Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
After a firm start, markets failed to hold on to their early upsurge and simply lost track to end marginally lower. Metal stocks bore the brunt while automobile, realty, and oil & gas stocks also came under selling pressure, thus dragging key indices lower.
Technically, on intraday charts, the Nifty has formed a double top formation and on daily charts it has formed Hammer candlestick formation which is broadly negative.
For day traders 16200 would act as a crucial support level, and below the same we could see a quick intraday correction till 16100-16050.
On the flip side, fresh uptrend is possible only after 16300 intraday breakout. On breaching the level, the index could move up to 16400-16475.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty opened on a positive note & attempted to scale higher on May 23. It went on to test the crucial level of 16400 where the index had faced resistance in the last two weeks. 16400 proved to be a strong barrier yet another time.
The hourly chart shows that upper end of an upward sloping channel also created pressure near 16400. Thus the index nose dived towards the end of the session & closed in the red for the day.
The overall structure shows that the Nifty is likely to witness sideways action in the short term. 16000 – 16400 is expected to be the range for the next few sessions.
Vinod Nair, Head of Research at Geojit Financial Services:
The government and RBI are making persistent efforts to moderate future inflation. Government fiscal measures like a hike in custom duty on steel and similar steps on other products in the future will help to control inflation.
However, the hawkish monetary and fiscal measures adopted by RBI & Government will have a cascading effect on market & economy in the short to medium-term.
Kunal Shah - Senior Technical & Derivative Analyst at LKP Securities:
The Nifty metal index on the back of government policy news witnessed a massive sell-off. The Index is trading at a very crucial support of 5,100 and if fails to sustain above it will lead to a further sell-off.
The upside resistance stands at 5,800 and the index remains in a sell-on-rise mode.
Rupee Close:
Indian rupee ended flat at 77.52 per dollar against Friday's close of 77.54.
S Ranganathan, Head of Research at LKP securities:
Markets gave up all its gains in afternoon trade today as it simply could not recover after the export tax imposed on steel products with the metal index falling almost 9% to 5200 levels in morning trade.
The prolonged Russia-Ukraine conflict coupled with its consequences and inflationary pressures weighed heavily in the minds of investors and traders.
Prospects of additional market borrowings by the GOI in the wake of the tax cuts on fuel to tame inflation also came to the forefront.
Market Close
Benchmark indices erased all the intraday gains and ended marginally lower in the volatile session on May 23.
At close, the Sensex was down 37.78 points or 0.07% at 54,288.61, and the Nifty was down 51.50 points or 0.32% at 16,214.70. About 1390 shares have advanced, 1932 shares declined, and 158 shares are unchanged.
M&M, Maruti Suzuki, HUL, Asian Paints and Larsen and Toubro were among the top Nifty gainers, while losers included JSW Steel, Tata Steel, Divis Labs, ONGC and Hindalco Industries.
Among sectors, auto, capital goods and IT indices added 0.5-1 percent, while metal index shed 8 percent and realty, pharma and oil & gas index fell 1 percent.
BSE midcap and smallcap indices ended in the red.
CLSA View On Zydus Lifesciences:
Brokerage firm CLSA has maintained buy rating on with a target at Rs 490 per share.
The in-line revenue, cost optimisation offsets inflationary pressures, while multiple R&D initiatives make its medium-term story promising, reported CNBC-TV18.
Zydus Lifesciences was quoting at Rs 362.60, up Rs 5.45, or 1.53 percent on the BSE.
Amara Raja Batteries shares down 6%:
Amara Raja Batteries share price fell 6 percent after company reported a decline of 47.80 percent in consolidated net profit at Rs 98.85 crore in the fourth quarter ended March 2022.
Revenue from the operations was up 3.72 percent at Rs 2,180.96 crore during the quarter as compared to Rs 2,102.61 crore in the year-ago period.
Total expenses were at Rs 2,064.13 crore, up 10% from a year ago.
Nomura View on Container Corporation of India
Nomura has maintained buy rating on Container Corporation of India but cut the target price to Rs 785 per share.
The results were in-line post adjustments with strong volume guidance. However, capex concerns were unjustified.
Nomura retained FY24/25 EPS estimates on strong volume outlook, reported CNBC-TV18.
Nifty Energy Index shed 1 percent dragged by the Adani Transmission, ONGC, Gail India
eMudhra IPO Updates:
India's largest licensed certified authority (CA) in the digital signature certificates space, eMudhra Limited, saw its public issue being booked 81 percent on the second day of subscription.
Investors have bid for 92.45 lakh shares against an IPO size of 1.13 crore units. Retail investors booked 1.55 times or 89.21 lakh shares of the portion set aside for them. Non-institutional investors booked 13 percent or 3.23 lakh shares allotted to them, while qualified institutional buyers were yet to subscribe to the issue.
UPL launches new biosolution to improve crop health & yield
UPL today announced the launch of ZOATIN, a new biosolution that effectively facilitates plant uptake and utilisation of phosphorus to improve crop health and yield, company said in its release.
ZOATIN is the first product launched as part of UPL’s partnership with global bioscience company Chr. Hansen to develop microbial biosolutions that will help growers around the world fight pests and diseases, and sustainably improve crop quality and yields, company added.
UPL was quoting at Rs 794.55, down Rs 13.50, or 1.67 percent.
Market at 3 PM
Benchmark indices erased most on the intraday gains and trading flat amid volatility.
The Sensex was up 82.89 points or 0.15% at 54409.28, and the Nifty was down 21.50 points or 0.13% at 16244.70. About 1402 shares have advanced, 1817 shares declined, and 132 shares are unchanged.
Energy Prices Update:
Buzzing:
Power Grid Corporation of India posted about 18 percent rise in its consolidated net profit at Rs 4,156.44 crore for the March 2022 quarter against Rs 3,526.23 crore a year ago, backed by higher income.
Total income during the quarter increased to Rs 11,067.94 crore compared to Rs 10,816.33 crore last year.
Power Grid Corporation of India was quoting at Rs 225.60, down Rs 3.45, or 1.51 percent on the BSE.
BSE Oil & Gas index slipped 1 percent dragged by the ONGC, Gujarat Gas, HPCL, Indraprastha Gas
V-Mart Retail was quoting at Rs 3,289.70, up Rs 216.40, or 7.04 percent. It has touched an intraday high of Rs 3,345.90 and an intraday low of Rs 3,048.80. The stock was trading with volumes of 3,213 shares, compared to its five day average of 761 shares, an increase of 321.99 percent.
European Markets Updates
Sequent Scientific was quoting at Rs 127.75, up Rs 13.20, or 11.52 percent. It has touched an intraday high of Rs 132.20 and an intraday low of Rs 114.90. The scrip was trading with volumes of 301,039 shares, compared to its five day average of 61,283 shares, an increase of 391.23 percent.
eMudhra IPO updates
India's largest licensed certified authority (CA) in the digital signature certificates space, eMudhra Limited, saw its public issue being booked 78 percent on the second day of subscription.
Investors have bid for 88.93 lakh shares against an IPO size of 1.13 crore units. Retail investors booked 1.49 times or 85.75 lakh shares of the portion set aside for them. Non-institutional investors booked 13 percent or 3.17 lakh shares allotted to them, while qualified institutional buyers were yet to subscribe to the issue.
Market Update at 2 PM: Sensex is up 297.02 points or 0.55% at 54623.41, and the Nifty up 58.30 points or 0.36% at 16324.50.
Nomura View On Ashok Leyland:
Broking house Nomura has kept buy rating on Ashok Leyland and raised the target price to Rs 168 per share.
M&HCV cycle set for a likely sharp recovery over FY22-24, while CNG range could improve market share, reported CNBC-TV18.
Buzzing:
Indiabulls Housing Finance reported an 11 percent increase in net profit for the fourth quarter of 2021-22 at Rs 306.75 crore from Rs 276.23 crore in the same period in the previous fiscal.
Revenue from operations declined by 7.7 percent to Rs 2,189.31 crore against Rs 2,371.71 crore in the same period in the previous fiscal.
Loan book fell by 7.4 percent to Rs 59,333 crore in the fourth quarter of last fiscal from Rs 64,062 crore a year ago.
Credit Suisse On Zydus Lifesciences
Research house Credit Suisse has upgraded Zydus Lifesciences rating to neutral with a target at Rs 380 per share.
The company gave good FY23 guidance, while Asacol HD competition likely delayed to Q3.
The cautious call was driven by high expectation from COVID vaccine opportunity. The balance sheet is stronger with a net cash position, reported CNBC-TV18.
Zydus Lifesciences was quoting at Rs 365.35, up Rs 8.20, or 2.30 percent on the BSE.
Credit Suisse View On Ashok Leyland:
Research firm Credit Suisse has maintained outperform rating on Ashok Leyland and raised the target price to Rs 169 per share.
The broking firm retained outperform rating on strong cyclical improvement in domestic CVs, reported CNBC-TV18.
Ashok Leyland was quoting at Rs 139.90, up Rs 9.60, or 7.37 percent on the BSE
Nifty Bank index added more than 1 percent led by the AU Small Finance Bank, PNB, IndusInd Bank
Patel Engineering Company Q4:
Patel Engineering Company has posted net profit of Rs 21.2 crore in the quarter ended March 2022 versus loss of Rs 144.9 crore and revenue was 51.6% at Rs 1,112 crore versus Rs 733.6 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) rose 97.8% at Rs 155 crore versus Rs 78.4 crore and margin at 13.9% versus 10.7%, YoY.
Market at 1 PM
Indian benchmark indices were trading higher with Nifty around 16,350.
At 13:00 hrs IST, the Sensex is up 406.76 points or 0.75% at 54733.15, and the Nifty up 91.40 points or 0.56% at 16357.60. About 1638 shares have advanced, 1504 shares declined, and 142 shares are unchanged.
eMudhra IPO Subscription Update:
Divis Laboratories Q4 Earnings:
Divis Laboratories has posted 78.2 percent jump in its Q4 consolidated net profit at Rs 894.6 crore against Rs 502 crore and revenue was up 40.8% at Rs 2,518.4 crore versus Rs 1,788.2 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was up 54.2% at Rs 1,104.4 crore versus Rs 716.3 crore and margin was up at 43.8 percent versus 40.1 percent, YoY.
Divis Laboratories was quoting at Rs 4,402.25, up Rs 95.65, or 2.22 percent on the BSE.
Zomato in focus ahead of its March quarter earnings
Shares of Zomato will be in focus ahead of its March quarter earnings due on Monday. The firm also said that it will take investors' calls after its earnings, for the first time since listing. The stock has fallen over 60% from its all-time high amid correction in stock markets. The scrip currently trading below its issue price of Rs 76 a share.
Jefferies View On Ashok Leyland:
Research firm Jefferieshas maintained buy rating on Ashok Leylandand raised the target price to Rs 160 from Rs 130 per share.
Research firm expect a big upcycle ahead as the truck market share has improved to 31% in Q4FY22.
It raises FY23/FY24 EPS estimates by 31%/6%, reported CNBC-TV18.
Today’s Stock Market Action
Aditya Birla Fashion & Retail in talks with GIC for raising funds
Aditya Birla Fashion & Retail is in talk with GIC for raising funds, quoting Source, reported CNBC-TV18.
GIC may infuse USD 300 million as equity and this fund may use for digital, direct-to-customer strategy, it added.
The company to consider GIC investment at board meet on May 24.
Aditya Birla Fashion & Retail was quoting at Rs 274.95, up Rs 3.75, or 1.38 percent on the BSE.
Tata Power to set up 7 MWp solar rooftop project at Tata Motors’ Chikhali plant
Reaffirming Tata Group’s commitment towards sustainable manufacturing The Tata Power Company Limited (Tata Power) and Tata Motors Limited (Tata Motors) have joined hands for the development of a 7 MWp solar rooftop project at Tata Motors’ Passenger Vehicle Plant in Chikhali, Pune, as per the company's press release.
This is the third phase of a joint 17 MWp on-site solar project developed by the two companies, of which a 10 MWp has been installed earlier. With this latest installation, the Tata Motors PV manufacturing unit, installed by Tata Power, will become home to India’s largest on-site solar project, it added.
Tata Power Company was quoting at Rs 234.25, up Re 1, or 0.43 percent on the BSE.
Market at 12 PM
Benchmark indices were trading higher in the afternoon session with Nifty above 16350.
At 12:02 hrs IST, the Sensex is up 455.89 points or 0.84% at 54782.28, and the Nifty up 107.30 points or 0.66% at 16373.50.About 1654 shares have advanced, 1439 shares declined, and 153 shares are unchanged.
Buzzing:
Shares of Jet Airways India locked at 5 percent upper circuit after the firm said it got an air operator certificate from Directorate General of Civil Aviation, allowing it to restart commercial flight operations.
Jet Airways now plans to recommence operations in July-September quarter. Aircraft and fleet plan, network and other details will be available in phases over the coming weeks.
BSE Capital Goods index rose nearly 2 percent led by the Hindustan Aeronautics, Carborundum Universal, Larsen & Toubro
Future Update:
Buzzing
Thermax reported a 4% year-on-year drop in consolidated net profit to Rs 103 crore for the March quarter. The company’s consolidated revenues were up 26% y-o-y to Rs 1,992 crore.
The company attributed lower profitability to increased commodity and freight costs during the quarter.
Thermax reported a 127% jump in order booking for the quarter to Rs 3,396 crore.
Sharekhan View On Ashok Leyland:
We expect Ashok Leyland to benefit from the faster recovery in CV volumes and improvement in EBITDA margins, led by operating leverage benefits.
The company is well placed in the industry to benefit from increased economic activities related to infrastructure, mining, and e-commerce, aided by its focus on growing its market share through increased penetration across all regions and new product launches.
The company’s profitability is expected to improve significantly in the medium term, with its EBITDA expected to post a 166% CAGR over FY2021-FY2023E.
Investments by investors and strategic partners in its EV subsidiary can lead to value unlocking and re-rating of the stock going forward.
We retain our buy rating on the stock with a revised price target of Rs 165.
Nifty Information Technology index rose 1 percent led by the Coforge, Mphasis, Mindtree
Macquarie View on One97 Communications:
Broking firm Macquariehas maintained underperform rating on One97 Communications with a target at Rs 450 per share.
The profitability still an uphill battle, while there was a marginal improvement in EBITDA losses and operating take rates are still weak.
The financial services business still sub-scale, however core business model uncertainties remains. It could take 12 quarters for EBITDA losses to break-even, reported CNBC-TV18.
