Sensex, Nifty Highlights on October 22: Market indices closed on a bearish note on Thursday, amid weak global equities. Sensex ended 148 points lower at 40,558 and Nifty fell 41 points to 11,896. SGX Nifty on the Singapore Exchange was falling 30 points indicating negative trend in domestic grounds today. Meanwhile, September quarterly earnings announcements by Asian Paints, Bajaj Auto, Bajaj Holdings, Bharti Infratel, Biocon, Coforge, HDFC AMC, L&T Finance, 3i Infotech, Bajaj Holdings, SBI Cards & Payments, Uco Bank will also set the tone for the stock market today. Yesterday, Sensex ended 162 points higher at 40,707 and NSE Nifty 50 gained 40 points to close at 11,937.
Here's a look at the updates of the market action on BSE and NSE today
3. 56PM: Closing
Market indices closed on a bearish note on Thursday, amid weak global equities. Sensex ended 148 points lower at 40,558 and Nifty fell 41 points to 11,896.
3. 39 PM: Market outlook
S Ranganathan, Head of Research at LKP Securities said,"Markets today exhibited volatility which the closing probably did not reflect as investors shopped across midcap cement counters as well as pharma stocks. Few PSU stocks including state owned PSU names witnessed value hunting today".
3. 22PM: Market outlook
On markets closing --Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said: "We closed within the current range of the Nifty: 11650-12050. The markets, marked by low volumes, moved in a tight range of about 100 points. It is just a matter of a few days when the index will either get past 12050 to achieve 12300 or break 11650 and achieve 11450."
3. 12 PM: Asian Paints earnings estimate
As per Edelweiss Securities, company's revenue and EBITDA is expected to grow 7% YoY and 18.9% YoY to Rs 5,405.2 crore and Rs 1,135.1 crore, respectively while net profit is expected to dip by 11.4% YoY to Rs 748.3 crore on account of tax reversal in the base quarter.
"We expect the run rate of June to continue and the company to clock 13 per cent volume growth on a base of 14 per cent (Q1FY21 saw 36 per cent volume dip on a base of 16 per cent)," the brokerage added.
3.06 PM: Rane Madras share update
Jyoti Roy- DVP- Equity Strategist, Angel Broking said,"Rane Madras reported a 3.6% YoY degrowth in consolidated revenues to Rs 318.5 crore for Q2FY21, as compared to revenues of Rs 330.3 crore for Q2FY20. EBIDTA for the quarter stood at Rs 12.67 crore down by 8.0% YoY while EBIDTA margins contracted by 20bps to 4.0%. Net profit for the quarter was flat at Rs 10.0 crore as compared to profit of Rs 10.75 crore in the corresponding quarter previous year. Profits were largely at last year's level due to lower interest costs and higher other income which were mitigated to some extent by higher tax expenses. While revenues were down marginally year on year they were up by 189% QoQ. Gradual opening up of the economy led to the strong sequential rebound in revenues though the drop in operating margin year on year was a bit disappointing as most of the auto ancillary companies have reported the same or sight improvement in margins so far."
2. 48 PM: Asian Paints share price trades lower
Shares of Asian Paints were trading 1.7% lower on Thursday, as the company plans to announce its September quarter results later in the day. The company is likely to register 3% year-on-year (YoY) growth in its revenue at Rs 5,200 crore, while its net profit is expceted to see a decline of 17% YoY.
Asian Paints share price touched an intraday low of Rs 2,078 falling 1.7% as against the closing price of Rs 2,114.35 on BSE. The stock also touched an intraday high of Rs 2,114.95, after opening at Rs 2,106. Asian Paints stock price currently trades 2.38% away from 52 week high of Rs 2142.65 on BSE.
2. 37 PM: Dr Reddy's Labs share slips over 4%
Dr Reddy's Laboratories share fell over 4% in afternoon trade today after the pharma firm said that it has isolated all its data center services across the world after detection of a cyber-attack. Dr Reddy's Labs share fell up to 4.24% to Rs 4,832 against previous close of Rs 5046 on BSE.
Dr Reddy's Labs share slips over 4% as firm shuts plants after cyberattack
2. 12 PM: Bajaj Auto update
As per HDFC Securities, Bajaj Auto is expected to post 8% yoy decline in net sales to Rs 7060 crore on back of 10% yoy decline in volumes at 10.5 lakh units. Company's Operating margins at 15.2% are likely to expand +190bps QoQ (-140bp YoY). PAT is expected to jump ~2x sequentially at Rs 1040 crore (-26% YoY). Outlook on exports, particularly to the African continent. The brokergae added that recovery trends in the Indian market would be key monitorables for investors to look out.
2. 00 PM: Bajaj Auto share price trades lower ahead of Q2 earnings
Shares of the two-and-three-wheeler maker Bajaj Auto were trading 1% lower today, as the firm is scheduled to announce its Q2 earnings today.
Amid heavy decline in sales volumes and higher tax cost for the July-September quarter, the company is likely to register 5% in revenue drop.
Bajaj Auto share price touched an intraday low of Rs 2,977, falling 1.3% as against the closing price of Rs 3,016.35 on BSE. The stock also touched an intraday high of Rs 3,037.95, also its opening price. Bajaj Auto stock price has fallen after 2 days of consecutive gain
Bajaj Auto share price trades lower ahead of Q2 earnings
1. 50 PM: Castrol stock update
Centrum Broking in its note said," Castrol traded at an average 1-yr forward PE of 23x over CY17-20TD. At CMP, the stock trades at 10.6x CY22 EPS of Rs10.6 and EV/EBITDA of 6.6x (CY22) with EBITDA CAGR of 6% (CY19-22). Current dividend yield is ~5%. Due to lubricant players similarity to FMCG companies in terms of financial metrics and consumer centric business, we have compared Castrol with FMCG peers and observed that it trades at 70% discount to FMCG players. The average RoE of FMCG proxy universe is ~50%, while PE multiple is 38x (consensus). Moreover, we have also calculated theoretical PE (dividend discount model), which is 15.6x for CY22E earnings. Hence, we are comfortable with our 16x target PE multiple for Castrol. Valuing the stock at 16x, we initiate coverage on CSTRL with a 2-Year Target Price of Rs.169, which implies 51% upside from the current level."
1. 40 PM: Market outlook
Arjun Yash Mahajan, Head Institutional Business at Reliance Securities said," Domestic trade set-up does not look inspiring as of now. The market is expected to open flat to marginal loss and may consolidate at these levels. However, news pertaining to government working on new stimulus package may offer support to the market in the near term, he said, adding that 2Q earnings and management commentaries so far have been encouraging, which bode well for Indian equities."
1. 30 PM: Rupee falls 16 paise to 73.74
The rupee fell by 16 paise to 73.74 per dollar on Thursday's opening deals, as a strong dollar and lower domestic equities weighed on investor sentiments.
The domestic unit opened sharply lower at 73.77 at the interbank forex market, but recovered slightly to touch 73.74, falling of 16 paise over its previous close.
The rupee had pared earlier gains and settled 9 paise lower at 73.58 per dollar on Wednesday, over its earlier close of 73.49.
Rupee falls 16 paise to 73.74 amid strong US dollar, weak equities
1. 24PM: Top losers and gainers
ICICI Bank, followed by Asian Paints, Reliance Industries, PowerGrid, Nestle India and SBI were among the top losers today. On the other hand, Bajaj Finserv, Bajaj Finance, Bharti Airtel, L&T and UltraTech Cement were among the gainers.
1. 13 PM: Aurobindo Pharma update
Yash Gupta Equity Research Associate, Angel Broking said," Aurobindo Pharma Limited informs that AuroLife Pharma LLC, a wholly owned step down subsidiary of the Company, has received a warning letter from USFDA for its oral solid manufacturing facility situated at Dayton, New Jersey. This latter follows the earlier letter dated June 4, 2020 issuing a OAI status for this facility. Companies believe that the existing business from this facility will not be impacted. Company will be engaging with the regulator and are fully committed in resolving this issue at the earliest. This is negative development for Aurobindo Pharma Limited".
1.04 PM: Chennai Petroleum update
Jyoti Roy - DVP- Equity Strategist, Angel Broking said," Chennai Petroleum reported a 20.2% YoY degrowth in consolidated gross revenue to Rs 9,733 crore for Q2FY21. Adjusted for Excise duties net sales were down by 47.4% YoY to Rs 4,863 crore. Consolidated EBIDTA for the quarter stood at Rs 608.2 crore as compared to a loss of Rs 115.2 crore in Q2FY20. Sharp improvement in EBIDTA was driven by lower crude prices and inventory gains during the quarter. Consolidated net profit for the quarter came in at Rs 292 crore as compared to loss of ?214 crore in the corresponding quarter previous year. Company reported GRM of USD 9.7 per bbl for the quarter as compared to USD 2.03 per bbl in Q2FY20. Overall the company has posted a good set of numbers for the quarter."
12. 49 PM: Sagar Cements update
Keshav Lahoti Associate Equity Analyst, Angel Broking said," For Q2FY21, Sagar Cements revenue grew by 23% YoY to Rs 325.9 crore and volume registered a growth of 2%. Plants operated around 48% utilisation during the current quarter. Operating EBITDA reported a sharp growth of 147% YoY to Rs 104.8 crore mainly due to increase in cement realisation in its operating regions, especially in the states of Andhra Pradesh and Telangana and reduction in power and fuel cost. Net profit increased by 920% to Rs 50.1 crore. Operating EBIDTA/ton was Rs 1,451/ton for the quarter against ?596/ton in Q2FY20. In addition, Company believes that the completion of MP and Odisha expansion should not only help them diversify their region & revenue mix but should result in further rationalization of the freight costs. Company also highlighted that implementation of greenfield projects of Satguru Cement Private Limited, Madhya Pradesh and Jajpur Cements Private Limited, Odisha is progressing as per schedule. Company declared an interim dividend of Rs 2 per equity share. "
12. 34 PM: Bajaj Auto Expectations
As per HDFC Securities, Bajaj Auto is expected to post 8% yoy decline in net sales to Rs 7060 crore on back of 10% yoy decline in volumes at 10.5 lakh units. Company's Operating margins at 15.2% are likely to expand +190bps QoQ (-140bp YoY). PAT is expected to jump ~2x sequentially at Rs 1040 crore (-26% YoY). Outlook on exports, particularly to the African continent. The brokergae added that recovery trends in the Indian market would be key monitorables for investors to look out.
12. 21PM: Newgen Software stock
Shares of Newgen Software rallied 15% in two sessions after the firm reported a seven-fold rise in Q2 net profit. Newgen Software share gained 7.47% intra day to Rs 264.7 against previous close of Rs 246.30 on BSE. Newgen Software Tech stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The share has gained 2.77% in one year and risen 31.42% since the beginning of this year.
Newgen Software stock rises 15% in 2 days after Q2 profit climbs seven-fold
12. 11 PM: Gold, Silver prices in India on October 22
Gold prices fell on Thursday following weak cues from overseas but managed to hold the Rs 51K mark in India as the safe-haven asset attracted investors amid rising coronavirus cases. Gold October Futures on the Multi Commodity Exchange traded Rs 250 lower at Rs 51,070 after hitting an intraday high and low of Rs 51,199 and Rs 51,065, respectively.
Gold price trades above Rs 51K mark; silver at Rs 62,900
11. 55 AM: Bajaj Finance share rises over 2%
Bajaj Finance share rose over 2% in early trade today despite fall in Q2 profit. The firm reported a 18% decline in net profit for the quarter ended September 2020. Sentiments around the stock were upbeat as NPAs fell in Q2 and management delivered a positive commentary expecting rebound in growth.
Bajaj Finance share rises over 2% despite fall in Q2 profit
11. 43 AM: Indian Energy Exchange update
Indian Energy Exchange said in its note,"The power market has seen a revival this quarter with the economy inching back to pre-covid levels. Over the last six months, IEX has increased its market share to around 50% of the short term market on account of better price discovery and superior technology platforms. The company has launched two products in the last six months and is on track to launch two more in FY21. We expect IEX to increase its market share in the near term catering to almost 100% of the short term power market demands. Currently, IGX is in a nascent stage with tremendous opportunity size in the medium to long term. We maintain our BUY recommendation with a target price of Rs 244".
11. 32 AM: Gold outlook
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," Lower interest rates and enormous amount of liquidity infusion by global central banks helped Gold gains over 25 percent in 2020 as it is considered as a hedge against inflation and currency debasement. Prices also found some support as reinforcement of the pandemic triggered curbs in Europe and global cases surpassing 40.8 million boosted the appeal for the safe haven, Gold."
On gold's outlook, he added,"No major signs of a deal over the additional corona relief fund by U.S. before the upcoming elections might weigh on the safe haven, Gold. On the MCX, gold prices are expected to trade higher in today's session."
11. 24 AM: Coronavirus toll
Globally, there were 414.87 lakh confirmed cases and 11.3 lakh deaths from COVID-19 outbreak. In India, COVID-19 caseload breached the 77-lakh mark and the death toll from COVID-19 infections rose to 1.16 lakh, as of today.
11. 10 AM: Wipro Q2 update
Geojit Financial Services in its note said," Wipro's Q2FY21 revenue rose 1.4% QoQ, on account of improving business sentiment across the segments. BFSI, Communication and Consumer Business Unit (CBU) stood out as the top 3 key contributors to revenue this quarter. Various cost rationalization efforts (including cost reduction and higher utilization) were taken to drive margins in the long-run. Impact of COVID-19 will continue to affect a few sectors, while sectors like Energy, Natural gas and Utility (ENU) are expected to return to growth trajectory in coming quarters. Given positive performance path and improving growth aspects, we upgrade our rating to BUY on the stock with a revised TP of Rs. 383 based on 19x FY22E EPS."
10. 59 AM: Stocks to watch today on October 22
HDFC, UltraTech Cement, Bajaj Finserv, Zee Entertainment, RIL among others are the top stocks to watch out for in Thursday's trading session
Stocks in news: HDFC, UltraTech Cement, Bajaj Finserv, Zee Entertainment, RIL
10. 44 AM: Real Estate sector update
Rajat Goel. Joint Managing Director, MRG World says, "In the recently released residential segment report by consultancy firm, PropTiger; affordable housing has been the biggest contributor to sales with 45%. The 35,132 units sold during Q3 were in the price bracket close to 45 lakh rupees for eight major cities which included Delhi NCR as well. The figures augur well for the real estate sector and reflect a positive curve for growth. Affordable housing in urban cities have become one of the most prominent residential segments due to the influx of job opportunities available and the influx of migrants that come for settling here. Property ownership brings secured future, and the pandemic has brought about a change in the mindset of people towards creating valuable capital assets."
10. 31AM: Bajaj Finserve
Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking said,"For Q2FY21 Bajaj Finserve reported a subdued set of numbers, owing to Bajaja Fiance elevated provisioning impacted PAT, however, to some extent insurance business manage to absorb hit. PAT Plunge 18% YoY for Q2FY21. In General Insurance segment gross written premium (GWP) fell 2.8% to Rs.4156cr, owing to the decline in sales of commercial vehicle and travel insurance policies. The sequentially Combined ratio improved by 20bps to 97.4%. In the insurance segment, it reported new business premium growth of 11% YoY to Rs.1,372cr. Currently, Bajaj Finserve trades at 15.5x on trailing earnings."
10. 24 AM: Bajaj Finance Q update
Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking said," For Q2FY21, Bajaj finance reported a Subdued set of numbers. AUM grew 1.1% YoY and sequentially remained flat. AUM growth was primarily driven by mortgage book (up 13.6% YoY) and rural portfolio (up 8.3% YoY), while consumer B2B and commercial segment declined 19.3% YoY and 11.4% YoY respectively. Management has toned down its FY21 AUM growth guidance to 6-7% from 9-11% with possible upside risk based on the Q4 business movement. In Q2 Rs.1750cr worth of loan converted into Flexi loan and now Outstanding Flexi loans amount to Rs.43,000cr, which is ~31% of AUM. BAF PAT plunge 36% owing to an elevated level of provision cost. It has increased coverage of stage 1 & Stage 2 assets. Management continue to guide elevated level provisions for FY21 (6000cr - 6300cr) and expecting credit cost of 1.5% - 1.8% in FY22. Bajaj finance currently trades at 4.4x of FY22E Book value, which we believe higher considering low AUM growth and high provision cost. An investor will wait for better clarity on FY22 growth Numbers. Stock price to consolidate till AUM growth evidence and asset quality clarity emerge."
10. 13AM: JK Tyre & Industries update
Jyoti Roy - DVP- Equity Strategist, Angel Broking said,"JK Tyre & Industries Ltd. reported a 5.6% YoY growth in Consolidated revenues to Rs 2,275 crore for Q2FY21, as compared to revenues of Rs 2,155 crore for Q2FY20. EBIDTA for the quarter stood at Rs 355 crore up by 19.8% YoY while EBIDTA margins expanded by 185bps YoY to 15.6%. Profit before tax excluding exceptional items was up by 104% YoY to Rs 146.7 crore. Net profit for the quarter was down by 34.4% YoY to Rs 109.7 crore. However the Q1FY20 numbers include deferred tax write backs of Rs 165.9 crore which makes comparison difficult. Overall the numbers are positive given topline growth and margin expansion. The management has attributed the performance to the economic recovery especially in the automotive sector, which has taken place during the quarter. The Company has also achieved healthy sales in the replacement market, doing better than the industry. The company also achieved higher Export Sales of Rs 337 crore during the quarter."
10.00 AM: Nifty outlook
On markets today --Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said,"The Nifty has gone sideways - we are around the mid point of the range where 11650 is the lower end and 12050 is the upper end. Unless we do not cross one of these levels we will not see a substantial move and hence a trade in either direction may trigger a stop loss. Traders should be cautious when trading a range and if at all they end up trading, they should consider smaller quantities to encapsulate the stops. If we get past 12050, we can trade for a target of 12300 and if we break 11650, we can trade for a downward target of 11450."
9. 53 AM: Gold outlook
Commenting on gold's near term outlook, Hareesh V, Head of Commodity research, Geojit Financial said,"A recovery in the US dollar and doubts over US fiscal stimulus measures before the presidential election are likely to weigh gold prices further. However, resurging pandemic cases and unsolved US-China trade tensions may limit major selling pressure on prices.
On London spot technical outlook, he added," In the event of inability to move past $1940, we can expect selling pressure to continue during the day. However, major weakness may be seen only a close below $1840."
9. 44 AM: PNC Infratech update
Keshav Lahoti - Associate Equity Analyst, Angel Broking said," PNC Infratech Limited has been declared as the L1 (lowest) bidder in an EPC Project in Andhra Pradesh of upgradation of Canal System. The Water Resources Department, Government of Andhra Pradesh, employer for the project invited bids on 26.8.2020 (Second Call); 4 bids received in response and PNC Infratechs bid at a quoted value of Rs. 1000.72 crore declared as the first lowest bid (L1) on 20.10.2020. The Project is to be constructed in 36 months. Earlier PNC Infratech, 99% order book used to be road EPC projects. Bagging such orders apart from road projects will lead to diversification in the order book. Due to diversification in the order book, stock valuation multiple will be re-rated. Post this order, executable order book Rs.16,800 cr which is close to 3.5x FY20 revenue. Company is targeting Rs.7,000 cr order for this financial year. Of that it has already received Rs.4,250 cr order. Looking at the current run rate, we believe the Company will be able to achieve its target of new order for this year. We are bullish on the Company considering its robust order book, good track record and strong balance sheet."
9. 38 AM: Global markets
Global equities turned bearish today amid fears that agreement on a key U.S. stimulus bill will not be reached until after the presidential election on November 3
International Monetary Fund on Wednesday downgraded its growth forecast for Asia-Pacific. The IMF downgraded its forecast for Asia-Pacific to -2.2% in 2020.
In another update, Trump and Democratic challenger Joe Biden will face off in their second and final debate on Thursday night.
9. 20 AM: Opening session
Market indices opened on a bearish note on Thursday, amid weak global equities. SGX Nifty on the Singapore Exchange was falling 30 points indicating negative trend in domestic grounds today. Sensex fell 150 points to 40,572 nd Nifty was trading 50 points lower at 11,886.
9. 10 AM: Market outlook
As per Reliance Securities,NSE-NIFTY witnessed sharp decline after testing its psychological hurdle point of 12,000 level, but after a corresponding bounce back, finished trade on positive note. On the daily chart, the index has formed an indecisive pattern-Doji. As mentioned earlier, our bearish stance will remain intact as we believe the index will soon resume its southward journey. In case of breakout, the index will test 11,250 and 11,430 levels. However a stable move below its last week's low of 11,661 level will confirm the short-term bearish reversal for the index. That could drag the index towards 11,400 mark.
As for the day, support is placed at around 11,840 and then at 11,782 levels, while resistance is observed at 11,952 and then at 12,006 levels.
9.00 AM: Earnings today
Investors are also awaiting Sept quarter earnings reports will provide a clear picture of the disruption caused by the coronavirus pandemic-induced lockdown. Asian Paints, Bajaj Auto, Bajaj Holdings, Bharti Infratel, Biocon, Coforge, HDFC AMC, L&T Finance, 3i Infotech, Bajaj Holdings, SBI Cards & Payments, Uco Bank are among the top companies that will be reporting their Q2 earnings.
8. 50 AM: FII action
Foreign portfolio investors (FPIs) bought shares worth Rs 2,108.48 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,633.53 crore in the Indian equity market on 21 October, provisional data showed.
8. 40 AM: Rupee closing
On the currency front, Indian rupee pared earlier gains and settled 9 paise lower at 73.58 per dollar on Wednesday, over its previous close of 73.49, amid weak cues from Asian equities.
Commenting on Rupee, Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said,"As of now, we are expecting the rupee to trade with a depreciating bias in the near-term, given RBI's persistent attempts to cap upside in the unit. Moreover, the dollar index also has some scope to rebound from current levels, if the US stimulus package does not materialise. Volatility on the local unit is expected to increase in the run-up to the US elections, and the rupee could depreciate towards the 74.20 mark in the coming sessions."
8. 30 AM: Closing on Wednesday
After a volatile trading session, market indices closed bullish on Wednesday, amid mixed cues from global markets. Extending gains for the fourth straight session, Sensex ended 162 points higher at 40,707 and NSE Nifty 50 gained 40 points to close at 11,937. Yesterday, Sensex ended 112 points higher at 40,544 and Nifty gained 23 points to settle at 11,896.
Sensex ends 162 points higher, Nifty at 11,937; Bharti Airtel, Tata Steel, NTPC, HDFC Bank top gainers