MARKET OUTLOOK 17TH APRIL, 2015

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 were little changed, after the Standard & Poor’s 500 Index neared a record, as semiconductors declined on SanDisk Corp. results to offset a rally in Netflix Inc.

Dow Jones	18105.8	-6.8	-0.04%
Dow Futures	18041.0	+19.0	+0.11%
Hangseng	27802.5	+62.8	+0.23%
Nikkie	19785.7	-100.1	-0.50%
SGX Nifty	8716.0	+5.0	+0.06%

 

• Most Asian stocks fell after the regional benchmark index closed Thursday at a seven-year high. Japanese shares slid to pare a third weekly advance
• Market is expected to open on flattish note and likely to remain range bound during the day.
• American private equity fund KKR has sold its entire 2.5% stake in Bharti Infratel
• Sandoz has got USFDA approval for generic Copaxone (sole generic). Natco- Mylan is likely to receive approval soon in a market likely to have 3 players for 2-3 qtrs atleast. Dr Reddys has also filed for the product. Positive for Natco
• Sun Pharmaceutical has inked a pact with Israel's Technion university to develop anti-cancer drugs.

• MRF Limited plans to invests an additional Rs 980 crore to expand the tyre manufacturing plant located in Medak district, near Hyderabad.

• M&M is in the final stages of negotiations to buy Italian auto-design firm Pininfarina SpA

• Government to divest 15% stake in MMTC
• Hitachi is setting up a plant in Chennai for Valve Timing Control Systems.Plant to cost Rs313 Cr
• Skymet expect monsoon to be notmal and earlier than normal date

 

• Results Announced

Gruh Finance	Result below expectation
TCS	TCS result is in line with expectation. Apparently result looks weak on account of one time Rs.2628cr reward to employee, excluding that $revenue came at 3900mn vs exp 3941mn Rupee sales came at 24220cr vs exp 24527 EBITDA came at Rs.6909cr vs exp 6962cr PAT came at 5773cr vs exp 5396cr. Volume growth came at 1.6% Management has indicated NASCOM guidance of growth for industry at 12-14% can be achieved which is lower than FY15 $ revenue growth of 15%. TCS is trading at 21PE of FY16 earning as compared to 18.4PE of Infosys
Indusind Bank - Insti	IndusInd Bank’s 4QFY15 profit beat our estimate by 12%. Its bottom-line grew 25% YoY on the back of a healthy pre-provision profit growth of 18% and reasonable credit costs. Net interest income (NII) grew 18%, driven by a credit growth of 25% and stable net interest margin (NIM) of 3.7%. Non-interest income grew 26%, with higher traction witnessed in distribution fees, investment banking fees and trade and remittance fees, which were up 65%, 41% and 33%, respectively. The cost-to-income ratio improved 110bps sequentially to 46.3%. Loan slippage for the quarter was higher at 2.6%, mainly on account of three standard stress accounts classified as non-performing assets or NPAs and sold to an asset reconstruction company (ARC). Annualised credit costs stood at 49bps for the quarter and 51bps for FY15 as against the bank’s guidance of 60bps. We have increased our FY17 ABV estimate by 3%, factoring in higher NIM and better traction in fee income. We have retained our Buy rating on the stock, increasing our target price on it to Rs1,075 (Rs975 earlier) and valuing it at 4.0x P/ABV FY17E numbers.
Jay Bharat Maruti	Result is declining
Mindtree	Result is in line with expectation $ revenue came at 147.8mn vs exp 147mn. Sales came at Rs.918cr vs exp 917cr EBITDA came at 178cr vs exp 184cr PAT came at Rs.129cr vs exp 133cr. Share is trading at 22x PE FY16 earning which seem costlier.

 

• Result to be Announced (PAT Rs cr)

17-Apr	Mar'14	Dec'14	Expectation	NB Insti
CRISIL Ltd.	68.71	70.79	73.9	81.9
Delta Corp Ltd.	3.1	-0.4	na	na
Agro Tech Foods Ltd.	13.0	9.4	9.1	na
RS Software (India) Ltd.	16.0	17.1	na	na
Reliance Industries Ltd.	5631.0	5085.0	5931.5	na
18-Apr
LIC Housing Finance Ltd	370.02	344.35	390.56	na
Titagarh Wagons Ltd	1.8	9.2	na	na

 

NIFTY OUTLOOK, 17TH APRIL, 2015

Nifty (8706.70, -43.50, -0.50%)
While the fall in the Nifty has just been half a percentage point and the late recovery from sub-8650 level suggested some probable bounce back in today’s session, the index option statistics seem to pour cold water on that since the large number of fresh call writing for 8700 and 8800 strike prices amply indicate that the weakness signs are unlikely to disappear so soon. This coupled with massive bull liquidation in the 8700 and 8800-strike Jan Nifty put options also indicate that the bulls had been on much shaky ground than they had been even a few days back. Unless the range between 8735 and 8740 gets taken out decisively, it would be an uphill task for the bulls to push things up at least from a Nifty centered perspective.

• Most critical levels for the day: 8735 – 8740 (upside) & 8687 – 8669 (downside)


• Strong resistance: 8778 – 8804


• Major resistance: 8849 – 8891


• Strong support: 8623 – 8604


• Major support zone: 8558 – 8523

Bank Nifty (18637.05, -79.25, -0.42%)

Here is a sector index that is not looking very weak it showed even-stevens for warring parties on both sides. If the the range between 18453 and 18410 is ably defended by the bulls then we would see some recovery worth talking about. The above support zone is very critical for the Bank Nifty since any failure to sustain above such range would invite bears to sell again afresh or otherwise. On the way up, 18900 through 19200 range would act as a major resistance zone for now; unless cleared it would nip any recovery attempt in the bud while if the support of 18450 through 18400 gets taken out then the last support, before we see sub-18000 levels, is at 18200. Any major weakness developing now would mean a test of 17600 through 17300 very strong support area.

• Most critical level for the day: 18557


• Strong resistance: 18779 – 18900


• Major resistance: 19050 – 19185


• Strong support: 18453 – 18410


• Major support: 18200 - 17990

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