F&O Expiry: Financials drag indices, Sensex falls 335 pts; HDFC slips 4%
All that happened in the markets today
 "markets")
NSE's Nifty ended at 11,102, down 101 points, or 0.9 per cent.
9:20 AM
Sensex Heatmap at Open
9:19 AM
Opening Bell
9:18 AM
Opening Bell
9:11 AM
Top gainers and losers on the S&P BSE Sensex at Pre-open
9:09 AM
Markets at Pre-open
9:08 AM
Markets at Pre-open
9:07 AM
>> Cash at the end of June’20 stands at INR184.5b (INR75.3b of free cash and INR109.2b of restricted cash). Despite higher cash burn of ~INR300m per day, the company was successful in its initiatives to create additional liquidity and thus realized ~35% of its earlier target of INR30–40b, leading to free cash reduction of ~INR14b (v/s reported loss of INR28.4b).
>> We continue to believe that long-term demand and stability in the sector remain key challenges; thus, we remain cautious on the stock. We revise our forecast EPS down to -INR163/+INR64 for FY21/FY22 (from -INR169/+INR77).
>> The stock trades at 14.1x FY22 EPS of INR64.4 and 4.2x FY22 adj. EV/EBITDAR. We value the company at 16x FY22 EPS of INR66.4 to arrive at TP of INR1,030. Maintain Neutral.
BROKERAGE VIEW :: Motilal Oswal Financial Services on InterGlobe Aviation
CMP: Rs 910 | TP: Rs 1,030 (+13%) | Reco: Neutral
>> INDIGO reported higher yield than est. at INR4.53 (+11.1% YoY) v/s our est. of INR3.7. Yield was stronger on the higher base of last year (a quarter of the Jet
>> INDIGO reported higher yield than est. at INR4.53 (+11.1% YoY) v/s our est. of INR3.7. Yield was stronger on the higher base of last year (a quarter of the Jet
demise), aided by fare bands imposed by the Ministry of Civil Aviation (MoCA). However, the company is of the view that fare caps on domestic travel should be removed as early as possible.
>> Cash at the end of June’20 stands at INR184.5b (INR75.3b of free cash and INR109.2b of restricted cash). Despite higher cash burn of ~INR300m per day, the company was successful in its initiatives to create additional liquidity and thus realized ~35% of its earlier target of INR30–40b, leading to free cash reduction of ~INR14b (v/s reported loss of INR28.4b).
>> We continue to believe that long-term demand and stability in the sector remain key challenges; thus, we remain cautious on the stock. We revise our forecast EPS down to -INR163/+INR64 for FY21/FY22 (from -INR169/+INR77).
>> The stock trades at 14.1x FY22 EPS of INR64.4 and 4.2x FY22 adj. EV/EBITDAR. We value the company at 16x FY22 EPS of INR66.4 to arrive at TP of INR1,030. Maintain Neutral.
9:02 AM
BROKERAGE VIEW :: Motilal Oswal Financial Services on Dr Reddy's Labs
CMP: Rs 4,300 | TP: Rs 4,600 (+7%) | Reco: Neutral
>> Dr Reddy’s (DRRD) delivered strong 30% YoY growth in 1QFY21 earnings, led by a superior show in Pharmaceutical Services and Active Ingredients (PSAI)/ EU and other emerging markets.
>> We expect a 21% earnings CAGR over FY20–22, led by a sales CAGR of 6% in the US, 19% in DF, and 23% in PSAI, supported by 340bp margin expansion.
>> We raise our EPS estimate by 11%/7% for FY21/FY22 and revise our price target to INR4,600, valuing DRRD at 23x 12M forward earnings. We maintain Neutral on limited upside from current levels
>> Dr Reddy’s (DRRD) delivered strong 30% YoY growth in 1QFY21 earnings, led by a superior show in Pharmaceutical Services and Active Ingredients (PSAI)/ EU and other emerging markets.
>> We expect a 21% earnings CAGR over FY20–22, led by a sales CAGR of 6% in the US, 19% in DF, and 23% in PSAI, supported by 340bp margin expansion.
>> We raise our EPS estimate by 11%/7% for FY21/FY22 and revise our price target to INR4,600, valuing DRRD at 23x 12M forward earnings. We maintain Neutral on limited upside from current levels
9:00 AM
HDFC: The housing finance company is scheduled to report its June quarter earnings (Q1FY21) today. Analysts at Emkay Global expect HDFC’s loan growth to be around 5 per cent, mainly due to continued disbursements for approved sanctions in the retail book. They peg the housing financier’s net interest income (NII) to come in at Rs 5,002.5 crore for the recently concluded quarter, up 64 per cent YoY, from Rs 3,042 crore reported in the June quarter of FY20. READ MORE
Stocks to watch today
RIL: The oil-to-telecom behemoth is slated to announce its June quarter results later in the day. The company's retail and energy verticals expect a dent in earnings in the June quarter (Q1), because of the pandemic. However, higher earnings in the telecom business may partly cushion the hit.
HDFC: The housing finance company is scheduled to report its June quarter earnings (Q1FY21) today. Analysts at Emkay Global expect HDFC’s loan growth to be around 5 per cent, mainly due to continued disbursements for approved sanctions in the retail book. They peg the housing financier’s net interest income (NII) to come in at Rs 5,002.5 crore for the recently concluded quarter, up 64 per cent YoY, from Rs 3,042 crore reported in the June quarter of FY20. READ MORE
9:00 AM
>> While MSIL’s 1QFY21 performance was insignificant as normal operations were there only for two weeks in 1Q, commentary on demand recovery is positive. However, commentary on demand recovery is positive. Management has not given any demand outlook as the situation in dynamic and operating environment is changing frequently.
>> MSIL would be the fastest to recover on account of its strong brand equity and strength in entry-and mid-segment PVs. Key monitorables are (a) normalization of operations, and (b) sustenance of demand recovery.
>> The stock trades at 40.7x/25.6x FY21/FY22E consol. EPS. Maintain Buy, with TP of ~INR6,850 (~25x Sep’22E consol. EPS)
BROKERAGE VIEW :: Motilal Oswal Financial Services on Maruti Suzuki
CMP: Rs 6,186 | TP: Rs 6,850 (+11%) | Reco: Buy
>> While MSIL’s 1QFY21 performance was insignificant as normal operations were there only for two weeks in 1Q, commentary on demand recovery is positive. However, commentary on demand recovery is positive. Management has not given any demand outlook as the situation in dynamic and operating environment is changing frequently.
>> MSIL would be the fastest to recover on account of its strong brand equity and strength in entry-and mid-segment PVs. Key monitorables are (a) normalization of operations, and (b) sustenance of demand recovery.
>> The stock trades at 40.7x/25.6x FY21/FY22E consol. EPS. Maintain Buy, with TP of ~INR6,850 (~25x Sep’22E consol. EPS)
8:55 AM
BROKERAGE VIEW :: Jefferies on Colgate Palmolive
Maintains 'Buy'
>> Toothpaste segment showed reselience in Q1 with slight volume decline
>> Toothbrushes declined by 1/3, but revenues, margins ahead of estimates
>> Quarter drives 2-7% EPS upgrade
>> Expect the company to gain market share
>> Toothpaste segment showed reselience in Q1 with slight volume decline
>> Toothbrushes declined by 1/3, but revenues, margins ahead of estimates
>> Quarter drives 2-7% EPS upgrade
>> Expect the company to gain market share
8:52 AM
BROKERAGE VIEW :: CLSA on Bharti Airtel
Maintains 'Buy', Target price: Rs 715
>> Revenue ahead of estimates, led by India mobile biz
>> EBITDA in-line but loss more than estimated
>> Data traction strong with data traffic up 12% QoQ
>> ARPU is likely to go further up to Rs 81
>> See consolidated EBITDA growth of 27% in FY20-22
>> Revenue ahead of estimates, led by India mobile biz
>> EBITDA in-line but loss more than estimated
>> Data traction strong with data traffic up 12% QoQ
>> ARPU is likely to go further up to Rs 81
>> See consolidated EBITDA growth of 27% in FY20-22
8:47 AM
11,300 key level for Nifty ahead of F&O expiry: CapitalVia Global Research
Nifty outlook
Market traded with mixed sentiments on Wednesday and witnessed profit booking from 11,300 levels. Nifty closed above 11,200 which will act as immediate support for July monthly expiry. Nifty managed to close at 11,202.90, slashing 97.60 points. Pharma and public sector bank (PSB) stocks traded with positive sentiment whereas auto, technology stocks closed in the red. Nifty bank closed at 22,076.60, slashing 28.60 points from the previous day’s closing. READ MORE
Topics : Coronavirus Markets Bharti Airtel IndiGo TVS Motor Reliance Industries HDFC US Fed MARKET WRAP
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First Published: Jul 30 2020 | 7:29 AM IST
