Market Live: Sensex, Nifty, Midcap under pressure; Metals shine, Pharma down 1.5%

1:13 pm Earnings Estimates: Repco Home Finance’s first quarter profit is seen rising 22.8 percent year-on-year to Rs 48.5 crore from Rs 39.5 crore, according to average of estimates of analysts polled by CNBC-TV18.

Net interest income is likely to increase 22.8 percent to Rs 103.2 crore from Rs 84 crore on year-on-year basis.

Key things to watch out for would be asset quality, AUM growth and net interest margin.

Analysts said if asset under management growth comes above 15 percent and net interest margin above 4.4 percent then that will be positive.

12:55 pm Europe trade: European bourses opened slightly lower, as investors monitored earnings reports and reacted to further political uncertainty at the White House.

The pan-European Stoxx 600 edged 0.12 percent lower shortly after the opening bell with most sectors and major bourses in negative territory.

12:45 pm Buzzing: Shares of Punj Lloyd surged more than 8 percent intraday as the company achieved financial closure of largest gas pipeline project in Malaysia.

The project worth USD 822 million, was awarded by Petronas for the construction of 512 km, 36 inch dia pipeline for transporting gas from Sabah oil and gas terminal to the Petronas LNG complex at Bintulu, Sarawak.

Atul Jain, director of Punj Lloyd said, “Our relationship with Petronas has been built on trust and delivery and we are committed to complete their ongoing project – RAPID Tank Farm to their satisfaction. This is the largest EPC pipeline project that Punj Lloyd has executed till date.”

12:36 pm Earnings Estimates: FMCG company Dabur India is expected to show dismal performance in Q1 due to GST (Goods & Services Tax) impact, weak international business (30 percent of total revenue) and Patanjali competition.

Net profit during the quarter is seen falling 7.5 percent year-on-year to Rs 271 crore and revenue may decline 5 percent to Rs 1,856 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is likely to fall 5.6 percent to Rs 329 crore and margin may contract by 20 basis points to 17.7 percent compared with year-ago quarter.

Domestic volumes are expected to decline 4-5 percent in Q1 against 2.4 percent growth in previous quarter and 4.1 percent in same quarter last year.

12:23 pm Market Check: Equity benchmarks remained under pressure in afternoon, weighed by pharma stocks and Reliance Industries.

The 30-share BSE Sensex was down 88.94 points at 32,148.94 and the 50-share NSE Nifty fell 13.40 points to 10,000.25 amid consolidation.

About 1,338 shares declined against 941 advancing shares on the BSE.

11:50 am Earnings Estimates: Berger Paints’ first quarter profit is seen rising 3.5 percent year-on-year to Rs 124 crore and revenue may increase 10 percent to Rs 1,368 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is likely year-on-year to rise 4.5 percent to Rs 204 crore but margin may shrink 80 basis points to 14.9 percent in Q1 on higher input costs & trade discounts.

Raw material – TiO2 prices (30-35 percent of cost of goods sold) increased 27 percent in Q1 YoY.

Important to watch out for would be GST (Goods & Services Tax) impact.

Analysts expect volume growth of 4-5 percent in Q1 against 7 percent growth in Q4FY17. Company hiked product prices by 5-5.5 percent in recent times.

11:43 am Interview: Cummins India had a poor showing in Q1, weak exports and lower margins impacted EBIDTA.

Domestic revenue grew by 6 percent and exports revenue grew by 31 percent, Rajiv Batra, CFO, Cummins India said.

Business impacted due to challenges in Africa and West Asia regions. Exports will continue to face uncertainty, he added.

In Q1, power generation revenue grew by 12 percent, industrial revenue grew by 21 percent and distribution revenue grew by 18 percent. We are experiencing strong tailwind from the government investment in the infrastructure segment for industrial segments, said Batra.

For Q1, domestic revenues compared to year ago are 10 percent, so we are on the higher end of the guidance, he further mentioned.

11:22 am Earnings Estimates: Utility vehicle and tractor maker Mahindra & Mahindra (M&M) is expected to see steady growth in April-June quarter on good tractor sales volume growth.

Profit during the quarter is seen rising 1 percent year-on-year to Rs 971 crore and revenue may increase 6 percent to Rs 11,168 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is likely to increase 6 percent to Rs 1,573 crore but margin may contract 20 basis points to 14 percent compared with same quarter last year due to higher material cost.

Revenue growth may be led by volume growth of 3 percent while realisations may improve by 3 percent due to better product mix.

Tractor sales increased 13 percent YoY and market share of tractors increased from 38 percent to 42 percent.

11:05 am Market Check: Equity benchmarks extended losses amid consolidation, with the Sensex falling more than 100 points.

The 30-share BSE Sensex was down 111.29 points at 32,126.59 and the 50-share NSE Nifty down 20.05 points at 9,993.60.

About 1,255 shares declined against 893 advancing shares on the BSE.

IOC gained more than 4 percent after earnings.

10:45 am MOSt upgrades IOC: Motilal Oswal said IOC reported marginally better core gross refining margin (GRM) of USD 7.7 per barrel versus USD 3.6/bbl in Q1FY17 and USD 6.9/bbl in Q4FY17. It reported inventory loss of Rs 2,800 crore in refining and Rs 1,200 crore in marketing.

The company also wrote back Rs 2,800 crore of earlier provision for entry tax issue in the state of Haryana.

Adjusting for all this, EBITDA at Rs 9,100 crore was marginally above our estimate of Rs 8,700 crore. Forex gain stood at Rs 600 crore versus loss of Rs 330 crore in Q1FY17 and gain of Rs 1,500 crore in Q4FY17. Reported PAT stood at Rs 4,500 crore, while adjusted PAT was Rs 2,700 crore. We had downgraded the stock last quarter.

Even after the recent rally, the stock is down 12 percent. Considering this, we upgrade our rating to Buy, but maintain target price of Rs 458.

10:30 am Market Outlook: The Indian market continued its corrective trend, as benchmark indices fell in the opening tick, and dragged the Nifty below 10,000-mark.

“Valuations are still on the higher side…certain pockets are still overvalued,” Sanjeev Prasad, Senior Executive Director & Co-Head, Kotak Institutional Equities told CNBC-TV18 in an interview.

IT and pharmaceuticals space are not seeing outlandish valuations, but challenges on growth remain. “The sectors are nearing the bottom with respect to valuations,” he said.

On pharma, which was under pressure due to weakness in Biocon, he said he has been very light on the sector for the past three years.

10:10 am Buzzing: Tyre manufacturer Ceat declined 8.7 percent intraday post it has reported massive decline in its Q1 net profit.

The company’s Q1 consolidated net profit slipped 98.6 percent at Rs 1.4 crore against Rs 103.3 crore, in a year ago period.

Revenue was down at Rs 1,628.6 crore versus Rs 1,646.2 crore. The operating profit (EBITDA) fell 83.5 percent at Rs 27.6 crore and EBITDA margin slipped 950 bps at 1.9 percent.

Anant Goenka, managing director of Ceat said, “Q1 was a challenging quarter for us in light of destocking by the channel partner due to GST and raw material prices which hit us at the same time.”

10:00 am Market Check: Equity benchmarks continued to consolidate after two-day fall and investors looked for more corporate earnings.

The 30-share BSE Sensex was down 4.30 points at 32,233.58 and the 50-share NSE Nifty rose 6.30 points to 10,019.95.

The market breadth was marginally positive as about 972 shares advanced against 842 declining shares on the BSE.

9:50 am Further rate cut?: Kunal Shah of Kotak Mahindra Old Mutual Life Insurance said he believes if core inflation surprises on the downside and settles below 4 percent RBI can reduce rates by another 25bps. On the other hand, the neutral stance will enable RBI to remain on a long pause till the time inflation remains around 4 percent mark.

Since the past few policies, we were of the opinion of the easing in policy rates sighting drop in inflation and weak growth recovery.

He also believed the drop in yield differential with developed world should be seen in conjunction with a drop in inflation differential. In fact, even after the compression in yields, the real yields in India are one of the highest supporting capital inflows. Since the start of the year, FPIs have invested Rs 1.4 trillion in the Indian bond markets.

9:39 am Buzzing: Shares of Ramco Systems and Kokuyo Camlin slipped 4 percent and 8 percent, respectively intraday as the companies have reported loss in the quarter ended June 2017.

Ramco Systems has reported net loss of Rs 3 crore in the quarter ended June 2017 against profit of Rs 8.8 crore, reported in the same quarter last year.

Revenue of the company was at Rs 110.3 crore versus Rs 109.7 crore.

Kokuyo Camlin has posted Q1 net loss at Rs 1.25 crore versus profit of Rs 4.7 crore, in a year ago period.

Revenue was down 12.6 percent at Rs 170.5 crore versus Rs 195.1 crore.

The operating profit (EBITDA) was down 86.3 percent at Rs 1.54 crore and EBITDA margin was down 500 bps at 0.95 percent.

9:29 am FII View: Christopher Wood of CLSA said there are now grounds to believe that action is finally close at hand to address the banking system’s long-standing bad asset problem, most of it contained in the state-owned banks.

He further said the political reality is that the growing likelihood that Narendra Modi will be re-elected in 2019 is another reason for these delinquent corporate borrowers to agree to some form of a deal.

This is because it means there is no near-term prospect of returning to ‘business as usual’, which historically for many Indian promoters has meant effectively treating state-owned banks as their own private piggy banks, he said.

9:15 am Market Check: Equity benchmarks fell further for third consecutive session in opening Friday, weighed by healthcare stocks.

The 30-share BSE Sensex was down 43.68 points at 32,194.20 and the 50-share NSE Nifty fell 10 points to 10,003.65.

Sun Pharma, Dr Reddy’s Labs, Lupin, Cipla, Aurobindo Pharma, Ambuja Cements, ONGC, Bharti Airtel, HDFC, Hero MotoCorp and Yes Bank declined up to 2 percent.

Biocon plunged 6 percent on getting 10 observations from USFDA for Bangalore plant

IOC, Tata Motors, BPCL, HUL, Tech Mahindra, Coal India, Axis Bank, Infosys, GAIL, HPCL and Wipro gained up to 2 percent.

Nifty Midcap was down 0.3 percent, dragged by pharma stocks. Cadila Healthcare, Strides, Torrent Pharma, Glenmark Pharma, MRF, Shree Pushkar, Titan, Kokoyu and Apollo Tyres fell up to 4 percent.

Ceat and Ujjivan Financial lost up to 7 percent post Q1 earnings while PNB Housing Finance gained 7 percent.
Asian markets wavered, after US stocks were dented overnight by a report that the special counsel investigation into Trump and his campaign was intensifying. Japan’s Nikkei was down 0.4 percent while China’s Shanghai gained 0.2 percent.