Stock Market Live: Indices at record closing; Sensex rallies 610 points, Nifty ends above 15,300 led by banks

Joseph Thomas, Head of Research, Emkay Wealth Management

The markets closed the day on a high note with the Sensex crossing the 52,000 mark, with both Sensex and Nifty closing with a gain of more than 1%. What moved the markets was the Bank Nifty, which climbed by 3.65 % to 37,425, a significant surge from the 31,000-32,000 levels where it was basing itself for a couple of weeks. Midcaps, small caps, realty and healthcare too participated in the rise today. Markets elsewhere, in the East  as well as early Europe, has been well supported by the fruition of large scale vaccination as also  expectations of larger economic stimulus in the US.

Ajit Mishra, VP – Research, Religare Broking 

Markets started the week on a robust note and made a new record high, largely led by firm global cues and encouraging domestic macro-economic data. The benchmark opened gap up and hovered in a range for most of the session however renewed buying in the last hour helped the index to close around the day’s high. Markets have resumed the trend after a week-long consolidation phase and we are now eyeing the 15,500 in Nifty. With no major events, participants should keep a close watch on global markets for cues. Also, maintain focus on the selection of stocks and avoid a contrarian approach.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

The Nifty continued its strong form and closed almost at the high of the day. We should be heading to 15,500 soon where we could face the next level of resistance. The stop level has been raised to 15,100 and hence traders can build fresh positions for a new target of 15,500.

Market At Close

– All Frontline Indices Close At Record Highs

– Sensex Closes Above 52,000 & Nifty 15,300 For The 1st Time Ever

– Bank Leads Market Higher With Nifty Bank Posting Record Close Of 37,306

– Midcap Index Closes At Record High But Market Breadth Favours Declines

– Nifty Rises 151 Points To 15,315 & Sensex 610 Points To 52,154

– Midcap Index Gains 299 Points To 23,214 & Nifty Bank 1,197 Points To 37,306

– All 5 Top Nifty Gainers Are Financials; Axis Bank, ICICI & Bajaj Fin Top The List

– 7 Nifty Stocks Hit Fresh 52-week Highs; 5 Of Them Are Financial Stocks

– Insurance, Autos & IT Underperform; HDFC Life, SBI Life Top Nifty Losers

– Positive Commentary On JLR Helps Tata Motors Rise Nearly 2%

– Apollo Hospitals Surges Over 13% After A Strong Management Commentary

– Hind Copper, Piramal Ent, LIC Hsg, HEG, RBL Bank Amongst Top Midcap Gainers

– Market Breadth Favours Declines; Advance-Decline Ratio At 3:4

Closing Bell | The Indian equity indices ended at record levels on Monday led by strong gains in banks and financial stocks amid positive global cues. The Sensex gained 609.83 points, or 1.18 percent, to close at 52,154.13, while the Nifty ended at 15,314.70, up 151.40 points, or 1.00 percent. Broader markets supported the rally with the Nifty Smallcap100 and Nifty Midcap100 gaining 0.42 percent and 1.31 percent each.

Among sectors, Nifty Private Bank rallied the most over 3 percent followed bu Nifty Financial Services, Nifty PSU Bank, Nifty Realty and Nifty Auto. Meanwhile, IT, metals and pharma indices were under pressure. Axis Bank, ICICI Bank, SBI, Bajaj Finance and IndusInd Bank led gains among Nifty50 constituents, while SBI Life, HDFC Life, Dr Reddy’s Laboratories, Tata Steel and TCS were the top index losers.

Nirali Shah, Head of Equity Research, Samco Securities

RailTel is coming out with an IPO of Rs 819.24 Cr, an OFS by the Government of India to divest part of their stake. The company derives 66% of its revenues from the telecom segment while the remaining portion is from railways and other projects. RailTel, if performs efficiently can benefit from the 5G growth in India from a fiberisation needs’ perspective. It could also play a key role in digital transformation of the railways. Besides, Covid-19 has had a minimal impact on the telecom industry and has infact triggered growth for certain players due to increased data usage and VPN services for people working from home. Since RailTel is a debt free company and pays consistent dividends it could witness some traction but for long term investors there are a few red flags.

Firstly, the company has delivered single-digit revenue and PAT CAGR of 7.5% and 2.5% respectively from FY18 to FY20. There is a high dependence on government entities and concentration risk given that 23.8% of its revenues come from top 3 customers. Its presence in a highly regulated industry is another cause of concern. Overall, the company is fairly priced at its FY20 P/E of 21.3 times. It has been commanding a good grey market premium indicating the offer will sail through but keeping the risks in mind, we recommend investors to subscribe for listing gains only.

Nish Bhatt, Founder & CEO, Millwood Kane International

The Indian rupee has appreciated, it is trading near the psychological level of 72.50/$, almost a 1-year high level for the rupee. The appreciation in the rupee is primarily due to RBI intervention, positive comments by rating agency Moody’s on India’s economic outlook, record fund flows in Indian equities by FIIs.

The rally in crude prices, a hope of an extra stimulus package from the US government, and the policy stance of the US Fed to keep rates low for a longer duration of time has kept the Dollar lower. Moving forward RBI’s action via OMO to support the rupee, global economic recovery, and vaccination process will guide the INR/USD movement.

TVS Motor Company | The company announced its new distribution partnership with Public Motors; part of the reputed Ghaf Investments L.L.C, in the United Arab Emirates. As a part of this association, a 2000 sq ft marquee showroom was inaugurated, along Sheikh Zayed Road in Dubai. Apart from hosting a wide range of two-wheelers, the showroom will provide spare parts and feature a service facility.

Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services

Across the globe, equities are charged on ‘risk-on’ tone as countries and regions are rolling out vaccines and easing lockdown restrictions. This optimism has pushed Indian rupee to surge to 72.57, the highest level since Mar 3, 2020. The trading range has shifted to 72.00-73 and RBI seems to be comfortable with rupee appreciating below 73 level. This week is a holiday-thinned market so fx trading may be uninspiring but RBI intervention will be eyed. The focus will remain on global flash PMIs and Fed minutes and until then 72.50 will act as strong support in USDINR spot, a break of which can push the spot price towards 72 zone, while 73 will act as immediate resistance.

Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking

Since the budget day, markets just took off once again. This financial led rally continued after a brief pause last week. 50,000-48,000 now becomes key support for the benchmark.

Motilal Oswal on Coal India

Coal India’s result reflects a broad recovery in power demand. Off-take rose 9% YoY in 3Q (v/s 8% YoY decline in 1H). Operationally, though, EBITDA (ex-OBR) declined 5% YoY on lower e-auction realizations and provisions. Muted power demand has impacted e-auction realizations and overall growth in off-take. However, with recovery in power demand and a large cash position, Coal India can tide over the situation. Maintain Buy, with Target Price of Rs 178 per share based on 3.5x Dec’21 EV/EBITDA.

IRCON International | The company’s board has deferred the proposal to consider bonus issue to the next board meeting. It declared an interim dividend for FY2020-21 of Rs 1.30 per share. which will be paid on Wednesday, 3rd March 2021 onwards.

Rally supported by fundamentals; Nifty earnings to double over 5 years: Renaissance’s Pankaj Murarka

The benchmark Sensex rallied over the 52,000 mark for the first time ever on Monday propelled by gains in the broader market. Pankaj Murarka, founder of Renaissance Investment Managers spoke to CNBC-TV18 to discuss the fundamentals of the market.

Murarka said, “We are in one of the most ferocious bull market that we are going to experience in this decade because we have a combination of fiscal expansion and benign liquidity that is going on in the economy and after almost a decade we are seeing a strong resurgence in corporate earnings coming back so if you look back it took 10 years for Nifty to double its earnings over the last decade from 2010 to 2020 and this time I think we will do it in the next five years you will get again double earnings.” Watch here.

HDFC Securities on OIL India

Our Reduce recommendation on Oil India with a price target of Rs 119 is premised on (1) a muted oil and gas realisation and (2) lack of production growth for both oil and gas. We expect oil prices to remain at ~USD 50 per barrel in FY22/23E vs. USD 61/bbl in FY20, given the weak global macro. With no subsidy sharing with OMCs, OIL remains a pure play on the crude oil price. 3QFY21 revenue was in line with our estimates, but EBITDA was 116% below our estimate, owing to dry wells write-off of Rs 6.5 billion. RPAT was above our estimate, owing to higher-than-anticipated other income and credit of Rs 12 billion of taxes.

CLSA on Bharat Forge

Bharat Forge’s (BFL) 3QFY21 standalone results were slightly better than expectations. Revenue (5% above our estimate) and its Ebitda margin were almost flat YoY despite an inferior mix and the removal of export incentives. Subsidiary profitability improved sharply and management indicated improved revenue traction over the coming quarters.

While the revival of non-auto exports could take longer, we are enthused by the stronger-than-anticipated cyclical recovery in domestic and export truck revenue. A turnaround in subsidiaries would also help its bottom-line meaningfully.

We increase our FY21-23 Ebitda forecasts by 6%-12% and raise our target price from Rs 645 to Rs 770. We maintain our BUY rating.

Bullish on CV demand; EV, a work in progress: Baba Kalyani

Bharat Forge’s Q3FY21 earnings came in operationally better than estimates, but bottomline was hit by a one-time loss. The Auto components major reported a consolidated net loss of Rs 210.45 crore in the third quarter ended December 31, 2020. The company had posted a consolidated net profit of Rs 40.44 crore in the same quarter last fiscal, Bharat Forge said in a regulatory filing.

Baba Kalyani, CMD of Bharat Forge discussed the numbers. “We began to see fairly strong demand in commercial vehicle (CV) space across all the geographies that we operate in. therefore we are very bullish that this will continue and it will register strong growth for us on a sequential basis going forward,” he said.

In terms of production-linked incentive (PLI) scheme, he said, “I personally welcome the PLI scheme for auto components. It is a very good initiative that the government has taken, which will kickstart a larger amount of investments in the manufacturing sector to create growth opportunities. We are waiting for the details on the PLI scheme.” Watch here.

Apollo Hospitals hits 52-week high; stock jumps 10% on strong Q3 results: Should you buy now?

Shares of Apollo Hospitals surged nearly 10 percent to hit its 52-week high on Monday after the company reported better than expected December quarter earnings. It posted a 49.14 percent rise in consolidated net profit at Rs 134.16 crore in Q3 mainly on account of a reduction in expenses.

Brokerages were also very bullish on the stock post the results on strong margin lifting the sentiment further. JPMorgan, Goldman Sachs and Credit Suisse were all positive on the stock.

JP Morgan was overweight on the stock with a target at Rs 3,120 per share. It said that Q3 was another quarter of margin beat as the focus remained on non-COVID recovery and digital space. Organic and inorganic investments will strengthen the firm’s presence in the East and North India, it noted, adding that the firm’s focus is on more than doubling its diagnostic revenue. Read more.

Motilal Oswal on Ashok Leyland

Ashok Leyland’s 3QFY21 performance was impacted by adverse mix, increase in discounts, and commodity cost inflation. The performance was weaker than its peers (probably due to timing differences of cost inflation). Ashok Leyland remains a pure play on a CV cycle recovery, with additional levers for expansion of revenue pools. We have left unchanged our FY21E/FY22E EPS estimates as upgrades in volumes are offset by a reduction in margin. Maintain Buy.

RBI announces special OMO | The Reserve Bank of India (RBI) has announced special OMO simultaneous purchase and sale of Government securities of Rs 10,000 crore on February 25.

Buzzing | Vodafone Idea shares fall over 3% after Q3 earnings; should you buy, sell or hold?

The share price of Vodafone Idea declined almost 4 percent on Monday after the debt-ridden telecom operator reported its December quarter earnings below analysts’ estimates, leading brokerages to maintain a bearish outlook on the stock.

Vodafone Idea on Saturday reported narrowing of consolidated loss to Rs 4,532.1 crore in the third quarter ended on December 31, 2020. The company had posted a loss of Rs 6,438.8 crore in the same quarter a year ago.

“Besides AGR, VIdea is reeling under enormous debt led by spectrum payment liabilities at Rs 1,171 billion. With the awaited court verdict on AGR and sector tariff hikes, we retain our ‘Underperform’ recommendation and Rs 12 target price,” CLSA said. Read more.

Nureca IPO fully subscribed

The Rs 100-crore initial public offering (IPO) of Nureca has been subscribed 1.79 times so far on Monday, the first day of bidding. The portion reserved for retail investors has been subscribed more than 10 times, and that of employees’ is 26 percent subscribed.