Sensex slips for 3rd day, drops 379 pts, Nifty defends 15,100; ONGC up 8%
Sectorally, the Nifty PSU Bank index jumped another 5.6 per cent today, while the Nifty CPSE and Energy indices settled up to 4 per cent higher
 "markets, investor, stock market, broker, trader")
9:17 AM
Opening Bell
9:09 AM
COMMODITY CHECK
9:08 AM
Sensex Heatmap | Top gainers & losers in pre-open trade
9:07 AM
Nifty adds nearly 70 points in pre-open trade
9:06 AM
Pre-open session :: Sensex adds 150 points
8:58 AM
BROKERAGE VIEW :: MOFSL on Repco Home Finance
CMP: Rs 296 | TP: Rs 430 (+45%) | Reco: Buy
>> Since the IL&FS crisis, REPCO reduced its dependence on capital market borrowings to nil at present from 20% earlier. It proactively increased its lowcost NHB borrowings at the same time, thus maintaining margin. The management has laid great emphasis on controlling asset quality. While it is still early days, it seems that the impact of the crisis on asset quality is likely to be minimal. Credit costs should normalize to 30-40bp in FY22E. However, growth still remains elusive. While we forecast a pick-up, we expect the company to deliver only 8% loan book growth over FY21-23E. We increase our FY22E/FY23E EPS estimate by 2-4% to factor in higher margin. Maintain Buy with a TP of INR430 per share (1x FY23E BVPS).
>> Since the IL&FS crisis, REPCO reduced its dependence on capital market borrowings to nil at present from 20% earlier. It proactively increased its lowcost NHB borrowings at the same time, thus maintaining margin. The management has laid great emphasis on controlling asset quality. While it is still early days, it seems that the impact of the crisis on asset quality is likely to be minimal. Credit costs should normalize to 30-40bp in FY22E. However, growth still remains elusive. While we forecast a pick-up, we expect the company to deliver only 8% loan book growth over FY21-23E. We increase our FY22E/FY23E EPS estimate by 2-4% to factor in higher margin. Maintain Buy with a TP of INR430 per share (1x FY23E BVPS).
8:56 AM
BROKERAGE VIEW :: MOFSL on Bharti Airtel
CMP: Rs 594 | TP: Rs 720 (+21% ) | Reco: Buy
>> Bharti announced that it is buying back its 20% stake in its DTH business from Warburg Pincus for ~INR31.26b (which it sold for INR24.5b in FY18), offering ~INR10b in cash and the balance through 36.5m equity shares of Bharti at INR600/share (i.e. a dilution of 0.7%).
>> At 8.5%, this implies a moderate cost of capital. But with the risk of a digital disruption, the outlook for the DTH industry and valuations may have only weakened in the last three years in contrast of a cumulative 28% return for Warburg Pincus.
>> This deal is valued at FY21E EV-to-EBITDA of 7.4x. With high net debt, we would prefer to see more signs of deleveraging as it could help rerate valuations.
>> However, Bharti’s DTH services has clocked a healthy 18% EBITDA CAGR over FY17-20 to INR20b and is well placed in an industry, which has consolidated in the last few years
>> Bharti announced that it is buying back its 20% stake in its DTH business from Warburg Pincus for ~INR31.26b (which it sold for INR24.5b in FY18), offering ~INR10b in cash and the balance through 36.5m equity shares of Bharti at INR600/share (i.e. a dilution of 0.7%).
>> At 8.5%, this implies a moderate cost of capital. But with the risk of a digital disruption, the outlook for the DTH industry and valuations may have only weakened in the last three years in contrast of a cumulative 28% return for Warburg Pincus.
>> This deal is valued at FY21E EV-to-EBITDA of 7.4x. With high net debt, we would prefer to see more signs of deleveraging as it could help rerate valuations.
>> However, Bharti’s DTH services has clocked a healthy 18% EBITDA CAGR over FY17-20 to INR20b and is well placed in an industry, which has consolidated in the last few years
8:53 AM
BROKERAGE VIEW :: MOFSL on Gland Pharma
CMP: Rs 2,206 | TP: Rs 2,700 (+23%) | Reco: Buy
>> Gland Pharma (GLAND) is a comprehensively injectable-focused company, with a wide generics portfolio comprising of a) own/contract development, b) technology transfer, c) an established manufacturing value chain across the range of delivery systems, and d) extensive regulatory capabilities. GLAND is progressing well on building a complex product pipeline, backward integration, and gaining market share in commercialized limited-competition products.
>> Accordingly, we expect a 25% earnings CAGR over FY20–23. The potential upside in earnings owing to inorganic opportunities funded through cash available on balance sheet is not captured in our estimate. GLAND stands out in the pharma universe with solid track record of developing and commercializing complex products in the injectables space. Given that injectables have stringent regulatory guidelines compared with other dosages, GLAND is clearly at an advantage on account of its successful compliance. Moreover, it has delivered superior profitability / return ratios with minimal financial leverage. Accordingly, we value GLAND at 29x 12M forward earnings to arrive at Target Price of INR2,700. Initiate with a Buy rating on the stock
>> Gland Pharma (GLAND) is a comprehensively injectable-focused company, with a wide generics portfolio comprising of a) own/contract development, b) technology transfer, c) an established manufacturing value chain across the range of delivery systems, and d) extensive regulatory capabilities. GLAND is progressing well on building a complex product pipeline, backward integration, and gaining market share in commercialized limited-competition products.
>> Accordingly, we expect a 25% earnings CAGR over FY20–23. The potential upside in earnings owing to inorganic opportunities funded through cash available on balance sheet is not captured in our estimate. GLAND stands out in the pharma universe with solid track record of developing and commercializing complex products in the injectables space. Given that injectables have stringent regulatory guidelines compared with other dosages, GLAND is clearly at an advantage on account of its successful compliance. Moreover, it has delivered superior profitability / return ratios with minimal financial leverage. Accordingly, we value GLAND at 29x 12M forward earnings to arrive at Target Price of INR2,700. Initiate with a Buy rating on the stock
8:51 AM
Stocks to watch: Bharti Airtel, IndiaMart, Dish TV, GAIL, Ambuja Cements
Bharti Airtel: The company will acquire 20 per cent stake in its DTH arm Bharti Telemedia from an affiliate of Warburg Pincus for about Rs 3,126 crore.
Dish TV India: The company's board approved raising funds of up to Rs 1,000 crore on Wednesday. The company and its promoters also settled with Sebi cases of alleged disclosure lapses after paying nearly Rs 45 lakh as settlement charges. READ MORE
8:44 AM
FII/FPI & DII trading activity on NSE, BSE and MSEI
8:42 AM
Rupee check
Source: Bloomberg
8:39 AM
Oil prices extend gains as Texas cold snap cuts US output
>> Oil prices rose as much as a dollar on Thursday, extending this week’s gains and hitting 13-month highs, as a cold snap sweeping Texas and surrounding regions shut at least a fifth of US refining output and a million barrels of crude production.
>> Brent crude climbed 93 cents, or 1.5%, to $65.27 a barrel, touching its highest since Jan. 20, 2020. US West Texas Intermediate (WTI) crude futures gained 76 cents, or 1.2%, to $61.90 a barrel, registering its highest since Jan. 8, 2020.
(Source: Reuters)
>> Brent crude climbed 93 cents, or 1.5%, to $65.27 a barrel, touching its highest since Jan. 20, 2020. US West Texas Intermediate (WTI) crude futures gained 76 cents, or 1.2%, to $61.90 a barrel, registering its highest since Jan. 8, 2020.
(Source: Reuters)
8:35 AM
Bounce-back on cards?
>> At 8:30 am, the index was at 15,248 levels, up 52 points.
Topics : MARKET WRAP Markets Sensex Nifty 50 BSE NSE stock market Dalal Street Wall Street SGX Nifty Dixon Technologies Airtel GAIL Dish TV Nalco S&P 500
Don't miss the most important news and views of the day. Get them on our Telegram channel
First Published: Feb 18 2021 | 7:59 AM IST
