Sensex, Nifty Surge For Sixth Day Powered By Auto, Energy Stocks; FPIs Stay Net Buyers

FPIs have stood as net buyers for twelve days in a row. It is the longest buying streak by FPIs till date in 2022.

Foreign portfolio investors net bought equities worth Rs 1,376.84 crore today, as per data from the National Stock Exchange.

On the other hand, domestic institutional investors net sold equities worth Rs 136.24 crore on Friday.

Institutions had net bought Rs 3,978.31 crore worth of equities last month in July alone; the only month of the year of 2022 so far when institutions remained net buyers.

Institutions have net bought Rs 11,838.1 crore worth of equities so far in August and net sold equities worth Rs 36,601.59 as yet in 2022.

India's stock benchmarks rose, aided by gains in auto, energy, oil and gas, fmcg and power stocks, amid slid in brent crude prices. Sensex and Nifty have risen for six days in a row, equalling the longest winning streak in 2022, so far.

The Sensex gained over 0.6% (nearly 380 points) to 59,842.21. The Nifty advanced by similar magnitude to 17,825.25. Today 42 of Nifty 50 stocks rose while eight fell. HDFC Life Insurance, Adani Ports and Eicher Motors were among the top gainers.

The broader indices have outperformed their larger peers, with both MidCap and SmallCap gauges adding over 1%. Barring Metal and Telecom measures, all the other 17 sectoral indices compiled by BSE Ltd. rose, with Auto index gaining over 2.5%.

The market breadth was skewed in the favour of bulls. About 1,995 stocks rose, 1,553 fell and 157 remained unchanged.

Rakesh Jhunjhunwala’s Rare Enterprises backed Concord Biotech has sought SEBI’s approval to go public.

• Concord’s IPO will be a pure offer-for-sale, selling 2.09 crore shares.

• IT hardware maker Balaji Solutions’ IPO will be a combination of an offer-for-sale and fresh issue.

• The owner of Foxin brand will sell up to 75 lakh existing shares and issue shares worth up to Rs 120 crore.

Source: DRHPs

Shares of HDFC Asset Management Co. Ltd. rose over 13%, most in at least a year. Trading volume surged 18 times the 30-day average. Share price crossed above 200-day simple moving average, indicating potential upward price momentum. The relative strength index of the stock is 71, suggesting it may be overbought.

• About 11.96 million shares changed hands in a large trade on BSE, according to data compiled by Bloomberg. Buyers and sellers are not immediately known.

• Of the 24 analysts tracking the company, 18 maintain 'buy', four suggest 'hold' and two recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 0.3%.

Source: Bloomberg

• The ​​Gujarat Cooperative Milk Marketing Federation, marketer of Amul products, has raised milk prices by Rs 2 per litre in all markets effective from Aug. 17.

• Prices of Amul's Gold, Shakti and Taaza milk brands will be increased by Rs 2 per litre.

• After Amul, Mother Daily to hike milk prices. Mother Dairy will hike milk prices by Rs 2 per litre with effect from Wednesday.

Source: PTI

• European markets advance amid strong earnings from world's biggest miner BHP Group and slide in oil prices.

Source: Bloomberg

Shares of Mahindra & Mahindra Ltd. rose over 3%, most in a week to a 52-week high of Rs 1,298.7 apiece.

The uptick comes after M&M and Volkswagen Group announced their intention to expand their cooperation. The companies signed a term sheet for the supply of Modular Electric Drive matrix (MEB) electric components for M&M's electric platform INGLO, the company new electric SUV family.

• This marks the deepening of the partnership between the two companies after they signed a deal earlier this year.

• The supply of over million units including equipment of five all-electric SUVs with MEB components will be covered, under the collaboration. Mahindra & Mahindra and Volkswagen will also explore other opportunities for collaboration, including e-mobility, vehicle projects, charging and energy solutions and cell manufacturing.The final supply agreement is likely to be completed by end of 2022.

• The announcement comes after Mahindra showcased its new electric SUV family at the Mahindra Born EV vision unveil event in United Kingdom on August 15. Anand Mahindra, the group chairman said that the time was ripe to enter four-wheeler space and unveiled five electric SUVs. The company intends to introduce first of the five e-SUVs towards the end of 2024, starting from Indian market.

Source: Exchange filing, Bloomberg

Shares of DFM Foods hit 20% upper circuit for the second day in a row. Trading volume is thrice the 30-day average. Share price crossed above 200-day simple moving average, indicating potential upward price momentum. The relative strength index of the stock is 79, suggesting it may be overbought.

• The uptick comes after the company said that its promoters AI Global (Cyprus) Investments and AI Darwin (Cayman) proposed to acquire all shares held by public shareholders and voluntarily delist the shares from BSE, NSE. JM Financial has been appointed as the manager to the delisting proposal.

• The company believed that the move would provide increased operational flexibility to support its business and reduce compliance costs, according to an exchange filing. The company added that delisting proposal would give shareholders a chance to realise immediate and certain value for their equity shares.

Source: Exchange filing, Bloomberg

• July Wholesale Prices rise 13.93% YoY (Bloomberg Estimate: 13.7%)

• Primary article prices rise 15.04% YoY

• Wholesale food prices rise 10.77% YoY

• Fuel, power, lighting prices rise 43.75% YoY

• Manufactured product prices rise 8.16% YoY

Source: Ministry of Commerce & Industry

India's stock benchmarks advanced, aided by gains in auto, realty, fmcg stocks, amid a slide in brent crude price to $94 per barrel.

The Sensex rose over 0.5% (nearly 350 points) to 59,802.89. The Nifty 50 also advanced by similar magnitude to 17,903.85. Today 40 of Nifty 50 stocks rose while 10 fell.

The broader indices outperformed their larger peers rising over 0.75%. Barring telecom and metal gauges, all the other 17 sectoral measures gained.

The market breadth is skewed in the favour of bulls. About 1,873 stocks rose, 1,542 fell and 182 remained unchanged.

Shares of Sun TV Network rose 5% in intraday trade, most in three weeks after the company reported net income for the quarter-ended June that beat the average analyst estimate, post market hours on Friday. The regional languages-TV channels operator also declared an interim dividend of Rs 5 per equity share of face value of Rs 5 each for the financial year 2022-23.

Q1FY2022-23 Results (Standalone, YoY)

• Net profit at Rs 491.68 crore Vs. Rs 389.76 crore

• Revenue at Rs 1,193.90 crore Vs. Rs 810.10 crore

• EBITDA at Rs 763.83 crore Vs. Rs 494.97 crore

• EBITDA margin at 63.98% Vs. 61.1%

Trading volume is nearly five times the 30-day average. Share price crossed above the 200-day simple moving average, indicating potential upward price momentum. The relative strength index of the stock is at 71, suggesting it may be overbought.

Of the 19 analysts tracking the company, 14 maintain 'buy', four suggest 'hold' and one recommends 'sell'. The return potential of the stock is 13.9%.

Analysts believe that recovery in movie business, improvement in viewership share and high valuations of its IPL team in the recently concluded auctions as positive triggers for the company.

Here's a gist of the brokerages' view of the company's earnings.

Motilal Oswal

• Reiterates 'buy' and hikes target to Rs 550 from Rs 500, an implied upside of 15.26%

• Believes that Q1 performance was healthy despite weakness in ad revenue growth.

• Higher contribution from movie business is a positive factor.

• Loss in market share and delayed OTT investments remain key concerns.

• Believes that upbeat valuation in the auction of new IPL teams makes the stock's valuation compelling.

• Expects Sun TV to maintain growth momentum in viewership.

• Raises FY2022-23 EPS estimate by 4% and factors in 6% CAGR over FY22-24.

Emkay

• Reiterates 'hold' and maintains target price at Rs 470, an implied downside of 1.51%.

• Believes that Sun TV's ad revenue print was better than Zee Entertainment due to improved ad spends by regional advertisers, improvement in viewership share in Tamil and lack of FTA channel-linked impact.

• Strong theatrical revenue from Tamil movie 'Beast' aided movie production segment while weak performance by its IPL team weighed on revenue.

• Expects sustained recovery in ad revenue due to improved spends and stable market share in Tamil.

ICICI Direct

• Reiterates 'hold' and maintains target price at Rs 460.

• Q1 performance was strong from earnings/margin front.

• Believes that overall viewership share improvement is a positive trigger.

• Expects recovery in Tamil/Telugu/Kannada markets in the upcoming quarters.

• See the ramp up in SunNXT content is a positive as the company lags in spending on OTT.

Source: Exchange filing, Brokerage notes, Bloomberg

• Senior Advocate Mukul Rohatgi said some issues between the two sides have been settled.

• Maran and Spicejet are in a dispute related to share transfers since 2017.

• The bench presided by Chief Justice of India Justice NV Ramana adjourned the hearing for four weeks.

Shares of UTI Asset Management rose over 17%, most in over five months since February 28. Trading volume is 35 times the 30-day average. Share price crossed above 100-day moving average. The relative strength index of the stock is 84, suggesting it may be overbought.

• The surge comes after report by CNBC-TV18 that Tata Asset Management is eying a 'significant' stake in UTI Asset Management, citing undisclosed sources.

• Tata Asset Management has not confirmed the report, so far.

Source: CNBC-TV18, Bloomberg

Prem Watsa’s Fairfax and Virat Kohi-backed Go Digit has filed its draft prospectus for an IPO.

• The IPO will be a combination of fresh issue of shares and an offer for sale.

• The firm will issue equity shares of up to Rs 1,250 crore and sell 10.94 crore shares.

Source: DRHP

Shares of Muthoot Finance tumbled 15%, most in over two years since March 2020 when the markets corrected due to the restrictions following the outbreak of Covid-19 pandemic.

Trading volume is 22 times the 30-day average. Share price crossed below the 50-day simple moving average, suggesting potential downward price momentum.

Of the 21 analysts tracking the company, 15 maintain 'buy', four suggest 'hold' and two recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 32.6%.

The sharp decline comes after the company reported net income for the June quarter than missed average analyst estimates.

Q1FY2022-23 Results (Standalone, YoY)

• Net income at Rs 802.01 crore Vs. Rs 971.16 crore

• Revenue at Rs 2,509.27 crore Vs. Rs 2,714.93 crore

• Interest income at Rs 2,481.57 crore Vs. Rs 2,683.71 crore

Since the earnings, at least two analysts have downgraded the stock.

Here's a gist of the brokerages' view of the company's earnings and growth prospects.

Motilal Oswal

• Downgrades the stock to 'neutral' from 'buy' and raised the target to Rs 1,250 from Rs 1,240, an implied upside of 5.27%.

• Believes that the growth visibility is lacking and cites NIM compression as the reason for Q1 miss.

• Sequential decline in gold AUM, elevated advertising costs, aggressive brand campaigns characterised the June Quarter which saw an extension in trade-off between loan growth and margin.

• Aggression of banks and gold loan fintechs could leave Muthoot Finance vulnerable as customers can choose banks and gold fintechs as they offer gold loans at relatively lower interest rates.

• Cuts FY23/24 estimates by 16%/4% to account for elevated costs and moderation in spreads.

• Believes that there are limited triggers for further upside in the stock as there is a lack of loan growth visibility and structural changes in gold loan NBFC business.

• Believes that demand for gold loans is not very buoyant.

Nirmal Bang

• Reiterates 'buy' and slashes target to Rs 1,443 from Rs 1,493, still an implied upside of 21.53%.

• Weakening trends in core gold loan business and spread compression dragged net income in Q1.

• Total customer base fell 1.4% YoY as well as sequentially due to price-led competition by banks .

• Reduces full-year growth estimates to account for the sequential decline in Q1.

• Believes that new customer acquisition is a key monitorable for the company in the upcoming quarters.

Prabhudas Lilladher

• Reiterates 'buy' and maintains target price at Rs 1431 apiece.

• Maintains EPS estimates for FY23 and FY24 on hopes of improvement in yields in the coming quarters as teaser loans are repriced.

• Company expects AUM on gold loans to rise in the next two to three quarters and also anticipates vehicle finance business to show marked improvement.

Shares of Hero MotoCorp jumped over 3%, most in two weeks to Rs 2,845.65 apiece, just 3.68% off the 52-week high of Rs 2,954.45.

The rise comes despite the company reported net income, revenue and EBITDA for the quarter-ended June that missed average analyst estimates, post market hours on Friday.

Q1FY2022-23 (Standalone, QoQ)

• Revenue up 13% to Rs 8,392.5 crore Vs Rs 7,422 crore (Bloomberg estimates: Rs 8,709 crore)

• EBITDA up 14% at Rs 941 crore Vs Rs 828 crore (Bloomberg estimates: Rs 1,087 crore)

• EBITDA margin unchanged at 11.2% (Bloomberg estimates: 12.5%)

• Net profit flat at Rs 624.5 crore compared with Rs 627 crore (Bloomberg estimates: Rs 766 crore)

Trading volume is quadruple the 30-day average. Since the earnings, at least two analysts have downgraded the stock. Of the 49 analysts tracking the company, 33 maintain 'buy', 11 suggest 'hold' and five recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 6.2%.

The stock is among the top gainers in Nifty Auto index. Analysts tracking the company noted that the operating performance was adversely impacted due to high costs. However they expect domestic demand to recover in the upcoming festive season. They also added that the low vulnerability to EVs, stable commodity costs to aid earnings in the next two-three years.

Source: Brokerage notes, Bloomberg, Exchange filing

Shares of SpiceJet rose over 4.5%, most in intraday trade since Thursday. The rise comes after the company entered into settlement agreement with aircraft lessor Goshawk Aviation and its affiliated leasing entities Wilmington Trust SP Services (Dublin), Sabarmati Aviation and Falgu Aviation.

• The agreement is related to two Boeing 737 MAX aircraft and one Boeing 737-800 NG aircraft.

• The parties have agreed to settlement all disputes related to aircraft lease agreement.

• All proceedings, before UK court and Execution Proceedings before the Delhi High Court will be withdrawn.

• The dispute pertained to unpaid dues by SpiceJet. Goshawk and its leasing entities had leased three planes to SpiceJet. SpiceJet decided to spin off the assets prompting Goshawk to approach the court to stop the transfer till the lease dues were fully paid.

• The move will allow the entry of two more Boeing 737 MAX aircraft into SpiceJet's fleet.

• SpiceJet will report its earnings for the quarter-ended June on August 22. of the 10 analysts tracking the company, two maintain 'buy', four suggest 'hold' and four recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies a downside of 39.8%.

Source: Exchange filing, Bloomberg

Shares of Max Healthcare Institute Ltd. rose nearly 3%, most in a week, after a weak open. Trading volume surged over 216 times the 30-day average. Share price crossed above 50-day as well as 200-day simple moving average, indicating potential upward price momentum.

• According to data compiled by Bloomberg, about 26.47 crore shares (constituting 27% of equity) changed hands in today's session. The buyers, sellers are not known immediately.

• Earlier, Moneycontrol had reported that KKR will sell its entire stake in Max Healthcare to raise Rs 9000 crore through block sale. KKR unit Kayak Investments held 27.5% stake in Max Healthcare as of June 30.

• All nine analysts tracking the company maintain 'buy'. The return potential of the stock is 19.1%.

Source: Bloomberg, Moneycontrol

India's stock benchmarks advanced, aided by gains in auto, banking, information technology and consumer discretionary stocks, after technology firms powered U.S. markets on Monday.

The S&P BSE Sensex rose over 0.5% (300 points) to 59,785.85. The NSE Nifty 50 also advanced by similar magnitude to 17,778.85. Today 37 of the Nifty 50 stocks rose while 13 fell.

The broader indices almost mirrored their larger peers. Barring Basic Materials, Healthcare and Metal gauges, all the other 16 sectoral indices compiled by BSE Ltd. advanced with Auto index adding 1%.

The market breadth is skewed in the favour of bulls. About 1,699 stocks rose, 886 fell and 165 remained unchanged.

Infrastructure firm KEC International bagged new orders worth Rs 1,313 crore across its various businesses, Transmission & Distribution (T&D), Railways, Civil, Oil & Gas pipelines and Cables.

Source: Exchange Filing

• U.S. Dollar Index at 106.5

• U.S. 10-year bond yield at 2.77% on Monday

• Brent crude down 1.2% to $93.9 per barrel

• Nymex crude at $88.3 per barrel

• SGX Nifty up 0.28% to 17,834.50 as of 8:35 a.m

• Bitcoin up 0.06% to $24,088

Source: Bloomberg

• Cargo handling firm Navkar Corp has sold its Valsad unit to Adani Logistics for Rs 835 crore.

• Adani Logistics will also pay additionally for trade receivables and inventories.

Source: Exchange filing

Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.

SpiceJet entered into settlement agreement with aircraft lessor Goshawk Aviation and its affiliated leasing entities Wilmington Trust SP Services (Dublin), Sabarmati Aviation and Falgu Aviation.

• The agreement is related to two Boeing 737 MAX aircraft and one Boeing 737-800 NG aircraft.

• The parties have agreed to settlement all disputes related to aircraft lease agreement.

• All proceedings, before UK court and Execution Proceedings before the Delhi High Court will be withdrawn.

• The move will allow the entry of two more Boeing 737 MAX aircraft into SpiceJet's fleet.

Source: Exchange filing

GST may go in for another round of rate changes to fix instances of inverted duty and withdraw some exemptions, reported The Economic Times citing people aware of the matter.

• A group of Ministers headed by Basavaraj Bommai, the Chief Minister of Karnataka is working on the rate changes.

• Inverted duty structures (rate of tax on input is greater than rate of tax on outward supplies, which discourage value addition) prevail in automobiles, some electronic items, urea and other fertiliser inputs.

Source: The Economic Times

• Ambuja Cements: The Competition Commission of India approved Gautam Adani’s the acquisition of Holcim Group’s stake in Ambuja Cements and ACC.

• Jindal Steel & Power: The company appointed Bimlendra Jha as Managing Director with effect from Aug. 14. Jha will replace Vidya Rattan Sharma after the completion of his term on Aug. 13.

• HDFC/HDFC Bank: The merger between the two companies received the approval of CCI.

• Indiabulls Real Estate: The company’s joint Managing Director Gurbans Singh and Chief Financial Officer resigned with effect from Aug. 12.

• DFM Foods: Promoters AI Global (Cyprus) Investments and AI Darwin (Cayman) to acquire all shares held by public shareholders and voluntarily delist the shares from BSE, NSE. JM Financial has bee appointed as the manager to the delisting proposal.

Hero Motocorp Q1 FY23 (Standalone, QoQ)

• Revenue up 13% to Rs 8,392.5 crore Vs Rs 7,422 crore (Bloomberg estimates: Rs 8,709 crore)

• EBITDA up 14% at Rs 941 crore Vs Rs 828 crore (Bloomberg estimates: Rs 1,087 crore)

• EBITDA margin unchanged at 11.2% (Bloomberg estimates: 12.5%)

• Net profit flat at Rs 624.5 crore compared with Rs 627 crore (Bloomberg estimates: Rs 766 crore)

Life Insurance Corporation of India Q1 FY23 (Consolidated, QoQ)

• Revenue down 20% at Rs 1,69,601 crore Vs 2,12,230 crore

• Net profit down 75% to Rs 603 crore Vs Rs 2,409 crore

• Solvency at 1.88 Vs 1.85

• VNB at Rs 1,861 crore

• VNB margin at 13.6%

Oil and Natural Gas Corporation (Consolidated, QoQ)

• Revenue up 17% at Rs 1,82,894 crore Vs Rs 155,920 crore (Bloomberg estimate: Rs 45,530.7)

• EBITDA fell 23% at Rs 18,855.01 crore Vs Rs 24,411.23 crore (Bloomberg estimate: Rs 28,379.8 crore)

• EBITDA margin 10% Vs 16%

• Net profit up 13% at Rs 11,936.64 crore Vs Rs 10,550.29 crore

Aegis Logistics Q1 FY23 (Consolidated, QoQ)

• Revenue up 6% at Rs 2,235 crore Vs Rs 2,104 crore

• EBITDA fell 41% at Rs 84.52 crore Vs Rs 143.08 crore

• EBITDA margin 4% Vs 7%

• Net profit up 9% at Rs 103.37 crore Vs Rs 94.75 crore

Apollo Tyres Q1 FY23 (Consolidated, YoY)

• Revenue up 30% at Rs 5,942 crore Vs Rs 4,584 crore

• EBITDA up 22% at Rs 689.80 crore Vs Rs 566.7 crore

• EBITDA margin 11.6% Vs 12.3%

• Net profit up 49% at Rs 190.68 crore Vs Rs 127.78 crore

Astral Q1 FY23 (Consolidated, YoY)

• Revenue up 73% at Rs 1,213 crore Vs Rs 701 crore

• EBITDA up 33% at Rs 171.70 crore Vs Rs 129.4 crore

• EBITDA margin 14% Vs 18%

• Net profit up 20% at Rs 88.9 crore Vs Rs 73.9 crore

Eureka Forbes (Consolidated, QoQ)

• Revenue up 41% at Rs 526 crore Vs Rs 374 crore

• EBITDA up 2x at Rs 46.05 crore Vs Rs 20.07 crore

• EBITDA margin 9% Vs 5%

• Net profit up 4x at Rs 19.8 crore Vs Rs 4.62 crore

Restaurant Brands Asia Q1 FY23 (Consolidated, QoQ)

• Revenue up 22% at Rs 489 crore Vs Rs 400 crore

• EBITDA up 44% at Rs 29.22 crore Vs Rs 20.23 crore

• EBITDA margin 6% VS 5%

• Net loss narrowed to Rs 50.88 crore Vs Rs 81.53 crore

Zee Entertainment Enterprises Q1 FY23 (Consolidated, QoQ)

• Revenue fell 21% at Rs 1,846 crore Vs Rs 2,323 crore

• EBITDA fell 53% at Rs 235.76 crore Vs Rs 506.8 crore

• EBITDA margin 13% Vs 22%

• Net profit fell 41% at Rs 106.6 crore Vs Rs 181.93 crore

Asian equities are set for a cautious open on Tuesday amid rising concerns over economic slowdown, dollar strengthening and a commodity slide.

Japanese, Australian and Hong Kong equities are set for a muted start after technology firms such as Tesla Inc. and Apple Inc. powered the S&P 500 index to close higher on Monday.

At 5:55 a.m., the Singapore-traded SGX Nifty--an early barometer of India's benchmark Nifty 50--traded 0.34% higher at 17,846 points.

Oil fell below $89 a barrel on demand concerns and the possible return of Iranian supplies.