Markets traded lackluster and settled almost unchanged, tracking mixed cues. Initially, upbeat global cues led a firm start however it pared its gains in no time, following weak domestic sentiments and a sharp cut in select index majors. Among the sectors, selling pressure witnessed across IT, pharma and telecom stocks while FMCG, Consumer Durables and Metals extended support and capped the downside.
It’s a short week and the focus would remain on the earnings announcements. We feel the upcoming derivatives expiry will keep the participants on their toes. We reiterate our cautious view and suggest keeping a close watch on the banking index for cues. Nifty should see a decisive break from the prevailing range of 9000-9200 for any directional move.
Stock In News
* Coromandel International reported Q4FY20 numbers wherein its revenue grew by 8.8% YoY to Rs 2,869 cr, while PAT grew by 112% YoY to Rs 234 cr.
* Kotak Mahindra Bank announced that the board approved opening of QIP effective May 26, 2020 (today) at floor price of Rs 1147.75 per share.
* Praj Industries reported its Q4FY20 numbers, wherein its net sales were down by 19% YoY to Rs 296 cr. While its net profit stood at Rs. 25 cr, down by 26%.
Buy Havells India Ltd 9-12 Months CMP 460.70 Target 470
* Havells India’s (Havells) Q4FY20 results were weak as the March month (particularly last two weeks), which generally contributes ~25% to its Q4 revenues was impacted by COVID-19 led lockdown. Havells’ consolidated Q4FY20 revenue declined by 19.5% YoY, EBITDA declined by 22.3% YoY, while net profit was down by 10.7% YoY.
* We have based our valuation on P/E of 36xFY22E EPS. Given the sharp correction of ~28% in the last five months, we opine that near term growth concerns have been factored into the valuation of the stock. Thus, we recommend a BUY on Havells with a target price of Rs 577 per share.
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