NIFTY OUTLOOK

Nifty (8513.50, -68.25, -0.79%)
The index looks very weak. Unless it quickly recovers to levels between 8528 and 8540, there would be no redeeming feature. On the contrary, a fall below 8498 – 8478 range is likely to aggravate the problems of the bulls. A sustained campaign below the 8478-mark would pave the way for a retest of 8410 – 8399 range. In the unlikely event of a strong recovery, we need to see the index getting past 8557 through 8562 potentially strong supply zone. Any rally that fizzles out prior to decisively taking out this range would invite fresh selling by the bears. And a close above 8615 would bring the bulls back on the center stage.

• Most critical levels for the day – 8528 – 8540, its immediate resistance


• Strong resistance: 8557 – 8562


• Major resistance: 8615 – 8640


• Strong support: 8498 – 8478


• Major support: 8410 – 8399

Bank Nifty (18635.85, -229.15, -1.21%)

This index looks even weaker. If it were to fall below the level of 18525 and stay there then much greater weakness could well be felt since large scale selling might just be on the way once the most critical level mentioned above gives way. Any semblance of a sustained recovery could be seen only if it takes out the 18795-mark. Any rally that does not successfully take out the 18768 – 18818 potentially strong supply zone would be a grand invitation to the bears. The bulls would be on the driver’s the day they take out the 19100-mark.

• Most critical levels for the day – 18525, its immediate support


• Strong resistance: 18768 – 18795 - 18818


• Major resistance: 19050 - 19100


• Strong support: 18525 – 18486 - 18411


• Major support: 18299 - 18275

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MARKET OUTLOOK

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 about 1% lower on Friday, despite surprisingly strong Amazon earnings, as signs of slower global growth weighed on sentiment.

Dow Jones	17568.5	-163.4	-0.92%
Dow Futures	17525.0	+2.0	+0.01%
Hangseng	24644.1	-484.2	-1.93%
Nikkie	20394.4	-150.1	-0.73%
SGX Nifty	8500.5	-51.0	-0.60%

 

• Asian stocks fell, after the Dow Jones Industrial Average posted its worst week since January, as investors awaited data on China amid a selloff in commodities.
• Market is expected to open on negative note and likely to witness selling pressure during the day.
• PFC OFS can be subscribed in retail category to take advantage of 5% discount. otherwise PFS share is fairly priced in present scenario. PFC is trading at PE of 5.74 P/BV of 1.06 and ROE of 18.5% as compare to PE of 5.35 P/BV of 1.13 and ROE of 21% of REC.
• Zee looking to enter regional GEC space Co considering Bhojpuri and Malayalam GEC opportunities
• Tata Motors looking to de-risk CV biz by focusing on defence (ET) Tata Motors plans new JLR plant in Poland
• Lupin has acquired TEMMLER PHARMA, a part of the Aenova Group, one of the world’s largest pharmaceutical contract  manufacturers, for an undisclosed amount. Temmler has a fast growing specialty portfolio of 13 products including key CNS products and specialty products that address rare disease areas like Myasthenia Gravis, Huntington disease as well as fast-growing dermatology products for anti-wart treatment.
• Delhi High Court Allows Red FM To Participate In Phase III Auction
• Sequent Shasun JV to buy Lyzka’s veterinary biz
• Cipla has re-negotiated payment terms for acquiring majority stake in Uganda's Quality Chemicals and decided to pay $26 million (Rs 166 crore) upfront to the shareholders of the firm.
• Cyient Limited announced the acquisition of Global Services Engineering Asia, based in Singapore, from Pratt & Whitney Services Pte Limited. This site provides repairs, development and validation for aero gas turbine engine components in support of Pratt & Whitney throughout the region.
• Syngene IPO Note – Subscribe for long term gains - Syngene International Ltd (SIL) is one of the leading India-based contract research organisations (CRO), offering a suite of integrated, end-to-end discovery and development services for novel molecular entities (NMEs) across industrial sectors. It offers service in discovery and development cover multiple domains across small molecules, large molecules, antibody-drug conjugates (ADC) and oligonucleotides. The integrated discovery and development platforms help organisations conduct discovery (from hit to candidate selection), development (including pre-clinical and clinical studies, analytical and bio-analytical evaluation, formulation development and stability studies) and pilot manufacturing (scale-up, pre-clinical and clinical supplies) under one roof. Between FY10-15 SIL’s revenues grew at CAGR of 26.4% while EBIDTA grew at a CAGR of 26.5% and PAT by 42%. We expect it to maintain 20-25% growth going forward. On the valuation front, at the upper price of band of Rs 240-Rs 250, SIL is commanding at PE of 18x of our rough calculations for FY17E. Considering the healthy balance sheet, strong growth and robust profitability, We recommend subscribing the issue for long term gains.

 

• Results Announced

Axis Bank	Result ahead of expectation
Crompton Greaves	result not good sales came 3165cr vs Exp 3494cr EBITDA came at 79cr vs exp 177cr PAT came at 16cr vs exp 74cr
Havells India	result below expectation
ABB India	Result inline Sales came at 1906cr vs Exp 1937cr EBITDA came at Rs.150cr vs Exp 149cr PAT came at 57.45cr Vs Exp 66.6cr
Hitachi Home	result improved Sales came at 704cr vs qoq 489cr yoy 595cr EBITDA came at 83.45cr vs qoq 45.5cr yoy 68.6cr PAT came at 46.52cr vs qoq 24.1cr yoy 43cr.
Artson Eng	result improved
Lumax Auto Technology	result improved. Sales came at 217cr vs qoq 201cr yoy 197cr EBITDA came at 17.7cr vs qoq 14.5cr yoy 16cr PAT came at 8.2cr vs qoq 5.2cr yoy 2.cr
Tata Elxsi	Result good Sales Came at 244cr yoy increase of 28% from 191cr qoq 231cr EBITDA came at 56cr vs yoy 37.7cr qoq 47.39cr PAT came at 35.7cr vs qoq 29.8cr yoy 20.8cr Qtr EPS Rs.11.
Everready Inds.	Result improved Sales came at 348cr vs yoy 323cr qoq 275cr EBITDA came at 37.30cr vs yoy 33.18cr qoq 19.29cr PAT came at 15.90cr vs yoy 10.60cr yoy 5.45cr  Qtr EPS Rs.2.19
Supreme Inds. - Insti	Inventory Gains Lead To Healthy Margins, Retain Accumulate, Downside: 2%, cut TP: Rs617 (Rs643 earlier),19xFY17E EPS of Rs32.4 SIL posted healthy volume growth of 8.4% at 94,141tn following 6.5%/18.1%/5.8%/14.7% volume growth in piping/packaging/industrial/consumer product divisions. With inventory gains at 4.5%-5.0% of sales, better product mix and a higher share of value-added products, operating margin improved 278bps to 20.2%, 438/380bps above our/Bbg esti. SIL generated healthy operating/free cash flow of Rs5.4/3.76bn for FY15 against Rs2.4/1.0bn, in FY14. SIL changed its financial year-end from June to March from FY16, which will increase its year-end working capital needs by ~Rs3bn as June quarter was a lean quarter earlier. In FY15, inventory at Rs5.75bn in March quarter was 23.8% above that of June quarter. We have incorporated these changes and revised our FY16 (9M) and FY17 estimates. With lower input prices coupled with expected recovery in demand, total volume is estimated to grow at a faster pace of 14.9%/13.0% in FY16/17 compared to 1.8%/9.6% in FY14/15. A healthy 31.9% net profit growth in FY17E against a flat CAGR over FY13-FY15 is expected to lend support to SIL’s rich valuation of 19.4x FY17E P/E.
Reliance Inds.	result marginally ahead of exp. Standalone sales came at 65817 vs exp 67800cr EBITDA came at 9307cr vs exp 9098cr PAT came at 6318cr vs exp 6328cr GRM came at $ 10.4 vs qoq $10.10 and yoy $8.7. The Avg Singapore GRM for Q1 was $8.00 which has come down in initial 23 days of July to Avg $5.62. Which may have impact on GRM of Q2
Lumax Industry	result good. Sales came at 315cr vs qoq 306cr yoy 273cr EBITDA came at 26.75cr vs qoq 12.08cr yoy 16.72cr PAT came at 11.36cr vs qoq 2.44cr yoy 4.98cr Qtr EPS came at 12.16
Nitin Spinner	result improved. Sales came at 196cr vs qoq 188cr yoy 133cr EBITDA came at 38cr vs qoq 32cr yoy 22cr PAT came at 12cr vs qoq 12cr yoy 9cr
State Bank of Bikaner and Jaipur	result ok
Kolte Patil	result ok
Agro Tech Food	Result ok. Sales came at 181cr vs qoq 185cr yoy 179cr EBITDA came at11.13cr vs qoq 22.8cr yoy 9.9cr PAT came at 4.59cr vs qoq 14.6cr yoy 5.4cr
Coromandel Engineering	result ok. Sales came at 48.42cr vs yoy 36.16cr qoq 124.69cr EBITDA came at 4.69cr vs yoy negative 1.88cr qoq 25.26cr PAt came at 2.04cr vs yoy negative 5.51cr qoq 17.46cr Qtr EPS 0.62
Deepak Nitrite	result Ok Sales came at 336cr vs qoq 330cr yoy 320cr EbITDA came at 38cr vs qoq 37cr yoy 27.9cr PAT came at 13.3cr vs qoq15.2cr yoy 9.7cr
VIP Ind	result inline. Sales came at 354cr vs Exp 349cr EBITDA came at 39cr vs exp 41cr PAT came at 25cr vs Exp 25.45cr
Relaxo Footware - Insti	Strong result on all fronts Due to Penetration, mkt share gain and strong traction in Sparx brand, net revenue grew by 21.3% to Rs4,536mn. Gross margin improved by 778bps to 66.7% due to lower crude oil price and better product mix, which improved operating margin by 231bps to 15.2%. EBITDA increased by 43.1% to Rs689mn. PAT grew by 55.5% to Rs360mn.
Srikalahasthi Pipe	result improved. Sales came at 256cr vs qoq 301cr yoy 217cr EBITDA came at 62cr vs qoq 57cr yoy 36cr PAT came at 34cr vs qoq 30cr yoy 13cr
Atul Ltd	Result is below expectations Sales is Rs 587.4 cr vs exp of Rs 646.8 cr. QoQ Rs 605.8 cr YoY Rs 636.2 cr EBITDA is Rs 98.4 cr vs exp of Rs 111.1 cr. QoQ Rs 80.7 cr YoY Rs 103.8 cr PAT got a boost from higher other income (8.2 cr vs 1.4 cr Q4/1.5 crQ1FY15) PAT is Rs 60 cr vs exp of Rs 55.8 cr. QoQ Rs 44.9 cr YoY rs 59.8 cr
Visaka Industry	result ok. Sales came at 318cr vs yoy 310cr EBITDA came at 36cr vs yoy 34cr PAT 14cr yoy
Jenburkt Pharma	Result is ok
Uniply	Result declining
TVS Motor	Result below exp Sales came at 2591cr vs exp 2611cr EBITDA came4 at 163cr vs exp 179cr PAT came at 90cr vs exp 100cr
KSB Pump	result declined. Sales came at 198cr vs  qoq 188cr yoy 196cr EBITDA came at 21.83cr vs qoq 12.17 yoy 29.34cr PAT came at 22.22cr vs qoq 6.41cr yoy 22.45cr hiher PAT is on account of Higher Other Income.
Gujarat ambuja Export	result ok. Sales came at 608cr vs qoq 613cr yoy 583cr EBITDA came at 55cr vs qoq 34.14cr yoy 58cr PAT came at 24.85cr vs qoq 20.06cr yoy 29.75cr.
Pfizer	Result is ok Sales is Rs 479 cr vs QoQ Rs 456 cr YoY rs 240 cr EBITDA is Rs 112 cr vs QoQ Rs 124.8 cr YoY Rs 62 cr PAT is Rs 53 cr vs QoQ Rs 42.7 cr YoY rs 46 cr
M&M Fin Services (Consolidated)	result below exp NII stood at 812cr vs 781cr exp, 987cr qoq & 751cr yoy  PBP at 507cr vs 526cr exp, 702cr qoq & 494cr yoy Prov  337cr vs 297cr exp,150cr qoq & 233cr yoy PAT at 107cr vs 217cr exp, 367cr qoq & 169cr yoy
Andhra Bank	Result is Below expectations NII stood at 1157cr vs 1310cr exp, 1371cr qoq & 804cr yoy Non Interest Income at 315cr vs 437cr qoq & 395cr yoy PBP 825at cr vs 982cr exp,1003cr qoq & 626cr yoy Prov  503at cr vs 633cr qoq & 414cr yoy PAT 203at cr vs 245cr exp, 185cr qoq & 107cr yoy Qrtrly EPS 3.36 GNPA  7238cr vs 6877cr qoq at 5.75% vs 5.31% qoq NNPA 3650cr vs 3689cr qoq at 2.99% vs 2.93% qoq
Astec Life	result below expectation After very good growth in Q4 Q1 is a normal quarter with 12% growth yoy. Sales came at 57.22cr vs yoy 92cr EbITDA came at 10.57cr vs yoy 9.0cr yoy 18.9cr PAT came at 2.99cr vs yoy 1.8cr qoq 10cr Qtr EPS 1.38
Ashapura Intimate fashion	result declined qoq
Indian Overseas bank	result not good NII stood 1329at cr vs 1256cr qoq & 1427cr yoy Non Interest Income at 535cr vs, 794cr qoq & 278cr yoy PBP 556at cr vs  1180cr qoq & 686cr yoy Prov  664cr at cr vs 986cr qoq & 299cr yoy PAT at 15cr vs 36cr qoq & 277cr yoy Qrtrly EPS 0.12 GNPA   16451cr vs 14922cr qoq at 9.40% vs 8.33% qoq NNPA 10640cr vs 9813cr qoq at 6.31% vs 5.68% qoq
Geojit BNP paribas	Result declining
Persistent System	result  below expectation. $ revenue came at $78.61 vs exp $79 and qoq $80.03 decline of 1.8%. Rupee revenue came at 500cr vs exp 504cr qoq497cr yoy 435cr EBITDA came at 97cr vs Exp 102cr qoq 100cr yoy 91cr PAT came at 67cr vs exp 74cr qoq 76cr yoy 69cr Qtr EPS Rs.8.5
Bajaj Steel	Result continue to remain weak
Sarda Energy	result declining Sales came at 309cr vs qoq 327cr yoy 362cr EBITDA came at 47.45cr vs qoq 85cr yoy 83cr  PAT came at 24cr vs qoq 6cr yoy 40cr
Bajaj Electronics	result improved. Sales came at 1069cr vs yoy 997cr EBITDA came at negative 5cr vs yoy negative 46cr PAT came at 61cr vs yoy 26cr q1 is a weak qtr for BEL company declared 2:1 bonus
Empire Inds.	result ok

 

• Result to be Announced (Reported PAT Rs cr)

27/7/2015	Jun'14	Mar'15	Exp	NB Insti
Adi Finechem Ltd.	5.2	3.0	na	2.6
Ambuja Cements Ltd.	408.7	317.7	269.2	277.7
Century Enka Ltd.	8.7	1.4	na	na
Century Textiles & Industries Ltd.	66.5	11.8	2.1	na
Coromandel International Ltd.	32.6	68.7	49.9	na
DIC India Ltd.	-10.1	5.7	na	na
Geometric Ltd.	19.2	3.3	7.3	na
Gini Silk Mills Ltd.	0.7	1.6	na	na
Inox Wind Ltd	na	117.9	na	na
Ion Exchange (India) Ltd.	2.9	14.0	10.0	na
Jagran Prakashan Ltd.	55.1	129.7	69.1	na
Jindal Saw Ltd.	54.9	71.1	79.9	na
Just Dial Ltd.	28.1	47.2	34.8	44.2
KEC International Ltd.	11.4	62.9	21.9	14.7
Kirloskar Brothers Ltd.	-19.9	36.0	8.3	na
KPR Mill Ltd.	39.4	50.1	53.5	na
Mahindra CIE Automotive Ltd.	6.5	32.0	75.0	na
MRF Ltd.	230.2	332.6	300.5	na
Info Edge (India) Ltd.	39.8	82.2	49.1	na
OCL India Ltd.	36.2	36.0	29.7	25.8
Orient Refractories Ltd.	12.9	12.9	14.0	na
Subros Ltd.	3.3	7.4	5.0	na
Tech Mahindra Ltd.	630.7	472.0	595.7	na
TFCIL	19.0	11.2	13.8	na
Torrent Pharmaceuticals Ltd.	256.0	130.0	273.8	243.2
TRF Ltd.	-6.2	0.0	na	na
Trident Ltd.	32.3	40.4