}

Friday, 29 April 2016

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29 April 2016 - Today's View & News

Market View

[09:10, 29/04/2016] cspaul2009: Nifty is likely to open on a negative note based on the global cues. Support for the day is placed at 7770 levels for the day and any breach of the level, one can see more downside

Nifty Spot Levels

Support 7772 – 7717
Resistance 7880 - 7923
Market Update

SGX Nifty -13 pts (7883) from last trade 7896 , Nikkei clsd , Hangseng -173 pts , NOW @6.53am , ‎Dow -210.79 pts ,Nsdq -57.85 pts , S&P -19.34 pts ‎, Bovespa -165 pts , Ftse +2 pts , Dax +21 pts  , Cac -2 pts  , Crude @ $45.90 brl (-0.13), Brent @ $48.04 brl (+0.86) , Gold @ $1268.40 (+2.00), Silver @ $17.60 (+0.04), Euro @ $1.1355, JPY @ $108.0800, INR @ $66.5213

Today's Key Results  29th Apr

Icici Bank (Cog Est Net 3131cr +7 % Yoy Time-After Mkt) Atul ltd, Digjam Ltd, Force Motor, Gic Housing,Inter Globe,IDFC,Kirloskar Ferro,Marico,Oberoi Realty,Rpg Life,Sanofi Ind,Shriram Trans,Tinplate, UPL Ltd

Global Market Update

US stocks closed down on Thursday as the Bank of Japan's shocking call to cap monetary stimulus continued to rattle investors while a late day decline in Apple shares on remarks by billionaire investor Carl Icahn added to selling pressure.
Stocks fell early in the day on the BOJ's decision to hold steady in the face of soft global demand and a rise in the yen, jarring markets particularly after media reports that the central bank would likely go deeper into negative interest rates.

Derivative Update


NIFTY PCR:
0.92
NIFTY IMPLIED VOLATILITY:
16.6
MARKET WIDE OPEN INTEREST:
 Rs161,376 crore and Rs30,181 crore were added
MKT WIDE ROLLOVER:
 84.65% vs 80.92%
NIFTY FUT ROLLOVER:
 73.92% vs 62.85%
GOOD ROLLOVERS
Glenmark Pharmaceuticals (96%), UPL (95%), Divis Laboratories (95%), NHPC (94%) and Bosch (93%)
LOW ROLLOVERS
UCO Bank (56%), Indian Overseas Bank (57%), Hindustan Zinc (62%) Cummins India (66%) and Havells India (67%)

TOP NEWS

Glenmark pharma receives tentative approval from USFDA for Adapalene and Benzoyl Peroxide Gel, gEpiduo, used in treating acne and skin disease – Positive for Glenmark.

Idea Cellular Q4FY16–  Earnings beats estimates, though volume growth remain soft-  Idea cellular posted strong operational performance, its operating profit grew by 15.6% on a sequential basis, backed by pricing growth in voice (+4.7% qoq) as well as data(+2.7% qoq) segment, but the growth volume growth tapered for both the segments at 1.2% and 1.5% qoq). Higher depreciation & interest cost resulted in 24.7% qoq decline in net earnings. (detailed in the investment call)

Lupin bolsters US brands portfolio with Methergine oral tablets, used to address rising incidence of postpartum hemorrhage – Positive for lupin (during market hours)
Lupin announces the re-introduction of Methergine (methylergonovine maleate) Oral Tablets  for the prevention and management of postpartum hemorrhage (PPH). Methergine is the only FDA-approved oral uterotonic and is a preferred oral agent in the management of PPH. More than half of all maternal deaths occur within 24 hours of birth, most commonly from excessive bleeding, and rates of maternal mortality continue to rise in the US  where PPH is a leading cause of pregnancy complications .

RBI proposes to regulate peer-to-peer lending sector – negative read thru for NBFCs and Microfinance companies
The Reserve Bank of India (RBI)  has initiated steps to regulate the nascent and unregulated peer-to-peer (P2P) lending business. RBI has proposed registering P2P lending platforms as non-banking financial companies (NBFCs). P2P lending is a form of crowd-funding that can be defined as the use of an online platform, which matches lenders with borrowers in order to provide unsecured loans. Crowd funding generally refers to a method of funding a project or venture through small amounts of money raised from a large number of people. According to RBI, P2P lending as a business model has gathered momentum globally and is taking roots in India. Peer to peer lending could extend services where formal finance is unable to reach and also could lead to an increased competition and lower costs.

Reliance Industries -- Parliament's Public Accounts Committee said the company is entitled to recover all cost incurred on unviable gas discoveries – Sentimentally positvie

IL&FS Transportation in advanced talks with US-based infra co for sale of minority stake in 2 annuity based projects – Positive read thru; funds raised will ease some stress on balance sheet

Sugar – Government has asked states to curb hoarding, put check sugar price rise –sentimentally negative for Sugar companies (including Balrampur Chini and Dhampur Sugar)
In the backdrop of rising sugar prices state governments have powers to impose stock holding limits on sugar and other commodities under the Essential Commodities Act. Despite the power, states wait for central orders. This will largely put control on the sugar prices at the retail level. 
OTHERS NEWS

Ambuja Cement Q1CY2016: Volume up by 9.5% YoY, lower realization impacted earnings
During the quarter company reported revenue of Rs2418.3 crore largely driven by volume, however decline in realization ( down 8.9% YoY) and additional provision under mineral act impacted the operating margins, decline by 193 basis point. Hence reported PAT for the quarter stood at Rs303.7 which include extraordinary income of Rs21 crore excluding that earnings stood at Rs282.7 crore decline of 11% YoY. EBIDTA per tonne decline by 18% YoY to Rs723

Dr Reddy’s plans are to first launch biosimilar products in India & then in the Emerging markets & later in the developed markets. DRL will have to look for tie –ups to launch its biosimilars in the Developed Markets. Biosimilar products are not interchangeable unless regulations change.

Reliance Industries: Public Accounts Committee (PAC), citing loopholes in production sharing contract has said RIL is entitled to recover all cost incurred (USD 2.3 billion) on unviable gas discoveries as government's technical arm DGH had in the first place allowed it to retain the entire KG-D6 block area. PAC has taken contrary view to CAG which had stated that the ministry should accept sharing of exploration cost of only those wells which resulted in discovery and disallow the cost for others. – Sentimentally positive for RIL

JSW Energy's proposed acquisition of 1,000 MW power plant in Raigarh, Chhattisgarh from JSPL has hit a major road block as the conditions of the deal were not agreed upon by both the parties – Negative for JSPL. JSW in memorandum of understanding with JSPL has agreed to pay Rs 6000 crore. However during the final negotiations demanded that JSPL should facilitate signing of power purchase agreement for 90% of the output of 1000 MW power plant with various SEB’s. Otherwise the valuation of should be adjusted to about Rs 4,500 crore. – Negative for JSPL 

Government has invited bids from merchant bankers to assist in its stake sale in OIL, NFL and RCF. Government holds 67.64 per cent stake in OIL, 89.71 per cent in NFL and 80 per cent in RCF and it plans to sell 10% stake in OIL(approx 1900 crore), 15% in NFL and 5% in RCF.
ICRA expects Passenger Vehicle segment to grow at a better rate of 9.5%, M&HCV segment to grow 15% in 2017; impact factored in stock prices  
ICRA expects passenger vehicle (PV) industry’s domestic volumes to grow at a better rate of 9.5% in 2017, while that of medium & heavy commercial vehicles (M&HCV) is expected to grow by 15%. Passenger vehicle volumes are estimated to pick up supported by the return of the first-time buyers, As per ICRA, while there are some concerns related to 2-4% additional infrastructure cess, however, the expected pick-up in the economy, favourable monsoon as well as benefits of the 7th Pay Commission, will support overall growth in the domestic PV sector. The street is already factoring pick up in the passenger vehicle demand and the news is unlikely to have any impact.

Nissan targets mini segment with Redi Go; unlikely to have material impact on Maruti Suzuki India

Nissan is targeting the min car segment with the launch of Datsun Redi Go. The company will launch the car on June 1 and has priced the car at Rs 2.5 lakh, which is at a slight premium to the Maruti Suzuki Alto. While this will increase the competition in the mini segment, we believe Maruti is unlikely to be materially impacted as Nissan is restricted by its distribution reach. (Maruti’s dealer network at 1,800 nos is almost nine times that of Renault-Nissan).Further, Maruti has been able to defend its market share in the mini segment, despite initial strong demand for the Reanult Kwid.      

Stock In News

1. ICRA optimistic on passenger vehicle sales this year
2. Tata Steel UK not willing to split assets: CEO
3. Hotels see room for growth as occupancy, rates move up
4. Power plants with long-term PPA are of interest, says JSW Energy
5. Dabur to invest Rs 250 crore to set up plant in Assam
6. Govt may have to do more to help Tata find buyer for UK assets: CEO
7. Lupin strengthens branded drug business in US
8. Air Canada to start the first Delhi-Vancouver flight
9. As kitchen appliance business slows, TTK Prestige ventures into home cleaning
10. Cognizant acquires 49% ownership in ReD Associates
11. Capacity utilisation falls for RINL, JSW Steel and JSPL
[09:10, 29/04/2016] cspaul2009: Global Market:

More News

Lupin launches Methergine brand in US; drugmaker markets five brands in this market
Vijay Mallya effect: CVC tightens screws on loan verification
JSW Energy's power plant deals with JSPL hits a roadblock
IOC investing Rs 45K crore to expand refining capacity to meet demand
India Inc's external commercial borrowings drop 43% in March
Volkswagen not in talks with Apple, Google to start digital mobility business: Matthias Mueller
Mahindra Intertrade signs MoU with MSTC to set up India’s first auto shredding facility
Scooters to drive two-wheeler sales till FY20: Report
Online ICRA expects 8.5-9.5% growth in PVs and 13-15% growth in MHCV sales in FY17
Honda Cars expects sales to grow in double digits in 2016-17
Want capital? Step up recovery of your NPAs first, government tells state-run banks
Parag Milk Foods, Schreiber Dynamix get approval to export cheese to Russia
RIL entitled to recover cost on unviable gas discovery: Parliament's Public Accounts Committee
Godrej Consumer Products completes acquisition of Strength of Nature
Patanjali will shut the gate in Colgate, make Nestle's bird disappear: Baba Ramdev
Hotstar, Sony Liv gear up to take on Netflix in India
Walmart wants to sell food products in India via both brick-and-mortar and online stores
Airtel faces data penetration challenge amid competition
Air India losses to come down to Rs 2,636 cr: Government
Kansai Nerolac sees shades of grey on rising input prices, import duties
Adani Power Mundra plant accident death toll mounts to 7
TTK Prestige forays into home cleaning market
HCC net falls 5% on flat income from operations
Biomax told to stop production
ADB funding to help Mytrah Energy to take up wind, solar projects
Akzo Nobel NV proposes JV with Atul Lt
Berger Paints, Nippon sign biz transfer pacts with BNB Coating
TVS Motor tops two-wheeler customer satisfaction study
Global exchanges eye rejig via BSE IPO
India asks UK to deport Vijay Mallya
ITNL in advanced talks to sell two road assets
I want to rewrite the 30-year-old history: Kenichi Ayukawa
Govt proposes to ban household paint with high lead content
Govt looks to divest stakes in two state-owned fertilizer companies
Infosys buys minority stake in US-based start-up Trifacta
Canara Bank raises Rs3,000 crore via Basel-III bonds
Mahindra Intertrade, MSTC to build auto shredding facility
Reliance Jio to raise up to Rs2,250 crore via debentures
LNG shipbuilding plans cross a milestone
Markets dive after Japan holds interest rates
Panel gives bankruptcy law overseas ambit
Tata Steel UK not willing to split assets: CEO
Renault & Datsun enter the Alto territory
India Inc's ECBs drop 43% in March
Essar Oil to double CBM production this year
We chose to focus on improving the operating income: Himanshu Kapania
NHPC OFS: Retail portion undersubscribed
Will Thyrocare IPO perform as smartly as Dr Lal Pathlabs?
Global exchanges eye rejig via BSE IPO

Sharekhan Stock Update

HCL Tech
Reco : Buy
TGT : 950

Key Points

  • Revenues slower than expected: For Q3FY2016, HCL Technologies (HCL Tech) has reported a weaker-than-expected revenue growth of 1.3% QoQ at $1,587.2 million on a reported basis and 1.7% Q-o-Q growth on a constant-currency (CC) basis (weaker growth rate on lower base as compared with Infosys [1.9%] and TCS [2.1%]). The lower-thanexpected revenue growth was attributed to some project closures in the BFSI space and some slow ramp-ups. The IMS services grew by 3.9% QoQ (in line with our expectation), IT services grew by 0.7% QoQ, while BPO declined by 4.1% QoQ on a CC basis. 
  • Margins fall short of estimates: Despite the absence of Chennai flood cost and rupee tailwinds, the EBIT margins for Q3FY2016 fell short of expectations. Importantly, the management has stopped providing margins guidance for FY2017, owing to integration margins headwinds from Volvo (Q1FY2017) and Geometric Ltd (end of FY2017). The net income for the quarter remained flat at Rs1,926 crore as compared with Rs1,920 crore (includes property sale of $21 million) in Q2FY2016. 
  • Deal wins remain strong, but conversion remains weak: Deals won for the quarter remained strong with seven transformational deals worth in excess of $2 billion in total contract value (TCV), twice as compared with the usual $1 billon TCV. Effectively, the total number of transformational  ngagements during the nine month of FY2016 stood at 25, with a TCV of more than $4 billion. Looking at the revenue CQGR of 0.9% in the last six preceding quarters, deal conversions look weak, as some of the deals have a longer execution cycle time, which is affecting the deals conversion. The management has indicated at strong deals pipeline, though seeing short of big ticket deals in the engineering and R&D services verticals, while the financial service space remains soft due to vendor consolidation, digitisation, automation and shift in the outsourcing model. 
  • Maintain Buy with a revised price target of Rs950: The increasing complexity deals engagement (slower deal conversion) and integration of headwinds will result in volatile earnings performance in FY2017. Further, lack of conviction in management commentary on the organic growth front, ex Volvo in Q1FY2017 and absence of margins guidance, will affect the near-term stock’s performance. We have revised our estimates down for FY2017 and FY2018 by 7% and 2% respectively. We expect, after near-term hiccups and volatility, margins performance will start showing improvement with deals reaching steady state (also reflects in revenue growth), which will be the most important rerating trigger for HCL Tech. The stock is trading at inexpensive valuation of 14x and 12x its FY2017E and FY2018E earnings. We have maintained our Buy rating on the stock with a revised price target of Rs950.
Bharti Airtel
Reco : Hold
TGT : 425

Key Points

  • Q4FY2016 result snapshot; strong performance, operating profit jumps 8.1% QoQ: Bharti Airtel (Bharti) posted a strong show, with consolidated operating profit growth of 8.1% QoQ, led by a strong 3.6% Q-o-Q growth in the revenue. The solid voice volume (+6% QoQ) and data volume (+9.6% QoQ) aided the top-line growth, while margins across the segments were on the expansionary mode, with Indian mobile margins at 39.9% ). Low tax for the quarter negated the effect of higher interest and depreciation cost, resulting in a 15.5% Q-o-Q growth in earnings. Adjusting for exceptionals, the net earnings grew by 4% QoQ. 
  • Management comments: The management in the conference call mentioned that a strong voice volume growth in the quarter is the result of sharper and aggressive portfolio segregation and go-to market initiative drive, coupled with its greater emphasis on the network quality. It continued to maintain that the current level of voice prices (at 33.25 paise per minute) is not sustainable and is likely to increase in the medium to long run, but the competitive intensity continues to drive it low. On the upcoming spectrum, it continued its stance of higher base price of 700-Mhz band, but mentioned that it would be interested in the 2,100-Mhz band. On Africa, its strategy of concentrating on data growth and making itself sustainable has started yielding some results. For FY2017 it guided for a capex of overall $3.1 billion.Further the company has also announced its buyback plan for Rs1,434 crore at a price of Rs400, that it would receive from its subsidiary Bharti Infratel (Bharti Infratel has announced buyback of Rs2,000 crore at the price of Rs400). 
  • Outlook & view: Bharti’s robust performance (industry-leading volume growth and margins), along with improving Africa trajectory validate our thesis of improving execution from Bharti. Further, after the recent spectrum deals with Videocon and Aircel, Bharti has enhanced its pool of both 3G and 4G spectrums, making it less vulnerable to the competitive intensity in the upcoming auction. Thus, Bharti continues to be our preferred pick in the sector, but the impending risk in the form of the launch of Reliance Jio and uncertainty over its pricing and market strategy makes us retain our Hold rating on the stock. In this note, we have introduced our FY2018 estimates, while maintaining our FY2017 EBITDA estimates. We expect Bharti to post 9.9% and 10.6% revenue and EBITDA CAGR, respectively, over FY2016-18E. With the forward rolling of the multiple to FY2018, our price target stands revised at Rs425 (valued at 6.2x its FY2018E EV/EBITDA).
Gateway Distriparks
Reco : Hold
TGT : 315

Key Points

  • Weak macro environment and margin pressure continue to affect earnings: For Q4FY2016, Gateway Distriparks Ltd (GDL)’s consolidated adjusted earnings after minority interest and associate income declined by 45.7% YoY to Rs26.5 crore. The consolidated revenues were affected by lower volumes in container freight station (CFS; down 6.6% YoY) and rail (down 14.6% YoY) divisions. The volume off-take was primarily affected by lower and imbalanced export-import trade, loss in volumes at Punjab conware and Chandra facilities, rise in competitive intensity at Vizag and no major benefit from double stack cost savings. Subsequently, the company witnessed over 700-BPS erosion in operating profit margin (OPM) for both CFS and rail divisions. Consequently, the operating profit for the quarter declined by 37.0% YoY to Rs49.0 crore. 
  • Near-term uncertainty to remain: In the near term, the outlook for a revival in the CFS and rail divisions seems difficult which is likely to affect the financials of the company for H1FY2017. The management has lowered growth guidance for rail volume for FY2017 to single digit (albeit on a low base). However, the Krishnapatnam CFS facility is expected to start operations during the current year while Viramgam inland container depot (ICD) is expected to start to contribute meaningfully from Q3FY2017 onwards. These measures to revive CFS volume and to save 2-4% of rail haulage charges are yet a year away to materially affect the earnings positively. 
  • Downgrade to Hold with revised price target of Rs315: We believe, the headwinds in the company’s CFS and rail divisions are expected to continue in the near term, affecting its financials. The improvement in trade environment and revival in operating profit margin (OPM) in its businesses will be the key monitorable going ahead. Although the structural growth story over the long term remains intact for GDL (owing to a range of services, leadership position in the CFS and rail businesses, and a healthy balance sheet), the near-term uncertainties is likely to weigh heavy on valuation. Consequently, we have downgraded the stock to Hold with a revised price target of Rs315. 
  • Risk: The risk to our call is earlier-than-expected revival in demand environment coupled with improvement in OPM.

Thursday, 28 April 2016

28 April 2016 - Today's View & News

Market View

Markets are likely to open on flat to positive note. Nifty is facing resistance at 8000 level. Today being expiry of F&O one can see volatility in market.

Nifty Spot Levels 

Support 7923 – 7870 – 7820
Resistance  8040 – 8080 - 8140
Market Update

Sgx Nifty +27 pts ‎Dow +51.23 pts ,Nsdq -25.14 pts , S&P +3.45 pts ‎, Bovespa +1400 pts , Ftse +35 pts , Dax +40 pts  , Cac +26 pts  , Nikkei  +236 pts , now, Crude @ $45.25 brl (-0.08), Brent @ $47.52 brl (+1.52) , Gold @ $1247.20 (-3.20), Silver @ $17.24 (-0.04), Euro @ $1.1326, JPY @ $111.3200, INR @ $66.4525

Global Market Update

US stocks ended slightly higher on Wednesday after fears eased that the Federal Reserve would strongly signal it would raise interest rates in June, though a slump in Apple shares weighed on the Nasdaq index.
The Fed next meets on June 14-15. While the labor market continues to gain strength, inflation remains below the central bank's 2 percent target and mixed economic data could cloud the path to future rate hikes.
The Dow Jones industrial average rose 51.23 points, or 0.28 percent, to 18,041.55.
Today's Corporate Action  28th Apr Ex Date

CRISIL Interim Dividend - Rs. - 5.0000
DLINK  Buy Back of Shares 


Today's Key Results  28 th. Apr‎

IDEA CELLULAR, AMBUJA CEMENTS, ACC, VEDANTA, HCL TECH,TATA ELXSI, DABUR INDIA, CAN FIN HOMES,  GRANULES INDIA, ESSEL PROPACK, TATA METALIKS, HIND CONSTR, KAYA, KPR MILL, STEEL STR WHEEL, KAJARIA CERAMIC, ESQUIRE MONEY, AUTO STAMPINGS, TCI FINANCE, PINCON SPIRIT, INDIAN BRIGHT, GTL, SMRUTHI ORGANIC, GUJ FOILS, NIRLON, RAVALGAON SUGAR, WENDT

TOP NEWS

Aurobindo gets tentative nod from USFDA to manufacture and market Tadalafil, used in treating erectile dysfunction and for treatment of pulmonary hypertension – Positive for Aurobindo.

Torrent Pharma recalls 21000 cartons of hypertension drug telmisartan in US due to presence of ‘foreign substance’ – Sentimentally negative for Torrent Pharma

Strong result: Exide Industries: Reported strong numbers, ahead of our as well as consensus estimates. Topline grew 7% yoy to Rs 1,761 cr beating forecasts, margins improved 70 bps yoy to 15.2% and net profit grew 29% yo to Rs 178 cr (higher other income and lower tax) (further details in investments calls).

Call drop case- Positive comments from Supreme court ; positive for incumbents like Bharti & Idea
Supreme court hears out the call drop case, states that all the burden cannot be put on the telecos, final hearing date 3rd May- Positive comments on telecos  by supreme court along with good results from Bharti Airtel (along with Buyback) augurs positive for incumbent teleco players like Bharti Airtel and Idea Cellular

OTHERS NEWS

Infosys invests in Silicon Valley-based data analytics startup Trifacta
Infosys, has invested an undisclosed amount in U.S-based Trifacta. Trifacta is a provider of data wrangling software that enables non-technical users to easily transform data for analysis. As part of this investment, Trifacta will provide a data wrangling solution for the Infosys Information Platform (IIP) and Infosys’ other platforms and offerings, Infosys said in a statement. Infosys has been actively scouting for companies working on innovative technologies. Last year, Infosys had announced a USD 500-million Innovation Fund, earmarked for investments in the growth of disruptive new technologies. The company has stated that it will invest in companies that develop innovative technologies on automation, Internet of Things (IoT), and artificial intelligence

Delta Corp - Maharashtra may allow offshore casinos to boost tourism – if allowed would be positive for Delta corp
The Maharashtra government is expected to discuss whether or not to legalise casinos in the state. It has suggested the state to allow offshore casinos which could operate from a yacht off the coast where entry would be limited to foreign tourists. If the venture turns out to be successful, the government may consider allowing Indians as well to play

DLF launches Mall of India (2 million sq ft built at an investment of Rs1700 crore) – Positive for DLF
As per media reports, DLF officially launched Mall of India in Noida. The mall built at an investment of Rs1700 crore is spread across 2 million square feet. As much as 95% of the space in the mall has been leased out with as many as 14 anchor partners. The mall is expected to generate revenue worth Rs250 crore per annum for DLF. The development is positive for DLF.

MEP Infrastructure JV receives Rs826 crore hybrid annuity project – Positive for the stock
MEP Infrastructure Developers – Sanjose India Infrastructure has received Letter of Acceptance from Ministry of Road Transport & Highways for rehabilitation and upgradation of NH 66 to four lanes in Maharashtra on Hybrid Annuity Mode. The construction period is 2 years with concession period of 15 years. The Bid project cost is Rs826.28 crores and O&M bid is Rs11.6 crores for the first year. The company will receive Bi-annual annuity from MORTH. The development is positive for MEP Infrastructure.

Va tech Wabag has received wastewater treatment plant order, funded by Asian Development Bank in Nepal worth Rs 141 crore. It also includes Operations & maintenance of the plant for 10 years. – Positive for Va tech wabag (News came during market hours)

Oil India: Fitch Ratings has affirmed BBB- rating to Oil India with the stable outlook citing the Oil India’s operational and financial links to Government of India.- Sentimentally positive for Oil India
More News

US continues to keep India on IP priority watch list
Bankruptcy law okayed; good times over for wiful frauds
DIPP moves cabinet note on 100% FDI in food processing
Rise in pvt sector debt posing risk to economies: Fitch
Bharti Airtel Q4 net profit up 2.8%, beats estimates 
ED seeks to recall exemption given to Vijay Mallya
UN chief urges end to nuclear weapons testing
GST rollout, infra funding an uphill climb for India: Moody's
NHPC share sale subscribed 1.56 times
US Federal Reserve keeps rates unchanged
Biocon's Q4 net profit jumps 250% to Rs 361 crore on exceptional income
SC asks Sahara to submit list of all group assets
India likely to become net importer of sugar as drought dries fields
AgustaWestland not blacklisted under UPA rule: Govt
Iran seeks interest on $6.5 bn due from Indian oil refiners 
Kerala gets first heat wave warning on blazing El Nino trail 
GNFC back in black with Rs. 226 cr profit in FY-16  
Walmart India awaits FDI policy guidelines for marketing food products
 Adani’s mining project in Australia faces another legal hurdle
MCX copper slips below 200-day moving average
Indian stainless-steel-bar exporters may face renewed EU tariffs
Tata Steel UK’s pension hurdle could be £2.5 billion: Report
TPG Growth buys India-focused cancer treatment chain
Coromandel International’s net profit rises 35% in Mar quarter
Start-up report says 50% decline in funding in March quarter
Alembic Pharma net profit up 30%
Infosys buys minority stake in US-based start-up Trifacta            
India's World Bank ranking has improved: Nirmala Sitharaman
TRAI to take action for call drops to protect consumer
Indian Railways to harness 1000 MW solar power by 2020
Slow networks in India preventing Apple from full bloom: Tim Cook
4,983 complaints against UIDAI operators for charging money
Dumping duty on telecom gear from Huawei, ZTE
Telephone subscriber base increases to 105 cr in Feb
Non-core income pushes Yes Bank net by 27%
KYC norms relaxed for import of gifts through courier
Thyrocare raises Rs 144 crore from anchor investors
Telenor threatens to exit India on incurring operating loss worth Rs 2,500 crore 
Shipping companies see rise in Baltic Dry Index as a blip
P&G moving away from unprofitable businesses in India: Global CFO
Will take action for call drops to protect consumer interest: Trai to Supreme Court
Infosys invests in US-based analytics software firm Trifacta
Ujjivan Financial Services Mops Up Rs. 265 Crore From Anchor Investors
JSW Energy to announce acquisition of 1000 MW power plant
Reliance Jio Infocomm and the Cellular Operators Association of India (COAI) are at loggerheads over the GSM industry body's recent call for a uniform annual levy for using airwaves.
Torrent Pharma   (BS) Recalls 21000 cartons of hypertension drug in US
Aviation stocks-Airlines to refund development fee charged for Delhi passengers beyond April 30
Monnet Ispat   & energy; Bankers: Lenders seek to sell 51 percent stakes Ev as of FY15 : Rs 8247  crore
Govt says no proposal to merge BSNL and MTNL
Purvankara to exit its investment of  Rs 403 crore at Raidurg
Empee Distilleries   Board approves allotment of 14 percent NCDs aggregating to Rs 37.5 crore to select investors under private placement
Adani Ports & SEZ Co incorporates wholly owned subsidiary ‘Adani Petroleum Terminal Ovt Ltd’ Infosys invests In US-based Data Wrangling Startup Trifacta
Rico Auto Industries Commercial production begins in Chennai plant
Websol Energy   revises conversion price of FCCBs to Rs 62/Sh, extends maturity by 5Y.

Sharekhan Stock Update

Yes Bank
Reco – Buy
Cmp Rs 916
Price Target Rs 1050
Robust operating performance, healthy growth outlook, PT revised to Rs1,050
Key points
Strong NII growth, margins remain stable: Yes Bank has delivered a strong set of numbers for Q4FY2016 as its net profit was up by 27.4% YoY driven by a healthy net interest income growth of 27.1% and a stable net interest margin. The non-interest income grew by 36.0% YoY owing to a 74.3% surge in the corporate banking fees. The liability franchisee continued to show an improvement as the CASA ratio was up by 142BPS to 28.1% on a sequential basis. 
Asset quality shows a slight deterioration but outlook remains stable: For Q4FY2016 the bank has reported a slight deterioration in its asset quality as its GNPA are up by 10BPS QoQ to 0.76%. Accounts worth around Rs360 crore slipped during the quarter partly due to the RBI’s asset quality review (AQR). However, this has been now completely factored in by the bank and hence moving ahead, the outlook remains stable. The bank sold to ARC one account from restructured category having a book value of about Rs40 core during the quarter as a result of which the restructured book declined to 0.53% of the total advances as compared to 0.67% in the previous quarter. The bank did not carry out any 5:25 refinancing or SDR during the quarter. It has guided for a credit cost of about 50 to 70BPS for FY2017 which is similar to the levels of FY2016 (credit cost for FY2016 was 50BPS). 
Valuation and outlook: Yes Bank continues to deliver a strong operational and business performance in a challenging environment. Despite a slight deterioration in the asset quality it remains the best among the system. The bank would continue to focus on growing its retail and SME segments and has shown a strong improvement in its liability base by garnering higher CASA and retail deposits. We believe the margin expansion and healthy loan book growth would continue to drive the earnings. We expect the earnings to grow at 25.1% CAGR over FY2016-18E which would result in an RoA of 1.9%. We have rolled over our valuations to FY2018E. This has resulted in a new price target of Rs1,050, by valuing the bank at 2.3x FY2018E BV.

Inox Leisure
Reco – Buy
Cmp Rs 212
Price Target Rs 285
Missed on operating parameters, maintain Buy with revised PT of Rs285
Key points
In-line revenue performance, missed margin expectations: For Q4FY2016 Inox Leisure Ltd (ILL) has reported a revenue growth of 31.8% at Rs286.9 crore, driven by a strong gross box-office (GBOC) revenue growth of 41.7% year on year (YoY) and a food & beverages growth of 52.3% YoY. The advertisement revenues were down by 2% YoY. Further, the footfalls increased by 36.9% YoY during the quarter. However, ILL reported a lower than expected performance on the margin front with margins at 5.2% in Q4FY2016, up 42 basis points (BPS) YoY. The decline in the margins on a sequential basis was primarily due to an increase in the entertainment tax rate as the entertainment tax exemption for six properties expired during the quarter, the entertainment tax rate spiked for four properties in the Delhi region and the other expenses increased (up 28.7% YoY). The net profit was Rs16.1 crore in Q4FY2016 compared with a loss of Rs4.1 crore in Q3FY2015; the net profit performance was largely aided by a tax benefit from Satyam Multiplex acquisition of Rs26.1 crore. 
Operating metrics lack improvement: (1) ILL added three new properties during the quarter (it has a presence in 57 cities) and seven new screens, taking the total number of properties to 107 with 420 screens and 108,931 seats. The lower than expected addition was on account of some regulatory issues. (2) The average ticket price (ATP) increased by 5.7% YoY to Rs167, the food & beverages spending per head (SPH) increased by 9.4% YoY to Rs58 while the occupancy rate grew by 300 basis points (BPS) YoY at 23% and fell by 500BPS sequentially. The management expects the occupancy rate to be in the range of 29-30% going ahead and the ATP to increase 5-6%. (3) The advertising revenue per screen declined by 13% YoY to 0.49 million on account of a weaker quarter and a price hike during the fag end of the third quarter of FY2016 (it takes a longer time for customers to absorb hikes). (4) The entertainment tax increased to 18.6% as compared with 16.9% in Q4FY2015, led by six properties falling out of tax exemption and also an overall increase in the entertainment tax rate in the Delhi region. (5) The share of Internet booking went up to 27% in Q4FY2016. (6) The NBOC for “Jungle Book” has been Rs140 crore and that for “Fan” has been Rs80 crore till now; the same will be booked in Q1FY2017. (7) ILL expects to add 20 new properties in FY2017 taking the total to 127. It expects to add 89 screens, taking the total to 509 screens by the end of FY2017. It is on track to take the total number of screens to 688 in the next two to three years on the back of the agreements signed. It has also added five IMAX Theaters. 
Maintain Buy with revised PT of Rs285: ILL has missed expectations of an improvement in the operating parameters like advertisement revenues and screen addition. It has also missed the expectations on the margin front. We have revised down our earnings estimates for FY2017 and FY2018 by 4.8% and 6.8% respectively. Nevertheless, we remain positive on ILL, given its aggressive growth plans and healthy balance sheet (lower financial leverage). We expect a gradual improvement in the operating parameters over FY2017 and FY2018. With its strong brand and extended reach ILL is also well poised to leverage the opportunity in India’s under penetrated multiplex sector and growing spending of moviegoers. We maintain our Buy rating on ILL with a revised price target of Rs285.

Wednesday, 27 April 2016

27 April 2016 - Today's View & News

Market View

Nifty likely to open on flatish note, but the short-term trend in Nifty and Bank Nifty remains positive and dips can be utilised as a buying opportunity  for the target of 8080, major Support at 7870.

Nifty Spot Levels 

Support  7923 – 7870 – 7820
Resistance  8025 – 8080 – 8140

Global Market Update

Energy shares dragged Wall Street slightly lower on Monday, tracking a decline in oil prices, while earnings and guidance from companies including Perrigo and Xerox also weighed on US stocks.
The Federal Reserve is expected to hold interest rates steady after a two-day meeting set to begin on Tuesday, but policymakers may be more upbeat on the economic outlook, leaving the path open for future rate hikes.
The Dow Jones industrial average fell 26.51 points, or 0.15 percent, to 17,977.24

 Derivatives Update

NIFTY PCR:
1.13
India  VIX:
16.58
MARKET WIDE OPEN INTEREST:
Rs. 244303 cr and Rs.5422 cr were Added in OI
NIFTY CALL:
Added 22.34 lakh shares in OI
NIFTY PUT:
Added 21.57 lakh shares in OI
MAJOR OI GAINERS
CESC (28%), Ceat (25%), UBI (17%), JSW Energy (17%) and ICICI Bank (17%)
MAJOR OI LOSERS
RCom (-7%), BoI (-4%), Jindal Steel (-4%), Tata Steel (-3%) and Hind Zinc (-3%)


TOP NEWS

 Bharti Infratel: Strong earnings, Board approves buyback of upto Rs 2,000 crore at Rs 450 per share
For Q4FY16, consolidated net profit up 17%  at Rs 662 crore vs Rs 566 crore (Q-o-Q) and 18.7% yoy,  consolidated total income up 2.2% qoq and 7% yoy  at Rs 3,162 crore, consolidated EBITDA margin at 45%  vs 43.6 percent (Q-o-Q) and 45.1% yoy.  Board approves buyback of upto Rs 2,000 crore at Rs 450 per share (CMP at Rs363)

MRPL has initiated a partial shutdown of some of its units and is also running some units on reduced capacity. The step was taken due to water shortage in dakshin kannada district of Karnataka and restrictions imposed by the district administration in pumping river water for industrial use. This will impact the crude processing volume of MRPL, consequently leading to lower profits – Negative for MRPL

Apple: World largest tech company reported decline of 13% in revenues, a fall in revenues first time in last 13 years, led to 7.8% drop in its share price – Sentimentally negative for redington India


Dalmia Bharat showed interest in buying Electrosteel casting: Positive for Electrosteel casting

OTHERS NEWS

Rallis India Ltd (Consolidated) Q4FY16 results; Lower deprecation cost and higher other income supported earnings growth
Revenue for the quarter increase by 8% YoY to Rs348.3 crore, however high input cost impacted the operating margins. Hence operating margins for the quarter 177 basis point to 12% YoY. Higher other income and low deprecation cost fuel earnings for the quarter, earnings for the quarter grew by 51% YoY to 32.3 crore.

Dalmia Bharat showed interest in buying Electrosteel casting: Positive for Electrosteel casting
The Dalmia Bharat Group has expressed an interest in buying a stake in Electrosteel Steels, after First International Group (FIG) withdrawn its offer.  The Dalmia Group’s interest stems from its presence in refractories housed in OCL India whose main customers are steel companies. Meanwhile, it has also come to light that the promoters of the Dalmia Group and Electrosteel are related.  The Dalmia Group’s proposal is similar to that made by the London-based FIG, which had sought a loan waiver of Rs 2,500 crore and conversion of close to Rs 5,000 crore into cumulative redeemable preference shares. 

M&M regains ground in the utility vehicle segment on back of new launches; to focus on petrol variants and compact segment to further consolidate market share
M&M has regained ground in the utility vehicle segment gaining 10% market share in the last three quarters on back of new launches in the compact utility vehicle segment. M&M has rolled out TUV300, KUV100 and NuvoSport which enabled it to take its market share to 40% in UV category. Further, the company is working on a new compact crossover and also plans gasoline variants of Scorpio and XUV 500, using the 2.2 litre gasoline engine that it uses for export markets by the end of FY17. Also as per the media sources all M&M vehicles will have a gasoline option by mid-FY19. The option of the gasoline option will insulate the company from the diesel issues as well as widen its product offerings, which could help the company consolidate its position in the UV space    

More News

World Bank raises crude price forecast to $41 for '16
NPAs a huge threat to India's credit profile: Moody's
Maruti Q4 net falls 12%; dividend at Rs 35/share 
RIL may launch 4G services in 3 months; net $1 bn revenue: MS
Indian pvt defence industry divided over partnership
Cash crunch easing: RBI to conduct open market operation
Govt to sell 11.36% stake in NHPC tomorrow at Rs 21.75 a share
Wheat procurement sees 3-fold jump to 14.58 mn tonnes so far
Patanjali aims to beat Nestle, P&G & Colgate
SC asks govt to set up a panel to probe bad loan issue
IT dept to pay interest on delayed TDS refund
701 bad loan accounts owe PSU banks Rs 1.63 lakh crore
Axis Bank Q4 net dips after 46 quarters
Sebi ropes in HDFC Realty, SBI Capital for sale of Sahara assets
60% water cut for distilleries and breweries in drought-hit Marathwada
Hindalco to sell Australian unit to Metals X
 Apex Court orders Mallya to furnish overseas asset details of family
Onus on banks, insurers to deliver on crop insurance  
Maharashtra Cabinet approves draft Bill regulating pulse prices 
Service tax returns filing date extended to April 29
Oil prices edge up but concerns over Saudi output cap gains
SC dismisses plea challenging reappointment of Sebi chief
RBI to conduct OMOs on Thursday to infuse Rs 15,000 crore
India is the biggest virtual exporter of water
Maharashtra to seek World Bank loan for drought mitigation
State Bank of Mysore Q4 profit down 23% to Rs105 crore
Alipay raises record $4.5 billion to fund global expansion            
Sensex settles above 26K on firm global cues, corp earnings
Blackmoney: SC asks SIT to look into Bank of Baroda scam
Realtors say no scope for further cut in housing prices
Bharti Infratel Q4 Net jumps 19%; to buy back shares of Rs 2K cr
Govt owes over Rs 43,000 cr subsidy to fertiliser industry
Oil, energy sector PSUs marked for stake sale: Govt
India narrowing gap with China on FDI inflows: Nomura
Despite mkt volatility, MFs add 59 lakh folios in FY16
Govt invites bids to sell 10% stake in Oil India
Centre sets up IMG to speed up state mines auction

Stock in News 

  • Patanjali Ayurved is targeting Rs 10,000-crore revenue in 2016-17, after sales grew 150 % in the previous financial year to Rs 5,000 crore.
  • India now among top 6 markets for Renault
  • Govt to sell 11.36% stake in NHPC, may raise Rs 2,700 crore
  • Bharti Infratel net profit up 19% in March quarter; board approves share buyback
  • Supreme Court orders Vijay Mallya to disclose overseas assets to banks
  • Sebi ropes in HDFC Realty, SBI Capital for sale of Sahara assets
  • Boeing selects Bharat Forge for supply of titanium forgings
  • Parag Milk plans to raise Rs 300 cr
  • Apple: World largest tech company reported decline of 13% in revenues, a fall in revenues first time in last 13 years, led to 7.8% drop in its share price – Sentimentally negative for redington India
Sharekhan Stock Update

Axis Bank - Q4FY16 result update: Business growth remains healthy; Asset quality stable; PT revised to Rs 590
NII up 19.8%; Margins expand: Axis bank reported a strong 19.8% growth in Net interest for Q4FY16 owing to 20.5% jump in the advances and expansion in Net Interest Margins (up 16 BPS Yo and 18 BPS QoQ). Non-interest income growth was flat as treasury profit declined by 65.4% YoY, however retail fee income showed a growth of 15.1% YoY. Provisions for Q4FY16 surged by 64.6% YoY owing to Rs 300 crore contingent provisions made during the quarter.
Loan book growth remains healthy, asset quality remains stable: For Q4FY16 advances grew by 20.5% YoY owing to, strong growth of 23.8% YoY in the retail advances and 21.7% growth in the corporate advances.  Growth in retail advances was mainly driven by higher growth in personal loans and credit card segment. Asset quality remained largely stable as GNPA was stable (down 1 BPS QoQ to 1.67%). Slippages during the quarter were lower on sequential basis (Rs 1474 crore versus Rs 2082 crore QoQ) The Bank invoked SDR in 4 accounts worth Rs 205 crores and undertook 5:25 refinancing in 1 account amounting to Rs 130 crore. Accounts worth 400 crore slipped from restructured category to NPA during Q4FY16. The Bank has created a watchlist of stressed accounts amounting to Rs 22600 crore which it feels could slip into NPA over next two years.
Valuation and Outlook: Axis bank has delivered better than expected performance during the quarter and has all the ingredients to grasp opportunities during an economic revival. Liability franchisee of the Bank remains strong (CASA at 47%) while it is well capitalized to sustain healthy loan book growth. Though the management has guided for some stress in the corporate portfolio we feel retail segment would continue to drive growth and corporate loan growth would be tilted towards better rated category. We have rolled over our valuations to FY18E leading to a revised price target of Rs590 by valuing the bank at 2.0x FY18E BV. We maintain a buy rating on the stock

Maruti Suzuki India: Margins surprise positively; maintain Buy with revised PT of 4,700
Maruti springs margin surprise in Q4 FY16: Maruti Suzuki surprised the street by reporting strong operating performance in Q4FY2016. Contrary to the street expectations of a sequentially similar margins due to impact of the Yen appreciation and subdued volumes; Maruti surprised positively reporting 100 bp sequential expansion in the margins. The operating margins were 60-80 bp above the consensus estimates. Discount reduction on back of a strong demand for new products coupled with cost control measures the company posted better than anticipated margins. 
Maruti to continue outgrowing industry growth in FY2017: Maruti is aiming to outpace the industry growth in FY2017 on back of strong demand for the recent launches (Baleno and Vitara Brezza which have strong orderbacklogs), launches in the new segment (Ignis in the compact utility vehicle space) and further expansion of the distribution network particularly in the rural areas. Maruti would also be beneficiary of the consumer shift towards the petrol segment (Maruti 70% volumes are petrol driven as against industry average of 55%).
Increasing estimates; maintain Buy: Maruti has demonstrated robust margin performance despite challenging passenger vehicle industry and currency woes. We expect MSIL to outpace the passenger vehicle industry in FY2017 on back of sustained strong demand for recent launches and strong product pipeline. Also, Maruti Suzuki’s Yen exposure is likely to reduce given the increased localization initiatives and royalty on future models which would be INR denominated. Also, we expect the discounting/vehicle to tread down given the increased proportion of new launches (recent launches have order backlog of about five to six months) and new launches in the festive season which would have no discounting. Further, MSIL has guided for a lower tax rate going ahead (tax rate estimated at 26-27% as against the current rate of 30%) due to higher other income recognition under the new IFRS rules. We have marginally raised our estimates by about 6% for both FY2017 and FY2018, given the robust operating performance. We maintain Buy rating on the stock with a revised price target of Rs 4,700.