Sensex, Nifty end flat but Mid-Smallcap shine; Cipla rallies 4%
17 Oct 2017
3:30 pm Market Closing: Equity benchmarks closed flat after consolidation but Nifty managed to end at record closing high.
The 30-share BSE Sensex was down 24.48 points at 32,609.16 and the 50-share NSE Nifty rose 3.60 points to 10,234.50.
The market breadth was almost balanced as about 1,367 shares advanced against 1,301 declining shares on the BSE.
Cipla, Bharti Airtel, Asian Paints, Bajaj Auto, Hero Motocorp, BPCL, HPCL and Indiabulls Housing were top gainers, up 1-4 percent whereas Axis Bank, Tata Motors, Bajaj Finance and Dr Reddy's Labs lost a percent each.
3:25 pm Jio to turn profitable in Q3?: Reliance Jio reported its maiden quarterly results on Friday (October 13). Q2FY18 revenue was Rs 6,150 crore; adding back interconnect income, underlying revenue was Rs 6,550 crore, which implies an estimated 13-14 percent revenue market share [RMS] for Q2.
Jio 'operationalised' its 4G mobile assets starting 1st July; these amounted to 71 percent of its Rs 2,07,600 crore gross asset base as of end-Q2.
Thanks to significant opex capitalisation pertaining largely to non-mobile asssets, and an unconventional depreciation & amortisation policy, Jio was EBIT positive in Q2 and reported a modest Rs 270 crore net loss.
JM Financial expects Jio to swing to profits in Q3, driven by the 57 percent IUC (interconnection usage charge) cut to 6 paise per min from 14 paise, effective October 1.
3:15 pm Demand for petrol & diesel to bring under GST: Former Union Minister S Jaipal Reddy today said petrol and diesel should be brought under the ambit of Goods and Services Tax (GST) for better "predictability" of prices.
Echoing views expressed by Dharmendra Pradhan, Union Minister of Petroleum and Natural Gas earlier, Reddy said state governments should reduce their VAT on the fossil fuel.
"I support the demand that the state government(s) must also decrease their tax. But while increasing their own tax and increasing the rate, they (the Centre) is trying to pass on the burden or blame to the states," Reddy, a former Minister of Petroleum and Natural Gas, told reporters.
Pradhan had earlier indicated that he was requesting the Finance Minister and GST Council to bring petrol and diesel under the GST purview.
Pradhan had recently urged all states to reduce VAT on the fuel in their respective states so as to bring down the prices.
3:10 pm Market Check: Equity benchmarks continued to consolidate after the Nifty hitting a fresh record high.
The 30-share BSE Sensex was down 40.42 points at 32,593.22 and the 50-share NSE Nifty fell 1.60 points to 10,229.30.
The market breadth remained positive as about 1,319 shares advanced against 1,252 declining shares on the BSE.
2:59 pm Management Interview: Private sector lender Federal Bank's second quarter (July-September) earnings beat analysts' expectations as profit for the quarter grew by 31.1 percent year-on-year to Rs 263.7 crore. The growth was driven by higher net interest income and operating profit.
Sharing more details on the performance of Q2 and the outlook going forward Shyam Srinivasan, MD & CEO, Federal Bank said the bank saw growth across various sectors in the quarter gone by.
He said the credit growth was steady in last 4-5 quarters. A 20-25 percent loan growth in FY18 is achievable, he said. The loan book market share has crossed 1 percent of the industry, said Srinivasan.
Talking about NCLT cases, he said the bank doesn't have significant exposure to the cases referred to NCLT by RBI. The bank was the first to recognize Videocon as a non-performing asset (NPA), said Srinivasan.
He further added the bank did not undertake any large-ticket exposure in corporate book.
2:47 pm Gold ETFs lose: Gold exchange-traded funds (ETFs) continued to lose sheen as an investment class as investors pulled out Rs 388 crore from these instruments in April-September 2017.
Trading in gold ETF segment has been tepid during the last four financial years. It witnessed outflows of Rs 775 crore in 2016-17, Rs 903 crore in 2015-16, Rs 1,475 crore in 2014-15 and Rs 2,293 crore in 2013-14.
On the other hand, equity and equity-linked saving scheme (ELSS) saw an infusion of more than Rs 80,000 crore during the first six months (April-September) of the current financial year. This included an investment of close to Rs 19,000 crore in the last month alone.
Stock markets have been on an upswing, touching new highs this year.
2:38 pm Earnings Poll: Software firm Wipro is expected to report dollar revenue at USD 2,020 million for quarter ended September 2017, up 2.4 percent over previous quarter.
Revenue growth in constant currency terms may be at around 0.9 percent for the quarter.
While announcing first quarter earnings, the company had estimated revenue growth in constant currency terms at 0.5-1.5 percent at USD 1,962-2,001 million due to pressure in healthcare vertical and sluggishness in communications and retail.
Growth may be aided by large deal ramp-ups in the BFS vertical.
2:24 pm Coal auction: The Cabinet Committee on Economic Affairs (CCEA) will soon take a call on methodology for allocation of coal blocks for commercial mining, a top official has said.
The comments come amid some of the power producers facing low coal stocks at their plants.
"The CCEA note (on methodology of commercial coal mining) is ready. I think in the next one week or 10 days it should come in the Cabinet," Coal Secretary Susheel Kumar told PTI.
A discussion paper on the modalities for allocation of coal mines through auction route was earlier placed in the public domain for seeking comments of stakeholders.
2:14 pm Earnings: Private sector ICICI Lombard General Insurance today reported a 19.3 percent increase in net profit at Rs 204.04 crore for the quarter ended September.
A subsidiary of ICICI Bank, the general insurance firm had earned a profit of Rs 170.95 crore in the same quarter of the previous fiscal.
Total income also rose to Rs 2,098.05 crore for the quarter, from Rs 1,948.31 crore in the year-ago period, ICICI Lombard General Insurance said in a filing to stock exchanges.
This is the first quarterly result of the company after going public last month.
2:00 pm Buzzing: Delhi-based HT Media has recorded a whopping 52 percent growth year-on-year in consolidated profit at Rs 77.8 crore for the quarter ended September 2017, backed by strong operational performance.
Consolidated revenue during the quarter fell 6.9 percent to Rs 560.6 crore compared with Rs 602.2 crore in same quarter last fiscal.
EBITDA (earnings before interest, tax, depreciation and amortisation) shot up 107.3 percent year-on-year to Rs 104.5 crore and margin expanded sharply by 1,020 basis points to 18.6 percent in July-September quarter.
The stock price was quoting at Rs 104.00, up Rs 8.20, or 8.56 percent amid high volumes on the BSE.
1:50 pm Earnings Estimates: Axis Bank is expected to report profit at Rs 1,298.7 crore for the quarter ended September 2017, a whopping 307 percent growth over Rs 319.1 crore in same quarter last fiscal. In year-ago quarter, profitability was impacted by higher provisions.
On sequential basis, profit is expected to decline 0.5 percent.
According to average of estimates of analysts polled by CNBC-TV18, net interest income is seen rising 5 percent to Rs 4,741 crore from Rs Rs 4,513.9 crore year-on-year.
1:40 pm Nomura on WPI: WPI inflation is expected to moderate further in the coming months, and is likely to average 2.8 percent in 2018, says a Nomura report.
According to the Japanese financial services major, a moderation in WPI inflation in the coming months is likely owing to falling vegetable prices and favourable base effects.
"Looking ahead, with food prices (vegetables) falling further in recent weeks and favourable base effects on fuel inflation until January 2018, we expect WPI inflation to moderate further in the coming months, before stabilising," Nomura said in a research note.
Nomura expects WPI inflation to average 2.8 percent year-on-year in 2018 from 3.1 percent in 2017.
According to the official data, wholesale inflation fell to 2.60 percent in September from 3.24 percent in Auguat as prices of food articles, led by vegetables, softened.
1:27 pm Investment in KG-D6 block: Reliance Industries and its partner BP Plc of the UK will invest about USD 1.5 billion to bring to production six satellite gas discoveries in the flagging KG-D6 block by 2022.
RIL-BP combine yesterday submitted to the Directorate General of Hydrocarbons (DGH) a field development plan for what are known as satellite and other satellite fields, sources with direct knowledge of development said.
They plan to develop four deepsea satellite gas finds, named D-2, 6, 19 and 22, together with two other nearby finds, D-29 and D30, in the Krishna Godavari basin block.
In all, 5-6 gas producing wells will be drilled and tied to production facilities, they said adding peak output may be in the range of 10 to 12 million standard cubic meters per day.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
1:17 pm Earnings: Two-wheeler maker Bajaj Auto's second quarter profit fell 0.6 percent to Rs 1,193.58 crore compared with Rs 1,200.72 crore year-ago quarter.
Revenue from operations grew by 2 percent to Rs 6,566.4 crore compared with Rs 6,432.3 crore in same quarter last fiscal.
The stock price was quoting at Rs 3,295.00, up Rs 73.20, or 2.27 percent after hitting a record high of Rs 3,310.20 per share.
1:05 pm Buzzing: Shares of Snowman Logistics gained around 9 percent intraday as investors cheered a decision of partnering with a global furniture chain.
According to a report on CNBC-TV18, the company partnered with IKEA to manage in-store restaurant business in India.
12:59 pm Maruti in focus: Maruti Suzuki Dzire sustained the 1st spot in the list of the most selling car of India in September 2017 with 34,305 units sold, this is also the highest ever sales of Dzire in a single month.
Last month, Maruti Suzuki sold 30,934 units of Dzire. Introduced this May the 2017 Dzire is the third generation of Maruti Suzuki Dzire which used to have Swift Moniker before its name. At a base price tag of RS 5.45 lakh for the petrol variant, Maruti Suzuki already had 33,000 bookings for the new Dzire before the launch.
Overall Maruti Suzuki recorded 9.3% sales growth in September 2017 with 1.63 lakh units sold. The new Dzire played a major role for the company to get a big market share on sub-4 meter sedan market. Available in 14 variants, Dzire ranges from Rs 5.43 lakh up to Rs 9.39 lakh.
12:45 pm Market Check: Benchmark indices turned negative in the afternoon, but the Nifty still traded above 10,200-levels.
The Sensex was down 38.68 points at 32594.96, while the Nifty was down 5.00 points at 10225.90. The market breadth was narrow as 1,239 shares advanced against a decline of 1,152 shares, while 116 shares were unchanged.
Bharti Airtel, Indiabulls Housing, BPCL and Hero MotoCorp gained the most on both indices, while Tata Steel, HDFC Bank and Religare Enterprises fell the most.
12:30 pm Buzzing stock: Share price of Colgate Palmolive has declined further on Tuesday on the back of poor numbers announced by the company on October 16 for the quarter ended September 2017.
The company has reported a fall of 2 percent in its September quarter net profit at Rs 177.6 crore against Rs 181.3 crore during the same period last year.
The company's revenue, however, grew 2.7 percent at Rs 1,085 crore against Rs 1,056.6 crore during the same period in the previous year.
12:10 pm Management Speak: Prime Focus is surging in trade, up over 19 percent. In an interview to CNBC-TV18, Namit Malhotra, Executive Chairman of Prime Focus spoke about the latest happenings and his outlook going ahead.
We believe revenue and EBITDA will grow at a higher rate going ahead, said Malhotra.
Talking about debt, he said net debt as of March is in the range of Rs 1,250 crore. Therefore, we continued focus on paring and re-financing the debt, he added.
11:53 am Market Check: Equity benchmarks recouped early losses, with the Nifty hitting a fresh record high of 10,251.85 amid volatility.
The 30-share BSE Sensex was up 16.63 points at 32,650.27 and the 50-share NSE Nifty rose 12.80 points to 10,243.70. Nifty Bank gained 60 points, backed by Yes Bank, Federal Bank, PNB, Bank of Baroda, Canara Bank, Axis Bank, SBI and ICICI Bank.
The BSE Midcap index was up 0.3 percent and Smallcap rose 0.5 percent. About 1,282 shares advanced against 1,037 declining shares on the BSE.
11:46 am Foreign Reserves: India's foreign reserves, which touched a record USD 402.5 billion in September, are high enough to cushion the country against the external vulnerabilities, the Development Bank of Singapore (DBS) said today.
The import cover (on total reserves minus gold) is better than what is seen during the 2013 taper tantrum, said DBS in its report on Indian economy.
Taper tantrum is the term used to refer to the 2013 surge in the US Treasury yields, which resulted from the Federal Reserve's use of tapering to gradually reduce the amount of money it was feeding into the economy. It had sent the rupee reeling.
The record high reserve of USD 402.5 billion in September 2017 is a long way since reserves bottomed out at USD 275 billion in August 2013, at the worst point of the Fed taper tantrum, it pointed out.
11:35 am Buzzing: Shares of Aurobindo Pharma rose 2 percent intraday as the company has received final approval to manufacture Esomeprazole Magnesium Delayed-release capsules.
The company has received final approval from the US Food & Drug Administration (USFDA) to manufacture Esomeprazole Magnesium Delayed-Release Capsules OTC, 20mg.
Esomeprazole Magnesium Delayed-Release Capsules OTC is a therapeutic equivalent generic version of AstraZeneca's Nexium 24HR capsules.
Nexium 24HR capsules are indicated to treat frequent heartburn and the product will be launched immediately.
11:22 am Listing: Non-banking finance company MAS Financial Services is set to debut on exchanges on October 18. The issue price is fixed at higher end of price band of Rs 456-459 per share.
Analysts expect the stock to list with a premium of Rs 150-200, given the strong subscription to the issue and strong financials of the company.
The Rs 460-crore initial share sale offer had received overwhelming response from investors as it was oversubscribed 128.39 times on last Tuesday.
11:18 am Buzzing: Share price of Hatsun Agro Products added nearly 4 percent intraday on the back of robust September quarter (Q2FY18) numbers.
The company has reported 17 percent jump in its Q2 net profit at Rs 38.21 crore against Rs 32.56 crore, in the same quarter last fiscal.
Revenue was up 6 percent at Rs 1066 crore versus Rs 1001 crore. The company's Earnings before interest, tax, depreciation and amortization (EBITDA) was up 16 percent at Rs 105.6 crore and margins was up at 9.9 percent.
The company has invested Rs 60 crore to expand its cattle feed production plant in Tamil Nadu.
11:10 am Jio Results Analysis: Analysts were closely watching out for two key data points in Reliance Industries September earnings. One was the gross refining margin and the other was the losses in its telecom subsidiary Jio.
The company met market expectations on refining margins but positively surprised the market by posting a profit at the earnings before interest and tax (EBIT) level in its telecom operations. Since its launch in September 2016, it was for the first time that Jio's financial numbers were made public.
Jio, a late entrant in the telecom space, took the sector by storm with tariff rates way below competition. The aggressive pricing helped the company build a customer base of 138.6 million users within a year.
Surprisingly, despite the aggressive pricing, Reliance has been able to post average revenue per user (ARPU) of Rs 156.4 as compared to Rs 154 of market leader Bharti Airtel. The management is confident of improving its ARPU further, which will help the company report profits sooner than most analysts expect.
For the September quarter, Jio reported revenues of Rs 6,147 crore and a marginal loss of Rs 270.59 crore. The company posted an operating profit of Rs 1,443 crore at an operating margin of 23.5 percent.
11:00 am Gold Options Trading: Finance Minister Arun Jaitley today launched gold options trading on the leading commodity bourse MCX and said this is one of the steps towards formalising trade in the yellow metal.
Options are derivatives which give a buyer the right but not the obligation to buy or sell an underlying asset or instrument at a specific price on or before a certain date.
"This marks a very important evolution in trading of yellow metal itself. It hedges all risks by giving them (traders) the option of futures," Jaitley said after launching the options trade on the auspicious day of Dhanteras today.
The gold options contract launched today allows trading in 1kg gold.
10:52 am Prime Focus in action: Motilal Oswal has initiated coverage with a buy rating on Prime Focus and expects the stock to rally by 46 percent to Rs 130 per share, citing better growth ahead and likely reduction in debt.
The stock price was locked at 20 percent upper circuit at Rs 106.95 on Tuesday.
Prime Focus has turned into a strong media service player globally, offering visual effects, 3D animation and media-focused ERP solutions in India and abroad.
The company turned profitable in FY17 post completion of M&A integration in FY15-16.
According to the brokerage house, the four M&A transactions in the last five years have allowed Prime Focus to become a strong media service player globally.
The company's position as one of the top-4 Hollywood VFX service providers and a steady order book should drive 15/18 percent revenue/EBITDA CAGR over FY17-20, it feels.
Motilal Oswal noted that the demons of around 2.8x jump in net debt to Rs 1,390 crore and 50 percent equity dilution over the last five years are now behind.
Improving EBITDA and lower capex requirement are expected to help generate healthy free cash flow, improve return on invested capital to 19 percent, and reduce net debt by around 68 percent to Rs 450 crore by FY20, the research house said.
10:38 am Buzzing: Shares of Godawari Power & Ispat has locked at 5 percent upper circuit on Tuesday as it has received additional coal linkage from Coal India.
The company has been awarded additional 28,700 metric tonnes of long-term coal linkage in the coal linkage auction concluded on October 16, 2017 by Coal India to be used in the company's sponge iron unit.
The total coal linkage now aggregates to 5,13,400 metric tonnes with this additional quantity of coal linkage awarded to the company.
Recently the company has been awarded 52,400 metric tonnes of long-term coal linkage for its Sponge Iron Unit and also got 1,20,400 metric tonnes of coal linkage for its Gassifier unit and 13,900 metric tonnes of coal linkage for its biomass power plant.
10:29 am Rupee Update: The rupee dropped by 15 paise to 64.89 against the US currency today, breaking its six-day winning streak.
A spurt in dollar demand from importers amid sustained foreign fund outflows weighed on the rupee.
Dealers said the dollar's gains against some other currencies overseas also impacted the domestic currency.
Yesterday, the rupee had ended at more than three-week high of 64.74 a dollar, surging by 19 paise helped by extremely bullish macro indicators.
10:20 am Market Check: Equity benchmarks continued to consolidate after the rally in previous three consecutive sessions.
The 30-share BSE Sensex was down 67.46 points at 32,566.18 and the 50-share NSE Nifty fell 12.90 points to 10,218.
The broader markets outperformed benchmarks, with the BSE Midcap and Smallcap indices rising 0.3 percent each. About 1,093 shares advanced against 903 declining shares on the BSE.
10:12 am SEBI Approval: HDFC Standard Life Insurance Company has received capital markets regulator Securities and Exchange Board of India (SEBI)'s go ahead to raise an estimated Rs 7,500 crore through an initial public offering.
The insurance firm had filed draft papers with SEBI in August and obtained its "observations" on October 13, which is very necessary for any company to launch public offer, latest update with the markets watchdog showed.
The public issue comprises sale of 1,91,246,050 equity shares, amounting to 9.55 percent stake, by HDFC Ltd and up to 1,08,581,768 scrips, or 5.42 percent, holding by Standard Life Mauritius, according to the draft red herring prospectus (DRHP) filed with Sebi.
Currently, HDFC owns 61.41 percent stake in HDFC Standard Life and Standard Life has about 34.86 percent, while the remaining is with employees and PremjiInvest.
9:59 am IPO: Mahindra Group's logistics arm has received the go-ahead from markets regulator Sebi to garner about Rs 700 crore through an initial share-sale offering.
Mahindra Logistics had filed its draft red herring prospectus with Sebi on August 4 and obtained "observations" on October 6, which is very important for any company to float a public offer, as per the latest update with Sebi.
The public issue of Mahindra Logistics comprises sale of 1,93,32,346 equity shares. This includes the sale of 96,66,173 shares, amounting to 13.74 percent stake, by the parent firm Mahindra and Mahindra Ltd.
Besides, Normandy Holdings would sell 92,71,180 shares, while Kedara Capital would offload 3,94,993 scrips.
Normandy Holdings is a 100 percent subsidiary of Kedaara Capital.
9:50 am Direct US-North Korea talks? The United States is not ruling out the eventual possibility of direct talks with North Korea, Deputy Secretary of State John J. Sullivan said on Tuesday, hours after Pyongyang warned nuclear war might break out at any moment.
Talks between the adversaries have long been urged by China in particular, but Washington and its ally Japan have been reluctant to sit down at the table while Pyongyang while it continues to pursue a goal of developing a nuclear-tipped missile capable of hitting the United States.
"Eventually, we don't rule out the possibility of course of direct talks," Sullivan said in Tokyo after talks with his Japanese counterpart.
"Our focus is on diplomacy to solve this problem that is presented by the DPRK. We must, however, with our allies, Japan and South Korea and elsewhere, be prepared for the worst should diplomacy fail," he said.
9:33 am Capex: Sajjan Jindal-controlled, JSW Cement said it is investing around Rs 1,800 crore towards expansion of cement capacity to 20 million tonnes (MT) and looking at initial public offer (IPO) in 2019-20.
"We expect huge demand for cement in the country and plan to expand our cement manufacturing capacity from 12.5 MT to 20 MT by 2020. We are adding 4.5 MT at our Dolvi unit in Maharashtra and 1.2 MT in Vijaynagar unit in Karnataka, apart from 1.2 MT adding in Odisha unit. We will incur capex of around Rs 1,800 crore for capacity expansion over the next three years period," JSW Cement managing director Parth Jindal told PTI.
"We will come out with IPO in 2019-20 by diluting 15-20 percent stake, depending on price band. We will wait for the outcome of general elections in 2019 and create healthy EBITDA profile before launching our IPO," Jindal said.
Post-IPO, according to Jindal, the company will be targeting at reaching 30 MT capacity by 2025 and 50 MT by 2030, both through organic and inorganic growth.
Despite JSW Cement is one of the recent entrants into the cement market, it is aiming to be in top-5 cement players in India in the next 7-8 years, Jindal added.
9:25 am Tata Steel ruled out on Monday a flotation in the next two to three years of the planned merger of its European steel operations with those of ThyssenKrupp.
T.V. Narendran, Tata's managing director for India and South East Asia, told Reuters that the capacity of Tata's Kalinganagar plant in India would like be expanded to 5 million tonnes.
9:20 am Buzzing: Share price of Jaiprakash Power Ventures has locked at 10 percent upper circuit, testing 52-week high of Rs 8.80 Tuesday as it has received non-binding bids for acquisition of equity stake in the company.
There were five bidders who put in non-binding bids for 35 percent equity stake in Jaiprakash Power.
Brookfield Asset Management, India Power Corporation, Resurgent Power, a joint venture between Tata Power and ICICI Ventures, JSW Energy in partnership with Piramal and Bain Capital assets have bid for about 35 percent equity stake in Jaiprakash Power's assets, one of the persons directly involved with the development said.
Additionally, Edelweiss Asset Reconstruction Company (ARC) too is in the race and has bid for the debt of the sustainable portion of the company
9:15 am Market Check: Equity benchmarks opened mildly lower on profit booking Tuesday after the rally in three consecutive sessions.
The 30-share BSE Sensex was down 33.86 points at 32,599.78 and the 50-share NSE Nifty fell 15.10 points to 10,215.80.
Axis Bank, Reliance Industries, GAIL, Bajaj Auto, Yes Bank, IOC and Bharti Airtel were early gainers while Wipro, Bajaj Finance and BPCL were losers.
DCB Bank, JM Financial and Colgate were down 1.5-2.5 percent.
Persistent Systems, Federal Bank, Delta Corp, Radico Khaitan, DHFL, Prime Focus, Aries Agro, Jaiprakash Power and Jaiprakash Associates gained up to 20 percent.