Wednesday, 21 November 2018

Buy or Sell: Bank Nifty to move to 26,750; Buy IndusInd Bank


The Nifty opened positive and continued upwards to 10,774, on the back of positive momentum. Recently, it has given a consolidation breakout at 10,650, and has extended its gains by more than 120 points in the last two trading sessions, said Chandan Taparia, Derivative & Technical Analyst, Motilal Oswal Securities.

We have witnessed a positive momentum in select counters. The jump in the Put/Call ratio indicates an extended upmove. Now, the Nifty has to hold above 10,650 to move towards 10,850-10,880, he said.
Bank Nifty, despite being range-bound, has given a consolidation breakout. It needs to hold above 26,100 to move towards 26,500-26,750. On the downside, it has support near 25,750-25,800, Taparia said.

We have seen Put writing activity at 10,600, 10,700 that is likely to hold the market, he said. As of now, the option belt signifies a broader trading range of 10600-10850, he added

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Panasonic eyes Rs 140 cr sales from bluetooth trackers biz


Japanese tech giant Panasonic on Wednesday said it expects to clock sales to the tune of Rs 140 crore in the next one year from its bluetooth-based trackers that have been conceptualised and designed by its team in India.

The company, which launched two versions of its tracker 'Seekit' priced Rs 1,299 onwards, will start selling the devices online from the first week in December.

"We are starting with a small device and this will be built up into a larger ecosystem. While the market is still at a nascent stage, there is a strong potential not only in the consumer segment but also enterprise...we expect sales of Rs 140 crore in the first year," Panasonic India and South Asia President and CEO Manish Sharma told PTI.

He added that using their mSince the device has bi-directional tracking feature, it also allows users to find their phone by double pressing the button on the tracker.

If users leave their phone behind, Seekit will 'buzz and glow', reminding the user to go get it, Sharma said adding users can also click selfies using the device.

Seekit also allows users to send SOS alerts with their GPS location to three selected contacts by pressing the button on the device. The devices have a battery life of 12-18 months.

Apart from consumers, Panasonic sees a huge potential in the enterprise segment. "We are also talking to companies like luggage makers and car makers to embed our technology in various products," he said.

Sharma said reports suggest that globally the beacon market (including marketing potential) is expected to touch USD 14.8 billion by 2024. Currently, the market size is about 30 million units globally.

Beacon is a device designed to attract attention to a specific location.

"We are focusing on both Internet of Things (IoT) and artificial intelligence-based solutions at our India Innovation Centre. The launch of Seekit is strategically aligned to our objective to create a smart and connected ecosystem," Sharma said.obile phones, users can find out the location of keys and other items to which the tracker can be attached to.

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ICICI Bank, HDFC among 10 picks based on September quarter results: Motilal Oswal


The September quarter earnings season was broadly in line with expectations as far as the Nifty earnings are concerned.

In a broader sense, September quarter earnings were largely led by the commodity sector, with metals and oil & gas accounting for more than 72 percent of incremental earnings growth, Motilal Oswal said in a report.

The MOSL Universe numbers missed our expectations, entirely attributed to disappointments from PSU banks and telecom sectors. As many as 73 companies saw earnings cut of over 3 percent, while 38 companies saw upgrades of over 3 percent.

MOSL’s FY19/20 Nifty EPS estimates have been cut by 4.4/2.9% to Rs 515/655 v/s Rs 539/674 earlier. The brokerage firm expects Nifty EPS to increase 13.1 percent in FY19. And, nearly 70 percent of the earnings cut is driven by Tata Motors, IOC, Reliance Industries and ONGC.

The stock which saw earnings upgrades include Axis Bank, Bajaj Finance, and Hindalco. On the other hand, stocks which were downgraded include Tata Motors, UltraTech Cements, IndusInd Bank and Cipla which saw EPS downgrades of 78.9%, 22%, 17.7% and 16.8%, respectively.

Here is a list of top 10 stocks which Motilal Oswal handpicked post Q2 results:

ICICI Bank

ICICI Bank reported a strong quarter under the new management, as fresh slippages were in control and gross stressed assets/watchlist declined sharply.

The net earnings improved sharply led by better margins and steady loan growth. The provisioning coverage ratio continued increasing (+330bp QoQ).

Axis Bank

The net earnings came in better than expected led by steady revenue growth and controlled opex. The net interest margin (NIM) expanded 7 bps on a QoQ basis to 3.4 percent and the management guided for an improvement in the NIM as MCLR re-pricing happens.

The asset quality improved as fresh slippages subsided. Assets under the BB quality and below pool declined by 15 percent on a QoQ basis to Rs 88.6 bn, resulting in a decline in the bank’s net stressed loans.

State Bank of India

Watch-list including SMA1 and 2 declined to Rs 204 bn which constitutes less than 1 percent of the total loans. The corporate slippages declined, but non-corporate slippages stood higher.

SBI holds 70 percent provision on NCLT exposure and is expecting significant write-backs (INR60b from NCLT-1).

Maruti Suzuki

The revenues grew by 2 percent on a YoY basis to Rs 222.3 bn (in-line), led by a 3.7 percent increase in realizations to Rs 458.6k, while volume declined 1.5 percent on a YoY basis.

The EBITDA margin shrank by 240bp YoY to 14.5 percent, with the impact of higher discounts (+80bp QoQ) being offset by mix improvement. Adj. PAT declined ~15 percent YoY to Rs 21 bn

HDFC

Total AUM grew 17 percent YoY (+3% QoQ) to Rs 4.3 trillion, with corporate AUM growth at 13 percent YoY. GNPA ratio declined 5 bps QoQ to 1.13 percent, driven by a 14 bps QoQ fall in corporate GNPLs to 2.18 percent.

During the quarter, one large corporate account of INR9b was partially recovered with <20% write off. The company has made prudent provisioning of Rs 270 crore during the quarter (30% of one-off gains on HDFC AMC stake sale of Rs 890 crore).

Titan

Despite the challenging base, Titan continued reporting strong top-line growth in Jewelry (segmental sales up 29%, aided by strong 32% SSSG, 24% volume growth), while margins came in lower than our estimate, largely due to one-offs.

The management commentary indicated that the outlook for Jewelry remains buoyant. Recovery in Watches revenues and margins continued at a healthy pace.

L&T

The revenue growth came in healthy at Rs 321 bn. The key segments driving growth were Hydrocarbon (+38% YoY), Infrastructure (+22% YoY), IT (+32% YoY) and Finance (+35% YoY). EBITDA stood at Rs 37.8 bn (+27% YoY) and margin at 11.8 percent.

EBITDA beat was driven by higher E&C margins (8.5% v/s estimate 8%), IT/TS and Others segment. The management maintained its FY19 guidance of sales growth of over 12-15% YoY, orders growth of 10-12 percent and EBITDA margin improvement of 25bp.

IOC

The marketing margin improved by 39 percent on a YoY basis, despite a weaker core GRM of USD3.5/bbl. The Petrochem EBITDA improved 51 percent YoY. PAT was further boosted by inventory gain of Rs 44 bn.

JSPL

Operating performance was strong, though there was some seasonal compression in the steel margins, both in India and Oman. The impact, however, was offset by improved profitability at overseas mines (e.g. Mozambique) and reversal of INR1b provision at Australia.

Cummins

Revenue growth was supported by healthy growth in the domestic business (+35% YoY). Operating profit increased 50 percent on a YoY basis to Rs 2.5 bn, with the margin improving 240bp YoY to 16.9 percent.


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Rahul Gandhi 'best PM material': Veerappa Moily


Telangana Assembly Polls 2018 As efforts to forge an anti- BJP front gather momentum, senior Congress leader M Veerappa Moily said Wednesday his party's president Rahul Gandhi is the "best material" to become the prime minister.

Moily said TDP supremo and Andhra Pradesh Chief Minister N Chandrababu was "doing well" to unite opposition parties.

The former Karnataka chief minister, on the campaign trail in Telangana, also said the Congress was gaining ground at the national level, while the BJP-led NDA was losing partners.

"I don't want to say that.... the question is that ultimately he (Rahul Gandhi) is the best material for the prime minister," he told PTI when asked whether the proposed anti-BJP coalition will project Gandhi as its leader.

Quoting Naidu as having said that the Congress is the "mentor" in the larger context of unity among opposition parties, Moily noted, "That's how things are shaping up".

The former union minister said there will be a consolidation of opposition parties against the NDA at the national level.

He asserted the Congress was likely to win the elections in all the five states--Madhya Pradesh, Rajasthan, Telangana, Chhattisgarh and Mizoram--where the poll process was under way.

"Things are shaping up so well, evolving so well, the opposition unity is becoming a reality, and the Congress party is picking up in all the five atates... (there's) likelihood of coming to power. Definitely, it adds up to the credibility of our leader Rahul Gandhi," he said.

Moily was dismissive about scepticism over the success of a broad-based opposition alliance with the possibility of partners squabbling on the issue of who would be the prime minister.

"All that is not correct. Everybody is united against Narendra Modi, the present BJP regime. When it comes to unity against Narendra Modi and NDA, all parties are united and that is important," he said.

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Outlook for mid & smallcaps: After a tough 2018, experts see some relief


What mid and small-cap stocks have witnessed so far in 2018 is nothing short of a carnage, but experts believe that it has offered a window for investors to bet on quality names.

Speaking on the sidelines of Moneycontrol’s Wealth Creator Awards 2018, experts highlighted how valuations and possible earnings recovery could aid such stocks.

“Mid and small-cap stocks are no longer a falling knife (kind). There has been a destruction in these names in the past 10-11 months and the market at these levels have bottomed out. In fact, we are now seeing consolidation before making the next move upwards,” Ambareesh Baliga, an independent market expert said.

Midcap indices have fallen 13-16 percent year-to-date (YTD). Small-cap index, meanwhile, has fallen 25 percent in 2018 so far. To put this in context, small-cap index’s fall is equal to what Sensex and the Nifty had gained in 2017.

The recent correction has ignited the debate — what are ‘comfortable’ valuations to enter for mid and smallcaps?

For instance, A Balasubramanian, Chief Executive Officer at Aditya Birla Sun Life AMC, believes the current situation of Indian market is that of not being very expensive, but not a very attractive one as well.

“Smallcaps have corrected 34-35 percent and that has brought valuations at reasonable levels. Risk in the system seems to have reduced and stocks look reasonably attractive,” he told the portal on the sidelines of the event.

Apart from pure valuation plays, should fundamentals (in terms of earnings) be also considered?

Nifty companies have had a good earnings story. The growth rate has been around 17 percent and only about 2-3 companies disappointed the Street, explained Krishna Kumar Karwa of Emkay Global.

“In the small and mid-cap segment, earnings have been a mixed bag. On an aggregate basis, one-third companies reported results on expected lines, while one-third of those were below expectations. The balance 33 percent of companies posted disappointing earnings. The momentum is improving for largecap earnings and that could flow into mid- and small-caps as well,” he further told the portal.

To sum up, experts feel that while one could look at these sectors, it would be prudent to keep quality names in mind.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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D-Street Buzz: Nifty IT tanks 3% dragged by TCS, Infosys; PSU banks gain, RIL sheds 2%


The  Indian stock market has extended the morning loses in this afternoon session with the Nifty50 down 74 points, trading at 10,581 while the Sensex shed 310 points at 35,164.

Nifty IT since yesterday has remained the biggest drag to the market weakness, down 3 percent in this session led by Tata Consultancy Services, HCL Tech, Infosys, Mindtree, Tech Mahindra, KPIT Tech, Tata Elxsi and Wipro.

Nifty Energy shed 1 percent dragged by Reliance Industries which shed 2 percent while on the other hand, BPCL, HPCL and Indian Oil Corporation traded in the green.

PSU banks are up led by Bank of Baroda, Bank of India, Canara Bank, Oriental Bank of Commerce, Union Bank of India and State Bank of India.

From the BSE midcap space, the top gainers included Wockhardt, Exide Industries and Union Bank of India while the top losers were L&T Infotech, MRPL and Max Financial Services.

From the BSE smallcap space, the top gainers were Kesoram Industries, 63 Moons and Minda Corp while the losers included KDDL, Max India and Rattan Power among others.

The top gainers from NSE include Dr Reddy's Labs which spiked 7 percent followed by YES Bank, BPCL, IOC and UPL.

The top losers included Infosys, Tech Mahindra, Tata Consultancy Services, Bajaj Auto and Power Grid.

The most active stocks were YES Bank, Dr Reddy's Labs, Infosys, Reliance Industries and TCS.

Aarti Industries, Adani Gas and Birla Cable were some of the few stocks which hit new 52-week high on the NSE.

64 stocks have hit new 52-week low including names like ABG Shipyard, Hexaware Technologies, Deepak Fertilizers, NTPC, SAIL and Empee Distilleries among others.

The breadth of the market favoured the declines with 740 stocks advancing and 897 declining while 423 remained unchanged. On the BSE, 1055 stocks advanced, 1218 declined and 129 remained unchanged.

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UPL rises 2% as Mauritius subsidiary buys agrochemical company in Costa Rica


 share market tips

After buying agrochemical company in Costa Rica by the subsidiary, UPL shares gained more than 2 percent intraday Wednesday.


UPL Corporation (Mauritius), the wholly owned subsidiary of the company, has signed a definitive agreement to acquire directly or through its subsidiaries 100 percent of the shares of Bioquim Group which has annual business is in excess of $20 million.

Companies, which are part of acquisition, are based at Costa Rica, Nicaragua, Panama, Dominican Republic; and Guatemala.

Bioquim Group is engaged in the business of producing, selling and marketing of agro-chemicals and crop protection products in Costa Rica and certain countries in the Caribbean and Central American Region.

The deal is expected to be completed in first half of calendar year 2019.


Bioquim Group sells its products in Costa Rica, Nicaragua, El Salvador, Honduras, Panama, Dominican Republic and Cuba. Its annual turnover from the fiscal year 2015 to fiscal year 2017 was in the range of about $18 million to $21 million.

At 12:00 hours IST, the stock was quoting at Rs 774.05, up Rs 14.30, or 1.88 percent on the BSE.

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Buy Vedanta, target Rs 230




Vedanta has been consolidating since last many days around Rs 200. Every time there is a dip below Rs 200, we can see buying interest from this level.

200-Week moving average is also placed at Rs 205. RSI is already showing signs of positive divergence on the weekly chart. In coming days, bounceback till Rs 230 is a high possibility.


Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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Infosys to create 1,200 jobs in Australia, to set up 3 innovation hubs


The Bengaluru-based company is already setting up similar hubs in the US - its largest market - and expects to hire 10,000 local workers by 2019.




IT services firm Infosys on Wednesday said it will set up three innovation hubs in Australia and create 1,200 jobs in the country by 2020.

The Bengaluru-based company is already setting up similar hubs in the US - its largest market - and expects to hire 10,000 local workers by 2019.

"The creation of 1,200 IT jobs in Australia by 2020, of which around 40 per cent will be Australian university graduates from a range of fields including computer science and design," Infosys said in a statement.

It added that the new innovation hubs will serve as a platform to enable Infosys to co-create and co-innovate alongside clients, academia and government to accelerate innovation and upskilling of talent in emerging technologies and solutions. No investment details were disclosed.

Infosys said this approach provides the company with a strong foundation to meet rising demand for expertise in areas like machine learning, artificial intelligence (AI), user experience, cyber security, digital platforms, big data and cloud.

"Today marks an important milestone for our company in our 20 year journey in Australia," Pravin Rao, Chief Operating Officer at Infosys, said.

As a key technology partner of Australian business, Infosys is proud to announce its commitment to accelerating digital skills in the region through the creation of 1,200 skilled jobs, the development of our new innovation hubs and deepening partnerships with academia, he added.

Infosys, like many of its peers, has been ramping local hiring in key markets like the US, the UK and Australia to tackle increasing scrutiny around work visas by various governments.

This is also part of Infosys' three-pronged strategy of focussing on stabilising the company's business in 2018-19, build momentum next year, followed by acceleration in 2020-21.

Infosys said it has recruited 75 graduates, and more than half have completed their induction training and are ready to be placed on strategic client projects.

"Under this programme, graduates start their Infosys learning journey in our Sydney and Melbourne training centres. They can choose from high demand areas, including artificial intelligence, machine learning, user experience, cyber security, cloud and big data," Infosys Senior Vice President for Australia and New Zealand Andrew Groth said.

So far, Infosys has opened two technology and innovation hubs, one in Indianapolis, Indiana and another in Raleigh, North Carolina in the US.

Infosys has also announced setting up of more such hubs in Hartford, Connecticut and Phoenix, Arizona, as well as a unique design and innovation hub in Providence, Rhode Island.


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A morning walk down Dalal Street | Investors should maintain cautious stance

Crucial resistance level for the Nifty is placed at 10740-10800 while supports are placed at 10,500-10440.

Weak global cues pushed the bears back in charge for D-Street. It wiped out gains made in the previous session and pushed the index below 200-DMA placed at 10752 levels.

The final tally on D-Street looked like: S&P BSE Sensex plunged 300 points to close at 35,474 while the Nifty50 was down by 107 points to end at 10,656.

Correction in crude oil prices and consistent appreciation in INR vs USD is encouraging but liquidity concerns amongst NBFCs and uncertainty in the upcoming state elections is likely to keep volatility high.

Analysts advise investors to maintain a cautious stance on the markets in near term and be selective while picking stocks.

Technically, it saw a touch-and-go moment with its long-term moving average placed at 10752.

It slipped below its crucial moving averages such as 100, 50, as well as 5-EMA.

Technical View:

Nifty formed a bearish belt hold pattern on daily charts

Crucial resistance level is placed at 10740-10800 while supports are placed at 10,500-10440

Three levels to watch out: 10440, 10640, 10740-10800

 Share Market Tips

Max Call OI: 10800, 11000

Max Put OI: 10000, 10500

Stocks in news:

Five companies -- NBCC, Kotak Investment, L&T Infrastructure, Singapore-based Cube Highways and Suraksha group -- have shown interest in taking over debt-ridden Jaypee Infratech, which is facing bankruptcy proceedings in NCLT.

NTPC has signed MoUs with Vehicle Aggregators Ola, Lithium, Shuttle, Bikxie, Bounce, Electrie and Zoom Car for development and utilization of public charging infrastructure.

IT and pharma companies will remain in focus as the rupee rose by 21 paise to end at 71.46 against the US dollar on November 20 on increased selling of the greenback by exporters amid softening crude oil prices, and persistent foreign fund inflows.

Technical Recommendations:

Here’s what they have to recommend:

Dredging Corporation: Buy| Target: Rs 415| Stop Loss: Rs 342| Return 12%

Filatex India: Buy| Target: Rs 59| Stop Loss: Rs 49| Return 11%

Raymond: Buy| Target: Rs 860| Stop Loss: Rs 730| Return 10%

Disclaimer:- The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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