Stock Market Highlights: Sensex ends marginally lower, Nifty below 14,950 amid volatility; banks, metals drag

Ajit Mishra, VP – Research, Religare Broking

Markets traded subdued and ended almost unchanged, in continuation to the prevailing consolidation phase. The benchmark started with an uptick, tracking supportive global cues and inched further higher initially but profit-taking in the index majors trimmed all the gains as the session progressed. The US markets are doing comparatively well despite caution ahead of the Fed meet and rising bond yields. At the same time, our markets are facing pressure and hovering in a range, after the subdued macroeconomic data and rising in the COVID cases. We feel the prevailing consolidation would end soon. Meanwhile, we suggest avoiding directional trades and preferring hedged positions.

Market At Close

– Sensex & Nifty Close Flat Amid Volatility; Banks Underperform

– Nifty Bank Falls Over 1% With Majority Of Its Constituents In The Red

– Stocks Like Dhani, Mphasis, Coforge Help Midcap Index Close Higher

– Nifty Ends 19 Points Lower At 14,910 & Sensex 31 Pts Lower At 50,364

– Midcap Index Rises 96 Pts To 24,048 While Nifty Bank Slips 378 Pts To 34,805

– IT Stocks Amongst Top Nifty Gainers; All Nifty IT Constituents Close Higher

– ICICI, HDFCs, RIL, L&T Drag While Asian Paints, TCS, Infy & HUL Support Nifty

– Tata Comm Slips Despite Non-retail Portion Of OFS Being Fully Subscribed

– Gland Pharma Rises 7% On Co’s Agreement For RDIF’s Sputnik Vaccine  

– Market Breadth Neutral With Advance-Decline Ratio At 1:1

Closing Bell | Indian equity indices ended Tuesday’s volatile session marginally lower dragged by selling in metals, banks and financial stocks. The Sensex ended 31.12 points, or 0.06 percent lower at 50,363.96, while the Nifty fell 19.05 points, or 0.13 percent, to close at 14,910.45. Broader markets outperformed the benchmarks with the smallcap and midcap indices ending higher. Among sectors, Nifty PSU Bank, Nifty Metal, Nifty Pharma and Nifty Financial Services declined, while IT, FMCG and auto indices gained.

On the Nifty50, Cipla, Tata Steel, ICICI Bank, SBI and BPCL led the losses, while Asian Paints, Dr Reddy’s Laboratories, Hindustan Unilever, HCL Technologies and ITC were the top gainers.

HG Infra Engineering | The company has received the purchase order from NTPC for transportation of 26.41 lakh Cu. M. of pond ash from NTPC Ramagundam to NHAI-PIU Mancherial road construction project. The estimated project cost is Rs 122.38 crore and the company’s bid price is Rs 94.95 crore. The project to be completed in 15 months, the company said.

Gland Pharma | The company has entered into an agreement to supply upto 252 million doses of RDIF’s Sputnik V COVID-19 vaccine. This is the first of multiple partnerships being explored by Gland Pharma to leverage its manufacturing capacity and capabilities to support global supply of COVID-19 vaccine, the company said.

Market Watch: Mehraboon J Irani of Gini Gems Consultants

On Tata Communications

This company will do well in terms of business potential. This is a stock that you need to buy. The correction which we are seeing following the government’s offer-for-sale at a price much lower than the market price definitely is a buying opportunity. Possibly two-three years down the line, this could be a stock price we will not be imagining right now.

On IT

I believe there is going to be a reclassification of the valuation that these IT companies should be having. This is a story which everybody likes. The story is superb, intact and on the frontline names, HCL Technologies, Tech Mahindra, Infosys and Tata Consultancy Services (TCS) – take your pick but in the midcap I see more opportunities, Tata Elxsi, Intellect, Happiest Minds and Tata Communications. These are names which I believe over the next three-six quarters, the numbers are going to surprise positively.

HDFC Securities on Tata Elxsi | For FY22E, Tata Elxsi (TELX) is set to grow at a 10 pp premium to mid-tier peers both on growth and margin. We initiate coverage on TELX with a Buy and target price of Rs 3,330, based on 36x (base case) at 1.6x the average multiple, supported by top quadrant growth/efficiencies, quality of franchise, industry tailwinds, and favourable risk-reward (upside risk to base case).

Oil drops as rising stockpiles compound COVID-19 demand concerns

Oil prices fell for a third straight day on Tuesday as rising stockpiles in the United States added to concerns about risks to demand as countries including Germany and France halt COVID-19 vaccinations.

Amarjeet Maurya – AVP – Mid Caps, Angel Broking on Royal Orchid Hotels

Royal Orchid Hotels announced the opening of 8 new properties under the brand Regenta Resort, Regenta Central and Regenta Inn. Hotel locations are Bangalore, Noida, Goa (Panjim), Jaipur, Ajmer, Mashobra and Udaipur. Further, the company has set a target to reach 100 hotels (currently 64 hotels). As per company, in the Q1 and Q2 of FY21-22, we are expecting to add another 7 hotels. We believe this is a positive development for the company which would boost the revenue growth for the company going ahead.

Craftsman Automation IPO sees tepid bidding; subscribed 92% on day 2 so far

The initial public offering (IPO) of Craftsman Automation has been subscribed 92 percent on the second day of bidding. The offer received bids for around 35.75 lakh shares as against the offer size of 38.69 lakh equity shares. The reserved portion for retail investors was subscribed 1.39 times while that of non-institutional investors was bid 11 percent. Qualified institutional buyers have not started putting in bids for the offer.

FIIs add weight in banks, IT, staples; turn underweight in telecommunications

India witnessed the biggest foreign institutional investors (FIIs) inflows in February in the equity at US $3.5 billion. Along with Indonesia, India was the only key emerging market that saw equity inflows from the FIIs in February. FIIs remained overweight in banks but it is still much lower than in the past 12 months. Higher weights in IT, industrials, and staples were funded by a big cut in weight of communication services, according to a report by CLSA.

The overweight of FIIs in banks rose 24 bps MoM to 8.5 ppt, helped by active buying. However, this remains the lowest in many months other than January. After six months of overweight in communication services, FIIs again turned underweight due to an increase in weight of Bharti Airtel in the benchmark at the end-February 2021, CLSA said. Continue reading.

Emkay Global Financial Services on Tech Mahindra | For Tech Mahindra, HLS is a focus vertical (8-9 percent of revenue) and the Perigord acquisition will augment its domain capabilities and also expand its BPaaS offerings. Given the size of the acquisition (less than 0.5 percent of Tech Mahindra’s revenue), we do not expect any meaningful revision to our earnings estimates. We have a Buy rating on the stock with a target price of Rs 1,170 at 18x FY23E earnings.

Laxmi Organics IPO subscribed 3.5 times so far on Day 2 of bidding

The initial public offering (IPO) of Laxmi Organic Industries was subscribed 3.5 times on the second day of bidding led by retail investors. Investors have put in bids for over 11 crore equity shares against the offer size of 3.25 crore shares, subscription data available on exchanges showed. The portion reserved for retail investors was subscribed a massive 6.22 times and that of non-institutional investors 85 percent. Meanwhile, qualified institutional buyers’ potion was subscribed 82 percent.

IT stocks will continue to do well, bullish on autos: Andrew Holland

Andrew Holland, Chief Executive Officer at Avendus Capital Alternate Strategies, believes the global economy will pick up. “We have taken more of a barbell approach to the market where we have had some of these defensives. But the larger weighing on the barbell is towards industrials, banking, energy, consumer discretionary because we do believe that the global economy will pick up. There might be a few hiccups along the way and India will enjoy strong growth,” he said.

On IT stocks, he stated, “We have quite a number of IT stocks overall because we feel that the momentum for these stocks is – in terms of both their earnings and the tailwinds in terms of what is happening globally – going to continue to push earnings a lot better than the market expects. That is where you are going to continue to get earnings surprises. It is a barbell approach in terms of largecaps to midcaps within the IT sector as well.” Read more.

Kalyan Jewellers IPO subscribed 27% so far on day 1

The initial public offering (IPO) of Kalyan Jewellers has been subscribed 27 percent so far on March 16 (Tuesday), the first day of the bidding process. The issue has received bids for 2.60 crore equity shares against the offer size of 9.57 crore shares, as per data available on exchanges.

Anupam Rasayan IPO subscribed 5 times so far on the final day

The initial public offering (IPO) of specialty chemical maker Anupam Rasayan India has been subscribed almost 5 times so far on March 16 (Tuesday), the last day of the bidding process. The issue has received bids for 4.82 crore equity shares against the offer size of 97.01 lakh shares, as per data available on exchanges.

Jyoti Roy – DVP- Equity Strategist, Angel Broking

Nazara Technologies is present in the fast growing segment of interactive gaming, eSports and gamified early learning solutions. After posting a degrowth of 1.4 percent in FY2019 the company has posted strong revenue growth of 45.9 percent in FY2020 to Rs 247.5 crore. The company has already posted a revenue of Rs 200 crore in H1FY2021.

The company has been reporting losses as they have increased their spending significantly on advertising & promotion from FY2020 onwards which will help drive strong topline growth for the company. Advertising & promotion expenses which accounted for 16 percent of the company’s revenues in FY2019 has increased sharply to 53.7 percent of revenues in FY2020 and 59.7 percent of revenues in 6MFY2021.

At current levels, the stock is trading at EV/Sales of 11.6xFY20 revenues and we recommend a “Subscribe” rating to the IPO given strong growth potential for the company considering the vast potential offered by the gaming industry.

Gold rate today: Yellow metal trades flat; may face resistance at Rs 45,200 per 10 grams

Gold prices in India traded flat on the Multi Commodity Exchange (MCX) Tuesday tracking a muted trend in the international spot prices as investors awaited the outcome of the US Federal Reserve decision. Silver prices fell. At 11:00 am, gold futures for April delivery rose 0.11 percent to Rs 44,950  per 10 grams as against the previous close of Rs 44,900 and the opening price of Rs 44,950 on the MCX. Silver May futures eased 0.01 percent to Rs 67,659 per kg. The prices opened at Rs 67,572 as compared to the previous close of Rs 67,669 per kg. More here

Will continue to invest in technology rather than capacity: Praj Industries

The government has approved 20 percent ethanol blending in petrol to reduce vehicular pollution. Shishir Joshipura, MD & CEO of Praj Industries, spoke to CNBC-TV18 to assess the impact on their business. “This is the time in which the policy has been very progressive. It has continuously pushed forward for inclusion of bio-fuels in the overall energy mix of the country and that augurs well because on many dimensions. It improves the farmers’ income, it will help to alleviate the pollution and save foreign exchange. So, from all dimensions this has been a very positive development in the field.” More here

AU Small Finance Bank raises Rs 625.50 cr from investors via qualified institutional placement

Jaipur-based AU Small Finance Bank has raised Rs 625.50 crore by issuing shares to a set of investors through qualified institutional placement (QIP). The bank has completed the allotment of equity shares under QIP and has successfully raised Rs 625.5 crore through the issuance of 50,00,000 equity shares at an issue price of Rs 1,251 per share, the bank said in a regulatory filing. The issue was launched on March 9, with a floor price of Rs 1,181.06 apiece. The QIP witnessed strong reception from both domestic and international institutional investors and the QIP was subscribed by sovereign wealth funds, large foreign portfolio investors, life insurance companies and a domestic mutual funds, AU Small Finance Bank said. More here

Rupee inches 5 paise higher to 72.41 against US dollar in early trade

The rupee appreciated by 5 paise to 72.41 against the US dollar in opening trade on Tuesday supported by positive domestic equities. At the interbank forex market, the local unit opened at 72.46 against the US dollar, then inched higher to 72.41 against the greenback, registering a rise of 5 paise over its previous close. Read more.

Amarjeet Maurya – AVP – Mid Caps, Angel Broking

Ahead of IPO opening Kalyan Jewellers (KJIL) got good response from anchor investors which were around Rs 352 crore (30% of IPO issue size). The name investors are the Government of Singapore, Sundaram Mutual Fund, BNP Paribas, HDFC Life Insurance Company etc. We have a subscriber rating on IPO. In terms of valuations, the pre-issue TTM EV/Sales works out to 1.4 (at the upper end of the issue price band), which is low compared to Titan Company (trading at 7.7x). However, Titan company has a better financial track record compared to KJIL. Going forward, we believe that KJIL would perform better on the back of a strong brand and number of stores in India & internationally.