Nifty EPS targets up 10%, go above pre-pandemic level
Analysts turn bearish on Voda Idea post Q4 earnings; slash target price to Rs 3
Better Q4 numbers threaten to raise Allcargo delisting cost
RBI says banks face higher mark-to-market losses on bond holdings
Now lemme give you a quick glance on the state of the markets.
Dalal Street looked headed for a mild gap-up start this morning. Nifty futures traded some 27 points higher on the Singapore Exchange at 7 hours (IST). Other Asian markets climbed early Friday after strong economic data helped send US shares to a record. On Wall Street, the S&P 500 reached its sixth consecutive all-time closing high on upbeat economic data on Thursday.
Elsewhere, the dollar strengthened on solid US economic data. Bitcoin held losses and was trading around $33,900. Oil traded above $75 a barrel after the OPEC+ alliance descended into infighting, casting doubt on an agreement that could ease a surge in prices.
That said, here’s what is making news?
Analysts have reversed the earnings cuts that took place during the first wave of the pandemic last year. The FY22 Bloomberg consensus projection for the Nifty EPS has been upgraded by 10% since the beginning of the 2021 to Rs 745, which has surpassed the pre-pandemic level of Rs 705-711. Of the total upgrades, nearly half followed the robust March quarter earnings. The projected EPS for FY23 has been upgraded by 6% on a year-to-date basis.
Most brokerages have maintained a bearish view on Vodafone Idea as the company posted a Rs 6,985 crore loss for the March quarter and raised concerns over its viability. Some have raised target prices that predict that the stock will be reduced to a third of the current value in the next year. CLSA and Credit Suisse have maintained an underperform rating, JP Morgan has an underweight recommendation with a price target of Rs 3 and Goldman Sachs has a sell rating with a price target of Rs 3.
With Covid cases coming down and lockdowns getting lifted in many states, the auto industry started to get traction, with companies such as Maruti, Hyundai and Hero Moto regaining volumes. Maruti, the biggest car-maker, said its passenger vehicle sales in the domestic market stood at 1.24 lakh units in June, against 51,274 units in the same month last year. Just like the first quarter of 2020-21, the same period of this fiscal year was also hit by lockdowns over safety precautions.
RBI says the entry of the so-called ‘Big Tech’ companies in financial services in emerging markets such as India could present challenges to regulators towards maintaining adequate stability and governance of the ecosystem. The central bank flagged monopolistic practices, antitrust issues, cybersecurity risks, and challenges around data privacy as key concerns that could emerge.
Analysts have upgraded price targets for Allcargo Logistics by over 30% from the current level of Rs 153.8 following the company’s stellar March quarter performance and focus on reducing debt by selling non-core businesses. While this presents a buying opportunity for investors, it may make the promoter group’s delisting plan more expensive. Allcargo had passed a special resolution last October to delist the company where the promoter group holds a 70% stake.
LASTLY,
RBI says domestic banks face the risk of higher mark-to-market losses on their bond holdings amid a likely rise in rates. “Any hardening of interest rates would depress investment income under the AFS and HFT categories,” the central bank said in its Financial Stability Report. It said banks may mitigate such risks through the central bank’s bond-buying window, called government securities acquisition programme, or G-SAP. Trading profits dropped for all bank groups during the January-March period last financial year, as the benchmark bond yields surged 30 basis points, pulling prices down.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
Srei Infrastructure Finance on Thursday said its board has approved a resolution to raise up to Rs 2,500 crore through various means, including QIP
L&T on Thursday announced that its construction arm has secured ‘significant’ orders for its various businesses that range between Rs 1,000 crore and Rs 2,500 crore.
Reliance Infrastructure is in talks with Singapore based-Cube Highways for the sale of its four road assets for an enterprise value of Rs 1,430 crore.
GAIL has lined up a Rs 5,000 crore war chest to further integrate its fortunes with the government’s carbon-reduction goals and is looking beyond natural gas to stay relevant in a rapidly changing energy market landscape.
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
