Sensex, Nifty close in the red, erase early gains; Bharti Airtel, ITC top drags

Indian shares erased early gains and closed in the red on Wednesday, dragged by index heavyweights like Bharti Airtel, ITC and Infosys. After rising as much as 0.4%, Sensex settled at 38,310.49, down 59.14 points or 0.15%. Nifty declined 7.95 points or 0.07% to close at 11,300.45.

L&T, rising over 4%, was the top Sensex gainer, followed by Titan, NTPC, TechM and Ultratech Cement. Bharti Airtel, Sun Pharma, ITC, IndusInd Bank and SBI were among the laggards on the other hand. Of 30 Sensex shares, 16 closed in the red.

Shares of Emami Ltd have surged as much as 38% since it announced its June quarter results on Friday. It is noteworthy that the stock has been an unloved one in the consumer space for a long time.

In fact, even after the recent outperformance, the stock price has dropped by about 45% over the last five years, sharply underperforming the Nifty 200 index. And, there are reasons for the low investor confidence. (Full report)

The deal was announced last August by RIL chairman and managing director Mukesh Ambani, wherein Aramco was to pick up a 20% stake in the company’s oil and chemicals business for $15 billion, at an enterprise value of $75 billion. (Full report)

“Metropolis Healthcare Q1FY21 numbers were above our expectation. From 62.6% revenue degrowth (including covid testing) YoY in April'20, the Company has registered mid double digit revenue growth in July'20. We expect non-covid business to be back to normal from Q3FY21 onwards. We expect Covid-19 will speed up the pace of consolidation in the industry. We are positive on the long term prospects of the Company given expected long term growth rates of ~15% CAGR, stable margins profile and moderating competitive intensity,” said Keshav Lahoti- Associate Equity Analyst, Angel Broking Ltd.

Motilal Oswal has maintained a 'buy' rating on Gujarat State Petronet with a target price of ₹300. "At 25% holding company discount, the 54% stake in Gujarat Gas (and 27.5% stake in Sabarmati Gas) provides a valuation of INR141/share for GUJS, implying 3.6x FY22E P/E for the standalone business. The stock is trading at 10.7x FY22E P/E and we value GUJS at 8x standalone and reiterate Buy with a target price of INR300/share." the brokerage said.

Rupee settles 1 paisa lower at 74.84 against US dollar.

After Russia approved the world's first covid-19 vaccine-- Sputnik-V--travel and leisure stocks have skyrocketed. Shares of InterGlobe Aviation Ltd, which runs IndiGo airlines, have risen over 21% this week, while hotel chains Indian Hotels and Lemon Tree Hotels Ltd saw their stocks surge 24% and 36% respectively. Shares of cinema chains PVR and Inox Leisure have risen by over 11% each. (Full report)

Exits by private equity investors continued to see minimal activity in the month of July, even as investments picked up sharply to $3.7 billion, the highest monthly figure so far this year, according to a report by IVCA and EY.

Exit activity continued to remain subdued, with only $134 million in exits, primarily comprising of open market exits, the report said, adding that the month of July did not witness a single PE-backed IPO or secondary exit.

July 2020 recorded nine exits worth $134 million, 78% lower than the value of exits in July 2019 ($616 million) and 76% lower than the value recorded in June 2020 ($564 million).

The largest exit in July 2020 saw Warburg Pincus sell its 2.3% stake in Au Small Finance Bank Limited for $69 million.

Bharat Forge on Wednesday reported a consolidated loss of 127.3 crore for the quarter ended June 30.

The company had posted a consolidated profit of ₹171.9 crore in April-June period of the previous fiscal, Bharat Forge said in a filing to the BSE.

The company's income during April-June period declined to ₹1,199.2 crore from ₹2,372.7 crore in the year-ago period.

The Nifty auto index is down only 4% from its February highs now. Comparatively Ashok Leyland's stock is 36% lower from its February highs. The June quarter results explain the divergence in performance. (Full report)

SBI Mutual Fund sold 2.9 crore shares of Vedanta. The stock was in news recently as Moody's has assigned B3 rating with negative outlook to Vedanta's USD notes earlier this week on Tuesday. (Full report)

Shares of Bharat Forge Ltd soared 10% on Thursday after the company impressed the Street with its cost management efforts in the June quarter and signalled stabilisation in key business segments.

The company averted operating loss and reported an earnings before interest tax depreciation and amortization (Ebitda) of ₹1.7 crore, despite being operational for just one month and running at around 20% capacity in the June quarter. (Full report)

Indian shares erased early gains and slipped into the red dragged by index heavyweights like RIL, Bharti Airtel and HDFC. After rising as much as 0.4%, at 1:15pm, the S&P BSE Sensex dropped 0.14% to 38,314.89. The NSE Nifty 50 Index declined 0.1% to 11,297.50.

Foreign money is flowing back to Indian equities as markets recouped losses after the country announced lockdown following covid-19 outbreak in March end. Data showed that foreign institutional investors (FIIs) have have turned net buyers of Indian equities in 2020 for first time since beginning of this year. In this year so far FIIs have bought Indian shares worth $1.79 billion with an inflow of $3.08 billion in August despite risk-reward for Indian markets turning unfavourable with steep valuations and weak fundamental support for equities. Uncertainties around rise of covid-19 cases worldwide and escalating geopolitical tensions have also not dettered foreign investors parking money into equities.

Motilal Oswal has put'buy' rating on Tata Power with a target price of ₹66. "Net debt declined to INR444b (from INR471b in FY20) on account of asset monetization and WC management despite the current COVID-19 environment. While certain clarity is pending with regard to upcoming new regulations for Indonesian coal mines (concerning tax and royalty), at current levels, we view the risk-reward as favorable. Divestment-related measures (International Shipping business, Arutmin, and Tata SED) and approval for the infusion of INR26b from promoters would continue to aid debt reduction. Debt reduction should lead to lower interest costs, and with normalization in its EPC businesses and some WC, we expect EPS to increase at a 9–10% CAGR over FY20–23. The approval of a tariff hike at Mundra, merger of CGPL & Tata Power Solar with TPWR, and favorable InvIT valuations provide upsides. Upgrade to Buy, with TP of INR66/sh," the brokerage said.

“Galaxy Surfactants reported Q1FY21 numbers which have come in significantly above our expectations. Company reported a 8.7% yoy degrowth in consolidated revenues for the quarter to Rs. 607 cr. EBIDTA for the quarter was down by 7% yoy to Rs. 90.5 cr. while EBIDTA margins expanded by 26bps yoy to 14.9. Net profits for the quarter was up by 7.5% yoy to Rs. 56.5 cr due to lower tax rate of 19.2% as compared31.3% in Q1FY20. We continue to remain positive on Galaxy Surfactants and it remains one of our top picks in the chemical sector given its focus on the FMCG sector,” said Jyoti Roy, DVP- Equity Strategist, Angel Broking Ltd.

“For Q1FY21 Star Cement reported a 36.6% YoY decline in consolidated revenue to ₹292 cr was below our expectation. Revenue for the quarter was adversely impacted as there was no production and sales for the cement industry during the first 20 days of April due to lockdown. Post 20th April, the cement industry gradually gained momentum. Operating profit margin declined to 22.4% from 24.3% YoY for the quarter. Company recorded a decline of 47.3% in PAT to ₹44 cr. EBIDTA and PAT were above our expectation. Going forward, pick up of construction work in urban areas and local lockdowns will be key monitatables for the Company,” said Keshav Lahoti- Associate Equity Analyst, Angel Broking Ltd.

Motilal Oswal has maintained 'buy' rating on Bharat Forge with a target price of ₹500. "We estimate consol. revenue/EBITDA/PAT to grow at a 6%/19%/31% CAGR (FY20–23E). The stock trades at 28.7x FY22 consol. EPS and 15.3x EV/EBITDA. Maintain Buy, with TP of ~INR500 (~28x Sept’22 consol. EPS)," the brokerage said.

Prime Minister Narendra Modi on Thursday rolled out a programme for honouring honest tax payers and for making tax collection more transparent, which he said, will make taxation fairer and tax payers fearless. (Full report)

The company reported a consolidated net loss of ₹15.27 crore for the quarter ended 30 June. Thermax Ltd had posted a ₹62.76 crore net profit during the corresponding quarter of the previous financial year.

Shares of Tata Power on Thursday jumped as much as 8% after the company said its consolidated net profit rose by 10 per cent for quarter ended June.

Tata Power on Wednesday said its consolidated net profit rose by 10 per cent to ₹268 crore for the quarter ended June on the back of reduced expenses.

The company had posted a net profit of ₹243 crore during the same period a year ago, it said in a BSE filing.

During April-June, the company reported a total income of ₹6,540 crore as compared to ₹7,874 crore in the year-ago quarter.

Yes Securities has maintained 'buy' rating on Capacite Infraprojects with a target price of ₹147. "With significant impact of COVID on topline and margins, we cut our estimates for FY21. We believe, normalcy would only return from Oct’20 onwards. We expect revenues and margins to improve in FY22 as execution picks up. We believe, the comfortable balance sheet position would help execute the strong order book. We maintain our BUY rating on the stock for target of Rs.147 (9x FY22 EPS)," the brokerage said.

The ₹3,089 crore rights issue of Mahindra & Mahindra Financial Services (Mahindra Finance) was subscribed 1.3 times on Wednesday, the final day of the share sale, the company said in a statement.

Definitive Agreements have been signed for the integration of Volvo

Buses India business into Eicher Motors' arm VECV, accroding to a regulatory filing. They will cover the manufacture, assembly, distribution, and sale of the Volvo Buses in India, and other rights forming part of the business.

Sameer Gehlaut, co-founder and chairman of Indiabulls Housing Finance Ltd ( IBHFL) on Wednesday stepped down from his current position in the mortgage lender. In regulatory filing IBHFL said that Gehlaut will be replaced by SS Mundra, former deputy governor of Reserve Bank of India, while Gehlot will take charge as the chief executive of subsidiary Indiabulls Ventures with immediate effect.

The Trump administration has relaxed some rules for H-1B visas holders allowing them to enter the United States if they are returning to the same jobs they had prior to the proclamation of the visa ban. The US Department of State advisory said dependents (spouses and children) will also be allowed to travel along with primary visa holders.

The government has allowed the sale and registration of electric vehicles without pre-fitted batteries, a move which will reduce the upfront cost of these vehicles. The battery, which accounts for about 30-40% of the total cost of EVs, can be provided separately by companies.

Tata Steel, India’s largest private steel maker, is expected to report a consolidated net loss of ₹2,276.8 crore for the June ended quarter, according to a Bloomberg poll of eight analysts. The company had reported a ₹702 crore net profit in the year-ago period.

Consolidated revenue is seen at ₹23,542 crore, 34% lower than the ₹35,947 crore it reported last year, according to a poll of six analysts. (Full report)

Rupee opens on a flat note at 74.83 against US dollar in early trade.

China's ByteDance is in early talks with Reliance Industries Ltd for an investment in its video-based app TikTok's business in India, TechCrunch reported on Thursday, citing sources.

The two companies began conversations late last month and have not reached a deal yet, according to the report.

Zydus Cadila has launched Remdesivir under the brand name RemdacTM in the Indian market priced at ₹2,800 for a 100 mg lyophilized injection.

The company’s consolidated net profit rose by 10% to ₹268 crore for quarter ended June on the back of reduced expenses. Tata Power had posted a net profit of ₹243 crore during the same period a year ago.

India’s largest cement company Ultratech Cement Ltd will invest ₹1,500 crore in capital expenditure this fiscal despite the constraints of an ongoing pandemic, according to a Mint report. With a slew of acquisitions made in the last two years, Ultratech’s global capacity is now 114.8 million tonnes per annum and is the is the only company to have a capacity of over 100 million tonnes in a single country, outside of China.

The Nifty has resumed its up move after a brief pause yesterday. We should be heading to levels closer to 11500 during the course of this month's expiry. The support for the Nifty is at 11150 so a closing below that level could be kept as a stop for all long trades.

Hinduja Group flagship firm Ashok Leyland reported a consolidated net loss of ₹388.82 crore for the first quarter ended June 30, owing to the coronavirus pandemic. The commercial vehicle maker had posted a net profit of ₹274.96 crore for the April-June 2019 quarter.

The company reported a 22.81% rise in its consolidated net profit to ₹780.68 crore for the quarter ended on June 30, 2020, mainly on account of robust sales in the US market. Aurobindo Pharma had posted a net profit of ₹635.68 crore for the corresponding period of the previous fiscal.

Private equity firm Westbridge Capital on Wednesday bought 5.43 million shares or 1.41% stake in InterGlobe Aviation Ltd, which runs India's largest domestic airline IndiGo, for ₹559 crore through an open market transaction.

Indian benchmark indices opened higher on Thursday tracking positive cues from global peers. Sensex opened at 38,456.64, up 86.99 points or 0.22%, while Nifty opened 26.45 points or 0.23% higher at 11,334.85.

SBI, Tata Steel, NTPC, TCS, Axis Bank, M&M, rising over 1% each were top Sensex gainers. Bharti Airtel, ITC, Bajaj Auto and Maruti Suzuki were among the laggards on the other hand. Of 30 Sensex shares, 26 opened in the green.

Indian stocks traded marginally higher in the pre-opening trade on Thursday. At 9:05 am, Sensex advanced 70.74 points to 38,440.37, while Nifty added 30.55 points or 0.27% at 11,338.95.

InterGlobe Aviation, Aurobindo Pharma, Tata Power, Ultratech Cement and shares of IT companies among other stocks may be in focus in today's trade.

Indian equities snapped four straight sessions of gains on Wednesday, led by decline in pharma, metal stocks amid economic growth concerns.

After touching an intraday low of 38,125.81 in the early trade, Sensex pared some of the losses and settled at 38,369.63, down 37.38 points or 0.10%. Nifty ended 14.10 points or 0.12% at 11,308.40.

Asian stocks gained Thursday and were on course to erase this year’s declines as the global equity rally that’s driven shares higher since March continued to strengthen.

Hong Kong’s Hang Seng rose 0.4%.

Shanghai Composite added 0.3%.

Japan’s Topix index advanced 0.9%.

South Korea’s Kospi climbed 0.6%.

Singapore’s SGX Nifty gained 0.11%.

Stocks rebounded on Wall Street Wednesday, briefly inching the S&P 500 above its all-time closing high set before the coronavirus pandemic led to a historic market plunge.

The benchmark index had its eighth gain in nine days and ended within 0.2% of its record high from Feb. 19. Big technology stocks led the way higher once again. Health care and communication services stocks also had a strong showing. Financial stocks were the only laggards.

The S&P 500 rose 46.66 points, or 1.4%, to 3,380.35.

The Dow Jones Industrial Average gained 289.93 points, or 1%, to 27,976.84.

The Nasdaq composite climbed 229.42 points, or 2.1%, to 11,012.24.