Benchmark indices ended Friday's volatile session in the red, thus recording fall for the eighth straight day and third consecutive week, as investors remained cautious ahead of the US-China trade negotiation outcome.
The benchmark S&P BSE Sensex ended the day 96 points, or 0.26 per cent, lower at 37,463, with Tata Consultancy Services (TCS), HCL Tech, Tata Steel, IndusInd Bank and Infosys contributing the most to the indice's fall. Twenty-one of the 30 constituents of BSE ended the session with losses.
The broader index Nifty50 gave up the crucial 11,300 mark and slipped 23 points, or 0.20 per cent, at 11,279. About 1,187 shares advanced, 1,270 shares declined, and 162 shares were unchanged.
On a weekly basis, Sensex and Nifty post biggest weekly loss since October 2018, falling over 3 per cent each.
Among sectoral indices, both Nifty IT and Nifty Metal dipped more than 1 per cent. However, Nifty PSU Bank gained 2.5 per cent, the highest among the gainers.
The broader indices fared better than their benchmark peers with the S&P BSE MidCap index ending 34 points, or 0.24 per cent, higher at 14,390, while the S&P BSE SmallCap index was ruling at 14,106, up 29 points or 0.21 per cent.
HCL Technologies slipped over 4 per cent to Rs 1,08.05 on the BSE after the company announced a 100 basis point (bps) cut in the estimated operating margin (OM) for FY20 as against FY19. READ MORE
State Bank of India (SBI) shares rose nearly 3 per cent to Rs 308.05, bouncing back from day's low of Rs 292 in intra-day trade on the BSE, after the bank reported improvement in assets quality in last quarter of financial year 2018-19 (Q4FY19). READ MOREGLOBAL MARKETS
Global stocks made gains on Friday as investors held out hopes for a trade deal between the United States and China, even as another round of US tariffs on Chinese goods took effect.
European stock markets bounced off six-week lows, with Germany’s trade-sensitive DAX index leading the charge with a 1 per cent rise.
MSCI’s broadest index of Asia-Pacific shares outside Japan, which dropped more than 1 per cent early Friday, remained where they were when tariff increase kicked in, up 0.3 per cent. Japan’s Nikkei was off 0.3 per cent.
(With inputs from Reuters)
3:39 PM IST
3:38 PM IST
3:18 PM IST State Bank of India (SBI) shares rose 4 per cent to Rs 311, bouncing back 6 per cent from day's low of Rs 292 in intra-day trade on the BSE, after the bank reported improvement in assets quality in last quarter of financial year 2018-19 (Q4FY19). The bank’s gross non-performing assets (NPAs) ratio declined to 7.53 per cent against 8.71 per cent in the previous quarter and 10.91 per cent in the corresponding quarter of the previous fiscal. Net NPAs during the period came in at 3.01 per cent against 3.95 per cent in the previous quarter and 5.73 per cent in the year-ago quarter. READ MORE
SBI rebounds 6% from day's low on improved asset quality in March quarter
State Bank of India (SBI) shares rose 4 per cent to Rs 311, bouncing back 6 per cent from day's low of Rs 292 in intra-day trade on the BSE, after the bank reported improvement in assets quality in last quarter of financial year 2018-19 (Q4FY19). The bank’s gross non-performing assets (NPAs) ratio declined to 7.53 per cent against 8.71 per cent in the previous quarter and 10.91 per cent in the corresponding quarter of the previous fiscal. Net NPAs during the period came in at 3.01 per cent against 3.95 per cent in the previous quarter and 5.73 per cent in the year-ago quarter. READ MORE
Tata Steel records sharpest intra-day fall since November 2016; slips 8%
Tata Steel slipped 8 per cent to Rs 480 on the BSE in intra-day deal on report that the company's joint venture (JV) with Thyssenkrupp may fail as the deal is yet to be approved by European regulators who have expressed concerns about its impact on competition. The stock recorded its sharpest fall since November 15, 2016, when it dipped 8.3 per cent during intra-day trade on the BSE. READ MORE
NEWS ALERT | Kajaria Ceramics Q4 result
- Net prfit at Rs 66 cr vs Rs 77.5 cr y-o-y
- Revenue comes at Rs 815.3 cr vs Rs 840 cr
- EBITDA comes at Rs 123 cr vs Rs 141 cr
SBI reports Q4 profit of Rs 838 crore, NPAs decline
State Bank of India (SBI) on Friday reported standalone net profit at Rs 838.4 crore for the March quarter of the financial year 2018-19 (FY19). The state-owned lender had posted a loss of Rs 7,71l.17 crore in the year-ago period. Analysts had expected SBI to post a net profit of around Rs 3,900 crore, up 0.3 per cent on a sequential basis. READ MORE
SBI stock reacts to March quarter numbers
SBI Q4 results
Exceptional items for the year ended March 3I,201,9 include:
a) Net profit of Rs 473.12 crore on sale of partial investments in our subsidiary SBI General lnsurance Company Limited;
b) Net profit of Rs 1,087.43 crore on transfer of the bank's merchant acquiring business (MAB) to a wholly owned subsidiary SBI Payment Services Private Limited (SBIPSPL) pursuant to a business transfer agreement dated September 29,2OL8 for a consideration of Rs 1,250 crores
The bank has made a provision of Rs 3,984 crores for the year ended March 31, 20I9 towards arrears of wages due for revision w.e.f November I, 2OI7
Analysts had expected slippages at around Rs 10,000 cr
Phillip Capital sees slippages around Rs 10,000 crore in the recently concluded quarter and expects strong recoveries from power sector accounts. “Slippages will mainly come from watch list… Containment of slippages and strong recovery from power sector NPA is likely to improve gross/net NPA (GNPA/NNPA),” said a Phillip Capital result preview note.
Sectoral trend on NSE
RIL erases gains
NEWS ALERT | Shakti Pumps up nearly 3% on strong Q4 result
- Net profit up 64.9% y-o-y at Rs 16.5 cr
- Revenue up 22% at Rs 159.5 cr
Venky's slips 6% on weak March quarter results, stock nears 52-week low
Venky’s (India) shares slipped 6 per cent to Rs 1,820 on BSE in the intra-day trade on Friday after the company reported 41.5 per cent year on year (YoY) drop in its net profit at Rs 29.94 crore in March quarter (Q4FY19), due to higher raw material costs. It was the third straight quarterly decline in net profit for the company. READ MORE
Result impact | Nocil slips nearly 4%
- Net profit down 29.8% to Rs 35.8 cr from Rs 50 cr. y-o-y
- Revenue down 12% to Rs 242.6 cr from Rs 276 cr y-o-y
- EBITDA drops 30.2% from 84.6 cr to Rs 59 cr
NEWS ALERT | PVR Q4 result
- Consolidated EBITDA at Rs 160.8 crore, margin 19.2%
- Cons. net profit at Rs 46.4 crore
- Cons revenue at Rs 837.6 crore
NEWS ALERT | Strides Pharma Q4 result
- Adjusted net profit at Rs 60.9 crore
- Reported EBITDA at Rs 158 crore, up 57% y-o-y
- EBITDA margin at 18.8%
- Revenue comes at Rs 839 crore, up 24% y-o-y
Elara Capital on Gujarat State Petronet
Target Price : INR 229
Upside : 31%
CMP : INR 175 (as on 09 May 2019)
Gujarat State Petronet reported a PAT of INR 1.5bn, down 3% YoY vs our estimates of INR 1.7bn. The negative surprise was on lower transmission volume and other income. Gas transmission volume was down 5% YoY to 32.4mmscmd vs our estimates of 34.5mmscmd. The transmission tariff improved 28% YoY to INR 1,447/mscm, with a 28% tariff hike in H2FY19 by the gas regulator (PNGRB) for the high pressure pipeline network. Subsequently, strong EBITDA growth continued at 14% YoY, however, PAT declined YoY due to higher interest cost at INR 505mn, up 390%, on acquisition of Gujarat Gas stake from GSPC.
Cyclone Fani' Odisha carnage may weigh on micro-financiers' asset quality
Cyclone Fani, which hit Odisha's coast last Friday, could hurt the asset quality of some micro finance lenders such as Bharat Financial Inclusion (BFIL), Ujjivan Financial Services, L&T Finance Holdings, CreditAccess Gramen and Bandhan Bank. READ MORE
Nifty Metal index falls over 1%, dragged by Tata steel
Tata Steel slips in trade
Buzzing | Shree Metalloys plummets over 4% ahead of Q4 results
Syndicate Bank up 2% ahead of Q4 result
NEWS ALERT | Datamatics Q4 results
- Net profit comes at Rs 26.4 cr, up 74.1% y-o-y
- Revenue reported at Rs 307 crore, up 30.7% y-o-y
ICICI Securities on Tata Communications
We continue to believe that long term roadmap on the data segment is a tall ask. We would await traction and profitability in innovation services (a major chunk of the margin expansion guidance), before turning constructive. We continue to maintain our HOLD rating on the stock, valuing it at Rs 540/share on an SoTP basis. The target price is inclusive of the value from the land bank. Furthermore, acquisition of TTSL is still awaited. If undertaken, it could result in increase in leverage, which is negative.
Buzzing | South Indian Bank slips almost 5%
Higher receivables for renewable IPPs in a few states a credit concern: ICRA
Renewable IPPs (Independent power producers), especially wind and solar energy plants, are facing a mixed trend with respective to collection pattern from state distribution utilities, with worsening of receivable position in a few states emerging as a credit concern. As per ICRA note, the overdue receivable position for the renewable IPPs (wind & solar) in states such as Telangana and Andhra Pradesh have worsened to about 8 to 11 months, while that from utility in state of Tamil Nadu has been even higher with overdue receivable position exceeding 15 months for few entities rated in ICRA’s portfolio. This exposes the IPPs in these states to higher credit risks.
Result impact | Venky's India down 4% on weak Q4 nos
- Net profit and EBITDA down over 40 % y-o-y
Jet Airways gains 24% in three days ahead of buy-out bidding outcome
Shares of Jet Airways inched up for the third consecutive day on Friday, rallying 7 per cent intra-day on the BSE to quote Rs 158 apiece after the airline received its first formal buy-out bid.
State Bank of India-led lenders'consortium had invited bids from potential buyers, for the temporarily shut airline, till May 10. READ MORE
Buzzing | PNB Housing Finance zooms over 9%
Nifty PSU Bank is trading over 1% higher
Anand Rathi on Atul
Last close: Rs 3,574
Target price: Rs 4,000
Driven by the strong performance of each division, Atul exited FY19 at a high, with 22.5% revenue and 55% PAT growth to `40.3bn and `4.4bn. Further, the EBITDA margin came at a higher ~19%,chiefly due to strong price growth resulting from short supply on the strict implementation of environmental norms in China. With the greater utilisations through capitalising on latent revenue potential, we estimate that Atul would achieve sales of ~`50bn by FY21. We maintain our Buy rating, and our price target of Rs 4,000.
Top gainers and losers on S&P BSE Sensex
Sectoral trends on NSE at this hour
Anand Rathi on Star Cement
Last close: Rs 106
Target price: Rs 135
Sturdy demand continued to drive Star Cement’s performance, though profitability suffered from higher costs. Its continuous efforts on cost rationalisation, however, government subsidies and a strong demand outlook would boost its performance. Despite capex for coming expansions, the company would still hold to a net cash position in FY21. We are sanguine about its prospects and retain our Buy rating, with a target of Rs 135.
NEWS ALERT | Weak El Nino conditions prevail: Met Dept
- May ease in summer months.
Elara Capital on HCL Tech
Target Price : INR 1430
Upside : 26%
CMP : INR 1132 (as on 09 May 2019)
HCL Technologies organic revenue growth guidance of 7-9.0% is in line with our expectations of 8.4% organic growth over FY20 and in the same range. The margin guidance of 18.5-19.5% is a full 100bp lower YoY. We believe this is just a temporary phase, with margin being affected in FY20, due to 1) investment ahead of integration of IBM products in June 2019, and 2) continued investments in Mode-2 segment that is 18.9% of revenue as on 4QFY19. Management confirmed gross margin for the Mode-2 segment is ahead of the company average and up YoY, but EBIT margin at 13.1% as on 4QFY19 is 590bp below the company average of 19.0%; it also has confirmed margin will expand once revenue in this segment scales up.
Elara Capital on KEC International
TARGET PRICE: Rs 450
We raise our earnings by 1% in FY20E but cut in 1% in FY21E on higher interest cost and introduce FY22. We reiterate Buy with a new TP at Rs 450 from Rs 440 as we roll forward by a quarter to 18x (unchanged) March 2020E P/E. Given strong orderbook in T&D and continued execution in non-T&D, we expect an earnings CAGR of 13% over FY19-22E vs 50% over FY16-19 and an average ROE of 20% & ROCE of 15% over FY19-21E.
Anand Rathi Financial Services on Star Cement
The company’s coming expansion plans are on track. The Siligudi plant is expected to be commissioned by Q3 FY20, and a debottlenecking exercise is expected in Q2 FY20. Capex estimated by the company for FY20 is Rs 3.5 bn. Despite capex plans, with the aid of subsidies, the net-debt-to-equity will be nearly -0.2x in FY21. We expect a 12% PAT CAGR over FY19-21. With the better growth prospects and operational performance, we retain our Buy rating with a higher target price of Rs 135 based on 10x FY21e EV/EBITDA.
Risk: Rising operational costs.
Motilal Oswal Financial Services on Asian Paints
We cut our FY20/21 EPS forecast sharply by 16.5%/15.3% to factor in (a) the slowdown amid a higher fixed cost environment, with Asian Paints having just finished a massive round of capacity addition (>50% capacity added over the last six months), (b) the weakening operating performance and (c) the deteriorating mix over the past few quarters severely affecting the gross margin.
Notably, even after the sharp earnings cut, the FY21 EBITDA margin forecast of 18.2% is at the higher end of the longer-term average, which too could be at risk if crude prices increase further. We, thus, downgrade our rating on the stock to Sell with a target price of Rs 1,150 (targeting 40x FY21E EPS).
Momentum Picks by ICICI Securities
HT Media slips 2% ahead of Q4 result
HCL Technologies slips 4% on disappointing margin guidance for FY20
HCL Technologies slipped 4 per cent to Rs 1,084 on the BSE during the early morning trade on Friday after the company announced a 100 basis point (bps) cut in the estimated operating margin (OM) for FY20 as against FY19. The company sees the OM at 18.50 – 19.50 per cent in constant currency (CC) terms for the current financial year. READ MORE
L&T Q4FY19 preview: Commentary on Mindtree acquisition in focus
Larsen & Toubro (L&T), the engineering and construction major, is scheduled to release its March quarter (January-March period) results for the financial year 2018-19 (FY19) on Friday. The company is expected to report robust performance on all fronts led by strong order inflows. During the quarter under review, L&T secured orders worth over Rs 47,000 crore and is expected to report strong order inflows growth. Key monitorables include commentary on Mindtree acquisition, working capital and order inflow. READ MORE
NEWS ALERT | Will strike back on tariff hike: China commerce min
- China’s Commerce Ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating, Reuters reported.
- Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal.
NEWS ALERT | Higher US tariff to be applicable on Chinese cargo: Reuters
- With no action from the Trump administration to reverse the increase, U.S. Customs and Border Protection imposed the new 25 percent duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.
- Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10 percent duty rate, a CBP spokeswoman said.
NEWS ALERT | US hikes tariff on $200 billion worth Chinese goods: Reuters
- Hike in tariff from 10 per cent to 25 per cent.
- No word from Washington as yet on suspension on hike decision
- Trump administration said negotiations will contiue on Friday
YES Bank rises over 2%
Zee Entertainment continues its northward journey, rises 2.5%
Nifty PSU Bank index is trading over 1 per cent higher
Voltas declines over 5% after heavy slide in Q4 profit
Jet Airways climbs almost 6%
Asian Paints slides over 2% after reporting 1.7% decline in Q4 net profit
Sectoral trend on NSE
Top gainers and losers on S&P BSE Sensex
Rupee opens 11 paise lower at 70.05 against US dollar
The rupee breached the crucial 70 level a US dollar in the opening trade on Friday amid subdued global cues and rise in crude oil prices. On Thursday, the domestic unit depreciated by 23 paise to settle at 69.94 on unabated foreign fund outflows amid simmering US-China trade tensions. READ MORE
At 09:16 am, the S&P BSE Sensex was trading 106 points or 0.28 per cent higher at 37,664 levels while the NSE's Nifty50 index was ruling at 11,311, down 10 points or 0.09 per cent.
Top gainers and losers on S&P BSE Sensex
Market at pre-open
Market at pre-open
Rupee opens lower at 70.05/$ vs Thursday's close of 69.94 against the US dollar
Breach of internal code of conduct will not hurt investors, biz: DSP MF
DSP Mutual Fund (MF) said Thursday code of conduct breaches by six of its sales department employees will not impact its investors or company's business.
"It is important to note that the said breaches related to transactions done in their personal capacity and have absolutely no effect on investors, distributors or the business. The internal inquiry committee has till date found no evidence of any insider trading or front-running or any other illegal activities. The organisation’s actions are a reinforcement of our commitment and belief in our core pillars: honesty and integrity," said a statement by the fund house. READ MORE
HCL Tech overtakes Wipro to become third-largest IT services firm in India
HCL Technologies (HCLT) on Thursday surpassed Wipro to become the third-largest IT services firm in India in 2018-19, making the first change in the pecking order of the country’s $170-billion IT outsourcing industry in the last seven years.
The Noida-based IT services firm announced its revenues touched $8.63 billion in the last financial year, a rise of 10 per cent over the previous financial year. READ MORE
Reliance Industries buys British toy retailer Hamleys for about Rs 620 cr
Mukesh Ambani-led Reliance Industries (RIL) will acquire British toy retailer Hamleys for a cash consideration of £67.96 million (about Rs 620 crore), the company said in a statement on Thursday.
“Reliance Brands, a subsidiary of RIL, and C. banner International Holdings, a Hong-Kong listed company, today signed a definitive agreement for Reliance Brands to acquire 100 per cent shares of Hamleys Global Holdings, the owner of the Hamleys brand, from C. banner International,” the company said in its statement to the BSE. READ MORE
SBI, L&T, HCL Tech, RIL, Eicher Motors and Voltas among top stocks to watch
Here's a look at the top stocks that may remain in focus today -
SBI, L&T: State-owned State Bank of India (SBI) is scheduled to announce its March quarter results for 2018-19 today. According to sector analysts, SBI is expected to post a net profit of around Rs 3,900 crore, up 0.3 per cent on a sequential basis. Engineering and construction major Larsen & Toubro will also report its March quarter earnings later in the day.
Earnings Today: A total of 56 companies are slated to release their Q4 numbers today including names such as Canara Bank, Allahabad Bank and Eicher Motors. READ MORE
Slowdown in equity flows amid election result uncertainty hits MF industry
The Rs 24-trillion mutual fund (MF) industry, grappling with the issue of debt exposure, has been hit hard by a sharp slowdown in equity inflows. In April, the inflows into equity schemes, including tax-saving ones, dropped 60 per cent compared to the previous month to Rs 4,608 crore, the lowest since September 2016. READ MORE
Retail investors should avoid InVITS unless they know underlying business
Recently, capital market regulator Securities and Exchange Board of India reduced the minimum investment limits on real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). The minimum subscription limit for REITs is brought down to Rs 50,000, from the earlier Rs 2 lakh. READ MORE
SBI Q4 result preview: Profit growth may be muted; slippages to be watched
Analysts at HDFC Securities, for instance, peg the net profit for the recently concluded quarter at Rs 3,970 crore on the back of a reduced loan loss provision (LLP), while those at Elara Capital remain optimistic and see the profit after tax (PAT) at Rs 4,252 crore, up 7.6 per cent quarter-on-quarter (q-o-q). The bank had incurred a loss of Rs 7,718 crore in the same quarter last year, but had posted a profit of Rs 3,955 crore in Q3FY19. READ MORE
Four different ways to play markets when you are unsure of the direction
Options give you the opportunity to trade with limited risk. For example, when you are bullish on the stock or the index, you can buy a call option and when you are bearish you can buy a put option. In case you are moderately bullish or moderately bearish, you have strategies like a bull call spread or a bear put spread respectively. But all these strategies are fine when you have a view on the direction of the market. What if your view is that the direction of the market cannot be known? Is there is a strategy for that? Firstly, what do we mean by directionless markets? READ MORE
Anand Rathi on Visaka Industries
Higher selling & branding expenses along with losses due to a delay in the Jhajjar plant commencement and losses in ATUM resulted in Visaka's restrained operating performance in Q4. On the Jhajjar plant commencing, we expect lead-distance rationalisation and working-capital reduction. The yarn division's better performance is another positive. We retain our Buy rating, with a TP of Rs 495.
Nifty outlook by HDFC Securities
Nifty shifted into a volatility yesterday, post sharp weakness of the last two sessions and closed lower. A small body negative candle was formed with gap down opening. Technically, this pattern indicates a formation of high wave type candle pattern. Nifty is currently placed near the support of upper channel line around 11270 levels. Hence, a formation of high wave type candle pattern near the supports needs to be viewed carefully. There is a possibility of upside bounce from the lows in the short term.
Elara Capital on KEC Industries
Target Price : INR 450
Upside : 53%
CMP : INR 294
KEC International (KECI IN) management guided for revenue growth of 15-20% in FY20 (our estimates of 18%) on the back of strong T&D orderbook of INR 150bn, execution in railways and the civil business. The company expects the SAE business to grow by 30-40% as execution in Brazil picks up and railways revenue could touch INR 23-24bn in FY20 from INR 19bn in FY19 (exceeding target of INR 17bn). It expects EBITDA margin of 10.0-10.5% in FY20 (FY19: 10.5%).
We raise our earnings by 1% in FY20E but cut in 1% in FY21E on higher interest cost and introduce FY22. We reiterate Buy with a new TP at INR 450 from INR 440 as we roll forward by a quarter to 18x (unchanged) March 2020E P/E. Given strong orderbook in T&D and continued execution in non-T&D, we expect an earnings CAGR of 13% over FY19-22E vs 50% over FY16-19 and an average ROE of 20% & ROCE of 15% over FY19-21E.
Today's picks: From BPCL to JSW Steel, hot stocks to buy on Friday
Commodity outlook by Tradebulls Securities: Buy lead, Sell Natural gas
Dollar index is trading near 97.30 and is looking strong; thanks to escalate in trade war tension. The US President has threatened to hike tariffs from 10 per cent to 25 per cent on Chinese goods from Friday if US-China trade deal does not happen.
This has put the market in risk-mode and all the risky assets, be it commodity and equity, saw sell off. Safe haven buying was seen as the greenback got stronger and gold saw some buying. Indian rupee has also depreciated on back of weak Indian equity market and foreign institutional investors (FIIs) outflow. We expect Indian rupee to test levels of Rs 70.50 soon if Trump implements higher tariffs on $200 billion worth of goods from China. READ MORE
Derivative Strategy for Divi's Lab by HDFC Securities
Sell Divi’s Lab May Future @ Rs 1,634
Stop loss: Rs 1,660
Target: Rs 1,595
- Short build up is seen in the Divi’s Lab Futures’, where we have seen rise in Open Interest with price falling by 3 per cent.
- The stock has broken down on the daily chart, to close at its lowest level since February 26, on the daily charts with higher volumes
- It is trading below its 5 and 20 day-SMA (simple moving average) indicating the stock is in downtrend for the short term.
- Oscillators and momentum indicators like relative strength index (RSI) and moving average convergence divergence (MACD) are indicating weakness in the stock. READ MORE
Top stock calls by Anand Rathi: Buy HDFC, Indraprastha Gas; sell Divi's Lab
STOP LOSS: 11,400
Nifty has closed in the negative territory in the last trading session for the seventh consecutive day now. The daily momentum indicator MACD is in the sell mode on the daily as well as weekly charts. Hence, the probability of a further downtrend is high. The index has been forming lower tops and lower bottoms and till that continues, the overall trend will remain negative. The short term support is pegged at 11,225, whereas resistance is pegged at 11,400; hence, we recommend selling. READ MORE