Seeing robust demand for laptops, expect it to continue, says Croma’s Ritesh Ghosal

As COVID cases have started to dip and unlock across states including Maharashtra is starting in a phased manner, demand for laptops and other electronic items like AC has surged during this period with major offices continuing work from home. In an interview with CNBC-TV18, Nilesh Gupta, Managing Partner, Vijay Sales and Ritesh Ghosal, CMO, Croma shared their views on the same. “Laptop demand is very robust. Last year was a big boom, this year it continues. There is a lot of repeat demand also for laptops coming in. There are shortages, we are not able to cater to all the requirements. There is pent-up demand on ACs and coolers as well,” Ghosal said. Read here.

Lupin | The USFDA has accepted the Biologics License Application (BLA) for the company’s proposed biosimilar to Neulasta (pegfilgrastim) through a filing using the 351(k) pathway.

Stocks hover near record highs on rebound bets, oil rallies above $70

Stock markets hovered near record highs on Wednesday as investors cheered the latest evidence of a sustained rebound in global economies and stronger oil prices lifted energy stocks. The mood was less buoyant than on Tuesday, however, as traders waited for crucial US jobs data on Friday to assess what the increasing evidence of a faster-than-expected economic recovery would mean for central bank policy in the United States and Europe. A strong expansion in US and European factory activity in May had lifted world shares to record highs on Tuesday. The broad Euro STOXX gained 0.22 percent slightly below Tuesday’s record high. British shares extended their rally with the FTSE 100 up 0.36 percent, while Germany’s DAX and the French CAC 40 gained marginally. The MSCI world equity index, which tracks shares in 49 countries, was 0.1 percent lower. Futures pointed to a slight fall on Wall Street at the open. Read here.

Oil extends gains on OPEC+ supply discipline, demand prospects

Oil prices rose on Wednesday after OPEC and its allies stuck to their plan to cautiously bring back oil supply to the markets in June and July while expecting a robust recovery in demand in the United States and China, the world’s two biggest oil consumers. US West Texas Intermediate (WTI) crude futures rose 18 cents, or 0.27 percent, to USD 67.90, extending a 2.1 percent gain following the Memorial Day holiday in the United States on Monday. Prices rose to their highest since October 2018. Brent crude futures climbed 22 cents, or 0.31 percent, to USD 70.47 a barrel, after rising 1.3 percent overnight, when it hit its highest since March 8. Read here.

Jefferies: India to see record fund raising in FY22; 40% of that through IPOs

India may see a record equity supply of Rs 2-3 lakh crore in FY22, said global brokerage house Jefferies, while adding that, as much as 40 percent of it may come from the initial public offerings (IPO). A substantial chunk of it may come from the country’s maturing internet space with companies such as Zomato and Paytm lined up with IPOs leading the pack, it said in a research report Markets hitting multiple new highs last month indicates that investor confidence has returned as the COVID-19 second wave hit its peak supported by gains in global equities. A notable trend over the past decade is that the contribution of IPOs in equity fund-raising has been around 27 percent. Jefferies adds that this trend could improve led by India’s maturing space that could raise around Rs 40,000 – 50,000 crore. Read here.

Buzzing | Adani Ports’ shares jump 3% on strong operational performance in May

Shares of Adani Ports and Special Economic Zone rose 3 percent on Wednesday after the company reported an improvement in operational performance in May. In a BSE filing, the company said that its handled cargo volume for May stood at 25.65 MMT, up 79 percent on a year-on-year basis. In the container segment, the company registered a rise of 67 percent in handled volume at 0.72 MN TEU’s in May. Mundra port handled container volume of 0.56 MN TEU’s which is up 61 percent YoY, the filing added. Read here.

Hedge funds pull money out of commodities for 3rd straight week; here’s why

Data released on Tuesday shows that hedge funds have pulled money out of commodities for a third straight week. The index has 23 commodities and nearly 20 of those have seen money being taken out. The net long positions that have been holding, have seen some unwinding of positions. In the agricultural trade commodities, the longs declined by nearly 10 percent in the previous week itself. The total holdings now stand at a 10-month low. Corn has seen the bullish positions decline since December lows and the long positions in soybean have been cut into halves in the last three weeks. Read here.

Sun Pharmaceutical Industries | The company has entered into a licence agreement with Ferring Pharma to commercialise a room temperature stable formulation of obstetric drug, Caritec (Carbetocin RTS) in India. Caritech is used for prevention of excessive bleeding in women after vaginal or caesarean child birth.

ICICI Direct shares model largecap, midcap portfolios; sees Nifty at 16,300 in FY23

Indian indices are trading at all-time highs and could further scale new heights. Experts, however, advise caution and expect to see consolidation in the future. Domestic brokerage major ICICI Direct sees a 15-20 percent discount in the equity markets factoring in future earnings volatility and unforeseen macro risks. It sees the Nifty at 16,300 in FY23. “We use bottom-up P/E construct to derive ~26.2x as weighted average target PE on Nifty based on our in-house target PE multiples for the index constituents. Consequently, we now value the Nifty at 16300 i.e. 22x P/E on FY23E EPS of Rs 740,” analysts at ICICI Direct noted in a research report. The brokerage said it will revise its earnings for FY22 after the management commentary, while also adding, that it believes the impact of the FY23 number may remain limited. Read here.

Market Watch:Aditya Agarwala, Yes Securities

– Buy Glenmark Pharma with a stop loss of Rs 600 and a target of Rs 640.

– Buy Oberoi Realty with a stop loss of Rs 590 and a target of Rs 650.

Shishir Baijal, Chairman & Managing Director, Knight Frank India on RBI Policy

With the second wave of COVID – 19 that has brought about a new phase of economic uncertainties, we expect RBI to remain growth supportive and leave the policy interest rates unchanged in the upcoming policy. While the rise in commodity prices have been exerting upward pressure on input material cost and on margins, the Central Bank at the current juncture should not risk increasing the borrowing cost. With the second wave of the pandemic, the economy is in a vulnerable condition and would require further policy support from the Central Bank and the Government.

Low-interest rate in the economy, has been a very strong supportive factor for the bounce back in the housing sector, witnessed before the second wave of COVID 19. When the real estate sector was just about getting back on its feet, it got hit by the uncertainties of the second wave and ensuing lockdowns. The household’s sentiments have been marred deeply by the second wave of the pandemic. Any meaningful revival of the real estate sector would require sustained demand stimulant measures and easy credit conditions to promote consumption and investment.

Market Watch: G Chokkalingam, Founder & MD, Equinomics Research & Advisory

On Kovai Medical Centre & Hospital | Good management, good balancesheet, a lot of expansion is going on. I firmly believe that Rs 1,600 is the conservative target price but then two-three years it can go much beyond that.

On Punjab National Bank | I firmly believe that this can be a multibagger. I think the time has come like the post-Lehman crisis and like post-drought in 2003, the PSU banks like PNB to play out in a very big way.

What’s Buzzing: Gujarat Gas posts strong Q4 numbers; CLSA target price at Rs 570

Gujarat Gas posted strong Q4FY21 numbers. It was a beat on all parameters. Revenues soared to come in at Rs 3,500 crore, slightly lower than CNBC-TV18’s poll. Other than that, there was an expectation of a sharper EBITDA decline. EBITDA declined 6 percent, at Rs 554 crore. The CNG volumes were at a record high for the company at 1.7 mmscmd. Total volumes went up 22 percent on a year-on-year (YoY) basis, they were up 6 percent on a sequential basis. CLSA has downgraded the stock to ‘outperform’ from ‘buy’ because of higher valuations but has increased the target price to Rs 570. Watch here.

Ujjivan Small Finance Bank ventures into supply chain finance

Ujjivan Small Finance Bank today announced its collaboration with fintech partner, Desiderata Impact Ventures Private Limited (Progcap) for end-to-end digitized invoice-based financing services and repayments for loan applications received from Micro, Small and Medium Enterprise (MSME) units seeking small tenor working capital for their businesses.

Sandeep Bagla, CEO, TRUST AMC on RBI Policy

In the upcoming credit policy, RBI has a tough task at hand, navigating between galloping commodity prices, which raise inflationary expectations – and the unpredictable impact of the lockdowns on employment, production and the general welfare in the real economy. Easy liquidity conditions and low policy rates have not led to widespread growth in credit offtake which is languishing at multi-year lows.

In case of an uncertain economic outlook, a central banker is likely to err on the side of caution by continued easy liquidity and policy rates lower than normal to stimulate the economy. It is expected to be a no change policy, with continued economy friendly soft interest rate bias. The market should continue to have faith in RBI’s ability to contain inflation credibly for the policy to succeed. We, at TRUST MF, recommend fixed-income investments in structured high-quality bond portfolios up to 3-year maturity in the current interest rate scenario.

Market Watch: Ruchit Jain, Angel Broking

– Buy Piramal Enterprises with a stop loss of Rs 1,765 and a target of Rs 1,880.

– Buy West Coast Paper with a stop loss of Rs 223 and a target of Rs 242.

Narayana Health’s Viren Shetty expects third wave to be less severe than second wave

Narayana Health posted Q4FY21 earnings. The company has clocked in a record-high profit, and margins have improved significantly to 17 percent. However, the management commentary remains quite cautious on near-term recovery. Viren Shetty, Executive Director and Group COO, Narayana Health, discussed the performance. “We are working with a large number of corporates, buying huge numbers of ventilators and oxygen generators, while maintaining a huge stock of medicines and PPEs to prepare for any eventuality,” he said. “We were still in the process of procuring a large number of ventilators and oxygen generators when the second wave of COVID-19 hit us. So now, we are not taking any chances,” he shared. Read here.

The Phoenix Mills | The company and Singapore’s sovereign wealth fund GIC announced the execution of definitive documents to form a strategic investment platform, to develop, own and operate retail‐led, mixed‐use developments in India. Earlier in December 2020, PML had announced signing of a non‐binding term sheet with GIC for formation of this retail‐led, mixed‐use platform.

Motilal Oswal on Auto sector

The Auto industry was impacted by COVID infections peaking in May 2021, leading to localized lockdowns and affecting consumer buying sentiment. Current valuations largely factor in a sustained recovery (our base case), leaving a limited margin of safety for any negative surprises. We prefer 4Ws over 2Ws as PVs are the least impacted segment currently and offers a stable competitive environment. We expect the CV cycle recovery to slowdown in the near term. We prefer companies with: a) higher visibility in terms of demand recovery, b) a strong competitive positioning, c) margin drivers, and d) balance sheet strength. Maruti Suzuki India and Mahindra & Mahindra are our top OEM picks. Among the Auto Component stocks, we prefer Endurance Technologies. We prefer Tata Motors as a play on global PVs.

Prefer midcaps over largecaps; see upside in metals, positive on pharma & autos: Ambit’s Dhiraj Agarwal

 

“This bull market is here to stay. It is not a demand supercycle, which is why many people tend to get a bit bearish saying that the demand is not as strong as 2003-07 period,” Dhiraj Agarwal, co-head equities, Ambit Capital, told CNBC-TV18. However, he added that the Indian market is expected to remain rangebound with an upward bias. Midcaps will have more steam over the next one-two years in terms of re-rating. Top sectoral bets at this point of time would be metals, pharmaceuticals and automobiles,” Agarwal said. He continues to remain positive on metals, pharmaceuticals and autos. According to him, there is more upside for metal stocks. He believes that the lack of capacity addition in the past few years will keep prices higher, which will aid metal companies. More here