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Nifty, Sensex Clock Second Week Of Gains On Earnings Optimism

Shares of the Mangaluru-based lender rose as much as rose as much as 7.9 percent, the most in over three months to Rs 165.40 as gross bad loans improved to 4.13 percent from 4.34 percent last quarter.

Other key earnings highlights:

  • Operating income up 57 percent on lower opex and supported by higher other income
  • GNPA at 4.13 percent versus 4.34 percent (QoQ)
  • Absolute gross NPAs up 1.4 percent (QoQ)
  • Provisions rise to Rs 226 crore versus Rs 199 crore (QoQ)
  • Capital Adequacy Ratio stands at 12.46 percent
  • Advances growth at 12.3 percent; Deposit growth at 6.5 percent

Highlights from Management:

  • Asset quality is not a big concern for bank
  • Have taken proactive step to provide for likely NPAs
  • Not seeing any NPA problem in coming quarter
  • Provisions not to be higher in next quarter
  • Provisions to either be at the same level or lower in next quarter
  • There could be some pressure on provisions in Q3
  • Trading gains aided other income growth
  • Have increased service charges and reduced interest on savings account aided growth
  • GIC IPO gets bids for 12.72 crore versus 12.47 on offer, according to NSE data.

TCI Express

  • Stock rose as much as 19.1 percent to Rs 608.70
  • Trading volume was 32.4 times the 20-day average for this time of day

Kirloskar oil Engines

  • Stock rose as much as 9.3 percent to Rs 394.90
  • Trading volume was 84.6 times the 20-day average for this time of day

Polyplex Corp

  • Stock rose as much as 13.8 percent to Rs 529.95
  • Trading volume was 17.2 times the 20-day average for this time of day

Shares of the telecom company rose 8.1 percent and were headed for highest close since September 19. Shareholders of Idea Cellular approved the merger proposal with Vodafone Mobile Services Ltd. and Vodafone India Ltd. at a meeting held by India’s NCLT yesterday.

  • ITC has 13.7 lakh shares change hands in a block
  • Cylient has 24.3 lakh shares (or 2.2 percent of equity) change hands at Rs 525 each in a single block deal on the BSE.
  • JSW Energy has 24 lakh shares change hands at Rs 80.40 each in a block deal on the BSE.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares rallied as much as 20 percent amid spike in volume to 94.3 times the 20-day average for this time of day.

The company won total Rs 349 crore of order from Bihar Urban Infrastructure Development and Karnataka Urban Infrastructure Development & Finance Corp, it said in a filing Thursday.

The stock surge follows a decline to record on Wednesday.

Shares of the country’s largest telecom operator rose as much as 8.1 percent, the most in over five months, to Rs 432.60.

The Sunil Mittal-led company agreed to take over Tata group's consumer telecom services business. The “debt-free cash-free” merger will see Airtel take control of operations and a small portion of Tata Teleservices Ltd.’s unpaid spectrum liabilities.

The stock was the best performer on both the Sensex and the Nifty. Trading volume was 14.7 times its 30-day average. Bharti Airtel trades at 51.8 times trailing 12-month earnings per share and 72 times its estimates for the coming year.

Shares of Tata Teleservices (Maharashtra) rose as much as 10.5 percent to Rs 4.86

Shares of the alcohol maker rose as much as 7.1 percent after it entered into a bottling pact with SDF Industries, Palakkad for its brands

The company got an approval from southern Kerala state’s agency and products will be introduced in first week of November, it said in an exchange notification.

It expects sale of 300,000 cases in FY18.

Investors shouldn’t read too much into Friday’s advance in Indian bonds, which follows a slower-than- estimated rise in inflation last month.

That’s because the softer headline number masks an increase in demand-side pressures, which is what the central bank looks to manage through interest rates. The so-called core inflation climbed to 4.6 percent in September from 4.5 percent in August, according to estimates from Deutsche Bank AG.

Indian shares climbed for a fourth time this week led by Bharti Airtel, which agreed to merge with Tata’s consumer telecom business, and Reliance Industries ahead of its second quarter earnings.

Both the S&P BSE Sensex and the NSE Nifty 50 rose 0.5 percent in early trade. Seventeen of 19 sector gauges complied by the BSE Ltd. advanced led by the S&P BSE Telecom Index’s 4.24 percent jump.

Companies reporting earnings this week include Reliance Industries Ltd., the country’s most valued company. India’s factory output rose at its fastest pace in six months in August as manufacturing activity expanded after the implementation of the Goods and Services Tax.

Investors pumped a net Rs 18,900 crore into Indian equity funds in September, after pouring in a record Rs 20,400 crore in August, data from the Association of Mutual Funds in India show.

Tata Consultancy Services (Q2, QoQ)

  • Total income rose 3.2 percent to Rs 30,451 crore
  • EBIT grew 10.8 percent to Rs 7660 crore
  • EBIT margins at 25.1 percent versus 23.4 percent
  • Profit up 8.4 percent to Rs 6,446 crore

Reliance Industrial Infrastructure (Q2, YoY)

  • Revenue fell 14.8 percent to Rs 19.85 crore
  • EBITDA declined 32.4 percent to Rs 3.65 crore
  • EBITDA margins at 18.4 percent versus 23.2 percent
  • Profit down 20.6 percent to Rs 2.7 crore

IndusInd Bank (Q2, YoY)

  • Net profit rose 24.9 percent to Rs 880 crore
  • Net Interest Income grew 24.7 percent to Rs 1,821 crore
  • Gross NPAs unchanged at Rs 1,347 crore QoQ
  • Provisions fell 5.2 percent to Rs 293.8 crore QoQ

Nifty 50

  • Reliance Industries Ltd.

Other Results Today

  • Bhansali Engineers
  • GNA Axles
  • Karnataka Bank
  • Kirloskar Oil Engines
  • MCX
  • Reliance Naval
  • General Insurance Corporation of India continues on day 3. The issue was subscribed 0.9 times at end of day 2.
  • Reliance Nippon Life Asset Management IPO at Rs 247-252 a share starting October 25
  • Nifty October Futures closed with a premium of 15 points versus 7.5 points at 10,111.4
  • October Futures: Nifty open interest up 4 percent; Bank Nifty open interest down 10 percent
  • India VIX closed lower by 5.8 percent at 11.04
  • October series highest Call base at 10,000 (open interest at 37.9 lakh, down 25 percent)
  • October series highest Put base at 10,000 (open interest at 65.4 lakh, up 24 percent)
  • October call strikes 10,000 10,100, 10,200 saw open interest unwinding
  • October put strikes 9900, 10,000, 10,100 saw open interest addition

Credit Suisse on Bharti Airtel

  • Upgraded to Neutral from Underperform; hiked price target to Rs 400 from Rs 320
  • Expect significant cost and network synergies from Tata deal
  • Deal adds value accretion of Rs 80 per share
  • Deal to place Bharti neck-to-neck with Idea + Vodafone
  • Risk from Jio’s aggressive positioning prevents from turning more constructive on the stock

UBS on Bharti Airtel

  • Maintain Buy Rating with price target of Rs 495
  • Tata Tele acquisition will likely be EBITDA accretive for Airtel from the start
  • Airtel will take 30-40 percent of spectrum liabilities (Rs 8,000-8,500 crore), essentially getting spectrum at a lower price
  • Bharti will be key long-term winner given its scale, spectrum footprint and network head-start

AnandRathi on Sanghi Industries

  • Initiates Buy with price target of Rs 147; Potential Upside 28 percent
  • One of the lowest-cost producers of cement
  • Strong pricing and demand in western markets, along with savings to drive its EBITDA/tonne
  • Plans to double cement and power capacities over FY19-20
  • Expect volume and revenue to grow at CAGR of 8 percent and 18 percent over FY17-20
  • Utilisation in next two years to improve to 82 percent versus 70 percent

Kotak Securities on Bharti Airtel

  • Upgraded to Add from Reduce; hiked price target to Rs 470 from Rs 430
  • Deal with Tata is positive for Bharti
  • Bharti likely to surrender a bulk of the 107.25 MHz administered spectrum
  • Bharti would take close to Rs 3,000 crore of spectrum liability

CLSA on IndusInd Bank

  • Maintain Buy with price target of Rs 2,060
  • Q2FY18 was tad ahead of estimates; Operating profit grew aided by healthy topline and efficiencies from digitisation
  • Expect 25 percent CAGR in profit over FY17-20 as it leverages deposit franchise
  • IndusInd top picks in the sector

UBS on IndusInd Bank

  • Maintain Neutral with price target of Rs 1,800
  • Bank continues to report strong growth across all parameters
  • Net interest income, loan book and asset quality largely stable
  • Likely merger announcement with Bharat Financial to be positive; EPS and ROE accretive

CLSA on TCS

  • Maintain Buy; hiked price target to Rs 2,970 from Rs 2,880
  • Q2FY18 was mixed, with third successive quarter of soft CC revenue growth
  • Expect growth recovery in insurance and retail to precede a recovery in banking
  • Expect growth acceleration from Q4FY18

Credit Suisse on TCS

  • Maintain Neutral; hiked TP to Rs 2,350 from Rs 2,250
  • Impressive growth in digital demonstrates that TCS has been able to make the transition
  • TCS to likely fall short of its targeted 26-28 percent margin level in FY18

Morgan Stanley on TCS

  • Maintain Underweight; hiked price target to Rs 2,250 from Rs 2,100
  • Results were a miss on revenues, beat on margins and net income
  • EPS estimates for FY18, FY19 and FY20 by 1.5 percent, 2.1 percent and 1.5 percent respectively on better margin performance
  • Strong margin performance led by currency and cost initiatives

Macquarie on TCS

  • Maintain Neutral; hiked price target to Rs 2,375 from Rs 2,224
  • FY18/19 EPS estimates slightly increased to factor in 8 percent (YoY) growth in $ revenue
  • Expect FY18 margins to be at 25 percent below company estimate of 26–28 percent
  • Pecking Order: HCL Tech > Infosys > TCS > Wipro and TechM
  • Tata and Bharti Airtel to combine consumer telecom business in cash-free, debt-free deal
  • Piramal Enterprises approves raising Rs 2,000 crore through a rights issue
  • Sun Pharma to increase shareholding in Ranbaxy Malaysia to 79.5 percent from 71.2 percent
  • Shriram EPC: Wins Rs 349 crore of multiple orders
  • DHFL loan to Manpreet Estates under tax scan (Business Standard)
  • Indiabulls Housing Finance's U.K. subsidiary OakNorth Bank gets £154 million investment
  • M&M, Shapoorji, Liberty House view for ABG Shipyard; offer Rs 3,000-3,500 crore for assets. Lenders face a haircut of 70 percent (Economic Times)

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.12 percent to 10,113.5.

Asian equities were largely flat whereas U.S. equities were weighed down by declines in Citigroup and JP Morgan Chase on consumer credit concerns. S&P 500 Index edged lower after hitting some record highs this week. Bitcoins touched a new record, moving above $5,300.

Commodities:

  • West Texas Intermediate crude rose 0.57 percent to $50.89 a barrel.
  • Gold futures added 0.19 percent to $1,296.13 an ounce

What’s Coming Up This Week:

  • China’s export growth is forecast to pick up to 10 percent in September from 5.6 percent the previous month, on robust U.S. and EU demand. Import growth is also expected to accelerate, with the trade surplus narrowing to $38 billion. The central bank may also release monthly loan and money-supply data.
  • The active Atlantic hurricane season will probably figure prominently in U.S. data on retail sales and consumer prices. U.S. wholesale prices jumped in September by the most in five months as gasoline costs spiked after Hurricane Harvey. The producer-price index rose 0.4 percent.

. Read more on Markets by BloombergQuint.