MARKET WRAP: Nifty ends below 11,100, Sensex sheds 289 pts; CCD slips 20%

The Sensex and Nifty50 touched an intra-day low of 37,359 and 11,073 respectively.

8:46 AM

NEWS ALERT | SBI tightens lending terms for auto dealers: Reuters

-- State Bank of India (SBI) has tightened lending terms dramatically for auto dealerships, according to a source and an internal memo, seeking to reduce its exposure to risk from a sector in the midst of a sharp downturn.

-- In one internal memo for financing dealers selling vehicles made by Hyundai Motor Co’s India unit, SBI said it is revising the lending terms because of “growing stress” in the carmaker’s portfolio.

(As reported by Reuters)

8:42 AM

More than 36% of registered companies have 'closed' down in India

The reason for the jump is the inclusion of companies not filing financial statements or annual returns for two years into the category of “closed” companies. The government identified such companies and declared them defunct under the Companies (Removal of Names of Companies from the Register of Companies) Rules (along with amended Rules 2019), coined under Section 248(1) of the Companies Act, 2013. READ MORE

8:40 AM

Axis Bank Q1 preview: 15% growth in NII seen, exposure to stressed assets eyed

Analysts at Prabhudas Lilladher, for instance, peg the bank’s profit at Rs 1,860.3 crore, up 165 per cent YoY. This would be a nearly 24 per cent rise from the sequential profit of Rs 1,505.1 crore reported in the March quarter of previous fiscal (Q4FY19).

 

“Core performance for Axis Bank will continue to improve with likely NII growth of nearly 15 per cent YoY and pre-provision profit (PPOP) growth of nearly 22 per cent YoY,” they wrote in their result preview note. READ MORE

8:38 AM

Hero MotoCorp Q1 preview: Over 15% fall in profit seen amid falling volume

he company's volumes saw a 12.5 per cent dip in the June quarter on a year-on-year (YoY) basis to 18.4 lakh units. Scooter volumes slumped 37 per cent to 1.2 lakh units while motorcycle volumes declined around 10 per cent YoY to 17.2 lakh units during the quarter.

Analysts at Motilal Oswal see a 19.6 per cent decrease in Hero MotoCorp's net profit to Rs 730.9 crore for the quarter under review as compared to Rs 1,115.2 crore profit reported in the corresponding quarter last year. Revenue, they said, may see an 8 per cent YoY degrowth to Rs 8,096.2 crore. READ MORE

8:36 AM

Tech Mahindra Q1 preview: Weak numbers likely; revenue guidance eyed

ech Mahindra, the Pune-headquartered IT services firm, is likely to report a weak set of numbers for June quarter of the financial year 2019-20 (1QFY20) when it declares its financial results Tuesday. In line with industry peers, the company is expected to see a dip in operating margin, owing to rupee appreciation, wage hikes, visa fees and Comviva seasonality. READ MORE

Tech Mahindra CEO C P Gurnani

8:33 AM

Kotak Securities on Persistent Systems

Recommendation: ADD

TP: Rs 592

In Q1FY20, the company has again reported dismal performance, we have accordingly changed our earnings estimates to reflect the same. Key parameters such as utilization levels, attrition rate, revenue productivity and digital revenue mix have been disappointing in Q1FY20. We expect Persistent to report an EPS of Rs.48.1/share in FY20E (earlier Rs. Rs.49.6) and an EPS of Rs.49.3/share in FY21E (earlier Rs. Rs.52.5). With the change in the top management, we expect better execution, lower attrition, higher revenue from re-seller business and past challenges to be resolved in the medium to long term.

 

We now recommend ADD rating on Persistent and a multiple based price target of Rs.592/share (earlier Rs.735/share). At CMP, the stock is valued at 5.2x EV/EBITDA and 11.4x P/E on FY21E basis. We have valued the stock at 12x PE multiple at significant discount to its peer considering its subdued performance.

8:32 AM

Kotak Securities on Mold-Tek Packaging

Recommendation:  ADD 

TP: Rs 280

Given the leadership position in IML packaging and increased traction from Edible oil segment and incremental volume contribution from Mysore and Vizag units to Asian Paints, which is expected to help the company to register 12.7% revenue CAGR for FY19-FY20E period with an EBITDA margin of 16.5% down 80 bps YoY. PAT is expected to grow at 16% CAGR during the same period, with return ratios in the range of 17-18%. Though we are comfortable, with the long term story and the company's position to capitalize the market opportunities, but there are near term headwinds in terms of economic slowdown and increased cost pressure in 2QFY20 due to left over provisions of RAK. We believe the re-rating will take some time. Hence, we downgrade the stock to ADD (earlier BUY), with a revised target price of Rs280, valuing at its last five years average multiple of 18x FY21E earnings. At CMP, the stock is trading at 19.5x/16.7x FY20E/FY21E earnings.

8:28 AM

Motilal Oswal Financial Services on Escorts

Outlook: Neutral

CMP: Rs 471

TP: Rs 520

Upside: 10% 

We cut our FY20/21 EPS by 9%/12% to factor in our lower volume assumptions. With the tractor cycle coming off peak and the cyclicality in CE, current valuations do not capture the risk of the substantial pressure on earnings. The stock trades at 9.8x/9.9x FY20/21E EPS. Neutral.

8:28 AM

NEWS ALERT | Bank of Japan maintains 10-yr JGB target at around 10%: CNBC TV18

8:25 AM

Motilal Oswal Financial Services on ABB

Recommendation: Sell

CMP: Rs 1,395

TP: Rs 1,240

Downside: 11% 

We value ABB on an SOTP basis in order to value the discontinued business separately. We have valued its discontinued T&D business at 25x and current core business at 42x Mar’21 EPS. Given the expensive valuations, we maintain our Sell rating on the stock with a target price of INR1,240

8:22 AM

Motilal Oswal Financial Services on Havells India

Recommendation: Neutral

CMP: Rs 666

TP: Rs 700

Upside: +5%

On back of our EPS cut, our TP is reduced to INR700 (prior: INR800) with an unchanged target FY21E P/E multiple of 40x (in line with the last-five-year average trading multiple but at ~10% discount to the current one-year forward multiple of 44x). Maintain Neutral as we await a better entry point in the stock.

8:19 AM

Today's picks: From Grasim to Infosys, hot stocks to watch on Tuesday

Bank Nifty
 

Current: 29,296 (fut: 29,381)

 

Target: NA

 

Stop long positions at 29,225. Stop short positions at 29,525. Big moves could go till 29,700, 29,050. Trend remains negative. READ MORE

8:17 AM

Top trading calls by Anand Rathi: Buy Berger Paints, Mindtree, GCPL

NIFTY: BUY

 

TARGET: 11,300

 

STOP LOSS: 11,100

 

Nifty closed in the negative territory in the last trading session and it has taken a good support at the 200-day moving average (DMA); hence, a probability of a bounce back is quite high. The momentum indicator moving average convergence divergence (MACD) too, appears, oversold at the current moment. Thus, we recommend buying at this level for the upside target of 11,300 with a stop loss of 11,100. READ MORE

8:15 AM

NEWS ALERT

8:14 AM

NEWS ALERT | CCD founder VG Siddhartha went missing last night in Mangalore: Reports

According to the report, the news emerged after the Mangaluru City Police started a search for a person who had jumped off the kilometre-long Ullal bridge on Monday night.

 

The report said that one of the police officers confirmed that a person was suspected to have jumped off the Ullal bridge, which is built across the River Nethravathi, at 9pm. READ MORE

V G Siddhartha, Café Coffee Day's founder