(%)
ESSEL PROPACK 258.20 -5.42
VODAFONE IDEA 11.12 -1.33
IDFC FIRST BANK 32.15 0.63
KPIT TECHNOLOGI. 103.80 -0.48
AU SMALL FINANCE 710.10 0.79
» More on Most Active Volume

BUZZING STOCK | Natco Pharma surges over 11%


Nifty FMCG index the only sectoral index trading in red at this hour


MARKET CHECK :: Sensex off opening highs


Shilpa Medicare at day's high


Cipla jumps 5%


Lupin soars over 6%, hits 52-week high

>> As per news reports, Ireland's pharma company Perrigo has voluntarily recalled albuterol sulfate inhalation aerosol. This development, according to reports, can benefit Lupin and Cipla as they are likely to increase sales of the same drug manufactured by these companies.


RITES advances 2% ahead of Board meet to consider share buyback


Sterling and Wilson Solar surges 5% on new order

>> Sterling and Wilson on Thursday announced that it has signed an order of 106.71 MW worth US dollar 62.6 million (nearly Rs 462 crore) in Chile. The order has been received from a global independent power producer (IPP), work for which is expected to begin in Q4 FY 2021.


TCS trades around 0.8% higher

>> Tata Consultancy Services announced that it has partnered with Phoenix Group, the UK's largest long-term savings and retirement business, to launch an enhanced client analytics tool for workplace pension clients of its Standard Life Assurance Limited business.


Dr Reddy's Labs hits fresh 52-week high

>> Pharma major Dr Reddy’s Laboratories yesterday said it has settled its patent litigation with Celgene for the latter's cancer drug capsules.


Large Trade :: Around 18% equity changes hands on Essel Propack


Sectoral trends at Open


Sensex Heatmap at Open


First Trade | Nifty tops 11,550


First Trade | Sensex up around half a per cent


BROKERAGE VIEW :: Kotak Institutional Equities on Dr Reddy's

CMP: Rs 4,817 | Fair value: Rs 3,700 | Reco: Sell

DRRD has announced patent settlement for Revlimid with BMS, with a volume-restricted launch post March 2023. The settlement is in line with our base case assumption of a 2HFY23 launch, and while exact details are not yet available, we expect further 3-5 settlements for CY2023-24 launch timelines, thereby capping the upside for DRRD. The sharp run-up in the stock captures Revlimid fully, with the stock trading at 18X FY2023E EPS including Revlimid. SELL.
 

BROKERAGE VIEW :: Kotak Institutional Equities on Avenue Supermarts

CMP: Rs 2,139 | Fair value: Rs 1,530 | Reco: Sell

Covid has accelerated existing grocery e-tailers’ order run-rates; we believe some of these customers may prefer the online channel even post Covid. Dmart thus needs to bring more cities under its e-commerce network in order to maintain revenue momentum. Competitive intensity would ensure that Dmart’s margins may not expand significantly going forward. We revise our DCF-based FV to Rs1,530 (from Rs1,480) as we roll forward to September 2021E. Retain SELL

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


Markets at Pre-Open


Markets at Pre-Open


BROKERAGE VIEW :: MOFSL on Dr Reddy's Labs

CMP: Rs 4,827 | TP: Rs 4,600 (-5%) | Reco: NEUTRAL

>> Dr Reddy’s (DRRD) and Celgene (innovator) have agreed to settle the litigation pertaining to g-Revlimid for the US market. Per the settlement, DRRD could begin selling g-Revlimid in the US from FY23.

>> The settlement provides better visibility to DRRD. We factor INR270 per share as NPV based on the settlement agreements of DRRD and other generic players with the innovator.

>> With limited price erosion in the base business / robust ANDA launches in the US segment, improving benefit from cost rationalization, favorable demand in the
PSAI segment, and synergy benefit through the addition of the Wockhardt portfolio, DRRD is well-placed to deliver a 21% earnings CAGR over FY20–22. However, we maintain Neutral as valuations are rich.

BROKERAGE VIEW :: MOFSL on Power Grid

CMP: Rs 168 | TP: Rs 223 (+32%) | Reco: Buy

>> We analyzed details of Power Grid (PWGR)’s tariff-based competitive bidding (TBCB) projects from their annual reports. At an aggregate level, in our view, PWGR should be able to generate ~14% equity IRR (assuming a debt-to-equity ratio of 80:20 for its 11 under-construction projects). Equity IRR for its eight commissioned TBCB projects varies in the range of 2–27%.

>> PWGR also seeks to monetize its TBCB assets through the InvIT mode and has acquired an in-principle approval from the board and the cabinet. The company has stated it plans to use the proceeds from this monetization primarily to invest in upcoming projects. Excess cash available, in the event of fewer-than-expected investment opportunities, could be paid out as dividends. PWGR’s eight commissioned projects account for a gross block of ~INR125b. We await details on the transfer of such assets.

BROKERAGE VIEW :: MOFSL on Hero Moto

CMP: Rs 3,062 | TP: Rs 3,900 (+27%) | Upgrade to BUY

>> HMCL is in a sweet spot as strong rural-led recovery plays to its strength in the Economy–Executive category in the Motorcycles segment. With an apt product
portfolio for the rural market, the highest brand recall, and a strong distribution network, it is best placed to benefit from low penetration and ongoing momentum in the rural economy.

>> While there is no clarity on whether the GST cut would actually happen and whether it would be across 2W segments, we do believe that there is a case for GST cuts for commuter segment (100–125cc 2Ws). This augurs well for HMCL considering >95% of volumes come from <125cc segment (incl. Scooters). Anecdotal evidence suggests the biggest benefit could accrue to the <125cc segment, which would benefit HMCL the most.

>> We believe HMCL has multiple re-rating triggers including: 1) the return of volume growth, 2) a possible foothold in Premium Motorcycles, Scooters, and/or Exports, and 3) a speculated GST cut.

>> We upgrade our FY21E/FY22E EPS estimates by 3%/15% to factor in for faster volume recovery. The stock trades at 15.1x/14.1x FY22/23E EPS, implying a 20–25% discount to 5-year average P/E of 18x. Unlike the last 5 years, we expect EPS to grow at a 12% CAGR over FY20–23E. Hence, we now value HMCL at 18x Sep’22 EPS (at 5-year average P/E v/s 16x earlier) to factor improved volume visibility. We upgrade to BUY (from Neutral), with TP of INR3,900 (18x Sep’22 EPS + INR100/share for NBFCs

Stocks to watch out for

TCS: Tata Consultancy Services announced that it has partnered with Phoenix Group, the UK's largest long-term savings and retirement business, to launch an enhanced client analytics tool for workplace pension clients of its Standard Life Assurance Limited business.
 
Sterling and Wilson on Thursday announced that it has signed an order of 106.71 MW worth US dollar 62.6 million (nearly Rs 462 crore) in Chile. The order has been received from a global independent power producer (IPP), work for which is expected to begin in Q4 FY 2021.
 
HDFC Bank: US-based Rosen Law Firm and Schall Law Firm have filed class-action suits against HDFC Bank alleging misleading public statements and for failing to inform investors about the bank's improper internal controls on vehicle loans. READ MORE  


Pfizer in focus: Vaccine trial bets on early win against coronavirus

In recent weeks, Pfizer has said it should know by the end of October whether the vaccine, developed together with Germany's BioNTech SE, is safe and effective. If the vaccine is shown to work by then, Pfizer has said it would quickly seek regulatory approval. It has not said what data it would use. READ MORE

Trading strategies for copper and lead by Tradebulls Securities

Silver has failed to cross 70,000 in MCX since August. Every time it falls after testing levels of 69,800-69,900, thus finding resistance around that levels. We are more bullish in gold than silver and we might see more upside in silver if volatility increases. As history has shown, low volatility is friend of silver bears than bulls. 66,000 is immediate support and fall below that, we might see silver tumbling to 65,000 to 64,500. READ MORE

Nifty can test higher levels if it holds 11,400: Nilesh Jain of Anand Rathi

BUY NIFTY | TARGET: 11,650 | STOP LOSS: 11,400
 
The Nifty index is stuck in a broader range and, as expected, we saw buying coming in from lower levels. Now, the immediate support is placed at 11,400 levels and as long as Nifty trades above that, we can again expect Nifty to test the higher levels. The momentum indicators and oscillators on the weekly scale are very well in 'buy' mode. Hence, aggressive traders can initiate a long position with a stop loss of 11,400 levels for upside move towards 11,650 levels. The broader markets have outperformed and are also looking good on the chart. Hence, a defensive trader should adopt stock-specific actions. READ MORE

Here's a Bull Spread Strategy on Manappuram Finance by HDFC Securities

Bull Spread strategy on Manappuram Finance
 
Buy Manappuram Fin Sept 160 CALL at Rs 4.75 & simultaneously sell 170 Call at Rs 1.75
 
Lot Size 6000
 
Cost of the strategy Rs 3 (Rs 18000 per strategy)
 
Maximum profit Rs 42000 If Manappuram fin closes at or above 170 till September expiry.
 
Break-even Point Rs 163 READ MORE

Bulk deals on BSE as on Thursday

Bulk deals on NSE as on Thursday

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


Rupee check

Source: Bloomberg


Oil eases as US production resumes after storm

>> Oil prices drifted lower on Friday, pausing after three days of gains, as producers prepared to resume operations in the Gulf of Mexico and data showed Saudi Arabian exports rose from record lows.
 
>> Brent crude was down 6 cents at $43.24 a barrel, while US oil futures dropped 6 cents to $40.91 a barrel. 

(Source: Reuters)

SGX Nifty update


Asian stocks mixed

Source: Reuters


Wall Street ends lower

Source: Reuters


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