Closing Bell: Nifty above 24,800, Sensex up 148 pts; bank, metal, realty shine

Indian benchmark indices ended higher on August 22 with Nifty above 24,800. At close, the Sensex was up 147.89 points or 0.18 percent at 81,053.19, and the Nifty was up 41.30 points or 0.17 percent at 24,811.50.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices for all the global market action.

Today, the benchmark indices continued positive momentum, the Nifty ends 40 points higher while the Sensex was up by 148 points. Among sectors, Consumer, Metal and PSU Banks stocks witnessed buying interest whereas selective IT and Energy stocks registered intraday profit booking at higher levels.

Technically, after a gap up open market witnessed intraday profit booking at higher levels. On daily charts it has formed small bearish candle which indicates indecisiveness between the bulls and bears.

We are of the view that, the short-term market texture is still in to the positive side but due to temporary overbought conditions we could see range bound activity in the near future. For the traders now, buying on dips and sell on rallies would be the ideal strategy.

24750-24700/80800-80650 would be the key supports zone while 24900-24950/81400-81600 could act as key resistance areas for the day traders. However, below 24700/80650 the sentiment could change. Below the same, traders may prefer to exit out from the trading long positions.

The market continued with lacklustre movement on the higher side on Thursday and closed the day with reasonable upside gains. After opening with a positive note, the Nifty showed consolidation in the early part of the session. A narrow range movement that emerged in the early-mid part has continued till the end of the session.

A small negative candle was formed on the daily chart at the swing highs, which is indicating a choppy movement at the resistance. Nifty is currently placed at the hurdle of previous opening downside gap of 2nd Aug around 24850-24960 levels. Though, Nifty placed at the gap resistance, still there is no indication of any significant reversal pattern building at the highs.

The short-term trend of Nifty continues to be positive amidst range movement. A decisive upmove from here is expected to pull Nifty towards the new all-time high of 25100 levels in the near term. Immediate support is at 24680.

The domestic market witnessed modest gains owing to the positive global sentiments. Particularly, the recent signs of weakness in the US non-farm payroll data have strengthened the case for potential interest rate cuts in September. However, in the broader market, investors are being cautious, opting for a selective approach, awaiting more clarity from central bank leaders in Japan and the US.

Nifty opened on a flat note and consolidated during the day to close with gains of ~41 points. The upmove has been slow steady without any meaningful pullback towards the hourly moving averages. The hourly momentum indicator has a negative crossover along with a negative divergence. Thus, can be a intraday dip and hence caution on longs is advised. The Nifty is also trading close to the 78.6% retracement mark 24830 which shall restrict further upside. Thus, the overall trend remains sideways, and the range of consolidation is 24200 – 24900.

The Bank Nifty witnessed continuation of the positive momentum which started during the second half of the previous trading session. It has managed to close above the key daily moving averages and the daily momentum indicator also has a positive crossover, which is a buy signal. Thus, the Bank Nifty which was underperforming can now witness a upmove towards 51500 – 51900 from short term perspective. A stoploss of 50400 should be maintained for the long positions.

Non-directional weekly expiry day ended higher at 24,811.50 with gains of 41.30 points. On a sectoral front, Metal was the top gainer followed by PSU Banks and FMCG while Energy was the major laggard.

Divergence was seen in the broader market performance where midcaps outperformed while smallcaps moved in tandem with the frontline index.

The Index has virtually touched the target of 24,870 (Today's high- 24,867.35). The range of 24,850-25,000 is a bearish gap zone, and considering a one-way rally from the past 5 sessions, a pullback can be anticipated where the index will find support at 24,720.

Indian rupee ended marginally lower at 83.95 per dollar on Thursday versus Wednesday's close of 83.93.

Indian benchmark indices ended higher on August 22 with Nifty above 24,800.

At close, the Sensex was up 147.89 points or 0.18 percent at 81,053.19, and the Nifty was up 41.30 points or 0.17 percent at 24,811.50. About 2111 shares advanced, 1299 shares declined, and 92 shares unchanged.

Grasim Industries, Tata Consumer Products, Tata Steel, Bharti Airtel and Apollo Hospitals were among major gainers on the Nifty, while losers were Tata Motors, Dr Reddy's Labs, NTPC, Wipro and M&M.

Among sectors, power index down 1 percent, while pharma, oil & gas, auto, IT ended marginally lower. On the other hand, bank, FMCG, metal, realty, telecom up 0.5-1.4 percent.

The BSE midcap and smallcap indices rose 0.5 percent each.

Bharat Electronics has secured orders worth Rs 695 crore.

The orders comprise of Combat Management System, Communication equipment, Stabilized Optronic Pedestal, Upgrades, Spares, Services etc.

The meeting of the board of directors of the company is scheduled on 24/08/2024 to consider and approve a proposal for buyback of the fully paid-up equity shares of the company.

#1 Company’s operating performance has consistently surprised in the past 12-18 months

#2 Precarious industry capacity situation has kept yields/spreads healthy

#3 Supply adds seem to have picked up recently

#4 Raise spread estimates, EPS by 6-7 percent for FY26/27

The Sensex was up 106.01 points or 0.13 percent at 81,011.31, and the Nifty was up 30.20 points or 0.12 percent at 24,800.40. About 2122 shares advanced, 1276 shares declined, and 92 shares unchanged.

#1 Business class launch of company ends Vistara/Air India monopoly

#2 Business class launch may not be margin accretive in the near-term

#3 The shift could reduce leakage of corporate traffic and strengthen positioning

#4 Loyalty program, strong network and corporate market share could support its premium product

Aether Industries has entered into a Contract / Exclusive Manufacturing Agreement with Chemoxy International Limited, a wholly-owned subsidiary of the SEQENS group (Seqens).

Under this take-or-pay contract, Aether will produce a series of natural bio-based products exclusively for Seqens.

The contract spans an initial period of three years.

The production is expected to commence over the next 10 months with a volume of 100+ MT per year.

#1 The company is on a high growth and transformation journey

#2 Management’s pragmatic approach to move up value chain

#3 Diversifying products/metals & backward integration to capture efficiencies make it stand out

#4 Successful foray into new businesses showcases its execution capabilities

#5 Multiple new projects commencing operations in FY25/26 provide strong earnings visibility

#5 Multiple new projects mitigate profitability risk through diversification

#6 Believe market is not fully appreciating integrated operations such as internal sourcing

#1 Management believes Paytm’s ticketing business acquisition will help to focus on areas where it expects to raise GOV

#2 Company expects to increase gross order value from Rs 3,200 crore in FY24 to Rs 10,000 crore in FY26

#3 Biggest risks are smooth integration of acquired businesses into new district app

#4 Cash burn initially to incentivize users to migrate from Paytm’s app to Zomato & district apps

Indian Rupee declined today on FII outflows and dollar demand from importers. However, weakness in the US Dollar index and US treasury yields cushioned the downside. Weak crude oil prices supported the Rupee at lower levels. US Dollar declined to a fresh seven-month low on amid rising odds of a rate cut by the Fed in September and lower revision to the job numbers by the US Labour Department (BLS).

We expect Rupee to trade with a slight negative bias on outflows by foreign investors and demand for the greenback by importers. However, positive tone in the domestic markets and declining global crude oil prices may support the Rupee.

Traders may remain take cues from the weekly unemployment claims, existing home sales and PMI data from the US. Investors may remain cautious ahead of Fed Chair Powell’s speech at Jackson Hole Symposium for any cues on rate cuts by the central bank.

USDINR spot price is expected to trade in a range of Rs 83.75 to Rs 84.20.

#1 France August Manufacturing PMI at 42.1 and Services PMI at 55

#2 Germany August Manufacturing PMI at 42.1 and Services PMI at 51.4

#3 Euro Zone Services PMI at 53.3

#1 Target Price of Rs 300, implying 15% potential upside

#2 Company expects to complete the acquisition in 2QFY25

#3 Zomato's food delivery business is stable, and Blinkit offers a generational opportunity to participate in the disruption of industries such as retail, grocery and e-commerce

The board of directors has approved the proposal for buyback of fully paid up equity shares of the company having a face value of Rs 10 not exceeding 3,65,169 equity shares at a price of Rs 160 per equity share on a proportionate basis

Central Bank of India has entered into a strategic Co-Lending Partnership with M/s. Piramal Capital & Housing Finance Limited to offer MSME_LAP and Home Loans at competitive rates

#1 Paytm’s ticketing business acquisition will expand TAM for company into event ticketing business

#2 Acquired business will be part of new app ‘district’, expected to launch in a few weeks

#3 Company has a strong track record of successfully acquiring consumer tech businesses

#1 The company's net profit declined by 43.7% year-on-year to Rs 16.78 crore for the June 2024 quarter, down from Rs 29.82 crore in the June 2023 quarter, despite healthy operating numbers and a decrease in input costs

#2 The decline was impacted by an exceptional loss of Rs 20.19 crore (compared to nil in the same period last year)

#3 Revenue from operations fell 5.7% to Rs 283.9 crore, down from Rs 301.2 crore in the same period

#4 The company declared a final dividend of Rs 60 per share

#1 The company is on a high growth and transformation journey

#2 Management’s pragmatic approach to move up value chain

#3 Diversifying products/metals & backward integration to capture efficiencies make it stand out

#4 Successful foray into new businesses showcases its execution capabilities

#5 Multiple new projects commencing operations in FY25/26 provide strong earnings visibility

#5 Multiple new projects mitigate profitability risk through diversification

#6 Believe market is not fully appreciating integrated operations such as internal sourcing

The defense and heavy engineering manufacturer has signed a strategic Memorandum of Understanding (MoU) with the Directorate of Marine Engineering, Indian Navy, to develop advanced marine applications for defense. Additionally, the company has entered into an MoU with Malaysia’s largest rolling stock manufacturer, SMH Rail, to meet global demand for rail and metro solutions.

Zomato has announced the acquisition of Paytm's entertainment ticketing business for a cash consideration of ~ Rs 20.5 billion (~1.0x trailing EV/FY24 GOV)

The acquisition gives size and scale to Zomato's going out business, acting as an additional growth engine over the medium-to-long term

It also lends credence to the company's aim of building a one-stop destination for Going-out and would be part of the new District app (to be launched in the next few weeks)

Mgmt. believes that going-out experiences will continue to see strong growth, with overall growth in lifestyle and consumption

Post-acquisition, the management estimates going-out GOV at > Rs100bn in FY26

Management expects the going-out business to operate near break-even on adjusted EBITDA basis, while potentially delivering 4-5% adjusted EBITDAM as a % of GOV over the medium-to-long term

Management's strong execution track record grants confidence that going-out will add further value over the long term

Retain buy with Target Price of Rs 270

The company board approved to issue 53,60,951 equity shares of face value of Rs 10 each at an issue price of Rs 560 per equity share (including a premium of Rs 550 per equity share) for an aggregate consideration of Rs 300,21,32,560

Subsidiary Welspun Michigan Engineers has received the Letter of Acceptance (LOA) from the Brihanmumbai Municipal Corporation (BMC) for rehabilitating man-entry sewers using trenchless technology in Mumbai's suburbs. The contract value is Rs 159.75 crore, and the project is to be executed within 24 months (excluding monsoon) from the commencement notice.

Bartronics India board in its meeting held on August 22 approved to enter into Memorandum of Understanding and give Non-Binding Term Sheet for the proposed investment by acquisition, which aims to secure a 3% equity stake in Ventugrow Consultants along with an additional 2% in the form of Advisory Board Equity, resulting in a total 5% stake in the B2B segment.

Furthermore, Bartronics plans to acquire a controlling 51% stake in a newly forming subsidiary of Ventugrow Consultants. The proposed investment is subject to completion of due diligence, customary formalities, and other necessary approvals including statutory & regulatory, as applicable.

In Q1FY25, the D2C segment gained significant traction, driven by the company's well established e-commerce channels, such as Blinkit.

Going forward, its cooler product mix, and visibility in Google searches, YouTube and OTT platforms, will potentially accelerate topline growth.

Also, the introduction of Symphony Spa, Soul and Sauna ranges in the water heater segment is expected to enhance market penetration and boost winter season performance.

The recent share buyback announcement has already led to a stock price increase.

Also see limited upside potential in the near term due to recent price hikes and premium valuations.

Downgrade rating to Reduce on the stock with a revised target price of Rs 1,513, based on 38x FY26E adjusted EPS.

#1 At the end of FY24, net cash of the company stood at Rs 2.4 billion

#2 Anticipate that it would generate PAT+Depr of Rs 10 billion/Rs 10.9 billion in FY25/26E

#3 If the company is to execute projects worth Rs 140 billion by CY27, it may strain its balance sheet

#4 In phenol, Haldia Petrochemicals is expected to come up with a 300 tmpa capacity by FY26, creating competition for DN

#5 Expect EPS CAGR of 7% during FY24-26E. Valuing the company at 43x FY26 EPS, retain ‘Reduce’ rating with a target price of Rs 2,717

The company board approved subdivision/ split of every one equity share of face value of Rs 10 each, fully paid up, into 10 equity shares of face value of Re 1 each.

The company announced that its board of directors will meet on August 24 to consider issuing non-convertible debentures of up to Rs 50 crore on a private placement basis.

The global engineering and R&D firm has collaborated with Thales to offer innovative business models to customers. Under this strategic collaboration, L&T Technology will use the Thales Sentinel platform to help customers monetize their software with flexible licensing options.

The company has opened its Qualified Institutions Placement (QIP) on August 21, setting the floor price at Rs 1,685.18 per share. According to CNBC-TV18 sources, the QIP issue size may be around Rs 800 crore, with the potential to scale up to Rs 1,000 crore.

#1 Demand trends in India have been soft over last couple of months

#2 India PV industry growth guide remains at low-single digit for FY25

#3 Festive trends however will be key to monitor

#4 Sensed more confidence on margin delivery given favorable mix (CNG) & benign raw material

A meeting of the board of directors of the Paras Defence and Space Technologies is scheduled to be held on Tuesday, August 27, 2024, to evaluate a proposal for raising of funds, in one or more tranches, through permissible mode(s) and / or combination(s) thereof as may be considered appropriate, by way of issuance of any instruments or securities, through private placement, preferential issue, rights issue, qualified institutions placement or such other methods or combinations thereof as may be decided by the board, subject to such approvals as may be required.

#1 Strong commodity cycle & margin expansion projects to drive upside

#2 Current stock price seems to factoring in aluminium / zinc prices to be USD 170/140/t lower than spot

#3 Recent corporate actions (stake sale in Hindustan Zinc & dividend) augur well for deleveraging

#4 With a positive outlook on metal prices, & high dividend yield, see risk reward attractive

ECOS Mobility and Hospitality is set to open its initial public offering (IPO) on August 28 with the subscription period closing on August 30, 2024. The IPO features a face value of Rs 2 per share and includes an Offer for Sale (OFS) of 1,80,00,000 shares. Of the total shares offered, 35 percent are allocated to the retail portion.

REC has outlined its financial guidance for FY25, targeting an Asset Under Management (AUM) of Rs 5.85 to 6 lakh crore, with disbursements expected to reach Rs 1.9 lakh crore and a Net Interest Margin (NIM) of 3.6 percent. Looking further ahead to 2030, the company aims for an AUM of Rs 10 lakh crore and Renewable Energy (RE) assets of Rs 3 lakh crore. REC also plans to maintain its market share at 20 percent.

Interarch Building Products is scheduled to finalize the basis of IPO share allotment on Thursday, August 22. Bidders will get messages, alerts or emails for debit of their funds or revocations of their IPO mandate by August 23 or over the weekend. The IPO, which was open for bidding between August 19 and August 21, had received a solid response from the investors.

The company raised a total of Rs 600.29 crore from its IPO, which included a fresh share sale of up to Rs 200 rore and an offer-for-sale (OFS) up to 44,47,630 shares.

Shyam Metalics shares surged 8 percent to hit 52-week after the company finalised first 20.43 MW Renewal Energy implementation out of the announced 100 MW

Rail Vikas Nigam (RVNL) has signed an MoU with Dhaya Maju Infrastructure (Asia) Sdn Berhad (DMIA). They may collaborate to work jointly on railway infrastructure and services projects in the ASEAN market and other regions.

The Sensex was up 185.89 points or 0.23 percent at 81,091.19, and the Nifty was up 55.10 points or 0.22 percent at 24,825.30.

Aster DM Healthcare, A-1 Acid, Benares Hotels, Data Infrastructure Trust, Gretex Corporate Services, Globus Spirits, Goldiam International, Hester Biosciences, Hindware Home Innovation, Investment & Precision Castings, Indian Railway Finance Corporation, Jindal Steel & Power, Kakatiya Cement Sugar & Industries, LG Balakrishnan, Mazda, Omax Autos, Panama Petrochem, Relaxo Footwears, Sirca Paints India

#1 Valuation of Paytm’s ticketing business acquisition looks compelling in context of growth forecast

#2 Ultimate margin like food delivery, low capital intensity promises high return ratio in steady-state

#3 Company up against leader 'Bookmyshow,' the question is can Zomato do it yet again?

Indian Renewable Energy Development Agency (IREDA) is considering a fundraise of up to Rs 4,500 crore through Qualified Institutional Placement (QIP), right issue or other means, the company informed exchanges on August 21.

A board meeting in this regard will be held on Thursday, August 29, to take up the proposal for approval.

#1 Government likely to ease June circular to give relief to foreign airlines & foreign shipping sectors

#2 Government to consider bringing in changes in June circular in upcoming GST council meeting on September 9

#3 Government feels service sector needs ease of doing business & GST clarity

#4 DGGI has recently sent notices to several foreign airlines, shipping lines & Infosys

#1 Paytm’s ticketing business acquisition will expand TAM for company into event ticketing business

#2 Acquired business will be part of new app ‘district’, expected to launch in a few weeks

#3 Company has a strong track record of successfully acquiring consumer tech businesses

Latest US jobs data for the 12 months ending March 2024 shows additional jobs generated lower than estimated earlier. The implication of this significant data is that it makes the path to Fed rate cuts clearer. The most likely scenario now is a Fed turning dovish and starting the rate cut cycle with a 25 bp rate cut in September indicating further cuts to follow. This can keep the markets stable since the room for uncertainty is coming down.

The declining trend in the dollar continues with the dollar index at 101.14 facilitating further firming up of gold. This, in turn, is positive for the gold jewellery business and gold loan lenders. The valuations of the latter are fair.

In institutional activity the trend of sustained buying by DIIs and sustained selling by FIIs continues. But the intensity of FII selling is declining. Retail investors are likely to continue with the buy on dips strategy which has been a consistently successful strategy in this bull market.

Awfis announced the launch of two new centres at Mantri Commerce and Vista Pixel in Bengaluru.

The centres offer 39,000 sq. ft. and 27,846 sq. ft. built-up areas respectively, expanding Awfis' extensive footprint and providing premium workspace solutions in prime locations.

The meeting of the board of directors of the Company is scheduled on 26/08/2024 to consider and approve the proposal of buyback of equity shares of the company.

Paytm announced that its Board of Directors has opted for a reduced salary under a 'revised remuneration structure.' The proposed revision, subject to shareholder approval, will reduce the annual salaries of Non-Executive Independent Directors from Rs 1.65-2.07 crore to a capped amount of Rs 48 lakh, with a fixed component of Rs 20 lakh, effective April 1, 2024. The variable component will be linked to attendance at meetings and roles in various committees.