Select midcaps poised for stellar run, earn upgrades
After 4 years, JP Associates makes a bid for debt recast
Banks book profits with both hands on falling yields
US Fed all set to walk tightrope later today
Now let me give you a quick glance on the state of the markets.
Dalal Street looked headed for a muted start as Nifty futures on the Singapore Exchange traded 10 points lower ahead of the opening of Indian markets. Stocks in other Asian markets had a weak start. Wall Street indices retreated from all-time highs overnight as investors awaited the Fed’s policy decision.
Elsewhere, crude oil traded at the highest level since 2018 at $72.49 a barrel. The rupee fell for the sixth day in a row on Tuesday to close 2 paise lower at 73.31 against the US dollar. Bitcoin fluctuated around $40,000.
That said, here’s what is making news.
On average, red outscored green on earnings outlook after the March quarter, but several midcap companies have seen significant upgrades to profit estimates despite the second Covid wave. Aditya Birla Fashion, Moil, Teamlease, Fortis Healthcare, Jamna Auto, and JK Lakshmi Cement are among the dozen companies that have seen earnings upgrades between 15% and 70% in the past four weeks. The Covid surge notwithstanding, analysts expect these companies to make significant cash in the next few months.
Record-low interest rates did not immediately trigger demand for loans in Covid-ravaged India, but falling yields across the board sustained a bond rally that allowed many state-run banks to log profits for the first time in five years. They reported a net profit before tax in FY21 of about Rs 45,900 crore, of which more than twothirds came from bond portfolios, show data from ICRA. Those government banks earned PBT of Rs 31,600 crore in bond sales. When bond yields fall, prices rise.
Motherson Sumi Systems, which provides components to global automobile majors, looks well-positioned to take advantage of a gradual pick-up in demand given the turnaround in its European subsidiary SMP and efforts to prune debt. Besides, value unlocking from the proposed demerger of the domestic wiring harness business would offer further support to the stock, which has remained rangebound over the past three months.
Nearly four years after RBI ordered bankruptcy action against Jaiprakash Associates, the parent of Jaypee Infratech, banks led by ICICI Bank have been slow in pursuing the case in the NCLT, amid fresh attempts to restructure the company’s loans. A loan restructuring, for which a meeting of lenders will be convened over the next few days, will provide relief to the promoters led by the Gaur family, which has lost Jaypee Infratech, its crown jewel, that had a massive land bank, running from Noida to Agra along expressways.
The Federal Reserve is inching toward the start of a long road to normalizing its relationship with the rest of Washington and Wall Street. After spending the past 15 months providing unprecedented help to the federal government and investors via trillions of dollars of bond purchases, it could start preliminary discussions about scaling back that support at a pivotal two-day policy meeting that kicked off on Tuesday.
Before I go, here is a look at some of the stocks buzzing this morning.
Authum Investment and Infrastructure has emerged as the highest bidder for Reliance Home Finance, a subsidiary of Anil Ambani’s Reliance Capital.
Dodla Dairy, a leading dairy company in southern India, on Tuesday said it has raised a little over Rs 156 crore from anchor investors ahead of its IPO that opens on Wednesday.
Dish TV said its board will meet next week to consider raising up to Rs 1,000 crore by issue of permissible securities.
Dr Reddy’s Laboratories said it has been asked to pay $46.25 million (around Rs 339 crore) to Australia-based Hatchtech as part of an asset purchase agreement between the two parties in 2015.
ICICI Bank on Tuesday said it has raised over Rs 2,827 crore by issuing bonds on a private placement basis.
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay put with us for all the market news through the day. Happy investing!
