Nifty Logs Best Day In Nearly Four Weeks, FIIs Bought Rs 156.08-Crore Stocks On July 18

India's stock benchmarks logged best day in nearly four weeks, and extended winning streak for the second day, aided by gains in information technology, metal, banking stocks.

The Sensex gained 760 points (1.41%) to 54,521.15. This is the most the 30-stock gauge gained in nearly four weeks since June 21. The Nifty 50 also advanced by similar magnitude to 16,278.50. Today 42 of the Nifty 50 stocks rose while eight fell.

The broader indices almost mirrored their larger peers. Barring FMCG measure, all the other 18 sectoral indices compiled by BSE advanced.

The market breadth was skewed in the favour of bulls. About 2,357 stocks rose, 1,089 fell and 166 remained unchanged.

Foreign Portfolio Investors net bought equities worth Rs 156.08 crore on July 18, data from National Stock Exchanged showed. The domestic institutional investors were net bought stocks worth Rs 844.33 crore. Institutions have net sold Rs 2,092.49 crore worth of equities in July alone and Rs 54,510.49 crore so far this year.

• Yield on the 10-year bond fell 4bps to 7.40%, during the session below closing little changed.

Source: Bloomberg

• Rupee fell 0.13% (10 paise) to close at a new low of 79.98 against the U.S. dollar.

Source: Bloomberg

• KKR says its affiliate Kayak Investments is not in discussions with any strategic acquirer or Indian business conglomerate in relation to a sale of its shareholding in Max Healthcare.

Source: Exchange filing

Shares of HeidelbergCement India fell 2.5% in intraday trade, most in over two weeks after the company reported net income for the quarter-ended June that missed average analyst estimate.

Q1 Results (YoY)

• Net income down 25% at Rs 51.61 crore Vs. Rs 68.65 crore (Bloomberg consensus estimate: Rs 54.1 crore)

• Revenue youp 6% at Rs 589.89 crore Vs. Rs 566.45 crore (BBG estimate: Rs 609 crore)

• EBITDA down 27% at Rs 95.05 crore Vs. Rs 131.09 (Bloomberg estimate: Rs 102 crore)

• EBITDA margins at 16.11% Vs. 23.14%

Trading volume is 3.5 times the 30-day average. Of the 23 analysts tracking the company, 11 maintain 'buy', seven suggest 'hold' and five recommend 'sell'. The return potential of the stock is 14.3%.

Source: Exchange filing, Bloomberg

Though the geopolitical situation and the consequent elevated commodity prices have imparted considerable uncertainty…India’s real GDP growth is expected to be still above 7% in 2022-23.

• This is in contrast to many advanced and emerging market economies where downward revision in GDP growth rate has been made.

• The government is closely monitoring the global price movements and their impact on India’s economy through trade.

• Government has also taken various supply side measures like cut in excise duty on petrol and diesel, special excise duty/cess on the export of petrol, diesel and aviation turbine fuel that are likely to alleviate inflationary pressures.

Source: Written reply to Lok Sabha

• Rupee fell 10 paise to new low of 79.98, against the U.S. dollar.

Source: Bloomberg

• Global factors such as Russia-Ukraine conflict, soaring crude oil prices, tightening of global financial conditions are the major reasons for the weakening of Indian Rupee against U.S. dollar.

• Currencies such as British pound, Japanese Yen and the Euro have weakened more than the Indian Rupee against the U.S. dollar.

• Indian Rupee has strengthened against Pound, Yen and Euro in 2022.

• The depreciation of a currency is likely to enhance export competitiveness. It also makes imports more costly.

• The RBI regularly monitors the foreign exchange market and intervenes in situations of excess volatility.

• Outflow of foreign portfolio capital is a major reason for the depreciation of Indian Rupee. FPIs have withdrawn about $14 billion from Indian equity markets in FY2022-23 so far.

Source: Lok Sabha

• RBI is of the view that cryptocurrencies should be prohibited, says Finance Minister Nirmala Sitharaman.

• Value of cryptocurrencies rests solely on the speculations and expectations of high returns that are not well anchored, so it will have a destabilising effect on the monetary and fiscal stability of a country.

• In view of the concerns expressed, RBI has recommended framing of legislation on this sector.

• Cryptocurrencies are borderless and require international collaboration to prevent regulatory arbitrage. Therefore any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.

Source: Parliament reply

Shares of HCL Technologies rose nearly 3%, most in three weeks. Trading volume is nearly twice the 30-day average.

• The company announced that it signed multi-year deal with Dutch chemicals firm DSM.

• HCL Technologies will modernise DSM's core I.T. business systems and help in transitioning to product-based operating model, using in Fenix 2.0 digital execution framework.

• Of the 47 analysts tracking the company, 28 maintain 'buy', 14 suggest 'hold' and five recommend 'sell'. The return potential of the stock is 21.4%.

Source: Exchange filing, Bloomberg

• European markets open higher, amid rise in Asian equities.

Source: Bloomberg

• Indian rupee rose 16 paise (02.0%) to 79.72, during the session, before erasing gains.

• Rupee is 10 paise away from the 80 levels against the U.S. dollar, as of 1:50 p.m.

Source: Bloomberg

Shares of Bank of Maharashtra jumped nearly 6%, the most in seven weeks.

Trading volume is seven times the 30-day average. Share price crossed above 50-day simple moving average, indicating potential upward price momentum.

The uptick comes after net profit more than doubled YoY in the quarter-ended June.

Q1FY2023 Results

• Net income up 117% at Rs 451.90 crore Vs. Rs 208.01 crore YoY

• Gross NPA at 3.74% Vs. 3.94% QoQ

• Provisions up 50% at Rs 548.41 crore Vs. Rs 365.38 crore QoQ

• Interest income Rs 3,457.47 crore Vs. Rs 3,103.55 crore YoY

• Interest expense Rs 1,771.76 crore Vs. Rs 1,697.63 crore YoY

• Other income at Rs 24.83 crore Vs. Rs 28 crore YoY

Source: Exchange Filing, Bloomberg

India's stock benchmarks advanced, aided by broad based gains led by information technology, metal and capital goods stocks.

The Sensex added over 500 points (over 1%) to 54,307.79. The Nifty advanced by similar magnitude to 16,218.25. Today 39 of the Nifty 50 stocks rose, while 11 fell.

The MidCap and SmallCap measures outperformed their larger peers, rising 0.3%. All 19 sectoral indices compiled by BSE Ltd. advanced with Information Technology gauge rising 3%.

The market breadth is skewed in the favour of bulls. About 2,256 stocks rose, 1,081 fell and 172 remained unchanged.

Shares of Federal Bank rose 4%, the most in over two weeks.

• Trading volume is more than thrice the 30-day average.

• The relative strength index on the stock is 71, suggesting it may be overbought.

• The uptick comes after analysts reiterated 'buy' on the lender citing healthy credit growth and lower provisions in Q1.

• Of the 34 analysts tracking the company, 31 maintain a 'buy' and three suggest 'hold', according to Bloomberg data. The 12-month consensus price target implies an upside of 22.8%.

Source: Bloomberg, Brokerage notes, Exchange filing

Gujarat State Fertilizers & Chemicals informed exchanges that its Urea-II plant has been shut down immediately after noticing leakage in bottom thermo well of Urea reaction on July 16.

• The estimated time to prepare standby Urea reactor will be at least 12 days, according to company, which expects 13 days of production loss and 10,400 million tonnes of neem urea due to the shutdown.

• The company's other Urea plant Urea-1 will continue to produce 320 million tonnes per day production during the next 13 days.

Source: Exchange filing

• The company has reduced MRP of soyabean oil, sunflower oil, mustard oil, bran oil, groundnut oil, vanaspati and palmolein oil.

• The steep reduction in oil prices is in continuation to sharp fall in global price.

• Recently, the food ministry called a meeting of edible oil industry bodies and manufacturers to deliberate on price reduction.

Source: Company statement

Yes Bank is no longer under the reconstruction scheme, Prashant Kumar, MD & CEO, Yes Bank

• Have come out of the reconstruction scheme successfully

• This is the first time a financial institution of this size has successfully exited reconstruction

• As of June 30, our deposit book has reached Rs 1.93 lakh crore

• Trying to make our loan book more granular.

• Working on granularising our loan book even on the corporate loan book, taking limited exposures

• Strategy of debulking and derisking large corporate book has led to a slower growth of 9% in that portfolio.

• On track to achieve 0.75% return on assets in FY23.

• Despite all other issues being resolved, the bank was still grappling with a large gross NPA number.

• The bank is carrying a 81% provision coverage against this pool.

  It was important to find a solution for this issue.

• Engaged with EY in August 2020 to discuss options to resolve this portfolio.

• Took a call to create a partnership to sell the entire pool of assets.

• This joint venture will not only take care of Yes Bank’s assets, but will also look to resolve assets at other financial institutions.

• This is an opportunity to create a credible platform to resolve stressed assets.

• NARCL was created by the government on similar lines.

• Feel that it would be good for the system if there are multiple such platforms.

• The additional advantage with JC Flowers as a partner is that they already have a functioning ARC.

• Got guidance from the regulator that they would support this initiative, as long as the bank holds 20% stake in the ARC.

• Going exactly by that guidance of the regulator.

• Launched a Swiss challenge auction on Saturday, as is required

Source: Yes Bank briefing

Shares of SpiceJet rose over 6%, most in nearly four weeks. The sharp uptick comes after Delhi High Court rejected a PIL seeking to stop the operation of SpiceJet airline.

• The PIL had cited breach of professional and safety obligations as the premise of its prayer.

• The Delhi High Court said that it cannot stop operation of the airline on the basis of a PIL and press reports, according to PTI.

Source: Bloomberg, PTI

Shares of airlines like SpiceJet and InterGlobe Aviation surged after the oil marketing firms lowered jet fuel prices by about 2%.

• The move, the second such reduction in 2022 so far, comes amid volatility in crude prices.

• Indian Oil Corp slashed ATF prices to Rs 1,38,147.93 per kiloliter in New Delhi, effective July 16.

• ATF prices are revised every fortnight. In the last revision on July 1, prices were kept unchanged.

Source: Indian Oil Statement, Bloomberg

Shares of internet and security solutions provider Quick Heal Technologies jumped nearly 20%, most in at least a year.

• Trading volume is 96 times the 30-day average. The relative strength index on the stock is 78, suggesting the stock may be overbought.

• The uptick comes after the company said that it will consider the proposal for buy back of fully paid up equity shares on July 21. The company will also announce its June-quarter earnings on the same day.

Source: Exchange filing, Bloomberg

Infrastructure companies like Larsen & Toubro, which have witnessed margin headwinds due to rise in commodity costs, could reverse course and see margin expansion as key commodity prices fall, according to Nomura.

• In its note on Sunday, Nomura estimated Larsen and Toubro and KEC International to witness margin expansion of 45-80bps and 27-40bps for FY23F and FY24F, respectively. This will be driven primarily by correction in steel prices.

• The brokerage also expected ABB and Siemens to gain from commodity cost correction and export-focused firms like AIA Engineering and Cummins to benefit from decline in freight costs.

Source: Nomura note, Bloomberg

• Prestige Estates sales in Q1 at Rs 3,012.1 crores, up 310% year-on-year.

• Collections at ​​Rs 2,146.40 crore, up 110% year-on-year.

Source: Exchange filing

Shares of Bharat Electronics Ltd. rose over 6%, the most in over three months, after the company reported net income for the quarter-ended June that beat average analyst estimate.

Q1FY2022-23 (Standalone, YoY)

• Net profit up 3,770% at Rs 431.49 crore Vs. Rs 11.15 crore (Bloomberg consensus estimate: Rs 210 crore)

• Revenue up 90% at Rs 3,112.78 crore Vs. Rs 1,634.59 crore (Bloomberg estimate: Rs 2,110 crore)

• EBITDA up 717% at Rs 513.47 crore Vs. Rs 62.86 crore

• EBITDA margin at 16.50% Vs. 3.85%

• Company recommended a final dividend of 150% (Rs 1.50 per share of Re 1 each) for FY2021-22 in its board meeting on May 23.

• Order book on the company, as of July 1, 2022, stood at Rs 55,333 crore.

Trading volume is 18 times the 30-day average. Of the 29 analysts tracking the company, 26 maintain 'buy', two suggest 'hold' and one recommends 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 6.7%.

Since the earnings on Saturday, ICICI Securities, Edelweiss Capital and Antique Stock Broking reiterated 'buy', while Morgan Stanley reiterated 'Overweight/In-Line'.

Source: Bloomberg, Exchange filing, Brokerage notes

India's stock benchmarks open higher, aided by gains in information technology, metal, realty, power, capital goods stocks, amid rise in global equities.

The S&P BSE Sensex jumped over 400 points (0.79%) to 54,187.87. The NSE Nifty 50 advanced by similar magnitude to 16,182.35. About 46 of the Nifty 50 stocks rose while four fell.

The broader indices almost mirrored their larger peers. All the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Information Technology, Metal, Capital Goods indices leading the gains.

The market breadth is skewed in the favour of bulls. About 1,922 stocks rose, 490 fell and 118 remained unchanged.

• Yield on the 10-year bond fell 2bps to 7.42% at the open.

Source: Bloomberg

• Indian currency rose 0.16% to 79.75 against the U.S. dollar, at the open.

• Rupee has fallen against the dollar for six sessions in a row

Source: Bloomberg

• Sequent Scientific: The company has appointed PV Raghavendra Rao as the chief financial officer effective from July 25.

• Coforge: To consider proposal for an interim dividend on July 22.

• Tata Steel: Tata Steel Netherlands has agreed to reduce its carbon dioxide emissions by 5 megatons by 2030. The company also promised to be “climate neutral” by 2045.

• Coal India, Adani Enterprises: India's largest miner has cancelled its maiden tender for short-term coal imports in which Adani Enterprises had emerged as L1 bidder, according to The Financial Express.

L&T Technology Services Q1 FY23 (Consolidated, QoQ)

• Revenue up 6.7% at Rs 1,873.7 crore

• EBITDA up 5.4% at Rs 401 crore

• EBITDA margin 21.4% vs 21.67%

• Net profit up 4.6% at Rs 274.2 crore

JSPL Q1 FY23 (Consolidated, YoY)

• Revenue up 23% at Rs 13,045.41 crore

• EBITDA down 24% at Rs 3,438.74 crore

• EBITDA margin at 26.36% vs 42.78%

• Net profit up 193 times at Rs 2,770.88 crore

HDFC Bank Q1 FY23 (YoY)

• Net profit up 19% at Rs 9,196 crore

• NII up 14.5% at Rs 19,481 crore

• NII margin at 4% of total assets

• Gross NPAs at 1.28% vs 1.17% in Q4 FY22

• Net NPAs at 0.35% vs 0.32% in Q4 FY22

• Provisions down 34% at Rs 3,188 crore

Asian stocks and U.S. equity futures rose amid a dip in the dollar after bets on aggressive Federal Reserve interest-rate hikes cooled.

Shares climbed on Monday in Australia and South Korea following a Wall Street rally Friday led by banks on earnings optimism. Japan is shut for a holiday.

At 7:32 a.m., the Singapore-traded SGX Nifty -- an early barometer of India's benchmark Nifty 50 -- rose 1.09% at 16,214.5.

The dollar slipped, with a gauge of the greenback’s strength down from a record high. Oil fell as the market digests slowing demand and whether supply will be increased after President Joe Biden’s visit to Saudi Arabia.