Ajit Mishra, VP - Research, Religare Broking:
Markets traded lackluster in a narrow range and ended lower amidst weak cues. Initially, feeble global cues were weighing on the sentiment but failed to trigger any major fall. Consequently, the Nifty index settled at 11,896; down by 0.4%. In between, movement in the broader market kept the participants busy wherein both Midcap and Smallcap index ended higher by 0.6% and 1% respectively. On the sector front, Telecom, Capital Goods and Metals were the top gainers whereas IT, Banking and Healthcare ended with losses.
Markets are currently seeing time-wise correction after a phenomenal recovery and we feel it’s healthy for the markets before the next directional move. However, traders are facing tough times due to recent consolidation in the index while stocks are witnessing volatile swings due to the prevailing earnings season and mixed global cues. We suggest limiting naked leveraged positions in such a scenario and preferring hedge positions. Investors, on the other hand, should use this phase to accumulate quality stocks on dips.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities:
The short term trend of Nifty is range bound with minor weak bias. There is a possibility of continuation of range bound action around 11850-11950 levels by next session. Immediate supports to be watched at 11800 and crucial upside hurdle is placed at 12025.
S Ranganathan, Head of Research at LKP Securities:
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.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
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.
Market close:
Benchmark indices broke the 4-day winning streak and ended lower with Nifty settled below 11900 dragged by the pharma, IT and banking names.
At close, the Sensex was down 148.82 points or 0.37% at 40558.49, and the Nifty was down 41.20 points or 0.35% at 11896.50. About 1412 shares have advanced, 1188 shares declined, and 159 shares are unchanged.
IndusInd Bank, Hero MotoCorp, Infosys, ICICI Bank and Cipla were among major losers on the Nifty, while gainers included Bharti Airtel, Tata Motors, IOC, NTPC and Bajaj Finance.
Among sectors, pharma, IT and bank ended in the red, while buying witnessed in the energy, metal and infra sectors. BSE Midcap and Smallcap indices added 0.5-0.8 percent.
ICICIdirect on Tata Metaliks:
The investment lined up in development of water infrastructure and allied projects augurs well for DI pipes demand, which is likely to grow at a steady pace in the medium term to longer term horizon. The government had constituted the Jal Shakti Mantralaya whose primary objective is to work with states to ensure Har Ghar Jal (piped water supply) to all rural households by 2024 under the Jal Jeevan Mission, auguring well for DI pipes demand.
We value the stock at 6x FY22E EV/EBITDA and arrive at a target price of Rs 675. Hence, we assign a buy rating to the stock. Key risk to our call is a significant increase in raw material costs and lower-than-expected increase in demand for DI pipes.
Asian Paints Q2
The company's consolidated net profit rose 1.2% YoY at Rs 851.9 crore versus Rs 842.1 crore and revenue was up 5.9% at Rs 5,350.2 crore versus Rs 5,051 crore, reported CNBC-TV18.
Market Updates
Benchmark indices recovered some intraday losses but still trading in the red with Nifty around 11900.
At 15:10 IST, the Sensex was down 169.61 points or 0.42% at 40537.70, and the Nifty was down 43.10 points or 0.36% at 11894.60. About 1298 shares have advanced, 1169 shares declined, and 122 shares are unchanged.
IOC board to consider fund borrowing
The board on October 30 would consider the proposal for delegation of authority for borrowings including borrowings upto Rs 20,000 crore during a financial year through private placement of bonds/ debentures in one or more tranches, from time to time, within the overall borrowing limit of Rs 1,65,000 crore approved by shareholders at the last Annual General Meeting.
Dolat Capital on Bajaj Auto:
Dolat Capital has maintained positive stance on Bajaj Auto given 1) improving outlook for domestic and export 2W segments owing to increasing preference for personal mobility, 2) operating efficiency and volume recovery to support EBITDA margin and 3) strong cash reserves.
Tube Investments Q2
: Net profit went up 9.6 percent at Rs 99.2 crore against Rs 90.5 crore (YoY). Revenue went down 4.3 percent at Rs 1,193 crore against Rs 1,247.5 crore (YoY). EBITDA grew 11.7 percent at Rs 175 crore against Rs 156.4 crore (YoY). EBITDA margin stood at 14.6 percent against 12.5 percent (YoY).
Rupee at close
Rupee closes at 73.53 per US dollar against October 21 close of 73.58 per US dollar.
Equitas Small Finance Bank fully subscribed on final day:
The Rs 518 crore public offer of Equitas Small Finance Bank has been fully subscribed on October 22, the final day of bidding. The IPO has seen tepid response so far despite attractive valuations.The offer has received bids for 14.38 crore equity shares against offer size of 11.58 crore equity shares, the subscription data available on the exchanges showed. The offer size excluded anchor book, through which company had raised Rs 140 crore on October 19.
Most active stocks on NSE in terms of volumes
Abhishek Bansal, Founder Chairman, Abans Group:
Silver prices dropped from yesterday’s high of USD 25.425, after the dollar recovered, and doubts emerged on a new US fiscal coronavirus aid package. On Wednesday, President Donald Trump accused Democrats of being unwilling to craft a compromise on aid. Precious metals are likely to find support from Dovish central bank comments. U.S. Federal Reserve Governor, Lael Brainard, has said that the economic recovery is uneven, while ECB President, Lagarde, has said that the unexpected early second wave of Covid infections is a "clear risk" to the economic outlook.
Silver prices are likely to find support near the 100-days EMA at USD 23.78, and the 200-days EMA at USD 21.89. Meanwhile, critical resistance is seen near USD 25.98-USD 26.83 levels.
Indian Bank Q2
: Net profit went up 11.6 percent at Rs 412.3 crore against Rs 369.3 crore (QoQ). Gross NPA at 13.64 percent against 13.45 percent (QoQ). Net NPA at 10.57 percent against 10.3 percent (QoQ). Provisions at Rs 2,284.1 crore against Rs 2,139 crore (QoQ). NII grew 7 percent at Rs 4,144 crore against Rs 3,874 crore (QoQ). Gross NPA at Rs 36,198 crore against Rs 39,965 crore (QoQ). Net NPA at Rs 10,052 crore against Rs 12,755 crore (QoQ).
UCO Bank Q2
: Net profit at Rs 30.1 crore against loss of Rs 892 crore (YoY). Gross NPA at 11.62 percent against 14.38 percent (QoQ). Net NPA at 3.63 percent against 4.95 percent (QoQ). NII grew 10 percent at Rs 1,393.2 crore against Rs 1,266.2 crore (YoY). Provisions at Rs 1,300 crore against Rs 1,180 crore QoQ and against Rs 2,099 crore YoY. Gross NPA at Rs 13,366 crore against Rs 16,576 crore (QoQ). Net NPA at Rs 3,832 crore against Rs 5,138 crore(QoQ). Loan growth at 6.7 percent (YoY).
Aurobindo Pharma gets USFDA nod
Aurobindo Pharma has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Acetaminophen Injection, 1,000 mg/ 100 mL single-dose vial (SDV).
Acetaminophen Injection is a generic equivalent of Mallinckrodt’s Ofirmev Injection. The product will be launched in December 2020.
Bajaj Auto Q2 result
The company has posted 18.8 percent YoY fall in its Q2 net profit at Rs 1,138.2 crore versus Rs 1,402.4 crore and revenue was down 7.2% at Rs 7,156 crore versus Rs 7,707.3 crore.
EBITDA was down at Rs 1,266.2 crore and margin was at 17.7 percent, reported CNBC-TV18.
Aurobindo Pharma gets USFDA nod
Aurobindo Pharma has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Acetaminophen Injection, 1,000 mg/ 100 mL single-dose vial (SDV).
Acetaminophen Injection is a generic equivalent of Mallinckrodt’s Ofirmev Injection. The product will be launched in December 2020.
Sterlite Technologies Q2 numbers
The company has reported consolidated net profit at Rs 58 crore in the Q2FY21 versus Rs 6 crore in the quarter ended June 2020.
Revenue of the company was up 32% at Rs 1,160 crore versus Rs 876 crore. EBITDA rose 61% at Rs 212 crore and margin was at 18 percent, reported CNBC-TV18.
ICICIdirect on Bajaj Finance:
Leaving the year FY21 behind and front loading provisions for asset quality stress, the management has guided for strong improvement from FY22E. They believe transformation has led to lower operating costs, while business velocity to surge ahead. As per the management, post March, April 2021 when normalcy is likely to be achieved: 1) growth is expected to accelerate to 25-27% (we factor in 19% growth in FY22) and 2) credit costs for FY22 to be in 160-180 bps of average loans (we have factored 220 bps).
Factoring in these two changes along with tight cost to income ratio trend, our FY22E PAT estimate has been revised upwards by 23% to Rs 5723 crore. Given lower moratorium and meagre restructuring till date, return ratios are well placed to witness improvement ahead.
RoE seen back to ~15% and RoA at 2.2% in FY22E. At 5.1x FY22E ABV, the stock valuations look reasonable for long term earnings growth guidance of 23-24%. We upgrade the stock from hold to buy and revise our target price to Rs 3850, valuing the stock at ~6x FY22E ABV.
FPIs raises stake in RIL
Foreign Portfolio Investors raised their stake in Reliance Industries (RIL) to 25.20 percent in September quarter from 24.72 percent in the quarter ended June 2020.
BSE Metal Index rose 1 percent supported by the Vedanta, SAIL, Tata Steel:
RBI announces Rs 1 lakh crore 'on tap' TLTRO:
The Reserve Bank on October 21 announced an 'on tap' Targeted Long-Term Repo Operations (TLTRO) scheme of up to Rs 1 lakh crore to enable banks to provide liquidity support to a host of sectors, including agriculture, retail, drugs and pharmaceuticals and MSMEs. "Investments made by banks under this facility will be classified as held to maturity (HTM) even in excess of 25 per cent of total investment permitted to be included in the HTM portfolio. All exposures under this facility will also be exempted from reckoning under the large exposure framework (LEF)," the RBI said.
All banks eligible under the Liquidity Adjustment Facility (LAF) can participate in the scheme. Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial paper and non-convertible debentures issued by entities in sectors like agriculture; agri-infrastructure; secured retail; MSMEs; and drugs, pharmaceuticals and healthcare — over and above the outstanding level of their investments in such instruments as on September 30, 2020.
Rupee Update
s:Indian rupee has recovered but tradingmarginally lower at 73.63 per dollar, amid selling seen in the domestic equity market.
It opened 19 paise lower at 73.77 per dollar against previous close of 73.58.
Buzzing Stock
Dr Reddy's Laboratories share price was trading lower by a percent after data breach forces the pharma company to shut plants. In major data breach, drug maker Dr Reddy's Laboratories has temporarily shutdown production across its key plants. The incident happened in the early hours. Sources within the company confirmed to Moneycontrol about the breach, and the halt of production.
Ashok Leyland launches trucks:
The company launched the BOSS LE and LX Trucks, with i-Gen6 BS-VI technology in BS6. BOSS Brand has been one of the leading brands, from Ashok Leyland, in the Intermediate Commercial Vehicle (ICV) segment. These two vehicles will address the 11.1 tonne to 14.05 tonne GVW market. Customers can choose from multiple combinations, the company said in an exchange filing.
Way2Wealth Research on Hindustan Zinc:
Volume ramp-up, however, has been lagging guidance. Promoter Vedanta pledging part of its shareholding in the company is an additional overhang on the stock. Zinc outlook would be supported by the broadly balanced market in CY20, supply cutbacks and gradual recovery in demand with easing of lock-down. Strong silver prices, lower costs and recovery in metal volumes would support earnings. Strong growth visibility, high payout, FCF yield and inexpensive valuations compel it to be an attractive risk-reward. Hence, we continue to see it as a value buy for the near to medium term with fair price of Rs 255-265.
Market Update
: Sensex is down 116.17 points or 0.29 percent at 40591.14, and the Nifty shed 36.30 points or 0.3 percent at 11901.40. Bharti Airtel, Tata Steel and Larsen & Toubro are the top gainers while Reliance Industries, Dr Reddy's Labs and Bajaj Finance are the most active stocks. Among the sectors, the metal and the capital good index are trading in the green while the midcap and smallcap indices are trading flat.
Hareesh V, Head of Commodity research, Geojit Financial Services
: 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.
In the event of inability to move past USD 1,940, we can expect selling pressure to continue during the day. However, major weakness may be seen only a close below USD 1,840.
Motilal Oswal on Colgate Palmolive
: We maintain a buy on Colgate given that the nature of the category (98 percent of sales from oral care) offers less uncertainty currently. It has best-of-breed balance sheet, valuations are moderate at 38x FY22E EPS, close to its 10-year average, and there is a spark of an incipient market share recovery under the new Managing Director. We arrive at a target of Rs 1,720 (target multiple of 40x September 2022E EPS, close to 5-year average).
Buzzing Stock
National Peroxide share price was up over 6 percent after the company's net profit surged 286 percent to Rs 22.33 crore in the quarter ended September 2020 as against Rs 5.78 crore during the previous quarter ended September 2019.
India at doorstep of economic revival: RBI Governor Shaktikanta Das
Reserve Bank Governor Shaktikanta Das on October 21 said the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government.
"We are almost at the doorstep of revival process and it's very important that the financial entities have adequate capital (to support growth)," he said. Many of them have already raised capital and others are planning, he said, adding they would certainly do so in the coming months.
Newgen Software gains 6%
Newgen Software Technologies share price gained over 6 percent on October 22 jumping over 15 percent in the last 2 days.The company’s quarterly net profit was at Rs. 27.52 crore in September 2020 up 745.77 percent from Rs. 3.25 crore in September 2019. EBITDA margin was up 26.5 percent from 5.9 percent amid strong cost rationalisation initiatives undertaken by the company.
Net sales was at Rs 145.17 crore in September 2020 up 10.71 percent from Rs. 131.13 crore in September 2019.EBITDA stands at Rs. 41.37 crore in September 2020 up 245.33 percent from Rs. 11.98 crore in September 2019.
Granules India gets USFDA nod
Granules has received marketing approval from the USFDA for Potassium Chloride Extended Release Tablets USP, 10 mEq (750 mg) and 20 mEq (1500 mg) for the treatment of patients with hypokalemia. Granules’ tablet product is bioequivalent to the reference listed drug (RLD), K-Dur.
Market Updates
Benchmark indices are trading lower with Nifty around 11900.
At 10:21 IST, the Sensex was down 121.74 points or 0.30% at 40585.57, and the Nifty was down 39.30 points or 0.33% at 11898.40. About 1069 shares have advanced, 883 shares declined, and 94 shares are unchanged.
Sebi to increase Investor Protection Fund size: Chairman Ajay Tyagi
The Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi says the capital markets regulator is considering taking multiple steps to assuage investor concerns about the safety of their investments.
The steps include the expansion of the Investor Protection Fund (IPF). Sebi is also working on the proposed T+1 settlement, he said.
Aurobindo Pharma arm gets warning letter
AuroLife Pharma LLC, a wholly owned stepdown subsidiary of the company, has received a warning letter from USFDA for its oral solid manufacturing facility situated at Dayton, New Jersey.
Company believes that the existing business from this facility will not be impacted and company will be engaging with the regulator and are fully committed in resolving this issue at the earliest.
Rupee Opens
Indian rupee slipped in the early trade on October 22. It opened 19 paise lower at 73.77 per dollar against previous close of 73.58, amid selling seen in the domestic equity market.
On October 21 rupee ended 12 paise lower at 73.58 per dollar versus Tuesday's close of 73.46.
Nifty Pharma Index shed 1 percent dragged by the Aurobindo Pharma, Dr Reddy's Lab, Cipla
Embassy Office Parks to acquire property maintenance services biz:
The board of directors of Embassy Office Parks Management Services Private Limited, manager to Embassy Office Parks REIT approved the acquisition of the property maintenance services business in relation to Embassy Manyata Business Park, Bengaluru and Embassy TechZone, Pune by Manyata Promoters and Embassy Office Parks respectively, from Embassy Services Private Limited.
Crude Updates
Oil prices dropped in early trade on Thursday, adding to heavy losses overnight, after a build in USgasoline inventories pointed to a deteriorating outlook for fuel demand as coronavirus cases soar in North America and Europe.
Gainers and Losers on the BSE Sensex:
Market Opens:
Indian indices opened on negative note on October 22 with Nifty around 11900.
At 09:16 IST, the Sensex was down 71.54 points or 0.18% at 40635.77, and the Nifty was down 25.50 points or 0.21% at 11912.20. About 492 shares have advanced, 443 shares declined, and 39 shares are unchanged.
Bajaj Auto to announce Q2 earnings today; here's what brokerages expect
Company sold 10.53 lakh units in September quarter, down 10.2 percent compared to 11.74 lakh units sold in same period last year, but up 137.7 percent QoQ.... Read More
Market at pre-open
: Benchmark indices are trading lower in the pre-opening session with Nifty below 11850.
At 09:02 IST, the Sensex was down 194.40 points or 0.48% at 40512.91, and the Nifty was down 114.60 points or 0.96% at 11823.10.
Asia Updates
Asian shares fell on Thursday and U.S. Treasury yields ticked lower as investors fretted over the slow pace of U.S. stimulus talks and a surge in global cases of COVID-19 ,reported Reuters.
Global investor sentiment took a fresh hit over talks to boost the world's largest economy after U.S. President Donald Trump on Wednesday accused Democrats of being unwilling to craft an acceptable compromise on stimulus, following reports of progress earlier in the day, it added.
