Sensex continues to fall, Nifty opens below 8900; Infosys falls
9:55 am CLSA on Reliance:CLSA has retained its buy call on Reliance Industries, with increased target price at Rs 1,500 (from Rs 1,350) after the company guided on Jio’s FY21 EBITDA of over USD 11 billion and expects 50 percent rise in industry revenue to USD 45 billion by FY21. According to management, Jio’s 4G capacity is nearly 5x of the remaining industry. Jio expects to be able to handle 4 billion GB of data per month by end of 2017.
CLSA says Jio is hopeful of fully sorting out interconnection issues in this month and Jio’s capacity may warrant a higher EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation) multiple of 7.5x.
The brokerage house has raised its multiple for refining to 6.5x EV/EBITDA and retail to 1x EV/sales.
Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.
9:35 am Goldman on Infosys: Goldman Sachs has initiated its coverage on Infosys with a sell call and target of Rs 829 as application services is shrinking led by swift contraction in BFSI.
It says the company lagged peers in terms of penetration of new digital areas. The company is more exposed to H-1B/L1 visa changes, it feels.
According to Goldman, frequent management changes may make it harder to achieve stable growth and growth model is not well-suited to its DNA.
9:25 am Buzzing: Shares of A2Z Infra Engineering gained 6.7 percent intraday as it has been awarded a contract worth USD 70,66,613.41.
The contract has been awarded by Grid Solar and Energy Efficiency Project, Nepal Electricity Authority for design, supply, delivery, installation, testing and commissioning of 33/11 KV substations and 33 KV lines, for the contract price aggregating to USD 7,066,613.41.
Also read – Bull’s Eye: Buy Bajaj Auto, SCI, PNB, Escorts, Reliance Capital
9:15 am Market Check
Equity benchmarks continued downtrend amid consolidation as investors awaited assembly elections results due next week, tracking weak global cues. The 30-share BSE Sensex was down 63.46 points at 28776.33 and the 50-share NSE Nifty fell 20.05 points to 8879.70.
Infosys, ITC, Asian Paints, Tata Steel, TCS, Kotak Mahindra Bank, Bosch and Bank of Baroda were under pressure while Reliance Industries, Tata Motors, Bharti Airtel, Axis Bank, Dr Reddy’s Labs, Hindalco, Bharti Infratel, Grasim and UltraTech Cement were gainers.
The Indian rupee slipped in the early trade on Friday. It has opened lower by 17 paise at 66.87 per dollar versus previous close of 66.70.
Ashutosh Raina of HDFC Bank says the increasing probability of Federal Reserve rate hike in March has resulted in dollar index soaring above the 102 level.
However, the USD-INR pair continues to defy the overall dollar strength, but the gains have been capped by strong intervention, he adds.
He expects the pair to trade in a 66.70-67 dollar range today.
The dollar gained to seven-week highs against a basket of currencies, after hawkish comments by a Federal Reserve official encouraged investors to expect a near-term interest rate hike.
Asia markets traded lower today, following an overnight decline in US equities but the Dow Jones industrial average still closed a touch above the 21,000 level.