Market View 27th October 2023

View on market: Volatility Prevails, Market is searching for better value

Asian equities were poised for a mixed open Friday as big tech stocks on Wall Street rallied in trade following good earnings. US share futures advanced, according to Bloomberg report. Brent crude rose to $88.38 a barrel, and West Texas Intermediate was trading around the $83.63 mark. The yield on the 10-year U.S. bond was trading at 4.86%, whereas Bitcoin was above the $34,000 level. At 6:02 a.m., the GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India, was trading flat at 18,856.5. India’s benchmark stock indices fell for the sixth consecutive day on Thursday, given the geopolitical uncertainties stemming from the Israel-Hamas war and the resultant rise in crude prices coupled with higher-for-longer U.S. rates. The headline indices logged the longest stretch of losses in over seven months. The Sensex has fallen 4.94% in the last six sessions, and it was down 7% from its life high scaled on Sept. 15. The Nifty slipped 4.82% in six days and was down 6.8% from its all-time high. The S&P BSE Sensex closed 900 points, or 1.41%, lower at 63,148.15, while the NSE Nifty 50 fell 265 points, or 1.39%, to end at 18,857.25. Indian markets recorded the biggest single-day equity selloff of the year by overseas investors as global concerns continue to roil stocks.

Economic Calendar:

• USD : Core PCE Price Index (MoM) (Sep) on 27^th October, 2023
• USD : CB Consumer Confidence (Oct) on 31^st October, 2023
• INR : FX Reserves, USD on 27^th October, 2023
• INR : Infrastructure Output (YoY) (Sep) , USD on 31^st October, 2023

Brokerage Radar:

MS on Canara BK: UW. TP Rs 315 Q2 PAT of Rs36bn (1% annualized RoA) 10% above est., led mainly by core performance & recovery from write-off a/cs Core PPoP was 8% above MSe, owing to NII beat (3% above MSe) & strong fees. Asset quality trends improved Continue to prefer BOI & BOB

Jefferies on Colgate: Buy, TP raised to Rs 2320 Reported subdued volume trend, with nearly flat volumes YoY (JEFe). Pricing power however allowed a respectable revenue growth & smart margin expansion drove 18% YoY growth in Op Ebitda.

MS on Home First: OW, TP Rs 1050 PAT beat of 5% driven largely by higher net interest income. NII was 3% higher on better-than-expected loan spreads. Borrowing costs compressed 13bp QoQ. Disbursements (+7% QoQ) and AUM (+8% QoQ) growth were strong.

International Markets

 U.S & Europe:

Asian markets:

ADR Watch:

Commodities & Currency:

FIIs & DIIs:

News Update:

Axis Bank: The lender appointed Munish Sharda as a whole-time director, designated as executive director, for three years, with effect from Nov. 1. Praveg: The board approved the scheme of amalgamation between Eulogia Inn and the company. A total of 17.33 lakh new equity shares of Praveg will be issued to the shareholders of Eulogia Inn.

CARE Ratings: CARE Ratings (Africa), a subsidiary of the company, has incorporated a step-down subsidiary, i.e., CARE Ratings South Africa, on Oct. 25 for providing credit rating services.

Karnataka Bank: The bank approved an allotment of equity share capital of Rs 800 crore on a preferential basis. The board approved the allotment of 3.34 crore shares with a face value of Rs 10 each to HDFC Life Insurance, Bajaj Allianz Life Insurance, Quant Mutual Fund, Bharti AXA Life Insurance, and Bajaj Allianz General Insurance at a price of Rs 239.52 apiece.

McLeod Russel: Borelli Tea Holdings, a wholly owned subsidiary of the company, sold 100% of the capital contribution in Phu Ben Tea Company, a step-down subsidiary of the company, to TLK Agriculture for a net consideration of $2.15 million on Oct. 25. The sale is expected to be completed by Dec. 24.

Aurionpro Solutions: Ashish Rai has been promoted to CEO.

Lemon Tree Hotels: The company has signed a license agreement for a 50-room property in Visakhapatnam under the brand ‘Red Fox Hotels’. The hotel is expected to be operational by FY 2026.

Source: Moneycontrol, Bloomberg Quint, Investing 

Disclosure in pursuance of Section 19 of SEBI (RA) Regulation 2014

Elite Wealth Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.

For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.elitewealth.in. Analysts employed by Elite Wealth Limited are registered/qualified as research analysts with SEBI in India.( SEBI Registration No.: INH100002300)

Disclosure Appendix

Analyst Certification (For Reports)

Kiran Tahlani, Elite Wealth Limited, kirantahlani@elitestock.com

The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Elite Wealth Limited.

As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:

(1) all of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and

(2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report.

For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.

Research Excerpts

This note may include excerpts from previously published research. For access to the full reports, including analyst certification and important disclosures, investment thesis, valuation methodology, and risks to rating and price targets, please visit www.elitewealth.in.

Company-Specific Disclosures

Important disclosures, including price charts, are available and all Elite Wealth Limited covered companies by visiting https://www.elitewealth.in, or e-mailing research@elitestock.com with your request. Elite Wealth Limited may screen companies based on Strategy, Technical, and Quantitative Research. For important disclosures for these companies, please e-mail research@elitestock.com.

Options related research:

If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the risk disclosure documents, please contact your Broker’s Representative or visit the OCC’s website at https://www.elitewealth.in

Other Disclosures

All research reports made available to clients are simultaneously available on our client websites. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your respective broker’s sales person.

Ownership and material conflicts of interest Disclosure

Elite Wealth Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of Elite Wealth Limited. Analyst as officer or director: Elite Wealth Limited policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.

Country Specific Disclosures

India – For private circulation only, not for sale.

Legal Entities Disclosures

Mr. Ravinder Parkash Seth is the Managing Director of Elite Wealth  Ltd (EWL, henceforth), having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, is a SEBI registered Research Analyst and is regulated by Securities and Exchange Board of India. Telephone: 011-43035555, Facsimile: 011-22795783 and Website: www.elitewealth.in

EWL discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:

1. Reports
2. a) EWL or his associate or his relative has no financial interest in the subject company and the nature of such financial interest;

(b) EWL or its associates or relatives, have no actual/beneficial ownership of one per cent. or more in the securities of the subject company, at the end of the month immediately preceding the date of publication of the research report or date of the public appearance;

(c) EWL or its associate or his relative, has no other material conflict of interest at the time of publication of the research report or at the time of public appearance;

2. Compensation

(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;

(b) EWL or its associates have not managed or co-managed public offering of securities for the subject company in the past twelve months;

(c) EWL or its associates have not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months;

(d) EWL  or its associates have not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months;

(e) EWL or its associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.

3 In respect of Public Appearances
(a) EWL or its associates have not received any compensation from the subject company in the past twelve months;
(b) The subject company is not now or never a client during twelve months preceding the date of distribution of the research report and the types of services provided by EWL

Provided that research analyst or research entity shall not be required to make a disclosure as per sub-clauses (c), (d) and (e) of clause (ii) or sub-clauses (a) and (b) of clause (iii) to the extent such disclosure would reveal material non-public information regarding specific potential future investment banking or merchant banking or brokerage services transactions of the subject company.
(4) EWL or its proprietor has never served as an officer, director or employee of the subject company;
(5) EWL has never been engaged in market making activity for the subject company;
(6) EWL shall provide all other disclosures in research report and public appearance as specified by the Board under any other regulations.