MARKET WRAP: Indices at new high; Sensex up 442 pts, Nifty hits 11,700

Benchmark indices ended at an all-time closing high on Monday, boosted by gains in bank stocks

1:15 PM

Top contributors to today's Sensex rise

COMPANY	LATEST	CHG(RS)	CHG(%)	FREE FLOAT MKT CAP (RS CR)	CONTRIBUTION (POINTS)
ICICI BANK	340.55	10.45	3.17	212391.28	63.34
RELIANCE INDS.	1292.70	14.65	1.15	437442.77	47.24
INFOSYS	1402.80	22.85	1.66	262225.54	40.92
ITC	313.55	3.20	1.03	379598.40	36.81
ST BK OF INDIA	309.60	9.30	3.10	112562.41	32.85
KOTAK MAH. BANK	1275.00	20.20	1.61	167466.35	25.40

1:00 PM

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Turkey's economic crisis has created headaches for investors and policymakers across emerging markets, but for some fund managers, it's a chance to pick up a range of cheap assets, from Indonesian bonds to Brazilian equities. The bullish view on global growth has been severely tested this year, with stock markets hit by a Sino-US trade war, rising US yields and a dollar rally READ MORE

12:54 PM

UBS on Britannia Industries

 

The timing and nature of a demand recovery has been a central debate in the Indian consumer sector in FY15-FY18. Our analysis of UBS Evidence Lab data suggests early signs of a recovery. We believe it is unlikely to be limited to just personal care, home care and discretionary categories. 

 

In our view, packaged food could see an upswing as domestic consumption, especially in rural India, recovers. We raise our FY19/FY20 revenue estimates 3.2%/7.2% on the basis of volume growth and inflation-led pricing (given recent MSP hikes). We increase our EPS estimates for FY19/FY20 by 5.6%/11.1%. We maintain our Buy rating and raise our price target to Rs 7,700.

12:53 PM

Edelweiss on PVR

We reiterate our positive stance on PVR owing to: (1) strategic acquisition of SPI Cinemas (SPI) - set to reap manifold benefits; and (2) limited overhang of F&B controls - till now courts have adopted favourable stance on the issue. As SPI is the most popular screen brand in South India, PVR will draw operational synergies and scale up ad revenues, while reducing content risk.

The acquisition also clears the decks for PVR to emerge as the No. 1 player in key South Indian cities as well as undertake seamless expansion (100 plus screens post FY19). We expect the deal to be earnings accretive in the first year itself. Hence, we raise our FY19/20E EPS by 2.70%/4.08% and also revise our target multiple to 30x (from 28x) FY20E EPS to arrive at a revised target price of Rs 1,608 (earlier Rs 1,442). Maintain ‘BUY’.

12:51 PM

IDFC Securities on Apollo Hospitals

Apollo Standalone Pharmacy (ASAP), India’s largest organized pharmacy retail business with 3,000 stores, has been Apollo Hospitals’ (Apollo) standout business since last few years. Relatively slower growth in Apollo’s healthcare services have overshadowed ASAP’s consistent performance (23% revenue and 37% EBITDA CAGR over FY15-18).

The ASAP business is at now an inflection point with FY18 revenue/EBITDA of Rs32.7bn/Rs1.5bn, respectively, and RoCE of 15%. We estimate 18% CAGR in ASAP revenues over FY18-21E and value this business at Rs53.7bn (20x FY21E EV/EBITDA) which implies that Apollo’s ex-SAP business is currently trading at 13.5x EV/EBITDA (FY21E). We maintain Outperformer on Apollo with a target price of Rs1,483 and Apollo is our top pick in healthcare services space.

12:45 PM

Top BSE500 gainers

COMPANY	PRICE()	CHG()	CHG(%)	VOLUME
ZYDUS WELLNESS	1675.00	194.40	13.13	20378
JINDAL SAW	88.90	7.85	9.69	281058
MOIL	189.90	16.00	9.20	288517
ADANI TRANSMISSI	183.70	14.30	8.44	152628
RURAL ELEC.CORP.	118.65	7.30	6.56	632986

12:30 PM

Pricing pressures, regulatory worries for Dr Lal Pathlabs and Thyrocare

 

A muted June quarter performance on the back of pricing pressures coupled with worries on regulatory action could hamper the near-term outlook for diagnostic companies. The largest listed diagnostic players, Dr Lal Pathlabs and Thyrocare Technologies have indicated that competitive intensity in the sector is high.

 

Given the focus on higher volumes, some of the pressures on pricing could continue to hamper the profitability of the companies. Disappointing June quarter This was reflected in the June quarter performance both on volumes and margins. READ MORE

12:20 PM

This PSU stock zoomed over 100% in one month

 

Hindustan Organic Chemicals (HOCL) was locked in upper circuit of 10% at Rs 39.60 on the BSE on back of heavy volumes.

 

HOCL had posted a robust set of numbers for the quarter ended June 2018 (Q1FY19). The company reported a net profit of Rs 402 million in Q1FY19, on back of strong growth in operational revenue. It posted a net loss of Rs 498 million in June 2018 quarter and loss of Rs 896 million in March 2018 quarter. READ MORE

12:11 PM

SECTOR WATCH Aviation

For India’s domestic airlines, the Jan-July’18 span brought a ~22% yoy growth in passengers (PAX), at ~80mn travelers. Even in the off-season month of July’18, PAX growth was in line with the YTD trend, with domestic carriers achieving ~21% yoy growth. Load factor for most players has delivered yoy improvement. Among major carriers, Indigo PAX grew ~32% yoy during July’18 which took its market share to 42.1% (+80bps qoq).

Spicejet continues to report 90%+ PLF, highest in its peer set. Also, Air India/Jet Airways show ~140bps/~440bps PLF improvement on qoq basis to 82.3%/83.9% respectively. Although, PAX was robust, pressure on tariffs and the declining sector profitability due to cut-throat competition and crude price rise remain a key concern

(Source: IIFL report)

12:03 PM

Edelweiss on Dabur

Dabur remains amongst our top picks in staples. And, our recent interaction with the top management reaffirms our confidence in the company’s ability to sustain double digit volume growth in FY19. Key strategic initiatives that bolster our optimism are: (i) focus on innovation & improving market leadership; (ii) aggressive ad spends; and (iii) enhancing direct distribution (Project Buniyaad).

In our view, Dabur is best placed to regain share from some of the herbal companies that are facing a slowdown. This coupled with improving rural economy bodes well for Dabur. Hence, we raise our target multiple to 50x (45x earlier) and arrive at revised TP of INR560 (INR505 earlier). Maintain ‘BUY’

12:01 PM

Markets at noon

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	38,641.93	+390.13	+1.02
S&P BSE SENSEX 50	12,218.64	+115.72	+0.96
S&P BSE SENSEX Next 50	35,094.42	+223.96	+0.64
S&P BSE 100	11,977.86	+107.86	+0.91
S&P BSE Bharat 22 Index	3,722.06	+51.07	+1.39

11:45 AM

Product mix to aid SAIL's realisations; analysts remain positive on stock

 

With much-delayed expansions getting onstream, SAIL has been posting a consistent improvement in performance over the last few quarters and the June quarter was no different. Its operating profit per tonne at Rs 7,877 is a significant improvement over Rs 86 in the year-ago quarter and reflects a 13 per cent rise on a sequential basis.

 

These levels are the highest since FY10. While volume growth remains strong led by expansions and robust demand, it is the improved realisations and cost controls that have driven profitabilty. READ MORE

11:30 AM

Nifty Bank up 1%, top gainers in the pack

COMPANY	LATEST	PREV CLOSE	GAIN()	GAIN(%)	VOLUME
RBL BANK	627.10	609.70	17.40	2.85	2150180
YES BANK	383.20	374.20	9.00	2.41	3732191
KOTAK MAH. BANK	1278.60	1254.50	24.10	1.92	843297
IDFC BANK	47.75	46.85	0.90	1.92	3009922
ICICI BANK	336.05	330.15	5.90	1.79	5679471

11:15 AM

LIC Housing Finance falls 7% post June quarter results

 

Shares of LIC Housing Finance dipped 7% to Rs 531 on the BSE in intra-day trade in otherwise strong market after the company reported disappointing April-June quarter (Q1FY19) results.

 

LIC Housing Finance reported 18% year on year (YoY) growth in net profit at Rs 4.79 billion in Q1FY19 on account of lower provisions under the IndAS framework. Net interest income grew 6.6% YoY at Rs 9.94 billion. READ MORE

11:00 AM

Pharma, IT, FMCG sectors are back on investor's radar

 

With the markets at an all-time high amid global and local uncertainties that lie ahead, investors seem to be gradually allocating more money towards classical defensive plays such as pharmaceuticals (pharma), information technology (IT) and fast moving consumer goods stocks.

 

Thus far in August, the Nifty FMCG and Nifty IT indices have gained around 5 per cent each, as compared to 2 per cent rise in the Nifty 50 index. The Nifty Pharma index, on the other hand, moved up nearly 10 per cent during this period to hit its 52-week high of 10,142 last week. READ MORE