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Market Highlights: Sensex rallies over 1,400 pts from day’s low, Nifty ends at 9,973; RIL up over 3%, M&M jumps 7%

sensex, Nifty

Share Market News Today | Sensex, Nifty, Share Prices Highlights: Domestic equity market benchmarks BSE Sensex and Nifty 50 staged a smart recovery in the late afternoon deals and settled over half a per cent higher on Friday. The 30-share Sensex jumped 242 points or 0.72 per cent to end at 33,781, while the broader Nifty 50 index settled at 9,973, with a gain of 71 points or 0.72 per cent. M&M share price soared over 7 per cent on the back of better traction from its farm equipment segment and was the top Sensex gainer. Reliance Industries, Bajaj Finance, Bharti Airtel, Sun Pharma, SBI and Titan were among the other top Sensex gainers. While ONGC led the pack of losers on Sensex, followed by Tech Mahindra, Power Grid, Infosys, Kotak Mahindra Bank, TCS and Axis Bank. Barring Nifty Media and Nifty IT all the Nifty sectoral indices settled in the positive territory. The Nifty Auto index jumped nearly 3 per cent led by gains in M&M, Hero MotoCorp, TVS Motor and Bajaj-Auto. Similarly, Nifty Bank index also advanced over half a per cent with Bandhan Bank, RBL Bank, IDFC First Bank and Federal Bank as top index gainers.

M&M delivered strong performance in 4QFY20 on the back of better traction from its farm equipment segment despite subdued performance of auto business. We expect company to benefit from tractor business going forward as tractor segment is linked to most essential agri output. Moreover healthy Rabi crop and higher MSP would support the industry in FY21. Therefore we remain positive on M&M: Mitul Shah, Vice President Research at Reliance Securities

The Supreme Court on Thursday asked private telecom operators like Bharti Airtel and Vodafone Idea to file affidavits within five days outlining the details as to how they will pay the adjusted gross revenue (AGR) dues. Telecom giant Bharti Airtel was among top BSE Sensex gainers with a growth of 1.6 per cent to trade at Rs 560.90 apiece in an otherwise weak market. Throughout the session, even when BSE Sensex and Nifty 50 were down over 2 per cent each, Bharti Airtel shares managed to hold ground.

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The Karnataka government has ruled differentiating paratha or parota from roti, which are essentially two types of Indian breads, and has clarified that paratha must be taxed at more than triple the GST tax rate on roti. The Authority for Advance Rulings (Karnataka bench) has said that parathas must attract 18% GST, while roti is taxed at the concessional GST tax slab rate of 5%. 

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Nifty’s Index management Sub-committee (IMSC) has announced a rejig of certain NSE indices as part of its periodic review. The reshuffle that will come into effect on June 26 will not see any change in the Nifty 50 index but will see changes in the Nifty Next 50, Nifty 100, Nifty 500, and sectoral indices. The NSE announced that Nifty Next 50 will see Ashok Leyland Ltd., Indiabulls Housing Finance Ltd., L&T Finance Holdings Ltd, New India Assurance Company, and struggling telco Vodafone Idea exit from the index. These will be replaced by Abbott India Ltd, Indraprastha Gas Ltd, Muthoot Finance Ltd, and Torrent Pharmaceuticals Ltd.

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Given new customer acquisitions, deepening business with existing customers, and increase in the ODM mix, we expect Dixon’s sales/EPS to grow at a CAGR of 19%/25% over FY20-22E. Dixon has multiple growth options, both current and future, including upcoming opportunities in electronic manufacturing- difficult to capture all of which in near term earnings forecasts in FY20-22E. We believe this will keep multiples high for the company. Hence, we increase the multiple premia by 10% to 38x(from 35x) FY22E, and raise our TP to Rs6100, and upgrade the stock to Buy: DART

Even as Indian share market traded with nearly 1.5 per cent cuts on Friday, taking cues from the global markets, Sun Pharma was among top four BSE Sensex gainers today. Sun Pharma stock gained 1 per cent to hit day’s high of Rs 479 apiece on BSE today. Sun Pharmaceuticals Industries stock has been on a gaining spree since it touched a 52-week low of Rs 315.20 in March this year. It rallied over 62 per cent from its March low and hit a 52-week high of 512.55 earlier this week.

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Indian Hotels’ performance was stable upto February (revenue up 2% YoY), but the COVID-19 impact in March (down 48% YoY) led to Q4FY20 revenue contracting 15% YoY. The company is already scouting for new revenue sources to help fill the void and also targeting cost optimisation to mitigate the Corona impact ahead. Unlike peers, IHCL’s liquidity/leverage remains extremely comfortable (net debt down YoY) and it has also managed to declare a dividend amidst the pandemic. That said, as we highlighted, recovery for the sector remains 21-24 months away and we continue to remain cautious on the sector. Maintain ‘HOLD’ with DCF-based TP of INR86 (17x FY22E EV/EBITDA).

~ Edelweiss 

In an otherwise weak share market, telecom giant Bharti Airtel saw its stock surge 1.15% to trade at Rs 557.95 per share. Bharti Airtel, is one of the private firms that might have shell out a large amount to pay the DoT’s AGR Dues. However, Analysts think  Bharti Airtel might be in a better spot to pay its dues when compared to its peers, primarily Vodafone Idea. According to ICICI Securities Bharti Airtel is comfortably placed and can provide bank guarantees as it is already sitting on a huge cash balance. Meanwhile, Motilal Oswal thinks if telcos increase tariffs to pay their AGR dues, Bharti Airtel again stands to benefit from that move as was seen in its recent ARPU performance.

While AUM (~5% YoY growth) and PPOP (down 3.2%) trends were in line, PAT was much lower than estimates on a/c of higher provisions and SHTF’s lower moratorium % vs. peer asset financiers surprised. We’ve reduced our earnings further to factor in (1) lower NIMs (persistent NIM pressure for the last few qtrs) , (2)  potential flows from high GS-II to GS-III (even as GS-III has improved slightly) and (3) higher LLPs (conservatively) due to COVID-19 related uncertainties. We would watch for SHTF’s performance on the liquidity and borrowing fronts as well as comments on the anticipated 3-way inter-group merger. We maintain ADD with a TP of Rs 825 (1.1x FY22E ABV).  SHTF’s unique business model and attractive valuations underpin our stance.

~ HDFC Securities 

Gold and silver prices fell lower on Friday despite steady rates in the international market. On Multi Commodity Exchange (MCX), gold August futures were trading with a loss of Rs 288 or 0.61 per cent at Rs 47,126 per 10 grams, while the silver July futures tumbled Rs 727 or 1.49 per cent to rule at Rs 47,912 per kg. Analysts are bullish on gold and recommend to buy the yellow metal.

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In the event that the apex court grants a 20-year staggered option plan to the incumbents to pay their AGR dues, maintaining the NPV of the balance AGR dues at an 8% interest rate, this would result in cash outgo of INR27b/INR52b per annum for BHARTI/VIL over a 20-year period. Considering VIL’s liquidity constraints, it needs a ~50% ARPU increase to achieve EBITDA of INR300b by FY22E. 

~ Motilal Oswal

The Supreme Court is today again hearing a petition seeking a waiver of interest during the period of moratorium on loan repayments. This could turn into a move that could prove disastrous for the banking institutions of the country already dealing with the threat of a spike in non-performing assets at the end of the moratorium period. If things go south for banks, it could result in lenders losing as much as 111% of their operating profits for the next fiscal year, said a report by brokerage and research firm Motilal Oswal. The moratorium period, which was earlier in March proposed by the Reserve Bank of India to be for a period of three months on term loans, was last month extended for another three months by the central bank.

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India’s biggest public-sector lender, State Bank of India (SBI) has decided to reduce its stake in SBI Life Insurance Company by 2.10% through an Offer For Sale (OFS) beginning today to achieve minimum public shareholding of 25%. At a floor price of Rs 725 per share, the OFS stands at a 2.24% discount to SBI Life’s closing price of Rs 741 apiece on Thursday. SBI Life Insurance is a joint venture between SBI and French financial services firm BNP Paribas Cardif. The divestment will see SBI sell up to 2.10 crore shares in the company on BSE and NSE.

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The Indian rupee opened weaker and fell 31 paise to 76.10 against US dollar in early trade on Friday.

Following a mammoth plunge on Wall Street, BSE Sensex and Nifty 50 tumbled over per cent in Friday’s trade. Index heavyweights HDFC Bank, HDFC, ICICI Bank, Infosys, Reliance Industries and Kotak Mahindra Bank contributed the most to the indices’ losses today.

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Markets have corrected this week after the hefty rally seen in the previous two weeks. The Nifty has gradually corrected in the last four sessions making lower tops and lower bottoms in the process. The short term moving averages like the 20-minute MA too are sloping down and below their 50-minute MA indicating a weak trend for the near term. The 14-day RSI too has dipped lower and cut its 9-day EMA in the process.

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Retain BUY rating with a 12m TP of Rs880. Believe SHTF is better placed than peers on capital position and potential recovery in collection efficiency during June-August (resilient client base). SHTF trades at 0.9x/5.4x FY22 ABV/EPS. Visibility of RoA climbing back above 2% in FY22 will re-rate valuation: Yes Securities

April Industrial Production (exp -45%) and May CPI data (exp 5.8%) is due post market hours today. The focus will also be on the RBI reserves figure to see how close they have got to the psychological USD 500bn mark. The petition for waiver of interest accrued during the moratorium period is to be heard by the Supreme Court today. The court had asked for comments from the RBI to which the RBI had responded by explaining how detrimental the waiver could be for the stability of the banking system. The court is expected to rule in favor of the RBI: Abhishek Goenka, Founder and CEO, IFA Global

IndusInd Bank was the top Sensex loser with a decline of 5.59 per cent, followed by ONGC, Kotak Mahindra Bank, NTPC, Axis Bank, ICICI Bank, Reliance Industries (RIL) and State Bank of India (SBI), among others.

Sun Pharma share price was up nearly 1 per cent at Rs 477 apiece on BSE in Friday’s weak trade. The stock hit day’s high of 478 and low of 457 apiece.

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Domestic equity market benchmarks BSE Sensex and Nifty 50 tumbled over 2.5 per cent on Friday following a mammoth plunge on Wall Street.

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Hindalco Industries, Mahindra & Mahindra, Goodyear India, Castrol India, Eicher Motors, IOL Chemicals, Pudumjee Paper Products, Suprajit Engineering and Alkali Metals are among 30 companies which are scheduled to announce their March quarter earnings today.

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Petrol price hiked by 57 paise per litre, diesel by 59 paise; cost of petrol up by Rs 3.31 in six days, diesel by Rs 3.42, PTI said in a tweet.

GST council meet: GST council meeting will be held today for the first time after nationwide lockdownSC to hear interest waiver case: Supreme Court’s hearing on interest loan waiverIIP data: Industrial production data for the month of April will be released todayCPI inflation: CPI inflation numbers for May scheduled to be announced today

The non-telecom PSUs got a major relief from the Supreme Court on Thursday but the fate of telecom operators like Bharti Airtel and Vodafone Idea continued to hang in balance in the adjusted gross revenue (AGR) dues matter. Coming down heavily on the department of telecommunications (DoT) for issuing demand notices of around Rs 4-lakh-crore to a clutch of PSUs having telecom licences and spectrum, a bench led by Justice Arun Mishra said that the move was a gross misuse of its earlier ruling on the matter.

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In overnight trade on Wall Street, S&P 500 was placed on track for its worst day in nearly three months. The Dow was down 1,512 points, or 5.6%, to 25,477. The Nasdaq composite, which was coming off an all-time high, slid 4%.S&P 500 lost 188.04 points, or 5.89%, to 3,002.1.

Asian stock markets fell sharply lower in Friday’s morning trade following a plunge on the Wall Street in overnight trade amid growing concerns of second-wave resurgence of the coronavirus pandemic. In Japan, the Nikkei 225 slipped 2.05% while the Topix index fell 2.24%. Australia’s S&P/ASX 200 declined 2.63%, while the MSCI Asia ex-Japan index traded 2.1% lower.

Trends on SGX Nifty suggests deep red start for the Sensex and Nifty on Friday. Nifty futures were trading 256 points or 2.59 per cent lower at 9.639.50 on Singaporean Exchange.

Share Market Today | Sensex, Nifty, BSE, NSE, Share Prices, Stock Market News Live Updates

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