Sensex ended the day with the gain of 676 points to 73,663 and Nifty went up 203 points to 22,394 on Thursday, May 16, 2024. Nifty Bank climbed 289 points to 47,977 and Nifty Midcap zoomed 445 points to 51,153.
The agriculture and manufacturing sector gained in the market today while the banking sector traded in red.
The volume traded for Canara Bank surged by 35.47% compared to the previous day, while the price dropped to Rs.112.9, marking a decline of 5.13%. Traders might consider reducing long positions and keeping a close watch for potential support levels at 112.58 and 111.67.
Indian benchmark indices surged at the commencement of trading on Thursday, mirroring the positive momentum seen in global markets. This optimism was fueled by lower-than-anticipated inflation figures in the US. As the opening bell rang, the Sensex soared by 351.21 points, equivalent to 0.48%, reaching 73,338.20, while the Nifty climbed by 118.70 points, marking a 0.53% increase, to stand at 22,319.20.
Thursday's trading session is expected to be volatile as key players react to earnings releases post-market hours on Wednesday. Stocks such as Dixon Technologies, Mankind Pharma, Titagarh Rail, IEX, Transport Corporation of India, and NLC India are in focus.
Among the noteworthy names unveiling their financial performance on Thursday are Mahindra & Mahindra, along with a cluster of broader market entities including Biocon, Crompton Consumer, JK Paper, KIMS, Hindustan Aeronautics, Solar Industries, and Motherson Sumi Wiring. Their reports will likely dictate the market's trajectory in the near term.
NCC witnessed an 8% surge on May 16, following the announcement of strong earnings for the quarter ending March 2024 (Q4FY24). Brokerage firms maintained bullish outlooks on the stock, raising target prices as NCC continued to demonstrate notable improvements in net working capital (NWC) and aimed to further reduce its debt to Rs 500 crore by March 2025. NCC reported a 25% year-on-year increase in consolidated net profit to Rs 239.2 crore for the March quarter, driven by enhanced execution. The company's revenue surged by 31% to Rs 6,484.9 crore, benefitting from its record order wins in 2022-23. Furthermore, it secured its highest-ever order inflow of about Rs 26,000 crore in 2022-23, attributed to increased government outlay under the National Infrastructure Pipeline (NIP). Despite NCC's decision to halt its development plans due to a subdued real estate market, these land holdings are anticipated to yield significant value appreciation when the real estate sector rebounds, according to Nuvama, which maintained its 'buy' rating on the stock with a revised target price of Rs 290, up from Rs 267 previously.
May 16, 2024, 2:41 pm IST
Apollo Tyres Shares Rally 7.2% as Nomura, JPMorgan Boost Ratings Post Q4 Results
Apollo Tyres Ltd. experienced a significant surge of 7.2% on Thursday following upgrades from brokerages Nomura and JPMorgan, prompted by the tyre manufacturer's March quarter results. The stock is now inching closer to its record high of Rs.557, achieved on March 31 this year.
JPMorgan, a brokerage firm, elevated the stock's rating from "neutral" to "overweight" and adjusted its price target to Rs.555, up from the previous Rs.535. In its assessment, JPMorgan emphasized Apollo Tyres' consistent display of commitment to balance sheet deleveraging and disciplined growth strategies. The brokerage anticipates a potential re-rating of the stock, attributing it to the company's proactive stance on price discipline and debt reduction. Apollo Tyres has already initiated price hikes to counter the impact of escalating commodity prices.
Similarly, Nomura upgraded the stock from "reduce" to "neutral" and revised its price target to Rs.512 from the earlier Rs.478.
May 16, 2024, 2:38 pm IST
Railway Stock Rockets 9% On Strong Q4 Results; Target Price Hits Rs.1,285 Per Share
Titagarh Rail Systems Ltd., a potential multibagger in the railway sector, surged by 9% following robust Q4 results, with its stock price aiming for Rs.1,285 per share.Titagarh Rail Systems Ltd. shares witnessed a 9% increase on Thursday, May 16, reaching a day's high of Rs.1,217 per share on the NSE. The company reported a remarkable 64% year-on-year surge in net profit to Rs.79 crore for the March 2024 quarter. Additionally, the EBITDA margin improved to 11.4% from 9.8% compared to the previous year. Morgan Stanley, a renowned global brokerage firm, maintains an 'Overweight' rating on the stock, setting a target price of Rs.1,285 per share, indicating a potential upside of 15% from Wednesday's closing levels.
May 16, 2024, 1:07 pm IST
Go Digit IPO Review
Go Digit General Insurance, supported by Anushka Sharma and Virat Kohli, had a respectable subscription rate going into the second day of bidding on May 16, with 45 percent of the issue being subscribed. In contrast to the 5.28 crore shares on sale, bids for 1.89 crore shares were received for the offer. A combination of a new issue of 4.14 crore shares valued at Rs 1,125 crore and an offer for sale of 5.48 crore shares valued at Rs 1,489.65 crore make up the Rs 2,614.65-crore IPO. In the retail category, 1.83 subscriptions were made to the public issue. Of their allotment, non-institutional investors purchased 43%. Exchange data indicated that the section reserved for Qualified Institutional Buyers (QIBs) has not yet been booked.
May 16, 2024, 12:43 pm IST
Oberoi Realty Soars To All-Time Highs
Oberoi Realty's shares shot up about 5%, hitting a record high of Rs 1,657 on the National Stock Exchange (NSE) on May 16. Brokerages have revised target prices upward, reflecting the upbeat mindset of investors, which has led to this notable advance that builds on recent session gains. The upward revision is attributable to the growing annuity portfolio, successful project launches, and positive inventory liquidation expectations.The Mumbai-based real estate developer had an unprecedented 64 percent increase in net profit for the quarter that ended in March 2024, with a record high of Rs 788 crore. Strong demand and efficient operations were the main drivers of this rise. In addition, the company's revenue increased by 37% year over year to Rs 1,315 crore during the quarter that was reviewed.
May 16, 2024, 12:24 pm IST
Shyam Metalics and Energy Q4 Results Update | Niche business segments to drive earnings
“Shyam Metalics (SMEL) reported EBITDA of INR4.4bn, higher than JMfe of INR4bn. EBITDA/ton stood at INR6.4k for 4QFY24, vs INR6.3k/t in 3Q. Sequentially higher realisations helped sustain margins despit the raw material inflation. Coompany witnessed a ~7% increase in volumes QoQ driven by improved demand scenario. Further, SMEL’s strategy to foray into niche business segments - Aluminium foil, stainless steel TMT and colour coated sheets will offer growth optionality, besides improving SMEL’s margin profile. Shyam Metalics offers a unique play in the Indian metals space, with a combination of a) increasing contribution from finished steel and valued added segments and b) diversified business across the steel value chain. The company has executed capacity expansion plans with precision over the past few years. Capital allocation towards niche business segments augur well for the company. Maintain BUY,” Ashutosh Somani of JM Financial said in a report.
May 16, 2024, 11:41 am IST
Apollo Tyres Q4 Result Update | Demand recovery / Profitability focus to drive performance
Ronak Mehta - Senior Analyst at JM Financial said, “During 4QFY24, Apollo Tyres reported consol. adj. EBITDAM of 17.5%, in-line with JMFe. EPR liability related cost had an impact of 110bps on consol. margins. Domestic replacement demand has started picking-up from Apr’24. And, overall replacement demand is expected to grow by high single-digit / double-digit during FY25. Demand in the International markets has also started to recover, albeit gradually. Pricing environment in domestic replacement market is largely stable. Recent price hike (3% in May’24) is expected to partially mitigate the impact of increase in RM basket and EPR liability. Focus on favourable mix and tight cost control is expected to support margin performance. Capex intensity is expected to be low in the medium-term. We have marginally tweaked our FY25/26 estimates to adjust for higher than expected tax rate. Consistent focus on driving profitable growth, deleveraging and improving ROCE is expected to support the stock performance. Maintain BUY and ascribe a 15x PE to arrive at Mar’25 TP of INR 550.”
May 16, 2024, 11:17 am IST
Bharti Hexacom Q4 Results Update | Strong results; beneficiary of premiumisation story
“Bharti Hexacom (BHL) 4QFY24 EBITDA was 1.5% higher than JMFe at INR 9.3bn (up 4.1% QoQ and 13.8% YoY) on account of strong wireless subs (subscribers) additions (of 560k) and sharper jump in ARPU (to INR 204) driven by rise in AMDU and improved subs mix on back of robust 4G/5G net adds (of 640k). EBITDA margin improved 18bps QoQ to 49.6%. Home broadband and wire-line business continued to register strong subs addition while its ARPU further declined QoQ. Capex was INR 1.4bn higher QoQ at INR 4.9bn; net debt increased by INR 2.9bn to INR 78.3bn at end-4QFY24 due to seasonal increase in working capital. Further, board approved final dividend of INR 4/share (or 40% payout), though will frame dividend policy once some deleveraging is done. We maintain BUY on BHL (revised 1 year TP of INR 1,075) as we believe India wireless business tariff hikes are likely to be more frequent, going forward, given the consolidated industry structure and higher ARPU requirement for Jio also to justify significant 5G capex. ARPU growth aided by likely moderation in capex will drive BHL’s FCF growth from FY25, enabling it to get to net cash by FY29; this will also aid in accretion in equity value. We see BHL as a midcap pure-play on wireless ARPU growth story,” said Dayanand Mittal - Research Analyst at JM Financial.
May 16, 2024, 11:00 am IST
Dixon Technologies Q4 Result Update | Backward integration is a key focus along with customer addition
“Dixon Technologies’ 4QFY24 Revenue was at INR 46.5bn up 52% YoY and down 3% QoQ below JMFe by 2% and consensus by 8%. EBITDA at INR 1.8bn up 17% YoY and down 1% QoQ. PAT of INR 973mn up 21% YoY and flat QoQ. Revenue growth was driven by the Mobile phones & EMS segment while consumer electronics and lighting segments continue to remain weak. The mobile segment should continue to materially scale up led by incremental volumes coming from Xiaomi and new customer additions along with Ismartu. Dixon also continues to focus on new segment/business addition. We estimate EPS CAGR c.69% over FY24-26E along with strong return ratios (ROE of 24-35%) led by efficient capital/NWC management. Maintain Buy with revised price target of INR 8,620 (50x FY26 EPS),” said Deepak Agarwal - Vice President - JM Financial Ltd.
May 16, 2024, 10:37 am IST
Bharti Airtel Q4 Result Update By JM Financial Services
Bharti’s 4QFY24 consolidated EBITDA at INR 197bn (down 2.8% QoQ but up 3.7% YoY) was 4% lower than JMFe/consensus, primarily due to impact of Nigerian Naira currency devaluation on the Africa business. However, India wireless EBITDA was largely in-line with JMFe at INR 122bn (+2% QoQ and +15.6% YoY) as higher net subscriber (subs) adds (at 6.7mn) and 4G/5G subs adds (at 7.8mn) were offset by lower APRU at INR 209. EBITDA margin remained stable QoQ at 55.1%. Traction in FTTH business remained strong; however, enterprise business growth continues to be subdued due to slowdown in the global business. Consolidated capex was INR 12bn higher QoQ at INR 105bn with India capex INR 7bn higher QoQ at INR85bn; management re-iterated FY24 was peak capex and will moderate from FY25. Further, board approved final dividend of INR 8/share (or 61% payout), though will frame dividend policy once some deleveraging is done. We maintain BUY on Bharti (revised TP of INR 1,450) as we believe India wireless business tariff hikes are likely to be more frequent, going forward, given the consolidated industry structure and higher ARPU requirement for Jio also to justify significant 5G capex. ARPU growth aided by likely moderation in capex will drive Bharti’s FCF from FY25, enabling it to get to net cash by FY29; this will also aid in accretion in equity value.
May 16, 2024, 10:03 am IST
Morning Market Outlook By Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
The underperformance of the Indian market during the last one month is striking. While the S&P 500 is up by 5.08% and Euro Stoxx 50 is up by 3.74%, Nifty is almost flat with only 0.24% gain. More important is the huge outperformance of Chinese stocks with a stunning gain of 17.38% in Hang Seng. It is this outperformance of China that is causing the sustained selling by FIIs in India.
India’s underperformance is likely to change soon with clarity on election results. DIIs, HNIs and retail can turn aggressive buyers lifting the market sharply. FIIs can’t afford to miss this potential rally. The only risk is political instability after elections which appears a very low probability event now.
Meanwhile the global market construct continues to be supportive with the US indices setting new records. The decline in US CPI inflation in April to 3.4% sets the stage for a rate cut by the Fed.
May 16, 2024, 9:45 am IST
Titagarh Rail Systems Stock Surges Over 6% Following 64% YoY Rise In Q4 Net Profit
Titagarh Rail Systems witnessed a significant surge of more than 6% in its share prices after the company unveiled robust financial results for the fourth quarter. The company reported a 64% year-on-year (YoY) surge in its net profit, reaching Rs 79 crore in Q4FY24. The company recorded a 8% YoY increase in revenue from operations, totaling Rs 1,052.4 crore.
The board has recommended a dividend of 40% at ₹0.80 per equity share of Rs 2 each for the financial year 2023-24.
May 16, 2024, 9:41 am IST
Jindal Stainless Stock Dip Over 2% Following 30% Decline In Q4 Net Profit
Jindal Stainless witnessed a decline of more than 2% in its share value after the company disclosed a significant setback in its financial performance for the fourth quarter. The company reported a 30% year-on-year (YoY) decrease in its consolidated net profit, plummeting to Rs 501 crore during the March quarter. This decline was attributed to compromised margins, exacerbated by the downward trend in nickel prices and escalating shipping costs.
Despite a modest 3% YoY decrease in consolidated net revenue, amounting to Rs 9,454 crore, Jindal Stainless faced substantial challenges in maintaining profitability amidst a challenging economic environment.
May 16, 2024, 9:21 am IST
Market Opens With Gains
Indian benchmark indices surged at the commencement of trading on Thursday, mirroring the positive momentum seen in global markets. This optimism was fueled by lower-than-anticipated inflation figures in the US.
May 16, 2024, 9:08 am IST
Rupee Opens Stronger
Rupee opens at 83.47/$ versus Wednesday’s close of 83.50/$
May 16, 2024, 8:40 am IST
Oil Prices Edge Up On Decreasing US Inventories, Improved Risk Sentiment
Oil prices continued their ascent for a second consecutive day, supported by diminishing US stockpiles and an expanded risk appetite driven by indications of receding inflationary pressures in the US.
The global benchmark Brent crude surpassed the per barrel mark after recording a 0.5% increase on Wednesday, while the US benchmark West Texas Intermediate hovered close to . Notably, US oil inventories experienced a decline of 2.5 million barrels last week, marking the first consecutive reduction since March and bringing national reserves to their lowest level in a month.
May 16, 2024, 8:39 am IST
Asian Markets Surge, Dollar Softens Following US CPI Report
Asian stock markets surged in early trading on Thursday, mirroring the gains seen on Wall Street, as investors responded positively to the latest US inflation data, heightening expectations for potential Federal Reserve interest-rate cuts.
Equities in Australia, Japan, and South Korea witnessed notable gains, buoyed by the optimistic sentiment. Additionally, futures contracts for the S&P 500 and Nasdaq 100 showed early signs of advancement after both benchmarks soared by over 1% to achieve fresh record highs on Wednesday. Meanwhile, trading in Hong Kong is set to resume following a holiday pause.
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