1:25 PM
IIFL on Axis Bank
We slash FY18/19 ABV estimates by 5‐10% factoring increased operational challenges and a larger deterioration in NPL situation. This credit cycle for Axis Bank is turning out to be deeper and stickier. We expect operational profitability and credit performance to stabilize only from H2FY19. Some of the ongoing favorable franchise trends would resonate fully in core profitability from FY20.
The stock may extend its underperformance considering that RoA/RoE could remained depressed in the near‐to‐medium term and that valuation is not cheap at 2.1x FY19 P/ABV. While retaining Accumulate rating, we lower the 12‐month price target on Axis Bank to Rs 562.
1:05 PM Broader markets little changed
The BSE Midcap was trading flat at 16,114 levels, while the BSE Smallcap was up 0.1% at 17,085.
1:04 PM Markets check
At 1:00 pm, the S&P BSE Sensex was trading at 32,556, down 52 points, while the broader Nifty50 was ruling at 10,208, down 26 points.
1:03 PM
Edelweiss Securities on Bajaj Finserv
We are enthused by improvement in operating variables across businesses. Bajaj Finserv is going strong with 35% plus asset and earnings surge. There has also been significant value discovery in life and general insurance businesses over past couple of quarters. Incorporating this in our target multiples for BALIC & BAGIC and also factoring in strong performance and capital raising at BFL, we revise our SOTP-based TP to Rs 5,337 (Rs 4,892 earlier). However, recent stock outperformance limits upside; hence, we maintain ‘HOLD/SP’.
12:37 PM Markets in noon deals
(Source: BSE)
12:35 PM
Nirmal Bang Institutional Equities on Wipro Q2
Wipro has reiterated its guidance of FY18 margins being in a ‘narrow band’ vis-à-vis FY17 on constant-currency basis. We believe if that happens a large part would have been played by better INR/USD realisation on its revenues - quite unlike most of its peers - and benefits from automation. We have kept our USD revenue estimates constant but increased EBIT margins estimates by 60-100bps across the forecast period leading to improvement of EPS by ~5%.
We have retained Sell rating on Wipro with a September 2018 target price of Rs244 (down 16% from CMP. Rs228 previously) based on 11.0x September 19E earnings. 11.0x P/E is at a 20% discount to the target P/E multiple assigned to Infosys/TCS. We believe our target P/E multiple is justified on a poor run in organic growth and poor return ratios.
We believe it is also justified on the basis of lack of turnaround in business metrics and the fact that Wipro possibly has the worst RoIC in the industry because of poor organic growth and returns-dilutive acquisitions. We believe the stock is currently supported by the ongoing buyback (7% of outstanding equity)
12:27 PM
Buzzing stock
JBF Industries soared almost 20% to Rs 237 on the BSE in early morning trade after the media report suggested that the company is in discussions with potential buyers for a stake sale.
READ MORE12:09 PM
Interview of the day
Markets regulator Securities and Exchange Board of India (Sebi) has said a mutual fund house can have only one scheme per category. The move will impact a number of fund houses, particularly the larger ones that operate as many as a dozen schemes in some categories. Anthony Serhan, managing director, research strategy, Asia-Pacific at Morningstar, says the new rule is harsh.
READ FULL INTERVIEW
Anthony Serhan, MD, research strategy (Asia-Pacific), Morningstar
11:57 AM Nifty extends losses; top five losers on the index
Source: NSE
11:33 AM
Buzzing stock
Nucleus Software Exports surged 19% to Rs 389, also its 52-week high on the BSE in intra-day trade, after the company reported 36% quarter on quarter (q-o-q) growth in its consolidated net profit at Rs 15.66 crore in September quarter (Q2FY18). The IT software products company had reported profit of Rs 11.51 crore in the June quarter (Q1FY18).
READ MORE
11:17 AM Markets check
At 11:15 am, the S&P BSE Sensex was trading at 32,522, down 86 points, while the broader Nifty50 was ruling at 10,195, down 38 points.
11:03 AM
Sebi's new rules make mutual funds see red
The Securities and Exchange Board of India’s (Sebi’s) new rules on ‘categorisation and rationalisation of mutual fund (MF) schemes’ are facing a pushback from managers overseeing assets worth Rs 21 lakh crore ($320 billion). Earlier this month, the markets regulator set rules to define various investment scheme categories offered by fund houses within the debt and equity segments.
READ FULL REPORT10:46 AM
MAS Financial Services makes strong debut
MAS Financial Services made a strong debut by listing at Rs 660, a 44% premium against its issue price of Rs 459 per share on the National Stock Exchange (NSE) and the BSE.
READ MORE10:15 AM
Wipro gains post Q2
Wipro gained over 2% to Rs 298 after country's third largest software services firm said its consolidated net profit declined marginally to Rs 2,143.2 crore for the quarter ended September 30, 2017. This is against a net profit of Rs 2,163.6 crore in the July-September 2016 quarter as per Indian accounting norms (Ind AS), Wipro said in a BSE filing.
READ EARNINGS DETAILS
9:54 AM Sectoral trend: All but Nifty Metal and Nifty Realty indices were trading in red.
Source: NSE
9:38 AM
Information nugget: Muhurat trading timimg
Diwali Laxmi Pujan for Equity Segment on Thursday, October 19, 2017
Pre-open Session
Order Entry Period#
6:15 pm - 6:23 pm
Order Matching & Equilibrium price determination
6:23 pm - 6:30 pm
Continuous Trading
6:30 pm - 7:30 pm
Closing
7:30 pm - 7:40 pm
Post-Closing
7:40 pm - 7:50 pm
9:33 AM Axis Bank top loser
Axis Bank tanked over 7% to Rs 475 as the private lender's asset quality worsened with percentage of gross non-performing assets (NPA) increasing to 5.90% from 5.03% in the sequential quarter ended June 30, 2017. READ EARNINGS DETAILS HERE
9:25 AM Sensex heatmap at open
Source: BSE
9:23 AM Markets at open
At 9:20 am, the S&P BSE Sensex was trading at 32,519.36, down 90 points, while the broader Nifty50 was ruling at 10,219, down 15 points.
9:11 AM
Stocks to buy in Samvat 2074
Here is a compilation of the top stocks that leading research houses and brokerages have recommended for Samvat 2074
READ MORE HERE9:10 AM
Market outlook by ICICI Securities
Going forward, with a positive momentum in the economy driven by reforms undertaken by the central government amid stable commodity prices, we expect earnings to stage a strong double digit recovery (15.7% CAGR) over FY17-19E. We ascribe a fair value for Sensex at 34500 i.e. 18.4x P/E on FY19E EPS with corresponding levels for the Nifty at 10750
9:08 AM
Indiabulls Ventures zooms nearly 1000% in Samvat 2073
A quick analysis of stock price movement in the BSE 500 segment reveals as many as 24 stocks doubled investor wealth during the last Samvat (between October 30, 2016 – October 13, 2017), with Indiabulls Ventures rallying up to 1000%. Adani Transmission, Avanti Feeds, Rain Industries, Bombay Dyeing and Future Retail gained in the range of 200% - 400% during this period, ACE Equity data show
CLICK HERE FOR MORE9:07 AM
Jefferies on Axis Bank
The quarter was marred by higher NPL recognition and provisions - RBI driven divergence and NCLT cases. However, the pool of below investment grade exposure is steadily trending down, at 5.9% of exposure ex retail. The new business franchise remains robust although NPL pains will be visible next 2 quarters. Roll fwd, maintain Buy with revised price target of Rs 635.
9:06 AM
Jefferies on Bajaj Auto
Bajaj's 2Q revenue, EBITDA and net profit were in line with our expectations but slightly ahead of consensus. Despite sharp QoQ improvement in EBITDA margin to 19.7%, we believe it will still fall short of full year guidance of 19.5% to 20%. More importantly we remain concerned on growth and market share trends in domestic 2-wheeler business. Recent trends in exports have been encouraging and look like the best source for a positive surprise in 2H, if any.
We value Bajaj using DCF to arrive at a price target of Rs3002 (including Rs148 on account of its 48% stake in KTM), which implies FY19 P/E of 20x. Key risks: 1> Turnaround/Further weakening in export markets 2> Beat/miss in domestic volume growth, market share 3> Beat/miss in margins 4> Entry into scooters
(Photo courtesy: Twitter)
9:05 AM
Stay long on Nifty, with a stop at 10,125
The market soared in pre-Diwali trading. Strongly bullish global trends, excellent results by Reliance Industries and high liquidity translated into new highs. The Nifty hit 10,251 before seeing some profit-booking. Although foreign portfolio investors (FPIs) remained net equity sellers, retail and domestic institutional buying picked up.
READ MORE9:03 AM
Emkay Global on pharma sector
US president again rakes up high prescription drug prices in the US but in our opinion more of a political threat against US branded companies than generic industry. US political environment against pharma price hikes continues to turn adverse; note the laws passed by US states Maryland and California against any predatory pricing.
Generic sector though should worry about limited ability to raise prices in older mature products, a practice far more widespread than earlier believed. On a separate note; expect more diplomatic pressure on countries like India, which have denied branded companies complete flexibility in enforcing their global patents and pricing strategies
9:03 AM
Emkay Global on Wipro Q2 earnings
Q2FY18 performance was broadly inline on operating basis. The revenues grew by 0.3% in CC terms below our estimates but commentary turns confident on improved performance going forward as indicated from Q3 guidance of 1% (midpoint growth) despite seasonality and at par performance outlook by Q4FY18.
Guidance for Q3 is modest (0% to 2% qoq growth) and do not enthuse much confidence even if it achieves mid-point of the band. Also given that lower band suggest no growth we believe its outlook for recovery by Q4FY18 run rate appears more aspirational than natural-traction driven base.
We largely retain our earnings estimates for FY19/20 as better OPM performance got negated by lower CC growth performance. We believe the OPM performance may see further impact as Fx realisations normalize to current rate.
9:02 AM
Technical picks by Prabhudas Lilladher
BUY BANK OF BARODA
CMP: Rs 139.15
TARGET: Rs 152
STOP LOSS: Rs 132
8:56 AM
Nifty outlook by HDFC Securities
Nifty has surpassed the crucial resistance of 10,178 and registered a new all-time high above 10,250. Peak and Trough, Moving averages and Momentum Oscillators all are indicating bullish trend for the Nifty. We maintain our bullish view on Nifty with potential upside target of 10,540 in the coming weeks. Short-term support for the Nifty is seen at 10,100 and long should be protected with that stoploss.
8:55 AM
Today's Picks
Devangshu Datta on Nifty, Bank Nifty, Axis Bank, BPCL, Infosys
8:52 AM
Wall Street on Tuesday
The Dow Jones Industrial Average briefly broke above the 23,000-point mark for the first time on Tuesday, driven by strong earnings from UnitedHealth and Johnson & Johnson, but finished the session just below that milestone.
The Dow Jones Industrial Average rose 40.48 points, or 0.18% to end at 22,997.44, a record closing high. It rose as high as 23,002.20 during the session. The S&P 500 gained 1.72 points, or 0.07% to 2,559.36, also a record high close. The Nasdaq Composite dipped 0.35 point, or 0.01% to 6,623.66.
8:51 AM Asian markets
Asian shares consolidated recent gains as investors waited to see what policies might emerge from China’s Communist Party conference. The blue-chip CSI300 index was up 0.3%, while Shanghai stocks added 0.1%. Recent economic data from the Asian giant has been generally upbeat, fuelling a tide of optimism about global growth that has benefited shares across the region.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1% near their highest since late 2007, while Australia rose 0.2%. Japan’s Nikkei added 0.1%, and was trying to string together a 12th straight session of gains.
8:49 AM Singapore Nifty indicates negative start
At 8:47 am, SGX Nifty was trading at 10,227, down 34 points or 0.34%.
8:47 AM Good Morning!
Welcome to Business Standard's market liveblog.
First Published: Wed, October 18 2017. 13:02 IST
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