Thank you readers! Here are the key highlights from today's session
- Market Fails To Hold Recovery, Closes With Minor Cuts
- Nifty & Sensex Slip 0.7-0.8%; Nifty Bank Falls 0.5%
- Midcap Index Ends With A Minor Gain; Mkt Breadth Favours Declines
- Nifty Slips 105 Points To 15,209 & Sensex 400 Points To 51,704
- Nifty Bank Falls 187 Points To 36,911 While Midcap Index Rises 72 Pts To 23,388
- PSU Banks Amongst Top Gainers On Privatisation Reports
- Bank Of India, Bank Of Maha, Central Bank Close At Upper Circuit
- SBI Amongst Top Nifty Gainers On The Buzz Of An Upgrade
- HDFC Twins, Kotak Bank & Infosys Drag While RIL, SBI & Hero Support Nifty
- Happiest Minds Rises 20% After Nomura Initiates Coverage With A Buy Rating
- ITI, Dixon Tech Gain On Cabinet’s Approval For Telecom Equipment PLI
- Page Ind Falls More Than 3% After CEO’s Resignation
Closing Bell: Sensex ends 400 points lower, Nifty below 15,200; IT, financials drag
The Indian indices ended over half a percent lower on Wednesday mainly dragged by the financial and IT stocks. Meanwhile losses in FMCG and pharma sectors also weighted on the sentiment. However, Nifty PSU Bank rallied during the day, up nearly 6 percent on privatisation buzz. The Sensex ended 400 points lower at 51,703 while the Nifty fell 104 points to settle at 15,209. Nifty Pharma lost the most, down 1.7 percent. The Nifty Bank IT and Nifty Fin Services indiced lost over a percent each while Nifty Bank and Nifty Fin Servcies fell around 0.5 percent each. On the Nifty50 index, Hero Moto, BPCL, SBI, Adani Ports and Powergrid were teh top gainers while Nestle, Asian Paints, Maruti, Bajaj Finserv and HDFC Bank led the losses.
Market Watch: Prakash Diwan Market Expert
“If you see Adani Ports in perspective of freight corridor coming in and the kind of basket of ports presence that the company has created for itself I think it brings in a huge level of potential efficiencies that will come in. One could probably into this at lower levels and probably wait for at least for next two years for it to kind of start giving out that kind of returns you would expect on 18-20 percent CAGR basis.”
Happiest Minds Tech
“The way it has moved up 35-40 percent in just about a weeks’ time does make you worry that there will always be a time when you can buy these and there is still a lot of floating stock that is available post the IPO that won’t have changed hands. So at higher levels you will probably see some dispersion and that is when you would get in closer to Rs 420-410 and then kind of look at it from a longer term perspective.”
Expect earnings momentum to continue; positive on capital goods and PSUs: Roha Asset Managers
Dhiraj Sachdev, Managing Partner & CIO of Roha Asset Managers on Wednesday said that Q3 earnings witnessed a sharp rebound and demand recovery. He said that it was has been one of the best earnings seasons and expects the earnings momentum to continue as the economy revives. “The corporate result season for December quarter concluded and we were compiling the data. It shows that there is significant improvement and upgrades that is happening across the sector. As the economy has happened and the number of COVID cases have contained, Q3 results witnessed a sharp rebound and demand recovery along with cost savings. So, it has been one of the best earnings season and fairly broad-based. So we expect the earnings momentum to sustain despite partly being pent up given that there will be a further revival in the economy,” he said in an interview with CNBC-TV18. More here
S P Apparels share price jumps 20% on new order
S P Apparels share price jumped 20 percent intraday on February 17 after the company bagged a new order worth Rs 25 crore. The company’s order book now stands at Rs 240 crore as of today. The share touched its 52-week high Rs 231 and 52-week low Rs 57.95 on 14 January, 2020 and 26 May, 2020, respectively.
Have reduce rating on IndusInd Bank, says HDFC Securities' Krishnan ASV
HDFC Securities has a ‘reduce’ rating on IndusInd Bank, said Krishnan ASV, Lead Analyst for BFSI at the domestic brokerage on Wednesday.Explaining the rationale for the rating, Krishnan said, “We have a reduce rating. The colour of the book doesn’t change significantly. I believe the RoE normalisation will take a bit longer. That is the reason why we have a reduce rating there. This was in the works, there has been a little bit of extension given to the promoters, so for the last week or so, this has been doing the rounds that the money has to come in this week. I think this is a fairly priced stock.”
RailTel Corporation IPO subscribed 4.2 times, HNIs portion fully booked on second day
The public offer of RailTel Corporation of India, which has been profitable since FY07 and consistently paying dividends since FY08, has continued to see good subscription for the second day of bidding on February 17. It is subscribed 4.24 times so far with strong support from retail investors whose reserved portion has seen a 8 times subscription. The Rs 819-crore IPO has received bids for 25.95 crore equity shares against offer size of over 6.11 crore shares, the subscription data available on the exchanges showed. The portion set aside for non-institution investors was subscribed 1.32 times and that of employees 1.1 times, while the qualified institutional buyers put in 1 percent bids against their reserved portion.
Expect margin recovery in the near term: KEC International
KEC International has won orders worth over Rs 1,600 crore. Vimal Kejriwal, MD & CEO, KEC International speaking to CNBC-TV18 said, “Roughly Rs 1,200 crore are from Power Grid and another Rs 100 crore from another transmission clients and then we have Rs 250 crore odd from a water pipeline and the rest are from smart city and cables.” On margins, Kejriwal said, “Margin profile is lower because these were quoted sometime back when the metal prices were slightly low. So right now the margins are low, but we do expect that the margins should go back to normal 8-9 percent but as of today the margins are lower in some of the orders, but other are okay.” More here
CRISIL study on NPAs: NBFC stressed assets may hit Rs 1.5-1.8 lakh crore by FY21
Stressed assets of non-banking financial services companies (NBFCs) are expected to reach Rs 1.5-1.8 lakh crore, or 6.0-7.5 percent of the asset under management (AUM) by the end of the financial year 2021, according to credit rating agency Crisil. However, the one-time Covid-19 restructuring window and MSME restructuring scheme will limit the reported gross non-performing assets (GNPA) of the NBFC, Crisil said. It noted that unlike previous crises, current challenges on account of COVID-19 impacted almost all NBFC asset segments. Most impacted segment as per CRISIL to see deterioration in asset quality in the NBFC sector is real estate finance followed by unsecured loans i.e. personal loans and consumer loans. More here
Morgan Stanley upgrades India's growth estimates for FY22 & FY23
Morgan Stanley has raised the gross domestic product (GDP) growth estimates by 200 bps for FY22 and by 50 bps for FY23. Therefore, the current projection stands at 6.7 percent versus 6.2 percent earlier. The report says that the brokerage expects growth recovery to be faster than previously anticipated for India and the country is on the cusp of a virtuous growth cycle. Watch accompanying video of CNBC-TV18’s Ekta Batra for more details
Base case for US 10-year yield is below 1%: HSBC
The Budget, the Parliament and the Reserve Bank's latest policies have put a lot of problems and uncertainties before India's financial markets, more so, its bond and forex market. Hitendra Dave, Head of Global Banking & Markets at HSBC India, talks about the US yields and factors impacting them. In an interview with CNBC-TV18, Dave said, "The US being the mother market for all fixed income markets or actually all markets global, if their yields go up then all bond markets globally tend to have the same direction."
More here
Motilal Oswal Financial: Expect autos, BFSI, metals to perform; financials to be sector of 2021
Motilal Oswal Financial Services expects better performance in auto, banking, financial services and insurance (BFSI) and metals companies, said Gautam Duggad, Head of Research-Institutional Equities at the firm on Wednesday. According to them, financials could turn out to be the sector of the year 2021. Speaking in an interview to CNBC-TV18, Duggad said, “If I were to point out three sectors which are driving earnings for FY22 for our Nifty estimate then it is auto, BFSI and metals. I still find a lot of value in private sector banks and financials will turn out to be the sector of the year as far as 2021 is concerned because the numbers have been strong, underlying operating drivers have been strong, management commentary has been upbeat as well as asset quality and restructuring has been far better than what people were fearing in June-July. So there are pockets where you can still find value.”
More here
Bearish on steel; outlook for copper is good, says S&P Global Platts’ Paul Bartholomew
S&P Global Platts is getting a bit bearish on steel since its recent surge, said Paul Bartholomew, Senior Managing Editor of the firm on Wednesday. Speaking in an interview with CNBC-TV18, he said, “Coming out of Chinese New Year holiday next weeks, many people in the market are not sure where the price direction is going to head. So it’s a bit of a bearish assessment creeping in at the moment.” Bartholomew also said that the steel market may start seeing a drop in demand given high prices.
For more details, watch the video
PSU Banks in focus on privatisation buzz: Bank of Maharashtra, BoI jump 20%, up 40% in 2 days
PSU Banks continued to remain in focus on Wednesday, extending gains for the second straight session on reports of privatisation of some lenders. The Nifty PSU Bank index soared 5.5 percent in an otherwise weak market as compared to a half percent decline in benchmarks. Media reports suggested that the government has shortlisted four mid-sized state-run banks for privatisation. Shares of these 4 PSBs - Bank of Maharashtra, Bank of India, Indian Overseas Bank and Central Bank of India jumped 17-20 percent in intra-day deals. In the past two days, shares of these banks have risen over 40 percent each.
Warren Buffett's Berkshire cuts Apple’s holding but reveals three New Secret Buys
Business Tycoon Warren Buffet's Berkshire Hathaway has bought new stakes in Verizon stock, Chevron (CVX) and Marsh & McLennan, according to a regulatory filing on Tuesday. These bets were confidential and not revealed in the third quarter regulatory filing. Interestingly, the conglomerate has cut its stake in Apple by 6 percent but the iPhone maker remains the number 1 stock in his portfolio in terms of market value. Berkshire's stake in Apple is still valued at a staggering $120 billion, according to another filing.
It's the number 2 stock in the portfolio in terms of the number of shares. According to a report in Investors.com, the American ace investor Verizon stock is worth $8.62 billion for 147 million shares, which now account for 3 percent of Berkshire's total portfolio. In terms of the number of shares, Buffet's stake makes American telecommunications firm 6th in his portfolio. Among the stocks that Berkshire dumped entirely were Pfizer, JPMorgan Chase, Barrick Gold, M&T Bank and PNC Financial. More here
FM Nirmala Sitharaman to chair SEBI board meet
It’s the SEBI’s first board meeting post a union budget, and as per the protocol, the finance minister would be chairing this board meeting. As far as the agenda is concerned, this board meeting would particularly look at making it easier for large IPOs issues to come on the exchanges and get listed. SEBI may soon allow a smaller float for large IPOs issues. We learnt that for companies that intend to have a post listing market cap of about Rs 10,000 to Rs 1 lakh crore for them the minimum dilution may be reduced to Rs 1,000 crore plus 5 percent of value exceeding Rs 10,000 crore. Watch the video for more
Rajesh Exports bags order worth Rs 1,352 crore
Gold refiner Rajesh Exports on Wednesday said the company has secured an order worth Rs 1,352 crore. "Rajesh Exports has bagged a first major prestigious order post-COVID worth Rs 1,352 crore of designer range of gold jewellery from Germany. The said order is to be completed by March 31, 2021," the company said in a regulatory filing. Rajesh Exports said this is the first major order accepted by the company after the outbreak of pandemic. Till recently international passenger flights were not operating normally leading to a constraint in shipping the goods due to which it was not viable to accept orders, as per Rajesh Exports.
Expect growth in FY22 to be at 30-35% over FY21, says NCC
NCC's third-quarter revenue was lower on a year-on-year basis. Margins have improved but are still down sequentially. YD Murthy, Executive Vice President-Finance of NCC spoke to CNBC-TV18 to talk about its Q3 performance. “Topline is down in all the first three quarters mainly because of pandemic and slow down of the economy. But if you see the sequential growth, we have reported 30 percent topline growth and 240 percent bottom-line growth in the second quarter. Likewise in the third quarter, we have reported about 24 percent topline growth compared to the second quarter, likewise profit also has grown.” More here
Adani Ports shares jump 5% on acquisition of Dighi Port Limited; Citi retains 'buy' call
Shares of Adani Ports and Special Economic Zone (APSEZ) rose 5 percent to hit a new high in intra-day deals on Wednesday after the company completed the acquisition of Dighi Port Limited (DPL) for Rs 705 crore. DPL is the 12th port to join APSEZ’s string of economic gateways across the eastern and western coast of India. This acquisition would establish the company’s footprint in Maharashtra, the largest contributor to India’s GDP, the company said in a press release. Brokerage house Citi retained a buy rating on the stock post the acquisition with a target at Rs 715 per share. It believes consolidation is continuing in the industry and the valuation is attractive, especially given good quality underlying business.
Nestle declines 5% as December quarter earnings miss estimates; Credit Suisse downgrades stock
Shares of FMCG major Nestle fell 5 percent on Wednesday after the firm posted a 2.3 percent year-on-year (YoY) growth in profit in the December quarter, missing analysts' expectations. Profit in the quarter under review came in at Rs 483.3 crore versus Rs 472.6 crore year-ago period. The company follows the calendar year as its financial year. The stock fell as much as 5 percent to the day's low of Rs 16,360 per share on the BSE. In the last 1 year, the firm has seen a flat performance as compared to a 26 percent rise in Nifty50. The sentiment was also weighed after global brokerage Credit Suisse downgraded the stock to 'neutral' on stretched valuations after its Q4 earnings. As per the brokerage, the firm sees a steady double-digit growth but there is limited room for any surprise going ahead. More here
Continue to hold Nestle; expect rerating in IndusInd Bank, Tata Consumer, says Deven Choksey
Nestle India reported a 2.25 percent rise in its net profits for the quarter ended December, while its revenue grew some 9 percent. Deven Choksey of KRChoksey continues to hold the stock. He believes any correction in the price of IndusInd Bank would be a welcome correction because he expects the stock to go into a rerating mode in the future. Choksey believes public sector undertakings (PSUs) always hold huge potential. As far as metal commodities are concerned, he expects a bull run. For more, watch the video.
Cairn Energy files case in US to push India to pay $1.2 billion award
Cairn Energy has filed a case in a U.S. district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India, a court document showed, ratcheting up pressure on the government to pay its dues. In December, an arbitration body awarded the British firm damages of more than $1.2 billion plus interest and costs. The tribunal ruled India breached an investment treaty with Britain and said New Delhi was liable to pay. Cairn asked the U.S. court to recognise and confirm the award, including payments due since 2014 and interest compounded semi-annually, according to the Feb. 12 filing seen by Reuters.
More here
FMCG industry grew 7.3% in December quarter, smaller companies fared better than large players
Consumption in India is picking up on the back of a healthy festive period in November-December, and price hikes in some food categories. As more people consume staples, home and personal care products, the Fast Moving Consumer Goods (FMCG) industry grew at 7.3 percent in the October-December quarter as compared to the same period last year, market research firm Nielsen has said. The report notes that the large FMCG companies, especially those with over Rs 600 crore in annual sales bounced back after two-quarters of decline with a 5 percent value growth and a 4 percent growth in volume. Smaller manufacturers (annual sales less than Rs 100 crore), however, continue to perform better with double-digit growth of 16 percent in the December quarter as compared to the year ago. More Here
