News and Impact
· Mixed bag opening in the Asian markets and strong gained Nasdaq Future may open domestic market on a flat note despite sharp decline in US and European market yesterday. Nasdaq Future climbed up nearly 200 points or 1.5% after one of the largest semiconductor player Nvidia gave a bullish revenue outlook for the current quarter on booming demand for artificial intelligence processors. Its shares soared more than 25% in late trading. Overnight, US market declined over half percent and European markets ended 2-month low (down 2%) as debt-ceiling concerns weighed on investors sentiment for a second day and hotter-than-expected UK Inflation. Among the Minutes of meeting outcome, US Federal Reserve officials were divided at their last meeting over where to go with interest rates, with some members seeing the need for more increases while others expected a slowdown in growth to remove the need to tighten further. US Dollar Index surged to 2-month high and US Vix gained 8% to close above 20 level. Fitch Ratings said it may downgrade the US’s AAA credit rating which is a also concern in the global markets. SGX Nifty declined by 45 points or quarter percent. Domestic sentiment remain bullish due to strong FIIs buying interest and impressive quarterly results. FIIs were net buyers yesterday over Rs1000cr and nearly Rs20000cr during the month of May, highest since last five months. Yesterday, Sensex decline over 200 points but BSE Mid-cap Index closed on a record high. Moreover, Nifty 500 stocks advance decline ratio was 1:1. Expects, rally on mid-cap and small cap stocks to be continue due to good quarterly results and stock specific action to continue. Intra-day volatility may not be ruled out on ahead of May series F&O expiry today. US Q1 GDP data will be release today. Expects weakness in the metal stocks due to base metal price on LME fell to 3-6 months low. IT stocks may positive after one of the largest global semiconductor player Nvidia announced strong quarterly results and a bullish revenue outlook. Government allowed the exports of broken rice may be positive for rice exports companies.
· US Market –. US equities closed lower in New York trading as debt-ceiling concerns weighed on investors sentiment for a second day. Both Nasdaq and Dow Index declined over half percent each. Minutes from the Federal Reserve’s latest policy meeting did little to lift shares, with policymakers split on whether further interest-rate increases would be needed to tame inflation.
· Global market summary – US Volatility Index (US Vix) close 2-week high of above 20 (gain 8%), European Market closed on a 2-month low, UK Inflation during the month of April at 8.7% while the expectation was 8.2%. One of the largest semiconductor player Nvidia forecast sales in the three months ending July of $11 billion vs the analyst estimate of $7.18 billion. Base metal price on LME fell to 6-month low. US Dollar Index spiked to over 2-month high.
· Asian Market – Asian markets are witnessing mixed bag. Asian semiconductor-related stocks climb after one of the largest semiconductor player Nvidia gave a bullish revenue outlook for the current quarter on booming demand for artificial intelligence processors. Its shares soared more than 25% in late trading.
· US AAA Credit Rating May Be Cut by Fitch on Debt-Limit Impasse - Fitch Ratings said it may downgrade the US’s AAA credit rating to reflect the worsening political standoff that’s preventing a deal to solve the nation’s debt-ceiling crisis.
· European Market – -- European stocks fell the most in more than two months as a stalemate persisted in US debt-ceiling talks, while a hotter-than-expected UK consumer prices report rekindled concerns over inflation. UK Inflation during the month of April reported at 8.7% while the expectation was 8.2%.
· Oil – Oil futures traded higher by 2% to $78/bbl after Saudi Arabia's energy minister warned of pain ahead for short sellers. Support also came from industry data showing a drop in U.S. crude and product inventories ahead of an official tally from the Energy Information Administration.
· Gold – Gold fell 1% to $1956/ounce as investors assessed progress on US debt-ceiling negotiations. President Joe Biden and House Speaker Kevin McCarthy called their discussions on Monday productive, but an agreement remains elusive.
· Previous Day market Update - After a rally in the three trading sessions, equity benchmarks Index settled in negative territory following weakness in the global markets amid concern of US debt ceiling negation, hotter-than-expected UK inflation print and ahead of US Fed minutes of meeting to be release today. Traders were booking profit ahead of May series F&O expiry tomorrow which resulted India Vix surged by 4% today. Sentiment has been dampened on account of across the global markets along with US future decline after the U.S. debt-ceiling talks have failed to make sufficient progress and there are growing risks of a U.S. default. Moreover, surging UK Inflation during the month of April (April Inflation at 8.7% while the expectation was 8.2%) and the overnight US Vix spiked by 8% have negative impact in the market. Sensex finished the day at 61,775, down by 208 points or 0.30% while Nifty shed by 63 points or 0.3% to close at 18,285. Banks and metal stocks were major losers today while Nifty Mid-cap and small cap Index managed to ended positive territory. Tyre stocks witnessed smart rally today. HDFC Bank, HDFC, ICICI Bank, and Reliance Industries among the major losers while ITC, Titan, Sun Pharma, and SBI Life among the major gainers today. Nifty 500 stocks advance decline ratio was 1:1. Yesterday, both FIIs and DIIs were net buyers Rs1186cr and Rs301cr respectively.
· Nifty Technical Levels - Nifty formed a long pin bar on daily scale with higher upper shadow indicating pressure at higher zones. It negated its higher highs - higher lows formation of the last two sessions. Now it has to hold above 18281 zones, for a bounce towards 18400 and 18442 zones while on the downside supports exist at 18181 and 18081 zones.
· Bank Nifty Technical Levels – Bank has formed a small bearish candle on daily scale with upper shadow as selling pressure is seen at upper band of the range and it ended in negative territory below 43700 zones. Now it has to hold above 43750 zones for a bounce towards 44144 then 44250 zones while a hold below the same could see some weakness towards 43500 then 43333 marks.
· Actionable BUY – Engineers India, Zomato, NBCC, KRBL
· Brokers Radar – Hindalco – CLSA TGT at 530. Nykaa – Goldman Sachs TGT at 175, Nomura TGT at 183 and Macquarie TGT at 115. UBS TGT on Tata Motor at 450.
· Events – May series F&O expiry, Whirlpool Results and board meeting for bonus.
· Results – AIA Engineering, Bharat Dynamics, Eclerx, Emami, FDC, Global Spirits, GMM Pfaudler, GSFC, IEX, Ingersoll Rand, Kolta-Patil, Lincon Pharma, Page Industries, Price Pipe, Radico Khaitan, Triveni Engineering, TTK Prestiage and Zee Entertainment,
· Corporate Action - Trent Rs2.20, Kennametal Rs20, Kansai Nerolac Rs2.70, SNL Bearing Rs6.50, NMDC Rs2.85, Roto Pumps Rs3.15, Polyplex Rs3, Amaraja Batteries Rs3.20, Galaxy Surfactants Rs4, Gandhi Special Tubes Rs12, Linde India Rs12, Jenburkt Pharma Rs14.40
· Global Data – Initial Jobless Claims, Annualized GDP, Pending Home sales, Personal Consumption (US), Housing Price Index (UK). Business Confidence and Manufacturing Confidence (France). Private Consumption and Government Spending (Germany)
· Market Summary – Brigade Enterprise (BEL) reported highest ever bookings, Cummins India skipping guidance for FY24, Deepak Nitrite announces on $600M Capex Plan, Oberoi Realty Signs Pact to Acquire Land in Thane, RBI Rate Decision to Depend on Situation on Ground, Das Says. M & M sold entire 3.2% stake yesterday via block trades yesterday and sets offer price at Rs430-452.85 a share. M&M sold entire Mahindra CIE 3.2% stake yesterday via block deal, Hindalco, Cummins India announced lower than expected Q4 results, Bikaji Food announced impressive Q4 results. JB Chemical announced better than Bloomberg expected Q4 Ebitda
· Adani Group – Company commits to a total of about $10b in long-term investment into logistics, ports, energy and technology sectors in Vietnam – Long term positive
· Garden Reach Shipbuilders – Company wins order worth Rs248.5cr– positive
· Aptech – Company announced bonus in the ratio of 2:5
· Cummins India - The company will not provide any guidance for fiscal year 2024 at this time considering the uncertainty related to the geopolitical and supply chain conditions that remain unpredictable – stock decline yesterday by 5% after the news
· Wipro – Company announced a partnership between its Engineering Edge business line and Spartan Radar, an automated mobility sensor software provider, to build advanced vehicle solutions - Positive
· Mahindra CIE – Mahindra CIE Automotive- Promoter, the Mahindra Group. M & M sold entire Mahindra CIE stake of 1.21cr shares, or a 3.19% stake at Rs 447.65 a share worth Rs520cr via block trades yesterday. Mahindra's stake in the automotive component supplier now stands at NIL – Positive
· Deepak Nitrite announces on $600M Capex Plan - Deepak Nitrite announced a Rs5000cr ($600 million) capital expenditure plan. The company said it has signed a memorandum of understanding with India’s Gujarat state for setting up specialty chemicals, phenol and bisphenol units over the next four years
· HG Infra – Company wins orders worth Rs42.5cr from NTPC - Positive
· RBI Rate Decision to Depend on Situation on Ground, Das Says - India’s monetary policy decision will be based on the situation on ground, RBI Governor Shaktikanta Das said. “I’m driven by what’s happening on ground, what’s the outlook on ground, what are the trends, how is the inflation softening,” he said . Indian banking system remains stable and resilient . India’s FY23 GDP growth could be more than 7%
· Oberoi Realty Signs Pact to Acquire Land in Thane, India – Company has entered into a memorandum of understanding with NRB Bearings to acquire land of 25,700 square meters at Thane in Maharashtra. The real estate company has paid a portion of undisclosed amount of the consideration for the land. The balance will be paid on completion of the transaction, which is subject to certain terms and conditions – positive
· Bajaj Electricals Expects Demand, Margin To Improve In Two Quarters - Bajaj Electricals Ltd. expects margins to improve in the next two quarters if commodity prices continue to ease and as consumption revives. As demand improves gradually, Prasad said, margins will also recover unless volatility in commodity prices reoccurs. – Positive
· Route Mobile Targets Billion-Dollar Revenue In 3-4 Years On Cloud, AI Push - Route Mobile is on track to achieve a billion-dollar revenue run rate in the next three to four years, as communications platform-as-a-service increasingly becomes the backbone of the enterprise communications ecosystem. – Long term positive
· JB Chemical – Company announced stock split each share into two. Company announced impressive Q4 results - Positive
· Dividend – Hindalco Rs3, Cummins India Rs13, JB Chemical Rs9.25
· BLS International - Overseas travel boom takes Indians' foreign currency spends to record highs - Overseas travel after the pandemic has risen to record highs and so has the foreign currency spends by Indians. The overall foreign currency spends by Indians rose by $7.5 billion to a record high of $27.1 billion in FY23. Foreign currency spends were at about $19.6 billion in FY22 and $12.7 billion in FY21 largely due to subdued travel amid the pandemic. With the waning of the pandemic, there has been a surge in overseas travel, which jumped to $13.7 billion in FY23, an increase of 97% from $6.9 billion in FY22, the report showed. – Positive on BLS International
· India Cement Q4 Net loss Rs217.8cr vs loss Rs237.1cr – expectation loss Rs140cr, one time loss Rs114cr, other income Rs18.42cr (up 291% YoY), Ebitda loss Rs44.5cr vs profit Rs60cr (YoY) – expectation loss Rs60cr and Income Rs1460.5cr (up 4.9% YoY) – expectation Rs1400cr
· Bikaji Food announced better than Bloomberg estimates Q4 results. Company reported Q4 Revenue up 15.49% at Rs 462.26 crore (Bloomberg estimate: Rs 511.60 crore), Ebitda up 52.39% at Rs 61.84 crore (Bloomberg estimate: Rs 55.80 crore), Ebitda margin at 13.38% vs 10.14% (Bloomberg estimate: 10.9%) and Net profit up 57.12% at Rs 38.29 crore (Bloomberg estimate: Rs 33 crore)
· Hindalco Consolidated Q4 Net profit Rs2418cr (down 37% YoY) – expectation Rs2300cr, Ebitda at Rs5820cr (down 20% YoY)- expectation Rs6100cr, Ebitda margin 9.5% vs 13.1% (YoY) – Expectation 11.4% and Income Rs55860cr (up 0.2% YoY) – expectation Rs53500cr
· Cummins India Q4 Net profit Rs318.5cr (up 69% YoY) – Bloomberg expectation adj. net profit Rs345cr, Ebitda Rs326cr – Bloomberg expectation Rs335cr, Ebitda margin at 17% vs 13.8% (YoY) and Income Rs1926cr (up 29% YoY) – Bloomberg expectation Rs2021cr
· Nykaa Q4 Net profit 2.4cr (down 72% YoY) – Bloomberg estimates Rs9.76cr, Ebitda Rs70.6cr (up 84% YoY) – estimates Rs70.70cr, Ebitda margin 5.4% vs 4% (YoY) and Income Rs1300cr (up 34% YoY) – Bloomberg estimates Rs1351cr
· JB Chemical announced better than Bloomberg expected Q4 Ebitda. Company reported Q4 net profit 87.63cr (up 3.3% YoY) – Bloomberg expectation Rs102cr, Ebitda Rs181cr (up 21% YoY) - Bloomberg expectation Rs175cr, Ebitda margin flat at 23.8% vs 23.8% (YoY) and Income Rs762cr (up 22% YoY) – Bloomberg expectation Rs762cr
· Brigade Enterprise (BEL) reported highest ever bookings of Rs1490cr up 47% (YoY ) - 26% above estimate. Company reported Q4 Revenue Rs842cr (down 11% YoY)- expectation 949.4cr, EBITDA Rs202cr (up 1% YoY) – Expectation Rs255.7cr, Ebitda margin at 24% vs 21.8% - expectation 26.9% , PAT reported Rs70cr while adjusted for exceptional gain of Rs17cr, PAT stood Rs50cr (up 5.3% YoY) – expectation Rs94.7cr
· Aptech announced strong Q4 results. Company reported Q4 net profit Rs33.35cr (up 88% QoQ) and Income Rs181.5cr (up 51% QoQ).
