12/11/2021
News and Impact
• Expects market to open on a positive note on account of strong opening in the Asian markets. Japan, China, Hong Kong, Taiwan and South Korea Index gained 1% each. Media report that the US Government likely to meet with China government to reduce geo-political tension. Bloomberg News reported that China Evergrande had stumped up the cash for the interest on bonds due by the end of Wednesday. SGX Nifty is up 0.3% and Dow Future gained 0.2%
• In the US market, U.S. equities pared back a rebound Thursday after a selloff in the previous session due to fears high inflation could spur tighter monetary policy. Nasdaq Composite gained half percent while Dow Jones slipped nearly half percent. US Dollar Index spike to 16-month high while US 10-Year bond ended flat at 1.56%.
• European stocks gained to a record high, as a boost from mining shares outweighed market participants’ concerns over rising inflation risks. UK Index gained 0.6% while Germany and France Index bounced back into positive territory.
• Brent Crude declined 1% to below $83/bbl as the US President Joe Biden kept investors guessing about whether he’ll act to tame prices that have helped to stoke U.S. inflation
• Gold gained marginally at $1860/ounce, approaching the five-month high reached after the hottest U.S. inflation print in three decades cast doubt on the Federal Reserve’s ability to look through
• price pressures.
• Expect market will bounce back after a fall of last three trading sessions. Undertone positive sentiment in the market on account of impressive economy data and strong quarterly results. FIIs were net sellers Rs1637cr while DIIs were net buyers Rs456cr
• Actionable - BUY GMR Infra, Hindustan Aeronautics, Tata Motor, Tata Steel, Zee Entertainment
• Brokers Radar - Tat steel TGT by Jefferies at 1600, Tata Steel TGT by Macquarie at mac 1817, CLSA TGT on Tata Steel at 1950, - Astra IDL TGT by Jefferies at 2210, OIL India TGT by CLSA at 360
• Events – Fino Payments IPO listing, Muthoot shares buy-back record date.
• Results - Alkem Labs, Amara Raja Batteries, Apollo Hospital, Ashok Leyland, Bharat Forge, BEML, City Union Bank, Coal India, Burger King, Glenmark Pharma, Granules India, Grasim, Hero Motocrp, Himadri Speciality, Hindalco, India Glycols, IOL Chemical, KIOCL, Kaveri Seed, Johnson Pharma, Linde India, Nalco, NBCC, Noida Toll, ONGC.
• Market Summary - Suzuki Motor expects automobile sales in India to decline 6%, Finolex Cables enters room heaters segment, SCI to hive off non-core Assets, Page Industries announced strong Q2 results, HAL announced impressive Q2 results, PEL reported improved Q2 asset quality, Bharat Dynamic and Natco Pharma announced poor Q2 results. Godrej Consumers reported inline with expected Q2 results. Reviewing Clinical Data on Merck’s Covid Pill: Sun Pharma.
• Sun Pharma says the company is gearing to introduce oral antiviral molnupiravir in India. The Drugs Controller General of India is currently reviewing clinical data of molnupiravir for the treatment of Covid-19 in adults – positive
• Bajaj Finserve – Post Payment Bank in alliance with Bajaj Allianz Life – Positive (Bajaj Allianz Life is a JV between Bajaj Finserve)
• Maruti - Japan's Suzuki Motor Corp on Thursday said it expects its automobile sales in India to decline 6 per cent YoY and has cut its overall global sales forecast for the ongoing fiscal by 2.25 lakh units on account of semiconductor shortage – We are long term positive.
• Finolex Cables has announced its entry into the room heater segment with a new range of high-performance room heaters. - Positive
• J Kumar Infraprojects Receives LoA From Maharashtra Metro Rail Corp For Navi Mumbai Metro Rail Project Worth Rs 163.22 Crore – positive
• Home First Finance appoints Chief Technology Officer and Chief Risk Officer to the board. Appoints Dharmvir Singh as Chief Technology Officer (CTO).- positive
• Meghmani Finechem, a leading manufacturer of Chlor-Alkali products has announced its expansion plans into Chlorotoluene and its value chain. The upcoming facility in its existing Chlor-Alkali Complex of Dahej will produce intermediates for manufacturing pharmaceutical and agro-chemical active ingredients, which are amongst the fastest growing segments. – positive
• Route Mobile has informed that the Company’s wholly-owned subsidiary, Route Mobile (UK) , has successfully completed the acquisition of 100% equity stake of Masivian S.A.S., Columbia, South America – Positive
• Acrysil Limited, the largest manufacturer of “Quartz Kitchen Sinks” in Asia with German Technology, has announced additional production capacity expansion by 20% (200,000 Quartz Kitchen Sinks p.a.) at Bhavnagar in Gujarat. Thus taking the Overall Capacity to 1.20 – positive
• Bank of Baroda appoints S. Anantharaman as Chief Risk Officer – positive
• Monte Carlo Fashion have approved the incorporation of a wholly-owned subsidiary of the company in the “Home Textiles” and will help the company in becoming more agile and customer-focused. – Positive
• Navin Fluorine bags multi-year contract for key agro-chemical fluoro intermediate. The project holds an investment of Rs125cr which includes an approximate investment of Rs14cr for expansion of the effluent treatment plant. The proposed capacity addition is expected to have a peak revenue potential of Rs150cr to Rs170cr per annum – Positive
• CRISIL reaffirms 'A1+' rating on Hindustan zinc's commercial paper worth Rs7500cr – positive
• VST Tillers Tractors to invest $1.6M in US-based Zimeno. Zimeno Inc is in the Development of Electric Driver optional Tractor – positive
• Ind-Ra affirms Motherson Sumi Systems Long-term Issuer Rating at 'AAA'; Outlook stable - positive.
• Future Retail Vs Amazon: Supreme Court To Begin Final Hearing In The Case On November 23 - Wait for Supreme Court Final verdict
• Ind Rating downgrades Dredging Corporation's long-term issuer rating to 'BBB+/Negative' – avoid
• Moody’s withdraws Union Bank of India’s ratings on the lender's request. The company said that long-term local and foreign currency deposit rating Ba1 and BCA b1 rating has been withdrawn. – positive
• Firstsource Solutions: Sourcepoint, a Firstsource company, has entered into a definitive agreement to acquire The StoneHill Group, subject to regulatory approvals. – Positive
• Zee Entertainment : Approved revised agreement pertaining to transfer of digital publishing business division to Indiadotcom Digital. An aggregate consideration of Rs 63.77 crore will now be discharged by Indiadotcom in cash instead of issuing equity shares to the company.- positive
• Tata Power : Moody's Investors Service has upgraded the rating of the company to Ba2 with stable outlook from Ba3 with stable outlook.- positive
• Wipro: The company has launched an automotive e-commerce cloud solution for direct-to-consumer marketplaces to launch and grow quickly.- positive
• Balkrishna Industries - The company will invest Rs 350 crore to modernise old Waluj Plant.- positive
• Bharat Forge incorporates wholly-owned subsidiary in Australia. KSSAPL is a newly incorporated Company to undertake activities relating to Defence and Aerospace Industry. - positive
• Alembic Pharma also informed that U.S. FDA issued a Form 483 with 10 observation after conducting an inspect at the company's injection facility in Karkhadi from October 28 and November 10 – Avoid
• OIL India approves interim dividend of Rs. 3.50 (dividend yield 1.7%)
• Wipro has been chosen as a strategic partner in the transformation of Aggreko's Finance and Procurement function. - positive
• IRIS Business Services bags project in Kuwait – positive
• Power Grid Corporation has approved investments proposals worth around 552 crore.
• Shipping Corporation has incorporated subsidiary to hive off non-core Assets. Move as part of demerger under SCI's strategic disinvestment process undertaken by the government. - Positive
• NTPC Barh Super Thermal Power Station Unit To Begin Commercial Operations From Friday. With this, the commercial capacity of NTPC and NTPC group will become 54,232.5 Mega Watt and 67,657.5 Mega Watt, respectively.- positive
• CSEC announced impressive Q2 results. Company reported Q2 net profit Rs Rs340cr (down 12.1% YoY), Ebitda Rs914cr (up 3% YoY), Ebitda margin 26.2% vs 26.45% (YoY), Other Income Rs40cr vs Rs25cr and Income Rs3494cr (4.3% YoY)
• Page Industries announced strong Q2 results and beat Ebitda and Ebitda margin. Company reported Q2 net profit Rs160cr (up 44% YoY) - expectation Rs121cr,Ebitda margin 21.5% vs 22.3% (YoY) - expectation 21.5% , Ebitda Rs233cr (up 23% YoY) - expectation Rs183cr, dividend Rs150 a share and Income Rs1080cr (up 46% YoY) - expectation Rs851cr
• Natco Pharma announced poor Q2 results. Company reported Q2 net profit Rs65.1cr (down 67.8% YoY), Ebitda margin 18.7% vs 34.5% (YoY), Ebitda Rs70.5cr (down 74.5% YoY), dividend Rs150 a share and Income Rs377.2cr (down 53% YoY).
• Sundaram Fasteners announced impressive Q2 results. Company reported Q2 net profit Rs122.5cr (up 19.6%), Ebitda Rs218cr (22% YoY), Ebitda Margin 17.6% vs 20.1% (YoY)
• Godrej Consumer announced inline with expected Q2 results. Company reported Q2 net profit Rs479cr (up 4.1% YoY) - expectation Rs493cr, Ebitda margin 24.6% vs 23.1% (YoY) - expectation 21.4% Ebitda Rs680cr (up 31% YoY) - expectation Rs679cr, domestic volume growth 4% and Income Rs3164cr (up 8.5% YoY) - expectation Rs3177cr
• HAL announced strong Q2 results and Ebitda. Company reported Q2 Net profit Rs848cr (up 38% YoY), dividend Rs14 a share, Ebitda Rs1242cr (up 21% YoY), Ebitda Margin 22.4% vs 21.2% and Income Rs5550cr (up 14% YoY)
• Bharat Dynamics announced poor Q2 results. Company reported Q2 Net profit Rs65r (up 43.2% YoY), dividend Rs14 a share, Ebitda Rs66.1cr (up 25.6% YoY), Ebitda Margin 13.1% vs 18.7% (YoY) and Income Rs504cr (up 79.4% YoY)
• PEL announced strong AUM growth and improved asset quality. Company reported Q2 Net profit Rs419.2CR (down 33.35 YoY), GNPA 2.9% vs 4.3% (QoQ), NPA 1.5% vs 2.2% (QoQ) AUM Rs67000cr (up 42% YoY), other income Rs128cr (up 241% YoY) and Income Rs3302cr (down 5.9% YoY).
• Engineering India announced lower than expected Q2 results. Company reported Q2 Revenue Rs650cr (down 5% YoY), EBITDA margin decline by 200bp YoY to 9.3%. Adj.PAT stood at INR595m, down 36% YoY and 15% below our estimate.
• Indian Bull Housing profit increased on account of lower provision. Company resporteds Q2 net profit Rs286cr (down 11% YoY), Income Rs2230cr (down 12% YoY), Provision Rs105cr (down 51% QoQ).
• Tata Steel Q2 Net profit Rs11918cr (up 34% YoY) – expectation Rs10400cr, exceptional gain Rs516cr, operating profit Rs16456cr (up 2.1% YoY) – expectation Rs18300cr and Income Rs60283cr (up 13% YoY)- expectation Rs60700cr
• CRISIL announced impressive Q2 results. Company reported Q2 Net profit at Rs112.86 (up 12% YoY) and Revenue at Rs 570.96 crore (up 8% YoY)
• Brigade Enterprise announced strong growth its pre- sales – Company reported 44%/73% YoY/QoQ increase in pre-sales to Rs830cr. Strong growth was driven by 33%/72% YoY/QoQ growth in sales volume at 1.31msf (equal to Sobha) and 8%/1% rise in realization to Rs6,322/sqft. BEL launched 0.38msf of area across three projects in Bengaluru. Company will further launch 2.2msf of residential projects in near term. BEL leased out 0.17msf of additional space during the quarter including 0.1msf of hard option exercised in Brigade Tech Garden (BTG). Further 50k sqft was leased out in GIFT City. Company is seeing active enquiries for mid-sized space and has indicated an active leasing pipeline of 1msf (1.5msf in previous quarter)
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