Sensex Ends At Record High For Third Straight Day

India's Sensex rose to a record closing high for a third day in a row.

The S&P BSE Sensex rose 0.1 percent or 33 points to 36,858 while the NSE Nifty 50 index was little changed 11,132.

For most part of the day, the benchmarks traded in a narrow range as gains in HDFC twins, ITC and State Bank of India were offset by losses in Axis Bank, NTPC, TCS and M&M.

Eleven out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Power index's 1.5 percent drop. On the other hand, the S&P BSE Metal index was top gainer, up 0.8 percent.

The mid- and small-cap shares ended mixed as the S&P BSE MidCap index fell 0.1 percent while the S&P BSE SmallCap index rose 0.2 percent.

Shares of the country's largest steel maker extended decline despite beating Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Net profit up 3.7 times at Rs 2,366 crore versus estimate of Rs 2,105 crore.
• Revenue up 36 percent at Rs 20,519 crore versus estimate of Rs 19,283 crore.
• Ebitda up 95 percent at Rs 5,105 crore versus Rs 2,617 crore (YoY).
• Margin at 24.9 percent versus 17.3 percent (YoY).

There are specific set of stocks doing well and the market is not re-rating itself, says Ajay Srivastava of Dimensions Corporate Finance.

Key highlights of the conversation:

• Banks and two-wheeler earnings showing signs of caution.
• Value picking among the non-performers could be a dangerous strategy.
• This is a market for growth stocks and not the value stocks.

• Tata Elxsi: The Bengaluru-based software developer rose as much as 7.3 percent to a record high of Rs 1,479 after its profit beat Bloomberg consensus estimates in June quarter.
• Alkem Labs: The Mumbai-based drugmaker rose as much as 6.2 percent to Rs 2,150 as ICICI Securities maintained its ‘Buy’ call on the stock and raised target price to Rs 2,428 from Rs 2,262.
• Sayaji Hotels: The Vadodara-based hotel chain operator was locked in a five percent upper circuit at Rs 279.30 after Mint reported that Barbeque Nation has raised Rs 90 crore in pre-IPO funding from Rakesh Jhunjhunwala-backed firm Alchemy.
• Indiabulls Ventures: The Delhi-based stock broking firm extended gains to seventh day, rising as much as 5 percent to a record high of Rs 561.30. The stock posted its longest winning streak in over a year and it has risen 19 percent during last seven trading sessions.

• Zee Entertainment has 1.25 crore shares (1.3 percent equity) change hands in a block. Stock down 1 percent at Rs 520.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Domino's pizza chain operator rose as much as 2.76 percent to Rs 1,477 after its net profit beat Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Net profit rose over three times to Rs 75 crore versus estimate of Rs 64 crore.
• Revenue rose 26 percent to Rs 855 crore versus estimate of Rs 820 crore.
• Margin at 16.7 percent versus 11.8 percent (YoY).
• Ebitda up 78 percent at Rs 142 crore versus Rs 80 crore (YoY).
• Same store sales growth (SSSG) for Domino’s at 25.9 percent versus BloombergQuint estimate of 17-19 percent.

Shares of the consumer electrical products maker extended losses and fell as much as 3.5 percent after it reported June quarter earnings.

Key earnings highlights:

• Net profit up 30 percent at Rs 104 crore versus Rs 80 crore (YoY)
• Revenue up 11 percent at Rs 1,204 crore versus Rs 1,081 crore (YoY)

Shares in Europe edged higher on Wednesday after a positive session in Asia as earnings season rumbled on, though trade tensions were high on the agenda ahead of a meeting between U.S. President Donald Trump and European Commission chief Jean-Claude Junker. Oil helped commodities rise.

Shares of the Mumbai-based fabricated metal and hardware maker pared losses and was down 0.8 percent at Rs 1,638 after its profit beat Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Net profit up 25 percent at Rs 80 crore versus estimate of Rs 75 crore
• Revenue up 5 percent at Rs 755 crore versus estimate of Rs 736 crore

• Indian equity benchmarks were trading in a narrow range as gains in HDFC, Reliance Industries and ITC were offset by losses in TCS, NTPC and Hindustan Unilever.
• The S&P BSE Sensex rose 0.18 percent to 36,898 and the NSE Nifty 50 index advanced 0.12 percent to 11,147.
• Twelve out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal index's 1.3 percent gain. On the flipside, the S&P BSE Telecom index was top loser, down 1.2 percent.
• The overall market breadth was positive as 1,420 shares were advancing while 1,035 were declining on the BSE.

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Shares of the Delhi-based multiplex operator fell 1 percent to Rs 1,161 despite beating Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Revenues up 9 percent at Rs 696.3 crore versus Rs 636.6 crore
• Net profit up 17.3 percent at Rs 52.2 crore versus Rs 44.5 crore
• Ebitda up 20 percent at Rs 137.2 crore versus Rs 114.4 crore

Shares of the Delhi-based state-run lender fell as much as 3.1 percent to Rs 71.65 after its asset quality worsened in June quarter.

Key earnings highlights:

• Net interest income up 17 percent at Rs 1,337 crore versus Rs 1,146 crore.
• Net loss of Rs 393 crore versus loss of Rs 486.20 crore (YoY)
• Gross non-performing assets at 17.89 percent versus 17.63 percent (QoQ)
• Net non-performing assets at 10.63 percent versus 10.48 percent (QoQ)

Shares of the Bengaluru-based software developer were trading with a negative bias despite meeting Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Net profit up 41 percent at Rs 70.50 crore versus estimate of Rs 66.8 crore
• Revenue up 18 percent at Rs 382 crore versus estimate of Rs 391 crore

Shares of the Delhi-based heavy electrical equipment maker rose as much as 6 percent, the most in two months, to Rs 77.85 after its profit nearly doubled in April-June quarter.

Key earnings highlights:

• Net profit up 93 percent at Rs 156 crore versus Rs 81 crore (YoY)
• Revenue up 8 percent at Rs 5,790 crore versus Rs 5,354 crore (YoY)
• Ebitda up 41.6 percent at Rs 287.2 crore versus Rs 202.8 crore (YoY)
• Margin at 4.8 percent versus 3.5 percent (YoY)

Shares of the Bengaluru-based pressure cooker maker swung between gains and losses after it reported June quarter earnings.

Key earnings highlights:

• Net profit down 73 percent at Rs 35.9 crore versus Rs 134 crore (YoY)
• Revenue up 18 percent at Rs 444.6 crore versus Rs 377.15 crore (YoY)
• Margin at 13.2 percent versus 12.5 percent (YoY)
• Ebitda up 24.3 percent at Rs 55.4 crore versus Rs 44.6 crore (YoY)

Shares of the Pune-based iron and ferrous castings maker rose as much as 7.2 percent to Rs 91.15 after its net profit rose over eight times in June quarter.

Key earnings highlights:

• Net profit up 8.5 times at Rs 10.46 crore versus Rs 1.23 crore (YoY)
• Revenue up 29 percent at Rs 485 crore versus Rs 377 crore (YoY)
• Ebitda at Rs 34.6 crore versus Rs 15.5 crore (YoY)
• Margin at 7.1 percent versus 4.1 percent (YoY)

Shares of the Mumbai-based chemical maker fell as much as 2.5 percent to Rs 220.25 after it reported June quarter earnings.

Key earnings highlights:

• Revenue up 12 percent at Rs 405.3 crore versus Rs 361.8 crore (YoY)
• Net profit up 57 percent at Rs 32.38 crore versus Rs 20.61 crore (YoY)
• Ebitda up 40 percent At Rs 61 crore versus Rs 43.6 crore (YoY)
• Margin at 15.1 percent versus 12.7 percent (YoY)

Shares of cement manufacturers fell after National Companies Law Appellate Tribunal (NCLAT) upheld Competition Commission of India's Rs 6,300 crore penalty order on 10 cement companies, Bloomberg reported.

Shares of the South India-based private lender fell as much as 3.5 percent to Rs 96.20 after its asset quality worsened in June quarter.

Key earnings highlights:

• Net interest income up 8 percent at Rs 583 crore versus Rs 538 crore
• Net profit down 69 percent at Rs 46 crore versus Rs 148 crore (YoY)
• Gross non-performing assets (NPAs) as a percentage of total advances at 7.44 percent versus 6.56 percent (QoQ).
• Net NPAs as a percentage of total advances at 4.50 percent versus 4.16 percent (QoQ)

HDFC Asset Management Company's Rs 2,800 crore three-day initial public offering opened today as HDFC Ltd. and Standard Life look to sell stake in the joint venture.

BloombergQuint spoke to Amit Jeswani of Stallion Asset Management and Siddhartha Khemka of Motilal Oswal on whether to invest in the HDFC AMC IPO. Below are the key highlights of the conversation:

Amit Jeswani:

• HDFC AMC is a high-quality asset.
• HDFC AMC is a free cash flow machine.
• HDFC AMC is a secular 15 percent growth story.
• Expect the profits to go up 5-6 times.
• There can be a listing gain of Rs 300-400.

Siddhartha Khemka:

• AMC business has been growing and see strong growth in the space.
• Would hold on to stake in RNAM and try luck in HDFC AMC IPO.
• Focus will shift to HDFC AMC over time
• Scarcity premium is likely to lift the listing price of HDFC AMC.

Shares of the country's largest car maker fell as much as 1.34 percent to Rs 9,701 after it announced to recall 1,279 vehicles to check airbag controller unit.

Maruti Suzuki will recall some new Swift and Swift Dzire models to inspect possible fault in airbag controller unit, the company said in an exchange filing. 566 new Swifts and 713 new Swift Dzire models made between May 7 and July 5 to be recalled.

Shares of the Ahmedabad-based air cooler maker fell as much as 20 percent, the most in over three years, to Rs 1,125 after it reported weak June quarter earnings.

Symphony's net profit in June quarter fell 49 percent to Rs 20 crore from Rs 39 crore during the same period last year, while its revenue rose 23 percent to Rs 146 crore.

Shares of the Mumbai-based IT company fell as much as 8 percent to Rs 456 after it reported June quarter earnings.

Key earnings highlights:

• Revenue up 9.2 percent at Rs 1,137 crore.
• Net profit up 14 percent at Rs 153 crore.
• EBIT up 8.2 percent at Rs 159 crore.
• Margin flat at 14 percent.

Meanwhile, the brokerages have downgraded the stock after June quarter earnings citing expensive valuations. Here's what brokerages said:

Macquarie

• Downgraded to ‘Neutral’ from ‘Buy’; target price raised to Rs 500 from Rs 476.
• Second quarter revenue broadly in line; margins lower than estimates.
• Guidance raised to 12-13 percent from 10-12 percent for CY18.
• Raise calendar year 2018-20 EPS estimates by 2-5 percent largely led by currency movement.
• Downgraded the stock to ‘neutral’ on valuations.

Credit Suisse

• Maintained ‘Underperform’; target price raised to Rs 380 from Rs 360.
• Revenue growth remains solid and ahead of estimates.
• Margins disappointed for second consecutive quarter.
• Negatives: High client concentration, lop-sided nature of growth and margin concerns.

• Bharti Infratel has 14 lakh shares change hands in a block ahead of earnings. Stock up 0.3 percent at Rs 286.70.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Pune-based consumer finance company rose as much as 3.4 percent to trade above Rs 7,000-mark for the first time.

The stock so far this year has risen 34 percent compared with a gain of 5.7 percent gain in the Nifty 50 index.

India's S&P BSE Sensex rose to record high led by metal stocks.

The S&P BSE Sensex rose as much as 0.28 percent or 103 points to 36,928.06 while the NSE Nifty 50 index climbed as much as 0.17 percent or 19 points to 11,153, 18 points away from its all-time high of 11,171.55.

The benchmarks, however, wiped out early gains as IT heavyweights Infosys and TCS came under selling pressure.

Thirteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal index’s 1.4 percent gain. On the other hand, the S&P BSE Telecom index was top loser, down 0.6 percent.

• Indian rupee opened at 68.96 per dollar against yesterday's close of 68.95.

ICICI Securities on Alkem Labs

• Maintained ‘Buy’; target price raised to Rs 2,428 from Rs 2,262.
• Company resolved observations within four months, which is encouraging.
• Expect the approvals pace to pick up, as more than 25 ANDAs are pending.
• Ramp up in U.S. sales to improve margins with operating leverage kicking in.
• Remain positive considering strong positioning in Indian market.

Brokerages On Asian Paints

Bank of America Merrill Lynch

• Maintained ‘Buy’ with target price of Rs 1,650.
• Solid first quarter earnings with double-digit domestic volume growth.
• GST rate cut to give fresh impetus to growth.
• Price hikes to cover any input cost inflation to be taken over time.
• Premium valuation to sustain on strong growth.

CLSA

• Downgraded to ‘Outperform’ from ‘Buy’; target price raised to Rs 1,600 from Rs 1,460.
• Good growth with strong margin expansion.
• Benefitted from low GST base and 12 percent plus volume growth in India.
• Raise EPS estimates by 3-4 percent to factor in better margins.
• Stock is up 25 percent in three months, forcing us to downgrade the rating.

Macquarie

• Maintained ‘Neutral’; target price raised to Rs 1,300 from Rs 1,220.
• First quarter results were in line with estimates, but second quarter may be challenging.
• Benefits of GST tax rate cut to emerge in medium term on premiumisation side.
• Volume growth trend continued from fourth quarter to first quarter.
• Price hikes help maintain gross margins.

JPMorgan

• Maintained ‘Neutral’; target price raised to Rs 1,400 from Rs 1,300.
• Good Q1 led by margin beat.
• Raw material inflation continues; Management expects 10 percent increase.
• Price hikes deferred due to GST rate cut and it may weigh on near-term margins.
• Demanding valuations keep us on the sidelines.

Brokerages On ICICI Prudential Life

Investec

• Maintained ‘Buy’; target price cut to Rs 550 from Rs 580.
• ULIP longevity improving; margins driven by credit life.
• Material improvement on surrenders and persistency.
• Growth recovery is key for re-rating.

CLSA

• Maintained ‘Buy’ with target price of Rs 560.
• Premium growth lagged on high base, margins expand.
• Margins expanded due to rise in share of protection premium, better persistency and change in tax assumptions.
• Expect margins to trend towards 20 percent over the next three years.
• Valuations are at a 50 percent discount to HDFC Life and remains top pick in the sector.

JPMorgan

• Maintained ‘Overweight’ with target price of Rs 520.
• Strong first quarter new business value growth could serve as a near-term catalyst.
• Earnings decline due largely to rising bond yield and higher acquisition cost.
• Positives: product mix enhancement, strong distribution channel and solid balance sheet.
• Believe the key investment case for India’s life insurers is get growth exposure.

CLSA on Info Edge

• Maintained ‘Buy’ with target price of Rs 1,700.
• Naukri revenue as well as billing growth recover.
• 99acres growth momentum maintained.
• Monthly order run rate surge for Zomato and Zomato Gold have been a stellar success.
• PolicyBazaar is likely the next leg of value creation.

Brokerages On Hexaware

Macquarie

• Downgraded to ‘Neutral’ from ‘Buy’; target price raised to Rs 500 from Rs 476.
• Second quarter revenue broadly in line; margins lower than estimates.
• Guidance raised to 12-13 percent from 10-12 percent for CY18.
• Raise calendar year 2018-20 EPS estimates by 2-5 percent largely led by currency movement.
• Downgraded the stock to ‘neutral’ on valuations.

Credit Suisse

• Maintained ‘Underperform’; target price raised to Rs 380 from Rs 360.
• Revenue growth remains solid and ahead of estimates.
• Margins disappointed for second consecutive quarter.
• Negatives: High client concentration, lop-sided nature of growth and margin concerns.
• Current valuations are very high.

Investec on Inox Leisure

• Maintained ‘Buy’; target price cut to Rs 260 from Rs 350.
• Q1 EBITDA marginally below expectations.
• Digital media key overhang on multiplexes.
• Maharashtra government’s irrational take on food and beverages (F&B) to hurt operations.
• Target price cut to factor in 4-7 percent cut in F&B revenues.

Who’s Meeting Whom

• Rallis India to meet Franklin Templeton Investments on July 27.

Insider Trades

• Anuh Pharma promoter and director Bharat Nemchand Shah acquired 13,700 shares from July 19-23.
• Leel Electricals promoter acquired 26,500 shares on July 23.
• Wonderla Holidays promoter acquired 20,000 shares on July 23.
• Sadbhav Infra Project promoter Sadbhav Engineering acquired 19,600 shares on July 19.
• GTPL Hathway promoter acquired 52,000 shares on July 23.

(As reported on July 24)

Bulk Deals

• Adani Enterprises: Asia Investment Corporation sold 80 lakh shares or 0.73 percent equity at Rs 173.25 each.
• Kwality Ltd: Promoter Sanjay Dhingra sold 31.5 lakh shares or 1.31 percent equity at Rs 12.63 each.
• Sri Adhikari Brothers Television: Union Bank of India Tresury Branch sold 2.6 lakh shares or 0.73 percent equity at Rs 5.7 each.

Trading Tweaks

• 8K Miles Software placed under additional surveillance measures (ASM) framework.
• Polaris Consulting to be delisted from today.

F&O Cues

• Nifty July futures ended at 11,142, with a premium of 8 points versus 14.7 points.
• Nifty August futures ended at 11,167.4 premium of 33.4 points.
• Across series: Nifty open interest up 2 percent and Bank Nifty open interest up 3 percent.
• Rollover: Nifty at 36 percent and Bank Nifty at 31 percent.
• India VIX ended at 12.4, down 4 percent.
• Max open interest for July series call at 11,200 strike price call option (open interest at 32.2 lakh, up 5 percent)
• Max open interest for July series put at 11,000 strike price put option (open interest at 55.2 lakh, down 4 percent)

Nifty Earnings To Watch

• Bharti Infratel
• Hero MotoCorp
• Larsen & Toubro

Other Earnings To Watch

• Ambuja Cements
• BHEL
• Canara Bank
• Crompton Greaves Consumer Electricals
• GRUH Finance
• IRB Infra
• JSW Steel
• Jubilant Foodworks
• Jyothy Laboratories
• Karur Vysya Bank
• KPIT Technologies
• Karur Vysya
• Oriental Bank Of Commerce
• PVR
• Shriram City Union Finance
• Syngene International
• SKF India
• Tata Elxsi

Earnings Reaction To Watch

Asian Paints (Q1, YoY)

• Revenue up 15.1 percent at Rs 4,390.28 crore.
• Net profit up 30.6 percent at Rs 558 crore.
• Ebitda up 31.4 percent at Rs 874.5 crore.
• Margin at 19.9 percent versus 17.4 percent.

Also Read: Q1 Results: Asian Paints’ Profit Beats Estimates

Team Lease Services (Q1, YoY)

• Revenue up 19.7 percent at Rs 1,021.3 crore.
• Net profit up 32.9 percent at Rs 21.8 crore.
• Ebitda at Rs 20.2 crore versus Rs 13 crore.
• Margin at 2 percent versus 1.5 percent.

Borosil Glassworks (Q1, YoY)

• Revenue up 44.1 percent at Rs 72.2 crore.
• Net profit up 109.4 percent at Rs 11.1 crore.
• Ebitda at Rs 6.9 crore versus Rs 3.06 crore.
• Margin at 9.5 percent versus 6.1 percent.

Music Broadcast (Q1, YoY)

• Revenue up 7.7 percent at Rs 75.7 crore.
• Net profit up 25 percent at Rs 13.5 crore.
• Ebitda up 17.6 percent at Rs 26.1 crore.
• Margin at 34.5 percent versus 31.6 percent.

KSB Pumps (Q2, YoY)

• Revenue up 20.6 percent at Rs 253.6 crore.
• Net profit up 39.9 percent at Rs 21.4 crore.
• Ebitda up 20.2 percent at Rs 28.6 crore.
• Margin at 11.3 percent versus 11.3 percent.

NR Agarwal Industries (Q1, YoY)

• Revenue up 20.3 percent at Rs 332.5 crore.
• Net profit up 35.5 percent at Rs 29 crore.
• Ebitda at Rs 51.6 crore versus Rs 32.9 crore.
• Margin at 15.5 percent versus 11.9 percent.

Hexaware Technologies Q2 QoQ

• Revenue up 9.2 percent at Rs 1,137 crore.
• Net profit up 14 percent at Rs 153 crore.
• EBIT up 8.2 percent at Rs 159 crore.
• Margin flat at 14 percent.

Rane Brake Lining (Q1, YoY)

• Revenue up 21.7 percent at Rs 122.3 crore.
• Net profit down 9.6 percent at Rs 6.6 crore.
• Ebitda down 5.5 percent at Rs 14.7 crore.
• Margin at 12 percent versus 15.4 percent.

Symphony (Q1, YoY)

• Revenue down 23.2 percent at Rs 146 crore.
• Net profit down 48.7 percent at Rs 20 crore.
• Ebitda down 39.3 percent at Rs 17 crore.
• Margin at 11.6 percent versus 14.7 percent.

ICICI Prudential Life Insurance (Q1, YoY)

• Net premium income up 12.8 percent at Rs 5,437.8 crore.
• Profit down 30.6 percent at Rs 281.6 crore.
• Solvency Ratio at 2.35 versus 2.89.

• Music Broadcast announces Rs 57 crore buyback of 14.8 lakh shares or 2.59 percent equity at Rs 385 each.
• Punj Lloyd files plea challenging maintainability of ICICI Bank’s application before NCLT.
• Gujarat Sidhee Cements’ kiln operations resume after a suspension due to rains.
• Andhra Bank gets capital infusion of Rs 2,019 crore from the central government.
• Oil India signs joint venture pact for construction of grid pipelines in eight North-East states.
• HDFC to consider raising up to $1.5 billion via foreign currency loan. (Bloomberg)

• NSE asks clients to get ready for derivative trading till 11:55 P.M.
• Pakistan heads into its most controversial election in years
• Mehul Choksi moves to Antigua, gets local passport
• Vijay Mallya eyeing India return?
• Maratha quota stir turns violent; call given for Mumbai bandh today
• India is said to mull selling $2.6-billion NHPC stake to NTPC
• It’s getting real: World economy feels the bite from trade war
• Trump’s wild tweets gives Raamdeo Agrawal sleepless nights
• Housing downturn puts $20 billion in Indian bank loans at risk
• Bond-market veteran braces for rising emerging-market defaults

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.1 percent to 11,150 as of 8:22 a.m.

Asian stocks traded mixed Wednesday and the yen edged lower as the Bank of Japan left its bond buying unchanged and a rally in Chinese equities stalled. Treasuries ticked higher and the dollar steadied.

Shares were up in Japan, Hong Kong, while stocks slipped in China, South Korea and Australia.

Currencies

• The yen was flat at 111.26 per dollar.
• The offshore yuan held at 6.8054 per dollar.
• The Bloomberg Dollar Spot Index held near the lowest in a week.
• The euro bought $1.1693.
• The British pound traded at $1.3155 after rising 0.3 percent.

Commodities

• West Texas Intermediate crude rose 0.5 percent to $68.85 a barrel.
• Gold rose 0.2 percent to $1,226.70 an ounce.
• The Bloomberg Commodity Index increased 0.5 percent on Tuesday.

Here are some key events coming up this week:

• Earnings season continues with the following tech companies among those reporting: Facebook, Amazon.com, Twitter, Advanced Micro Devices, Qualcomm and Intel. They are joined by global financial giants Deutsche Bank, Nomura and Visa. Others include Nissan and Shell.
• Pakistan holds national elections Wednesday.
• The European Central Bank’s policy decision is Thursday.
• U.S. gross domestic product probably increased by about 4.2 percent at an annualized rate in the second quarter, the most since 2014, economists forecast ahead of Friday’s data.