Author: Pranati Deva

Top brokerage calls for today: Credit Suisse ‘neutral’ on Eicher Motors, Macquarie begins coverage on MGL

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Benchmark indices are likely to open on a flat note following Asian peers, which were flat in early trade on Friday as deteriorating global economic outlook outweighs more signs of progress in trade talks between China and the United States.

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up less than 0.1 percent. Australian shares gained 0.5 percent and Japan’s Nikkei stock index was 0.3 percent lower.

Indian shares ended on a positive on Thursday led by metal, banking, and pharma stocks. The 30-share BSE Sensex gained 142.09 points to end at 35,898.35 while the 50-share NSE Nifty rose 54.40 points to close at 10,789.90.

Here are the top brokerage calls for the day:

Credit Suisse on Eicher Motors
– Maintain neutral call, target at Rs 21,800 per share
– State-wise trends do not look very encouraging
– Within domestic motorcycles companies, the company lost market share in almost all the states in Q3, with Kerala and Tamil Nadu seeing the sharpest decline
– Key state driving growth for the company has been Uttar Pradesh, but volume growth in the state has slowed down from 60% to 10%

Investec on general insurance companies
– Equity investment in the sector is attractive from a portfolio perspective
– In India, this sector as attractive given massive under penetration
– Market structure is in favour of top private players
– ICICI Lombard and Bajaj are well ahead Of the other peers With RoE more than 20 percent
– PSUs are in bad shape with only New India Assurance (NIA) standing apart
– Initiate coverage on ICICI Lombard with Buy rating and New India Assurance with Hold rating
– Target for ICICI Lombard at Rs 1,000, Bajaj Finserv at Rs 7,835 per share
– Target for New India Assurance at Rs 170 per share

Macquarie On Mahindra CIE
– Raise CY19-20 EPS estimates by 1-2 percent on strong Q4CY18
– CY19-21 EPS estimates are 6-7 percent above consensus
– Maintain outperform, target at Rs 300 per share

Macquarie on Mahanagar Gas
– Initiate coverage with neutral rating, target at Rs 800 per share
– Expect earnings to compound at 9 percent over the next five years

Citi on BHEL
– Maintain neutral call, target cut to Rs 70 from Rs 84 per share
– Revise EPS estimates downwards by 8-13 percent over FY19-21
– Management says FY19 will end with overall tendering of 15 GW of power equipment

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nifty Auto falls over 25% in 1 year, analysts advice long-term bets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After under-performing the frontline indices on the year-to-date (YTD) basis, analysts expect the auto sector growth to remain muted in the coming quarters on poor demand. December-quarter earnings and January sales figures also paint the same picture.

“Lower operating leverage, high discounts/incentives and commodity costs being on the higher side somewhat hampered margins,” Prabhudas Lilladher said in a report.

As the sector is expected to face more obstacles, the Nifty Auto index fell over 12 percent YTD and over 25 percent in the last 1 year. In comparison, the benchmark Nifty50 declined a little over 1 percent YTD and gained over 3 percent in the last 1 year.

Amid individual stocks, M&M, Ashok Leyland, Exide Industries and TVS Motors fell in the range of 19-21 percent, while Eicher Motors and Maruti Suzuki slipped 12 percent and 9 percent, respectively. Tata Motors was down nearly 3 percent. Bajaj Auto was the only stock in the Nifty Auto index in green. It rose 2 percent YTD.

Most analysts eliminate prospects of gains in auto stocks in the immediate future, however, they suggest investors approach the sector from a long term perspective. Correction in fuel prices, resolution of liquidity issues and upcoming new product launches in the future will lead to better growth for the auto sector.

While Prabhudas Lilladher remains positive on domestic passenger vehicle industry growth with a long-term view, Motilal Oswal Securities (MOSL) expect the commercial vehicle demand to continue growing in FY20 driven by normalization of financing issues and pre-buying ahead of the BS6 implementation.

“In the base case, we estimate domestic medium and heavy commercial vehicles volumes CAGR of 1.7% over FY19-21. Capacity utilization is also likely to increase to 88% by FY20 supporting a benign competitive environment and relatively less pressure in weak FY21. Our top pick is Ashok Leyland,” added MOSL.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Radico Khaitan shares crack after pollution regulator directs closure of Rampur plant

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Radico Khaitan cracked nearly 5 percent in early morning trade on Thursday, falling for the 11th straight session after the Central Pollution Control Board directed closure of Radico Khaitan’s plant at Rampur.

The company has announced that the Central Pollution Control Board, New Delhi has made certain observations on zero liquid discharge system of the company’s one of the plants to improve the environmental conditions.

Radico Khaitan shares slumped as much as 5.2 percent to Rs 349 per share intraday on the NSE. At 10:15 am, the scrip underperformed the frontline indices, down 3.3% at Rs 356 on NSE. On comparison, the Nifty50 was trading at 10,732, down 2 points.

The stock has fallen 20 percent in the last 11 sessions (since February 8).

The company in Q3 reported a 48.78 percent jump in its net profit at Rs 52.09 crore for the quarter ended December 2018. The company had posted a net profit of Rs 35.01 crore during the same period of the previous fiscal.

Total income during the quarter under review stood at Rs 2,081.12 crore. It was Rs 1,747.98 crore in the year-ago period, Radico Khaitan said in a regulatory filing.

Catch all the action and updates in our Market Live blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Market opens flat, Nifty tests 10,750; PSU Banks gain on capital infusion

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Benchmark indices opened flat following muted trend seen in the Asian peers, taking cues from the minutes of the January Federal Reserve meeting, which were released on Wednesday.

At 9:20 am, the S&P BSE Sensex was trading at 35,796, up 40 point, while the Nifty50 index was trading at 10,744, up 9 points.

The broader markets outperformed the benchmarks. The Nifty Midcap and Smallcap indices gained 0.3 percent each with positive market breadth.

ONGC, SBI, Sun Pharma, ICICI Bank, and HUL were the top gainers on Sensex, meanwhile, Bharti Airtel, Infosys, Yes Bank and M&M dragged the index.

Amid sectors, Nifty PSU bank index gained nearly 1.5 percent after the government on Wednesday approved a capital infusion of Rs 48,239 crore into 12 public sector banks (PSBs). Central Bank of India, Syndicate Bank, Punjab National Bank, Union Bank of India and Bank of India surged in the range of 4.2-9.2 percent.

Globally, MSCI’s broadest index of Asia-Pacific shares outside Japan was steady in early trade, hovering just off their highest since early October.

Australian shares gave up early gains, last trading 0.1 percent lower, meanwhile, Japan’s Nikkei was down 0.3 percent after closing at a two-month high during the previous session.

US Federal Reserve minutes affirmed it would be “patient” on interest rate and risk assets got a lift from hopes of further progress in US-China trade talks. Fed officials also signaled that they will soon lay out a plan to stop letting go of $4 trillion in bonds and other assets and said they expect to keep rates steady for now but left room for hikes later if conditions improve.

Also, catch all the action and updates in our market live blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Dollar inches up after Fed minutes, trade issues back in view

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The dollar inched up on Thursday after minutes from the Federal Reserve’s last meeting revived expectations for a possible US rate hike this year while investors shifted their focus back to trade issues for fresh directional cues.

The greenback had risen slightly against the yen and trimmed losses versus the euro late on Wednesday after the Fed, in the minutes of its latest meeting in January, said the US economy and its labor market remained strong, prompting some expectations of at least one more interest rate hike this year.

The dollar index against a basket of six major currencies added 0.1 percent to 96.569, crawling away from a two-week trough of 96.286 marked on Wednesday.

The Fed caught markets off guard last month after it took a dovish turn in its commentary, widely read as a sign it would suspend a three-year campaign to raise interest rates.

“The dollar drew some lift as the minutes appeared to have appeased market participants who were clinging to views that the Fed would hike rates one more time this year – but all in all, the minutes were in line with what the Fed said in January,” said Daisuke Karakama, chief market economist at Mizuho Bank.

“The market’s focal point will now shift back to trade. The US-China trade negotiation deadline could be extended and that may mean Europe and Japan could be faced with trade issues.”

US President Donald Trump on Wednesday said the United States would impose tariffs on European car imports if it cannot reach a trade deal with the European Union.

The dollar was a shade weaker at 110.75 yen after rising 0.25 percent overnight.

The euro was little changed at $1.1337 after being nudged off a two-week high of $1.1371 scaled earlier on Wednesday.

A big mover in Asia was the Australian dollar, which was last down 0.15 percent at $0.7151.

The Aussie rallied early in the session to a two-week peak of $0.7207 on strong domestic January employment data. But the currency quickly lost altitude, with traders attributing the slide to interest rate cut forecasts made by Westpac.

Reserve Bank of Australia (RBA) Governor Philip Lowe had sent the Aussie tumbling early in February by stepping back from the central bank’s long-standing tightening bias, saying the next move in interest rates could be either down or up.

“It is difficult for the Aussie to keep rising indefinitely when the RBA has seemingly switched to a dovish stance,” said Shin Kadota, senior strategist at Barclays.

The pound dipped 0.15 percent to $1.3031 pulling back further from a near three-week high of $1.3109 touched the previous day.

Sterling took a knock after three lawmakers defected from British Prime Minister Theresa May’s ruling Conservative party in a move that could undermine her Brexit strategy.

The pound was also weighed after Fitch Ratings said on Wednesday it may downgrade the United Kingdom’s “AA” debt rating based on growing Brexit uncertainty.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Top brokerage calls for the day: Morgan Stanley overweight on Dr Reddy’s, L&T

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Benchmark indices indicate a mixed opening on Thursday even as Asian shares held near 4-1/2-month highs. The global optimism was maintained after US Federal Reserve minutes affirmed it would be “patient” on interest rate rises and risk assets got a lift from hopes of further progress in US-China trade talks. The SGX Nifty, however, was trading in red in the early morning deals.

On Wednesday, The market closed higher, snapping nine-day losing streak, with the Nifty holding 10,700 levels led by metals, banking, and IT sector.

Here are the top brokerage calls for the day:

Macquarie On IT Services

-NASSCOM’s survey hints at a cautiously optimistic outlook for FY20.

– Macquarie expects growth in most IT companies in India to improve in FY20.

– Revenue growth in Infosys, HCL Tech & Tech Mahindra can be seen in the range of 230-410 basis points in FY20. One basis point is a hundredth of a percentage point.

– FY20 dollar revenue growth is expected to be higher in midcaps than large Caps.

-TCS may have the strongest organic growth rate among peers.

– Top largecap picks are TCS & HCL Tech & for midcap is L&T Info.

Morgan Stanley On Dr. Reddy’s

– Overweight call, target at Rs 3,197/share.

– Suboxone Relaunch: Spotlight moves to the market place.

Morgan Stanley On L&T

– Overweight call, target at Rs 1,786/share.

-Guidance implies inflows of Rs 49,000 crore in Q4.

– Of the reported orders in Q4, domestic orders account for 70 percent.

Morgan Stanley On Indian Hotels

– Overweight call, target at Rs 174/share.

– FY19 was about signing new contracts, FY20 to be about commissioning.

– The company reiterated its FY23 targets of 30 percent growth in the portfolio.

Nomura On Banks

– The final tranche of infusion announced, PCA banks adequately capitalised.

– Pricing power remains strong and the credit cycle is also normalising.

– Positive on corporate banks and prefer corporate private banks.

– Buy call on ICICI, Axis Bank and SBI.

DB On Metals

– Domestic steel prices hiked for the second time in February.

– Indian companies had hiked the price by Rs 750-1000/tonne at the beginning of the month.

– India’s domestic steel demand continues to remain resilient.

HSBC On GSPL

– Higher cost impacted earnings in Q3.

– The decline in gas volumes may lead to reduced profitability next year.

– Target cut to Rs 138 from Rs 152/share.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

January domestic air passenger traffic growth at 53-month low of 9.1%: DGCA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The number of passengers flying in Indian airlines grew at its slowest pace since October 2014, according to data released by the Directorate General of Civil Aviation (DGCA) on Wednesday.

Passenger growth declined as carriers hiked prices to offset higher fuel cost and a weaker rupee.

Passengers carried by domestic airlines during January 2019 were 1.25 crore as against 1.14 crore in December 2018, thereby registering a growth of 9.10 percent, lowest in 53 months.

The DGCA data shows that the passenger load factor for SpiceJet was the highest among peers at 90.9 percent in January 2019, though it declined from 92.7 in December 2018.

Passenger load factor for Air Asia, GoAir, IndiGo, Jet Airways, Vistara, and Air India was 88.4 percent, 87.4 percent, 86.4 percent, 86.1 percent, 84.2 percent, and 80 percent, respectively, in January 2019.

Passenger load factor is the percentage of occupied seats in a flight.

The passenger load factor in January 2019 also showed a decreasing trend compared to the previous month, the DCGA reported.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Markets remain positive on global optimism; metals lead, ADAG stocks tumble

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Benchmark indices continued to trade in positive led by gains in metal and financial stocks on the back of positive Asian cues. Asian stocks advanced to four and a half month high on Wednesday as investors bet that Chinese and US trade negotiators would be able to secure a deal to de-escalate their year-long tariff war.

At 11.56 AM, the S&P BSE Sensex was trading 228 points higher at 35,580, meanwhile, the Nifty50 index was ruling at 10,674, up 70 points. Vedanta, Tata Steel, ONGC, and L&T were the top performers in the S&P BSE Sensex meanwhile, gains were capped by auto stocks like Bajaj Auto and HeroMoto Corp.

Broader market indices rose in tandem with their frontline peers. Both the Nifty and BSE MidCap indexes were up almost 0.5 percent. All sectoral indices, except FMCG, was trading in green. Nifty Metal was the top performing sector on positive global cues with JSPL, Vedanta, SAIL and Tata Steel gaining in the range of 2.7-4.7 percent. Nifty PSU Bank index and Nifty Financial services followed.

Amid individual stocks, shares of Anil Ambani group companies cracked after the Supreme Court held Ambani guilty of contempt in Ericsson debt payment case today. The Apex Court slapped a fine of Rs 1 crore to Anil Ambani and has directed RCom to pay the balance amount to Ericsson India in four weeks. In case of payment default, Anil Ambani will be sent to jail for three months.

Reliance Communications, Reliance Capital and Reliance Infra shares slipped in the range of 9-10 percent on BSE following the judgment. Reliance Naval and Engineering fell 5 percent whereas Reliance Power was trading flat.

Jaypee Infratech was locked in 5% upper circuit after JP Associates offers to repay the company’s dues. The promoters of debt-ridden Jaypee Infratech (JIL) have made a last minute offer to withdraw the company from insolvency proceedings, sources aware of the development told CNBC-TV18.

Catch all the action and updates in our Market Live blog.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Financial stocks gain ahead of meeting with RBI governor

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of financial services companies including banks and non-banking financial companies (NBFC) surged on Wednesday ahead of the RBI governor Shaktikanta Das’ meeting with the bank heads. Nifty PSU Bank index ended 1.7 percent higher, while the Nifty Financial Service index added 1.1 percent, as compared to a 1.24 percent rise in the Nifty50 index.

Cental Bank of India, IDBI Bank, Indian Bank, Syndicate Bank and Canara Bank rose in the range of 2-3.8 percent

Meanwhile, in the NBFC segment, Indiabulls Housing Finance, Shriram Transport Finance Company, and Edelweiss gained between 5.3 percent to 6.1 percent.

Das on Monday said that he will meet the heads of public and private sector banks later this week to discuss the pass over of the interest rate cut it had announced to borrowers. Speaking to media after RBI’s central board meeting, Das said the transmission of its monetary policy decisions is important and will be discussed with the public and private sector CEOs.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Top brokerage calls for the day: CLSA picks L&T, NCC in infra sector

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian benchmark indexes are likely to open higher following gains in Asian stocks on the back of US-China trade talks as well as the minutes from the US Federal Reserve for clues on policymakers’ thinking on interest rates and its balance sheet reduction policy.

Here are the top brokerage calls for the day:

CLSA on infra sector
-The sector shows backlog at top meanwhile the valuations remain at the bottom
-New orders in the sector were well spread and reflected by L&T’s inflows
-Margin for the sector expanded 36 bps, driving EBITDA to grow at 23 percent
-The brokerage like stocks like L&T, Sadbhav, NCC and IRB

CLSA on auto companies
-Maruti Suzuki should be well placed on technology in the coming years
-Any rapid shift for EVs could result in valuation pressures for Indian auto stocks
-Maruti & Mahindra have significant tie-ups, Tata might need some too
-Potential collaborations among German luxury OEMs could put pressure on JLR

HSBC on Jet Airways
-Reduce call, target cut to Rs 190 from Rs 200/share
– Operationally, a lot needs to be changed to ensure sustainability
– Successful restructuring & cost control are key concerns

MS on Grasim
– Equal-weight call, target at Rs 958/Share
– Signed a definitive agreement to acquire Chlor-alkali business Of KPR Industries
– Company Will have a market share Of 30% in Chlor-alkali business in India

Centrum on GSK Pharma
– The brokerage maintains ‘sell’ rating with a target price of Rs 1,060
-The stock trades at rich valuations compared to peers
– The company derives 25% revenues from vaccines segment
-Key risks include faster-than-expected growth in the domestic market, re-structuring benefits and higher growth of its flagship brands

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow