Sensex skids 531 pts; RIL, IndusInd Bank dip 5%, pharma stocks outperform

Stock market updates: Indian equities failed to hold on to their gap-up start and skid 1 per cent on Monday as profit booking in Reliance Industries' stock and weakness in banking counters erased gains. That apart, reports of a fresh clash between Indian and Chinese troops, which left many injured, in Sikkim soured sentiment. READ MORE

The benchmark S&P BSE Sensex settled the session at 48,347.6 levels, down 531 points or 1.09 per cent, dragged by Reliance Industries (down 5.6 per cent), IndusInd Bank (down 5.5 per cent), HCL Tech (down 3.86 per cent), and HDFC (down 1 per cent).

The Nifty50, meanwhile, gave up the 14,250-mark and closed at 14,239 levels, down 133 points or 0.93 per cent.

In the broader market, the S&P BSE MidCap index slipped 1.14 per cent to end at 18,547 levels, while the S&P BSE SmallCap index ended at 18,211 levels, down 1.15 per cent.

The volatility index, India VIX, ended nearly 4 per cent higher today at 23.25 levels.

Sectorally, pharma stocks outperformed the market with the Nifty Pharma index ending nearly 2 per cent higher. On the downside, the Nifty Realty and the Nifty IT index ended with a cut of 1 per cent.

Domestic markets will remain shut on Tuesday on account of Republic Day holiday.

Global markets

Asian shares climbed to near all-time highs on Monday as concerns over rising Covid-19 cases and delays in vaccine supplies were eclipsed by optimism of a $1.9 trillion fiscal stimulus plan to help revive the US economy. 

MSCI's broadest index of Asia-Pacific shares outside Japan rose to 726.46, while Japan's Nikkei rebounded from falls in early trading to be up 0.7 per cent. Australian shares added 0.4 per cent after the country's drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with a phased rollout likely late next month. Chinese shares rose, with the blue-chip CSI300 index up 1.1 per cent. Hong Kong’s Hang Seng index leapt nearly 2 per cent led by technology stocks.

In Europe, stocks rose as gains in technology shares and upbeat earnings reports helped investors look past the possibility of extended lockdowns. The pan-European STOXX 600 index rose 0.4 per cent.


LIVE UPDATES

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

Today, the market has formed “the three black crows candlestick pattern”. Consisting of three consecutive bearish candles at the end of a bullish trend, the three black crows signals a shift of control from the bulls to the bears. The Nifty/Sensex is also diverging negatively on a daily chart and that would trigger further weakness. In brief, the Nifty 50 index is heading for 14100/13900 levels, (BSE Sensex 48100/47500), if it breaks 14200 (BSE Sensex 48400) decisively. On the higher side 14350/49000 and 14500/49400 would be crucial levels to surpass and sustain. As the market is falling vertically, we are of the view that ahead of the budget we should look for adding strong stocks and selective stocks to our positional portfolio between 14100/13900 (48100/47500) levels.

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

Nifty started on a positive note after suffering steep losses in the previous two trading sessions but could not sustain it and closed down by 1%.  Except pharma, all the other sectors closed flat or in red. YES Bank closed down by 3.8% after the private sector lender has posted a net profit of Rs 151 crore in the third quarter ended December 2020 and said it will not be raising capital via equity soon. Heavyweight Reliance Industries tumbled by 5.3% on reporting a 13 per cent rise in quarterly net profit.  UltraTech Cement also closed down by 3% even after its quarterly results beat on all the fronts. Now all eyes would be on budget. This week the market will react on the basis of expectation of the budget.

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

Markets traded volatile and lost nearly a percent, in continuation to the prevailing corrective phase. The benchmark opened on a firm note following positive global cues however it pared all its gains no time and hovered range-bound thereafter. Dometic cues viz. decline in index major, Reliance, post the results and news of fresh feud between India-China at Sikkim border dented the sentiment. Finally, the Nifty index ended lower by 0.9% at 14,238.9 levels. On the sector front, except healthcare and metals, all the other indices ended with losses wherein Oil & Gas, IT and Auto were the top losers. The broader indices were trading under pressure from the beginning and lost in the range of 1.2% each.
 
It’s a holiday-shortened week and we expect volatility to remain high ahead also due to the scheduled expiry of January month derivatives contracts. Besides, we’re seeing participants speculating on the probable announcements in the Union Budget, which is further adding to the volatility. Amid all, we reiterate our view that a decisive close below 14,200 in Nifty would derail the present momentum so participants should align their positions accordingly.

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

Indian benchmark equity indices fell for the third straight session on January 25. The Nifty fell post 1315 Hrs as European markets gave up their initial gains.  At close, the Nifty was down 133 points or 0.93% at 14,238.90.
 
Volumes on the NSE were lower than the previous session but in line with recent average. Among sectors, Pharma was the main gainer while IT, Realty and Auto were the main losers. Reliance Industries fell 5.6% - its biggest single-day fall seen in the stock in nearly three months.
 
Nifty has fallen for the third consecutive session. This has happened after about 4 months. Poor advance decline ratio hints at broader profit taking. Pre Budget nervousness has resulted in some unloading. Locking up of large sums in the recent IPOs have also led to this sell-off. 14123-14148 is the next support band for the Nifty.

MARKET CLOSING COMMENT :: Sumeet Bagadia, Executive Director, Choice Broking.

Fundamental
 
Indian equity markets opened higher this week on account of positive sentiments across Asia, however markets turned volatile bouncing between gains and losses until profit booking in the afternoon session pulled the benchmarks down. The Nifty index ends today’s session around 0.93% down. Pharma, Metal and Bank sectors were the top gainers, while IT, Auto and Realty sectors were the top laggards. Broader markets saw losses too with the Midcap index moving in line with the benchmarks and the Smallcap was around 1.2% down. For stock specific performance, Grasim Industries, UPL and Cipla were the top gainers in the index today, while Reliance Industries, IndusInd Bank and HCL Technologies were the top losers. Going ahead investors will pay attention to the earnings of key companies like L&T to be announced later today.
 
Technical
 
Nifty closed at 14238 level with the loss of 120 points on back of few large cap stocks which tumbled over 2% average loss during the trading session. On the other hand, the Bank Nifty index closed at 31198 level with the gain of 31 points. Technically, the benchmark index has been trading in its Upward Rising Channel Formation since the last many days which is a continuation formation and indicates an upside movement. Moreover, it has been trading above its 21 days moving average which shows a positive trend for the time being. At present, Nifty has strong support of 14200 level which is a lower band of the formation as well as recent bottom also placed at 14200 level while upside resistance comes at 14500.
 
 

TECH VIEW :: Rohit Singre, senior technical analyst at LKP Securities

One more volatile session ended on a negative note as nifty closed a day at 14239 with loss of nearly one per cent and formed three black crows candle pattern which is bearish in nature. The index has breached all good support which hints if index managed to sustain below today’s low then index may hit 14k mark soon which is strong support on the downside, on the higher side now index has good resistance near 14350-14440 zone again that would be profit booking levels for longs

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

The market witnessed yet another day where bears were able to take the charge completely despite the positive opening. Market might continue to witness the correction this week. 14170-14200 will be an important support zone, a decisive break-down below this level could lead to the next support zone of 13970-14000. the momentum indicators like RSI, MACD indicating the corrections might continue.

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

Indian markets witnessed a highly volatile trade and closed in red due to weak global market and reports of Indo-China border tension. The downside was equally contributed by all the sectors except pharma which traded in the green. Policy decisions of the US Fed meeting which will commence tomorrow will drive the global market in the coming days. We have seen Indian markets being highly volatile these days and this trend is expected to continue this week as we inch closer to the Union Budget
 

Market stats :: Advance-decline ratio, at 1:4, tilts towards bears


SECTOR OF THE DAY :: Pharma index ends firm in a weak market


Sensex contributors :: RIL, Infosys, HDFC top drags


Grasim ends nearly 6% higher on foray into paint business


STOCK OF THE DAY :: Reliance Industries tank over 5% on profit booking


Sectoral trends on NSE :: IT stocks take a back seat, pharma counters shine


Sensex Heatmap at Close :: Axis Bank ends 2% higher ahead of results on Wednesday, RIL slides 5%


CLOSING BELL

The benchmark S&P BSE Sensex settled the session at 48,347.6 levels, down 531 points or 1.09 per cent, dragged by Reliance Industries (down 5.6 per cent), IndusInd Bank (down 5.5 per cent), HCL Tech (down 3.86 per cent), and HDFC (down 1 per cent).
 
The Nifty50, meanwhile, gave up the 14,250-mark and closed at 14,239 levels, down 133 points or 0.93 per cent.
 

Hero MotoCorp, TVS Motor hit 52-week highs; Bajaj Auto scales fresh peak

Among individual stocks, TVS Motor Company rallied 5 per cent to Rs 548 in the intra-day trade, gaining 8 per cent in the past two trading days. The company is scheduled to announce its October-December quarter (Q3FY21) results on Thursday, January 28, and may declare interim dividend, if any for the financial year 2020-21 (FY21). READ MORE

Sensex Heatmap at this hour


Nifty IT witnesses profit-taking, drops nearly 1%


India's corporate bond sales set to slow significantly after record year

Issuance will fall by 17 per cent to about 7.55 trillion rupees ($103.5 billion) this year, according to the median estimate of six of the nation’s top debt arrangers. Companies have less need to build up cash buffers and the potential for higher funding costs were cited by bankers as reasons for the expected drop. READ MORE

Fall from intra-day high in BSE500 stocks in today's session

COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) LATEST(RS) FALL(%)
Apollo Tyres 239.60 210.65 211.85 -11.58
Cyient 638.00 556.95 573.25 -10.15
Vodafone Idea 12.84 11.55 11.69 -8.96
Future Retail 89.50 81.05 81.50 -8.94
Click here for the full list

India VIX jumps over 3%, tops 23-mark

-- VIX is a measure of volatility

ALERT :: Sensex extends fall


L&T scales fresh 52-week high ahead of December quarter results

Shares of Larsen & Toubro (L&T) rose 2.4 per cent and hit a fresh 52-week high of Rs 1,396 on the BSE on Monday in intra-day trade ahead of its December 2020 quarter (Q3FY21) results later in the day. The stock of the engineering & construction (E&C) major was trading at its highest level since November 2019. READ MORE

L&T scales fresh 52-week high ahead of December quarter results

Shares of Larsen & Toubro (L&T) rose 2.4 per cent and hit a fresh 52-week high of Rs 1,396 on the BSE on Monday in intra-day trade ahead of its December 2020 quarter (Q3FY21) results later in the day. The stock of the engineering & construction (E&C) major was trading at its highest level since November 2019. In the past three months, L&T has outperformed the market by surging nearly 50 per cent, on the back of strong orders flow, as compared to 20 per cent rally recorded by the S&P BSE Sensex. READ MORE

FDI in India rose by 13% in 2020 as inflows declined in major economies: UN

An 'investment trends monitor' issued by the United Nations Conference on Trade and Development (UNCTAD) on Sunday said that global foreign direct investment (FDI) collapsed in 2020 by 42 per cent to an estimated USD 859 billion from USD 1.5 trillion in 2019.
 
Such a low level was last seen in the 1990s and is more than 30 per cent below the investment trough that followed the 2008-2009 global financial crisis. READ MORE

MARKET UPDATE:: Sensex at day's low


Apollo Hospitals gains 4%, hits new high on successful fund raising via QIP

Shares of Apollo Hospitals Enterprises jumped 4 per cent in intra-day trade on Monday to hit a new high of Rs 2,688, in an otherwise subdued market, after the company said it has raised Rs 1,170 crore via qualified institutional placement (QIP) issue. The stock surpassed its previous high of Rs 2,683 touched on January 21. In the past three months, the stock has outperformed the market by surging 30 per cent as compared to a 20 per cent rise in the S&P BSE Sensex. READ MORE



Sector Watch :: BSE Healthcare biggest sectoral gainer, rises over 1.5%


PSBs' Q3 nos to be a mixed bag; loan growth, NPAs to be tracked: Analysts

Those at Emkay Global, on the other hand, say that the Supreme Court's stay on NPA tagging remains an irritant in Q3, and may lead to optically elevated proforma slippages due to the spill-over from Q2FY21. That said, overall NPA formation, as well as restructuring proposals, are meaningfully lower than expected though one needs to be watchful of the tail-end risk, it added. READ MORE

Lupin gets USFDA nod to market generic Sevelamer Carbonate tablets

Drug firm Lupin on Monday said it has received nod from the US health regulator to market its generic Sevelamer Carbonate tablets that are used to control phosphorus in people with chronic kidney disease on dialysis. The company has received approval to market its Sevelamer Carbonate tablets in the strength of 800 mg from the United States Food and Drug Administration, (USFDA), Lupin said in a statement. (Text Source: PTI)

Q3 preview: IndiGo, SpiceJet to benefit from weak dollar, festive travel

A troika of festive travel, low fuel costs, and rupee appreciation may help IndiGo and SpiceJet to narrow their losses during the December quarter of FY21, say analysts. The recovery in earnings, however, may be capped by weak air fares, and stricter travel restrictions amid a new strain in coronavirus (Covid-19). While most analysts remain divided on the quantum of loss incurred by domestic airlines during the quarter, they unanimously agree that the Indian aviation sector is on a slow but steady path to recovery. READ MORE

UCO Bank logs net profit at Rs 35 cr in Dec quarter

State-owned UCO Bank on Monday reported a net profit of Rs 35.44 crore in the third quarter ended December of the current fiscal year due to substantial fall in bad loans leading to lowering in provisioning requirements. The Kolkata-headquartered lender had posted a net loss of Rs 960.17 crore in the same quarter of the previous fiscal year. Sequentially, there was a net profit of Rs 30.12 crore in the second quarter ended September 2020 of this fiscal. 

Retail investors in driver's seat; dwarf FII flow into mkts in 2 yrs: UBS

Foreign investor flows – considered to be the movers and shakers of equity markets – have taken a backseat over the past couple of years with retail investors now being in the driver’s seat, suggests a recent report from foreign brokerage firm UBS. The report is based on a survey done in November 2020 that was focused on urban consumers with an average income of Rs 95,000 per month. READ MORE

IT sector biggest contributor to India Inc dividend pool in the past decade

The information technology (IT) sector emerged as the biggest contributor to India Inc’s dividend pool in the past decade. The oil & gas sector had been the biggest contributor to the profit pool, showed a study conducted by Motilal Oswal. The brokerage analysed profits and payouts for 186 companies between FY10 and FY20. READ MORE

Up 160% in 10 months; will Grasim's foray into paint biz mean more upside?

A strong growth outlook for the paints sector has Grasim Industries hooked as it looks to identify new growth engines. However, analysts believe the path to success in the oligopolistic Indian paint market will not be an easy feat to achieve. Grasim on Friday announced that it will foray into the paints business with an initial investment of Rs 5,000 crore over the next 3 years. This is part of the company's endeavours to invest in businesses that have the potential to be a leader in their addressable markets and generate consistent and attractive returns in the long term. READ MORE

Logistics shares gain; Gateway Distriparks zooms 55% in 5 days

In Q3FY21, Gateway Distripark’s consolidated net profit nearly doubled to Rs 32.62 crore, 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 company’s Ebitda (earnings before interest, taxes, depreciation, and amortization) margins improved 520 basis points (bps) to 26.9 per cent from 21.7 per cent in Q3FY20. READ MORE

BSE advance-decline ratio at 1:2 at this hour


Indian, Chinese soldiers clash at Sikkim's Naku La, several injured

Indian and Chinese soldiers clashed at Naku La in North Sikkim last week with many injuries reported, said a government source. The situation is said to be under control though as of now. Naku La, incidentally, was one of the original face-off sites, along with Pangong Tso, Galwan, Gogra, Hot Springs, in early-May last year. The government source said the clash took place three days ago. It happened while both the countries' government and military were readying for another round of talks to resolve border dispute along the 3,488 kilometre-long Line of Actual Control. READ MORE

IPO Update | Home First Finance IPO subscribed nearly 3 times so far


MARKET UPDATE:: Sensex declines again in volatile session


Q&A | Faster withdrawal of global stimulus can impact markets: Vetri Subramaniam

It is not just the Indian markets that are at all-time highs. Several markets, in developed and developing countries, are trading at either lifetime or multi-year highs. Without a doubt, fiscal and monetary support across geographies have contributed to this outcome. This support has enabled the markets to look beyond Covid-19, considering the loss of output as being temporary. READ INTERVIEW HERE
Vetri Subramaniam, group president and head of equity, UTI AMC

MARKET UPDATE:: Broader indices underperform benchmarks; India VIX rises 4%


Top losers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
APOLLO TYRES 217.00 -6.43
TUBE INVESTMENTS 774.00 -5.79
KANSAI NEROLAC 613.25 -5.73
POLYCAB INDIA 1213.60 -5.14
INFO EDG.(INDIA) 5074.85 -5.07
» More on Top Losers

ALERT :: Sensex slips again on reports of clash between Indian and Chinese troops in Sikkim

>> Reports suggest Indian & Chinese Army clashed at Naku La Pass in Sikkim around three days ago.

>> Injuries have been reported on both sides.

>> Situation peaceful at the moment
 

DCM Shriram rallies 24% in one week on strong operational performance in Q3

Shares of DCM Shriram hit a fresh 52-week high of Rs 495, surging 8 per cent in the intra-day trade, on the BSE on Monday on the back of a strong operational performance for the quarter-ended December 2020 (Q3FY21). The stock has rallied 24 per cent in the past one week, as compared to a per cent rise in the S&P BSE Sensex. READ MORE

Gripped by greed, emerging markets turn to the US Fed for next spur

Traders are likely putting their trust in the Federal Reserve to provide the next spur to an emerging-market rally that may be showing signs of fatigue. With Friday's declines delivering a week-ending jolt to the bulls, some of the warning signs took on a more worrying look. The Bloomberg Barclays local-currency bond index registered its first back-to-back weekly drop since June. Bloomberg's Fear-Greed indicator for the MSCI developing-nation stock gauge -- which measures selling strength versus buying strength -- climbed to its highest in almost a decade, a sign that gains may have been excessive. READ MORE

L&T Q3 results today: Strong order inflow, liquidity management may aid nos

HDFC Securities
 
Analysts at the brokerage forecast a 71.5 per cent sequential growth in consolidated net profit at Rs 1,980 crore for the quarter under review, compared with a profit after tax of Rs 1,151.6 crore in Q2FY21. On a yearly basis, however, the PAT may decline around 16 per cent from Rs 2,352.1 crore clocked in Q3FY20. READ MORE

Aurobindo gains 5% on govt nod for promotion of manufacturing bulk drugs

Shares of Aurobindo Pharma rose 5 per cent to Rs 966 in intra-day trade on the BSE on Monday, thus gaining 7 per cent in the past two trading days, on report that the government has given the company approval under the Production Linked Incentive (PLI) scheme for promotion of domestic manufacturing of critical bulk drugs. The PLI scheme aims at promotion of manufacturing of critical key starting materials (KSMs)/drug intermediates and APIs in the country. READ MORE

RIL dips 5% post Q3; analysts see up to 21% upside

Reliance Industries shares tanked as much as 4.7 per cent and hit an intra-day low of Rs 1,953 on the BSE on Monday as investors booked profits on the stock amid better-than-expected December quarter results. The oil-to-telecom conglomerate's consolidated net profit of Rs 13,101 crore in the December quarter jumped 37 per cent sequentially, and beat Street expectations of a 32 per cent QoQ PAT improvement. On a yearly basis, the profit grew 12.5 per cent as lower expenses cushioned earnings even as revenues declined. READ MORE


BUZZING STOCK :: TCS becomes World's biggest IT firm in m-cap terms

>> M-cap surpasses that of Accenture


NBFC stocks in focus; Chola Investment, Shriram Transport rally up to 8%

Shares of non-banking financial companies (NBFCs) were in focus in Monday's session as they rallied up to 8 per cent after the Reserve Bank of India (RBI) released a discussion paper on revised regulations for the sector. Shares of Shriram Transport Finance Corporation jumped 8 per cent to Rs 1,242 on the BSE while Cholamandalam Investment and Finance Company and Mahindra & Mahindra Financial Services were up 6 per cent each at Rs 449 and Rs 185, respectively, in intraday trade. READ MORE

BUZZING STOCK :: Grasim rises 5% as firm looks to foray into paint business

The firm said it will enter paints business and invest Rs 5,000 crore over the next three years.

Nifty Financial Services index holds gains in a volatile market


Most active stocks by volume

COMPANY PRICE(rs) CHG(%)
VODAFONE IDEA 11.96 -5.83
TATA MOTORS 283.10 -2.18
FUTURE CONSUMER 8.54 -4.90
FUTURE RETAIL 81.05 -4.98
PUNJAB NATL.BANK 33.80 -2.17
» More on Most Active Volume

Sensex Heatmap | Top gainers & losers at this hour


UltraTech Cement jumps 5%, hits new high on solid December quarter results

Shares of UltraTech Cement hit a record high of Rs 5,800, up 5 per cent, on the BSE in Monday's opening trade after the company's net profit more than doubled to Rs 1,584 crore in the quarter ended December 31, 2020 (Q3FY21) on the back of higher volume growth. The company had posted a profit of Rs 712 crore in the corresponding period of the previous year. The stock surpassed its previous high of Rs 5,695 touched on January 11, 2021. READ MORE

MARKET UPDATE :: RIL biggest Sensex drag at this hour


Sensex off day's high, drops 175 points


Ahead of Results :: L&T trades over 1% up


Tata Motors snaps winning streak, slips into the red

>> Tata Motors, on Friday, said it has increased prices of its passenger vehicle (PV) range by up to Rs 20,000 to offset rising input costs and semiconductors. The company will also offer protection from the price increase to customers who have booked Tata passenger vehicles on or before January 21.


MTNL slips 1% on report merger ith BSNL may be called off

>> The plan to revive the state-owned telecom companies BSNL and MTNL by merging the two entities is set to be shelved after almost two decades of deliberations on the matter, according to a Business Standard report.


YES Bank gains 1.5% post Q3 results

>> YES Bank reported a profit of Rs 150.7 crore in Q3FY21 against a loss of Rs 18,560 crore in Q3FY20. Net interest income jumped to Rs 2,560.4 crore from Rs 1,064.7 crore YoY.


Result Reaction :: UltraTech Cement hits 52-week high

>> The cement maker reported a consolidated profit of Rs 1,584 crore in Q3FY21, up 122 per cent year-on-year. Its revenue from operations stood at Rs 12,254.12 crore, up 17.38 per cent YoY.


Sectoral trends on NSE at Open :: Realty, Metal indices up 2%


Sensex Heatmap :: RIL slides 3%, UltraTech Cement up 3.5%


Opening Bell


Opening Bell


NEWS ALERT :: Cadila says Desidustat shows efficacy in treating Hypoxia in hospitalized Covid-19 patients


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


Markets at Pre-open


Markets at Pre-open


Stocks to watch: RIL, Tata Motors, YES Bank, L&T, IndusInd Bank, Grasim

RIL: Reliance Industries (RIL) consolidated net profit for Q3FY21 came in at Rs 13,101 crore, up 12.5 per cent year-on-year (YoY) as lower expenses cushioned earnings even as revenues declined. Consolidated net sales in the period under review stood at about Rs 1.18 trillion, down 23 per cent YoY.
 
UltraTech Cement: The cement maker reported a consolidated profit of Rs 1,584 crore in Q3FY21, up 122 per cent year-on-year. Its revenue from operations stood at Rs 12,254.12 crore, up 17.38 per cent YoY. READ MORE

BROKERAGE VIEW :: Nirmal Bang on Gland Pharma

CMP: Rs 2,283 | TP: Rs 2,330 | Reco: Accumulate

>> Gland Pharma’s (GLAND) 3QFY21 revenue at Rs8,594mn grew by 33% YoY and 3.4% QoQ. Revenue came in 5% above our estimate. Revenue growth was driven by the growth in existing products, as well as high value launches like Micafungin in the US. The company also entered new geographies (emerging markets) to support ongoing volume growth.

>> Gross margin at for the quarter at ~53% and was lower 439bps YoY and 242bps QoQ. Gross margin should remain volatile on a quarter over quarter basis due to change in product / business mix and seasonality. On a full year basis, the trend should normalize. The gross margin for 9MFY21 is just 36bps below the 9MFY20 gross margin. EBITDA at Rs2,642mn decreased by 11.2% QoQ, which was 18.3% below our estimate. The EBITDA margin was lower 204bps YoY and 506 bps QoQ due to a decline in gross margins and increase in other expenses QoQ. Increase in other expenses was led by higher R&D costs and there were expenses related to Covid precautions. Net profit stood at Rs2,041mn, which was 18% below our estimates.

>> We value Gland at 25x FY23E earnings to arrive at a target price of Rs2,330 and assign an accumulate rating. The higher valuation multiple is to basically account for the following: 1) Gland has maintained a consistent track record of regulatory compliance. 2) Shanghai Fosun Pharma will be enabling smooth entry and faster market penetration in China where the company has already filed 6 products. 3) Strong RoCE profile despite growing competition in injectable space. 4) Headroom to scale up operations led by approvals of complex injectable formulations and foray into newer geographies.

BROKERAGE VIEW :: Edelweiss Securities on UltraTech Cement

CMP: Rs 5,535 | TP: Rs 6,446 | Reco: Buy

>> UltraTech Cement (UTCL) reported a robust performance yet again (beating our estimates hands-down) and we stay enthused with management’s commentary that ‘the best is yet to come’. Despite a 14% volume surge (6% expected; indicating demand traction), realisation dip of mere <2% (3% expected) is heartening.

>> Owing to muted price hikes (in current busy season, so far), despite rising fuel cost, we keep our estimates unchanged. However, improved demand visibility certainly makes a case for valuation re-rating (largely undoing covid-19 led downgrades). Hence, we revise up EV/EBITDA to 15x (13x earlier) and maintain ‘BUY’ with revised target price of INR6,446 (INR5,378 earlier).

BROKERAGE VIEW :: Prabhudas Lilladher on RIL

Rating: BUY | CMP: Rs 2,050 | TP: Rs 2,232

>> We leave our FY22/23E estimates unchanged, but increase FY21 estimates by 34% to factor in deferred tax credit for restructuring of the O2C business and other changes in depreciation and finance charges. Recovering economic activity augurs well for all RIL’s business segments and downstream focus will create value going ahead. RIL with its stated intention to monetize and forge global partnership across businesses, is well positioned to incubate new business and pursue inorganic opportunities given its liquid BS. We believe positive news flow on global partnerships or stake sale is likely to keep valuations at elevated level. Maintain BUY with a PT of 2,232 (unchanged).

BROKERAGE VIEW :: MOFSL on Biocon

CMP: Rs 393 | TP: Rs 385 (-2%) | Reco: Neutral

>> We expect 23% earnings CAGR over FY20-23E, led by a 25%/13% sales CAGR in Biologics/Research Services, and 140bp margin expansion. We expect RoE to improve to 17% by FY23E from 12% in FY20.

>> We lower our FY21E/FY22E/FY23E EPS estimate by 16%/12%/7% to account for Covid-led delays of approval for potential products in the Biosimilars/Generics
segment, slower off-take of Biosimilars in emerging markets, and lower operating leverage.

>> We value BIOS at 34x 12 months forward earnings to arrive at our price target of INR385/share. Maintain Neutral given the limited upside from current levels.
 

BROKERAGE VIEW :: MOFSL on SBI Life

CMP: Rs 862 | TP: Rs 1,050 (+22%) | Reco: Buy

>> SBILIFE reported strong growth in the Protection and Non-PAR businesses, while the ULIP business is also seeing gradual recovery. We expect growth to revive further from FY22E. The company has also reported improvement in persistency trends across cohorts, while the control on cost ratios has been commendable. We
estimate the VNB margin to reach ~22% by FY23E, enabling a 23% VNB CAGR over FY20–23E. We expect operating RoEV to sustain at ~19% by FY23E and estimate 18% EV growth over FY20–23E. Maintain Buy, with TP of INR1,050/share (2.6x Sep’22E EV).

BROKERAGE VIEW :: MOFSL on JSW Steel

CMP: Rs 375 | TP: Rs 435 (+16%) | Reco: Buy

>> We like JSTL given its strong project pipeline and cost reduction initiatives, which should support margin. Over FY21-23E, we expect above industry 16% CAGR in volume, led by Dolvi expansion. Any turnaround in its lossmaking overseas operations could provide a further upside.

>> Despite high capex, we expect net debt to decline by ~10% over FY20-22E to INR578b. Deleveraging should accelerate post FY22 as capex ends and invested projects start generating cash flows. However, the BPSL acquisition may add INR30b in debt (assuming 30% equity in a 50:50 JV).

>> We value JSTL at 6.5x FY22E EV/EBITDA to arrive at a TP of INR435. Buy

BROKERAGE VIEW :: MOFSL on HDFC Life

CMP: Rs 688 | TP: Rs 650 (-6%) | Reco: Neutral

>> HDFCLIFE remains focused on maintaining a balanced product mix across the businesses, with an emphasis on product innovation and superior customer service.
However, in the near term, the Annuity and PAR segments are likely to see healthy growth, while ULIP is also showing recovery trends. On the other hand, it would take a calibrated approach in the Protection segment due to higher COVID-related claims witnessed in 3QFY21.

>> We estimate VNB margins to reflect stable trends, with gradual improvement to ~26.4% by FY23. Overall, we expect operating RoEV to remain steady at 18.5% over FY23E. The stock currently trades at rich valuations of 4.7x FY22EV (30x FY22 EVOP). We value the stock at INR650, corresponding to 4.1x Sep’22E EV. Maintain Neutral.

BROKERAGE VIEW :: MOFSL on UltraTech Cement

CMP: Rs 5,535 | TP: Rs 6,650 (+20%) | Reco: Buy

>> UTCEM’s strong pan-India distribution network and preferred supplier status for key infrastructure projects places it well to tap into expected growth in both retail and institutional (non-trade) cement demand in India.

>> While it is ramping up its under-utilized acquired capacities, it also has a strong pipeline of expansion projects that offers strong growth visibility.

>> We estimate a 14%/28% CAGR in consolidated EBITDA/PAT over FY20–23E, driven by a 7% volume CAGR and lower operating/interest cost.

>> The valuation is reasonable at 13.4x FY22E EV/EBITDA, a ~20% discount to peer Shree. We value UTCEM at 14x Dec’22E EV/EBITDA to arrive at TP of INR6,650. Reiterate Buy.

BROKERAGE VIEW :: MOFSL on RIL

CMP: Rs 2,050 | TP: Rs 2,325 (+13%) | Reco: Buy

>> Conso. Dec’20 debt stood at INR2,574b and cash and equivalents at INR2,205b. The company received INR735b in 3QFY21, and considering balance commitments of INR398b, ceteris paribus, the company’s net cash stood at INR30b.

>> As RJio’s growth slows, Jio Platforms Ltd, its holding company, is keen to replicate the success of Wireless in other business streams. With aggressive plans and product launches in place, Jio Platforms is creating multiple monetization opportunities in the Digital space.

>> Thus, we assign an EV/EBITDA multiple of 17x on FY23 EBITDA, maintaining TP of INR900/share (for its 66% stake). The higher multiple captures digital revenue opportunity, potential tariff hikes, and opportunity in the Low-cost Device market, among others, not built into our estimates.

>> Using SOTP, we value the Refining and Petrochemical segment at 7.5x FY23E EV/EBITDA to arrive at a valuation of INR780/share for standalone. We ascribe
an equity valuation of INR900/share to RJio and INR645/share to Reliance Retail. Reiterate Buy, with Target Price of INR2,325/share

Stocks that Vaishali Parekh of Prabhudas Lilladher is bullish on

BUY NOCIL | CMP: Rs 149 | TARGET: Rs 168-175 | STOP LOSS: Rs 135
 
The stock has been steadily in the rising trend with recently taking support near 140 levels and is indicating a momentum pickup to reverse the trend. Technically, the stock is well placed and we anticipate further upside move from here on to expect a target of 168-175 levels. The RSI also has indicated a trend reversal, signaling a buy making the bias positive. We suggest to buy and accumulate this stock for an upside target of Rs 168-175, keeping the stop loss of Rs 135. READ MORE

Bulk deals on the BSE as on Friday

Bulk deals on the NSE as on Friday

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


Rupee check

Source: Bloomberg


Oil prices fall for second session

>> Oil prices slipped for a second straight session on Monday as renewed Covid-19 lockdowns raised fresh concerns about global fuel demand.
 
>> Brent crude futures for March fell 15 cents, or 0.3%, to $55.26 a barrel while US West Texas Intermediate crude for March was at $52.19 a barrel, down 8 cents, or 0.2%.

(Source: Reuters)

SGX Nifty Update

>> At 8:18 am, the index was ruling 129 points, or 0.9 per cent, higher at 14,486 levels

Asian market check

Asian shares were firm in trade on Monday. South Korea's Kospi surged 1.2 per cent while Japan’s Nikkei and Australia's ASX 200 were up 0.4 per cent, each. At 7:30 AM, the SGX Nifty ruled 161 points higher at 14,518 levels, indicating a gap-up open for the Indian markets today.

(Source: Reuters)

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