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Wednesday, January 27, 2016

Daily Market Strategy - Jan 27 2016

Hope doesn't come from calculating whether the good news is winning out over the bad. It's simply a choice to take action. - Anna Lappe
Things look better after a break for the Indian market. This month has seen one of the highest foreign fund outflow for January since 2008. While world markets were tumbling, Indian markets were shut on account of Republic Day and saved some damage. The Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, says S&P. 
The outlook is a positive start. The choppiness associated with F&O expiry could come into play. Crude prices are swinging and data from China continues to be worrisome. The outcome of US Federal Reserve's rate-setting meeting is also expected this week. Global cues are positive and a number of results are expected including HDFC, Colgate-Palmolive IDFC Bank, Bharti Infratel, Godrej Consumer, Power Grid and Just Dial.
Asian markets are mostly upbeat with Nikkei trading over 2% higher. China's CSI300 is down over a percent while Hong Kong's Hang Seng has gained 1%. South Korea's Kospi and Taiwan's TWSE are in the green.  US stock indices rallied on Tuesday, driven by energy stocks following a recovery in oil prices. Earnings from Sprint Corp., Procter & Gamble Co. and 3M Co. also perked up the sentiment on Wall Street. The Dow surged 1.8% and the S&P 500 was up 1.4. 
Finance Minister Arun Jaitley reportedly said the government is looking into the recommendations of Parthasarathi Shome committee for simplifying tax administration.
India’s Chennai based auto maker HMFCL-Mitsubishi, is recalling approximately 2400 Cedia vehicles produced between 2006 to 2008 so as to refit the passenger side airbag.
Addressing a gathering of business leaders of France and India, along with French President Francois Hollande, Prime Minister Narendra Modi said that retrospective tax is thing of the past, and assured them that the government is working on the modalities to ensure that such steps are not taken in future.
Among stocks to watch today: 
HDFC: Housing Development Finance Corporation Ltd will announce its Q3 results today. IIFL expects net profit to rise 15.4% to Rs.1,746.10 crore yoy and 8.8% qoq. 
Colgate Pamolive: Colgate Pamolive India Ltd, a leading manufacturer of personal care products, will announce its Q3 results today. IIFL expects net profit to rise 26.10% to Rs. 165 crore yoy and 5.2% qoq.  
Bharti Infratel: The company will announce its Q3 results today. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 605.5 crore, a rise of 19.5 % on Y-o-Y basis and 4.5 % on Q-o-Q basis.
Bajaj Auto: Bajaj Auto is scheduled to launch a new motorcycle on 1st February that could be a new brand introduction by the Pune-based two-wheeler major, reports a business daily. The new brand could be called 'Bajaj V', according to a recent teaser video.
Reliance Power Ltd: Reliance Power Ltd. has written to the Andhra Pradesh government, seeking to exit the stalled 4,000 MW Ultra Mega Power Project (UMPP) in Krishnapatnam, reports a business daily.
Hinduja Foundries: Hinduja Foundries has announced that the Committee of Board of Directors at their meeting held on January 25, 2016 recommended to the Board of Directors to issue Global Depository Receipts (GDRs) to promoters, promoter group, group company(ies) and any other entity which is a subsidiary, associate of its parent, group companies or any other entity eligible to invest in GDR for an amount up to Rs.400 crore.
Gujarat Fluor chemicals: The company has announced that Inbox Wind Infrastructure Services Limited, a step down Subsidiary of Gujarat Fluor chemicals Limited, has acquired 100% of Equity Shares of Vinirrmaa Energy Generation Private Limited with effect from January 23.
IOC,BPCL,HPCL: Public sector oil firms IOC, BPCL, HPCL and EIL will invest Rs. 1.5 lakh crore in setting India's biggest refinery on the west coast, Oil Minister Dharmendra Pradhan reportedly said.
BEL: The company will announce its Q3 results today. IIFL expects net profit to plunge 7.4% to Rs. 252 crore yoy; however, Q3 net profit is expected to rise 21.7% qoq.
Persistent Systems Ltd: Persistent Systems Ltd. is targeting annual revenue of US$1 billion and will focus on acquisitions to achieve the same, reports a financial newspaper. 
Concor: Container Corporation of India Ltd reported standalone net profit of Rs. 206.12 crore for the quarter ended December 31, 2015, registering decline of 31.53% yoy. The company’s standalone total income from operation of Rs. 1404.56 crore, declined by 3.25% yoy
HCL Technologies: HCL Technologies announced its acquisition of Point to Point Limited and Point to Point Products Limited (jointly referred as Point to Point or P2P).
United Spirits: United Spirits will announce its Q3 results today. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 173.9 crore, a rise of 132.9 % on Y-o-Y basis while 81.3 % decline on Q-o-Q basis.
Tata Power: Tata Power announced termination of a share purchase agreement (SPA) with Ideal Energy Projects Limited (IEPL) for acquisition of 100% stake in a 270 MW coal based thermal power project in Maharashtra, extendable to 540 MW. 
Kajaria Ceramics: The company will announce its Q3 results today.IIFL expects net profit to rise 63.8% to Rs. 74.70 crore yoy and 27.2% qoq.
RCOM: Reliance Communications has increased capital expenditure outlook by Rs. 1,000 crore to Rs. 4,000 crore for the financial year ending on March 31, according to reports.
Power Grid: Power Grid will announce its Q3 results today.IIFL forecasts the company’s net revenue for Q3 FY16 to rise to Rs. 5,195 crore, growing at a rate of 19.3% yoy and 5.6% qoq. 
Reliance Capital: Reliance Capital Ltd announced that it has acquired more than 5% voting rights in Radiant Hues CRM Solutions.
Kirloskar Oil Engines: Kirloskar Oil Engines, leading auto parts and equipments company, will announce its Q3 results today. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 29.8 crore, a decline of 12.6 % on Y-o-Y basis and 16.6 % on Q-o-Q basis.
HCL Infosystems: The net loss for the quarter stands at Rs. 65.7 crore as against loss of Rs.49.2 crore (YoY). The consolidated net sales stands at Rs. 1146.6 crore as against Rs. 1470.6 crore (YoY).
HT Media: HT Media, leading media and publishing company, will announce its financial results for the quarter ended December 2015 today. HT Media is likely to witness higher ad revenue growth backed by increase in corporate spending due to festive season. According to IIFL estimates, the company’s net profit for Q3FY16 is likely be around Rs. 53.0 crore, a decline of 28.3 % on Y-o-Y basis and 10.4 % rise on Q-o-Q basis.
Nilkamal: Nilkamal, home furniture manufacturer in India, reported standalone net profit of Rs. 20.19 crore for the quarter ended December 31, 2015, registering over two folds jump yoy but decline of 21.56% qoq. The company’s revenue stood at Rs. 428.42 crore, witnessing growth of 1.76% yoy.
Veto Switchgears: The company has bagged additional order worth Rs. 40 crore from dealers conference, Rajasthan.
Subros: Subros, manufacturer of air-conditioner systems and thermal products, reported standalone net profit of Rs. 6.01 crore, registering growth of 55.7% yoy but decline of 2.12% qoq. 
Mcleod Russel India: Mcleod Russel India, world's largest tea planter, reported standalone net profit of Rs. 56.98 crore for the quarter ended December 31,2015, registering decline of 29.15% yoy and 73.67% qoq. 
MRF: The net profit for the quarter stands at Rs. 388 crores. The company's EBITDA Margin at 22.6% as against 19.2% (YoY).
Kansai Nerolac Paints: The company's total income has increased by 8.7% at Rs. 965 crore for the quarter against Rs.887 crore in the corresponding quarter of the previous year.
HDFC Bank: The bank reported standalone net profit of Rs. 3,356.84 crore for the quarter ended December 31, 2015, registering growth of 20.12% yoy. The bank’s Net Interest Margin stood at 4.3% for the quarter.
Eveready Industries: The company recorded a rise of 10.8% in its net profit at Rs. 17 crore for the quarter ended December 31, 2015 as compared to Rs.15.3 crore for the quarter ended December 31, 2014. 
Blue Star Limited: The company has announced the launch of a stylish range of airconditioners comprising a wide array of highly energy-efficient as well as eco-friendly split airconditioners for the residential and commercial segments.
Swaraj Engines: Swaraj Engines, Hi-tech engine components manufacturer, reported standalone net profit of Rs. 8.36  crore for the quarter ended December 31,2015, registering marginal growth of 0.96% yoy. The Company’s standalone revenue stood at Rs. 105.59 crore, witnessing growth of 3.48% yoy.
Global Data: Consumer Price Index (QoQ) (Q4) AUD, RBA trimmed mean CPI (YoY) (Q4) AUD, Consumer Price Index (YoY) (Q4) AUD, RBA trimmed mean CPI (QoQ) (Q4) AUD, Gfk Consumer Confidence Survey (Feb) EUR, Nationwide Housing Prices s.a (MoM) (Jan) GBP, Nationwide Housing Prices n.s.a (YoY) (Jan) GBP, UBS Consumption Indicator (Dec) CHF, Consumer Confidence (Jan) EUR, Consumer Confidence (Jan) EUR, Business Confidence (Jan) EUR, BBA Mortgage Approvals (Dec) GBP, 30-y Bond Auction EUR, MBA Mortgage Applications (Jan 22) USD, New Home Sales Change (MoM) (Dec) USD, New Home Sales (MoM) (Dec) USD, EIA Crude Oil Stocks change (Jan 22) USD, 5-Year Note Auction USD, Fed Pace of MBS Purchase Program (Jan) USD, Fed Pace of Treasury Purchase Program (Jan) USD, Fed's Monetary Policy Statement  USD, Fed Interest Rate Decision USD, Fed's Monetary Policy Statement and press conference  USD, RBNZ Interest Rate Decision NZD, Monetary Policy Statement  NZD, Trade Balance (MoM) (Dec) NZD, Exports (Dec) NZD, Trade Balance (YoY) (Dec) NZD, Imports (Dec) NZD, Foreign bond investment (Jan 22) JPY, Foreign investment in Japan stocks (Jan 22) JPY, Retail Trade s.a (MoM) (Dec) JPY, Retail Trade (YoY) (Dec) JPY, Large Retailer's Sales (Dec) JPY
Results: Colgate-Palmolive (India),HDFC, IDFC Bank,Bharti Infratel, Bharat Electronics Ltd, Godrej Consumer Products,Power Grid Corporation Of India, Just Dial,State Bank Of Mysore, Kajaria Ceramics,Neyveli Lignite Corporation, SKS Microfinance, Graphite Indiablue Star Infotech, Beryl Drugs, Accel Frontline,Bajaj Steel Industries, Alfred Herbert (India),United Spirits,Zenotech Laboratories, Alkyl Amines Chemicals,HT Media,Ortel Communications, Tata Coffee, Sagar Cements, Ser Industries, Shanthi Gears,Sri Amarnath Finance, Aunde India, Automobile Products Of India,Beryl Securities,Aditya Birla Money, Database Finance, Datasoft Application Software, Dhruv Estates, Dhunseri Petrochem, Ecoplast, Emami Paper Mills,Freshtrop Fruits,Gujarat Narmada Valley Fertilizers & Chemicals Ltd., Gujarat Nre Coke, Havells India, Healthfore Technologies, Heg, Ind-Agiv Commerce,Ivee Injectaa,Kaushalya Infrastructure Development Corporation Ltd,Kirloskar Oil Engines, K.P.R.Mill, Kss,L.G.Balakrishnan & Bros, LGB Forge,Mirza International, MPS, Modi Naturals, Natural Capsules, National Plywood Industries, Next Mediaworks, Nidhi Granites,Nocil,Pentokey Organy (india), Polyspin Exports, Procal Electronics India, Rane Engine Valve, Rose Merc, Safari Industries, Umang Dairies
Trends in FII flows: The FIIs were net sellers of Rs.9.11 bn in the cash segment on Monday. The domestic institutional investors (DIIs) were net buyers of Rs.30.7 bn as per the provisional figures released by the NSE.
Other news in the media:
Tata Power announced termination of a share purchase agreement (SPA) with Ideal Energy Projects Limited (IEPL) for acquisition of 100% stake in a 270-mw coal based thermal power project in Maharashtra, extendable to 540 Mw.  (BS)
Blue Star, is eyeing around 12% market share in the Indian AC market by end of FY17 from the current 10.5%. After launching THE company's new range of star rated inverter ACs, B Thiagarajan, Executive Director & President - AC&R Products Business, Blue Star Limited said that the room AC segment is estimated to be around Rs110bn in the overall AC market, which is estimated to be around Rs150bn.  (BS)
Low cost carrier SpiceJet announced its cheaper deals for domestic base fares as low as Rs826 and overseas base fares starting at Rs3026. (BS)
Mahindra and Mahindra (M&M) had offered its new generation Scorpio for bookings online on e-commerce portal Snapdeal in September 2014. The success of the endeavour encouraged the company to now offer its latest offering the micro sports utility vehicle (SUV) KUV100 online on Flipkart and two other platforms. (BS)
Eros International Media Ltd has announced its pipeline of 65-plus films across multiple languages for this year. The titles include Housefull 3, Shivaay, Singam 3 and Rock On 2. (BL)
Emami Ltd has launched a new product Zandu Pure Honey. In a statement, the company said the product’s 100% purity is guaranteed, and no sugar is added to it. It is available in pack sizes of 100 gm, 250 gm and 500 gm and priced at Rs75, Rs165 and Rs270, respectively. (BL)
At least five Indian drug companies — Torrent Pharmaceuticals, Dr Reddy's Laboratories, Aurobindo Pharma, Cipla and Lupin — are in initial discussions to bid for Sagent Pharmaceuticals, a Nasdaq-listed specialty injectables maker, sources familiar with the talks said. (ET)
Looking to exit the stalled 4,000 MW Krishnapatnam power project, Reliance Power has written to Andhra Pradesh government suggesting that it could be done on similar lines to that of Tilaiya UMPP, which was acquired by procurers from the company. (BS)
Indian naval ship (INS) Vikrant, the first aircraft carrier, which played a pivotal role in the 1971 Indo-Pak war, has made its way into a commuter bike to be launched by Bajaj Auto next month. It will launch a 150-cc motorcycle on February 1 christened ‘V’ which is built from metal used in the country’s most celebrated aircraft carrier. (BS)
The Paradip Refinery of Indian Oil, which is set to be dedicated to the nation on February 7, will massively boost the bottomline of the largest oil marketeer to the tune of 20-30%, thanks to the latest technologies deployed at the facility that's coming up after a delay of 14 long years. (BS)
Drug discovery firm Sun Pharma Advanced Research Company (SPARC) has received markets regulator Sebi's approval to raise up to Rs2.50bn through a rights issue. (BS)
Apollo Energy Company Limited, an Apollo Hospitals Group company, has approved the divestment of 23.3% shareholding in Apollo Munich Health Insurance Company Limited to its joint venture partner, Munich Re of Germany for Rs1.6bn. The proposed transaction values Apollo Munich at Rs7bn. (BS)
In a tussle of manufacturers and the end-user industry over imposition of steel import curbs, the department of commerce has recommended introduction of standards on certain grades of steel as a measure to keep shipments from South Korea and China at bay. (BS)
Road Transport and Highways Minister Nitin Gadkari will meet bankers and road contractors on January 28 to discuss issues related to funding of highway projects. (ET)