MARKET WRAP: Indices snap 5-day rally, Sensex slips 345 pts; IT, autos fall

All that happened in the markets today

12:09 PM

MARKET UPDATE:: Sensex trades range-bound

11:59 AM

Nifty PSU Bank index surges 5%; Canara Bank, BoB, Indian Bank gain over 5%

Indian Bank, Bank of Baroda, Canara Bank and Bank of Maharashtra were up in the range of 6 per cent to 9 per cent, while, State Bank of India (SBI), Punjab National Bank (PNB), Bank of India, Indian Overseas Bank and Union Bank of India from the PSU bank index were trading higher between 3 per cent and 5 per cent. READ MORE

11:52 AM

BROKERAGE VIEW:: ICICI Securities on Pfizer

RATING: BUY | TARGET PRICE: Rs 4,740 

We continue to believe in Pfizer’s strong growth track record in power brands and capability in new launches on a fairly consistent basis (recent launches from parent’s staple- Zavicefta (anti-infective), Eliquis (CVS), Xeljanz (pain management). We maintain BUY and arrive at a target price of | 4740 based on 40x FY22

EPS of Rs 118.6.

11:46 AM

BROKERAGE VIEW:: ICICI Securities on Nestle (India)

RATING: HOLD | TARGET PRICE: Rs 17,500

Coffee business is over indexed in North India and that benefits Nestle. There are challenges too. Greater salience of urban (~80% contribution) and impact from potential downtrading (defocused Rs 5 Maggi packs) are likely to be headwinds. That said, deflation in dairy prices in CY20 (procurement prices already down 15% QoQ in Q2CY20) provides support to earnings growth. Our relative positive view on Nestle'’s financial performance is intact; HOLD reflects the requirement of lower multiples to turn more constructive.

11:44 AM

BROKERAGE VIEW:: Prabhudas Lilladher on infrastructure sector

We continue to prefer companies with low debt, good corporate governance, lean working capital cycle and high book to bill ratio as they are better placed to wither the storm in such unprecedented scenario as well as emerge stronger amongst their peers. Our top picks in the sector are KNR Constructions, PNC Infratech and HG Infra.

11:42 AM

BROKERAGE VIEW:: Centrum Broking on CGDs

Tuesday’s correction in CGDs (City Gas Distribution Co’s) was driven by i) a call done by regulator PNGRB (Petroleum and Natural Gas Regulatory Board) where they laid out a 2Mth timeline for issuing open access notifications and ii) follow up apprehensions raised on the street highlighting regulatory threats to volume growth for the incumbent CGDs, IGL, GGL & MGL. We believe that while the imminent issue of regulations with respect to CGDs open access is a threat, the business impact is likely to be far less than feared.

Nonetheless, given the uncertainty of macro environment, we have reduced our volume growth and margins assumptions post FY23E in our DCF for IGL/GGL/MGL with TP revised to Rs 485/ Rs340/Rs950. Reiterate BUY on IGL/GGL and ADD on MGL.

11:39 AM

BROKERAGE VIEW:: Centrum Broking on Aviation sector

We expect net loss of Rs26.7bn for IndiGo and Rs10.1bn for SpiceJet in Q1FY21 driven by low traffic volume, low fleet utilisation and poor coverage of fixed costs. Our estimates factor anticipated rationalisation in employee costs (factor 30-35% down yoy) and other overheads. With closing USD/INR rates in Q1FY21 remaining almost flat vis-à-vis Q4FY20 we estimate a relatively small MTM Fx loss of Rs538m/Rs330m for IndiGo and SpiceJet respectively.   

IndiGo best placed to withstand pressure; Maintain Buy

IndiGo’s robust balance sheet (gross debt of Rs 24.3bn, free cash of Rs 89.3bn as on Mar-20) and competitive cost structure (set to improve further) is best placed amongst Indian carriers to withstand the current disruption and also be in a position to capitalise on growth recovery. We value IndiGo on FY22 basis at 9x FY22E EBITDAR. We maintain our Buy rating with a price target of Rs 1,244. We maintain Reduce on SpiceJet over concerns of stretched liquidity position and weak capitalisation of the balance sheet. 

11:35 AM

BROKERAGE VIEW:: Edelweiss Securities on Himatsingka Seide

Himatsingka Seide reported weak Q4FY20 numbers with revenue contracting 37% YoY---lowest among peers and much lower than industry (-3%). Management attributed this to a different client mix on whom the lockdown impact was much sharper. Working capital contraction and marginal debt reduction were the only positives during the quarter. Factoring the Q4FY20 weakness, we revise down FY21/22E EBITDA 13%/3%. HSS has lagged industry and peers, but the underperformance was more pronounced in Q4FY20. With leverage also among the highest in the sector, we continue to maintain our decade low target multiple of 5x, leading to revised TP of Rs 58 (Rs 61 earlier). Maintain ‘HOLD’. 

11:34 AM

BROKERAGE VIEW:: Edelweiss Securities on Indian Energy Exchange

Indian Energy Exchange (IEX) logged 9% volume growth (excluding REC’s 14% growth) in Q1FY21 riding low spot pricing, new product launch and a slightly favourable base. We are enthused by the 0.5bn unit volume of real time market product (RTM-new) in the first month (June) and it further bolsters confidence in our conservative FY21 volume estimate (9% growth). We remain constructive on company’s horizontal and vertical diversification business approach, which provides huge growth headroom and strong revenue visibility. We have realigned our volume numbers internally without changing the overall volume growth. In this note, we also attempt to present quarterly volume estimates. Maintain ‘BUY’.

11:26 AM

PE-VC investors see decline in fund raising activity for next 1 yr: Crisil

According to the survey report, though the market is sitting on sufficient un-invested capital, or 'dry powder,' good investment opportunities are seen as difficult to find in the current environment.

 

"About 58 per cent surveyed expect investment value to decline over the coming 12 months," the report said. READ MORE

11:18 AM

Consumer durables shares gain on demand recovery in June; Polycab up 6%

Polycab India, the largest manufacturer of wires and cables in India and a fast-growing player in the FMEG space, gained 6 per cent to Rs 884 in intra-day trade today. Whirlpool of India was up 2.5 per cent to Rs 2,244, while V-Guard Industries up 2 per cent to Rs 174.  READ MORE

11:09 AM

NEWS ALERT | Canara Bank reduces its MCLR on Loans/Advances across all tenors with effect from July 07

-- The bank has reduced interest rate by 10 basis points across all tenors i.e., one year, 6 months, 3 months, 1 month and Overnight tenors.

11:03 AM

NEWS ALERT :: ABB launches anti-bacterial switches and sockets

>> Co says, given the high risk of infection spread via surfaces, this product range has been developed with anti-bacterial properties, keeping light switches and sockets free from bacteria.

10:54 AM

RBI steps up intervention in forwards, rupee weakens on heavy dollar demand

Currency dealers said nationalised banks had been quite active in buying dollars since the last few days, and a subsequent jump in the forward premium would indicate they were buying spot dollars on behalf of the central bank and selling them in the forward markets. READ MORE

10:45 AM

Bajaj Finance investors should await clarity on moratorium

While business growth is an important metric, the Street’s reaction to Bajaj Finance’s June 2020 quarter (Q1) update, announced on Monday after market hours, indicates that investors are more concerned about the lender’s asset quality during the pandemic. Despite a muted business performance in Q1, shares of Bajaj Finance gained almost 8 per cent on Tuesday to emerge as the top Sensex gainer. READ MORE