MARKET WRAP: Indices end flat ahead of no-confidence motion; IT stocks slip

Benchmark indices ended flat on Thursday, a day ahead of a no-confidence motion against the government.

9:46 AM

Additional Surveillance Measures continue to weigh heavy on scrips

Companies in the Additional Surveillance Measure (ASM) list have significantly underperformed the market. An analysis of a number of stocks on the list showed they lost around a fifth of their value even as markets hit new highs. READ MORE

9:31 AM

With rising share of FMCG biz, ITC presents a bottom-fishing opportunity

Challenges such as a 13 per cent surge in tax under the goods and services tax (GST), intense competition from the tobacco-chewing segment and the illicit cigarette trade impacted ITC's flagship business — cigarettes — last financial year.

 

As a result, its stock has been a laggard, down 16 per cent in the past year, compared to a six per cent gain in the BSE FMCG index and a 13 per cent rise in the benchmark Sensex. However, ITC's effort to scale up its non-cigarette businesses, especially fast-moving consumer goods (FMCG), is likely to provide impetus to the performance. READ MORE

9:25 AM

Sectoral Trend

9:20 AM

Top Sensex gainers and losers

9:17 AM

Markets at Open

At 9:17 am, the S&P BSE Sensex was trading at 36,480, up 106 points while the Nifty50 index was ruling at 10,998, up 19 points

9:05 AM

Market at pre-open

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,476.82	+103.38	+0.28
S&P BSE SENSEX 50	11,530.84	+30.19	+0.26
S&P BSE SENSEX Next 50	31,339.54	+66.84	+0.21
S&P BSE 100	11,212.58	+28.59	+0.26
S&P BSE Bharat 22 Index	3,335.00	+5.69	+0.17

(Source: BSE)

8:52 AM

Equirus Securities on Avanti Feeds (AFL)

While we expect 1HFY19 to be challenging for the industry, the recent stock correction (-43% in 2 months) seems overdone. AFL is trading at 17x/12x our FY19E/FY20E EPS — attractive given its market leadership, improved net cash balance and a core ROIC of >50%. We pare FY19/FY20 PAT estimates by 4%/1% while retaining LONG on the stock with a rolled over Sep’19 target price of Rs 800 (Jun’19 target price of Rs 820 earlier) set at a TTM PE multiple of 25x.

8:49 AM

INTERVIEW OF THE DAY HDFC will keep its stake above 50% in HDFC MF, says MD Milind Barve

Just ahead of HDFC Mutual Fund's Rs 28-billion initial public offer (IPO), Milind Barve, managing director of the fund house, talks to Business Standard's Jash Kriplani. READ MORE HERE

Milind Barve | Photo: Kamlesh Pednekar

8:46 AM

Results today

Company name	Purpose	Meeting Date
BAJAJ FINSERV LTD.	Quarterly Results	19-Jul-18
Bajaj Finance Limited	Quarterly Results	19-Jul-18
BHARAT IMMUNOLOGICALS & BIOLOGICALS CORPORATION LTD.	Quarterly Results	19-Jul-18
ADITYA BIRLA MONEY LTD.	Quarterly Results	19-Jul-18
KOTAK MAHINDRA BANK LTD.	Quarterly Results	19-Jul-18
MENON BEARINGS LTD.	Quarterly Results	19-Jul-18
RBL Bank Ltd	Quarterly Results	19-Jul-18
SAGAR CEMENTS LTD.	Quarterly Results	19-Jul-18
SHREE DIGVIJAY CEMENT CO.LTD.	Quarterly Results	19-Jul-18

8:44 AM

Today's picks: From Hindalco to HDFC, hot stocks to watch on Thursday

Hindalco

Current price: Rs 212.5

Target price: Rs 208

 

Keep a stop at Rs 215 and go short. Add to the position between Rs 209 and Rs 210. Book profits at Rs 208.

 

HDFC

Current price: Rs 2,009

Target price: Rs 2,040

 

Keep a stop at Rs 1,990 and go long. Add to the position between Rs 2,030 and Rs 2,035. Book profits at Rs 2,040. READ MORE

8:42 AM

Kotak Securities on Blue Star

The blue star stock has corrected since our previous recommendation ("Reduce" CMP Rs 756 and Target Rs 759). In view of this, we upgrade rating to "Accumulate" with revised target price of Rs 701 (Rs 759 earlier). Given modest upside from current levels, we recommend "Accumulate". In terms of valuation, the stock is trading at 40x and 28x FY19 and FY20 earnings, which is at a premium to sector leader – Voltas

8:40 AM

MUST READ Govt faces no-trust vote; BJP confident of punching holes in Oppn's efforts

Lok Sabha Speaker Sumitra Mahajan surprised the Opposition on Wednesday, the first day of the monsoon session of Parliament, when she not only accepted their notices for a no-confidence motion against the Narendra Modi government but also announced that the debate and voting on the motion would be held as early as Friday.

 

During the Budget session in March, Mahajan had pointed to disruptions in the House for not taking up a discussion on the notices of no-confidence motion, drawing criticism from opposition parties READ MORE HERE

Prime Minister Narendra Modi arrives to address the media ahead of the Monsoon Session of Parliament, in New Delhi ,Parliamentary Affairs Minister Ananth Kumar, Union Minister for Development of North Eastern Region (DoNER) Jitendra Singh, MoS Arju

8:38 AM

Anand Rathi on Mastek

In step with our estimates, Mastek reported revenue of $36.1m, up 4% q/q (~6.7% in CC dollars). The EBITDA margin at 12.7% was a little lower than anticipated due to the higher onshore cost structure (70%). The tax rate has moved toward 22% (tax rates are lower in all three regions: the US, UK and India).

This and currency movements lead to further increase in FY19e/20e earnings by 9%/12%. We maintain our target PE at 15x to derive a target of Rs 730 (from Rs 650). The Majesco stake now contributes Rs 90 a share

8:38 AM

Edelweiss on Jindal Stainless

Jindal Stainless’ (JSL) Q1FY19 standalone EBITDA at Rs 3.8bn (up 50% YoY) was primarily driven by volume jumping 51% YoY to 217kt. Key highlights: 1) realisation rose 3% YoY to Rs 145K due to higher stainless steel prices; and 2) raw material cost jumped 19% YoY to Rs 102K/t owing to higher scrap prices. As a result, JSL reported profit at net level for sixth successive quarter. 

Going ahead, management expects robust domestic stainless steel demand led by: 1) spurt in Indian Railways’ stainless steel coach production and; 2) newly introduced BIS-IV norms for automobiles. We believe that JSL will benefit from the focus on value-added products and ensuing capacity/production ramp up. At CMP, the stock is trading at 3.7x FY20E EBITDA.  Maintain ‘BUY’ with target price of Rs 100, implying an exit multiple of 5x FY20E EBITDA

8:36 AM

Nomura on Ashok Leyland

Given the higher risks to the CV cycle, we cut our EV/EBITDA multiple for AL’s stand-alone business to 8x (from 11x) FY21F (discounted back to Sep-20F) leading to valuation of INR106. We value the LCV subsidiary at Rs 10/sh and other investments at Rs 8/sh. We downgrade AL to Neutral as the current valuation at ~7.7x FY20F EV/EBITDA (adjusted for subsidiaries) is near our target range. We prefer Maruti Suzuki (MSIL IN) in the auto sector