PremiumIndian indices on Monday closed higher, in a volatile trading session, as losses in infra and IT stocks were offset by gains in banking and auto scrips. Major heavyweights Maruti, NTPC, SBI, and Kotak Bank added positively to Sensex, while Ambuja Cements and ACC Ltd also posted solid gains after Holcim's deal with Adani. Asian equities retreated Monday following last week's temporary rally on Wall Street due to fears of surging inflation and supply chain woes inflicted by Beijing's punishing zero-Covid policy.
Indian indices edged higher on Monday, snapping a 6-day losing run, led by healthy gains in market heavyweights SBI, NTPC, Maruti, and the stocks of Ambuja Cements and ACC after Adani Group announced it would buy Holcim AG's controlling stake in the companies.
The Sensex surged 180.22 points, or 0.34%, to close at 52,973.84, while Nifty50 added 60.15 points to end at 15,842.30. Sectorally, realty, power, auto, and banks posted the biggest gains, while FMCG and IT declined.
On the 30-stock index, the most gains were made by NTPC, Bajaj Finance, SBI, HDFC, and Maruti among others, while Ultratech Cement, Asian Paints, and ITC were among the biggest losers.
On Nifty50, Eicher Motors, Apollo Hospital, and UPL made the most gains, while Ultratech Cement, Shree Cement, and Asian Paints were among the biggest laggards.
The initial share sale of supply chain company Delhivery was subscribed 1.63 times on the final day of subscription that ended on Friday. According to the NSE data, the offer received bids for 10,17,04,080 shares against 6,25,41,023 shares on offer.
Global shares were mixed Monday, as investors eyed surging energy costs and prospects for interest rate hikes in the U.S.
European benchmarks were trading mixed, with shares up in France and Germany but down in Britain. Stock moves were similar earlier in the day in Asia, where benchmarks finished higher in Japan and Australia, but fell in South Korea. Shares rose in Hong Kong but declined in Shanghai.
France's CAC 40 declined 0.4% in early trading to 6,336.07, while Germany's DAX shed 0.5% to 13,963.69. Britain's FTSE 100 was up less than 0.1% at 7,421.33. U.S. shares were set to drift lower with Dow futures down 0.1% at 32,085.00. S&P 500 futures fell 0.3% to 4,006.00.
Gold prices fell more than 1% on Monday to their lowest level since late January, as a stronger dollar continued to hammer demand for greenback-priced bullion.
Spot gold fell 0.8% to $1,797.82 per ounce, by 0815 GMT. U.S. gold futures dropped 0.6% to $1,797.40.
Earlier in the session, gold prices dropped 1.4% to their lowest level since Jan. 31 at $1,786.60. On Friday, they posted their fourth consecutive weekly decline.
If bets in the futures market are any guide, India’s retail investors remain optimistic about equities despite a 14% plunge in the nation’s stock market from a record high hit last year.
Chinese stocks retreated, erasing early gains, as disappointing economic data outweighed moves by authorities to boost the property sector and ease virus-related curbs in the financial hub of Shanghai.
The CSI 300 Index ended Monday’s session down 0.8% after climbing as much as 0.7% earlier. China’s industrial output and retail sales both contracted more than estimated in April, data showed Monday, and the central bank left the interest rate on one-year policy loans unchanged.
That offset optimism spurred by Beijing’s decision Sunday to cut mortgage rates for first-time homebuyers. The reduction, however, helped spur gains in real estate shares. A Bloomberg Intelligence gauge of the sector was up 1.7% after having jumped as much as 3.1% earlier.
Gujarat Fluorochemicals will start its battery chemicals plant in FY23, and some revenues are likely to flow in from FY24, highlighted brokerage ICICI Securities. The chemical manufacturer has increased capex outlay by 10% for the next two years on anticipation of a favourable market.
Well Positioned to Grow, Maintain BUY!
The key highlights of CreditAccess Grameen Ltd.’s (CA Grameen) Q4FY22 performance were a pick-up in GLP growth and improved asset quality. On the operational front, disbursements during the quarter stood at ₹5,792 Cr (+23% YoY and QoQ). Robust disbursement growth translated into a healthy GLP growth of 22% YoY, ahead of management’s guidance of 17-19%. With growth momentum expected to remain healthy, CA Grameen expects GLP to grow at 24-25%, driven by 8-10% customer addition growth. However, as the company looks to implement the new RBI guidelines, disbursement growth in Q1FY23 is likely to be muted.
We believe the asset quality stress is now largely behind and the company is well-positioned to accelerate growth in a risk-calibrated manner.
Delhivery IPO closed with a total subscription of 1.63 times on day 3, till day 2 even it was a question that delhivery IPO will receive the full subscription on not. Delhivery has received a weak response from retail investors, retail subscription was at 0.57 times so now all the investors in the retail category will receive the full allotment.
On day 3 the QIB category investors came forward to rescue delhivery IPO. Just because of QIB only IPO is able to receive the full subscription. Delhivery IPO QIB portion was oversubscribed and received a total subscription of 2.66 times.
If we look at GMP, as per the news GMP of delhivery IPO is trading in negative so we can expect a soft listing from delhivery IPO. We have given a neutral rating to delhivery IPO looking at the expensive valuations of the IPO.
Avenue Supermarts Ltd’s stock rose about 7% in opening deals on Monday on the National Stock Exchange, partly reversing losses seen last week when the stock had declined nearly 12%. In fact, shares of the company that runs the DMart chain of retail stores are now off the extremely high levels that they have been enjoying for a while now. After all, the stock has declined as much as 40% from its 52-week high of ₹5,900 apiece seen on 18 October on NSE.
Titan plans to strengthen the core while scaling up its new business. In Jewellery, ICICI Securities said it likes the strategy to open (more) stores in smaller towns. Further, it has clearly carved out its focus on high-growing sub-segments to drive growth.
We maintain BUY Rating on the stock with revised target price of ₹4,654/share at 30x on FY24E EPS. The stock trades at PER of 23.3x on FY24E EPS.
We maintain ‘Buy’ rating on SBI with a revised price target of ₹659: We value the bank at 1.35x FY23 P/BV for an FY23E/24ERoE profile of 14.3/15.8%. We assign a value of ₹181 per share to the subsidiaries, on SOTP.
We maintain our BUY rating on GUJS, with a revised TP of ₹370/sh (from ₹400/sh), as we adjust our estimates to accommodate for a slower trajectory in volume growth and to account for downward revision in tariff. Our SOTP ascribes ₹115/sh to GUJS’s core business, on DCF basis and ₹255/sh to listed and unlisted investments.
Gold today struggled for gains in Indian markets amid flat global rates. On MCX, gold futures slightly higher at near 3-month lows of ₹49,954 per 10 gram while silver moved 0.4% higher at ₹59,565 per kg.
Rating: BUY | CMP: Rs2,433 | TP: Rs2,950
We maintain BUY on Eicher Motors as we anticipate (1) volume growth from Classic 350 plus new product launches and (2) rising exports volume from channel expansion and market share gains to further aid profitability. We trim our EBITDA margin estimates by 100bps for FY23/24 factoring in commodity cost pressures and assign a SoTP based TP of ₹2,950 (at 27x FY24E EPS for standalone business and 17x for VECV).
Volatile market conditions have led to a significant slowdown in the Indian initial public offer (IPO) market during the first quarter of 2022 as compared to the first quarter of 2021, EY Global IPO trends report suggests.
Tata Power Company in a regulatory filing said on Monday that its wholly-owned subsidiary Tata Power Solar Systems won an order to build a 300-megawatt solar project for state-owned utility major NHPC at an all-inclusive price of ₹1,731 crore.
Shares of ACC and Ambuja Cements were in huge demand on Monday after Gautam Adani's group clinched a deal to acquire a controlling stake in Holcim Ltd's businesses in India for USD 10.5 billion.
The stock of ACC rallied 7.79 per cent to ₹2,288.15 on the BSE.
Shares of Ambuja Cements gained 4.13 per cent to ₹373.65.
Gautam Adani's group on Sunday said it has clinched a deal to acquire a controlling stake in Holcim Ltd's businesses in India for USD 10.5 billion, marking the ports-to-energy conglomerate's entry into the cement sector.
The base metals pack ended the week on a mixed note, with aluminum being the only metal to gain 1.2 percent for the week.
Copper prices rose on Friday after falling to 7-month lows as a slowing global economy will have little to no demand for metals. However, the prices were still on track for their sixth week of losses due to rising fears of a worldwide economic slowdown dampening demand.
In the short term, however, metals may stay under pressure, owing to COVID-19 limitations in top customer China, which have slowed metal demand and disrupted supply networks.
Another hindrance for base metals was a stronger US dollar, which traded around two-decade highs, lowering demand for dollar-backed commodities. For other currency holders, a stronger dollar raises the cost of acquiring these goods.
Outlook: We expect copper to trade lower towards 737 levels, a break of which could prompt the price to move lower to 718 levels.
Bharat Forge (CMP Rs.629)
In view of better business visibility, improving economic situation, healthy demand outlook for CV segment and foray into high-margin segments, going forward, we recommend BUY on Bharat Forge with 1-Year TP of Rs1,000, valuing the stock at 30x FY24E. .
Intraday Pick
DLF (PREVIOUS CLOSE: 319) BUY
For today’s trade, long position can be initiated in the range of ₹313- 316 for the target of Rs. 327 with a strict stop loss of ₹310.
JUBLFOOD (PREVIOUS CLOSE: 475) BUY
For today’s trade, long position can be initiated in the range of ₹466- 471 for the target of Rs. 485 with a strict stop loss of ₹463.
TCS (PREVIOUS CLOSE: 3415) BUY
For today’s trade, long position can be initiated in the range of ₹3380- 3410 for the target of Rs. 3500 with a strict stop loss of ₹3330.
TechM reported a mixed 4QFY22 performance. Margins were below our expectations while PAT was above our expectation. We expect both telecom and enterprise verticals to witness a healthy growth on the back of step-up in 5G capex and mid-term resiliency in technology demand. We believe TechM will be the key beneficiary of the medium-term themes such as software defined network (SDN) and telecom IT modernization. In view of healthy deal wins, strong deal pipeline and 5G rollout benefiting profitability, we maintain our BUY rating on the stock with a Target Price of Rs1,890, valuing the stock at a P/E multiple of 23x on FY24E earnings.
Life Insurance Corporation of India (LIC) will list on the stock exchanges tomorrow, following the initial public offer (IPO) which was oversubscribed nearly three times the issue size. The government has fixed the issue price of LIC shares at ₹949 apiece, the upper end of the IPO price band, fetching the exchequer around ₹20,557 crore.
The initial public offer of Venus Pipes and Tubes was subscribed 16.31 times on the last day of subscription on Friday. The issue received bids for 5,79,48,730 shares against 35,51,914 shares on offer. The issue had a price range of ₹310-326 per share.
In view of the strong volume growth ahead, regular price hikes, healthy export potential, structural positives in European operations and comfortable valuation, we turn positive on APTY. Post recent price correction, risk reward is favourable at current valuation of 10.6x FY24E earnings. Therefore, we upgrade APTY to BUY with a revised Target Price of Rs235 (vs. Rs220 earlier).
Millions of Indians investing in the country’s biggest listing could turn sour on the equity market if the stock follows the poor performance of its state-run predecessors.
Prime Minister Narendra Modi’s government raised $2.7 billion by selling shares in Life Insurance Corporation of India, including to millions of families nationwide that hold LIC policies. The stock starts trading Tuesday at a time when markets worldwide are being roiled by the fallout of Russia’s invasion of Ukraine and rising interest rates.
While deep-pocketed global funds can withstand volatility, small investors -- especially first-time shareholders such as the ones created by by LIC’s listing -- risk being burned if the stock underperforms. Of the 21 Indian state-run companies that debuted in the stock market since 2010, half are still trading below their issue price.
India's Adani Group acquired a controlling stake in Holcim AG's cement businesses in India in a $10.5 billion deal to become the second biggest cement producer in the country, Adani Group said in a statement on Sunday.
Asia's richest person Gautam Adani's conglomerate acquired 63.19% of Ambuja Cements Ltd and its subsidiary ACC in fierce bidding with local companies.
The divestment is the latest move by Holcim as it seeks to reduce its reliance on cement production, an industrial process which produces high levels of carbon emissions and has therefore deterred many environmentally-conscious investors.
Despite the near-term volatility in demand in tractor sales, we expect tractor industry to continue growing going forward on account of the changing industry dynamics, increasing mechanization, rising affordability, and widening alternate usage of tractors. In view of the sizable presence in a relatively better-placed tractor segment, strong positive cash flow, healthy return ratios and attractive valuation, we reiterate our BUY rating on the stock, and maintain the Target Price of Rs2,250.
Rating: BUY | CMP: Rs3,231 | TP: Rs4,651
We cut FY23/24 EPS estimates by 10.8% and 13.5% and DCF based target price to Rs4651 (5345 earlier) even as we upgrade to the stock to Buy post sharp correction. We believe increased capex following accelerated store openings, higher inventory due to inflation and assuming higher WACC (rising interest rates). D’Mart reported strong growth despite higher inflation while growing the share of general merchandise and apparel by 50bps in FY22 vs FY21 (still lower than 27.3% share in FY20). 4Q margin expansion of 15bps shows the robust business model despite deterioration in sales mix and operating cost of 21 new stores opened in 4Q (other expenses up 18.9% YoY and 3.7% QoQ versus just 9.2% increase YoY in 9MFY22).
Gold edged up on Monday from a more than three-month trough hit in the previous session, as lower U.S. Treasury yields kept demand for zero-yield bullion afloat above the key psychological support level of around $1,800 per ounce. Spot gold was up 0.1% at $1,812.15 per ounce, as of 0227 GMT. U.S. gold futures gained 0.1% to $1,809.80.
Bitcoin staged a modest recovery to trade at around $30,000, extending a period of relative market calm after the collapse of a closely watched stablecoin roiled digital assets in the past week.
The largest cryptocurrency advanced 3.4% n Sunday to $30,350 as of 4 p.m. in New York. Ether, the second-biggest token, rose 5% while coins like Avalanche and Cardano posted even larger gains.
Bitcoin dipped to a low of $25,425 on Thursday after the TerraUSD algorithmic stablecoin unraveled, throwing the entire ecoystem that supports it into disarray. At its height, the market panic engulfed the $76 billion stablecoin Tether, a key cog in cryptoassets that briefly dipped from its dollar peg.
Goldman Sachs Group Inc. economists cut their forecasts for US growth for this year and next to reflect the shake-out in financial markets amid the Federal Reserve’s tightening of monetary policy.
In a report Sunday, the economists led by Jan Hatzius said they now expect the economy to grow 2.4% this year and 1.6% in 2023, down from 2.6% and 2.2% previously.