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Tuesday, 21 February 2017

21 February 2017 - Views & News

MARKET INSIGHT

Markets are likely to open positive. Nifty initial hurdle is at 8900 which when taken it will fly towards 8930 levels. On the lower side 8860 is the immediate support and till that is held the uptrend for intraday will remain intact as below that it will again go in consolidation phase i.e. between 8800-8860 levels. 

Nifty Spot Levels

Support 8860 – 8827 – 8784
Resistance 8900 – 8930 - 8980


GLOBAL MARKET

US markets were closed yesterday.

Asian stocks steady, euro pressured by French election worries MSCI's broadest index of Asia-Pacific shares outside Japan was flat in opening trades on Tuesday and held below a 19-month peak hit last Thursday. The index is up more than 11 percent since Dec. 23.

Market Update:

Sgx Nifty +1 pts ‎US Mkt Clsd , Bovespa +784 pts , Ftse -0.10 pts , Dax +70 pts  , Cac -2 pts , Nikkei  +43 pts now , Crude @ $53.98 brl (+0.20), Brent @ $56.12 brl (-0.01) , Gold @ 1237.50 (-1.60), Silver @ $18.03 (+0.002), Euro @ $1.0612, JPY @ $113.3700, INR @ $66.975

Today's Key Result 21st Feb

Castrol( 146 cr +4% Yoy Elantas Beck,Huhtamaki Ppl,ITD Cement,Kamat Hotel,Net 4 India

TOP NEWS

TCS announced buyback up to 5.6 crore equity shares (2.85%) at Rs2,850 per share for maximum of Rs 16,000 crore under tender offer route, overall acceptance ratio for shareholders will be close to 3%  (would be different for small shareholders holding less than Rs2 lakhs amount of shares).
View: The buyback will be more positive for Tata Sons, which is holding close to 73% of share capital, however given that buyback price premium to Friday close price is around 17% and 14% from yesterday close , it will support the stock performance in near term. Nevertheless, we believe buyback will only have sentimentally positive impact on the stock in near term (which is already there, stock trading at positive momentum from the last few trading session, post the buyback announcement), however for lasting out performance, earnings growth will be the only key catalyst , which  seems to be missing under the current difficult industry environment. We maintain our Hold rating on the stock.

M&M Korean subsidiary Ssangyong Motors records first annual profit in the last 10 years; aims for improved performance ahead; positive …….(details in other news)

India LNG imports declined by 15% YoY and 14% MoM to 1.24mmt for January 2017 –negative for Petronet LNG


 OTHER NEWS

Britannia signs MoU with Greece’s Chipita for joint venture in India; in-line with its strategy to venture new categories in bakery space – long term positive for the stock
Britannia Industries signed a non-binding MoU and is working towards formalising a joint venture with Greek baker Chipita to make rolls, croissants, and other dough products to meet the demands of a rapidly urbanizing home market.  The categories are highly scalable and are bridge products between the existing product portfolios of the company. Britannia is likely to hold the majority stake in the venture that will involve an initial manufacturing investment of about $11million. Britannia will set up facilities next to its existing plants to optimise logistics costs, and leverage its existing strengths of supply-chain and distribution networks.  The rollout across markets including modern trade stores as well as tier two markets is expected early next year.

M&M Korean subsidiary Ssangyong Motors records first annual profit in the last 10 years; aims for improved performance ahead; positive
M&M Korean subsidiary Ssangyong Motor (SYMC) reported its first ever annual net profit of 58.1 billion Korean Won in 2016 in a decade compared to a loss of 61.9 billion Korean Won in 2015. In the October to December 2016 quarter, the revenue increased by 2.7% y-o-y to 1,000 billion won while the net profit remained flat 19.4 billion Won. The profitability was spurred by higher domestic and export volumes and healthy response to compact SUV Tivoli. Also establishment of SY Auto Capital, the captive financing company in November last year, supported sales growth by providing high-quality financial services for installments and other one-stop services that combine sales and financing. Going ahead, SYMC aims to launch a new product every year to boost volumes.  In CY2017, M&M will successfully launch the large-sized premium SUV Y400 and expand its product line-up to further increase sales and continue the profitabilitiy trend. Positive for M&M.

TVS Motors launches “Wego” scooter upgrade with new color tone and BS4 compliant engine to boost volumes
TVS Motor has launched an upgrade of its existing Scooter - Wego. The new scooter comer with a host of new features like Sync braking system, fully digital speedometer, dual tone seat cover, silver oak panels and a USB charging port and two new color variants. The upgraded scooter is BS4 emission norm compliant and will be available at select outlets across the country and is priced at Rs 50,434 (ex showroom Delhi). The new scooter would help the company improve its sales volumes

Siemens wins order worth Rs287cr for supplying signaling systems for Nagpur metro; positive for Siemens

Nestle India looking at new categories to pep up growth – positive read through for the stock
Nestle India is now looking at consolidating its portfolio, entering new categories, and growing penetration of its products. The focus is on de-risking the business model after Maggie Noodles controversy. New categories on the radar include building a premium coffee business under Nespresso and Dolce Gusto, looking at entering petcare business, and growing presence in the cereals segment. The company, which has a relatively small business in the healthcare and skincare products segment, will also focus on growing these categories. It has also re-launched its malt-based beverage, Milo, in the ready-to-drink format, which it claims comes with lower sugar levels.

Infosys denies whistleblower allegations in Panaya acquisition deal
Infosys has strongly denied that any member of the Infosys management team was involved in prior investments in Panaya as alleged by an anonymous whistleblower letter and entire process was carried out within the framework of a corporate governance. In a point by point rebuttal, Infosys stated that the valuation was done by Deutsche Bank, the financial and tax due diligence was done by one of the Big four firms and legal diligence was done by a law firm – Kirkland & Ellis.

Future group joins hands with UK's Laura Ashley for selling its merchandise in India  - positive read thru
Future group has partnered UK clothing and home ware retailer Laura Ashley that runs about 450 stores globally and Future will have exclusive rights to make and sell merchandise as well as wholesale distribution in India. While Laura Ashley, which was well known in the 1980s for its floral dresses, has a clothing line as well, Future Group has signed the licensing deal for its larger business - home furnishings.  About a year ago, Future Group acquired FabFurnish and said it will spin it off with furniture retail format Hometown to create a separate listed entity with target revenue of Rs 1,000 crore.

 MORE NEWS

TCS okays Rs 16K-cr buyback at Rs 2,850/share
ArthVeda plans to raise $1 billion for housing 
Birlas in talks to sell fertiliser business to Indorama
SC directs Unitech to pay 14% interest to home buyers
Local telecom gear cos to get access to $1bn fund
Infy to come under pressure after TCS share buyback
RBI, Sebi discuss HDFC Bank breach
Tata Power eyes stake sale in renewable power arm
ICEX, NMCE considering merger: EY to do due diligence
IDBI privatisation back on govt agenda
Ambuja's Q4 net up 60% due to lower taxes and energy costs
Steel firms lower prices as demand stagnates
BharatQR code promises to take India down less-cash road
Centre seeks expression of interest for IRCON Inttl IPO
Chandra takes the hot seat at Tata Sons today
Havells puts its cash to use by buying Lloyd’s consumer biz
EU pushes India to extend investment pacts by six months
Canara Bank’s Rs. 1,124-cr rights issue opens on March 2 
India a priority among large emerging markets: CPDQ's Rashad Kaldany
World Bank arm to invest $47.5 million in Granules India
Flipkart, Microsoft announce strategic cloud partnership
Eveready plans to revamp tea business, could be spun off into a subsidiary
Lender serves bankruptcy notice to Ruchi Soya
Collapse of Kraft-Unilever tie-up extends run of failed mega-deals
Govt may cross Rs 45.5K crore divestment target this fiscal
India and Rwanda sign MoUs in innovation, aviation, visa requirements
India's growth slowdown spilling over into Q4: Nomura
Vedanta Group Q3 EBIDTA jumps 79% to $882 million
I-T dept to launch 2nd phase of bank a/cs scrutiny next month
Best time for home loans as rates at 6-yr low
FDI in print media, state-run banks may be hiked to 49%
RCom-Tata Tele talks could spawn third largest telecom combine
25,000 tonnes of basmati to be exported to Iran

STOCK IN NEWS

1. Note ban in India has led to Rs 100-cr loss of sales in Dec quarter: Nestle
2. Tata Power eyes stake sale in renewable power arm
3. Abbott likely to withdraw high-end stents
4. Jet Airways offering bonus frequent flyer miles till March-end
5. Eveready Industries plans tea business revamp, hive off into separate arm
6. TCS plans India's biggest buyback at Rs 16,000 cr
7. Vedanta Group Q3 EBIDTA jumps 79%, revenue rises 26%
8. Litigation, sagging financials to hit Tata Tele, R-Com merger talks

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