Debt-free firms make up 57% of all market cap: Why Dalal Street loves them Dalal Street shows a special preference for companies that stay away from debt and fund their operations largely from internal accruals. Debt-free companies (on net debt basis) account for 57 per cent of all market capitalisation of listed non-financial companies even though these companies are in a minority in terms of revenues, assets and net profits. In all, 209 non-financial companies out of a total sample of 594 companies were debt-free at the end of 2017-18 and together they accounted for 25.6 per cent of the sample companies' combined net sales, 22.7 per cent of all assets and 46.5 per cent of their net profit READ MORE Metal stocks gain; Vedanta, Jindal Steel JSW Steel among top gainers COMPANY LATEST CHG(RS) CHG(%) FREE FLOAT MKT CAP (RS CR) WEIGHT IN INDEX (%) VEDANTA 256.70 7.40 2.97 38168.21 7.65 JINDAL STEEL 234.45 4.95 2.16 8623.12 2.40 JSW STEEL 336.55 4.20 1.26 47997.01 11.25 NATL. ALUMINIUM 71.10 0.70 0.99 2611.18 1.60 COAL INDIA 297.00 2.50 0.85 36872.02 30.59 HINDALCO INDS. 236.45 1.35 0.57 33442.30 7.94 S A I L 76.45 0.35 0.46 7894.48 3.76 NMDC 118.20 0.30 0.25 7479.46 5.43 Kotak Institutional Equities on Q4FY18 results of India Inc 4QFY18 results were generally below expectations and resulted in moderate downgrades to our FY2019/20 net profit estimates. Nonetheless, we expect net profits of the Nifty-50 Index to grow 23% in FY2019 from a lower base of FY2018, post the earnings cuts in 4QFY18 results season. India’s macro is weak, politics uncertain and valuations rich, a potentially dangerous combination in case earnings were to disappoint. TOP SENSEX GAINERS TODAY COMPANY LATEST CHG(RS) CHG(%) FREE FLOAT MKT CAP (RS CR) WEIGHT IN INDEX (%) BAJAJ AUTO 2834.95 82.80 3.01 41837.82 1.50 ICICI BANK 291.95 6.35 2.22 187715.08 6.12 MARUTI SUZUKI 8689.95 155.00 1.82 115502.64 2.51 TATA MOTORS 287.90 5.00 1.77 55694.96 2.99 LARSEN & TOUBRO 1387.25 19.65 1.44 194430.02 4.92 Emkay Global on Apar Industries Apar Industries (Apar) reported Q4FY18 earnings below our estimate. While revenue increased by 35.9% yoy to Rs17.7bn, PAT declined by 16.2% yoy to Rs400mn due to higher Raw Material prices, stiff competition and increased interest expenses. We have trimmed our earnings estimates to factor in declining margins in the Conductors segment due to higher raw material prices and heightened competition. Accordingly, we have cut our target price to Rs879 (14XFY20E EPS) vs Rs929 earlier. However, we reiterate BUY, as the stock has corrected recently and provides a potential 24% upside from CMP. Edelweiss on SAIL We expect limited cash flow accretion owing to capex commitments and potentially higher employee cost as there could be fresh wage hikes as the company’s performance improves. Taking cognizance of Q4FY18 numbers, we revise up FY19E EBITDA 2%, while keeping FY20E EBITDA broadly unchanged. Despite signs of turning around, SAIL’s relative performance is expected to remain subdued owing to higher conversion cost and leverage playing spoilsport. Maintain ‘REDUCE’ with revised target price of Rs 72 (earlier Rs 70).
Among sectoral indices, the Nifty Metal index is trading around 1% higher led by a rise in the shares of Vedanta and Jindal Steel & Power.
Investors are likely to react to the outcome of gross domestic product (GDP) data during the day. They will also keep a close watch on the global markets, movements in oil prices and the rupee.
Backed by government spending and investment, the economy grew at a seven-quarter-high rate of 7.7 per cent in January-March. The data was released after market hours the previous evening.
RUPEE
On Thursday, the rupee edged up by 2 paise to end at 67.41 against the US currency on stray dollar selling by banks and exporters also supported by expectations of robust macroeconomic outcomes.
GLOBAL MARKETS
South Korea’s KOSPI was up 0.7 per cent on upbeat export data while Japan’s Nikkei advanced 0.3 per cent, buoyed by the yen’s weakening against the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.1 per cent but the index was still down roughly 0.6 per cent for a week in which it touched a six-week low on concerns about political developments in Italy.
CRUDE OIL
(with wire inputs)