MARKET WRAP: Sensex falls 241 pts; banks, FMCG, IT stocks among top losers

All that happened in markets today

9:16 AM

Market at open

At 9:15 AM, the S&P BSE Sensex was trading at 36,365, down 30 points, while the broader Nifty50 was ruling at 10,875, down 14 points.

9:07 AM

Commodity watch

(Image source: Nirmal bang report)

9:04 AM

Market at pre-open

9:02 AM

Rupee opening

Rupee opens at 71.17/$ vs its previous close of 71.18 against the US dollar

8:56 AM

Jefferies on Apollo Hospitals

While we expect improvement in margins going forward, we believe that competitive risks are still high and that the valuations leave no room for upside. We expect mature-hospital margin improvement to be gradual as competitive intensity from Fortis and others increases. We expect EBITDA CAGR of 17% over FY18-21 led by 160bps margin improvement. Retain Hold with SOTP-based price target of Rs1,180 implying FY20 EV/EBITDA of 15.8x and valuing the hospital business at a 10% discount to the historical average multiple at 15x

8:56 AM

Bulk deal on NSE as on Monday

11-Feb-2019	PCJEWELLER	PC Jeweller Ltd	CROSSLAND TRADING CO	BUY	24,49,553	69.38	-
11-Feb-2019	PCJEWELLER	PC Jeweller Ltd	CROSSLAND TRADING CO	SELL	24,49,553	69.37	-
11-Feb-2019	PCJEWELLER	PC Jeweller Ltd	DIVYA PORTFOLIO PRIVATE LIMITED	BUY	23,23,916	68.71	-
11-Feb-2019	PCJEWELLER	PC Jeweller Ltd	DIVYA PORTFOLIO PRIVATE LIMITED	SELL	23,98,573	68.94	-
11-Feb-2019	RELCAPITAL	Reliance Capital Limited	ALPHAGREP SECURITIES PRIVATE LIMITED	BUY	18,20,628	133.89	-
11-Feb-2019	RELCAPITAL	Reliance Capital Limited	ALPHAGREP SECURITIES PRIVATE LIMITED	SELL	18,20,628	133.88	-
11-Feb-2019	RELINFRA	Reliance Infrastructu Ltd	ALPHAGREP SECURITIES PRIVATE LIMITED	BUY	17,30,946	118.63	-
11-Feb-2019	RELINFRA	Reliance Infrastructu Ltd	ALPHAGREP SECURITIES PRIVATE LIMITED	SELL	17,30,946	118.62	-
11-Feb-2019	RELINFRA	Reliance Infrastructu Ltd	REGIME DE RETRAITE D HYDRO-QUEBEC	SELL	13,43,158	118.34	-
11-Feb-2019	ROLTA	Rolta India Ltd.	SWAPNIL MEHTA	BUY	13,40,215	3.99	-

Click here to see full list

8:54 AM

INTERVIEW OF THE DAY Abhijit Bhave of Karvy Wealth

HNIs are looking at international diversification: Abhijit Bhave

Do you think the wealth management segment is getting overcrowded and the margins will get thinner going ahead?

India is on the growth trajectory where projections of a $10 trillion economy over eight years are being made. This leads to a lot of potential for wealth management companies to grow and the sector will not get saturated anytime soon. In the short-term, there may seem to be some overcrowding in this space. That said, there is huge potential to grow over the long term READ MORE HERE

8:52 AM

Edelweiss on Britannia

Britannia posted in-line YoY Q3FY19 revenue, EBITDA and PAT growth of 10.5%, 13.4% and 14%, respectively. Domestic volume grew 7% YoY, translating to three-year average volume growth of 7% (highest so far in consumer space; Dabur recorded 6.8% and HUL 5.7%). This coupled with a price hike of 2% and a favourable mix of 2% aided overall sales growth.

Price hikes, better inventory management and change in accounting for the breads business lifted gross margin by 252bps YoY. Building in initial expansion expenditure at the Ranjangaon facility, employee cost and other expenditure were high – up 24.9% YoY and 20.7% YoY, respectively. Hence, EBITDA margin grew only 38bps YoY. Britannia’s journey towards becoming a total foods company is gaining flavor with entry into new categories and geographies and rising share of premium products that will keep the company in good stead. Maintain ‘BUY

8:51 AM

Edelweiss on Max Financial Services

Max Financial Services (MFS; holding company for life insurance) clocked a mixed Q3FY19 performance. Growth came in below trend (individual APE up 13% YoY) due to the tilt towards lower-ticket, higher-margin protection business (individual protection at 6% versus 4% in 9MFY18) and a diversified portfolio (ULIPs’ proportion down to 40%). The company delivered across critical metrics, viz., persistency, AUM accretion and distribution diversification. It reported embedded value of INR82.5bn with an NBM of 20.4% (post-cost overrun) and operating RoEV of 18.8% supported by an improving protection mix. We expect growth acceleration and sustained improvement in underlying metrics to drive the rerating ahead. Maintain ‘BUY’

8:50 AM

Edelweiss on Thermax

Thermax’s (TMX) Q3FY19 revenue surpassed estimate riding healthy order backlog, while price pressure led to margin belying it. Key highlights: a) order inflow rose mere 5% in the absence of large order finalisation. Management expects small orders in ethanol, waste heat recovery & Sox Nox to drive FY20 order inflow, along with three major orders anticipated in the refinery segment by Q2FY20; b) stability in commodity prices & pick up in contract awarding remain key for margin expansion; and c) though liquidity situation is improving, it is expected to be gradual.

In our view, lack of large orders in the domestic market and incremental growth from international market continue to pose challenges for full fledged growth and margin expansion. We trim FY20E EPS 7% given muted YTD19 order intake and maintain ‘REDUCE’ with Rs 700 target price, as we roll forward to June 2020 valuation, maintaining 16x PE

8:49 AM

Jefferies maintains BUY rating on Eicher Motors

Royal Enfield's 3Q revenue and EBITDA performance surprised positively in the backdrop of muted volume growth due to higher realization (up 10% YoY and 6% QoQ). Most of the increase in 3Q was on account of shift to rear disc brake; in 4Q shift to ABS should drive up realization even more. VECV margin shrunk sharply YoY and QoQ. Despite near-term headwinds around volume growth and increased competition we maintain Buy noting strong medium to long-term prospects

8:48 AM

Market Preview

At 8:00 a.m. IST, the SGX Nifty Futures was trading at 10,907.00, which is 0.2% lower than its previous close. It is at a premium to the Nifty’s previous closing of 10,888.8.

 

On Monday, FIIs/FPIs sold stocks worth Rs 125.1 crore and DIIs sold stocks worth Rs 232.6 crore.

 

Global stock markets:  Nikkei +2.0%, KOSPI +0.2%, Hang Seng -0.2%, NASDAQ +0.1%, S&P 500 +0.1%, Dow 30 -0.2%.

 

Q3 results today: COAL INDIA, BATA INDIA, HINDALCO, and HEG

 

Key News

 

Eicher Motors reported its Q3 FY 2019 results yesterday. Net profit met the market expectations with 2.4% y/y growth. Revenues of the Royal Enfield units grew 3.2% and met market expectations. However, the margins shrank on account of higher raw material cost.

 

According to a filing, the government is planning to raise ~Rs 5,300 crores by sale of stake in Axis Bank through SUUTI. The offer will start from February 12 and the government intends to sell 3% equity stake through the process.

 

Reliance Power’s board has accused L&T Finance and Edelweiss through a regulatory filing of unlawfully invoking the Company’s shares and selling it in the open market, which has led to a sharp fall in its stock price. The Company has written to the SEBI in the matter.

(Source: William O’Neil report)

 

8:48 AM

Derivatives strategies: Short-term trend likely to be negative

The Nifty made a failed breakout to above 11,000 and then reacted down quite sharply. It’s back in the trading range of 10,700-11,000 even though the RBI made a surprise rate cut and changed policy stance to “neutral” from “calibrated tightening”. The index is again taking support from its own 200-Day Moving Average (DMA).

 

Until and unless, there’s another breakout or breakdown, judging intermediate trend will be impossible. The short term trend seems negative. Volumes continue to be low. READ MORE

8:42 AM

NEWS ALERT

Corporation Bank's slippages at Rs 4,068.4 crore in Q3FY19

8:41 AM

NEWS ALERT

Corporation Bank has recovered more than Rs 3,000 crore in 9MFY19, as per CNBC TV18 report