MARKET: Indices snap 5-day rally amid weak global cues, Sensex dips 59 pts

All that happened in the markets today

9:09 AM

Elara Capital on Bajaj Finance

9:08 AM

Nomura on Sun TV

• We expect Sun TV to report a ~60% y-y decline in advertisement income in 1QFY21, as regional/smaller advertisers are likely to have cut ad budgets due to the weak business outlook. 
 

• On the subscription side, we expect ~14% y-y growth in revenues due to ongoing digitisation. Overall revenues are likely to have declined 43% y-y in 1QFY21 due to the absence of IPL revenues (~23% of 1QFY20 revenues).

 

• EBIT margins are likely to have risen ~sharply to 58.1% on lower spends on new content in 1Q, fewer movies showcased in 1Q and better revenue mix (subscription revenue share up 20 ppts q-q to 74%)

• We maintain our Buy rating on the stock as current valuations at 10.6x FY22F EPS are attractive.

9:07 AM

Commodity heatmap :: Gold inches towards 50,000-mark on MCX

9:04 AM

Top gainers and losers on the S&P BSE Sensex at Pre-open

9:03 AM

Markets at Pre-open

9:03 AM

Markets at Pre-open

8:58 AM

Stocks to watch: L&T, HUL, Axis Bank, Bajaj Auto, IndiaMART, Polycab India

L&T: Edelweiss Securities notes that L&T's year-on-year (YoY) numbers are not comparable as previous year does not include Mindtree. It estimates L&T's revenue to slip 22.8 per cent YoY to Rs 22,867.5 crore while earnings before interest, taxes, depreciation, and amortisation (EBITDA) is expected to see a sharp decline of 50.5 per cent at Rs 1,644.1 crore.
 

Bajaj Auto: With a volume decline of over 60 per cent year-on-year, analysts expect Bajaj Auto’s margins to remain under pressure for the April-June quarter earnings of financial year 2020-21 (Q1FY21). However, the decline in net profit could be cushioned by higher other income, analysts say. 

 

HUL: FMCG major Hindustan Unilever on Tuesday reported a 5.7 per cent increase in consolidated net profit to Rs 1,897 crore for the first quarter ended June 30. The company had posted a net profit of Rs 1,795 crore in April-June quarter of the previous fiscal. READ MORE 

8:53 AM

BROKERAGE VIEW :: Motilal Oswal Financial Services on Hindustan Zinc

CMP: Rs 183 | TP: Rs 208 (+14%) | Reco: Neutral

We expect HZ’s EBITDA at 11% CAGR over FY20-22E despite lower LME, primarily on ~10% volume CAGR to 1,034kt. LME Zinc prices have recovered ~21% from the recent lows this year and are down just ~5% YTDCY20 (CMP: USD2,173/t). We have factored in LME Zinc of USD2,125/t for FY21E and USD2,250/t for FY22E. At CMP, the stock trades at 6.3x/5.0x FY21E/FY22E EV/EBITDA. We remain Neutral, with TP of INR208/share, based on 6.0x FY22E EV/EBITDA.

 

8:48 AM

BROKERAGE VIEW :: Motilal Oswal Financial Services on Axis Bank

CMP: Rs 446 | TP: Rs 600 (+35%) | Reco: Buy

AXSB reported a strong quarter amidst tough macro environment. It reported a sharp decline in moratorium book while asset quality ratios improved considerably. Earnings were in line as the bank adopted conservative accounting policies and further strengthened the balance sheet by making additional provisions; however, NII growth was robust despite moderation in margins. The sharp decline in the moratorium book eases concerns on asset quality/capital erosion – similar to the loss that the bank reported in 4QFY20 – bringing back focus on potential earnings/credit cost trajectory. Though the BB & below pool witnessed slight moderation, slippages are likely to remain elevated over FY21E and would be driven by such low-rated assets besides loans under moratorium. We have increased our FY21/FY22E earnings by 12%/10% and estimate AXSB to deliver RoA/RoE of 1.0%/11.5% in FY22E. Maintain Buy with a revised target price of INR600 (1.7x FY22E ABV)

8:45 AM

BROKERAGE VIEW :: Motilal Oswal Financial Services on HDFC Life

CMP: Rs 627 | TP: Rs 600 (-4%) | Reco: Neutral

HDFCLIFE remains focused on maintaining a balanced product mix across the Savings/Protection businesses, with emphasis on product innovation / superior customer service. However in the near term, Individual Protection/PAR segments are likely to see healthy growth while ULIP trends should remain sluggish. VNB margins have moderated over the past few quarters, and we estimate these to gradually improve to ~26% by FY22E. However, persistency trends are likely to moderate, especially in the ULIP segment, while it should remain strong in the Protection segment. Overall, we expect operating RoEV to remain steady at ~18%. HDFCLIFE currently trades at rich valuations, and thus, offers limited upside, in our view. We value the stock at INR600, corresponding to 4.1x FY22E EV. Maintain

Neutral

8:42 AM

BROKERAGE VIEW :: Motilal Oswal Financial Services on Bajaj Finance

CMP: Rs 3,293 | TP: Rs 3,000 (-10%) | Reco: Neutral

>> BAF has guided for continued cost rationalization and focus on fees in the near term to navigate earnings pressure. AUM growth is likely to be 10–12% for FY21 (MOFSe of 12% YoY) and provisioning expenses would be INR60–63b. We bake-in provisions of INR66b (4.3% of loans) for FY21.

>> BAF reported a largely in-line quarter, barring the surprise on fee income and MTM gains. We have upgraded fees and other income estimates by ~20%, leading to a PPoP upgrade of 3–4%. However, due to an increase in provisioning estimates, PAT estimates are largely unchanged. Maintainneutral, with target price of INR3,000 (Unchanged, 4.2x FY22 BV).

8:39 AM

BROKERAGE VIEW :: Motilal Oswal Financial Services on HUL

CMP: Rs 2,319 | TP: Rs 2,550 (+10% ) | Reco: Buy

>> The company’s earnings growth has gained further momentum in recent years (17% EPS CAGR in the past three years v/s ~12% CAGR over 10 years). This is particularly impressive given the weak mid-single-digit earnings growth posted by (much smaller) peers in recent years. HUVR’s best-of-breed analytics and execution ability (exhibited by the successful implementation of the WIMI strategy, cost-saving plans, herbals, etc.) are key factors driving the pace of earnings growth.

>> The scale of HUVR’s P&L v/s peers offers the company significant levers for superior management of costs even beyond what was already witnessed in 1QFY21. Even in FY20, the company managed to carve out as much as 7% of sales on cost savings.

>>  We remain positive on HUVR from a medium-term perspective, encouraged by: a) robust earnings growth potential beyond the near term owing to its portfolio

and execution strengths and b) significant synergies in FY22E as a result of GSKCH. These factors suggest premium multiples are likely to sustain. Valuing the company at 55x Jun’22 merged EPS, we arrive at TP of INR2,550, implying a 10% upside.

8:33 AM

Nifty view and stock call by Vinay Rajani, HDFC Securities

Nifty heading towards 11300 Target

 

Nifty has risen for the fourth session on the trot. The index has reached well above its 200-day simple moving average (SMA), placed at 10,865. Now, 200-day moving average (DMA) can act as a support for trading long positions. The Upward sloping trendline adjoining bottoms of Oct 2018(10,004), Aug 2019(10,637), and Sep 2019(10,670) projects the strong resistance around 11,300 in Nifty.  READ MORE

8:31 AM

Trading strategies by Religare Broking

Indian Oil Corporation Limited
 

Recommendation: Buy
 

Target: 102
 

Stop loss:87
 

IOC surged strongly on July 21, posting a fresh breakout from a month-long consolidation phase. Besides, the energy index has also witnessed a fresh breakout, which further adds to the confirmation. Put together, we are anticipating the momentum to continue ahead thus traders can initiate fresh longsin the given range. READ MORE

8:28 AM

Bulk deals on BSE as on Tuesday

Click here for complete list