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Friday, 3 May 2019

Top buy and sell ideas by Prakash Gaba, Rajat Bose, Mitessh Thakkar for short term

Benchmark indices failed to hold 11,750 level and ended marginally lower in lacklustre trade on May 2. The Sensex ended 35.78 points down at 39,031.55, while Nifty closed 6.50 points lower at 11,748.20.

The Nifty after opening marginally lower at 11,725.55 remained rangebound throughout the session. The index touched an intraday high of 11,789.30 and low of 11,699.55, before closing 23.40 points lower at 11,724.80.

India VIX moved up 5.19 percent at 22.96. Higher VIX suggests that volatile swings could continue in the market ahead of election polls and outcome.

According to the Pivot charts, the key support level is placed at 11,686.43, followed by 11,648.07. If the index starts moving upward, key resistance levels to watch out are 11,776.23 and 11,827.67.

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Source: Moneycontrol

Stocks in the news: Tata Motors, Hero MotoCorp, HUL, Orient Paper, Godrej Properties, Blue Star

Here are the stocks that are in news today:

Results Today: HUL, Century Textiles, Birla Corp, Godrej Consumer Products, L&T Technology Services, Tata Chemicals, Visaka Industries, VST Industries

Tata Motors total domestic sales for April 2019 declined by 20% at 42,577 units against 53,511 units, YoY

Hero Motocorp April auto sales

Total sales at 5.74 lakh units

Tata Motors April sales:

Total JLR US sales up 10% at 9,312 units

Total Jaguar US sales up 6.3% at 2,147 units

Total Land Rover US sales up 11.1% at 7,165 units

National Fertilisers Q4

Net Profit up 19.5% at Rs 81 crore versus Rs 67.7 crore

Revenue up 47% at Rs 3,088 crore versus Rs 2,099.7 crore

Sunteck Realty Q4

Net profit up 2.9% at Rs 63.4 crore versus Rs 61.6 crore

Revenue up 30.5% at Rs 269.7 crore versus Rs 206.7 crore

Tata Power Q4

Consolidated net profit down 95.5% at Rs 57.6 crore versus Rs 1,291.5 crore

Consolidated revenue at Rs 7,230.2 crore versus Rs 7,216.9 crore

L&T Infotech Q4

Net profit at Rs 378.9 crore versus Rs 375.5 crore

Rupee revenue up 0.5% at Rs 2,486 crore versus Rs 2,472.9 crore

Dollar revenue up 2% at USD 353.8 million versus USD 346.9 million

Orient Paper Q4 net profit jumped 105% to Rs 32.4 crore versus Rs 15.8 crore, YoY

Blue Star Q4 net profit at Rs 79.8 crore versus Rs 31.7 crore, revenue up 18.5% at Rs 1,595.8 crore versus Rs 1,346.3 crore, YoY

Laurus Labs Q4: Net profit down 4.2% at Rs 431 crore versus Rs 450 crore, revenue up 13.4% at Rs 635.1 crore versus Rs 560.2 crore, YoY

Godrej Properties purchases R.K. Studios' land in Chembur, Mumbai

Standard Life to sell 1.78% stake in HDFC Life Insurance on May 3 & May 5

IRCON International wins Railway work worth USD 91.27 million in Sri Lanka

Persistent Systems joins Siemens' MindSphere Partner Program to bring Industrial IoT solutions to market

DLF transferred its property, Mall of India, Noida to one of its subsidiaries, Paliwal Real Estate at an arms-length consideration of Rs 2,950 crore

Grasim Industries' brownfield expansion of 45 TPD Value Added Speciality Fibre capacity at Kharach in Gujarat has been fully commissioned from May 1 2019

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Source: Moneycontrol

Market Live: Nifty around 11,750, Sensex up nearly 100 pts; Jet Airways falls 5%

Buzzing: Shares of Bombay Dyeing and Manufacturing Company rose nearly 12 percent in the early trade on Friday after company turns profitable in the quarter ended March 2019.

Market Opens: It is flat start for the benchmark indices on May 3 with.

The Sensex is up 41.39 points at 39022.82, while Nifty is up 10.90 points at 11735.70. About 318 shares have advanced, 187 shares declined, and 31 shares are unchanged.

Yes Bank, IOC, Sun Pharma, Bharti Infratel, Coal India, HDFC, Bombay Dyeing, Suntech Realty, NFL, Orient Papers, Tata Power are among major gainers, while losers are Laurus Lab, Jet Airways, L&T Infotech, TCS and Infosys.

Among sectors, except IT and FMCG all other indices are trading in green.

Rupee Opens: The Indian rupee opened marginally lower at 69.39 per dollar versus yesterday's close 69.35.

Market at pre-open: Indian indices are trading higher in the pre-opening session.

At 09:01 hrs IST, the Sensex is up 104.26 points or 0.27% at 39085.69, and the Nifty up 30.70 points or 0.26% at 11755.50.

Brokerages View: Source: CNBC-TV18

Citi on Dabur

Buy rating, target cut to Rs 455 from Rs 520 per share

Can deliver 11%/12% revenue/EPS CAGR over FY19-22

Co sees high-single-digit volume + 2-3% pricing growth in India in FY20

Morgan Stanley on Dabur

Overweight call, target at Rs 500 per share

Both domestic & international business performed below expectations during Q4

Credit Suisse on Dabur

Maintain outperform, target cut to Rs 460 from Rs 500 per share

Weak quarter further marred by one-offs

Cut FY20/FY21 earnings estimate by 8-9%

Macquarie on Dabur

Neutral call, target raised to Rs 430 from Rs 421 per share

Like aggressiveness on market share, but it lead to near-term margin pressure

Macquarie on Britannia

Underperform rating, target raised to Rs 2,473 from Rs 2,104 per share

Cut FY20/21 EBITDA by 1%

Credit Suisse on Britannia

Maintain outperform, target cut To Rs 3,250 from Rs 3,400 per share

EBITDA growth moderating due to macro slowdown

Citi on Britannia

Buy rating, target at Rs 3,250 per share

Market share gains have accelerated in the past 6 months

CLSA on Britannia

Outperform rating, target cut To Rs 3,125 from Rs 3,400 per share

In-line volume growth but EBITDA miss

Citi on Tata Power

Neutral call, target at Rs 77 per share

Mundra UMPP's FY19 EBITDA loss widened to Rs 194 crore from Rs 153 crore In FY18

Q4 under-recoveries reduced to Rs 0.64/Unit from Rs 0.94/Unit YoY

Citi on Hindustan Zinc

Neutral call, target raised to Rs 255 from Rs 250 per share

EBITDA was 5% below Citi estimates on higher costs

Metal production fell YoY on lower mine output

Credit Suisse on Hindustan Zinc

Maintain neutral call, target at Rs 274.45 per share

Q4 results largely in-line with EBITDA/PAT +1%/-5% versus our estimates

Morgan Stanley On Coal India

Overweight call, target at Rs 268 per share

Headline growth muted; reflects base impact

For FY20, estimate production growth at 6% YoY

Nomura o Bandhan Bank

Downgrade to neutral from buy, target raised to Rs 625 from Rs 570 per share

Good show but valuations near full now

Nomura on Tata Motors

Neutral call, target at Rs 187 per share

Factoring in A 3% decline in global wholesales for JLR in April

CLSA on Kansai Nerolac

Sell rating, target at Rs 385 per share

Impact of auto slowdown was clearly visible

Management cautious on its near-term demand outlook

Credit Suisse on L&T Finance

Downgrade to underperform, target cut to Rs 110 from Rs 125 per share

Acceleration in developer loans concerning in current turbulent times

Deutsche Bank on MRF

Hold Rating, target cut to Rs 55,000 from Rs 62,000 per share

Margin trajectory continues to disappoint

Macquarie on Tata Motors

Maintain outperform, target at Rs 260 per share

JLR reported 10% growth in sales in the US in April

Macquarie on Bandhan Bank

Underperform call, target at Rs 400 per share

Expensive Gruh acquisition, promoter stake sale overhang

Macquarie on Tata Power

Neutral call, target at Rs 83 per share

Reported in-line operational results in Q4

Balance sheet improvement is underway with non-core asset sales

Macquarie on L&T Info

Outperform call, target raised to Rs 2,368 from 2,240 per share

Deal wins set stage for strong growth in FY20

Wall Street ends lower: US stocks eased further from recent record highs on Thursday as energy shares dropped along with oil prices and investors continued to digest comments by Federal Reserve Chairman Jerome Powell.

Asian markets trade lower: Asian share markets were subdued on Friday amid thin holiday trade although the dollar found support as investors pared expectations for a US rate cut this year while oil prices loitered near one-month lows on oversupply fears.

SGX Nifty: Trends on SGX Nifty indicate a flat start for the broader indices in India, a fall of 9.50 points or 0.08 percent. Nifty futures were trading around 11,745.50-level on the Singaporean Exchange.

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Source: Moneycontrol

Thursday, 2 May 2019

Closing Bell: Sensex, Nifty end lower after a lacklustre day; IT, pharma stocks drag

Market close: Benchmark indices ended lower on volatile day with Nifty fell to hold 11,750 level.

At close, the Sensex was down 50.12 points at 38981.43, while Nifty was down 23.40 points at 11724.80. About 1053 shares have advanced, 1442 shares declined, and 163 shares are unchanged.

Yes Bank, Bharti Infratel, Power Grid Corp, HDFC Bank and Hero Motocorp were the top gainers on the Nifty, while losers were Britannia Industries, Zee Entertainment, Tata Motors, ICICI Bank and IndusInd Bank.

Among the sectors, except infra all other indices ended in red led by IT, pharma, FMCG, auto and bank.

Buzzing: Share price of Hindustan Zinc declined 2 percent after company net profit fell 19.7% at Rs 2,012 crore, while revenue down 12.5% at Rs 5,491 crore.

Radico Khaitan Q4 result: Net profit rose 14.2% at Rs 39 crore versus Rs 34.2 crore, revenue up 6.1% at Rs 510 crore versus Rs 481 crore, YoY.

Kansai Nerolac Q4: Net profit down 12.3% at Rs 93 crore versus Rs 106 crore, revenue up 4.5% at Rs 1,153 crore versus Rs 1,103 crore, YoY.

Rupee at day's high: The Indian rupee is trading at day's high level at 69.50 per dollar versus Tuesday's close 69.56.

MRF Q4 results: Net profit down 14.8% at Rs 293 crore versus Rs 345 crore, revenue up 6.2% at Rs 4,073.5 crore against Rs 3,836 crore, YoY.

Buzzing: Shares of Greaves Cotton rose 4 percent after company board approves buyback of its equity shares for an aggregate amount not exceeding Rs 240 crore

Dabur India Q4 results: The company has reported 6.5 percent fall in its fourth quarter consolidated net profit at Rs 370.4 crore on the back of of Rs 75.3-crore write-off of goodwill for Turkey business.

Gruh Finance will hold a shareholder meet on June 4 for approval of the merger with Bandhan Bank

PNB housing to consider raising up to $1 billion via external commercial borrowing, on May 9. The board will also mull issuing NCDs worth up to Rs 10,000 crore in various tranches. - CNBCTV18

Bajaj Auto reported 1.96 percent rise in total sales at 4,23,315 units in April 2019 compared to 4,15,168 units it sold in the year-ago period.

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Source: Moneycontrol

Outlook for Nickel for the week (April 29,2019 – May 03,2019):

If Nickel Mcx Future breaches minor support on the downside and closes below it we may see fresh break down and Nickel Mcx Future can head towards major support on lower side around 840- 845 and if breaches minor resistance on the upside and closes above it we may see fresh breakout and Nickel Mcx Future can head towards higher levels around 950- 960

Currently Nickel Mcx Future is trading above 200 days exponential moving average and suggests long term trend is bullish. EquityPandit’s analyst predicts range for the week is seen from 950- 960 on upside and 840- 845 on downside.

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Source: EquityPandit

Britannia Industries: Steady execution in Q4 but recent demand moderation needs a close watch

Britannia Industries’ Q4 FY19 consolidated sales grew 10 percent year-on-year (YoY) aided by 7 percent volume growth in domestic business, which benefits from a ramp-up in its distribution network and higher growth in northern states. When compared to the last two consecutive quarters (Q2 and Q3), sales were flattish, which underlines the management’s observation that there has been slowdown in market place in recent months.

Result snapshot

Source: Company

Gross margin expanded 273 bps YoY (flattish quarter-on-quarter), aided by moderate inflation in the prices of key raw materials.

EBITDA margin, while benefiting from gross margin expansion, was partially offset by higher other expenses (29 percent YoY). The latter could also be due to aggressive advertising/promotion campaigns in recent times backing new launches (cakes/croissant portfolio) and World Cup campaign.

Capex plans

The management updated on its capex plans, which includes commissioning of its croissant line at Ranjangaon and salted snacks line in Bengaluru. There was no update on its greenfield project in Nepal in its submission to the stock exchanges.

Outlook

Overall, the Q4 result underlines a steady run-rate, with benefits so far from increasing distribution reach, addressing gaps in its product portfolio and geography, and cost savings programme. The company’s product strategy remains at bridging portfolio gaps in the bakery business and other adjacent macro snacking business opportunities.

Britannia remains a beneficiary of distribution reach catch up with the nearest competitor Parle and other FMCG players. Its rural exposure remains in the low 20 percent of sales, but is expanding rapidly – 26 percent increase in dealership. It is witnessing super normal growth in northern states – double-digit sales growth in the last three years. Having said that, the management's commentary on 'slowdown in market place in the recent months' should be closely watched in the near term.

The stock has already corrected by around 11 percent from its CY19 high and now trades at a reasonable multiple of 50 times its FY20 estimated price-to- earnings.

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Source: Moneycontrol

Historical data suggests May belongs to bulls; will 2019 be different?

Investors have been nervous lately on the back of political uncertainty ahead of elections, rising cude prices and weakening rupee. But if historical data is anything to go by, May could be a good month for the market.

Data shows Sensex rose in 7 instances in the month of May since 2008.

The S&P BSE Sensex jumped 20 percent in May 2009, followed by 8 percent rally in May 2014, and over 4 percent gain each in 2016 and 2017.

On the other hand, bears gripped the sentiment on Dalal Street in 4 instances since May 2008. The S&P BSE Sensex fell over 6 percent each in May 2008 and May 2012. (See chart)

April 2019 was subdued for investors as they remained on sidelines ahead of Lok Sabha election result on May 23. The muted performance is likely to continue in May as well, fear experts.

Although history suggests bulls have an upper hand but the verdict from experts remains fairly mixed. India VIX is trading at multi-year high and any disappointment on the political front could put the index in a tailspin.

“We’ve had a fairly positive view for the past few months. Going forward, our base case remains that a majority government will drive further upside. Post-election relief, optimism and confidence could drive markets higher, given the fair amount of domestic capital are on the sidelines,” Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management said.

“Until clarity emerges, the safer path for fresh capital is to wait on the sidelines. Our preference remains tilted towards a diversified portfolio of short-term bond funds, high-quality corporate bond funds, and given expectations of further rate cuts by the RBI, a weightage to moderate duration funds,” he said.

Institutional activity:

Foreign institutional investors (FIIs) remained net sellers in May in five out of the last 10 years, according to data from AceEquity. They pulled out more than Rs 8,000 crore in 2010, followed by withdrawal of Rs 5,200 crore in 2011 and around Rs 5,000 crore just last year.

“FIIs have added over $8 billion YTD, coming out of an unfavourable year. We believe the FIIs are betting on the long-term India growth story. While we are not experts to predict elections, if there is a return of the current government, it would only act as a catalyst in front-loading some of these flows,” Nitin Rao, CEO, Reliance Wealth Management told Moneycontrol.

“Currently most of the FII flows into India have been a part of the emerging market (EM) focused funds and not necessarily in India focused ETFs alone. A stable administration at the Centre could see India focused ETFs also attract flows,” he said.

Domestic institutional investors, on the other hand, were mostly net buyers in Indian markets in May for the last 10 years. They were net buyers in eight instances in the last 10 years.

They poured in more than Rs 13,000 crore in 2018, followed by over Rs 9,000 crore buying in 2017 and more than Rs 7000 crore in 2016.

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Source: Moneycontrol

Silver futures fall 0.68% to Rs 36,430/kg

Silver prices eased 0.68 per cent to Rs 36,430 per kg in futures trade Thursday as investors cut down their bets taking weak cues from overseas markets. Also, profit-booking at existing levels by speculators weighed on silver prices.

At the Multi Commodity Exchange, silver for delivery in May contracts was trading lower by Rs 248, or 0.68 per cent, to Rs 36,430 per kg in a business turnover of 499 lots.

Traders said, off-loading of positions by participants due to a weak global trend led to the fall in silver futures.

Globally, silver shed 0.02 per cent to USD 14.64 an ounce in Singapore.

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Source: Moneycontrol

'Don’t wait to invest; data shows election results don't alter market trends fundamentally'

Should election outcomes influence your investment decisions?

To answer this, first we need to check if election outcomes really alter the course of stock markets.

There may be some short-term volatility based on the noise around election time, however, economic fundamentals and corporate earnings growth drive the markets eventually.

There is evidence to suggest that election outcomes do not fundamentally alter the stock market trends.

If you go by the last 4 elections and check the 6 months Sensex performance pre & post elections there is no clear pattern that is visible that can form a basis for investment decision making.

The longer-term Sensex performance for those years, when these governments remained in power post each of the last 4 elections actually shows a direct correlation to earnings growth as shown below.

Further, for the 20-year period across the last 4 governments, the Sensex has returned about 11 percent CAGR and the EPS growth in the same period has been close to 10 percent p.a.

While equity market may at times run ahead of fundamentals (overvalued) or fall behind fundamentals (undervalued) based on sentiment and forward-looking expectations, the actual returns are in line with earnings over the long term.

It is important to stick to your investment objectives and risk-profile based asset allocation across different asset classes to derive the best outcome from your investments.

On the equity front, we believe that the Indian economy is on the cusp of earnings revival led by banks as NBFCs are facing headwinds post the recent liquidity episode.

Also, investments should revive post the elections and further support growth & earnings. While Consumption has slowed in the near term, low inflation should lead to easy monetary policy which in turn can boost consumption.

On the global front, while growth has slowed, the easing stance of the US Fed and positive feelers on US-China dispute resolution could support the markets.

We maintain our stance of being overweight on equities with a bias towards largecap stocks. At the same time, we expect midcap and smallcap stocks are due for a revival post the substantial price corrections in recent times.

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Source: Moneycontrol

Kotak Mahindra Bank Q4 profit jumps 25% YoY; should you buy, sell or hold?

The brokerages have a mixed rating on Kotak Mahindra Bank after it reported an impressive jump in profits. Jefferies downgraded the stock to Underperform, while CLSA maintained 'buy' rating on the company.

The private lender reported Q4 standalone net profit at Rs 1,407.8 crore against Rs 1,124 crore reported in the same quarter last fiscal.

The net interest income (NII) of the bank rose 18 percent at Rs 3,048 crore against Rs 2,580 crore in Q4FY18.

Gross NPA stood at 2.14 percent versus 2.07 percent, while net NPA was at 0.75 percent versus 0.71 percent, QoQ.

Here what brokerages recommended on Kotak Mahindra Bank post Q4 results:

Morgan Stanley | Rating: Overweight | Target: Rs 1,600

The research house maintained Overweight call with a target at Rs 1,600 per share. The company's consolidated PAT was 5 percent below estimate, which is mainly driven by lower bank earnings, it said.

The key positive was strong RoEV/higher margin in insurance.

Macquarie | Rating: Outperform | Target: Rs 1,445

Macquarie has maintained Outperform call on the stock with a target at Rs 1,445. According to Macquarie, the consolidated profit was in-line with expectations. The loan growth was modest and lagged retail focussed peers such as HDFC Bank, it added.

Jefferies | Rating: Underperform | Target: Rs 1,175

Jefferies has downgraded the stock to underperform with a target at Rs 1,175 per share.

It said bank's RoEs remain capped at sub-16 percent on a consolidated basis. The calculations at current levels look expensive.

Deutsche Bank | Rating: Buy | Target: Rs 1,550

Deutsche Bank has maintained Buy call with a price target at Rs 1,550 per share. The company's insurance business surprises, while banking business was steady, it said. It reduced consolidated earnings estimate by 2-3 percent for FY20/21.

Citi | Rating: Neutral | Target: Rs 1,460

Citi has kept Neutral call on the stock with a target at Rs 1,460 per share. The standalone PAT was in-line with consensus, the bank said. The NIM improved 15 bps QoQ on back of strong growth in CASA, while consolidated PAT dragged by weak earnings growth at subsidiaries, it said.

CLSA | Rating: Buy | Target: Rs 1,665

CLSA has maintained Buy rating and raised target price to Rs 1,665 from Rs 1,500 per share. The steady rise in earnings and quality to support the premium valuation. The company continue to outperform peers on CASA and asset quality, it added.

At 0925 hours, Kotak Mahindra Bank was quoting at Rs 1,388.35, up Rs 1.30, or 0.09 percent on the BSE.

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Source: Moneycontrol

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Friday, 3 May 2019

Top buy and sell ideas by Prakash Gaba, Rajat Bose, Mitessh Thakkar for short term

Stocks in the news: Tata Motors, Hero MotoCorp, HUL, Orient Paper, Godrej Properties, Blue Star

Market Live: Nifty around 11,750, Sensex up nearly 100 pts; Jet Airways falls 5%

Thursday, 2 May 2019

Closing Bell: Sensex, Nifty end lower after a lacklustre day; IT, pharma stocks drag

Outlook for Nickel for the week (April 29,2019 – May 03,2019):

Britannia Industries: Steady execution in Q4 but recent demand moderation needs a close watch

Historical data suggests May belongs to bulls; will 2019 be different?

Silver futures fall 0.68% to Rs 36,430/kg

'Don’t wait to invest; data shows election results don't alter market trends fundamentally'

Kotak Mahindra Bank Q4 profit jumps 25% YoY; should you buy, sell or hold?