Stimulus for MSME, NBFCs fails to lift sentiment; Sensex tanks 886 pts

All that happened in the markets today

12:36 PM

Infosys, Reliance Industries top contributors to Sensex's decline today

12:32 PM

Regular passenger trains unlikely before June 30: Indian Railways

The national transporter said in a notification on Wednesday that all the regular passenger operations, including mail, express, passenger and suburban services will remain cancelled until further guidelines from the authorities. The notification added that all the tickets booked on these trains till June 30 will remain cancelled and passengers will be availed full refund for that. This comes almost 53 days after the government stopped passenger services on March 22 READ MORE

12:27 PM

NEWS ALERT :: Credit Suisse appoints new head of wealth management for India

Puneet Matta to join Credit Suisse as Head of Wealth Management India on June 1, 2020. He will report functionally to Balakrishnan Kunnambath, Market Group Head Indian Sub-Continent, and locally to Mickey Doshi, CEO India.

12:18 PM

BROKERAGE VIEW:: Emkay Global Fin Services on NBFCs

We continue to like NBFCs with relatively diversified liability franchise and superior collection mechanism. The current liquidity measures would accelerate margins, however the collection mechanism remains the key for now. We remain confident of the collection ability of HDFC (Buy, TP Rs1971), Bajaj Finance (Hold, TP Rs2331) and Cholamandalam Finance (Buy, TP Rs240).

12:14 PM

BROKERAGE VIEW:: Edelweiss Securities on Siemens

Siemens (SIEM), despite in line sales (down 20% YoY), missed ours/consensus bottom line estimates by a wide margin owing to sharp rise in other operating cost. High base for gas & power (HVDC impact) and hit on growth & OPMs of smart infra led to a sharp 14%/28% dip in H1 sales/EBIT. The plunge in OPMs (EBITDA margin fell 330bps YoY to 8.3%), in our view, was due to negative operating leverage, COVID-19 expenses (INR200mn) and possible forex loss. Management highlighted rising customer thrust on reducing capex and driving productivity, which augurs well for SIEM’s expanding portfolio. While we trim our FY20/21E EPS 6/7%, we expect SIEM to benefit from rising trend of low voltage and automation products, apart from government’s sharpening focus on reviving infrastructure. Maintain ‘BUY’ with revised TP of Rs 1,400 (Rs 1,425 earlier) as we roll forward to March 2022E valuing at 42x PE.

12:13 PM

BROKERAGE VIEW:: LKP Securities on Maruti

MSIL posted a dismal performance in Q4 as volumes and margins both witnessed deceleration. Volumes were impacted by macros, Covid related lockdown, and BS VI implementation, while margins were impacted by low operating leverage, higher discounting. However, MSIL’s moat in the form of its market leadership position, strong vendor base and wide dealer network gives us confidence about the company’s come back post Covid. We maintain our BUY as we believe MSIL

to be the proxy to any recovery in demand hereon. On margins front, higher local content, control on discounts in mid-term, lower RM costs and operating leverage once all the three plants function simultaneously, will provide a positive impact. In line with subdued Q4 numbers and expectations of a lack luster FY21, we have reduced our volume and margin estimates. Forced shift towards personal mobility and small cars in view of Covid will spur growth next fiscal. Maintain BUY.

12:12 PM

BROKERAGE VIEW:: HDFC Securities on Havells

Havells' clocked 20% revenue dip in 4QFY20 due to high revenue contribution from the last 12-15 days of March (~25% mix). However, co was witnessing strong recovery with ~9% growth for the quarter (ex-Covid) after posting weak show in 9MFY20 (-1% in 9MFY20 and -10% in 3QFY20). Lloyd recovery pre-Covid was strong led by various initiatives taken by the company. Besides, Havells has managed its cost very effectively and posted strong 11% EBITDA margin. With pressure led by negative oplev, most appliances companies will face pressure on sustaining margins. Additionally, the co is well positioned in terms of its working capital to ride out the disruption caused by Covid-19. Our expectation of a recovery by Havells, albeit delayed, remains intact. However, due to the loss of sales of summer products and weak demand environment, we cut our EPS estimates by 8-9% for FY21/FY22 (28/23% cut in our 4QFY20 preview). We value Havells at 36x on Mar-22E EPS, and derive a TP of Rs 515. Maintain ADD.

12:11 PM

BROKERAGE VIEW:: Edelweiss Securities on Power sector

The Government of India (GoI), under the COVID-19 economic package, today announced measures to support the power sector value chain: 1) INR900bn loan to discoms for the exclusive purpose of discharging the amount due to gencos/transcos. and 2) Central public sector generation companies (CPSE) and Central transmission Utilities (CTU) to offer rebate to discoms. While greater clarity is awaited on amount / mode of rebate, our interactions indicate ~6% hit on NTPC’s FY21E profitability, which is in line with our expectations (read NTPC’s bulwark). Overall, in our view, these measures are likely to provide the much needed liquidity support to the sector. However, they need to be further bolstered by bolder reforms (tariff policy, PPA sanctity etc) which could potentially improve the sector dynamics, investment climate and carry a multiplier effect on the economy. NTPC remains our top pick in the sector.

12:10 PM

NEWS ALERT :: April WPI food inflation at 3.6% vs 5.49% MoM, reports CNBC TV18

12:08 PM

NEWS ALERT :: Govt to not release WPI Inflation print for April, reports CNBC TV18

>> Govt says due to spread of Covid-19 pandemic, it has been decided to release the Price Movement of selected Sub-groups/Groups of WPI. All Commodities WPI could not be computed for April-2020 due to non availability of manufactured product group index


Alert: It had withheld CPI Inflation figures earlier due to inability to collect data amid lockdown

12:00 PM

Govt likely to purchase gold from households without seeking the source

The government is working on a series of measures, including using household gold and foreign exchange reserves as collateral to print more currency, to finance the proposed expenditure to revive the economy, sources close to the development said. The planned move will ensure that the newly minted currency does not put any pressure on the fiscal situation, the sources said. READ MORE

11:49 AM

Indiabulls Hsg, Bajaj Fin: 5 NBFCs that are heading towards breakout levels

Shares of non-banking financial companies (NBFCs) were trading mixed on Thursday, a day after Finance Minister Nirmala Sitharaman announced a major liquidity boost of Rs 75,000 crore to NBFCs and microfinance institutions (MFIs).
 

While these announcements are enough to keep NBFCs, and micro finance institutions (MFIs) afloat in the current environment where working capital is drying up, it won’t revive the sector per se, says Siddharth Purohit, equity research analyst at SMC Global Securities. READ MORE

11:44 AM

Sovereign Indian bonds reverse losses on talk of help from RBI

Yields on 10-year bonds slid as much as eight basis points to to 6.08 per cent after surging by as much as 12 basis points earlier. Bonds sold off Monday after the administration raised its annual borrowing plan by more than half late Friday.
 

“There’s speculation the sharp reversal is due to the central bank being on the buying side in a market that has enough reasons to decline,” said Naveen Singh, head of fixed-income trading at ICICI Securities Primary Dealership. There should have been a “reset” of 50-75 basis points in yields had it not been for the RBI’s presence, he said. READ MORE

11:37 AM

SECTOR ALERT :: Nifty CPSE index declines 3%

11:32 AM

Indian firms getting downgraded like never before; credit markets at risk

For every upgrade of rupee debt of Indian companies since April 1 there have been about 11 downgrades, leaving this quarter set to be the worst on record if sustained, according to a review of moves by the country’s four main credit assessors — CARE Ratings, Crisil, ICRA and India Ratings & Research.

Ratings have been cut for 847 domestic firms in the period. READ MORE