LIVE market updates: After ruling higher for better part of the day, domestic equities witnessed sharp profit booking in the fag end of the session as European stocks slipped in early trade and US stock futures hinted at a muted start on Wall Street later today.
Concerns about the fast-spreading Delta variant and regulatory actions in China dragged the pan-European STOXX 600 index down 0.5 per cent while Dow Jones Futures were quoting 100 points, or 0.3 per cent, lower. Nasdaq Future, meanwhile, tumbled 1.1 per cent and those linked to S&P500 declined 0.6 per cent. Earlier in Asia, Nikkei skidded 2 per cent, and Kospi and Hang Seng erased over 1 per cent each.
Against this backdrop, the frontline S&P BSE Sensex gyrated 376 points in intra-day trade and ended 66 points, or 0.13 per cent, lower at 52,587 levels dragged by Bajaj Finance (down 2.5 per cent), Bajaj Finance, SBI, Tata Steel, Titan, Asian Paints, Axis Bank, IndusInd Bank, and Nestle India.
It's NSE counterpart, Nifty50, shut shop at 15,763 levels, down 15 points or 0.1 per cent. The broader markets, however, outperformed with the BSE MidCap and SmallCap indices zooming 0.52 per cent an 0.69 per cent, respectively.
MARKET STRATEGY :: What will drive the indices next week?
The RBI’s MPC meeting is scheduled for the coming week however the expectation is that the RBI too, just like the Fed, will not hamper the repo rates so as to continue supporting impacted sectors with cheaper credit. The Governor's comments on inflation will also throw some light ontoour economy and any future actions our central bank might take.
Auto sales numbers, PMI figures along with the result season will continue to drive stock specific movements on D-Street.
Investors can continue investing in the markets in a SIP format to accumulate quality stocks. Nifty50 closed the week at 15,763.05, down by 0.59%.
Views by: Nirali Shah, Head of equity research, Samco Securities
MARKET RECAP :: Vinod Nair, Head of Research at Geojit Financial Services
Taking support from pharma, fertilizer and auto stocks, the domestic market attempted to trade positively but failed to stick with the gains amid weak global trend. Eurozone inflation in July rose to 2.2% YoY above European Central Bank’s target impacting the European market and the Chinese market was fragile too. Pharma stocks were back on action beating early worries of weak Q1 results as recent quarterly of major companies were in favor of market expectation. Fertilizer stocks were in focus today as Chinese firms were asked to suspend exports in order to ensure domestic supply
MARKET RECAP :: S Ranganathan, Head of Research at LKP Securities
A highly volatile session of trade today with plenty of action across stocks and sectors. Profit Booking was seen in key Pivotals and across high-quality Midcaps to erase the gains for the day. The Pharma Index however bucked the trend with a stellar 3.5% up move today led by the big boy which posted good numbers for the quarter. A day of high volatility amidst a slew of earnings was indeed the highlight for today
Markets this week :: Top losers on NSE
>> Dr Reddy's Labs: 13.11%
>> Axis Bank: 6.16%
>> Maruti Suzuki: 4.33%
>> Asian Paints: 4.06%
Markets this week :: Top gainers on NSE
>> Sun Pharma: 10%
>> Tech Mahindra: 6.95%
>> Hindalco: 2.9%
>> Bajaj Finserv: 2.6%
>> Tata Steel: 1.7%
Markets this week :: MidCap index trumps Benchmarks
>> Markets slip for second straight week
>> Sensex & Nifty slip 0.6% each
>> Nifty Bank falls 3% in last two weeks, the biggest 2-week fall in nearly 4 months
>> Midcap index regains last week's losses, up nearly 1% this week
MARKET VIEW :: Investors go home with leaner portfolios ahead of a likely weak Wall St session
BSE Snapshot :: Rally in broader markets skews market breadth towards advances
India VIX ends 1% down at 12.18 levels.
Sector Watch :: Metal index slips 1% after rising 5% on Thursday
Sector Watch :: 13 of 15 auto index constituents end higher
>> Ashok Leyland top gainer; Tube Investments of India top laggard
Sector Watch :: Sun Pharma, Cipla drive Nifty Pharma index over 3% higher
Index contributors :: RIL, SBI, Bajaj Finance top drags on the Sensex
BSE SmallCap Heatmap :: Index ends 0.7% higher
Broader market :: BSE MidCap index holds ground, adds 0.5%
Sectoral trends on the NSE
Sensex Heatmap at Close
Top gainers: Sun Pharma, Tech M, Power Grid
Top losers: Bajaj Finance, SBI, Bajaj Finserv
The frontline S&P BSE Sensex ended 66 points, or 0.13 per cent, lower at 52,587 levels
It's NSE counterpart, Nifty50, shut shop at 15,763 levels, down 15 points or 0.1 per cent.
Sun Pharma rallies 9%, hits over 4-year high on strong June quarter results
The company reported better-than-expected consolidated sales from operations at Rs 9,669 crore, a growth of 29 per cent over Q1 last year and 14 per cent over Q4 last year. Analysts had expected 19.5 per cent YoY revenue growth for the quarter. The strong revenue growth was mainly due to 39 per cent YoY jump in domestic formulations to Rs 3,308 crore and 35 per cent YoY rise in the US formations to Rs 2,800 crore. READ MORE
MARKET CHECK :: Sharp fall in indices
Q1 Results :: MARICO
Cons revenue at Rs 2525 crore
Cons PAT at Rs 365 crore
EBITDA at Rs 481 crore
Cons margin at 19%
June Quarter Results :: Indian Oil Corporation reports weak nos sequentially
>> PAT: Rs 5,941 crore
>> Revenue: Rs 1.18 trillion
>> Ebitda: Rs 11,126 crore
>> Ebirda margin: 9.4%
Laurus Labs rebounds 9% from day's low after 3 straight sessions of decline
On Thursday, Laurus Labs reported 31.1 per cent year-on-year (YoY) growth in revenue at Rs 1,278.5 crore, mainly driven by 95 per cent YoY jump in CRAMS (contract research & manufacturing services) business to Rs 195 crore and strong traction in formulations to Rs 521 crore with growth of 48 per cent YoY. Net profit grew 40 per cent YoY at Rs 241 crore. READ MORE
June Quarter Results :: Sun Pharma
>> PAT: Rs 1,444.1 crore
>> Revenue: Rs 9,669.4 crore
>> Ebitda: Rs 2,821 crore
>> Ebitda margin: 29%
Market Check :: Sensex at day's high
June Quarter Results :: Dr Lal Path Labs reports a profit of Rs 131.2 crore
>> Revenue: Rs 606.6 crore
>> Ebitda: Rs 189 crore
>> Ebitda margin: 31.2%
JUNE QUARTER RESULTS :: V-GUARD INDS
Cons revenue at Rs 565 crore vs Rs 408 crore YoY
Cons PAT at Rs 26 crore vs Rs 4 crore YoY
NEWS ALERT :: Govt suspends international passenger flights till Aug 31
India equity deals set to pick up pace as investors hunt post-pandemic bets
Cash-laden investors are set to step up the hunt for Indian firms, mainly tech start-ups, likely to benefit in the post-pandemic world, after pumping in a record $30 billion via public and private equity deals this year, bankers and analysts said.
Eyeing India's large middle class with access to cheap smartphones and the internet, global investors have flocked to online platforms in the country and helped swell the ranks of unicorns, or start-ups valued at $1 billion or above. READ MORE
Amazon's recent numbers don't look good: should investors start worrying?
E-commerce sales are clearly slowing, foreshadowing more lackluster revenue results the rest of the year. Of course, part of the issue is the company’s outperformance in 2020 during the height of the pandemic. Amazon was a big beneficiary of the shift toward online purchasing. But as the economy reopens, consumers are likely to return to their previous habits and pre-Covid activities — including frequenting physical stores. Spending may also ratchet back as government stimulus payments dissipate. READ MORE
Devyani International IPO opens on August 4
· Price Band of Rs. 86 – Rs. 90 per equity share of face value of Rs. 1 each (“Equity Shares”)
· Bid/Offer Opening Date – Wednesday, August 4, 2021 and Bid/Offer Closing Date – Friday, August 6, 2021
· Minimum Bid Lot is 165 Equity Shares and in multiples of 165 Equity Shares thereafter
· The Floor Price is 86 times the face value of the Equity Share and the Cap Price is 90 times the Face Value of the Equity Share
NEWS ALERT :: Adani Ports appoints Deloitte Haskins & Sells LLP as new auditors of Adani Krishnapatnam Port
>> The Co informed that R C V & Co., Chartered Accountants have resigned as the Statutory Auditors of material subsidiary i.e. Adani Krishnapatnam Port Limited with effect from July 29, 2021.
>> Deloitte Haskins & Sells LLP has been appointed as the Statutory Auditors of AKPL on July 29, 2021.
BUZZING :: Marico trades at day's high ahead of Q1 earnings
India's worst-performing stock in July may rebound if history is any guide
The stock’s relative strength index has dropped to a level indicating the shares are oversold. When that’s happened over the past five years, shares of the Hyderabad-based company have rallied about 15% on average in the 20 subsequent trading sessions, according to data compiled by Bloomberg. READ MORE
Garware Hi-Tech hits record high as Ashish Kacholia ups stake by nearly 1%
Shares of Garware Hi-Tech Films were locked in the 5 per cent upper circuit band, at Rs 1,058.40 on the BSE on Friday, after investor Ashish Kacholia bought nearly one per cent additional stake in the commodity chemicals company via open market on Thursday. On July 29, 2021, Ashish Rameshchandra Kacholia purchased 141,871 equity shares, representing 0.61 per cent equity of Garware Hi-Tech Films, at a price of Rs 1,005 per share through bulk deal on the BSE. READ MORE
Larsen & Toubro Infotech, Persistent: Mid-cap IT stocks that can rise 7-15%
The Nifty IT index has scaled a new record high of 30,818 levels and has surged over 25 per cent this calendar year (CY21), as compared to the S&P BSE Sensex and Nifty 50, which have gained 11.5 per cent and 14 per cent each during this period. A large chunk of this upside is attributed to the gains in the frontline stocks - Infosys, Tata Consultancy Services (TCS), and Wipro - that saw an increased investor participation post their June 2021 quarter numbers. READ MORE
June-quarter miss, valuations may restrict upside in Nestle India
The stock of Nestle India, the fourth largest consumer company by market capitalisation, slipped by a per cent after its June quarter results came in lower than street estimates. This coupled with a cut in net profit estimates and higher valuations led to the weakness in the stock.
While the company posted a steady 14 per cent YoY growth driven by volume and product mix, this was on a weak base of 1.7 per cent and lower than consensus estimates. READ MORE
Ashok Leyland advances 10%, nears 52-week high on drawing up EV road map
Shares of Ashok Leyland edged higher by 10 per cent to Rs 137.45 on the BSE in intra-day trade on Friday on the back of heavy volumes after the commercial vehicle (CV) major lined up its electric vehicle (EV) road map on Wednesday. The stock Hinduja Group Company was trading close to its 52-week high level of Rs 138.85 touched on February 4, 2021. READ MORE
Microsoft looks to tap into Oyo before its potential IPO: Report
Microsoft Corp is in advanced talks to invest in Indian hotel chain Oyo at a $9 billion valuation, a source familiar with the matter said on Thursday. The deal could be announced in the coming weeks and would be a prelude to an initial public offering (IPO) by Oyo, the source said. Founder and Chief Executive Officer Ritesh Agarwal said earlier this month that Oyo would consider a potential public offering, but did not provide a timeline. READ MORE
>> Ashoka Buildcon Limited wins the contract for development of existing Grand Port Hospital to 600 Beds super speciality hospital and proposed medical college with residential quarters of Zodiac Healotronics Private Limited, the company said in a NSE filing
Food for thought: Does Higher Inflation → Higher Earnings?
Share prices tend to lead earnings and hence the value of forecasting earnings is only in disagreeing with what the market may be pricing in. Then again, the wisdom of the market means it goes wrong infrequently. We attempt to overcome these challenges via our Leading Earnings Indicator (LEI), which is built from real time indicators. While not a perfect tool, it does have good forecasting ability with a 95% confidence interval.
The problem, currently, is that the confidence interval is at its widest in history, implying that our LEI indicates the next two years' compounded earnings growth for the BSE Sensex could range between +36% and -15%. This wide range underpins the greater uncertainty of the current environment and the possibility (and also our view) that we may be at the start of a new profit cycle. Usually, inflexion points are accompanied by less certainty in outcome.
(Source: Morgan Stanley report)
Source: Motilal Oswal report
Source: Motilal Oswal report
Nomura on TVS Motor
Anand Rathi on Ajanta Pharma
Ajanta’s operations are now recovering from the impact of Covid and the company has launched 25 products in India in the last one year while R&D spend for the US has gone up. With launches and continuing momentum in the Rest of Asia and Africa, Ajanta is set to deliver 16.4%/15.7%/24.4% revenue/EBITDA/PAT growth over FY21-23. We retain our Buy rating, with a higher target of Rs2,795 (earlier Rs2,167), 24x FY23e EPS.
Anand Rathi on Dalmia Bharat
With a target of 110-130m-ton cement capacity by FY31, Dalmia Bharat is expanding capacity to 48.5m tons by FY24 regions where it operates. Aiming at all-India operations, it will expand into the North/Central regions in the next phase of expansion, keeping net debt/EBITDA below 2x. Its greater focus on expanding the share of green energy, improving return ratios, divesting non-core assets and a defined capital-allocation policy are steps in the right direction. We retain a Buy, with a higher target of Rs.2,510 (earlier Rs.1,746.)
NEWS ALERT :: Lupin acquires Souther Cross Pharma in Australia
>> Deal value subject to post closing adjustments
SRF rallies 8% on strong Q1 performance; market-cap zooms past Rs 50,000 cr
SRF is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. In Q1FY22, SRF's consolidated net profit more-than-doubled at Rs 395.3 crore against Rs 176.9 crore in Q1FY21. The company reported a 75 per cent year-on-year (YoY) growth in revenue at Rs 2,699 crore compared with Rs 1,545 crore in the corresponding quarter of the previous fiscal. Ebitda (earnings before interest, taxes, depreciation, and amortization) margin improved 50 basis points (bps) to 24.6 per cent. READ MORE
Tata Steel rides metal rally to become second biggest firm in group
After a two-month lull, industrial metal and mining companies are again leading the rally on the bourses. The S&P BSE Metal index, which tracks the market capitalisation of the country’s top 10 metals and mining companies, rose 5.5 per cent on Thursday, beating the benchmark Sensex, which was up 0.4 per cent. READ MORE
R Systems soars 15% as board to consider share buyback proposal
As of June 30, 2021, the promoters held a 51.58 per cent stake in R Systems International, 48.42 per cent was in public shareholding and 36.85 per cent stake was held by a single investor Bhavook Tripathi, the shareholding pattern data shows. READ MORE
Sector Watch :: Fertiliser stocks rally on report key Chinese fertiliser firms to suspend exports
>> Some of China’s key fertiliser companies said they would temporarily suspend exports to assure the supply in the domestic market, according to a statement on the website of the National Development and Reform Commission (NDRC) on Friday: Reuters
Tech Mahindra surges 8.5%, hits new high as Q1 profit beats estimates
The consolidated revenue from operations in Q1FY22 grew 11.98 per cent YoY at Rs 10,198 crore. The company had posted revenue of Rs 9,106 crore in the same period a year ago. Sequentially, the figure rose by 4.8 per cent from Rs 9,730 crore posted in the preceding quarter, led mainly by 4.5 per cent QoQ growth in Enterprise revenues and 2.9 per cent QoQ growth in communications. READ MORE
MARKET VIEW :: Bargain hunting in 15,735-15,700 range likely
While ruling out directional downsides, we were keen to see a close above 15767 yesterday. In fact, almost all dips to this level, post the opening hour’s volatility, found buying, indicating a positive undercurrent. However, given the low VIX environment, it was important to take down key resistances, to maintain momentum. This is something Nifty failed to do yesterday on approach to 15810, reducing the chances of an upside-gapped opening today. The soft opening thereof today would attract bargain hunting in the 15735-15700 with an eye on 15890-970, but a slippage into the 15700-650 region could mean that 15767 will end up as a lid for the day.
-- Anand James, Chief Market Strategist at Geojit Financial Services
Privi Speciality surges 11%, hits new high on entering JV with Givaudan
>> Aroma chemicals company Privi Speciality Chemicals will set up a joint venture with Swiss fragrance firm Givaudan for setting up a greenfield production facility in Mahad.
Garware Hi-Tech hits upper circuit as Ashish Kacholia picks further stake
Ashish Kacholia increased stake in Garware Hi-Tech Films, buying 1,41,871 equity shares at Rs 1,005 per share on the BSE, as per the latest bulk deals data. Kacholia held a 2.58 per cent equity stake in the company as of June 2021.
Results Impact :: Raymond slides over 2%
> The company reported a consolidated net loss of Rs 157.10 crore for the quarter ended June 2021. The company had posted a net loss of Rs 247.60 crore during the April-June quarter of the previous fiscal. However, its revenue from operation rose over four-fold to Rs 825.70 crore as against Rs 163.16 crore in the corresponding period of the previous fiscal.
Earnings Impact :: Concor gains 3% on over 400% YoY jump in profit
>> State-owned Container Corporation of India (Concor) reported a 409.67 per cent YoY surge in consolidated net profit to Rs 251.22 crore for the first quarter ended June 30. The company had clocked a net profit of Rs 49.29 crore in the year-ago period.
Result Reaction :: TVS Motor Company jumps 4%
>> The company reported a consolidated net loss of Rs 15 crore for the first quarter ended June 30. The company had reported a net loss of Rs 183 crore in the April-June quarter of the 2020-21 financial year.
Earnings Impact :: Tech Mahindra surges over 7%, hits 52-week high
>> Tech Mahindra’s (TechM) Q1 FY22 net profit came in at Rs 1,353 crore, up 39.2 per cent year-on-year (YoY) 25 per cent sequentially. Broad-based growth across segments and verticals allowed the company to deliver strong numbers. Revenue for the quarter grew 12 per cent YoY at Rs 10,198 crore. It was up 4.8 per cent sequentially.
Broader markets outperform benchmark
Sector Watch :: Nifty IT lead gainer, FMCG index declines most
Sensex Heatmap | Top gainers & losers at opening tick
First Trade :: Nifty50 eyes 15,800
Sensex adds 80 points in opening trade
OPENING BELL: Sensex, Nifty defy global mood, edge higher
>> IT, bank stocks led the gains in opening trade
Commodity prices in early deals
Top gainers and losers on the S&P BSE Sensex in Pre-open
Two stocks that Anand Rathi's Osho Krishan is bullish on
BUY MCX | TARGET: Rs 1,710 | STOP LOSS: Rs 1,540
MCX recently witnessed a strong breakout from the descending channel on the daily chart and has retraced 61.80% of the rally, offering an opportunity to accumulate the stock. Also, the stock plunged near the breakout zone that coincides with 21 DEMA and the mean of the Bollinger band (20, 2), suggesting nearby support zone in the counter. Even on the oscillator front, MACD is placed in the comfort zone aloft the signal line affirming inherent strength in the counter. READ MORE
Sharekhan on Tech Mahindra
We maintain a Buy rating on Tech Mahindra (TechM) with a revised PT of Rs. 1,300 given healthy deal win TCVs, strong deal pipeline, 5G opportunity and reasonable valuation.
Strong beat on all fronts; new deal win TCVs stood at $815 million, in-line with our expectation and higher than its average quarterly deal win TCVs of $400 mn-$500 mn.
Management reiterated its double-digit organic revenue growth with an upward bias, given healthy deal wins and broad-based growth across verticals; expect sustainable margin performance with an upward bias in subsequent quarters.
We continue to prefer TechM because of improving deal wins, 5G opportunities, and anticipation of stable margin performance. TechM is expected to report USD revenue/earnings CAGR of 11%/17%, respectively, over FY2021-FY23E.
Edelweiss on Tech M
Reco: BUY | TP: Rs 1620
TechM has posted stellar Q1FY22 numbers. Management highlighted that there is solid demand around 5G integration and digital transformation. We believe TechM, with strong leadership, client relationships and huge transformation demand, will be in a position to post robust growth. The stock trades at 17x FY23E. We maintain ‘BUY/N’ with revised TP of INR1,620 (25x Q3FY23E)
Top stocks to watch today
TechM: Tech Mahindra’s (TechM) Q1 FY22 net profit came in at Rs 1,353 crore, up 39.2 per cent year-on-year (YoY) 25 per cent sequentially. Broad-based growth across segments and verticals allowed the company to deliver strong numbers. Revenue for the quarter grew 12 per cent YoY at Rs 10,198 crore. It was up 4.8 per cent sequentially.
TVS Motor Company: The company reported a consolidated net loss of Rs 15 crore for the first quarter ended June 30. The company had reported a net loss of Rs 183 crore in the April-June quarter of the 2020-21 financial year. READ MORE
Here's a derivative strategy for Canara Bank
Bull spread Strategy on CANARA BANK
Buy CANARA BANK 150 CALL at Rs 7 and simultaneously sell 160 CALL at Rs 3.50
Lot Size: 5400
Cost of the strategy: Rs 3.5 (Rs 18,900 per strategy)
Maximum profit: Rs 35,100 if CANARA BANK closes at or above Rs 160 on the August 26 expiry
Brent crude futures slipped 0.34 per cent to $75.79 per barrel while US crude futures were lower by 0.42 per cent to $73.33 per barrel.
SGX Nifty alert
>> At 8:13 AM, the index was at 15,763 levels, down 77 points or 0.48 per cent.
Wall Street overnight
US stocks ended higher, boosted by robust earnings and GDP data. The Dow Jones rose 0.44 per cent, the S&P 500 gained 0.42 per cent and the Nasdaq Composite added 0.11 per cent.
Asian markets slide
Selling resumed in Asian markets after a one-day hiatus as risks of China crackdown still loomed. Meanwhile, US futures also declined as traders weighed a possible slowdown for large tech companies after Amazon missed estimates in the June quarter.
Japan's Topix index shed 1 per cent, Hong Kong Hang Seng tanked 1.4 per cent and China's Shanghai Composite index lost 0.8 per cent. At the same time, Nasdaq and S&P futures were down 1.3 per cent and 0.8 per cent, respectively.
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