The rebound in global markets extended on Wednesday helping Nifty to end higher by more than a percent mainly on back of 4% surge in the Nifty IT Index. The Trump victory in US presidential election had a booster impact for US markets but may have a negative impact in Indian market as he emphasized on policy on illegal immigrants and limiting H1B visa that may impact Indian IT companies severely. From Nifty perspective, the current rebound is seen as mere dead cat bounce and is soon likely to follow with sharp slide towards 22,000 while a rally unlikely to extend beyond 24,500. Adding to it, major risk for emerging markets may come from strong dollar and tariff regime which may increase cost of exporting goods and services to US and may lead to rise in interest rates. Also, the Q2 earnings season has been sombre so far with cautious management commentary indicating a slowdown in domestic consumption. Maintain a cautious stance with selective buying on the stock specific front.
Results Today – M&M, Trent, Cummins, Indian Hotels, Wabag
Nifty 50 Chart
Stocks to watch
Positive Read through
- Ultratech – Increases stake in UAE-based Rakwct by 11.5 pct for ~USD 22 mn.
- Tata Steel – Posted Q2 above estimates driven by India business.
- Blue Star – EBITDA jumped 21 pct, sales from operations rose 20 pct YoY.
- Wipro – In strategic partnership with Relex Solns for retail operations & inventory planning.
- Sonata Soft – Margin stood at 6.7 pct vs 5.7 pct, EBIT grew 1.1 pct QoQ.
- Apollo Hosps – Margin & profits beat estimates, all segments see mid-teens growth.
- Rvnl – JV is lowest bidder for Rs. 19.17 bn BSNL contract, company bags order of Rs. 1.80 bn.
- Shakti Pumps – Bags order worth Rs. 1.16 bn under PM Kusum scheme.
- Reliance Power – Arm prepays Rs. 4.85 bn debt to Varde partners to become a zero-debt company.
- Gujarat Gas – Strong margin expansion, volumes lower than estimates.
- JSPL – India business performance in-line with estimates, net debt increased on higher capex.
- Chambal Fert – EBITDA jumped 28.5 pct, margin at 18.2 pct vs 11.4 pct YoY.
Negative Read through
- Ultratech – Increases stake in UAE-based Rakwct by 11.5 pct for ~USD 22 mn.
- Hindalco – Weak numbers from Novelis, withdraws short-term EBITDA/t guidance.
- Wockhardt – Launches QIP, issue price of Rs. 1,105/sh at 13 pct disc to CMP.
- Power Grid – Q2 missed estimated, EBITDA fell 2.1 pct YoY.
- Kirloskar Ferrous – EBITDA fell 34.3 pct, margin at 33 pct vs 41 pct YoY.
- Rain Ind – EBITDA shrank 41 pct, margin at 5.5 pct vs 8.8 pct YoY.
- Gulf Oil – EBITDA fell 5.5 pct, margin at 12.4 pct vs 12.7 pct QoQ.
- Delta Corp – EBITDA tumbled 66.1 pct, margin at 18 pct vs 38.3 pct YoY.
- JK Lakshmi – Realisation declines & volumes are lower by 14 pct YoY.
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