F&O expiry: Mkts end flat after a choppy session; Nifty settles at 10,289

All that happened in the markets today

10:44 AM

BROKERAGE VIEW:: Edelweiss Securities on Metals and Mining

We believe the recent run-up in most stocks is unjustified in view of the subdued domestic demand and likely pressure on margins. While consensus FY22E earnings have been trimmed 14% on average in the past three months, we perceive further downside risk. We prefer JSPL (‘BUY’; TP: Rs 190) as longs are likely to fare better than flats and Hindalco (‘BUY’; TP: Rs 185) due to relatively stable Novelis earnings. Incidentally, we had featured these two stocks in our coffee table book, “The Renaissance of Indian Businesses”. Among mid caps, we like Jindal Stainless (‘BUY’; TP: Rs 45) as debt concerns are far lower. A key risk to our stance is faster-than-expected demand uptick in the domestic market.    

10:43 AM

BROKERAGE VIEW:: Edelweiss Securities on India Cements

India Cements’ (ICEM) operating performance disappointed yet again with Q4FY20 EBITDA (down 65% YoY) missing estimate 53%. Even as volumes stood 2% ahead (down 21% YoY due to COVID-19 impact), the dismal performance was primarily owing to weak realisation, which slipped 3% QoQ (4% growth estimate and 3-5% growth reported by regional peers). Overall cost was broadly in line. With current cement prices in ICEM’s markets being materially higher versus Q4FY20 and on expectation of benign fuel cost, we see limited risk to our forward estimates. We continue to value ICEM at 6.5x FY22E EV/EBITDA, yielding TP of Rs 75 given limited visibility on reduction of its high debt and low RoE. Without any change in fundamentals, the stock has surged >80% in the past six months. We believe this may be on account of a single investor increasing stake in ICEM (from 1.3% in Q2FY20 to ~20% in Q4). Pending clarity over the objective behind spike in stake, maintain ‘REDUCE’. 

10:39 AM

BROKERAGE VIEW:: YES Securities on Cochin Shipyard

RATING: BUY | TARGET PRICE: Rs 429

• CSL is targeting to increase its ship repairing (SR) market share through new initiatives like repairs of oil rigs and merchant vessels at Mumbai Port, A&N admin, Kolkata port and Hooghly‐ CSL JV. It expects incremental revenues of Rs3‐4bn/year once ISRF becomes operational by H2FY22. CSL could achieve SR revenues of Rs10bn+ with margins of 25% beyond FY23.
• It has shipbuilding revenue growth visibility till FY23 due to planned execution of Rs65bn from IAC. We think new large ticket order inflow would be critical for its long‐term growth.

10:37 AM

BROKERAGE VIEW:: JM Financial on Cochin Shipyard

We downgrade the stock to HOLD with TP of Rs 350, as we foresee rising concerns on shrinking order book (weak inflows), declining profitability (adverse forex movement in ASW Corvette order) and depleting cash balance (by more than 50% over FY20-22) as CSL erects new facilities in Cochin, Kolkata and other locations.

10:35 AM

BROKERAGE VIEW:: ICICI Securities on Bank of Baroda

Business growth is expected to remain moderate with MSME showing some traction as the bank intends to avail government’s credit guarantee scheme. Out of Rs 50,000 crore eligible for the ECLGS scheme, the bank has sanctioned | 6000 core. With four quarters past merger, fear of delinquency shock is allayed making the bank relatively better placed after SBI. Though downtrend in moratorium remains positive, extent of slippages needs to be seen ahead. A sharp correction in stock price poses elevated dilution risk in case of capital raising. Subdued RoE ahead led us to value the bank at 0.5x FY22E ABV and arrive at a target price of Rs 58. We maintain HOLD rating.

10:30 AM

MARKET CHECK :: Sensex turns positive

10:25 AM

General Insurance Corporation jumps 8.5% as Q4 net profit grows 98% YoY

The insurer reported a 14 per cent increase on gross premium to Rs 9,217 crore from Rs 8,089 crore while for the full year, gross premium rose 15.35 per cent to Rs 51,030 crore in FY20 from Rs 44,238 crore in FY19. Among various business segments, life insurance reported a 75 per cent jump in premium, while fire segment reported a 17 per cent jump in premiums, marine recorded a 19 per cent jump and premiums in the miscellaneous segment rose 14 per cent in FY20. READ MORE

10:16 AM

Bharti Infratel dips 5% as Co extends deadline for merger with Indus Towers

On April 24, Bharti Infratel had said that its board took note of the status of the scheme of arrangement between Indus and Bharti Infratel and further extended the long stop date till June 24, 2020. READ MORE 

10:08 AM

Rupee Opening

Rupee opens mildly lower at 75.75 per US dollar vs Wednesday's close of 75.71/$

10:00 AM

Domestic fund managers' exposure to private banks hits 20-month low in May

In May, equity MF exposure to private banks hit a 20-month low — 16.7 per cent of assets under management (AUM). The weighting has seen a decline of nearly 440 basis points on a year-to-date (YTD) basis, the data provided by Motilal Oswal Research shows.

 

Though banking and financial remains the sector where most MF assets have been deployed, fund houses' dependence on this space has come off sharply this year with others, such as pharmaceuticals, auto, and telecom, witnessing an increase in weighting. READ MORE

9:52 AM

MARKET CHECK :: Sensex stages recovery

9:47 AM

NEWS ALERT :: Govt may opt to list LIC as a Corporation & not Company, sources to CNBC TV18

>> Listing as a company may not allow govt guarantee on policies

>> This will lead to huge cash infusion

>> Govt may need to introduce Authorised Share Capital in LIC Act, and accordingly infuse cash

>> Govt will also decide on Issue Capital for size of LIC's IPO

>> Matter to be decided when govt amends LIC Act

9:41 AM

Result Impact | General Insurance Corp surges over 7%

9:38 AM

Ashok Leyland trades weak ahead of Q4 nos

9:35 AM

IndusInd Bank dips 2%

The legal battle in the Hinduja family, which could result in a partition of family assets, is likely to delay their plan to increase stake in IndusInd Bank. The bank is promoted by holding companies IndusInd International Holdings and IndusInd, which are predominantly controlled by Ashok Hinduja, the youngest among the four Hinduja brothers.