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Actionable: Buy Voltas & Bata. Investment Buy – ICICI Bank & HDFC Bank.

October 22
06:21 2019

From Advisory Desk : Vikash Sahay

22 Oct 2019 : Market Outlook – US market closed in green due to good corporate earnings reported so far. Asian markets were trading up by half a percent. SGX Nifty is down by 35 points in comparison to Nifty October futures closing on Friday.

Over this long weekend, a lot of companies reported quarterly numbers which would keep Nifty and Bank Nifty volatile. Due to the whistleblowing against the financial malpractices, Infosys ADR was down by 13% and we expect a gap down opening for Infosys in Indian markets as well.

Motilal Oswal

On the other hand, markets would be drawing positive cues from State election’s exit polls. We expect the Nifty to be between 11400 – 11750

Actionable: Buy Voltas & Bata. Investment Buy – ICICI Bank & HDFC Bank.

Result Today – Asian Paints, Axis Bank, Bajaj Finance, ICICI Prudential, Kotak Bank, M&M Financial, Jubilant Food, RBL Bank.

Result Update –

Reliance Industries: Largely in line results with strong performance in petrochemical due to higher volumes and retail business. However, refining segment impacted to lower volumes and lower GRM’s ,reported free cash flows positive which means bottoming of the capex cycle, JIO numbers inline while ARPU continues to decline120. Deleveraging and consumer business are major earnings drivers going ahead.

HDFC Bank: HDFC Bank results has beaten estimates in Q2 with 27% growth in PAT, strong deposit growth of 23% and advances up by 19%, provisions spike but asset quality remain stable at GNPA 1.38%, subsidiaries performance below estimates due to spike in provisions in HDB financial and week capital markets for HDFC securities.

Shree Cement : Strong Q2 results with volume growth of 1.1% in week quarter, highest EBITDA /ton due to higher realizations and lower costs, company planning to raise Rs.3000 cr for the capacity expansion through QIP which will be equity dilution after a long time but value accretive in long run.

Ultratech cement : Ultratech reported marginally below estimates.

Strong results from AU Small finance and Ujjivan finance. Week results: LIC Housing Finance, DCB Bank, Oberoi realty

Global market:
DOW: +57
NIFTY 50 : 11661
Sensex : 39298

FII: +37 Cr
DII: +587 Cr

Dollar: $ 70.92

Gold: $1486 per ounce
Crude: $58.95 per barrel

10 year US bond rate: 1.80
10 year Indian Bond rate: 6.69

Update –

Infosys : Infosys management facing severe allegations of unethical practices to boost profits by group of employees. The letter says CEO and CFO forced finance team to act against the standard accounting practices in large deals and not to recognize several costs like Visa costs in last quarter And also says several billion dollar deals have nil margins and all the information not shared with auditors. Recently deputy CFO resigned from long innings. Stock will be under pressure in the near term.

Derivative View – VIX closed at 15.92. Max Put OI is at 11500 then 11400 strike while Max Call OI is at 11700 then 11800 strike. Option data suggests a trading range in between 11500 to 11800.

Vikash Ranjan Sahay, Founder & CEO , Value Management Solution P Ltd, (Exclusive Business Partner of MotiLal Oswal)

Mr. Vikash Sahay can be contacted at +91 9471133334

Actionable – Bata, ICICI Bank, HDFC Ltd . Auto and Insurance sectors are showing

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