HDFC Bank, Infosys help Sensex settle 259 pts higher, Nifty ends at 11,605
All that happened in the markets today
 "BSE Sensex")
M&M (up over 4 per cent) ended as the top Sensex gainer, followed by Bajaj Auto (up 3.4 per cent). (Photo: Kamlesh Pednekar)
9:20 AM
Sectoral trends at Open
9:19 AM
Sensex Heatmap at Open
9:18 AM
Opening Bell
9:17 AM
Opening Bell
9:05 AM![]()
NEWS ALERT :: Jet fuel price cut by Rs 2,955.38 (7%) to Rs 39,492.53/kL in Delhi
9:04 AM
Top gainers and losers on S&P BSE Sensex at Pre-Open
9:03 AM
Markets at Pre-Open
9:02 AM
Markets at Pre-Open
9:01 AM![]()
BROKERAGE VIEW :: Kotak Institutional Equities on YES Bank
Fair value: Rs 10 | Reco: Sell
>> We reinstate coverage on Yes Bank with a SELL rating and Fair Value of Rs10. The bank has stabilized its key business operations and is on the path to recovery. However, this recovery is unlikely to be easy as the bank has the challenging task of rebuilding confidence and deliver RoE through an asset mix where
>> We reinstate coverage on Yes Bank with a SELL rating and Fair Value of Rs10. The bank has stabilized its key business operations and is on the path to recovery. However, this recovery is unlikely to be easy as the bank has the challenging task of rebuilding confidence and deliver RoE through an asset mix where
competence is untested. Execution risk leading to delayed recovery in return ratios is high while valuations leave limited room for disappointment.
8:59 AM![]()
BROKERAGE VIEW :: HDFC Securities on DR Reddy's Labs
Target price: Rs 4,670 | Reco: Add
We upgrade Dr Reddy’s to ADD (from REDUCE) and increase TP to Rs4,670. The growth visibility of the US business has improved with the strong momentum of new launches (12 launches in YTD FY21) including niche ones such as gCiprodex (first to market). The dependence of gCopaxone and gNuvaring on FY22 earnings reduces with the new product flow and favourable ruling of gVascepa (now in our estimates). Structural tailwinds in the API business (15% of revenues) will lead to double digit growth over the next few years. We increase our EPS forecast by 7-8% for FY21/22 to factor gVascepa launch and our target multiple to 22x (from 20x earlier) to factor improved visibility in the US and API business.
We upgrade Dr Reddy’s to ADD (from REDUCE) and increase TP to Rs4,670. The growth visibility of the US business has improved with the strong momentum of new launches (12 launches in YTD FY21) including niche ones such as gCiprodex (first to market). The dependence of gCopaxone and gNuvaring on FY22 earnings reduces with the new product flow and favourable ruling of gVascepa (now in our estimates). Structural tailwinds in the API business (15% of revenues) will lead to double digit growth over the next few years. We increase our EPS forecast by 7-8% for FY21/22 to factor gVascepa launch and our target multiple to 22x (from 20x earlier) to factor improved visibility in the US and API business.
8:56 AM![]()
BROKERAGE VIEW :: Angel Broking on SpiceJet
Spicejet reported a net loss for Q1FY21 of Rs. 593.4 crore as compared to a profit of Rs. 261.7 crore in Q1FY20. During the quarter revenues were down sharply by 83% YoY to Rs. 514.7 crore. Company posted an EBITDAR loss of Rs. 166.5 crore for the quarter as compared to profit of 684.2 crore in Q1FY20 despite cost control. Total operating costs for the quarter excluding lease rentals were down by 70.6% YoY to Rs. 681.2 crore. During the quarter the company maintained its 16% market share with a load factor of 66% despite the Covid-19 impact which resulted in 90% YoY contraction in ASKM. During the quarter the company increased its focus on cargo as a result of which revenues from cargo increased by 144% YoY to Rs. 165.9 crore while air transport service registered a degrowth of 88% YoY to Rs. 348.8 crore. The numbers were along expected lines as it was expected that the company would post a loss in Q1FY21 given sharp fall in air traffic.
8:54 AM![]()
BROKERAGE VIEW :: MOFSL on PVR
CMP: Rs 1,265 | TP: Rs 1,460 (+15%) | Reco: Buy
>> PVR’s near-term profitability and business scale would be affected as cinemas would be the last to open and would operate with a much reduced capacity and limited timings.
>> Rental waivers come as a great relief for the company; however, other operational charges, such as sanitization costs, would increase post the reopening of the cinemas, along with expected decline in revenues in the highmargin F&B category.
>> PVR’s remains comfortable in terms of liquidity, with INR5.5b in cash (INR3b proceeds from rightsissue) and INR1.6b in undrawn credit lines available from
>> The recent shift in movies to OTT platforms and increased viewership raises concerns regarding increased competition from the OTT medium. However, once the multiplexes resume operations, a fixed exclusive window of movie viewing in cinemas and healthy flow of movie content, coupled with PVR’s scale and execution, should bode well for the company. Also, sharp cost reduction measures could aid the business in the long term.
>> We expect a revenue/EBITDA CAGR of 5%/3% for PVR over FY21–22E and value the company at 14x FY22E EBITDA to arrive at target price of INR1,460. Maintain Buy.
>> PVR’s near-term profitability and business scale would be affected as cinemas would be the last to open and would operate with a much reduced capacity and limited timings.
>> Rental waivers come as a great relief for the company; however, other operational charges, such as sanitization costs, would increase post the reopening of the cinemas, along with expected decline in revenues in the highmargin F&B category.
>> PVR’s remains comfortable in terms of liquidity, with INR5.5b in cash (INR3b proceeds from rightsissue) and INR1.6b in undrawn credit lines available from
banks.
>> The recent shift in movies to OTT platforms and increased viewership raises concerns regarding increased competition from the OTT medium. However, once the multiplexes resume operations, a fixed exclusive window of movie viewing in cinemas and healthy flow of movie content, coupled with PVR’s scale and execution, should bode well for the company. Also, sharp cost reduction measures could aid the business in the long term.
>> We expect a revenue/EBITDA CAGR of 5%/3% for PVR over FY21–22E and value the company at 14x FY22E EBITDA to arrive at target price of INR1,460. Maintain Buy.
8:54 AM
![]()
Top stocks to watch out for today
Hexaware Technologies: IT firm Hexaware Technologies on Tuesday said market regulator Sebi has allowed the extension of closure of its delisting offer to September 16. The voluntary delisting process of Hexaware Technologies from the BSE and the NSE had started on September 9. The delisting offer with a floor price of Rs 264.97 per share was slated to close on September 15.
SpiceJet: Low-cost airline SpiceJet reported a pre-tax loss of Rs 593.4 crore in the first quarter of the current financial year, against a profit of Rs 261.6 crore in the same quarter of the previous year.
Lakshmi Vilas Bank (LVB), which had signed a preliminary, non-binding letter of intent with Clix Capital Services Private Limited and Clix Finance India Private Limited (collectively, Clix Group) in relation to the proposed amalgamation of Clix Group with the bank, informed on Tuesday that the mutual due diligence process was nearly complete. READ MORE
8:50 AM![]()
BROKERAGE VIEW :: MOFSL on Pidilite
CMP: Rs 1,498 | TP: Rs 1,385 (-8%) | Reco: Neutral
>> Faster growth in the ‘Growth’ and ‘Pioneer’ categories would lead to contribution from these categories increasing from around one-third of sales combined to
>> Technology implementation in distribution in recent years is boosting efficiency and elevating distributor ROI, enabling the company to retain channel loyalty in
>> We maintain a Neutral rating on the stock from a one-year perspective on account of fair valuations (58.5x FY22 EPS) and uncertain near-term recovery, especially in the B2B part of the business (~15% of sales). However, initiatives to grow the Growth and Pioneer categories could go a long way in revitalizing medium-term sales and earnings growth, which have dropped significantly in the past four years. These metrics reported an 8–10% CAGR over the past four years v/s ~16% and ~20%, respectively, in the first six years of the decade.
>> Faster growth in the ‘Growth’ and ‘Pioneer’ categories would lead to contribution from these categories increasing from around one-third of sales combined to
around half of sales over the next three to four years. This would provide significant impetus to the topline over the medium term, something that has been lacking in recent years.
>> Technology implementation in distribution in recent years is boosting efficiency and elevating distributor ROI, enabling the company to retain channel loyalty in
the current uncertain times.
>> We maintain a Neutral rating on the stock from a one-year perspective on account of fair valuations (58.5x FY22 EPS) and uncertain near-term recovery, especially in the B2B part of the business (~15% of sales). However, initiatives to grow the Growth and Pioneer categories could go a long way in revitalizing medium-term sales and earnings growth, which have dropped significantly in the past four years. These metrics reported an 8–10% CAGR over the past four years v/s ~16% and ~20%, respectively, in the first six years of the decade.
8:46 AM![]()
BROKERAGE VIEW :: MOFSL on Indraprastha Gas
CMP: Rs 420 | TP: Rs 470 (+12%) | Reco: Neutral
>> IGL has ~75% of its volumes coming from CNG. This segment led growth for the last couple of years, led by the proliferation of CNG stations and higher conversions. However, opening up of schools and normalization of public transportation (for CNG) and commercial space like malls/restaurants (for PNG) may take more time.
>> Nevertheless, we reiterate our belief in the company’s volume trajectory (in line with management guidance), led by growth in NCR, intercity travel on CNG, higher conversions to CNG due to the BS6 implementation, and contributions from newer GAs.
>> Over the short-to-medium term, IGL could increase its sales volumes from new areas such as Rewari, Karnal, and Muzaffarnagar; Gurugram; and the newly
>> IGL has ~75% of its volumes coming from CNG. This segment led growth for the last couple of years, led by the proliferation of CNG stations and higher conversions. However, opening up of schools and normalization of public transportation (for CNG) and commercial space like malls/restaurants (for PNG) may take more time.
>> Nevertheless, we reiterate our belief in the company’s volume trajectory (in line with management guidance), led by growth in NCR, intercity travel on CNG, higher conversions to CNG due to the BS6 implementation, and contributions from newer GAs.
>> Over the short-to-medium term, IGL could increase its sales volumes from new areas such as Rewari, Karnal, and Muzaffarnagar; Gurugram; and the newly
awarded (3) GAs in the 10th round – (a) Kaithal (Haryana), (b) Ajmer, Pali, and Rajsamand (Rajasthan), and (c) Kanpur, Fatehpur, and Hamirpur (Uttar Pradesh).
>> The stock trades at around 24.4x FY22 EPS of INR17.2 and EV/EBITDA of 15.1x in FY22. We value the company at 24x FY22 adj. EPS of INR17 and add value from JV to arrive at target price of INR470. Maintain Neutral.
>> The stock trades at around 24.4x FY22 EPS of INR17.2 and EV/EBITDA of 15.1x in FY22. We value the company at 24x FY22 adj. EPS of INR17 and add value from JV to arrive at target price of INR470. Maintain Neutral.
Don't miss the most important news and views of the day. Get them on our Telegram channel
First Published: Sep 16 2020 | 7:42 AM IST
