FII remained net sellers last week as they sold equities worth Rs 1,272.41 crore.
Markets witnessed brisk buying last week, with the Nifty regaining 11,600 and the Sensex closing above 39,000 on the back of mostly inline earnings from India Inc.
Foreign institutional Investors (FIIs) sold equities worth Rs 1,272.41 crore and Domestic Institutional Investors (DII) worth Rs 1,367.05 crore.
The BSE Smallcap index rose 1.40 percent, Midcap gained 0.14 percent, while the Largecap index was down 0.24 percent.
"The Nifty now needs to hold the support to attempt the upper band of the trading range towards 11,700 zones, while a decisive hold below 11,550 zones could negate the current short-term bullish set up for the downside support towards 11,480-11,450 zones," said Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services Private Ltd.
"Going forward, investors would keep a watch on developments on the US-China trade war, Brexit deal along with Infosys whistleblower case and telcos recourse towards Supreme Court ruling," he said.
Here are 10 companies in which foreign brokerages have raised the target prices after the September quarter earnings (Source: CNBC-TV18):
HDFC Bank | Brokerage: Citi | Rating: Buy | Target: Raised to Rs 1,520 from Rs 1,400 per share
HDFC Bank has reported a healthy 26.75 percent year-on-year (YoY) growth in profit at Rs 6,345 crore against Rs 5,005.73 crore earned in the same period last year.
Net interest income during the quarter grew by 14.89 percent to Rs 13,515.04 crore YoY, with loan growth at 19.5 percent as compared to the same period last year.
Research house Citi has raised FY20/21 PAT estimates by 5%/7% on tax benefit.
According to Citi, the profit was in line with estimates and loan growth improved sequentially, while operational parameters remained steady amidst soft macro.
Reliance Industries | Brokerage: HSBC | Rating: Buy | Target: Raised from Rs 1,475 to Rs 1,565 per share
Reliance Industries (RIL) reported the highest-ever quarterly consolidated profit of Rs 11,262 crore in Q2FY20, up 11.46 percent sequentially and 18.34 percent YoY .
Consolidated revenue increased 3.63 percent YoY to Rs 148,526 crore in the September quarter, but fell 5.4 percent sequentially.
Gross refining margin came in at $9.4 a barrel for the quarter, against $8.1 in the June quarter.
HSBC feels that the strong show in consolidated business helped offset the weakness in its energy business, while cash profits broadly matched capex after five years.
It expects balance sheet deleveraging to accelerate in the coming quarters and earnings outlook to remains robust.
Maruti Suzuki | Brokerage: CLSA | Rating: Buy | Target: Raised to Rs 9,000 from Rs 7,950 per share
Maruti Suzuki registered 39.4 percent YoY decline in profit to Rs 1,358.6 crore in the September quarter from Rs 2,240.4 crore in the same period in 2018.
The revenue dropped 24.3 percent YoY to Rs 16,985.3 crore as volumes fell 30 percent YoY. consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) declined 53% YoY, said CLSA.
It feels that the easing commodity costs and demand recovery should improve margins. However, it cut FY20 EPS by 7% on lower volumes/margins but maintain FY21-22 estimates.
Bajaj Auto | Brokerage: CLSA | rating: Sell | Target: Raised to Rs 2,800 from Rs 2,525 per share
Bajaj Auto reported a healthy 21.7 percent year-on-year growth in the second quarter profit at Rs 1,402.4 crore from Rs 1,152.5 crore in same period last year. Tax expense fell sharply to Rs 206.5 crore from Rs 500.2 crore in the same period YoY.
Revenue from operations declined 4.1 percent to Rs 7,707.3 crore, with a 12 percent YoY drop in volumes.
CLSA upgraded FY20-22 EPS by 2-3% factoring in higher margins. The stock at 18x FY21e PE is looking expensive, while export growth rate is moderating.
Larsen and Toubro (L&T) | Brokerage: Nomura | Rating: Buy | Target: Raised to Rs 1,730 from Rs 1,725 per share
L&T reported a 13 percent YoY jump in consolidated net profit at Rs 2,527 crore for the quarter.
Revenue jumped 15 percent YoY, coming at Rs 35,328.4 crore in Q2FY20 against Rs 30,678.13 crore in Q2FY19. The company reported EBITDA at Rs 4,021.4 crore, while EBITDA margin came at 11.4 percent.
According to Nomura, order inflows were strong despite lack of an uptick in domestic ordering, however, the working capital is a concern.
It raised EPS estimates by 12-14% for FY21-22 to factor in lower tax rate.
HCL Technologies | Brokerage: Morgan Stanley | rating: Underweight | Target: Raised from Rs 1,000 to Rs 1,090 per share
HCL Technologies reported healthy growth in earnings driven by IBM deal, with the September quarter profit rising 19.4 percent sequentially and an upward revision in full-year revenue guidance.
Profit during the quarter increased to Rs 2,651 crore, compared to Rs 2,220 crore in the June quarter. Revenue grew by 6.7 percent quarter-on-quarter to Rs 17,528 crore.
HCL Tech registered a 5.2 percent QoQ growth in dollar revenue at $2,486 million and constant currency topline growth was 6 percent QoQ.
Organic growth rates have been better than its peers and raising revenue and profit estimates slightly, while EPS estimates remained largely unchanged, said Morgan Stanley.
According to the firm, the revenue growth, driven by integration of IBM products, implied H2 organic growth is softer than H1.
Hero MotoCorp | brokerage: JPMorgan | Rating: Underweight | Target: Raised to Rs 2,450 from Rs 2,400 per share
Hero MotoCorp registered a 10.4 percent year-on-year decline in the September quarter profit at Rs 874.8 crore against Rs 976.3 crore. The total tax cost fell by 65.5 percent YoY to Rs 163 crore in Q2.
Revenue from operations fell by 16.7 percent to Rs 7,570.7 crore YoY, as volumes dropped 20.7 percent to 16.91 lakh units compared to the same period last year.
The growth outlook clouded by BS-VI transition and margin unlikely to be sustained in H2FY20, said the research house.
It was early to call a recovery as BS-VI transition could commence in November, it added.
Jubilant FoodWorks | Brokerage: CLSA | Rating: Buy | Target: Raised to Rs 1,850 from Rs 1,655 per share
Jubilant FoodWorks reported a 2.8 percent year-on-year decline in the September quarter consolidated profit at Rs 73.4 crore due to one-time loss of Rs 12.5 crore. Consolidated revenue grew 12.2 percent YoY to Rs 998 crore.
At the operating level, EBITDA jumped 59.9 percent YoY to Rs 234.1 crore and margin expanded 700 bps to 23.5 percent in Q2 FY20.
According to CLSA, the 4.9% same store sales growth appears reasonable, given weak macro. It upgraded FY20 EPS estimates by 3-5%.
The stock may be volatile in near-term and any weakness was an opportunity to buy, it said.
Axis Bank | Brokerage: JPMorgan | Rating: Neutral | Target: Raised to Rs 790 from Rs 770 per share
Axis Bank reported a net loss of Rs 112.1 crore, posting below-expectation September quarter numbers.
The bank reported a profit of Rs 789.61 crore in the corresponding quarter previous financial year and a profit of Rs 1,370 .08 crore in the June quarter.
The net interest income (NII) jumped 17 percent YoY at Rs 6,102 crore against the CNBC-TV18 poll of Rs 5,979.8 crore. The net interest margin (NIM) stood at 3.51 percent, the highest in the last nine quarters.
Operating growth remains strong and slippages must reduce for stock re-rating, said JPMorgan.
It changed FY20-21 EPS estimates by -10%/+5%.
Kotak Mahindra Bank | | Brokerage: Credit Suisse | Rating: Neutral | Target: Raised from Rs 1,340 to Rs 1,450 per share
Kotak Mahindra Bank reported a 51 percent year-on-year jump in net profit at Rs 1,724.5 crore for the September quarter against a net profit of Rs 1,141.65 crore in the corresponding quarter the previous financial year.
NII jumped 25.2 percent, coming at 3,349.6 crore against 2,676.3 crore in the same quarter in FY19. NIM for Q2FY20 came at 4.61 percent, up from 4.19 percent in Q2FY19.
According to Credit Suisse, earnings were boosted by tax-cut gains and improvement in interest margins. However, stronger margin outlook offset any earnings impact.
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