Market Pulse

Firmness persisted on the bourses in mid-morning trade on sustained buying demand in index pivotals. At 12.21 IST, the Sensex is seen at 35,450.27  up 368.45 points or 1.05%, while the NSE was trading at 10,870.70 up 82.15 points or 0.76%.

Gains were triggered on reports indicating that the government is mulling a proposal to hike foreign direct investment (FDI) limit in the banking sector. Positive Asian stocks also underpinned sentiment.

Domestic stocks saw gap-up opening following positive Asian cues. Stocks held firm in morning trade after the Sensex and the Nifty hit fresh record high levels in morning trade.

The S&P BSE Mid-Cap index was off 0.17%. The S&P BSE Small-Cap index was up 0.36%. Both these indices undeperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,382 shares rose and 1,244 shares fell. A total of 124 shares were unchanged.

Overseas, Asian stocks extended this year's stellar run, following their US counterparts higher amid optimism for global growth. US stocks rose to fresh highs yesterday, 17 January 2018 as companies continued to indicate the tax overhaul will boost earnings this year. The Dow Jones Industrial Average staged a late rally to end above 26,000 for the first time ever.

The Fed's Beige Book indicted that the outlook for 2018 remains optimistic for a majority of contacts across the country. As for the much vaunted tax cuts, only businesses in Chicago and Dallas were excited over the Republican tax plan, while districts along the East Coast were worried about higher taxes from the new limits on deductions for mortgage interest and property and state income taxes, reports indicated.

Back home, private bank stocks led gains among banking stocks on reports the government is mulling a proposal to allow 100% (foreign direct investment) FDI in private banks. Increasing the permissible limit for FDI in public sector banks to 49% from the current 20% is also being considered, reports indicated. Raising the permissible limit for FDI in the banking sector could reportedly improve services and help meet minimum capital requirements. At present, FDI of up to 49% is allowed in private banks without the permission of the government, and upto 74% can be invested with the government's approval.

Among private bank stocks, HDFC Bank (up 2.85%), Kotak Mahindra Bank (up 0.96%), RBL Bank (up 1.16%), ICICI Bank (up 1.02%) and IndusInd Bank (up 2.92%) gained.

Yes Bank advanced 3.15% ahead of its Q3 December 2017 result today, 18 January 2018.

Axis Bank rose 1.54% after the bank hiked its lending rates based on marginal cost of funds based lending rate (MCLR) by 5 basis points across all tenors with effect from 18 January 2018. The announcement was made after market hours yesterday, 17 January 2018.

Axis Bank said that the bank's MCLR for overnight loans will be 7.85%, for one month will be 7.85% and for three months will be 8.05%. The MCLR on 6-month loans will be 8.2% and for one-year loans the rate would be 8.3%, the bank said. MCLR for two-year loans would be at 8.35% and loans with three-year maturity would carry an MCLR of 8.4%, the bank said.

Among PSU bank stocks, Dena Bank (up 3.52%), UCO Bank (up 1.75%), Punjab National Bank (up 0.71%), Bank of Baroda (up 0.52%), IDBI Bank (up 1.4%) and Union Bank of India (up 0.14%) rose. Canara Bank (down 0.8%) and Bank of India (down 1.48%) fell.

State Bank of India (SBI) rose 1.22% after the bank said that the executive committee of central board (ECCB) approved the proposal for issuance of long term bonds of Rs 20000 crore for financing of infrastructure and affordable housing in domestic and overseas market in FY 2017-18 and FY 2018-19. The announcement was made after market hours yesterday, 17 January 2018.

Most FMCG stocks rose. Dabur India (up 1.17%), Godrej Consumer Products (up 3.1%), Marico (up 0.71%), Nestle India (up 0.44%), Britannia Industries (up 0.44%), GlaxoSmithkline Consumer Healthcare (up 0.57%), Colgate-Palmolive (India) (up 0.32%) and Jyothy Laboratories (up 3.13%) rose. Tata Global Beverages (down 0.1%), Procter & Gamble Hygiene and Health Care (down 0.31%) and Bajaj Corp (down 0.5%) fell.

Hindustan Unilever (HUL) slipped 0.19% to Rs 1,369.20. The stock was volatile. It hit high of Rs 1,405 so far during the day, which is also a record high for the counter. The stock had hit a low of Rs 1,366.60 so far during the day. HUL's net profit rose 27.7% to Rs 1326 crore on 10.8% increase in net sales to Rs 8323 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 17 January 2018.

HUL's earnings before interest, tax, depreciation and amortization (EBITDA) rose 24% to Rs 1680 crore in Q3 December 2017 over Q3 December 2016.

HUL's chairman Harish Manwani said that the company delivered another strong performance in the quarter, with broad based growth across categories and further improvement in margins. HUL remains positive about the mid-term outlook of the industry and will continue to invest strongly in its core brands and developing categories of the future. There are early signs of commodity cost inflation and the company will further sharpen its focus on cost effectiveness programs and manage its business dynamically for competitiveness and sustained profitability.

Varun Beverages rose 1.26% after the company said that its board approved to acquire franchisee rights for PepsiCo India's previously franchised sub-territory in Bihar. Upon completion of this acquisition, Varun Beverages will be a franchisee for PepsiCo products across 20 states and 2 Union Territories of India. The announcement was made after market hours yesterday, 17 January 2018.

Thirumalai Chemicals rose 6.53% after consolidated net profit rose 241.02% to Rs 51.46 crore on 39.27% increase in net sales to Rs 345.62 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 17 January 2018.

Today's Call: 

#Buy 25th January, Expiry option of Rs.110 of Federal Bank Ltd at Rs.1, for a target of Rs.1.5. As mentioned above, the government is mulling a proposal to allow 100% (foreign direct investment) FDI in private banks. Increasing the permissible limit for FDI in public sector banks to 49% from the current 20% is also being considered, reports indicated. Raising the permissible limit for FDI in the banking sector could reportedly improve services and help meet minimum capital requirements. At present, FDI of up to 49% is allowed in private banks without the permission of the government, and upto 74% can be invested with the government's approval.
Brokerage firm Sharekhan said, "Performance of Federal Bank was a mixed bag with strong net interest income (NII) growth of 20 per cent y-o-y in Q3 FY2018, but high slippages. Federal Bank's results were impacted by weak asset-quality performance which eclipsed an otherwise reasonable operating performance. Going forward, we expect the growth trajectory and higher asset utilisation to aid the bank's return ratios. As overall demand improves in the Indian economy, credit offtake (aided by low interest rates) would be conducive to well-managed players such as Federal Bank. We maintain our Buy rating on the stock with a revised price target of Rs 135." 
Money Control writes: The knee jerk reaction in the stock post results and the near-term weakness is an opportunity to accumulate as the bank seems to be doing a decent job on most other parameters.
If you are buying the shares of Federal Bank, then you can do the same at around Rs.104, for a short term target of Rs.115. SL: Rs.101.

#Accumulate the shares of 3i Infotech Ltd at Rs.7.45 for targets of above Rs.50. The company offlate has been doing excellently well.

#Intraday BUY ZINC at around Rs.217.70, SL below Rs.217.00, T: Rs.219.00. Zinc prices edged up to their highest in more than a decade, supported by potential shortages and low inventories, but some investors voiced concern about the lofty levels. Three-month zinc on the London Metal Exchange was up 1.3% at $3,426 a metric ton in official midday trading on Monday, having earlier touched a peak of $3,440 a ton — its highest since August 2007, Reuters reports.

~~with inputs from Capital Market - Live....

Central Bank of India: Buy

CMP: Rs.74.15

Target: Rs.83-87

Introduction: Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. The establishment of the Bank was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India as the 'property of the nation and the country's asset'. He also added that 'Central Bank of India lives on people's faith and regards itself as the people's own bank'.

During the past 106 years of history the Bank has weathered many storms and faced many challenges. The Bank could successfully transform every threat into business opportunity and excelled over its peers in the Banking industry.

In line with the guidelines from Reserve Bank of India as also the Government of India, Central Bank has been playing an increasingly active role in promoting the key thrust areas of agriculture, small scale industries as also medium and large industries. The Bank also introduced a number of Self Employment Schemes to promote employment among the educated youth.

Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in all 29 States as also in 6 out of 7 Union Territories in India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 4715 Branches, 1 Extension counters, along with 10 Satellite Offices (as on November 2017) at various centres throughout the length and breadth of the country

Customers' confidence in Central Bank of India's wide ranging services can very well be judged from the list of major corporate clients such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate houses in the country.

Shareholding Pattern: The promoters hold 81.91%, while the general public holds 18.09%. Among the general category, the Financial Institutions/Banks hold 13.38% while the Life Insurance Corporation Of India  holds 13.36% of the shares of the company.

In addition to this the other insurance companies hold 0.33%, while Foreign Portfolio Investors hold 0.32%% of the shares of the company. Apart from this the Corporate Bodies hold 2.17% while India Infoline Ltd holds 1.47% of the shares of the company, leaving very little on the plate of the retail investors. This increases the valuation of the share price of the company for the obvious reasons.

Triggers:
#Themarket cap of the Central Bank of India is only Rs.14,590.86 crore as against H1FY18 revenues of Rs.13767.04 crore, making it one of the best bets among the PSBs. It has a book value of Rs.89.59, as compared to the CMP of Rs.74.15.

#The Central Bank of India holds 2.39% in SIDBI, whose valuation could be around Rs.300 crore considering that Nabard bought 7% stake in Sidbi from IDBI Bank for Rs.900 crore, in last October.

#The company will hold an EGM on 2nd February, '18,  to consider allotment of 3,88,45,460 equity shares of face value of Rs.10 each to the President of India on preferential basis for cash at an issue price of Rs.83.15 per equity shares including premium of Rs.73.15 per equity share, aggregating to upto Rs.323 crores.

#The government last October announced Rs.2.1 lakh crore capital infusion for state-owned banks – Rs 1.35 lakh crore from bonds, Rs.18,000 crore from budgetary support and the remaining Rs.58,000 crore through share sales.
On the face of it, the move will ease PSU banks’ capital deficiency (especially following asset quality pressure and the impending transition to Basel III norms) and marginally encourage lending. However, to start with, it will largely address asset quality stress and act as precursor to consolidation.b

#RBI has stepped has accelerated the NPA resolution issue, by taking errant companies to the Insolvency and Bankruptcy Code (IBC). This will make the balance sheets of banks look much healthier in the coming months, albeit with large hair cuts in place.

#Most Indian banks are flush with liquidity, post the demonetization exercise and lack of appetite for credit in the system. This has resulted in banks ending up investing most of this liquidity in government securities, driving the Statutory Liquidity Ratio (SLR) bond holdings of banks above the minimum requirement by up to 700 basis points. Now, as the economy picks up steam, the banks are likely to push credit with more ease and systematic manner under the eagle eyes of the RBI.

#Ownership pattern of PSBs banks are likely to change dramatically in the coming days. Approximately 27% of the new equity will be issued to the public, the remaining 73% being brought in by the government (58:153). The government holding of all PSBs will move up and this will technically be the unintended third nationalisation drive. This is likely to increase the confidence of not only the shareholders, but also the customers, who use banks for everyday transactions.

#The bank's gross non-performing assets (NPAs) were at 17.27% of gross loans by September 30, 2017. The gross NPAs were 13.70% of the gross loans at the end of the same quarter a year earlier.
Likewise, net NPAs or bad loans jumped to 9.53% as on September 30, 2017 from 8.17% a year ago, it said in a regulatory filing. However, these things have happened and the stock corrected. Now with the amended IBC in code, in future the share price is likely to get a forward kick.

Conclusion:  The government is likely to incentivise the efficiently managed PSBs and create larger size banking entities to avoid a repeat of the current problems. Hence, we need to be a little choosy, while picking up names from the PSB basket.

Moreover, according to the the latest information available on internet, 37% of the portfolio of Berkshire Hathaway's is made up of banking stocks; many of which are believed to have been selected by CEO Warren Buffett himself.  Buffett initially purchased shares of American Express during a banking panic in the 1960s. Additionally, M&T Bank was purchased in the wake of the Savings and Loan Crisis in 1991.
Following this trend, when the government of India is making all-round efforts to do away with the NPA crisis, I believe, it is the best time to invest in PSB counters especially when they are trading at a fraction of their future valuations, apart from the being reasonably safe bets; albeit with government patronage.

Meanwhile, though the RBI has placed Central Bank of India under the Prompt Corrective Action (PCA) Framework, the former said that placing banks under this system will not affect their normal operations. The Reserve Bank of India statement comes in the wake of media reports about the closure of some public sector banks, post their being placed under the PCA framework.

Terming the PCA as one among the various “measures/tools to maintain sound financial health of banks,” the RBI said that the framework involves “monitoring of certain performance indicators of banks as an early warning exercise and is initiated once such thresholds as relating to capital, asset quality, etc., are breached.”

The PCA is intended to help banks take timely corrective measures, including those prescribed by the RBI. The PCA framework also keeps the RBI focussed on such banks by engaging with their managements in ‘trouble areas’. It encourages banks to avoid risky activities and focus on conserving capital to strengthen their balance-sheet. So, the worst seems to be over in case of Central Bank of India.

On the daily candlestick chart, after a long fall, a hammer pattern has been formed. The RSI has taken a support around 41 and oscillators are in the oversold region. Therefore, buy the scrip of Central Bank of India Ltd at around Rs.74-74.50, for short term targets of Rs.83-87. SL: Rs.71.

Market Pulse

Key benchmark indices edged higher in early trade despite negative trend in Asian stocks. The BSE  Sensex is now trading at 34,900.88 up 129.83 points or 0.37% while Nifty is seen at  10,731.40 up 30.95 points or 0.29%. IT stocks led gains on the bourses.

Among the secondary indices, the S&P BSE Mid-Cap index fell 0.19%. The S&P BSE Small-Cap index dropped 0.39%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was negative. On the BSE, 1,014 shares declined and 679 shares rose. A total of 54 shares were unchanged.

Sun Pharmaceutical Industries rose 0.9% after the company announced that its wholly-owned subsidiaries have reached an agreement with Ironwood Pharmaceuticals, Inc. and Allergan plc (together known as the companies) to resolve the patent litigation regarding submission of an abbreviated new drug application (ANDA) for a generic version of Linzess (Linaclotide capsules) in the US. The announcement was made after market hours yesterday, 16 January 2018.

Pursuant to the terms of the settlement, the companies will grant the wholly owned subsidiaries of Sun Pharma, a license to market a generic version of Linzess in the United States beginning 1 February 2031 (subject to US drug regulator's approval) or earlier under certain circumstances. As a result of the settlement, all Hatch-Waxman litigation between Sun Pharma and the companies, regarding the Linzess patents, will be dismissed. Additional details regarding the settlement were not disclosed. The agreement is subject to customary regulatory approvals.

Hindustan Unilever fell 0.09% ahead of its Q3 results today, 17 January 2018.

Zee Entertainment Enterprises dropped 0.5% ahead of its Q3 results today, 17 January 2018.

Overseas, Asian stocks stepped back from a record high as the region's resource shares were dented by falling oil and commodity prices while digital currencies tumbled on worries about tighter regulations.

Japanese orders for machinery surged to their highest level in a decade in November. Cabinet Office data showed core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 5.7% in November from the previous month.

US benchmark indices pulled back from lifetime highs set earlier in the session to end mostly lower yesterday, 16 January 2018, on likely profit booking amid concerns over the possibility of a government shutdown, reports said. On the data front, the Empire State manufacturing survey slipped to 17.7 in January from a revised 19.6 in December, the New York Fed said.

Today's Call:

#Buy Idea Cellular Ltd at around Rs.101-102, SL: Rs.97, for short term Target of Rs.115-117.  Idea Cellular and Vodafone India, which are currently negotiating a merger to create India’s largest telecom operator, are likely to start operating as a single unit from April, Mint reported on 15 January.

#The stock of 3i Infotech Ltd (Rs.7.75) which is currently in the lower circuit broke the immediate support at around Rs.7.90-8. However, it can at best go to Rs.6.75-6.98, from where definitely a bounce would come, if today it does not close above Rs.8. I feel the share of 3i Infotech Ltd may not go two low from here; in view of the buoyancy in the IT stocks following twin reasons of upgradation of ratings for Infosys, Tech Mahindra and HCL Technologies to OVERWEIGHT by of the sector by global brokerage firm Morgan Stanley and a slight depreciation of the INR Vs USD. Yesterday, the Nifty IT index jumped 3.65% to 12,430.95 with 9 out of 10 constituents ending in the green and 1 in the red. There is no apparent reason for the scrip hitting lower circuits, except some chartical (technical) adjustments. Therefore, the medium to long term investors should accumulate in intraday declines.

#Buy Housing Development & Infrastructure Ltd or HDIL, 25th January, '18, CALL of Rs.70, at Re.0.95. T: Rs.2. Housing Development & Infrastructure's (HDIL) Finance Committee of the Board at its meeting held on January 12, 2018, approved the allotment of two crore warrants at an issue price of Rs.70.5 per warrant to Sarang Wadhwan, promoter of the company.
The promoters had also been allotted two crore warrants on November 14, 2017. The total promoter holding as of Q2FY18 was 36.49% out of which 12.1% is pledged. The total promoter shareholding after the exercise of the warrants would rise to ~42%. This is a positive development for the company. Capital infusion by promoters increases the confidence in future prospects of the company.
HDIL as of Q2FY18 had Land reserves of 199.29 mn sq.ft.
HDIL has operations in the Mumbai Metropolitan Region (MMR) with projects in Residential (65%), Commercial and Retail (6.4%) and SRA (28.6%) as of Q2FY18. It is one of the largest land bank owner in MMR region. Management is now focusing more on affordable housing segment through which it plans to launch apartment in Berkeley square (Ghatkopar) with a price range of Rs.50lacs to Rs.1 crore from Jan 2018.

#Buy Dena Bank Ltd at around Rs.25.35, T: Rs.27-29. SL: Rs.23.7.

#Buy Central Bank Ltd at around Rs.74, T: Rs.83, SL: Rs.72.5...Most of the Bank stocks are moving up today. Both the banking counters are likely to follow this trend.

~~with inputs from Capital Market - Live News....

WINNING STROKES

IT Sector was buoyant today

Key benchmark indices settled with modest losses led by decline in index pivotals Reliance Industries, ITC and HDFC. However, gains in Infosys, TCS and ICICI Bank cushioned steep losses on the bourses. The barometer index, the S&P BSE Sensex, fell 72.46 points or 0.21% to settle at 34,771.05. The Nifty 50 index fell 41.10 points or 0.38% to settle at 10,700.45.

Bank stocks edged lower. Metal and mining stocks dropped. Realty stocks declined.

Indices opened with small gains and hovered in the positive terrain near the flat line till morning trade. Stocks slipped into the red in mid-morning trade but soon pared losses. The market once again reclaimed positive terrain in early afternoon trade, however, once again drifted lower in afternoon trade. Indices slipped into the red again after staging recovery in mid-afternoon trade. Indices swung between gains and losses in late trade.

The Sensex lost 72.46 points or 0.21% to settle at 34,771.05, its lowest closing level since 12 January 2018. The Sensex rose 92.52 points or 0.27% at the day's high of 34,936.03 in morning trade. The index fell 107.96 points or 0.31% at the day's low of 34,735.55 in mid-afternoon trade.

The Nifty 50 index lost 41.10 points or 0.38% to settle at 10,700.45, its lowest closing level since 12 January 2018. The Nifty gained 20.80 points or 0.19% at the day's high of 10,762.35 in morning trade. The index declined 53.70 points or 0.5% at the day's low of 10,687.85 in mid-afternoon trade, its lowest level since 12 January 2018.

Among the secondary indices, the S&P BSE Mid-Cap index fell 1.74%. The S&P BSE Small-Cap index dropped 2.21%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 7648.82 crore, higher than turnover of Rs 5271.95 crore registered during the previous trading session.

The broad market depicted weakness. There were more than three losers for every gainer on BSE. 2,223 shares declined and 749 shares rose. A total of 119 shares were unchanged.

Index heavyweight Reliance Industries lost 2.54% to Rs 923.50.

Index heavyweight and cigarette major ITC dropped 2.06% to Rs 261.75.

Index heavyweight and housing finance major HDFC fell 1.14% to Rs 1,848.70.

Bank stocks edged lower. Among PSU bank stocks, IDBI Bank (down 5.24%), Syndicate Bank (down 4.41%), Central Bank of India (down 1.67%), Andhra Bank (down 3.84%), State Bank of India (SBI) (down 2.02%), Punjab National Bank (down 4.03%), Bank of Baroda (down 4.27%), Canara Bank (down 4.39%), Bank of India (down 3.65%) and Union Bank of India (down 2.19%) fell.

Among private bank stocks, Axis Bank (down 0.35%), RBL Bank (down 1.46%), Yes Bank (down 0.61%), Kotak Mahindra Bank (down 0.63%) and IndusInd Bank (down 0.69%) fell. ICICI Bank (up 1.43%) and HDFC Bank (up 0.48%) rose.

Federal Bank lost 7.51%. The bank's net profit rose 26.43% to Rs 260.01 crore on 6.76% growth in total income to Rs 2729.83 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 15 January 2018.

The bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 2.52% as on 31 December 2017 as against 2.39% as on 30 September 2017 and 2.77% as on 31 December 2016. The ratio of net NPAs to net advances stood at 1.36% as on 31 December 2017 as against 1.32% as on 30 September 2017 and 1.58% as on 31 December 2016.

The bank's provisions and contingencies rose 2.27% to Rs 162.43 crore in Q3 December 2017 over Q3 December 2016.

Metal and mining stocks dropped. Steel Authority of India (down 5.99%), Bhushan Steel (down 5.07%), Vedanta (down 2.7%), Tata Steel (down 2.16%), NMDC (down 3.82%), Hindalco Industries (down 2.4%), JSW Steel (down 1.32%), Hindustan Zinc (down 2.06%) and National Aluminium Company (down 8.37%) edged lower. Jindal Steel & Power gained 1.01%.

In the upcoming budget 2018-19, the metal industry is expecting a push for use of indigenous products, encouraging Make-in-India and increased spending on infra project including housing for all and roads.

Buying activity was witnessed in IT stocks. HCL Technologies (up 4.61%), Infosys (up 3.93%), and Wipro (up 4.88%) edged higher.

TCS gained 3.77% after the company announced the launch of TCS HOBS (Hosted OSS/BSS), a TM Forum certified platform for digital enterprises, on Microsoft Azure. The announcement was made during market hours today, 16 January 2018. The cloud ready TCS HOBS platform will enable customers to get to market quicker and benefit from a pay-as you-use commercial model.

Separately, TCS said that M&G Prudential, the UK and European savings and investments business of Prudential plc, entered into a new agreement with the company to digitally transform their business and deliver enhanced service for its UK savings and retirement customers. The value of the agreement exceeds 500 million pounds or $690 million over 10 years and covers the support of over 4 million customer policies. The announcement was made during market hours today, 16 January 2018.

Tech Mahindra rose 2.56% after the company said that it partnered with ContextSpace Solutions, a privacy research and development firm based in Israel, to develop the world's first global software privacy ecosystem, MyData Shield. Providing a comprehensive approach to data protection thereby delivering privacy by design and by default, the cloud-based software privacy ecosystem enables corporate software developers and start-ups to meet tough, global privacy and data protection regulations.

By 2020, over one-third of all data will live in or pass through the cloud, with data production in 2020 being estimated at 44 times greater than it was in 2009.Tech Mahindra issued the press release on its website yesterday, 15 January 2018.

Realty stocks declined. Indiabulls Real Estate (down 5.95%), Unitech (down 8.06%), Sobha (down 1.63%), Oberoi Realty (down 0.67%), DLF (down 3.67%), HDIL (down 2.67%) and Phoenix Mills (down 3.56%) edged lower.

Severely impacted by various reforms like RERA, GST and demonetisation, the realty sector is reportedly pinning its hopes on Budget 2018-19 for relief measures like lower taxes and infrastructure status. Industry players are expecting rationalisation of the GST rates from the current 12% to 6% and bringing stamp duty under the ambit of GST. Single window clearances for all approvals and additional tax incentives for first time home buyers are also expected.

ICICI Lombard General Insurance Company rose 3.81% after net profit rose 5.2% to Rs 231.76 crore on 9.60% increase in total income to Rs 2019.77 crore in Q3 December 2017 over Q3 December 2016. The result was announced during trading hours today, 16 January 2018.

Delta Corp surged 3.62% after consolidated net profit jumped 344.7% to Rs 44.74 crore on 62.6% growth in total income to Rs 170.10 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 15 January 2018.

Gujarat Narmada Valley Fertilizers & Chemicals lost 10.23% after the company said that it has indefinitely closed its TDI-II plant at Dahej following leakage. The announcement was made during market hours today, 16 January 2018.

GNFC said that in the morning on 15 January 2018, there has been a sudden leakage at TDI-II plant, Dahej, which called for plant shutdown at Dahej. Due to safety measures already put in place by the company over a period of time, neither there is any property damage nor any loss of life, GNFC said.

However, as a matter of abundant precaution, management has decided to close the plant indefinitely till the root cause is thoroughly analysed, reviewed and necessary further safety measures to be taken are fully evaluated in addition to current safety precautions, the company said.

Among macroeconomic data, exports rose 12.36% to $27.03 billion in December 2017 over December 2016. Imports rose 21.12% to $41.91 billion in December 2017 over December 2016. The trade deficit for December 2017 was estimated at $14.88 billion as against the deficit of $10.54 billion during December 2016.

Overseas, most European stocks edged higher as investors awaited the release of corporate earnings. On macro front, the trade surplus in the 19 countries sharing the euro expanded in November to its highest point in eight months. The European statistics office Eurostat said the euro zone's surplus in goods trade rose in unadjusted terms to 26.3 billion euros in November, up from 18.9 billion euros in October. It was also higher than the 23.8 billion surplus recorded a year earlier.

Asian stocks gained, erasing early losses amid announcements of corporate earnings. US stock markets remained shut yesterday, 15 January 2018, for the Martin Luther King Jr. holiday.

#Today, the stocks of 3i Infotech Ltd (CMP: Rs.8.15), inspite of coming out with decent set of numbers since the last few quarters, hit the lower circuit, due to some chartical (technical) adjustments and should not be a cause for worry. 

On the other hand most of the IT heavyweights reaped solid gains during the session after global brokerage firm Morgan Stanley upgraded ratings for Infosys, Tech Mahindra and HCL Technologies to overweight. The Nifty IT index jumped 3.65% to 12,430.95 with 9 out of 10 constituents ending in the green and 1 in the red. The share of 3i Infotech Ltd is expected to bounce from around Rs.7.9-8 levels and move northwards, for shot term targets of Rs.13-19.

#The shares of HDIL today touched Rs.66 intraday before closing at Rs.63.85. The real estate sector has been battling the triple shocks of demonetization, RERA and GST. The sector is yet to show significant signs of recovery, new figures from the capex-tracking database of the Centre for Monitoring Indian Economy (CMIE) show.. Project announcements in the December quarter plunged to their lowest since 2005, marking a fall of 91% from the year-ago period, the data shows. The property developers are hoping that in the ensuring budget, there would be  a revision in GST rate. A buyer of an under-constructed property faces an effective GST rate of 12% since it is considered as availing of services from the builder. But a sale of a completed property is not considered as rendering of services. 

Credit Suisse, in a December note, said the price arbitrage between under-construction and fully constructed houses has gone up significantly due to GST tax, slowing down of sales of under-construction houses and squeezing of developers' balancesheets. 

The demand for the sector remained sluggish, with seven top cities sitting on an unsold inventory of 6,85,000 housing units by the end of September quarter. As per Cushman & Wakefield, the housing sector witnessed a 35% fall in new supply across eight major cities to about 74,000 units in 2017. Launches of low-cost homes rose a modest 6% during the year. RERA requirements have pushed back launches by developers who are unable to meet the eligibility criteria, Credit Suisse said. 
Developers are also pushing for abolition of stamp duty, which continues to remain in force, even after implementation of GST. Granting of infrastructure status to the real estate sector for the affordable housing sector was the biggest highlight of the 2017 Budget.

On the positive side: Home loan rates have fallen by more than 250 basis points over the last two years and the race to acquire market share in affordable housing has only heated up more. This is all the more so given the government’s push to affordable housing. To make the housing market more inclusive, the NDA government has offered heavy subsidies on mortgage loans to buy what are now called affordable homes. And this has been the fastest growing slice of the mortgage loan pie since FY16. Under Pradhan Mantri Awas Yojana, the government offers interest subsidy of 6.5% to economically weaker sections on their home loans. These are individuals with income of up to Rs.3 lakh are the biggest beneficiaries of the interest subsidy.

~~with inputs from Capital Market - Live News...

WINNING STROKES

Trading for the week started on a jubilant note as key benchmark indices posted decent gains, with indices hitting fresh record highs. The barometer index, the S&P BSE Sensex, rose 251.12 points or 0.73% to settle at 34,843.51. The Nifty 50 index advanced 60.30 points or 0.56% to settle at 10,741.55. Data showing India's industrial production surging at 25-month high pace of 8.4% in November boosted sentiment. Both the Sensex, and the Nifty, hit record highs on intraday as well as on closing basis. Key indices gained for the third straight day.

Stocks of public sector banks nudged higher. Stocks of private sector banks were mixed. IT major Infosys nudged higher after reporting good Q3 December 2017 results. Housing finance major HDFC surged after the company's board approved raising funds upto Rs 13000 crore.

Key indices had opened on a firm note and extended intraday gains till mid-morning trade. Both the key indices hit fresh record highs. Intermittent selling pulled indices off their intraday peaks later during the session.

The Sensex rose 251.12 points or 0.73% to settle at 34,843.51, a record closing high. The index surged 371.30 points, or 1.07%, at the day's high of 34,963.69. The index rose 94.82 points, or 0.27%, at the day's low of 34,687.21.

The Nifty advanced 60.30 points or 0.56% to settle at 10,741.55, a record closing high. The index surged 101.40 points, or 0.95%, at the day's high of 10,782.65. The index advanced 32.55 points, or 0.3%, at the day's low of 10,713.80.

Among the secondary indices, the S&P BSE Mid-Cap index dropped 0.04%. The S&P BSE Small-Cap index advanced 0.25%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was positive. On the BSE, 1,534 shares advanced and 1,386 shares declined. A total of 197 shares were unchanged.

The total turnover on BSE amounted to Rs 5268.62 crore, lower than turnover of Rs 5391.20 crore registered during the previous trading session.

Among the sectoral indices on the BSE, the S&P BSE Bankex index (up 1.25%), the BSE Consumer Durables index (up 1.13%) and the BSE Basic Materials index (up 0.95%) outperformed the Sensex. The BSE IT index (down 0.48%), the BSE Telecom index (down 0.98%), the BSE Auto index (down 0.89%) and the BSE Oil & Gas index (down 0.7%) underperformed the Sensex.

Stocks of public sector banks nudged higher. IDBI Bank (up 3.03%), Indian Bank (up 1.87%), Bank of Baroda (up 0.89%) and State Bank of India (up 0.15%) gained. Punjab National Bank (down 0.75%) and Bank of India (down 0.18%) edged lower.

Stocks of private sector banks were mixed. ICICI Bank (up 3.73%), HDFC Bank (up 1.47%), Kotak Mahindra Bank (up 1.39%) and Axis Bank (up 0.89%) gained. IndusInd Bank (down 1.41%) and Yes Bank (down 1.38%) declined.

IT major Infosys rose 0.19% at Rs 1,080.40 after consolidated net profit rose 37.65% to Rs 5129 crore on 1.29% growth in net sales to Rs 17794 crore in Q3 December 2017 over Q2 September 2017. The result was announced after market hours on Friday, 12 January 2018.

The sharp jump in Infosys' net profit in Q3 December 2017 is mainly on account of the conclusion of an advance pricing agreement (APA) with the US Internal Revenue Service (IRS). This has also led to an increase in basic earnings per share (EPS) by Rs 6.29 for the quarter.

On a consolidated basis, the company expects its revenues for the fiscal year ending 31 March 2018 (FY 18) to grow 5.5%-6.5% in constant currency terms. The guidance in constant currency is unchanged compared with the revenue growth guidance issued by the company at the time of announcing Q2 September 2017 earnings.

The revenue is expected to grow 6.5%-7.5% in dollar terms in FY 18. The guidance in dollar terms is unchanged compared with the revenue growth guidance issued by the company at the time of announcing Q2 September 2017 earnings.

TCS declined 0.93% at Rs 2,747.20. The company announced an expanded strategic technology partnership with Marks and Spencer plc to enable the iconic retailer to become a digital-first business. As part of the retailer's five-year plan to transform its business, the retailer aims to make its technology function deliver more commercial opportunities. The announcement was made during market hours today, 15 January 2018.

Housing finance major HDFC surged 6.17% at Rs 1,869.95 after the company said that its board approved issuing equity shares up to an aggregate amount not exceeding Rs 13000 crore through a combination of a preferential allotment and qualified institutions placement, subject to shareholders' approval through postal ballot. The announcement was made on Saturday, 13 January 2018.

L&T was down 0.46% at Rs 1,323.10. The company said that its construction division has secured orders worth Rs 1310 crore across various business segments. The announcement was made during market hours today, 15 January 2018.

Lupin dropped 0.39% at Rs 915.60. The company said that it has made a foray into the over the counter segment under the Lupin Life Consumer Healthcare umbrella with the pan India launch of Softovac. It is used to cure constipation and irregular bowel habits. The announcement was made during market hours today, 15 January 2018.

On the macroeconomic data front, India's industrial production surged at 25-month high pace of 8.4% in November 2017 over November 2016, while showing a sharp acceleration in growth from the 2% increase in October 2017.

India's inflation based on consumer price index (CPI) surged to 17-month high of 5.21% in December 2017 compared with 4.88% in November 2017. The core CPI inflation increased to 4.96% in December 2017 compared with 4.75% in November 2017. The cumulative CPI inflation was lower at 3.25% in April-December FY 2018 compared with 4.85% in April-December FY 2017. Both IIP and CPI data was announced after market hours on Friday, 12 January 2018.

The government today, 15 January 2018 said that India's inflation based on monthly wholesale price index (WPI), eased to 3.58% (provisional) for the month of December 2017 as compared to 3.93% (provisional) for the previous month and 2.1% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 2.21% compared to a build up rate of 3.71% in the corresponding period of the previous year.

Overseas, European stocks edged lower. Most Asian stocks closed higher amid optimism on global growth prospects.

US stock markets will remain shut today, 15 January 2018, for the Martin Luther King Jr. holiday. Better-than-expected quarterly earnings from some financial majors and robust economic data boosted the benchmark US indices to fresh closing highs on Friday, 12 January 2018. Among macro data, US Commerce Department said retail sales increased by 0.4% in December, in-line with estimates.

#TV Vision Ltd hit another buyer freeze today in the opening trade. This stock has been hitting upper circuits from the day it was recommended in this blog at Rs.21. Today it closed at Rs.27.65, in the NSE.

#The share of Housing Development & Infrastructure Ltd or HDIL today made an intraday high of Rs.69.15 in the NSE before giving a close at Rs.65.55 up 2.66%, after a long time. There was news reports that the Finance Committee of the Board at its meeting held on January 12, 2018, approved the allotment of two crore warrants at an issue price of Rs.70.5 per warrant to Sarang Wadhwan, promoter of the company. According to India Infoline: "The promoters had also been allotted two crore warrants on November 14, 2017. The total promoter holding as of Q2FY18 was 36.49% out of which 12.1% is pledged. We believe the total promoter shareholding after the exercise of the warrants would rise to ~42%. This is a positive development for the company. Capital infusion by promoters increases the confidence in future prospects of the company". 

The brokerage house further mentioned that HDIL as of Q2FY18 had Land reserves of 199.29 mn sq.ft. HDIL has operations in the Mumbai Metropolitan Region (MMR) with projects in Residential (65%), Commercial and Retail (6.4%) and SRA (28.6%) as of Q2FY18. It is one of the largest land bank owner in MMR region. Management is now focusing more on affordable housing segment through which it plans to launch apartment in Berkeley square (Ghatkopar) with a price range of Rs.50 lacs to Rs.1 crore from Jan 2018.

India Infoline expects a pickup in pre-sales figures after launch of Mulund Phase II of the Nest and Pant Nagar in Gharkopar under budget homes by FY18E. On a consolidated basis, HDIL's net profit rose 64.32% to Rs.60.88 crore on 26.09% decline in net sales to Rs.161.52 crore in Q2 September 2017 over Q2 September 2016. HDIL has a significant operations in the Mumbai Metropolitan Region.

It is pertinent to mention here that on November 17, 2017 Morgan Stanley (France) S.A.S. bought 29,18,400 shares of Housing Development and Infrastructure (HDIL) at Rs.64.26 on the NSE. We can look forward for immediate targets of Rs.71-77 within this week. Stay invested.

#The scrip of 3i Infotech Ltd, where who's who of the Indian Corporate world and big shots hold around 52.11% stake, even after superb Q3FY18 surprisingly hit the lower circuits at Rs.8.55 in the NSE. The volume as usual in the counter was huge and was around 16,587,945. In absence of any negative news it seems those who entered earlier, at around Rs.5 has offloaded their holdings, leading to the stock hitting the lower boundaries set by the exchanges. However, this is investment grade scrip as it has large institutional investors, whose list is giving below, holding stakes:

• Financial Institutions/Banks hold 31.61%, 
• Insurance Companies hold 1.63%, 
• Foreign banks hold 14.65%,
• Reliance Capital holds 1.85%, 
• SREI Equipment Finance Ltd holds 1.01%,
• Tata Capital Financial Services Ltd holds 1.75%, 
• MACSF Epargne Retraite hold 3% and 
• Energy Management hold 3%.

The Company today announced that it has allotted 26,39,09,361 equity shares of Rs.10 each and 44,49,82,211 0.10% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs.5 each ('Class B Preference Shares') at par on a preferential basis to Srei Multiple Asset Investment Trust, a category II alternative investment fund within the meaning of the Securities and Exchange Board of India (Alternative I.nvestment Funds) Regulations, 2012 (on behalf of or for appropriation to its scheme, Vision India Fund) on January 15, 2018. It is a board managed company like ITC Ltd, Subex Ltd, etc and doing fine under the current leadership. The stock would soon start hitting the upper circuits -- accumulate on declines. I am looking for targets of Rs.50-plus in the coming days.

#The stock of MBL Infrastructure Ltd today hit the lower circuits of around Rs.27.35 before closing at Rs.27.55 ahead of the crucial verdict of NCLAT. 

But what most investors I believe don't understand is that the verdict is regarding whether the promoters can bid for their company or not. If the promoters are not allowed then someone or some strategic investors would buy the company and we could have open offers (on this logic my recommended IVRCL Ltd rose 4.69% today and closed at Rs.6.7) coming from the new entity, which will be superb for the shareholders. Hence, I don't understand what is the fear in the minds of some of the investors, regarding MBL Infrastructure Ltd when the company has a manageable debt of around Rs.1700 crore against a humongous order book of around Rs.7500 crore and the stock is trading at the price of dirt, against this backdrop. Anyway, I cannot change your mental stupidities and aberrations overnight, if you yourselves do not rectify them - do what you think is the best according to you. I am still holding my target of Rs.110, in the medium to long term. A stock market is not a machine that, as soon as you put your funds it would start to multiply - investors needs to have patience and should have thorough knowledge of equity investing before he/she could eke out some meaningful gains from the markets.

#The share of Sri Adhikari Brothers Television Network Ltd today hit another buyer freeze at Rs.35.95 today. The next targets are Rs.39-41. 

#I have recommended a small cap stock from the Telecom sector to the Premium  Members. Hope the stock will do well in the coming days. I have another stock which could become 3-4 times in a couple of years. Those who have a fund capacity of at least Rs.5 lakhs can contact me at: suman2005s@rediffmail.com, for investing in the scrip. The money to be shared in this case will be in the ratio 50:50 and not the usual 25% which my firm takes in profit sharing package. There will be minimum risk involved, as it will be pure investment and we will exit at the SL in case the scrip does not perform as expected or goes down and  invest in another  one. 

#Gammon Infrastructure Projects Ltd which was recommended in this blog at around Rs.2.95, today touched Rs.4.60, intraday before closing at Rs.4.45, up 11.25  intraday. The stock is near my 1st target of Rs.5.

#Those who have sent me documents to open  demat accounts with BMA Wealth Creators  Ltd should give me some time for the things to get settled down at my end -- processing takes time. After the account gets activated, you would be required to deposit a cheque of Rs.1.5 lakhs as seed capital to start trading. This minimum amount to get my Premium  Service for FREE is for those  who have already sent me the documents or are slowly sending me the same. From 16th January, '18, the amount is set to rise to Rs.2 lakhs. Also, the price of my Premium Service will increase to Rs.18000 per year from 16th January, 2018.

Moreover,those who lost money due to demonetization, can start in a fresh way with a minimum amount to cover all your losses. I will help you in this case, following the profit sharing model.

. 

~ with inputs from Capital Market - Live News

Pre-Session: Market may surge in the open

15-Jan-18: Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could jump 40.50 points at the opening bell. Firmness in Asian stocks to support gains on the bourses. India's industrial production surging at 25-month high pace of 8.4% in November will also support gains.

Overseas, Asian stocks gained and built on the strong start to this year and headed for a fresh record high amid optimism in global growth.

Among corporate news, on a consolidated basis, IT major Infosys' net profit rose 37.65% to Rs 5129 crore on 1.29% growth in net sales to Rs 17794 crore in Q3 December 2017 over Q2 September 2017. The result was announced after market hours on Friday, 12 January 2018. The result is as per Indian Accounting Standards (Ind-AS).

On a consolidated basis, the company expects its revenues for the fiscal year ending 31 March 2018, under IFRS, to grow 5.5%-6.5% in constant currency. The revenues are expected to grow 2.1%-3.1% in rupee terms based on the exchange rates as of 31 December 2017. The revenues are expected to grow 6.5%-7.5% in dollar terms based on the exchange rates as of 31 December 2017.

Housing finance major HDFC said its board approved issuing equity shares up to an aggregate amount not exceeding Rs 13000 crore through a combination of a preferential allotment and qualified institutions placement, subject to shareholders' approval through postal ballot. The announcement was made on Saturday, 13 January 2018.

Housing Development & Infrastructure (HDIL) said its board approved allotment of 2 crore warrants at Rs 70.50 each to Sarang Wadhawan, promoter of the company. The announcement was made on Saturday, 13 January 2018.

On the macro front, India's industrial production surged at 25-month high pace of 8.4% in November 2017 over November 2016, while showing a sharp acceleration in growth from the 2% increase in October 2017.

The all-India general CPI inflation surged to 17-month high of 5.21% in December 2017 (new base 2012=100), compared with 4.88% in November 2017. The corresponding provisional inflation rate for rural area was 5.27% and urban area 5.09% in December 2017 as against 4.79% and 4.90% in November 2017. The core CPI inflation increased to 4.96% in December 2017 compared with 4.75% in November 2017. The cumulative CPI inflation was lower at 3.25% in April-December FY2018 compared with 4.85% in April-December FY2017.

The government will announce inflation data based on wholesale price index (WPI) for December today, 15 January 2018. The WPI-based inflation accelerated further higher to eight-month high 3.9% in November 2017 from 3.6% in October 2017.

The stock market closed the volatile trading session with small gains on Friday, 12 January 2018, on positive global cues.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 158.16 crore on Friday, 12 January 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 696.25 crore on Friday, 12 January 2018, as per provisional data.

~~Powered by Capital Market - Live News

Reliance Infrastructure Ltd: Buy

CMP: Rs.555.55

Triggers:

#Reliance Infrastructure (RInfra) is likely to win an engineering, procurement and construction (EPC)

project worth Rs5.67 bn, according to a media report. The company has emerged as the lowest bidder (L1) in a tender floated by NTPC for Flue Gas Desulphurisation (FGD) works of its 3 x 500 MW power plant in Jhajjar, Haryana, the report added.

#Reliance Infrastructure (RInfra) has applied to Maharashtra Electricity Regulatory Commission (MERC) to transfer its Mumbai power business and the attached licences to Adani Transmission Ltd. The total deal value is Rs.13,251 crore. In addition, regulatory assets under approval estimated at Rs.5,000 crore and net working capital on closing estimated at Rs.550 crore will flow directly to RInfra. Thus, the total consideration value has been estimated at Rs.18,800 crore. Post-deal, RInfra would become debt-free, with a cash surplus of up to Rs.3,000 crore.

#Global research firm JPMorgan maintained its overweight stance on the stock with a target of Rs.630. It said that the implied equity value of the deal is Rs.6,250 crore i.e. two times regulated equity base. It expects the transaction to conclude in a couple of quarters.

#In a latest development regarding the Versova-Bandra sealink, the Anil Ambani-led Reliance Infrastructure has replaced a Chinese company as its partner for the Versova-Bandra Sealink project.

#Reliance Naval and Engineering Ltd in which Reliance Infrastructure Ltd stake, has a debt of Rs.8,418.67 crore. However, this is expected to come down substantially as according to Ambani, with the acquisition of Reliance Naval and Engineering Ltd (earlier known as Reliance Defence and Engineering Ltd and Pipavav Defence & Offshore Engineering) it is now one of the only two companies in India strategically positioned to participate in the Centre’s strategic partnership programme announced earlier this year.
The company has decided to focus on defence and engineering, procurement and construction business. It plans bids for six submarines worth Rs.50,000 crore. “With regard to Reliance Naval, the mandatory requirement for change of ownership is what we’ve achieved with our 31% shareholding. We have the ability to increase our shareholding to 36%. We will be shortly announcing a rights issue and through the rights issue, we will have the ability to increase our shareholding,” Anil Ambani said in September, 2017.

#The drive to make power plants compliant with environmental norms is going to open up a Rs 1.3-lakh-crore opportunity in the next three years for emission control equipment providers. According to a latest report by research firm Motilal Oswal Securities, companies such as BHEL, L&T, GE Power and Reliance Infra should benefit from the opportunity.

#RInfra plans to participate in the controversial Rs.1-lakh crore bullet train project from Mumbai to Ahmedabad, for which it is in talks with Japanese companies, Ambani told shareholders at the 88th AGM of Reliance Infrastructure on September, '17.

#The company is eyeing large engineering, procurement and construction (EPC) order inflow from projects like the Bandra-Versova Sea Link and Coastal Road, both in Mumbai, for which it has been shortlisted. The company has qualified for the Rs.40,000-odd crore Mumbai-Nagpur Expressway project too.

#Earlier in January 2017, the Reliance Shipyard was qualified by the U.S. Navy as an approved contractor to perform complex repair and alteration services for the U.S. Navy’s Seventh Fleet vessels operating in the region. Reliance Shipyard at Pipavav, Gujarat is the first Shipyard in India to have received MSRA Certification to undertake service and repair works for the vessels of Seventh Fleet.

#The book value of the shares of the company is Rs.948.49. It is a dividend paying company -- last year it gave a dividend of 90% to the shareholders. Its market cap is only Rs.14,610.41 crore. The stock fell from a high of around Rs.1350 in 2009 to the current price of around Rs.655.55. Buy the scrip of Reliance Infrastructure Ltd for short term targets of Rs.800-877.

The Indian IT Sector and 3i Infotech Ltd (Rs.9)

Target: Rs.50-plus

Auditor's Take on its Subsidiaries

#According to a report in Business Today, CY17, was one of the most challenging years for the $154 billion Indian IT sector that employs about 4 million people.  IT exports soared 20-fold in the last 17 years to $108 billion but 2017 saw some difficult times for the industry and exports are projected to grow by a mere 7-8%. But, 3i Infotech Ltd could buck the trend because the Indian banking sector is slowly coming out of the blues and the BFSI sector is set do well as the economy picks up steam.
Headquartered in Mumbai, India, 3i Infotech is a trusted global Information Technology company that has been committed to driving business value across all industry verticals. 3i Infotech provides a comprehensive set of IP based software solutions coupled with a wide range of IT services, uniquely positions the company to address the dynamic requirements of a variety of industry verticals, predominantly Banking, Insurance, Capital Markets, and Asset & Wealth Management (BFSI). The company also provides solutions for other verticals such as Government, Manufacturing, Retail, Distribution, Telecom and Healthcare.
Recently 3i Infotech has been assessed at Level 5 of the Capability Maturity Model Integration (CMMI SE / SW version 1.1) for all of its development centers in Mumbai. In addition the company's Infrastructure Services is ISO 9001:2000 certified. Using its domain knowledge and through continuous investment in technologies, 3i Infotech Limited helps corporations in their businesses through its expertise in enterprise-class software solutions, software services, information security consulting, IT infrastructure and disaster recovery solutions. 
3i Infotech has been reported as one of the top 5 Indian Software Product Companies with a presence across 5 continents and servicing customers in 45 countries.

#While what exactly constitutes digital was still hotly contested, traditional IT services declined and new generation of offerings broadly under the SMAC (social, mobile, analytics and cloud) category grew. 3i Infotech’s has a cloud based offering known as ORION ERP which is tailor made to help asset management companies to integrate their businesses.

#Unlike some of the alarmist headlines, Indian IT was still a net hirer in 2017. The industry added about 1.7 lakh jobs among IT-BPM companies.  3i Infotech has envisioned major growth plans for itself, in the backdrop of strong tailwinds experienced over six successive quarters through the last two years. With a revenue of over Rs.1000 crores in the last 4 years, the Company has added 139 new customers in FY 17, growing its customer portfolio to more than 1000 customers across 50 countries in 4 continents. 

#When TCS recently bagged a $2.25 billion contract (albeit spread over 8 years), the average size of
contracts shrunk. This meant Indian IT companies, specially the large players, need to be more nimble to chase more number of contracts whose average ticket sizes would be considerably lesser. In comparison mid-sized companies like 3i Infotech Ltd is expected to do  better because of lower overheads and superior integration of its overseas operations.

#With US accounting for about 60 per cent of Indian IT export revenues, the new Trump administration moves to cut down on H1-B visas and insisting that locals be employed. This development coupled with Brexit meant Indian IT had to face newer set of challenges. Having perfected their offshore low cost destination centric delivery model, they are being forced to hire in high cost, near shore markets. This is likely to have an impact on their margins and competitiveness. However, the businesses of 3i Infotech Ltd is spread across 4-continents including Africa and Gulf. The Petro-dollar economies are set to do well in future, as the crude oil prices have started to spike  up in the international market. 

#Three of India's largest IT companies - TCS, Infosys and HCL - saw leadership changes at the very top in the last 12-15 months. While some of the transitions like in the case of TCS was smooth, it was turbulent in others like Infosys. As the industry faces newer set of challenges, it is clear that stable leadership with a clear vision and a will to execute would be required going forward. 

In contrast 3i Infotech Ltd is going great under the leadership of Padmanabhan Iyer, MD & Global CEO. The Company reported a net profit of Rs.100.65 crores in FY 2017, with an improved EBITDA over the past 5 years, while achieving an order-book balance of Rs.572 crores as on March 31, 2017. The cash flow from operations has been positive and the Company’s net worth as on March 31, 2017 was Rs.370.09 crores. The Company continues to be profitable and has reported a net profit in H1-FY2018 and in Q3FY18.

#Over the past couple of years, Indian IT has started investing in platforms and products; apart from stepping up of investment in innovation.  Inspite of the several challenges Indian IT faces, today it has the resources, industry and domain expertise to continue to remain highly profitable and a key global player with an unmatched talent pool. 

Speaking on this fresh phase of growth in 3i Infotech, and positioning it as a future ready IT enterprise of 2020, Padmanabhan Iyer, Managing Director & Global CEO, 3i Infotech said, “3i Infotech’s core strength lies in strategic engagement with customers offering comprehensive IT solutions, made effective by deep domain expertise. Digital transformation is the base of the Company’s end-to-end solution stack and consulting framework, comprising of IPR based solutions and IT Services. With the impetus to expand the impact of our product portfolio, we are focusing on disruptive technologies, such as - IoT, Blockchain, SMAC, Robotics, AI, Machine Learning, Telematics & Cybersecurity to facilitate expansion of market reach of our customers. The organization, driven by over 4800 talented technology specialists across products and services group, is also geared up culturally and operationally to collaborate and offer composite next generation solutions to its customers.” 

#After strong numbers on Consolidated basis, in Standalone basis too the figures are encouraging -- the net loss of 3i Infotech Ltd has come down from Rs.131.84 crore in Q2FY18 to mere Rs.2.53 crore in Q3FY18 -- the figures cannot be compared on Y-o-Y basis because of the twin shocks of demonetization and implementation of the GST. Hence, I have taken the sequential figures. Moreover, according to the management commentary, in Q3FY18, 3i Infotech Ltd has allotted 1,064,298 equity shares at a price of Rs.16.5 per share aggregating to Rs.175.61 lakhs against conversion of FCCBs. The stock is likely to cross Rs.50 in a very short time. 

I have seen some boarders of MMB (that internet BROTHEL sponsored by Money Control), speaking about fair valuation of Rs.16-18 for the share of 3i Infotech Ltd, but in share market there is nothing like that in strict sense of the term, especially in a BULL MARKET -- or else the shares like GVK Power and Infrastructure Ltd, with humongous debt and scant visibility of future earnings would not be trading at Rs.256 (on Rs.10, face value); only because a fund manager has given a buy on it. I have nothing against the fund manager who is a very good friend of mine --- irrational exuberance is a part of the stock market architecture and a scrip would continue to rise as long as the investors pour money in the same. There is no hide and seek -- a naked fact is also a fact. 

WINNING STROKES

Photo: Aaj Ki Job

The stock market closed the volatile trading session with small gains on positive global cues. The barometer index, the S&P BSE Sensex advanced 88.90 points or 0.26% to settle at 34,592.39. The Nifty 50 index rose 30.05 points or 0.28% to settle at 10,681.25. Both the Sensex, and the Nifty, hit record high on intraday as well as on closing basis.

The Sensex and Nifty had hit record highs in early trade on the back of positive trading sentiment in Asian stocks fueled by strong lead from Wall Street. Also, expectations of recovery in domestic earnings in Q3 FY18 aided sentiment. Indices hovered with modest gains till mid-morning trade. Suddenly selling pressure emerged in afternoon trade after Supreme Court judges said that the working of Supreme Court was not in order. Indices bounced back to positive terrain to close the session with small gains.

Justice J Chelameswar, the second senior most judge in the Supreme Court, today, 12 January 2018, said the administration of the apex court is “sometimes not in order” and many “less than desirable things” have taken place. In an unprecedented move, Justice Chelameswar and three other senior judges today held a press conference on various issues relating to the apex court judiciary. Besides Justice Chelameswar, the other judges were Justices Ranjan Gogoi, M B Lokur and Kurian Joseph. Unless this institution is preserved, democracy will not survive in this country, Justice Chelameswar reportedly said.

The Sensex advanced 88.90 points or 0.26% to settle at 34,592.39, its record closing high. The index advanced 134.93 points, or 0.39%, at the day's high of 34,638.42. The index lost 161.33 points, or 0.46%, at the day's low of 34,342.16.

The Nifty rose 30.05 points or 0.28% to settle at 10,681.25, its record closing high. The index advanced 39.20 points, or 0.36%, at the day's high of 10,690.40. The index lost 54.10 points, or 0.5%, at the day's low of 10,597.10.

Among the secondary indices, the S&P BSE Mid-Cap index declined 0.17%. The S&P BSE Small-Cap index rose 0.05%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was negative. On the BSE, 1,561 shares declined and 1,354 shares advanced. A total of 155 shares were unchanged.

The total turnover on BSE amounted to Rs 5387.75 crore, higher than turnover of Rs 5253.96 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Bankex index (up 0.5%), the BSE Capital Goods index (up 0.48%) and the BSE Metal index (up 0.45%) outperformed the Sensex. The BSE FMCG index (down 0.52%), the BSE Healthcare index (down 0.34%) and the BSE Realty index (down 1.46%) underperformed the Sensex.

Bank stocks were mixed. Among public sector banks, Indian Bank (up 1.16%), Punjab National Bank (up 0.9%) and Central Bank of India (up 0.27%) edged higher. IDBI Bank (down 1.21%), Bank of Baroda (down 0.18%) and Bank of India (down 1.72%) edged lower.

State Bank of India (SBI) dropped 0.07% at Rs 301.80. The bank said that the proposal will be submitted to executive committee of central board (ECCB) on 17 January 2018, for approval for issuance of long term bonds of Rs 20000 crore for financing of infrastructure and affordable housing in domestic and overseas market instead of Rs 5000 crore as intimated earlier. The announcement was made after market hours yesterday, 11 January 2018.

Among private sector banks, ICICI Bank (up 2.63%) and IndusInd Bank (up 0.41%) edged higher. Yes Bank (down 0.57%), Axis Bank (down 0.45%), Kotak Mahindra Bank (down 0.02%) and HDFC Bank (down 0.01%) edged lower.

Realty stocks slumped. D B Realty (down 4.81%), Oberoi Realty (down 3.11%), Prestige Estates Projects (down 1.79%), Sobha (down 1.98%), Unitech (down 1.53%), HDIL (down 1.24%), DLF (down 1.4%) and Godrej Properties (down 1.36%) declined.

Indiabulls Real Estate was down 0.57%. The company through its wholly-owned subsidiary, Yashita Buildcon, has on 11 January 2018, entered into a binding and definitive agreement to acquire a prime and newly constructed commercial building, having leasable area of about 2.5 lakh sq ft in Gurugram. The deal is expected to get completed in 3 to 4 months when the Occupation Certificate of the building is expected to be received, the company said. The announcement was made after market hours yesterday, 11 January 2018.

TCS dropped 0.56% at Rs 2,772.90. The company's consolidated net profit rose 1.31% to Rs 6545 crore on 1.18% growth in net sales to Rs 30904 crore in Q3 December 2017 over Q2 September 2017. The result was announced after market hours yesterday, 11 January 2018.

Separately, TCS today, 12 January 2018, announced that it has entered into an agreement with Transamerica, a leading provider of life insurance, retirement and investment solutions, to enable the transformation of administration of its US insurance and annuity business lines. The multi-year agreement is worth more than $2 billion in revenues, and is expected to be completed by the second quarter of 2018, the company said. The announcement was made before market hours today, 12 January 2018.

Separately, TCS said it has been selected by Modell's Sporting Goods, one of America's oldest retailers of sporting goods, to deploy TCS OmniStore Unified Store Commerce Suite to transform their stores and deliver a true omni-channel experience for customers. The announcement was made during market hours today, 12 January 2018.

Infosys advanced 0.26% at Rs 1,078.40. The company's consolidated net profit rose 37.65% to Rs 5129 crore on 1.65% growth in total income to Rs 18756 crore in Q3 December 2017 over Q2 September 2017. The result was announced after market hours today, 12 January 2018. The result is as per Indian Accounting Standards (Ind-AS).

Shree Cement lost 3.36% at Rs 18,856.50, with the stock declining on profit booking after declaring good Q3 result. The result was announced after market hours yesterday, 11 January 2018.

Shares of Shree Cement had witnessed a pre-result rally in anticipation of good Q3 result. The stock had gained 8.04% in five trading sessions to settle at Rs 19,511.95 yesterday, 11 January 2018, from its close of Rs 18,059.15 on 4 January 2018.

Shree Cement's net profit rose 41.6% to Rs 333.33 crore on 23.1% growth in net sales to Rs 2296.23 crore in Q3 December 2017 over Q3 December 2016.

Overseas, European stocks edged higher amid earnings. Most Asian stocks closed higher after strong lead from Wall Street. China reported trade data for December with exports up 10.9% and imports rising 4.5%, resulting in a trade surplus at $54.69 billion. China reported a 7.9% jump in exports and 15.9% rise in imports — both in dollar terms — for 2017, the country's General Administration of Customs said today, 12 January 2018. China's overall trade surplus for 2017 was $422.5 billion.

US stocks surged to close the session at record highs yesterday, 11 January 2018 as investors bet economic growth would pick up steam.

#Today the share of Sri Adhikari Brothers Television Network Ltd hit another buyer freeze at Rs.34.25 in the NSE, as it cleared the resistance zone of Rs.31-32. We can look forward for the next targets of Rs.37-41 in the coming days.

#3i Infotech Ltd (Rs.9) today came out with excellent set of Q3FY18 numbers, even when the Indian economy was not doing well. Though the sales were marginally down by 4.23% to Rs.237.52 crore (Rs.248.00 crore during the previous quarter ended December 2016), the Net Profit of 3i Infotech Ltd rose 19.78% to Rs.22.77 crore in the quarter ended December 2017 as against Rs.19.01 crore during the previous quarter ended December 2016. There were media reports last month that the company has pre-paid Rs.19.50 crore of its principal outstanding debt. This amount represents 3 monthly installments of the principal amount which were due for repayment on October 31, November 30 and December 31, 2018 as per the terms of the Debt Realignment Scheme (DRS) approved by its lenders. With this pre-payment, the company has now prepaid 9 months of principal debt to its lenders, the company said. The company continues to service its lenders on a regular basis from the effective date of implementation of DRS i.e. April 1, 2016.
Meanwhile, Orion ERP from 3i Infotech continues its growth momentum and delivers industry-beating performance. The company recently posted an impressive 28% growth result in Q2, FY18 of license revenues from the ERP vertical, over the same quarter in FY17.
The stock of 3i Infotech Ltd, has given a multi-year break out today on the upside; we can therefore look forward for targets of Rs.39-62-79-97-126 in the coming. Accumulate the scrip on every decline, as the scrip will very soon cross Rs.40. When a scrip makes multi-year highs, then it generally gives huge returns to the investors.

#TV Vision Ltd today hit another consecutive buyer freeze today as it closed at Rs.26.35. The stock has been making continuous upper freezes since it was recommended at around Rs.21.

#According to my sources in Kolkata and Delhi, the verdict of NCLT for debt affected MBL Infrastructure Ltd (Rs.28.75) has been postponed to 16th January, 2018; like what we have seen in case of Videocon Industries Ltd (Rs.25.20). This is a little positive for the company as it will get more time to gather its resources. Moreover, if we take the case of Videocon Industries Ltd, as an example, the stock could start hitting the upper circuits from next Monday. I mean a settlement with the lenders is on the  cards, after the NDA government recently made amendments to the IBC. However, I don't understand one thing: why the stock is still lying in the T--group? Will the regulators please look into the matter?

#The stock of Videocon Industries Ltd as expected hit the upper circuits in the late trade today, at Rs.25.20 in the NSE. The company according to a report, last year had Rs.22,000-crore oil assets, apart from its consumer electronics business. The value of these assets are set to rise as the crude oil is spiking up in the international market. The company's CMD,  Mr. Venugopal Dhoot said the company has applied to banks to elongate the tenure of the domestic debt by few years so that it can set its house in order. Accumulate the stock on every decline, as  it is set to cross Rs.100, in the coming days.

#The scrip of Reliance Infrastructure Ltd (Rs.555.40) after correction is looking good for investment once again for targets of Rs.611-615. Unless there is crash in the market next week for the recent disturbing events concerning few apex court judges, the stock is likely to get supports at Rs.552-553 ranges. You can buy with a SL at Rs.547. Today, I have taken few shares of the company, for  some of my clients.

#The share of Uttam Galva Steel Ltd recommended in this blog last month at around Rs.22-23, has given good returns in the short time. Today, the scrip touched a high of Rs.30.45 intraday and closed at Rs.28.80. The investors should do well to book at least 50% of the profits and hold the rest with a SL at Rs.27.

#The subscription chage of my Premium Service (information) is set to increase to Rs.18,000 per year from 16th January, 2018. However, those who will enroll their names before the cut off-date will be given an extension of 15 days to pay the amount. Moreover, if you have a portfolio size of more than Rs.2.5 lakhs (Rs.1.5 - 2 lakhs quota/slot is full), you can come to me - we will make money jointly on PROFIT SHARING BASIS. Moreover, since, I have a limited capacity, preference will be given to higher portfolio sizes. Also, if you join my associated brokerage house: BMA Wealth Creators Ltd, with a minimum portfolio size of Rs.2.5 lakhs  ((Rs.1.5 - 2 lakhs quota/slot is full), you will get Premium Service FREE of charge, till  you continue with me.

~~ With inputs from Capital Market - Live News....

Market Pulse

Key benchmark indices edged higher in early trade with the two key benchmark indices hitting record highs. The Sensex is now trading at 34,608.21 up 104.72 points or 0.30%, while Nifty is now trading at 10,682.65 up 31.45 points or 0.30%.

Among the secondary indices, the S&P BSE Mid-Cap index rose 0.41%. The S&P BSE Small-Cap index advanced 0.65%. Both these indices outperformed the Sensex.

Overseas, Asian stocks edged higher after strong lead from Wall Street. US stocks surged to close the session at record highs yesterday, 11 January 2018 as investors bet economic growth would pick up steam.

Back home, the breadth, indicating the overall health of the market, was strong. On the BSE, 1,056 shares advanced and 256 shares declined. A total of 48 shares were unchanged.

TCS was down 1.16% at Rs 2,756. The company's consolidated net profit rose 1.31% to Rs 6545 crore on 1.18% growth in net sales to Rs 30904 crore in Q3 December 2017 over Q2 September 2017. The result was announced after market hours yesterday, 11 January 2018.

Separately, TCS today, 12 January 2018, announced that it has entered into an agreement with Transamerica, a leading provider of life insurance, retirement and investment solutions, to enable the transformation of administration of its US insurance and annuity business lines. The multi-year agreement is worth more than $2 billion in revenues, and is expected to be completed by the second quarter of 2018, the company said. The announcement was made before market hours today, 12 January 2018.

IT major Infosys was up 0.32% at Rs 1,079.05. The company is scheduled to announce Q3 December 2017 results today, 12 January 2018.

State Bank of India (SBI) advanced 0.6% at Rs 303.80 after the bank said that the proposal will be submitted to executive committee of central board (ECCB) on 17 January 2018, for approval for issuance of long term bonds of Rs 20000 crore for financing of infrastructure and affordable housing in domestic and overseas market instead of Rs 5000 crore as intimated earlier. The announcement was made after market hours yesterday, 11 January 2018.

On the macro front, the government is scheduled to announce industrial production data for November 2017 today, 12 January 2018. India's industrial production increased by 2.2% year-on-year in October, easing from an upwardly revised 4.1% gain in September.

The government will also announce today, 12 January 2018, inflation data based on consumer price index (CPI) for December 2017. Consumer prices increased 4.88% year-on-year in November, higher than 3.58% in October.

Today's Call:

#Buy Jai Corp Ltd at around Rs.211, T: Rs.292--340, SL: Rs.202. It is a completely debt free company belonging to Anil Ambani's half brother Anand Jain. It is into SEZ and Port Developments. It VC funds in the real estate sector and is into making PP/PE woven products (Jumbo bags) and so on....
There were recent media reports that Reliance Industries Chairman Mukesh Ambani, through his personal investment firms, is in talks to buy out BSE-listed Jai Corp’s 24% stake in Navi Mumbai Special Economic Zone (NMSEZ). If the deal goes through, Ambani will be the largest shareholder of the NMSEZ with a 48.1 per cent stake.
Last week, the NMSEZ project received the go-ahead from the Maharashtra government-owned City and Industrial Development Corporation (Cidco) for its conversion into an industrial city. When a stock  gives multi-year high, it generally gives huge returns. I have a target of Rs.900-1100, in the next 3-4 years. Last time when the stock rose from Rs.50, many I am told became millionaires, within 2-3 years. If the scrip of GVK Power and Infrastructure Ltd (Rs.25.60) has been rising due to the announcement of Navi Mumbai Airport and Tans-harbour link between Navi Mumbai and Sewri in Mumbai, the stock of Jai Corp Ltd should also  rise, anchoring on the same logic.  I have been recommending the stock of Jai Corp Ltd since 2013, from Rs.67-68 levels.

#The stock of TV Vision Ltd has been hitting the upper circuits since it was being recommended around Rs.21. Those who are holding can continue to the same. 

#Those who are holding the shares of Videocon Industries Ltd (Rs.24.70) from around Rs.12.50-13, should continue to hold for a target above Rs.100. The company has huge OIL ASSETS whose valuations are rising along with a spike in the crude oil  prices. You should therefore accumulate in every intraday dips, as mentioned earlier.

#Those who are holding the shares of Sri Adhikari Brothers Television Network Ltd (Rs.34.25), can continue to hold, as the scrip was able to cross the resistance zone of Rs.31-32, with ease. The stock has hit the upper circuits even today -- like TV Vision Ltd, it is hitting the upper circuits since it was recommended some days back.

#Those who are holding the shares of Pincon Spirit Ltd (Rs.44.50) from around Rs.38-39, should book complete  profits and wait for the price to stabilize before fresh entry. For the time being, this call is closed. 

#Buy the shares of 3i Infotech Ltd at around Rs.9-9.10 for a short term target of Rs.13. The company's consolidated net profit rose 40.55% to Rs.22.77 crore on 3.22% rise in total income to Rs.243.75 crore in Q3 December 2017 over Q2 September 2017.
The stock had outperformed the market over the past one month till 11 January 2018, jumping 125.26% compared with the Sensex's 3.13% rise. The stock had also outperformed the market over the past one quarter, surging 118.5% as against the Sensex's 8.39% rise. The scrip had also outperformed the market over the past one year, gaining 42.35% as against the Sensex's 27.13% rise.
The small-cap company has an equity capital of Rs 1334.15 crore. Face value per share is Rs 10. 3i Infotech provides software solutions and a wide range of IT services.

~~ with inputs from Capital Market - Live News....