MARKETS: Financials drag indices, Sensex slips 81 pts; midcaps outperform

All that happened in the markets today

11:54 AM

BROKERAGE VIEW:: HDFC Securities on ICICI Bank

ICICIBC’s 4Q PPOP was in line with estimates, although NIM expansion surprised. PAT registered a sharp QoQ fall on the back of COVID-19 related provisions (similar to peers’) and was lower than expected. COVID-19 will impact growth and asset quality across the board. However, a stronger b/s (granular, sticky liability base, lower stress levels, higher PCR and adequate CAR), improved underwriting practices and lower exposure to contextually vulnerable products will help ICICIBC emerge stronger. ICICIBC remains our preferred. Maintain BUY (TP of Rs 442, 1.6x core FY22E ABV+ Rs 126 for subs).

11:50 AM

Gold outlook by Hareesh V, Head Commodity reseach at Geojit Financial Services

Gold prices may hold steady with positive bias as its safe haven demand remains on the higher side due to fears of global recession and the chances of further economic easing measures from Central Banks. However, a strong US dollar and limited physical market activities cap major upsides in the commodity.

 

Technical Outlook (London spot): As long as prices stay above $1,665 we expect the bullish outlook to continue in the counter. An unexpected drop below the same would be an early signal of selling pressure for the day.

11:48 AM

MARKET CHECK | Auto stocks rally; S&P BSE Auto index jumps 4%

11:38 AM

IBA considering proposal to set up AMC and AIF, takeover NPAs from PSBs

Indian Bank’s Association is considering a proposal from Sashakt panel for setting up an asset management company and Alternate Investment Fund (AIF) to acquire bad loans from banks with aim to turnaround those assets to protect and enhance value. Public sector bank executive said the structure advised by Sashakt panel is being considered for an establishing vehicle, dubbed as bad bank, to park toxic assets in back in focus. READ MORE

 

11:32 AM

MARKET UPDATE:: Sensex off day's high

11:21 AM

Hero MotoCorp gains 6% as it claims 10,000 unit sales in a week

Shares of Hero MotoCorp were up 6 per cent to Rs 2,080 on the BSE on Monday after the country's largest two-wheeler maker Hero on Sunday said it has resumed operations across 1,500 touch-points, including authorised dealerships, across the country. These outlets contribute to around 30 per cent of the Company’s total domestic retail sales. READ MORE

11:06 AM

Reliance Industries may rewrite recent history of rights issues: Here's how

The Rs 53,125 crore rights issue of Mukesh Ambani's Reliance Industries Limited (RIL) is scheduled to open on May 14 might rewrite the recent history of "rights". Shares of the company gained 3.4 per cent at Rs 1,615 on the BSE on Monday after the date was fixed for determining shareholders eligible to apply for its rights issue. The stock was trading close to its record high of Rs 1,618, and recovered 84 per cent from its 52-week low of Rs 876 on March 23. READ MORE

10:54 AM

Nifty Bank index falls 400 points from day's high, turns negative

10:46 AM

BUZZING STOCK | VIP Industries jumps over 9%

10:37 AM

RIL fixes May 14 as record date for rights issue. Should you subscribe?

Most brokerages expect the company to do well over the coming quarters and have pegged the target price for the stock higher than its current market price. In this backdrop, they feel subscribing to the rights issue does make sense. READ MORE

10:29 AM

BROKERAGE VIEW:: MOFSL on ICICI Bank

As a prudent measure, the bank has made additional provisions of Rs 27.2b toward COVID-19-related stress; furthermore, lower exposure to the SME segment (3.5% of loans) and high granularity in the BB and below book provides some comfort. Nevertheless, we increase our credit cost estimate to 2.2% in FY21E and cut FY21/22E earnings by 8%/3%. We thus estimate ICICIBC to deliver RoA/RoE of 1.3%/12.4% in FY22. Maintain Buy, with an SOTP-based target price of Rs 475 (1.9x FY22 ABV for the bank).

10:27 AM

BROKERAGE VIEW:: MOFSL on RIL

RJio should garner revenue/EBITDA CAGR of 22%/44% over FY20-22E along with strong EBITDA margin expansion. Although the company has witnessed subdued ARPU growth in 4QFY20, we believe this could be due to longer validity plans and full benefit of the price hike should accrue in FY21. Further, the favorable competitive landscape in the Indian telecom industry could offer healthy incremental EBITDA gain through a combination of ARPU increase and market share gains. Due to RJio’s lower debt and market leadership position, the company should garner premium valuations as compared to competitors. Thus, we have valued RJio at INR855/share (v/s Rs 760/share earlier) assigning 13x EV/EBITDA on FY22E (v/s Bharti’s 11x on India business). Subsequently, we have increased target price of RIL to Rs1,713/share from Rs 1,618 earlier.

10:26 AM

BROKERAGE VIEW:: Prabhudas Lilladher on Shree Cement

Rating: HOLD | CMP: Rs 18,733 | TP: Rs 16,900

SRCM reported Q4FY20 earnings in line with our estimates. Company depicted strong maturity over last one year with tight discipline on volumes and prices in its Northern operations. This is reflected in highest ever margins since FY09 and best ever absolute bottom line. However, we see material downside risk to SRCM's margins due to competition from new capacities, weak demand outlook and increased likelihood of leakage on volumes coupled with widening gap between A and C category brands. Company raised Rs 24bn in Q3FY20 through QIP of equity to fund capacity expansion despite quality B/S and strong cash flow generation. Overcapacity and weak demand would delay SRCM's capacity creation and hence, the RoE profile due to idle cash loaded in the B/S. Peaked out margins, slowing growth and stretched valuations (EV/EBITDA of 16.7x and P/E of 33x FY22E) leaves no scope for margin of safety. Hence, we maintain Hold with TP of Rs 16,900 (earlier Rs16,680).

10:23 AM

BROKERAGE VIEW:: Edelweiss Securities on Shree Cement

While the dislocation for FY21 is apparent on account of the COVID-19-caused havoc, we are optimistic on FY22 being a normal year. Factoring in SRCM’s strong balance sheet, and superior RoE and cost/t versus peers, we continue to value it at 15x FY22E EV/EBITDA. Despite a rich target multiple, our valuation framework implies limited upside. Maintain ‘HOLD/SP’ with a TP of Rs 19,503/share.

10:23 AM

BROKERAGE VIEW:: Edelweiss Securities on consumer durables

As the world mulls the roadmap to phased opening up post lockdowns, we advise investors to look beyond FY21E (double-digit growth dip) and focus on players with resilient demand exposure and strong competitive niche. We follow up our previous note with two key points: i) Lockdown extension in major consumption centres (top 25 cities) will slice off primary sales of cooling products/light electricals ~50–60%/30–35% in Q1FY21E considering high inventory levels and focus on liquidation by dealers. ii) We remain wary of players with high exposure to real estate given prolonged pain in the latter and prefer stable demand beneficiaries with robust competitive niche. Hence, we upgrade Crompton to ‘BUY/SO’ (from ‘HOLD/SP’) and downgrade Havells to ‘REDUCE/SU’ (from HOLD/SP); while the former has better resilience in a low-demand scenario with upsides from sector consolidation, Havells is more vulnerable to real estate pain.