MARKET WRAP: Sensex slips 107 pts ahead of RBI policy outcome; banks fall

Among the sectoral indices, the Nifty Bank index fell 0.61 per cent weighed by HDFC Bank and State Bank of India (SBI)

10:34 AM

Uflex is trading over 6% higher 

10:27 AM

Equity fundraising draws a blank in November for the first time in 5 years

 

Equity fundraising came to a grinding halt in November despite a sharp recovery in the secondary markets. According to the data by PRIME Database, not a single penny was raised either through initial public offerings (IPOs) or additional fundraising avenues such as qualified institutional placements, rights offerings, and offer for sale. This was the first time since November 2013 — amid turbulence created by taper tantrum — when India Inc didn’t raise a single rupee through equity issuance, the data showed. Read more

10:15 AM

Shankara Building is trading 5% lower over the concerns of margin pressure for the next couple of quarters

10:00 AM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,122.63	-118.37	-0.33
S&P BSE SENSEX 50	11,365.76	-24.01	-0.21
S&P BSE SENSEX Next 50	32,406.31	+62.93	+0.19
S&P BSE 100	11,129.38	-16.82	-0.15
S&P BSE Bharat 22 Index	3,427.06	-2.92	-0.09

9:56 AM

GDP could rebound in 3QFY19 but disappoint in FY20: Ambit Capital

 

GDP growth in 2QFY19 was recorded at a 3-quarter low of 7.1 per cent YoY. The deceleration was due to the industrial sector slowing from the supply side and private consumption losing steam from the demand side. Excluding the effect of Government spending, headline growth was in fact recorded at 6.4 per cent, i.e. a 5-quarter low. Going forward, even as GDP growth may surprise on the upside in 3QFY19 as the economy responds to Government pump-priming ahead of  elections, we expect GDP growth to decelerate by nearly 90bps in FY20 vs FY19. The challenges in the NBFC sector and slowdown of government expenditure post elections will adversely affect GDP growth in FY20. 

9:52 AM

ICICI Securities on Shankara Building Products

 

We expect SBPL’s topline growth at 12.0 per cent CAGR to Rs 3,198.9 in FY18-20E. However, with the management commentary on significant decline in EBITDA margins expected ahead, we lower our EBITDA margin assumption resulting in further sharp earnings downgrades by 44.1 per cent. We now expect its earnings to de-grow by 21.3 per cent CAGR to Rs 45.7 crore in FY18-20E. Hence, we maintain our HOLD recommendation on the stock with an SOTP-based target price of Rs 650/share. We value its retail business at Rs 639/share (12x FY20E EV/EBIT). The channel and enterprise business has been valued at Rs 127.9 per share (at 5x FY20E EV/EBIT).

9:45 AM

Sun Pharma: Issues continue to plague pharma leader, says Edelweiss Securities

There seems to be no end to Sun Pharma’s (SUNP) woes – the latest one being a whistle-blower filing with SEBI. Previously reported business challenges coupled with recently highlighted issues have led to its sharp de-rating. We appreciate the management for arranging an investor call. While they gave clarifications, a few questions still remain unanswered, particularly regarding Aditya Medisales (AML) and the nearly USD 350 million unsecured loan extended by SUNP.

Most other issues were dated, but enough to question the track record of India’s largest Indian pharma. Unless SUNP re-evaluates some of its structures and transactions, which weaken investors’ confidence, these issues will overshadow the SUNP’s overall performance. We are, therefore, cutting SUNP’s target multiple to the pharma sector average of 20x (from 23x). Maintain ‘REDUCE/SU’ with a revised TP of Rs 430 (earlier Rs 500).

9:40 AM

Motilal Oswal Financial Services on HUL-GSK Consumer deal

 

As the transaction may take around a year to conclude and is subject to approvals, we have not made any changes to our forecasts. Prior to this deal the four key trends particularly relevant for HUVR, which could result in an

elevation in its earnings growth trajectory of nearly 20 per cent compared to the past are: 

 

(a) rapidly improving adaptability to market requirements exemplified by its ‘Winning In Many Indias’ (WIMI) strategy;
(b) recognition and strong execution on Naturals; 

(c) continuous strong trend towards premiumization; and 

(d) extensive plans to employ technology, thus creating further entry barriers. 

 

We see the proposed merger as another demonstration of HUVR’s ability to generate shareholder value, going forward, through acquisitions, thereby elevating growth prospects. HUVR offers the best earnings growth visibility in the large-cap Indian consumer space, and also has the highest return ratios, justifying premium valuations. On a target multiple of 54x (~20% premium to 3- year average, due to significantly improving business fundamentals) and rolling

forward to December 2020 EPS, we arrive at a target price of Rs 2,140. Maintain Buy.

9:35 AM

Nifty Realty index is trading around 1% lower

9:32 AM

MARKET COMMENT :: ICICI Securities

Over past four weeks, Nifty midcap index has retraced just 23.6% of earlier one week’s sharp up move of 10%. The shallow nature of price retracement along with elongated time consolidation signifies robust price structure. On Monday, the index headed higher and looks set to break out of four-week consolidation, on expected lines. Also, the daily stochastic oscillator recorded a bullish crossover and is now pointing upward. This makes us believe the index will outperform the benchmarks in coming weeks. Hence, any dip from here on should be used to accumulate quality stocks

9:32 AM

WEB EXCLUSIVE HUL-GSK deal proves the power of equity, role of premium valuations

 

The much-awaited announcement of sale of Horlicks brands finally turned out to be a complete buy-out of the GSK Consumer Healthcare in a share swap deal by Hindustan Unilever (HUL) pipping among others, Nestle, which was thought to the closest suitor till a few days ago. The first big positive is that it’s a share swap deal where-in 4.39 equity shares of HUL would be swapped for every equity share of GSK Consumer. It seems a win-win for both the shareholders, but more so for HUL as a company. Click here to read more
 

9:22 AM

GlaxoSmithKline Consumer Healthcare gains in early trade post HUL merger deal

9:20 AM

Sectoral trend on NSE

9:18 AM

Opening gainers and losers in BSE Sensex

9:17 AM

Market at open

 

At 9:15 AM, the S&P BSE Sensex was trading at 36,226, down 14 points while the broader Nifty50 was ruling at 10,881, down 2 points.