MARKET: Sensex slips 422 pts amid a sell-off in RIL; Nifty ends at 11,203

All that happened in the markets today

12:30 PM

BROKERAGE VIEW:: Anand Rathi Shares on Aarti Drugs

As a prominent partner of pharma companies seeking to diversify supplies from China, Aarti’s Q1 sales grew 34% y/y. A better product mix and higher realisations on key APIs (prices rose 10-15%) led to a 772bp gross-margin expansion. The EBITDA margin swung to a record 24.6% (a 1,110bp expansion). Absolute EBITDA grew 145% to Rs 1.3bn. The better operating performance and lower tax rate rocketed adj. PAT 281% to Rs 855m. On such a strong Q1, we raise our FY21e/22e/23e EPS 43.5%/ 29.5%/28.9%. We expect revenue/PAT to clock 18.9%/34.5% CAGRs over FY20-23. We retain our Buy rating, with a higher target of Rs 2,090.

12:22 PM

Oil rises after surprise drop in US inventories offsets demand concerns

Oil prices rose on Wednesday after an industry report showed that crude inventories in the United States fell against expectations, giving the market a boost amid record increases of coronavirus infections in the US and elsewhere. Brent crude futures were up by 14 cents, or 0.3 per cent, at $43.36 a barrel by 0326 GMT, after dropping 0.4 per cent on Tuesday. READ MORE

12:13 PM

Cement stks extend gains on strong performance by sector majors in June quarter

Shares of cement makers continued on an upward trajectory and gained up to 4 per cent in an otherwise subdued market on Wednesday, after sector majors UltraTech Cement, ACC, and Ambuja Cements reported strong operational performances in the April-June quarter. JK Lakshmi Cement, UltraTech Cement, HeidelbergCement India, Dalmia Bharat and JK Cement were up in the range of 2 per cent to 4 per cent on the BSE. In comparison, the S&P BSE Sensex was down 0.39 per cent or 152 points at 38,341 at 10:53 am. READ MORE 

12:07 PM

BROKERAGE VIEW:: ICICI Securities on Marico

Though growth prospects in Saffola edible oil & foods remain strong, it contributes only 20% to sales. A large part of portfolio (hair oils) remains a saturated category with limited growth opportunity. Also, edible oil remains a low margin category with extensive competition. The stock is trading at 37x FY22E earnings. We maintain HOLD with a revised TP of RS 380.

12:06 PM

BROKERAGE VIEW:: Prabhudas Lilladher on UltraTech Cement

Rating: BUY | CMP: Rs 4,136 | TP: Rs 4,675

The major positive surprise came on the cost reduction and its sustainability going forward. Sustainable reduction of 10% in fixed overheads, higher operating leverage and lower coal costs would help keep costs under control. Hence, we upgrade EBITDA estimates by 10%/8% for FY21e/FY22e to factor in higher realisations and lower costs. We remain bullish on UTCEM due to its dominant size (with capacity of 112mnt and market share of 22%) and highly efficient operations. We reiterate BUY with revised TP of Rs 4,675, EV/EBITDA of 14x FY22E.

12:03 PM

BROKERAGE VIEW:: Prabhudas Lilladher on NIIT Technologies

Rating: BUY | CMP: Rs 1,767 | TP: Rs 2,190

Led by strong commentary, we raise NIIT Tech US dollar revenue growth assumption to 2%/16.7%/14.7% for FY21/FY22E/23E (vs -3%/11%/10.8% earlier). NIIT Tech is poised to show strong momentum in FY22 and could outpace peers by a wide margin. We assign 20X multiple for NIIT Tech (earlier 15X) 10% discount to LTI multiple as NIIT Tech growth momentum will surpass everyone in FY22 & concentrated share float ( Baring holds 70.3% in NIIT Tech) can also lead to steeper P/E multiple increases for the stock. We arrive at a TP of Rs 2,190 (earlier Rs 1,533) valued at 20X Sep-20 EPS of Rs.109. At CMP, the stock trades at 20x/17x/15x FY21/22/23E EPS. Reiterate BUY.

12:01 PM

BROKERAGE VIEW:: Edelweiss Securities on IndusInd Bank

We reiterate that the interpretation of moratorium accounts as the superset of future problem loans is inappropriate. The deposit franchise has shown signs of stabilisation, but sustainability is key. Our prognosis on systemic asset quality remains bleak and IIB remains at bottom-third of our coverage in terms of proximity of reported net worth vis-a-vis ‘true residual equity’. The capital-raising (nearly Rs 33bn, which shores up Tier 1 by 125bps) is a step in the right direction and deepens ‘equity certainty’, but uncertainty reduction (to arrive at true BV) is yet not solid enough to boost our target multiples. Retain ‘HOLD’ with a TP of Rs 540.

11:59 AM

BROKERAGE VIEW:: Axis Securities on ITC

RATING: BUY | Target Price : Rs 243

Cigarette faster than expected recovery: Cigarette biz Revenue/EBIT declined 29%/38% respectively largely driven by over 45% decline in volumes owing to Covid-19 led lockdowns impacting its availability. Volume degrowth was much lower than what the street was expecting at 45-50% driven by resumption of manufacturing operations post mid-May and rapid scale up thereafter, sales & distribution ramp up and possible market share gains (Godfrey Phillip plant was shut for large part in Q1). Sales were also supported by launch of new variants in DSFT (mass segments) and innovative pack sizes (largely targeted at loose cigarette consumption by introducing pack of 5cigs vs standard 10cigs pack) thereby expanding target audience in key markets. EBIT Margins contracted by 970 bps YoY at 61% impacted by weak operating leverage and inferior mix.

11:49 AM

BROKERAGE VIEW:: Emkay Global on Nestle India

RATING: SELL | TARGET PRICE: Rs 15,600

The portfolio may benefit from current consumption trends but this is already reflected in our forecasts, and upsides to growth momentum are not visible yet. Valuations at 62x CY21/54x CY22E EPS remain unattractive. Maintain Sell with a revised TP of Rs 15,600 (Rs 15,000 earlier) based on Sept-22E EPS.

11:40 AM

United Spirits Q1 hit by Covid-19, analysts sceptical about early recovery

The knock-on effect of the Covid-19-triggered lockdown was visible in United Spirits’ June 2020 quarter (Q1) numbers, which were announced on Monday after market hours. Although the management believes the worst is behind, analysts say the pain is far from over.

 

A 53.6 per cent year-on-year (YoY) drop in net revenue to Rs 1,030.2 crore was better than consensus estimate of Rs 930 crore. READ MORE

11:30 AM

Nifty Bank: 9 years of outperformance wiped in 4 months due to pandemic

For nearly a decade, banks, especially private sector lenders, were the perfect stocks for investors and fund managers to pick to beat benchmark indices and generate alpha returns in their portfolios. The Covid-19 pandemic has ended this as years of outperformance by banking stocks has been wiped off over the past four months. The Nifty Bank Index has fallen 32 per cent since January, and continues to lag behind the broader market. READ MORE

11:20 AM

Maruti Suzuki Q1FY21 preview: Brokerages see net loss of up to Rs 750 crore

According to the company's monthly auto sales data, Maruti Suzuki sold 76,599 units during Q1FY21, down 81 per cent on year-on-year (YoY) basis as compared to 402,594 units sold in Q1FY20. The Q1FY21 numbers comprise the sale of 67,027 units and 9,572 units in the domestic market and export, respectively. READ MORE

11:11 AM

PVR, Inox Leisure: Trading ideas for multiplex stocks ahead of Unlock 3.0

PVR Ltd (PVR): After a sharp run up toward Rs 1,200 levels at the end of May, 2020, this counter has seen a decline. It started consolidating from mid-June till mid-July in the range of Rs 1,100 to Rs 920. Currently, the stock is decisively trading above its 100-DMA and also above its upper resistance level of the consolidation seen during this period. This should see buying momentum emerge gradually. READ MORE

11:02 AM

Nestle India slips 3% post June quarter nos; here's what brokerages say

Shares of Nestle India slipped nearly 3 per cent on the BSE on Wednesday after the fast-moving consumer goods (FMCG) major announced its June quarter numbers for the fiscal year 2020-21. At 10:28 am, the stock was trading 2.5 per cent lower at Rs 16,670.50 on the BSE. It hit a low of Rs 16,618.70 during the trade against Tuesday's close of Rs 17,098.95. In comparison, the S&P BSE Fast Moving Consumer Goods index was trading flat at 11,442 levels while the S&P BSE Sensex was quoting 197 points or 0.51 per cent lower at 38,295.53 levels. READ MORE

10:53 AM

NIIT Technologies surges 7%, nears 52-week high post June quarter results

Shares of NIIT Technologies rallied 7 per cent to Rs 1,894 on the BSE on Wednesday after reporting a healthy order intake of $ 186 million in June quarter (Q1FY21). The stock of the IT consulting & services company is trading close to its 52-week high level of Rs 2,057, touched on January 23, 2020. The company said that fresh business of $186 million was secured during the quarter, which included a large deal along with two more significant deals. A total of 11 new clients were added during the quarter. READ MORE