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Wednesday, 26 July 2017

26 July 2017 - Views & News

MARKET UPDATE

Markets are likely to open on flattish note. Yesterday Nifty opened above 10000 but witnessed some selling pressure at higher levels, it is at the upper end of the rising channel and the bulls are finding it difficult to push the index beyond it. The possibility of minor consolidation / sideways movement cannot be ruled out in the near term. On the way down, 9928 – 9838 will act as a support in the near term. On the way up, the benchmark index can rise higher towards our short term target of 10100.

Nifty Spot Levels

Support 9928 – 9838 – 9792
Resistance  10011 – 10100 - 10180

GLOBAL MARKET

US markets hit a fresh record high in overnight trade on Tuesday. The S&P 500 climbed to an all-time high led by gains in McDonald's and Caterpillar post quarterly results and gains for bank shares.
The Dow Jones Industrial Average rose 100.26 points, or 0.47 percent, to 21,613.43.
US consumer confidence jumped to a near 16-year high in July amid optimism over the labor market while house prices maintained their upward trend in May, which could boost consumer spending after recent sluggishness, said a Reuters report.
The Fed concludes a two-day meeting later on Wednesday, and is widely expected to keep interest rates unchanged.

Today's Key Result 26 July

HDFC,Yes Bank,Adlabs,Bharat Financial,Federal Bank,HCL Infosystems,IFB Agro,Inox Leisure,L&T Finance,Mphasis,Nestle India,Orient Cement,PNB Gilts,PVR,,Radico Khaitan,Shanti Gears,Siyarams

TOP NEWS

Alert: Maruti Suzuki: Industry experts believe the growth in the Indian automobile industry (passenger vehicle segment) to double to 15% from the currently ~8% once the uncertainties stemming from the nationwide implementation of the Goods and Services Tax (GST) settle. The growth projection of 15% is higher than our expectation of 8-10%. Positive for Passenger vehicle industry and Maruti Suzuki

Alert: Gabriel India has informed that CRISIL has revised its outlook on long term bank facility and fixed deposits of the company to “Positive” from “Stable” earlier. Positive for Gabriel

Alert: Construction companies: Most construction companies corrected in the past few weeks due to delay in tendering by NHAI. The change in chairman of NHAI and GST related uncertainties led to delay in the tendering process that was expected in last June and July. Industry sources expect the tendering of projects worth close to Rs5,000 crore in later part of next month. The new tenders plus decent quarterly performance should reignite the interest in construction stocks. Another concern has been the expected supply of state government bonds to fund the farm waiver which could put pressure on interest rates. However, given the benign inflation and weak industrial activity the RBI could reduce interest rate and turn more dovish in the policy review meet next month and assuage concerns on interest rates. View: We continue to remain positive on the road/rail construction space due to increased government spending, easing interest rates, alternate funding options like Infra Investment Funds (InvIT) and lower competitive intensity in the bidding for new orders. We prefer leading quality players like Sadbhav Engineering, KNR Construction and Ashok Buildcon. Our recommendation on MEP Infra (recommended at Rs73 on May 22, 2017 and now trades at Rs127; up by 74% within two months) has performed exceedingly well and we do not recommend fresh investment in the stock now.

Indraprastha Gas Limited (IGL) has increased CNG price by Rs1.11/kg to Rs38.76/kg and PNG price by Rs0.33/scm (standard cubic meter) to Rs25.19/scm in Delhi with effect from 26-July-2017 to offset the overall impact on its cost after transition to GST  – positive for IGL as the price increase would help it to sustain margins.

Reliance Industries (RIL): Reliance Jio (RJIO), subsidiary of RIL, has added 1.4 crore subscribers in Q1FY2018. This translates into strong growth of 13% in subscriber addition on sequential basis for RJIO – positive read through for RIL. 

Cipla launches Rectal Artesunate Suppositories for Severe Malaria in young children – Positive for Cipla

Alfanar Group of Saudi Arabia collaborates with Suzlon for its Renewable Energy foray into India; positive for Suzlon

 OTHER NEWS

ITC increases cigarette prices by 4-8% to pass on the impact of Cess hike – will have negative impact on the cigarette business sales volume; margins would be maintained
ITC increased cigarette prices by 4-8% a week after the GST Council imposed a cess to make up for lower tax incidence under the new regime on a class of goods tagged as sin products. A 20-cigarette pack of Classic and Gold Flake Kings will now cost Rs 300, compared with their earlier maximum retail price of Rs 278. The price of a 10-stick Navy Cut Filter pack has gone up to Rs 94 from Rs 89, while the Flake Special Filter will now cost Rs 2 extra at Rs 50 for a 10-cigarette pack.

Berger Paints – Labour union withdraws strike at Berger Paints Goa facility; the workers went on strike from 10th May 2017 affecting the operations at factory for almost 2 months – positive read through for the stock as management indicated of limited impact of strike on the production and financial performance

TD Power Systems receives order from European MNC worth Rs 750cr, for manufacturing & supply of certain components (product) of traction motors used in electric locomotives to be supplied to Indian Railways by the MNC. This order to be executed over 10 years starting from 2018. Positive

GCPL eyes 10% share of professional hair care market in next two and a half years – positive read thru
Godrej Consumer Products (GCPL) has forayed into the Rs 1,200 crore-professional hair care segment, through its acquired brand B Blunt, and aims to capture at least 10 per cent of market share in the next two and a half years. It will roll out to the top 10 cities and will extend this, next year, to the tier I and some tier II cities. By the end of the next year, GCPL will be reaching around 15,000-16,000 salons in India. The hair care segment contributes around 13-14 per cent of the company's revenues in India and with the entry in the professional space, the company expects it to be 20 per cent in the next three years.

Reliance Industries (RIL) plans to make its digital arm (Reliance Digital) a Rs40,000 crore entity by 2020 with target to increase its market share in electronics and mobile phone retailing to 12% from 4% currently as per the media reports - positive read through for RIL..

Airtel eyes 9mobile for consolidation
Bharti Airtel is looking to merge its Nigerian arm with 9mobile, which has just rebranded from Etisalat Nigeria following takeover as a result of financial problems. France’s Orange mobile and United Kingdom’s Vodafone had earlier emerged as potential bidders for the Nigerian fourth mobile network. Presently, Nigeria is Bharti’s largest African market, where it generates around 30% of its revenues.

Infosys EdgeVerve expands Blockchain integration to Sales Platform
EdgeVerve, a subsidiary of Infosys, is looking to integrate the tech into a global sales platform it operates. The company is in the process of incorporating blockchain into TradeEdge. TradeEdge network now with more than 2,000 partners, processes approximately 3 billion transactions per month.

Wipro, HPE partner to offer IT infrastructure solutions
Wipro and HPE have partnered to offer consumption-based IT infrastructure solutions or a pay-per-use business model for enterprises. Wipro will leverage HPE Flexible Capacity, which is an on-demand capacity service that delivers economics of public cloud.

Idea, Vodafone expect to complete merger deal in 2018
Idea Cellular and Vodafone expect proposed merger to get statutory approvals and anticipate completing the transaction during 2018. On July 24, India’s Antitrust Regulator clears Vodafone-Idea Merger.

Wipro and Compuware jointly launch a Mainframe Center of Excellence
Compuware Corporation announced the launch of a Mainframe Center of Excellence (CoE) in partnership with Wipro. The Mainframe CoE will be dedicated to helping large global enterprises better leverage their systems of record for competitive advantage in fast-moving digital markets.

STOCK IN NEWS

 • Tata Steel to consider take over of firms at NCLT
JSW Energy eyes solar rooftop, energy storage
PE firms eye GTL Infrastructure stake
Bhushan Steel's market share, big customers attractive bet for JSW Steel
Vedanta plans $2.4-billion capex over two years
Vodafone, Idea CEOs expect merger to be completed in 2018
TDSAT hearing on Reliance Jio free-offer case on August 18
Cipla's newly launched drug to cure severe malaria in young children
Wipro, Hewlett Packard announce partnership to offer IT infra solutions
Piramal Finance sanctions Rs 400-cr in emerging, mid-market biz

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