MARKET WRAP: Nifty ends below 11,100, Sensex sheds 289 pts; CCD slips 20%

Topics Markets | MARKET WRAP

Domestic market hit a two-month low at the benchmark level, while Nifty500, in the broader market, hit a three-month low on Tuesday as weak corporate earnings and continuous selling by foreign portfolio investors knocked off investment sentiment. Frontline indices, which hit an intra-day low of 37,359 and 11,073 at S&P BSE Sensex and Nifty50 respectively, were dragged down by banking and financial stocks, followed by weakness in metal and auto counters.

Indices shrugged-off optimism in the global markets ahead of the US Federal Reserve's policy decision, scheduled to be announced on Wednesday. 

The benchmark S&P BSE Sensex lost 289 points, or 0.77 per cent, to close at 37,397 level. Only eight out of the 30 stocks in the index ended in the green. YES Bank, IndusInd Bank, Hero Motocorp, and State Bank of India slipped the most while Bharti Airtel, TCS, HCL Tech, and L&T managed to hold gains. Nifty50, on the other hand, slipped below its 200-DMA level intra-day, to close below the psychological level of 11,100. It eventually settled at 11,085-mark, down 104 points or 0.93 per cent.

In the broader market, S&P BSE Mid-cap slipped 217 points, or 1.58 per cent, to settle at 13,546 level. The S&P BSE Small-cap, too dipped, 276 points, or 2.13 per cent, to close at 12,650 level.

Sectorally, all the indices barring IT, ended in the red. Nifty PSU bank index tumbled the most, down 5 per cent at close. This was followed by losses in the Nifty Metal index (down 3.25 per cent), and Nifty Auto index (down 2 per cent). Nifty Bank, Private Bank, Realty, and Pharma closed with losses of over 1.5 per cent each. Nifty IT managed to end with gains of 0.65 per cent.

CCD CO-FOUNDER GOES MISSING

Cafe Coffee Day (CCD) founder and former Karnataka Chief Minister, SM Krishna's son-in-law, V G Siddhartha, is suspected to have jumped off a bridge in Mangaluru on Monday night, the Times of India reported on Tuesday. 

In his last letter to the Coffee Day Enterprises' board of directors dated July 27, its co-founder V G Siddhartha said he had fought for a long time, but was giving up as he could not take any more pressure from one of the private equity partners who was forcing him to buy back shares. Siddhartha, who is missing since Monday night, had said that "tremendous pressure" from other lenders had made him succumb to the situation. READ MORE

Shares of Coffee Day Enterprises plunged 20 per cent to hit the lower circuit limit of Rs 154.05 on the BSE in the opening deals on Tuesday. READ MORE


3:46 PM IST

3:45 PM IST

3:37 PM IST The S&P BSE Sensex shed 289 points or 0.77 per cent to settle at 11,085 levels while NSE's Nifty50 index dropped 104 points or 0.93 per cent to end at 11,085.40. 

3:25 PM IST Recommendation:    Long TCS August Future at | 2165-2170 and short Nifty August Future at | 11230-11240   Current Price Ratio (Nifty/TCS): 5.18   Target: 4.80   Stop loss: 5.40   Till August expiry   Rationale Technology heavyweights seem to be immune to the ongoing market weakness. The Nifty has come down towards 11200 losing almost 5% in July while IT index is down just 2.6%. Sectoral heavyweights like TCS and Infosys have remained outperformers in the recent move. TCS has the highest Put base at 2100 strike. Post Budget announcement, it had breached this level but recovered sharply and hovered around Rs 2,100 for most of the July series before moving higher.

3:22 PM IST S&P BSE Bharat 22 Index 3,335.78 -50.65 -1.50 S&P BSE 100 11,159.51 -120.76 -1.07   S&P BSE SENSEX Next 50 29,626.23 -538.56 -1.79   S&P BSE SENSEX 50 11,561.77 -112.06 -0.96   S&P BSE SENSEX 37,379.41 -306.96 -0.81  

3:00 PM IST

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2:42 PM IST

2:41 PM IST -- Trades nearly at 5-month low Alert:  200-DMA was 11,140 (via CNBC TV18)

2:40 PM IST

LIVE UPDATES

Sectoral trends at NSE at close


Top gainers and losers on S&P BSE Sensex at close


CLOSING BELL

The S&P BSE Sensex shed 289 points or 0.77 per cent to settle at 11,085 levels while NSE's Nifty50 index dropped 104 points or 0.93 per cent to end at 11,085.40. 

Derivatives Strategy by ICICI Securities: Long TCS, short Nifty

Recommendation: 
 
Long TCS August Future at | 2165-2170 and short Nifty August Future at | 11230-11240
 
Current Price Ratio (Nifty/TCS): 5.18
 
Target: 4.80
 
Stop loss: 5.40
 
Till August expiry
 
Rationale
  • Technology heavyweights seem to be immune to the ongoing market weakness. The Nifty has come down towards 11200 losing almost 5% in July while IT index is down just 2.6%. Sectoral heavyweights like TCS and Infosys have remained outperformers in the recent move.
  • TCS has the highest Put base at 2100 strike. Post Budget announcement, it had breached this level but recovered sharply and hovered around Rs 2,100 for most of the July series before moving higher.

MARKET CHECK

S&P BSE Bharat 22 Index 3,335.78 -50.65 -1.50
S&P BSE 100 11,159.51 -120.76 -1.07
 
S&P BSE SENSEX Next 50 29,626.23 -538.56 -1.79
 
S&P BSE SENSEX 50 11,561.77 -112.06 -0.96
 
S&P BSE SENSEX 37,379.41 -306.96 -0.81
 

NEWS ALERT | Have exposure of Rs 4,000 cr each towards DHFL, Indiabulls Hsg: Bank of India


Market check


Sectoral trends at NSE at this hour | All sectoral indices, barring Nifty IT, down over 1%


Market check


MARKET ALERT | Nifty slips below 11,100 for the first time since March 11


Market check | Nifty50 breaches 200-DMA

-- Trades nearly at 5-month low

Alert:  200-DMA was 11,140 (via CNBC TV18)

Sector watch | Nifty PSU Banks' index slide, down 5%


NEWS ALERT | Indiabulls Housing Fin will issue pre-mature redemption offer for NCDs, worth Rs 659.5 cr, maturing in September


Nifty slips below 11,150


NEWS ALERT | Sun Pharma promoter creates pledge on 99.7 lakh shares on July 24: CNBC TV18


RBL Bank tumbles over 10%


Global markets check

Asian stocks advanced on Tuesday in anticipation of a cut in U.S. interest rates later this week while the pound tumbled to a 28-month low versus the dollar due to heightened concerns over prospects for a no-deal Brexit.

In early European trade, the pan-region Euro Stoxx 50 futures inched down 0.1%, German DAX futures were little changed and Britain’s FTSE futures rose 0.3 per cent.
 
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent. The Shanghai Composite Index rose 0.3% and Hong Kong’s Hang Seng edged up 0.2 per cent. Australian stocks climbed as much as 0.7 per cent to touch a record high, supported by buoyant mining shares and adding to the previous day’s tech-driven gains. Japan’s Nikkei rose 0.4 per cent, showing limited reaction to the Bank of Japan’s widely anticipated decision to stand pat on monetary policy.

Deeply saddened by developments at Cafe Coffee Day: KKR to CNBC TV18

-- Our thoughts are with VG Siddhartha's family at this time
 
-- We believe in VG Sidharata and had invested in the company about 9 yrs ago
 
-- We sold approximately 4.25% of 10.3% in Coffee Day in February 2018

Nifty PSU Bank index is trading over 3 per cent lower


Indiabulls Housing Finance off day's high


More NBFCs will have to die if India's shadow-banking sector is to survive

The slowdown that began among India's shadow banks is spreading. Sectors that had come to depend on credit from what in India are called non-banking financial companies (NBFCs) are posting awful numbers. Insurance is slowing and real estate is troubled. The automobile sector -- which contributes half of India's manufacturing output -- is shrinking as stressed shadow banks prioritise survival above lending growth. READ MORE

VG Siddhartha case | Black letter day for startups & entrepreneurship in India, says Amit Ranjan, co-founder SlideShare

VG Siddhartha case | Industry, political leaders raise concerns on 'ease of doing business'

VG Siddhartha case | Kiran Mazumdar Shaw, Biocon CMD to Biocon CMD

He (Siddhartha) seems to have undergone huge stress from PEs and I-T. These two have to be investigated. Govt should look at ways of relieving stress of businesses

Earnings Alert | VIP Industries Q1 result

-- Net profit at Rs 35.1 cr vs Rs 63.4 cr YoY

-- Revenue at Rs 564.2 vs Rs 517.8 cr YoY

-- EBITDA at Rs 125.1 cr

Earnings Alert | United Bank of India Q1 result

-- Net profit at Rs 105 cr vs loss of Rs 388.7 cr YoY

-- NII at Rs 727.5 cr vs 545.3 cr YoY

NEWS ALERT | Have no exposure to Coffee Day Enterprises: HDFC, Karnataka Bank

-- K'taka Bank says have exposure to unlisted Coffee Day Global

(As reported by CNBC TV8)

EXPERT COMMENT | Quote on the CCD Crisis from CapitalAim

CCD shares have been hitting 52-week lows for quite some time in the last couple of months. Now, the unfortunate event of founder missing and in the light of the alleged letter left by him clearly underlines the crisis in the company. The letter in the media reveals that VG Siddhartha was under tremendous pressure from other lenders. From the information available, CCD is severely affected by the slowdown in the economy and liquidity crunch. We may see the stock to slide further to double digits if the clarity regarding its financials is not declared. The case reminds us of the notorious case of Satyam fiasco. Investors should avoid this stock until the whole situation is out and clear.  

Earnings Alert | Bank of India Q1 result

-- Slippages at Rs 3,683 crore vs Rs 3,102 cr (QoQ) 

Number of companies without a single independent director on the rise again

An analysis of data from nseinfobase.com, a website tracking corporate data, shows that this marks a rising trend in recent years, after a sharp decline in the financial year ending March 2016 (FY16).
 
Several of these companies have gone bankrupt and are under the resolution process. Ownership issues are also among the reasons for companies not having independent directors, according to industry watchers. READ MORE

Earnings Alert | Piramal Enterprises Q1 result

-- Cons Net Profit at Rs 450 cr

-- Revenue at Rs 3,506 cr

-- One-time loss of Rs 11.3 cr


Elara Capital on Strides Pharma Science

Rating: BUY
 
Target Price: Rs 590
 
Upside: 67%
 
Strides Pharma Science's (STR) exit from the Australia business resulted in significant deleveraging of balance sheet. The divestment would result in an EBITDA loss; however, it would be offset by the fall in interest cost. STR’s US business has scaled up over the past three quarters post its transition to front-end, and given strong visibility its other regulated markets, it should result in strong growth over FY19-21. We have broadly maintained our FY120/21E EBIDTA; however, our PAT stands reduced by 15%/9% on account of higher losses from JV. At the CMP, the stock is trading at attractive valuation of 6.5x FY21E EV/EBITDA. We reiterate Buy with a target price of Rs 590 on 10.0x FY21E EV/EBITDA.

HDFC Securities on Orient Cement

We reiterate BUY on Orient Cement with a target price (TP) of Rs 150 (8x FY21E EBITDA). Orient Cement’s stellar show continued in 1QFY20 on strong realization tailwinds amid benign input costs. While we believe cement pricing has peaked out in 1Q (for near term), the sharp uptick in past two quarters should buoy FY20 NSR by 7.5%. Further, with fuel costs moderating, and expected demand recovery in H2, we estimate unitary EBITDA to rebound to ~Rs740 in FY19/20 (~50% ahead of FY19).

STOCK ALERT | 2.3% equity worth Rs 161.34 cr changed hands in Jubilant Life on NSE


ICICI Securities on Havells India

We believe Havells’ Lloyd business is in a transition phase with high investment in people, technology and branding. This, coupled with pricing pressure in the air conditioner business (due to significant competition from MNCs) would likely weigh on overall EBTIDA margin of the company in the near term. We maintain our HOLD rating on the stock and revise our target price lower to Rs 725.

Anand Rathi Shares and Stock Brokers on Aarti Drugs

The gross margin improved 364bps sequentially on account of softening raw-material prices, resulting in a 132bp improvement in the EBITDA margin. Y/y, however, the gross margin improved 147bps y/y chiefly as Q1 FY19 had seen a disruption of ciprofloxacin sales. We believe the stabilized intermediate prices would help improve the operating margin in subsequent quarters. 
 
We retain our Buy rating, with a price target of Rs 796 (earlier Rs 745), based on 12x FY21e EPS. Risks: Delay in the ramp-up of the recently-added capacity; more-than-expected competition in generic APIs.

 

Result impact | Bank of India slips 5%


Earnings Alert | Bank of India Q1 result

-- Net profit at Rs 242.6 crore

-- Gross NPA at Rs 62.068 crore; 16.5%

-- Net NPA ratio at Rs 19,288 crore; 5.79%

With founder Siddhartha missing, will Cafe Coffee Day get sold to PE firms?

"Coffee Day Enterprises was more of a promoter-driven outfit. This business prospects and the stock will take a hit in the short-to-medium term, at least till the time there is clarity on the news development and how the business will be managed going ahead," says A K Prabhakar, head of research at IDBI Capital. READ MORE
VG Siddhartha

Bank of India hits 52-wk low ahead of Q1 result; dips 27% in 2019 thus far

The stock, which hit its 52-week high of Rs 110.15 earlier this year, has slipped 27 per cent in the calendar year 2019 thus far. In comparison, the benchmark Nifty50 index has gained 3 per cent during the period. 
 
The public sector lender is scheduled to announce its June quarter results later in the day amid expectations of weaker operational performance. READ MORE

Expert Comment :: Mustafa Nadeem, CEO, Epic Research on VG Siddhartha

Coffee Day Enterprises' stock, in the short term to medium term, may continue to slip till things become clearer or any statement from the existing management of the company eases panic. Traders should definitely exit the stock if they find any opportunity as this is going to be a long tedious process.

Exit of all investors at once, however, would be a problem for the business. All, now, depends on the new management or anyone from existing Board as to how they handle the situation and take things forward. 


Elara Capital on Strides Pharma

STR’s exit from the Australia business resulted in significant deleveraging of balance sheet. The divestment would result in an EBITDA loss; however, it would be offset by the fall in interest cost. STR’s US business has scaled up over the past three quarters post its transition to front-end, and given strong visibility its other regulated markets, it should result in strong growth over FY19-21. We have broadly maintained our FY120/21E EBIDTA however our PAT stands reduced by 15%/9% on account of higher losses from JV. At the CMP, the stock is trading at attractive valuation of 6.5x FY21E EV/EBITDA. We reiterate Buy with a TP of INR 590 on 10.0x FY21E EV/EBITDA.

Matter is 'utterly fishy', says DK Shivakumar

VG Siddhartha case :: CCD co-founder missing

Index Contributors at this hour


NEWS ALERT | Tax authorities are dealing with cases in draconian manner: Shekhar Gupta of The Print on VG Siddhartha

-- Criminalising financial issues is not a good sign

-- There is massive crisis in Indian Business Sector

Alert: CCD co-founder VG Siddhartha went missing last night. 

         In a letter to the Coffee Day Enterprises, dated July 27, he alleged harassment by the previous DG, Income Tax in the form of attaching of shares on two separate occasions to block the Mindtree deal and then taking possession of Cofee Day shares.

Market check


Market check | Broader indices slip


NEWS ALERT | Coffee Day Enterprises write to exchanges


Buzzing | GTPL Hathway gains 6%


In last letter to CCD board, Siddhartha blamed lenders, tax authorities

"I would like to say I gave it my all. I am very sorry to let down all the people that put their trust in me," he wrote in the letter, which was also addressed to the wider Coffee Day family. "I fought for a long time but today I gave up as I could not take any more pressure from one of the private equity partners forcing me to buy back shares, a transaction I had partially completed six months ago by borrowing a large sum of money from a friend. Tremendous pressure from other lenders lead to me succumbing to the situation," he added. READ MORE
CCD co-founder VG Siddhartha

NEWS ALERT | US FDA's observations on Cipla

-- Equipment monitoring process parametrs not adequate

-- Preventive controls over inventory, warehousing management systems not adequate

-- Process validations of API intermediates not executed as per proposals

-- Written procedures for packging not established

 Alert: Form 483 was issued to Cipla’s API site in Bengaluru by US FDA.

         Seven observations were issued after inspecting the plant from 15th July to 19th July

(As reported by CNBC TV18)

IDBI Bank slips 5%


Pick of the week :: Kotak Securities

Federal Bank

Recommendation: BU
 
Price: Rs 95 
 
Target: Rs 130 
 
Potential Upside 36.8%

Federal Bank reported ~20% YoY loan growth in 1QFY20, driven by robust growth in retail lending (up ~25% YoY) and strong performance in the agricultural portfolio (up 20% YoY). We forecast the retail and corporate segment to deliver robust growth going ahead. We forecast ~15% loan CAGR in FY19-22E. 
Non-interest income increased sharply by 45% YoY in 1QFY20 led by increase in fee income (up 40% YoY) and sharp uptick in sale of investments at 90% YoY.

Valuation rerating ahead for ICICI Bank; Q1 loan growth at 14-quarter high

However, the June quarter (Q1) results, published over the weekend, seem to be the most convincing proof that the worst in terms of asset quality may be behind. Net non-performing asset (NPA) ratio at 1.8 per cent and domestic loan growth at 18 per cent year-on-year (YoY) have been the best in 14 quarters. READ MORE

Sector watch | Metals lose shine; index trades lower


Strides Pharma soars 12% after Co announces JV with Chinese firm

Strides Pharma Global Pte (Singapore) and Sun Moral International (Hong Kong), a wholly-owned subsidiary of Sihuan Pharmaceutical Holdings Group Ltd (Sihuan), have entered into a JV to form called Sihuan Strides HK Ltd where the latter will hold 49 per cent stake, according to a BSE Filing. READ MORE

Bank of India trades lower ahead of Q1 results


TVS Motors hits 52-week low; pares losses to trade 0.8% higher


Dilip Buildcon declared lowest bidder for project in Jharkhand


Hero MotoCorp trades lower ahead of Q1 results


S&P BSE Sensex holds early gains


Most active stocks by volume

COMPANY PRICE(rs) CHG(rs) CHG(%) VOLUME
REL. COMM. 1.51 0.04 2.72 6920847
VODAFONE IDEA 6.75 -0.02 -0.30 3170366
YES BANK 94.80 0.05 0.05 851939
SPICEJET 147.70 6.65 4.71 672810
RELIANCE INFRA. 47.40 1.10 2.38 550348
» More on Most Active Volume

Tata Sponge dips 3% after reporting Rs 85 cr loss in Q1


Coffee Day Enterprises tanks 20% as co-founder VG Siddhartha goes missing

Shares of Coffee Day Enterprises plunged 20 per cent to hit the lower circuit limit of Rs 154.05 on the BSE in the opening deals on Tuesday after reports said VG Siddhartha, the founder of the country's largest coffee chain, has been missing since Monday night. Siddhartha, is suspected to have jumped off a bridge in Mangaluru on Monday night, the Times of India reported on Tuesday. READ MORE

Shalby soars 17%


PNB Housing Fin trades over 3% higher


Coal India hits 52-week low


JSW Steel gains 2%


Bajaj Finserv trades 1.6% higher


Market check | Nifty tests 11,250


Nifty Pharma leads sectoral indices; up over 1%


Shilpa Medicare rises 2%


Market check | Sensex gaining ground


DLF trades higher


Strides Pharma rises 9%


Axis Bank trades flat ahead of earnings


NEWS ALERT | Sorry to let down all the people that put their trust in me: VG Siddhartha to CCD Board, CNBC TV18 says

-- I would like to say I gave it my all
 
-- I fought for a long time but today I give up
 
-- Have failed to create the right profitable business model
 
-- Every financial transaction is my responsibility

ICICI Bank trades higher


Market check


HDFC Bank trades flat


Mindtree dips over 2%


Eicher Motors trades over 1% higher


Broader Market Check


Tata Motors trades lower


Pfizer rises over 1.5%

-- Drugmaker Pfizer has agreed to spin off its generic drugs business and combine it with Mylan, a move that leaves Pfizer with more profitable innovative drugs, including cancer drug Ibrance and pneumonia vaccine Prevnar, said a Reuters report.


Dr Reddy's Labs trades lower


Coffee Day Enterprises hits 20% lower circuit after founder VG Siddhartha went missing


Sectoral trends at NSE during opening trade


Top gainers and losers on S&P BSE Sensex during Opening trade


Market at Open


Market at Open


Domestic institutional investors' bump up holding in Indian stocks in June

The value of the holdings of DIIs—comprising mutual funds, insurers, banks and other financial institutions—rose to 13.78 per cent at the end of June 30, up from 13.69 per cent at the end of the previous quarter, data from nseinfobase.com shows. This is 30 per cent lower than the ownership of foreign portfolio investors (FPIs), which stood at a two-year high of 19.8 per cent on June 30. READ MORE

Coffee Day Enterprises tanks 19% during Pre-Open


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


Rupee opening

Rupee opens flat at 68.75/$ vs 68.73 against the US dollar

Market at Pre-open


Market at Pre-open


RBI to discuss sovereign bonds on Aug 16 amid risks flagged by economists

The Reserve Bank of India’s board will meet on August 16 to discuss, among others, the nation’s proposed maiden offshore bond sale plan, the people said, asking not to be identified as they are not authorized to speak on the subject.
 
The offering is mired in confusion after an official overseeing the plan was abruptly transferred out of the Finance Ministry last week, amid reports that the Prime Minister’s office had asked for a review. Finance Minister Nirmala Sitharaman said in an interview to the Economic Times newspaper that there’s no rethink and the plan is on course. READ MORE

Why are FPIs selling?

We have recently seen significant selling of Indian equities by foreign portfolio investors. In July, the selling has touched almost $2.5 billion, and is now seems to be accelerating. Consequently, India has had a very tough year on a relative basis.

While the markets globally are hitting new highs, we are struggling to stay in positive territory. Indian mid-caps and small-caps continue to get decimated — downdouble digits for the year. In a ranking of the top 50 equity markets, in terms of performance year-to-date, we are ranked 43rd. READ MORE

Stocks to watch: Coffee Day Enterprises, TechM, Axis Bank, Hero MotoCorp

Here's a list of some of the counters that are likely to trade actively in today's trading session -
 
Coffee Day Enterprises: Shares of Coffee Day Enterprises may hog the limelight today as reports said VG Siddhartha, the founder of Coffee chain Cafe Coffee Day (CCD), is suspected to have jumped off a bridge in Mangaluru on Monday night. READ MORE
 
Pfizer: Drugmaker Pfizer has agreed to spin off its generic drugs business and combine it with Mylan, a move that leaves Pfizer with more profitable innovative drugs, including cancer drug Ibrance and pneumonia vaccine Prevnar, said a Reuters report. READ MORE

Bajaj father-son duo hits out at govt on slowdown, EV policy flip-flop

At the 12th annual general meeting (AGM) of Bajaj Auto on Friday, the company’s shareholders heard the father-son duo — Chairman Rahul Bajaj and Managing Director Rajiv Bajaj — take on the government for its inability to kick-start growth. They also criticised the government for sending out confusing signals regarding the e-vehicle policy. READ MORE

NEWS ALERT | SBI tightens lending terms for auto dealers: Reuters

-- State Bank of India (SBI) has tightened lending terms dramatically for auto dealerships, according to a source and an internal memo, seeking to reduce its exposure to risk from a sector in the midst of a sharp downturn.

-- In one internal memo for financing dealers selling vehicles made by Hyundai Motor Co’s India unit, SBI said it is revising the lending terms because of “growing stress” in the carmaker’s portfolio.

(As reported by Reuters)

More than 36% of registered companies have 'closed' down in India

The reason for the jump is the inclusion of companies not filing financial statements or annual returns for two years into the category of “closed” companies. The government identified such companies and declared them defunct under the Companies (Removal of Names of Companies from the Register of Companies) Rules (along with amended Rules 2019), coined under Section 248(1) of the Companies Act, 2013. READ MORE

Axis Bank Q1 preview: 15% growth in NII seen, exposure to stressed assets eyed

Analysts at Prabhudas Lilladher, for instance, peg the bank’s profit at Rs 1,860.3 crore, up 165 per cent YoY. This would be a nearly 24 per cent rise from the sequential profit of Rs 1,505.1 crore reported in the March quarter of previous fiscal (Q4FY19).
 
“Core performance for Axis Bank will continue to improve with likely NII growth of nearly 15 per cent YoY and pre-provision profit (PPOP) growth of nearly 22 per cent YoY,” they wrote in their result preview note. READ MORE

Hero MotoCorp Q1 preview: Over 15% fall in profit seen amid falling volume

he company's volumes saw a 12.5 per cent dip in the June quarter on a year-on-year (YoY) basis to 18.4 lakh units. Scooter volumes slumped 37 per cent to 1.2 lakh units while motorcycle volumes declined around 10 per cent YoY to 17.2 lakh units during the quarter.

Analysts at Motilal Oswal see a 19.6 per cent decrease in Hero MotoCorp's net profit to Rs 730.9 crore for the quarter under review as compared to Rs 1,115.2 crore profit reported in the corresponding quarter last year. Revenue, they said, may see an 8 per cent YoY degrowth to Rs 8,096.2 crore. READ MORE

Tech Mahindra Q1 preview: Weak numbers likely; revenue guidance eyed

ech Mahindra, the Pune-headquartered IT services firm, is likely to report a weak set of numbers for June quarter of the financial year 2019-20 (1QFY20) when it declares its financial results Tuesday. In line with industry peers, the company is expected to see a dip in operating margin, owing to rupee appreciation, wage hikes, visa fees and Comviva seasonality. READ MORE
Tech Mahindra CEO C P Gurnani

Kotak Securities on Persistent Systems

Recommendation: ADD

TP: Rs 592

In Q1FY20, the company has again reported dismal performance, we have accordingly changed our earnings estimates to reflect the same. Key parameters such as utilization levels, attrition rate, revenue productivity and digital revenue mix have been disappointing in Q1FY20. We expect Persistent to report an EPS of Rs.48.1/share in FY20E (earlier Rs. Rs.49.6) and an EPS of Rs.49.3/share in FY21E (earlier Rs. Rs.52.5). With the change in the top management, we expect better execution, lower attrition, higher revenue from re-seller business and past challenges to be resolved in the medium to long term.
 
We now recommend ADD rating on Persistent and a multiple based price target of Rs.592/share (earlier Rs.735/share). At CMP, the stock is valued at 5.2x EV/EBITDA and 11.4x P/E on FY21E basis. We have valued the stock at 12x PE multiple at significant discount to its peer considering its subdued performance.

Kotak Securities on Mold-Tek Packaging

Recommendation:  ADD 

TP: Rs 280

Given the leadership position in IML packaging and increased traction from Edible oil segment and incremental volume contribution from Mysore and Vizag units to Asian Paints, which is expected to help the company to register 12.7% revenue CAGR for FY19-FY20E period with an EBITDA margin of 16.5% down 80 bps YoY. PAT is expected to grow at 16% CAGR during the same period, with return ratios in the range of 17-18%. Though we are comfortable, with the long term story and the company's position to capitalize the market opportunities, but there are near term headwinds in terms of economic slowdown and increased cost pressure in 2QFY20 due to left over provisions of RAK. We believe the re-rating will take some time. Hence, we downgrade the stock to ADD (earlier BUY), with a revised target price of Rs280, valuing at its last five years average multiple of 18x FY21E earnings. At CMP, the stock is trading at 19.5x/16.7x FY20E/FY21E earnings.

Motilal Oswal Financial Services on Escorts

Outlook: Neutral

CMP: Rs 471

TP: Rs 520

Upside: 10% 

We cut our FY20/21 EPS by 9%/12% to factor in our lower volume assumptions. With the tractor cycle coming off peak and the cyclicality in CE, current valuations do not capture the risk of the substantial pressure on earnings. The stock trades at 9.8x/9.9x FY20/21E EPS. Neutral.

Motilal Oswal Financial Services on ABB

Recommendation: Sell

CMP: Rs 1,395

TP: Rs 1,240

Downside: 11% 

We value ABB on an SOTP basis in order to value the discontinued business separately. We have valued its discontinued T&D business at 25x and current core business at 42x Mar’21 EPS. Given the expensive valuations, we maintain our Sell rating on the stock with a target price of INR1,240

Motilal Oswal Financial Services on Havells India

Recommendation: Neutral

CMP: Rs 666

TP: Rs 700

Upside: +5%

On back of our EPS cut, our TP is reduced to INR700 (prior: INR800) with an unchanged target FY21E P/E multiple of 40x (in line with the last-five-year average trading multiple but at ~10% discount to the current one-year forward multiple of 44x). Maintain Neutral as we await a better entry point in the stock.

Today's picks: From Grasim to Infosys, hot stocks to watch on Tuesday

Bank Nifty
 
Current: 29,296 (fut: 29,381)
 
Target: NA
 
Stop long positions at 29,225. Stop short positions at 29,525. Big moves could go till 29,700, 29,050. Trend remains negative. READ MORE

Top trading calls by Anand Rathi: Buy Berger Paints, Mindtree, GCPL

NIFTY: BUY
 
TARGET: 11,300
 
STOP LOSS: 11,100
 
Nifty closed in the negative territory in the last trading session and it has taken a good support at the 200-day moving average (DMA); hence, a probability of a bounce back is quite high. The momentum indicator moving average convergence divergence (MACD) too, appears, oversold at the current moment. Thus, we recommend buying at this level for the upside target of 11,300 with a stop loss of 11,100. READ MORE

NEWS ALERT

NEWS ALERT | CCD founder VG Siddhartha went missing last night in Mangalore: Reports

According to the report, the news emerged after the Mangaluru City Police started a search for a person who had jumped off the kilometre-long Ullal bridge on Monday night.
 
The report said that one of the police officers confirmed that a person was suspected to have jumped off the Ullal bridge, which is built across the River Nethravathi, at 9pm. READ MORE
V G Siddhartha, Café Coffee Day's founder

Bulk deals on NSE as on Monday

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


Rupee Check

Source: Bloomberg


Oil Check

At 8:04 am, Brent Crude Futures were at $63.91 per barrel

SGX Nifty

At 8:02 am, SGX Nifty was trading at 25.5 points highers at 11,236.5 level, indicating a flat to positive start for domestic indices

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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