Share Market Highlights 03 January 2024: Sensex tumbles 535 pts; Nifty settles below 21,550; IT, metal stocks drag

Amber Enterprises India Ltd’s shares were up 0.34 per cent after the company finalised definitive agreements to acquire a majority stake of 60 per cent in Ascent Circuits pvt Ltd. This acquisition was executed through ILJIN Electronics, a subsidiary of the Amber Group.

The acquisition is a move for Amber to fortify its EMS portfolio by increasing local value addition and backward integration into passive components of PCB Assemblies.

Stock markets declined for a second day in a row on Wednesday with benchmark Sensex closing lower by 535 points due to selling in HDFC Bank and IT shares amid weak global trends.

The 30-share BSE Sensex fell by 535.88 points or 0.75 per cent to settle at 71,356.60. During the day, it tumbled 588.51 points or 0.81 per cent to 71,303.97.

The broader Nifty of the National Stock Exchange slipped 148.45 points or 0.69 per cent to 21,517.35.

Adani Total Gas Ltd’s shares were up by 10 per cent after the company announced signing a MOU with Shigan Quantum Technologies Limited to collaborate on decarbonization initiatives. 

The partnership aims to explore retrofitting internal combustion engines for alternative fuels like Compressed Natural Gas and Liquefied Natural Gas, with a specific focus on transportation and mining applications. 

The rupee appreciated 4 paise to close at 83.28 (provisional) against the US dollar on Wednesday, supported by easing crude oil prices and foreign fund inflows.

However, forex traders said the Indian currency remained under pressure amid a negative trend in domestic equities.

At the interbank foreign exchange market, the rupee opened at 83.30 against the greenback.

UltraTech Cement has informed the appoinment of Chandrashekhar Chavan, as Chief Human Resource Officer with effect from February 16, 2024. He will take on the role of Chief Human Resource Officer from April 1, 2024. 

The Board also noted the movement of Ramesh Mitragotri, Chief Human Resource Officer, into another role within the Aditya Birla Group. He will continue in his role with the Company till 31st March, 2024.

Bharat Aluminium Company Limited, a subsidiary of Vedanta Limited, has received an Order from The Office of the Commissioner, Raipur, confirming demand of GST pertaining to FY 2017-18 on account of procedural issue related to transfer of credit of erstwhile taxes to GST regime in terms of relevant provisions of the Central Goods and Services Tax Act, 2017 read with Integrated Goods and Services Tax Act, 2017 (‘GST Law’).

BALCO evaluated the merits of the case and decided to file the appeal with the Appellate Authority within the time limit prescribed under the GST Law. 

Vedanta stock traded at ₹265.45 on the NSE, up by 2.83%.

Zydus Wellness stock trades at ₹1,689.50 on the NSE, up by 0.94%. The company is in receipt of Order under CGST Act, 2017.

GlaxoSmithKline Pharmaceuticals informed the exchanges that the Delhi High Court ruled in favour of the company. It has quashed and set aside the demand of the National Pharmaceutical Pricing Authority (NPPA) raised on the Company vide its letters dated 5th October 2004 and 17th December 2004 respectively. Court has also directed that the Company would be entitled to the refund of the amount deposited along with any interest accrued thereon and the bank guarantee as furnished by the Company vide the previous interim Order of the Court be refunded back to the Company.

Glaxo stock is up 1.06% on the NSE, trading at ₹2,070.65.

Major gainers on the NSE at 3pm:

Bajaj Auto (5.29%), Adani Enterprises (2.65%), ITC (1.74%), Adani Ports (1.61%), Cipla (1.54%)

Major losers:

Hindalco (-3.83%); JSW Steel (-3.44%), LTI Mindtree (-2.90%), Infosys (-2.86%), Wipro(-2.71%)

Stocks advanced on BSE at 3 pm on January 3, 2024, were 2,226 against 1,578 stocks that declined; 119 stocks remain unchanged. Total stocks traded were 3,923. The number of stocks that recorded a 52-week high was 379, and those that hit a 52-week low was 22.

Updater Services has received an order from the office of the Deputy commissioner of Commercial Taxes, for an amount of ₹1,99,57,774 under section 73(9) OF KGST/CGST Acts, read with Rule 142 of the KGST/CGST Rules, 2017 read with sec 20 of the IGST Act,2017. 

Based on the Company’s assessment, the order has been passed without considering the response that we have submitted against the notice. The Company is in the process of exploring all legal options.

UDS stock declined 1.13% on the NSE, trading at ₹314.40.

First Energy 8 Private Limited (FE8PL) has ceased to be a wholly owned step-down subsidiary of Thermax Ltd.

Thermax stock rose 2.27% on the NSE, trading at ₹3,165.95.

CMS Info Systems Ltd.’s shares were up by 0.58 per cent after the company reported a 9.3 per cent year-over-year growth in retail consumption during the first half of FY24, based on an extensive analysis encompassing 11 consumer-facing sectors. The sectors include large format retail, jewellery, FMCG, e-commerce, hospitality, and aviation.

Dr. Reddy’s Laboratories Ltd, along with its subsidiaries, has acquired MenoLabs business, a women’s health and dietary supplement branded portfolio from Amyris, Inc. 

Dr Reddy’s Lab stock inches up by 0.27% on the NSE, trading at ₹5,943.

Gold-loan-focused non-banking financial companies (NBFCs) have maintained a reasonably resilient market share despite intense competition from banks, CRISIL Ratings said. 

Steady market share, support from strong capitalisation, sharp focus on risk management and healthy profitability has meant their credit profiles continue to be stable. 

In FY24 (up to September 2023), the market share of gold loan NBFCs was 61 per cent (62 per cent in FY23) , with Banks accounting for the rest.

Prabhudas Lilladher Metals and Mining weekly report:

Indian benchmark HRC prices (ex-Mumbai) declined 0.7% W-o-W to Rs 54,600/t after staying stable at around Rs 55,000/t for almost six weeks. Spot spreads declined 1% WoW to Rs 18,794/t from Rs 19,061/t due to lower prices. Indian HRC prices continue to trade at a significant discount on import parity basis.

India Ratings and Research (Ind-Ra) has revised upwards its GDP growth estimate for FY24 to 6.7 per cent from 6.2 per cent earlier. 

Adani Total Gas Limited (ATGL) announced the signing of a Memorandum of Understanding (MoU) with Shigan Quantum Technologies Limited (Shigan) that aims at decarbonizing the supply chain by creating an ecosystem which will enable transitioning to cleaner fuels such as CNG and LNG. Under the MoU, both ATGL and Shigan will explore various areas of collaboration. 

ATGL stock jumps 9.29% on the NSE, trading at ₹1,093.85.

Grasim Industries informed that its joint venture AV Terrace Bay Inc, Canada, has undertaken temporary idling of its pulp operations with immediate effect due to prevailing market conditions. The mill will be put into a state of warm idle to facilitate a possible future restart. 

Grasim stock trades at ₹2,088.35 on the NSE, down by 0.62%.

​JTEKT India​ has received a Show Cause Notice from the Office of the Principal Commissioner of Central Goods & Services Tax, Gurugram. The stock surges by 4.88% on the NSE, trading at ₹178.35.

Snowman Logistics has commenced operations at a newly leased multi-temperature-controlled warehouse in Guwahati.

The BSE Sensex fell 331.07 pts or 0.46% to 71,561.41. The NSE Nifty was down 98.75 pts or 0.46% to 21,567.05.

Growington Ventures India Limited’s shares were up 2.09 per cent after the company reported that its wholly-owned subsidiary, Elementures Foodstuff Trading LLC, based in Dubai, UAE, finalised an arrangement with an agri-commodity company in Vietnam for a consistent supply of fresh produce, including Dragon fruits, Coconut, Guava, Lime, and other agricultural products starting from the first quarter of the calendar year 2024.

Ceat Ltd has received order(s) confirming GST demand along with interest and/or penalty have been issued by: 

1. Deputy Commissioner of State Tax, Maharashtra; 2. Additional Commissioner, CGST & Central Excise, Vadodara

Ceat stock rises by 1.12% on the NSE, trading at ₹2,443.50.

Mark Mobius, hailed as the Indiana Jones of emerging market investing, said he was not unduly perturbed about rich valuation multiples being assigned to Indian companies as traditional valuation metrics often overlooked the future growth potential of many of these firms. 

“While the current price to earning ratios may seem high, they primarily reflect past performance and don’t fully capture the prospective rapid growth in earnings, potentially making Indian stocks more attractive in the long term,” Mobius said in a blog post, that also highlighted his month-long trip to India last year covering nine cities.

Investment timing should focus on solidly growing companies, as there are always opportunities to find firms that excel regardless of the market’s overall state, he said.

Mobius said he is often asked about the right time to invest in Indian equities, currently labeled as “overvalued” by some analysts.

For newcomers to the investing world, particularly those unable to research individual stocks, Mobius recommends choosing a well-diversified mutual fund managed by experienced and reputable investment professionals. 

“This approach offers a balanced entry point into the Indian market,” he said.

The month-long trip, added Mobius, had revealed the incredible depth and variety of India’s cultural landscape. “I met many enthusiastic entrepreneurs and software engineers, and was deeply impressed by their positive spirit and enthusiasm to improve their companies and work,” he said.

Arrow Greentech Limited (AGTL) has received a grant for patent titled “Improved Water Soluble Film and method of making the same.” 

The stock inches up by 0.97% on the NSE, trading at ₹426.85.

A PIL filed in February 2023 led to SC directing SEBI’s probe and setting up an expert committee, culminating in the recent directive for SEBI’s investigation completion.

Public equity fund-raising rose 59 per cent to Rs 1.44 lakh crore in CY23, led by 57 mainboard initial public offerings (IPOs) that raised Rs 49,434 crore, and 45 qualified institutional placements (QIPs) that mobilised Rs 54,350 crore, according to primedatabase.com.

The mop-up from QIPs is 363 per cent higher than the Rs 11,743 crore raised in 2022. QIPs were dominated by financial services and engineering companies, with Bajaj Finance raising Rs 8,800 crore, accounting for 16 per cent of the total amount. In addition, the QIPs of Brookfield India Real Estate Trust, a ReIT, and India Grid Trust, an InvIT, raised Rs 2,305 crore and Rs 669 crore, respectively.

Lead futures (January contract) on the Multi Commodity Exchange (MCX) has been in a sideways crawl for nearly two weeks. It has been oscillating in a tight range between ₹182.50 and ₹183.50.

Prior to this horizontal movement, the contract saw a decline. The downswing is expected to be over since the contract has a strong support band between ₹180 and ₹182. We anticipate a bounce in price from the current level or after a dip to ₹180.

IL JIN Electronics (India) Pvt Ltd, material subsidiary of Amber Enterprises, has entered into ‘definitive agreements’ with Ascent Circuits Pvt Ltd (Ascent) for acquiring majority stake in the equity share capital of Ascent. 

Amber Enterprises stock inches up by 0.49% on the NSE, trading at ₹3,121.45.

Shares of Adani group of companies jumped in morning trade on Wednesday, defying a weak trend in the broader equity market, after the Supreme Court ruling that there was no ground to order an investigation by a SIT or other probe agency into allegations against the group.

The Supreme Court on Wednesday said capital market regulator SEBI must conclude its probe within three months.

Adani Energy Solutions zoomed 17.83 per cent, NDTV jumped 11.39 per cent, Adani Total Gas climbed 9.99 per cent, Adani Green Energy soared 9.13 per cent and Adani Enterprises surged 9.11 per cent on the BSE.

Shares of Adani Wilmar went up by 8.52 per cent, Adani Ports climbed 6 per cent, Adani Power (4.99 per cent), Ambuja Cements (3.46 per cent) and ACC 2.96 per cent.

Two of the group firms -- Adani Ports and Ambuja Cements -- also hit their 52-week high levels during the morning trade.

Lotus Eye Hospital and Institute informed the exchange that the NCLT has approved the merger of S.K.D.C. Consultants Limited with its holding company Link In time India Private Limited. 

Lotus Eye Hospital stock rises by 4.92% on the BSE, trading at ₹87.50.

Sukhjit Starch & Chemicals Limited has declared interim dividend of ₹8 per equity share. Record Date for payment has been fixed for 12/01/2024. 

The stock trades at ₹490.85 on the NSE, up by 1.20%.

AU Small Finance Bank, India’s largest SFB, announced its partnership with Mastercard, marking the official launch of the Mastercard Debit Card today. This initiative is specifically designed for the bank’s Corporate Salary customers and is introduced under the theme #Swipe&Save.

Retail Consumption Trends by CMS Info Systems is a macroeconomic indicator of retail purchases based on the cash collected & processed from 52,000+ organized retail touchpoints across India. It provides a view into consumers’ spending trends as seen in FY24 compared to FY23, which included the Cricket World Cup event, festival, and wedding season. The analysis takes a closer look at consumer preferences through the demographic lens, offering trends into consumer behavior in the country by measuring in-store and online retail purchases across various sectors.

In the B2C segment, retail consumption witnessed an annual increase of 9.3% in the key 11 sectors, during the April–September 2023 period. The FMCG and E-commerce sectors experienced an annual increase of 26.2% and 19.4% respectively, during Q2-FY24, reflecting rising consumer demand in these sectors amid easing inflation. The Aviation and Hospitality sectors saw annual growth of 29.7% and 12.8% in Q2-FY24 respectively, reflecting increased demand for travel, driven by large events such as the Cricket World Cup. The jewelry sector saw an annual growth of 7.1%, in contrast to a 4.6% decline in Q2-FY23, suggesting higher spending triggered by the wedding season and endorsing post-pandemic demand bounce-back. The large format retail sector experienced an annual increase of 7.8% in Q2-FY24, driven by factors such as rising incomes, urbanization, and changing consumer preferences.

From a demographic perspective, Metro cities which had grown the fastest from Q2-FY23 to Q1-FY24, were outpaced in H1 FY24 by SURU (semi-urban and rural), which saw the fastest consumption growth of 9.2% YoY, triggered by improved discretionary spending and demonstrating tailwinds in the rural economy.

Hindustan Zinc stock inches up by 0.61% on the NSE, trading at ₹319.25. The company’s mined metal output has registered a rise of 7 per cent to 2,72,000 tonnes in the December quarter on the back of improved mined metal grades and higher ore production. The refined metal production in the third quarter increased 1 per cent to 2,59,000 tonnes over 2,57,000 tonnes in the year-ago period.

India’s forex reserves grew 7.5 per cent in 2023, and are now at a healthy level above $600 billion, helped by FPI and FDI inflows. Other emerging economies, however, present a mixed bag in accretion to reserves.

RailTel Corporation of India Ltd. has received the work order from Rail Vikas Nigam Ltd for data centre hosting & application support services amounting to ₹35,08,09,200 (Excluding Tax) for service period of 3 Years. 

RailTel stock is up by 3.18% on the NSE, trading at ₹365.20. RVNL stock rises by 2.49% on the NSE, trading at ₹185.30.

Rating: ACCUMULATE

Target Price : INR 200

Diversification on a better footing

Non-gold business shaping up along expected lines 

Manappuram Finance (MGFL IN) management’s strategy to improve business share of gold and non-gold portfolios by 50:50 across cycles is underway through diversification and derisking business practices backed by tech integration, cybersecurity, data leverage and an experienced team. The microfinance (MFI) segment with a 26% share is on the verge of a turnaround with operating leverage improvement as a focal point, led by digitization and process automation. The vehicle finance vertical (8% share) is shifting gears with deeper penetration in non-Metros, enhanced OEM tie-ups alongside decentralized decision-making and customer retention measures. With focus on scalability and cross-selling (60-65% of existing gold loan customers), MGFL has built the MSME and allied business (micro home finance & secured personal loans) (7% share of overall) with focus on the high-yielding self-employed segment, in-house sourcing and system-driven controls.

Suman Chowdhury, Chief Economist and Head – Research, Acuité Ratings & Research,

CY2023 has been a special year for the Indian economy when the performance of the economy exceeded expectations. GDP growth was well over 7.0% in two quarters of the year albeit supported by a favourable base. Government capital expenditure did the heavy lifting for the economy, driving core sector activity and demand for commodities such as steel, cement, and coal.

Urban demand has been strong as reflected by a step up in passenger vehicle sales, online food deliveries, airline traffic, and hotel occupancies. On the other hand, there were indications of weaker rural demand due to the El Nino phenomenon and the shortfall in the Kharif crop

CY2024 promises to be an interesting year with a confluence of some tailwinds and headwinds. The resilience in urban demand is one of the primary drivers of the current momentum in the Indian economy albeit there may be some impact of the latest RBI circular which seeks to tighten the sharp growth in consumer lending.

The robust growth of 7.7% in H1FY24 is clearly not sustainable in the second half of the fiscal but there is a likelihood of the overall growth print reaching near 7.0% for FY24, given the momentum that has caught on to the economy.

Nevertheless, one can’t ignore the risks accruing from the weaker agricultural growth, the geo-political risks and the possibility of a deeper global slowdown in CY24. We had revised our growth forecast for FY24 to 6.5% with some upside but we prefer to remain cautious on the growth prospects for FY25 at this stage.

The outlook on the global markets, however, appears better in CY24. The expected reversal in Fed policy stance, India’s inclusion in J P Morgan bond indices, and the slowdown in the developed economies is expected to induce higher capital flows to India unless there are new geo-political risks and surprises in the upcoming Indian election outcomes.

Interest rates in India are set for a gradual albeit back-ended moderation. Let’s hope that the Indian economy will continue to show its resilience despite all the anticipated turbulence.

KP Energy has received new order from ABREL EPC Limited (Aditya Birla group company) for development of Balance of Plant of 86.1MW wind capacity forming part of the wind-solar hybrid power project (comprising of 86.1MW wind and 65MWac Solar) to be connected to existing 140MW power evacuation facility at Fulsar Pooling Sub-station.

The stock trades at ₹739 on the BSE, down by 0.65%.

LTIMindtree, along with Farmers Edge, has launched the Farmers Edge Innovation Lab (FEIL) in Mumbai, an innovation hub, powered by Fairfax Digital Services to redefine agriculture.

Major gainers on the NSE at 12: 

ITC (1.91%); Adani Enterprises (1.55%); BPCL (1.48%); SBI (1.22%); Bharti Airtel (1.07%)

Major losers:

JSW Steel (-3.31%); Hindalco (-2.95%); LTIMindtree (-2.69%); Infosys (-2.26%); Hero Motocorp (-2.21%)

Stocks advanced on BSE at 12 noon on January 3, 2024, were 2,113 against 1,558 stocks that declined; 146 stocks remain unchanged. Total stocks traded were 3,817. The number of stocks that recorded a 52-week high was 323, and those that hit a 52-week low was 15.

Bharat Road Network (18.62%)

Aarey Drugs & Pharmaceuticals (15.66%)

Max India (11.30%)

The Sandesh (11.03%)

Airo Lam (10.90%)

Nucleus Software Ltd’s shares were up by 1.13 per cent after the company was given the “Most Innovative Use of Process Automation: Most Innovative Project” Award by IBSi Global Fintech Innovation Awards 2023. 

The recognition is for the implementation of FinnOne Neo, Nucleus Software’s advanced digital lending platform, in collaboration with Mahindra Rural Housing Finance Ltd The project, covering Lines of Businesses (LOBs) such as Home Loan, Loan Against Property, and Personal Finance, introduced modules like FinnOne Neo Customer Acquisition System (CAS), Loan Management System (LMS), Collateral Management System (CMS), and FinnOne Neo mCAS (mobility application) for Sourcing Verification.

Global steel prices will likely remain subdued in 2024 despite a modest recovery in Chinese rates in the second half of 2023.

Depressed prices, especially in major markets other than China, will keep a leash on global average prices, said research agency BMI, a unit of Fitch Solutions.

Tamilnadu Petroproducts has resumed the operations of Linear Alkyl Benzene (LAB) manufacturing unit on January 2. 2024 (late hours). With this resumption of LAB unit, the Company have restored its entire plant operations, it said in a regulatory filing. 

The stock trades at ₹100.15 on the NSE, down by 0.30%.

Indian sugar production between October 1 and December 31 dropped 7.6 per cent compared to the previous year.

Lower production in Maharashtra and Karnataka, key sugar-producing states, contributed to the decline.

Maharashtra’s sugar production fell from 4.74 million tonne to 3.82 million tonne, while that of Karnataka dropped 10 per cent to 2.4 million tonne.

Uttar Pradesh saw a 12 per cent increase in sugar production to 3.5 million tonne.

India’s sugar output for the current crop year is expected to be lower than consumption for the first time in seven years.

Weak rains and lower plantings may lead to India importing sugar in the following year.

India has allowed sugar mills to divert up to 1.7 million tonne of sugar for ethanol production.

India is likely to ban sugar exports, the first restriction since 2016, due to concerns about food inflation and upcoming elections.

GAIL and TruAlt Bioenergy has announced $72 million investment through CBG Joint Venture - JV to set up 10 plants aiming at over 33 Million kgs production of CBG, nearly 20 million kgs of Solid Fermented Organic Manure (SFOM) and over 30 million kgs of Liquid Fermented Organic Manure (LFOM) per annum. 

GAIL stock trades at ₹163.35 on the NSE, down by 0.43%.

Ambuja Cements has received order from the Assistant Commissioner of State Tax, Ropar, Punjab levying penalty of ₹28,76,095 and from Assistant Commissioner, CGST, Sankrail, West Bengal levying penalty of ₹6,10,877 passed under section 73 of Central Goods and Services Tax (CGST) Act, 2017. The Company is taking appropriate steps to appeal against the orders imposing the penalty before the appropriate authority.

The company’s stock trades at ₹536.15 on the NSE, up by 0.99%.

The HSBC India Purchasing Managers’ Index (PMI) reported a slowdown in the manufacturing sector in December, dropping to an 18-month low of 54.9, down from November’s 56. Despite this dip, the sector remains in expansion mode. According to Pranjul Bhandari, Chief India Economist at HSBC, while growth in output and new orders softened, future output index increased. This index, a leading indicator, is compiled from responses by around 400 manufacturers, indicating sector performance ahead of official data release. With a 15% share in Gross Value Added (GVA) and significant employment contribution, manufacturing’s steady expansion despite the slowdown indicates a positive year-ahead outlook.

Securekloud Technologies Ltd’s shares were up 1.48 per cent after the company’s step-down subsidiary, Healthcare Triangle Inc., announced the completion of a $2 million private placement debt offering.

Major gainers on the BSE at 11 am:

Adani Energy (10.19%)

Reliance Infra (9.43%)

Alox Textiles (8.47%)

ATGL (7.94%)

Reliance Power (7.89%)

Major losers:

3M India (-4.85%)

National Aluminium (-4.82%)

Mphasis (-3.52%)

JSW Steel (-3.44%)

Dmart (-3.24%)

MOIL stock rises by 1.54% on the NSE, trading at ₹320.65. The company had registered production of Manganese (Mn) ore at 1.85 lakh MT in December, 2023, which is 31% higher y-o-y.

Vodafone Idea informed the exchange about the resignation of P. Balaji, Chief Regulatory & Corporate Affairs Officer of the Company. 

The company’s stock is up by 1.25% on the NSE, trading at ₹16.25

Bank Nifty opened today’s session slightly higher at 47,796.30 versus yesterday’s close of 47,761.65. The index is now hovering around 47,640, down 0.25 per cent.

Within the index, six stocks are in the green whereas the other six are down after the initial hour of trade. Bandhan Bank, up five per cent, is the top gainer whereas Punjab National Bank, down 1.1 per cent, is the top loser.

The Supreme Court has refuses SIT probe into Adani-Hindenburg row. The apex court endorsed the SEBI probe, per a report by Live Law. A Bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra pronounced its verdict.

According to Reuters, the court directed SEBI to complete its investigation into the Adani group within three months

The Chief Justice of India said, “Reliance on newspaper reports and third party organisations to question the statutory regulator does not inspire confidence. They can be treated as inputs but not conclusive evidence to doubt SEBI probe.”

“The Govt of India and the SEBI to look into if there is any infraction of law by the Hindenburg report on short selling and if so, take action in accordance with law, the CJI said.

Chief Justice DY Chandrachud further observed that the power to transfer investigation must be exercised in exceptional circumstances. Such powers cannot be exercised in the absence of cogent justifications, per the Live Law report.

The BSE Sensex fell 334.87 pts or 0.47% to 71,557.61. The NSE Nifty was down 98.35 pts or 0.45% to 21,567.45. 

Top losers of Nifty IT stocks:

Mphasis (-3.10%)

Coforge (-2.84%)

LTI Mindtree (-2.72%)

Wipro (-2.60%)

Infosys (-2.31%)

​Crude oil​ futures traded marginally lower on Wednesday morning ​after losing more than 1.5 per cent on Tuesday​. There was pressure on risk assets in the market despite the increased tensions in the Red Sea region.

Mold-Tek Packaging Ltd informed the exchange about the inauguration of a new unit situated at Panipat, Haryana, India, today. 

Commercial production is set to commence on or before March 31, 2024.

The company’s stock inches up by 0.84% on the NSE, trading at ₹933.80.

WiseX, India’s leading Neo-Realty investments platform, today announced its hiring plans for 2024. With an aim to continue its mission to revolutionize alternative investment space in India, WiseX is looking to triple its workforce across several functions and levels in Bangalore and Delhi.

Pidilite Industries has received order from the Assistant Commissioner of State Tax, Royapettah, Chennai, Tamil Nadu imposing penalty of ₹6,57,640 under applicable provisions of the Central Goods and Service Tax Act, 2017. GST department has levied penalty of for the disallowance of ITC availed as the same is not appearing in GSTR-2A. 

The Company reasonably expects a favourable outcome at the appellate level, it said in a regulatory filing. 

The stock trades at ₹2,730.55 on the NSE, down by 0.26%.

NSE nifty was down by 0.39 per cent or 85.10 to 21,578.70 points, while the BSE sensex was at 71,548 down by 0.47 per cent or 337.11 points.

Nifty 50 continues to trade lower. It is currently trading at 21,588, down 0.36 per cent. Read more here.

V2 Retail reported that its standalone revenue from operations for the quarter ended (QEI December 31, 2023 stood at ₹373.73 crore. The stock rises by 4.99% on the NSE, trading at ₹346.90.

Adani group stocks opened higher on Wednesday ahead of the Supreme Court verdict on a batch of petitions on the Adani-Hindenburg row over allegations of stock price manipulation by the Indian corporate giant.

A bench comprising Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra will deliver the judgement at 10:30 AM on as many as four petitions, says a PTI report.

IG Petrochemicals Ltd (IGPL), serving as the flagship company within the Dhanuka Group, is the largest manufacturer of Phthalic Anhydride (PAN) in India. The company is one of the most cost-efficient producers of PAN globally.

PAN is a downstream product derived from Orthoxylene (OX), a fundamental petrochemical. Functioning as a versatile intermediate in organic chemistry, PAN plays a pivotal role in the production of Plasticizers, Unsaturated Polyester Resins, Alkyl Resins, and Polyols. Presently, the spread between PAN and OX has narrowed from its decadal average of $150-200 per MT to $90 per MT.

Zomato has raised its platform fee for food delivery services by 33 per cent, hiking it from ₹3 to ₹4 per order in key markets effective January 1, 2024. It started levying a convenience fee of ₹2 per order in August 2023, which subsequently rose to ₹3 per order by end of August.

The resultant convenience fee (two months) has been one of the drivers of growth of 60bp q-o-q and 220 bps y-o-y in the take rate (19.4 per cent, excluding delivery charges) in Q2-FY24. The food delivery adjusted revenue too grew 21.8 per cent y-o-y in Q2-FY24 vs 18.5 per cent y-o-y in Q1-FY24.

Tata Consumer Products Limited (TCPL) will merge its subsidiary Tata Coffee Limited (TCL) with itself via share issuance by January 15 ^th—the record date. With this, TCPL moves one step closer to realising its aim of being a large integrated FMCG company.

Prior to the current move to consolidate operations, TCPL had been consolidating Tata Coffee’s financials. This will remove redundancy in management structure, benefit both entities from market reach of each other and eliminate minority interest in TCL. 

Bank of Maharashtra stock rises by 1.54% on the NSE, trading at ₹46.15. The bank recorded total deposits at ₹2,45,738 crore in December 2023, as against ₹2,08,436 crore in December 2022.

Anand James, Chief Market Strategist at Geojit Financial Services, on Nifty outlook:

The anticipated slide towards 21420/370 stopped midway yesterday, and effected a reversal move strong enough to take away much of the downside momentum. So, it appears, the Nifty will start the day with a neutral bias, or even attempt to push higher, as long as above 21645. However, favoured view expects bears to regroup, as long upswings are held below 21693 or 21740

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“Market has turned highly volatile with profit booking triggered by high valuations. Even DIIs who have been consistent buyers are booking profits. Buying on dips also is happening simultaneously. These twin moves of profit booking and dip buying will keep the market highly volatile in the near-term. An important trend in the market is the renewed buying in pharmaceuticals. Further buying can be expected in this segment. The Supreme Court judgement on the Adani- Hindenberg issue expected this morning will have a sentimental impact on the Adani stocks in particular and the overall market in general.

Long-term investors can buy the fairly-valued largecap private banking stocks which have the potential to outperform the Nifty this year.”

Major gainers on the NSE at 9:30 am:

Adani Enterprises (4.49%); Adani Ports (2.83%); Bajaj Finserv (0.97%); ITC (0.90%); Eicher Motors (0.64%)

Major losers: JSW Steel (-2.33%); Tata Steel (-1.97%); Hindalco (-1.94%); Wipro (-1.75%); Infosys (-1.59%)

Glenmark Pharma: Company to Launch Biosimilar of Popular Anti-Diabetic Drug, Liraglutide, in India. Glenmark stock up by 0.45% on the NSE, trading at ₹892.80.

Tata Chemicals has received orders from (i) Office of the Assistant Commissioner of CGST and Central Excise, Maharashtra and (ii) Assistant Commissioner (ST) Tamil Nadu, levying a penalty of ₹1,52,46,868 and ₹25,27,316 respectively, under Central Goods and Services Tax Act, 2017 (CGST Act). The stock down by 1.47% on the NSE, trading at ₹1,105.80.

Cipla - Top Pick 

Outperform - Sun, Cipla, Biocon, & Gland 

Market Perform - DRL, Lupin, Aurobindo, & Alkem 

Underperform - Divis & Abbott 

2024 is possibly a year to take a breather 

Don’t see significant catalysts

Like Axis, ICICI, IIB, HDFB & SBI 

Vals attractive for Growth & ROE

Top picks - L&T, Siemens, Thermax & KEI 

Operating leverage surprise should continue in 2024

EW, TP Rs 165

Loan growth moderated while customer deposits continued to do well. 

Gross loan growth was 3.3% QoQ (18.4% YoY) vs. +5% QoQ last qtr 

Customer deposits grew 3.9% QoQ (+18% YoY). 

Overall deposit growth was lower at 2.9% QoQ 

OW, TP Rs 970 

India Ratings upgraded Co’s NCD rating to IND AA + from IND AA with a stable outlook 

See this development as +ve for growth & profitability – it could help improve both availability & cost of borrowing, thereby benefiting loan spreads & loan growth

EW, TP Rs 285

Disbursements were -7.5% MoM (+5% YoY), 3% below MSe. 

Gross assets rose 25% YoY (+0.3% MoM) 

Have assumed higher growth (15% YoY) in F4Q24, so if disbursements do not pick up, there could be risks to our AUM forecast.

Hold, TP Rs 295 

For 3Q, AUM grew by 25%YoY (3% QoQ) to Rs969bn, tad below est. 

Disbursements grew 7% YoY in 3Q 

Collection eff. was steady YoY at 98% in Dec-23 

At 1.8x FY25E core BV, risk/reward balanced given 12-14% ROE outlook over FY24-26E

Sell, TP Rs 3650

3QFY24 update: Growth moderates further, despite favorable festive timing 

Store expansion has also slowed significantly in FY24

Buy, TP Rs 4600 

3QFY24 sales growth declined sequentially to c17% yoy; throughput improved, but remained below pre COVID-19 levels 

Five stores were opened in 3Q (17 so far in FY24) taking overall stores count to 341; still a pedestrian pace 

TP Rs 4471

Operational metrics improve further, pace of store additions needs to pick up 

Standalone 3Q revenue of Rs132bn was up 17% YoY (+8% QoQ), led by an 11% increase in store count, on average 

Estimate that implied SSSG was 7%.

In December 2023, Adani Ports and Special Economic Zone Ltd (APSEZ) handled 35.65 MMT of cargo volumes, resulting in a strong 42% year-on-year (YoY) increase. Dry bulk cargo handling was up 63% while handling of containers increased by over 28% on a YoY basis. For the quarter ended December, APSEZ handled around 109 MMT of overall cargo, with around 106 MMT contributed by our domestic ports portfolio. In the initial nine months of FY 24, APSEZ managed around 311 MMT of total cargo, which is a healthy 23% YoY growth.

Crude oil futures traded marginally lower on Wednesday morning after losing more than 1.5 per cent on Tuesday. There was pressure on risk assets in the market despite the increased tensions in Red Sea region. At 9.22 am on Wednesday, March Brent oil futures were at $75.888, down by 0.01 per cent; and February crude oil futures on WTI (West Texas Intermediate) were at $70.37, down by 0.01 per cent. January crude oil futures were trading at ₹5883 on Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning against the previous close of ₹5943, down by 1.01 per cent; and February futures were trading at ₹5932 as against the previous close of ₹5989, down by 0.95 per cent.

Indian benchmark indices, namely Sensex and Nifty, initiated the day with weakness on Wednesday, influenced by frail global cues. The 30-share BSE Sensex witnessed a decline of 251.5 points, opening at 71,640.98. 

Similarly, the NSE Nifty dropped 30.30 points, marking an early trade at 21,635.50. Analysts highlighted the necessity for fresh catalysts in both global and domestic markets, noting that prevailing positives have already been factored in.

The indices witnessed some pullback in Tuesday’s sessions as the IT and the banking heavyweights witnessed some selling pressure, said Ruchit Jain, Lead Research, 5paisa.com. However, the overall market was not very negative and certain sectors such as Pharma and Oil & Gas continued their upmove, he said.

“The overall data from the FIIs remain positive with minor unwinding seen, while in the options segment the put writers in the index had to cover their positions,” he added.

Mandar Bhojane, Equity Research Analyst, Choice Broking, said: “Analysing Open Interest (OI) data, the highest OI on the call side is noted at the 21,800 level, followed by the 22,000 strike prices. On the put side, the highest OI is observed at the 21,500 strike price. This data provides insights into the levels where options traders have the greatest exposure.”

Profit taking in banking, IT, auto and realty stocks took a toll on the markets, as expensive valuations prompted investors to pare their holdings, said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

“Besides, the ongoing conflict in the Red Sea has been making investors jittery as any flare-up in violence could trigger an upsurge in oil prices and weigh on the economy. The biggest negative catalyst: COVID-19 sub-variant JN.1 cases have seen a surge throughout India. Strictly speaking, if the last two days’ trading action on Dalal Street is any indication, then volatility could be seen going ahead,” he cautioned.

Avdhut Bagkar, a Technical and Derivatives Analyst at StoxBox, observed global markets declining on Tuesday, following a similar trend seen at the close of 2023. US markets witnessed weakness, notably in technology stocks, reflecting a pullback after recent strength. The Nasdaq Composite and S&P500 tumbled on the year’s first trading day. Asia anticipates India’s factory activity data while monitoring escalating tensions in the Red Sea after Iran deployed a destroyer. RBI may announce a new 10-year benchmark bond soon. Oil prices fluctuated due to Red Sea tensions, while gold prices rose, expecting potential US Fed rate cuts. Additionally, the Supreme Court prepares to announce its judgment on petitions involving Adani Group allegations. Sensex and Nifty anticipate a negative start on Wednesday after a lower low marked a distribution day in the recent pullback rally.

Election Sound Bites to Keep Stocks Higher 2023 saw earnings upgrades for most industrial companies. Order flow growth YoY slowed for some but was in double digits. Operating leverage surprise should continue in 2024. Upcoming budget signalling some govt capex growth slowdown is a potential negative, but indigenisation focus and PSU/pvt sector driven industrial/power capex should help stocks. 8 of our 10 covered companies are Buy-rated, except Cummins and BHEL.

Top picks - L&T, Siemens, Thermax and KEI.

While initial expectations during the Q2FY24 results season and initial festive channel checks pointed to optimism both on underlying demand revival and one-off factors—favourable base, festive shift tailwind—the quarter does not seem to be showing any improvement in sentiment/performance. This also poses a larger question on when and how revival will play out given the festive trigger is behind.

Key highlights: i) Trent is expected to sustain outperformance. ii) QSR companies’ SSSG would see no major sequential pickup despite a favourable base. iii) Jewellery demand is stable and remains an exception. Overall, top picks remain Sapphire Foods, Trent and RBA; negative on Page Industries, Bata India and DMart.

Nuvama Institutional Equities has initiated BUYs for all Indian listed REITs - Embassy REIT, Mindspace REIT, Brookfield REIT and Nexus REIT. The firm said that the worst seems to be over for the office space in India and it has forecast 10-13 per cent growth in net operating income for the three office REITs during the years FY24 to FY27. For Nexus it has forecast NOI annual growth of 8% during the same period, saying that the retail consumption is likely a secular growth story.

Avdhut Bagkar Technical and Derivatives Analyst, StoxBox.

On the global front, Stocks moved mostly lower during trading on Tuesday, extending the pullback seen in the final trading session of 2023. The weakness in the US’ broader markets came as some traders continued to cash in on recent strength, particularly among technology stocks. Taking cues from Wall Street, the Nasdaq Composite and the S&P500 indexes tumble on the first trading day of the year. Investors in Asia await India’s factory activity data from S&P Global for December, while oil prices will also be closely watched following Iran’s deployment of a destroyer to the Red Sea that has ratcheted up tensions in the region. Further, RBI is likely to announce a new 10-year benchmark bond early next week or on January 8. On the commodity front, Oil prices were volatile today after Iran dispatched a warship to the Red Sea, as the situation remains tense in the critical waterway for global shipments that has seen vessels attacked by Yemen’s Houthi rebels. Meanwhile, Gold prices gained today, boosted by expectations of an easing of monetary policy by the US Federal Reserve in 2024 as investors look forward to a slew of economic data this week that could shed more light on the timing of rate cuts. In the major development, Supreme Court will pronounce judgement on a batch of petitions seeking court-monitored investigation into the allegations made by made by the US-based Hindenburg Research against the Adani group of companies regarding violations of the stock market. Benchmark indices Sensex and Nifty are eyeing a negative start to Wednesday’s trade in line with global market losses this morning.

The benchmark index opened with selling pressure to mark the day’s low of 21555 in the opening hour, however, it managed to generate modest buying interest and recovered 100 points to close marginally above 21660. With this it marked the first lower low in the recent pullback rally making it a distribution day. The index is anticipated to invite further selling pressure on closing below the support of 21590

INDIAN LINK CHAIN MANUFACTURES LTD.

Stock Split From Rs.100/- to Rs.10

Nuvama Institutional Equities has retained its ‘buy’ rating on Sterling and Wilson Renewable Energy, and raised its 12-month target price for the stock to Rs 620. The target price revision is led by a 120 basis point cut in the weighted average cost of capital as the recent successful QIP fund raise of Rs 1500 crore has tipped the balance sheet into cash.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd

“On the second trading day of 2024, Nifty and Bank Nifty experienced uneasiness marked by profit-taking, driven by a surge in COVID-19 sub-variant JN.1 cases in India. Described as a day of “volatility” on Dalal Street, the overbought technical conditions triggered panic among Nifty Bulls after it reached a new all-time high at 21,834.35. Buzzing stocks included DIVISLABS, ADANIPORTS, and SUNPHARMA as top gainers, while EICHERMOT, M&M, and ULTRACEMCO were the leading losers. Key indicators, including Nifty PCR and INDIA VIX, reflected market dynamics. Looking ahead, the benchmark may consolidate with Nifty’s support at 21487 being a critical level, and aggressive upside targets at 22000 from a technical perspective.”

Spot LNG prices have corrected by over 30% in the past 1-2 months to USD11-12/mmbtu currently, as the ongoing winter season peaks, with no major disruptions and the near-to-medium term supply outlook looking comfortable, as per our checks. Major spot LNG plays in our coverage universe are Gujarat State Petronet (GSPL), Gujarat Gas (GUJGA) and Petronet LNG (PLNG), which tend to benefit from lower rates. GSPL’s volumes can see fillip from sectors like power, refinery & industries, while GUJGA’s spreads are also likely to improve (as propane remains steady in Jan’24). PLNG’s tolling volumes can see an uptick, with higher demand for spot gas. We, however, note that JKM futures currently seems to bottom out at USD11/mmbtu in this cycle and it would be difficult to estimate the extent of any further decline in spot prices. Oil price volatility also persists, with China outlook still unclear, which poses a risk to propane prices as well. We hence maintain REDUCE on GUJGA with TP of Rs440, on expensive valuations. We uphold our constructive view on GSPL (BUY, with TP of Rs335/sh), as upcoming tariff clarity is a key trigger and, given GSPL’s healthy capex, the actual cut could be sizably lower than our 30% assumption. We reiterate BUY on PLNG (TP: Rs245), wherein the QatarGas contract renewal (potentially under favorable terms) could be a material positive trigger

We expect pure play engineering research & development (ER&D) companies to benefit from the likely acceleration in ER&D spend, growing digitization, and rising share of sourcing. ER&D spend has a high correlation with industry cycles and is thus prone to macro factors in the short term. But many industries like Auto are undergoing significant technology transition/disruptions that are driving higher spends on ER&D—this would negate any near-term weakness in other segments due to macro factors. Developed economies are expected to face shortage of skilled talent which will drive sustainable opportunities and sourcing from the engineering talent-rich Indian market. Nifty IT index inched up ~8%/11% in the last 1M/3M, on hopes of higher rate cuts in USA in CY24. ER&D stocks also saw a similar/better upmove which may cap any near-term upside; however, improving medium-term growth outlook would support higher valuations, in our view. We initiate coverage on Cyient with a BUY recommendation and TP of Rs2,700/share, and on LTTS with a REDUCE and TP of Rs5,050/share

We expect Q3 to be another robust quarter for hotels, with 10-25% YoY revenue growth for our covered companies. We see the strongest growth for Chalet Hotels, which benefits from capacity expansion and ARR growth. Chalet will also see its margin increasing YoY on operating leverage benefit. Lemon Tree would benefit from the start of Aurika Mumbai. Indian Hotels is expected to see consolidated revenue growth of ~10% YoY, with RevPAR reporting ~11% YoY growth for domestic hotels. Occupancies and ADR remain elevated. Our TP for all three names has increased due to roll forward by a quarter and increased multiple amid continued strength in the industry. We maintain ADD on all three names, aided by supportive macros.

FTA picking up from below pre-COVID levels; domestic demand to stay strong

As per HVS Anarock, RevPAR growth was >27% YoY in October and >6% YoY in November. Though the hotel occupancy rate fell 600bps YoY in November, primarily due to Diwali (which was in October in CY22), underlying demand in the industry remained strong. Domestic air travel continues to exhibit strength with the number of passengers increasing 9% YoY in Nov-23 to 12.7mn. For Jan-Nov 2023, domestic air passenger travel increased 25% YoY. FTA increased 18% YoY in Sep-23 and was up 20% YoY in Oct-23. FTA in India, as of YTDCY23, still stands below pre-COVID levels by ~16%. However, tourist arrival is picking up on a YoY basis. This indicates further scope for growth in FTA, which can support demand for hotels. Moreover, ARR levels are expected to pick up in Q4FY24, as business travel again resumes, following the holiday season. Q4 would also have weddings and conferences, which would support demand.

Q3 preview: Chalet to deliver strong Q3; Lemon Tree to benefit from Aurika

Chalet: We expect a strong Q3 for Chalet with RevPAR registering growth in the high teens YoY. We expect strong revenue growth of >25% YoY (>17% QoQ) for Chalet, aided by (i) robust ADR growth and occupancy in existing properties; and (ii) property expansion. Moreover, we expect margins to improve 500bps YoY (450 bps QoQ) to 40.4% on operating leverage benefit. Chalet can continue to benefit as business travel picks up in Q4.

Lemon Tree: We expect revenue to increase 17.4% YoY/20.7% QoQ, supported by the start of Aurika Mumbai in Q3, though this can be a drag on occupancy. We expect EBITDA margin to decline 380bps YoY (>550bps QoQ) to 50.3% due to higher costs YoY. We remain positive on LTH’s earnings and margin trajectory, prompted by: i) the opening of Aurika, Mumbai Skycity, in Oct-2023; and ii) further addition in the managed and franchise portfolios.

IHCL: For IHCL, we expect ~10% YoY revenue growth in Q3FY24. We expect consolidated margins to be flat at 35.8% in Q3 (>37bps QoQ; >1100bps QoQ).

Our TP has increased due to roll forward of estimates by a quarter to December and an increase in EV/EBITDA multiple amid continued strength in the industry. We maintain ADD on all three names aided by supportive macros

Building Materials - Praveen Sahay - Research Analyst, Prabhudas Lilladher Pvt. Ltd.

Oct-Dec’23 Earnings Preview – Margin expected to improve, healthy PAT

Building Material companies under our coverage universe are expected to report moderate to strong volume growth even after higher base. We anticipate healthy volume growth ~12% YoY in plastic pipe sector, while tiles and bathware sectors are likely to experience lower growth of 5-7% YoY. Further we also expect companies to register sales growth of 5.8% YoY, given correction in realizations in plastic pipe segment. With correction in RM prices and fuel expenses, we expect margins to improve YoY (+190bps YoY) along with EBITDA/PAT growth of 21.1%/28.9% YoY. We remain positive on the sector considering 1) buoyancy in real estate market, 2) Govt. focus on housing, sanitation and infrastructure, 3) improvement in agri. segment with normalization in RM prices, 4) pick-up in exports, and 5) increase in branded/large players market share.

The Centre’s fiscal position is comfortable despite additional spending amid buoyant tax and non-tax revenue. Front loading of capital expenditure continues to yield much-needed fillip to growth. We expect the Centre to achieve its targeted fiscal deficit of 5.9% of GDP in FY24E and target 5.4% for FY25E. We see the government relaxing the fiscal glide path, to push the target of 4.5% (meant earlier for FY26E, ahead by a year). 

Comfortable fiscal position; capex frontloading continues

The Centre’s fiscal deficit was reported at 50.7% of BE during April-Nov FY24 versus 58.9% of BE in FY23. Continued buoyancy in revenue collections, both tax and non-tax, despite higher revenue expenditure will allow the government to comfortably achieve the targeted fiscal deficit of 5.9% of GDP. The quality of expenditure remains healthy, with the government frontloading capital expenditure – 58.5% of BE in FY24 versus 59.6% of BE in FY23, up 30.98% YoY.

Overall revenue receipts grew by 20.87% YoY, outpacing the growth in total expenditure of 8.57% YoY during April-November FY24. Revenue expenditure growth remained modest at 3.5% YoY in April-November FY24, recording the slowest pace of growth in the past eight years as spending on subsidies accounted just 65% of the FY24BE, significantly narrower than 95% of FY23BE during April-November (due to subsuming of the Free Foodgrain Program into National Food Security Act).

Revenue expenditure growth pale; to pick pace in coming months

The Centre’s revenue expenditure growth eased to 3.6% YoY, the lowest since FY16 amid a sharp drop in subsidy spending. In the first eight months of the fiscal, the Centre spent INR 2.4tn on overall subsidies, which is down by 19% YoY. However, the Central government has recently presented the first batch of supplementary grants. The net cash outgo is pegged at INR 583.78bn in FY24. As per break-down of the net cash outgo, the government has sought an additional INR 133.5bn in cash for fertilizer subsidy, and INR 70.2bn as an additional amount for food subsidy on account of extension of PM-Garib Kalyan Anna Yojna (PMGKAY). With this additional expenditure, the government’s fertilizer subsidy for this year is now pegged at ~INR 1.88tn and food subsidy at INR 2.04tn. Apart from this, to cover the losses posted by oil marketing companies (OMCs) owing to domestic LPG operations (INR 75bn) and PM-Ujjwala Yojna, the Ministry of Petroleum is set to incur an additional INR 92bn expenditure. 

Retain 5.9% fiscal deficit target 

If the current trend of revenue is sustained, we see no fiscal slippages despite the expected shortfall in disinvestment revenue of INR 400bn. The disinvestment proceed shortfall would be offset by gains in non-tax revenue (+ 400bn) and higher tax revenue (INR 800 bn). Considering the additional cash outgo placed in First Supplementary Demand for Grants and likely additional expenditure in Second Supplementary Demand for Grants, we see the government comfortably meeting the fiscal deficit target of 5.9% of GDP amid higher-than-expected tax and non-tax revenue. We do not see the dynamics reversing despite likely second supplementary demand for grants.

ONGC | Limited earnings growth prospects

Oil and Natural Gas Corporation (ONGC) stock rallied 40% and outperformed the Sensex by 21% in CY23YTD, as Brent crude price increased from USD 81/bbl at the beginning of CY23 to a high USD 96/bbl seen in Octoer 2023. However, going ahead we see limited upside to ONGC’s crude price realisation in the current environment of windfall tax (which has not allowed ONGC to earn more than USD 75/bbl since the levy of the tax on 1 July 2022), slowing global oil demand, strong non-OPEC+ oil production growth and increasing spare OPEC oil capacity. ONGC’s gas price realisation too is unlikely to change significantly, as APM gas price is frozen till March 2025 and 95% of ONGC’s gas sales fall under APM. We estimate the stock price factors ~USD 73/bbl oil price for FY25E. With limited earnings growth, we downgrade ONGC to REDUCE.

MS on PNB Housing: Maintain Overweight on Company, target price at Rs 970/sh (Positive) 

MS on DMart: Maintain Overweight on Company, target price at Rs 4471/sh (Positive) 

Citi on M&M Fin: Maintain Buy on Company, target price at Rs 350/sh (Positive) 

MOSL on M&M: Maintain Buy on Company, raise target price at Rs 2005/sh (Positive) 

Citi on Federal Bank: Maintain Buy on Company, target price at Rs 170/sh (Positive) 

Emkay on L&T FH: Maintain Buy on Company, target price at Rs 190/sh (Positive) 

Nomura on Indusind Bank: Maintain Buy on Company, target price at Rs 1700/sh (Positive) 

Citi on India Electric Utilities: Focused stocks: NTPC and Power Grid (Positive) 

Jefferies on Industrials: Key Picks: L&T, Siemens, Thermax and KEI Ind (Positive) 

Citi on NBFC: Key Picks: L&T FH and Shriram Finance (Positive) 

Nomura on M&M Fin: Maintain Reduce on Company, target price at Rs 230/sh (Neutral) 

Jefferies on M&M Fin: Maintain Hold on Company, target price at Rs 295/sh (Neutral) 

MS on M&M Fin: Maintain Equal weight on Company, target price at Rs 285/sh (Neutral) 

MS on Federal Bank: Maintain Equal weight on Bank, target price at Rs 165/sh (Neutral) 

Nomura on Federal Bank: Maintain Buy on Bank, target price at Rs 190/sh (Neutral) 

Nomura on Bandhan Bank: Maintain Buy on Bank, target price at Rs 375/sh (Neutral) 

Nomura on Yes Bank: Maintain Neutral on Bank, target price at Rs 16.5/sh (Neutral)

HDFC Securities analysts -Jay Gandhi, Institutional Research Analyst and Tanuj Pandia, Institutional Research Analyst, HDFC Securities 

We recently interacted with numerous store managers and companies to assess the festive performance and demand in discretionary categories. Despite a promising start to the festive season, most categories (excluding jewellery and travel) seem to have hit the snooze button. Several factors contribute to this, including (1) the normalisation of ticket sizes and purchase frequencies, (2) weak footfalls (on a per sq foot basis), and (3) a trend towards downtrading. With a few exceptions, SSSG (especially for apparel and footwear) has ranged from -5 to 2%. Both retail and distribution channels continue to grapple with elevated inventory levels. This has led to (a) an early commencement of End of Season Sales (EoSS) by 2-3 weeks and (b) higher discount levels in the system. Consequently, margins are likely to be weak. While grocers continue to improve their GM portfolio, their apparel segment still needs fixing. On a positive note, the jewellery segment, courtesy the hand of Go(l)d, continues to perform well, led by robust wedding demand. However, ticket sizes have inched down.

Apparel, innerwear and footwear demand remains weak: Our interaction with key stakeholders/companies suggested that although the initial response in the festive season was healthy, demand took a beating from mid-Nov onwards in apparel, innerwear, and footwear. Sales densities were weak, with SSSG ranging from -5 to +2% by the third week of December. Ticket sizes have been normalising downwards as (1) articles per order declined and (2) a trend towards downtrading emerged. Purchase frequencies have dropped this fiscal (on a high base). In terms of sub-categories, Indian ethnic wear performance was good courtesy the festive/wedding season; however, menswear and women’s western wear, winter wear and innerwear continue to struggle. Note: there was some loss of sales in apparel and footwear during the World Cup days too. Expansion is likely to be measured in Q3. Likely relative outperformers in Q3FY24: (a) Trent (courtesy Zudio), (b) VMART (given a low base), and (c) Metro Brands.

Jewellery remains blessed by the hand of GO(L)D: Given the gold price tailwind (up 13% YoY till 20-Dec-23), most jewellery companies continue to do well in terms of growth. However, ticket sizes have inched down for the industry. Grammage (per store basis) continues to decline. Most companies have been aggressive in expanding YoY; hence growth rates are expected to be in the high-teens to mid-20% range. Note: area growth for Tanishq/Kalyan Jewellers/Senco Gold stands at 20/19/12% respectively YoY (H1FY24).

On inventory levels and margins: Inventory levels remain elevated in apparel/footwear/innerwear, both in retail and in distribution. Hence, most of the companies started an early EoSS (by 2-3 weeks), except Trent and Metro Brands, and the share of discounted sales remains high in the system. Given (1) moderating sales densities, (2) a higher share of discounted sales, and (3) sticky rental bills, margins are likely to be weak or contract in Q3. Jewellery margins are likely to be steady YoY.

Margin of safety missing: Most discretionary categories (ex-jewellery and travel) are staring at moderating growth, negative-to-flat SSSGs, and potential contraction in margins. Hence, we suspect the earnings downgrade cycle to continue. Add to that, the sector’s nosebleed valuations (universe trades at 57x Dec-25 P/adj. PBT), and we may be staring at a double-whammy of earnings/multiple derating. Likely relative outperformers in Q3: Titan, Trent, Metro Brands, VMART.

Buzzing Stocks: Adani group stocks, MOIL, GVK Power, VST Industries, Hindustan Zinc, Asian Paints,Brigade Enterprises, Ind Renewable, UFlex, NIBE

ADANIPORTS

General

ADTYFRG

General

DHAMPURSUG

Buy Back of Shares

EXHICON

Preferential Issue of shares;Issue Of Warrants

FOODSIN

General

INDITALIA

General

PRISMX

General

PTCIL

General

SHAH

General

SHARDUL

Voluntary Delisting of Shares

CORF

Preferential Issue of shares;

General;Increase in Authorised Capital

SUKHJIT

Interim Dividend

TCCServices

Preferential Issue of shares;General03 Jan

Shyam Metalics, has launched QIP, Indicative price at Rs576 per share to raise about ₹2,500 crore; Floro price is comes at a discount of 10.4 per cent to Tuesday’s closing price

Listing of Equity Shares of Shri Balaji Valve Components Limited

81,60,000 Equity Shares @ 100/-…Market Lot 1200

Listing of new securities of Bharti Airtel Ltd

3152886 Equity shares of Rs. 5/- each issued at a premium of Rs. 513/- pursuant to conversion of Foreign Currency Convertible Bonds (FCCBs) of the Company.

Listing of Equity Shares of Manoj Ceramic Limited

83,34,000 Equity Shares @ 62/-…Market Lot 2,000 shares

\u0009 

Listing of New Securities of Suzlon Energy Limited

12,56,891 Equity shares pursuant to conversion of partly paid shares to fully paid up of Rs. 2/- each issued on rights basis.

Listing of Equity Shares of HRH Next Services Limited (SME IPO)

9205438 Equity shares @ 36/-…Market lot 3,000 shares

Listing of Equity Shares of Akanksha Power and Infrastructure Limited (SME IPO)

18518520 Equity shares @ 55/-…Market lot 2,000 shares

• BALRAMCHIN

• HINDCOPPER

• DELTACORP

• IEX

• SAIL

• ZEEL

The Reserve Bank of India (RBI) plans to tighten the prudential requirements relating to capital adequacy and asset quality for the declaration of dividends by banks from the accounting year ended March 31, 2025 onwards.

However, banks could be given some leeway when it comes to the maximum dividend payout ratio (DPR), per the RBI’s draft circular on “Declaration of dividend by banks and remittance of profits to Head Office by foreign bank branches in India.”

Most of the large PSU banks and some private sector banks have raised interests on their term deposits to support credit growth, which is traditionally accelerated in the last quarter of the financial year, and protect their margins.

Over the last few weeks, lenders such as State Bank of India, Union Bank of India, Bank of India, Kotak Mahindra Bank and Punjab National Bank have hiked interest rates on domestic and/or NRI retail term deposits of less than ₹2 crore, by 10-75 bps, across various tenures.

Bank of Baroda was the outlier, raising rates by up to 125 bps. The PSU bank said that rate hikes are largely focused on shorter-term maturity buckets, especially those less than 1 year, to benefit shorter maturity depositors and help the bank manage its deposit portfolio.

Drugmaker Sun Pharmaceutical Industries has acquired 100 per cent shares of Libra Merger Ltd, a company incorporated in Israel.

This is Sun’s second buy in Israel, after Taro Pharma, a high-profile acquisition for the Indian drugmaker. Sun said the Libra acquisition was to facilitate consolidation of business in Israel.

ICICI direct’s “Market Strategy 2024” report, citing robust corporate earnings growth, healthy GDP, and favourable commodity and likely rate cuts, lays out reasons to be optimistic on prospects for Indian markets in 2024. Here are five charts that bring out the various high growth indicators from their latest research report, supporting their outlook. 

Here are the intraday supports and resistances for widely traded stocks such as Reliance Industries, ITC, ONGC, Infosys, HDFC Bank, TCS, and SBI

The outlook is bullish for EIH. The stock surged about 6 per cent on Tuesday and closed on a strong note. This rise has taken the stock price above ₹255 – a key resistance. This level of ₹255 will now act as a strong resistance-turned-support level. 

*Researchbytes Analyst App *

https://play.google.com/store/apps/details?id=com.intelegain.rb

Arihant Capital: Mileen Vasudeo, Sr Research Analyst

Views On Market And Stock Picks By Mileen Vasudeo Of Arihant Capital Markets

https://www.youtube.com/watch?v=tKRdOnHwFFk

Maruti Suzuki: Shashank Srivastava, Chief General Manager - Marketing

Shashank Srivastava Of Maruti Suzuki On Auto Sales, Inventory And 2024 Outlook

https://www.youtube.com/watch?v=V73-oG-QGE0

Royal OrchHotel: CK Baljee, CMD

Royal Orchid: Growth Drivers For FY25 | Chender Baljee

https://www.youtube.com/watch?v=7xfF_UAnO9w

Rushil Decor: Rushil Thakkar, ED

Rushil Decor Receives BIS Certification; Biz Stability Strategies | Rushil Thakkar

https://www.youtube.com/watch?v=aaccWcEpbeA

Medplus Health: G Madhukar Reddy, MD CEO

Implementing Better Control, IT Systems In Stores To Ensure Better Compliance: Medplus

https://www.youtube.com/watch?v=BeP3UUmFX98

NLC Nalco India : Prasanna Motupalli, CMD

NLC India’s Renewables Foray: Key Targets | Prasanna Kumar Motupalli

https://www.youtube.com/watch?v=dObT3HgPc0Y

SBI: Dinesh Kumar Khara, Chairman

SBI Chairman Dinesh Kumar Khara Discusses The Outlook For The Banking Sector In 2024

https://www.youtube.com/watch?v=8D8JETePJRk

Techno Electric: PP Gupta, MD

Techno Electric Bags Orders Worth ?1,750 Cr | PP Gupta Discusses

https://www.youtube.com/watch?v=AoAcHNhTt7Q

Ugro Capital: Shachindra Nath, Executive CMD

UGRO Capital On Track To Reach 10K Cr AUM?

https://www.youtube.com/watch?v=xKaH_VEVxSk

Cello World: Gaurav Rathod, Joint Managing Director

Cello World: Key Triggers For Growth

https://www.youtube.com/watch?v=MsY0U1JFwNU

Events today…

https://www.researchbytes.com/Default.aspx?cc=event

Results today…

https://www.researchbytes.com/Default.aspx?cc=result

Replays available at www.researchbytes.com

10.30 INDIA Manufacturing PMI (Expected: 55.9 versus Previous: 56.0)

20.30 U.S. ISM Manufacturing PMI (Expected: 47.2 versus Previous: 46.7)

20.30 U.S. Jolts Job Openings (Expected: 8.85M versus Previous: 8.73M)

00:30 U.S. FOMC Meeting Minutes

Provisional Cash Rs. In Crs.

FII/FPI: NET BUY: +1602.16 

(10200.31 - 8598.15) 

DII: NET SELL: -1959.04 

(8695.68 - 10654.72)

Asian equities declined, mirroring the drop in US stocks, which witnessed a waning risk-on sentiment in Wall Street, particularly affecting prominent tech companies.

South Korea’s KOSPI index experienced a 1.71% or 45.63-point decline, opening at 2,624.18, while Australia’s index slid 1.19% or 90.80 points to 7,537 after nearing record highs in the previous session. Japan’s markets remained closed due to a holiday.

In the US, the S&P 500 concluded with a loss of 27 points (0.57%) at 4,742.83, while the Nasdaq Composite dropped 245.41 points (1.63%) to 14,765.94. Conversely, the Dow Jones Industrial Average edged up by 25.5 points (0.07%) to reach 37,715.04.

Meanwhile, oil prices retreated as investor sentiment moderated regarding potential rate cuts and alleviated concerns about disruptions in Red Sea supplies. Earlier, prices had surged approximately $2 per barrel after reported attacks on vessels by Houthi rebels and the alleged arrival of an Iranian warship on Monday.

US crude settled at $70.38 a barrel, down by $1.27, while Brent dropped $1.15 to settle at $75.89 a barrel.

Additionally, spot gold experienced a 0.2% decline, reaching $2,058.59 an ounce.

The S&P 500 and Nasdaq Composite closed the first trading session of 2024 lower, weighed by a fall in Apple shares after a broker downgrade and declines among other big-tech names triggered by a move higher by Treasury yields.

The lackluster session follows a year where Wall Street’s three major indexes notched double-digit gains on the back of optimism around artificial intelligence and stabilizing inflation. The S&P 500 ended last week within 1% of a record closing high reached in early 2022.

The S&P 500 lost 27 points, or 0.57%, to end at 4,742.83 points, while the Nasdaq Composite lost 245.41 points, or 1.63%, to 14,765.94. The Dow Jones Industrial Average rose 25.5 points, or 0.07%, to 37,715.04. - Reuters