Sensex, Nifty Slide In Final Hour To Close At Day's Low; FPIs Turn Net Buyers

India's stock benchmarks swung between gains and losses for the most part of the session, before slipping in the final hour to close at day's low and snapping a seven-day winning streak, dragged by FMCG and banking stocks. Today's decline comes after the rise on ceremonial Muhurat trading session on Monday, the best in 14 years. The markets will be closed for a local holiday today.

The Sensex fell 0.48% (288 points) to 59,543.96. The Nifty 50 also declined by similar magnitude to 17,656.35. Today 20 of Nifty 50 stocks advanced, one remained unchanged while 29 declined.

Tech Mahindra, Maruti Suzuki, JSW Steel, Larsen & Toubro and Eicher Motors were the top gainers while Nestle India, HUL, Kotak Mahindra Bank, Bajaj Finserv and Britannia declined most among index constituents.

The broader indices outperformed their larger peers with MidCap jumping over 0.45% and SmallCap slipping 0.35%. Ten of the 19 sectoral indices compiled by BSE declined with FMCG index losing over 1%.

The market breadth was skewed in the favour of bears. About 1,442 stocks rose, 1,976 fell and 111 remained unchanged.

Overseas investors snap two days of net buying to turn net sellers on Tuesday.

As per data from the National Stock Exchange, foreign portfolio investors net sold equities worth Rs 247.01 crore.

Similarly, Domestic institutional investors turned net buyers and bought equities worth Rs 872.88 crore.

Institutions have net bought Rs 7,007.53 crore worth of equities in October so far and net sold Rs 30,819.08 crore worth of Indian equities till date in 2022.

Yield on the 10-year bond fell 7bps to 7.44%, steepest decline in three weeks since October 4.

Source: Bloomberg

• Indian currency fell 4 paise to 82.73 at the close, against the U.S. dollar.

Source: Bloomberg

Shares of FSN E-Commerce Ventures fell over 3% to record low Rs 1,108.05, below the IPO price of Rs 1,125 apiece. Trading volume is 0.9 times the 30-day average.

The relative strength index of the stock is 23, suggesting it may be oversold.

Of the 19 analysts tracking the company, 13 maintain 'buy', four suggest 'hold' and two recommend 'sell'. The return potential of the stock is 46.3%.

Source: Bloomberg

• PNB has 1.25 million shares change hands in a large trade.

• Details of buyers, sellers are not immediately.

Source: Bloomberg

Shares of Indraprastha Gas surged nearly 6.5%, most in four weeks since September 27 and are on course to extend winning streak to the fourth day.

Trading volume is more than twice the 30-day average. Share price crossed above 200-day moving average, suggesting potential upward price momentum.

The company reported 2% rise in consolidated net profit for the quarter-ended September on Saturday.

Q2FY2023 (Consolidated, YoY)

• Net income at Rs 426.84 crore Vs. 418.63 crore

• Revenue at Rs 3,922.02 crore Vs. Rs 2,015.99 crore

• EBITDA at Rs 527.52 crore Vs. Rs 530.18 crore

• EBITDA margin at 13.45% Vs. 26.29%

The company also appointed Sukhmal Jain as an Additional Director and Chairman of the company effective from October 23, following the cessation of Arun Kumar Singh as Chairman and Director from October 23.

Of the 35 analysts tracking the company, 27 maintain 'buy', six recommend 'hold' and two suggest 'sell'. The return potential of the stock is 15.3%.

Source: Exchange filings, Bloomberg

India's stock benchmarks declined in a volatile session so far, dragged by losses in FMCG, Telecom, banking stocks while Metal, auto, information technology stocks advanced.

The Sensex declined 0.26% (over 150 points) to 59,674.63. The Nifty 50 fell by similar magnitude to 17,686.95. Today 26 of index constituents rose while 24 declined. Tech Mahindra, JSW Steel, Maruti Suzuki, Tata Motors and Hindalco gained the most while Nestle India, Britannia, HUL, Kotak Mahindra Bank and Bajaj Finserv declined the most among Nifty 50 stocks.

The broader indices outperformed their large peers with MidCap gaining 0.34% and SmallCap gauge remaining little changed. Eleven of the 19 the sectoral measures complied of BSE advanced.

The market breadth is skewed in the favour of bears. About 1,391 stocks rose, 1,853 fell and 119 remained unchanged.

Shares of United Spirits jumped over 4%, most in three weeks since October 4. Trading volume is 2.5 times the 30-day average.

Share price crossed above 200-day simple moving average, indicating potential upward price momentum.

The rise comes after the company reported net income for the second quarter that beat average analyst estimate, post market hours on Friday. The stock rose nearly 2% on Muhurat trading session as well.

Q2FY2023 (Consolidated, YoY)

• Revenue up 1% at Rs 8,283 crore

• EBITDA down 7% at Rs 437.3 crore

• EBITDA margin at 5.3% vs 5.7%

• Net profit up 90% at Rs 553.1 crore (Bloomberg consensus estimate: Rs 232 crore)

Of the 24 analysts tracking the company, 16 maintain 'buy', six suggest 'hold' and two recommend 'sell'. The return potential of the stock is 1.6%. Since the Q2 earnings, Nuvama maintained 'hold', ICICI Securities retained 'add' and Macquarie reiterated 'underperform'.

Here's a gist of the brokerages view on the company Q2 results and growth prospects.

Dolat Capital

• Raises stock to 'buy' from 'reduce' with the target price raised to Rs 977 from Rs 830 apiece, an implied return of 19.06%

• Believes that the robust Q2 performance was driven by volume growth in P&A segment.

• Observes that new MD & CEO has imbibed confidence of profitable double-digit revenue growth through intervents in product and market segments.

• Increases FY23/FY24 revenue estimates by 6/9% and EPS by 8/11% to factor it strong Q2 performance.

ICICI Securities

• Reiterates 'add' with target price of Rs 940, an implied return of 12.52%.

• Believes that the robust revenue growth was driven by 14% YoY volume growth even as gross margins contracted to a multi-year low.

• Observes that the Q2 performance needs to vieweed in the context of operational headwinds like scotch negotiation in select states, Delhi RTM changes and inflation woes.

• Believes that the concerns of the part of markets is too myopic.

Source: Bloomberg, Exchange filing, Bloomberg

Yield on the 10-year bond fell 6bps, most in over a week since October 17, to 7.45%, during the session.

Source: Bloomberg

• Indian currency rose 10 paise to 82.59 during the session before reversing gains to slide 9 paise to 82.78 against the U.S. dollar.

• The Rupee was little changed at 82.72, as on 11:03 am.

Source: Bloomberg

Shares of RBL Bank fell over 6.1%, most in nearly a months since September 26. The stock fell 4.5% on Muhurat trading session on Monday.

The company reported net income for the quarter-ended September that missed the average analyst estimate, on Saturday.

Net income came in at Rs 202 crore compared to the Bloomberg analyst estimate of Rs 212 crore. The GNPA fell 3.8% Vs. 4.08 QoQ (Bloomberg estimate: 3.94%) while interest income rose 10% YoY to Rs 2,176 crore Vs. estimate of Rs 2,182 crore.

Trading volume is more than thrice the 30-day average. The company reported numbers on Saturday.

Of the 22 analysts tracking the company, 11 maintain 'buy', three suggest 'hold' and eight recommend 'sell'. The return potential of the stock is 6.8%.

Source: Bloomberg, Exchange filing

Shares of Hindustan Unilever fell 1.7%, extending decline from Monday when they lost over 3%.

The declines comes despite the company reporting net income for the quarter-ended September that beat average analyst estimate, post market hours on Friday.

Q2 FY23 (Consolidated, YoY)

• Revenue up 16% at Rs 15,144 crore

• EBITDA up 8% at Rs 3,479 crore

• EBITDA margins at 23% vs 24.7 %

• Net profit up 22% at Rs 2,665 crore (Bloomberg estimate: Rs 2,391 crore)

The company's CEO Sanjiv Mehta said in a statement that demand environment remained 'challenging with inflation impacting consumption'

Trading volume is 2.5 times the 30-day average. Analyst updates in the past seven days included two downgrades.

Kotak Institutional equities said that gross margin recovery would be slower than expecte due to persistent inflation in commodities and Rupee depreciation.

Nirmal bang said that operating performance was largely in-line with estimates, and remained hopeful on recovery, while Motilal Oswal expected the EBITDA margins to recover with a lag.

Nomura, however, observed that the company remained a leader among peers even in difficult circumstances and termed the performance in home care 'strong', BPC 'steady' and F&R 'lacklustre'. The global brokerage firm expected HUL to benefit from demand uncoiling in discretionary categories.

Of the 42 analysts tracking the company, 28 maintain 'buy', 11 suggest 'hold' and three recommend 'sell'. The return potential of the stock is 12.3%.

Source: Exchange filing, Bloomberg, Brokerage notes.

Shares of Tech Mahindra rise over 2.25%, most since October 20.

The company informed exchanges post market hours on Friday that it entered into a share subscription agreement to acquire 26% shares in Upendra Singh Multi Transmission Pvt. for Rs 48 lakh. The acquisition would enable Tech Mahindra to procure 1.5 Mega Watt of solar energy for its captive consumption at facilities located in Noida, Uttar Pradesh. The indicative time for completion of the acquisition is four months from issuance of the offer letter.

The company is scheduled to report its quarterly earnings for the three-month period ended September on November 1. The company beat EPS estimates six times in the past 10 fiscal periods. On Saturday, Tech Mahindra said that it will also consider a proposal for payment of interim dividend for FY2022-23, it is board meeting on October 31 and November 1.

Of the 47 analysts tracking the company, 31 maintain 'buy', 10 suggest 'hold' and six recommend 'sell'. The return potential of the stock is 7%.

Source: Exchange filing, Bloomberg

Shares of Multi Commodity Exchange of India Ltd. jumped nearly 8.6%, most in nearly eight months since March 2.

Trading volume is over 25 times the 30-day average. The relative strength index of the stock is 74, suggesting it may be overbought.

The stock nearly 4% on Muhurat trading session on Monday.

The company reported financial results for the September quarter on Saturday.

Q2FY2023 (Consolidated, QoQ)

• Net profit at Rs 63.27 crore Vs. Rs 41.46 crore

• Revenue at Rs Rs 127.4 crore Vs. Rs 108.79 crore

• EBITDA at Rs 65.60 crore Vs. Rs 49.26 crore

• EBITDA margin at 51.49% Vs. 45.10%

Of the 11 analysts tracking the company, eight maintain 'buy', three suggest 'sell'. The return potential of the stock is 8.4%.

Source: Bloomberg, Exchange filing

• ITC has 2.87 million shares changed hands in a large trade.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

Shares of ICICI Bank rose nearly 2%, on course to rise for the third day in a row, to a record Rs 943.5 apiece.

The rise comes after the private lender reported net income above average analyst estimate for the quarter-ended September while asset quality improved.

ICICI Bank Q2 FY23

• Net profit at Rs 7,557.8 crore vs Rs 5,511 crore (YoY) (Bloomberg consensus estimate: Rs 7,174 crore)

• NII at Rs 14,787 crore vs 11,690 crore (YoY)

• Gross NPAs: 3.19% vs 3.41% (QoQ)

• Net NPAs: 0.61% vs 0.7% (QoQ)

Trading volume is nearly thrice the 30-day average.

Nomura said that the Q2 numbers were strong driven by NII and fee income and offset by higher expenses, but maintained that the company remains in pole position among peers. The global brokerage firm also saw opportunity to reduce international exposure and repatriate capital back to subsidiaries and raised EPS by 1.2%/3%/0% for FY23F/24F/25F.

Kotak Institutional Equities said that the Q2 performance was 'solid', aided by loan growth, NIM expansion and decline in credit costs and observed that it liked the progress of the bank thus far. It added that the positive investment thesis on the stock rested on the belief that the global economic slowdown would have a lower impact on the bank. It also said that the strong outperformance of the lender in recent years implied that further re-rating would be very gradual.

Of the 55 analysts tracking the company, 54 maintain 'buy', one suggests 'hold'. The return potential of the stock is 15%.

Source: Exchange filing, Bloomberg, Brokerage notes

India's stock benchmarks opened higher before erasing gains in the initial minutes, as gains in FMCG, Utilities, Banking stcks were offset by gains in information technology, auto stocks.

The S&P BSE Sensex opened 171 points higher at 60,002.96, before erasing gains. This is the first time the 30-stock gauge reclaimed 60,000 after a month since September 20.

The NSE Nifty 50 is little changed at 17,733.95. Today 29 of index constituents advanced while 21 fell. Tata Motors, Maruti Suzuki, Dr. Reddy's, JSW Steel and Eicher Motors gained the most while UPL, IndusInd Bank, Power Grid, Axis Bank, Nestle India declined

The broader indices underperformed their larger peers with MidCap and SmallCap gauges losing over 0.1%. Ten of the 19 sectoral indices compiled by BSE Ltd. declined.

The market breadth is skewed in the favour of bears. About 1,120 stocks rose, 1,412 fell and 96 remained unchanged.

• Yield on the 10-year bond fell 3bps to 7.48%, at the open.

Source: Bloomberg

• Indian currency appreciated 1 paise to 82.68 at the open, against the greenback.

Source: Bloomberg

Mahindra & Mahindra, Ceat, Vardhman Special Steels, Orient Cement, Bigbloc Construction, CCL Products India, ZF Commercial Vehicle Control

• Reliance Industries: The company will demerge its financial services arm and list on the stock exchanges as Jio Financial Services. The company will also demerge its subsidiary Reliance Projects and Property Management Services.

• Vodafone Idea: The company will issue Indian rupee denominated optionally convertible, unlisted, unsecured and unrated debentures worth Rs 1,600 crore to ATC Telecom Infrastructure on preferential basis.

• State Bank of India: The bank hiked interest rates on most of its term deposits under Rs 2 crore in the range of 25-80 basis points with effect from Oct. 22.

• Biocon: Biocon Biologics integrated insulins manufacturing facility in Malaysia accorded Certificate of GMP Compliance by the European Medicines Agency following a site inspection in July 2022.

• DLF: The company’s board approved raising funds to the tune of Rs 1,500 crore through NCDs and/or debt securities.

• Hindustan Aeronautics: The company received Air System Design Organisation approval certificate, making it the first defence PSU to receive CEMILAC's Design Organisation approval as per the new Design Organisation Approval Scheme.

• Borosil Renewables: The company will acquire solar glass maker GMB and glass company Interfloat Group for a total consideration of 7.5 million euros (Rs 61.07 crore).

• Kirloskar Industries: The board has approved to convening an EGM of the shareholders of Kirloskar Brothers.

• Welspun Corp: Associate company East Pipes Integrated Company for Industry in the Kingdom of Saudi Arabia has announced that its shareholders have approved the board's recommendation to grant bonus shares in the ratio of 1:2 through the capitalisation of SAR 105 million (Rs 230.79 crore) from retained earnings.

• Tech Mahindra: The company will acquire 26% equity shares in Upendra Singh Multi Transmission for a consideration of Rs 48 lakh.

• Reliance Power: The company made preferential allotment of 20.58 crore warrants of Rs. 15.55 apiece on a private placement basis to VFSI Holdings under public category.

• V-Guard Industries: The company made further investment of Rs 31.39 crore in wholly owned subsidiary V-Guard Consumer Products and allotted 3.14 crore equity shares of Rs each.

• Tata Consumer Products: The company made a preferential issue of 74.6 lakh shares of Re 1 each to Tata Enterprises (Overseas) at an issue price of Rs 765.16 apiece.

• Adani Ports And Special Economic Zone: The company incorporated a wholly owned subsidiary Tajpur Sagar Port for the purpose of development of deep-sea port on design, build, finance, operate and transfer basis at Tajpur, West Bengal.

• Garware Technical Fibres: The board approved buyback of up to 2.4 lakh shares with a face value of Rs 10 from all shareholders through the tender offer route at Rs 3,750 apiece, for an aggregate amount not exceeding Rs 90 crore.

• REC: The company clarified before the exchanges that its board in January 2021, had approved loan assistance of Rs 4,260 crore to SJVN Thermal in respect of Buxar Thermal Power Plant, in the normal course of business, and this facility had insignificant impact on its loan book.

• Garden Reach Shipbuilders & Engineers: The company signed 13 MoUs during the recent Defence Expo 2022, ranging from covering exports targets to other business avenues.

Reliance Industries Q2 FY23 (Consolidated, QoQ)

• Revenue up 4.3% at Rs 2,32,863 crore

• EBITDA fell 25% at Rs 28,416 crore

• EBITDA margin at 12.4% vs 15.6%

• Net profit down 20% at Rs 15,512 crore

Hindustan Unilever Q2 FY23 (Consolidated, YoY)

• Revenue up 16% at Rs 15,144 crore

• EBITDA up 8% at Rs 3,479 crore

• EBITDA margins at 23% vs 24.7 %

• Net profit up 22% at Rs 2,665 crore

Kotak Mahindra Bank Q2 FY23

• Net Profit at Rs 2580.68 crore vs Rs 2,032 crore (YoY)

• NII at 5,099 crore vs 4,021 crore (YoY)

• Gross NPAs: 2.08% vs 2.24% (QoQ)

• Net NPAs: 0.55% vs 0.62% (QoQ)

Yes Bank Q2 FY23

• Net Profit at Rs 152.82 crore vs Rs 225.5 crore (YoY)

• NII: Rs 1,991 crore vs Rs 1,512 crore (YoY)

• Gross NPAs: 12.89% vs 13.45% (QoQ)

• Net NPAs: 3.6% vs 4.7% (QoQ)

ICICI Bank Q2 FY23

• Net profit at Rs 7,557.8 crore vs Rs 5,511 crore (YoY)

• NII at Rs 14,787 crore vs 11,690 crore (YoY)

• Gross NPAs: 3.19% vs 3.41% (QoQ)

• Net NPAs: 0.61% vs 0.7% (QoQ)

JSW Steel Q2 FY23 (Consolidated, YoY)

• Revenue up 10% at Rs 41,778 crore

• EBITDA down 59% at Rs 1,752 crore

• EBITDA margin at 4.2% vs 32%

• Net loss of Rs 848 crore against net profit of Rs 9,791 crore

Torrent Pharma Q2 FY23 (Consolidated, YoY)

• Revenue up 7% at Rs 2,291 crore

• EBITDA up 5% at Rs 679 crore

• EBITDA margins at 29.6% Vs 30.3%

• Net profit down 1% at Rs 312 crore

SBI Life Insurance Q2 FY23 (Consolidated, YoY)

• Revenue up 8% at Rs 27,525 crore

• Net profit up 52% at Rs 377 crore

• Solvency ratio 2.19 Vs 2.12

DLF Q2 FY23 (Consolidated, YoY)

• Revenue down 12% at Rs 1,302 crore

• EBITDA down 5% at Rs 436.67 crore

• EBITDA margin at 33.5% vs 31%

• Net profit up 26% at Rs 477.04 crore

United Spirits Q2 FY23 (Consolidated, YoY)

• Revenue up 1% at Rs 8,283 crore

• EBITDA down 7% at Rs 437.3 crore

• EBITDA margin at 5.3% vs 5.7%

• Net profit up 90% at Rs 553.1 crore

Bajaj Holdings Q2 FY23 (Consolidated, YoY)

• Revenue up 28% at Rs 188 crore

• EBITDA up 24% at Rs 151.08 crore

• EBITDA margin at 81% vs 83%

• Net profit up 10% at Rs 1242.79 crore

VIP Industries Q2 FY23 (Consolidated, YoY)

• Revenue up 56% at Rs 515 crore

• EBITDA up 71% at Rs 71.58 crore

• EBITDA margin 14% vs 13%

• Net profit up 2X at Rs 43.4 crore

• Declared interim dividend of Rs 2.5 per share

Chalet Hotels (Consolidated QoQ)

• Revenues down 2% at Rs 247.84 crore

• Net profit at Rs 15.73 crore vs loss of Rs 13.66 crore

• EBITDA down 19% at Rs 87.71 crore

• Margins at 35.39% vs 43%

Tejas Networks (Consolidated QoQ)

• Revenue up 75% at Rs 219.94 crore

• Profit after tax at Rs 1.07 crore

• EBITDA at Rs 21.54 crore vs loss of Rs 7.32 crore

• Margins at 9.8%

Credit Access Grameen (Consolidated)

• Net interest income up 39.9% at Rs 516.2 (YoY)

• Net profit up 171% at RS 172.03 crore (YoY)

• Gross NPAs at 2.17% vs 7.67% (QoQ)

• Net NPAs at 0.77%

• U.S. Dollar Index at 111.79

• U.S. 10-year bond yield at 4.21% on Friday

• Brent crude up 0.23% to $93.47 per barrel

• Nymex crude at $84.82 per barrel

• SGX Nifty down 0.06% to 17,832.5 as of 6:37 a.m.

• Bitcoin down 0.49% to $19,287.1