Sensex ends at fresh closing peak of 48,782, up 689 pts; Nifty at 14,347

Stock market updates: Earnings optimism and positive global cues fuelled a broad-based rally in the markets with benchmark indices settling over a per cent higher on Friday. IT stocks led from the front and contributed nearly half of Sensex's 600-point gains today. Reliance Industries, Maruti Suzuki, HDFC Bank, and L&T provided the remaining fillip to the BSE barometer.

The S&P BSE Sensex notched 689 points, or 1.43 per cent, to end at fresh closing peak of 48,782.5. The index hit a new lifetime high of 48,854.34 levels earlier in the day. The Sensex index gained 2 per cent during the week and clocked the longest stretch of weekly gains since 2009. 

Maruti Suzuki jumped 6 per cent and remained the top Sensex gainer, followed by Tech Mahindra, up 5 per cent. The IT company today entered the elite Rs 1-trillion market capitalisation club, becoming the fifth IT firm to achieve the feat. At close, its m-cap was Rs 1.01 trillion.

 
That apart, Tata Consultancy Services (TCS) hit a record high of Rs 3,127.55 apiece in the intra-day trade and closed 3 per cent higher ahead of the announcement of Q3FY21 results. The IT firm's revenue in constant currency (CC) terms is expected to rise in the range of 2.4-4 per cent on quarter-on-quarter (QoQ) basis while it may grow between 3-4.5 per cent in dollar revenue. 

The broader Nifty50 too, ended at fresh closing peak of 14,347, closing 210 points or 1.48 per cent higher on the NSE. 41 of the 50 constituents ended the day in the green. The index touched lifetime high of 14,367 in noon deals today. For the week, the index was up 2.3 per cent.

 In the mid-cap space, S&P BSE MidCap index, though underperformed the frontline index, settled 1 per cent higher at 19,138.7 level after hitting a record peak of 19,161 earlier in the day, and clocked a 5-per cent weekly gain. The S&P BSE SmallCap index, on the other hand, ended at 18,908.59 levels, up 0.72 per cent.

 
Global markets

European stocks rose on Friday, with Germany’s DAX hitting a record high on the back of better-than-expected economic data and encouraging earnings updates from chipmakers.

The pan-European STOXX 600 index rose 0.7% and was on track for a more than 3% weekly gain, with hopes of more US stimulus boosting economically sensitive sectors such as miners, oil & gas and banks. Germany’s DAX index jumped 0.8% after data showed both industrial output and exports rose more than expected in November.

In Asia, Japan's Nikkei added 2.36 per cent while South Korea's Kospi jumped 4 per cent.


LIVE UPDATES

MARKET CLOSING COMMENT :: S Ranganathan, Head of Research at LKP Securities

IT & Auto stocks pulled their weight today ahead of TCS earnings as Bulls went berserk, lifting Indices by 1.5% buoyed by positive Global Cues. An array of high quality Midcaps across sectors registered smart gains as mood remained buoyant through the day.

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

The rally led by IT and auto stocks guided the domestic market to discover new highs which was due to improved quarterly outlook. The expectations of  TCS quarterly result which is to be released later in the day helped in cheering investors’ mood. Support from strong global indices also helped in raising domestic market sentiments. The official certification of Biden’s presidency by the US Congress and easing of the political unrest as Trump promised a smooth transition of power, have created an upbeat movement in the western market. The focus of Indian markets has shifted to third quarter earnings, forward ignoring high valuations. 

Market stats :: BSE m-cap hits Rs 195.6-trillion mark


Sensex contributors :: IT stocks, RIL, HDFC Bank, and Maruti lift the index


SECTOR OF THE DAY :: Maruti Suzuki, MRF zoom 6% and 5% respectively


SECTOR WATCH :: Nifty Bank hits 32,000-mark for the first time since Jan 14, 2020


SECTOR OF THE DAY :: Nifty IT index zooms 3.6% on NSE; Tech M, LTI, Wipro top gainers


Sectoral trends on NSE at Close


Sensex Heatmap at Close


CLOSING BELL

>> The S&P BSE Sensex notched 689 points, or 1.43 per cent, to end at fresh closing peak of 48,782.5. The index hit a new lifetime high of 48,854.34 levels.

>> The broader Nifty50, too, ended at fresh closing peak of 14,347, closing 210 points or 1.48 per cent higher on the NSE.

Ahead of Results :: TCS rallies 3%


Reliance Capital's total outstanding debt rises to Rs 20,380 crore

The total debt, including interest, stood at Rs 19,805.7 crore on August 31, 2020.
 
Total financial indebtedness of the listed entity, including short-term and long-term debt and accrued interest, was Rs 20,379.71 crore at the end of December 2020, Reliance Capital said in a regulatory filing on Thursday. READ MORE

Heatmap: S&P BSE Sensex gainers and losers at this hour


ICRA maintains stable outlook for road sector amid improved toll collection

Toll collections witnessed a marked improvement on the back of increased movement of both passenger and commercial vehicles which have picked up significantly over the last three months, thereby surpassing pre-Covid levels, according to ICRA.
 
On average, the increase in toll collections in September to November 2020 stood at about 13 per cent, implying growth in traffic of 8 to 9 per cent in terms of passenger car units. READ MORE

IT shares in rally; Tech Mahindra's m-cap tops Rs 1-trillion

With market-cap of Rs 1.02 trillion at 02:15 pm, Tech Mahindra became the fifth IT company that joined Rs 1-trillion ma-cap club. Overall, the company stood at 30th position in m-cap ranking, BSE data shows. Currently, among IT companies, TCS is numero uno with Rs 11.66 trillion market-cap, followed by Infosys (Rs 5.53 trillion), HCL Technologies (Rs 2.69 trillion) and Wipro (Rs 2.44 trillion), data shows. READ MORE

ALERT :: Nifty50 scales fresh peak


ALERT :: Sensex hits record high of 48,708.46 in intra-day deals


Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(%)
ADANI ENTERP. 515.00 526.80 -0.58
ADANI PORTS 517.75 527.05 0.80
AJANTA PHARMA 1816.85 1833.00 2.75
AMARA RAJA BATT. 1001.55 1006.15 1.45
APL APOLLO TUBES 965.00 966.90 5.94
» More on 52 Week High

Stock picks by Angel Broking


Sector check :: Nifty CPSE gains around 2%


Agri-related stks in focus; FACT, Madras Fertilizers hit 20% upper circuit

Shares of agri-related companies, including agrochemicals and fertilisers, were in focus as demand for the procurement of fertilizers has been promising due to surplus reservoirs levels, record-high Kharif crop sowing and plentiful rainfall during the monsoon season. Among individual stocks, Fertilizers & Chemicals Travancore (FACT) and Madras Fertilizers were locked at 20 per cent upper circuit limits at Rs 76.05 and Rs 25.65, respectively. These stocks are also quoting at their 52-week high levels. READ MORE
 

Chart check: How fertiliser stocks are faring ahead of Q3 nos, Budget 2021

Chambal Fertilizers & Chemicals Limited (CHAMBLFERT): The recent new all-time high of Rs 247.90 in the stock has triggered a fresh upside, as per the daily charts. Going forward, the stock needs to show stability above Rs 240 levels which, if held decisively, can push prices towards Rs 260 and Rs 275 levels. The medium-term trend is bullish as long as the stock trades above Rs 220 levels, as per the weekly chart. READ MORE

PC Jeweller falls 4% after hitting 52-week high in previous session


AMFI DEC DATA

  • Total AUM at Rs 31 lakh cr vs Rs 29.8 lakh cr MoM
  • Equity AUM at Rs 8.9 lakh cr vs Rs 8.3 lakh cr MoM
  • Net inflow at Rs 2,968 cr vs inflow of Rs 27,194 cr MoM
  • Equity outflow at Rs 10,147 cr vs outflow at Rs 12,917 cr MoM

Infosys, TCS top contributors to Sensex's 500-pt gain today


Wipro jumps 5%, trades at new 52-week high of Rs 427.60


HMEL to shut Bathinda refinery for 40 days from end-January: Report

India's HPCL-Mittal Energy Ltd (HMEL), part owned by steel tycoon L N Mittal, will shut its 226,000 barrels per day (bpd) Bathinda refinery in northern Punjab state for about 40 days from end-January for maintenance, two sources said.
 
During the shutdown HMEL will also carry out work to be able to hook petrochemical units, including a 1.2 million tonnes a year ethylene cracker, sources with knowledge of the plan said. READ MORE

After years of underperformance, NMDC stock strikes when iron is hot

After years of underperformance, iron ore miner NMDC’s (formerly National Mineral Development Corporation) stock price is up 55 per cent since the beginning of October 2019, against a 24 per cent rally in the Sensex during the period. After its recent rally, the stock is back to its year-ago levels, even as the Sensex is up 16 per cent in the last 12 months. READ MORE

India's Dec retail inflation likely fell to within RBI target: Reuters Poll

India's retail inflation likely fell sharply in December, landing within the Reserve Bank of India's target range, due to a significant drop in vegetable and food prices, a Reuters poll predicted. The Jan. 5-7 poll of around 45 economists suggested retail inflation fell to 5.28% in December from 6.93% in November. "Food inflation - particularly vegetable prices - are beginning to correct since supply lines are being restored in food aided by good monsoons," said Prithviraj Srinivas, chief economist at Axis Capital in Mumbai. (Source: Reuters) READ HERE


M-cap of BSE-listed firms zoom to fresh record high of over Rs 195.2 trn

The market capitalisation of BSE-listed companies zoomed to a fresh lifetime high of over Rs 195.21 trillion in morning trade on Friday as markets returned to winning ways after two days of decline. Helped by the rally in the equity market, the market capitalisation of BSE-listed firms jumped to Rs 1,95,21,653.40 crore ($2.6 trillion) in early trade. READ MORE

INDEX CHECK :: Auto stocks outperform; Maruti Suzuki, Eicher Motors top gainers


Top gainers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
RAIL VIKAS 32.50 12.07
J & K BANK 26.55 9.94
ZEE ENTERTAINMEN 235.55 7.56
T.V. TODAY NETW. 241.05 6.94
S H KELKAR & CO. 138.30 6.84
» More on Top Gainers

MARKET CHECK :: Nifty tops 14,300-mark for the first time


Himatsingka Seide partners with The Walt Disney Company; stock jumps 7%

-- Himatsingka Seide signs new licensing agreement with The Walt Disney Company for the European region. 

-- The license will give Himatsingka the rights to design, develop, manufacture and distribute a broad range of home textile products inspired by Disney's vast archives and characters from all its franchises including Disney, Marvel, Pixar and Lucas.

M&M hits 52-week high on price hike of personal, commercial vehicles

Shares of Mahindra & Mahindra (M&M) hit a 52-week high of Rs 768.75, up 3 per cent, on the BSE in intra-day trade on Friday after the company announced price increase for its personal & commercial range of vehicles from today, January 8, 2021, due to rise in input costs. The stock surpassed its previous high of Rs 764.10, touched on December 8, 2020. The price will increase by around 1.9 per cent, resulting in an increase of Rs 4,500 - Rs 40,000, depending on the model and variant, M&M said in a press release. READ MORE


SoftBank's Masayoshi Son is poised for another IPO windfall in 2021

Among the startups heading for initial public offerings are South Korean e-commerce pioneer Coupang Corp, Indonesian online mall operator PT Tokopedia and China’s ride-hailing giant Didi Chuxing, according to people familiar with the matter, asking not to be named because the matter is private. The IPOs could give Son another round of enormous gains after successful offerings from DoorDash and KE Holdings in 2020. READ MORE

TCS, Infosys: Positive Q3 results may trigger next leg of rally in IT stks

NIFTY IT INDEX: After scaling the 26,000 mark, the index is witnessing minor profit-booking. This level may act as a mild resistance for a few sessions ahead. A defensive trend above 26,120 mark may induce more upside towards 28,000 level from a medium-term view. The support comes at Rs 25,000 levels. The counter is witnessing buying momentum in the overbought territory of the Relative Strength Index (RSI), as per the weekly chart. READ MORE

Poultry stocks in focus amid reports of avian influenza outbreak

Shares of poultry breeder Venky’s (India) and feed producer Godrej Agrovet are down as much as 7 per cent and 2 per cent, respectively, in the last three trading sessions (even as the Sensex was flat) amid reports of fresh concerns over the outbreak of avian influenza (also known as bird flu). READ MORE


BofA, CLSA think Axis, IndusInd Bank are ripe for re-rating; here's why

Shares of Axis Bank and IndusInd Bank Bank have, so far, outperformed the benchmark S&P BSE Sensex in calendar year 2021, on the back of consistent foreign capital inflow and hopes of sustainable economic recovery. Analysts at BofA Securities have "turned positive" on the Indian banking sector, and have upgraded Axis Bank, IndusInd Bank, and State Bank of India (SBI) on a "surprisingly" resilient asset quality outlook, and reasonable valuations. READ MORE

BSE Midcap index hovers at record high level; ZEEL top gainer


Oaktree Capital, Piramal group trade charges over bids for bankrupt DHFL

Upping the ante, Oaktree Capital and the Piramal group have drawn the attention of the lenders to bankrupt housing finance firm DHFL that the offer submitted by the other firm is legally flawed and could eventually be challenged in court. Voting on the proposals submitted by the bidders will conclude on January 14.READ MORE

BSE cash market trades on mobiles up 11x on wider access, cheap data

The proportion of the cash market turnover attributable to mobile phones is up almost 11x in the past five years. The rise has come on the back of higher smartphone penetration, lower data charges, and booming equity markets. The share of cash market trades carried out on mobile phones was 1.5 per cent in January 2016 on the BSE. READ MORE

Stock Idea by Geojit Financial: HPCL | Target Price: Rs 260

HPCL’s net revenue stood at Rs. 51,773cr (-14.9% YoY) in Q2FY21. However, it improved 37.3% on a sequential basis on the back of a sharp recovery in petroleum demand and refineries utilization rate of 100%, despite the lockdown. During the first half of this fiscal year, HPCL added 895 new retail outlets & 103 new CNG retail outlets. Strong infrastructure and pipeline network, along with robust inventory management will boost the company’s performance in the long-term. Therefore, we upgrade our rating to BUY on the stock with a target price of Rs. 260 based on SOTP Valuation.

Maruti shares climb 3% on spurt in volume


India VIX eases 2%

- India VIX is a volatility indicator

Strides dips 6% from high on profit booking as Aditya Puri joins as advisor

Shares of Strides Pharma fell 3 per cent to Rs 939, down 6 per cent from its early morning high on the BSE on Friday after Aditya Puri joined as advisor to the Strides Group & Director of Stelis Biopharma. The drug maker's stock hit a 52-week high of Rs 1,000 in intra-day trade today. In the past six months, the stock has zoomed 130 per cent, as compared to 33 per cent rally in the S&P BSE Sensex. READ MORE

MARKET NOW :: Sensex jumps 450 points, trades at day's high

  • Infosys, TCS, HDFC Bank among top contributors
  • Only 4 of 30 Sensex stocks in the red at this hour
  • TechM top gainer, Titan worst loser

Sun Pharma rises 3%, hits over 2-year high on steady earnings visibility

Shares of Sun Pharmaceutical Industries rose 3 per cent to hit an over two-year high of Rs 619 on the BSE in intra-day trade on Friday on expectations of steady earnings visibility. The pharmaceutical company's stock was trading at its highest level since October 2018. The board of directors of Sun Pharma are scheduled to meet on January 29, 2021 to consider and approve the financial results of the company for the quarter ended December 31, 2020 (Q3FY21). READ MORE

 

Former HDFC Bank MD Aditya Puri joins Strides Group

Former HDFC Bank managing director Aditya Puri has joined global pharma major Strides Group as an advisor and will also serve as a director of its associate company Stelis Biopharma. "Eminent corporate doyen Aditya Puri joins the Strides Group as an advisor and also will be a director of its associate company, Stelis Biopharma," Strides Pharma Science Ltd said in a regulatory filing. (Text Source: PTI)


ZEEL zooms 6%


BUZZING STOCK :: RVNL shares surge 12%, hit 52-week high


SECTOR WATCH :: Nifty Realty jumps over 2.5%, biggest sectoral gainer on NSE


Rupee opening

Rupee opens weaker at 73.39/$ vs Thursday's close of 73.33 against the US dollar

Most active stocks by volume

COMPANY PRICE(rs) CHG(%)
VODAFONE IDEA 12.17 1.67
SUZLON ENERGY 8.35 0.36
TRIDENT 13.92 -4.13
B H E L 39.90 1.53
RAIL VIKAS 32.60 12.41
» More on Most Active Volume

Biocon gains 2% after arm gets Rs 555 crore capital injection from ADQ

Shares of Biocon climbed 2 per cent to Rs 466 on the BSE on Friday after the company announced that the board of its subsidiary Biocon Biologics has approved a primary equity investment by Abu Dhabi based ADQ, one of the region’s largest holding companies. READ MORE

Lupin jumps 2% on getting USFDA nod for generic diabetes drug

Drug maker Lupin on Thursday said it has received approval from the US health regulator for its Empagliflozin and Metformin Hydrochloride extended-release (ER) tablets, used to treat diabetes, in the American market. The company has received tentative approval for the product in multiple strengths from the United States Food and Drug Administration (USFDA), Lupin said in a statement.

NEWS FLASH | M&M says hiking prices of CVs by 1.9% from today

(Source: Cogencis)

Bitcoin slides more than 5% after topping $40,000 for first time

Bitcoin fell more than 5% on Friday, a day after topping $40,000 for the first time. The world’s most popular digital currency slid to as low as $36,618.36 on Bitstamp exchange, after reaching an all-time high of $40,402.46 in the previous session. (Source: Reuters)


Phoenix Mills stock jumps 6% on Q3 business update

-- Firm sees sustained recovery in the consumption at our malls since reopening. Consumption across our retail portfolio came in at Rs. 13.7 billion in Q3 FY21, up 192% QoQ and at approximately 66% of Q3 FY20.
 
-- The company is witnessing significant interest from customers for ready to move in inventory at One Bangalore West and Kessaku. "We sold 14 units with aggregate sales value of approximately Rs 740 million in Q3 FY21. For 9MFY21, we sold 24 units with aggregate sales value of Rs. 1.4 billion in 9M FY21," it said in a BSE filing
 
-- Rent & CAM Collections across the commercial portfolio remain strong at approximately Rs 390 million in Q3 FY21 and Rs 1.14 billion in 9MFY21.
 
-- Our hotel properties saw improved traction in social events and F&B revenue during Q3FY21, the company said.
 

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

Formal certification of Biden presidency and Trump promising smooth transition of power have further pushed US markets higher. Even though this might embolden our bulls too, there are some areas of concern. FII inflows are steadily declining and low- grade stocks are touching record highs. Irrational retail investor enthusiasm for 'cats & dogs' is an indication for caution. This is not the time for exuberance. Investors can use the present excessive optimism to sell poor quality stocks in the portfolio.

DHFL underperforms in a strong market, slumps 5%

>> Oaktree Capital has said its revised bid for the debt-ridden DHFL is unconditional and comes with a commitment of fresh capital infusion of Rs 1,000 crore for the revival of the company.


NTPC rises 1%

>> The power giant served notices to six states and two Union Territories for non-payment of dues, according to a PTI report. NTPC has also made it clear that it will be forced to shut-off or restrict power supply if they fail to clear their dues.


BUZZING :: Zuari Global hits 52-week high


Bharat Rasayan leaps 10% on buyback proposal

>>The company will consider the proposal of buyback of equity shares on January 12


Vodafone Idea up nearly 2%

>> According to media reports, Vodafone Idea has approached the Supreme Court to seek a modification on orders on the final AGR due amount, pointing out arithmetical errors in the government’s calculations.


Biocon adds 2% in opening deals

>> Biocon announced that its subsidiary Biocon Biologics has approved a primary equity investment by Abu Dhabi-based ADQ, one of the region's largest holding companies. As per the terms of the proposed agreement, ADQ will invest Rs 555 Crore for a 1.80 per cent minority stake in the biosimilar business.


TCS trades over 1% higher ahead of Q3 nos


Sectoral trends on NSE at Open


Sensex Heatmap :: All except HDFC trade in the green


First Trade


First Trade


NEWS ALERT :: Our vaccine appears to work against new strand discovered in the UK, says Pfizer

Commodity Heatmap


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


Markets at Pre-open


Markets at Pre-open


Result today :: Cloud adoption, large deal wins may lift TCS Q3 profit by 8% YoY

The IT firm's revenue in constant currency (CC) terms is expected to rise in the range of 2.4-4 per cent on quarter-on-quarter (QoQ) basis while it may grow between 3-4.5 per cent in dollar revenue. As for revenue growth in rupee terms, it is expected to be up between 3.4-5 per cent year-on-year (YoY) and 2.7-4.2 per cent quarter-on-quarter (QoQ). Besides, analysts expect TCS to post a 3-8 per cent year-on-year (YoY) growth in its Q3 net profit. READ MORE

BROKERAGE VIEW :: Prabhudas Lilladher on Gujarat Gas

TP: Rs 403 | Reco: Buy

>> GGAS remains sole gas supplier post ban on dirty competing fuels. Management likely to pass gas price hikes on consumers if demand momentum sustains. Addition of fifteen new units along with expansion of existing units to drive GGAS volumes; we factor in 10.3% CAGR volume over FY20-23E.

>> Demand traction remains robust led by 1) revival in domestic housing market supported by govt. initiated liquidity measures and 2) strong export demand given cost competitiveness along with opening of new markets in US and Brazil. Improved ceramic market demand augurs well for GGAS as Morbi accounts for over 60% of total sales volumes. Also, ban on competing dirty fuel has led to restricted competition with propane in summer months, thereby improving GGAS’s margin visibility. Rising pollution in industrial zones is likely to drive gas usage. Reiterate BUY with a PT of Rs403.

BROKERAGE VIEW :: Prabhudas Lilladher on Dalmia Bharat

TP: Rs 1,480 | Reco: Buy

>> We initiate coverage on Dalmia Bharat (DALBHARA) with BUY rating, underpinned by strong earnings growth and compelling valuations post mutual fund fiasco.

>> DALBHARA is India’s 4th largest cement producer with capacity of 29.6mnt, spread over East, South and West region. In South (40% volume share), more than 75% volumes come from profitable states of Tamil Nadu, Karnataka and Kerala while volatile and oversupply prone states of AP & Telangana constitute only 25% of volumes. In East (50% of volumes), the company enjoys logistics edge over peers with integrated operations in Odisha.

>> Led by strong market positioning and competitive cost structure, DALBHARA’s margins rank in top quartile of the sector. To further consolidate its position in East region, company is expanding East plant’s capacity by 75% or 8mnt with its All-India capacity increasing by 27% to 37.5mnt. This would drive 13%/31% CAGR in EBITDA/PAT for FY20-FY23E. We value the stock at Rs1,480, EV/EBITDA of 9.0x FY23e (25% discount to pre-MF episode valuations of 12.0x).

Top stocks to watch today

TCS: The IT major is slated to announce its December quarter results today. TCS is likely to post a robust performance for Q3FY21 on the back of strong demand in cloud adoption, tailwinds of large digital deals, project ramp-up and lower furloughs, analysts said.
 
Biocon: The company announced that its subsidiary Biocon Biologics has approved a primary equity investment by Abu Dhabi-based ADQ, one of the region's largest holding companies. As per the terms of the proposed agreement, ADQ will invest Rs 555 Crore for a 1.80 per cent minority stake in the biosimilar business. READ MORE

 

BROKERAGE VIEW :: Axis Securities on Dixon Tech

TP: Rs 15,636 | Reco: Buy

>> Dixon continues to focus on new client acquisition and product addition to increase its top-line, backward integration and increasing ODM revenues.The company has added new clients across segments and is expanding capacities based on healthy order-book.Strong traction across segments, PLI boost under Government’s initiatives to give a thrust to domestic manufacturing under ‘Make in India’ and ‘Atmanirbhar Bharat’ will lead to strong growth going forward in our view. We believe Dixon will continue to ride on the strong order book and execution capabilities to scale up its operations thuss capturing such opportunities.

>> We maintain BUY and value Dixon at 45x FY23E EPS of Rs 347 arriving at target price of Rs 15,636 a premium to consensus PE of 37x FY23E EPS. We do think it enjoys the scarcity premium tag given that it remains the only listed player in the industry with a well diversified industry exposure as compared to Amber Enterprises which caters exclusively to air conditioning and HVAC segment.

BROKERAGE VIEW :: ICICI Securities on HDFC Life

TP: Rs 820 | Reco: Buy

>> HDFC Life is focused on delivering consistent profitability with steady growth. GWP has grown at 17.1% CAGR in FY15-20. Value of new business (VNB) saw growth at 26.6% CAGR in FY15-20 while VNB margin expanded 740 bps to 25.9% in FY20 from 18.5% in FY15. PAT posted 10.5% CAGR in the past five years to Rs 1,295 crore for FY20. The company has a healthy RoEV at 18.1% for FY20 and has remained at 20% mark in the past few years. We expect PAT to grow at 8.9% CAGR to Rs 1,671 crore in FY20-23E.

>> We expect gross written premium (GWP) to grow at a CAGR of 10.1% in FY20-23E to Rs 43,703 crore. PAT is expected to grow at 9% CAGR over the same period to Rs 1,671 crore. VNB margins are expected to be in the region of ~25% by FY23E. HDFC Life currently trades at ~4.3x FY23E embedded value (EV), which is at a premium compared to its peers.

>> Given the superior business franchise and continued focus on profitability, valuations are expected to remain at a premium. Considering the current business
franchise and building anticipated improvement in business momentum and profitability metric, we initiate coverage on the stock with a BUY rating and a target price of Rs 820/share, valuing the company at 5.0x FY23E EV.

BROKERAGE VIEW :: Emkay Global on GAIL

TP: Rs 125 | Reco: Buy

>> Overall volumes are now back to pre-Covid levels. Polymer prices are also strong, with healthy momentum expected in Q4. Petchem demand outlook is good and Pata plants are running stable. Q1/Q2FY22 would see some domestic capacity increase from HMEL. Gas trading outlook is better amid high international prices but the current situation is volatile and GAIL is monitoring the same, hence cannot say if further hedging can be done. GAIL expects spot LNG prices to cool off going ahead.

>> Gas transmission volume outlook is dependent more on demand than supply. Hence, new RIL-KG basin gas could rather replace LNG volumes and hence, not impact pipeline throughput much. Overall incremental volumes/demand in India should flow through GAIL’s pipelines, hence offers an upside.

BROKERAGE VIEW :: HDFC Securities on Mphasis

>> Mphasis is well positioned to capture the improving growth in the technology space led by its lower exposure to impacted verticals, improved traction in deal wins, strong relationship with top customers, customer stickiness and the integrated nature of services provided to clients. Mphasis has a strong record of retaining key customers, with an average tenor of 14-15 years that provides some operating stability. Its strong deal wins, healthy balance sheet and expectation of inorganic growth could bring earning visibility in medium to long term.

>> We think the Base case fair value of the stock is Rs 1774 (21.0x Sept22E EPS) and the bull case fair value of the stock is Rs 1899 (22.5x Sept22E EPS) over the next 2 quarters. Investors can buy at LTP and add further on dips to Rs 1426-1436 band (17.0x Sept22E EPS). At the LTP of Rs 1616, stock trades at 19.2x Sept22E EPS.

BROKERAGE VIEW :: MOFSL on United Spirits

CMP: Rs 614 | TP: Rs 750 (+22%) | Reco: Upgrade to Buy

>> Sharp excise increases were seen over Apr–May’20 amid the COVID outbreak, leading to the expectation of a nosedive in sales and volumes. However, in a positive surprise, the company witnessed a strong recovery in 2QFY21, driven by robust in-home consumption. With various occasions of indulgence restricted (outdoor social activity, cinemas, and travel and tourism), spirits offered a convenient alternative for in-home consumption.

>> Accordingly, after 49% volume decline YoY in the lockdown impacted 1QFY21, volume decline was arrested to just 3.9% in the 2QFY21. Hence, we expect volume growth in the positive territory in 3QFY21.

>> Valuations, on the other hand, are at a 25% discount to our Coverage Universe at 46x FY22 EPS and 34.7x FY23 EPS. With an improving outlook, we upgrade UNSP to BUY, with TP of INR750, valuing the company at 45x Dec’22 EPS

'Nifty Bank may hit record high in coming days'

BUY BANK NIFTY | TARGET: 32,600 | STOP LOSS: 31,550
 
The Nifty Bank index has outperformed so far this week and is showing resilience as every dip is getting bought into. Although, the momentum indicators and oscillators have reached the overbought territory but there aren't any signs of reversal yet. Hence, a further momentum on the higher side is likely to continue. The overall broader structure is hinting at a fresh new high in the January series and as long as it sustains above 31,550 levels, the decline should be utilized as a buying opportunity. READ MORE

Here's a Bull Spread Strategy on Max Financial Services

Rationale:
 
Long build up was seen in the MFSL Futures’ where we have seen 11% rise (Prov) in the Open Interest with price rising by 3%

The stock price has already broken out on the daily chart on 6th January. READ MORE

SGX Nifty Update

>> At 8:22 am, the index is at 14,288 levels, up 78 points.

Bulk deals on the BSE as on Thursday

Bulk deals on the NSE as on Thursday

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


Rupee check

Source: Bloomberg


Oil hovers near 11-month highs

>> Oil prices edged higher on Friday, hovering near 11-month highs hit the previous day, as Saudi Arabia’s pledge to make voluntary cuts to its output continued to buoy the mood in the market though worries over slower fuel demand capped gains.

>> Brent crude climbed 2 cents to $54.40 a barrel, after closing slightly higher the previous day. It touched $54.90 on Thursday, the highest since February.
 
>> US West Texas Intermediate (WTI) also gained 2 cents to $50.85 a barrel. The contract closed up 0.4% on Thursday after also hitting its highest since February at $51.28.
 
>> Both benchmarks are on track for gains of about 5% for this week.

(Source: Reuters)

Wall Street hits record high overnight

>> In overnight trade, stocks on Wall Street hit record levels as investors bet a Democrat-controlled Congress will deliver more stimulus spending to help the US economy overcome a steep pandemic-induced downturn.
 
>> The Dow Jones Industrial Average rose 0.69%, the S&P 500 gained 1.48% and the Nasdaq Composite added 2.56%.

(Source: Reuters)

Asian stocks jump on revived recovery hopes

>> Asian stocks opened higher on Friday, with Japan hitting a three-decade high as investors looked beyond rising coronavirus cases and political unrest in the United States and bet on an economic recovery later in the year.

>> Futures for the S&P 500 jumped 1.48% and Japan’s Nikkei 225 rose 0.84%, hitting its highest level since August 1990.

>> Australia’s S&P/ASX 200 gained a more moderate 0.16% . However, Hong Kong’s Hang Seng index futures lost 0.02% after reports that the Trump administration was considering banning U.S. entities from investing in an expanded list of Chinese companies in the waning days of the presidency.

(Source: Reuters)

Good morning, readers!

Welcome to Business Standard's LIVE blog

Track all the latest, markets-related updates here

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel