Indian equity markets surged over 4 per cent higher on Tuesday, in line with their Asian peers.
The S&P BSE Sensex index was up 1,310 points, or 4.75 per cent, at 28,850 levels. IndusInd Bank and Mahindra & Mahindra zoomed 10 per cent each while index hdavyweights ICICI Bank (up 8 per cent), and Kotak Mahindra Bank and HDFC Bank (up 6%) were other top gainers. The Nifty50 index jumped 360 points, 4.5 per cent, higher at 8,440 levels. Nifty Bank index, up 5.5 per cent, was the top sectoral gainer.
In the broader market, the S&P BSE MidCap and SmallCap indexes were also up over 2 per cent each.
GLOBAL CUES
US stocks rocketed higher on Monday, with each of the major indices rallying over 7 per cent. In Asia, Japan's Nikkei was up 2.3 per cent while South Korea's Kospi gained over 1 per cent.
In commodities, Brent crude rose 2 per cent and US crude was up nearly 4 per cent on hopes that the world’s main oil producers including Saudi Arabia and Russia could agree to cut output at a meeting on Thursday.
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09:59 AM
Nomura on M&M
We continue to value MM at a target 12x P/E multiple, based on FY22F EPS (ex-subsidiary dividends). Thus, we value the core auto business at INR272/share and investments at Rs 147/share. We think that during distress, auto sector volumes may continue to disappoint in the short term. However, lock-downs may be lifted earlier in the rural areas, which shoud benefit M&M.
Also, MM’s core auto business, MM+MVML, trades at ~8x / 6x FY21/22F EPS and on P/B it trades at ~0.85x FY20F which is the lowest level ever. We find this quite attractive given MM+MVML’s ROCE of ~22%/24% (FY21/22F) even in the bottom of the cycle, as we estimate that the company will remain profitable.
09:58 AM
Nomura on Dr Lal PathLabs
Dr Lal PathLabs is trading at 36.2x FY21F consensus EPS of Rs 37.0 and 48.4x our FY21F EPS of Rs 27.7. The valuations on consensus estimates are at 85%/9% premium to domestic peers Thyrocare and Metropolis Healthcare, respectively. The average valuation of international peers is 17.9x one-year forward consensus earnings estimates. We expect DLPL to trade at a premium to international peers given its superior longer-term growth profile and higher ROE.
09:57 AM
ICICI Securities on M&M Financial Services
We attended the business update call of M&M Financial Services (MMFS) and remain convinced that the demand recovery in the auto sector has got further
prolonged because of the Covid-19 situation in India.
Important takeaways: 1. Asset quality is likely to deteriorate given the current lockdown and the three-month moratorium on term loans 2. Demand for H&MCVs would come down further but tractors and 2W demand can pick in the coming quarters 3. MMFS has strong liquidity on its balance sheet with which it can comfortably discharge its liabilities and fixed cost obligations for the next six months 4. Rural still remains more resilient and will be the quickest to recover when a semblance of stability comes back. Our SoTP-based valuation leads to a revised target price of Rs 205 (earlier: Rs 365). Upgrade to BUY.
09:56 AM
ICICI Securities upgrades Godrej Properties to Buy
We believe that Godrej Properties GPL with its strong execution track record, healthy balance sheet (net debt of Rs11bn as of December 2019) and counter-cyclical business development strategy will emerge stronger over the medium-term. Hence, we are upgrading our rating to BUY from SELL post the 37% correction in stock price over last three months with a revised target price of Rs721/share (earlier Rs772) factoring in lower sales volumes of 30% each in FY21-22E and trimming our NAV premium to 25% from 30%.
09:48 AM
NEWS ALERT :: L&T Constructions bags order worth Rs 2,500-5,000 cr: BSE filing
>> The project involves the creation of a resilient Cloud based IT infrastructure on Infrastructure as a service (IAAS) model.
>> The project is to be implemented in 18 months followed by 3 years of warranty and 7 years of AMC during which LOT will provide Managed Maintenance Services including SLA monitoring, service impact analysis and root cause analysis for the countrywide Armed Force Next Generation Network
09:42 AM
Market check | Sensex advances 1,300 pts
09:37 AM
CORONAVIRUS UPDATE :: Total cases in India rise to 4,421: Govt
09:29 AM
HCL Tech advances over 6%
09:27 AM
Gujarat Alkalies trades 14% higher
09:26 AM
HDFC Bank gains 5%
The S&P BSE Sensex index was up 1,310 points, or 4.75 per cent, at 28,850 levels. IndusInd Bank and Mahindra & Mahindra zoomed 10 per cent each while index hdavyweights ICICI Bank (up 8 per cent), and Kotak Mahindra Bank and HDFC Bank (up 6%) were other top gainers. The Nifty50 index jumped 360 points, 4.5 per cent, higher at 8,440 levels. Nifty Bank index, up 5.5 per cent, was the top sectoral gainer.
In the broader market, the S&P BSE MidCap and SmallCap indexes were also up over 2 per cent each.
GLOBAL CUES
US stocks rocketed higher on Monday, with each of the major indices rallying over 7 per cent. In Asia, Japan's Nikkei was up 2.3 per cent while South Korea's Kospi gained over 1 per cent.
In commodities, Brent crude rose 2 per cent and US crude was up nearly 4 per cent on hopes that the world’s main oil producers including Saudi Arabia and Russia could agree to cut output at a meeting on Thursday.
CATCH ALL THE LIVE UPDATES
Auto Refresh
09:59 AM
Nomura on M&M
We continue to value MM at a target 12x P/E multiple, based on FY22F EPS (ex-subsidiary dividends). Thus, we value the core auto business at INR272/share and investments at Rs 147/share. We think that during distress, auto sector volumes may continue to disappoint in the short term. However, lock-downs may be lifted earlier in the rural areas, which shoud benefit M&M.
Also, MM’s core auto business, MM+MVML, trades at ~8x / 6x FY21/22F EPS and on P/B it trades at ~0.85x FY20F which is the lowest level ever. We find this quite attractive given MM+MVML’s ROCE of ~22%/24% (FY21/22F) even in the bottom of the cycle, as we estimate that the company will remain profitable.
09:58 AM
Nomura on Dr Lal PathLabs
Dr Lal PathLabs is trading at 36.2x FY21F consensus EPS of Rs 37.0 and 48.4x our FY21F EPS of Rs 27.7. The valuations on consensus estimates are at 85%/9% premium to domestic peers Thyrocare and Metropolis Healthcare, respectively. The average valuation of international peers is 17.9x one-year forward consensus earnings estimates. We expect DLPL to trade at a premium to international peers given its superior longer-term growth profile and higher ROE.
09:57 AM
ICICI Securities on M&M Financial Services
We attended the business update call of M&M Financial Services (MMFS) and remain convinced that the demand recovery in the auto sector has got further
prolonged because of the Covid-19 situation in India.
Important takeaways: 1. Asset quality is likely to deteriorate given the current lockdown and the three-month moratorium on term loans 2. Demand for H&MCVs would come down further but tractors and 2W demand can pick in the coming quarters 3. MMFS has strong liquidity on its balance sheet with which it can comfortably discharge its liabilities and fixed cost obligations for the next six months 4. Rural still remains more resilient and will be the quickest to recover when a semblance of stability comes back. Our SoTP-based valuation leads to a revised target price of Rs 205 (earlier: Rs 365). Upgrade to BUY.
09:56 AM
ICICI Securities upgrades Godrej Properties to Buy
We believe that Godrej Properties GPL with its strong execution track record, healthy balance sheet (net debt of Rs11bn as of December 2019) and counter-cyclical business development strategy will emerge stronger over the medium-term. Hence, we are upgrading our rating to BUY from SELL post the 37% correction in stock price over last three months with a revised target price of Rs721/share (earlier Rs772) factoring in lower sales volumes of 30% each in FY21-22E and trimming our NAV premium to 25% from 30%.
09:48 AM
NEWS ALERT :: L&T Constructions bags order worth Rs 2,500-5,000 cr: BSE filing
>> The project involves the creation of a resilient Cloud based IT infrastructure on Infrastructure as a service (IAAS) model.
>> The project is to be implemented in 18 months followed by 3 years of warranty and 7 years of AMC during which LOT will provide Managed Maintenance Services including SLA monitoring, service impact analysis and root cause analysis for the countrywide Armed Force Next Generation Network
09:42 AM
Market check | Sensex advances 1,300 pts
09:37 AM
CORONAVIRUS UPDATE :: Total cases in India rise to 4,421: Govt
09:29 AM
HCL Tech advances over 6%
09:27 AM
Gujarat Alkalies trades 14% higher
09:26 AM
HDFC Bank gains 5%
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