MARKET WRAP: Sensex slips 229 pts ahead of CPI inflation nos; banks tumble

Topics Markets | MARKET WRAP

Disappointing IIP figures for September, cautiousness ahead of the release of CPI inflation data for October and growing worries over US-China trade deal talks sent the benchmark indices over half a per cent lower on Wednesday. Besides, CLSA's statement that India's GDP may slip to 5 per cent in FY20, too, added to the investors' woes. READ MORE

The S&P BSE Sensex slid 229 points or 0.57 per cent to end at 40,116 levels while NSE's Nifty50 index slipped below 11,850-mark to end at 11,840, down 73 points or 0.61 per cent.

IT major TCS (up around 4 per cent) emerged as the top gainer on the Sensex while YES Bank (down over 6.50 per cent) was the biggest loser. ICICI Bank, Axis Bank, Infosys, ITC, and SBI were the top contributors to the index's fall. 

Sectorally, all the indices on the NSE ended in the red. Media stocks bled the most with the Nifty Media index slipping over 4.53 per cent to 1,793.85 levels. Metal stocks came second on the list.

In the broader market, the S&P BSE MidCap index lost 0.77 per cent to end at 14,660 levels while the S&P BSE SmallCap index closed at 13,344.69, down 153 points or 1.13 per cent. 


Shares of Indian Hotels Company soared 6 per cent to Rs 156 on the BSE on Wednesday after the company reported EBITDA (earnings before interest, tax, depreciation and amortisation) margin improvement of 590 basis points (bps) at 17.7 per cent in September quarter (Q2FY20). EBITDA jumped 57 per cent year-on-year (YoY) to Rs 182 crore during the quarter. Both absolute EBITDA and EBITDA margin was highest in the last 10 years. READ MORE

Britannia Industries stock surged nearly 6 per cent to Rs 3,298 apiece on the BSE on Wednesday after the company on Monday posted a profit before tax (PBT) of Rs 498 crore for the second quarter ended September 30, 2019 (Q2FY19), up 8.5 per cent when compared with the corresponding period of the previous fiscal. The stock ended around 5 per cent higher at Rs 3,270.25 on the BSE.  READ MORE 


Asian stocks and Wall Street futures fell on Wednesday, as confusing signals over the extent of progress made in US-China trade talks and concern about intensifying unrest in Hong Kong hurt demand for risky assets. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.03 per cent to the lowest in more than a week. Hong Kong shares slumped 2 per cent to a four-week low, battered by fears that anti-government protests appear to be spiralling out of control.

Chinese shares fell 0.18 per cent, while Japanese shares fell 0.76 per cent.

The pan-region Euro Stoxx 50 futures were down 0.57 per cent, German DAX futures were off 0.58 per cent, and FTSE futures fell 0.54 per cent.

In commodities, oil prices slipped as US-China trade deal prospects dimmed.  

(With inputs from Reuters)




Sectoral gainers and losers on the NSE

Top gainers and losers on the S&P BSE Sensex


The S&P BSE Sensex slipped 229 points or 0.57 per cent to end at 40,116.06 while NSE's Nifty50 index ended at 11,840.45, down 73 points or 0.61 per cent. 

Sobha hits 52-week low on disappointing Q2 results

In Q2FY20, the real estate developer’s profit before tax (PBT) grew in single digit by 4 per cent to Rs 187 crore over the previous year quarter. EBITDA (earnings before interest, tax, depreciation and amortisation) margin remained unchanged at 23 per cent. Operational revenue increased by 19 per cent to Rs 784 crore on year-on-year (YoY) basis. READ MORE  

Rupee Check | Re at day's low

MARKET CHECK | Sensex recovers from day's low

MARKET CHECK | Sensex extends decline, drops over 250 pts

BUZZING STOCK | Morepen Labs slips 6% post Q2 nos

EARNINGS ALERT | Kaveri Seed Co Q2 net profit slips nearly 13%

Tax expense at Rs 2.3 cr Vs Rs 5.5 cr (YoY)

BROKERAGE RADAR | Anand Rathi on HG Infra Engineering

Given the steep ask in H2, we?ve slightly lowered our FY20e revenues ~4% (FY21:~0.5%). But, accounting for the to the newer tax regime, FY20e and FY21e earnings stand raised ~9% and ~17% respectively. At the ruling price, (excl. investments) the stock trades at PER of 6.2x FY20e and 5.2x FY21e. Risk. Any slower-than-expected pace of execution. 

Market check | Sudden slide in Sensex

Earnings Alert | Adani Green Q2

-- Cons net profit at Rs 102.3 cr

-- Cons revenue at Rs 689 cr

India's passive funds set to beat active peers for second straight year

Active funds have historically outperformed passive funds in India when share price moves were more broad-based and market inefficiencies helped stock pickers as they hunted for shares whose prices were not truly reflective of their worth.
But India's stock market rally has been much narrower in the past two years, with investors preferring some well-established heavyweights over smaller ones owing to broader uncertainties around a slowing domestic economy and the U.S.-China trade war. READ REPORT HERE

AU Small Finance Bank hits new high, gains 14% in two days

Trading volumes on the counter jumped nearly 10-fold today, with 308,000 equity shares changing hands on the BSE till 01:32 pm. Around 193,233 shares, representing 0.07 per cent of total equity of the bank, changed hands at 09:59 am in a single deal, the exchange data shows. READ MORE

NEWS ALERT | PE firm ChrysCapital looking to invest Rs 500 cr in RBL Bank: sources to CNBC TV18

-- ChrysCapital in advanced stage of discussions

-- RBL Bank likely to raise Rs 1,500 cr from a clutch of investors; looks to raise Rs 3,500 cr in tranches over the next few months

Alert: ChrysCapital had invested in RBL Bnak in pre-IPO round in 2016, eventually exiting completely. 

       : RBL Bank announced plans to raise Rs 3,500 cr

CLSA sees India's FY20 GDP growth at 5%; fiscal deficit at 4.3%

“India is in the middle of a severe credit contraction that started with the liquidity squeeze triggered by the crisis in the non-bank finance companies (NBFCs), which has now spread to deposit-taking companies as well. India is growing below historical trend and there will be some pressure on broad consumption aggregates. Modi’s corporate tax cuts are bold but will take time to gain traction. India’s recovery will be postponed to late 2020,” said Eric Fishwick, chief economist at CLSA. READ MORE
Eric Fishwick, chief economist at CLSA & Anthony Nafte, senior economist at CLSA (Photo: Dalip Kumar)

Sun TV tumbles 12% as operational expenses jump 66% YoY in Q2

In the quarter under review, the company’s operational revenue went up 6 per cent at Rs 826 crore, while total expenses jumped 66 per cent to Rs 500 crore over the corresponding quarter of the previous year. Additionally, the company’s advertisement revenue came in at Rs 337 crore, down 1.5 per cent YoY, impacted by a weak economic environment. READ MORE  

Stocks that hit 52-week low on the NSE

EARNINGS ALERT | Gujarat Borosil reports loss of Rs 4.5 cr against profit of Rs 5.3 cr YoY

Soon, the burden of dividend tax may shift from companies to investors

The move would be the latest in a series of steps from Prime Minister Narendra Modi’s government to prop up growth from the lowest in six years. Over recent months, authorities have slashed corporate taxes, rolled back a levy on global funds, injected $10 billion into struggling state banks, and eased foreign investment rules to encourage companies to boost spending. READ MORE  


Most industrial stocks slip; S&P BSE Industrials slide over 1%

BUZZING STOCK | ZEEL slips around 4.50%

BROKERAGE RADAR :: Reliance Securities on Kalpataru Power

We value KPP’s standalone business at Rs470 (14x of FY21E standalone earnings), JMC at Rs57 (10x of FY21E earnings) and SSL at Rs21, and other assets at Rs 26. With healthy growth outlook and value-unlocking of subsidiaries, we maintain our BUY recommendation on the stock with an SOTP-based Target Price of Rs 573.  

Earnings Alert | Zydus Wellness Q2

-- Consolidated net loss at Rs 12 cr vs profit of Rs 41.4 cr

ABB trades lower ahead of results

MARKET CHECK | Top gainers on the BSE at present

BROKERAGE RADAR :: Motilal Oswal Research on Power Grid

We note that capitalization run-rate for FY20 may still be at risk if the Raigarh-Pugalur project gets deferred. Further, the nature and clarity of the company’s asset monetisation program needs to be watched. However, PWGR’s stock trades at just 1.4x/1.2x FY21/FY22E P/BV for steady long-term growth and under-penetrated market. Maintain Buy with DCF-based TP of Rs 244/share.

Index Contributors at this hour | Financials drag the most

Tata Motors gross leverage ratio hits 9-year high on Jaguar-Land Rover woes

A decline in profitability at Jaguar Land Rover (JLR) and its domestic automotive business has started to weigh on Tata Motors consolidated balance sheet.
This has prompted the company to look at the option of raising fresh equity either from its parent or seek a potential joint venture partner.
On Tuesday, Bloomberg reported that the Tata Group flagship has approached carmakers, including China’s Zhejiang Geely Holding Group and BMW AG, as it seeks partnerships for the beleaguered British automotive business. READ MORE HERE

GAIL's Q2 profit down 47% on poor gas transmission, LPG profitability

GAIL India posted a sluggish performance for the quarter ended September. Despite steady volume growth, operating performance was impacted by one-offs in the trading and gas transmission segments. This coupled with poor LPG & liquid hydrocarbon segment profitability resulted in a sub-par performance. Operating profits which were down 30.8 per cent sequentially slid by 47 per cent year-on-year. READ MORE

Top losers on BSE at this hour

NEWS ALERT | Mitsubishi UFJ sells 2.08% stake in Cipla: CNBC TV18

-- Total stake now at 5.56% Vs 7.64% earlier

NEWS ALERT | SC refuses relief to JSPL in plea to monetise, transport Rs 2000 cr iron ore: CNBC TV18

-- No immediate relief to JSPL in the Odisha Mining case. 

-- Next hearing on Nov 19

Result today | SpiceJet Q2 preview: Analysts estimate 8x EBITDAR growth, loss to narrow

Edelweiss Securities pegs the EBITDAR growth at 8x at Rs 247.5 crore, due to decline in crude oil prices. It, however, cautions that the EBITDAR growth could be off-set by hike in lease rates and forex losses (depreciating rupee) due to translation of lease liabilities. The EBITDAR was Rs (-) 43.8 crore in Q2FY19.
“Although industry growth has slowed down considerably to nearly 5 per cent, the airline continues to capitalise on the vacuum left by Jet Airways’ shutdown. It has, in fact, grown at 9x industry, accounting for bulk of the slots vacated by Jet. Consequently, top-line growth remains robust at 51 per cent at SpiceJet aided by yield expansion,” it said. READ FULL PREVIEW HERE

MSTC zooms 91% in 12 days as Chhattisgarh govt appoints co as selling agent

The stock of the state-owned e-commerce firm was trading at its highest level since listing on March 29, 2019. In the last 12 trading days, it has soared 91 per cent, as compared to a 3.3 per cent rise in the S&P BSE Sensex. READ MORE 

Indian Hotels soars 6% as it logs highest margin in 10 yrs for Sept quarter

The Tata Group company reported a consolidated net profit of Rs 71 crore during the quarter, against a net loss of Rs 5 crore in a year-ago period. Revenue grew 4.9 per cent to Rs 1,029 crore on YoY basis. READ MORE 

BROKERAGE RADAR :: ICICI Securities on Sun TV Network

The weak macroeconomic growth clouds the ad growth outlook in the near term while content spend is expected to remain elevated both to maintain/regain market share in key markets as well for SunNXT. The silver lining, on the other hand, is TN digitisation potential and much needed focus on OTT segment. However, we would turn constructive when we witness ad recovery and stabilisation in costs. We maintain HOLD rating with a target price of Rs 500/share (12x FY21 EPS). READ MORE 

Britannia Ind jumps 6% as Q2 net profit rises 33% YoY to Rs 403 crore

Britannia Industries stock surged nearly 6 per cent to Rs 3,298 apiece on the BSE on Wednesday after the company on Monday posted a profit before tax (PBT) of Rs 498 crore for the second quarter ended September 30, 2019 (Q2FY19), up 8.5 per cent when compared with the corresponding period of the previous fiscal. READ MORE 

Indian Hotels margins have room for expansion with better cost optimisation

Led by an improvement in key parametres, Indian Hotels registered a better-than-estimated performance in the September quarter. Receipts were led by higher revenue per available room or RevPar (combination of occupancy and room rates) which rose 4 per cent.
Occupancies jumped 4 percentage points over the year-ago quarter to 68 per cent. Its performance in key markets of Mumbai, New Delhi, Chennai, and Hyderabad, among others, helped it outperform the sector and gain market share.  READ MORE

BUZZING STOCK | Hind Rectifiers surges 16%, hits new high on strong Q2 results

The company’s operating profit (EBITDA) more-than-doubled to Rs 13.47 crore in Q2, as against Rs 5.57 crore in the corresponding quarter of the previous fiscal. Net sales grew 40 per cent year-on-year (YoY) at Rs 83.18 crore during the quarter. Net profit increased an over three-times from Rs 2.35 crore to Rs 7.52 crore. READ MORE 

Momentum Picks by ICICI Securities

Rupee tumbles 28 paise, opens at lowest level since Sept 17 vs US dollar

The rupee on Monday tumbled by 19 paise to a near one-month low of 71.47 as fresh concerns over US-China trade deal and Hong Kong unrest kept forex market participants edgy. Investors also played their bets cautiously in view of India's rating outlook cut by Moody's investors Services last week. The forex market was closed on Tuesday on account of Guru Nanak Jayanti. READ MORE 


Coal India gains around 2% post Q2 nos

Britannia jumps 5% post Q2 results

Sectoral gainers and losers on the NSE

Market reverses losses; top gainers and losers on the S&P BSE Sensex


At 09:18 am, the S&P BSE Sensex was trading 26 points or 0.07 per cent lower at 40,318.80 while NSE's Nifty50 index was trading at 11,899, down 15 points or 0.12 per cent.

NEWS ALERT | Promoters of Avenue Supermarts looking to sale stake: Report

-- Initiated preliminary discussions with merchant bankers for a stake sale by the promoters in Feb 2020

-- This will be a big share sale (for around 5.21%) in excess of Rs 6000 crores as per the current m-cap, the report quoted unnamed sources

Alert: The promoters, led by veteran stock market investor Radhakishen Damani, hold 80.21% stake in the company.

        : SEBI's minimum public shareholding (MPS) rule for listed companies stipulates that promoters cannot own more than 75% and that public shareholders should own a minimum 25%

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

Market at Pre-open

Market at Pre-open

Rupee Opening Alert

-- Rupee opens weaker at 71.75/$ vs Monday's close of Rs 71.46 per US dollar

-- Re opens lowest since Sept 17.

Bharti Airtel bids for RCom spectrum, Jio seeks deadline extension

It is believed that apart from Bharti Airtel and Bharti Infratel, there are four players that have made a bid. They include US-based Varde Partners, a private equity fund that has a joint venture in India with the Aditya Birla group. But the joint venture has not made the bid, sources say. An e-mail query to Varde Partners did not elicit any response. READ MORE

Economists estimate India's July-September GDP growth at 4.2-4.7%

Looking forward, though the economists expect the Reserve Bank of India (RBI) to cut rates up to 50 basis points in the two remaining policy meetings of the fiscal year, they said the effectiveness of rate cuts has diminished now.
Saying that the domestic slowdown is syncronised with the global slump, the State Bank of India has lowered its estimate for growth in gross domestic product (GDP) at 4.2 per cent. For the full fiscal year, it has given the lowest estimate so far, at 5 per cent. READ REPORT HERE

Stocks to watch: Vodafone Idea, CIL, BHEL, Infosys, Lupin, Tata Motors

Here's a look at the top stocks that may remain in focus today -
Vodafone Idea: Vodafone Group Plc’s Indian venture may be headed for liquidation unless the government eases off on demands for mobile spectrum fees, the phone company’s chief executive officer said. READ MORE
Lupin: Drug major Lupin on Monday said its board has approved selling its entire stake in Japanese subsidiary Kyowa Pharmaceutical Industry to Japan-based private equity fund Unison Capital Partners for an enterprise value of JPY 57,361 million (Rs 3,702.4 crore). The Mumbai-based company has entered into a definitive agreement for sale of its entire stake (99.82 per cent) in Kyowa, Lupin said in a statement. READ MORE

AGR verdict: Vodafone's future in India uncertain amid setback, says CEO

Chief Executive Nick Read said India, where Vodafone formed a joint venture with Idea Cellular in 2018, had been "a very challenging situation for a long time", but it remained a sizable market where Vodafone had a 30% share.

Vodafone said its future in India could be in doubt unless the government stopped hitting operators with higher taxes and charges, after a court judgment over license fees resulted in a 1.9 billion euro group loss in its first half. READ REPORT HERE

Ultratech to Asian Paints: 5 firms that gain from Rs 25k-cr realty package

However, once the initiative starts rolling, there would beneficiaries even beyond the realty sector, which include companies producing cement, sanitary-ware, paints, tiles and pipes among other products.  READ MORE

BROKERAGE RADAR :: IndiaNivesh Securities on Alkem Labs

Since the past two years, Alkem’s operating performance was impacted by several factors such as (1) price control, (2) demonetisation, (3) API price hikes, and (4) investments in field force and R&D. However, with most factors now in the base, no upfront costs (lesser focus on OTC), a steady decline in API prices, and India
growth in the mid-teens, we believe half of this will be recouped over the next two years.

Factoring in the lower tax rate guidance of 10% (vs 15% earlier), we have upgraded our earnings by 10%/7% for FY20/21E, respectively. At the CMP, the stock trades at 20x FY21 EPS of Rs97. Maintain ACCUMULATE

BROKERAGE RADAR :: IndiaNivesh Securities on EIH Ltd

We value EIH using the SOTP method, assigning a 15x EV/EBITDA multiple to the asset-heavy business and a 25x PAT to the asset-light management contract business. We arrive at a target price of Rs160 per share, implying an upside of 4% from the CMP. Reiterate ACCUMULATE 

Top stock recommendations by Anand Rathi: Buy Bank of Baroda, IndusInd Bank

BANK OF BARODA: BUY | TGT: Rs 105 | SL: Rs 91.50
The stock has formed a nice inverse head and shoulders pattern which is a bullish reversal pattern. The momentum indicator MACD is well in the buy mode on the daily as well as weekly charts, hence we recommend buying this stock. READ MORE

Bulk deals on BSE as on Monday

Bulk deals on NSE as on Monday

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

Rupee Check

Source: Bloomberg

Oil Check

At 8:18 AM, Brent Crude Futures were at $61.86 per barrel-mark.

SGX Nifty

At 8:13 AM, the Singaporean Exchange for Nifty Futures were at 11,913 level, down 31 points or 0.26 per cent.

Asian Market Check

Source: Reuters

US Market Check

Source: Reuters

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