Sensex, Nifty end on a flat note, midcaps outperform; Dr Reddy’s down 2%

20 Nov 2017


3:30 pm Market at Close: Benchmark indices began the week on a flat note, after trading Rangebound through the day. Midcaps managed to outperform frontline Sensex and Nifty.

The Sensex was up 17.10 points at 33359.90, while the Nifty was up 15.20 points at 10298.80. The market breadth was positive as 1652 shares advanced against a decline of 1025 shares, while 159 shares were unchanged.

Coal India, ONGC, GAIL and Tata Power were the top gainers, while ICICI Bank, DRL, and Ambuja Cements were the top losers.

3:20 pm Analysts on Strides-Eris deal: Credit Suisse has an outperform call on Strides Shasun with a target price of Rs 1,000 per share as net debt/EBITDA will reduce to 2.8x from 3.3x.

India business exit came as a surprise while Eris deal is EPS neutral to accretive, it said.

Eris Life has bought India generic business of Strides.

Macquarie has also maintained its outperform rating on Strides with a target price of Rs 1,100, citing likely debt reduction.

"The deal will pare down debt by Rs 400 crore and reaffirmed management focus on core US Australia, Africa and institutional business," it said while expecting earnings momentum to accelerate in FY19 as rate of product approvals picks up.

Positives are higher focus on B2C business, market share gains in the regulated markets and robust compliance track record, Macquarie said. "Strides is one of the top mid-cap picks,"

The research house expects Strides Shasun as an emerging leader that can potentially generate 100 percent return over three years.

3:15 pm Gold Trade Update: Gold eased due to a stronger US dollar, but remained near a one-month high hit in the previous session on uncertainty over progress on a potential overhaul of the US tax code.

US gold futures for December delivery dropped 0.35 percent to USD 1,291.90.

3:05 pm Management Interview: Panacea Biotec has focused more on the branded pharmaceutical and vaccine business in the private market and also on growing the differentiated products in the portfolio, where competition is limited and complexity is high, Rajesh Jain, Joint MD said In an interview with CNBC-TV18.

Speaking about fund raising, he said, ''The fund raising plan is going pretty well and we have had the board, as well the shareholders' approval in place. We are doing the roadshows and there is a big interest of investment in Panacea Biotec from several investors.''

The process is expected to get completed by February-March of FY18, he added.

2:50 pm Sugar production: The country's sugar production has touched 13.73 lakh tonne (lt) till November 15 of the ongoing 2017-18 season, up 79 per cent from the year-ago period, Indian Sugar Mills Association (ISMA) said today.

ISMA has pegged the output at 25.1 million tonne in 2017-18 season as against 20.2 million tonne in the last sugar season (October-September).

In a statement, ISMA said higher output so far was on account of early crushing operation.

As many as 313 sugar mills were under operation till November 15 of this season, as against 222 mills in the same period last year, it said.

2:40 pm Alto retains top slot: Maruti Suzuki India's (MSI) Alto has retained the top slot as the top-selling passenger vehicle (PV) model in the country after being overtaken by sibling Dzire for two consecutive months in August and September.

According to the latest data from the Society of Indian Automobile Manufacturers (SIAM), MSI's Alto clocked sales of 19,447 units in October, more than 17,447 units of Dzire. In August, Dzire had beaten Alto for the first time clocking sales of 26,140 units as against 21,521 of Alto. It again beat Alto in September sales.

In October, seven out of the top 10 selling passenger vehicle models were from the stable of Maruti Suzuki India (MSI). The remaining three models were from Hyundai Motor India. Among the top 10 best selling models in October, MSI's premium hatchback Baleno came in third with 14,532 units as against 10,718 units in the same month last year.

2:20 pm Japan's exports growth: Japan's export growth held steady in October, suggesting that brisk global demand for Japanese cars and electronics will likely carry its economic recovery into the current quarter.

Ministry of Finance (MOF) data out today showed that exports rose 14.0 percent year-on-year in October, led by shipments of cars to Australia and liquid-crystal device production equipment and raw materials for plastics to China.

That compares with a 15.8 percent annual gain expected by economists following a 14.1 percent increase in September.

The trade figures followed data that showed last week Japan's economy expanded at an annualised rate of 1.4 percent in the third quarter, driven by solid external demand.

2:15 pm 5G Technology: Telecom giant Bharti Airtel has struck a partnership with Ericsson to develop 5G technology for the former's India operations.

Ericsson's Senior Vice President and Head of Market Area South East Asia, Oceania and India Nunzio Mirtillo, confirmed the news and said, "We have MoUs (agreements) with 36 operators globally. In India, we have recently tied up with Bharti Airtel for 5G technology.

According to the terms of the partnership, Ericsson and Bharti have come together to push Airtel's transition into the next-gen 5G network, Mirtillo said.

Interestingly, this is not the first time both the companies have joined hands as the Swedish company already has tie-ups with Airtel for its 4G and managed services.

Mirtillo also spoke about the technology and said 5G has an "extremely high throughput and ultra-low latency".

2:05 pm Management Interview: Biocon in a BSE filing said the US Food and Drug Administration (USFDA) has issued an Establishment Inspection Report (EIR) in relation to the cGMP (current good manufacturing practice) inspection of its aseptic drug product facility that was audited between May 25 -June 3, 2017.

"The USFDA has classified the outcome of this inspection as VAI (voluntary action indicated) and EIR states that the inspection is closed," it added.

Sharing further details with regards to the above development Kiran Mazumdar Shaw, CMD, Biocon said this inspection had thrown up a number of 483s, which had raised a number of concerns.

She said getting a voluntary action indicated (VAI) status on our corrective and preventive action CAPA) plan is very positive news, adding that the company has been told that the May inspection has been closed and they can carry on CAPA implementation.

Therefore, this is a very positive news and hope to cross the finishing line on the target action date, which is December 3, for the biosimilar Trastuzumab, adding that although this news is not directly linked with Trastuzumab, it will have some positive implications.

1:50 pm Market Update: Benchmark indices remained flat in afternoon but broader markets extended gains.

The 30-share BSE Sensex was down 13.94 points at 33,328.86 and the 50-share NSE Nifty rose 0.90 points to 10,284.50.

About 1,514 shares advanced against 965 declining shares on the BSE.

Cement stocks were under pressure after the Supreme Court asked all states and Union Territories to consider prohibiting the use of pet coke and furnace oil by industries.

Shree Cements, UltraTech Cement, JK Cement, JK Lakshmi Cement, Ambuja Cements, India Cements and ACC declined 1-4 percent.

1:44 pm Results: Insecticides India said profit in Q2 grew by 28.7 percent to Rs 36.1 crore from Rs 28.1 crore YoY, driven by operational performance.

Revenue increased 0.7 percent year-on-year to Rs 416.5 crore, from Rs 413.6 crore in same quarter last fiscal.

EBITDA (earnings before interest, tax, depreciation and amortisation) jumped 17.7 percent YoY to Rs 55.6 crore from Rs 47.3 crore and margin expanded to 13.4 percent from 11.4 percent YoY.

1:35 pm Europe Trade: European bourses opened lower after preliminary coalition talks in Germany collapsed.

The pan-European Stoxx 600 was 0.01 percent lower with sectors moving in different directions.

In Asia, equities were mostly lower on growing doubts over US plans to update the tax system.

1:25 pm Earnings: Mangalam Drugs' second quarter profit grew by 31.4 percent year-on-year to Rs 6.7 crore, compared with Rs 5.1 crore in year-ago.

The growth was driven by strong operational performance.

Revenue during the quarter increased 8.8 percent to Rs 83.1 crore, against Rs 76.4 crore in same quarter last fiscal.

EBITDA (earnings before interest, tax, depreciation and amortisation) surged 39.8 percent year-on-year to Rs 14.8 crore and margin expanded sharply to 17.8 percent from 13.9 percent.

1:10 pm Market Check: The Sensex is down 40.60 points or 0.12% at 33302.20, and the Nifty is down 8.70 points or 0.08% at 10274.90. About 1496 shares advanced, against 960 shares' decline, while 130 shares are unchanged.

12:47 pm Market Outlook: Even as doubts emerge over the short term prospects for emerging markets like India, Sukumar Rajah, MD & CIO, Franklin Local Asset Management told CNBC-TV18 that on a long term basis, investors prefer exposure to India.

In the near term though, it may not be the case. India lacks earnings momentum and we are not looking at stocks on a PE basis, he added. The parameters include a combination of discounted cash flow and implied growth rate.

Speaking on financials, he believes that we are still in a sweet spot with respect to private banks. ''The market is expecting 15-20 percent growth for private banks over next 10 years and currently have 30 percent market share,'' he told the channel.

12:30 pm Pet Coke Ban: The Supreme Court, November 17, asked all states and Union Territories to consider prohibiting the use of pet coke and furnace oil by industries.

Earlier, the Apex Court has banned the usage in states of UP, Rajasthan and Haryana. Further the government is now considering banning import of pet coke - a cheap but polluting fuel widely used by cement, paper, brickkiln, chemicals and textile industries.

Stewart & Mackertich Reserach feels the companies which are expected to be impacted are Shree Cements, Ultra Tech Cement, JK Cement, JK Lakshmi Cement, Ambuja Cements, India Cements and ACC, given their usage of pet coke levels in their plants, especially in the above mentioned three states.

12:16 pm Buzzing: Global brokerage house CLSA has maintained its buy rating on Aditya Birla Fashion & Retail as it believes the network expansion of retail chain brand Pantaloon should help drive growth for the company. The stock gained a percent.

It expects the stock to hit a target price of Rs 197 per share, implying 29.3 percent upside from Friday's closing level.

According to the research house, improving in supply chain capabilities, sharpening price points, shift to four-season cycle and rationalisation of its store network are expected to lead to 4-5 percent same-store-sales growth going ahead.

CLSA feels innerwear segment may see a healthy growth in coming days as the segment has been growing rapidly and management sees a large opportunity in that space.

12:05 pm Edible Oil Trade Update: Indian soyoil and crude palm oil futures jumped by the daily maximum limit of 4 percent after the government raised import tax on edible oils, traders said.

India has raised import tax on edible oil to the highest level in more than a decade, the government said in an order, as the world's biggest importer of edible oils aims to support its farmers.

11:55 am Market Check: The broader markets continued to outperform equity benchmarks that hovered around the flatline in late morning deals.

The 30-share BSE Sensex was up 16.27 points at 33,359.07 and the 50-share NSE Nifty rose 3.20 points to 10,286.80.

About 1,521 shares advanced against 852 declining shares on the BSE.

Asia markets were mostly lower, following a decline in US equities last Friday on lingering concerns about American tax reform.

11:45 am Oil Trade Update: Oil markets were tepid as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices.

Brent crude futures, the international benchmark for oil prices, were at USD 62.64 per barrel, down 0.13 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were at USD 56.64 a barrel, or 0.16 percent, from their last settlement.

11:35 am Divis gets EIR: Shares of Divis Laboratories rose 2.6 percent intraday as its Visakhapatnam unit received EIR from USFDA.

The company has received an establishment inspection report (EIR) from United States Food & Drug Administration (USFDA) for its Unit-II at Visakhapatnam.

With this there is a closure of audit by FDA.

The company's Unit-II at Visakhapatnam was inspected by USFDA in September, 2017 wherein a Form-483 was issued with 6 observations.

11:25 am Acquisition: Monnet Ispat share price surged 11 percent intraday Monday after steel giants and private equity firms have submitted bids to acquire the debt laden company.

Sources told CNBC-TV18 that Tata Steel, JSW Steel, Vedanta and Shyam Steel have put in their bids to acquire Monnet Ispat.

Edelweiss ARC, Blackstone, TPG and SSG Capital are also among contenders for acquisition. The last date for submission of bids has been extended till November 27.

Monnet Ispat is one of 12 accounts identified by the Reserve Bank of India for insolvency proceedings under Insolvency and Bankruptcy Code.

11:15 am German Politics: Chancellor Angela Merkel said today her efforts to form a three-way coalition government had failed, thrusting Germany into a political crisis and pushing Europe's largest economy closer to a possible new election.

The pro-business Free Democrats (FDP) unexpectedly pulled out of more than four weeks of negotiations with Merkel's conservative bloc and the ecologist Greens, citing irreconcilable differences.

The euro hit a two-month low against the yen soon after FDP leader Christian Lindner said on Sunday that his party was withdrawing from the talks as the three would-be partners could not find common ground on key issues.

A tired looking Merkel said she would stay on as acting chancellor and would consult with President Frank-Walter Steinmeier on how to move forward, adding that a deal had been within reach.

11:00 am USFDA Nod: Glenmark Pharmaceuticals has received final approval from the US health regulator for generic version of Loestrin tablets used to prevent pregnancy.

"Glenmark Pharmaceuticals USA has been granted final approval by the US Food and Drug Administration (USFDA) for Hailey 24 Fe (Norethindrone Acetate and Ethinyl Estradiol tablets, USP and Ferrous Fumarate tablets), 1 mg/20 mcg, the generic version of Loestrin 1 24 Fe tablets, of Allergan Pharmaceuticals," the company said in a filing.

According to IQVIATM sales data for the 12 months to September 2017, the Loestrin 24 Fe tablets market achieved annual sales of approximately USD 96.7 million, Glenmark said.

10:50 am Market Check: Benchmark indices were mildly lower amid consolidation, tracking subdued trade in Asian markets, and after investors digested Moody's India rating upgrade.

The 30-share BSE Sensex was down 30.71 points at 33,312.09 and the 50-share NSE Nifty declined 15.80 points to 10,267.80.

The broader markets outperformed benchmarks on positive breadth. About 1,359 shares advanced against 857 declining shares on the BSE.

10:44 am Order Win: Home-grown telecom gearmaker Himachal Futuristic Communications (HFCL) today said it has bagged a Rs 128-crore order from Bharat Sanchar Nigam Ltd.

"The company has received the purchase order worth Rs 128 crore approximately from Bharat Sanchar Nigam Ltd for supply of packet microwave radio systems on pan-India basis for BSNL mobile network," HFCL said in a BSE filing.

The company said the equipment purchase order is part of a turnkey project and the balance order for installation and AMC support services will be issued separately by BSNL.

10:32 am Rupee Update: The rupee depreciated by 7 paise to 65.08 against the dollar today after renewed demand for the US currency from importers.

The dollar made headway against the euro after Angela Merkel's attempts to form a new government for Europe's biggest economy collapsed, plunging Germany into a crisis. A subdued start at domestic stock markets cast its shadow, traders said.

On Friday, the rupee had bounced back in style to end at a one-week high of 65.01 after Moody's upgraded India's sovereign credit rating.

10:22 am USFDA Approval: Drug major Cipla has received final approval from the US health regulator for generic version of Dacogen, indicated for treatment of patients with myelodysplastic syndromes.

In a BSE filing today, Cipla said "it has received final approval for its abbreviated new drug application (ANDA) for Decitabine Injection 50 mg single-use sterile vial from the United States Food and Drug Administration (USFDA)".

The approved product is a generic equivalent of Otsuka America Pharmaceutical Inc's Dacogen. It is indicated for treatment of patients with myelodysplastic syndromes (MDS), the company added.

10:12 am Bond Yields: Indian bond yields fell sharply in morning after the central bank unexpectedly cancelled its sale of bonds via open market operation post market hours on Friday, reports Reuters.

The Reserve Bank of India said on Friday it was withdrawing the OMO sale that was scheduled for November 23 due to ''recent market developments and based on a fresh review of the current and evolving liquidity conditions''.

The benchmark 10-year bond yield was down 12 basis points at 6.92 percent.

10:05 am Acquisition: Eris Lifesciences on Saturday said it has entered into a definitive agreement to buy India branded generics business of Strides Shasun for an aggregate cash consideration of Rs 500 crores.

The transaction is subject to customary closing conditions and parties intend to close the transaction by November 30th, 2017.

Strides' India branded generics business comprises of a portfolio of 130 plus brands in the domains of neurology, psychiatry, nutraceuticals and gastro.

As per the terms of the agreement, Eris will acquire the marketing and distribution rights for the said portfolio of products in India, along with the employees forming part of the business. Strides will retain the global rights to the products.

The acquisition is Eris's fourth-and the largest--in the last 18 months, the company will be among the top ten companies in the central nervous system (CNS) segment.

9:54 am Market Outlook: "We continue to believe that Indian markets are in a phase of a secular bull run. Hence, even if there are event-based intermittent corrections in the Indian markets, the long-term trend remains bullish," Prasanth Prabhakaran, Senior President & CEO, YES Securities (India) said in an interview to YES Securites.

These events in the immediate future could be the outcome of the state elections or the US Fed policy review but we firmly believe that it will not reverse the overlying trend of upward asset values.

In the short term, it is essential to look at individual stocks that offer superior value in terms of their valuation even at current market levels instead of looking at the headline indices.

9:44 am Reliance Comm in focus: Moody's Investors Service has withdrawn debt-laden Reliance Communications' corporate family rating, citing a missed scheduled payment related to the company's dollar bond.

"Moody's has today withdrawn Reliance Communications' (RCom) Ca corporate family rating (CFR) and its negative outlook.

At the same time, Moody's has also withdrawn the Ca rating on RCom's senior secured notes," a Moody's statement said.

According to Moody's website, a CFR applies to all affiliates under the management control of an entity to which it is assigned, whereas obligations rated 'Ca' are highly speculative and are likely in, or very near, default with some prospect of recovery in principal and interest.

The rating withdrawal follows a default on interest payment on a foreign bond.

9:35 am Market Update: Benchmark indices gained strength after flat opening, backed by L&T, ITC and select private banks.

The 30-share BSE Sensex was up 85.95 points at 33,428.75 and the 50-share NSE Nifty rose 17.10 points to 10,300.70.

About two shares advanced for every share falling on the BSE.

9:26 am Buzzing: Shares of Biocon gained 5.6 percent in the early trade on the back of EIR received from USFDA.

".... confirms that the United States Food and Drug Administration (USFDA) has issued an Establishment Inspection Report (EIR) in relation to the cGMP (current good manufacturing practice) inspection of its aseptic drug product facility that was audited between May 25-June 3, 2017."

The FDA has classified the outcome of this inspection as VAI (voluntary action indicated) and the EIR states that the inspection is closed.

9:20 am Order Win: Larsen & Toubro's arm L&T Construction, its heavy civil infrastructure business vertical, has bagged an order worth Rs 8,650 crore from the Mumbai Metropolitan Region Development Authority (MMRDA) for the construction of Mumbai Trans Harbour Link (MTHL), packages 1 and 3.

The project involves construction of a 21.8 km bridge connecting Mumbai mainland with Navi Mumbai. "The contract (package 1), secured in partnership with IHI Corporation, Japan involves construction of an Orthotropic Steel Deck crossing the various obligatory navigation channels," L&T said.

The package 1 involves construction of a multi-level interchange at Sewri and a six-lane marine bridge from Sewri extending 10.38 km into the Mumbai bay.

The package 3, won by L&T on a standalone basis, involves construction of a 3.6 km, six-lane land bridge at Navi Mumbai, it added.

9:15 am Market Check: Equity benchmarks opened flat with a negative bias on Monday, after rallying nearly 600 points in previous two consecutive sessions. Subdued Asia trade also caused some selling pressure. Investors digested Moody's India upgrade and focussed on Gujarat Assembly elections that will take place next month.

The 30-share BSE Sensex was down 27.26 points at 33,315.54 and the 50-share NSE Nifty fell 15 points to 10,268.60.

L&T surged 2 percent after bagging Mumbai Trans Harbour Link project.

Yes Bank, IndusInd Bank, ONGC, Sun Pharma, HDFC Bank, TCS and UPL were early gainers.

Infosys, Coal India, Cipla and Zee Entertainment were early losers.

Biocon, Jai Corp, Reliance Industrial Infra, Glenmark Pharma, Eris Lifesciences, Strides Shasun, Transport Corp, Patel Integrated and Havells gained 1-5 percent.

Cement stocks were under pressure - Shree Cement, UltraTech Cement, JK Lakshmi and Ambuja Cements fell 1-4 percent.

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