Market At Close
– Market Ends At Day’s High After An Uptick In Last Hour
– Sensex & Nifty Back Above 50,000 & 14,800 After 4 Sessions
– Banks Gain After SC’s Judgement In The Moratorium Case; Nifty Bank Reclaims 34,000
– HDFC Bank & ICICI Bank Contribute Most To Nifty’s Gains Today
– Amongst PSBs, Bk Of India Hits Upper Circuit, IDBI Bk, Union Bk Gain 7% & 5% Each
– Sensex Ends At 50,051 After A Gain Of 280 Points; Nifty Up 78 Points To End At 14,814
– Nifty Midcap Index Gains 204 Points To End At 23,808
– Cement Stocks Top Index Gainers Today While PSU Cos Lead Losers
– UltraTech Hits Intraday 52-week High; Shree Cement Ends 5% Higher
– IOC, GAIL, Power Grid & ONGC Top The Nifty Losers Chart
– Adani Ports Ends 2% Higher After Announcing Acquisition Of Gangavaram Port
– Market Breadth In Favour Of Advances With Adv-Dec Ratio At 3:2
Closing Bell | The Indian equity indices ended higher on Tuesday led by gains in banks and financial services stocks. The Sensex gained 280.15 points, or 0.56 percent to 50,051.44, while the Nifty ended at 14,814.75, up 78.35 points, or 0.53 percent. Midcap and smallcap indices supported the rally.
Among sectors, Nifty PSU Bank gained the most followed by Nifty Realty, Nifty Auto and Nifty Pharma, while Nifty Metal, Nifty FMCG and Nifty Media closed in the red. On the Nifty50, Shree Cement, UltraTech Cement, Divi’s Laboratories, HDFC Bank and IndusInd Bank were the top gainers, while Hindalco Industries, ONGC, PowerGrid Corporation, GAIL India and ITC were the top index losers.
US Treasury yields rising 10-15 bps is not unreasonable, says Standard Chartered’s Manpreet Gill
The US bond yields went up from 1.3 to 1.73 percent in a matter of three weeks. But now it has receded to 1.67 – 8 basis points (bps) lower from the recent highs. So, is the chaos or the volatility in the bond markets over? And how are financial flows into emerging markets (EMs) shaping up? Manpreet Gill, Head-FICC Investment Strategy of Standard Chartered Private Bank answered these questions.
“We have seen a little bit of pullback and it has been nice. But arguably you could attribute some of that to positioning having become lopsided but there are still some fundamental questions ahead of us on the inflation side,” he said. Gill believes there is no reason for Powell to react to rising bond yields if the economy is doing okay. Read here.
With SC lifting the stay on #NPA classification, banks expected to report additional gross NPA of Rs 1.3 lakh cr in the March quarter. ICRA Research shows that additional interest on interest would be over Rs 7,000-7,500 cr. @_ritusingh reports pic.twitter.com/bv7csAIi0N
— CNBC-TV18 (@CNBCTV18Live) March 23, 2021
Samantak Das, Chief Economist and Head of Research & REIS, India, JLL
The Supreme Court’s refusal to extend the six-month loan moratorium period offered by the Reserve Bank of India (RBI) last year is on expected lines keeping in mind the fiscal situation of the country. The refusal to not extend the moratorium period is unlikely to considerably impact the developers since not many of them opted for the moratorium in the first place. As far as home buyers are concerned, significantly low-interest rates offered by various banks have already pushed up affordability.
In the last quarter (October to December 2020), we have seen a growth in sales in the residential market at 51% over the previous quarter. We believe that this sector will hold on to the growth trajectory through this year provided that the economic growth is back on track and there is an improvement in the employment scenario.
Glenmark gets $40 mn COVID credit line from IFC
International Finance Corporation on Tuesday said Glenmark Pharmaceuticals has become the first domestic drugmaker to get a USD 40-million (about Rs 290 crore) credit-line from its USD 8-billion fast-track COVID-19 facility. The loan to Glenmark will help it increase the availability of affordable, quality medicines in the country as well in other countries, including treatment for the pandemic.
The World Bank Group lender said the USD 40 million-loan is under its USD 8-billion fast-track COVID-19 facility and will help the Mumbai-based company boost its generic drug production capacity in general and respiratory drugs in particular. IFC’s partnership with Glenmark began way back in 2016, supporting its expansion and growing its research and development capacities.
IDBI Bank | The Board of Directors of the bank on March 26 will consider and approve the proposal of Rupee Bond Borrowings limit of Rs 8,000 crore for FY 2021-22.
Emkay Global Financial Services on Vedanta open offer
Vedanta Resources Ltd has raised the open offer price for buying 17.5% of Vedanta Ltd outstanding shares to Rs 235 per share. The offer price is at a 5.1% premium to the CMP of Rs 223.6. The open offer starts on March 23 and will close on April 7. The offer is not subject to any minimum level of acceptance. Our analyst believes that revival in commodity prices is a strong positive for the stock, and estimates the target price (at current commodity levels without any holdco discount) at Rs 280, which is significantly higher than the offer price. Hence, we expect that major domestic institutions with a cumulative stake of ~4.4% may not participate in the offer.
Lux Industries | The company has announced a capital expenditure of Rs 110 crore over the next 12-18 months. The capex will lead to an incremental sale of Rs 400 crore, it said.
Goldman Sachs maintains ‘buy’ rating on Bandhan Bank
Goldman Sachs maintained its ‘buy’ rating on Bandhan Bank, stating that the West Bengal election manifesto promises development and does not propose any waiver for micro-borrowers, which comes as a relief for the bank. The brokerage firm has set a price target of Rs 484 for the stock. The firm also states that robust profitability and diversification of revenue stream would help in addressing the asset quality better for the firm. Read more.
Market Watch: Shrikant Chouhan, Kotak Securities
– Buy Tata Motors with a stop loss of Rs 302 and a target of Rs 330-335.
– Buy United Spirits with a stop loss of Rs 544 and a target of Rs 575-580.
#JustIn | Asian Granito announces a debt reduction plan over next 1-2 years, says will reduce around Rs 100 cr
Firstly, co to use warrant conversion proceeds to pare debt of Rs 40-50 cr & then Rs 50-60 cr will be pared by internal accruals pic.twitter.com/kzbsC1ujN0
— CNBC-TV18 (@CNBCTV18Live) March 23, 2021
Real growth likely in FY22; early shoots are visible: Sundaram Finance
TT Srinivasaraghavan, managing director of Sundaram Finance, on Tuesday said that there is room for optimism as the infrastructure sector was showing signs of revival. According to Srinivasaraghavan, while the real growth will only start in FY22, the early shoots are certainly visible. “There is enough positive coming out of the Budget and what we are hearing even anecdotally from our customers – steel has started doing well, cement is starting to pick up. So, all of these things speak the infra story. So, if you put all the pieces together, I believe there is room for optimism, though the real growth I think will start probably in the second half of FY22. But the early shoots I think are certainly visible,” he said in an interview to CNBC-TV18. Watch here.
Anuj Puri, Chairman – ANAROCK Property Consultants
The Supreme Court’s rejection of the plea from various trade associations and corporate bodies to extend the six-month loan moratorium period given by the RBI may not have a major impact on real estate as such. As noted, towards the end of 2020 the overall percentage of those who availed the loan moratorium benefit was not as significant as anticipated. Moreover, continuing the loan moratorium for retail investors is not as beneficial as switching to the prevailing lowest-best home loan rates. Banks have their limitations in their ability to extend this benefit as ultimately, it will impact overall business and profitability.
The last two two quarters – Q4 2020 and Q1 2021 – have seen robust housing sales wherein many buyers have been capitalizing on the low home loan rates, government sops and developer discounts.
Credit Suisse maintains Outperform rating on IndusInd Bank; expects RoE to improve
Credit Suisse has maintained an Outperform rating on private lender IndusInd Bank with a target price of Rs 980 per share. It also expects the bank’s return on equity to improve to 13 percent. The brokerage stated that post the recent warrant conversion by the promoters of the bank, its CET was strong at 15.7 percent.
Credit Suisse also noted that IndusInd Bank’s management did not expect capital for the next 12-18 months even as growth picks up. Also, the management is interested in venturing into para banking. Read more.
Bharti Airtel | Airtel Africa has signed agreements to sell its telecommunications tower companies in Madagascar and Malawi to Helios Towers plc for approximately $108 million. The Group’s tower portfolios in these two markets together comprise 1,229 towers which form part of the Group’s wireless telecommunications infrastructure network.
Buzzing | Shares of Jubilant Ingrevia were locked at 5 percent upper circuit and at all-time high after Ace investor Rakesh Jhunjhunwala said persons acting in his concert have purchased 3,04,009 equity shares in Jubilant Ingrevia on March 19, resulting in an increase in total shareholding in the company to 99,33,809 equity shares or 6.23 percent of total paid-up equity.
Uttara Kolhatkar, Partner, J Sagar Associates
Government of India and the RBI through it various schemes and subsidies have been mindful of the anticipated liquidity challenges and related impact, which COVID-19 may have had on the ability of borrowers to continue operating in the ordinary course. Having said that, temporary measures viz. the moratorium, etc. introduced to tide over such exigencies like the pandemic, cannot be permanent measures or fixtures, and can only have a limited life- cycle for economic relief.
The judicial machinery cannot go beyond its brief. Courts cannot usurp the jurisdiction of decision makers in the garb of Judicial Review. Each wing of the State has the power to act in its own sphere of activity. Courts do not and cannot act as appellate authorities examining the correctness, suitability and appropriateness of a policy nor are courts advisors to the executive wing on matters of policy which the executive is entitled to formulate. Courts cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded.
Credit Suisse gives ‘outperform’ rating to Shriram Transport Finance
Credit Suisse has given a ‘outperform’ rating to Shriram Transport Finance. The brokerage firm reiterates the outperform rating with improving growth, margin, and asset quality outlook. Credit Suisse has set a price target of Rs 1,625 for the stock.
A few weeks ago, in an interview with CNBC-TV18, Umesh Revankar, the managing director of Shriram Transport Finance, said that the demand was picking up slowly, but steadily. He stated that there has been a pick-up in auto sales and therefore demand for commercial vehicle (CV) financing has also risen. He expects the loan growth to be around 6 percent in the 2021 fiscal but added that it will be much higher next year. Read more.
Granules India in focus | Bulk drug prices of Paracetamol in India rise by 75-85% in past 2-3 months due to spike in prices of 2 main raw materials. Prices have risen to Rs 650-700 from Rs 350-400/kg pic.twitter.com/tbefN9WWEe
— CNBC-TV18 (@CNBCTV18Live) March 23, 2021
CLSA maintains ‘buy’ rating on Tata Motors
Brokerage firm CLSA maintained a ‘buy’ rating on Tata Motors with a target price of Rs 425. Its positive view on the stock continued on the back of strong free cash flow and deleveraging, CLSA said. According to the brokerage firm, volume recovery and cost cuts should continue to drive free cash flow and deleveraging.
“JLR’s Ebit margin should improve from 0% in FY20 to 6% in FY23, while its India Ebitda margin should recover from 1% to 8%. We forecast FY21-23 FCF of £1.8 bn for JLR and Rs 84 bn in India,” said CLSA in its note. This, it added, should lead to auto net debt declining from Rs 487 billion in FY20 to Rs 276 billion by FY23CL. Continue reading.
Insecticides India | The company’s board will consider the proposal for buyback of the fully paid-up equity shares of the company of face value of Rs 10 each, as well as matters related incidental thereto on March 30, 2021.
Remain positive on private sector banks, large cap IT, says Elixir’s Dipan Mehta
Dipan Mehta, Director at Elixir Equities remains positive on private sector banks. HDFC Bank, Kotak Mahindra Bank, Axis and ICICI Banks are typically long-term investment plays, he added. “Large banks with good balance sheet, good technology, large network and branches, will continue to do exceedingly well. The likes of HDFC Bank, Kotak Mahindra Bank, Axis Bank and ICICI Bank typically are long-term investment companies and usually part of the core holding of many investors. If you are underweight in any of the private sector banks, then underperformance is a good opportunity to get equal-weight or slightly overweight.” Under-performance in private sector banks is just a passing phase, Mehta said. Read more.
Sustaining 10-year govt yield at 6.10% looks difficult in near term: Kotak Mahindra AMC’s Lakshmi Iyer
The 10-year government yield sustaining at 6.10 percent looks difficult in the near term, said Lakshmi Iyer, CIO-Debt and Head Product at Kotak Mahindra AMC on Tuesday. The view comes after the last bond auction of the current financial year, scheduled on March 26 was cancelled.
“This is not completely priced. The announcement was more of conjecture for the market and after the announcement yesterday, it could mean positive news,” she told CNBC-TV18. There could be a reasonably good rally in market opening today, Iyer added. Watch here.
Rupee rises 3 paise against US dollar in early trade
The rupee advanced by 3 paise to 72.34 against the US dollar in opening trade on Tuesday, as easing crude oil prices and buying trend in equity markets lifted sentiment. The rupee’s gains were, however, restricted as investors turned a bit cautious due to rising US dollar amid foreign fund outflows. At the interbank forex market, the local unit opened flat at 72.37 against the US dollar, then gained some strength to quote at 72.34, a rise of 3 paise over its last close. In the previous session, the rupee had settled at 72.37 against the American currency. Read more.