Opening Bell
October 29, 2020
Market Outlook Today’s Highlights
Indian markets are likely to open gap down on the back of Results: TVS Motors, Maruti Suzuki, Zensar, weak global cues amid uncertainty about US stimulus and a BlueDart, Himadri Specialty Chemicals, surge in Coronavirus cases in developed countries. Vodafone Idea, MRPL, SIS India, Havells India, However, global news flows and sector specific Laurus Labs, Bank of Baroda, Mastek, Tata developments will be key monitorables. Chemicals
Index Movement
Markets Yesterday 12500 41600 . Domestic markets ended lower tracking losses across 12000 39600 sectors, mainly financials amid weak global cues 37600 11500
35600 11000 . US markets ended lower amid concerns regarding 10500 continued rise in Covid-19 infections in the US 33600 31600 10000
Key Developments BSE (LHS) NSE (RHS)
C lose Previous C hg (%) MTD(%) YTD(%) P/E (1yrfwd) S ensex 39,922 40,522 -1.5 4.9 -3.2 26.8 . Maruti Suzuki is expected to report a healthy Q2FY21E on Nifty 11,730 11,889 -1.3 4.3 -3.6 27.3 the back of strong volume offtake during the quarter. Total dispatches for the period were at 3.93 lakh units, up 16.2% Institutional Activity YoY (domestic up 18.6%, exports down 13%). ASPs are expected to stay largely unchanged QoQ amid stable C Y18 C Y19 YTD C Y20 Yesterday Last 5 Days product mix (UV at ~16-17% of total volumes), greater F II (| cr) -68,503 40,893 -47,791 -1,131 7,529 D II (| cr) 107,388 44,478 56,711 1 -7,095 absorption of BS-VI pricing in the market. Total operating income is expected at | 19,327 crore, up 13.8% YoY. We World Indices – Monthly performance expect it to post EBITDA of | 1,995 crore vs. previous BSE NSE K ospi S hanghai Nikkei quarter's loss of | 863 crore, with corresponding EBITDA 39,922 11,730 2,345 3,269 23,419 margin of 10.3%. Consequent PAT is seen at | 1,387 crore 5.1% 4.5% 1.6% 1.6% -0.4%
Nasdaq D ow Jones U.K. F rance G ermany . MCX reported a healthy operational performance with 19.5% YoY growth in topline to | 119.7 crore, led by 10% 11,005 26,520 5,583 4,571 11,561
-0.7% -3.4% -5.3% -5.4% -9.9% YoY growth in ADTO at | 38144 crore. Steady opex led ~760 bps YoY improvement in EBITDA margin at 54.8%.
However, lower other income & higher tax impacted
earnings that were at | 58.6 crore vs. | 72 crore in Q2FY20
Nifty Heat Map . .Bharti 452 451 H ero 2,946 604 2,135 UPL M&M E icher Airtel 4.3% 2.8% Moto 1.2% 1.2% 0.8% 336 7,186 983 2,164 78 Wipro Maruti L&T HUL IOC 0.5% 0.4% 0.1% 0.1% -0.1%
Bajaj 2,944 H D F C 586 G rasim 777 2,622 P ower 173 TCS Auto -0.1% Life -0.2% Ind -0.2% -0.3% G rid -0.4% Markets Today (ADR data updated till yesterday) Bajaj 5,642 771 T ata 135 17,119 765 S BI Life Nestle C ipla Commodities C lose Previous C hng (%) MTD(%) YTD(%) F inserv -0.4% -0.4% Motors -0.6% -0.6% -0.6% G old (|/10 gm) 50,509 50,961 -0.9 -0.1 28.8 Axis 505 66 3,131 3,542 345 ONGC D ivis Lab Britannia BPCL Silver (|/kg) 60,199 62,281 -3.3 1.1 29.7 Bank -0.7% -0.7% -0.8% -0.9% -0.9% Crude ($/barrel) 39.6 41.2 -4.0 -3.4 -40.1 JS W 306 166 C oal 113 R eliance 2,011 1,217 C opper ($/tonne) 6,748 6,798 -0.7 1.7 10.2 ITC T itan S teel -1.0% -1.0% India -1.1% Ind. -1.1% -1.2% C urrency U S D /INR 73.9 74.0 -0.2 -0.1 -3.4 83 1,077 S un 463 88 Asian 2,160 GAIL Infosys NTPC E U R /U S D 1.2 1.2 -0.6 0.0 4.5 -1.3% -1.3% P harma -1.5% -1.5% P aints -1.6% U S D /Y E N 104.4 104.4 0.0 1.0 4.0 S hree 21,361 H D F C 1,210 830 T ata 402 4,469 ADR s H C l T ech U ltratech C ement -1.7% Bank -1.9% -2.1% S teel -2.1% -2.1% H D F C Bank 59.9 59.5 0.8 19.9 -5.5
190 K otak 1,551 170 Bajaj 3,371 4,951 IC IC I Bank 11.2 11.1 0.7 13.5 -26.0 SBI H indalco D r R eddy T ata Motors 9.5 9.1 4.6 4.3 -26.7 -2.2% Bank -2.3% -2.3% F inance -2.4% -2.9% Infosys 14.9 14.9 -0.5 7.5 43.9 804 Adani 354 IC IC I 396 Indusind 593 H D F C 1,969 T echM Dr Reddys Labs 68.0 66.9 1.7 -2.2 67.6 P orts Bank Bank Ltd -2.9% -3.0% -3.4% -3.4% -3.5% Wipro 4.9 4.9 -0.4 4.5 30.9
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Key Data Points Exchange Cash Turnover (| crore) Key Economic Indicator Period L atest Prior Values 100000
RBI Cash Reserve Ratio N/A 3.00% 3.00%
61,444 59,789 55,908
54,454 49,638 R BI R epo R ate N/A 4.00% 4.00% 49,468 RBI Reverse Repo Rate N/A 3.35% 3.35% 50000
C P I Y Y S ep 7.34% 6.69% 4,012
2,860
2,727
2,675
2,511 2,404 C urrent Account Balance Q1 -0.6bln $ -2.6bln $ 0 E xports - U S D S ep 27.4 bln$ 22.7 bln$ 21-Oct 22-Oct 23-Oct 26-Oct 27-Oct 28-Oct FX Reserves, USD Final Aug 542 bln$ 534.6 bln$ BSE Cash NSE Cash G D P Q uarterly yy Q2 -23.90% 3.10% GDP Annual F Y 20 4.20% 6.10% NSE Derivative Turnover (| crore) Imports - U S D S ep 30.31 bln $ 29.47 bln $ Industrial O utput yy Aug -8.00% -10.80% 6000000
Manufacturing O utput Aug -8.60% -11.10% Bell Opening
T rade D eficit G ovt - U S D S ep -2.72bln $ -6.77bln $ 4000000
3,302,119 5,274,740 2,901,390
WPI Food yy S ep 8.17% 3.84% 2,154,121 1,829,728
WPI Fuel yy S ep -9.54% -9.68% 2000000 1,164,475 WP I Inflation yy S ep 1.32% 0.16% WPI Manuf Inflation yy S ep 1.61% 1.27% 0 21-Oct 22-Oct 23-Oct 26-Oct 27-Oct 28-Oct NSE Derivative
Corporate Action Tracker Sectoral Performance – Monthly Returns (%) Security name Action E x Date Record Date Status Price (|) Banks 12.6 Asian P aints D ividend 28-O ct-20 30-O ct-20 3.35 IT 5.9 Granules India D ividend 28-O ct-20 30-O ct-20 0.25 Capital Goods 5.1 H industan U nilever D ividend 28-O ct-20 29-O ct-20 14.00 Consumer Durables 4.7 Real Estate 4.1 Colgate Palmolive India D ividend 29-O ct-20 2-Nov-20 18.00 Power 2.9 Nestle India D ividend 29-O ct-20 2-Nov-20 135.00 BSE Small Cap 0.8 Tech Mahindra D ividend 29-O ct-20 2-Nov-20 15.00 BSE Midcap 0.6 FMCG 0.6 Auto 0.2 Metals -2.1
Retail Equity Research Equity Retail
Healthcare -2.2 PSU -2.4 – Oil & Gas -4.9 -10.0 -5.0 0.0 5.0 10.0 15.0 (%)
ICICI Securities Key News for Today Company/ News View Impact Industry
Axis Bank Axis Bank reported a healthy operating Axis Bank has reported an improvement in performance with NII growing 20% YoY to | asset quality even if standstill excluded 7326 crore aided by 7 bps YoY rise in NIM to along with healthy operating performance. 3.58%. PAT for Q2FY21 was at | 1683 crore Outlook for restructuring remaining vs. a loss of | 112 crore YoY. Credit growth subdued remains a key positive. was 10.5% YoY led by 12% rise in retail and Reasonable provisions, capital adequacy corporate loans. Asset quality improved QoQ and operational efficiency augur well for with GNPA, NNPA declining 54 bps, 25 bps to steady earnings growth 4.18%, 0.98%, respectively. On a standstill classification basis, it saw an improvement. Total 1.6% of loans are probable for restructuring. Covid related provisions were at | 5012 crore with cumulative provisions at 2.2% of standard loans
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Hero HMCL reported strong Q2FY21 results. Net Topline tracked 7.7% YoY volume MotoCorp sales were at | 9,367 crore, up 23.7% YoY, increase to 18.2 lakh units. Margin, PAT (HMCL) with blended ASPs at | 51,412/unit, a rise of performance was a beat on our estimates. ~15% YoY. EBITDA margins were down 80 Control over employee & other expenses bps YoY to 13.7% while PAT came in at | (down 70 bps, 190 bps YoY on percentage 953.5 crore (up 9% YoY). HMCL posted CFO of sales basis) helped margin print. of | 3,439 crore, FCF of | 3,187 crore over Profitability was higher courtesy lower H1FY21 vs. | 2,614 crore, | 1,967 crore, depreciation outgo respectively, in the corresponding period last year
Marico Marico reported strong results with 11% We believe the company is aggressive in domestic volume growth led by continued its approach to grow foods & other new robust growth in Saffola. Revenues increased age product portfolio. We expect 8.7% to | 1989 crore with domestic & continued demand for healthier edible oil international business seeing growth of 8% & & food products to result in stronger 12%, respectively. Parachute brand grew 8% growth for entire Saffola franchise, which with volume increase of 10% supported by is contributing ~25% of consolidate sales. constant pricing despite copra prices rising The company has launched Saffola Honey, sharply. Saffola saw growth of 16% led by Saffola Arogyam Chyawan Amrut and 20% volume growth with trend of immunity boosting products in last six consumption shifting from unbranded to months to leverage high demand for these healthier proposition brands. Value added products. We believe high growth in hair oil (VAHO) sales fell 1% with 4% increase edible oil & foods products would in volumes. The slower growth was impacted compensate for low growth in hair oil by continued double digit sales decline of segment for the company. With single CSD channel. Gross margin fell 163 bps given digit growth in hair oil & high growth in copra & rice bran prices increased 11% & foods & new launches, Marico would be 26%, respectively. Marico has not taken any able to grow volumes by 8-10%, going price hikes in Q2. However, contraction in forward. The stock is trading at 37x FY23E gross margins was offset by 127 bps & 56 bps earnings. We are positive on the stock savings in advertisement & overhead spends, respectively. We believe larger part of savings has come from lower ad rates. This resulted in operating profit growth of 10.2% to | 389 crore & operating margin expansion of 25 bps to 19.6%. PAT grew 7.9% to | 273 crore
Supreme Revenues came in at ~| 1375 crore, up by We believe Supreme Industries' Industries ~8% YoY (in line with our estimate of | 1322 performance in Q2FY21 was better than crore) led by higher realisation (up ~7% YoY) our estimates on the profitability front during the quarter. Strong EBITDA margin at mainly due to better product mix and 18.6% (up by 500 bps YoY) was attributable benign raw material prices. In addition to to ~424 expansion in gross margin. Despite this, despite a challenging scenario the reversal of tax benefits in the base period, the company maintained its debt free status company managed to report PAT growth of while free cash flow of the company ~25% YoY at | 175 crore (vs. I-direct estimate increased sharply by 32% YoY to | 452 of ~| 95 crore) crore in H1FY21, led by stringent working capital management. We maintain our positive stance on the stock
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Larsen & i) L&T reported a reasonable Q2FY21 i) L&T reported a reasonable performance Toubro operational performance amid a subdued on the operational and order inflow front (L&T) business environment. Standalone revenues while the infrastructure segment saw de-grew 15.8%, YoY, nearly in line with our some green shoots of recovery amid estimates. Standalone EBITDA margins productivity challenges. Also, cash declined marginally by 50 bps to 7.8% YoY. proceeds from sale of E&A business Consequently, for Q2FY21, standalone provided much needed liquidity comfort adjusted PAT (excluding impairments and on the balance sheet front in these E&A proceeds) comes to | 1051.6 crore, challenging times. However, working which de-grew 40.8% YoY. Order inflow capital levels continue to be a key came in at | 28039 crore at group level, down monitorable in the long term. ii) 42% YoY. L&T concluded the transfer of its Additionally, HSR mega project is by far electrical & automation (E&A) business as gain the largest EPC order that L&T has won in on transfer of | 8416.8 crore (net of tax). Also, its history significantly improving its order the company reported exceptional items intake for FY21E despite the challenging worth | 2818.7 crore. ii) Separately, L&T economic environment. This will further awarded a mega* order (~ | 25000 crore) to strengthen its order book and enhance its build a C4-package (tender to design and revenue visibility for coming years. L&T construct 237-km mainline covering ~47% of plans to deploy state of art construction total alignments) of upcoming Mumbai- methods and extensive digital Ahmedabad High Speed Rail (MAHSR) to be technologies for this project executed over the next four years
Radico Radico announced its Q2FY21 results, with Radico reported positive volume growth, Khaitan revenues up 11% YoY to | 630 crore. despite the continued closure in on-trade Revenues were backed by volume growth of channels. On the balance sheet front, 5% to 6 million cases (P&A segment grew 4% Radico has reduced its net debt by | 129 to 1.7 million cases while popular segment crore in H1FY21 to | 253 crore (cumulative grew 5% to 4.4 million cases). The EBITDA debt reduced by | 694 crore since FY16) margin expanded 180 bps to 17% led by 90 bps expansion in gross margins while the rest was contributed by lower employee expense. Subsequently, EBITDA, PBT grew 24%, 50% to | 107 crore, | 92 crore, respectively. However, PAT de-grew 6% due to tax writeback in the base quarter V-Guard Net sales for the company came in at | 617 The company witnessed a sharp Industries crore almost at the same level of Q2FY20 improvement in demand on a QoQ basis. while it was up 52% QoQ. The EBITDA However, the consumer durable segment margin came in at 12%, led by savings in witnessed a slow recovery due to supply other expenses that were down ~254 bps disruption as some key vendors faced YoY. Finally, PAT came in at ~| 50 crore, Covid-19 related shutdowns. Further, down ~13% YoY dragged by higher tax rate working capital has improved with of 30% in Q2FY21 vs. 25% in the base period reduced receivables and inventory days. We maintain our positive stance on the stock
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Titan Titan’s revenues (including bullion sales of | Overall sales recovery of jewellery in Company 391 crore) declined 2% YoY to | 4553.0 crore. Q2FY21 has been encouraging given the EBITDA margins were lower by 430 bps YoY challenging scenario. The management to 6.9%. EBITDA came in at | 313 crore. indicated that the demand scenario has Provision of | 34 crore towards overdue been improving and the company margin money from a broker also impacted witnessed high single digit growth (like for the profitability. PAT for the quarter declined like) during the first 10 days of the festive 45% YoY to | 174.0 crore season. Titan continues to gain market share as unorganised regional players are currently hovering at 55-70% recovery rate. With the upcoming festive season, the management expects the momentum to sustain with full normalcy expected by Q4FY21. The company expects a pick-up in pace in the share of studded jewellery in Q3FY21, which would aid gross margins, going forward. As on September 30, Titan is net cash surplus vs. net debt as on March 30, 2020 PI PI Industries reported topline growth of 28% We believe the performance from isagro Industries YoY to | 1158 crore led by better has been improving along with operating performance from CSM along with domestic margins, which is visible in the group formulation business. Better gross margins performance. Better cash generation for along with lower opex due to operating H1 was one of the key positive for the leverage expanded OPM by 310 bps YoY to quarterly performance 24.2%, leading to EBITDA growth of 46% YoY to | 280 crore. Higher other income and lower taxes (17% vs. 27% in Q2FY20) improved bottomline growth by 77% YoY to | 218 crore
Dr Reddy's Q2 revenues grew 2.0% YoY to | 4911 crore Q2 revenues were better than I-direct (I-direct estimate: | 4564 crore) mainly due to estimates on all fronts on the back of strong growth across segments partially strong growth in the US, Europe and offset by high base effect in Q2FY20 Indian markets and better-than-expected (divestiture of certain proprietary products). operational performance. We remain US revenues grew 28.5% YoY to | 1833 crore positive on the company banking on the on the back of rupee depreciation and new management’s sustained focus on cost product launches. Domestic revenues grew rationalisation, especially on SGN&A front 21.5% YoY to | 912 crore due to Wockhardt and their endeavour to focus on integration and Covid products. Europe simultaneous launches across revenues grew 35.8% YoY to | 375 crore due geographies and segments besides to new launches and currency tailwinds. PSAI realignment of R&D spend towards - segment posted a robust 19.7% YoY growth Global Generics, biosimilars and PSAI to | 851 crore. EBITDA margins expanded 144 segment. We believe the efforts taken in bps YoY to 23.5% (I-direct estimate: 22.7%) the last few quarters are sustainable and due to lower other expenses partially offset should support a stable performance, by higher raw material and staff costs. going ahead Subsequently, EBITDA grew 8.7% YoY to | 1156 crore against I-direct estimate of | 1037 crore. Net profit de-grew 30.3% YoY to | 772 crore (I-direct estimate: | 608 crore). Delta vis- à-vis EBITDA was mainly due to negative tax in Q2FY20
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Navin Navin Fluorine reported topline growth of The company commissioned cGMP3 last Fluorine 16.8% YoY to | 319 crore. The topline growth year at Dewas, which is translating to was outlined primarily on account of better better growth from CRAMS segment for performance from CRAMS. Lower employee the company. We expect the same cost owing to operating leverage improved trajectory to continue, going ahead, OPM by 340 bps YoY to 28.4% (highest in the leading revenue contribution from value history), leading to EBITDA growth of 33% added segment to inch up further, thereby YoY to | 90.7 crore. Lower taxes (28% vs. the operating margins, return rations and 32% in Q2FY20) improved bottomline growth cash flows by 43% YoY to | 67.8 crore
Sun Sun Pharma's subsidiary, Taro Pharma's net Taro's Q2 results were a mixed bag while Pharma sales declined 11.2% YoY to US$143 million topline was in line with our estimates, in Q2FY21 vs US$161 million in Q2FY20. EBITDA was higher due to better than EBITDA was down 31.2% YoY at US$47 expected gross margins and lower SG&A million vs. US$68 million (Q2FY20) dented by costs. Q2 saw sequential improvement in lower gross margins. EBITDA margins were at sales despite being continued to be 32.7% vs 42.3% in Q2FY20. PAT was at impacted by the pandemic on the back of US$45 million, down 19.8% YoY. Delta vis-a- regular product launches and steady vis EBITDA was due to a lower tax rate market shares
Saregama Saregama India's revenue for Q2FY21 fell Music segment declined 21% YoY while India 31.3% YoY to | 108.1 crore. Carvaan sales TV & films segment fell 76% YoY. Carvaan dropped to 81K units against 250K units in sales, while improved QoQ, are still well Q2FY20 as sales from retail stores are still below pre-Covid level and faster pick up in low. EBITDA was at | 36.9 crore, up 52% YoY sales during festive season will be due to lower promotional costs and contract important. The company had incurred manufacturing charges. Subsequently, higher promotion costs and manufacturing reported PAT stood at | 28.2 crore, up 46.4% charges in base.quarter. Cost YoY rationalisation across the segment led to better operating performance which is a positive. Monetisation of IPs via digital medium and licensing deals with streaming and other media platforms gives potential for revenue growth going ahead
Pidilite Pidilite Industries entered into a definitive HAMSPL manufactures and sells Industries agreement with Huntsman Group (USA) for adhesives, sealants and other products acquiring 100% stake in one of their under well-known brands such as Araldite, subsidiaries in India namely, Huntsman Araldite Karpenter and Araseal in India. Advanced Materials Solutions Pvt Ltd The company has a nationwide (HAMSPL). This is for a cash consideration of distribution network and strong presence ~| 2100 crore in the retail trade. In addition to the Indian Sub Continent business, the acquisition includes a Trademark licence for Middle East, Africa and ASEAN countries. Company has clocked revenue of | 400 crore in FY19. We believe, the acquisition is valued at ~ 5x of sales (~50% discount to Pidilit’s TTM Mcap/sales). The said acquisition would further expand Pidilite’s product portfolio and enhances its geographic presence
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Key developments (Continued…)
Vodafone Idea to report numbers today. We expect churn for Vodafone Idea to continue, albeit reverse migration of labourers to cities to arrest the same. We consequently bake in ~3 million customer exits on a QoQ basis, much lower than average churn of ~10 mn seen in last 4 quarters. We build in ARPU growth of ~3% QoQ at | 117, aided by higher data based usage upgrades. We expect overall revenues to grow by 0.9% QoQ at | 10,753 crore. Reported margins are expected at 36.4%, down 200 bps QoQ as Q1 had one-off benefits of | 300 crore in licence fee and network & IT cost. The company is expected to post a net loss of | 5892 crore. Key monitorable: Fund raising plans and ARPU trajectory ahead Covid-19 breakout would make business growth to remain sluggish for Bank of Baroda. We expect loan growth to remain broadly flat sequentially to | 6.9 lakh crore. Expect traction towards MSME loans due to the ECLGS scheme. NII is seen at | 6862 crore with NIMs at 2.55%. Extension of morat period till October 2020 would keep NPA levels flattish. Subsequently, GNPA/NNPA levels are expected at 9.51%/2.71% respectively. Nationwide lockdown and IBC suspension till December would to delay the breather for the bank's substantial NCLT exposure. With the merger process nearly completed, credit cost is seen at 55 bps. We estimate PAT to come in at | 404 crore vs a loss of | 864 crore in Q1FY21 GSK Pharma's Q2FY21 revenues remained flattish (down 0.3%) YoY at | 879 crore. Adjusting for tailend portfolio rationalization in base year topline growth was 3% YoY. Sequential recovery in sales (up 35.6% QoQ) was attributable to key brands gaining market share. EBITDA margins improved 130 bps YoY to 23.3% mainly due to lower other expenses tracking cost rationalization efforts and improving efficiency. Subsequently, EBITDA grew 5.6% YoY to | 205 crore. Adjusted Net Profit (ex- Zinetac recall impact in Q2FY21 and exceptional gains in Q2FY20) grew 38.4% YoY to | 140 crore Schaeffler India posted a commendable performance in Q2FY21 wherein revenue grew 8% YoY to | 1120.7 crore led by a robust performance in the mobility segment. EBIDTA came in at | 202.2 crore, up 30% YoY, whereas the entailing margin was recorded at 18% vs 15% YoY, an expansion of ~ 300 bps. Ensuing PAT came in at | 113.5 crore, up 20% YoY Apcotex reported topline growth of 4.2% YoY to | 129 crore which was primarily led by volume growth. We believe that better demand from auto led an improvement in the business performance for NBR segment. Better gross margins (+900bps YoY) largely on the back of lower key RMAT prices along with lower pass on the benefit to end users owing to better demand, expanded operating margins for the quarter. OPM expanded by 800bps YoY to 14% translating into EBITDA growth of 171% YoY to | 19 crore. Lower taxes along with better operational performance improved bottomline growth, which was remained at 200% YoY to | 12 crore Firstsource reported healthy set of Q2FY21 numbers. The company’s dollar revenues increased 13.1% QoQ in constant currency terms & 14.1% on YoY basis. We believe the strong growth in dollar revenues was due to easing of supply side pressure. In terms of rupee, the company’s revenues increased by 20.6% YoY and 11.8% QoQ mainly led by ~13% QoQ growth in Banking and Financial Services and ~30% QoQ growth in Communication, Media and Technology. The company’s EBITDA margin increased by 10 bps QoQ to 15.8%. The company’s PAT increased by 18.7% QoQ to | 105.3 crore. The company’s short term debt decreased from | 834. 1 crore to | 588.5 crore HDFC Ltd has received NCLT approval for the amalgamation of HDFC ERGO Health Insurance Limited (Transferor company) and HDFC ERGO General Insurance Company Limited (Transferee Company) PNB Housing to get capital infusion worth Rs 600 crore from Punjab National Bank. Also approves fund raising worth Rs 1,800 crore through preferential issue, rights issue Wipro Limited announced that it has signed a definitive agreement to acquire Encore Theme Technologies Private Limited (Encore Theme), a specialist in providing SaaS and Cloud solutions in financial services. Encore Theme brings trade finance product expertise coupled with significant delivery experience of Finastra solutions for both Trade Finance and Cash Management implementations. Wipro will pay | 95 crore for 100% stake at EV/Sales of 1.7x. 73% equity stake to be acquired by Wipro Limited upfront. Remaining 27% equity stake to be acquired subject to receipt of certain regulatory approvals/confirmations Infosys today announced that it has completed the acquisition of Blue Acorn iCi, an Adobe Platinum partner in the US, and a leader in digital customer experience, commerce and analytics Tata Consultancy Services (TCS) has been selected as a strategic partner for managed IT services by AG, a leading Belgian insurer, to help enhance the latter’s digital channels and modernize its IT systems, leveraging TCS’ Machine First™ approach. With over 2.7 million customers, AG is a market leader in the Belgian insurance sector. It provides a full spectrum of insurance offerings – including life insurance, auto, fire and civil liability insurance as well as employee benefits. The insurer has partnered with TCS to transform its technology stack and adapt to the changing expectations of its diverse range of customers
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Tata Elxsi announces the opening of a Global Engineering Center (GEC) with Aesculap AG, a subsidiary of B. Braun, one of the world´s leading manufacturers of medical devices and pharmaceutical products and services. The GEC is part of a strategic multi-year engagement in the field of engineering services. The GEC serves as a platform of talent and expertise for product design & engineering, regulatory support and clinical evaluation services Cipla has launched IgG ELISA tests (ELIFast) for antibody detection of Covid-19 in India. The test will be manufactured by Karwa Ltd, which has received the technological know-how and process for the same through technology transfer from ICMR. Cipla will be responsible for the marketing and distribution of these tests though its expansive distribution network across the country Abbott has launched Duphalac Bears, a new product featuring fruit-flavoured gummy bears designed to support children’s digestive health As per a recently released circular by DGCA, the ban on scheduled international flights will be extended till November 30. However, government will continue to operate international flights under the Air Bubble pact with various countries, including the US, UK, UAE and more Casinos across Goa are allowed to re-open from November 1 with 50% capacity. The key beneficiary will be Delta Corp which is having 3 offshore casinos out of 6 offshore casinos in Goa. It also has one land based casinos in the same location Oil Secretary said that oil ministry supports industry's request that natural gas should be brought under GST. He also said that government is planning more reforms to boost participation of private sector in E&P According to media sources, NTPC has signed an agreement with Japan Bank for International Cooperation for a loan worth | 3500 crore. As per the agreement JBIC will provide 60% of the loan amount while the rest would be provided by other commercial Japanese Banks. The loan proceeds will be utilised by NTPC for funding its capex for FGD and renewable energy projects As per media sources, Tata Consultancy Services (TCS) is planning to split its cloud business in 5 strategic units namely Amazon Web Services, Google, Azure, TCS own private cloud and cloud consulting unit. Individual vice presidents will head each of the five units and be responsible for their revenue performance As per media reports, several properties in the range of | 35- 55 crore have been registered after the state government decided to reduce stamp duty a few months ago to boost sales, post COVID-19. Housing sales are at 86 % of pre-COVID levels in Mumbai. October and November is likely to see housing sales rise further to even above pre-COVID levels, to be aided by government cutting the stamp duty rates, banks slashing interest rates to the lowest in multiple decades and developers giving discounts and freebies CRISIL has downgraded its rating on the non-convertible debentures (NCDs) and long-term bank facilities of Vedanta Ltd to 'CRISIL AA-/Stable' from 'CRISIL AA/Negative'. The rating on the commercial paper and short- term bank facilities has also been reaffirmed at 'CRISIL A1+'. Furthermore, Crisil has also withdrawn its rating on NCDs aggregating | 4,580 crore of Vedanta Ltd. On receipt of independent confirmation of their redemption. As per media sources, China was the top foreign buyer of Indian steel between April and September as it bought1.9 million tonnes(MT), cornering 29% of India's finished steel exports, which hit their highest in at least six years at 6.5 MT. China and Vietnam together purchased just over 75% of Indian hot-rolled coils, of the overall 4.49 MT exported
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Nifty Daily Chart Technical Outlook
Equity benchmarks edged lower on the back of weak global cues. The Nifty ended the session at 11730, down 160 or 1.3%. In the coming session, volatility would remain high owing to monthly derivative expiry session. We believe, the breach of October low (11660) would lead to extended correction. Hence, intraday pullback towards 11748-11770 should be used to create short position for target of 11661. In the coming sessions, index is likely to open on a negative note tracking weak global cues. However, post gap down opening it would be prudent to watch mid-October low of 11660, as holding above 11660 (on a closing basis) would lead to continuance of consolidation in the choppy range of 12000 -11700. Failure to do so, would lead to extension of price and time-wise correction towards key support threshold of 11500 in coming weeks. Meanwhile, 12000 would continue to act as immediate hurdle as on seven out of thirteen sessions index made failed attempt to surpass psychological mark of 12000.
Pivot Points CNX Nifty Technical Picture
Index/Stocks Trend Close S1 S2 R1 R2 Nifty 50 Intraday Short Term SENSEX Neutral 39922.5 39576 39230 40465 41010 Trend Down Range Bound Nifty 50 Neutral 11729.6 11633 11536 11877 12026 Support 11660-11610 11500 ACC Ltd Neutral 1638.9 1614 1589 1672 1705 Resistance 11750-11790 12000 Axis Bank Ltd Positive 504.7 493 481 517 529 20 day EMA 0 11748.0 200 day EMA 0 11017.0 HDFC BANK LTD Neutral 1209.6 1196 1184 1227 1245 SBI Negative 190.5 189 186 195 198 Advances/Declines HERO MOTOCORP LT Positive 2946.2 2907 2866 3012 3076 MOTHERSON SUMI Positive 106.3 104 102 110 114 Advances Declines Unchanged Tata Motors Positive 134.8 131 127 141 147 BSE 951 1681 155 M&M FIN SERVICES Negative 121.4 120 117 126 129 NSE 597 1248 120 BAJAJ AUTO LTD Neutral 2944.1 2901 2857 2978 3011
TCS Negative 2622.2 2600 2578 2650 2678 Daily Technical Calls INDIAN OIL CORP Neutral 78.1 78 77 79 79 Daily Technical Calls
CIPLA LTD Positive 765.3 758 751 776 787 1. Buy Asian Paints in the range of 2147.00-2151.00 PIDILITE INDS Positive 1518.6 1506 1492 1540 1560 2. Sell PFC in the range of 85.50-86.00 Reliance Industries Neutral 2011.5 1994 1976 2045 2076 All recommendations of October Future
BHARTI AIRTEL Positive 451.9 434 415 480 507 DR REDDY'S LABS Neutral 4951.0 4864 4777 5094 5237 See Momentum Pick for more details
Nifty Call – Put Strike (Number of shares in lakh) – October 2020 Intraday Derivative Strategy i) Colgate Palmolive 11300 23 5 Buy COLPAL OCT Fut at ₹1516.00-1520.00 11400 21 4 CMP: 1515 11500 39 4 Target 1: 1530.9 Target 2: 1550.1 11600 29 5 Stop Loss: 1505.1 11700 32 18 11800 24 40 ii) M&M Financial 11900 14 50 Sell MAHFIN OCT Fut at ₹121.30-121.80 12000 8 66 CMP: 121.5 12100 1 29 Target 1: 118.3 Target 2: 113.5 60.0 40.0 20.0 0.0 20.0 40.0 60.0 80.0 Stop Loss: 124.7 Put Call
See Derivatives view for more details
See Daily Derivatives for more details
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Results/Events Calendar
12 October 13 October 14 October 15 October 16 October 17 October Monday Tuesday Wednesday Thursday Friday Saturday Shalby,IN CPI YoY Wipro Infosys,Tata Elxsi South Indian Bank HCL Tech,Federal Bank HDFC Bank IN Industrial Production YoY UK Unemployment Rate Titagarh Wagons(Q1FY21) Mindtree,Cyient Philip Carbon Black Avenue Supermarts IN Manuf. Output MoM US CPI YoY CH Industrial Production IN Trade Bal., US Crude Oil Inv. IIFL Securities. Oberoi Realty 0 CH Trade Balance CH Retail Sales,US PPI MoM IN Exports, IN Imports Tata Communications JP Exports, JP Imports 0 CH Imports,CH Exports WPI Inflation US Initial Jobless Claims US Retail Sales JP Trade Balance
19 October 20 October 21 October 22 October 23 October 24 October Monday Tuesday Wednesday Thursday Friday Saturday ACC,Tata Metaliks Mahindra CIE,LTI Bajaj Finserv,CPCL,KPIT Mphasis,Bajaj Auto,Hexaware JSW Steel,Tech Mahindra Polycab Ind Britannia,Rallis Granules,HUL Colgate,Sasken Asian Paints,Alembic Pharma Persistent Systems Ltd. Vardhman Textiles EU Construction Output Hindustan Zinc Newgen,Sagar Cement Kewal Kiran,Sterlite Tech,Biocon Nestle,Control Print,Atul Ltd. 0 0 Kajaria Ceramic Ultratech Cement,Bajaj Finance Music Broadcast,HDFC AMC Sudarshan Chemicals,Yes Bank 0 0 0 JK Tyre,Syngene,DB Corp Bharti Infratel,Ambuja Cement Genus Power,Heidelberg 0
26 October 27 October 28 October 29 October 30 October 31 October Monday Tuesday Wednesday Thursday Friday Saturday Mahindra Finance JM Financials,Bharti Airtel Axis Bank,Titan,Navin Fluorine TVS Motors,Maruti Suzuki, IOC,Mahindra Lifespace IN Trade Balance Swaraj Engines,SBI Life Amara Raja Batteries,Castrol Radico,Marico,Firstsource Zensar,Bluedart,Himadri Spec. Intellect,Zee Media(Q1FY21) DCB Bank Torrent Pharma Tata Motors,Sanofi,CEAT Larsen & Toubro,MCX,PI Ind. Vodafone Idea,MRPL,Orient Cem.Mahindra Logistics,Quess Corp Relaxo Footwear Kotak Mahindra Bank SKF India,Nippon Life Supreme Ind.,Vguard,Dr.Reddy Havells India,Laurus Labs,Mastek Jindal Stainless Ltd.,UPL Hester Bio CH Industrial Production VST Ind.,KPR Mill,Accelya Saregama, HeroMotocorp Bank of Baroda,TATA Chem. Grindwell Norton,IndusInd Bank 0
02 November 03 November 04 November 05 November 06 November 07 November Monday Tuesday Wednesday Thursday Friday Saturday Ramco Cements,Bandhan Bank Dabur,Jagran Prakashan, Pidilite India,SBI,USL,Jyothy Lab Trent,ITC,Birla Corp,Birla Soft TV Today,Bosch,J&K Bank,UBL Sobha Ltd.,Dlink India HDFC Limited.,AIA,Escorts Kansai Nerloac,GAIL, Jubilant Life,Greenply Ind. Gujarat Gas,Concor,Somany Bhel,Cipla,Indoco Remedies, IPCA Labs TAJ GVK,Wonderla Holidays Ratnamani Ltd.,Sun Pharma Lupin,EIH,ENIL,Apollo Tyres Ador Welding,Bajaj Electronics Bharat Elect.,Voltas,Glenmark Divis Labs Zydus Wellness,Oracle,Zee Ent. Ajanta Pharma,JSW Energy KEC Int.,HPCL,Balrampur Chini Sumitomo Chem.,Somany Cera. Tata Consumer,Ashok Leyland CH Composite PM TCI Express,NTPC,PNC Const. Varun Beverage,PVR,TCI Indian Hotels,Thermax,Hikal Greaves Cotton India Cement,Sonata Software 0
09 November 10 November 11 November 12 November 13 November 14 November Monday Tuesday Wednesday Thursday Friday Saturday Nocil,Kanpur Plastipack Exide Industries Teamlease,Emmbi Industries HEG,Mahanagar Gas US PPI MoM US PPI MoM CH CPI YoY Endurance,Motherson Sumi P&G Healthcare,nhpc Timken India,Nirlon EU Trade Balance 0 CH PPI YoY TTK Prestige,Teamlease Bharat Forge,Petronet LNG Gujarat Pipavav EU GDP QoQ 0 JP Current Account Century Plyboards,NCC UK Industrial Prod YoY Page Industries WPI Inflation,WPI Manuf.Inflation0 0 IN Trade balance UK Manufacturing Prod. IN Industrial Production IN Trade Balance,IN Imports 0
Major Economic Events this Week Result Preview
Date Event Country Period Actual Expected Company Revenue Chg(%) EBITDA Chg(%) PAT Chg(%) 26-Oct New Home Sales US Sep 959K 1025K | Crore Q2FY21E YoY QoQ Q2FY21E YoY QoQ Q2FY21E YoY QoQ 27-Oct Consumer Confidence US Oct 100.9 102.5 Vodafone Idea 10,753.4 -0.8 0.9 3,914.1 16.9 -4.5 -5,892.0 NA NA 28-Oct Crude Oil Inventories US Sep 4.320M 1.230M Maruti Suzuki 19,327.0 14.0 371.0 1,995.0 24.0 LP 1,387.0 2.0 LP Bank of Baroda 6,861.9 -2.4 0.7 4,334.0 -18.8 0.3 404.0 -45.2 NA 28-Oct Goods Trade Balance US Sep -79.37B -- Date Event Country Period Expected Previous 29-Oct Consumer Confidence EU Oct -15.5 -15.5 29-Oct Initial Jobless Claims US Oct 780K 787K 29-Oct GDP QoQ US Sep 31.9% -31.4% 29-Oct Unemployment Rate JP Sep 3.1% 3.0%
29-Oct Retail Sales JP Oct -- -1.9% 30-Oct Federal Fiscal Deficit IN Oct -- 8703.5B 30-Oct FX Reserves, USD IN Oct -- 551.1B 30-Oct Infrastructure Output IN Sep -- -8.5% 30-Oct Manufacturing PMI CH Oct 51.2 51.50 Recent Releases 30-Oct Non-Manufacturing PMI CH Oct -- 55.90 Date Report 30-Oct GDP YoY EU Oct -15.0% -15.0% October 28,2020 Result Update-Tata Motors October 28,2020 Result Update-Nippon Life India AMC October 28,2020 Company Update-Sanofi India October 28,2020 Result Update-VST Industries October 28,2020 Company Update-Accelya Solutions.
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Pankaj Pandey Head – Research [email protected]
ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC Andheri (East) Mumbai – 400 093 [email protected]
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