Sensex rises nearly 300 points, Nifty tad below 10,600; RIL, ICICI, HDFC lead
16 October 2018
Infosys Q2 Earnings:
Country's second largest software services company Infosys has reported 13.8 percent sequential growth in second quarter consolidated profit at Rs 4,110 crore.
Consolidated revenue grew by 7.7 percent to Rs 20,609 crore compared to Rs 19,128 crore in previous quarter.
“We are delighted with broad-based growth across all business segments and geographies during the quarter. This is a testimony to strong client relationships, digital led full service capabilities, and intense focus on the needs of clients," Salil Parekh, CEO and MD said.
Revenue in dollar terms increased 3.2 percent quarter-on-quarter to $2,921 million and 4.2 percent in constant currency.
Large deal wins at over $2 billion during the quarter demonstrate increased client relevance and also give better growth visibility for the near-term, he added.
The company has maintained its full year constant currency revenue growth guidance at 6-8 percent and EBIT margin at 22-24 percent
Benchmark indices closed sharply higher on Tuesday with the Sensex gaining nearly 300 points as all sectoral indices ended in the green despite mixed global cues. The fall crude oil prices and rupee appreciation also boosted sentiment.
The 30-share BSE Sensex rose 297.38 points to 35,162.48 and the 50-share NSE Nifty gained 72.30 points at 10,584.80.
Reliance Industries, ICICI Bank, HDFC, M&M, SBI, Adani Ports, Axis Bank, ONGC and TCS were leading contributors to Nifty's gains while HDFC Bank, Infosys, Indiabulls Housing, JSW Steel, Eicher Motors and Maruti Suzuki fell.
Nifty Midcap index gained 1.5 percent with strong advance:decline ratio of 3:1.
South Indian Bank, Federal Bank, Jet Airways, InterGlobe Aviation, MCX, SpiceJet, Escorts, Tata Elxsi and NIIT Technologies rallied 3-16 percent while Dewan Housing, Repco Home Finance, Motherson Sumi, Dish TV, Tata Communications, United Breweries and Castrol closed lower.
Morgan Stanley India Strategy:
Morgan Stanley said India's return on equity (RoE) is likely to rise further in the coming 24 months and the RoE gains will come across the board, with banks likely leading the charge.
It feels rising asset turn is pointing to a robust private sector capex cycle in the ensuing year. "Hence we would be buyers of banks and industrials."
Global research firm's favourite stocks include HDFC Bank, ICICI Bank, L&T, Ashok Leyland & Adani Ports. It has added L&T to the focus list at the expense of M&M Financial.
Bulls retained charge on Dalal Street as benchmark indices continued to trade higher amid steady earnings season.
The 30-share BSE Sensex rallied 298.19 points to 35,163.29 and the 50-share NSE Nifty gained 73.90 points at 10,586.40 while the Nifty Midcap index gained 1.5 percent.
About two shares advanced for every share falling on the BSE.
Adani Ports, M&M, Tech Mahindra, ONGC and SBI were top five gainers among Nifty50 stocks while Indiabulls Housing, Eicher Motors, Cipla, JSW Steel and Power Grid Corp fell 1-5 percent.
Hathway Cable and Den Networks in Focus:
Hathway Cable stock gained nearly 5 percent ahead of board meeting which is scheduled on October 17 to consider the proposal for raising of funds by issuance of equity shares through one or more methods including further public issue/ADR/GDR/qualified institutional placement /preferential issue.
The board meering of Den Networks is also scheduled on same day to consider the proposal for raising of funds inter alia by issuance of equity shares through one or more methods including further public issue/ADR/GDR/qualified institutions placement/ preferential issue.
Emkay Sees 68% Upside in Delta Corp after Strong Q2 Earnings:
Gaming company Delta Corp jumped 8 percent intraday as research house Emkay expects the stock to return 68 percent over one year after strong earnings for September quarter.
Emkay Research has reiterated its Buy call on the stock with a target price at Rs 380 per share, implying potential upside of 68 percent after the company's profit was ahead of expectations.
"We were positively surprised by highest ever Goa Casino revenue of Rs 200 crore. This shows that DELTA is gaining market share from small land based casinos post disruption caused by license fees hike," the brokerage firm said.
The country's largest gaming company said profit in Q2FY19 grew by 11 percent year-on-year to Rs 47.7 crore and revenue surged 39 percent to Rs 201 crore.
Buyback in State Run Companies?
India may look to raise Rs 20,000 crore ($2.71 billion) in 2018/19 fiscal year via buyback of shares in state-run companies including Oil and Natural Gas Corp Ltd (ONGC), local TV channels reported today, citing government sources.
This could help the government partly meet its budgetary target of raising Rs 80,000 crore ($10.86 billion) through sale of its stake in state companies in the current fiscal year.
Last month, ONGC sought an exemption from the government request to buy back government-held shares in the company and said it needed the funds for its own capital expenditures. Source: Reuters.
Zee Media Corporation Jumps 17% On Stellar Earnings Performance in Q2:
Zee Media Corporation shares surged nearly 17 percent intraday after the company reported stellar earnings performance in Q2.
Consolidated net profit during the quarter grew sharply to Rs 17.25 crore against Rs 3.79 crore reported in year-ago period.
Consolidated income from operations during the reported quarter stood at Rs 168.6 crore, a growth of 35.5 percent year-on-year, the company said.
The company said results are not comparable consequent to acquisition of Akaash News.
Oil prices erased gains to trade lower, though Iranian oil exports this month have fallen from September ahead of US sanctions against Tehran that are set to start in November.
International benchmark Brent crude for December delivery fell 0.41 percent, to $80.45 per barrel. US West Texas Intermediate crude for November delivery was down 0.40 percent at $71.49 a barrel.
Iran has exported 1.33 million barrels per day (bpd) to countries including India, China and Turkey in the first two weeks of October, according to Refinitiv Eikon data. That was down from 1.6 million bpd in September, the data showed.
The October exports are a sharp drop from the 2.5 million bpd exported in April before US President Donald Trump withdrew from a multi-lateral nuclear deal with Iran in May and ordered the re-imposition of economic sanctions on the country, the third-largest producer among the members of the Organization of the Petroleum Exporting Countries (OPEC). Source: Reuters.
DQ Entertainment in Focus:
DQE, the entertainment production and distribution company, announced new broadcast and licensing agreements for its globally popular property The Jungle Book that will see the Mowgli and his Jungle Friends swing into the American market by launching in Sinclair Broadcast Group’s children's Channel KidsClick this year.
The animated series produced by DQ Entertainment will air on KidsClick channel soon, the company said.
Sinclair Broadcast Group , one of the largest and most diversified television broadcasting organisation in The US owns and operates 192 Television Stations and 611 Channels all across USA. Kidsclick – their children’s channel that has a reach in over 75 million households will be broadcasting all the three seasons of the Jungle Book series.
Federal Bank Q2 Profit Rises 0.9%
Federal Bank's second quarter (July-September) profit grew 0.9 percent year-on-year to Rs 266 crore, impacted by sharp rise in bad loans provision. However, other income, operating income and NII helped the bottomline.
Net interest income during the quarter increased 13.7 percent year-on-year to Rs 1,022.5 crore, the bank said.
Hathway Cable, DEN Network, GTPL Hathway jump up to 20% on RIL stake buy buzz:
Share price of Hathway Cable and DEN Network gained up to 7 percent intraday on news Reliance Industries is likely to buy controlling stake in both the companies. Shares of GTPL Hathway rallied 20 percent intraday.
Reliance Industries (RIL) is likely to announce acquisition of Hathway Cable and Den Network on October 17, CNBC-TV18 reported quoting sources.
RIL is likely to buy stake via fresh equity issuance, which is likely to trigger an open offer for both companies, it added.
The deal will help boost Reliance Jio's GigaFiber services as it expands its subscriber base. This deal is going to add premium customers for Jio improving their ARPU.
OPEC's Barkindo Says Global Spare Oil Capacity Shrinking
OPEC Secretary-General Mohammad Barkindo said global spare oil capacity was shrinking, adding that producers and companies should increase their production capacities and invest more to meet current demand.
Members of the Organization of the Petroleum Exporting Countries and non-OPEC countries participating in a supply-reduction agreement are on course to reach 100 percent compliance, Barkindo said on Tuesday during the IHS CERA conference.
IT Companies File Lawsuit Against US Immigration Agency
An IT advocacy group representing more than 1,000 small IT companies mostly run by Indian-Americans has filed a lawsuit against the US immigration agency for issuing H-1B visas for shorter than three years durations.
The H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.
These visas are typically issued for three to six years to employers to hire a foreign worker.
Alembic Pharma Gets USFDA Approval For Anti-diabetic Drug
Alembic Pharmaceuticals stock rallied 2.65 percent intraday owing to approval from the US health regulator for anti-diabetic drug.
Alembic Pharmaceuticals has received tentative approval from the US Food & Drug Administration (USFDA) for its abbreviated new drug application (ANDA) Alogliptin tablets, which are available in 6.25 mg, 12.5 mg and 25mg strengths.
The company said the tentatively approved ANDA is therapeutically equivalent to the reference listed drug product, Nesina tablets of Takeda Pharms USA.
Future Retail and Amazon Deal
The deal between Future Retail and Amazon is expected to be signed in the next two weeks, reports CNBC-TV18 quoting sources.
Amazon is likely to buy 7-8 percent stake in Future Retail through investment arm and both companies are in final stages of preparing agreement, could include exclusivity clauses, sources said.
LTI and PTC Unveil IoT Center of Excellence
Larsen & Toubro Infotech, a technology consulting and digital solutions company, in alliance with USA-based PTC Inc., today unveiled a state-of-the-art
Center of Excellence (CoE) in Bengaluru, focused on Internet of Things (IoT)-based innovations.
The CoE will focus specifically on Industry 4.0 solutions in manufacturing and oil & gas sectors.
Market Extends Rally
Benchmark indices extended rally with the Sensex rising 300 points, driven by buying across sectors barring pharma.
Nifty Bank, Auto, Financial Service and Metal indices gained over a percent each while the Nifty Midcap index, too, rose over a percent.
The 30-share BSE Sensex rallied 312.89 points to 35,177.99 and the 50-share NSE Nifty climbed 83.50 points to 10,596.
Sterlite Technologies Rallies on Long Term Contract from Indian Navy:
Sterlite Technologies share price gained more than 4 percent intraday after the company received purchase order for designing, building and managing the Indian Navy’s digital network.
"This Rs 3,500-crore project is a multi-year contract, which will include design, execution, operations and maintenance of the Navy Digital Network," the company said.
The company had in February 2018 announced the award of the advanced purchase order (APO) for this project.
Jefferies Maintains Buy on Indian Energy Exchange
Jefferies has retained its Buy call on the stock with a target price of Rs 2,050, implying potential upside of 25 percent after the company reported double-digit volume growth of 18 percent in Q2FY19.
CERC order has set the tone for stable pricing and Indian Energy Exchange is expected to benefit from volume growth on stable pricing and cost base, the global brokerage house said.
Brokerages Remain Upbeat On Indiabulls Housing Finance Post Q2
JPMorgan, Macquarie, as well as CLSA maintained their rating on Indiabulls Housing Finance post Q2 results and sees 40-60 percent upside from current levels.
Indiabulls Housing Finance (IBHFL) reported a profit of Rs 1,044.1 crore for the second quarter of the current fiscal, up 21.2 percent over the year-ago period. The company's profit after tax (PAT) was Rs 861.3 crore during July-September quarter of 2017-18.
Reacting to the results, JPMorgan maintained its overweight rating on Indiabulls Housing Finance with a target price of Rs 1600 post Q2 results which translate into an upside of 68 percent from Monday’s closing price of Rs 948.70..
Indiabulls Housing Finance Off Its Opening High
Shares of Indiabulls Housing Finance (IBHFL) climbed as much as 3 percent in early trade but erased some gains to trade with moderate gains, after the company reported strong results for the second quarter.
IBHFL reported a profit of Rs 1,044.1 crore for the July-September quarter, a 21.2 percent jump from last year.
The company's total revenue for Q2 was Rs 4,255.3 crore, up from Rs 3,452.5 crore in the same quarter last year.
IBHFL also said it closed September 2018 with cash and liquid investments of Rs 21,249.7 crore.
"Home sales, especially in our core segment of mid-income affordable housing have been strong and strengthening by the passing day. We are very well positioned to grow our business by 20 percent plus in the current macro environment," IBHFL managing director Gagan Banga said talking to PTI.
ICICI Bank on Buyers' Radar
The Reserve Bank of India has approved the appointment of Sandeep Bakhshi as Managing Director & CEO of the bank for a period of three years with effect from October 15, 2018.
The board had approved the appointment of Sandeep Bakhshi as an Additional Director and Wholetime Director and Chief Operating Officer of the bank effective from June 19, 2018 which was subsequently approved by RBI on July 31, 2018 and the Shareholders of the bank on September 12, 2018.
The board at its meeting held on October 4, 2018 had approved the appointment of Bakhshi as Managing Director & CEO for a period of five years until October 3, 2023, subject to regulatory and other approvals.
Market Opens: It is a positive start on the Dalal Street with Nifty is trading around 10,550, while Sensex is up 100 points.
At 09:16 hrs IST, the Sensex is up 69.48 points or 0.20% at 34934.58, and the Nifty up 20.50 points or 0.20% at 10533.
Share of Infosys is trading higher by 1 percent as company is going to announce its second quarter numbers later today.
Midcap and smallcap are trading with 0.5 percent gain.
Shares of Hathway Cable & Datacom and DEN Networks gained 6 percent on a report that Reliance Industries is likely to buy controlling stake in both the companies.
Delta Corp, Yes Bank, IndusInd Bank, Titan, Vedanta, Asian Paints are trading higher, while Wipro, Axis Bank, BPCL, Dr Reddy's Lab are on the losing side.
Market at pre-opening: Benchmark indices are trading higher in the pre-opening trade with Nifty hovering around 10,550 mark.
The Sensex is up 173.54 points or 0.50% at 35038.64, and the Nifty up 37.90 points or 0.36% at 10550.40.
IndusInd Bank, South Indian Bank, DEN Network, Hathway Cable were among major gainers in the pre-opening trade.
Dollar Check: The US dollar was on the defensive on Tuesday after weak retail sales data, with the safe-haven yen and Swiss franc benefiting from tensions between the West and Saudi Arabia and amid a standoff on Brexit talks over Britain’s plan to exit the EU, reported Reuters.
The dollar, also sought during times of markets stress, struggled despite weaker equities and broader risk-off sentiment in part as US data overnight suggested consumers were reluctant to spend and as US bond yields paused from recent spikes, it added.
Crude Update: Oil prices rose on Tuesday on signs of falling Iran oil exports ahead of US sanctions against Tehran in November, while geopolitical tensions remain over a missing Saudi journalist, reported Reuters
International benchmark Brent crude for December delivery rose 9 cents, or 0.1 percent, to USD 80.87 per barrel. US West Texas Intermediate crude for November delivery was up 5 cents at USD 71.83 a barrel.
Asian markets trade higher: Asian stocks bounced modestly on Tuesday, gaining a toe-hold after a week of heavy losses, although increasing tensions between Saudi Arabia and the West fanned geopolitical concerns and capped gains, reported Reuters.
The disappearance earlier this month of a Saudi journalist critical of Riyadh has provoked an international outcry against the oil-rich kingdom.
US President Donald Trump has sent Secretary of State Mike Pompeo to Saudi Arabia over the case, potentially straining the relationship between the strategic allies, it added.
Wall Street ends lower: US stocks ended lower in a choppy trading session on Monday, dragged down by technology stocks amid lingering worries over interest rates and corporate earnings, reported Reuters.
The benchmark S&P 500 index teetered between positive and negative territory for much of the day but moved definitively lower in the last half-hour of trading. The Dow, which was positive for most of the session, reversed course.