Closing bell: Sensex bleeds 241 points, Nifty above 10,800 levels
On acount of FIIs fishing out their money from the Indian markets and looking towards new round of Sino-US trade talks, the Indian indices extended its bleeding for third straight trade session on Tuesday. The BSE Sensex tank 241 points to 36,153 levels while the 50-stock Nifty slide 57 points to 10,831 levels. However, the market experts had a sigh of relief as the Nifty closed above 10,800 levels, which they have been maintaining as strong support. Shares of Gujarat Narmada Valley, Meghmani Organics, T Nadu Newsprint, Sharda Cropchem and Magma Fincorp were among the top losing stocks on Tuesday. Telecom major Vodafone Idea crashed over 5 per cent while Tejas Networks went off by more than 6 per cent.
Speaking on the outlook of the markets Simi Bhaumik, SEBI registered technical equity analyst told Zee Business online, "The market is range-bound till Nifty is trading in the range of 10,800 to 11,200 levels. Bear or bull run at the Indian indices can't be predicted till any of the range is broken." She said that a bull run can be expected if the market sustains above 11,000 levels for two successive closes.
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Utility and telecom sector bleed maximum on Tuesday intraday trade. The BSE Utility index went off by near 3 per cent on Tuesday. Shares of Adani Power and Adani Transmission went off by 1.7 per cent and 1.2 per cent respectively. IP Gas stock went down by 1.35 per cent, Lanco Infratech and Mahanagar Gas counters went down by more than 4.5 per cent.
Profit booking witnessed in IT sector
IT major Infosys went down by more than 1.5 per cent, Moschip Semiconductor Chip corrected to the tune of near 4 per cent, NIIT Tech went down by more than 1.1 per cent, Zensar Tech went down by near 1.75 per cent, Tata Elxsi stock went southward by near 1.5 per cent, TVS Solutions stock crashed by over 2 per cent, Take Solutions stock went down by more than 3 per cent, TCS corrected by nera 0.9 per cent, Matrimony stock nosedived by near 5.8 per cent while Aptech counter corrected by near 3.8 per cent.
Buy Spicejet for 80% gains, advises Elara Securities
Spicejet posted a net profit of Rs 551mn vs our estimates of Rs 1.52bn and Rs 2.30bn in Q3FY18 and a PAT loss of Rs 3.31bn in Q2FY19. Q3FY19 EBITDAR recovered by 147% QoQ to Rs 4.56bn based on 26% QoQ and 10% YoY improvement in average fares, although it was down 18% YoY on higher fuel cost at Rs 1.68 per seat-km, which was up 32% YoY agaisnt market's Rs 1.75 per seat-km and lower PLF, down 403bp YoY.
On suggestion to the market investors in regard to Spicejet counter Gagan Dixit and Rachael Alva, Analyst at Elara Securities informed in a detailed research report that fundamentals of the counter is poised for upside swing of around 80 per cent. The research report says that an investor can buy the scrip for the target of Rs 144/counter levels. Currently, the stock is oscillating around Rs 80 per shares level.
Telecom Index Goes Down
The BSE telecom index is down by around 1.25 per cent. Telecom major Vodafone Idea is down by more than 3 per cent, Tejas Networks is down by more than 2 per cent, ITI Ltd. stocks went down by 1.36 per cent, GTL Infra shares crashed by more than 4.5 per cent while Bharti Infra stocks nosedived by more than 2.5 per cent.
BSE Utility Index Bleeds Heavily
The BSe Utility Index crashed over 2.25 per cent in early intraday trade. Shares of After showing some signs of recovery on Monday shares of Reliance Power and Reliance Infra crashed today as well. Reliance Powe stock is down by more than 2.25 per cent while Reliance Infra stock went down by 3.8 per cent. lanco Infratech stock crashed by 4.55 per cent, IP Gas stock went down by around 3.9 per cent while Adani Power went down by more than half a per cent.
Buy Dilip Buildcon Limited for 58% gains, advises Narnolia Financial Advisors
DBL has continued to post strong earning numbers as the revenue was up by 28% YoY with stable EBITDA margin. Going forward, we expect, the revenue growth momentum will continue to remain strong on back of robust order book with superior execution and early completion of projects will help to keep EBITDA margin healthy. Company has completed financial closure of all the 12 HAM projects and appointment date of 4 has been already received. Another couple of projects will receive appointment date in Q4FY19 and reaming 6 projects is expected to receive in Q1 of next year. Working capital days have improved from high of 137 days to 83 days and it will further rationalize by way of implementation of SAP.
Speaking on the fundamentals of the counter Sandip Jabuani and Ketan Mehrotra, Research Analyst at Narnolia Financial Advisors informed in a detailed research report,"Fundamentals of the scrip suggests an upside swing of around 58 per cent. An investor can buy the scrip for the target of Rs 530 per stock." Currently, the stock is osccillating around Rs 335 pre counter.
Shares of PI Industries, Shankara Building, Dilip Buildcon, JP Associates and Hindustan Copper were among the top gainers in early intraday trade on Tuesday. The PI Industries stock went up by more than 5.5 per cent, Shankara Building shares surge near 4.5 per cent, Dilip Buildcon stock which has been advised by the Zee Business online experts early morning too went up by around 4.4 per cent, Jp Associates stocks went northward by 4.3 per cent while Hindustan Copper was up by 3.34 per cent.
Gujarat Narmada Valley, Jet Airways, Graphite India and IIFL Holdings are the major losing stocks that need special mention. Shares of Gujarat Narmada Valley crashed by more than 7 per cent, IIFL Holdings corrected by bear 5 per cent, Graphite India stock went down by more than 4 per cent while shares of Jet Airways went down by more than 3.5 per cent in early intraday trade.
Buy Sonata Software for 39% gains, advises HDFC Securities
Sonata Software delivered a good quarter, international IT services (IITS) revenue was up 4.3% QoQ (+5.0% CC) to $40.8mn, in-line with our est of $40.3mn. Growth was led by IP-led revenue (+10.7% QoQ) and continued traction in Top-5 accounts (+10.5% in 9MFY19). IITS margin expanded 779bps QoQ to 28.4% (highest ever) led by cut in high cost sub-con expenses, higher utilisation and operational efficiency. The sustainable margin range for IITS is 23-24% (9MFY19 23.8%). Total revenue stood at Rs 8.44bn, +42.3/10.1% QoQ/YoY, led by growth in Domestic Product & Services’ +(DPS) revenue (Rs 5.63bn, +72.8/6.2% QoQ/YoY).
Speaking on the fundamentals of the Sonata software as a counter Amit Chandra and Apurva Prasad, Analyst at HDFC Securities informed, "Fundamentals of the scrip suggests an upside potential for around 39 per cent. An investor can buy the scrip for the target of Rs 466/stock." Currently, the counter is oscillating at Rs 334/counter levels.
Buy Alkem Labs for 22% gains, advises HDFC Securities
Alkem’s 3QFY19 performance was in line with our expectations. A softer acute season led to a 1% fall in the domestic business, while the 44% jump in the US helped in maintaining 10% plus YoY top line growth. Poor business mix (lower India sales) and increased raw material cost led to a ~680bps drop in gross margin. As a result, EBITDA margin shrunk 450bps YoY and EBITDA declined 13% to Rs 3.1bn. Reported PAT at Rs 2.1bn was up 14% YoY owing to higher taxes in 3QFY18. Despite reporting dismal performance in FY19, experts remain optimistic about Alkem as they believe the effect of raw material price hike will alleviate in FY20.
On suggestion to the investors in regard to counter Amey Chalke, Analyst at HDFC Securities told, "The fundamentals of the scrip suggests an upside potential of near 22 per cent. An investor can maintain a buy position in the scrip for the target of Rs 2,340/stock levels." Currently, the scrip is oscillating around Rs 1900/counter levels.
Buy Amber Enterprises for 41% gains, advises Elara Securities
Amber Enterprise reported revenue growth of around 15%, largely driven by 19% growth in air conditioners (15% volume growth and 3.5% hike in average realization). Key drag was 23% revenue contraction in AC components business due to loss of customers, and EBITDA decline by 20%, dragging margin by near 220 bp from 7.1% to 4.9% YoY, primarily due to cost inflation. The company has been successful in passing cost inflation to customers, thereby protecting margin. The company reported a profit of Rs 38.5mn against 1.1mn in Q3FY18. The company is confident of delivering on its earlier FY19 guidance of 10% volume growth of 2.1mn units vs 1.9mn units in FY18, implying 41% volume growth in Q4FY19 (0.95mn units vs 0.67mn units in Q4FY18) due to strong order book and new customer additions.
On suggestion to the traders in regard to the counter Pankaj Chhaochharia, Analyst at Elara Securities told in a detailed research report, "The scrip looks positive from the fundamental perspective and has potential for near 41 per cent upside. An investor can buy the scrip for target of Rs 975 per stock levels." Currently, the counter is oscillating in the vicinity of Rs 692 per stock levels.
FIIs fuelling bear run at Sensex, Nifty
FII's in the third quarter have been net sellers in the Indian equity market. The month of October had seen the worst sell off to the tune of 28,921 crores. A tepid inflow of 5981 crores and 3143 crores followed in November and December. The Net selling by FII's had been on the backdrop of volatile crude and depreciating rupee. The strengthening dollar and rising US yields also aided to the cause.
Out of the 425 BSE companies to share the shareholding data, 256 have reported FII's to be sellers and only 169 companies have seen FII's to be net buyers.
Asian stocks side-ways
Asian shares barely budged on Tuesday with investors looking to a new round of Sino-US trade talks as the world`s two largest economies try to resolve a tariff dispute that has put a dent on global growth and corporate earnings.
MSCI's broadest index of Asia-Pacific shares outside Japan was unchanged in early trade. Japan`s Nikkei was up 1.1 per cent after a market holiday on Monday.
US and Chinese officials expressed hopes on Monday that a new round of talks would bring them closer to easing their months-long trade war.
Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.