MARKETS ON MONDAY: Sensex ends 232 pts lower; Realty, pharma, metals drag

This was the fifth consecutive session of losses for the markets. PSU bank stocks, however, bucked the trend

2:06 PM

SPECIAL REPORT Midcap, Smallcap shares under pressure; 111 stocks hit 52-week low

Shares of midcap and smallcap companies were under pressure with 111 stocks hitting their respective 52-week lows as these indices have fallen more than 1% on Monday. Adani Power, Ajanta Pharma, Castrol India, CRISIL, Federal Bank, Glenmark Pharmaceuticals, IDFC Bank, LIC Housing Finance and Vakrangee from the midcap index hit 52-week lows today READ MORE

Photo: Shutterstock.com

2:04 PM

COMMENT Nomura on RBI policy

In our base case (55% probability), we expect the Reserve Bank of India (RBI) to leave the policy rate unchanged but change its stance from ‘neutral’ to ‘withdrawal of accommodation’ on 6 June, followed by 25bp rate hike in each of August and October. June remains a close call; we assign a 40% probability to the RBI pre-emptively hiking by 25bp in June, followed by another 25bp hike in August

2:00 PM

Market Check

 

S&P BSE Sensex	34,685.82		-0.47%
Nifty 50	10,533.20		-0.60%
S&P BSE 200	4,562.46		-0.75%
Nifty 500	9,127.30		-0.89%
S&P BSE Mid-Cap	15,700.12		-1.23%
S&P BSE Small-Cap	16,984.66		-1.97%

1:46 PM

Century Textiles falls 12% on demerger of cement biz into UltraTech Cement

Shares of Century Textiles have declined 12% to Rs 935 per share, also their 52-week low on the BSE in intra-day trade, after the company said its board approved demerger of cement biz into UltraTech Cement through a share-swap deal. READ MORE
 

1:30 PM

Ashok Leyland extends fall on concerns of volume growth

Shares of Ashok Leyland have declined 8% to Rs 136, extending their 4% fall on the BSE on Friday, on concerns of truck volume growth in current fiscal on account of a partial overloading ban relaxation in Uttar Pradesh (UP) from last month.
 

In past two weeks, Ashok Leyland has underperformed the market by falling 18% as compared to 1.2% decline in the S&P BSE Sensex. The stock hit a record high of Rs 168 on May 8, 2018 in intra-day trade. READ MORE

1:15 PM

Dividend yield hits 10-year low of 1.1%; equity payouts down 3% in 2017-18

Dividends of listed companies which have announced their results are lagging behind the rally in their stock prices in the last one year. As a result, the dividend yield has now hit a 10-year low of 1.1 per cent against 1.44 per cent at the end of 2016-17 and 1.5 per cent two years ago.

 

This is the first time in the past three years when the dividend payout of listed companies has failed to keep pace with the movement in their share prices. READ MORE
 

1:03 PM

Equirus on Navneet Education

 

FY18 growth was affected by one-offs such as delayed text-book launches, higher paper prices and INR appreciation. We expect growth to return from FY19 onwards on higher-standard syllabus changes in both Gujarat and Maharashtra boards and a strong stationery order pipeline for FY19. We roll over to Sep’19 target price of Rs 160 (from target price of Rs 162 earlier) set at a 19x Sep’19 EPS of Rs 8.3.

12:47 PM

What's the true value of a stock?

What's common to Hyundai, Johnson & Johnson, Samsung and Patanjali? All of them are big players in their respective sectors. All are unlisted in India. The lack of listing is frustrating.

 

It eliminates the Peter Lynch type of investment where a consumer buys both the brand and the company. For example, a consumer may compare equivalent Hyundai and Maruti models before buying a car. A Lynch follower would like to buy shares in the company from which she bought the car. READ MORE

12:35 PM

Ahmedabad-based cryptocurrency firm may challenge RBI circular in SC

Ahmedabad-based crypto firm Kali Digital Ecosystems may approach the Supreme Court to bring forward its next hearing on the Reserve Bank of India’s (RBI’s) circular prohibiting banks from dealing with cryptocurrencies.

 

This is because the central bank has asked all the lenders to wind up dealings by July 6. The hearing is slated for July 20. Alternatively, the company is also exploring a strategy of going to the RBI to put off its diktat to lenders unless the apex court comes out with its order. READ MORE

12:24 PM

MUTUAL FUNDS How you should bet on FMCG funds to tap into the last defensive sector

If you look at the trailing returns of sector funds belonging to the fast-moving consumer goods (FMCG) sector, they are remarkably attractive (see table). Turn to the year-wise performance and they are equally eye-catching: These funds have given positive returns every year except 2008. With the information technology and pharma sectors faltering in recent times, FMCG remains the last defensive in which investors can seek refuge when the markets turn turbulent READ MORE

12:10 PM

Indostar Capital Finance lists at 5% premium over issue price

Indostar Capital Finance has been listed at Rs 600, a 5% premium against its issue price of Rs 572 on the National Stock Exchange (NSE) and the BSE (Bombay Stock Exchange).
 

At 10:01 am; the stock was trading at Rs 596, a 4% higher against its issue price. It touched high of Rs 606 and a low of Rs 594 so far. A combined 5.85 million shares changed hands on the counter on the BSE and NSE. READ MORE
 

12:02 PM

IDBI Capital on Amara Raja Batteries

We believe Amara Raja holds durable competitive advantages over peers, with strong brand, technical expertise (via parent JCI – global brand) and its lower cost structure (compared to its peers). We expect margins to improve in FY19 (despite weak Q4FY18 margins) on price hikes and cost improvement measures taken by the company. The company foresees opportunities in the energy storage and electric vehicles space. We maintain our BUY rating on the stock with a revised target price of Rs955 (Earlier Rs986).

12:01 PM

Markets at noon

 

S&P BSE Sensex	34,712.63		-0.39%
Nifty 50	10,546.15		-0.47%
S&P BSE 200	4,567.65		-0.64%
Nifty 500	9,136.60		-0.79%
S&P BSE Mid-Cap	15,707.34		-1.18%
S&P BSE Small-Cap	17,011.15		-1.82%

11:51 AM

Edelweiss on Bajaj Finserv

In Q4FY18, Bajaj Finserv’s lending business (BFL) posted a strong performance and general insurance (BAGIC) sustained momentum. BFL clocked yet another robust performance—AUM (consolidated) jumped ~40% and PAT grew >60% YoY. Qualitatively, BAGIC reported a steady quarter—combined ratio at 93.4% (lowest among peers). However, PAT missed marginally on lower investment income.

Life insurance’s (BALIC) operating metrics (individual growth, persistency) continued to improve; sustainability is key. EV of INR118bn missed estimate on negative investment variance and higher cost overruns—key monitorables. While we are enthused by Q4FY18 performance, we perceive limited upside due to: 1) BFL’s steep valuations (>5x FY20E P/BV, post equity raising) pricing in near-term growth potential; 2) BAGIC’s 25x FY20E EPS valuation; and 3) BALIC’s valuation at 1.9x P/EV. Hence, maintain ‘HOLD’

11:50 AM

HDFC Securities on JBM Auto

We believe, JBM Auto's core sheet metal business (body-in-white and chassis) will continue to deliver strong earing growth helped by: 1) Accelerated growth in PV's segment, 2) Increasing revenue from Ford, Tata Motors, M&M, RE, HMSI and VECV, 3) benefits of oplev. Also, strong order book of tooling division business will boost margin and profitability.

Moreover, proposed amalgamation of its subsidiary JBMAS and JV JBMMA into a single entity will be synergetic and EPS accretive. We reckon 35% PAT CAGR over FY18-FY20E; fuelled by improving operating leverage, richer product mix and acquisition of new clients. We value stock at Rs. 560 (18x FY20E EPS) and maintain BUY