DAILY MARKET OUTLOOK, 29TH OCT, 15

Dear Customer,

 

Markets always tend to be interesting with something or the other happening all the time. Our Morning Mantra is released before the opening bell and it includes the market commentary along with Corporate & Global news for the day.

 

• U.S. stocks closed up more than 1% at session highs on Wednesday after the October Fed statement gave investors more confidence in the possibility of a December rate hike. 

Dow Jones	17779.5	+198.09	+1.13%
Dow Jones Fut	17650.0	-52.00	-0.29%
Hangseng	22898.8	-57.74	-0.25%
Nikkie	18885.8	-17.18	-0.09%
SGX Nifty	8149.0	-30.00	-0.37%

 

• Asian stocks trimmed gains early Thursday, as investors digested the Fed's decision to leave interest rates near zero.
• The U.S. Federal Reserve kept interest rates unchanged on Wednesday, but downplayed global economic headwinds and left the door open to tightening monetary policy at its next meeting in December. Following a two-day policy meeting, the central bank said it was still monitoring economic and financial developments abroad, but did not repeat that global risks would have a likely impact on the U.S. economy, as it warned at its last meeting in September
• Market is expected to open on slightly negative note and likely to remain range bound during the day.
• Amtek Auto is looking to sell its German unit Tekfor, a business with sales of more than 500 million euros
• Ashoka Buildcon has bagged a contract worth $38.11 million from Maldives-based company Housing Development Corporation. 
• Sun Pharmaceutical Industries has initiated a recall of a little over a million boxes of Loratadine, an anti-allergic drug, from the US market after checks revealed the tablets were ‘super potent’ and ‘out of specification’. Such recalls are done by drug makers if there is a defect in the product, which, if unaddressed, could result in stricter action from regulators. Sun did not comment on the  recall.
• Axis Bank, plans to raise Rs 3,000 crore by way of infrastructure bonds.
• ICRA gives stable outlook rating for DLF's NCDs worth Rs.900 cr
• Indigo , commenced its operations in Aug 2006, and in this 9 years the company has been profitable for 7 years even when the industry was not doing good. Going forward, Indigo plans to expand its fleet size from 97 in FY15 to 154 in Aug 2018. With highest market share of 37.4% of domestic passengers till aug,2015, Having a low cost structure model, and with expansion on cards we believe indigo will not only be able to tap the coming opportunity in the industry but also generate profits. With the price band of Rs 700-765 , issue is priced at EV/EBITDAR of 10.8x FY15(at higher band) . We recommend a SUBSCRIBE to the issue 

 

• Results announced

Onmobile	Result ahead of Expectation Sales came at 207cr vs qoq 201cr yoy 207cr EBITDA came at 39.34cr vs qoq 35.12cr yoy 23.88cr EBITDA  margin came at 19% vs qoq 17.4% yoy 11.5% Management guided earlier to take the margin to 20% by year end from 17.4% in Q1 but in Q2 itself has come to 19%. PAT has come at 1.26cr vs qoq loss of 0.16cr yoy loss of 1.21cr. Lower profit is on account of higher Amortisation related to one of the old deal of Latin america This amortisation will reduce in Q1FY17. Company has a Net Cash of Rs.290cr. Company is likely to do Rs.10 EPS in FY17 and Share is trading at 9.5x FY17 EPS Positive
Thermax- SELL- Inst	2QFY16 Result Update- Macro Headwinds Persist; Retain Sell: The 2QFY16 performance of Thermax was weak on all parameters marred by slowdown in execution, lower profitability, tepid order inflow and muted outlook on corporate capex recovery. Thermax reported standalone revenue of Rs10.5bn for 2QFY16, down 9% YoY and 13% below our/consensus estimates each, primarily impacted by a 11% YoY decline in the energy segment (76% of total revenue). EBITDA fell 18% YoY to Rs996mn, 17%/21% below our/consensus estimates, respectively. Operating profit margin stood at 9.4%, down 120bps YoY, as the energy segment posted a 160bps YoY decline in operating margin to 11% while the environment segment’s margin rose 50bps YoY to 8%. A sharp decline in other income (by 44% YoY) led to a 25% YoY fall in PAT to Rs648mn, 19%/23% below our/consensus estimates, respectively.
Sun TV	Result marginally ahead of Exp Revenue came at 568cr vs Exp 570cr qoq 691cr yoy 509cr EBITDA came at 432cr vs Exp 404cr qoq 409cr yoy 396cr PAT came at 218cr vs exp 208cr qoq 197cr yoy 154cr Share is trading at 15x FY17 earning
Exide Ind	Result marginally ahead of Exp. Sales came at 1736cr v Exp 1779cr qoq 1795cr yoy 1761cr EBITDA came at 257cr vs Exp 247cr qoq 266cr yoy 208cr PAT came at 156cr vs Exp 145cr qoq 155cr yoy 126cr
Ambuja Cement Ltd- Inst	ACCUMULATE-3QCY15 Result Update- Lower Realisation Dents Earnings Yet Again: Ambuja Cements (ACL) reported 3QCY15 numbers in line with ours as well as Bloomberg consensus estimate of Rs3.3bn consensus  at Rs3.37bn, down 14.4% YoY. Revenue at Rs21.1bn declined 4.1% YoY on account of lower realisation. Cement volume grew only 3.2% YoY despite a favourable base of the previous year. Realisation continued to remain weak with a decline of 7.1% YoY as pricing in the northern and western regions of India was weak. We expect pricing to improve for ACL in 4QCY15 on account of an increase in realisation in the northern region. Operating costs per mt declined 5% YoY led by power and fuel costs, which declined 7.6%. EBITDA/mt, as a result, stood at Rs699, down 17% YoY, slightly better than that of ACC but much lower than that of UltraTech Cement. During the quarter, ACL provided Rs400mn as contribution to the DMF (District Mineral Fund) including Rs268mn for the period prior to 30 June 2015. Overall, weak demand and lower realisation hurt earnings yet again for ACL. Another development is that the company’s chief financial officer or CFO, Mr. Sanjeev Churiwala, resigned. We have retained our earnings estimates and Accumulate rating on ACL with a target price of Rs224.
KEC InternationaI	Results marginally ahead of exp. Sales came at 1998.27cr vs Exp 2140cr qoq1858.5cr  vs yoy 2140.12cr . EBITDA came at 154.79cr vs Exp 160cr qoq 140.70cr  vs yoy 120.82cr . EBITDA margin came at 7.74% vs Exp 6.9% qoq 7.6% yoy 5.6% PAT came at 44.12cr Exp 40.75cr vs qoq 30.39cr vs yoy 20.30cr. Share is trading at 12.9 PE FY17 earning. Positive
Jet Airways	Result improved . Company was able to maintain sales and EBITDA in off season as compared to Q1 which is a  seasonal qtr. Sales came at 4855.6  cr vs qoq 4834.5 cr vs yoy  4402.7 cr. EBITDA came at 354.7 cr vs qoq 350.8 cr vs yoy -319.5 cr. Adj PAT came at 133.15  cr vs qoq  93.75 cr vs yoy loss of 235.19 cr.
Syndicate Bank	Result improved NII came at 1594cr vs qoq 1412cr yoy 1422cr Provision came at 440cr vs qoq 481cr yoy 538cr PBP came at 1225cr vs qoq 1039cr yoy 954cr PAT came at 332cr vs qoq 302cr yoy 316cr after providing for exception loss of rs.150cr Gross NPA  came at 7734cr vs qoq 7546cr yoy 6049cr. Slippage figure is not known which will decide the assets quality
Tata Elexi	Result improved Sales came at 264cr vs qoq 243cr yoy 206cr EBITDA came at 62.28cr vs qoq 56cr yoy 41.2cr PAT came at 38.1cr vs qoq 35.7cr yoy 23.64cr Qtr EPS Rs.12.24
Torrent power	Results OK. Sales came at 3060.96cr vs 2935.12cr qoq cr vs yoy 2624.32cr . EBITDA came at 780.05cr vs qoq 768cr  vs yoy 762cr . PAT came at 245.19cr vs qoq 220.65cr vs yoy 174cr. Qtr EPS is Rs.5.1. and share is trading at PE of 9.1x on Q2 annualised earning
Transport corp	Result ok  . Sales came at 555.94 cr vs qoq 548.3 cr vs yoy  556.01cr. EBITDA came at  43.77  cr vs qoq 41.3 cr vs yoy 41.5 cr. PAT came at 23.29 cr vs qoq 18.77  cr vs yoy  21.37cr.
Indian Hume Pipe	Results ok Sales came at 229.2cr vs 212.17cr qoq cr vs yoy 249.9cr . EBITDA came at 23.51cr vs qoq 23.25cr  vs yoy 26.9cr . PAT came at 7.05cr vs qoq 6.32cr vs yoy 11.76cr. Qtr EPS is Rs.2.91
Aditya Birla Money	Result ok
India Nippon	Result ok
Aditya Birla Chemical	Result ok
Dabur India	Result is ok Sales came at Rs 2092 cr vs exp of Rs 2126.5 cr. QoQ Rs 2064 cr YoY Rs 1924 cr EBITDA is Rs 404.5 cr vs exp of Rs 412 cr. QOQ Rs 322 cr YoY rs 351 cr PAT is Rs 341 cr vs exp of Rs 333.5 cr. QoQ rs 261 cr YoY rs 287.5 cr The stock is trading at 36.6x FY16E earnings
Elantas Back	Result ok Sales came at 85.6cr vs qoq 92cr yoy Rs.88cr EBITDA came at 15.7cr vs qoq 18cr yoy 11cr PAT came at 10.75cr vs qoq 12.6cr yoy 7.4cr Qtr EPS is Rs.13.6
JSW Energy	Result inline Sales came at 2491cr vs Exp 2386cr EBITDA came at 998cr vs Exp 1006cr PAT came at 492cr vs Exp 335cr Higher PAT is on account of Exceptional gain of rs.150cr
Shanti Gears	Results good. Sales came at 42.05cr vs 37.16cr qoq cr vs yoy 36.77cr . EBITDA came at 12.15cr vs qoq 4.84cr  vs yoy 4.60cr . PAT came at 5.87cr vs qoq 1.893cr vs yoy 4.60cr. Qtr EPS is Rs.0.72
Elecon Engineering	Results improved. Sales came at 280.70cr vs 253.94cr qoq cr vs yoy 294.31cr. EBITDA came at 35.32cr vs qoq 30.79cr  vs yoy 24.98cr PAT came at 1.40cr vs qoq 4.13cr vs yoy -3.01cr. Qtr EPS is Rs. 0.13. Order book in Gear division was Rs.112cr vs qoq 140cr yoy 118cr
TRF	Results good. Sales came at 266.28cr vs 198.95cr qoq cr vs yoy 246.46cr . EBITDA came at 25.42cr vs qoq -7.28cr  vs yoy 10.48cr . PAT came at profit 9.98cr vs qoq loss of -17cr vs yoy loss of -9.28cr.
Jubilant Ind	Result ok
Hikal	Result ok
JK Tyre	Result ok Sales came at 1791cr vs Exp 1830cr qoq 1759cr yoy 1858cr EBITDA came at 307cr vs Exp 301cr qoq 297cr yoy 232cr EBITDA margin came at 17.1% vs Exp 16.5% qoq 16.9% PAT came at 138cr vs Exp 124cr qoq 118cr yoy 76cr
MCX	Result ok Sales came at 61.25cr vs qoq 56cr yoy 54cr EBITDA came at 18.5cr vs qoq 19cr yoy 19cr PAT came at 31cr vs qoq 25cr yoy 29cr
HT Media	Result below expectation Sales came at 596cr vs Exp 597cr EBITDA came at 62.66cr vs Exp 71.97cr PAT came at 36cr vs Exp 40.6cr
Greenply Industries- Inst	Under Review- 2QFY16 Result Update- Near-term Headwinds likely: On account of weak demand, Greenply Industries (GIL) posted a 2.4% decline in 2QFY16 revenue to Rs4,008mn, 12.3%/9.2% below our/Bloomberg consensus estimates, respectively, following a 7.8% fall in plywood division and a modest 14.5% growth in medium density fibre (MDF) board division. Gross margin rose 351bps to 45.1%, which led to a 125bps improvement in operating margin to 14.1% amid lower raw material costs and higher capacity utilisation at 91.2% compared to 79.1% YoY in MDF division. Operating profit grew by a mere 7.1% to Rs565mn, 7.7%/9.3% below our/Bloomberg consensus estimates, respectively. Following a healthy cash flow and lower debt, interest costs declined 14.7% to Rs78mn. PBT grew  12.9% but because of a higher tax rate of 25.2% against 16.8% YoY, net profit grew only 1.5% to Rs272mn, 9.6%/13.6% below our/Bloomberg consensus estimates, respectively. Net D/E ratio fell from 0.8x to 0.4x YoY. Given the subdued market conditions, the management lowered its earlier revenue guidance of 10%-12% to 5%-6% for FY16, provided market conditions remain stable or else it could worsen further. Despite the current sluggish macro-economic environment, we expect demand growth to revive in FY17.
Amara Raja Batteries	Result marginally below exp
Kirloskar Oil engines	Result  below expectation. Sales came at 584.20cr as against expectation of 616.2 vs 577.16cr qoq cr vs yoy 622.51cr . EBITDA came at 48.27cr vs qoq 52.55cr  vs yoy 63.78cr . PAT came at 35.72cr vs qoq 35.89cr vs yoy 35.33cr. Qtr EPS is Rs.2.5. and share is trading at PE of 27.6x on Q2 annualised earning
Just Dial	Result below Expectation Sales came at 171cr vs Exp 182cr qoq 169cr yoy 147cr EBITDA came at 40cr vs Exp 51cr qoq 48cr yoy 43cr  PAT came at 46cr vs Exp 39cr qoq 33cr yoy 31cr Higher PAT is on account of higher other income
Raymond	Result below expectation Sales came at 1491cr vs Exp1596cr qoq 1109cr yoy 1453cr EBITDA came at 134cr vs 185cr qoq 48cr yoy 172cr PAT came at 41cr vs Exp 70cr qoq loss of 14cr yoy 68cr Result is comparable yoy
Kirloskar Brothers	Result continue to remain weak Sales came at 371.43cr as against expectation of 379 cr vs 366.22cr qoq cr vs yoy 348.96cr EBITDA came at 14.63cr vs qoq 13.53cr  vs yoy 19.68cr . PAT came at -2.25cr vs qoq 7.33cr vs yoy -0.56cr
Shree Digvijay Cement Ltd	Result is declining Sales came at 98.6cr vs qoq 92.4cr yoy 95.2cr EBITDA came at negative 6cr vs qoq 7.1cr yoy negative of 9.3cr PAT came at loss of -13.6cr vs qoq 1.1cr yoy loss of 13.1 cr
EMCO Ltd	Results continue to remain weak. Sales came at 151.60cr vs 142.06cr qoq cr vs yoy 208.26cr . EBITDA came at 17.97cr vs qoq 13.89cr  vs yoy 26.44cr . PAT came at -6.98cr vs qoq -7.12cr vs yoy 1.10cr
Federal Mogul Goetze	Result declining Sales came at 333cr vs qoq 332cr yoy 302cr EBITDA came at 29cr vs qoq 37cr yoy 39cr PAT came at 10.6cr vs qoq 9.8cr yoy 13.20cr
Excel Crop Care	Result declining.
Coromandel Engineering	Result declining. Sales came at 20.48cr vs 48.42cr qoq cr vs yoy 36.402cr . EBITDA came at 0.19cr vs qoq 4.69cr  vs yoy 0.03cr . PAT came at -1.45cr vs qoq 2.05cr vs yoy -3.85cr

 

• Results to be announced (PAT Rs cr)

29-Oct	Sept'14	June'15	Expectation
ADF Foods Ltd.	2.7	0.9	na
Ador Welding Ltd.	20.3	5.6	4.1
Alstom T&D India Ltd.	35.5	19.6	48.8
Astra Microwave Products Ltd.	23.4	4.9	6.8
Bharat Electronics Ltd.	147.0	60.7	156.5
Bharat Forge Ltd.	174.5	195.3	200.5
Bharat Gears Ltd.	-2.9	1.4	na
Colgate-Palmolive (India) Ltd.	129.6	114.3	139.9
Crompton Greaves Ltd.	69.6	16.0	50.8
City Union Bank Ltd.	93.7	111.6	108.9
Dishman Pharmaceuticals & Chemicals Ltd.	33.4	37.8	45.3
Dr. Reddys Laboratories Ltd.	574.1	625.7	636.8
Glenmark Pharmaceuticals Ltd.	165.1	178.3	212.3
Gujarat Pipavav Port Ltd.	89.5	80.4	93.1
Grasim Industries Ltd.	416.4	484.7	433.1
Hindustan Construction Company Ltd.	6.8	8.0	-0.4
Heidelberg Cement India Ltd.	1.6	3.4	-2.4
IFCI Ltd.	173.8	101.5	176.0
JM Financial Ltd.	92.2	72.4	na
Jubilant Life Sciences Ltd.	-94.1	128.1	104.5
LG Balakrishnan & Brothers Ltd.	21.5	9.0	na
MRF Ltd.	316.9	446.8	401.1
Mangalore Refinery & Petrochemicals Ltd.	-951.5	405.9	-240.1
Muthoot Finance Ltd.	170.7	183.2	193.4
Nestle India Ltd.	311.3	-64.4	250.3
Neuland Laboratories Ltd.	5.1	7.3	6.9
NTPC Ltd.	2071.6	2135.4	2026.5
Pokarna Ltd.	2.9	11.8	7.3
Polaris Consulting & Services Ltd.	49.2	38.1	na
Praj Industries Ltd.	24.9	5.2	11.7
Redington (India) Ltd.	86.0	81.2	98.4
RPG Life Sciences Ltd.	-7.4	2.1	na
State Bank Of Travancore	19.2	81.3	na
Sequent Scientific Ltd.	33.6	0.7	na
SKF India Ltd.	58.7	46.6	52.9
Solar Industries (India) Ltd.	32.3	41.4