Stock Market Highlights: Sensex ends 290 points lower, Nifty holds 15,000; metals, auto drag; smallcaps outperform

Market At Close | Here are the key highlights of today’s market session

– Market Closes In The Red But Nifty Holds On To 15,000

– Nifty Bank Falls The Most Amongst Frontline Indices, Down 0.7%

– Sensex Slips 291 Points To 49,903 & Nifty 78 Points To 15,030

– Nifty Bank Falls 237 Points To 33,685 & Midcap Index 34 Pts To 25,233

– Market Breadth Favours Advances; Advance-Decline Ratio At 3:2

– Tata Motors Top Nifty Loser On A Cautious Commentary By Mgmt

– Bharti Airtel Falls For 6th Straight Day; Q4 Earnings Below Expectations

– HDFC, Bajaj Fin, M&M, JSW Steel & UltraTech Amongst Top Nifty Losers

– IOC Closes 1% Higher After Reporting Better-than-expected Earnings

– BPCL Slips As Divestment Is Likely To Be Delayed By At Least 3 Months

– Coforge Falls Over 4% After a Block Deal Of Over 6% Equity Today

– Aarti Ind, JSPL, Ujjivan SFB, Nalco Top Midcap Losers

Closing Bell | Indian equity benchmark indices ended lower Wednesday dragged by selling in metal, auto and private banking stocks. The Sensex fell 290.69 points, or 0.58 percent to 49,902.64, while the Nifty ended 77.95 points, or 0.52 percent lower at 15,030.15. Broader markets closed mixed as smallcap index gained, while midcap index ended in the red.

Among sectors, Nifty Financial Services, Nifty Metal, Nifty Auto and Nifty Private Bank fell the most, while, gains were seen in pharma, realty, PSU Banks and media indices. Tata Motors, Bajaj Finanserv, M&M, HDFC and JSW Steel were the top losers on Nifty50 constituents, while Coal India, Cipla, Sun Pharmaceutical Industries, UPL and Nestle India wwre the top index gainers.

Sensex may hit 61,000 by December 2021: Morgan Stanley

Sensex could hit 61,000-levels by December 2021 in a bull case scenario, said Morgan Stanley. The 61,000 levels for Sensex indicate an upside of 22 percent for the BSE frontline index from the current levels of 50,000. Even in a base case scenario, Sensex could hit the 55,000 levels, indicating a 10 percent upside, said the brokerage house.  In the bear case scenario, it pegs the Sensex at 41,000 levels by December 2021. In a recent note, the brokerage house stated that it is overweight on India in a global emerging markets (GEMs) context and expects Indian equities are likely to outperform their emerging market (EM) peers in 2021. Read full report here.

ICICI Direct on Torrent Pharmaceuticals

Q4 operational performance was in line with I-direct estimates whereas bottomline was better amid higher-than-expected other income and lower interest cost. Overhang pertaining to two US focused plants notwithstanding, Torrent continues to impress thanks to its robust margin profile that can be attributed to global portfolio that comprises ~ 60% branded generics. We expect a further improvement in this matrix, product rationalisation to further strengthen margins. The company’s portfolio is finely balanced between India, Brazil, Germany and the US with India being the leader.

With consistent FCF generation, moderation in core capex, we expect the leverage situation to improve substantially. With these key characteristics we believe the premium valuation is justified. We maintain buy with a target price of Rs 3,290 (unchanged) based on 32x FY23E EPS of Rs 102.8.

Happiest Minds Technologies | The company has executed a digital transformation project for Coca Cola Bottling Company United for streamlining its order management with RPA in Microsoft Power Automate.

Just In | Royal Enfield to recall 2.37 lakh motorcycles of the Classic, Bullet, Meteor models due to a defect in one of the parts.

Indian Oil Corporation Q4FY21 | The company’s net profit was at Rs 8,781 crore as against CNBC-TV18 Poll of Rs 5,741 crore. Revenue was at Rs 1.24 lakh crore versus estimates of Rs 1.2 lakh crore. EBITDA was reported at Rs 13,501 crore, while EBITDA margin was at 10.9 percent for the quarter.

Emkay Global on Bharti Airtel 

Bharti Airtel reported in-line EBITDA, but ARPU of Rs 145 missed our estimate by 1.8%. This indicates a deceleration in the mix improvement-led ARPU uptick that has been seen over the last two quarters. Healthy performance of enterprise and home broadband segments continued, with the latter seeing the highest customer additions, yet again. Market share gains across the business segments reflect the strength of the underlying customer winning strategy.

We keep our estimates largely unchanged. We expect a tariff hike in H2FY22. This is crucial for fast-paced balance sheet deleveraging, in turn, driving next leg of re-rating for the stock. We maintain Buy with a SoTP-based TP of Rs 686.

Gateway Distriparks Q4FY21: Mgmt expects double-digit volume growth in rail, CFS biz in FY22

Logistics company Gateway Distriparks posted a robust set of numbers for the quarter ended March with their EBITDA rising 41 percent year-on-year (YoY). The company’s rail and container freight segments (CFS) also reported higher volumes and revenues. Detailing the numbers, Prem Kishan Gupta, CMD of the company said that the volumes are good so far in rail and container freight segments in Q1FY22.

“As far as this quarter (Q1FY22) is concerned, so far the going is good. The volumes are there both in the import as well as in the export direction. But going forward, we have visibility of imports coming in, but exports have been down because of the lockdowns. But nevertheless, the volumes, both in the rail and the CFS business are good till now and we hope that this quarter will do well,” he said in an interview with CNBC-TV18. According to Gupta, H1FY21 was a washout due to lockdown, but for FY22 he is expecting double-digit growth in volumes in both rail and CFS. Read here.

Market Watch: Aditya Agarwala, Yes Securities

– Buy Britannia with a stop loss of Rs 3,490 and a target of Rs 3,600.

– Buy Shalimar Paints with a stop loss of Rs 95 and a target of Rs 110.

Market Watch: Sudheer Guntupalli, Lead Analyst-Tech, ICICI Securities

Currently midcap IT is trading at 20 percent premium to Nifty IT and if I were to go by the precedent over the last 15-20 years, this happens only once and that did not sustain for a long period of time which essentially means time maybe ripe for a correction in the midcap IT names. In terms of broader IT sector also, valuations have run up much ahead of fundamentals in which condition the demand is going to be significantly higher post-COVID, profitability is going to be significantly higher post-COVID, market has spiced up the multiples to a significant extent and that’s why we see a reason to be cautious on the sector right now.

Commodity Outlook by Ajay Kedia

Gold prices are trading near to $1,868. A breach above $1,872.00 will activate the positive effect followed by rallying to achieving new gains that reach $1,900.00 – $1,918 level as long as prices are trading above $1,858. Strong bullish trend above $1,872.

Silver prices are trading near $28.00. Overall outlook remains bullish for a target located at $29.00 and above same can test $29.60. Holding above 27.75 is a bullish sign and vice-versa.

HDFC Securities on Ujjivan Small Finance Bank

Ujjivan Small Finance Bank witnessed significant asset quality deterioration in the micro-credit and MSE portfolios (overall GNPA rose by 230 bps QoQ). While the overall stressed book was steady at Rs 33 billion (~22% of loan book), we remain watchful of further deterioration from extended lockdowns in key states, especially in rural and semi-urban locations. With the run-down of provisions during the quarter, we revise our FY22/FY23E earnings estimates downward by 15.9%/11.7% to factor in elevated credit costs and lower disbursals. Maintain ADD with a revised TP of Rs 37 and Buy on Ujjivan Financial Services with a TP of Rs 354.

Kalyani Steels: Expect to make up for shortfall in sales volume in FY22

Kalyani Steels reported a consolidated profit of Rs 75.68 crore in the fourth quarter of the financial year 2021, steeply higher than Rs 22.66 crore in the previous year. While its revenue from operations has surged 39 percent year-on-year, its margins have also expanded significantly. RK Goyal, MD of Kalyani Steels discussed the earnings and the big rise in steel prices. Goyal says the company has witnessed a big impact in the current quarter in terms of sales volume due to the second wave of COVID-19. However, he expects to “make it up in May and June. So I don’t see much impact or substantial impact on the volumes and margins going forward,” he said. Kalyani Steels is targeting to maintain a 27 percent margin delivered in Q4FY21, he added. Read here.

Canara Bank expects double-digit growth in retail segment; says focus on infra sector

Canara Bank will see double-digit growth in FY22 in the retail segment, LV Prabhakar, MD & CEO told CNBC-TV18. The bank reported earnings for the March-ended quarter and has seen a high slippage figure of Rs 15,287 crore. “Our focus is on growth in retail and because of the verticalisation which we have done and the specialised units which we have created in the last year is giving the results and going forward in retail we are going to have a double-digit growth,” Prabhakar said. “We are concentrating on infrastructure projects very aggressively especially hybrid annuity model (HAM) and in Q1 we will be showing growth under corporate sector also,” he said. Read here.

Yash Gupta Equity Research Associate, Angel Broking

Brigade Enterprises reported a good set of numbers but a tough time ahead due to the COVID19 restriction. This was one of the difficult years for the real estate companies in India even the South India region is now one of the heaviest hit due to COVID-19 2nd wave, we expect the first half of FY2022 will going to be a washout quarter the company and some recovery in 2nd half of the year.

Dr Reddy’s in talks with RDIF on Sputnik V for other countries

Dr Reddy’s Laboratories, which is in a pact with the Russian Direct Investment Fund to sell 125 million people doses (250 million vials) of COVID-19 vaccine Sputnik V in India, is holding parleys with RDIF for acquiring rights for more countries, a senior official of the Indian drugmaker said. Dr Reddy’s which had received over two lakh vaccines from RDIF, recently soft-launched Sputnik V and tied up with Apollo Hospitals for piloting the vaccine. Read here.

Rupee rises 8 paise to 72.97 against US dollar in early trade

The Indian rupee inched higher by 8 paise to 72.97 against the US dollar in early trade on Wednesday amid a muted trend in the domestic equity market. At the interbank foreign exchange, the domestic unit opened on a flat note at 73.02 against the dollar, then inched higher and touched 72.97, registering a rise of 8 paise over its previous close. Read here.

Market prepared to look beyond COVID 2nd wave; cautious on autos, says Edelweiss’ Aditya Narain

The Indian equity market is prepared to look beyond the second wave of COVID-19, said Aditya Narain, head of research-institutional equities at Edelweiss Securities, on Wednesday. Speaking in an interview with CNBC-TV18, he said, “Prioritizing lives over livelihood at this point will remain an endearing theme and I don’t think the market should necessarily worry too much about it. The demand comeback is going to be gradual unlike last time and that’s where one needs to focus a bit more on.” Narain is of the view that the demand may get hit as the companies will hike prices to protect margins. Read more.

Positive on JLR prospects; expect over 15% volume growth: HDFC Securities

Tata Motors’ operationally strong earnings were in line with the street expectations. The company’s management is cautious owing to supply-side issues and rising raw material costs. Sector experts are of the view that Tata Motors have the potential to drive growth going ahead. Aditya Makharia, Senior Analyst-Automobiles of HDFC Securities is positive on the prospects for Jaguar-Land Rover (JLR). “Tata Motors has a lot of growth drivers ahead for it. There are several triggers which are yet available for this company,” Makharia told CNBC-TV18. He expects a double-digit growth, 15 percent plus volumes at JLR for next year. Watch here.

Brigade Enterprises zooms 13% post-Q4 results; 1-year gain 172%

Shares of realty firm Brigade Enterprises opened with a gain over 13 percent in early trade on Wednesday after the company reported a sharp surge in March quarter net profit. The company’s consolidated net profit in Q4FY21 rose to Rs 39.57 crore from Rs 2.68 crore, YoY. Total income during the quarter increased 27.39 percent to Rs 820.86 crore from Rs 644.34 crore in the year-ago quarter. The stock has gained over 7 percent in the last three days, while the one-year return on the stock is almost 172 percent, outperforming the Senex by 106 percent. Year-to-date, the stock has posted over 4 percent gains. More here