Month: July 2021

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Global shares fall on virus fears; oil slips on OPEC deal

Global shares fell Monday amid deepening pessimism over rising COVID-19 infections in much of Asia. Oil prices dropped further after oil producing nations agreed to raise production limits. France’s CAC 40 shed 1.1 per cent in early trading to 6,388.62, while Germany’s DAX was down 1.1 per cent at 15,370.28.

Britain’s FTSE 100 dipped 1.5 per cent to 6,906.69. The future for the Dow Jones Industrial Average dropped 0.8 per cent to 34,283.5. The future for the S&P 500 lost 0.6 per cent to 4,294.38. Experts are saying Indonesia has become a new epicenter for the pandemic as outbreaks worsen across Southeast Asia. Meanwhile, some athletes have tested positive for COVID at Tokyo’s Olympic Village, with the Games due to open Friday.

“The more transmissible delta variant is delaying the recovery for the ASEAN economies and pushing them further into the doldrums,” said Venkateswaran Lavanya, at Mizuho Bank in Singapore.

In Japan, the vaccine rollout came later than in other developed nations and has stagnated lately. Japan is totally dependent so far on imported vaccines and just one in five Japanese have been fully vaccinated. Japan’s benchmark Nikkei 225 shed 1.3 per cent to finish at 27,652.74. South Korea’s Kospi slipped 1.0 per cent to 3,244.04. Australia’s S&P/ASX 200 dipped 0.9 per cent to 7,286.00. Hong Kong’s Hang Seng fell 1.8 per cent to 27,489.78, while the Shanghai Composite lost a fraction of 1 point to 3,539.12.

In energy trading, benchmark US crude lost USD 1.28 to USD 70.53 a barrel in electronic trading on the New York Mercantile Exchange. It gained 16 cents to USD 71.81 per barrel on Friday. Brent crude, the international standard, fell USD 1.36 to USD 72.23 a barrel.

OPEC and allied nations agreed Sunday to eventually raise production limits imposed on five countries, ending an earlier dispute sparked by the United Arab Emirates that roiled global energy prices. Iraq, Kuwait, Russia, Saudi Arabia and the UAE would see their limits rise, the cartel said in a statement. The plan would boost their production by 2 million barrels a day by the end of this year.

OPEC+ agreed in 2020 to cut a record 10 million barrels of crude a day from the market to boost prices. It’s slowly added some 4.2 million barrels back over time, and prices have risen steadily this year, though they are still way below their peak in 2008.

Investors’ attention now turn to earnings. Most companies will report their results this week and in following weeks. Hopes are high, with profits in the S&P 500 expected to jump 64 per cent from a year earlier, according to FactSet. In currency trading, the US dollar fell to 109.82 Japanese yen from 110.04 yen late Friday. The euro cost USD 1.1782, inching down from $1.1812

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Mindtree share price jumps 9% post quarterly results; analysts remain mixed on outlook

Mindtree’s share price soared 9.3% on Wednesday to trade at Rs 2,728 per share as investors reacted to the more than 61.2% on-year jump in net profit of the IT company. While the stock price rose higher, analysts were mixed on the outlook as some advised selling the stock citing unsustainable margins, other asked investors to buy more shares banking on the accelerated digital adoption globally. Mindtree’s share price has soared 62% so far this year, in addition to the 136% rally in the stock between April and December last year.

The IT firm reported a net profit of Rs 343 crore in the April-June quarter, up 61.2% from last year’s Rs 213 crore. The company said it is witnessing broad-based growth across industries and services and that its deal pipeline continues to remain strong. Revenue grew 20% to Rs 2,291 crore from the year-ago period.

Kotak Securities – Sell

Fair value: Rs 1,900

The brokerage firm said that Mindtree’s Growth was led by a jump in short cycle programs and path towards normalization of spending in impacted travel vertical. Kotak Securities has raised EPS estimates by 5-6% and Fair Value to Rs 1,900 valuing the company at 20X June 2023E EPS. However, analysts are cautious about the “ unsustainable EBIT margin profile and rich valuations”. “EBITDA margin guidance of 20%+ seems unsustainable noting cost headwinds, likely decline in utilization rates and increase in travel and other discretionary costs,” they said.

ICICI Securities – Hold

Target price: Rs 2,375

Analysts at ICICI Securities said that revenue growth in the April-June quarter was largely in line with their estimates, but the quality of growth was weaker than usual. The brokerage firm said that the investor’s focus will likely shift to steady-state growth/margins in FY23 and ahead. Moderation in cloud activity, rise in the share of onsite effort and reversal of covid-led cost savings (e.g. travel) are the key headwinds to watch out for. “At 28x FY23E EPS, street is already factoring in mid-teens revenue growth with 20%+ EBITDA margin over the medium term. Scope for further surprises/upgrades are less likely,” they added.

Motilal Oswal – Neutral

Target price: Rs 2,620

Motilal Oswal sees positives in the quarterly results of Mindtree. “Since July 2019, after the disruption due to the ownership change, Mindtree has taken steps to stabilize its client and employee count,” they said. Although the brokerage firm sees limited upside potential, they believe the stock is fairly valued. “The key positives are already captured, and we see limited upside hereafter. Our TP of INR2,620 per share implies 26x FY23E EPS,” they added.

HDFC Securities – Add

Target price: Rs 2,635

Seeing Mindtree’s strong performance, HDFC Securities said revenue outperformance in Q1, all-time high bookings and hiring reflecting strong demand, and improving revenue profile (broad-based). “Mindtree’s growth mix has improved in recent times (vs. a skewed profile earlier), led by interventions to drive large/annuity deals,” HDFC Securities said. The brokerage firm values Mindtree at 28x Jun-23E EPS.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Sensex snaps 3-day losing streak on buying in RIL, bank stocks; Charts suggest bullishness in Nifty

Snapping the three-day losing streak, BSE Sensex ended over 0.75 per cent higher on Tuesday. The 30-share index surged 397 points or 0.76 per cent to finish at 52,770, while the broader Nifty 50 index jumped 120 points or 0.76 per cent to settle at 15,812. Index heavyweights such as ICICI Bank, Housing Development Finance Corporation (HDFC), Reliance Industries Ltd (RIL), Axis Bank contributed the most to the indices’ gain. Market breadth remained positive as 1,854 stocks advanced, while 1,360 scrips declined. BSE Smallcaps outperformed the equity benchmarks. In intraday deals, smallcap index hit a fresh 52-week high of 26,263.03, however, it ended at 26,188.45. BSE Midcap ended flat.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The markets are again near the resistance zone of 15900 and if we can get past that on a closing basis, we are in for treat. Conquering the 15900 level would take the Nifty to 16100 which would prove to be the next pit stop for the index. As long as we do not break 15400, dips or corrections can be utilized to accumulate long positions for higher targets.

Gaurav Udani, CEO & Founder, ThincRedBlu Securities

Nifty opened with a gap and managed to be above the gap for the entire day. It opened at 15798.3 made a low of 15758.3 and closed around its high of 15834. This is a bullish sign for traders. Now as long as Nifty trades above its current swing low of 15641, Nifty will test new all-time high. Aggressive traders can look at buying Nifty above today’s high for targets of 16000-16100. Conservative traders can wait for it to close above its current consolidation.

Bank Nifty made a strong bullish candle today. It closed at 35744 above its 2-day high. It has also been making a higher high and a higher low pattern. A volume higher than yesterday would have been a strong bullish confirmation. Traders can wait for it to close above 36000 after which a strong up move to 36500-37000 can be expected.

Sumeet Bagadia, Executive Director, Choice Broking

On the Technical Front, the Index has formed a bullish candle on a daily chart which suggests buyers are active. Moreover, the stochastic & MACD has indicated positive crossover on an hourly chart which adds bullish momentum in the index. Furthermore, the index has moved above the 21&50 HMA, which suggests an upside rally in upcoming sessions. At present, the nifty seems to have resistance at 15915, crossing above the same can shows 16100-16200 levels while immediate support comes at 15700.

Vinod Nair, Head of Research, Geojit Financial Services

Following favourable economic outcome and positive Asian markets, domestic bourses traded positive today. Asian shares sparked a rally after better-than-expected Chinese economic data and a bounce back in Chinese tech stocks. Though June CPI inflation continued to remain above RBI’s tolerance level, it eased to 6.26% from 6.30% in the previous month giving some relief to the market. Industrial production (IIP) for May grew 29.3% YoY essentially due to a lower base.

S Ranganathan, Head of Research, LKP Securities

Bulls were in cruise control today and market breadth was buoyant. Expectations of a good quarter for textile exporters aided by a weak rupee kept several companies in this space buzzing through the day. We also witnessed profit booking in several largecaps and high-quality midcaps that have had a good run-up in the last few months.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555

Sebi bars Allegro Capital, individual for insider trading activities in Biocon shares

Sebi has barred Allegro Capital and one of its senior executives from the securities market for one year in a case related to alleged insider trading activities in the shares of Biocon. Besides, the market watchdog has directed them to disgorge wrongful gains along with interest. The amount would be more than Rs 24 lakh.

Allegro Capital and its director as well as major shareholder Kunal Ashok Kashyap have been fined Rs 10 lakh each, according to an order by Sebi dated July 8. They also have to jointly and severally disgorge Rs 24,68,751 along with an interest of 12 per cent per annum from January 19, 2018, till the date of actual payment.

The regulator noted that Allegro Capital was in a temporary business relationship with Biocon and that Kashyap also held directorship in Mazumdar Shaw Medical Foundation. On January 18, 2018, Biocon had announced an exclusive global collaboration with Sandoz on next generation biosimilars.

Sebi had observed that shares of the company rose 5.6 per cent at close on the day after the announcement. Later, the regulator initiated a probe to ascertain whether certain persons/entities have traded in the scrip of Biocon while they were in possession of Unpublished Price Sensitive Information (UPSI) and were in violation of Sebi norms.

Based on the chronology of events leading up to the corporate announcement, it was alleged that the UPSI period was from December 4, 2017, to January 18, 2018, the order said quoting the showcause notice sent to Allegro Capital and Kashyap.

Kashyap had submitted that by resorting to his independent directorship in Mazumdar Shaw Medical Foundation and by making reference to Allegro Capital where Arun Chandavarkar (then CEO and Joint MD) and Kiran Mazumdar Shaw, have their trading accounts, Sebi was clearly grasping at straws trying to conclude that he was a connected person.

“In this regard, it is observed that reliance on the aforesaid have been placed to show that the association of Noticee No. 1 (Kashyap) with senior management of the company is not merely in the capacity of an advisor on specific set of projects, but it goes beyond that where he not only serves on the board of the charitable foundation of the promoter of Biocon but also provides broking services to the promoter and the then CEO and Joint MD,” Sebi said in the order.

This shows that Kashyap is in frequent communication with the key managerial personnel of Biocon outside his contractual relationship with Biocon and also shows his proximity to the management of Biocon.

“The same makes Noticee No. 1 stand on a different footing as compared to other advisors, if any, contracted by Biocon. Therefore, Noticee no. 1 association with M/s Mazumdar Shaw Medical Foundation and Allegro Capital Advisors Ltd., where he is the majority shareholder are relevant factors as it establishes his relationship / connection with Biocon and/ or its management. “Hence, the submission of the Noticee No. 1 is untenable,” the order said.

Passing the order, Sebi Whole Time Member Madhabi Puri Buch said that even if, the noticees (Kashyap and Allegro Capital) were bullish with respect to Biocon’s scrip in the long term, the sudden spurt/ jump in volume shown by them during UPSI period has not been justified by them.

“To put it differently, noticees may have been bullish about Biocon but because of the UPSI, their purchases in the scrip of Biocon were advanced as they wanted to buy it before the price starts to increase after the publication of the announcement.

“Thus, the trigger for buying irrespective of the long term bullish view was on the basis of UPSI. Therefore, it is held that the noticees have dealt in the scrip of Biocon on the basis of UPSI and hence have violated Section 15G(i) of Sebi Act,” the order noted.

Section 15G pertains to insider trading.

Eqwires Research Analyst

Best SEBI registered Intraday tips provider and Best SEBI registered stock advisory company

Telegram | Facebook | Twitter

Call: +91 9624421555 / +91 9624461555