Indices end flat, Nifty settles at 11,464; mid, small-caps outperform
All that happened in the markets today
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The S&P BSE Sensex settled 14 points, or 0.04 per cent higher at 38,854.5 levels.
9:06 AM
Markets at Pre-Open
9:05 AM
Markets at Pre-Open
9:00 AM
BROKERAGE VIEW :: Kotak Institutional Equities on Oil and Gas firms
>> The recent increase in marketing margins on auto fuels augurs well for the earnings trajectory of downstream PSU stocks in the near term, as it will more than offset (1) sustained weakness in underlying refining margins and (2) inherent volatility in global crude prices. This reinforces the flexibility utilized often by these companies to tide over an adverse global macro environment.
>> We reiterate BUY on BPCL, HPCL and IOCL noting inexpensive valuations post the recent correction in stock prices. A sharp rebound in crude price, albeit unlikely, is a key risk to our positive stance.
>> We reiterate BUY on BPCL, HPCL and IOCL noting inexpensive valuations post the recent correction in stock prices. A sharp rebound in crude price, albeit unlikely, is a key risk to our positive stance.
8:59 AM
BROKERAGE VIEW :: Kotak Institutional Equities on mid-tier IT firms
>> Baring Private Equity Asia (BPE) has announced its intent to acquire Virtusa Corporation, a US$1.3 bn revenue mid-tier IT Services company, at a transaction valued at US$2 bn. This values Virtusa at 16.2X ttm EBITDA. The acquisition comes at an interesting time when BPE is in the midst of delisting Hexaware through a SEBI mandated reverse book building process. Hexaware trades at TTM EV/EBITDA of 12.2X at the current market price.
>> Mid-tier companies’ performance has improved over the past few years. One of the reasons for improved performance is that digital has reduced the competitive advantage for scale players. Scale has been a big entry barrier into quality F500/G1000 clients till 2014.
>> Mid-tier firms have combined reduced deal sizes with smart sales strategies and solutions based approach to win fair share of deals. Ramp-up of these deals have helped shore up performance. For example, LTI won 8 large deals in the past 12 months, ramp-up of which has helped overall performance LTI is our preferred midcap pick.
>> Mid-tier companies’ performance has improved over the past few years. One of the reasons for improved performance is that digital has reduced the competitive advantage for scale players. Scale has been a big entry barrier into quality F500/G1000 clients till 2014.
>> Mid-tier firms have combined reduced deal sizes with smart sales strategies and solutions based approach to win fair share of deals. Ramp-up of these deals have helped shore up performance. For example, LTI won 8 large deals in the past 12 months, ramp-up of which has helped overall performance LTI is our preferred midcap pick.
8:56 AM
Top stocks to watch out for today
Info Edge: Shares of Info Edge may trade actively in today's session as food-delivery firm Zomato has raised Rs 760 crore in Series J funding from US-based hedge fund Tiger Global Management. Further, the company said it plans to file for an initial public offering in the first half of 2022.
RIL: Clarifying on news reports that RIL is planning to offer Amazon $20 billion stake in retail arm, the company said it cannot comment on media speculation and rumours and also it cannot confirm or deny any transaction which may or may not be in the works.
Earnings today: A total of 104 companies including IRCTC, BHEL, and Adani Green are scheduled to announce their quarterly earnings today. READ MORE
8:55 AM
BROKERAGE VIEW :: MOFSL on Tata Motors
CMP: Rs 143 | TP: Rs 227 (+58%) | Reco: Buy
>> With good support from the China, EU, and US governments, demand recovery is expected to be underway from 2HFY21. JLR should also benefit from the new
>> We estimate net debt (Auto) to decline to ~INR296b by FY23 from ~INR482b in FY20. This is not factoring any monetization in non-core assets, but factoring warrant conversion by the parent, resulting in the infusion of ~INR26b.
>> We revise our estimate upward by ~84% on low base for FY22E, driven by volume upgrades in India CV/PV, and 130bp EBITDA margins for India and ~40bp
>> With good support from the China, EU, and US governments, demand recovery is expected to be underway from 2HFY21. JLR should also benefit from the new
Defender and PHEV Evoque/Discovery Sport. We expect JLR's volumes (including the JV) to post an 8% CAGR over FY20–23E (after 4.4% decline over FY17–20). This, coupled with possible improvement in the mix and a reduction in variable marketing spends, should drive further improvement in realizations.
>> While TTMT’s India CV business has bottomed out, although recovery is slow, the business is witnessing sharp recovery, supported by industry-level recovery as well as TTMT’s new products. We estimate LCV/M&HCV/PV volume CAGR of 5.5%/4%/20% over FY20–23E and S/A EBIT margins of -8.4%/-0.9%/2.3% for FY21E/FY22E/FY23E.
>> While TTMT’s India CV business has bottomed out, although recovery is slow, the business is witnessing sharp recovery, supported by industry-level recovery as well as TTMT’s new products. We estimate LCV/M&HCV/PV volume CAGR of 5.5%/4%/20% over FY20–23E and S/A EBIT margins of -8.4%/-0.9%/2.3% for FY21E/FY22E/FY23E.
>> We estimate net debt (Auto) to decline to ~INR296b by FY23 from ~INR482b in FY20. This is not factoring any monetization in non-core assets, but factoring warrant conversion by the parent, resulting in the infusion of ~INR26b.
>> We revise our estimate upward by ~84% on low base for FY22E, driven by volume upgrades in India CV/PV, and 130bp EBITDA margins for India and ~40bp
EBIT margins for JLR. The stock trades at 2.7x FY22E EV/EBITDA and 1x P/BV. Maintain Buy, with TP of ~INR227 (Sep’22E-based SOTP).
8:49 AM
Charts show bulls are making a strong comeback: Nilesh Jain
BUY NIFTY | TARGET: 11,550 | STOP LOSS: 11,360
The Nifty index negated the formation of lower top and lower bottom formation pattern on the daily chart. Also, it has provided a breakout from a falling trend line on the hourly chart, which hints that the bulls are making a strong comeback. The momentum indicators and oscillators on the weekly scale are very well on buy mode. The volatility index “Indiavix” has also started cooling down which is giving comforts to the bulls. Hence, aggressive traders can initiate a long position for a pullback towards 11,550-11,600 levels. READ MORE
8:48 AM
Derivative strategy on Cummins
Buy Cummins 470 CALL at Rs 14.50
Stop Loss: Rs 11
Target: Rs 20
Lot Size: 1,200.
Rationale:
-- Long build-up is seen in the Cummins Futures’ where we have seen 8 per cent (Prov) rise in the Open Interest with Price moving up by 2 per cent. READ MORE
8:38 AM
FII/FPI & DII trading activity on NSE, BSE and MSEI
8:35 AM
Rupee check
Source: Bloomberg
8:31 AM
Oil prices add to losses as supplies swell amid weak demand due to pandemic
Brent crude was down 8 cents, or 0.2%, at $39.98 a barrel, after falling nearly 2% on Thursday, while U.S. crude was off by 2 cents at $37.28 a barrel, having fallen 2% in the previous session. READ MORE
8:27 AM
SGX Nifty update
>> At 8:26 am, the index was down 35 points, or 0.31 per cent, at 11,425 level.
8:24 AM
Asia trades mixed
Source: Reuters
Topics : Markets Hindustan Aeronautical Ltd Info Edge IRCTC Bhel YES Bank Reliance Industries MARKET WRAP
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First Published: Sep 11 2020 | 7:43 AM IST
