MARKET WRAP: Sensex climbs 482 pts, Nifty tops 11,300; Bharti Airtel up 5%

Here's a look at all that happened today in the stock market

11:34 AM

MSTC plans to raise Rs 226 crore at the upper band through IPO

State-owned MSTC’s initial public offering (IPO) will remain open for subscription between March 13 and March 15. The company has set the price band for its IPO at Rs 121-128 per share. READ MORE

11:30 AM

Momentum picks by ICICI Securities

11:25 AM

Morgan Stanley raises 2019 targets for MSCI EM, MSCI Asia Pacific indices

Morgan Stanley has raised the 2019 targets for the MSCI Emerging Market (EM) and MSCI Asia Pacific (excluding Japan) indices, boosting prospects for markets like India. Aggressive stimulus by China, US Federal Reserve’s decision to put interest rate hike on hold and signs of a thaw in the US-China trade war have prompted the brokerage to take an optimistic view on the EM universe. READ MORE

11:22 AM

Nomura on banking sector

SBI has decided to link its savings deposits (>INR0.1mn) and cash credit and overdraft loans (>INR0.1mn) to repo rates. The key intention is to have faster transmission of policy rates. In the near term, the change in SA and CC/OD pricing will be positive for SBI’s P&L as SA rates for deposits over INR10mn will reduce from 4% to 3.5% (6-7bps of positive NIM impact).

Over the medium term, the change will make margins less cyclical as SA rates will adjust with repo rate vs. being static earlier. We retain our positive view on SBI and private corporate banks (ICICI [ICICIBC IN, Buy] and Axis Bank [AXSB IN, Buy]) as the current credit cycle is nearing the end and we expect ROEs to normalise by FY20F.

11:19 AM

Multi-cap funds run the risk of missing out on the mid- and small-cap rally

The multi-cap schemes, which have the flexibility to invest in stocks across a wide spectrum of market capitalisation, run the risk of missing out on the mid- and small-cap rally as they continue to stick with large-cap stocks. READ MORE

11:18 AM

Prabhudas Lilladher on Jubilant Life Sciences

We cut our earnings estimates by 2.2% and 3.9% in FY20E and FY21E respectively, following assumptions of lower sales growth in US formulation. We expect that negative impact of the event as well as raising new debt capital will result in compression of PE multiples.

We reduce assigned EV/EBTIDA to 7.5x (from 8.5x) on FY21E in our SOTP valuations of the company. The current valuation reflects all possible positive developments in the near to medium term. With muted demand offtake in chemical biz (LSI), higher leverage and regulatory uncertainties, we downgrade our recommendation to 'Reduce' and lower TP to Rs703 (Rs822 earlier)

11:17 AM

ICICI Securities on consumer sector

Subsidiaries of multinational companies (MNCs) are on the road meeting investors; the first such instance in two decades for many of them. While we like the sudden improvement in disclosure standards (by some of them), we believe that these meetings are primarily to prepare the ground for the upcoming regulation on royalty payments.

Under the new norms, which come into effect from April 1, 2019, any ‘Royalty or Brand payments’ to related parties in excess of 2% of turnover will be treated as ‘Material Transaction’, hence requiring majority of minority shareholders’ approval. We note that within our consumer coverage, Colgate, HUL and Nestle, pay 3-5% royalty to their parent companies for brand and R&D support and will require to get shareholders’ approval if they wish to continue royalty payment over 2%.

11:15 AM

Sharekhan on KNR Construction

The successful order intake for KNR after the lull in 9MFY2019 (overall project awards remained muted for the industry) has improved the earnings outlook for the company. Advanced stages of its HAM projects also give us confidence of reviving growth from FY2020. Further, the agreement with Cube Highways for the complete stake sale in three of its HAM projects (due diligence going on for the fourth one) will limit KNR’s equity requirement.

We continue to believe KNR is a strong contender to benefit from the expected uptick in project awards. Hence, we reiterate our Positive view on the stock with 18-20% upside potential.

11:14 AM

Larsen & Toubro gains 4% on winning multiple orders; up 10% in two weeks

Shares of Larsen & Toubro were up 4 per cent to Rs 1,403 on the BSE on Tuesday, after the company said its power transmission & distribution business has bagged a number of engineering, procurement and construction (EPC) orders in India and abroad. At 10:43 am, L&T was the largest gainer among the frontline benchmarks, the Nifty 50 and S&P BSE Sensex. The benchmark indices were up 1.2 per cent each. A combined 2.74 million equity shares changed hands on both the exchanges. READ MORE

11:14 AM

Centrum on Birlasoft

We met Birlasoft management to get a business update. Post the merger with KPIT Technologies’ IT Services business, BirlaSoft now has ~USD475mn of revenues for FY19E with EBITDA margin of ~13% and ~10,000 employees. Management cited that the consolidated entity has net cash of ~Rs3,500mn on the balance sheet (12.5% of Mcap).

In the Q3FY19 concall, management had cited that the consolidated entity, Birlasoft, would have an EPS of ~Rs10/sh for FY19E. Hence, Biralsoft is currently trading at 10.5x FY19E EPS. We currently do not have a rating on the stock. The detailed operating metrics (vertical mix, service mix) and financial metrics (consolidated balance sheet and cash flows, etc) are not available to investors as yet. We expect more clarity on the combined entity by May 2019.

11:13 AM

Edelweiss on GMDC

We initiate coverage on Gujarat Mineral Development Corporation (GMDC) with ‘BUY’. Our conviction is underpinned by two Vs—volume and valuation. We see imminent volume uptick post production ramp up at new mines, despite stagnant prices, resulting in free cash flow accretion of INR11.7bn (~43% of current market cap) through to FY21E.

And, on the valuation front, the stock is trading at the lowest end of its 8-year EV/EBITDA band and discount to other coal companies. Key risks to our thesis are: 1) slow volume ramp up; 2) dip in international coal prices; and 3) unrelated investments. Our INR105 target price implies 3.5x September 2020 EBITDA (past 8 years’ trading average: 3.8x).

11:10 AM

Chart Check: 87 stocks in Nifty F&O segment are still trading below 200-DMA

The futures & options (F&O) segment of the Nifty50 index comprises approximately 203 stocks, considering changes based on the ban period. The recent rise in the indices has led to a steep rise in many stocks. Scrips such as Ujjivan Financial Services and Allahabad Bank have spurted 20 per cent. Other major stocks, too, have risen approximately 12-14 per cent, taking support above 200-day moving average (DMA). READ MORE

11:05 AM

NEWS ALERT | Nifty Bank crosses all-time closing high of 28,320 hit on August 9, 2018

11:03 AM

Global brokerages bullish on Indian stocks despite poll-related uncertainty

Foreign brokerages such as HSBC, BNP Paribas and Morgan Stanley have turned bullish on Indian equities despite the election-related uncertainty. In its recent report, HSBC for instance, has raised its weightage on India from ‘neutral’ to ‘overweight’ and remains bullish on financial, metal, and consumer discretionary sectors in the Indian context READ MORE HERE

Representative image

11:01 AM

HEAT MAP :: BSE Sensex