Sensex gains 77 points, Nifty ends above 10,000 on positive global cues

All that happened in Tuesday's trade

1:23 PM

Sebi diktat to impact large funds the most

 

Large fund houses will be impacted the most by the Securities and Exchange Board of India’s (Sebi’s) new diktat to bring all equity schemes under 10 sub-categories. An analysis of existing large-cap, mid-cap, small-cap, multi-cap and tax planning categories shows fund houses such as ICICI Prudential MF, Sundaram MF, Birla Sun Life MF and Reliance MF have the larger number of schemes between them, totalling in excess of 150. READ FULL ANALYSIS

1:10 PM

Sectoral trend

Source: NSE

1:09 PM

Nomura on Future Retail

 

Future Retail recently announced the acquisition of HyperCity, one of India’s leading food & grocery retailers. We believe that the acquisition is the step in the right direction, and with Future group’s strong logistics ability and sourcing prowess, the turnaround should be quick. The acquisition is synergistic, in our view, and would give the company an opportunity to extend its reach in key metro areas, access to loyal membership-based shoppers and an opportunity to push its private labels. 

 

We believe the acquisition should be EBITDA positive in FY19F and contribute positively to EPS from FY19F. Consequently, we have increased our revenue estimates by 2% and 6% for FY18F and FY19F, respectively; our EPS forecasts decrease due to additional share issuance. Our EBITDA assumption is unchanged for FY18F but increases by 3% for FY19F.

12:52 PM

China may beat its 2017 growth target?

 

China will have no problem meeting its economic growth target of around 6.5% this year, and may even beat it, the head of the Statistics Bureau said on Tuesday, confirming widespread market expectations. 

 

Steps taken by the government to rein in the overheated property market have also been effective and will remain in place, Ning Jizhe told reporters in a briefing in Beijing. READ MORE

12:36 PM

Broader markets outperform

 

Broader markets outperformed with the BSE Midcap and the BSE Smallcap indices gaining 0.6% and 0.8%, respectively.

12:35 PM

Markets check

At 12:30 am, the Sensex was trading at 31,932, up 85 points, while the broader Nifty50 was ruling at 10,014, up 25 points.

12:33 PM

Nomura on banks

 

Q1FY18 slippages for corporate banks were affected by granular slippages (retail/agri), which we expect to normalise in Q2FY18F. Also, among large and mid-corporates, telecoms (Aircel and Rcom) should lead to some rise in slippages over the next two-three quarters, but otherwise we expect a meaningful reduction in slippage levels – we expect 2QFY18F slippages to drop by 45% for PSU banks over FY17 levels, while for Axis/ICICI, we expect slippages to drop by 15% vs. FY17. Provisioning will remain high as banks provide for National Company Law Tribunal cases (RBI requires + 50% provisioning) and ICICI/SBI will likely use capital gains from subsidiary stake sales to improve their overall provision coverage, in our view.

12:31 PM

Stock watch: NBCC

 

NBCC management, during our recent interaction, indicated a shift in focus from order accretion to execution. The company is now geared to award design-build contracts/turnkey contracts of INR10bn plus and prune execution timeframe to 18-24 months. While it has already awarded Rs 60bn worth projects (Pragati Maidan, Ghosikhurd irrigation) over the past 1.5 months, tendering is underway for several large projects. We expect execution to gather pace in FY19 when work gathers steam on AIIMS, redevelopment projects in Delhi, among others. Maintain ‘HOLD’ with target price of Rs 223.

 

(Source: Edelweiss Research)

12:18 PM

BSE Smallcap index nears record high

 

The S&P BSE Smallcap index, the largest gainer among broader indices, was up 1% at 16,890 at 11:15 AM today, gaining for the eight straight trading day. The index is just 0.5%, or 92 points, away from its record high of 16,982 touched on September 20, 2017 in intra-day trade. READ MORE

12:03 PM

Reliance Securities on Skipper

 

Skipper continues to deliver a strong performance in its net revenue led by healthy performance in Engineering Products and Infra Projects segments.

 

Its outstanding order book stands at Rs 2640 crore, which is 1.5x of FY17 revenue. Robust order book provides revenue visibility in T&D business, while expansion in PVC business would aid Skipper to sustain healthy earnings profile, going ahead.

 

We expect Skipper’s Revenue & PAT to witness 15% & 24.6% CAGR, respectively over FY16-FY19E, while RoCE is seen at 22.9% by FY19E. we maintain our BUY recommendation and Target Price of Rs 254.

11:51 AM

Earnings preview: Capital goods

 

Our coverage universe is likely to witness ~12% YoY growth in revenues. While AIA, Skipper and Engineers (EIL) India may clock healthy  revenue growth at ~14% plus, Cummins India (CIL) is likely to witness lower growth at ~10% due to sluggish exports. While the growth in Skipper is aided by the capex in the Power Transmission segment, EIL’s growth is on the back of a strong orderbook mainly comprising of Hydrocarbon projects. Rolling forward the valuation methodology from Jun-19E to Sept-19E, the SOTP target price for Skipper has increased to Rs 261/share (vs 253/share earlier). The target price for CIL has increased to Rs 1,007 (vs Rs 974).  Also the target price for EIL has increased to Rs 183 (vs Rs 174).

 

(Source: HDFC Securities)

11:35 AM

Buzzing stock

 

Adani Transmission hit a new high of Rs 193, up 10% on BSE, after the company said it has entered into a period of exclusivity with Reliance Infrastructure (RInfra) until January 15, 2018 in relation to discussions for the proposed acquisition of the integrated business of generation, transmission and distribution of power for Mumbai City from RInfra. READ MORE

11:18 AM

Markets extend gains

 

At 11:15 am, the Sensex was trading at 31,9831, up 36 points, while the broader Nifty50 was ruling at 10,029, up 40 points.

10:53 AM

Edelweiss Securities on Tata Steel

 

We are upbeat on Tata Steel’s initiative to focus on domestic market by doubling capacity in next five years and enhance presence in value-added segments. On retail front, the focus on innovative products is expected to boost profitability through decommoditising steel besides opening up new avenues for growth. Maintain ‘BUY/SO’ with our SoTP-based target price of Rs 720, implying exit multiple of 6.4x FY19E EBITDA. At CMP, the stock is trading at 6.3x FY19E EBITDA.

10:38 AM

Q2 Earnings preview

 

The corporate results for the September quarter (Q2FY18) are expected to be better than those in the June quarter (Q1FY18), which was a disaster, given that it saw a bigger earnings de-growth than anticipated. READ FULL PREVIEW