MARKETS LIVE: Rupee in a free fall, hits record low of 70.3/$; indices weak

Edelweiss Securities on Sun Pharma Sun Pharma (SUNP) reported in-line Q1FY19 numbers, despite Taro’s tepid performance, led by sales from launch of Welchol AG and lower R&D spends. However, management has guided for increase in R&D spends to 8-9% of sales versus 7% in Q1FY19 on the back of clinical trials for label expansion of Illumya. In the specialty pipeline, the company launched Yonsa and expects Illumya & Cequa to be launched in coming quarters. Management reiterated its low double digit growth guidance for FY19; with 16% growth in Q1 on a weak base, 9M growth comes to 9%. Expect growth to taper and margins to come under pressure going forward. Maintain ‘HOLD’ with revised target price of Rs 560 (Rs 480 earlier) ICICI Securities on rupee outlook The dollar-rupee August contract on the NSE was at 69.99 in the previous session. August contract open interest increased 8.71% in the previous day We expect the US$INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions   ICICI Securities on Grasim Factoring better margin, we increase our FY19-FY20 EBITDA 7-10% and coupled with the recent stock price increase in Grasim’s various holdings, we increase our SoTP-based target price to Rs1,285/share (earlier Rs1,200/share), based on 8x FY20E EV/E and assuming 50% holdco discount on its various holdings on CMP basis. Post ~25% stock price correction over past one year, implied holdco discount have likely increased >70% assuming 8x one year forward EV/E for standalone entity which seems unjustified, in our view. Maintain BUY. ICICI Securities on Sun Pharma We expect margin recovery to continue in FY19-20 with increasing revenue contribution of specialty portfolio. We remain positive on the stock considering i) ramp up in revenue from branded/specialty business in US ii) higher than industry growth in India, iii) potential to buy inorganic growth based on strong balance sheet and iv) 31% earnings CAGR over FY18-21. Q1 ANALYSIS Retail lenders spur consumer demand across industries in Q1   Revenue and profit growth rebounded across industries in the June 2018 quarter, thanks to the favourable base-effect and an uptick in consumer demand from a low base last financial year.   Consumer demand had taken a beating in the first half of 2017 calendar year due to the twin effects of demonetisation and de-stocking prior to the roll-out of the goods and services tax, beginning July 1, 2017. Private consumption-related sectors have done well during the quarter but discretionary spending (automobiles and consumer durable) had done better than non-discretionary spending. READ MORE HERE JUNE-QUARTER RESULTS Corporate India sees earnings rebound after sharp fall in March quarter   After a disastrous fourth quarter of 2017-18 (FY18), when corporate earnings declined by a fifth led by corporate banks, 2018-19 (FY19) has started on an optimistic note for Corporate India. The combined net profit of 2,271 companies, whose first quarter (Q1) results are available, was up 7.9 per cent year-on-year (YoY) during the April-June 2018 period, the best in past five quarters.   Top line growth was even better at 18.7 per cent YoY, growing at the fastest pace in at least three years. READ MORE