Indices end near day's high, Sensex up 558 pts; UltraTech Cement jumps 7%

All that happened in the markets today

12:10 PM

Here's why CLSA and Edelweiss have downgraded Reliance Industries' stock

Edelweiss Securities notes that its two-stage reverse-discounted cash flow (DCF) analysis of RIL stock shows that the market is baking in high earnings per share (EPS) growth, particularly for Jio Platforms - 35 per cent compound annual growth rate (CAGR) and 31 per cent for Reliance Retail sustaining over the next ten years, which by any measure is a tall ask. READ MORE 

11:57 AM

MARKET CHECK

11:48 AM

BROKERAGE VIEW:: Centrum Broking on Asian Paints

We reckon its strategy, communicating safe painting gaining consumer confidence, strengthening rural coverage, and developing products meeting customer needs would yield better revenues in the medium-term. Further, management said down-trading is visible in the paint industry. Nonetheless, its focus on driving volume and gain market share from local players may get momentum in FY21. Considering tailwinds from benign RM cost (Crude oil) we have increased FY21E/22E PAT by 0.7%/4.4%. We retained Buy rating with DCF-based revised target price of Rs 1,916 (Implied 54.4x FY22 EPS).

11:43 AM

BROKERAGE VIEW:: Anand Rathi Shares on TCS

Given beside is the weekly line chart of TCS which depicts that recently the stock confirmed a multiyear breakout above 2300 mark and underwent some correction. The corrective move got arrested near the placement of another breakout extension. That breakout is a one from the falling trend line. The support coincides with the placement of ichimoku cloud on a weekly time frame. The price structure is still very bullish and the recent downside could just be a buying opportunity. Traders can accumulate the stock between Rs 2,200 - Rs 2,160 with a stop loss of Rs 1,980 (Closing basis) for an upside target of Rs 2,580.

11:41 AM

BROKERAGE VIEW:: Prabhudas Lilladher on Tech Mahindra

Rating: ACCUMULATE | CMP: Rs 665 | TP: Rs 716

We expect Enterprise business to led growth in FY21E led by Hi-tech, healthcare, life sciences & BFSI.  We now expect 5% total revenue decline in $ terms in FY21E (earlier: -9.7%) & have increased our margin estimates. Margin upgrades led to EPS upgrades of 16%/11% for FY22/23E. We now value Tech M on 14X multiple (margin volatility & lower margins than peers will restrict further re-rating of multiples) on Sep-22 EPS of Rs 51 to arrive at a changed target price of Rs 716 (old TP: Rs.493) Tech M is currently trading at 13.2X/12.8X earnings multiple of Rs.50.3/51.9 FY22E/23E EPS respectively. Upgrade to Accumulate from Reduce. Delay in the pickup of TCV remains risk to the rating.

11:39 AM

BROKERAGE VIEW:: Motilal Oswal Financial Services on Tech Mahindra

RATING: NEUTRAL | TARGET PRICE: Rs 750

Across cycles, P/E multiples of the stock averaged to 13x. Even as the entire sector re-rated (including Tier II) during this results season, TechM is still trading

at 12.6x FY22E EPS. We believe the sector re-rating is likely to sustain given the phenomenal resilience and adaptability demonstrated during the quarter. Accordingly, we see some headroom for the P/E multiple of TechM to catch up. We value the stock at ~14x FY22E EPS.

11:36 AM

BROKERAGE VIEW:: ICICI Securities on IIFL Securities

Client acquisition, the focus on building AUM remains focus leading to a gradual shift towards stability in a cyclical business. Covid has no direct impact on business; though a decline in overall volumes impacted. PAT (excluding exceptional gains) is expected to increase at 19% CAGR in FY21-22E. The impact of recent regulations related to intraday trading & distribution would be watched. The company has ~Rs 700 crore worth of real estate with book value on the balance sheet of ~ Rs 350 crore. Monetisation of real estate assets remains an upside catalyst to drive one-time gains. Given a beneficiary of strong growth in clients and cash ADTO witnessed in the industry, we maintain BUY rating with TP at Rs 46, valuing the stock at ~6.8x FY22E EPS.

11:34 AM

BROKERAGE VIEW:: LKP Securities on Bajaj Auto

Bajaj came out with better than expected numbers in Q1, thanks to its strength in the export markets. Going forward, as the nation is opening up and unlocking itself, things will start to improve. With intrinsic demand getting back almost to the pre-COVID level production/supply constraints still persist to some extent. 2W demand in the domestic markets is expected to continue its uptrend with strong rural demand driven by good monsoons. We expect a good festive season with pent up demand coming into foray. On the low base of FY 21, we anticipate a strong FY 22E. With export improvement expected to continue and high margin models to sell well in domestic markets, margins are expected to improve. With the ultimate demand for personal mobility playing on, we expect Bajaj to get its advantage. With a strong balance sheet, robust return ratios, and zero financial leverage, we believe the stock looks attractive even at 16x FY 22E earnings. We maintain our BUY rating on the stock with a target price of Rs 3,342 (at 18x FY 22E earnings).

11:32 AM

BROKERAGE VIEW:: Edelweiss Securities on Havells (India)

Havells India (Havells) posted better-than-consensus Q1FY21 numbers spurred by pent-up demand in June and cost initiatives (fixed, discretionary). However, cash flows deteriorated significantly with a sharp rise in debt. According to management, while June-July retail and channel demand were good, B2B/B2G was relatively weak. Demand in tier II/III and online sales fared well versus large towns/off-line, helping lower dealer inventory, which is comforting. The stock has run-up sharply recently (up 27% in two months) as the market is factoring healthy pent-up demand/lockdown lifting. However, we believe demand slowdown and channel stress are much deeper, especially in new construction/real estate, clouding medium-term growth outlook. Maintain ‘REDUCE/SU’ with TP of Rs 410 (32x FY22PE); retain Voltas and Crompton as top picks.

11:29 AM

YES Bank shares fall below FPO price of Rs 12; stock slips 58% in 13 days

The trading volumes on the counter have more-than-doubled, with a combined 640 million equity shares changing hands on the NSE and BSE. In the past 13-trading days, the stock has slipped 58 per cent from level of Rs 26.65 on July 9, 2020.

 

The private sector lender had raised Rs 15,000 crore through FPO by issuing shares at price of Rs 12 per share. Over 12.5 billion new shares issued in the FPO commenced trading on Monday. READ MORE

11:18 AM

Marico: Management's positive commentary offers some comfort, say analysts

Marico’s performance for the quarter ended June 30, 2020 (Q1), announced during market hours on Monday, came in as a surprise. Besides beating the Street’s expectations, the hair-to-edible oil major's Ebitda margin was the highest in nearly 12 years, led by aggressive cost control.

 

Yet, the Street wasn't convinced, given the negative stock reaction to the results amid worries over growth in the hair oil category and deceleration in Saffola edible oil's volume growth.  READ MORE

11:06 AM

Sebi starts one-time settlement opportunity in illiquid stock option cases

After the expiry of the scheme, entities who do not avail the one-time settlement opportunity will be liable for action, it added.

 

Underthescheme,the entities whoexecutedtradereversals on the stock options segment of BSE during the period April 1, 2014 to September 30, 2015, against whom any proceedings are pending, are eligible to avail the settlement opportunity. READ MORE

10:57 AM

Discount brokerages likely to benefit after intoduction of new norms

“The new norms remove the regulatory arbitrage on margin collections that traditional full-service brokerages were able to take advantage of. With upfront margins becoming mandatory across industry, players charging flat-broking fees to intraday traders are likely to gain traction,” said Jimeet Modi, founder and chief executive officer of Samco Securities. READ MORE

10:46 AM

HDFC Life Insurance hits all-time high ahead of inclusion in Nifty50 index

In the past one month, HDFC Life has outperformed the market by surging 19 per cent, as compared to an 8 per cent rise in the Nifty50 index. In the past three months, it has rallied 32 per cent, as against a 19 per cent gain in the benchmark index. READ MORE

10:36 AM

Aviation sector faces Covid-19 turbulence: What analysts expect from Q1 nos

“With domestic air travel resuming only from May 25th at 1/3rd of approved 2020 summer schedule, we expect Q1 performance to be adversely impacted due to loss of peak summer travel days; truncated size of operations; little to no ancillary revenues (except for cargo operations); and travel restrictions by state governments adding to confusion thereby further denting consumer confidence,” noted Paarth Gala, research analyst at Prabhudas Lilladher. READ MORE