Nifty ends Sept series above 11,550, Sensex up 396 points; metal stocks shine


Nagaraj Shetti, Technical Research Analyst, HDFC Securities:

After showing one day downward reversal in the last session, the Nifty witnessed a sharp upside bounce today and erased the loss of the last session. A long bull candle was formed today, that has engulfed the negative candle of the last session. Technically, this pattern indicates a strength of a recent uptrend and a smart comeback of bulls from a lower levels.
The crucial opening upside gap (event gap of 23rd Sept) remains partially filled as of last session. The Nifty showing upmove today, without violating this upside gap at the lows could be a positive indication. The next upside resistance to be watched at 11,700 levels.
Market Close: Nifty bounced back from the previous session fall and ended the September F&O series above 11,550 level. 
At close, the Sensex was up 396.22 points at 38,989.74, while Nifty was up 131 points at 11,571.20. About 1260 shares have advanced, 1236 shares declined, and 161 shares are unchanged. 
Vedanta, Coal India, M&M, Zee Entertainment and IOC were among major gainers on the indices, while losers were Yes Bank, Infosys, HUL, HCL Tech and Wipro.
Among sectors, except IT all other indices ended higher led by the metal, auto, bank, energy, infra, pharma and energy. BSE Midcap and smallcap ended with 0.5 percent gain.
Dharmesh Kant, Head- Retail Research, IndiaNivesh Securities:
IRCTC enjoys monopoly business in online rail ticket booking and food catering on running trains. Mobile application-based food ordering is gaining fast traction among travellers. It provides multiple caterers in tune with today’s taste and preferences of commuters.
Strong fundamentals and debt free balance sheet along with decent return ratios; ROE being 26%, operating margins of 20% and PAT margin at 15% augurs well. We expect revenue and PAT CAGR of 20% plus for next couple of years. IPO looks conservatively priced at a PER of around 19x based on FY19 earnings. We recommend subscribe.
The government is likely to target Rs 50,000 crore from asset monetisation in current fiscal 2019-20, reports CNBC-TV18 quoting unnamed sources.
Sources said government has set up a panel under cabinet secretary for asset monetisation sale.
Buzzing: MOIL jumped over 4 percent on September 26 after HSBC upgraded the stock to buy from hold but has kept the target unchanged at Rs 180 per share. The firm believes that the company is supported by healthy margins from low-cost operations.
Market Update:
Benchmark indices has extended the morning gains on the back of possible US-China trade deal.
The Sensex is up 367.44 points at 38,960.96, while Nifty is up 116.80 points or 1.02% at 11,557. About 1042 shares have advanced, 460 shares declined, and 56 shares are unchanged. 
Buzzing: Shares of Sterlite Technologies (STL) rose nearly 4 percent on September 26 after company entered into an agreements to acquire a 100 percent stake in European firm.
Market Opens: It is positive start for the Indian indices on the back of firm global cues.
The Sensex is up 147.33 points at 38740.85, while Nifty up 50.80 points at 11491. About 413 shares have advanced, 136 shares declined, and 25 shares are unchanged. 
Maruti Suzuki, ICICI Bank, Eicher Motors, Asian Paints, InterGlobe Aviation, Sterlite Tech, Indiabulls Housing, M&M, Cipla, IOC, ONGC, BPCL, IndusInd Bank, IndusInd Bank are among major gainers on the Indices, while losers are Axis Bank, HCL Tech and Infosys.
Rupee Opens: The Indian rupee opened flat at 71.02 per dollar on Thursday versus previous close 71.03.
Market at pre-open: Benchmark indices are trading higher in the pre-opening session on September 26.
At 09:03 hrs IST, the Sensex is up 160.48 points or 0.42% at 38754.00, and the Nifty up 36.20 points or 0.32% at 11476.40.
Upgrade to buy from hold, target unchanged at Rs 180 per share
Co supported by healthy margins from the low-cost operations
Valuation at current levels looks attractive
Cut FY20-22 EBIT estimates by 13-21% on an increase in unit cost
Negative impact largely offset at profit level by corporate tax cut
CLSA on Cements
Pick-up only after festival season
Limited benefit from lower income tax 
Demand growth continues to be weak 
Demand may pick up only from Nov/Dec
Prices in September down mildly across most markets 
Stocks may stay rangebound in the near term
Our top 12-month picks are Ambuja, Ramco & UltraTech
CLSA on Telecoms
4G ramp-up key to market share gains
Over the past two years, mobile’s active subscriber base has declined 5 crore
3G/4G subscribers have doubled to 58.6 crore to 50% penetration
An increase in 4G subscribers is the key metric to track
In last 6 months, Bharti Airtel has stepped up its 4G rollout
Positive on Reliance Jio & Bharti Airtel
For Vodafone Idea, out-of-control gearing is our key concern
CLSA on Zee Entertainment
Slash FY20-22 ad revenue forecast by 5%
Domestic subscriptions are surging with the new tariff regime
Corporate tax rate cut driving upgrades to our FY20-22 earnings
Risk to share pledging crisis remains despite extension for loan repayment
Positive on stocks due to growing business & compelling valuation 
Buy rating, target cut to Rs 450 from Rs 515 per share
Citi on Autos
Sep 2019 retails could be ahead of Aug but don’t start festivities yet
For the first 24 days, Sep PV new registrations up 17% vs similar period in Aug
On a YoY Basis, we have seen a 20% growth
For 2-wheeler, trends are even better
2-wheeler new registrations for Sep 1- 24 up 30% vs 27% in Aug 
Maintain Maruti as top sector pick
Citi on L&T Infotech
Buy rating, target cut to Rs 1,800 from Rs 1,825 per share
Q3FY20 could see a pick-up in revenue growth 
PAT margins will likely be in the range of 14-15%
In medium term, expect co to deliver better growth Vs Peers
Co is the only buy in IT midcap space
Goldman Sachs on OMCs 
Upgrade HPCL, IOC to buy & neutral on BPCL
See higher refining margin & range-bound crude prices in medium term
Morgan Stanley On IndiGo
Overweight call, target at Rs 2,261 per share
Rising intl mix, share of NEOs & healthy fare environment keep us OW 
Keep Core earnings estimates largely unchanged 
Reported EPS goes down 16% in FY20 due to Ind-AS 116 
MTM of balance sheet liabilities will add one-off non-cash FX losses in FY20 
P&L, BS now reflect the new accounting standard 
Credit Suisse on Jubilant Food 
Cut SSSG estimate for FY20 To 4.5%
Expect 100 bps drop in EBITDA Margin
Cut earnings by 8-11%
Downgrade to underperform from neutral, tgt cut to Rs 1,200 per share
Credit Suisse on L&T 
Maintain outperform, target at Rs 1,750 per share
There’s strong execution & order inflow momentum in domestic mkt
Middle East biz stable with strong inflows from hydrocarbon sector 
There is upside to margins from strong traction & benign commodities
Co trades at 16x FY21e core business earnings 
Cycle momentum needs to build up more for stronger upside
Morgan Stanley on OMCs 
OMCs remain steadfast in maintaining margin despite crude rise
Even digital payment related discounts have been removed recently 
With government looking to divest assets & fuel regulations, margin may remain high 
Top pick is HPCL amongst oil marketing companies
Nomura on Dr Reddy’s
Maintain buy call, target at Rs 3,284 per share
Big opportunity for co is Clopidogrel
Believe co may participate in the tender bids in FY20 
Co is conducting biostudies to qualify for the tenders
Clopidogrel market is more than USD 1 billion in size 
Citi on HDFC Bank
Maintain buy call, target at Rs 1,400 per share
Adjusting our numbers to reflect stock split of 1:1
Its relative value is most obvious in challenging times 
Valuations justified on continued high growth, quality & returns
Citi on CONCOR
Buy rating on the stock, target at Rs 621 per share
Economic slowdown is likely to impact near-term volume growth & results
Reiterate buy due to its potential to benefit from DFC commissioning
Positive on the stock due to large market share & net cash balance sheet
Will be an attractive candidate for acquisition
Morgan Stanley on Eicher Motors
Equal-weight call, target at Rs 17,052 per share
Believe the share price will fall relative to index over the next 30 days
Lower-priced variants, competition will put pressure on margin that RE enjoys
Recent rally in stock price also makes valuations less attractive
Wall Street gains: The S&P 500 notched its biggest daily gain in two weeks on Wednesday as investors shrugged off the news of an impeachment inquiry into President Donald Trump, while Nike shares jumped on upbeat quarterly results.
Asian stocks edge higher : Asian stocks edged up on Thursday as hopes the United States and China may soon end their year-long trade war boosted demand for riskier assets while worries about a US presidential impeachment bid ebbed.
SGX Nifty: Trends on SGX Nifty indicate a positive opening for the broader indices in India, a gain of 30 points or 0.26 percent. Nifty futures were trading around 11,505-level on the Singaporean Exchange.