Share Market Highlights May 22, 2024: Sensex gains 267 pts; Nifty ends near 22,600; FMCG, realty stocks shine

The Central Board of Directors of the Reserve Bank of India has approved a bumper transfer of ₹2,10,874 crore as surplus to the Central Government for the accounting year 2023-24. 

This is the highest surplus the RBI has transferred to the government so far. This could substantially reduce the government’s borrowing requirement in FY25 via government securities and have a salubrious impact on G-Sec yields.

Equity benchmark indices ended with gains on Wednesday amid buying in blue-chips Reliance Industries and Infosys amid mixed cues from global markets.

The 30-share BSE Sensex climbed 267.75 points or 0.36 per cent to settle at 74,221.06. During the day, it jumped 354.48 points or 0.47 per cent to 74,307.79.

Similarly, the NSE Nifty advanced 68.75 points or 0.31 per cent to finish at 22,597.80.

The rupee appreciated by 3 paise to settle at 83.28 (provisional) against the US dollar on Wednesday amid softening crude oil prices.

Forex traders said the local unit consolidated in a narrow range weighed down by foreign fund outflows.

At the interbank foreign exchange, the domestic unit opened at 83.29 and moved in the range of 83.22 and 83.29 against the greenback during the session.

The local unit finally settled at 83.28 (provisional) against the dollar, registering a rise of 3 paise from its previous close.

Indian benchmark indices were marginally in the green despite mixed global cues. A cautious undertone prevailed ahead of the release of the minutes of the U.S. Federal Reserve’s latest monetary policy meeting. Sectorally, seven out of thirteen indices were in the green with FMCG and Realty stocks gaining the most. Amongst individual stocks, IREDA jumped ~3% on news that it is considering a follow-on public offering in the second half of this fiscal. Strides Pharma shares rose more than 6% after the company showcased stellar Q4 financials, with net profit reaching Rs. 18.2 crores compared to a loss of Rs. 9.5 crores Q4FY23.

The 50-index opened 47 points higher and traded volatile in the first half hour of the trading session. As the volatility settled, it traded sideways almost throughout the trading session and surfaced above the lateral trend in the closing thirty minutes to close in the upper quartile of the trading range and marked a higher high for 8th straight session as the price action continued to pullback from the support of the rising channel. On the sectoral front, barring the metal, banking, finance, PSU banks and the auto index, all other indices closed in green.

Markets remained volatile for another session but ended with modest gains. After a flat start, Nifty fluctuated within a narrow range for most of the session, closing at 22,586. Sector trends were mixed, with FMCG and realty showing decent gains, while metal and banking lagged. The broader indices mirrored the same pattern, resulting in flat market breadth.

All key sectors are contributing to the index’s recovery, but the banking sector’s underperformance is limiting momentum. Amid the market’s choppiness, we anticipate the Nifty index will retest its record high soon. We continue to recommend a stock-specific approach, using dips or periods of consolidation to accumulate quality stocks.

Natural gas futures hit a four-month high of ₹233.4 this week. When the price action is considered, there are no signs of the rally fizzling out. However, the long-term chart shows that ₹235 is a resistance. Making this stiffer, a trendline falls at this level.

Top gainers:

Cipla (2.79%), Tata Consumers (2.51%), Hindustan Unilever (2.39%), Coal India (2.28%), Reliance (1.70%)

Top losers:

Shriram Finance (-1.53%), Apollo Hospitals (-1.32%), Hindalco (-1.17%), Hero Motocorp (-1.12%), HDFC Life (-0.86%)

Mahindra & Mahindra Financial Services Ltd’s shares were up by 0.95 per cent after the company obtained a corporate agency licence from the Insurance Regulatory and Development Authority of India (IRDAI). The licence will enable Mahindra Finance to offer its customers insurance products to enhance its service portfolio and provide a solution for its financial and insurance needs.

Read more here.

Sun Pharmaceutical Industries Ltd reported its consolidated net profit for the quarter ended March 2024 at ₹2,654.5 crore as against ₹1,984.47 crore in the corresponding quarter last year.

Dilip Shanghvi, Managing Director of the Company, is appointed as the Chairman of the Board with immediate effect.

Stock trades at ₹1,524.80 on the NSE, lower by 1,524.80.

Major gainers:

Cipla (2.82%), Hindustan Unilever (2.56%), Tata Consumers (2.46%), Coal India (2.35%), Reliance (1.85%)

Major losers:

Sun Pharma (-1.40%), Shriram Finance (-1.40%), Axis Bank (-1.34%), Hindalco (-1.32%), ICICI Bank (-1.24%)

Stocks advanced on BSE at 3 pm on May 22, 2024, were 1,800 against 2,008 stocks that declined; 117 stocks remain unchanged. Total stocks traded were 3,925. The number of stocks that recorded a 52-week high was 247, and those that hit a 52-week low was 29. 

In addition, 279 stocks traded in upper circuit, while 241 hit the lower circuit.

The NSE Nifty rose by 0.16% (36.20 points) to 22,565.25, while the BSE Sensex increased by 0.17% (128.61 points) to 74,081 at 3:01 p.m. A total of 3,835 stocks were actively traded, 1,799 advanced, while 1,893 declined and 143 stocks remained unchanged where 227 stocks hit a 52 week high and 25 stocks hit a 52 week low at 12.50 pm on the BSE.

Read more here.

Talbros Automotive Components stock rallies 6.36% on the BSE, trading at ₹334.60 after Q4 financial results.

BEL bags order worth ₹1,150 crore. 

The stock is up 2.61% on the NSE, trading at ₹281.30.

Awfis Space Solutions IPO has been subscribed 1.30 times as of 2.48 pm on the opening day - May 22, 2024. 

The NII portion has been subscribed 1.60 times, retail 4.70 times, and those reserved for employees 2.98 times. The issue closes on May 27.

Lupin stock rises 1.34% on the NSE, trading at ₹1,706.35. The company and its wholly owned subsidiary Lupin Pharmaceuticals, Inc., USA, had entered a settlement agreement with Health Care Service Corporation and Humana Inc. in connection with ongoing litigation for Glumetza, a drug for treatment of diabetes.

Lupin stock rises 1.34% on the NSE, trading at ₹1,706.35. The company and its wholly owned subsidiary Lupin Pharmaceuticals, Inc., USA, had entered a settlement agreement with Health Care Service Corporation and Humana Inc. in connection with ongoing litigation for Glumetza, a drug for treatment of diabetes.

AU Small Finance (-1.26%), ICICI Bank (-1.02%), Federal Bank (-0.89%), Axis Bank (-0.80%), IndusInd (-0.79%)

Tata Consultancy Services has signed a deal to modernise the core banking technology of Burgan Bank, a commercial bank in Kuwait.

TCS stock inches up 0.36% on the NSE at ₹3,834.

Strides Pharma Science board has recommended final dividend of ₹2.50 per equity share.

Company’s consolidated net profit for the quarter ended March 2024 was at ₹10.44 crore as against the net loss of ₹13.79 crore in the corresponding quarter last year.

Stock trades at ₹892.95 on the NSE, up 5.54%

(a) Raising Equity Capital aggregating up to ₹5000 crore (including premium) through various modes viz. QIP/ FPO/ Rights Issue or in combination 

(b) Raising AT 1/ Tier-2 Capital aggregating upto ₹2000 Crore through issuance of Basel III Compliant AT 1 Perpetual Bonds / Tier 2 Bonds in one or more tranches during the current or subsequent financial years based on the requirement. ‘

(c) Raising Long Term Infrastructure Bonds aggregating upto ₹5000 Crore for financing/refinancing of Infrastructure and Affordable Housing in compliance with applicable RBI guidelines and other applicable laws, rules and regulations.

NCLT Kolkata has pronounced its final order sanctioning and confirming the scheme of arrangement between RDB Realty & Infrastructure Limited and RDB Rear Estate Constructions Limited.

Shares of JK Tyre & Industries on Wednesday zoomed over 10 per cent after the company’s consolidated net profit increased 54 per cent for the fourth quarter ended March 31, 2024.

The company’s stock climbed 10.49 per cent to ₹446.75 on the BSE.

At the NSE, it rallied 10.55 per cent to ₹447.20 apiece.

JK Tyre & Industries on Tuesday said its consolidated net profit increased 54 per cent to ₹172 crore for the fourth quarter ended March 31, 2024, on account of higher sales.

The tyre maker had reported a net profit of ₹112 crore in the year-ago period.

Total income rose to ₹3,714 crore for the fourth quarter as compared with ₹3,645 crore in the year-ago period, JK Tyre said in a statement.

For the full-year ended March 31, 2024, the tyre maker posted a net profit of ₹811 crore, a three-fold jump, as against ₹265 crore in FY23.

Total income rose to ₹15,046 crore for the last fiscal as compared with ₹14,681 crore in FY23.

The company said it achieved highest-ever sales and profits during FY24.

Mahindra & Mahindra Financial Services Ltd has received Certificate of Registration from Insurance Regulatory and Development Authority of India to act as a ‘Corporate Agent (Composite)’ under the Insurance Act, 1938. 

Stock inches up 0.74% on the NSE, trading at ₹265.35.

BEML (10.73%), Alicon (10.04%), HBSL (9.95%), HG Infra (9.74%)

Anupam Rasayan’s Q4FY24 EBITDA at Rs 70 crore (-20%YoY/+16%QoQ) was below Consensus/our estimate of Rs 90/80 crore. 

FY24 saw challenges in agro, but past efforts on scaling up pharma and the polymers business have supported overall growth (pharma contributes 9% of FY24 revenue vs. 4% in FY23). Management expects H1 to remain subdued, and anticipates a broad-based recovery starting H2FY25, supported by contribution from LoIs. Company repaid Rs 250 crore of long-term borrowings in Q4 from the proceeds of the preferential issue. Working-capital (WC) days shot up to ~370 in FY24, on account of a challenging macro environment and lower sales. Company deferred its WC reduction guidance of 220-230 days to FY26 (vs. FY25 earlier), owing to a weak H1. We cut FY25E/26E numbers by 23%/18% to factor-in the slower growth outlook. We retain ADD, nicking our SoTP-based TP to Rs 850/share.

We upgrade the stock to BUY from Add.

Ujjivan SFB continues to deliver robust credit growth (25% YoY) which, along with healthy margins/fees, has led to a strong 3.3% RoA delivery in 4QFY24/3.5% in FY24. However, the asset quality trend is now normalizing after a consistent sharp improvement in the past 2Y; the bank is gradually consuming the excess provision buffers it has built. Ahead, the bank expects credit growth at 20-25%, with clear focus on diversifying the portfolio away from MFI; it expects NIM to slightly soften to 9% in FY25. The bank has reverse-merged the holdco, and has appointed Sanjeev Nautiyal (ex-SBI) as its MD&CEO (Designate) to replace its early-retiring current MD&CEO Ittira Davis. Also, the bank has elevated Carol Furtado, who is well versed with the MFI business, as Whole-time ED. We slightly tweak our earnings and expect the bank to deliver superior RoA/RoE at 2.5-3.1%/20-23% over FY25E-27E. Our TP remains unchanged at Rs65/share (implying 1.6x FY26E ABV).

DB Corp reported its consolidated net profit for the quarter ended March 2024 at ₹122.53 crore as against ₹41.02 crore in the corresponding quarter last year. 

The company has declared interim dividend of ₹8 per equity share. 

Karur Vysya Bank stock trades at ₹197.25 on the NSE, up 1.10%.

Welspun Enterprises stock rallies 7.69% on the NSE, trading at ₹399.25.

Bajaj Finance’s stock inches up 0.13% on the BSE, trading at ₹6,757.35.

Top gainers on the NSE at 12 noon:

Hindustan Unilever (2.42%), Britannia (2.32%), Tata Consumers (1.99%), Coal India (1.93%), Reliance (1.66%)

Major losers:

BPCL (-1.71%), Hero Motocorp (-1.66%), Hindalco (-1.51%), Apollo Hospitals (-1.48%), Sun Pharma (-1.40%)

Total stocks traded were 3,796. The number of stocks that recorded a 52-week high was 218, and those that hit a 52-week low was 23. 

In addition, 241 stocks traded in upper circuit, while 210 hit the lower circuit.

Strides Pharma Science Ltd’s shares were up by 0.76 per cent after the company said its step-down wholly-owned subsidiary, Strides Pharma Global Pte Ltd, Singapore, had received approval from the United States Food & Drug Administration (USFDA) for the generic version of Sucralfate Oral Suspension, 1gm/10 ml.

Zydus Lifesciences stock trades at ₹1,066.05 on the NSE, down by 2.05%.

Intellect Design Arena’s stock inches up 0.39% on the NSE, trading at ₹898.95.

Brahmaputra Infrastructure Ltd has signed the agreement, with the Chief Engineer Water Resource Department, Assam Water Centre, for the execution of contract for procurement of works for Dibrugarh Riverbank Protection Work, Dibrugarh District at Nagakhelia, Chaulkhowa as D/S of Bogibeel Bridge and Adaption Works – I and III underwater works and temporary slope protection works ( Section 1) and above water works with Permanent riverbank revertment works ( Section 2) (Package no W5- DG- Lot 1) of total amount ₹38.75 Crore. 

Brahmaputra Infrastructure stock trades at ₹86 on the BSE, down 0.68%.

Britannia Industries has received an order from District Consumer Disputes Redressal Commission, Ludhiana, under the Consumer Protection Act, 2019 regarding declared weight.

The company has been directed to pay ₹5,000 to the complainant.

Stock trades at ₹5,263 on the NSE, up 1.64%.

Hindustan Unilever (2.74%), Marico (2.63%), Godrej Properties (2.51%), Dabur (2.09%)

Bank Nifty futures (May contract) opened today’s session slightly higher at 48,190, as against yesterday’s close of 48,153. But it began to depreciate soon after the opening. It is now quoted at around 47,900.

The contract has support at 47,800. On its first test, this level has helped Bank Nifty futures rebound. However, for the bulls to get the momentum back, they should push the contract above the 48,000-mark.

Bombay Dyeing and Manufacturing Company has received order from Income Tax Department- National Faceless Assessment Centre-Delhi, imposing penalty of ₹17,19,057 u/s 271(1)(c) of the Income Tax Act, 1961.

Stock declines by 1.41% on the NSE, trading at ₹184.80.

Coforge stock is up 1.35% on the NSE at ₹4,854.75 following its collaboration with Microsoft to establish the Coforge Copilot Innovation Hub.

Major gainers on the BSE at 10.45 am:

PNC Infra (9.87%), HG Infra (9.49%), GIC (8.28%), KIOCL (7.75%), Hindustan Zinc (6.59%)

Major losers:

WABAG (-7.12%), GSFC (-7.10%), Global Health (-6.87%), TI (-5.50%), Maharashtra Seamless (-5.37%)

Meera Industries has secured a domestic order for Ring Twisting Machines, valued at a staggering ₹7.47 crore. 

Stock jumps 7.45% on the BSE, trading at ₹45.

The NII portion has been subscribed 0.18 times, retail 0.99 times, and those reserved for employees 0.73 times. The issue closes on May 27.

Going ahead, we maintain our positive bias and expect Nifty to challenge All Time High of 22800 in coming weeks. In the process, volatility would remain high as expectations related to General election outcome would have bearing on market direction coupled with progression of Q4 earning season. Thus, buy on dips would be the prudent strategy to adopt. Our positive stance is based on following observations:

A) Nifty has historically corrected 6% during polling phase in past four elections and three times hit new highs around election outcome. In current scenario , index staged a rebound after correcting 4.5% from life highs 

B) Over 70% of Nifty constituents indicate further upsides at current juncture. Banking, capital goods, Oil & Gas, Power, Auto and FMCG heavyweights are indicating bullish undertone

C) Major global indices are at life highs. Although in the short term our markets are ignoring those cues, once General election related anxiety settles down, strong global setups would act as tailwind for further market direction

Structurally, formation of higher peak and trough makes us confident to retain support base at 22000 as it is 80% retracement of current up move (21821-22502)

Phoenix Mills (5.17%), Lodha (4.59%), Prestige Estates (1.16%), Sobha (1.13%)

Cipla USA Inc., wholly owned subsidiary of Cipla in the US has received the final approval for its Abbreviated New Drug Application (ANDA) for Lanreotide Injection 120 mg/0.5 mL, 90 mg/0.3 mL, 60 mg/0.2 mL from USFDA. 

Suzlon will install 134 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW for both projects at the Suzlon proposed site at Fatehgarh in Rajasthan. 

Suzlon Energy stock trades at ₹44.85 on the NSE, up 1.82%.

SpiceJet will seek a refund of ₹450 crore out of the ₹730 crore it has previously paid to former promoter Kalanithi Maran and his firm, KAL Airways, following the Delhi High Court’s order on May 17.

SpiceJet stock trades at ₹60.29 on the BSE, down by 1.16 per cent.

Bank Nifty has seen a decrease in Open Interest of 2.20 per cent with an increase in price of 0.51 per cent, indicating Short Covering.

Nifty has seen a decrease in Open Interest of 5.18 per cent with an increase in price of 1.43 per cent, indicating Short Covering.

Option data indicates a probable trading range of between 47,500 to 48,500 for the Bank Nifty and for Nifty the current weekly expiry at 22,200 to 22,800.

BANK NIFTY Strategy: Call Spread

View: Moderately Bullish.

Rationale: - Traders could initiate this spread strategy to make modest returns with limited risk and reward. The spread suggested consists of buying one lot of 48,100 strike CALL Option and simultaneously selling one lot of 48,600 strike CALL Option.

Strides Pharma Science Ltd said its step-down wholly-owned subsidiary, Strides Pharma Global Pte. Ltd, Singapore, has received approval for the generic version of Sucralfate Oral Suspension, 1gm/10 mL, from the United States Food & Drug Administration (USFDA).

Strides Pharma Science stock inches up 0.29% on the NSE, trading at ₹848.55

Valiant Communications Ltd and Fortytwo42 Technology Innovations Pvt Ltd have agreed to cooperate in integrating, creating synergies, and marketing of respective Quantum-safe cryptography products with Valiant’s cyber-security solutions to domestic and international customers. 

Valiant Communications stock trades at ₹560 on the BSE, up by 0.57%.

Hawkish tone from Fed members continued. Fed member Barr said the Fed needs to sit tight for longer than thought. 

Fed member Waller said he wanted to see several months of Good inflation data before lowering rates. 

FOMC minutes are due to be released today.

Price action across assets

US 2y treasury yield is unchanged at 4.84% while 10y has come of couple of basis points to 4.42%. 

Dollar is steady across majors. 

S&P500 and Nasdaq rose to end 0.2% higher each at fresh record highs. 

Brent has come off to USD 82.3 per barrel. Gold has come off a tad to USD 2421 per ounce. 

Domestic Development

USD/INR

Rupee ended 2p stronger at 83.31 yesterday after trading a 83.26-83.36 range. 

It is likely to open flat and trade a 83.26-83.36 range with sideways price action. 

1y forward yield ended at 1.70% while 3m ATMF implied vol ended at 2.74%

IFA Global hedging barometer unchanged at 108 is indicating a neutral outlook on Rupee over the medium term of 3-6 months (Range 36-180 with 36 indicating extreme bullishness)

Bonds and Rates

Yield on the benchmark 10y ended 1bps lower at 7.08%. 1y and 5y OIS ended at 6.785% and 6.385% respectively. Banking system liquidity continues to remain in deficit of over Rs 1.5 lakh crs. Call rate fixed at 6.75% yesterday

Equities

India’s market cap crossed the USD 5tn mark yesterday. Nifty ended 0.1% higher at 22529 after a volatile session. Midcap index rose 0.4% while Smallcap index fell 0.4%. Metal stocks were the best performers. Nifty Metal index rose almost 4%. VIX ended at 21.81 as nervousness mounted heading into election outcome. GIFT is indicating modest gains for Nifty at open

Nifty outlook:

A substantial part of gains have been surrendered in the second half, we will start the day with eyes on 22500/480. While a swing higher is again expected, we would wait for a push above 22570 to play the 22720- 850 trajectory again. Inability to clear the same, or inability to float above 22500, could call for 22417-370. - Read more

Derivative outlook:

Nifty weekly contract has highest open interest at 23000 for Calls and 22500 for Puts while monthly contracts have highest open interest at 23000 for Calls and 21000 for Puts. Highest new OI addition was seen at 23000 for Calls and 21800 for Puts in weekly and at 23000 for Calls and 22500 for Puts in monthly contracts. FIIs increased their future index long position holdings by 13.47%, deceased future index shorts by -3.16% and in index options by 23.84% increase in Call longs, 5.10% increase in Call short, 38.84% increase in Put longs and 15.42% increase in Put shorts.

At 9.33 am on Wednesday, July Brent oil futures were at $82.32, down by 0.68 per cent, and July crude oil futures on WTI (West Texas Intermediate) were at $78.05, down by 0.78 per cent. June crude oil futures were trading at ₹6513 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday morning against the previous close of ₹6568, down by 0.84 per cent, and July futures were trading at ₹6509 against the previous close of ₹6565, down by 0.85 per cent.

Major gainers on the NSE at 9.30 am:

Reliance (1.84%), Coal India (1.74%), NTPC (0.98%), SBI (0.95%), Dr Reddy’s (0.92%)

Major losers:

Sun Pharma (-0.94%), Apollo Hospitals (-0.67%), Hero Motocorp (-0.65%), Shriram Finance (-0.64%), Bharti Airtel (-0.62%)

Gold prices remained near $2,420, after falling from record highs, as investors assessed Fed officials’ recent remarks. Several Fed members pushed for continuing policy caution, stating that the US central bank should wait a few more months to ensure that inflation is back on pace to meet its objective before lowering interest rates. Investors will pay close attention to the minutes from the Fed’s most recent policy meeting, which are set to be released later today, as well as remarks from other officials. Meanwhile, the bullion’s fall is capped by renewed US-China trade tensions and fears of rising geopolitical strife in the Middle East following the death of Iranian President Ebrahim Raisi. 

Silver prices rose on safe-haven purchasing and the potential of interest rate reduction from the US Federal Reserve later this year. Recent statistics revealed that US inflation has resumed its downward trajectory, but several Fed governors were hesitant about dropping rates too quickly and ruled out the need for an increase. Fed officials said the US central bank should wait several months to guarantee that inflation is back on track to meet its 2% target before lowering interest rates. Silver is poised for its fourth consecutive year of deficit due to tighter supplies, with inventories tracked by the London Bullion Market Association falling to the second-lowest level on record in April and volumes at New York and Shanghai exchanges remaining near seasonal lows.

Nvidia is expected to report earnings on May 22 after market close. 

Here is the view from Justin Khoo, Senior Market Analyst ,APAC - VT Markets how the tech sector looks and what we can expect from Nvidia. 

“Nvidia’s financial results have been stellar, with significant revenue growth driven by high demand for its AI chips. This robust financial health positions the company well for continued investment in innovation and market expansion. However, Nvidia faces increasing competition from tech giants like Intel, AMD, and custom AI chip developers such as Google and Amazon. These competitors are developing their own AI hardware solutions, which could erode Nvidia’s market share over time. Nvidia’s dependence on sectors like gaming and cryptocurrency, which are subject to significant market volatility, poses a risk. If Nvidia maintains its ability to innovate and sustain strategic partnerships, it can navigate these opportunities and challenges, ensuring continued leadership in the rapidly evolving tech landscape. 

“Despite its strengths, Nvidia’s stock is currently expensive at $948. Prices of $720 and below are seen as good accumulation areas, with technical analysis indicating $690 as potential support. Nvidia is expected to report earnings on 05/22/2024 after market close, with forecasts of $13.2 billion in earnings, $5.62 per share, and revenue of $24.6 billion. A $30 billion quarter is considered likely by year-end.”

Researchbytes Events Update

As of 07:20 AM Wednesday 22 May 2024

Can set alert for them at www.researchbytes.com 

9:00 AM Greenply

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6:00 PM GMM Pfaudler

Dial: +91 22 6280 1341

Weblink: https://tinyurl.com/be4remyu

( Hosted by Valorem )

6:30 PM Gland Pharma

Dial: +91 22 6280 1516

Weblink: https://tinyurl.com/ywdw8ywt

6:30 PM Sun Pharma

Dial: +91 22 6629 0049

Weblink: https://tinyurl.com/yrd8rutj

Steel Authority of India (SAIL IN)

Rating: SELL | CMP: Rs174 | TP:Rs127

Q4FY24 Result Update – Lower NSR & high input costs affected margins

Quick Pointers:

§ Sharp 5.1% QoQ decline in average realization and 8% jump in RM cost per ton affected EBITDA.

§ EBITDA/t declined 20% QoQ to Rs 4,472 post adjusting upward revision of provisional rail prices for earlier quarters.

SAIL reported in-line operating performance in 4Q affected by sharp 5.1% QoQ decline in NSR to Rs58,162 (PLe Rs59k) and sequential increase in coking coal prices. EBITDA per ton of Rs4,472 was in-line with PLe of Rs4,385 post adjusting for Rs 14.4bn towards upward revision of provisional railway contract prices for earlier quarters. Going forward, there is expectation of USD30/t decline in cost of coking coal in 1Q while FY25 sales guidance of ~19mt was given. Steel prices declined sharply in April and then improved which may keep 1Q NSR flattish sequentially. SAIL has planned to increase its capacity from ~20.2mtpa to 35mtpa by FY32 in phases, yet, in the near term no significant capacity addition is envisaged till FY27E. SAIL has ~1.5mt of finished goods inventory and enough capacity to cater to strong demand till FY26E.

We expect SAIL to remain a play on steel prices in long term as a) its volume growth would depend upon successful execution of planned capex and significant capacity addition would only come post FY27E; b) near term volume growth would remain 7-9% but margins may remain at mercy of coking coal prices; and c) higher capex can deteriorate balance sheet unless there is timely execution. We cut our FY25/26E EBITDA estimates by -1% each assuming ~18.5/20mt sales volume. We downgrade the stock to ‘Sell’ with revised TP of Rs 127 (Rs138 earlier) as the stock has run up ahead of fundamentals and we do not expect proportionate earnings growth.

The agency assigned ‘CARE A; Stable / CARE A1’ rating for Inox Wind Limited’s working capital limits.

NIFTY-50 OUTLOOK

NIFTY-50 has closed flat to positive and we expect a minor retracement to test the 20 day average of 20,350-20,380 levels f On the higher side now crossover of 22,650 levels will make the monthly candle positive and a breakout to test the all time high. f RSI is overbought on hourly charts and we expect some pullback from current levels to test the lower band of average. f Highest call OI has moved higher to 23,000 strike while the downside the highest put OI is at 22,400 for the weekly expiry. 

BANK NIFTY OUTLOOK

Bank Nifty failed to build momentum on the higher side and witnessed minor profit booking to close flat to negative for the day. f On the downside the support would move higher to 47,700 which would be a good opportunity for an entry and 50% retracement of the current move. f RSI is trending above the higher end of the range on daily charts and volatility will be high with respect to the weekly expiry. f Bank Nifty highest call is at 48,500 levels while on the downside put OI is at 48,000 levels for the weekly expiry.

Domestic equity benchmarks BSE Sensex and NSE Nifty opened in green on Wednesday. At 9.20 am, both the indices were trading flat. 

- MTAR Technologies has over the years created a niche for itself in the industry, being the key supplier of mission precision engineered systems to large global MNCs, government departments and large Indian public and private sector companies. As the largest supplier of fuel cell components to BE (global leader), the company will benefit from the emerging demand for fuel cells in the coming years.

- Apart from fuel cells, its other business segments (such as nuclear, space, defense and products) offer a huge runway for growth. We believe the company can capitalize on this opportunity with its strong manufacturing capabilities and customer relationship management.

- The company has registered a strong revenue CAGR of 25% over FY18-24E (despite the pandemic), aided by healthy 33% order book growth during the same period.

- We expect MTARTECH to clock a revenue/EBITDA/ adj. PAT CAGR of 38%/53%/67% over FY24-26, with RoE/RoCE of ~23%/21% by FY26E (vs. ~12%/11% in FY24). We believe that: 1) a 67% earnings CAGR over FY24- 26E, 2) strong return ratios (RoE of 23%, ROCE of 21%, and RoIC of 22% in FY26E), 3) a robust order book CAGR of 39% over FY24-26E, and 4) a healthy balance sheet will help MTARTECH trade at premium multiples.

- We initiate coverage on MTARTECH with a BUY rating and a TP of INR2,800 (premised on 40x FY26E EPS).

Despite commencing the trading week under selling pressure, the Nifty50 found immediate support after opening 97 points lower. It underwent a brief accumulation within the opening hour and garnered momentum, allowing the price action to pare the losses and close flat in the upper quartile of the trading range. The 20 and 50-day MAs continue to act as immediate supports, and sustenance above the averages will allow the index to continue to attract bullish strength.

Domestic equity benchmarks BSE Sensex and NSE Nifty will likely open marginally higher on Wednesday, tracking gains in global equities, with investors focused on minutes of the Federal Reserve’s latest policy meeting for clues on rate cuts.

The Gift Nifty was trading at 22,637 as of 8:06 a.m., indicating the Nifty 50 will open above Tuesday’s close of 22,529.05.

All three major US indices advanced and the S&P 500 and the Nasdaq reached all-time closing highs overnight. Asian markets rose on Wednesday.

Target: ₹2,360

CMP: ₹2,092.90

Mankind Pharma reported 42 per cent y-o-y EBITDA growth, led by 19 per cent sales growth (India formulation up 11 per cent and exports grew 230 per cent) and gross margin expansion (+262 bps). India growth was largely led by 15 per cent growth in the chronic segment (outperformance in CVS, anti-diabetics, and CNS) and recovery in gynaecology. Export grew 230 per cent YoY on US one-off opportunity.

Navratna Defence PSU Bharat Electronics Limited reported a 30 per cent year-on-year (y-o-y) increase in consolidated net profit to ₹1,797 crore in Q4 FY24, compared to ₹1,382 crore in Q4 FY23. The revenue from operations grew by 32.18 per cent y-o-y to ₹8,564 crore in Q4 FY24 from ₹6,479 crore in Q4 2023.

The rupee gained ground against the dollar (USD) over the past week. This was largely due to a decline in the dollar which was triggered by a drop in the US consumer inflation data for April. This stoked rate cut debate and that weighed on the greenback.

The Indian currency was further supported by considerable foreign inflows towards the end of the last week. As per the NSDL data, the net FPI inflows in the last two sessions amounted to nearly $640 million.

Muthoot FinCorp Limited, has reported highest ever loan disbursements in FY24 with consolidated disbursement at ₹61,703.26 crore, up by 18.60 per cent. The AUM stood at ₹33,359.30 crore with net profit at ₹1047.98 crore, an increase of 62.12 per cent over the preceding fiscal, while serving more than 93 lakh customers across the country.

11:30 UK CPI y/y (Expected: 2.1% versus Previous: 3.2%)

19:30 US Existing Home Sales (Expected: 4.21M versus Previous: 4.19M)

23:30 US FOMC Meeting Minutes

PDD Holdings Inc. (Pre market) (Sector- Technology)

TJX Companies, Inc. (Pre market) (Sector- Textile)

Analog Devices, Inc. (Pre market) (Sector- Technology)

Target Corporation (Pre market) (Sector- Retail)

Williams-Sonoma, Inc. (Pre market) (Sector- Retail)

NVIDIA Corporation (Post market) (Sector- Technology)

Synopsys, Inc. (Post market) (Sector- Technology)

Snowflake Inc. (Post market) (Sector- Technology)

ASHOKA, AVANTIFEED, CENTUM, DBCORP, DEEPAKCHEM, DHANBANK, EVERESTIND, GANDHAR, GEPIL, GLAND, GMMPFAUDLR, GPPL, GRASIM, GRSE, HEG, INDIGOPNTS, INDOAMIN, JUBLFOOD, LOKESHMACH, MAXHEALTH, METROBRAND, MINDACORP, NIITMTS, NIACL, NYKAA, PAYTM, PENIND, PETRONET, POWERGRID, RAMCOCEM, RATNAVEER, RTNPOWER, STAR, STARCEMENT, SUNDRMFAST, SUNPHARMA, TALBROAUTO, TORNTPOWER, UNICHEMLAB

GRASIM 

Revenue expected at Rs 6272 crore versus Rs 6645 crore

EBITDA expected to be seen at Rs 478 crore versus Rs 426 crore

EBITDA margin expected to be seen at 7.62% versus 6.41%

Net profit expected to be seen at Rs 139 crore versus Rs 93.5 crore

JUBLFOOD 

Revenue expected at Rs 1326 crore versus Rs 1252 crore

EBITDA expected to be seen at Rs 261 crore versus Rs 252 crore

EBITDA margin expected to be seen at 20.1% versus 19.6%

Net profit expected to be seen at Rs 36 crore versus Rs 48 crore

PAYTM 

Revenue expected at Rs 2140 crore versus Rs 2334 crore

EBITDA expected to be seen at Rs (-430) crore versus Rs (-126) crore

Net Loss expected to be seen at Rs 583 crore versus Rs 168 crore

PETRONET 

Revenue expected at Rs 12,377 crore versus Rs 13,874 crore

EBITDA expected to be seen at Rs 1099 crore versus Rs 943 crore

EBITDA margin expected to be seen at 8.9% versus 6.8%

Net profit expected to be seen at Rs 739 crore versus Rs 614 crore

POWERGRID 

Revenue expected at Rs 12,176 crore versus Rs 12,557 crore

EBITDA expected to be seen at Rs 10,624 crore versus Rs 10,909 crore

EBITDA margin expected to be seen at 87.2% versus 86.8%

Net profit expected to be seen at Rs 3216 crore versus Rs 4323 crore

SUNPHARMA 

Revenue expected at Rs 12,317 crore versus Rs 10,931 crore

EBITDA expected to be seen at Rs 3032 crore versus Rs 2802 crore

EBITDA margin expected to be seen at 24.6% versus 25.6%

Net profit expected to be seen at Rs 2377 crore versus Rs 1985 crore

Q4FY24 EARNING CALENDAR 23.05.2024 

AMRUTANJAN, BAJEL, BARBEQUE, BAYERCROP, BIKAJI, CELLO, CESC, CONCORDBIO, ESABINDIA, EXPLEOSOL, FINCABLES, FORTIS, GABRIEL, HIMATSEIDE, HONASA, IMFA, INDIGO, ITC, LANDMARK, MAZDA, NUCLEUS, ORCHPHARMA, PAGEIND, PCBL, SANDHAR, SCHNEIDER, SENCO, SMLISUZU, SUBROS, TAJGVK, TATAINVEST, TDPOWERSYS, TEGA, UNOMINDA, YATHARTH, ZAGGLE

Action Construction Equipment Ltd. | CMP Rs. 1568 | M Cap Rs. 18672 Cr | 52 W H/L 1695/415

(Nirmal Bang Retail Research)

Result has improved

Revenue from Operations came at Rs. 835.8 Cr (11% QoQ, 36.2% YoY) vs QoQ Rs. 753.1 Cr, YoY Rs. 613.8 Cr

EBIDTA came at Rs. 129.7 Cr (26.2% QoQ, 76.9% YoY) vs QoQ Rs. 102.7 Cr, YoY Rs. 73.3 Cr

EBITDA Margin came at 15.5% vs QoQ 13.6%, YoY 11.9%

Adj. PAT came at Rs. 98.4 Cr vs QoQ Rs. 88.3 Cr, YoY Rs. 47.7 Cr

Quarter EPS is Rs. 8.3

Stock is trading at P/E of 34.5x FY26E EPS

Fiem Industries Ltd. | CMP Rs. 1206 | M Cap Rs. 3174 Cr | 52 W H/L 1299/822

(Nirmal Bang Retail Research)

Result improved

Revenue from Operations came at Rs. 557.5 Cr (14.5% QoQ, 27.8% YoY) vs QoQ Rs. 487 Cr, YoY Rs. 436.2 Cr

EBIDTA came at Rs. 75.5 Cr (17% QoQ, 25.3% YoY) vs QoQ Rs. 64.5 Cr, YoY Rs. 60.2 Cr

EBITDA Margin came at 13.5% vs QoQ 13.2%, YoY 13.8%

Adj. PAT came at Rs. 47.2 Cr vs QoQ Rs. 40.3 Cr, YoY Rs. 38 Cr

Quarter EPS is Rs. 17.9

Stock is trading at P/E of 17.4x FY25E EPS

JK Tyre & Industries Ltd. | CMP Rs. 404 | M Cap Rs. 10533 Cr | 52 W H/L 554/171

(Nirmal Bang Retail Research)

Result ok

Revenue from Operations came at Rs. 3698.5 Cr (0.3% QoQ, 1.8% YoY) vs QoQ Rs. 3687.7 Cr, YoY Rs. 3632.5 Cr

EBIDTA came at Rs. 481.2 Cr (-12.5% QoQ, 27.9% YoY) vs QoQ Rs. 550.2 Cr, YoY Rs. 376.2 Cr

EBITDA Margin came at 13% vs QoQ 14.9%, YoY 10.4%

Adj. PAT came at Rs. 193.8 Cr vs QoQ Rs. 225.3 Cr, YoY Rs. 98.2 Cr

Quarter EPS is Rs. 7.4

Stock is trading at P/E of 10.8x FY25E EPS

Ramco Systems Ltd. | CMP Rs. 372 | M Cap Rs. 1318 Cr | 52 W H/L 450/209

(Nirmal Bang Retail Research)

Result continue to remain weak

Revenue from Operations came at Rs. 131.2 Cr (2.3% QoQ, 4% YoY) vs QoQ Rs. 128.3 Cr, YoY Rs. 126.2 Cr

EBIDTA came at Rs. 2.1 Cr (-147.9% QoQ, -105.9% YoY) vs QoQ Rs. -4.4 Cr, YoY Rs. -35.8 Cr

EBITDA Margin came at 1.6% vs QoQ -3.5%, YoY -28.4%

Adj. PAT came at Rs. -23 Cr vs QoQ Rs. -26.4 Cr, YoY Rs. -45.6 Cr

Quarter EPS is Rs. -6.5

Stock is trading at P/E of -5.4x TTM EPS

Mayur Uniquoters Ltd. | CMP Rs. 539 | M Cap Rs. 2369 Cr | 52 W H/L 618/445

(Nirmal Bang Retail Research)

Result ok

Revenue from Operations came at Rs. 220.9 Cr (23.9% QoQ, 14.3% YoY) vs QoQ Rs. 178.3 Cr, YoY Rs. 193.2 Cr

EBIDTA came at Rs. 41.3 Cr (16.8% QoQ, 17.2% YoY) vs QoQ Rs. 35.4 Cr, YoY Rs. 35.2 Cr

EBITDA Margin came at 18.7% vs QoQ 19.8%, YoY 18.2%

Adj. PAT came at Rs. 32.2 Cr vs QoQ Rs. 27.3 Cr, YoY Rs. 23.4 Cr

Quarter EPS is Rs. 7.3

Stock is trading at P/E of 19.3x TTM EPS

Godawari Power And Ispat Ltd. | CMP Rs. 934 | M Cap Rs. 12695 Cr | 52 W H/L 950/356

(Nirmal Bang Retail Research)

Result ok

Revenue from Operations came at Rs. 1529.8 Cr (16.9% QoQ, 16.2% YoY) vs QoQ Rs. 1308.9 Cr, YoY Rs. 1316.6 Cr

EBIDTA came at Rs. 328.9 Cr (-0.6% QoQ, 22.7% YoY) vs QoQ Rs. 330.9 Cr, YoY Rs. 268 Cr

EBITDA Margin came at 21.5% vs QoQ 25.3%, YoY 20.4%

Adj. PAT came at Rs. 219.8 Cr vs QoQ Rs. 229.3 Cr, YoY Rs. 184.3 Cr

Quarter EPS is Rs. 16.2

Stock is trading at P/E of 13.8x TTM EPS

Azad Engineering Ltd. | CMP Rs. 1542 | M Cap Rs. 9115 Cr | 52 W H/L 1542/642

(Nirmal Bang Retail Research)

Result is ok

Revenue from Operations came at Rs. 92.8 Cr (4% QoQ, 9.3% YoY) vs QoQ Rs. 89.2 Cr, YoY Rs. 84.9 Cr

EBIDTA came at Rs. 31.4 Cr (-4.2% QoQ, 3% YoY) vs QoQ Rs. 32.7 Cr, YoY Rs. 30.4 Cr

EBITDA Margin came at 33.8% vs QoQ 36.7%, YoY 35.9%

Adj. PAT came at Rs. 14.9 Cr vs QoQ Rs. 16.8 Cr, YoY Rs. 14.8 Cr

Quarter EPS is Rs. 2.5

Stock is trading at P/E of 155.6x TTM EPS

Ircon International Ltd. | CMP Rs. 290 | M Cap Rs. 27275 Cr | 52 W H/L 301/78

(Nirmal Bang Retail Research)

Result marginally ahead of Expectation

Revenue from Operations came at Rs. 3649 Cr (30.7% QoQ, -0.6% YoY) vs expectation of Rs. 3564 Cr, QoQ Rs. 2792.1 Cr, YoY Rs. 3669.9 Cr

EBIDTA came at Rs. 246.6 Cr (41.6% QoQ, 23.6% YoY) vs expectation of Rs. 224.6 Cr, QoQ Rs. 174.1 Cr, YoY Rs. 199.4 Cr

EBITDA Margin came at 6.8% vs expectation of 6.3%, QoQ 6.2%, YoY 5.4%

Adj. PAT came at Rs. 285.7 Cr vs expectation of Rs. 242.7 Cr, QoQ Rs. 185.1 Cr, YoY Rs. 248.2 Cr

Quarter EPS is Rs. 3

Stock is trading at P/E of 31.3x FY25E EPS

Hindustan Foods Ltd. | CMP Rs. 497 | M Cap Rs. 5694 Cr | 52 W H/L 632/461

(Nirmal Bang Retail Research)

Result improved

Revenue from Operations came at Rs. 731 Cr (0.2% QoQ, 10.8% YoY) vs QoQ Rs. 729.1 Cr, YoY Rs. 659.7 Cr

EBIDTA came at Rs. 60.6 Cr (6.7% QoQ, 23.5% YoY) vs QoQ Rs. 56.8 Cr, YoY Rs. 49 Cr

EBITDA Margin came at 8.3% vs QoQ 7.8%, YoY 7.4%

Adj. PAT came at Rs. 22.9 Cr vs QoQ Rs. 22 Cr, YoY Rs. 20.2 Cr

Quarter EPS is Rs. 2

Stock is trading at P/E of 61.2x TTM EPS

Gulshan Polyols Ltd. | CMP Rs. 197 | M Cap Rs. 1229 Cr | 52 W H/L 275/158

(Nirmal Bang Retail Research)

Result ok

Revenue from Operations came at Rs. 405.6 Cr (9.3% QoQ, 34.5% YoY) vs QoQ Rs. 371.1 Cr, YoY Rs. 301.5 Cr

EBIDTA came at Rs. 19.3 Cr (80% QoQ, -24.6% YoY) vs QoQ Rs. 10.7 Cr, YoY Rs. 25.6 Cr

EBITDA Margin came at 4.8% vs QoQ 2.9%, YoY 8.5%

Adj. PAT came at Rs. 6.6 Cr vs QoQ Rs. 4.6 Cr, YoY Rs. 14.4 Cr

Quarter EPS is Rs. 1.1

Stock is trading at P/E of 69.2x TTM EPS

Vodafone Idea’s board approved the allotment of 1,395,427,034 equity shares of face value of Rs. 10 each at an issue price of Rs 14.87 per equity share aggregating to Rs. 2,075 crore to Oriana Investments Pte. Ltd (Aditya Birla Group entity forming part of the promoter group), on a preferential basis.

Aided by exports and machining of windmill castings, Wheels India reported a 64.3 per cent growth in net profit for the fourth quarter of 2023-24. The company’s PAT increased to ₹36.8 crore. The company’s Board has recommended a dividend of ₹7.39 per share. 

On the BSE, the Wheels India share rose 19.89 per cent (₹117.05) to close at ₹705.60. 

JK Tyre & Industries Ltd (JK Tyre) reported a consolidated net profit of ₹171.66 crore for the fourth quarter ended March 31, up 54 per cent year-on-year (y--o-y) compared with ₹111.56 crore in the corresponding period last year.

Consolidated total income also rose two per cent y-o-y to ₹3,714 crore for the fourth quarter compared with ₹3,645 crore in the January-March period last year.

The Securities and Exchange Board of India (SEBI) has come out with guidelines for calculating the “unaffected price” after a listed entity verifies market rumours.

Listed entities are required to verify market rumours, upon material price movement. The unaffected price is to be considered by excluding the effect on the price of the equity shares of the listed entity due to the material price movement and confirmation of the rumour.

Gold prices rallied by ₹831 to ₹74,222 per 10 grams on a firm trend globally over the weekend on fear of renewed tension between Iran and Israel after Iran’s President helicopter crash.

This apart, the recent fall in the US inflation rate has raised expectations of a cut in the US interest rate sooner rather than later.

After a trading holiday, the yellow metal opened on a bullish note at ₹74,222 per 10 grams against ₹73,383 logged last Friday, according to the Indian Bullion and Jewellers Association of India data.

Analysts anticipate continued volatility in gold prices, fluctuating between ₹71,000 and ₹75,000 in the near term.

Private sector lender HDFC Bank on Tuesday sold its entire 3.20 per cent stake in Protean eGov Technologies for ₹150 crore through an open market transaction. According to the bulk deal data available with the BSE, HDFC Bank sold 12,94,326 shares, amounting to a 3.20 per cent stake in Protean eGov Technologies.

The market capitalisation of companies listed on BSE crossed $5 trillion for the first time on Tuesday, turning the spotlight on valuations.

The number of companies trading at more than 50 times 12-month forward price to earnings multiples has increased 10x over the past 10 years and now stands at 104 (see table). Nifty Midcap 100 is trading at 39 per cent premium to the 50-share Nifty.

The MSCI India Index has gained 35 per cent in the past year compared with 12 per cent gains logged by MSCI EM index, increasing the premium gap over emerging markets. India’s market cap to GDP ratio was at 132 per cent at the end of April, much higher than the long-term average of 85 per cent.

However, the number of companies trading at more than 50 times the 12-month forward price-to-earnings multiples has increased 10x over the past decade.

Here are the intraday supports and resistances for widely traded stocks such as Reliance Industries, ITC, ONGC, Infosys, HDFC Bank, TCS, and SBI

The upmove in Indian Bank is gaining momentum. The stock has closed on a strong note on Tuesday by surging 6.6 per cent. This has broken the prolonged sideways consolidation that was in place since February this year.

It has also taken the stock well above the key resistance level of ₹567. That leaves the outlook bullish.