Market View 20th February 2023

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

The dollar rose in early trading on Monday, adding to a third week of gains as hawkish comments by Federal Reserve officials and geopolitical tensions bolstered the appeal of the greenback. Shares fell in Japan and Australia, along with US equity futures. The S&P 500 Index declined Friday and slid for a second week. Futures contracts for Hong Kong slid earlier. Meanwhile, the yield on 10-year Treasuries advanced to 3.81%. Crude prices were trading around $83-mark, while Bitcoin was trading around 24,000-level. At 7:50 a.m., the Singapore-traded SGX Nifty, an early indicator of India’s benchmark Nifty 50, was up 0.17% at 17,966. Both domestic benchmark indices—Sensex and Nifty—closed 0.5% lower on Friday, snapping a three-day rally, as banking, IT and pharma stocks came under pressure. The Indian rupee weakened against the U.S. dollar as the greenback strengthened overseas and on muted domestic equities.

Economic Calendar:

• USD : Existing Home Sales (Jan) on 21^st February, 2023
• USD : GDP (QoQ) (Q4) on 23^rd February, 2023
• INR : Deposit Growth on 24^th February, 2023
• INR : GDP Quarterly (YoY) (Q3) on 28^th February, 2023

Brokerage Radar:

JEFFERIES ON SAMVARDHANA MOTHERSON: Hold, TP Rs 70; Acquires 100% stake in SAS Autosystemtechnik, a global provider of cockpit module assembly & logistics services to auto OEMs; Add 10-15% to co’s rev & EBITDA; Transaction multiple of 5.3xCY22 EV/EBITDA seems reasonable

MS ON SHRIRAM FIN: OW, TP Rs 1580; Fundamentals are tracking well & 3Q surprised; However, impute a higher stock supply disc. Valuation disc. to historical mean & to peers has widened. Stock should see a sharp rally post supply-overhang though timing uncertain

JPM ON CIPLA: OW, TP Rs 1210; Pithampur receives 8 observations under Form 483

While co has not commented on nature of observations at this point, note that this is one of its key manufacturing facilities besides Goa and Invagen plant in US

International Markets:

U.S & Europe

Asian markets

ADR Watch:

Commodities & Currency

FIIs & DIIs:

News Update:

Cipla: US FDA issues eight observations in Form 483 for Cipla’s Pithampur manufacturing facility in Indore, M.P.

Sun Pharmaceutical Industries: Acquires up to 26.09% of stake in Agatsa Software and 27.39% stake in Remidio Innovative Solutions for Rs 30 crore and Rs 150 crore, respectively.

Bharat Forge: Kalyani Strategic Systems, Bharat Forge’s subsidiary signs a Memorandum of Understanding with Rolls-Royce Marine, North America’ for the development of naval propulsion systems for the Indian market.

Dilip Buildcon: Skyway Infraprojects Pvt. receives LoA for Rs 1,947.06-core from Madhya Pradesh Jal Nigam, Bhopal for the engineering, procurement and construction of various component of the Rewa Bansagar Multi Village Scheme. Deal also included trial run with operations and maintenance of the entire Water Supply Scheme for 10 years.

Samvardhana Motherson International: Inks an agreement to acquire SAS Autosystemtechnik, one of the leading cockpit module integrators globally with large EV portfolio and gross revenues of ~Euro 4.4 Bn on principal basis. The enterprise value of the business is Euro 540 million and the transaction will be funded by a mix of debt and internal accruals.

Infosys: The company appointed Shaji Mathew as group head of human resources, effective March 22, 2023, after the retirement of Krish Shankar from the post.

Hindustan Unilever: The company will sell its ‘Annapurna’ and ‘Captain Cook’ brands to Uma Global Foods Pte. Ltd. (Singapore) and Uma Consumer Products Pvt. Ltd. (India), subsidiaries of Reactive Brands International, for Rs 60.4 crore.

Ambuja Cements/ACC: The index committee has decided to drop the stocks of the two companies from S&P BSE 100 ESG Index, effective at the open of Wednesday, February 22, 2023. The companies came under review after they were flagged under the Media and Stakeholder Analysis list.

Source: Moneycontrol, Bloomberg Quint, Investing

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