MosT GooD MorninG
Rajesh Desai
View-Point:
- Western mood was sluggish although it will be the domestic politics which will be at centre stage today with start of the parliament’s Winter session.
- Looks like No-Confidence Motion by one of the opposition parties (TMC) may not reach action for want of adequate number as the biggest opposition party (BJP) may look to get ahead with business in parliament or else risk to be seen as anti-progress on their action.
- If we see this session functioning and passing few bills, mood could swing into positive very quickly. Yesterday was a good hint of it.
Buy ICICI Bank (ICICIBC IN)
- For the quarter gone-by, bank had yet again reported above estimate nos with 2Q FY13 PAT growing 30% YoY to Rs. 19.6b (est. Rs. 18.2b).
- Healthy margins (3%, stable QoQ), strong domestic loan growth (+5.6% QoQ), lower provisions and higher than expected trading gains helped.
- We expect asset quality to remain strong given benign asset quality in retail segment, changing loan portfolio mix and better risk management.
- We expect FY12-14 NII CAGR of ~23% and margin improvement of 30/10bps for FY13 / FY14 respectively, whereas...
- ….core operating profit will grow at CAGR of ~20% over FY12-14.
- In effect, RoA is likely to remain strong at ~1.6% over FY13/14, whereas core RoE should increase from 11% over FY08-12 to ~15% in FY14.
- Retain top pick with a SOTP-based target price of Rs. 1,230.
News:
- Cipla will buy 51% of South African based Cipla Medpro for about $220mn, valuing at about $440mn.
- Reliance Infra, Tata Power and Crompton Greaves have placed bids to partner NTPC in its foray into electricity distribution.
- Blue Dart Express promoter plans to dilute 1.43mn (6.03) stake tomorrow using offer for sale mechanism through separate windows on of both BSE and NSE.
- Government to sell 4% stake in Hindustan Copper tomorrow through an auction.
Derivatives:
- Nifty Futures OI increased by 0.3m shs to 16.5m shs. Nifty Nov futures settled at a premium of 7 as against a premium of 12 in the previous session.
- Pharma Stocks: Cipla has witnessed delivery of 3.1m shs (10d-avg 1.2m shs) along with 19% rise in Fut OI to 11.3m shs and Sun Pharma has witnessed delivery of 0.8m shs (10d-avg 0.4m shs) indicating positive biasness.
- In Nov series for Nifty, Highest Call OI is at 5800 strike with 8.6m shs up 0.3m shs and highest Put OI is at 5500 strike with 8.7m shs up 1.7m shs which has changed from 5400 (OI at 8m shs up 0.5m shs).
Corporate Actions:
- Birla Corp (Rs.2.50), Infinite Computers (Rs.6), Max India (Rs.10), NMDC (Rs.2) Sundram Fastner (Re.0.60) and Welspun India (Rs.2) to trade ex-dividend today.
- City Union Bank (1:4) to trade ex-right today.
Key Statistics:
Market Sensex 18,460 up 131 & Nifty 5,615 up 43
Advance:Decline 1487 : 1362
F&O data (21st) Index Rs. (0.97)bn & Stock Rs 2.57bn
Cash (Prov 21st) FIIs Rs 1.82bn & DIIs Rs. (1.33)bn
Cash (20th) FIIs Rs. 1.74bn & MFs Rs. 0.54bn
Others Brent Oil $110.86 v $109.83 & Rs 55.12 v 55.09
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CA. Rajesh Desai