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Sensex holds 300 point-gain; UltraTech surges, JSPL tanks

14:00

The News International Team

03:10 Earnings

Liquor maker United Spirits has posted a net loss of Rs 55.6 crore in the quarter ended June 2014 as against profit of Rs 118.13 crore in same quarter last year on account of exceptional loss.

The company has made a provision of Rs 42.7 crore for diminution in value of investment in subsidiaries, which resulted in a loss on bottomline front.

Numbers were lower than analysts’ expectations. According to the average of estimates of analysts polled by CNBC-TV18, profit was expected at Rs 100 crore on revenue of Rs 2,340 crore for the quarter.

Revenue declined 11 percent to Rs 1,924 crore in April-June quarter of current financial year 2014-15 compared to Rs 2,161 crore in the year-ago period.

02:45 pm Results impact

Investors added more shares of Axis Bank on Monday as brokerage houses raised target price on the stock after the company’s second quarter earnings met street expectations. The stock rallied nearly 4 percent intraday.

India’s third largest private sector lender’s net profit climbed 18.3 percent year-on-year to Rs 1,611 crore led by higher other income and net interest income but impacted by higher provisions. The CNBC-TV18 poll had expected it at Rs 1,612 crore for the quarter.

While maintaining outperform rating on the stock, Credit Suisse raised earnings per share estimates by around 2 percent on higher-than-expected net interest margin. “With better-than-expected NIMs and pick-up in fees, pre-provisional profitability has improved. Valuation is inexpensive at 1.8x book, for 18 percent return on equity and 21 percent EPS CAGR,” it elaborated.

02:20pm Gainers and losers

ONGC maintained its uptrend, up over 6 percent on gas price hike followed by Tata Motors, HDFC, ICICI Bank, Larsen and Toubro, Axis Bank, State Bank of India, Hindalco Industries and Gail India with 2-5 percent gain.

However, Infosys (down 0.8 percent), Wipro (down 1.5 percent) and TCS (down 0.3 percent) were under pressure in afternoon trade.

02:00pm The market maintained its morning gains with the Sensex rising 328.89 points or 1.26 percent to 26437.42 and the Nifty climbing 97.15 points or 1.25 percent to 7876.85.

Advancing shares ountumbered declining ones by a ratio of 1593 to 1042 on the Bombay Stock Exchange.

Ridham Desai, Morgan Stanley says equities look appealing because of the potential earnings upside. “India’s stellar performance this year has been driven by hopes of reform momentum following strong election results, a likely turn in the economic cycle and benign global conditions,” he adds.

According to him, even as the market looks fair or better than fair on valuations relative to bonds and emerging markets, an upturn in the earnings cycle will likely support valuations. Over the coming two years, he sees earnings compounding at 19.8 percent and 15.5 percent for the Sensex and broad market, respectively.

UltraTech Cement rallied over 5 percent following higher-than-expected earnings in July-September quarter. Net profit shot up 55.24 percent year-on-year to Rs 410 crore on strong topline, operational and other income, and lower tax rate but impacted by higher finance, power and freight cost. Revenue during the quarter grew by 20 percent to Rs 5,429 crore driven by higher cement sales volumes. CLSA maintains a buy on the stock with a revised target price of Rs 3150.

Jindal Steel & Power plunged over 7 percent as sources say CBI has registered a fresh case of alleged cheating and corruption against the company, in connection with its probe into coal blocks allocation probe.

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