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April 09, 2024

Sbi Securities Daily Market Pulse 9th April 2024
● From Price Action Perspective:
Led by Oil & Gas and Metals, Nifty further strengthened gaining 0.66% for the day closing above 22650 levels. Bank Nifty yesterday witnessed consolidation closer to 48500-48600 zone & ended the day on a flat note.
Dissecting the last few days' price action, it's more of range-bound trading with individual Midcap and Smallcap stocks across diversified sectors in focus.
Among the sectoral indices, Realty, Metal, Auto, Consumer Durables, and Energy were the best performing indices during yesterday’s session, and we expect the momentum here to continue.
● From the Global Market perspective:
Dollar Index, is currently stable around 104.15 and is a short-term positive.
US10 year yields too have been trading around elevated levels of 4.40% since the past few sessions.
Brent Crude Oil prices, currently trading closer to $91 a barrel, could be a real cause of worry from an Indian perspective.
● Key Nifty levels:
Indices are in an overall uptrend, and hence, the stance remains a Buy on dips one with slight caution.
Going forward, while strong support lies around 22430-22450, the zone of 22630-22650 will be the immediate hurdle for the index for the day. Any sustainable move above the level of 22650 will lead to an extension of the rally towards 22770-22820 in the short term.
If in case index slips below 22450, it will lead to further selling pressure in the index upto the 22350-22310 level.
● OI data Interpretation
Nifty PCR has seen an improvement from 0.90 to 1.38 levels, implying strength in the indices.
Meaningful call writing is witnessed across 22700-22800 strikes, while Significant Put writing was witnessed in 22600-22500 strikes.
The overall range for the coming few sessions could be 22750 on the upside & 22430 on the downside.
● Key Bank Nifty Levels:
With the stability visible in HDFCBANK, ICICIBANK, and Indusindbk, the sentiments have been quite buoyant for the Banking Index, and texture has changed to buy on dips.
Till Index holds above its crucial supports placed at 48250, the current positive momentum could extend towards the zone of 48900-49020.
If the index slips below 48250, it will lead to further selling pressure in the index upto the 47950-47800 level.
From the Open Interest perspective,
With Banknifty PCR currently above 1.25 and significant call writing seen at 48500-48600-48900 strikes and 48500-48200 puts, it implies a range of 48200 and 49100 for the next few days.
● Sectors & stocks in Momentum:
From the broader market,
Bajaj Finserv, BEL, Canara Bank, PNB, Reliance, LT, Godrej Properties, Hind Copper, HAL, Icici Lombard, NCC, Policybzr, BEML, Castrol, Pnc Infra, Sobha, Voltas & Zomato look good based on technical parameters as well as on the Relative Strength chart.
● FII - DII Data Synopsis:
In Cash Market,
FIIs sold to the tune of 684 cr while DIIs bought to the tune of 3470 Cr.
FIIs' Long short ratio of index futures improved to 45% as on a net basis, they bought 11554 index futures.
On the stock futures front, FIIs have bought to the tune of 7273 contracts, while on the Options Front, FIIs sold 72707 call contracts and sold 157322 Put Option contracts.
Kotak Inst Eqt on Interglobe Aviation
Buy, TP Rs 4300
Pricing going up may be vital for sector’s financial health
FY2024: Sector in red while Indigo operating at healthy spreads
Profitability of Indigo can potentially breach past peaks & sustain for long before normalizing down
GS on Bandhan BK
Downgrade to Neutral, TP Rs 211
Await better clarity on near-term growth/profitability
Cut loan growth est. by 580bps/590 bps to c.13% for FY25E/FY26E
Still expect bank to deliver ROA/ROE in FY25 of 1.9%/16% (vs. 2.3%/18% prior)
HSBC on Cable & Wire Cos
Polycab, Buy, TP raised to Rs 5870
KEI Ind – Buy, TP raised to Rs 3850
RRRK Kabel – Buy, TP Rs 1800
Expect strong volume backed mid-teens y-o-y revenue growth & strong profit growth for covered stocks
C&W sector continues to see strong growth tailwinds
MOSL on CONCOR
Buy, TP Rs 1120
Commissioning of DFC to drive containerized cargo movement & Co will be key beneficiary
Expect blended vol to report 10% CAGR during FY24-26.
Further, with clarity on LLF provisioning, project EBITDA margin to be 23- 25% over FY24-26.
BoFA Sec on PAytm
Resume coverage, U-P – TP Rs 400
Lending biz growth gradual; Competition high in payments
Earnings recovery and re-rating may be 2-3 quarters away
Now expect Co to achieve EBITDA breakeven in FY27 & net income break-even in FY28.
Jefferies on Wealth Management Cos
Leading players will benefit from strong inflows & op. efficiencies to deliver 20-22% profit CAGR over FY24-27E.
Rise in share of trail fees (70-75% by FY27E) improves earning visibility & supports val. re-rating
Nomura on Tata Motors
Buy, TP Rs 1057
JLR 4Q retail vol up 11% y-y; EBIT margin est at 9%
JLR reports q-q & y-y increase in retail & wholesales vol for 4QFY24
Est. FCF of GBP600-700m (GBP642mn in 3QFY24F) which should bring JLR’s net debt to
MS on Tata Motors
OW, TP Rs 1013
JLR reported wholesale volume growth of 16% YoY in F4Q24 (+9% QoQ), to 110.2k units, vs MSe of 106k.
Mix was weaker, as: 1) Premium models (Defender, RR & RR Sport) share was at 61% vs 62% in F3Q24
2) China share down to 12% of sales vs 15% in Q3.
MS on Maruti
OW, TP Raised to Rs 14322
Global slowdown in EVs & rising share of hybrids, along with rising news flow on hybrid duty cuts in India, show that a powertrain portfolio strategy – which MSIL has – is best to navigate current landscape.
MS on RIL
OW, TP Rs 3046
RIL re-rated 10% YTD (35% in last 1 yr) & now trades at 24x P/E &10x EV/EBIDTA on F2026 MS est.
Potential for re-rating across verticals – new energy, refining, chemicals & telecom.
Net debt & slower capex intensity to be supportive of val
MS on Exide
OW, TP Rs 373
Exide plans to invest Rs45- 50bn in 6GWh battery capacity (Rs18.2bn already invested), indicating that the lithium business is valued at ~1x F2026e P/B.
Kotak Inst Eqt on Exide
Sell, TP Rs 270
Co signed an MoU with Hyundai-Kia
While expect demand growth to outpace capacity addition , co is well-positioned to benefit, given its partnership with SVOLT & 1st-mover advantage
SELL stays on expensive vals

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