MARKET WRAP: Indices gain for 3rd day, Sensex up 86 pts; PSU banks rally
All that happened in the markets today
 "stock market, Sensex, BSE, Nifty")
NSE's Nifty ended at 11,408, up 23 points or 0.20 per cent.
9:18 AM
Opening Bell
9:17 AM
Opening Bell
9:13 AM
Commodity heatmap
9:07 AM
BROKERAGE VIEW :: Credit Suisse on RIL
Netmeds acquisition gives RIL entry into online pharmacy; Total medicine market is $18 - 19 bn (online is 3 - 3.5% market); Margins are low in online pharmacy; RIL could expand online pharmacy market in India; Possible that RIL may go for aggregator model
9:06 AM
Markets at Pre-open
9:05 AM
Markets at Pre-open
9:04 AM
>> Management expects ad revenues to bounce back from H2FY21. Conversely, subscription revenue is anticipated to moderate, due to an inability to effect price hikes. While the viewership share has eroded meaningfully during the lockdown, it is starting to reverse.
>> The company has improved disclosures with quarterly balance sheet, standardized ZEE5 metrics and strengthened corporate governance policies. Consistent FCF generation is key for sustained re-rating given the underperformance in the recent past.
>> We remain watchful of timely subscription receivables from Dish and Siti, and investments in Sugarbox. The improvement in disclosures and policies, along with corrective steps, is leading us to upgrade Z IN to Hold with a revised TP of Rs190 (11x Sep’22E EPS).
BROKERAGE VIEW :: Emkay Global Financial Services on Zee Entertainment
CMP: Rs 174 | TP: Rs 190 | Rating: HOLD
>> Z IN posted poor operating performance, with EBITDA declining 67% yoy, accentuated by higher-than-expected opex. Advertising revenues fell 65% yoy, while domestic subscription revenues surprised once again by rising 6% yoy, driven by ZEE5.
>> Z IN posted poor operating performance, with EBITDA declining 67% yoy, accentuated by higher-than-expected opex. Advertising revenues fell 65% yoy, while domestic subscription revenues surprised once again by rising 6% yoy, driven by ZEE5.
>> Management expects ad revenues to bounce back from H2FY21. Conversely, subscription revenue is anticipated to moderate, due to an inability to effect price hikes. While the viewership share has eroded meaningfully during the lockdown, it is starting to reverse.
>> The company has improved disclosures with quarterly balance sheet, standardized ZEE5 metrics and strengthened corporate governance policies. Consistent FCF generation is key for sustained re-rating given the underperformance in the recent past.
>> We remain watchful of timely subscription receivables from Dish and Siti, and investments in Sugarbox. The improvement in disclosures and policies, along with corrective steps, is leading us to upgrade Z IN to Hold with a revised TP of Rs190 (11x Sep’22E EPS).
9:01 AM
BROKERAGE VIEW :: HDFC Securities on HG Infra
CMP: Rs 193 | Target: Rs 337 | Reco: Buy
>> HG Infra reported revenue at Rs 3bn (7% miss). However, APAT was nearly 3x our estimate on better than expected EBITDA margin and lower interest expense. Labour availability has improved to 85% of the required labour force. While HG did not secure any orders during the quarter, it aims to win Rs 30-40bn during FY21. Order backlog is robust at Rs 68bn (3.1x FY20 revenue). Standalone net debt increased to Rs 2.7bn from Rs 2.5bn on Mar-20 as working capital nearly doubled to Rs 1.4bn from Rs 0.7bn on Mar-20. Realization of receivables from Rajasthan project key for reduction in debt. We maintain BUY on HG with a SOTP based target price of Rs 337/sh, valuing the EPC business at 10x FY22E EPS. Key risks: (1) slowdown in NHAI ordering and (2) delays in receipt of pending dues from the Rajasthan project.
>> HG Infra reported revenue at Rs 3bn (7% miss). However, APAT was nearly 3x our estimate on better than expected EBITDA margin and lower interest expense. Labour availability has improved to 85% of the required labour force. While HG did not secure any orders during the quarter, it aims to win Rs 30-40bn during FY21. Order backlog is robust at Rs 68bn (3.1x FY20 revenue). Standalone net debt increased to Rs 2.7bn from Rs 2.5bn on Mar-20 as working capital nearly doubled to Rs 1.4bn from Rs 0.7bn on Mar-20. Realization of receivables from Rajasthan project key for reduction in debt. We maintain BUY on HG with a SOTP based target price of Rs 337/sh, valuing the EPC business at 10x FY22E EPS. Key risks: (1) slowdown in NHAI ordering and (2) delays in receipt of pending dues from the Rajasthan project.
9:01 AM
Top stocks to watch out for today
RIL: The Mukesh Ambani-owned conglomerate on Tuesday announced the acquisition of a majority equity stake in Chennai-based online pharmacy delivery startup Netmeds (Vitalic Health Pvt. Ltd) for a cash consideration of approximately Rs 620 crore.
Indiabulls Real Estate: Bengaluru-based realty firm Embassy Group on Tuesday signed an agreement to merge its various housing and commercial projects with Indiabulls Real Estate Ltd (IBREL) and take control of the merged entity.
Tata Consultancy Services (TCS) announced the launch of TCS Safe Workplace, a return-to-work solution that helps global enterprises quickly transition to a safe, secure, and productive work environment. READ MORE
9:00 AM
BROKERAGE VIEW :: HDFC Securities on Petronet LNG
CMP: Rs 258 | Target: Rs 291 | Reco: Buy
Our BUY recommendation on PLNG with a price target of INR 291 is premised on robust volume offtake in FY21/22E as (1) benign LNG prices will ensure high LNG imports, in turn allowing full utilisation at Dahej on its expanded capacity, (2) completion of the Kochi-Mangalore pipeline by 2HFY21 would subsequently raise utilisation at the Kochi terminal, and (3) healthy free cash flows of INR67bn over FY21E and FY22E cumulatively. 1Q EBITDA was 44% above estimates, led by an 18% beat on total volumes.
8:56 AM
BROKERAGE VIEW :: Motilal Oswal Financial Services on Zee Entertainment
CMP: Rs 174 | TP: Rs 190 (+9% ) | Reco: Neutral
>> 1QFY21 revenue declined 35% (v/s est. decline of 45%) as ad revenue plunged 65% YoY. Subscription revenue grew 5% YoY, leading to betterthan-expected EBITDA of INR2.2b. ZEE5’s OTT witnessed healthy traction during the lockdown and formed 13% of subscription revenues.
>> We have revised revenue/EBITDA estimates upwards by 7%/27% for FY21E and 13%/74% for FY22E. This is due to the positive management commentary for 2HFY21 and positive ad recovery over 2HFY20.
>> However, we remain watchful of losses from OTT, challenging ad economic environment and new governance norms. Maintain Neutral with TP of Rs 190.
>> 1QFY21 revenue declined 35% (v/s est. decline of 45%) as ad revenue plunged 65% YoY. Subscription revenue grew 5% YoY, leading to betterthan-expected EBITDA of INR2.2b. ZEE5’s OTT witnessed healthy traction during the lockdown and formed 13% of subscription revenues.
>> We have revised revenue/EBITDA estimates upwards by 7%/27% for FY21E and 13%/74% for FY22E. This is due to the positive management commentary for 2HFY21 and positive ad recovery over 2HFY20.
>> However, we remain watchful of losses from OTT, challenging ad economic environment and new governance norms. Maintain Neutral with TP of Rs 190.
8:54 AM
BROKERAGE VIEW :: Motilal Oswal Financial Services on InterGlobe Aviation
CMP: Rs 1,197 | TP: Rs 1,095 (-9%) | Reco: Neutral
>> INDIGO in its annual report highlighted that, average daily flights in China had recovered by 47% YoY as of May’20, based on recent data published by the Civil Aviation Administration of China (CAAC). Recovery was higher for domestic flights at 53% YoY in May’20.
>> As per DGCA data (July’20), INDIGO has been the biggest gainer in terms of market share post the resumption of operations. Its share climbed to ~60% of domestic market share from ~48% over Jan–Feb. The company has gained market share from Air India, GoAir, and other operators, while SJET’s market share remains consistent at 15–17%.
>> However, we continue to believe that in the long run, Aviation would witness continued headwinds in terms of surplus capacity, the lack of confidence among passengers to resume travel, and demand in business travel.
>> INDIGO in its annual report highlighted that, average daily flights in China had recovered by 47% YoY as of May’20, based on recent data published by the Civil Aviation Administration of China (CAAC). Recovery was higher for domestic flights at 53% YoY in May’20.
>> As per DGCA data (July’20), INDIGO has been the biggest gainer in terms of market share post the resumption of operations. Its share climbed to ~60% of domestic market share from ~48% over Jan–Feb. The company has gained market share from Air India, GoAir, and other operators, while SJET’s market share remains consistent at 15–17%.
>> However, we continue to believe that in the long run, Aviation would witness continued headwinds in terms of surplus capacity, the lack of confidence among passengers to resume travel, and demand in business travel.
8:52 AM
BROKERAGE VIEW :: Motilal Oswal Financial Services's India Strategy
>> Benchmark Indices – Nifty-50/Nifty Midcap-100 – have recovered from their Mar’20 lows gaining 50%/52%. Further, YTD CY20, Nifty-50/Nifty Midcap-100 are down 6%/3%, recovering almost all losses for CY20 in tandem with the rise in global equity markets.
>> FII holdings in the Nifty-500 remained near 5-year lows in 1QFY21 – it marginally increased by 8bp QoQ, but declined 130bp YoY to 20.8%. DII holdings were also marginally up in the Nifty-500 by 7bp QoQ/90bp YoY to 14.7%.
>> In the Nifty-500, FIIs have the highest ownership in Private Banks (44%), followed by NBFCs (31.6%), O&G (22.4%), Telecom (20.6%) and Real Estate (20.5%). DIIs have the highest ownership in Capital Goods (22.1%), Metals (21.5%), Private Banks (20.2%), Utilities (18.8%) and Autos (16.3%).
>> Using Nifty-500 as the benchmark, DIIs are significantly overweight in Utilities, Capital Goods, Metals and PSU Banks and underweight in NBFCs, Technology, Private Banks, and O&G.
>> FII holdings in the Nifty-500 remained near 5-year lows in 1QFY21 – it marginally increased by 8bp QoQ, but declined 130bp YoY to 20.8%. DII holdings were also marginally up in the Nifty-500 by 7bp QoQ/90bp YoY to 14.7%.
>> In the Nifty-500, FIIs have the highest ownership in Private Banks (44%), followed by NBFCs (31.6%), O&G (22.4%), Telecom (20.6%) and Real Estate (20.5%). DIIs have the highest ownership in Capital Goods (22.1%), Metals (21.5%), Private Banks (20.2%), Utilities (18.8%) and Autos (16.3%).
>> Using Nifty-500 as the benchmark, DIIs are significantly overweight in Utilities, Capital Goods, Metals and PSU Banks and underweight in NBFCs, Technology, Private Banks, and O&G.
8:47 AM
NEWS ALERT :: Man Industries bags export order worth Rs 405 crores
>> With this the total unexecuted order book of the company stands at approx. Rs. 1800 Crores to be executed in the current financial year.
Source: BSE filing
Source: BSE filing
8:44 AM
FII/FPI & DII trading activity on NSE, BSE and MSEI
Topics : Markets Reliance Industries Indiabulls Real Estate Hindustan Aeronautics Ltd Zee Entertainment MARKET WRAP
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First Published: Aug 19 2020 | 7:37 AM IST
