Earnings Estimates: Ambuja Cements’ first quarter profit is seen falling 23 percent year-on-year to Rs 235 crore but revenue may grow 1.1 percent to Rs 2,470 crore, according to average of estimates of analysts polled by CNBC-TV18.
Rising pet coke cost, weak operational performance and slow revenue growth may hit bottomline during the quarter but the company can surprise, especially after better-than-expected earnings by ACC.
Operating profit is expected to dip 12 percent to Rs 396 crore and margin may contract 237 basis points to 16.03 percent compared with year-ago period.
Ambuja Cements, which follows January-December as its financial year, has high exposure to West and North India (contributed 75 percent to sales).
Sales volumes are expected to fall by 1 percent YoY to 5.8 million tonne from 5.86 million tonne as North India sales impacted by demonetisation and elections, but may increase 16 percent sequentially.
Market Check: Equity benchmarks remained sluggish after a record session of trade on Wednesday, with the Sensex in the red ahead of F&O expiry.
The Sensex was down 51.62 points at 30081.73, while the Nifty was down 7.60 points at 9344.25. The market breadth was negative as 1,236 shares advanced against a decline of 1,436 shares, while 144 shares remained unchanged.
Yes Bank, along with auto stocks such as Tata Motors and Hero MotoCorp were among top gainers, while Axis Bank, Lupin and Grasim were among top losers.
Market Outlook: ICICI Direct believes the Indian economy is on a strong footing with relatively strong macroeconomic fundamentals, lower inflation/interest rate regime, possibility of a major reform such as GST and a favourable demography supporting sustainable growth.
“While the current index levels of around 30000 of Sensex looks optically high given corporate flat earnings trajectory over last 3-4 years (FY14-17) amid delay in revival of private capex cycle, we must make a note that markets discount future earnings and growth potential,” Pankaj Pandey, Head-Research, ICICI Direct said.
He feels earning growth would be the key factor driving the markets from hereon.
Furthermore, he believes that factors such as structural shift towards digitisation of the economy coupled with increased focus on channelisation of financial savings, given the relative attractiveness of equity vs. other asset classes, would keep the Indian financial market buoyant for the next 3-5 years.
Job losses in telecom: Riddled with crippling debt and a tough operating environment, telecom companies have been laying off employees over the last six months. While bigger players like Bharti Airtel and Vodafone India are managing to cut losses through consolidation, it is the smaller companies that are suffering the most.
According to CNBC-TV18 sources, nearly 3400 job losses have been reported in the last six months by telcos to cut down on costs and support falling margins. Read the full report here.
Market Check: Benchmark indices held on to its morning gains, while the Nifty held on to 9200-mark.
The Sensex was up 176.42 points at 29752.16, while the Nifty was up 42.10 points at 9223.55. The market breadth was positive, but narrow, as 1,637 shares advanced against a decline of 1,133 shares, while 111 shares were unchanged.
ITC, ICICI Bank and Power Grid were top gainers on both the indices, while Adani Ports, Tata Steel and Tata Power were top losers.
Spending on H1-B visa: Indian IT companies over the past one year have been facing tough time because of factors such as tightened H1B visa norms in the US, Brexit and the rise of artificial intelligence (AI) and automation.
In a bid to safeguard the interests of companies, industry body National Association of Software and Services Companies (NASSCOM) spent USD 440,000 (approx Rs 2.8 crore) in 2016 to lobby with the US Congress. The amount is the highest ever spent by the body since 2003, the time it began pushing for more liberal regulations for Indian IT engineers, according to opensecrets.org.
Buzzing Stock: Shares of Sadbhav Infrastructure fell nearly 7 percent intraday on Thursday as investors turned cautious on buzz of taxman’s actions.
According to a report on CNBC-Awaaz, the premises of the firm were searched by the Income Tax Department.
At 11:58 hrs, Sadbhav Infrastructure Projects was quoting at Rs 96.00, down Rs 3.75, or 3.76 percent.
Brokerage view: Bajaj Auto share price rallied nearly 2 percent after Morgan Stanley has upgraded the stock to overweight from underweight and also raised target price to Rs 3,251 (from Rs 2,502 earlier), implying 17 percent upside.
“The stock has underperformed BSE Sensex by 10 percent over past year, consensus is negative and we now take a contrarian view and upgrade Bajaj Auto to overweight,” it reasons.
The brokerage house says it now applies an 18x FY19 P/E multiple against 15x earlier, to reflect sector rerating, trough earnings and potential for higher dividend yield, as cash to market capitalisation is expected to rise to 21 percent by FY19. It would use any weakness in the stock post Q4FY17 earnings to build positions.
Stake sale: Lenders to Uttam Galva Steels have received two offers to take over the company, reports CNBC-TV18. The lenders plan to meet next week to discuss both offers.
The company was put on the block by lenders in a bid to recover Rs 5500 crore. SBI, which heads the 18-member consortium of lenders, was leading the efforts.
CNBC-TV18 learns one of the offers from AION Capital, which is currently working on the restructuring package. AION, which is a strategic partnership between ICICI Venture and Apollo Global Management, is an approximately USD-825-million fund.
4 GST bills in parliament?: The government may table four GST supplementary legislations in Parliament today, a union minister said.
“We can do it today as well. A meeting on GST will be chaired by Finance Minister Arun Jaitley today,” Minister of State for Finance Arjun Ram Meghwal said when asked about tabling of the four GST bills in the Lok Sabha.
He was speaking to reporters on the sidelines of an infrastructure event here. The Cabinet on Monday cleared the four GST related bills to enable roll out of the Goods and Services Tax from July 1. The four bills are: the Central Goods and Services Tax Bill 2017, the Integrated Goods and Services Tax Bill 2017, the Union Territory Goods and Services Tax Bill 2017 and the Goods and Services Tax (Compensation to the States) Bill 2017. A source had told that the bills would be introduced as money bills in Parliament this week.
Bajaj Hindusthan Sugar Ltd
* Approved sale and transfer of co-generation power business of capacity of 449 MW located in uttar pradesh to LPGCL
* Co has also negotiated escalation to tariff for power and margin on steam to be bought by co from LPGCL
* Says entire amount of cash consideration to be utilised towards advance repayment of existing term debt
* Deal expected to be completed by june 30, 2017 Source text – Further company coverage: BJHN.NS
Market check: Market is trading at a record high. Nifty is up 70 points at 9155.3, while the Sensex is currently 190 points higher at 29587.70.
Pennar Engineered soars 12%: Shares of Pennar Engineered Building Systems rose nearly 12 percent intraday Thursday on order wins worth Rs 152 crore.
Pennar Engineered Building Systems, a subsidiary of Pennar Industries, has announced receipt of orders from Hetero Drugs, Amplus Energy Solution, MELPL, S G Pharma, Shahi Exports and others of totalling Rs 152 crore.
The orders includes, order from Hetero Drugs for its Laboratory Building at Medak, Telangana and order from Solar Developer for its solar MMS project at Banda, UP.
Closing Bell: The market recovered from the day’s lows and closed almost flat. The Nifty regained its 8900-mark. However, the index posted its first weekly loss since January 22. Midcap stocks outperformed. The Sensex was down 7.34 points at 28832.45, while the Nifty was down 2.20 points at 8897.55. However, the market breadth was still marginally in the negative zone. About 1,389 shares had advanced, 1,442 shares had declined, and 174 shares remained unchanged.
Market Update: Benchmark indices recouped losses in last hour trade, with the Nifty getting back above 8900 level, supported by Infosys and Reliance Industries. The Sensex was down 3.64 points at 28836.15 and the Nifty gained 0.75 points at 8900.50.
Tata-DoCoMo truce: Tata Sons will split a dispute settlement payment of USD 1.18 billion owed to NTT DoCoMo over the Japanese firm’s exit from a telecoms joint venture, leaving it with about two-thirds of the amount to invest in India, a source said. Both companies are likely to approach India’s central bank within 15 days with a plan that will offer to split the payment into two parts, the source, who has direct knowledge of the matter, said. While Tata Sons will pay the fair value of DoCoMo’s 26 percent stake outside India, or roughly USD 390 million according to Reuters calculations, DoCoMo would need to invest the balance of USD 790 million in India, either for expansion or other joint ventures, the source added. It was not immediately clear how DoCoMo would use the money if the plan were formalised.
Market Check: The Sensex was down 85.94 points at 28898.55, while the Nifty was down 34.80 points at 8911.00. About 957 shares have advanced, 1,860 shares declined, and 161 shares are unchanged.
Cadila Healthcare gets 3 observations: Cadila Healthcare, part of Ahmedabad-based Zydus Cadila group, on Thursday, said the company got three observations from USFDA for its formulation facility at Baddi, Himachal Pradesh. The USFDA inspected the plant from February 20 to March 1. “All these three observations are related to pre-approval inspection (PAI) for a specific product filed,” the company said in a press release without naming the product. The stock fell over 7 percent intraday following the development.
While retaining overweight rating on Reliance Industries , Morgan Stanley raised its target price on the stock to Rs 1,506 (from Rs 1,280) to factor in higher energy earnings and increased clarity on telecom investments. RIL stock has underperformed peers by 60 percentage points in the past four years as its returns lagged peers. This is set to change as earnings start from energy projects and telecom monetisation gathers pace, it feels. After nearly doubling its energy business investments in the past four years, the research firm believe RIL’s energy earnings are poised to inflect over the next two years, benefiting from slowing oil oversupply, a rising global gas glut, and the start of a polyester upcycle. “We think the ability to leverage these trends sets RIL apart from its global peers and drives our conviction that energy earnings can beat consensus by 12-23 percent,” it says. RIL’s vertical integration in the energy value chain has deepened, increasing its flexibility to capitalise on changing energy prices while lowering earnings volatility – a key differentiator versus global peers, according to Morgan Stanley. It feels company’s energy return on capital employed is set to rise 500 basis points by FY20, to 15 percent, in the top five in returns and free cash flow growth globally. The brokerage house says, “The market is discounting about half of our projected growth in energy earnings, assuming our base case telecom NAV .” This reflects concerns about RIL’s execution of energy investments – most of which, it believes, are being de-risked as they are close to commissioning. The research firm says telecom uncertainty has decreased with disclosure on tariff plans, but not subsided completely. It believes energy return on capital employed growth buffers the impact from lower telecom returns in the near term. Disclosures on telecom key performance indicators (KPIs) should be a stock trigger, it says. In the past 23 years, despite low dividend payout, RIL has outperformed in times of free cash flow growth. Although RIL has one of the lowest payouts (against energy peers), the chairman’s comments on rewarding shareholders indicate a focus on capital efficiency, Morgan Stanley says, adding a higher dividend over time should trigger outperformance. The stock rallied 6 percent intraday today to hit neary 9-year high of Rs 1,256.50 on value buying, which helped it to cross Rs 4 lakh crore market capitalisation. In four consecutive sessions, it gained nearly 17 percent.