Sensex Plunges 488 Points; Realty and Energy Stocks Witness Selling
Closing

India share markets witnessed huge selling pressure during closing hours and ended their trading session deep in the red. Most of the losses were seen on the back of weak global cues.

At the closing bell, the BSE Sensex stood lower by 488 points (down 1.3%) and the NSE Nifty closed down by 138 points (down 1.2%).

The BSE Mid Cap index ended the day down 1%, while the BSE Small Cap index ended the day down 1.2%.

Sectoral indices ended in the red with stocks in the realty sector and energy sector witnessing most of the selling pressure.

The rupee was trading at 69.62 against the US$.

Asian stock markets finished deep in the red. As of the most recent closing prices, the Hang Seng was down by 1.2% and the Shanghai Composite was down by 1.1%. The Nikkei 225 was down 1.5%.

European markets were also trading on a negative note. The FTSE 100 was down by 0.4%. The DAX was trading down by 0.2%, while the CAC 40 was down by 0.3%.

BSE share price was in focus today as the company's board approved buyback of 67.7 lakh shares.

The company plans to buy back its fully paid up equity shares of Rs 2 each at Rs 680 per equity share through tender offer route. The total amount of buyback size will be a maximum of Rs 4.6 billion.

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Will Sensex Hit 100,000 After General Elections?

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In this guide she has identified an irreversible trend that could push Sensex above 100,000.

And in that process, could allow early investors to potentially make life-changing gains.

You can download it for free.

And if you really want to benefit massively from this guide…then join us for the Rebirth of India free MEGA Summit at 5pm on 16th May.

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The company proposes to buy back 67.64 lakh equity shares an offer price, representing 13.06% of the total paid-up equity capital. The buyback offer size represents 24.73% of aggregate of the total paid up capital and free reserves.

Apart from the above, the company also reported standalone net profit of Rs 2 billion during 2018-19. The operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) was Rs 253 million as per standalone results.The board of the company also recommended payment of dividend of Rs 25 per equity share of face value of Rs 2 each.

After taking into account the interim dividend of Rs 5 per share paid in the month of December 2018, the total dividend for the financial year stands at Rs 30 per equity share of face value of Rs 2 each.

In the news from the banking sector, Yes Bank share price was in focus today. The stock of the lender continued its downtrend and was down over 2% in morning trade today.

This is the third consecutive session the stock has been witnessing selling pressure.

Note that the stock has been in the negative territory since last Monday, May 6, 2019 after domestic rating agency ICRA downgraded the bank's long-term bond ratings and gave a guidance with a negative outlook.

Speaking of the banking sector, if there is any private sector bank that has severely underperformed in the last two years, it has to be Lakshmi Vilas Bank (LVB).

Look at the chart below.

Lakshmi Vilas Bank Down 60% from Its 2017 High

Here's what Sarvajeet Bodas wrote about this in the recent edition of The 5 Minute WrapUp...

  • LVB declined by more than 50% in the last 2 years compared to the overall BSE Bankex showing gains of about 30%.

    Here's another interesting data.

    If you look at the shareholding pattern of LVB during this 2-year time frame, retail investors (Individual share capital up to Rs. 2 Lacs) have increased by 15%. The number of shares owned by them increased by 24%.

This is a typical example of retail investors catching a falling knife!

In the news from the pharma sector, Natco Pharma share price was in focus today as the company said its marketing partner Alvogen has received final Abbreviated New Drug Application (ANDA) nod from the US Food and Drug Administration (USFDA) for chest pain tablets.

The company in its BSE filing said that its marketing partner Alvogen has received the final approval of ANDA from the USFDA for Nitroglycerin Sublingual Tablets USP, 0.3 mg, 0.4 mg, and 0.6 mg.

Nitroglycerin sublingual tablets are used to treat episodes of angina (chest pain) in people who have coronary artery disease (narrowing of the blood vessels that supply blood to the heart).

As per the data, the company stated that Nitroglycerin sublingual tablets had total annual sales of around US$ 77.3 million in the US market for the year ending 2018.

Speaking of pharma sector, note that the BSE Healthcare Index has been on a roller coaster ride in the past few years. The period from 2012 to 2015 saw the index go up more than three times.

And since then it has been a painful ride downwards.

As we wrote in one of our editions of The 5 Minute WrapUp...

  • Pre-2015, pharma companies enjoyed a fairytale ride in the US market. Low labor costs, good chemistry skills, along with efficiency, ensured Indian companies could copy innovator drugs to make generic drugs at a fast pace.

    The generic business had lucrative margins for all major pharma players. But the party did not last long. In the quest to supply drugs quickly, they compromised on quality at their manufacturing facilities.

    No wonder, the US regulatory authority (USFDA) took strict action. Sun Pharma received a warning letter for its Halol manufacturing facility in 2015. It was like a bolt out of the blue. Since then, the downward spiral began and has continued till date.

We believe that pharma companies that invest in creating a pipeline of complex generics or building competencies in alternative dosage forms are better equipped to tackle the changing dynamics in the US generics market as well as in the overall industry.

To know more on what moved the Indian stock markets today, you can check out the most recent share market updates here.


Sensex Trades Weak; Realty Stocks Fall
12:30 pm

Stock markets in India are presently trading on a negative note. The BSE Sensex is trading down by 335 points and the NSE Nifty is trading down by 95 points. Meanwhile, both, the BSE Mid Cap index and the BSE Small Cap index are trading down by 0.9%.

Among the sectoral indices, realty stocks and healthcare stocks are witnessing maximum selling pressure.

Speaking of stock markets and gold, gold has always been a staple investment for Indian households. More so on occasions like Akshaya Tritiya.

There are various opinions on what proportion of the portfolio could be allocated to the yellow metal.

Stocks versus Gold Over Past 5 Years

Here's what co-head of research at Equitymaster, Tanushree Banerjee wrote in the latest edition of The 5 Minute WrapUp:

  • "The magical metal will be no match for the Indian mettle over the next decade.

    So, by all means buy some gold for inflation hedge.

    But don't lose sight of the Rebirth of India opportunity."

In the news from the currencies space. Indian rupee weakened against the US dollar today amid weak global cues.

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Will Sensex Hit 100,000 After General Elections?

Senior Analyst and our Co-head of Research Tanushree Banerjee has just released a special guide.

In this guide she has identified an irreversible trend that could push Sensex above 100,000.

And in that process, could allow early investors to potentially make life-changing gains.

You can download it for free.

And if you really want to benefit massively from this guide…then join us for the Rebirth of India free MEGA Summit at 5pm on 16th May.

We expect thousands of Indians to join us for this summit and we have a limited capacity.

So if you don't want to miss out then…

Download Your FREE Guide Now – In Just 1-Click!!
(Plus automatically get a free seat in Rebirth of India MEGA SUMMIT)

------------------------------

Further, losses in the domestic equity market and a strengthening dollar against major currencies overseas amid trade worries also weighed on the rupee.

Reportedly, Chinese Vice Premier Liu will travel to US for two days of trade talks this week setting up a last-ditch bid for a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by US President.

During a 10-month US-China trade war, US tariffs have been imposed on US$250 billion worth of Chinese goods, and retaliatory Chinese tariffs slapped on US$110 billion worth of American products.

On the global front, growing fears about the impact of a worsening US-Sino trade conflict on global growth lifted the safe-haven Japanese yen to a six-week high against the dollar today.

The partially convertible currency is currently trading at 69.59, weaker by 16 paise from its previous close of 69.43 on Tuesday. The currency touched a high and low of 69.6400 and 69.5350 respectively.

Moving on to the news from the pharma sector. As per an article in a leading financial daily, Alembic Pharmaceuticals has entered into a Joint Venture Agreement (JVA) with SPH SINE Pharmaceutical Laboratories, China (SPH Sine) & Adia (Shanghai) Pharma, China (Adia) to promote and sell pharmaceutical products for the Chinese market.

Initially this JV will commercialize products manufactured by Alembic Pharmaceuticals. Subsequently the JV plans to set up a manufacturing facility in China.

The JV will commercialize products in the Chinese market which has an increasing demand for generic drugs.

It will initially launch with a portfolio of oral solids and is expected to widen to other areas like injectable, ophthalmology, dermatology & oncology which are being currently developed and manufactured by Alembic.

Reportedly, SPH Sine, Alembic & Adia shall hold 51%, 44% & 5% equity in the JVA. The JVA has standard terms including management functioning, restriction on transfer of shares, non-compete and termination events and consequences.

To know more about the company, you can access to Alembic Pharma's Q3FY19 result analysis and Alembic Pharma's 2018-19 Annual Report Analysis on our website.

At the time of writing, Alembic Pharma share price was trading up by 1.2%.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.


Sensex Opens Over 200 Points Lower; Reliance Industries & Vedanta Top Losers
09:30 am

Asian share markets are lower today as escalating trade tensions between the United States and China triggered global growth fears and drove investors away from riskier assets. The Nikkei 225 is down 1.7% while the Hang Seng is down 0.7%. The Shanghai Composite is trading down by 0.2%.

Back home, India share markets have opened the day on a negative note. The BSE Sensex is trading down by 220 points while the NSE Nifty is trading down by 60 points. The BSE Mid Cap index and BSE Small Cap index both opened the day down by 0.2%.

All sectoral indices have opened the day on a negative note with consumer durable stocks and energy stocks witnessing maximum selling pressure.

The rupee is trading at Rs 69.60 against the US$.

Market participants are tracking JK Paper share price, JSW Holdings share price, and Alembic Pharma share price as these companies are set to announce their Q4FY19 results later today.

In the latest developments from the results corner, Vedanta share price is in focus today as the Anil Agarwal-led company reported a consolidated net profit of Rs 26.2 billion for March quarter, down 34% from same period last year on the back of lower revenues which declined as copper factory at Tuticorin remained shut.

Reportedly, the company's top line was higher than expected at Rs 230.9 billion, down 15% from same period last year partly due to lower commodity prices and shutdown of the copper factory which normally contributes about 20% to the company's total revenue.

--- Advertisement ---
Will Sensex Hit 100,000 After General Elections?

Senior Analyst and our Co-head of Research Tanushree Banerjee has just released a special guide.

In this guide she has identified an irreversible trend that could push Sensex above 100,000.

And in that process, could allow early investors to potentially make life-changing gains.

You can download it for free.

And if you really want to benefit massively from this guide…then join us for the Rebirth of India free MEGA Summit at 5pm on 16th May.

We expect thousands of Indians to join us for this summit and we have a limited capacity.

So if you don't want to miss out then…

Download Your FREE Guide Now – In Just 1-Click!!
(Plus automatically get a free seat in Rebirth of India MEGA SUMMIT)

------------------------------

Exceptional gain was recorded at Rs 3.2 billion. The gains were mainly due to reversal of previously recorded impairment of Rs 2.6 billion in the KG ONN block of the oil and gas business.

The drop in revenues impacted the company's earnings before interest tax depreciation and amortization (EBITDA) for the March quarter as it stood at Rs 63.3 billion, down 19% from corresponding period last year.

As on March 31, 2019, the company's net debt stood at Rs 269.6 billion, up by Rs 50 billion from last year, primarily due acquisition of Electrosteel Steel. Last year, Vedanta occupied into steel business via acquisition of stressed Electrosteel Steel.

Meanwhile, the company achieved the production goal of 1.5 million tonne of steel. The company also aims to take the capacity to 3 million tonne hot metal production which will improve cost structure and strengthen EBITDA margins.

Speaking of interesting development in the steel sector, did you know In the last 6 years, India has been the world's fastest growing steel producer, among the top 10.

Have a look at the chart below which shows India's steel production growing at the fastest rate:

India's Steel Production Growing at the Fastest Rate

The above data validates Tanushree's optimism about India's future.

Here's what we wrote in one of the recent edition of The 5 Minute WrapUp...

  • Over the last 6-year period, India's steel production grew at a CAGR of 6%. Countries such as Germany and Japan registered negative growth. Growth has been flat in USA, South Korea, Russia, and Brazil.

    China, the world leading steel producer, which saw double-digit growth over 2001-2010, grew marginally by 4% CAGR in the last six years.

    Importantly, India's production growth is due to strong domestic demand. Particularly, on the back of strong infrastructure development and housing demand, especially affordable housing.

No wonder India has surged past Japan and USA to become the second largest steel producer in the world.

Moving on to the news from the aviation space, Naresh Goyal has offered to infuse Rs 2.5 billion of his own funds into Jet Airways in a new attempt to revive the Mumbai-based carrier.

As per an article in a leading financial daily, Goyal, who stepped down from the board and chairmanship of the debt laden airline in April, said he would invest the funds from Jet air Pvt. Ltd, a company that he controls.

Goyal's latest attempt comes after the banks rejected a potential bid by him in April to retain control of the carrier citing non-eligibility conditions for an ongoing bidding process.

In March, Goyal was forced to cede control of the airline he had founded more than two decades ago, after the cash strapped airline defaulted on payments to banks and aircraft lessors. Jet Airways eventually suspended operations on 17 April.

The groundings forced the Indian government to take steps to address the shortage in flights and minimize disruptions in the domestic civil aviation market. The government has since allotted slots of Jet Airways at domestic airports to other airlines for a period of three months to start new flights.

Meanwhile, the consortium of banks has opened a bidding contest to find a new investor that is expected to be completed in the June quarter.

According to the bidding eligibility conditions, strategic bidders looking to invest in Jet Airways should have a minimum net worth of Rs 10 billion or at least three years of experience in the aviation sector.

Jet Airways share price has opened the down up by 0.4%.


Indian Indices Continue Downtrend, Key Q4FY19 Results, and Top Stocks in Action Today
Pre-Open

On Tuesday, share markets in India fell sharply during closing hours and ended deep in the red after a volatile day of trading.

The BSE Sensex closed lower by 324 points to end the day at 38,277. Tata Motors and ICICI Bank were among the top losers.

While the broader NSE Nifty ended down by 100 points to end at 11,498.

Among BSE sectoral indices, telecom stocks fell the most by 2.4%, followed by energy stocks and banking stocks.

Top Stocks in Action Today

Lupin share price will be in focus today as the company has received tentative approval for its Fosaprepitant for Injection, 150 mg Single-Dose Vial, from the United States Food and Drug Administration (USFDA) to market a generic version of Emend for Injection, 150 mg Single-Dose Vial, of Merck Sharp & Dohme Corp. (Merck).

Mindtree share price will also be in focus today as the company has launched QuikDeploy, an IP-driven approach to helping customers maximize their use of the SAP Solution Manager. This flexible industry accelerator is tailor-made to rapidly deploy SAP S/4HANA into Microsoft Azure cloud.

Market participants will also track Gillette India share price, Titan company share price, and Rain Industries share price as these companies are set to announce their March quarter results today.

--- Advertisement ---
Will Sensex Hit 100,000 After General Elections?

Senior Analyst and our Co-head of Research Tanushree Banerjee has just released a special guide.

In this guide she has identified an irreversible trend that could push Sensex above 100,000.

And in that process, could allow early investors to potentially make life-changing gains.

You can download it for free.

And if you really want to benefit massively from this guide…then join us for the Rebirth of India free MEGA Summit at 5pm on 16th May.

We expect thousands of Indians to join us for this summit and we have a limited capacity.

So if you don't want to miss out then…

Download Your FREE Guide Now – In Just 1-Click!!
(Plus automatically get a free seat in Rebirth of India MEGA SUMMIT)

------------------------------

Results Corner

Escorts share price has reported a rise of 7.8% in its net profit at Rs 1213.5 million for the quarter under review as compared to Rs 1125.4 crore for the same quarter in the previous year.

Total income of the company increased by 13.1% at Rs 16,490 million for Q4FY19 as compared Rs 14,586 million for the corresponding quarter previous year.

Gujarat Gas share price has reported a rise of 76.7% in its net profit at Rs 1165.4 million for the quarter ended March 31, 2019 as compared to Rs 659.5 million for the same quarter in the previous year.

ICICI Bank share price registered a 5% drop in its net profit in the fourth quarter of FY19 with higher provisions and expenditure. The bank's net profit fell 5% to Rs 9.7 billion in the January to March 2019 quarter from Rs 10.2 billion a year ago.

Its standalone net profit for FY19 also fell 50% to Rs 33.6 billion from Rs 67.8 billion in FY18. The bank's bad-loan provision rose to Rs 54.5 billion in the fourth quarter of FY19 from Rs 42.4 billion in the third quarter.

However, on an annual basis, it fell by 17.7% from Rs 66.3 billion in the fourth quarter of FY18. Its gross non-performing assets fell to Rs 462.9 billion or 7.4% of gross advances as on March 2019 as against 9.9% a year ago. Net NPAs were also the lowest in about 13 quarters at Rs 135.8 billion or 2.3% of net advances as on March 2019 as against 5.4% on March 2018.

From the IPO Space...

Travel booking site EaseMyTrip is close to becoming the first online travel aggregator to list on the domestic bourses.

The Delhi-headquartered firm has engaged Axis Capital and JM Financial as merchant bankers for its proposed initial public offering (IPO).

The company is likely to raise between Rs 5 billion and Rs 7.5 billion via the IPO, though a final call on the issue size has not been taken.

EaseMyTrip was founded in May 2008 by the Nishant Pitti and Rikant Pitti. It provides air tickets, hotel bookings, bus bookings, holiday packages and white label services and has overseas branches in Dubai, Bangkok, Maldives and Singapore.

Speaking of IPOs, 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.

From the Currency Space...

The Reserve Bank of India (RBI) is planning to conduct at least one more swap of rupees for dollars after the general election as an effort to support economic growth.

The central bank also plans to conduct open market operations (OMOs) of up to Rs 500 billion over the next two months expanding a quantitative easing programme to spur the slowing economy.

Reportedly, these latest moves are expected to increase cash in the financial system and help push interest rates down.

Despite cutting its key policy rate by 50 basis points this year to 6%, the RBI has struggled to get banks to reduce lending rates due to tight cash conditions and high deposit rates.

The RBI's two US$ 5 billion buy/sell swap auctions in March and April together injected close to Rs 700 billion into the banking system.

How this all pans out remains to be seen. Stay tuned for more updates.