DAILY NIFTY OUTLOOK, 28TH OCT, 15

Nifty October futures (8244.25)(-19.35):
A small range day opened gap down and moved within a narrow band and nifty future closed in the negative, it closed above the opening rates which breathes hope for the bulls. Open interest studies shows that roll over as well as build up of positions is taking place in the November series.
The level of 8256 is an important resistance which must be taken out for upside momentum. 8280, 8300, 8324, 8375 are important hurdles leading to 8400. The immediate support is around 8230 but the strong support for now is in the 8200-8195 zone and till such time that this region holds on declines, the bulls will continue to hold fort. The critical support is around 8180 and a decisive breach of this region will see the bears returning to the centre stage again leading to panic selling if the 8127 support is also broken.

• Resistance: 8256, 8280, 8300, 8324, 8340, 8375, 8397-8400, 84015, 8447, 8500
• Support: 8230, 8200-8195, 8180, 8150, 8120, 8100, 8085, 8020, 7995, 7960, 7897-7900, 7880, 7820, 7765

Bank October Futures (17839.95) (+21.2):

A gap down open was followed by a steady upswing and Bank nifty future closed the day with modest gains. It took support in the 17744-17710 zone and till this region holds on declines, the long term uptrend will be considered to remain intact. A decisive breach of this support will, however, signal weakness and below it may then move down to test the lower supports of 17700, 17660, 17616, 17590, 17560. The level of 17560 is the critical support and if this is broken decisively, the long term uptrend will be in jeopardy which may lead to fresh panic offloading. On the higher side, 17900 is the immediate resistance but the major hurdle is around 18010 which must be taken out for fresh momentum.

• Resistance: 17860, 17900, 17998-18010, 18109, 18137, 18200, 18295-18300, 18400, 18510, 18560
• Support: 17800-17794, 17744, 17700, 17685, 17600, 17560, 17500-17495, 17440, 17356

DAILY MARKET OUTLOOK, 28TH 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 mildly lower Tuesday, under some pressure from disappointing data, as investors awaited key earnings reports and Wednesday's Fed statement

Dow Jones	17581.4	-41.62	-0.24%
Dow Jones Fut	17519.0	+6.00	+0.03%
Hangseng	23008.4	-134.37	-0.58%
Nikkie	18890.2	113.17	0.60%
SGX Nifty	8227.0	-18.00	-0.22%

 

• Asian stocks followed U.S. shares lower as material companies led declines and investors awaited a Federal Reserve decision on monetary policy.
• Bank of Japan's meeting at the end of the week. Many analysts expect the central bank to introduce further stimulus, 
• Market is expected to open on a negative note and likely to remain range bound during the day.
• SEBI, will come out with new guidelines within a month, for allowing participation of Foreign Portfolio Investors in Indian commodity markets, its chairman U.K. Sinha said.
• CBI registered a case against REI Agro, on the basis of a complaint by a group of bankers. A group led by UCO Bank had said the company had defrauded the banks of Rs 3,815 crore since 2013.
• Jubilant Life Sciences' board will meet on Thursday to consider a proposal to raise about Rs. 1,300 crore through securities.
• Petronet faces Rs. 10,000 cr hit on costly RasGas contract 
• Opto Circuits said its step-down subsidiary in the US has filed for bankruptcy to facilitate debt restructuring.
• Institution Desk- Federal Bank- Management Meet Update- Imminent Improvement In Performance Likely: We had a meeting recently with Mr. Ganesh Sankaran, the new executive director of Federal Bank. Mr. Sankaran, who joined the bank just a month ago, brings in extensive credit underwriting experience from his earlier assignment at HDFC Bank. He has served HDFC Bank for over 17 years and his experience spans across risk and corporate credit divisions. Key highlights of the meeting are: 1) The management looks increasingly confident of increasing its loan book by ~15% in FY16,  2) Higher traction likely in corporate loans/short-term loans, 3) Confident of improvement in asset quality, 4) Stable net interest margin or NIM at ~3.1%-3.2%, and 5) Operating leverage/optimisation  key to improvement in return ratios.

 

 

• Results announced

TVS Motor	Result ahead of Expectation Sales came at 2845cr vs Exp 2819cr EBITDA came at 212cr vs Exp 186cr PAT came at 116cr vs Exp 105cr
Alembic Pharma	Result is above expectations Sales came at Rs 1008 cr vs exp of Rs 830 cr. QoQ Rs 582 cr YoY Rs 546 cr EBITDA came at Rs 376 cr vs exp of Rs 294 cr. QoQ Rs 102 cr YoY Rs 108 cr PAT is Rs 288.5cr vs exp of Rs 188 cr. QoQ Rs 70 cr YoY Rs 77 cr The stock is trading at 23.6x FY16E earnings
Dish TV	Result  marginally ahead of Expectation Sales came at 750cr vs Exp765cr EBITDA came at 255cr vs Exp 245cr PAT came at 87cr vs Exp 55cr
Bharat Bijlee	Result improved
Mahindra Holiday	Result improved Revenue came at 217cr vs qoq 215cr yoy 178cr EBITDA came at 56.7cr vs qoq 52.7 yoy 52.8cr PAT came at 28.9cr vs qoq 25cr yoy 24.7cr
Eimco Elecon	Result improved
Anjani Portland Cement Ltd	Result improved Sales came at 79.1cr vs qoq 87.7cr yoy 62.9cr EBITDA came at 24.1cr vs qoq 22.9cr yoy 13.1cr PAT came at 9.6 cr vs qoq 6.7cr yoy 2.9 cr
Saurashtra Cement	Result improved Sales came at 128cr vs qoq 128.6cr yoy 126cr EBITDA came at 16.12cr vs qoq 16.21cr yoy 7.54cr PAT came at 10.33cr vs qoq 9.25cr yoy 1.93cr
KPR Mill	Standalone textile business has improved though consolidated result remain flat. Stand alone Sales came at 483cr vs qoq 447cr yoy 530cr EBITDA came at 101cr vs qoq 96cr yoy 88cr PAT came at 44cr vs qoq 41cr yoy 29cr
Navin Fluorine	Result  is very good Sales is Rs 150.8 cr vs QoQ Rs 150 cr YoY Rs 124 cr EBITDA is Rs 31.7 cr vs QoQ Rs 25.6 cr YoY Rs 14 cr PAT is Rs 23 cr vs QoQ Rs 18.1 cr YoY Rs 10.1 cr
Strides Arcolab	Result is operationally good Sales came at Rs 374 cr vs exp of Rs 337.6 cr. QoQ Rs 255.7 cr YoY Rs 292.9 cr EBITDA came at Rs 75.3 cr vs exp of Rs 64.8 cr. QoQ Rs 53.3 cr YoY Rs 62.8 cr PAT is Rs 23.4 cr vs exp of Rs 41 cr. QoQ Rs 41.9 cr The stock is trading at 28x FY16E earnings
Manugraph	Result good
Kirloskar Pneumatic	Result good. Sales came at 126.17cr vs 97.64 cr qoq cr vs yoy 91.26cr . EBITDA came at 11.93r vs qoq 4.7cr  vs yoy 2.35cr . PAT came at 7.27cr vs qoq 3.06cr vs yoy 0.02cr. Qtr EPS is Rs.5.66. The stock is trading at PE of 24.0x on Q2 annualized earning
Shasun	Result  is good Sales is Rs 323.3 cr vs QoQ Rs 319 cr YoY Rs 306 cr EBITDA is Rs 41.5 cr vs QoQ Rs 31.4 cr YoY Rs 20.6 cr PAT is Rs 13 cr vs QoQ Rs 3.8 cr YoY Rs 0.3 cr
Coromandal International	Result  inline Sales came at 3552cr vs Exp 3624cr qoq 2162cr yoy 3455cr EBITDA came at 314cr vs Exp 301cr qoq 92cr yoy 347cr PAT came at 173cr vs Exp 154cr qoq 14.5cr yoy 180cr
Axis Bank- Inst	Although loan slippage for Axis Bank in 2QFY16 was lower at 0.8% (Rs5.8bn), it sold two standard power sector accounts to ARC amounting to Rs18.2bn at a heavy loss of 64% (Rs11.7bn). PAT was almost in line with our expectations as it utilised Rs8.5bn from contingency reserve. Advances grew much above industry average at 23%. Deposit growth was lower at 14% with a stable CASA (current account savings account) ratio on a sequential basis. NIM (net interest margin) was flattish sequentially at 3.85%. Net interest income (NII) grew at a decent rate of 15% YoY. Non-interest income grew only 5% on account of lower treasury income of Rs1.7bn as against Rs2.7bn a year ago. Fee income grew at a moderate pace of 14%. Operating costs grew only 7% as the bank was slow on branch expansion. Cost-to-income ratio improved 160bps YoY for the quarter to 40.6%. The bank restructured Rs4.6bn of loans during the quarter. The management retained its guidance on stressed asset addition (excluding accounts sold to an asset reconstruction company or ARC) in FY16 at below the level of stressed asset addition in FY15 of Rs57bn. The management also retained credit cost guidance of 90bps (including only Rs3.4bn provided during the quarter pertaining to accounts sold to the ARC). Factoring in higher provisioning during the quarter, we have cut our ABV estimates for FY16/FY17 by 2% each. We have retained Accumulate rating on Axis Bank with a target price of Rs575 (Rs590 earlier), valuing the stock at 2.4x FY17E P/ABV.
Maruti Suzuki	Result  inline Sales came at 13575cr vs Exp 13959cr qoq 13078cr yoy 11996cr EBITDA came at 2269cr vs Exp 2266cr qoq 2189cr yoy 1521cr PAT came at 1226cr vs Exp 1258cr qoq 1192cr yoy 862cr Maruti Suzuki India will start paying royalty to its parent Suzuki in rupee instead of yen for all new models starting with a compact SUV to be launched early next year. The move, aimed at insulating the company from foreign exchange fluctuations, is likely to result in an average royalty rate of 5 per cent of net sales as compared to 5.6 to 6 per cent for the existing models, which are paid in yen.
Vedanta Limited	Result inline  Sales came at 16350cr vs Exp 16012cr qoq 16952cr yoy 19448cr EBITDA came at 4000cr vs Exp 3755cr qoq 3992cr yoy 6326cr PAT came at 974cr vs Exp 600cr qoq 865cr yoy 1619cr
Tata communication	Result Ok Sales came at 5130cr vs Exp 5259cr qoq 5180cr yoy 5071cr E BITDA came at 796cr vs Exp 788cr qoq 761cr yoy 777cr PAT came at 6.27cr vs Exp loss of 11.10cr qoq loss of 34cr yoy profit of 92cr
PI Industries	Result is ok Sales is Rs 444 cr vs exp of Rs 506 cr. QoQ Rs 552 cr YoY rs 425 cr EBITDA is Rs 85 cr vs exp of Rs 91 cr. QoQ Rs 136 cr YoY rs 72.6 cr PAT is Rs 58 cr vs exp of Rs 58 cr. QoQ Rs 87 cr YoY Rs 49 cr The stock is trading at 31x FY16E earnings
Poly Medicure	Result ok Sales is Rs 99.5 cr vs QoQ Rs 94.5 cr YoY Rs 94 cr EBITDA is Rs 20.7 cr vs QoQ Rs 18 cr YoY rs 23.7 cr PAT is Rs 12.6 cr vs QoQ rs 9.8 cr YoY adj PAT Rs13  cr
Jenburkt Pharma	Result is ok Sales is Rs 25.1 cr vs QoQ Rs 21.8 cr YoY Rs 22.2 cr EBITDA is Rs 5.2 cr vs QoQ Rs 3.6 cr YoY Rs 4.5 cr PAT is Rs 3.4 cr vs QoQ Rs 2.6 cr YoY Rs 3.2 cr
Ceat	Result  marginally below expectation Sales came at 1400cr vs Exp 1449cr qoq 1456cr yoy 1425cr EBITDA came at 202cr vs Exp 229cr qoq 224cr yoy 175cr EBITDA margin declined at 14.42% vs qoq 15.4% even Gross margin increased qoq mainly because of higher other operating expenses. PAT came at 107cr vs qoq 121 yoy 82cr Qtr EPS is Rs.26.55
Thermax	Result below expectation Sales came at 1044cr vs Exp 1221cr qoq 991cr yoy 1181cr EBITDA came at 99.60cr vs Exp 126cr qoq 91cr yoy 122cr EBITDA margin came at 9.50% vs Exp 10.3% PAT Came at 65cr vs Exp 85cr qoq 62cr yoy 86cr  New order booking declined 26% yoy to 810cr in the quarter as compared to 1089cr in last year same quarter. Stock is trading at 31 PE FY16 earning
Lupin	Result is below expectations Sales came at Rs 3178 cr vs exp of Rs 3345 cr. QoQ Rs 3074 cr YoY Rs 3117 cr EBITDA came at Rs 672 cr vs exp of Rs 855 cr. QoQ Rs 817 cr YoY Rs 832.5 cr PAT is Rs 411 cr vs exp of Rs 572.5 cr. QoQ Rs 525 cr YoY Rs 630 cr The stock is trading at 35x FY16E earnings
Nucleus  software	Result declined . Sales came at 84.68  cr vs qoq  84.82 cr vs yoy  86.84 cr. EBITDA came at 1.85 cr vs qoq  4.43 cr vs yoy 15.69 cr. PAT came at 4.54 cr vs qoq  6.79 cr vs yoy 12.85 cr.
Arshiya Ltd	Result continue to remain weak Company reported loss of Rs.101cr in a quarter
Supreme Petro	Result not good Sales came at 637cr vs qoq 676cr yoy 694cr EBITDA came at loss of 18.7cr vs qoq positive 93cr yoy positive 27cr Net Loss came at 25cr vs profit of 63cr yoy profit 11cr

 

• Results to be announced (PAT Rs cr)

 

28-Oct	Sept'14	June'15	Expectation
Amara Raja Batteries Ltd.	100.3	122.1	126.8
Ambuja Cements Ltd.	239.1	226.4	189.3
Dabur India Ltd.	287.5	261.1	332.8
De Nora India Ltd.	1.5	2.4	na
Elecon Engineering Company Ltd.	2.7	4.1	5.0
Excel Crop Care Ltd.	28.6	31.6	23.1
Exide Industries Ltd.	125.8	155.2	144.5
Hikal Ltd.	15.3	1.8	na
HT Media Ltd.	43.9	25.0	40.6
Indian Hume Pipe Company Ltd.	11.8	6.3	9.6
Jet Airways (India) Ltd.	69.8	221.7	na
JK Tyre & Industries Ltd.	76.5	118.1	124.1
JSW Energy Ltd.	318.6	277.5	325.1
Jubilant Industries Ltd.	-20.4	-11.0	na
Just Dial Ltd.	31.5	33.2	38.2
KEC International Ltd.	20.3	30.4	39.6
Kirloskar Brothers Ltd.	-0.6	7.3	1.2
Multi Commodity Exchange Of India Ltd.	29.4	-34.3	30.9
Onmobile Global Ltd.	-1.2	-0.2	0.9
Pidilite Industries Ltd.	138.9	225.5	184.4
Raymond Ltd.	68.1	-13.7	69.8
Sun TV Network Ltd.	154.5	197.3	207.9
Syndicate Bank	315.6	302.0	274.1
Shanthi Gears Ltd.	2.3	1.9	na
Shriram City Union Finance Ltd.	137.8	147.7	154.9
Tata Elxsi Ltd.	23.6	35.7	33.5
Transport Corporation Of India Ltd.	21.4	18.8	23.6
TCI Developers Ltd.	-0.1	0.5	na
Torrent Power Ltd.	23.1	173.5	185.4
TRF Ltd.	-9.3	-17.0	na