MARKET: Sensex surges 593 pts amid broad-based buying; Nifty ends at 11,228
All that happened in the markets today
 "Brokers trade at their computer terminals at a stock brokerage firm in Mumbai (")
Brokers trade at their computer terminals at a stock brokerage firm in Mumbai (
9:16 AM
First Trade
9:14 AM
Commodity Heatmap
9:11 AM
Strong support exists for Nifty at 10,900: CapitalVia Global Research
Markets traded with bullish mode on the first day of October series on firm global cues. Volatility Index, India VIX, dropped 12.06 per cent and closed at 20.6750, which shows some relief to bulls as volatility is likely to come down. Nifty managed to close at 11,050.30, adding 244.80 points. IT, Auto, and private banks along with financial stocks traded with positive sentiments whereas no index closed in the red. Nifty bank closed at 20,982.35, adding 525.50 points from the previous day’s closing. READ MORE
9:08 AM
Top gainers and losers on the S&P BSE Sensex at Pre-open
9:06 AM
Markets at Pre-open
9:05 AM
Markets at Pre-open
9:02 AM
BROKERAGE VIEW :: MOFSL on Aurobindo Pharma
CMP: Rs 772 | TP: Rs 1030 (+33%) | Reco: BUY
>> The Aurobindo Pharma (ARBP) stock has corrected ~20% over the past two months. This, we believe, provides a good entry opportunity in the stock.
>> Multiple factors strengthen our positive stance on the stock, such as: (a) the gradual improvement in outlook for the Injectable business, (b) ongoing efforts to build a complex product pipeline, (c) significantly reduced financial leverage, (d) completion of remediation measures at sites under regulatory issues, and (e) comfortable valuation (at 11.9x FY22E EPS of Rs 65 compared to 5-year average of 16x).
>> We expect ARBP to deliver 15% earnings CAGR over FY20-22E, led by new launches/increased market share in its key markets of the US/EU and lower financial leverage. We value ARBP at 16x 12M forward earnings to arrive at a target price of Rs 1,030. Re-iterate Buy.
>> The Aurobindo Pharma (ARBP) stock has corrected ~20% over the past two months. This, we believe, provides a good entry opportunity in the stock.
>> Multiple factors strengthen our positive stance on the stock, such as: (a) the gradual improvement in outlook for the Injectable business, (b) ongoing efforts to build a complex product pipeline, (c) significantly reduced financial leverage, (d) completion of remediation measures at sites under regulatory issues, and (e) comfortable valuation (at 11.9x FY22E EPS of Rs 65 compared to 5-year average of 16x).
>> We expect ARBP to deliver 15% earnings CAGR over FY20-22E, led by new launches/increased market share in its key markets of the US/EU and lower financial leverage. We value ARBP at 16x 12M forward earnings to arrive at a target price of Rs 1,030. Re-iterate Buy.
8:59 AM
BROKERAGE VIEW :: MOFSL on ITC
CMP: Rs 171 | TP: Rs 185 (+8% ) | Reco: Neutral
>> The news on the Maharashtra ban on loose cigarettes, while very difficult to implement, could affect cigarette volumes (if the implementation is extensive and stringent).
>> Loose cigarettes contribute 70–80% to cigarette volumes across various states.
>> Maharashtra is among the large states in terms of cigarette consumption. Moreover, the impact would be higher if other states follow suit either in the near term or later.
>> The news of the ban on loose cigarettes only adds to other concerns, such as: (a) persistent global ESG concerns on cigarettes (84% of EBIT in FY20), (b) the overhang of a further GST increase on cigarettes, and (c) a continued weak earnings trajectory (6.6% PBT CAGR over the last five years). The stock is trading at 13.5x FY22E EPS on our current forecasts. This may be affected by the negative impact of Maharashtra’s loose cigarette ban (if implemented stringently) or any potential steep GST increase. We value ITC at 14x Sep’22E EPS (a ~20% premium to global peers’ average multiple) to arrive at TP of INR184. Maintain Neutral.
>> The news on the Maharashtra ban on loose cigarettes, while very difficult to implement, could affect cigarette volumes (if the implementation is extensive and stringent).
>> Loose cigarettes contribute 70–80% to cigarette volumes across various states.
>> Maharashtra is among the large states in terms of cigarette consumption. Moreover, the impact would be higher if other states follow suit either in the near term or later.
>> The news of the ban on loose cigarettes only adds to other concerns, such as: (a) persistent global ESG concerns on cigarettes (84% of EBIT in FY20), (b) the overhang of a further GST increase on cigarettes, and (c) a continued weak earnings trajectory (6.6% PBT CAGR over the last five years). The stock is trading at 13.5x FY22E EPS on our current forecasts. This may be affected by the negative impact of Maharashtra’s loose cigarette ban (if implemented stringently) or any potential steep GST increase. We value ITC at 14x Sep’22E EPS (a ~20% premium to global peers’ average multiple) to arrive at TP of INR184. Maintain Neutral.
8:55 AM
BROKERAGE VIEW :: MOFSL on Steel sector
>> India’s steel sector has turned the corner with recovery in domestic demand and improved margins. This is led by sharp price hikes (supported by higher regional steel prices, particularly for flat steel) and lower raw material cost (despite recent rise).
>> However, we believe the regional (and thus India) HRC price is unlikely to rise further as we expect the price of key raw material iron ore to correct in the subsequent months. Iron ore supplies from Brazil have been normalizing, and port inventories in China have been rising, which does not bode well for iron ore prices, in our view. China HRC price has already corrected by 4% in Sept due to a 6% decline in iron ore price – the sharpest declines posted by both in the past five months.
>> Hence, we prefer long steel producer JSP (Buy, INR238 TP) over flat steel producers JSW Steel (Buy, INR300 TP) and Tata Steel (Neutral, INR380 TP). Over FY20-22E, JSP should also see a strong 16% CAGR in EBITDA and 37% decline in net debt.
>> On account of a higher price rise in flat steel v/s long steel, gross margin per ton for HRC is currently ~18% higher than pre-COVID levels and flattish for rebar.
>> However, we believe the regional (and thus India) HRC price is unlikely to rise further as we expect the price of key raw material iron ore to correct in the subsequent months. Iron ore supplies from Brazil have been normalizing, and port inventories in China have been rising, which does not bode well for iron ore prices, in our view. China HRC price has already corrected by 4% in Sept due to a 6% decline in iron ore price – the sharpest declines posted by both in the past five months.
>> Hence, we prefer long steel producer JSP (Buy, INR238 TP) over flat steel producers JSW Steel (Buy, INR300 TP) and Tata Steel (Neutral, INR380 TP). Over FY20-22E, JSP should also see a strong 16% CAGR in EBITDA and 37% decline in net debt.
8:51 AM
SAD-NDA split unlikely to trigger wild moves in market; eye on US elections
The Shiromani Akali Dal pulling out of the NDA due to differences over the Farm Bills will not affect the political balance too much. The BJP has a majority in the Lok Sabha on its own. However, this is the third erstwhile ally, which has pulled out of the NDA after differences with the BJP in the not-too-distant past. The Biju Janata Dal broke away from the BJP before the 2019 assembly elections in Odisha, and of course, the Shiv Sena has also parted ways. READ MORE
8:48 AM
Top stocks to watch out today
RIL: Reliance Industries Ltd (RIL) on Saturday said it has received Rs 7,500 crore from US private equity firm Silver Lake Partners, which has picked up 1.75 per cent stake in its retail arm.
Lakshmi Vilas Bank: A large section of shareholders of ailing Lakshmi Vilas Bank (LVB) voted against the reappointment of the managing director and chief executive, as well as seven directors and auditors, at the recent annual general meeting (AGM). READ MORE
8:44 AM
NEWS ALERT :: SC likely to hear interest waiver case at 10:30 am today
8:40 AM
FII/FPI & DII trading activity on NSE, BSE and MSEI
Topics : Markets Supreme Court Lakshmi Vilas Bank HDFC Bank Reliance Industries Vodafone Idea MARKET WRAP
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First Published: Sep 28 2020 | 7:38 AM IST
