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Of Depreciating Rupee, Q3FY19 Results, and Top Stocks in Action Today
Wed, 16 Jan Pre-Open | Monish Vora, TM Team

On Tuesday, share markets in India traded on a positive note throughout the day and ended on a strong note after an optimistic day of trading.

The BSE Sensex closed higher by 465 points to end the day at 36,318. While the broader NSE Nifty ended up by 149 points to end at 10,887.

Among BSE sectoral indices, IT stocks rose the most by 3%, followed by power stocks and realty stocks.

Top Stocks in Focus Today

Piramal Enterprises share price will be in focus today as the company has raised Rs 50 billion at an average rate of 9.5% through longer tenure bond sale in the last one month. The company's housing finance subsidiary-Piramal Capital & Housing Finance also raised Rs 40 billion of term loans in the same period.

M&M share price will be in focus today as the company has entered into a strategic partnership with Shell Lubricants.

Under the pact, the company and Shell will work together to offer market-leading, high-performance lubricant products, such as engine oils, transmission and axle oils, including those under the 'Maximile' brand. These lubricants will be distributed through the Mahindra dealership network and bazar networks through the Mahindra spares business unit.

L&T share price will also be in focus as the company's wholly-owned subsidiary-L&T Hydrocarbon Engineering (LTHE), in consortium with Subsea 7 has won another award for two projects from Saudi Aramco.

Market participants will also track Cyient share price.

Cyient is going to discuss a proposal for a maiden buyback offer at its meeting to be held on January 17, 2019.

Results Corner

Trident has reported a rise of 53.6% in its net profit at Rs 1.1 billion for the quarter under review as compared to Rs 0.7 billion for the same quarter in the previous year.

Hindustan Media Ventures has reported 25.4% fall in its net profit at Rs 291.6 million for the quarter under review as compared to Rs 390.9 million for the same quarter in the previous year.

However, total income of the company increased by 6% at Rs 2.5 billion for Q3FY19 as compared Rs 2.4 billion for the corresponding quarter previous year.

TV18 broadcast reported a consolidated net profit of Rs 1.46 billion for the third quarter ended December 31, 2018. The company had reported a net profit of Rs 85.3 million in the corresponding quarter a year ago.

Rupee Slides Past 71-Mark

The Indian rupee was under pressure yesterday as foreign funds pulled out Rs 7.3 billion from the capital markets on a net basis, while domestic institutional investors purchased shares worth Rs 5.3 billion on Monday.

The domestic currency breached the crucial 71-mark against the US dollar on Tuesday.

Data released on Monday showed retail inflation falling to 18-month low of 2.2% in December on account of lower food prices. But core inflation continues to remain elevated at 5.7%, mainly because of higher education and healthcare costs.

The rupee came under pressure recently after global oil prices rebounded from December lows on supply cuts by producer club OPEC and Russia.

Oil prices are up nearly 20% since hitting an 18-month low in late December. Higher crude prices put pressure on India's current account as well as fiscal deficit and thus hurts the rupee.

From the IPO Space...

In the latest development from the IPO space, several companies including cables and consumer electronic goods maker Polycab Wires Pvt. Ltd and hotel operator Chalet Hotels Ltd, are gearing up for their public offers.

Chalet Hotels is also expected to raise Rs 20 billion through its IPO. According to the company's draft red herring prospectus, it plans to raise Rs 9.5 billion in fresh capital, while the promoters will sell 24.7 million shares through the offer for sale. The hotel owner plans to use the fresh capital for repaying debt.

In 2018, 24 companies raised Rs 309.6 billion through their initial public offerings (IPOs), while 2017 witnessed 36 companies raising Rs 671.5 billion through public floats.

However, between October and December 2018, companies had desisted from launching IPOs, considering the highly volatile stock market.

Besides, Polycab and Chalet Hotels, Harsha Engineers Ltd, Dodla Dairy Ltd and Indiamart Intermesh Ltd are also looking to launch IPOs.

In 2018, the markets regulator approved 71 IPO proposals as compared to 46 in 2017.

Speaking of IPO's, according to an article in The Economic Times, Indian stock exchanges ranked second globally in terms of IPOs, raising US$ 5.52 billion from 161 offerings till November this year. The US ranked first, raising US$ 60 billion from 261 IPOs.

Here's an excerpt from the article:

  • According to the report, the drop in IPOs could be attributed to reasons such as significant corrections in the stock markets in mid-cap and small-cap stocks.

    Further, the amount of volatility has increased due to uncertainties around global growth compounded by the ongoing US-China trade wars.

    In addition, there are a number of macroeconomic factors which are contributing uncertainties such as liquidity crises among non-bank lenders in India triggered by defaults done by a leading infrastructure finance company IL&FS and currency volatility (depreciation of the rupee), the report added.

With so many IPOs set to hit the markets, we at Equitymaster believe a merit-based selection, primarily including valuation, business, and management quality, is the logical way to go about investing in IPOs.

If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often.

To know how to safely profit from the ongoing IPO rush, download this FREE report now and discover How to Get Rich with IPOs.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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Stock Market Updates

Sensex Ends 225 Points Higher; Metal and Banking Stocks Witness Buying (Today's Market)

Aug 11, 2020 Closing

While the BSE Sensex ended up by 225 points, the NSE Nifty ended higher by 52 points.

IDFC Share Price Up by 10%; BSE 500 Index Up 0.2% (Today's Market)

Aug 11, 2020 03:31 PM

IDFC share price is trading up by 10% and its current market price is Rs 23. The BSE 500 is up by 0.2%. The top gainers in the BSE 500 Index are IDFC (up 10.1%) and GARWARE TECHNICAL (up 11.0%). The top losers are M&M and V GUARD INDUSTRIES .

STRIDES PHARMA SCIENCE at 52 Week High; BSE 500 Index Up 0.5% (Today's Market)

Aug 11, 2020 02:25 PM

STRIDES PHARMA SCIENCE share price has hit a 52-week high. It is presently trading at Rs 628. BSE 500 Index is up by 0.5% at 14,843. Within the BSE 500, STRIDES PHARMA SCIENCE (up 2.1%) and NESCO (up 15.9%) are among the top gainers, while top losers are LAURUS LABS LTD and CAPLIN POINT.

CENTRAL BANK Share Price Up by 6%; BSE BANKEX Index Up 1.1% (Today's Market)

Aug 11, 2020 02:15 PM

CENTRAL BANK share price is trading up by 6% and its current market price is Rs 19. The BSE BANKEX is up by 1.1%. The top gainers in the BSE BANKEX Index is CENTRAL BANK (up 5.6%). The top losers is CITY UNION BANK (down 0.2%).

INDIAN BANK Share Price Up by 5%; BSE BANKEX Index Up 0.9% (Today's Market)

Aug 11, 2020 01:55 PM

INDIAN BANK share price is trading up by 5% and its current market price is Rs 63. The BSE BANKEX is up by 0.9%. The top gainers in the BSE BANKEX Index is INDIAN BANK (up 5.3%). The top losers is CITY UNION BANK (down 0.5%).

SCHNEIDER ELECTRIC INFRA Share Price Up by 5%; BSE CAPITAL GOODS Index Down 0.1% (Today's Market)

Aug 11, 2020 01:47 PM

SCHNEIDER ELECTRIC INFRA share price is trading up by 5% and its current market price is Rs 90. The BSE CAPITAL GOODS is down by 0.1%. The top gainers in the BSE CAPITAL GOODS Index is SCHNEIDER ELECTRIC INFRA (up 5.3%). The top losers are AIA ENGINEERING (down 0.1%) and LAKSHMI MACHINE (down 0.5%).

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