Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
On Wednesday, the Benchmark indices corrected sharply, the Nifty ends 160 points. Nifty opened with a gap down and maintain the negative stance throughout the day. Among Sectors, all the major sectoral indices traded in the red, but financial lost the most, shed over 1.5 percent.
Technically, the market is witnessing non directional activity, once again, the index succeeds to close below 50-day SMA and post gap down opening, it has formed bearish candle.
For the traders now, 17125 would be the immediate resistance level. If the index clears the resistance of 17125 then it may hit the level of 17200. However, trading below 17000 could increase further weakness. Below 17000 chance of hitting 16900-16850 would turn bright.
Gaurav Dua, Head Capital Market Strategy, Sharekhan by BNP Paribas:
Mega IPOs tend to boost retail participation and bring in many new investors into equity markets. With more than 27 crore LIC policy holders offered equity shares at 10% discount to offer price, the LIC IPO could have quite a meaningful impact in terms of deepening of the equity culture in India.
The government has also taken the right decision to reduce the offer size to Rs 21,000 crore and has priced the offering at valuations that are lower than expected earlier.
S. Hariharan, Head- Sales Trading, Emkay Global Financial Services:
As has been the trend for the last few months, the outlook for earnings in FY23 has continued to deteriorate. Incremental newsflow of restrictions on Indonesian palm oil exports would pose input cost challenges for all FMCG companies – this sector faces the highest risk of earnings downgrades in this quarter.
Similarly, fuel & commodity cost pressures would also impact earnings for Cement and Consumer durables companies’ earnings. Thus far, the trend of 4Q earnings season has pointed to disappointments and severe stock reactions to earnings misses.
Banks and Commodities companies are relatively sheltered from disappointments but are also consensus over-weight positions for market participants.
We believe that 2-wheeler companies can surprise to the upside on monthly volume trajectory as student-led demand and marriage season demand push numbers up from depressed bases.
Shivam Bajaj, Founder & CEO at Avener Capital:
Amidst the volatile environment, the revision in the LIC IPO valuation demonstrates the keenness of the government to deliver on the IPO. The revised IPO valuation can potentially unlock a favourable opportunity for investors towards wealth creation.
Being a landmark issue for the nation, LIC is expected to be pinned on global portfolio watchlists.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty, with a minor degree bounce on April 26, had reached near a falling trendline on the hourly chart, which was around 17200. Thereon the index nosedived on April 27. Structurally, the price action over the last few sessions has taken form of a triangular pattern, which is expected to be a continuation pattern in this case.
The index can witness a brief consolidation in the range of 17150-16900 & can ultimately break out on the downside. Thus, from short term perspective, the Nifty is expected to test the swing low of 16824 below which 16600 will be the subsequent target to watch out for.
Vinod Nair, Head of Research at Geojit Financial Services:
Market continued to be gripped by high volatility following a heavy selloff in the global markets led by elevated energy crisis and weak Chinese economic outlook underpinned by prospects of US rate hikes.
Investors are weighing the possibility of a global slowdown due to monetary tightening by central banks, lockdown in China and Russia -Ukraine war. This has resulted in an outflow of funds from equity markets to safe havens.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities:
For the short term Nifty remains in a corrective phase with resistance placed at 17315 levels. From the medium term perspective, we broadly remain positive and advice accumulating on dips. We see value in select financial and energy stocks while IT stocks are expected to trade with negative bias.
Market Close: In the volatile session, Indian benchmark indices ended on negative note with Nifty below 17,100 on April 27 amid selling seen across the sectors.
At close, the Sensex was down 537.22 points or 0.94% at 56,819.39, and the Nifty was down 162.40 points or 0.94% at 17,038.40. About 1146 shares have advanced, 2140 shares declined, and 107 shares are unchanged.
Bajaj Finance, Bajaj Finserv, Tata Consumer Products, Adani Ports and ICICI Bank were among the top Nifty losers, while gainers were Hero MotoCorp, Tata Steel, Asian Paints, Bajaj Auto and TCS.
Among sectors, bank, oil & gas, power indices down a percent each.
BSE midcap and smallcap indices down 0.5 percent each.
Schaeffler India touched a 52-week high of Rs 2,278.35, rising more than 8 percent after company recorded a massive 48.4 percent year-on-year growth in profit at Rs 207 crore for the quarter ended March 2022, driven by topline as well as operating performance.
Revenue from operations rose 19 percent YoY to Rs 1,567.5 crore during the quarter and EBITDA grew by 45 percent in the same period.
Yash Gupta- Equity Research Analyst, Angel One:
The much-awaited LIC IPO will be opening for subscription on the 4th of May at a price band of Rs 902-949 per share. The issue comprises an offer for sale of 22.1 crore shares by the Government of India representing 3.5% of the paid-up capital of the company.
The Government has brought down the issue size from 5% to 3.5% due to adverse market conditions. Moreover, the Government has also reduced the pricing of the issue.
As compared to earlier expected valuations of over Rs 10 lakh crore, the company is now valued at Rs 6 lakh crore at the higher end of the price band.
At the offer band, the LOC IPO is valued at a Price/Embedded value of 1.06-1.1 its Sep’21 EV of Rs 539,686 crore which is at a significant discount to listed private life insurance companies which trade at P/EV of 2.5-3.9x their Dec’21 EV. While HDFC Life Insurance is trading at a P/EV of 3.9x SBI Life and ICICI Pru Life trade at 3.2x and 2.5x their Dec’21 embedded value.
While LIC valuations appear to be cheap as compared to listed private players investors need to keep in mind that LIC has a lower VBN margin of 9.9% in FY2021 as compared to private players who have VNB margins of 22-27% due to higher share of participation & group product. Despite lower margins and inferior business mix, we believe that the IPO is being priced reasonably and offers value to investors with a long-term view.
Mahindra Logistics share price rose 10 percent despite company reported a 10.5 percent year-on-year decline in consolidated profit at Rs 11.11 crore in Q4FY22 despite higher revenue and strong operating performance.
Revenue grew by 10 percent YoY to Rs 1,072.7 crore and EBITDA increased by 19 percent to Rs 54.96 crore and margin expanded to 5.12 percent, from 4.73 percent on year-on-year basis.