MARKET WRAP: Stimulus package disappoints; Sensex plunges 1,069 pts

All that happened in the markets today

2:15 PM

NEWS ALERT | Axis Bank cuts lending rates by 5-15 bps across tenures, reports CNBC-TV18

2:14 PM

BROKERAGE VIEW:: ICICI Securities on Cipla

We continue to focus on the management’s long-drawn strategy of targeting four verticals viz. One-India, South Africa & EMs, US generics & specialty and lung leadership. Recent first generic approval by USFDA for Albuterol sulphate (Proventil HFA) amid rise in demand for Albuterol products in the ongoing Covid-19 pandemic are a vindication for its lung leadership quest. While US focus will be on specialty including hospitals, value accretive generics, India focus will be on branded (Bx), trade generics (Tx). On the Africa front, Cipla continues to rebase its business model towards private business in the backdrop of shrinking tender opportunities. Another key aspect to watch would be R&D recalibration. Across the board transformation from tenderised model to private model in exports market and towards rapid consumerisation of important Tx, Bx in India bode well to change the investors’ perspective. Our revised target price is Rs 670 based on 22x FY22E EPS Rs 30.2. We upgrade the stock from HOLD to BUY.

2:07 PM

Rupee closing

Rupee ends lower at 75.91/$ vs Friday's close of 75.56 against the US dollar

2:04 PM

Bharat Forge, HAL, Coal India: Bet on these 5 stocks on stimulus package

Coal India Ltd (COALINDIA): The stock has always been seen as a “risky trade” and continues to trade with the same sentiment. As this counter has breached the significant support of Rs 150, the momentum has turned bearish. One can witness the negative reversal of Moving Average Convergence Divergence (MACD) from the zero line, when the counter made an effort to cross Rs 150 mark recently. All this shows weakness if the stock tries to move up. There is clear selling pressure evident on the charts at higher levels. It is better to wait for Rs 150 to get conquered and then take a trading position. READ MORE

1:53 PM

Nifty Realty index hits lowest level since December 2016; DLF dips 5%

DLF, Prestige Estates Projects, Indiabulls Real Estate, Oberoi Realty, Mahindra Lifespace Developers, Brigade Enterprises and Sobha from the Nifty Realty index slipped in the range of 5 per cent to 10 per cent in intra-day trade on the National Stock Exchange (NSE). Of these, Mahindra Lifespace Developers, Brigade Enterprises and Prestige Estates Projects touched their respective 52-week lows. READ MORE  

1:45 PM

The stimulus and beyond: is a stronger demand support called for?

Structural reforms: features of the new normal

 

A number of major structural reforms were also introduced. These include repositioning of the public sector, decriminalization of certain corporate lapses, privatization of coal and other mineral mining, increased FDI limit in defence, ban on imports on specified defence weapons/platforms, and privatization of discoms in union territories. Direct listing of Indian companies abroad will enable them to raise capital overseas. In the case of agriculture, a genuine barrier-free all-India market for agricultural produce is a key feature of India’s new normal. These are far-reaching efficiency augmenting supply side reforms. READ MORE

1:41 PM

BROKERAGE VIEW:: Centrum Broking on Nippon Life India

Nippon Life India Asset Management (NAM-India) reported Q4FY20 revenue from operations of Rs2.75bn, lower to estimates, led by a fall in equity in the overall AUM. Opex saw a decline during the quarter led by lower employee cost/ other opex. Core operating profit grew 11.0% QoQ. Opex rationalisation in terms of variable pay (25% of EBE is variable) might protect profitability in FY21E. We like NAM-India given its pan-India distribution network and focus on sourcing granular retail AUM from B-30 cities. Also, it has added 290 corporate/HNI clients in H2FY20 (170 in Q3FY20) and it has partly regained lost market share lost in debt and liquid funds in the past year. We maintain our P/E multiple at 30.6x to arrive at a target price of Rs 284. BUY.

1:35 PM

NEWS ALERT | United Spirits to be delisted soon, reports CNBC-TV18

1:28 PM

NEWS ALERT :: Gold jumps to highest since October 2012

>> Gold rose over 1% on Monday to its highest in more than seven years as dismal US data underscored how badly the COVID-19 pandemic has damaged the world’s top economy, while palladium soared over 9% on better-than-expected demand outlook.

>> Spot gold was up 1.1% at $1,760.85 per ounce by 9:32 am, after rising to its highest since Oct. 12, 2012 at $1,763.51. U.S. gold futures gained 0.8% to $1,770.50.

1:24 PM

India VIX jumps 7%, crosses 40-mark

1:18 PM

FM's economic vaccine: Final tranche is high on reforms, low on stimulus

State-owned units will remain only in strategic areas, which, however, are yet to be defined, while those in other areas will be privatised, according to public sector enterprise policy, which the government will detail later.

 

Union Finance Minister (FM) Nirmala Sitharaman also gave leeway to states in terms of market borrowing, but much of it is conditional on reforms, such as the one-nation-one-ration card. READ MORE

1:11 PM

BROKERAGE VIEW:: Edelweiss Securities on L&T Technology Services

L&T Technology Services (LTTS) reported USD revenue decline of 2% QoQ in Q4FY20. EBITDA margin came in at ~ 19.8% (ex-one-off), in line with our estimate. Revenue contraction is attributable to a 9% QoQ dip in Plant Engineering (PE), overwhelming the robust 7% QoQ growth in the medical devices business. Industrial products and Telecom & Hi-Tech were marginally down QoQ. Management refrained from guiding for FY21, but mentioned they expect revenue to slide in Q1FY21 and the recovery to take place thereafter. While we remain bullish on the long-term prospects of the fast-growing ER&D and believe LTTS is in a pole position to benefit thereof, the near-term pain from COVID-19 forces our hand to cut LTTS’s EPS by 15% each for FY21E and FY22E. We are also slashing its target multiple from 20x to 17x in line with our sectoral adjustment. Maintain ‘BUY’ with a revised TP of Rs1,394 (Rs1,885 earlier) at 17x Q2FY22E EPS.

1:01 PM

Stimulus package to boost growth, but need sector-wise bailout: CEO poll

In a nationwide poll of 25 industry leaders on Sunday, 64 per cent said the package announced by Finance Minister Nirmala Sitharaman over the past five days will boost a sluggish economy, but 88 per cent of CEOs said they had been expecting sector-specific packages.

 

Some sectors like aviation, hospitality, travel and tourism, and automobile have witnessed zero cash flow since the lockdown began. Several companies from these sectors are either laying off people or have announced steep salary cuts. READ MORE

12:51 PM

BROKERAGE VIEW:: YES Securities on M&M Fin Services

Rating: ADD | Target Price: Rs 200

VIEW: Our FY21/22 earnings undergo severe cuts due to adverse adjustments to loan growth, NIM and credit cost. Retain ADD rating with a 12m TP of Rs200. While there is high uncertainty and a substantial near-term pain, the pro-cyclicality of franchise could drive a significant RoA/RoE bounce in FY22.

 

VALUATION: On a stand-alone basis, MMFS trades at 1.2x/5x FY22 ABV/EPS. Valuation is most sensitive to emerging asset quality picture.

Risk to our call: Prolonged Covid episode causing deeper impact on growth and AQ

12:49 PM

NEWS ALERT :: Zen Technologies looks to commercially manufacture ventilators

(Via BSE filing)