Market Live: Midcap underperforms Sensex; Aurobindo up 3%, Motherson trims losses
Thu Aug 10 2017
Rajesh Sharma (2003 articles)

Market Live: Midcap underperforms Sensex; Aurobindo up 3%, Motherson trims losses

12:55 pm Earnings: State-run power equipment maker Bharat Heavy Electricals (BHEL) said profit for April-June quarter stood at Rs 81 crore, higher by 3.9 percent over Rs 77.7 crore reported in year-ago quarter.

Profitability was largely hit by higher finance cost and other expenses. Deferred tax of Rs 52.37 crore (against Rs 12.13 crore YoY) helped the company to report growth of 3.9 percent but excluding that numbers were far lower than analysts’ expectations.

At operational level, the company posted EBITDA loss (earnings before interest, tax, depreciation and amortisation) of Rs 88.3 crore against profit of Rs 71 crore on year-on-year basis.

Overall numbers missed expectations. Profit was expected at Rs 60 crore and operating income at Rs 110 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Revenue during the quarter declined 1.5 percent to Rs 5,732 crore compared with Rs 5,821 crore in corresponding quarter of last fiscal.

 

12:41 pm Europe trade: European stocks opened slightly lower as investors monitored new corporate earnings and geopolitical tensions surrounding North Korea.

The pan-European Stoxx 600 was off by 0.2 percent with most sectors moving south.

Geopolitical fears remain the biggest focus after North Korea dismissed comments from President Donald Trump as a “load of nonsense” and said it was outlining plans for a missile strike near Guam, where the US has a military base, in mid-August.

12:25 pm Buzzing: Shares of Symphony declined nearly 10 percent intraday on the back weak Q1 (April-June) numbers declared by the company.

The company’s Q1 net profit decreased 23 percent at Rs 24 crore against Rs 31.6 crore, reported in same quarter last year.

Revenue of the company was down 15 percent at Rs 130 crore against Rs 152.6 crore.

The operating profit (EBITDA) fell 50.4 percent at Rs 19.4 crore and EBITDA margin was down 1000 bps at 15 percent.

12:07 pm Market Check: Benchmark indices continued to trade lower and are heading towards lower closing for fourth consecutive session.

The 30-share BSE Sensex was down 103.86 points at 31,693.98 and the 50-share NSE Nifty fell 28.55 points to 9,879.50 on weak breadth.

About 1,624 shares declined against 626 advancing shares on the BSE. The BSE Midcap and Smallcap indices underperformed Sensex, down 0.8 percent.

Motherson Sumi trimmed its losses to 2 percent from 6 percent post earnings.

11:55 am Earnings: Auto ancillary firm Motherson Sumi Systems missed analysts’ expectations on bottomline as well as operational front for April-June quarter as profit fell 21 percent year-on-year to Rs 347.3 crore.

Profitability was impacted by one-time loss of Rs 150.15 crore and weak operational performance by SMP that makes exteriors and interiors of cars.

Revenue during the quarter increased sharply by 25.8 percent to Rs 13,366.6 crore, including Rs 1,823 crore from PKC acquired recently.

11:35 am Market Outlook: The D-Street on Thursday continued to see weak movements as the Sensex lost around 100 points.

Institutions such as JM Financial had flagged concerns regarding the overbuying in the market when the Nifty hit 10,000 and now see a meaningful correction on the cards.

“You can call it a transition phase…the Nifty could test the lower end of the target of 9300,” Gautam Shah, Associate Director & Technical Analyst at JM Financial told CNBC-TV18 in an interview. He expects a correction of 5-10 percent from here as well.

Until now, the correction was in pockets and going forward, this could see some sort of an expansion, he added.

Further, Shah also expects the decline to be more on a global level and India could face collateral damage because of that as well.

One of the key factors that supported the market in the bullish run was the strong liquidity as inflows via mutual funds by retail investors were surging. With the risk in the market, is there a chance of these flows reducing? Shah is wary of that and is unsure of what will drive the market if liquidity dries out.

11:20 am Buzzing: Shares of Hindustan Construction Company (HCC) rose 3.3 percent intraday on bagging contract from Jammu & Kashmir State Power Development Corporation.

The company has been awarded a prestigious contract worth Rs 810.37 crore by Jammu & Kashmir State Power Development Corporation (JKSPDCL).

The contract includes construction of the 93 MW (3 x 31 MW) new Ganderbal Hydro Power project on Sind river in Central Kashmir on EPC basis.

The said work is to be completed in 48 months.

11:05 am Listing: Cochin Shipyard, the largest public sector shipyard company, will make a debut on exchanges on Friday, August 11. The issue price is fixed at higher end of price band of Rs 424-432 per share.

According to the grey market premium, the listing price is likely to be at a premium of around Rs 120-150 per share. It meant the opening price for the stock could be around Rs 550.

The premium of at least Rs 100 could be possible because of overwhelming response received by the issue, analysts feel.

The public issue was oversubscribed 76.19 times, with receiving bids for 258.9 crore equity shares against IPO size of 3.39 crore shares.

10:45 am Earnings: Auto ancillary company Bharat Forge reported solid performance in the quarter ended June 2017 and announced the issue of bonus shares in the proportion of one bonus share for every share held..

Profit during the quarter surged 43.4 percent year-on-year to Rs 175 crore on robust exports business.

Revenues increased 31.4 percent to Rs 1,258 crore in April-June quarter compared with Rs 957 crore in year-ago quarter.

“Q1FY18 was a strong quarter for the company with robust export revenues on back of increasing demand across automotive and industrial sectors,” Baba Kalyani, chairman & managing director said.

Despite disruption in domestic automotive demand caused by GST transition, domestic revenues were flat compared to previous year on the back of market share gain and new product ramp up, he added.

Operating profit grew by 36.4 percent to Rs 333 crore and margin expanded by 70 basis points to 27.7 percent compared with same quarter last year.

10:15 am Market Check: Equity benchmarks extended losses in morning trade, with the Sensex falling 150.96 points to 31,646.88 and the Nifty down 48.60 points at 9,859.45.

The broader markets continued to see heavy selling pressure for third consecutive session today. The BSE Midcap and Smallcap indices fell more than 1 percent as about four shares declined for every share rising on the exchange

10:02 am Listing: Security and Intelligence Services (India) opened the first trade at Rs 855 on the National Stock Exchange, up 4.9 percent over its issue price of Rs 815.

The listing was on expected lines as the issue saw a subscription of 7 times.

At 10:02 hours IST, the stock was trading at Rs 856.95, up 5.14 percent over issue price but down 2.6 percent from pre-opening price.

In the pre-opening, the stock settled at Rs 879.80, higher by 8 percent from its issue price.

SIS India raised Rs 780 crore through public issue that was opened for subscription between July 31 and August 2. The price band for the issue was at Rs 805-815 per share.

9:53 am Pre-opening: Security and Intelligence Services settled at Rs 879.80, up 8 percent over issue price of Rs 815 in pre-opening trade.

9:51 am Earnings Reaction: Shares of National Aluminium Company (NALCO) tumbled 7 percent intraday Thursday as it has reported fall in its net profit during the quarter ended June 2017.

The company’s Q1 net profit was down 4.5 percent at Rs 128.9 crore against Rs 135 crore, in the same quarter last year.

Meanwhile, revenue of the company has increased 14 percent at Rs 1911.6 crore versus Rs 1666.1 crore.

The operating profit (EBITDA) was up 16.9 percent at Rs 227.5 crore and EBITDA margin was at 12.62 percent.

The company has achieved remarkable growth in production on all fronts.

9:42 am Earnings Estimates: Textile company Page Industries’ first quarter profit is seen rising 13.4 percent year-on-year to Rs 76 crore and revenue may grow 14.2 percent to Rs 652 crore due to strong volume growth.

According to average of estimates of analysts polled by CNBC-TV18, operating profit is seen rising 13.8 percent to Rs 124 crore and margin may expand 10 basis points to 19.2 percent compared with same quarter last year.

Page Industries located in Bangalore is the exclusive licensee of JOCKEY International Inc (USA) for manufacture, distribution and marketing of the Jockey brand in India, Sri Lanka, Bangladesh, Nepal and the UAE.

Analysts expect volume growth at 7-8 percent and realisations at 7-8 percent that may negate the impact of high cotton price.

They don’t expect GST impact on the company, infact that is positive for Page.

Most of their products are in the sub Rs 1,000 range.

Branded apparel below Rs 1,000 has a GST rate of 5 percent, which is lower than what the company was paying earlier.

9:33 am FII View: Manishi Raychaudhuri of BNP Paribas Securities said notwithstanding the narrow breadth of positive surprises, analysis of earnings estimate progression across Asian countries and sectors shows that the earnings per share in some sectors, mostly in ASEAN markets, are beginning to show upward inflections.

These, along with sectors with secular upward momentum, could be the next outperformers, he feels.

Some sectors, like Indian financials, are showing signs of earnings per share bottoming out, he said.

9:25 am Buzzing: Shares of National Peroxide gained 9.2 percent intraday on robust Q1 (April-June) numbers.

The company has reported 46.7 percent jump in its Q1 net profit to Rs 17.9 crore versus Rs 12.2 crore in the same quarter last fiscal.

Revenue of the company rose 18 percent at Rs 76.9 crore versus Rs 65.1 crore.

The company at its meeting held on August 9, has considered and approved capacity expansion of company’s hydrogen peroxide plant at Kalyan (on 50 percent week-on-week basis) from 95,000 tonnes per annum to 1,50,000 tonnes per annum.

9:15 am Market Check: Equity benchmarks fell further in opening trade Thursday, with the Sensex losing more than 100 points.

The 30-share BSE Sensex was down 122.54 points at 31,675.30 and the 50-share NSE Nifty slipped 41.55 points to 9,866.50.

After earnings, Tata Motors down 4 percent while Aurobindo Pharma rallied 4 percent.

Eicher Motors, ONGC, Tata Power and SBI fell up to 1 percent.
Nifty Bank was down 0.4 percent. Nifty Midcap lost 0.7 percent as about two shares declined for every share rising on the NSE.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.

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