Market View 22nd June 2022

View on market: Stay Cautious, be with quality business:

Equities were mixed in Asia on Wednesday amid warnings about the risk of an economic downturn. Shares rose in Japan and Australia but fell in South Korea. The US futures declined after the S&P 500 and Nasdaq 100 jumped over 2% on Tuesday. As of 6:28 am, the Singapore-traded SGX Nifty — an early barometer of India’s benchmark Nifty 50 — was 0.49% higher at 15,698.50 points. Elsewhere, the yen hovered near 24-year lows against the dollar, due to the dichotomy that is the monetary policy of Bank of Japan and the US Federal Reserve. Crude oil retreated further below $110 a barrel. Bitcoin hovered around $20,000.

Economic Calendar:

• INR: RBI MPC Minutes on 22^nd June 2022.
• INR: Fiscal Deficit Data 30^th June 2022.
• USD: Core Durable Goods Order 27^th June, 2022.
• USD: Pending Home sales 27^th June, 2022.

Brokerage Radar:

GOLDMAN SACHS ON LIC: Initiate Neutral, TP Rs 700 Should benefit from strong structural growth, execution will be key Forecast topline growth to improve to c. 10% (FY22-25E) from 6% in FY19-22, but still trailing industry by 300bps Prvt players much better positioned to O-P.

BoFA SEC ON LIC: Initiate Buy, TP Rs 930 Large room for growth in underinsured market Margin expansion; rising share of non-par & protection Val @ 47-70% disc vs prvt peers Risks: equity market weakness given high EV sensitivity, slower-than-expected margin improvement.

CLSA ON INDUSIND BANK: Buy, TP Rs 1060 Back to improving growth trajectory Better placed on liabilities: this cycle will be a true test; it expect flat margins Asset quality worries behind & credit costs to normalise from FY23CL ROA getting back to 1.8%; no near-term capital raises.

CLSA ON TATA MOTORS: O-P, TP cut to Rs 453 vs Rs 480 Cutting vol est in both JLR & CV biz Stk valuing JLR at 0.5x P/BV Debt likely to come down as free cashflow improves JLR vol decline likely to continue as chip shortage & supply chain bottlenecks continue in CY22.

MORGAN STANLEY ON DR REDDYs: OW, TP Rs 5099 Expects double-digit sales growth to continue, driven by its core biz Reiterated 25% EBITDA & 25% ROCE guidance, driven by operating leverage & productivity gains Plans to be vigilant on capital allocation.

CLSA ON DR REDDY: Buy, TP Rs 4950 Provided more detail on its long-term growth drivers in its key markets of North America, India & EM along with its ongoing productivity enhancement measures Reiterated 25% Ebitda margin/RoCE target.

JEFFERIES ON DR REDDYs: Buy, TP Rs 5036 Re-iterated 25%/25% EBITDA/ROCE targets & elaborated on levers that will help achieve these Aims for sustainable double-digit top-line growth, & plans to expand existing biz & seek new opportunities such as Biologics CDMO & CGT.

JEFFERIES ON RELIANCE: Buy, TP Rs 2950 Correction Offers Opportunity Multi year-low inventories, declining Russian exports, muted Chinese exports, lower diesel production in Europe & delays in commissioning of ME refineries are, tailwinds to refining margins in CY22, Initial estimates suggest RIL could deliver 60% sequential growth in O2C Ebitda in 1QFY23E with likelihood of earnings upgrade Stock has corrected 10% from its recent peak

International Markets:

U.S & Europe:

Asian markets:

ADR Watch:

Commodities & Currency:

FIIs & DII:

News Update

Biocon: The company has denied allegations of bribery in drug approval process. That, after PTI reported, citing officials, that the CBI apprehended Joint Drugs Controller S Eswara Reddy for allegedly receiving Rs 4-lakh bribe.

Hero MotoCorp: The company has introduced Euro-V complaint Xpulse 200 4V motorcycle and Dash 110 and Dash 125 scooters in Turkey.

Jain Irrigation: Jain International Trading BV, a wholly owned subsidiary, has agreed to merge its business with Rivulis Pte.

SAIL: The company appointed Anil Kumar Tulsani as director (finance).

Coal India: Adani Enterprises and 10 other companies, including offshore firms, have expressed interest in bidding for coal import tenders floated by India’s biggest miner.

Source: Moneycontrol, Livemint,, Bloomberg, Investing

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