HDFC twins, RIL drive Sensex 834 pts up; Nifty tops 14,500; midcaps outrun

Topics MARKET WRAP | Markets | IRFC

Stock market updates: Solid December quarter results, so far, and positive global cues fulled an across-the-board buying in the equity markets on Tuesday. Bulls recovered nearly all the losses incurred over the past two days and settled nearly 2 per cent higher today.

In the intra-day trade, the S&P BSE Sensex zoomed 936 points to hit a high of 49,500 levels. The index pared gains marginally and closed with gains of 834 points, or 1.7 per cent, at 49,398.29 levels.

Bajaj Finserv, Bajaj Finance, HDFC, ICICI Bank, and L&T jumped between 3 per cent and 7 per cent on the BSE today, contributing the most towards the index's gain. That apart, HDFC Bank, Reliance Industries, and TCS, all up in the range of 1.5 per cent to 2.5 per cent, remained other contributors.

On the NSE, the Nifty50 reclaimed the 14,500-mark in the intra-day trade to hit a high of 14,546. The 50-share index, however, closed at 14,521 levels, up 239.85 points or 1.68 per cent. 46 of the 50 constituents ended the day in the green.

In the broader market, mid-cap peers outperformed the large-caps, with the S&P BSE MidCap index settling 2.3 per cent higher at 18,953. The SmallCap index, on the other hand, closed at 18,634.97, up 1.6 per cent higher.

Among key sectoral indices, Nifty Financial Services index ended 2.4 per cent higher at 15,614.10. During the day, Bajaj twins – Bajaj Finance and Bajaj Finserv - rallied 9 per cent and 6 per cent, respectively, while Cholamandalam Investment and Finance Company, too, surged 9 per cent on the back of heavy volumes. READ MORE

That apart, Nifty Realty index surged up to 4.8 per cent on the NSE, hitting an intra-day high of 341, which was close to its 52-week high level of 346.50. Among individual stocks, Indiabulls Real Estate zoomed 13 per cent to Rs 87.90; DLF hit a 52-week high of Rs 296 after rallying 7 per cent in intra-day trade; Godrej Properties, Prestige Estate Projects, Sobha, Oberoi Realty and Brigade Enterprises were up in the range of 3 per cent to 4 per cent.

Global cues

European shares rose on Tuesday after Asian markets rallied on optimism about China's economy, while upbeat earnings reports from miner Rio Tinto and computer peripherals maker Logitech boosted sentiment.

The pan-European STOXX 600 index gained 0.4 per cent, while Germany's DAX and France’s CAC 40 gained 0.4 per cent and London's blue-chip index rose 0.7 per cent.

Asian stocks closed in on all-time highs as investors wagered China's economic strength would help underpin growth in the region after data confirmed the world's second-largest economy was one of the few to grow over 2020.


LIVE UPDATES

MARKET CLOSING COMMENT :: Keshav Lahoti, associate equity analyst at Angel Broking

Tracking positive global cues, Nifty opened positively & gradually rallied during the day to close up by 1.7%. Rally was all across the sectors, all the sectoral indices closed in green. Nifty Realty closed up by 4.2% due to strong demand & favourable announcement in budget for the sector.  Mindtree closed up by 1.1% after it posted a 66% year-on-year rise in Q3 net profit.  Cholamandalam Investment and Finance Company surged 7% after its MD Arun Alagappan resigned.  Indiabulls Real Estate soared 11.5% after its quarterly consolidated net profit rose by 64%.  We are cautiously bullish on the market and expect it to hit new highs again.

MARKET CLOSING COMMENT :: Deepak Jasani, Head of Research, HDFC Securities

Indian equity benchmark indices bounced back strongly on Jan 19 after two days of losses. At close, the Nifty was up 239.90 points or 1.68% at 14,521.20.
 
Volumes on the NSE were the lowest since Jan 01. Among sectors, Realty, Metals, PSU Banks, Media, Bank, Auto and Pharma rose the most.
 
Nifty has bounced back smartly on Jan 19, however with lower volumes. This has raised hopes of continuation in the upmove. Sharply positive advance decline ratio also reinforces this feeling. However it would be interesting to watch as to whether Nifty will cross 14653 and make a new high.
 
 

MARKET CLOSING COMMENT :: Shrikant Chouhan, Executive VP, Equity Technical Research at Kotak Securities

The market has formed complete reversal formation by closing above the highest of the previous day, which was at 14459/49122. Today, all the sectors closed in positive territory. The market breadth was extremely encouraging. Unusual surge in the Hang Seng helped other Asian markets to trade higher. Along with Asian markets, today’s performance of US markets would decide the next course of action for our markets. The market is heading for 14580/49600 levels, which is a crucial hurdle point for the market. On the decisive break of 14580/49600 levels, it would result in retesting of 14650/49800 levels, which is an all-time highest level. On the downside, 14450/49100 and 14350/48800 would be major supports. The focus should be on Commodities and Pharmaceutical stocks

MARKET CLOSING COMMENT :: Ajit Mishra, VP - Research, Religare Broking

The bulls were back in action as the markets gained nearly two percent and settled around the day’s high as well. After two days of slide, the benchmark opened higher, in response to an optimistic statement from US Secretary of Treasury, Janet Yellen, about a big fiscal push in the US. The momentum further gained strength as the session progressed, with healthy buying across sectors. Consequently, the Nifty ended at 14,521 levels; up by  1.7%. The broader markets too posted decent gains in the range of 1.6-2.3%. Amongst the sectors, all the indices ended in positive with realty, metals and capital goods were the top gainers.
 
Going ahead, earnings and global cues would remain on the participants’ radar. Besides, we’re also seeing noticeable buzz across the sectors in run up to Budget. We feel it would be prudent for the markets to spend some time around the current levels. Meanwhile, there’ll be no shortage of trading and investment opportunities, thanks to prevailing earnings season and upcoming budget. Amid all, we suggest not to go overboard and stick to the quality names and accumulate them on dips.
 

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

Bulls took control after two days of massive sell-off, tracking positive cues from Asian markets and in expectation that the bigger US stimulus may keep the liquidity alive. Buying was seen across sectors with realty and PSU Banks outshining. The current market will get further boost by foreign inflow if additional US stimulus kicks in. However, recent volatility in the market has increased due to concerns over high valuations and bond yields, investors should be watchful

TECH VIEW :: Ashis Biswas, Head of Technical Research, CapitalVia Global Research

The market witnessed a strong pullback rally after a few sessions of continuous correction while sustaining and closing above 14400 would be a key factor in the market for the rally to continue. The market is aligned to be in a range-bound movement between the levels of 14180-14680. A decisive breakout above the zone of 14680-14700 could lead to an improvement in market breadth, and a rally till the levels of 14850-14870.

SECTOR OF THE DAY :: Nifty Realty index gains 5% in intra-day


Bajaj twins surge day ahead of Q3 nos

>> Results are scheduled for tomorrow, Jan 20

Tata Motors jumps 5%, ends as top gainer on Nifty


STOCK OF THE DAY :: Indiabulls Real estate ends over 11.5% higher

>> The stock surged over 14% in the intra-day trade today post stellar Q3 results


S&P BSE SmallCap performs in-line with frontline indices


Mid-caps in focus :: BSE Midcap index ends 2% higher; IDFC First Bank, L&T Finance Holdings jump up to 8%


Sectoral trends on NSE :: Realty stocks outperform on hopes of earnings revival


Sensex Heatmap :: Tech M, ITC, and M&M end as the only losers


Rupee Closing

Rupee ends at 73.17 per US dollar vs Monday's close of 73.28/$

CLOSING BELL

The S&P BSE Sensex index pared gains marginally and closed with gains of 834 points, or 1.7 per cent, at 49,398.29 levels. 
 
On the NSE, the Nifty50 reclaimed the 14,500-mark in the intra-day trade to hit a high of 14,546. The 50-share index, however, closed at 14,521 levels, up 239.85 points or 1.68 per cent. 46 of the 50 continuents ended the day in the green.

Dec Quarter Result :: Ceat's net profit comes in at Rs 132.1 crore

>> Revenue comes in at Rs 2,221.3 crore

>> EBITDA at Rs 327.7 crore

>> EBITDA margin at 14.7%

Apollo Hospitals hits record high on launch of Rs 1,000-crore QIP

The company said funds would be utilized for purchasing the balance 50 per cent stake in Apollo Gleneagles, any potential inorganic opportunity, reducing debt, technology upgradations, and other general corporate purposes. READ MORE

NBFC shares in focus; Bajaj twins, Cholamandalam Investment surge up to 9%

Shares of non-banking financial companies (NBFC) were in focus in Tuesday's session as the Bajaj twins – Bajaj Finance and Bajaj Finserv - rallied 9 per cent and 6 per cent, respectively, while Cholamandalam Investment and Finance Company, too, surged 9 per cent on the BSE in intra-day trade on the back of heavy volumes. READ MORE

Market Update :: Sensex rallies over 900 points


IRFC IPO sails through on Day 2 of the bidding process


Home First Finance IPO to open on Jan 21; issue price fixed at Rs 517-518

Investors can bid for 28 equity Shares and in multiples thereof
 

Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
A B B 1387.20 1417.70 3.14
APOLLO HOSPITALS 2650.00 2654.05 1.65
BAJAJ AUTO 3657.60 3663.95 2.73
BANK OF MAHA 15.60 16.17 5.76
CAN FIN HOMES 527.55 529.20 5.39
» More on 52 Week High

Nifty reclaims 14,500-mark in intra-day trade


Tata Metlaliks Q3 reportcard

>> Revenue at Rs 526 cr vs Rs 519 cr YoY
 
>> PAT at Rs 75 cr vs 46 cr YoY
 
>> Total Income at Rs 528 cr vs Rs 522 cr YoY

>> EBIDTA at  Rs 127 cr vs 78 cr YoY

Chemcrux shuts down production operations at Ankleshwar Plant; stock tanks

The company said it has shutdown production activities at Ankleshwar Plant, as a self compliance to the closure order of Gujarat Pollution Control Board (GPCB). Stock was down over 8%.

Top gainers on the BSE at this hour

COMPANY PRICE(rs) CHG(%)
INDBULL.REALEST. 86.40 10.63
HFCL 33.20 10.48
L&T TECHNOLOGY 2575.95 8.42
SOBHA 484.90 8.32
L&T FIN.HOLDINGS 107.35 7.89
» More on Top Gainers

Heatmap: S&P BSE Sensex gainers and losers


Automobile Q3 results preview: Strong volume recovery to drive earnings

A sharp recovery in volumes across segments and leaner cost of operations due to cost-cutting measures are set to help auto companies post strong results for the December quarter of FY21 (Q3FY21), analysts believe. Moreover, pent-up demand, increased preference for personal mobility and strong rural sentiments have also helped revive the sector.
 
According to HDFC Securities, the demand for automobiles has been resilient even post the traditional Diwali sales. READ MORE

MARKET CHECK :: MidCap stocks outperform; NBFC stocks lead


ALERT :: India VIX drops 5%

Mind your money :: Strike a balance between tax saving and liquidity

The government offers several benefits to senior (60-80 years of age) and very senior citizens (above 80 years) in the matter of income-tax (I-T). Such benefits come either in the form of enhanced deductions or relaxations in tax-filing procedures. READ MORE

L&T Technology advances 10% ahead of Q3 results; surges 50% in 3 months

Shares of L&T Technology Services (LTTS) moved higher by 10 per cent to Rs 2,621 on the BSE in the intra-day trade on Tuesday on the back of heavy volumes ahead of its October-December quarter (Q3FY21) results. The company said it will announce its results for the third quarter of FY21 on Wednesday, January 20, 2021 post market hours. The stock of LTTS, a subsidiary of Larsen & Toubro (L&T) focused on engineering, research & development (ER&D) services, hit a record high of Rs 2,780 on Friday, January 15, 2021. READ MORE

BUZZING :: Bajaj Finance rallies 5%


SENSEX SURGES 700 PTS


Robust deal wins, strong demand to keep growth momentum high for Mindtree

IT services firm Mindtree reported a strong revenue performance in a seasonally weak third quarter (Q3). The Bengaluru-based company’s revenue came in higher than the Street’s estimates at Rs 2,023.7 crore, translating to a 5.1 per cent growth sequentially. READ MORE

NEWS FLASH :: Wendt India board will consider interim dividend on Jan 22, Friday

Shares trade marginally higher at Rs 3,321.60 on the BSE

Dec Quarter Result :: Bank Of Maharashtra's net profit rises 13.9% at Rs 154.1 cr Vs Rs 135.3 cr (YoY)


Siemens trades near record high on strong outlook; surges 25% in two months

Shares of Siemens rose 4 per cent to hit a 52-week high of Rs 1,706 on the BSE on Tuesday, surpassing its previous high of Rs 1,673 scaled on January 11. The stock of heavy electrical equipment manufacturer was quoting close to its record high level of Rs 1,717, touched on October 23, 2019. In the past two months, the stock has rallied 25 per cent. READ MORE
 

Maruti Suzuki, Tata Motors, M&M: Price hike puts auto stocks in fast lane

Maruti Suzuki India (MARUTI): The "Inverse Head and Shoulder" breakout indicates a medium-term rally towards Rs 9,500 levels. The trend is expected to stay bullish as long as the stock holds the support of Rs 7,000 levels. The immediate trend suggests a positive bias, till the scrip trades above Rs 7,500 levels, with likely near-term targets of Rs 8,300 to Rs 8,500 levels. READ MORE

Damanis hike stake in India Cements in Q3 to 21%; stock jumps 6%

The promoter of Avenue Supermarts and billionaire investor Radhakishan Damani, along with brother Gopikishan S Damani, hiked stake in India Cements during the December 2020 quarter following a stellar performance by the firm from its 52-week low level scaled in February last year. READ MORE


NEWS ALERT :: Adani Enterprises inks Concession Agreement with AAI for 3 airports

>> Adani Jaipur International Airport Limited, Adani Guwahati International Airport Limited and Adani Thiruvananthapuram International Airport Limited, wholly-owned subsidiaries of the Company have signed the Concession Agreement on 19th January, 2021 with Airports Authority of India for the Operations. Management and development of Jaipur, Guwahati and Thiruvananthapuram Airports respectively.

>> The concession period is 50 years from the commercial operation date

Sensex Heatmap | Only two stocks in the red as index jumps 600 points


IPO Update :: IRFC IPO subscribed 83% on Day 2 so far


Global Market Update

U.S. stock index futures rose, as most Asian equities climbed, amid bullish sentiment a day before President-elect Joe Biden’s inauguration. March contracts on the S&P 500 advanced 0.7% in Tokyo. Futures added 0.5% on the Dow Jones Industrial Average and 1% for the Nasdaq 100 Index. An Asia-Pacific share gauge gained the most in more than a week. (Source: Bloomberg)

MARKET STATS :: Advance-decline ratio at nearly 3:1 on the BSE


L&T Finance Holdings' rights issue to open on Feb 1; stock surges 7%

Shares of L&T Finance Holdings were up 7 per cent at Rs 106 on the BSE on Tuesday. The company has fixed January 22, 2021 as record date, for its proposed Rs 3,000-crore rights issue, to determine the equity shareholders entitled to receive the rights entitlement in the rights issue. The stock will turn ex-date for rights issue on Thursday, January 21. READ MORE

How emerging uptick in commodity prices spells good news for Indian firms

A commodity super-cycle is developing across the globe. Usually, such an uptrend in prices of commodities has meant bad news for India through inflation and a stress on the balance of payments and consequent downward pressure on the rupee. But this time India seems poised to benefit from the upturn. READ MORE

MARKET CHECK :: Grasim, Tata Motors top gainers on Nifty50 at this hour


Stocks that lifted Sensex to day's high


Ultra long bonds are back in force as rock-bottom rates create sweet spot

After Germany's state of North Rhine Westphalia (NRW) raised 2 billion euros on Jan. 5 via a 100-year issue, France said on Monday it would soon sell a 50-year bond, its first new debt at that maturity since 2016.
 
A brisk start that has also seen Mexico and Indonesia sell 50-year bonds could mean issuance volumes approach levels seen in 2016, when euro zone governments sold a record 19 billion euros of bonds with maturities of 30 years and over. READ MORE

Nifty Realty index surges 5%; Indiabulls Real Estate, DLF rally up to 13%

Among individual stocks, DLF hit a 52-week high of Rs 296 after rallying 7 per cent in intra-day trade on the NSE. In the past one month, the stock has surged 27 per cent, against 4 per cent rise in the Nifty50 index. Godrej Properties, Prestige Estate Projects, Sobha, Oberoi Realty and Brigade Enterprises were up in the range of 3 per cent to 4 per cent. READ MORE

Mindtree gains 6% on healthy Q3 results; here's what brokerages say

Mindtree’s revenues during the quarter increased by 5.1 per cent QoQ and 3.1 per cent YoY to Rs 2,034 crore. Sequentially, the company’s revenues were up 5 per cent in dollar terms, while in constant currency terms it was up 4.6 per cent. Ebit (earnings before interest tax) margin expanded by 290 basis points (bps) QoQ and 750 bps YoY to 19.6 per cent. READ MORE

Dec Quarter Result :: CSB Bank's PAT surges 88.5% YoY to Rs 53 crore

>> GNPAs decline from 3.04% to 1.77% QoQ

>> NNPAs slip from 1.3% to 0.68% QoQ

>> NII improves from Rs 155.2 crore to Rs 251.2 crore YoY


Budget wish list :: LTCG exemption, clarity on dividend taxation

Industry players are hopeful that the government will exempt tax on long-term capital gains (LTCG) arising on sale of listed equity shares. The government could also streamline the holding period for granting such exemption to 24 months, bringing the same at a par with unlisted shares.
 
“Abolishing the much-criticised LTCG tax would be a welcome move. A widely discussed point of note is redefining the concept of long term to two years and the change of taxation to zero. This can bring stability to the duration of investments across financial assets,” said Tejas Khoday, co-founder and CEO, FYERS. READ MORE

Rupee Opening

Rupee opens higher at 73.16 per US dollar vs Monday's close of 73.28/$

ALERT :: India VIX cools-off around 3%

>> The index is now trading at 23.73 levels.

Most active stocks by volume

COMPANY PRICE(rs) CHG(%)
VODAFONE IDEA 13.28 2.15
TRIDENT 15.28 2.41
SUZLON ENERGY 6.90 -1.29
TATA MOTORS 252.85 2.93
ALOK INDUSTRIES 22.70 -4.02
» More on Most Active Volume

Reliance Industries back above Rs 2,000 apiece-mark


MARKET VIEW | V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The major positive development for markets today is the Treasury Secretary-elect Janet Yellen's comment on the need for 'big stimulus'. Further big stimulus along with the huge liquidity created by the unprecedented monetary stimulus can keep markets buoyant; but there is a risk of bubble valuations with its vulnerability to sharp corrections, even crashes. Meanwhile, midcaps have turned weak and strong large-caps like HDFC bank  & RIL have become strong. High delivery based buying in these stocks indicate their improving prospects.

BUZZING :: DLF surges 4%


Apollo Hospitals slips into the red after hitting 52-week high

>> Apollo Hospitals launched a QIP to raise as much as Rs 1,000 crore with floor price set at Rs 2,508.58 per share.


Man Industries gains 2.5% on new order win

>> Man Industries bags new orders worth Rs 250 cr,ore to be executed over 5 months


Result Reaction :: Indiabulls Real Estate zooms 7%

>> The consolidated net profit of the firm rose 64 per cent to Rs 80.69 crore for the quarter ended December. The company's total income was Rs 756.81 crore during the third quarter of the fiscal year, against Rs 1,317.70 crore a year ago.


Adani Green rallies around 2.5%

>> Promoter of Adani Green Energy, Adani Trading Services LLP, on Monday offloaded shares worth nearly Rs 3,309 crore in the firm, through open market transactions. Meanwhile, Acme Trade and Investment bought 3.61 crore shares at Rs 915.37 per share.


L&T Finance advances over 3% on fixing rights issue price

>> The board has fixed the price at Rs 65 per share for the Rs 3,000 crore rights issue which opens for subscription on February 1.


IndiaMART InterMESH benefits from strong Q3 results

>> The firm posted a 29 per cent rise in its consolidated net profit to Rs 80 crore for the third quarter ended December 31, 2020.


Maruti Suzuki up on price hike

>> The automaker increased the price for select models by up to Rs 34,000 to offset adverse impact of rising input costs with effect from January 18.


Mindtree jumps over 5% as Q3 nos beat Street expectations

>> The consolidated net profit of the IT company jumped 65.7 per cent to Rs 326.5 crore in the December 2020 quarter. The company said its deal pipeline continues to be healthy and strong.
 

Sectoral trends on NSE at Open


Sensex Heatmap :: Across-the-board buying lifts index


Opening Bell :: Nifty tops 13,350


Opening Bell :: Sensex surges over 350 pts


COMMODITY CHECK


Nifty gains over 90 points in pre-open session


Sensex Heatmap | Top gainers & losers in pre-open trade


Pre-open session: Sensex gains nearly 300 points


Kotak Institutional Equities on L&T Finance

L&T Finance (LTFH) reported strong operating performance with record disbursements in select segments and liability-side-led NIM expansion, a trend that may continue in the near term. The immediate impact of moratorium exit seems moderate although recovery trends remain a monitorable. We remain neutral on the stock post the sharp rally; further comfort on asset quality trends will make us more assertive to play LTFH’s recovery story. ADD; Fair value: Rs 105.

Phillip Capital on Mindtree: Maintains BUY; Target price at Rs 2,000

  • Mindtree reported a strong Q3 performance – beating expectations on all fronts. Growth was broad based, with the top client as well as non-top clients growing smartly – pacifying concerns of concentrated growth and top client plateauing out. 
 
  • Margin expansion was the biggest surprise, with margins coming at 33 quarter high – on the back of strong gross margin expansion. The management has guided to sustainable +20% EBITDA margins – achievable in our opinion, even with wage hikes (Q4) and travel costs coming back (FY22).
 
  • The margin expansion thesis, on which we had upgraded the stock is playing out to perfection. We believe there is enough near term play left in the stock, as we anticipate more EPS upgrades (we are already 7% above consensus) as Mindtree delivers margins ahead of street expectations. All along, we also expect its eventual merger with LTI to provide long term upside. Maintain BUY. TP: Rs 2,000

Stocks to watch: Mindtree, Maruti, Adani Green, YES Bank, Apollo Hospitals

Mindtree: The consolidated net profit of the IT company jumped 65.7 per cent to Rs 326.5 crore in the December 2020 quarter. The company said its deal pipeline continues to be healthy and strong.
 
Maruti Suzuki: The automaker increased the price for select models by up to Rs 34,000 to offset adverse impact of rising input costs with effect from January 18.
 
Q3 earnings: ICICI Lombard General Insurance Company, Alembic Pharmaceuticals, L&T Infotech, Tata Communications and CSB Bank among 26 companies set to announce their December quarter numbers today. READ MORE


BROKERAGE VIEW :: MOFSL on Coromandel International

CMP: Rs 823 | TP: Rs 1,090 (+32%) | Reco: Buy

>> We believe the earnings growth momentum is likely to sustain in 3QFY21. We expect CRIN to report revenue / EBITDA / adj. PAT growth of 15%/17%/29% YoY
to INR37.7b/INR5.4b/INR3.4b in 3QFY21 on the back of a strong on-going rabi season. We expect Manufacturing EBITDA/mt to grow 10% YoY to INR4,200/mt in 3QFY21. Absolute EBITDA from the Trading segment would grow 5.8x YoY on account of higher volumes and better trading margins. 

>> The structural story remains intact with regard to increasing farmers’ awareness about having balanced nutrients in crops. This is likely to aid the shift from urea
to complex fertilizers, and CRIN thus stands to be a key beneficiary. However, the key monitorable in the near future shall be RM prices.

>> We expect a revenue/EBITDA/PAT CAGR of 10%/14%/19% over FY20–23E. We value CRIN at 18x FY23E EPS to arrive at TP of INR1,090. Maintain Buy.
 

BROKERAGE VIEW :: MOFSL on L&T

CMP: Rs 1,335 | TP: Rs 1,625(+22%) | Reco: Buy

>> Over the past one-year, L&T has underperformed the Nifty by ~15%. Adjusted for the valuation of listed subsidiaries, the core business has underperformed Nifty by 30% and is valued ~40% below the last peak hit during the interim Budget in Jul’19 after May’19 elections. The stock itself is down 15% from its peak, whereas its subsidiaries have witnessed an over 50% jump. We attribute the underperformance to the COVID-induced impact on economic growth and fiscal concerns towards infrastructure spending in the country. With a recovery in sight, we see room for its core business to see a meaningful re-rating.

>> We maintain our Buy rating with a higher TP of INR1,625/share on account of: a) core business target P/E multiple of 20x v/s long-term average of 22x, and b) contribution from four listed subsidiaries, after applying a 20% holding company discount. Adjusted for valuation of subsidiaries (INR604/share contribution), L&T trades at FY22E/FY23E P/E of 16x/14x, providing ample valuation comfort. Should the stock move to its long-term average multiple of 22x, our target price would stand at INR1,730 assuming no change in the valuation of its subsidiaries.

BROKERAGE VIEW :: MOFSL on Mindtree

CMP: Rs 1,661 | TP: Rs 1,765 (+6%) | Reco: Neutral

>> Since Jul’19, post the disruption pertaining to ownership change, Mindtree has been undertaking encouraging steps toward achieving stability in both its client and employee counts.

>> The strategy change to increase focus on annuity revenue and tail account rationalization is already reflected in the revenue and client mixes.

>> (1) A stable outlook for the Top account, (2) decent deal signings, and (3) the ability to sustain improved margins are key positives.

>> Consistent margin expansion and a positive outlook on the same are key positives. High exposure to Travel, Transport, and Hospitality remains a drag on overall recovery.

>> The stock is currently trading at 20x FY23E EPS. The stock has been one of the best performers in the IT sector in CY20, with returns of 87%. We believe the key positives are already captured, and we see limited upside hereafter. Our TP of INR1,765 implies 21x FY23 EPS (15% discount to LTI). Maintain Neutral.

Crude check :: Brent crude edges up as optimism over economy trumps demand concerns

>> Brent crude futures edged up on Tuesday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally could cool fuel consumption.

>> Brent crude futures for March rose 17 cents, or 0.3%, to $54.92 a barrel after slipping 35 cents in the previous session.
 
>> US West Texas Intermediate crude was at $52.25 a barrel, down 11 cents, or 0.2%. 

(Source: Reuters)

Dollar hovers near one-month high as Biden's FX policy takes shape

>> The dollar hovered around its highest in nearly one month on Tuesday with traders expecting US Treasury Secretary nominee Janet Yellen to affirm a more traditional commitment to market-set currency rates when she testifies at Capitol Hill later.

>> The greenback has started the year with a near 2% rally against major peers, supported by a rise U.S. Treasury yields in response to Biden’s plan for a $1.9 trillion pandemic relief package.
 
>> The safe-haven currency fell nearly 7% last year on expectations US monetary policy would stay ultra-loose and on hopes for a post-pandemic global recovery.

>> The greenback has also been helped recently by an unwinding of bearish bets, with data showing that hedge funds piled up the biggest net short position since May 2011 in the week ended Jan. 12. Such large positions suggest that traders would be relatively more inclined to reduce their positions than add to already big bets.

(Source: Reuters)

Rupee check

Source: Bloomberg


Stock calls by Nilesh Jain of Anand Rathi

BUY TITAN | TARGET: Rs 1,570 | STOP LOSS: Rs 1,451
 
The stock has formed a "bullish candle" after falling for the 4th consecutive session. This pattern resembles a bullish engulfing candlestick pattern which is considered as a bullish reversal pattern. The stock also has strong support at 1,451 which was its previous swing low and looks like a possibility of a "double bottom" formation. It is also trading well above its short-term and long-term moving averages. The momentum indicator RSI has reversed from the oversold territory on the daily chart which hints of a strong pullback on the higher side. READ MORE

Bulk deals on the BSE as on Monday

Bulk deals on the NSE as on Monday

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


Dow Jones Futures up over 100 pts


Wall Street on Monday

Wall Street indices were shut on Monday on account of public holiday

Gap-up start on cards

>> At 8:00 am, SGX Nifty was ruling 96 points, or 0.67 per cent, at 14,372 levels.

Asian markets gain in trade

Asian share markets edged ahead on Tuesday as investors wagered China’s economic strength would help underpin growth in the region. Meanwhile, Janet Yellen, Joe Biden’s nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday that the government must “act big” with the coronavirus relief plan, reports said.
 
MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.2 per cent. Japan’s Nikkei bounced 1.2 per cent and Australia's ASX 200 firmed up 1 per cent. Hong Kong's Hang Seng also rose 1.6 per cent in early deals.

(Source: Reuters)

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