Trendlyne Marketwatch    
20 Mar 2019
Opening bell: Markets flat in morning trade

Markets are flat in morning trade, breadth is holding steady. Of the 415 stocks traded today, 192 were in the positive territory and 182 were negative.

Riding High:

Largecap and midcap gainers today include Bharat Heavy Electricals Ltd. (70.65 3.74%), DLF Ltd. (199.20 2.68%) and Godrej Properties Ltd. (773.95 1.97%).

Downers:

Largecap and midcap losers today include Jubilant Life Sciences Ltd. (791.50 -5.77%), Power Finance Corporation Ltd. (116.70 -2.71%) and Indian Oil Corporation Ltd. (158.55 -2.58%).

BSE 500: highs, lows and moving averages

2 stocks hit their 52 week highs,

Stocks touching their year highs included - Axis Bank Ltd. (765.00 0.50%) and Titan Company Ltd. (1105.00 -0.54%).

12 stocks climbed above their 200 day SMA including Minda Industries Ltd. (358.10 3.50%) and CG Power and Industrial Solutions Ltd. (46.90 0.86%). 8 stocks slipped below their 200 SMA including Triveni Turbine Ltd. (110.80 -1.86%) and Radico Khaitan Ltd. (398.00 -0.95%).

Torrent Power Ltd.    
20 Mar 2019
255.00
-2.02%
GSFS picks up 9.75% shares of Torrent Power in block transaction

Gujarat State Financial Services Limited has picked up 9.75% of Torrent Power (approximately 46.8 million shares) in a large SAST block deal transaction, reported after market hours. Torrent Power (which is in 22 stock screeners) was rising in share price on high trading volumes. The company saw mutual funds, promoters and FIIs increase their stake in the company in the most recent quarter. 

Torrent Power Ltd. has an average target of 317.50 from 3 brokers.
Trendlyne Marketwatch    
19 Mar 2019
Markets close higher, L&T and Mindtree issue conflicting messages

Upbeat trading today, as markets closed 0.70% higher. Market breadth is balanced. Of the 1301 stocks traded today, 578 were on the uptrend, and 585 went down.

 Larsen&Toubro CEO SN Subrahmanyan said that its takeover move of Mindtree was "made out of pyaar" and that Mindtree had approached L&T a few years ago. Mindtree Chairman Krishnakumar Natarajan however said that the company opposed the bid and didn't see a strategic value in it. 

 

Riding High:

Largecap and midcap gainers today include Godrej Properties Ltd. (759.00 5.75%), Edelweiss Financial Services Ltd. (197.50 5.61%) and Bank of India (100.90 5.60%).

Downers:

Largecap and midcap losers today include Jubilant Life Sciences Ltd. (840.00 -2.95%), Supreme Industries Ltd. (1080.35 -2.84%) and Eicher Motors Ltd. (21660.00 -2.80%).

Volume Rockets

16 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Meghmani Organics Ltd. (66.00 7.67%), JM Financial Ltd. (92.00 6.36%) and Blue Dart Express Ltd. (3475.00 6.07%).

Top high volume losers on BSE were Carborundum Universal Ltd. (360.55 -2.02%) and SBI Life Insurance Company Ltd. (603.00 -1.56%).

India Tourism Development Corporation Ltd. (292.20 5.49%) was trading at 6.3 times of weekly average. Larsen & Toubro Infotech Ltd. (1640.00 4.06%) and Thermax Ltd. (991.70 0.37%) were trading with volumes 6.1 and 4.9 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

11 stocks hit their 52 week highs, while 1 stock were underachiever and hit their 52 week lows.

Stocks touching their year highs included - Axis Bank Ltd. (761.70 0.97%), Godfrey Philips India Ltd. (1128.90 -0.49%) and ICICI Bank Ltd. (397.85 -0.45%).

Stock making new 52 weeks lows included - TVS Srichakra Ltd. (2195.00 -2.44%).

26 stocks climbed above their 200 day SMA including Manpasand Beverages Ltd. (120.30 7.22%) and Va Tech Wabag Ltd. (342.00 6.13%). 11 stocks slipped below their 200 SMA including Minda Industries Ltd. (346.00 -3.88%) and Supreme Industries Ltd. (1080.35 -2.84%).

Larsen & Toubro Ltd.    
19 Mar 2019
1395.00
1.76%
L&T's three step plan for a hostile takeover of Mindtree

The IT sector in India has largely been a gentleman's game, with no hostile takeovers so far. But that has changed with Larsen & Toubro (L&T) looking at a hostile takeover of Mindtree by purchasing V G Siddhartha's stake of the company. By buying up Coffee Day founder VGS's stake, they would now hold 20.3% of the company. This has been L&T's well-publicized first move. Mindtree is in 12 stock screeners today, including top losers, after the news. 

As step 2, L&T is buying shares in Mindtree in the open market, purchasing up to 15% this way at a Rs. 980 share price. That would bring L&T's holding to 35.3%. As step 3, L&T has also announced an open offer to Mindtree shareholders, to get 31% of the company. This could bring L&T's stake up to a total of 66.3%, if it succeeds with all three moves. 

L&T is clearly looking at growing L&T Infotech, and Mindtree is of a size that could make a difference. But the company has been struggling in recent quarters with order growth and margins, in a highly competitive IT midsize sector. Combine that with other dangers that come with a hostile takeover, such as multiple exits at mid and senior management levels, and the exits of founders, and L&T may have bitten off more than it can chew when it comes to this aggressive tech acquisition. 

BOB Capital Markets Ltd. released a Buy report for Larsen & Toubro Ltd. on 20 Mar, 2019.
Nifty FMCG    
19 Mar 2019
30198.85
-0.33%
Screener: Candlestick strength for indices

One way for traders to quickly check how an index is doing is to look at candlestick strength - is the index seeing more bullish candlesticks than bearish ones? Candlestick strength is calculated as the bullish-bearish difference or (number of bullish candlesticks - bearish candlesticks). +1 or more in strength score suggests a more bullish index, and -1 or lower means a more bearish index. 

The screener for example, currently shows the FMCG index as more bullish than others, while BSE Tech has more bearish candlesticks. Subscribers can set alerts on these screeners to get updates as they change and indices enter and exit.  

Trendlyne Marketwatch    
19 Mar 2019
Opening bell: Markets gain in morning trade

Markets are up in morning trade and breadth is even. Of the 413 stocks traded today, 215 were on the uptick, and 137 were down. Anil Ambani led company stocks are gaining today after brother Mukesh Ambani bailed him out on company debts to Ericsson.

Riding High:

Largecap and midcap gainers today include Reliance Power Ltd. (11.65 6.39%), Reliance Infrastructure Ltd. (141.75 6.10%) and Reliance Capital Ltd. (189.10 4.82%).

Downers:

Largecap and midcap losers today include Eicher Motors Ltd. (21785.00 -2.24%), Hero MotoCorp Ltd. (2615.65 -2.07%) and TVS Motor Company Ltd. (479.00 -2.04%).

BSE 500: highs, lows and moving averages

5 stocks took off, crossing 52 week highs,

Stocks touching their year highs included - Axis Bank Ltd. (752.25 -0.28%), Godfrey Philips India Ltd. (1135.40 0.08%) and Oriental Bank of Commerce (104.50 0.53%).

10 stocks climbed above their 200 day SMA including eClerx Services Ltd. (1136.00 1.65%) and Bank of Baroda (122.50 1.07%). 8 stocks slipped below their 200 SMA including Minda Industries Ltd. (353.15 -1.89%) and Hindustan Zinc Ltd. (275.00 -0.72%).

The Baseline    
18 Mar 2019
Nifty50, BSE Finance index see Golden Crosses

As the markets turned bullish over the past week, among the biggest beneficiaries have been finance and banking stocks, and the largecaps. The Nifty50, as well as the S&P BSE Finance Index both saw golden crosses, with SMA50 crossing over SMA200 on March 15 and holding steady today. Castrol India also made it to the golden cross list last week, even before Vanguard announced a big bulk deal buy in its shares.

Axis Bank Ltd.    
18 Mar 2019
760.50
0.63%
 Axis Bank targets 18% ROE as investors take a second look

By Suhani Adilabadkar

Axis Bank (which is in 19 stock screenersis back on investors radar. After a tumultuous 2016-18, analysts and brokerages have been upgrading the stock for the last three quarters. The rising share price of Axis Bank has raised investor wealth by 37% vis-à-vis, the Bank Nifty moving up by 18% YoY. Though dislodged by Kotak Mahindra in terms of profitability and market capitalization, Axis Bank still remains the largest Indian Private Sector Bank by assets. The Bank seems out of the woods galloping on the long green runway of Indian economy.

Quick Takes

  • Axis Bank had reported GNPA ratio of 6.77%, Net NPA of 3.40% and Net Loss of Rs.  2189 cr for the first time in Q4 FY18.
  • Axis Bank paid a heavy price for pursuing unbridled loan book growth by lending to risky, low rated companies.
  • In December quarter BB & Below pool has been reduced to 1.4% of Gross Customer Assets against 7.3% in Q1 FY17.
  • Back on the growth path, in Q3 FY19, Net profit galloped 131% YOY to Rs. 1681 crores, NII stood rose 18%, Non-interest income grew 54%, Deposits were up 26% YOY and retail loan book 20% YOY.

Forgettable years of de-growth

The Hows and Whys of share price shits are important questions in the mind of a layman investor. Axis Bank peers such as HDFC Bank and IndusInd did not exhibit this roller coaster ride in their financials. One reason was because they saddled up the growth stallion before riding through the economy's volatile domestic and global scenario.  And that is what happened to Axis Bank - It toppled for about four consecutive quarters of FY17. Net Profit shrunk 21% in the June quarter, 83% in September and fell 73% and 43% YoY in last two December and March quarters FY17. A complete wash out continued as skeletons kept coming out exhibiting inefficient credit risk management practices followed by the bank.

It was an astounding decline for the third largest player with one of the best NIMs, CASA and robust loan book in the industry ending up with GNPA ratio of 6.77%, Net NPA of 3.40%, Provisions trebling to Rs. 7180 cr and Net Loss of Rs.  2189 cr for the first time as PAT declined 278% YoY in Q4 FY18.

Axis Bank especially suffered from the “Banking Sector Clean Up” which started in early 2016. As a result all banks were handed over brooms to clean up years of cobwebs and put their house in order. Followed by IBC code, upgrading NPA recognition regulations and stringent Asset Quality Review under taken by the RBI, made the underlying weather hot and humid for the Indian Banking Sector for the last three years. As for Axis Bank, heavy price was paid for pursuing unbridled loan book growth by lending to risky, low rated companies especially in troubled power, iron & steel, infrastructure and textile sectors to name a few. Gross NPA formation in the fourth quarter FY18 was Rs. 16,536 crores, of which Rs. 13,938 crores was from the corporate lending book. And of all corporate slippages, 90% came from the low rated BB & below pool.

    Axis Bank On the Mend

    The recovery work started in the fourth quarter FY18 itself as the Bank significantly accelerated NPA recognition in its corporate lending book. The fountain of NPA mess, BB & Below pool was reduced to 1.8% of Gross Customer Assets against 7.3%, the unrivalled peak in Q1 FY17.  After realizing the root cause of this entire NPA mess exercise, there has been a fundamental shift in terms of credit underwriting and the Bank’s corporate lending segment is now based on four dimensions, reducing concentration risk, creating a highly rated lending book, increasing the share of working capital loans and transaction banking revenues and moving towards deeper bond markets through our DCM franchise. 

    The Bank is aiming to enhance its deposit growth to fund strong loan growth, as its market share stands at a low 4% for deposits and roughly 5% for loans. On the Profitability front, Axis bank aims to reduce its credit costs below its long- term averages, significant portfolio mix decisions to be based on assessment of Risk Adjusted Return on Capital, strive for higher cost efficiency by reducing cost to assets ratio to 2% and focus on higher margins and fee income.

    For the Sustainability strategy, the Bank is looking to strengthen its core operations, processes, reinvest in risk management architecture and reorient its organizational structure. MD & CEO Amitabh Chaudhry said, “Our goal at Axis Bank is to deliver 18% ROE on a sustainable basis by focusing on these three vectors Growth, Profitability and Sustainability across the Axis Franchise”.

     And all of this is to be achieved in the next three years. Sounds ambitious, but the third quarter results have been encouraging, where Net profit galloped 131% YOY to Rs. 1681 crores, Operating profit grew 43% and core operating profit jumped 41% YOY. NII stood at Rs. 5604 crores, rising 18%, Non-interest income grew 54%, Deposits were up 26% YOY, NIM came out at 3.66%, CASA at 46% and Retail and SME book comprising 62% of total loan book grew 20% and 13% respectively.

    Last but not the least, 82% of corporate exposure is ‘A’ rated or higher, BB & Below corporate portfolio has declined to 1.4% of Gross Customer Assets, RWA to Total Assets ratio at 71% improved 600 basis points YoY and GNPA and Net NPA improved 21 and 18 basis points sequentially in Q3 FY19. If this growth momentum is maintained, an 18% ROE target looks achievable.

     

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    Axis Bank Ltd. has gained 28.26% in the last 6 Months
    The Baseline    
    18 Mar 2019
    Top DVM screener stock gains 6% in four days

    One of four stocks in Trendlyne's signature High DVM High Return strategy has gained over 6% in four days, after entering the strategy on March 12. This stock saw months of volatilty, during which the screener avoided picking it. As share price has recovered however, the screener has picked it up on the uptrend. 

    This screener remains one of Trendlyne's most popular strategies, having delivered 19X returns based on verified backtests in the past six years. 

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