Sensex ends choppy day 42 pts up; Asian Paints jumps 8%, Tata Steel down 4%

On a weekly basis, both, the Sensex and the Nifty50 indices slipped around 1 per cent each

9:21 AM

Sectoral trends on the NSE :: PSBs outperform, IT stocks in the red

9:20 AM

Sensex Heatmap

Top gainers: Asian Paints, Titan Company, ITC

Top losers: TCS, M&M, Tech M

9:18 AM

Opening Bell

9:17 AM

Opening Bell

9:13 AM

Fuel price update :: Petrol price hiked by 29 paise & Diesel by 34 paise today

In last 10 days (since May 4), Petrol price has been raised by Rs 1.79/L & Diesel by Rs 2.04/L

9:12 AM

Commodity Heatmap

9:08 AM

Top gainers and losers on the S&P BSE Sensex in Pre-open

9:07 AM

Pre-open session

9:06 AM

Pre-open session

9:03 AM

BROKERAGE VIEW :: ICICI Direct on Cadila Health

Reco: Hold | TP: Rs 640

Cadila Healthcare's wholly owned subsidiary, Zydus Animal Health and Investments (ZAHL), has entered into an agreement to sell its animal health (AH) business focused on India and certain other markets to a Multiples Alternate Asset Management led consortium (Canada Pension Plan Investment Board and RARE Enterprises).

The deal looks decent from a valuation point of view with implied EV/sales at 4.87x FY21E animal health business and implied EV/EBITDA multiple of 19.5x. This deal bodes well in the larger scheme of things as the company will increase focus on its core businesses such as India formulations, wellness and the niche franchisees of biosimilars and injectables in the US and other developed markets besides significant debt reduction.

That said, Moraiya warning letter resolution and US base business performance are some important aspects to watch in the near term. Given the recent run-up in the stock, we change our stance from BUY to HOLD and arrive at our target price of Rs 640 (vs. Rs 555 earlier) based on 26x FY23E EPS of Rs 24.7.

9:01 AM

BROKERAGE VIEW :: ICICI Direct on Matrimony.com

Reco: Buy | TP: Rs 1,070

In the near term, we expect the company’s billing and revenues to be subdued QoQ due to lockdowns. However, we expect revenue and billing growth to improve from Q2FY22E onwards led by healthy subscriber growth, increasing market share in north and easing of lockdowns & vaccinations. In addition, introduction of new products (like IIMIIT matrimony) and inorganic opportunity (due to healthy cash) are expected to drive revenues in the long term.

Further, expectation of stable advertising expenses and operating leverage benefit are anticipated to lead to healthy margins. This, coupled with leadership in an underpenetrated online match making industry and strong cash flow generation prompt us to maintain BUY rating on the stock with a target price of | 1,070 (30x PE on FY23E EPS).

8:58 AM

BROKERAGE VIEW :: ICICI Direct on KEC Iternational

Reco: Buy | TP: Rs 445

KEC delivered a steady Q4FY21 performance driven by strong growth in non-T&D segment amid challenges in T&D-SAE and commodity price impact. However, T&D is likely to rebound in the medium term providing further accelerated execution. Also, a backlog of Rs 19,109 crore, strong profitable traction in railways, civil business and focus on operational efficiencies would further de-risk its business model in the medium term.

We expect KEC to deliver revenue, EBITDA, PAT CAGR of 10.4%, 9.1%, 13.0%, respectively, in FY20-23E. We revise our target price to Rs 445/ share at 14x FY23E EPS and maintain our BUY rating. 

8:56 AM

BROKERAGE VIEW :: Antique Stock Broking on Firstsource Solutions

Reco: Buy | TP: Rs 155

FSOL reported 4QFY21 USD revenue growth of 8.2%/35.4% QoQ/YoY better than expectation. In YoY constant currency terms revenue was up 31.7% while in constant currency organic terms it was up 28.7%. Robust growth was driven on back of continued traction in mortgage business and rebound in top client and new business ramp up.

Management has guided FY22 revenue growth of 15-18% in cc terms and margins in the band of 11.8-12.3%.

We remain constructive on First source in medium to long term with ramping up of new deal wins, healthy growth in banking segment and pick up in non-banking verticals. We maintain our Buy rating on the stock on a forward PE multiple of 16x (unchanged) on FY23e EPS of INR 9.6 (vs INR 9.0 earlier) to arrive at target price of INR155 (vs INR 145 earlier).

Our valuation multiple is at discount of ~40% to Mid-cap IT services firms. We expect FSOL earnings to grow at low double digit in medium to long term and expect RoE improvement and balance sheet deleveraging (through cash generation) to drive multiple re-rating.

8:54 AM

BROKERAGE VIEW :: Antique Stock Broking on KEC International

Reco: Hold | TP: Rs 430

KEC International (KEC) reported lower than expected EBITDA during the quarter, despite clocking better than expected revenue growth. The impact of rising commodity prices, particularly steel, is apparent. On the positive side, ordering remains encouraging. We believe that the while KEC will continue to benefit from planned T&D and infrastructure spend, there can be risk to margin and hence earnings given steep rise in prices of key commodities like steel, aluminum and others.

We have cut FY22e earnings by 5%, while retaining FY23e earnings. Given the risk to earnings in FY22 and limited upside, we downgrade the stock to hold, with target price of INR 430 (14x FY23e earnings, unchanged).

8:52 AM

BROKERAGE VIEW :: Antique Stock Broking on Apollo Tyres

Reco: Buy | TP: Rs 280

Apollo Tyres (APTY) reported strong revenue growth and EBITDA margin performance in its Indian and European operations. Consolidated EBITDA grew 70% YoY to INR 8.1bn, which was 5% ahead of our expectations due to better than expected margin in European operations.

The company is well placed to leverage the demand recovery, with investments in capacities, R&D, brand building, rural distribution network, etc. APTY has gained 350bp market share in OTR and PCR segments and ~150bps in TBR segment in FY21, partly aided by restrictions on import of tyres into the country.

As Apollo is approaching the end of its capex cycle in FY22E, we expect it to generate positive FCF, de- leverage balance sheet and improve return ratios over the next three years.

We maintain BUY rating on APTY with a price target of INR280 based on 15x FY23E EPS taking in to account strong demand in India and margin improvement in European operations.

Key risks to our estimates are 1) higher than expected increase in raw material prices, particularly crude and rubber and 2) slower than expected ramp-up in economic activities due to Covid-19.