Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
:
The USDINR spot closed 16 paise higher at 75.51, the highest level since July 2020, in a volatile session of trading. There may have been intervention from RBI at higher levels, coupled with lumpy corporate flows which pushed prices lower but rising oil prices and firming US bond yields kept bids alive. Over the near term, bias remains upward. The range can be between 75.10 and 75.90 on spot.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
It was a volatile session for the markets but bulls gained strength in late trades as Nifty once again breached the 18,000 mark before ending a tad lower below the psychological mark. On daily and intraday charts, Nifty has formed a promising higher bottom formation.
The intraday structure suggests 17850 could be the trend decider level for the bulls. Above the same, the uptrend formation is likely to continue up to 18050-18125 levels. On the flip side, below 17850/59850 the uptrend would be vulnerable.
S Ranganathan, Head of Research at LKP securities:
The day witnessed hectic activity in PSU banking space with stocks from 2-wheelers and consumer durables seeing good demand in line with the festive mood.
While we did see a continuation of profit booking in IT names, the small & midcap space was buzzing with accumulation across sectors. A late surge in the metal index led by aluminium stocks lent support to the rally.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research:
The market witnessed some volatile movements and an attempt to hold the 17900 level. The market shows that it is going to be crucial in the short-term scenario to sustain above the 18000 level.
If the market is able to sustain the level of 18000, we can witness higher levels of 18250. The momentum indicators like RSI and MACD indicating positive momentum is likely to continue.
Vinod Nair, Head of Research at Geojit Financial Services:
Following selling in IT stocks as a result of a weak start to the earnings season and weakness in global markets, the domestic market traded in the negative zone. However, with strong support from PSU Banks on revamped hopes of privatisation and continued buying interest in consumer goods, metals and auto, indices managed to end on a positive note.
While global markets traded with cuts in fears of rising inflation due to soaring commodity prices and energy crunch.
Market Close:
Benchmark indices ended higher on the fourth consecutive session amid volatility on October 12.
At close, the Sensex was up 148.53 points or 0.25% at 60,284.31, and the Nifty was up 46.00 points or 0.26% at 17,992.00. About 1664 shares have advanced, 1483 shares declined, and 115 shares are unchanged.
Titan Company, Bajaj Auto, Bajaj Finserv, SBI and Hindalco were among the major gainers on the Nifty. HCL Technologies, HDFC Life, Coal India, Tech Mahindra and Shree Cement were among the big losers.
On the sectoral front, auto, FMCG, metal and PSU Bank indices rose 1-3 percent, while IT index lost nearly 1 percent. BSE Smallcap and Midcap indices ended in the green.
Emkay on Ramkrishna Forgings
Research house Emkay has retained buy on Ramkrishna Forgings with a DCF-based Dec'22 target price of Rs 1,530, implying a forward EV/EBITDA of 9x.
Operating leverage, B/S deleveraging, diversification and continued order wins/flows are likely to put company on a sustainable path of profitability.
ROE is likely to rise from a low of 3% in FY21 to 23% in FY24E, driven by better margins and asset turnover. The key risks are delay in auto sector/macro recovery, client concentration risk and adverse currency.
BSE Metal index rose 1 percent led by the NALCO, Vedanta, Hindalco Industries
Yash Gupta, Equity Research Analyst, Angel One:
The Subject Expert Committee (SEC) of the drug regulator has granted an emergency use of Covaxin for kids age between 2-18 years.
Bharat Biotech Covaxin has completed phase 2 and phase 3 trials on children below 18 years of age in September 2021 and then submitted the trails data to DCGI (Drug and Controller general of India) after that Covaxin got approval for emergency usage for kids age between 2-18 years.
Overall this is positive news, as now children will also get the vaccine. Children will also require to get two dosages, with a gap of 20 days which is 84 days in the case of adults.
Nifty PSU Bank index added 3 percent supported by the Indian Bank, Canara Bank, IOB
Market at 3 PM
Benchmark indices kept gyrating between gain and losses with Sensex holding above 60000 level.
The Sensex is up 79.34 points or 0.13% at 60215.12, and the Nifty was up 26.90 points or 0.15% at 17972.90. About 1593 shares have advanced, 1490 shares declined, and 127 shares are unchanged.
Q2FY22 Power Generation at 7.3% YoY
"India’s overall power generation has improved to 7.3% YoY at 345 billionunits in Q2FY22, due to better power demand post lockdown relaxations. September generation was hit due to coal shortage, which showed volume contraction of 2% YoY. Coal-based thermal generation significantly improved 9.4% in Q2FY22 while hydro generation was saw slight growth at 1.8% YoY to 56.6 billion units and gas generation was negatively affected by higher gas prices. Renewables power generation rose 9% YoY on higher capacity addition," said Elara Securities.
Oil Price Rise Is A Risk
"Oil price spike beyond $80 a barrel is a key macro risk for Indian equities in terms of its impact on trade deficit and inflation. Risk is reflected in the INR depreciating by around 1.8% and bond yields rising by 13 bps over the past two weeks," said ICICI Securities.
Currently Brent crude futures traded at $84 a barrel, rising 62 percent year-to-date. Indian imports 80-85 percent of crude oil from oil producers every year, so any rise oil price is always a risk.
Top F&O Gainers
Delta Corp, BHEL, Titan Company, Canara Bank and Jubilant Foodworks are top gainers in the F&O segment, rising 4.5-6 percent,while NRB Industrial, AKG Exim, Arshiya, Williamson Magor and Hindustan Motors locked in 20 percent upper circuit.
Healthcare Q2FY22 Preview
ICICI Direct feels continuity of domestic formulations growth with increasing share of non-Covid portfolio is likely to drive Q2FY22 sales even as expected weakness in the US generics space could act as a spoiler for overall momentum.
"The I-direct healthcare universe (12 coverage companies) is expected to post YoY growth of around 5.5% to around Rs 46,123 crore. Domestic formulations (select pack) are expected to grow around 14%to Rs 11,219 crore due to continuous traction from acute segment (momentum began from Q1) besides normalised trend in the chronic segment," said the brokerage whichexpects a significant shift in growth momentum from Covid to non-Covid portfolio on the back of receding active cases and growing vaccination drive across the country.
Results on October 12
Bhansali Engineering Polymers, GM Breweries, Indbank Merchant Banking Services, Ind Bank Housing, JTL Infra, and DRC Systems India will announce its quarterly earnings on October 12.
Robust Presales Momentum
"The rerating ofreal estate stocks has surprised the street as well as us, with Nifty Realty Index having outperformed the Nifty Midcap 50 Index by 63 percentover the past year. Whilst we were positive on the sector, the extent of outperformance has been beyond our forecasts. The pandemic played a catalyst in accelerating market share gains into the hands of organised real estate players," said HDFC Securities.
"Banks, equity capital providers, buyers, and supply chains aligned with stronger developers to further solidify this shift. Economic recovery, high attrition backed by higher salaries, robust stock markets, low interest rates, high affordability, collapse of tier-2 developer ecosystem, new launches and quest for large house ownership/house ownership are some of the tailwinds fueling this recovery. We believe that this recovery has multiple legs and strong branded developers stand to gain disproportionately," the brokerage added.
Nifty IT Index Extends Losses For Second Day Post TCS Earnings
The Nifty IT index corrected 1 percent as HCL Technologies, Tech Mahindra, KPIT Technologies and Birlasoft fell 2-4 percent.
Gold-loan NBFCs Set To Clock 18-20% Growth In Current Fiscal
"Assets under management (AUM) of non-banking financial companies (NBFCs), which primarily offer loans against gold, is expected to rise 18-20 percentto Rs 1.3 lakh crore this fiscal. This would be despite a contraction in the first quarter, when the pandemic-driven lockdown measures hindered branch operations and kept potential borrowers away," said CRISIL Ratings in its note.
"Demand for gold loans from micro enterprises and individuals – to fund working capital and personal requirements, respectively – has increased with the pick-up in economic activity and the onset of the festive season, which coincides with the easing of lockdown restrictions by several states," the rating agency added.
Market at 2 PM
The benchmark indices continued to trade in the negative territory with Sensex holding above 60,000.
The Sensex was down 52.25 points or 0.09% at 60083.53, and the Nifty was down 13.00 points or 0.07% at 17933. About 1558 shares have advanced, 1499 shares declined, and 127 shares are unchanged.
Gaurav Garg, Head of Research, Capitalvia Global Research:
Indian equity benchmarks remained lower in the early afternoon session, with both Sensex and Nifty trading in red. Traders were cautious as a private report stating that the Reserve Bank is likely to change the stance of its monetary policy and hike rates from the first quarter of 2022.
Some concern also came after the World Bank said that the debt burden of the world’s low-income countries rose by 12 percent as countries responded to the Covid-19 crisis with massive fiscal, monetary and financial stimulus packages.
Our research suggests that 59600-59800 will be an important support level in the market. If the market sustains above 59600-59800, we can expect the market to trade in the range of 59600-60300. Technical indicators also support positivity in the market.
GM Breweries Q2 net profit rises 95.5% at Rs 21.9 crore
GM Breweries has posted 95.5 percent jump in its Q2FY22 net profit at Rs 21.9 crore against Rs 11.2 crore and revenue was up 59.8% at Rs 116 crore against Rs 72.6 crore, YoY.
The earnings before interest, tax, depreciation and amortization (EBITDA) was up 92.1% at Rs 29.2 crore and margin was at 25.2percent, YoY.
GM Breweries touched a 52-week high of Rs 837.15 and was quoting at Rs 822.15, up Rs 45.25, or 5.82 percent on the BSE.
Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One
On Monday, Spot gold ended marginally lower by 0.15 percent to close at $1754.1 per ounce. The bullion metal remained steady on the first trading day of the week as worries over possible stagflation overshadowed a stronger Dollar.
However, the dollar continued to gain strength on bets over tapering of the asset purchase program by US Federal Reserve which limited the gains for Gold.
A hawkish monetary approach which would lead to higher interest rates has clouded the outlook for the non-interest bearing Gold.
Also, increasing oil prices following bets over resumption in global economic activities boosted markets risk appetite which further pressured the safe haven Gold.
Gold might remain under pressure as the dollar remains steady on expectation of a tighter monetary policy by the US Central bank.
Oil rises for fourth day amid energy crunch
Oil prices reversed early losses to extend gains on Tuesday into a fourth day amid a rebound in global demand that is contributing to energy shortages in major economies.
Brent crude was up 21 cents or 0.3% at $83.86 a barrel at 0632 GMT, the highest in three years, after rising 1.5% on Monday.
U.S. oil gained 13 cents or 0.2% to $80.65 a barrel, a seven-year high, having also gained 1.5% in the previous session.
Market at 1 PM
Benchmark indices were trading lower dragged by the IT stocks.
The Sensex was down 101.90 points or 0.17% at 60033.88, and the Nifty was down 29.00 points or 0.16% at 17917. About 1490 shares have advanced, 1555 shares declined, and 115 shares are unchanged.
Ujjivan Small Finance Bank Q2 business update:
Ujjivan Small Finance Bank's gross loan book was up 4% YoY and up 3% on QoQ.
Its total deposits was up 31% and retail deposits were up 38% YoY. Its CASA ratio was at 22% Vs 16%, YoY.
The share was quoting at Rs 22.20, up Rs 1.40, or 6.73 percent.
Buzzing:
Tata Metaliks share price slipped 7 percent on October 12 after company reported poor numbers for the quarter ended September 2021.
The Q2FY22 net profit was down 33.4% at Rs 54.62 crore against Rs 82 crore in the same quarter last year, Tata Metaliks said in its release.
However, revenue of the company was up 24.1% at Rs 644.84 crore versus Rs 519.63 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was down 8.9% at Rs 99.7 crore and margin was down at 15.5 percent, YoY.
Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One:
On Monday, WTI Crude rose over 3 percent to close at USD 82 per barrel whereas MCX Crude prices surged over 4 percent closing at Rs 6186 per barrel. Oil extended gains from the earlier week and touched record levels following revival in global demand amid tight supply.
Mounting supply concerns following the resumption in global economies and revival in markets risk appetite have been supporting oil prices since last week.
OPEC and its allies vowing to stick with its scheduled expansion in production activities and US Energy Department not willing to release oil from the emergency crude reserves despite escalating shortage concerns further underpinned oil price.
The gains for crude were capped as appreciation in the US Dollar made the dollar denominated oil less desirable for other currency holders.
Rising fuel demand given the recovery in economic activities amid tighter oil supply and increasing natural gas prices might keep prices elevated.
Crude Updates:
Oil prices edged lower on Tuesday, dropping for the first time in four days in what analysts called a breather after weeks of gains fuelled by a rebound in global demand that is contributing to energy shortages in major economies.
Brent crude was down 6 cents at $83.59 a barrel at 0440 GMT, after touching three-year highs on Monday on the way to a 1.5% advance.
U.S. oil fell 13 cents to $80.39 a barrel, having also gained 1.5% in the previous session, in which it reached the highest in around seven years.
Market Updates:
Benchmark indices were trading lower with Nifty above 17900 amid selling seen in the IT and pharma names.
At 12:09 IST, the Sensex was down 114.88 points or 0.19% at 60020.90, and the Nifty was down 38.80 points or 0.22% at 17907.20. About 1431 shares have advanced, 1577 shares declined, and 119 shares are unchanged.
SJS Enterprises, Mobikwik, Skanray Tech Get Sebi Nod For IPOs
The Securities and Exchange Board of India (Sebi) has given its approval for the initial share sales of three companies, including SJS Enterprises and One Mobikwik Systems. Medical equipment maker Skanray Technologies has also received the nod from the watchdog for its initial public offering (IPO).
The three companies have been issued observations by the watchdog, according to the update on the processing status of draft offer documents as on October 8. An observation letter is mandatory for an initial share sale. In Sebi parlance, the issuance of observations implies its go-ahead for the IPO, reports PTI.
PAT To Outpace Sales On Growth in Q2FY22
Elara Capital envisaged Nifty-50 companies (excluding BhartiAirtel) to post 7.7%/16% sales/PAT growth in Q2FY22E, on two-year CAGR. "EBITDA, excluding Financials and Bharti, should likely be 16.8 percent, on two-year CAGR. Q2FY22, in the vein of Q1FY22, is affected by a distorted base. Thus, we continue to base our analysis on two-year CAGR, so as to arrive at pre-COVID comparisons, which helps us glean better colour on earnings performance."
They anticipate Elara universe’s Q2FY22E sales/PAT to likely grow 7.8%/20.3% on two-year CAGR, respectively. "Elara universe’, ex-Financials, sales/EBITDA/PAT two-year CAGR would likely stand at 7.5%/20.4%/15.7%, respectively. Bottom-line growth should outpace topline on operating leverage, witnessed by commodities stocks as they benefit from raw materials price hikes."
Nifty IT index shed 1.5 percent dragged by the HCL Tech, Coforge, Tech Mahindra
CLSA maintains buy call on Bharti Airtel:
Foreign broking house CLSA has maintained buy call on Bharti Airtel with a target at Rs 810 per share.
The cashback offer on 150 smartphones is likely to be ARPU accretive, and cashback offer will boost 4G subscriber additions & reduce the churn, said CLSA.
The timing is a positive too ahead of JioPhone next launch in November. CLSA retain its forecasts of over 50% EBITDA growth by FY24 in Bharti Airtel.
The company board has approved the appointment of Soumen Ray as the Chief Financial Officer (India & South Asia) and Key Managerial Personnel of the company w.e.f. December 21, 2021, company said in its release.
Bharti Airtel was quoting at Rs 687.95, down Rs 2.85, or 0.41 percent.
Alembic Pharmaceuticals gets EIR from USFDA
Alembic Pharmaceuticals has received Establishment Inspection Report (EIR) from US Food and Drug Administration (USFDA) for the inspection carried out by them at New Injectable Facility (F-3) at Karakhadi during the period from January 28, 2021 to February 5, 2021, indicating that the USFDA finds company's responses to their observations to be adequate, company said in its release on the exchanges.
USFDA has also indicated that a compliance verification would be performed during re-inspection of the said facility in the next review cycle.
Alembic Pharmaceuticals was quoting at Rs 831.00, up Rs 11.55, or 1.41 percent on the BSE.
Schaeffler India to consider stock split on October 28
A meeting of board of directors of Schaeffler India is scheduled to be held on October 28, 2021 to consider and approve the unaudited financial results of the company for the quarter ended September 30, 2021 and consider sub-division of equity shares of the company.
Schaeffler India touched a 52-week high of Rs 8,377.20 and was quoting at Rs 7,699.75, up Rs 482.05, or 6.68 percent on the BSE.
Market at 11 AM
Benchmark indices were trading marginally lower in the volatile trade with Nifty holding above 17900.
The Sensex was down 90.78 points or 0.15% at 60045, and the Nifty was down 24.40 points or 0.14% at 17921.60. About 1443 shares have advanced, 1505 shares declined, and 116 shares are unchanged.
L&T Construction bags orders in the range of Rs 1,000-2,500 crore
L&T Construction, the construction arm of L&T has secured various orders in India for its businesses.
The Metallurgical a Material Handling (MMH) business has secured an order to set up Coke Oven, By Product and Coke Dry Quenching plants.
The Buildings and Factories business has won an order from a prestigious client for construction of office space at Hyderabad.
The Water & Effluent Treatment business has bagged an order from Indian Oil Corporation (IOCL) to construct a Demineralization Plant, ETP and allied facilities for its Barauni Refinery in Bihar.
L&T GeoStructure Pvt Ltd. (LTGS), a wholly owned subsidiary of L&T, has bagged a strategic order from the Department of Water Resources, Government of Odisha.
Larsen & Toubro was quoting at Rs 1,707.95, down Rs 8.75, or 0.51 percent on the BSE.
Buzzing
Delta Corp share price touched a 52-week high of Rs 305, gaining 12 percent on October 12 after company narrowed its losses in the quarter ended September 2021.
In the quarter ended September 2021 company has reported net loss of Rs 22.57 crore against loss of Rs 54.91 crore in the same quarter last year.
The company posted a net loss of Rs 28.93 crore in the quarter ended June 2021, saw its revenue increase by 94 percent at Rs 74.72 crore versus Rs 38.37 crore, YoY.
BLS International gets authorized by the Embassy of Brazil for visa processing in India
BLS International has been authorized by The Embassy of Brazil in India for visa application processing. Under this mandate, the company will be accepting visa applications from centres in Delhi and Mumbai in India, company said in its press release.
BLS International Services was quoting at Rs 261.20, up Rs 0.50, or 0.19 percent on the BSE.
Tata Power Solar receives EPC orders worth Rs 538 crore from EESL:
Tata Power Solar Systems, a wholly-owned subsidiary of Tata Power, has received “Letter of Award” (LoA) to build 100 MW of Distributed Ground Mounted Solar projects for Energy Efficiency Services Limited (EESL). The total order value of project is Rs 538 crore. The commissioning date of the projects is set for 12 months, company said in the release.
Tata Power Company touched a 52-week high of Rs 198.70 and was quoting at Rs 193.70, up Rs 2.15, or 1.12 percent on the BSE.
Nifty Auto index rose 1 percent supported by the TVS Motor, Bajaj Auto, Hero MotoCorp
Tata Motors share price hits 52-week high:
Tata Motors share price continued to gain for the fourth straight session on October 12 after the company reported 24 percent higher global wholesale figures for the September quarter compared the year-ago period.
The Tata Motors Group global wholesales in Q2FY22, including Jaguar Land Rover, were at 2,51,689, 24 percent higher from Q2FY21, the company said in a press release.
Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in Q2FY22 were at 89,055, higher by 57 percent and passenger vehicles were at 1,62,634, up 11 percent from Q2FY21.
Tata Motors touched a 52-week high of Rs 435.65 and was quoting at Rs 423.40, up Rs 7.75, or 1.86 percent on the BSE.
HCL Technologies expands its strategic partnership with Google Cloud
HCL Technologies has expanded its strategic partnership with Google Cloud to jointly launch healthcare and life sciences solutions for customers, company said in the release.
HCL Technologies was quoting at Rs 1,253.50, down Rs 48.75, or 3.74 percent on the BSE.
Rupee Opens:
Indian rupee opened 7 paise lower at 75.42 per dollar on Tuesday against Monday's close of 75.35.
The movement in rupee is mainly driven by the uptrend in crude and DXY. Some cooling off in crude prices and sell side RBI intervention may limit the trend in USDINR spot. But worries about US inflation are still alive and any upswing in US CPI this week, will boost expectations of an earlier FOMC rate hike next year after tapering, keeping the USDINR spot afloat, said Emkay Global Financial.
So this week, we expect the spot to trade in between 74.75-75.50. There lies a strong support around 74.80-74.75, a break of which may push the spot towards 74.50. While, on upside a break of 75.50, may open doors for 75.75, it added.
