HDFC twins, RIL drive Sensex 834 pts up; Nifty tops 14,500; midcaps outrun
Stock market LIVE updates: India VIX cools off 6%
 "MARKET LIVE: Sensex soars 800 points; Bajaj twins, HDFC top gainers")
9:04 AM
Sensex Heatmap | Top gainers & losers in pre-open trade
9:03 AM
Pre-open session: Sensex gains nearly 300 points
8:55 AM
Kotak Institutional Equities on L&T Finance
L&T Finance (LTFH) reported strong operating performance with record disbursements in select segments and liability-side-led NIM expansion, a trend that may continue in the near term. The immediate impact of moratorium exit seems moderate although recovery trends remain a monitorable. We remain neutral on the stock post the sharp rally; further comfort on asset quality trends will make us more assertive to play LTFH’s recovery story. ADD; Fair value: Rs 105.
8:50 AM
Phillip Capital on Mindtree: Maintains BUY; Target price at Rs 2,000
- Mindtree reported a strong Q3 performance – beating expectations on all fronts. Growth was broad based, with the top client as well as non-top clients growing smartly – pacifying concerns of concentrated growth and top client plateauing out.
- Margin expansion was the biggest surprise, with margins coming at 33 quarter high – on the back of strong gross margin expansion. The management has guided to sustainable +20% EBITDA margins – achievable in our opinion, even with wage hikes (Q4) and travel costs coming back (FY22).
- The margin expansion thesis, on which we had upgraded the stock is playing out to perfection. We believe there is enough near term play left in the stock, as we anticipate more EPS upgrades (we are already 7% above consensus) as Mindtree delivers margins ahead of street expectations. All along, we also expect its eventual merger with LTI to provide long term upside. Maintain BUY. TP: Rs 2,000
8:46 AM
Stocks to watch: Mindtree, Maruti, Adani Green, YES Bank, Apollo Hospitals
Mindtree: The consolidated net profit of the IT company jumped 65.7 per cent to Rs 326.5 crore in the December 2020 quarter. The company said its deal pipeline continues to be healthy and strong.
Maruti Suzuki: The automaker increased the price for select models by up to Rs 34,000 to offset adverse impact of rising input costs with effect from January 18.
Q3 earnings: ICICI Lombard General Insurance Company, Alembic Pharmaceuticals, L&T Infotech, Tata Communications and CSB Bank among 26 companies set to announce their December quarter numbers today. READ MORE
8:41 AM
BROKERAGE VIEW :: MOFSL on Coromandel International
CMP: Rs 823 | TP: Rs 1,090 (+32%) | Reco: Buy
>> We believe the earnings growth momentum is likely to sustain in 3QFY21. We expect CRIN to report revenue / EBITDA / adj. PAT growth of 15%/17%/29% YoY
>> The structural story remains intact with regard to increasing farmers’ awareness about having balanced nutrients in crops. This is likely to aid the shift from urea
>> We expect a revenue/EBITDA/PAT CAGR of 10%/14%/19% over FY20–23E. We value CRIN at 18x FY23E EPS to arrive at TP of INR1,090. Maintain Buy.
>> We believe the earnings growth momentum is likely to sustain in 3QFY21. We expect CRIN to report revenue / EBITDA / adj. PAT growth of 15%/17%/29% YoY
to INR37.7b/INR5.4b/INR3.4b in 3QFY21 on the back of a strong on-going rabi season. We expect Manufacturing EBITDA/mt to grow 10% YoY to INR4,200/mt in 3QFY21. Absolute EBITDA from the Trading segment would grow 5.8x YoY on account of higher volumes and better trading margins.
>> The structural story remains intact with regard to increasing farmers’ awareness about having balanced nutrients in crops. This is likely to aid the shift from urea
to complex fertilizers, and CRIN thus stands to be a key beneficiary. However, the key monitorable in the near future shall be RM prices.
>> We expect a revenue/EBITDA/PAT CAGR of 10%/14%/19% over FY20–23E. We value CRIN at 18x FY23E EPS to arrive at TP of INR1,090. Maintain Buy.
8:35 AM
BROKERAGE VIEW :: MOFSL on L&T
CMP: Rs 1,335 | TP: Rs 1,625(+22%) | Reco: Buy
>> Over the past one-year, L&T has underperformed the Nifty by ~15%. Adjusted for the valuation of listed subsidiaries, the core business has underperformed Nifty by 30% and is valued ~40% below the last peak hit during the interim Budget in Jul’19 after May’19 elections. The stock itself is down 15% from its peak, whereas its subsidiaries have witnessed an over 50% jump. We attribute the underperformance to the COVID-induced impact on economic growth and fiscal concerns towards infrastructure spending in the country. With a recovery in sight, we see room for its core business to see a meaningful re-rating.
>> We maintain our Buy rating with a higher TP of INR1,625/share on account of: a) core business target P/E multiple of 20x v/s long-term average of 22x, and b) contribution from four listed subsidiaries, after applying a 20% holding company discount. Adjusted for valuation of subsidiaries (INR604/share contribution), L&T trades at FY22E/FY23E P/E of 16x/14x, providing ample valuation comfort. Should the stock move to its long-term average multiple of 22x, our target price would stand at INR1,730 assuming no change in the valuation of its subsidiaries.
>> Over the past one-year, L&T has underperformed the Nifty by ~15%. Adjusted for the valuation of listed subsidiaries, the core business has underperformed Nifty by 30% and is valued ~40% below the last peak hit during the interim Budget in Jul’19 after May’19 elections. The stock itself is down 15% from its peak, whereas its subsidiaries have witnessed an over 50% jump. We attribute the underperformance to the COVID-induced impact on economic growth and fiscal concerns towards infrastructure spending in the country. With a recovery in sight, we see room for its core business to see a meaningful re-rating.
>> We maintain our Buy rating with a higher TP of INR1,625/share on account of: a) core business target P/E multiple of 20x v/s long-term average of 22x, and b) contribution from four listed subsidiaries, after applying a 20% holding company discount. Adjusted for valuation of subsidiaries (INR604/share contribution), L&T trades at FY22E/FY23E P/E of 16x/14x, providing ample valuation comfort. Should the stock move to its long-term average multiple of 22x, our target price would stand at INR1,730 assuming no change in the valuation of its subsidiaries.
8:33 AM
BROKERAGE VIEW :: MOFSL on Mindtree
CMP: Rs 1,661 | TP: Rs 1,765 (+6%) | Reco: Neutral
>> Since Jul’19, post the disruption pertaining to ownership change, Mindtree has been undertaking encouraging steps toward achieving stability in both its client and employee counts.
>> The strategy change to increase focus on annuity revenue and tail account rationalization is already reflected in the revenue and client mixes.
>> (1) A stable outlook for the Top account, (2) decent deal signings, and (3) the ability to sustain improved margins are key positives.
>> Consistent margin expansion and a positive outlook on the same are key positives. High exposure to Travel, Transport, and Hospitality remains a drag on overall recovery.
>> The stock is currently trading at 20x FY23E EPS. The stock has been one of the best performers in the IT sector in CY20, with returns of 87%. We believe the key positives are already captured, and we see limited upside hereafter. Our TP of INR1,765 implies 21x FY23 EPS (15% discount to LTI). Maintain Neutral.
>> Since Jul’19, post the disruption pertaining to ownership change, Mindtree has been undertaking encouraging steps toward achieving stability in both its client and employee counts.
>> The strategy change to increase focus on annuity revenue and tail account rationalization is already reflected in the revenue and client mixes.
>> (1) A stable outlook for the Top account, (2) decent deal signings, and (3) the ability to sustain improved margins are key positives.
>> Consistent margin expansion and a positive outlook on the same are key positives. High exposure to Travel, Transport, and Hospitality remains a drag on overall recovery.
>> The stock is currently trading at 20x FY23E EPS. The stock has been one of the best performers in the IT sector in CY20, with returns of 87%. We believe the key positives are already captured, and we see limited upside hereafter. Our TP of INR1,765 implies 21x FY23 EPS (15% discount to LTI). Maintain Neutral.
8:29 AM
Crude check :: Brent crude edges up as optimism over economy trumps demand concerns
>> Brent crude futures edged up on Tuesday as optimism that government stimulus will buoy global economic growth and oil demand trumped concerns that renewed COVID-19 pandemic lockdowns globally could cool fuel consumption.
>> Brent crude futures for March rose 17 cents, or 0.3%, to $54.92 a barrel after slipping 35 cents in the previous session.
>> Brent crude futures for March rose 17 cents, or 0.3%, to $54.92 a barrel after slipping 35 cents in the previous session.
>> US West Texas Intermediate crude was at $52.25 a barrel, down 11 cents, or 0.2%.
(Source: Reuters)
(Source: Reuters)
8:27 AM
Dollar hovers near one-month high as Biden's FX policy takes shape
>> The dollar hovered around its highest in nearly one month on Tuesday with traders expecting US Treasury Secretary nominee Janet Yellen to affirm a more traditional commitment to market-set currency rates when she testifies at Capitol Hill later.
>> The greenback has started the year with a near 2% rally against major peers, supported by a rise U.S. Treasury yields in response to Biden’s plan for a $1.9 trillion pandemic relief package.
>> The greenback has started the year with a near 2% rally against major peers, supported by a rise U.S. Treasury yields in response to Biden’s plan for a $1.9 trillion pandemic relief package.
>> The safe-haven currency fell nearly 7% last year on expectations US monetary policy would stay ultra-loose and on hopes for a post-pandemic global recovery.
>> The greenback has also been helped recently by an unwinding of bearish bets, with data showing that hedge funds piled up the biggest net short position since May 2011 in the week ended Jan. 12. Such large positions suggest that traders would be relatively more inclined to reduce their positions than add to already big bets.
(Source: Reuters)
>> The greenback has also been helped recently by an unwinding of bearish bets, with data showing that hedge funds piled up the biggest net short position since May 2011 in the week ended Jan. 12. Such large positions suggest that traders would be relatively more inclined to reduce their positions than add to already big bets.
(Source: Reuters)
8:23 AM
Rupee check
Source: Bloomberg
8:20 AM
Stock calls by Nilesh Jain of Anand Rathi
BUY TITAN | TARGET: Rs 1,570 | STOP LOSS: Rs 1,451
The stock has formed a "bullish candle" after falling for the 4th consecutive session. This pattern resembles a bullish engulfing candlestick pattern which is considered as a bullish reversal pattern. The stock also has strong support at 1,451 which was its previous swing low and looks like a possibility of a "double bottom" formation. It is also trading well above its short-term and long-term moving averages. The momentum indicator RSI has reversed from the oversold territory on the daily chart which hints of a strong pullback on the higher side. READ MORE
8:10 AM
FII/FPI & DII trading activity on NSE, BSE and MSEI
Topics : MARKET WRAP Markets IRFC Maruti Suzuki India MindTree NSE BSE Sensex Nifty50 SGX Nifty Coronavirus Vaccine Rupee vs dollar
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First Published: Jan 19 2021 | 7:34 AM IST
