MARKET WRAP: Sensex crashes 624 pts; YES Bank tanks 11%, RIL surges 10%

Indian shares slipped on Tuesday, dragged lower by telecoms and automotive stocks, as investors remained wary in the absence of any announcement about a government fiscal stimulus package and ahead of key inflation data.

The fall in domestic markets was in line with declines in broader Asia, as fears about a drawn out Sino-US trade war, protests in Hong Kong and a crash in Argentina’s peso currency drove investors to safe harbours.

The S&P BSE Sensex and the Nifty50 fell 866.67 points and 244.3 points from day's highs to hit a low of 36,888.49 and 10,901.60 respectively in the intra-day trade.

The Sensex closed 624 points, or 1.66 per cent, lower at 36,958 levels with 28 of 30 stocks registering losses. YES Bank, M&M< Bajaj Finance, and Bharti Airtel ended the day with deepest cuts while only Reliance Industries and Sun Pharma managed to hold gains. The Nifty50, too, breached the psychological level of 11,000 to settle 184 points, or 1.65 per cent, lower at 10,926 mark.  

All the sectoral counters ended in the red. Nifty auto index ended 4 per cent lower, followed by financial services (3 per cent) and banking (2.5 per cent) scrips. 

In the broader market, S&P BSE mid-cap closed at 13,348 level, down 321 points, or 2.35 per cent, THe S&P BSE small-cap, on the other hand, dipped 181 points, or 1.43 per cent, to close at 12,518 levels.

Meanwhile, the surprise outcome in Argentina’s primary vote roiled the nation’s financial markets, sending the S&P Merval Index plunging 48 per cent in dollar terms. That marked the second-biggest one-day rout on any of the 94 stock exchanges tracked by Bloomberg going back to 1950. Sri Lanka’s bourse tumbled more than 60 per cent in June 1989 as the nation was engulfed in a civil war. READ MORE HERE 

RELIANCE INDUSTRIES IN FOCUS

Shares of Reliance Industries (RIL) zoomed as much as 12.09 per cent to Rs 1,302.50 apiece on the BSE in the intra-day trade on Tuesday after the company made a slew of announcements at its 42nd AGM (annual general meeting) held on Monday. READ MORE

The stock witnessed its biggest single-day gain in the last 10 years. Before this, it had rallied 24 per cent in the intra-day trade on May 18, 2009, data show. It added nearly Rs 89,381 crore to m-cap during the session. Additionally, the stock played a major role in capping the benchmark S&P BSE Sensex's loss as it contributed 427 points to the index. The stock ended the day at Rs 1,275 apiece, up 9.6 per cent. READ MORE

(With Reuters inputs).


3:46 PM IST

3:45 PM IST

3:35 PM IST The S&P BSE Sensex crashed 624 points or 1.66 per cent to settle at 36,958 while the Nifty50 index slipped below the crucial 11,000-mark to end at 10,926, down 184 points or 1.65 per cent.

3:29 PM IST Future Consumer (FCL) has entered four large categories — Dairy, Detergent, Biscuits and Namkeens; we would monitor their traction. Penetration in these categories would lead to upfront costs, which would dent consolidated PAT. We are, hence, pruning FY20/21E consolidated PAT to Rs 132mn/Rs 710mn from Rs 216mn/Rs 849mn. Maintain ‘BUY’ with a revised TP of Rs 42 (Rs 50 earlier).

3:20 PM IST Symbol Security New 52W/H Prev. High Prev. High Date LTP Prev. Close Chng % Chng ASIANPAINT Asian Paints Limited 1,594.00 1,581.90 09-Aug-2019 1,573.90 1575.50 -1.60 -0.10 AXISGOLD Axis Mutual Fund - Axis Gold ETF 3,400.00 3,293.00 09-Aug-2019 3,320.00 3249.55 70.45 2.17 BERGEPAINT Berger Paints (I) Limited 364.80 360.75 09-Aug-2019 363.60 359.35 4.25 1.18 GOLDBEES Reliance ETF Gold BeES 3,331.95 3,299.85 08-Aug-2019 3,331.90 3272.55 59.35 1.81 GOLDSHARE UTI Mutual Fund - UTI Gold Exchange Traded Fund 3,358.00 3,312.75 08-Aug-2019 3,347.55 3292.65 54.90 1.67 Source: NSE (Click to view the full list)

3:16 PM IST IIFL 112.75 -10.50 -8.52 MOTHERSUMI 97.50 -9.30 -8.71   YESBANK 73.90 -8.20 -9.99   BHEL 50.50 -6.40 -11.25   BEML 710.80 -105.40 -12.91  

3:14 PM IST -- Net profit at Rs 1,387.5 crore -- Revenue at Rs 8,374.4 crore -- EBITDA at Rs 1,996 crore

2:57 PM IST

2:56 PM IST -- Co said to seek Rs 2,000 cr from Amazon for stake sale

2:55 PM IST

2:53 PM IST -- Net profit at Rs 59 crore -- Revenue at Rs 335 crore

LIVE UPDATES

All sectoral indices on the NSE settle in the red


Top losers and gainers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex crashed 624 points or 1.66 per cent to settle at 36,958 while the Nifty50 index slipped below the crucial 11,000-mark to end at 10,926, down 184 points or 1.65 per cent.

Edelweiss Securities on Future Consumer

Future Consumer (FCL) has entered four large categories — Dairy, Detergent, Biscuits and Namkeens; we would monitor their traction. Penetration in these categories would lead to upfront costs, which would dent consolidated PAT. We are, hence, pruning FY20/21E consolidated PAT to Rs 132mn/Rs 710mn from Rs 216mn/Rs 849mn. Maintain ‘BUY’ with a revised TP of Rs 42 (Rs 50 earlier).

14 securities on the NSE hit 52-week high today

Symbol Security New 52W/H Prev. High Prev. High Date LTP Prev. Close Chng % Chng
ASIANPAINT Asian Paints Limited 1,594.00 1,581.90 09-Aug-2019 1,573.90 1575.50 -1.60 -0.10
AXISGOLD Axis Mutual Fund - Axis Gold ETF 3,400.00 3,293.00 09-Aug-2019 3,320.00 3249.55 70.45 2.17
BERGEPAINT Berger Paints (I) Limited 364.80 360.75 09-Aug-2019 363.60 359.35 4.25 1.18
GOLDBEES Reliance ETF Gold BeES 3,331.95 3,299.85 08-Aug-2019 3,331.90 3272.55 59.35 1.81
GOLDSHARE UTI Mutual Fund - UTI Gold Exchange Traded Fund 3,358.00 3,312.75 08-Aug-2019 3,347.55 3292.65 54.90 1.67

Source: NSE

(Click to view the full list)

Top 5 losers on the BSE at this hour

IIFL 112.75 -10.50 -8.52
MOTHERSUMI 97.50 -9.30 -8.71
 
YESBANK 73.90 -8.20 -9.99
 
BHEL 50.50 -6.40 -11.25
 
BEML 710.80 -105.40 -12.91
 

Earnings Alert | Sun Pharma Q1 result

-- Net profit at Rs 1,387.5 crore

-- Revenue at Rs 8,374.4 crore

-- EBITDA at Rs 1,996 crore

Market check | Sensex slips 600 pts


NEWS ALERT | Amazon said to near deal for up to 10% stake in Future Retail: Agencies

-- Co said to seek Rs 2,000 cr from Amazon for stake sale

Market check | Sensex breaches 37,000-mark


Earnings Alert | Dr Lal Path Labs Q1 result

-- Net profit at Rs 59 crore

-- Revenue at Rs 335 crore

Market check


Market check | Sensex sheds 500 pts


Market check | Sensex slips over 400 pts


Market check | Nifty breaches 11,000-mark


DHFL down 6%


NEWS ALERT | Group global wholesales at 78,600 units, down 14% YoY in July: Tata Motors via BSE filing


Market check


Federal Bank slips 5%


Argentina's 48% stock fall second in list of biggest market routs in 70 yrs

The surprise outcome in Argentina’s primary vote roiled the nation’s financial markets, sending the S&P Merval Index plunging 48 per cent in dollar terms. That marked the second-biggest one-day rout on any of the 94 stock exchanges tracked by Bloomberg going back to 1950. Sri Lanka’s bourse tumbled more than 60 per cent in June 1989 as the nation was engulfed in a civil war. READ MORE

Consumption sector’s valuations have remained high & will continue to remain so: Rakesh Jhunjhunwala to CNBC TV18

-- Very bearish on Ols, Uber and Lyft; disrupters will themselves dislocate

Motherson Sumi extends losses


Market check


Nifty PSU index slips


With every election, there is some slowdown in the economy: Rakesh Jhunjhunwala to CNBC-TV18

-- Think peak of NPA cycle has passed

-- Those with integrity are doing well in current environment 

-- Don't feel India has a 10% GDR growth rate model as of now

Not very happy with the state of the state of the Indian market right now: Rakesh Jhunjhunwala to CNBC TV18

-- Economy and the market wll rebound, can't put a timeline on it though

-- NBFC crisis and fiscal situation have led to short-term slowdown

-- PSU bank recap and support to NBFCs will aid lending

-- Expect RBI to not only cut rates, but also ensure liquidity

Bosch extends loss post Q1 results



Earnings Alert | Bosch Q1 result

-- Net profit at Rs 280 crore

-- Revenue at Rs 2,779 crore

-- EBITDA atRs 483 crore; margin at 17.4%

Market check


Reliance Nippon Life hits 52-week high in weak market; surges 12%

In the past three months, the stock of Reliance Nippon Life has outperformed the market by surging 38 per cent after Nippon Life Insurance on May 23, 2019 signed binding definitive agreement with Reliance Capital (Rcap) to increase stake in RNAM up to 75 per cent. In comparison, the S&P BSE Sensex has gained just1 per cent during the same period. READ MORE

Earnings Alert | JB Chemicals Q1 result

-- Net profit at Rs 62 cr, up 36% YoY

-- Revenue at Rs 446.1 cr, up 9.6% YoY

-- EBITDA at Rs 96 cr, up 18.8% YoY

Elara Capital on Britannia Industries

Rating: ACCUMULATE
 
Target Price : Rs 2815
 
Upside : 9%
 
We lower our earnings by 9% for FY20E and 11% for FY21E, led by a cut in 1) volume growth from 8.0% to 4.5% in FY20E, pricing growth cut by 100bp to 3.0%, 2) lower EBITDA as we expect gross margin to remain flat, due to inflation in FY20. We expect earnings growth to be muted at 4% YoY in FY20E, due to the slowdown, inflation and high ad spend on new products. We roll forward to June 2021E EPS of INR 63 and cut our TP by 16% to INR 2,815 based on 45x from 50x. We downgrade P/E, given the slowdown could hamper network expansion efforts in rural markets. We reiterate Accumulate with a cautious stance.
 

RESULT IMPACT:: Dishman Carbogen Amcis Ltd


ITC hits 52-week low


Earnings Alert | Ipca Labs Q1 results

-- Net profit up 89.1% YoY at Rs 129.6 crore

-- Revenue up 23.2% YoY at Rs 1,078.2 crore

-- EBITDA up 67.6% YoY at Rs 198.7 crore

-- EBITDA Margin at 18.4% vs 13.5% (YoY)
 

NEWS ALERT | OEMs need to be blamed for inventory pile-up: govt official to CNBC TV18

-- June registration data shows inventory coming down

NEWS ALERT | NBFC crisis at the heart of auto-slow down: Govt official to CNBC TV 18

-- Liquidity crisis affecting retail sales

-- Banks demanding 25% collateral for inventory financing has affected dealers

Market check


Passenger vehicle sales fall for 9th consecutive month, drop 31% in July

Domestic car sales were down 35.95 per cent at 1,22,956 units as against 1,91,979 units in July 2018, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Tuesday.
 
Motorcycle sales last month declined 18.88 per cent to 9,33,996 units for the month as against 11,51,324 units in the year-ago period. READ MORE

Jain Irrigation Systems rises over 7%


SHARP SLIDE | YES Bank slips 7%, nears 52-week low


Buzzing | SAIL hits 52-week low


Market slips again


Graphite India sinks 11% as revenue more than halves in June quarter

Shares of Graphite India tumbled 11 per cent to Rs 280 intra-day on the BSE on Tuesday after reporting 77 per cent drop in consolidated net profit at Rs 220 crore in the April-June quarter (Q1FY20), due to lower sales and higher operating cost. The company had a profit of Rs 957 crore in the year-ago quarter. Net sales during the quarter more than halved to Rs 967 crore from Rs 1,965 crore, on account of lower volumes and realizations as compared to previous quarter. READ MORE

NEWS ALERT | Tata Global likely to exit Czech Republic, Poland market: sources to CNBC TV18

-- Co working on bringing down subsidiaries

-- To reduce 5-10 subsidiaries in 2-3 years

NEWS ALERT | Tata Global will consolidate their business by exiting non-core international business: sources to CNBC TV18

-- Consolidation to help focus on select international and domestic market

-- Company explorig options to exit non-core, non-scalable operations in international portfolio

J&K Bank slips 5%


Hathway, Den Network rally up to 20% on Jio GigaFiber launch buzz, PVR dips

Stocks of local cable operators (LCOs) gained while those of movie service providers tanked after Reliance Industries announced roll out of its set top box (STB), backed by Reliance Jio, and Jio GigaFiber which would provide ‘Jio First Day, First Show’ to Jio customers. Shares of LCOs including Hathway cables and Datacom, Den Networks and GTPL Hathway zoomed in the range of 5 to 20 per cent during the morning deals on the BSE on Tuesday while those of PVR and INOX Leisure slipped up to 10 per cent. READ MORE

Nifty Auto index biggest loser among Nifty sectoral indices, down 2%


BHEL down 7% after reporting loss of Rs 219 cr in June quarter


Gayatri Projects claims 3% after arm wins arbitration claim worth Rs 914.3 cr


EXPERT COMMENT | RIL can surpass Rs 2,000-mark in next 12 mths: Romesh Tiwari, HoR, CapitalAim

Reliance can further move towards Rs 1,300 soon. Going by the track record of the management and potential of the retail and digital market of India, Reliance's announcements will prompt a fresh rush of buying the stock that can take it to new highs in short term and may pass Rs 2,000 levels in next 12 months. Reliance's mega announcements effect on the market may contribute 50-60 points on Nifty and combined with expected relief from government on FPI taxation issue and stimulus measures for economy, we may see Nifty to test 11,200 today. On the other hand, the global market sentiments are negative, which may trigger selling in other stocks and neutralise the Reliance's effect on the market, so I will be cautious on the markets but definitely positive on Reliance.
 

NEWS ALERT | Pidilite Ind Ltd and Grupo Puma arm enter into joint venture for Technical Mortars

-- Grupo Puma arm is Spain’s Corporacion Empresarial Grupo Puma S.L.

Centrum Broking on NCC

We expect new order wins and a partial revival of AP projects (considering only PMAY projects worth ~Rs50bn) to drive earnings recovery in FY21. The stock has corrected significantly and at 12.3x/6.6x FY20E/FY21E earnings and factors the earnings deceleration in FY20. Uptick in fresh order intake and clarity on recovery of Net working capital (NWC) of Rs 6.2 billion in Andhra Pradesh projects are key upside triggers. Initiate with Buy and PT of Rs 120, based on 11.5x FY21E earnings (~20% discount on historical average).

Gold prices likely to remain firm amid weak growth, soft rates

The ongoing trade war between the United States (US) and China, possibility of rate cuts by the US Federal Reserve (US Fed), long-standing nuclear issues with Iran, uncertainty regarding Brexit amid slowing global growth has pushed gold prices nearly 17 per cent higher in the international market on a year-to-date (YTD) basis to $1,503 per ounce. READ MORE

MARKET CHECK | RIL sees biggest single day gain in 10 years

- RIL contributes 426 points to Sensex; 
- RIL added Rs 89,381 crore to m-cap today

Momentum Picks by ICICI Securities


Elara Capital on Narayana Hrudayalaya

Rating: BUY
 
Target Price: Rs 320
 
Upside: 46%
 
Narayana Hrudayalaya (NH) reported another quarter of strong operating performance, which is likely to sustain. Given its low-cost model and scale-up in new hospitals, it is well-positioned to benefit from growing demand. As losses from new hospitals have stabilised and start reducing, we expect a 26 per cent EBITDA CAGR over FY19-21E. Our FY20E and FY21E EBITDA stands increased by 22 per cent and 24 per cent on IND AS116 adjustment and strong Q1 results. We reiterate Buy with a new TP of Rs 320 from Rs 282 on 15x (unchanged) FY21E EV/EBITDA.

Edelweiss Securities on SpiceJet

We believe, SpiceJet (SJ) will overtake Indigo in terms of capacity growth (FY20: 53% versus 26%) with take-over of Jet’s aircraft and resumption of B-737 Max aircraft. Non-fuel Cost Per Available Seat kilometer (CASK) gap versus Indigo has narrowed to 12% in Q1FY20, which is ahead of our estimate. Despite this, SJ trades at a 23% discount to Indigo, at 4.7x FY21E EV/EBITDAR. We maintain ‘BUY/SO’.

Sun Pharma trades 4% higher ahead of June quarter results today


Arvind Fashions slumps 8%


Top companies where FIIs raised stake over 50% in the last 4 quarters

Markets mostly have been a one-way street since the presentation of Union Budget on July 5 when the government proposed to increase tax on foreign portfolio investors (FPIs) up to 42 per cent. Following the proposal, overseas investors pulled out over Rs 11,000 crore (nearly $2 billion) from Indian equities in July, the steepest outflow in nine months. In the first two sessions of August, they withdrew a net Rs 2,881 crore, data show. READ MORE

Most active stocks on BSE as per volume

COMPANY PRICE(rs) CHG(rs) CHG(%) VOLUME
VODAFONE IDEA 5.01 -0.35 -6.53 6036223
YES BANK 82.50 0.40 0.49 2564393
DISH TV 23.25 -0.10 -0.43 1670860
REL. COMM. 1.32 0.00 0.00 1188086
INDIABULLS HOUS. 568.90 63.35 12.53 1053721
» More on Most Active Volume

Brokerages bullish on RIL post Aramco deal buzz, Jio's commercial launch

From a possible deal with Saudi Aramco for a 20 per cent stake in the company’s oil-to-chemicals (O2C) business segment and the commercial launch of Jio GigaFiber on September 5, the slew of announcements made by Reliance Industries’ chairman Mukesh Ambani in its 42nd annual general meeting (AGM) on Monday have been taken positively by brokerages, who now maintain a ‘buy’ rating on the stock from a 12-month perspective.
 
The announcements saw the stock rally over 8 per cent in intra-day trade on the National Stock Exchange (NSE) to Rs 1,257 levels on Tuesday. READ MORE

RIL jumps over 9%, tops Rs 1,250-mark on $15 billion Saudi Aramco deal

Shares of Reliance Industries (RIL) zoomed as much as 9.29 per cent to Rs 1,270 apiece on the BSE in the early morning trade on Tuesday after the company made a slew of announcements at its 42nd AGM (annual general meeting) held on Monday. Chairman Mukesh Ambani announced that Saudi Aramco and RILhave signed a letter of intent for a proposed investment in its oil-to-chemical division. The deal is likely to fetch $15 billion (nearly 1.06 trillion) for a 20 per cent stake. READ MORE

Divi's Laboratories slips 9% on subdued June quarter results

Shares of Divi's Laboratories slipped 9 per cent to Rs 1,512 on the BSE in Tuesday's early morning trade after the company reported 1 per cent year-on-year (YoY) growth in consolidated net profit at Rs 272 crore in the June quarter (Q1FY20), due to lower growth in revenue and higher raw material cost. The pharmaceutical company had a profit of Rs 268 crore during the same quarter last fiscal. READ MORE

Result impact | Bharat Forge trades 5% lower


Earnings Alert | Bharat Forge Q1 result

-- Net Profit at Rs 172 crore

-- Revenue at Rs 2328 crore

-- EBITDA at Rs 410 crore

HDFC Life Insurance gains over 1%


Canara Bank trades a per cent higher


MARKET CHECK


NTPC slips over 4%


Jamna Auto dips 2%


Eicher Motors slips over 1%


TV18 Broadcast gains 11%


NEWS ALERT | Dilip Buildcon bags order worth Rs 970 crore: BSE Filing

-- The Project is for construction Oo Kharkai Dam At Icha With All Control Gates And Its Allied Works Including Civil, Mechanical (With Design Of Gates), Electrical And SCADA System Under SMP In The State Of Jharkhand


NMDC trades higher


SpiceJet falls 4%


Motherson Sumi slips 4%


Godfrey Phillips locked in 20% upper circuit


Divi's Labs sheds nearly 9%

-- Its consolidated profit increased 1.8 per cent to Rs 272.4 crore against Rs 267.7 crore, while revenue rose 16.8 per cent to Rs 1,162.9 crore against Rs 995.2 crore YoY.


Reliance Capital gains over 2%


Maruti Suzuki slips 2%


MindTree trades 4% lower


Auto stocks under pressure; index trades 1.5% lower


Hindustan Petroleum trades over 1% higher


Market check | Sensex continues slide


Hathway Cables soars over 15%


TCS trades lower


HDFC Bank dips 2%


Market check


Indiabulls Housing Finance zooms over 7%


Jet Airways locked in 5% lower circuit


Vedanta slips over 2%


Reliance Ind extends gains on block deals


Bharti Airtel slips in trade


Dish TV trades 3% lower


PVR slips after RIL promises 'First Day, First Show' via Jio GigaFiber


Reliance Industries opens over 6% higher


Sectoral trends at NSE during Opening Trade


Top gainers and losers at S&P BSE Sensex during Open


Market at Open


Market at Open


NEWS ALERT | Alembic Pharma gets US FDA nod for Dorzolamide Hydrochloride Ophthalmic Solution


Motilal Oswal Financial Services on Reliance Industries

Recommendation: BUY

CMP: Rs 1162

TP: Rs 1400

Upside: 20%

-- We had downgraded the stock to Neutral in Apr’19 (Report link), citing (a) upcoming weakness in the refining and petrochem margins and (b) the build-up in the telecom and retail segments was already factored in our valuations. Moreover, we were concerned about the rising debt amidst high capex intensity. Since then, the stock has declined by ~20%. The AGM went a long way in allaying those concerns.
 
-- Although the announced Saudi Aramco-RIL deal is non-binding, it does highlight management’s intention to lower debt. Our estimates suggest consol. interest cost of INR268b in FY21, ~24% of EBITDA. A decrease in net debt of INR100b would result in an EPS increase of ~1.2% in FY21.
 
-- The core segment is expected to remain under pressure. However, the decline of ~20% in the stock price since our last report, combined with the possibility of a decrease in net debt, makes us upgrade RIL to Buy. We reiterate our TP of INR1,400, which includes valuation of core segments at 7.5x FY21 EV/EBITDA, Jio at INR230/share and Retail at INR414/share.

Reliance Industries locked in 10% upper circuit after slew of announcements during 42nd AGM


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


Rupee opening

Rupee opens weaker at 71.14/$ vs Friday's close of 70.80 against the US dollar

Market at Pre-Open


Market at Pre-Open


Saudi Aramco remains world's most profitable company even as oil falls

Profit slid 12% to $46.9 billion in the first six months of 2019, the state-owned energy giant said in its first-ever half-year earnings report. That easily outstripped corporate titans such as Apple Inc, Amazon.com Inc and other big oil producers, many of which suffered larger declines in profit as output and crude prices fell. READ MORE

A bond bubble?

Something odd is happening in the bond markets globally. Just look at some of these data points. Unprecedented on multiple dimensions.
 
Never seen anything like these. $15 trillion worth of bonds now trade at negative yields globally. 43 per cent of bonds outside the US are negative yielding and in Germany, the entire government bond yield curve is in negative territory (up to 30-year maturity). Multiple junk bond issuers in Europe are effectively getting paid to borrow money. READ MORE

Stocks to watch: RIL, Jet Airways, Bharti Airtel, Motherson Sumi and SAIL

Here's a list of some of the counters that are expected to trade actively in today's session -
 
RIL: Reliance Industries (RIL), the oil-to-telecom conglomerate, made a slew of announcements at its 42nd annual general meeting (AGM) ON Monday. Mukesh Ambani, the chairman of the group first announced that Saudi Aramco will take a 20 per cent stake the group's oil to chemicals (O2C) business at an enterprise value of $75 billion. Further, the company announced that it aims to become net zero-debt company in the next 18 months and plans to list Reliance Jio and its retail business in the next five years. 
 
Jet Airways: A day after submitting an expression of interest (EoI) for Jet Airways, billionaire businessman Anil Agarwal on Monday said he did not wish to pursue it any further, thereby pulling out of the race. CLICK HERE FOR OTHER STOCKS IN FOCUS

Reliance Capital in talks with 3 firms to sell entire stake in health arm

Reliance Capital, which owns a 100 per cent stake in Reliance Health Insurance (RHI), has approached three companies — the Ajay Piramal group, TVS Capital Funds, and PremjiInvest — to sell its entire stake in the company. A deal could be finalised by next month.
 
Moelis & Company, a global investment bank, is helping with the transaction. This is part of Reliance Capital’s strategy to monetise some assets and utilise the proceeds to pare debt. READ MORE

Anil Agarwal pulls out of race for acquiring grounded Jet Airways

“The EoI for Jet Airways by Volcan was exploratory in nature. On further evaluation and considering other priorities, we intend to not pursue this further,” said Anil Agarwal. Agarwal through his family investment arm, Volcan Investments, had submitted an EoI for Jet.
 
Meanwhile, the United Arab Emirates-based Eithad Airways on Monday said they did not submit an EoI for Jet because of unresolved issues pertaining to the beleaguered airline’s liabilities. READ MORE

RBI unlikely to vote in favour of overseas sovereign bond in Aug 16 meet

The Reserve Bank of India (RBI) is unlikely to vote in favour of an overseas dollar sovereign bond in its meeting with the government on August 16. The RBI, according to sources, fear that signals by overseas bonds would end up disrupting local bonds, which is tightly in control of the RBI, with the central bank being the money manager of the government. READ MORE

RIL's JioFiber home broadband services to hurt cable and DTH operators

Speaking at the annual general meeting of Reliance Industries (RIL), Chairman Mukesh Ambani said the investment cycle for Jio is now complete. “Unlike other industry players, your company had the foresight to pre-invest in the network assets,” he said. He added that because of early adoption of the ongoing enhancements to LTE technology, its wireless network was already ‘4G plus’ and it could be upgraded to 5G at minimum incremental cost. “Thanks to Jio’s converged network architecture, we can offer even faster fixed-line broadband to homes and business establishments today,” said Ambani. READ MORE

Gold funds give sheen to investor returns, help offset losses from equities

Gold funds have been the best-performing category in the last few months, beating all other fund categories by a wide margin.
 
According to data from Value Research, gold funds gave returns of 18.6 per cent in the three-month period, which was significantly higher than nine per cent returns given by the long duration schemes; the second-best category in the same period. "The rally in gold prices has helped investors with exposures to gold funds mitigate the hit on their equity or debt investments seen in recent months," said Vidya Bala. READ MORE

Slowdown cyclical rather than structural: Abakkus Asset Manager Founder

Quarterly results have been sombre with consumption stocks reflecting a general slowdown. In our view, this seems more cyclical rather than structural in nature. We need government supported actions to reignite the animal spirits to kick-start the economy and bring back the confidence. READ FULL INTERVIEW HERE

Most value funds are performing badly: Is it time to dump them?

Value funds have given a category average return of minus 11.53 per cent over the past year. Only the mid-cap and the small-cap categories have fared worse.
 
When investors put their money in value funds, they expect them to protect their portfolios against the downside risk in declining markets, which many have clearly failed to do so. READ MORE

Anand Rathi Shares and Stock Brokers on ICICI Bank

Recommendation: BUY

CMP: Rs 421

TP: Rs 511

With declining credit cost on account of lower slippages and much adequate provision coverage ratio, we believe ICICI Bank is favourably positioned to deliver superior profitability and return ratios. We initiate our coverage on ICICI Bank Limited with a BUY rating and target price of ₹511 per share.

Motilal Oswal Financial Services on Gail

Recommendation: BUY

CMP: Rs 124

TP: Rs 154

Upside: 24%

-- The stock price for GAIL has corrected by ~35% in the last one year, and is currently trading at a discount of ~40% to its 10 year long term average.
 
-- We revise our valuation multiple down from 9x to 8x due to concerns on restructuring of the company. However, we upgrade the stock to buy as we believe that it would be a key beneficiary of increasing domestic gas as well as LNG in the country. The tightening norms on industrial pollution would also help transmission segment in the longer run.
 
-- The fertilizer plants on the Jagdishpur-Haldia pipeline are expected to commence operations from 2021, which management believes would further decrease concerns on the sale of US LNG.
 
-- Valuing the stock at 8x FY21 adj. EPS of INR14.1, and adding contribution from the investment, we arrive at target price of INR154 (implying upside of ~24%).

Motilal Oswal Financial Services on Shree Cement

Recommendation: Downgrade to Neutral

CMP: Rs 20,248

TP: Rs 21,000

Upside: 4%  

-- Reprises industry trend of lower volumes, higher realizations: Volumes including clinker declined ~13.3% YoY to 6.1mt (our estimate: 6.0mt). Realizations were up ~14.5% YoY to INR4,703, while revenues declined 1% YoY to INR30.3b (our estimate: INR29b). Cement revenue stood at INR28b (-1% YoY) and Power revenue at INR1.9b (-6% YoY).
 
-- Total cost/t increased 1% YoY in the quarter. With power EBITDA at INR280m, cement EBITDA/t stood at INR1,443 (+67% YoY). As a result, EBITDA increased 40% YoY to INR9b (our estimate: INR7.5b), with the margin at 29.7% (+9pp YoY). Tax rate stood at 25% v/s 10% in the year-ago period. Adj. PAT was up 5% YoY to INR3.6b (our estimate: INR2.5b).

-- After a sharp 27% appreciation in the past six months, SRCM trades at 15x FY21 EV/EBITDA and EV/tonne of USD200/t, which are at a premium to large cap peers, including UltraTech (25% premium). We believe the stock is currently pricing in the sharp cement price hikes seen this year, limiting upside in the medium term. Therefore, we downgrade it to Neutral with INR21,000/share target price.

Motilal Oswal Financial Services on NTPC

Recommendation: BUY

CMP: Rs 124

TP: Rs165

Upside: 33%

We believe factors (DSM, carpet loss) impacting NTPC’s 1QFY20 performance (~INR3b) are transient/one-off in nature; adjusting for which the benefit of FY20-24
tariff regulations is broadly reflected. We note that NTPC’s plant availability has started improving (PAF for its coal plants is up ~520bp YoY in 1QFY20). Besides,
~5GW of capitalization for FY20 appears to be on track. We expect capitalization to pick up pace, thus, driving regulated equity CAGR of 16% over FY19-21E; it should also outpace capex and boost RoE. Our DCF-based TP is INR165/share. Maintain Buy

Motilal Oswal Financial Services on NTPC

Recommendation: BUY

CMP: Rs 124

TP: Rs165

Upside: 33%

We believe factors (DSM, carpet loss) impacting NTPC’s 1QFY20 performance (~INR3b) are transient/one-off in nature; adjusting for which the benefit of FY20-24
tariff regulations is broadly reflected. We note that NTPC’s plant availability has started improving (PAF for its coal plants is up ~520bp YoY in 1QFY20). Besides,
~5GW of capitalization for FY20 appears to be on track. We expect capitalization to pick up pace, thus, driving regulated equity CAGR of 16% over FY19-21E; it should also outpace capex and boost RoE. Our DCF-based TP is INR165/share. Maintain Buy

Nifty outlook, top stock picks by Angel Broking: Buy Motherson Sumi, HDFC

11,000 defended on weekly basis, further relief likely
 
In the midst of global uncertainty, our markets opened lower with a decent margin last Monday. However, Nifty managed to recover some lost ground on the same day to reclaim the 10,800 mark. On the subsequent day, the index followed similar kind of pattern and showed first signs of revival. Despite Wednesday’s weak session, it took off at the stroke of the penultimate hour on Thursday and we saw complete gush in the market to see some sharp short covering moves. This lead was extended on Friday to eventually conclude the week with a smart recovery of more than 300 points from the lowest point. READ MORE

Nifty Outlook and top trading Ideas by CapitalVia Global Research Limited

Buy Escorts Ltd. (NSE: ESCORTS): Above Rs 497
 
Target: Rs 525
 
Stop loss: Rs 475
 
The stock has formed a reversal pattern on daily charts after taking firm support at 460 level. We can now expect a breakout from the 497 levels. The level above 497 would result in a MACD bullish crossover on the daily charts. Moving average setup is bullish on the short to medium-term charts.
 
Considering the technical evidence discussed above, we recommend buying the stock above Rs 497 for a target of Rs 525, keeping a stop loss at Rs 475 on closing basis. READ MORE

Weekly market outlook and top two trading ideas by Prabhudas Lilladher

NIFTY VIEW
 
Nifty for now has taken support at 11,780 levels, with daily trend turned up and short covering witnessed in many stocks. The week is a truncated one and with a move above 200-day moving average (DMA) level of 11,170 would bring about further upside momentum. The support for the week is seen at 36,880/10,880 for Sensex and Nifty, respectively, while resistance is seen at 38,280/11,340. Bank Nifty would have a range of 27,720-29,150. FMCG counter continues to surge with HUL, Dabur, Marico, etc showing good uptrend. READ MORE

Bulk deals on NSE as on Friday


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


Rupee check

Source: Bloomberg


Oil check

At 08:07 am, Brent Crude Futures were at $58.45 per barrel
 

SGX Nifty

At 08:05 am, SGX Nifty was at 11,124 levels, up 34 points.

Asian Market check

Source: Reuters


US Market check

Source: Reuters


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