Closing Bell: Nifty below 21,500, Sensex falls 314 pts; pharma gains, banks drag

The Nifty slipped below the rising trendline on the daily chart, suggesting a bearish trend reversal. Besides, the index has fallen below the critical near-term moving average. Now, the trend is likely to remain weak as long as the index stays below 21,550. A decisive move above 21,550 might weaken the bears; until then, bears might control the market. On the lower end, support is placed at 21,400. A drift below 21,400 might take Nifty for a revisit to 21,250-21,200.

Net profit up 17.3% at Rs 2,297.9 crore against Rs 1,959.2 crore and Net Interest Income (NII) up 17.8% at Rs 5,295.7 crore versus Rs 4,495.4 crore, YoY.

While markets suffered losses for the third consecutive session, key indices pared losses in the second half amid recovery in European and select Asian indices. Investors will be more watchful about the ongoing earnings season as any stress on quarterly numbers could dampen the sentiment in the near term. A sharp rise in crude oil prices also cautioned investors to trim their positions in banking, IT and power stocks.

Markets extended fall and lost half a percent amid volatility. After the gap-down opening, Nifty tried to pare losses but continued fall in HDFC Bank and fresh decline in select heavyweights capped the recovery. Meanwhile, energy, banking and metal were among the top losers on the sectoral front while pharma and realty showed some strength. The broader indices also managed to end unchanged after a volatile swing.

Nifty couldn’t defend the short term moving average i.e. 20 EMA on the expected lines and came closer to the next crucial support of 21,200 level. Indications are now in favor of some consolidation after the recent fall and any rebound to 21,700-21,850 would attract fresh shorts. We thus reiterate our view to reduce positions on the rise and wait for some stability in the trend.

The Nifty opened the gap down and witnessed a volatile day of trade. It witnessed wild swings in both directions and the Nifty ultimately closed in the negative down ~110 points. On the upside, the counter-trend pullback can extend till 21600 – 21650 where resistance in the form of the 20-day moving average is placed. In terms of levels, 21550 – 21570 is the immediate hurdle zone while 21350 – 21300 is the crucial support zone.

Bank Nifty has reached the 161.82% Fibonacci extension level 45768 which also coincides with the 20-week moving average making the zone of 45800 – 45600 a crucial support zone and until this is not breached on the downside we can expect the recovery to continue. On the upside, the pullback can come till 46400 – 46600.

The benchmark indices exhibited recovery from the day’s low and ended in red amid weak global cues, as investors are trimming bets on rapid FED cuts due to strong US retail sales and the resulting rise in global bond yields. Furthermore, oil price advances and rate escalation risks have led to disruptions in global shipping and crude production. The broader market continued its selling pressure given the elevated valuation and profit booking with an aim for sector rotation.

Rupee traded flat, fluctuating between 83.07 and 83.17, amid a stable dollar index around 103. The range-bound session persisted after the last two days of weakness in the rupee from the 82.80 zones, where it faced resistance. The recent appreciation of the dollar kept pressure on the rupee, which continues to encounter resistance in the 82.80-82.90 zones. Broadly, the prices remain within the range of 82.80-83.30.

The markets witnessed extreme volatility in today's trade. Right from the beginning, the Index experienced a vertical decline (mainly driven by Mid and Smallcap stocks) but was followed by a quick comeback which resulted in a V-shaped recovery. However, towards the end of the day, Banking stocks dragged the Index lower but, managed to defend its intraday lows to end the weekly expiry at 21,462.25 with a loss of 109.70 points.

Among the sectors, Pharma was the best performer followed by PSU Banks while BankNifty and Metal remained the laggards. The Index has formed a Spinning Top candlestick pattern which indicates a reversal of trend and to confirm the same, the Index needs to breach the hurdle of 21,530 while the immediate support is placed at today's low i.e. 21,285.

Indian rupee ended flat at 83.12 per dollar versus previous close of 83.13.

In the highly volatile session the Indian benchmark indices ended lower with Nifty below 21,500.

At close, the Sensex was down 313.90 points or 0.44 percent at 71,186.86, and the Nifty was down 109.70 points or 0.51 percent at 21,462.30. About 1481 shares advanced, 1737 shares declined, and 70 shares unchanged.

Top losers on the Nifty included LTIMindtree, HDFC Bank, NTPC, Titan Company and Asian Paints, while gainers were Sun Pharma, Cipla, Tech Mahindra, Tata Motors and Axis Bank.

Among sectors, bank, FMCG, IT, metal and power down 0.3-1 percent, while auto, capital goods, healthcare, oil & gas and realty up 0.3-0.7 percent.

BSE midcap and smallcap indices ended on a flat note.

Net profit up 15.7% at RS 416.5 crore versus Rs 361 crore and revenue up 16.8% at Rs 4,340 crore versus Rs 3,715 crore, YoY.

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Indian Rupee depreciated on weak domestic markets and selling pressure from FIIs. Recovery in crude oil prices also weighed on Rupee. However, the weak US Dollar cushioned the downside. US Dollar softened today on positive global markets. US retail sales and industrial production data topped forecasts, which trimmed rate cut expectations by the Fed in March 2024.

We expect Rupee to trade with a slight negative bias on weak domestic markets due to an extended sell-off and a rise in crude oil prices due to the escalation of tensions in the Middle East. However, any decline in US Dollar as markets are still expecting six rate cuts by the US Federal Reserve in 2024 may support the Rupee at lower levels. Traders may remain cautious ahead of weekly unemployment claims, the Philly Fed Manufacturing Index and housing market data from the US. USDINR spot price is expected to trade in a range of Rs 82.90 to Rs 83.50.

-Hold call, target cut to Rs 5,160 per share
-Q3 revenues & margins missed estimate owing to high furloughs & low discretionary spends
-Company’s outlook for Q4 worsened and it pulled back its margin ambition as well
-Company’s Q4 outlook suggests medium-term portfolio headwinds
-Cut estimates to reflect lower growth and margins

Net profit at Rs 45 crore versus Rs 394 crore and revenue up 24.4 percent at Rs 5,633 crore versus Rs 4,528.3 crore, YoY.

Net profit down 28.2 percent at Rs 81 crore versus Rs 112.8 crore and revenue up 21.4 percent at Rs 305 crore versus Rs 251.4 crore, YoY.

Net Profit down 10.6 percent at Rs 692.3 crore versus Rs 774 crore and revenue down 6.8 percent at Rs 9,127.5 crore vs Rs 9,797 crore, QoQ.

Sensex Today | Market at 3 PM

The Sensex was down 348.84 points or 0.49 percent at 71,151.92, and the Nifty was down 114.20 points or 0.53 percent at 21,457.80. About 1542 shares advanced, 1680 shares declined, and 59 shares unchanged.

Largecap stocks held by mid-cap and small-cap funds tend to cushion the fall whenever the market corrects. However, it is not a cause of concern for the long term investors. READ MORE

ICICI Bank, the country's second largest private lender, is likely to report a 20 percent year-on-year (YoY) growth in standalone net profit at Rs 9,946 crore for the December quarter of the current financial year. According to a poll of brokerages, net interest income is set to rise 12 percent from the year-ago period to Rs 18,431 crore when the private lender reports its numbers on January 20. READ MORE

ONGC Videsh, the overseas investment unit of the country's top explorer, Oil and Natural Gas Corp, has received a five-year $420 million loan from DBS Bank and Bank of Baroda, a company spokesperson said on Thursday.

The loan will strengthen ONGC Videsh's available cash as it contends with shrinking free cash.

Merchant bankers said last month that the company was likely to issue bonds to raise funds, and Venezuela provided some respite in January by agreeing to give ONGC Videsh some oil in lieu of $600 million dividend dues.

ONGC Videsh's free cash flow was down about 88% from a year earlier to 6.48 billion rupees ($78 million) in the financial year ended March 2023, as per LSEG data.

Emkay Institutional Equities estimates Nifty to scale up to 24,000 level; registering a return of 11% by December 2024. SMIDs (small and mid-caps) should continue to outperform, with better earnings growth and momentum in return ratios.

Sensex Today | Market at 2 PM

The Sensex was down 378.66 points or 0.53 percent at 71,122.10, and the Nifty was down 127.20 points or 0.59 percent at 21,444.80. About 1477 shares advanced, 1718 shares declined, and 68 shares unchanged.

Net profit up 43% at Rs 87 crore versus Rs 61 crore and revenue up 36% at Rs 1,058 crore versus Rs 777 crore, YoY.

Net profit rose 19.5% at Rs 75.3 crore versus Rs 63 crore and revenue up 2.5% at Rs 784.3 crore versus Rs 765.5 crore, QoQ.

Sensex Today | BSE Metal index down 1 percent dragged by NMDC, Jindal Stainless, JSW  Steel:

Balaji Amines has received BIS Certification for the product Morpholine from the Bureau of Indian Standards for Unit-III at Chincholi MIDC, Maharashtra.

UP Cabinet approves raising state advised price of sugarcane by Rs 20/Quintal   

-Buy call, target Rs 4,020 per share
-Q3 decorative volume growth strong at 12 percent (15 percent 4-year CAGR)
-Volume growth due to strong festive demand; volume growth outlook also strong
-Margin expansion led to strong earnings growth of 35 percent
-Margin outlook reassures & should dispel fear of price wars
-See fear of price based competition exaggerated & see strong growth outlook

Uniparts Olsen Inc, a wholly owned subsidiary company in USA, has received order of $1.2 million from Doosan Bobcat North America Inc. Uniparts will supply construction equipment parts in the normal course of business. The order is expected to increase up to $5 million in the next 5 years.

-Downgrade to reduce, target Rs 5,675 per share
-Q3 was a miss on all fronts
-Weak Q4FY24 revenue guidance & commentary drives a cut in estimates
-Weak revenue delays company’s aspiration to exit with a 17-18 percent EBIT margin in FY24
-Weak revenue delays company’s aspiration achieves a similar range in FY25
-9MFY24 OCF at Rs 3,920 crore was up 86.1 percent YoY
-OCF/EBITDA stood at 80.9 percent vs 46.8 percent in 9MFY23

-Loss of Rs 63.7 crore versus loss of Rs 101.2 crore and revenue up 43.2% at Rs 582.9 crore against Rs 407 crore, YoY.

RailTel Corporation of India has received the work order amounting to Rs 82.4 crore from South Central Railway. The work order includes comprehensive ground infrastructure works for provision of 4G LTE-R in 523 RKM of Secunderabad division in South Central Railway.

Tyre Stocks in Focus:

Sensex Today | BSE Bank index down 0.5 percent dragged by HDFC Bank, AU Small Finance Bank, IndusInd Bank:

Speciality Restaurants has registered a 10% on-year decline in consolidated net profit at Rs 13.83 crore for quarter ended December FY24, dented by weak operating margin performance. Consolidated revenue from operations grew by 11.8% to Rs 116 crore compared to year-ago period.

DRC Systems India board approved issue of bonus shares in the ratio of 2: 1 i.e. 2 new bonus equity shares of Re 1 each for every 1 existing equity share of Re 1 each fully paid up held as on the record date.

Sensex Today | Market at 1 PM

The Sensex was down 405.70 points or 0.57 percent at 71,095.06, and the Nifty was down 133.40 points or 0.62 percent at 21,438.60. About 1471 shares advanced, 1691 shares declined, and 80 shares unchanged.

Ajmera Luxe Realty Private Limited (ALRPL), a joint venture between Ajmera Realty & Infra India Limited and Keystone Realtors will execute a redevelopment project in Bandra West.

Both companies will hold a 50% stake in the project, which is expected to generate a Gross Development Value (GDV) of Rs 760 crores. The project endeavor aims to deliver premium luxury residential apartments with an estimated carpet area of approximately 130,000 sq. ft for sale.

Sensex Today | Nifty Pharma index up 0.5 percent led by Aurobindo Pharma, Sun Pharma, Cipla:

The Board of Directors of Lloyds Engineering Works at its meeting held today, approved the allotment of 6,34,64,610 equity shares at a price of RS 15.50 per equity share.

Accordingly, pursuant to the Allotment, the paid-up equity share capital of the company has increased from Rs 1,07,88,98,382 to RS 1,14,23,62,992.

Further, the board also approved the increase in FD / OD facility with HDFC Bank not exceeding an amount of Rs 125 crores.

At 12:48 hrs Lloyds Engineering Works was quoting at Rs 43.79, up Rs 0.09, or 0.21 percent.

The company has received approval from the authorities of Gujarat International Finance Tech City (GIFT City), Gandhinagar, Gujarat to set up its branch office at International Financial Services Centre, GIFT City SEZ, Gujarat. The branch office established in GIFT City SEZ is planned for AI enabled product development and centre of excellence for customer success.

Mahindra and Mahindra's subsidiary Mahindra Aerostructures (MASPL) and Airbus Aerostructures GmbH have signed a new contract for the manufacture and delivery of metallic components for all Airbus commercial aircraft models, including the best-selling A320 family.

Under the contract, MASPL will supply close to 5,000 varieties of metallic components to Airbus in Germany from its manufacturing base in India.

Avenue Supermarts has opened two new stores at Velan Mall, Tirupur (Tamilnadu) and Sehore (Madhya Pradesh). The total number of stores as on date stood at 344.

-Reduce call, target Rs 4,600 per share
-Q3FY24 was a miss on most counts
-Commentary for Q4 subdued, no hint of significant demand revival yet
-Margin disappoints, exit margin of 17-18 percent delayed by a few quarters on urgent need to hire
-Lower FY24-26 EPS by approximately 1-4 percent
-Stock is trading at nearly 35x FY25 and nearly 30x FY26 EPS

-Confident of double-digit volume growth in Q4 as well
-Holding margin guidance at 18-20% because of geopolitical uncertainty
-Will plough back some gross margin savings into marketing and distribution spends
-Expect to hold gross margin around current levels
-Expect to see some recovery in home care going forward
-No big dent in business from competition
-Don’t expect competition to get even Rs 5,000 crore of sales in 3 years in an Rs 80,000 crore industry

Grindwell Norton has executed Shareholders Agreement and Share Issue Agreement with Advanced Synthetic Minerals (ASM), to hold 49% of equity share capital of ASM.,

Zaggle Prepaid Ocean Services has entered into an agreement with Torrent Gas, for implementing close loop fleet program. The gross transaction volume is estimated at Rs 200 crore.

Sensex Today | BSE Capital Goods index up 0.4 percent led by Suzlon Energy, L&T, Elgi Equipments:

The company Q3 net profit stood at Rs 305.4 crore versus Rs 103 crore and Net Interest Income (NII) down 0.7% at Rs 819 crore versus Rs 825 crore, YoY.

Owing to the beat on EBITDA margin, Motilal Oswal raises FY24 estimates by 5% while largely maintaining FY25 EPS. The double-digit volume growth was also supported by the shift in festive demand to 3QFY24.

With the entry of new players with deep pockets and massive commitments to investments, the overall industry may see a shift in market share and cost structures. These will be the key monitorables in FY25.

Broking firm remains cautious as the paints segment may not enjoy higher multiples of the past. It is important to note that the re-rating of the stock was a significant factor driving the appreciation of APNT's stock price over the past five to six years, as the earnings CAGR has been in the 12-14% range.

Motilal project a higher EBITDA margin (21.5% for FY25/FY26) on anticipatation that gross margin would not have a significant impact on the EBITDA margin due to increasing competition. APNT has a superior execution history and should be able to manage the challenges without compromising its large-margin structure.

Broking firm believe valuations are expensive at ~53xFY25E EPS and 48xFY26E EPS, especially considering the uncertain competitive pressure. Reiterate Neutral rating with a Target Price of Rs 3,340 (based on 50x Dec’25E EPS).

Purva Land, the plotted development arm of Puravankara has launched a new ‘wellness’ themed plotted development project in Guduvancheri, Chennai.

Part of a ~120-acre development, this will be Purva Land’s largest project in the city. The larger development will comprise more than ~2,200 plots ranging from ~600 Sq. Ft. to ~5,000 Sq. Ft. and has 35+ amenities for the community, including a 30,000 Sq. Ft. clubhouse. Considering the consumer needs, 80% of the plots are in the range of ~800 Sq. Ft. to 1,800 Sq. Ft.

Sensex Today | Market at 12 PM

The Sensex was down 135.71 points or 0.19 percent at 71,365.05, and the Nifty was down 61.40 points or 0.28 percent at 21,510.60. About 1442 shares advanced, 1681 shares declined, and 88 shares unchanged.

Owing to the beat on EBITDA margin, Motilal Oswal raises FY24 estimates by 5% while largely maintaining FY25 EPS. The double-digit volume growth was also supported by the shift in festive demand to 3QFY24.

With the entry of new players with deep pockets and massive commitments to investments, the overall industry may see a shift in market share and cost structures. These will be the key monitorables in FY25.

Broking firm remains cautious as the paints segment may not enjoy higher multiples of the past. It is important to note that the re-rating of the stock was a significant factor driving the appreciation of APNT's stock price over the past five to six years, as the earnings CAGR has been in the 12-14% range.

Motilal project a higher EBITDA margin (21.5% for FY25/FY26) on anticipatation that gross margin would not have a significant impact on the EBITDA margin due to increasing competition. APNT has a superior execution history and should be able to manage the challenges without compromising its large-margin structure.

Broking firm believe valuations are expensive at ~53xFY25E EPS and 48xFY26E EPS, especially considering the uncertain competitive pressure. Reiterate Neutral rating with a Target Price of Rs 3,340 (based on 50x Dec’25E EPS).

Persistent Systems said that the board may consider a proposal of alteration in the share capital of the company by sub-division/split of the existing equity shares having face value of Rs 10 each, on January 19-20.

Stock Market LIVE Updates | Vikas Lifecare buys 50% stake in portfolio managing events

Som Distilleries and Breweries has registered a 71% on-year growth in consolidated profit at Rs 18 crore for October-December quarter of FY24, backed by strong topline and operating performance. Revenue from operations (excluding excise duty) during the same period increased by 79.3% YoY to Rs 266.3 crore.

-Reduce call, target Rs 4,600 per share
-Q3 was a miss on most counts
-Commentary for Q4 subdued, no hint of significant demand revival yet
-Margin disappoints, exit margin of 17-18 percent delayed by a few quarters on hiring
-Lower FY24-26F EPS by approximately 1-4 percent
-Stock is trading at approximately 35x FY25 & approximately 30x FY26 EPS

Sensex Today | BSE Realty index down 0.5 percent dragged by Oberoi Realty, Macrotech Developers, Godrej Properties:

Shakti Pumps board at its meeting held on January 18, 2024approved the raising of funds for an aggregate amount of up to and not exceeding Rs 200 crores, in one or more tranches and/or one or more issuances, by way of qualified institutions placement(s) or any other method.

Shares of Minda Corporation Limited traded 2.2 percent higher to Rs 409.5 to scale a new 52-week high on January 18 after it offloaded a 15.07 percent stake in automotive components maker Pricol Ltd for around Rs 631 crore through an open market transaction.

According to block deal data from the NSE, Minda Corporation Ltd sold over 1.83 crore shares at an average price of Rs 343.60 per share, a discount of about 14 percent from the previous close of Rs 400. Read More

Sensex Today | BSE Power index down 1.3 percent dragged by NHPC, NTPC, Power Grid:

Oil prices rose on Thursday as OPEC forecast relatively strong growth in global oil demand over the next two years and the market eyed disrupted U.S. oil production amid a cold blast, as well as geopolitical tensions in the Middle East.

Brent crude futures gained 21 cents, or 0.3%, to $78.09 a barrel by 0505 GMT, while U.S. West Texas Intermediate crude futures rose 40 cents, or 0.6%, to $72.96.

Zydus Lifesciences was down marginally on January 18 after the company received the United States Food and Drug Administration's approval for a generic antipsychotic drug.

"...... has received final approvals from the United States Food and Drug Administration (USFDA) to manufacture and market Pimavanserin Capsules, 34 mg and Pimavanserin Tablets, 10 mg, respectively," the company said in its release.

Pimavanserin is an atypical antipsychotic indicated for the treatment of hallucinations and delusions associated with Parkinson disease psychosis. Read More