Monday, 31 July 2017

31 July 2017 - Views & News


The Nifty is likely to open on flat note followed by Asian markets. Climbing crude oil prices, economic data releases, geopolitical tensions and quarterly earnings numbers are all set to test Nifty50's newly-claimed 10,000 levels today. The resistance for Nifty is at 10200 level.

Nifty Spot Levels

Support 9963 – 9928 – 9838
Resistance  10050 – 10115 - 10200


 • The S&P 500 slipped on Friday on negative reactions to earnings reports from high-profile names such as Amazon, Exxon and Starbucks and a drop in shares of tobacco companies.
• Investors were also digesting data showing the US economy accelerated in the second quarter as consumers ramped up spending and businesses invested more on equipment.
• The Dow Jones Industrial Average rose 33.76 points, or 0.15 percent, to 21,830.31.

Sgx Nifty  -20 pts Dow +33.76 pts ,Nsdq -7.51 pts , S&P -3.32 pts‎, Bovespa +219 pts , Ftse -74 pts , Dax -49 pts , Cac -55 pts , Nikkei  -15 pts now , Crude @ $49.95 brl (-0.24), Brent @ $52.22 brl (+0.00) , Gold @ 1269.41 (+1.01), Silver @ $16.768 (+0.07), Euro @ $1.1748, JPY @ $110.5600, INR @ $64.133

Today's Corporate Action 31st July  Ex Date

ADANIENT Dividend - Rs. - 0.4000
ADANIPORTS Dividend - Rs. - 1.3000
ASTRAL Final Dividend - Rs. - 0.3000
DHUNINV Dividend - Rs. - 1.5000
EICHERMOT Dividend - Rs. - 100.0000
GABRIEL Dividend - Rs. - 0.8500
INDOCO Final Dividend - Rs. - 1.6000
IRB Interim Dividend - Rs. - 2.5000
JCHAC Dividend - Rs. - 1.5000
MENONBE Interim Dividend - Rs. - 0.7500
NILKAMAL Final Dividend - Rs. - 7.0000
PANCARBON Dividend - Rs. - 10.0000
SANOFI Interim Dividend - Rs. - 18.0000
SIMPLXREA Dividend - Rs. - 0.8000
TATACHEM Dividend - Rs. - 11.0000

Today's Key Result 31st July



HDFC Ltd. will sell 9.57% stake in HDFC Life through an IPO in the coming months – Positive read thru for HDFC Ltd. as prima facie benefciary of value unlocking. However the move casts doubts over whether the HDFC Life and Max Life merger, which is yet to receive the regulator’s approval, will go through. The two companies have a standstill agreement till July 31 which prevents HDFC Life from filing a draft prospectus with the Securities and Exchange Board of India. Hence, sentimentally negative for Max Financial Services.

Lupin: As per media reports, Lupin’s Pithampur facility concluded USFDA audit (between 24th July to 28th July20 17) without any 483 observations – Positive for Lupin.

Passenger vehicle players have witnessed weak retail demand (double digit drop) in volumes in July 2017 due to prebuying in the month of June before the GST rollout. Also, weak demand from SME segment (forms 25-30% of demand) has been impacted by GST as traders adjust to the new tax regime. Weak retail nos in July will have impact on wholesales dispatches for the month of August 2017. Negative read thru for PV players such as Maruti. However , Maruti is likely to have limited impact given the orderbacklog on 35% of its product portfolio.
Maruti Suzuki massive order backlog of 1.5 Lakh units across 3 models; Plans 3 new launches in FY2018. Positive ….(details in Other news)

IRB Infrastructure, IRB InvIT: IRB InvIT announces Q1FY2018 results; distribution of Rs1.55 per unit (Return of 12.6% annualized) – Positive for both IRB InvIT and IRB Infrastructure
IRB InvIT reported Rs151 crores revenue for Q1FY2018 (period of 53 days) and an EBITDA of Rs123 crores. The company generated distributable cash flow of Rs96 crores of which it distributed Rs90 crores (94% of distributable cash flow). The trust announced Rs1.55 per unit distribution (Rs1.05 as interest and Rs0.5 in form of Return of Capital). This return is for 44 days which translates into annualized payout of 12.6%. Positive for IRB InvIT and IRB Infrastructure.


ITC Ltd to soon foray into fruits, vegetables  - long term positive for ITC as the company is planning to enhance its non-cigarette portfolio’s to lower the dependence on the cigarette business
ITC Ltd plans to soon foray into fruits, vegetables and other perishable products with investment underway to create climate-controlled infrastructure for an efficient supply-chain. Investments have also been made in farming for aromatic and medicinal plants, keeping in mind ITC's focus on agri-based health and wellness products.  The non-cigarette segment now accounts for 58% of the net segment revenue. Currently, the non-cigarette businesses deploys 77% of the company's operating capital and 88% of the employee base.

ICICI Prudential: IRDA has approved the takeover of Sahara life by ICICI Prudential – neutral read thru since the portfolio being transferred is less than 1% of ICICI Prudential’s balance sheet size

Maruti Suzuki massive order backlog of 1.5 Lakh units across 3 models; Plans 3 new launches in FY2018. Positive
Maruti Suzuki currently has a order backlog of around 1.5 lakh units across its three models – Baleno, Vitara brezza and Dzire. The Baleno and Dzire have waiting period of around 16 weeks while the Brezza has a waiting period of 22 weeks. While the company is also planning to roll out new variant of S-Cross, a new Swift and a petrol version of Brezza in FY2018. The new car launches will help Maruti to sustain growth momentum and could also lead to market share gains.  

Reliance Communication, Aircel merger deal on risk, stock to be in focus
As per media news, the proposed merger of Reliance Communications wireless business and Aircel is clouded with more uncertainty with the Department of Telecommunications setting the Supreme Court's go-ahead a condition for it to approve the deal. The department, though, is close to clearing the merger of Sistema's Indian business with RCom, people aware of the process said. The SC had earlier this year threatened to cancel Aircel's licences if the top executives of its Malaysian parent, Maxis Berhad, continued to evade Indian courts over a case where they were accused of bribing politicians and officials. Cancellation of the licences could block the deal. DoT doesn't want to risk it clearing the merger and then the court making an adverse order.

Indian Hume Pipe has secured a work order of Rs 163.5 crore from Raipur Municipal Corporation, positive read-thru

Aviation sector: Aviation companies financials reporting may hit owing to proposed accounting norms from 2019- Indigo, Spice jet, Jet Airways to be in focus  
Domestic airlines will see "varying effects" on their profits in the coming years as they will be required to show all aircraft leases on their balance sheets under a new accounting standard, Leasing of aircraft rather than outright purchase is a common practice in the airlines industry worldwide. Once the new accounting standard is in place, the carriers would have to show all such leases on their respective balance sheets which would result in " substantial new assets and liabilities". The Indian Accounting Standard 116 (Ind AS 116),  which sets out the principles for recognition, presentation and disclosure of leases -- is proposed to be effective from April 2019.

Gayatri projects: Sembcorp Industries is looking to refinance long term debt worth Rs3000 crore of its 1320MW thermal power joint venture project with Gayatri Projects, Sembcorp Gayatri Power as per media reports. The development can help in lowering interest cost of the project thereby improving cash flows of the power project.

Technocraft-Shuts its unit in Thane to upgrade effluent treatment plant
The production at Textile plant of Technocraft Industries India Ltd, situated at Murbad, District Thane, has been stopped to enable the Company to upgrade its effluent treatment plant as desired by Pollution Control Authority. The management is taking all necessary steps for the same and the production is likely to re-start in few days.

Eros International: Promoter Eros Worldwide sold 5 lakh shares or 0.5%  stake at Rs 234.2 each. Had sold 0.5% stake on July 26th  as well, stock to be in focus

Government has invited bids for appointment of merchant bankers and legal consultant to manage sale of government's 51.11% stake in Hindustan Petroleum Corp (HPCL) to Oil and Natural Gas Corp (ONGC). Government  seeks to appoint two merchant bankers and one legal consultant for ONGC-HPCL transaction. 

Marico acquires a South African hair styling brand Isoplus for around Rs 36 crore – positive read through
Marico has acquired a South African hair styling brand Isoplus for around Rs 36 crore in an effort to complete its ethnic hair care portfolio in the country. The brand of styling products such as oil sheens and gels has an annual sales of Rs 30 crore and is the market leader in the styling products with about 27% share.  At present, Marico has brands such as Caivil, Black Chic and Hercules in South African aftercare maintenance, chemical treatments and hair colour segments. South Africa accounts for nearly 7% of its international business of Marico, which is currently reeling under the recessionary pressure. We believe the company has acquired the brand to enhance its presence in the South African market to achieve good growth in long run.

Infosys sees another senior-level exit – at least 10 executives have quit since March 2016, worryingly for Infosys while the industry is going through a tough phase
As per media report, a top executive at Infosys’s products and platforms unit EdgeVerve has quit. Anirban Dey, global head and chief business officer of the Edge line of products at EdgeVerve, resigned last week and is serving his notice period. This is the seven senior-level exit in last 4-5 months.

HPL Electric & Power Ltd to be in focus- EESL issues large tender 


MCA to look at long-pending court cases related to SFIO
Infosys can be 10 times bigger than today: Venkatesan
Idea will soon launch own handset to counter JioPhone
New valuation pegs BSNL's prime land at Rs 65K cr
No steps taken for launching Sharia-compliant MFs: RBI
NSE case: Sebi may have to recast probe committee
RCom, Aircel merger deal on sticky ground
Hyundai readies to enter commercial vehicle market in India
Investing heavily in Europe, hiring locals: Infosys
ITC's budget cigarette brand sales to rise under GST regime
SC orders Ketan Parekh to pay up Rs 50 cr in 2 months or face detention
12 NHs to double up as emergency landing airstrips
RBI must cut interest rate by at least 25 basis points: Assocham
Oil Ministry’s ₹2.7-lakh-cr refinery remains on paper 
HPCL may shelve plans to buy stakes in Russian oilfields 
FPIs infuse $4.1 billion into capital markets this month
BSE asks brokers to submit info on clients' funds by Aug 1
Centre keen to set up NFRA, to regulate audit quality
 ‘Competitive bidding positive for wind industry in the long run’ 
Cables, batteries for solar power to be taxed at 5%
No extension in deadline for filing ITR: Income Tax dept
Turning around Tata Motors’ India business need of the hour: N. Chandrasekaran
Hutchison sells Hong Kong fixed-line business to I Squared for $1.9 billion
Insolvency and Bankruptcy Code an opportunity for ARCs: Arun Jaitley
Sebi allows banks, insurers to invest in arms of IFSC-based exchanges
Sahara group to challenge IRDAI order on life insurance business transfer to ICICI Prudential
Indian govt cuts down on US lobbying to lowest in 7 years
Morgan Stanley cuts CPI forecast on benign GST, monsoon impact
Not just Rs 975 crore, BSNL sitting on land worth whopping Rs 65,000 crore
Snapdeal to send Flipkart’s proposal to shareholders this week


1. U.S. FDA clears Lupin’s Pithampur unit without any observations
2. IL&FS Transport bags contract for Zojila tunnel project in J&K
3. Indian Hume Pipe wins contract in Chhattisgarh
4. HDFC: To sell up to 19.12 crore shares or 9.57 percent stake in HDFC Standard Life through its IPO
5. NTPC: Shareholders approve raising funds via bonds and NCDs worth up to Rs 15,000 crore
6. Marico: Acquired South Africa-based leading hair styling brand ISOPLUS for 75 million rand
7. ONGC: Wins government nod to buy stake in GSPC worth Rs 7,738 crore (PTI)
8. HEG: Awarded patent for invention of a process for making high performance graphite nipple
9. Technocraft: Shuts its unit in Thane to upgrade effluent treatment plant
10. ITC: To enter into multi-speciality hospital business
11. Reliance Capital: Elevates Sunil Singhania as global head of equities at the company. Manish Gunwani to join Reliance Mutual Fund as chief investment officer
12. Inox Wind: NCLT closes insolvency proceedings against the company
13. Hexaware: NCLT approves scheme of amalgamation with Risk Technology International Ltd.
14. Reliance Industries: Clarifies that there is no demand from MMRDA for payment of any fine or an additional surcharge
15. ICICI Prudential: IRDAI orders on taking over policyholders' liabilities and corresponding assets of Sahara Life Insurance Co. Ltd.
16. Fortis Healthcare: Promoter transferred its complete shareholding in Hiranandani Healthcare Pvt. Ltd. to the company
17. Jyoti Structures: Circuit filter revised to 5 percent
18. Shree Renuka Sugars: Board Approves Terms Of Proposed Debt Recast Package To Be Submitted To JLF
19. IDFC infra fund to acquire first solar’s India portfolio
20. Syndicate bank, Union bank, PNB - Banks withdraw opposition to NSEL’s meger with parent
21. Reliance Communications Aircel deal on a sticky wicket
22. JBF Industries downgraded to D category by rating agencies

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