Representative imageStock market LIVE updates: An upbeat mood in the global markets, ahead of the swearing-in of Joe Biden as the 46th President of the United States, catapulted benchmark indices to fresh record highs on Wednesday. That apart, expectations of hefty US spending after US Treasury Secretary nominee Janet Yellen urged lawmakers to "act big" to save the economy further bolstered sentiment. Domestically, gains in heavyweights like Reliance Industries, HDFC, Infosys, TCS, and ICICI Bank, too, provided the necessary support.
In the intra-day session, the S&P BSE Sensex hit a new peak of 49,874, surging over 450 points. The index eventually settled at 49,792 levels, up 394 points or 0.8 per cent. Tech Mahindra, Maruti Suzuki, Asian Paints, Reliance Industries, Infosys, and M&M gained between 2 per cent and 3 per cent, and ended as the top performing stocks on the 30-share index. On the downside, NTPC, PowerGrid, HDFC Bank, ITC, and Nestle settled as top laggards, down up to 1 per cent.
It's NSE counterpart, Nifty50, surpassed the 14,650-mark and hit a fresh record high of 14,665. The index ended with gains of 123.5 points, or 0.85 per cent, at 14,645.
Sectorally, all except the Nifty FMCG index ended the day in the green on the NSE with the FMCG index closing down 0.16 per cent. On the upside, Nifty IT, Auto, and PSU Bank indices closed with gains of over 2 per cent each.
Among individual counters, Tata Consultancy Services and Tata Elxsi – hit their respective new highs on the NSE today, whereas Wipro, Mindtree, Mphasis and Coforge surged up to 5 per cent. READ MORE
In the auto index, Tata Motors and tyre stocks were the top gainers on the index. Among the OEMs, Tata Motors hit yet another 28-month high of Rs 278 on the NSE, while Ceat, JK Tyre, MRF, and Apollo Tyres advanced in the range of 4 per cent to 15 per cent. READ MORE
In the broader market, the S&P BSE MidCap index settled 1 per cent higher, while the S&P BSE SmallCap index gained 0.58 per cent.
European rebounded, with the Euro STOXX 600 climbing 0.4%. Indexes in Frankfurt and Paris were both up a similar amount, though London shares were flat.
The buoyant mood mirrored that in Asia, where MSCI’s Asia-Pacific index outside Japan rose 0.8% to its highest ever. Hong Kong’s Hang Seng gained 1% to near its 2019 peak. Australian shares hit a record high.
The Nifty index opened on a positive note and gradually moved higher during the day to register new highs. In just a couple of sessions, the index recovered all its losses of the recent correction and has ended the day tad below 14650.
If we look at the recent chart of Nifty on the daily time-frame, it is seen that the 20-day EMA has acted as a support on intermediate declines and the index has continued its ‘Higher Top Higher Bottom’ structure. With the last two days of upmove, this moving average support now coincides with Monday’s low of 14222 and thus, it now becomes a sacrosanct for the short term.
Meanwhile, we continue with our advice for traders to keep focusing on stock specific moves and identify the sectors which are showing momentum on a given day. Traders should also avoid taking leverage positions at this juncture and focus on timely exits on the trading positions. The intraday supports in Nifty for the coming session are placed around 14535 and 14490 whereas resistances are seen around 14710 and 14770.
MARKET CLOSING COMMENT :: S Ranganathan, Head of Research at LKP Securities
On a day when Joe Biden assumes office, the Bulls of Dalal Street held the Indices high, inching a step closer to the 50K mark buoyed by RIL and well supported by Auto & IT. The broader markets witnessed buying into Tyre stocks and PSU banks
TECH VIEW :: Rohit Singre, senior technical analyst at LKP Securities
One more positive session along with that index made fresh levels today and closed a day at 14645 with gains of nearly one per cent formed bullish candle for the second consecutive day. Now the good base is created is around 14560 followed 14500 zone holding above said levels index can show some more positive move towards 14700-14750 zone also any dip near 14500 zone will be again buying opportunity. In nifty bank strong hurdle is still at 32700 zone any decisive break above 32700 zone can quickly push the index to 33k zone
TECH VIEW :: Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty continued with a sustainable upmove for the second consecutive session on Wednesday and closed the day higher by 123 points. Nifty opened on a positive note, shifted into a further upside in the early part of the session before shifting into an intra-day range move. Minor dips of mid part has turned out to be a buy on dips opportunity and Nifty registered a new all time high at 14666 towards the end.
Another long bull candle was formed, which indicate an uptrend continuation pattern. The previous four sessions decline has been retraced completely in the last two session. This faster retracement could signal further upside in the short term.
The positive sequence like higher highs and lows continued on the daily chart and Nifty is currently making an attempt to reach higher highs. Previously, the short term downward corrections have resulted in a sustainable upside for many sessions. Hence, having moved up sharply from the higher bottom in the last two sessions, Nifty is expected to show further upside gradually.
The immediate support of 10 day EMA has proved to be a false downside breakout and that led to a sharp upside reversal. As per this pattern, this 10 period EMA could be tested again during next dip, after moving into new highs above 14666-14700 levels. On the upper side, the long term trend line resistances (top-top and bottom-bottom, as per monthly chart) could come into play.
Conclusion: The short term trend of Nifty continues to be positive and Wednesday's upmove could be a confirmation of bullish reversal from the lows. One may expect further upside for the next few sessions, before encountering a next crucial overhead resistances around 14800 levels. Immediate support is at 14550.
Extending yesterday’s gains, the market continued its upward trend and gained nearly a percent. Supportive global cues led to a positive start which was further fuelled by the buying in index majors. Consequently, markets touched a new record high largely led by healthy buying in Auto and IT counters. On the benchmark front, the Nifty ended with gains of 0.9% at 14,645 levels. All the sectoral indices, except FMCG, ended in the green.
The recent buoyancy on the global front combined with the supportive local cues are helping the index to regain momentum. However, volatility is still high on the stock-specific front. Keeping all in mind, we feel it’s prudent to continue hedged positions and prefer index majors over the others.
MARKET CLOSING COMMENT :: Shrikant Chouhan, Executive VP, Equity Technical Research at Kotak Securities
The market rallied and moved higher to cross the immediate hurdle of 14655/49800. Even if the market does not hold at a high level, we can expect a rally in the best case scenario up to 14750/50000 and up to 14850/50500. As we are approaching the major event of Union Budget, it would keep the market volatile between the broader trading range. The strategy should be to buy on dips between 14550-14500/49600-49500. Keep a final stop loss at 14450/49200 for the same. The focus should be on Commodities and Auto companies
MARKET CLOSING COMMENT :: Deepak Jasani, Head of Research, HDFC Securities
Indian equity benchmark indices rose for a second day in a row on Jan 20 with Nifty making new intra day record highs. At close, the Nifty was up 123.50 points or 0.85% at 14,644.70.
Volumes on the NSE were higher than the previous day. Among sectors, Auto, IT, PSU Banks and Media rose the most while FMCG ended marginally in the negative.
Nifty made a new intra day high reflecting the underlying strength in the indices. Its close was the highest ever. Volumes after rising post Jan 04, have come back to normal. Advance decline ratio has improved to much above 1:1. Institutional buying (esp FPI) has gradually slowed however neither the institutions nor the non-institutional participants seem to be in a hurry to take profits even as the Budget looms ahead.
MARKET CLOSING COMMENT :: Vinod Nair, Head of Research at Geojit Financial Services
An optimistic western market aided the Indian market to touch lifetime highs with new buying in segments like Auto, IT and PSU Bank. So far, the Q3 results have been better-than-forecasted and this has led to continued buying across sectors. Ahead of Joe Biden's inauguration as President, the US market is on an upbeat mood with high expectations of a big US stimulus
Market stats :: BSE m-cap reclaims Rs 197-trillion mark
SECTOR OF THE DAY :: Bank of Baroda, J&K Bank jump 5%
SECTOR OF THE DAY :: Tata Motors, Tyre stocks rally
STOCK OF THE DAY :: MRF hits fresh record high
STOCK OF THE DAY :: Tata Motors hits highest level since September 2018
Broader marker check :: BSE MidCap index settles 1% higher
Sectoral trends on NSE :: Auto, PSB, IT indices end over 2% higher
Sensex Heatmap at Close
In the intra-day session, the S&P BSE Sensex hit a new peak of 49,874, surging over 450 points. The index eventually settled at 49,792 levels, up 394 points or 0.8 per cent.
It's NSE counterpart, Nifty50, surpassed the 19,650-mark and hit a fresh record high of 14,665. The index ended with gains of 123.5 points, or 0.85 per cent, at 14,645.
Rally in IndiaMART's stock has more legs despite 50% jump in two months
Return to pre-Covid growth level, plans to expand business through the inorganic route, increasing trend of digitisation among medium, small and micro enterprises (MSMEs) and a better-than-expected December quarter (Q3) results have strengthened the Street’s confidence on future growth prospects for India’s online business-to-business (B2B) marketplace, IndiaMART InterMESH. READ MORE
Tata Motors jumps 51% so far in Jan on Tesla tie-up buzz; firm denies rumor
The stock of the Tata Group commercial vehicles company was trading at its highest level since September 2018. The stock has managed to hold investor interest despite denying reports that it’s planning to sell its stake in the domestic passenger vehicle (PV) business. In the past seven trading days, the stock has rallied 26 per cent on report that Tesla may choose Tata Motors for its much-awaited India foray. READ MORE
Govt raises authorised capital of Punjab & Sind Bank to Rs 10,000 crore
State-owned Punjab & Sind Bank on Wednesday said the government has raised its authorised capital to Rs 10,000 crore. Last year, the government had approved capital infusion of Rs 5,500 crore into the bank through preferential allotment of shares. (Text Source: PTI)
Consumer food company LT Foods, which owns basmati rice brands such as 'Daawat' and ‘Royal', on Wednesday announced acquisition of a 30 per cent stake in the Netherlands-based organic speciality food company Leev.nu. Nature Bio Foods BV, a subsidiary of LT Foods, has acquired 30 per cent stake in Leev.nu, with an option to acquire a further 21 per cent stake at the end of five years, a joint statement said without disclosing the deal amount. (Text Source: PTI)
Rebound in petchem, retail business to drive RIL Q3; JioMart road map eyed
Driven by a strong rebound in petrochemicals business, and supported by growth in the retail segment, Reliance Industries Ltd (RIL) is expected to clock a stellar sequential improvement in its net profit for the December quarter of the current financial year (Q3FY21). The firm is scheduled to report its Q3 earnings on Friday, January 22. READ MORE
Nifty Bank index recovers nearly 300 points from day's low
ALERT :: SENSEX SURPASES 49,800 FOR THE FIRST TIME
OPINION | Banking on Budget: The five areas of focus for FM Nirmala Sitharaman
There are evidently a lot of expectations from any Budget and this one will be no exception. Given the series of policy announcements made by Finance Minister Nirmala Sitharaman in the last 9 months it is reasonable not to expect more this time. So, what would be the areas of focus for the FM? First is the thrust on healthcare and this will probably be the main area where the expenditure will be concentrated. Presently it is not clear as to how the Covid vaccine would be administered and depending on the final plan, allocations have to be made by the centre. READ MORE
Limited upside in markets; Nifty to be at 15,000 by Dec: BofA Securities
After the strong rally since April, there is a limited upside in the Indian equities and the markets will end 2021 with a low single digit gain, an American brokerage said on Wednesday. BofA Securities said it is "not as bullish" and gave a target of 15,000 points for the 50-share benchmark Nifty by the end of the newly started year. READ MORE
ALERT :: Sensex nears record high of 49,795
Tata Communications tanks 8% on weak Q3 result, govt stake sale report
Shares of Tata Communications, erstwhile VSNL, slumped 8 per cent to Rs 1,040 on the BSE in the intra-day trade on Wednesday on report that the government could sell its entire 26.12 per cent stake in the company through offer for sale and strategic sale route in the current fiscal. READ MORE
IPO Update :: IRFC IPO subscribed 1.72 times on Day 3 so far
NEWS FLASH :: Expect GAIL buyback to fetch up to Rs 600 cr, says govt official
Lower taxes, opening of channels to aid volume recovery at United Breweries
After two quarters of muted volume growth, United Breweries (UB) is expected to witness a recovery in sales in the December quarter of financial year 2020-21 (Q3FY21).
In addition to opening up of trade channels, roll back of Covid-19 taxes by several states, price hike in some markets and cost cuts are expected to help the company improve its volumes and profitability. READ MORE
Dec Quarter Result :: Federal Bank clocks PAT of Rs 404 crore
>> NII at Rs 1,437 crore
>> GNPA at 2.71%
>> NNPA at 0.6%
SECTOR WATCH | Nifty Realty, Metals, FMCG indices wipe off gains, slip into the red
SBI Card gains 4%, hits new high ahead of December quarter results
Shares of SBI Cards and Payment Services hit a new high of Rs 1,002, up 4 per cent on the BSE on Wednesday ahead of the announcement of December quarter results, on Thursday. The stock surpassed its previous high of Rs 1,002, touched January 7, 2021. READ MORE
Dec Quarter Result :: Sterlite Technologies net profit jumps to Rs 86.6 crore vs Rs 52.6 crore YoY
Indigo Paints IPO opens: Trading strategies for other paint stocks
Shares of paint companies traded firm at the bourses on Wednesday as the three-day initial public offering (IPO) of Indigo Paints opened for public subscription. Among individual stocks, Shalimar Paints rose as high as 3.5 per cent on the BSE while Berger Paints and Kansai Nerolac Paints also gained 2 per cent each. Asian Paints also climbed as high as 1.7 per cent in intra-day deals.READ MORE
Market Update :: Sensex off day's high, up 170 points
Tyre stocks in demand; JK Tyre rallies 15%, MRF scales fresh high
Shares of tyre companies hogged the limelight in Wednesday's session and rallied up to 15 per cent on the BSE after Ceat reported a strong operational performance for the quarter ended December 2020 (Q3FY21). Shares of JK Tyre & Industries too hit a 52-week high of Rs 103.80, up 15 per cent, amid heavy volumes and ahead of its Q3FY21 results on January 21, 2021. MRF hit a record high of Rs 90,500, up 4 per cent, while, Apollo Tyres rose 7 per cent to hit a 52-week high of Rs 202 on the BSE. READ MORE
A surge in bad debt is set to further worsen India's NBFC crisis
India’s troubled shadow banks face mounting challenges to a nascent recovery from the pandemic, with their asset quality set to deteriorate further as flagged recently by the financial regulator. Non-performing assets already swelled in the most recent data to the highest in at least five years, at 6.3% as of March 2020 even before the worst of the pandemic impact, the Reserve Bank of India said in a report last week. That’s up 100 basis points from the year earlier, and the RBI forecasts it’s headed higher. READ MORE
India VIX eases over 4%, inches towards 21 level
- India VIX is a volatility indicator
Sector Watch :: All sectors on NSE continue to trade in the green
>> Nifty IT best sectoral performer at this hour, Nifty Financial Services worst
Gateway Distriparks surges 15% post Q3 results; analysts see more upside
Shares of Gateway Distriparks surged 15 per cent to Rs 135 on the BSE on Wednesday, amid heavy volumes, after the company’s consolidated net profit nearly doubled to Rs 32.62 crore for the December quarter (Q3FY21), led by strong operating performance. The company, a leading integrated inter-modal logistics facilitator, had posted a profit of Rs 16.39 crore in the year-ago quarter. The stock is trading close to its 52-week high level of Rs 138 scaled on January 29, 2020. READ MORE
Market Update :: Sensex holds gains, trades at day's high
IT shares in focus; TCS, Tata Elxsi scale fresh record highs
Shares of information technology (IT) companies were in focus at the bourses on Wednesday with both Tata Group stocks - Tata Consultancy Services (TCS) and Tata Elxsi – hitting their respective new highs on the National Stock Exchange (NSE). At 10:20 am, the Nifty IT index -- the top gainer among sectoral indices -- was up 2.4 per cent, as compared to 0.37 per cent rise in the Nifty50 index. The IT index hit an intra-day high of 26,758 points, quoting close to its record higH. READ MORE
L&T hits 52-week high on large order win
>> The Power Transmission & Distribution Business of Larsen & Toubro (L&T) has won a slew of transmission Line orders in Bangladesh. The scope of these packages involves Design, Supply, Installation, Testing and Commissioning of Extra High Voltage Transmission Lines on turnkey basis
>> Large contracts range between Rs 2,500-5,000 crore
IPO Update :: Indigo Paints subscribed 14% so far on Day 1
Adani Green commissions 150 MW solar power plant 3 months ahead of schedule
>> Adani Solar Energy Kutchh One, a subsidiary of Adani Green Energy, has commissioned 150 MW solar power project 3 months prior to its scheduled commissioning date.
>> With the commissioning of this project, Adani Green has total renewable capacity of 14,795 MW including 11,670 MW awarded and under implementation projects.
Care Ratings upgrades Gayatri Projects credit rating for bank facilities; stock jumps 4%
Meera Industries jumps over 3% on order win
Alembic Pharma extends decline on mixed December quarter results
>> Shares of Alembic Pharmaceuticals dipped 3 per cent to Rs 998 on the BSE in early morning trade on Wednesday, down 7 per cent in past two days, after the company reported a mixed bag of December quarter (Q3FY21) results.
>> The company’s consolidated revenues grew 8.7 per cent year-on-year (YoY) to Rs 1,314 crore on the back of strong growth in domestic, ROW formulations and API segment. However, US sales growth remained muted, down 0.6 per cent YoY at Rs 512 crore due to competition in Sartans. READ MORE
IT stocks among top Sensex contributors at this hour
P-notes investment climbs to 31-month high of Rs 87,132 cr in December
Investment through participatory notes (P-notes) in the domestic capital market rose to a 31-month high of Rs 87,132 crore at December-end, reflecting the bullish stance of FPIs. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process. READ MORE
MARKET VIEW | V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
An important feature of yesterday's sharp rally of 240 points in Nifty was that it was not triggered by high FII buying. The net institutional buying (FII buying minus DII selling) was only Rs 50 crores. This means the rally was triggered more by short-covering by the cornered bears. However, the sustained delivery buying in large-caps like RIL, HDFC Bank and HDFC indicate strong interest and acumulation in bluechip large-caps. The important message to look out for today would be the economic message from the newly installed President Biden. Early Q3 results indicate a continuation of the better than expected results.
Ceat rallies 10% in 2 days, hits fresh 52-week high on strong Q3 results
Shares of Ceat traded 4 per cent up at a fresh 52-week high of Rs 1,322 on the BSE in Wednesday's early morning trade after the company reported Ebitda (earnings before interest, taxes, depreciation, and amortization) margin expansion of 460 basis points (bps) at 15.3 per cent for the quarter ended December 2020 (Q3FY21), over the previous year quarter. The stock of the auto tyres & rubber products company has surged 10 per cent in the past two trading days, post the Q3 results. READ MORE
While higher exports have reflected in the September quarter performance, the other gain for the company has been improved profitability
Indigo Paints IPO opens for subscription today
At the upper end of the price band, the public issue is expected to fetch Rs 1,170.16 crore, which comprises Rs 300 crore through fresh issuance of shares and Rs 870.16 crore through offer-for-sale. Half of the issue is reserved for qualified institutional buyers, 35 per cent for retail investors, 15 per cent for non-institutional bidders and there is a reservation of up to 70,000 equity shares for subscription for employees, who will get a discount of Rs 148 per equity share to the offer price. READ MORE
Sensex gains momentum, trades at day's high
Garden Reach Shipbuilders advances on roadshow buzz
>> The company will conduct a roadshow on January 20-21 as the government looks to divest stake in the firm via offer for sale (OFS).
Prince Pipes and Fittings rises around 2% in opening deals
>> The firm received first tranche of Rs 26.1 crore from promoter group entity Prince Marketing. The company had remitted an advance amount of Rs 40 crore to Prince Marketing for purchase of immovable property in Mumbai.
Result Reaction :: L&T Infotech gains 2%
>> The firm on Tuesday reported a 37.85 per cent jump in net profit to Rs 519.3 crore for the December quarter, mainly driven by a surge in revenue and margin expansion.
Q3 shareholding pattern :: Big bulls cuts stake in Federal Bank
>> Rakesh Jhunjhunwala reduced stake in Federal Bank to 2.4 per cent from 2.71 per cent during the third quarter of FY21.
Tata Communication sinks over 4%
>> The government will sell its entire 26.12 per cent stake in Tata Communications, erstwhile VSNL, through an offer for sale and strategic sale route in the current fiscal. Meanwhile, Tata Communications posted over a five-fold jump in consolidated net profit at Rs 309.41 crore for the December 2020 quarter.
Sectoral trends on NSE at Open :: Banks, FMCG stocks dip marginally
Sensex Heatmap at Open
First Trade :: Nifty holds 14,500
First Trade :: Sensex opens on a flat note
Markets at Pre-open
Markets at Pre-open
BROKERAGE VIEW :: HDFC Securities on Gateway Distriparks
CMP: Rs 117 | TP: Rs 165 | Reco: Buy
>> In 3QFY21, Gateway Distriparks’ (GDL) EBITDA margin expanded 150bps QoQ to 26.3% and interest costs reduced to Rs 177mn (-18% QoQ) as the company deleveraged its balance sheet. This led to a significant PAT beat (Rs 327mn vs 40mn QoQ). The management has provided an upbeat outlook. In Sep-20, we upgraded Gateway Distriparks to BUY, given the company’s improving fundamentals. We raise our FY22/23 estimates by ~6%. Maintain BUY with an SOTP-based target price of Rs 165, at 9x FY23E EV/EBITDA for the rail business.
BROKERAGE VIEW :: HDFC Securities on IRB Infra
CMP: Rs 116 | TP: Rs 157 | Reco: Buy
>> IRB reported stellar 3QFY21 with revenue at Rs 15.5bn, beating our estimate by 15%. The outperformance was driven by 32% QoQ recovery in toll collections and improved EPC execution with 41.5% QoQ growth. There were no new order wins during the quarter. The company registered a profit of Rs 695 mn, 37% beat. While toll collection in most BOT assets has surpassed pre- COVID levels, aided by unlocks, execution too ramped up with normalisation of labour and streamlining of the supply chain. Consolidated net debt is stable at Rs 125bn, with net D/E at 1.9x. We maintain BUY on IRB, given attractive valuation and comfortable liquidity position. Our SOTP-based target price of Rs 157/sh and EPS estimates for FY21/22/23E remain unchanged.
BROKERAGE VIEW :: HDFC Securities on ICICI Lombard
CMP: Rs 1,510 | TP: Rs 1,230 | Reco: Reduce
>> While FY21E is expected to be a muted year in topline growth, ICICIGI is expected to deliver lower CORs. Lower COVID-19 cases and vaccination make us incrementally positive on the health segment. Additionally, changing motor regulations are expected to drive down both claims and tariffs, creating supernormal profitability in the short term. We believe that this period (of supernormal profitability) will be shortlived, as we expect IRDAI to restrict TP pricing growth, thereby limiting profitability. We believe the market is not factoring in this risk; accordingly, we rate ICICIGI a REDUCE with a revised target price of Rs 1,230 (DDM derived Sep-22E P/E of 27.9x and a P/ABV of 5.4x).
BROKERAGE VIEW :: Axis Securities on ICICI Lombard
CMP: Rs 1,509 | TP: Rs 1,780 | Reco: Buy
>> Product selection (mainly retail), risk curtailment (investment book) and focus on profitability (no crop insurance) are hallmarks of ICICIGI’s performance. Low premium cyclicality, improving share of profitable retail sub-segments, market share gains in the profitable segments and best in class investment function have led to RoE generation (20-21%) which is accretive and commands premium valuation. We cut FY22/23E earnings by 4% each to bake in the impact of loss of sale of credit-linked health benefit based through ICICI Bank, consequentially leading to lower TP of Rs 1,780, keeping the target multiple same. At CMP, the stock trades at 42/35x FY22/23E EPS.
BROKERAGE VIEW :: Nirmal Bang on Alembic Pharma
CMP: Rs 1,030 | TP: Rs 1,168 | Reco: Accumulate
>> Alembic Pharma’s (ALPM) 3QFY21 revenue at Rs13,143mn grew by 8.7% YoY but declined by 9.8% QoQ. The QoQ decline was steeper than we had expected. Revenue came in 8%/8.5% below our/consensus estimate.
>> EBITDA margin at 27.8% was 113bps below our estimate but 62bps above consensus estimate. EBITDA margin was aided by a 20% QoQ decline in R&D spend. EBITDA at Rs3,651mn decreased by 18% QoQ, which was 11.6% below our estimate and 6.4% below consensus estimate. Operational cost savings, which had aided 1HFY21 numbers, were not seen in 3QFY21 numbers and 3QFY21 expense structure reflects pre-Covid levels.
>> Net profit stood at Rs2,926mn, which was 1.3% below our estimate but 4.8% above consensus estimate.
>> We have tweaked our revenue and cost estimates and arrive at a new target price of Rs1,168 (from Rs1,152 earlier). Considering the rich valuation and limited upside, we recommend an Accumulate rating.
BROKERAGE VIEW :: Prabhudas Lilladher on IRB Infra
Rating: BUY | CMP: Rs 116 | TP: Rs 157
>> IRB Infrastructure is one of the largest BOT toll operators in the country having market share of ~22% in the total Golden Quadrilateral projects with over 3,700km of total projects successfully executed. On the back of strong 3Q numbers, we have tweaked FY21 revenue estimates upwards by 5.5% while keeping FY22 and FY23 estimates largely unchanged. At CMP, the stock trades at a P/E of 10.8x/ 6.2x on FY21E/ FY22E EPS and is trading at an EV of 9.2x/ 8.9x FY21E/ FY22E EBITDA. We roll over to FY23 estimates and maintain BUY rating on the stock with revised SoTP based TP of Rs157 (earlier Rs152).
Stocks to watch: Bajaj Finance, Federal Bank, Tata Comm, Garden Reach
Q3 earnings: Bajaj Finance, Bajaj Finserv, HDFC AMC, Havells India, Federal Bank and L&T Technology Services are among 36 companies set to post their December quarter numbers today.
Federal Bank: Rakesh Jhunjhunwala reduced stake in Federal Bank to 2.4 per cent from 2.71 per cent during the third quarter of FY21.
Tata Communications: The government will sell its entire 26.12 per cent stake in Tata Communications, erstwhile VSNL, through an offer for sale and strategic sale route in the current fiscal. Meanwhile, Tata Communications posted over a five-fold jump in consolidated net profit at Rs 309.41 crore for the December 2020 quarter. READ MORE
BROKERAGE VIEW :: Prabhudas Lilladher on Rallis India
Rating: ACCUMULATE | CMP: Rs 285 | TP: Rs 321
>> We have increased our EBITDA and PAT estimates between 0-5% for FY22-23, roll forward to FY23 estimates and upgrade the stock from hold to ACCUMULATE with revised target price of Rs321 (Previous TP 279) based on 20x FY23E EPS of Rs 16. Rallis India reported inline set of results driven by 19% growth in domestic business. Cropcare segment grew 5% (volume growth of 10%) driven by 15% growth in domestic business. International business dragged cropcare segment with 17% decline in realisations, due to sharp decline in Metribuzin price and drop in CRAMS business volumes. Ex-off metribuzin & PEKK, demand is resilient in international business.
>> Domestic business is on a strong footing in both crop protection and seeds with healthy demand, new launches (1 in CP, 2 in crop nutrition) and faster collection. RALI has completed capex for 3 molecules in Q3, while other 2 molecules will be completed by April 21. The management also plans to invest Rs1.2bn in MPP, to be operationalised by H2’22. Management’s strategy of capacity expansion driven growth continues and we maintain our positive bias from a long term point of view.
BROKERAGE VIEW :: Antique Broking on Mold-tek Packaging
CMP: Rs 327 | TP: Rs 440 | Reco: Buy
>> Mold Tek Packaging (MTEP) reported robust volume growth of 36%in 3Q and EBITDA growth of 48% yoy to INR277mn (vs. our estimate ofINR203mn). Key takeaways are: (1) The volume growth of 36% yoy includes growth of 48%/8%/49% in paints/lubes/F&F resp (2) Company guided FY21 volume growth of 8-9% vs. earlier flat on yoy basis on account of ramp up in Vizag/Mysore plants(3) Consol EBITDA/kg stood at INR36, +9% yoy led by various cost savings (4) Brownfield expansion at Mysore/Vizag will start contribution by Apr (5) Net D/E is lower at 0.2x post warrant issue from 0.6x in FY20.
>> Factoring the beat, we have raised our net profit estimates for FY21E/FY22E/ FY23E by 13%/7%/10% on account of improved C.U. We expect the company to report revenue/PAT CAGR of 13%/24% respectively over FY20-FY23E. We Maintain BUY with revised TP of INR440 (earlier INR400) based on 18x FY23E EPS. Current valuation of 13x FY23E EPS is a discount of 35% to it's 5 year average of 20x.
BROKERAGE VIEW :: Antique Broking on Gateway Distriparks
CMP: Rs 118 | TP: Rs 165 | Reco: Buy
>> Gateway Distriparks's 3Q EBITDA was higher than our/street estimates at INR826mn (Antique est: INR784mn) higher 37%YoY/27% QoQ. CFS/Rail segment Volumes grew +9%/-11% YoY. Unit profitability grew 25% YoY in Rail and 37%YoY in CFS segment. Management highlighted: (1) Positive operating leverage, improved turnaround boosted rail margins; (2) unit profitability in Rail now sustainably higher versus recent past trends; (3) Competitive intensity easing in both Rail/CFS segments on better Industry volumes; (4) Revival in EXIM trade much faster than anticipated; In Dec-20, Company registered record volumes in both segments; (5) With improved performance standards of Rail Industry (post Covid), there is a renewed interest from shipping lines for hinterland ICD push like never before - which could drive Modal shift from Road to rail post DFC; (6) DFC connection to Gujarat ports expected by Sep-21; (7) Balance sheet position (net Debt at INR4.9bn) has improved post the recent debt paydown.
>> Post a strong 3Q, we revise our FY21-23 EBITDA estimates upwards by 11-17%. We increase the Price Target on stock to INR165 (earlier INR105) on estimate upgrade, higher valuations of associate (Snowman Logistics) and 0.5-1x target multiple upgrade for CFS/Rail business reflecting improving business trend. We upgrade the stock to BUY.
BROKERAGE VIEW :: Antique Broking on IRB Infra Developers
CMP: Rs 116 | TP: Rs 155 | Reco: Buy
>> With near term plans, IRB can shore up the construction order backlog to INR70bn+. We expect the company to grow at modest revenue growth between FY20-FY23E. With lower EPC revenue and higher numbers from Mumbai-Pune TOT, we expect EBITDA margin to inch-up from the reported levels. We forecast 12% CAGR in EBITDA till FY23E. The current valuation has discounted the near-term stress in RoE. Using some of the parts, with reduced multiple for MRM, we revise the TP to INR155, and we maintain BUY.
BROKERAGE VIEW :: Antique Broking on Rallis India
CMP: Rs 285 | TP: Rs 350 | Reco: Buy
>> We believe that positive catalysts i.e. buoyant farm sentiments and improved crop prices are likely to persist in the near term to drive the show in the sector. We largely maintain our FY21/22 estimates. We expect RALI's to clock revenue/ PAT CAGR of 10%/20% over FY20-FY23E led by domestic market share gain and export ramp-up. Maintain 'BUY' with TP of INR350 based on 22xFY23E EPS (five-year average 20x, high/low 28x/10x).
BROKERAGE VIEW :: Emkay Global on Rallis India
CMP: Rs 289 | TP: Rs 325 | Reco: Buy
>> RALI’s Q3FY21 comparable EBITDA/PAT beat our estimates by 8/9% on the back of strong growth of 17% (derived) in the domestic crop care segment. RALI took a one-time charge of Rs78mn (Rs60mn in the seeds segment and balance Rs18m in crop care) on account of substandard stocks and slow-moving inventory.
>> Management expects domestic industry to grow at 8-11% in FY22E, subject to normal monsoons. Management mentioned that overall pest pressure was lower yoy in Q3; hence, growth of 17% in the domestic business appears impressive.
>> Metribuzin volumes have started to pick up from Q3 but realizations are still down 38-40% yoy. Management expects further improvement in Metribuzin prices as volume picks up in Q4FY21 and FY22E. Other export molecules, such as Acephate, Pendimethalin and Hexaconazole, were running at full capacity.
>> We trim our FY21/22/23E EBITDA estimates by 4%/3%/3% as we bake in slow improvement in margins, in line with management’s preference for growth over margins. We maintain Buy with a revised TP of Rs325 (Rs320 earlier) as we roll forward valuations to 23x Mar-23E EPS (Dec-22E earlier).
BROKERAGE VIEW :: MOFSL on IndiaMART InterMESH
CMP: Rs 7,406 | TP: Rs 9,000 (+22%) | Reco: Buy
>> Apart from the strong recovery in paid suppliers, collections, and revenue growth, the company has shown higher resilience on the margin front. While we concur that margin at current levels are not sustainable, the company would see positive benefits from cost optimization and operating leverage. We increase
our FY22E/FY23E EPS estimate by 17%/16% to factor in a robust operating performance.
>> We remain confident of strong fundamental growth in operations, led by: a) high growth in digitization among SMEs (~25%), b) the need for out-of-the-circle buyers, c) a strong network effect, d) over 70% market share in the underlying industry, e) the ability to increase ARPU on low price sensitivity, and f) high operating leverage.
>> We arrived at our DCF-based target price of INR9,000 per share assuming 11% WACC and 5% terminal growth rate. Our TP implies an upside of 22%. Reiterate
Stock picks by Ajit Mishra of Religare Broking
We're seeing consistent buying interest in the pharma pack and Lupin is also catching up with the other pharma majors. It has witnessed a decent recovery in the last two months after forming a strong base on the weekly chart around the 880 zone. It's currently trading around the previous swing high and is likely to surpass this hurdle soon. Traders can create fresh longs in the given range. READ MORE
Nifty outlook & stock picks by Vinay Rajani
Sharp pullback negates the possibility of a down trend
From the low of 14,222, the Nifty50 index registered sharp recovery towards 14,546 in a short span of time. This recovery has recouped more than 62 per cent of the entire fall which was registered from 14,653 to 14,222. Retracement of more than 62 per cent is considered as a negation of a primary down move. Bullish trend of Nifty has now got new support at 14,222 and with that stoploss longs should be held. READ MORE
FII/FPI & DII trading activity on NSE, BSE and MSEI
Oil extends gains on hopes of US stimulus and crude stocks drawdown
>> Oil prices rose in early trade on Wednesday, adding to solid gains overnight, on expectations the incoming US administration will go ahead with massive stimulus spending that would boost fuel demand and draw down crude stocks.
>> US West Texas Intermediate (WTI) crude futures climbed 23 cents, or 0.4%, to $53.21 a barrel, building on a 1.2% rise on Tuesday.
>> Brent crude futures rose 25 cents, or 0.5%, to $56.15 a barrel, adding to a 2.1% gain on Tuesday.
SGX Nifty Update
>> At 8:14 am, the index was at 14,516 levels, down 40 points
Wall Street check
On Wall Street, the Dow Jones rose 0.38 per cent, the S&P 500 gained 0.8 per cent, while the tech-heavy Nasdaq added 1.53 per cent on the back of US Treasury Secretary nominee Janet Yellen’s push for a sizable fiscal relief package in response to the Covid-19 pandemic. Meanwhile, President-elect Joe Biden will be sworn into office later in the day.
Asian market check
Asian markets were mixed early Wednesday. Australia’s ASX 200 rose half a per cent in early trade Wednesday and Hong Kong's Hang Seng index added 0.13 per cent. On the other hand, Japan’s Nikkei fell 0.4 per cent
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