Market off day’s low; Nifty hovers near 8900; Asian Pains up 2%

28. February 2017 Rohit Stock Market Research (0)

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Indian Indices: Indian equity indices trimmed some of their losses but continued to trade below neutral line as investors took a pause ahead of key economic growth and fiscal deficit data due later in the day amid firm global cues. Markets pared its losses led by Realty, Telecom and Basic Materials stocks.

However, the sell-off continued in Oil & Gas, Energy and PSU stocks. Investors took note of OECD report that cut India's growth forecast to 7% for 2016-17 in view of demonetisation from its earlier forecast of 7.4%, but said the pace will accelerate to 7.3% in the next fiscal 7.7% in 2018-19. It also said that India has been a star performer in gloomy times. Furthermore, sentiments remained subdued with India Ratings and Research’s (Ind-Ra’s) estimates that aggregate fiscal deficit of Indian states will increase marginally to 3.3% of gross domestic product (GDP) in FY18 from its forecast of 3.2% for FY17. It expects states’ debt/GDP ratio may increase marginally to 24.3% in FY’18 from 24% forecasted for FY17.

The BSE Sensex is currently trading at 28795.43, down by 17.45 points or 0.06% after trading in a range of 28729.52 and 28876.54. There were 15 stocks advancing against 15 stocks declining on the index. The broader indices were trading mixed; the BSE Mid cap index was down by 0.05%, while Small cap index was up by 0.54%.

The CNX Nifty is currently trading at 8883.60, down by 13.10 points or 0.15% after trading in a range of 8867.60 and 8914.75. There were 24 stocks advancing against 27 stocks declining on the index.

*MARKET INDICATORS*			·
*Top Movers (Group A)*
*Company*	Cmp	% chg
*Gainers*
*KTKBank*	137.70	6.83
*KSCL*	495.60	6.43
*RCOM*	38.90	5.99
*BHEL*	162.00	5.88
*Losers*
*Hindpetro*	537.80	-3.91
*Edelweiss*	136.90	-3.69
*BPCL*	669.60	-2.75
*Oberoirlty*	321.25	-2.61

INDEX PERFORMANCE
*Index*	*Close*	*% Chg*
*Sensex*	*28,812.88*	*-0.28*
*Nifty*	*8,896.70*	*-0.48*

Crporate Front: Branches of public banks remained either closed or non-operational today as staffers and officers went ahead with their day-long strike pressing for various demands, including accountability of top executives in the wake of mounting bad loans. Services like cash deposits and withdrawal from branches and cheque clearances have been hit hard by the strike, which has been called under the aegis of the United Forum of Bank Unions (UFBU).

Macroeconomic front: The Goods and Services Tax (GST) will be implemented from July 1 as all states have agreed on the implementation date, Economic Affairs Secretary Shaktikanta Das said on Tuesday."GST should be implemented by July 1. All states have agreed (on the date)," Das told reporters here.

On the global front:

On global front, European markets were trading in green as investors geared up for fiscal stimulus and infrastructure spending announcements from U.S. President Donald Trump during his speech before Congress later today. Asian markets were trading in green, even as gains remain capped ahead of Trump's speech and the annual meetings of China's top legislature and top political advisory body.

Commodity Updates:

*Commodity Prices (MCX):*
*Commodity*	Rs	*% Chang*
*Gold*	*29518.00*	*-0.65*
*Silver*	*43134.00*	*-0.67*
*Crude oil*	*3607.00*	*-0.44*
*Natural Gas*	*179.20*	*-0.28*
*Alluminium*	*126.75*	*-0.12*
*Copper*	*397.25*	*-0.29*

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Realty up by 1.21%, Telecom up by 0.74%, Basic Materials up by 0.36%, Metal up by 0.34% and Capital Goods up by 0.21%, while Oil & Gas down by 1.33%, Energy down by 0.85%, PSU down by 0.44%, Auto down by 0.16% and IT down by 0.16% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were Hindalco up by 1.80%, Asian Paints up by 1.52%, BhartiAirtel up by 1.50%, Mahindra & Mahindra up by 1.41% and Yes Bank up by 1.09%. On the flip side, BPCL down by 5.20%, Coal India down by 2.62%, Grasim Industries down by 2.18%, Idea Cellular down by 2.01% and Bosch down by 1.76% were the top losers.

Global Signals:

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.44 points or 0.09% to 1,695.28, KOSPI Index increased 6.12 points or 0.29% to 2,091.64, Jakarta Composite increased 11.16 points or 0.21% to 5,394.04, Nikkei 225 increased 11.52 points or 0.06% to 19,118.99 and Shanghai Composite increased 13.07 points or 0.4% to 3,241.73. On the flip side, Hang Seng decreased 184.32 points or 0.77% to 23,740.73.

All European markets were trading in green; UK’s FTSE 100 increased 4 points or 0.06% to 7,257.00, Germany’s DAX increased 5.31 points or 0.04% to 11,827.98 and France’s CAC increased 6.73 points or 0.14% to 4,851.91.

Dow Jones rises for 12th consecutive session as oil rises & US Dollar sees strength ahead of President Trump's speech to Congress today.

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Indian Indices: Asian stocks saw a rebound on opening bell with the Japanese 'Nikkei" index leading the gains as the Yen weakness saw gains for export related stocks. With oil prices also rising in tandem the global equity rally is seeing commodities lead from the front as 'risk on' trade gathers momentum.

Nifty hit a minor roadblock yesterday with a drift below 8900 as profit booking in banks and financial stocks led the index lower. Reliance continues to lead from the front as new highs incite fresh bouts of buying both technically and fundamentally. For today expect Energy, IT and Pharma stocks to lead the gainers while Banks, Infra and Auto's see profit booking on rallies.

The BSE Sensex is currently trading at 28834.45, up by 21.57 points or 0.07% after trading in a range of 28797.21 and 28876.54. There were 18 stocks advancing against 12 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index was up by 0.42%.

The CNX Nifty is currently trading at 8899.65, up by 2.95 points or 0.03% after trading in a range of 8891.65 and 8914.75. There were 29 stocks advancing against 22 stocks declining on the index.

MARKET INDICATORS			·
*Group ATopGainers*
*Company*	Price (Rs)	% chg
*Sparc*	336.90	5.28
*Orientbank*	126.20	3.27
*KTKBank*	133.15	3.30
*Adanient*	98.85	3.02
*Group ATopLosers*
*Hindpetro*	538.25	-3.83
*Idea*	111.40	-2.79
*CoalIndia*	322.95	-2.14
*PVR*	1255.50	-1.55

Market Statistics
	BSE	NSE
*Advances*	*1357*	*912*
*Declines*	*1054*	*548*

Technical view: Nifty finds support around yesterday's low @ 8888 and finds resistance around 8930, any break either side on closing basis will trigger further movement while Bank Nifty broke important support around 20600, which will see any close below 20536 trigger further downside with 20750 acting as strong resistance on the upside.

INDEX PERFORMANCE
*Indices*	*Support*	*Resistanes*
*Sensex*	*28750*	*29050*
*Nifty*	*8870*	*8975*

Trading ideas : Jet Airways (Buy above Rs 445.5, for Target of Rs 462, SL at Rs 436): On the weekly charts, Jet Airways took rising trendline support and has been moving up swiftly. Also, stock has broken out from a classic cup and handle pattern on the daily charts. The breakout is accompanied by higher than average volume build up in past few days. In addition, other momentum oscillators also indicate strength in the current upmove. We advise to Buy JETAIRWAYS above Rs 445.5, Stop Loss at Rs 436 and Target of Rs 462.

Derivative Snippets: Markets finally took a breather as the banking stocks led the fall. Nifty ATM/OTM put strikes added fresh long positions, while the ATM/OTM call strikes added fresh short positions, indicating a further downside.

FIIs were net sellers in cash market segment to the tune of Rs 146 crore.

FII’s index future long/short ratio at 4.8x.

Nifty Movers: The top gainers on Nifty were BhartiAirtel up by 1.15%, Tech Mahindra up by 1.11%, Bank of Baroda up by 1.06%, BhartiInfratel up by 1.01% and Zee Entertainment up by 0.95%.

On the flip side, BPCL down by 3.16%, Idea Cellular down by 2.23%, Coal India down by 2.08%, Grasim Industries down by 1.27% and Bajaj Auto down by 0.90% were the top losers.

Top Sectoral& Stock Screening: The top gaining sectoral indices on the BSE were Telecom up by 0.72%, Capital Goods up by 0.41%, Healthcare up by 0.38%, Basic Materials up by 0.37% and Realty up by 0.30%, while Oil & Gas down by 0.75%, Energy down by 0.66%, FMCG down by 0.20%, PSU down by 0.09% and Auto down by 0.01% were the losing indices on BSE.

On the global front: On the global front, Asian shares were trading mostly in green, as investors awaited a speech by US President Donald Trump for signals on tax reform and infrastructure spending. Japan’s industrial output unexpectedly fell in January for the first time in six months, pressured by a slowdown in shipments of cars to the United States in a sign of an economy grappling for a more sure-footed recovery.

Global Signals: The Asian markets were trading mostly in green; Shanghai Composite increased 5.46 points or 0.17% to 3,234.12, KOSPI Index increased 7.29 points or 0.35% to 2,092.81, Jakarta Composite increased 15.65 points or 0.29% to 5,398.52 and Nikkei 225 increased 117.77 points or 0.62% to 19,225.24.

On the other hand, Hang Seng decreased 32.75 points or 0.14% to 23,892.30 and FTSE Bursa Malaysia KLCI decreased 0.14 points or 0.01% to 1,693.70.Taiwan Stock Exchange was closed on account of ‘Peace Memorial Day’ holiday.

Sensex closes lower, Nifty below 8900; Banks, telecom, auto drag

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Indian Indices: After trading in negative territory, Indian equity benchmarks continued their lackluster trade hovering near neutral lines in late afternoon session despite positive European markets. Investors failed to get any sense of relief with the Finance Minister ArunJaitley’s statement that the demonetisation process is almost complete and it has been the smoothest possible replacement of currency anywhere in the world. He said that a predominantly cash economy has now to be substituted with a digital economy, which will bring more money into the banking system and lead to better revenue generation; the integration of the informal economy with the more formal one is now taking place.

He also said that the post-demonetisation regime is actually going to generate a far bigger GDP in the long run. Sentiments remained dampened with the report that economic think tank National Council of Applied Economic Research (NCAER) has lowered the country's growth forecast to 6.9% for the current fiscal on account of government’s demonetisation drive to curb black money and corruption.

The BSE Sensex is currently closed down at 28812.88, down by 80.09 points or 0.28% after trading in a range of 28812.88 and 28961.83. There were 14 stocks advancing against 16 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.36%.The CNX Nifty is currently shut down at 8896.70, down by 42.80 points or 0.48% after trading in a range of 8913.65 and 8951.80. There were 18 stocks advancing against 33 stocks declining on the index.

*MARKET INDICATORS*			·
*Top Movers (Group A)*
*Company*	Cmp	% chg
*Gainers*
*JPAssociat*	16.21	9.68
*Raymond*	609.00	9.03
*Escorts*	454.05	8.07
*Deltacorp*	145.75	6.89
*Losers*
*J&KBank*	72.95	-5.26
*Idea*	114.35	-4.43
*IDBI*	78.80	-3.61
*Cholafin*	977.50	-3.55

INDEX PERFORMANCE
*Index*	*Close*	*% Chg*
*Sensex*	*28,812.88*	*-0.28*
*Nifty*	*8,896.70*	*-0.48*

Crporate Front: The Centre should scale up the production of active ingredients used in drugs to meet the country's need, a government institute has said after it found that over 95 per cent of the samples examined during a survey were sourced from China.

Macroeconomic front: The Reserve Bank of India today fixed the reference rate of the rupee at 66.7249 against the US dollar and 70.5149 for the euro. The corresponding rates were 66.8351 and 70.5444 on Friday.According to an RBI statement, the exchange rates for the pound and the yen against the rupee were 82.8923 and 59.51 per 100 yens, respectively.

On the global front: On the global front, European markets were trading in green tracking another set of record highs for Wall Street’s main equities gauges. However, Asian markets were trading in red as investors preferred to stay on the sidelines as they await more details on U.S. President Donald trump's fiscal stimulus plans. Trump is set to make his first address to a joint session of Congress on Tuesday.

Commodity Updates:

*Commodity Prices (MCX):*
*Commodity*	Rs	*% Chang*
*Gold*	*29281.00*	*-0.07*
*Silver*	*42757.00*	*-0.18*
*Crude oil*	*3630.00*	*-1.04*
*Natural Gas*	*170.80*	*-0.99*
*Alluminium*	*125.60*	*0.16*
*Copper*	*403.00*	*-0.56*

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Energy up by 2.01%, Oil & Gas up by 0.90%, IT up by 0.78%, Healthcare up by 0.50% and Consumer Durables up by 0.45%, while Telecom down by 2.13%, Bankex down by 0.84%, Auto down by 0.73%, PSU down by 0.44% and Power down by 0.40% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were Reliance Industries up by 4.92%, AurobindoPharma up by 2.77%, Infosys up by 1.14%, Lupin up by 1.08% and Hindustan Unilever up by 1.07%. On the flip side, Zee Entertainment down by 3.27%, BhartiAirtel down by 2.94%, Axis Bank down by 2.91%, Power Grid down by 2.51% and BhartiInfratel down by 2.47% were the top losers.

Global Signals:

All Asian markets were trading in red; Nikkei 225 decreased 176.07 points or 0.91% to 19,107.47, Hang Seng decreased 40.65 points or 0.17% to 23,925.05, Shanghai Composite decreased 24.77 points or 0.76% to 3,228.66, KOSPI Index decreased 8.6 points or 0.41% to 2,085.52, Jakarta Composite decreased 5.19 points or 0.1% to 5,380.76 and FTSE Bursa Malaysia KLCI decreased 3.04 points or 0.18% to 1,695.31.

All European markets were trading in green; France’s CAC increased 19.47 points or 0.4% to 4,864.71, UK’s FTSE 100 increased 33.73 points or 0.47% to 7,277.43 and Germany’s DAX increased 45.51 points or 0.39% to 11,849.54.

Sensex closes lower, Nifty below 8900; Banks, telecom, auto drag

27. February 2017 Rohit Stock Market Research (0)

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Indian Indices: After trading in negative territory, Indian equity benchmarks continued their lackluster trade hovering near neutral lines in late afternoon session despite positive European markets. Investors failed to get any sense of relief with the Finance Minister ArunJaitley’s statement that the demonetisation process is almost complete and it has been the smoothest possible replacement of currency anywhere in the world. He said that a predominantly cash economy has now to be substituted with a digital economy, which will bring more money into the banking system and lead to better revenue generation; the integration of the informal economy with the more formal one is now taking place.

He also said that the post-demonetisation regime is actually going to generate a far bigger GDP in the long run. Sentiments remained dampened with the report that economic think tank National Council of Applied Economic Research (NCAER) has lowered the country's growth forecast to 6.9% for the current fiscal on account of government’s demonetisation drive to curb black money and corruption.

The BSE Sensex is currently closed down at 28812.88, down by 80.09 points or 0.28% after trading in a range of 28812.88 and 28961.83. There were 14 stocks advancing against 16 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index was up by 0.36%.The CNX Nifty is currently shut down at 8896.70, down by 42.80 points or 0.48% after trading in a range of 8913.65 and 8951.80. There were 18 stocks advancing against 33 stocks declining on the index.

*MARKET INDICATORS*			·
*Top Movers (Group A)*
*Company*	Cmp	% chg
*Gainers*
*JPAssociat*	16.21	9.68
*Raymond*	609.00	9.03
*Escorts*	454.05	8.07
*Deltacorp*	145.75	6.89
*Losers*
*J&KBank*	72.95	-5.26
*Idea*	114.35	-4.43
*IDBI*	78.80	-3.61
*Cholafin*	977.50	-3.55

INDEX PERFORMANCE
*Index*	*Close*	*% Chg*
*Sensex*	*28,812.88*	*-0.28*
*Nifty*	*8,896.70*	*-0.48*

Crporate Front: The Centre should scale up the production of active ingredients used in drugs to meet the country's need, a government institute has said after it found that over 95 per cent of the samples examined during a survey were sourced from China.

Macroeconomic front: The Reserve Bank of India today fixed the reference rate of the rupee at 66.7249 against the US dollar and 70.5149 for the euro. The corresponding rates were 66.8351 and 70.5444 on Friday.According to an RBI statement, the exchange rates for the pound and the yen against the rupee were 82.8923 and 59.51 per 100 yens, respectively.

On the global front: On the global front, European markets were trading in green tracking another set of record highs for Wall Street’s main equities gauges. However, Asian markets were trading in red as investors preferred to stay on the sidelines as they await more details on U.S. President Donald trump's fiscal stimulus plans. Trump is set to make his first address to a joint session of Congress on Tuesday.

Commodity Updates:

*Commodity Prices (MCX):*
*Commodity*	Rs	*% Chang*
*Gold*	*29281.00*	*-0.07*
*Silver*	*42757.00*	*-0.18*
*Crude oil*	*3630.00*	*-1.04*
*Natural Gas*	*170.80*	*-0.99*
*Alluminium*	*125.60*	*0.16*
*Copper*	*403.00*	*-0.56*

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Energy up by 2.01%, Oil & Gas up by 0.90%, IT up by 0.78%, Healthcare up by 0.50% and Consumer Durables up by 0.45%, while Telecom down by 2.13%, Bankex down by 0.84%, Auto down by 0.73%, PSU down by 0.44% and Power down by 0.40% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were Reliance Industries up by 4.92%, AurobindoPharma up by 2.77%, Infosys up by 1.14%, Lupin up by 1.08% and Hindustan Unilever up by 1.07%. On the flip side, Zee Entertainment down by 3.27%, BhartiAirtel down by 2.94%, Axis Bank down by 2.91%, Power Grid down by 2.51% and BhartiInfratel down by 2.47% were the top losers.

Global Signals:

All Asian markets were trading in red; Nikkei 225 decreased 176.07 points or 0.91% to 19,107.47, Hang Seng decreased 40.65 points or 0.17% to 23,925.05, Shanghai Composite decreased 24.77 points or 0.76% to 3,228.66, KOSPI Index decreased 8.6 points or 0.41% to 2,085.52, Jakarta Composite decreased 5.19 points or 0.1% to 5,380.76 and FTSE Bursa Malaysia KLCI decreased 3.04 points or 0.18% to 1,695.31.

All European markets were trading in green; France’s CAC increased 19.47 points or 0.4% to 4,864.71, UK’s FTSE 100 increased 33.73 points or 0.47% to 7,277.43 and Germany’s DAX increased 45.51 points or 0.39% to 11,849.54.

Sharetipsinfo-Research Report-Global cues bring Domestic Rally

27. February 2017 Rohit Stock Market Research (0)

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Global cues bring Domestic Rally

A joyful life is an individual creation that cannot be copied from a recipe.

The market has seen a joyful run in recent series. A healthy correction is long awaited. Global cues today are subdued and that need not bring in any meaningful fall. So far, sector rotation and follow-on buying have kept the market in good cheer. This week will see the market react to Q4 GDP numbers and infrastructure output for January. The outlook is a weak start. RIL could help reduce the losses on the main indices. The F&O rollover was encouraging as market wide rollover of Nifty contracts to March series stood at 73 pc as against an average of less than 70 pc in the last three series. HPCL could see action on reports that ONGC could take control of it as part of the governments plan to create an integrated public sector oil entity. FPI activity has resumed as overseas investors put in over Rs. 14,600 crore into the Indian market in Feb investing Rs 9,359 crore in equities and another Rs 5,279 crore in the debt segment.

DERIVATIVES STRATEGY

Rollovers Analysis - February 2017

Back to back strong series, as Nifty shutting shop at 8940 levels for February expiry, Nifty/Banknifty up 3.9/7.2% on (eoe) basis. Participation increased as open interest swelled towards life high levels on market wide positions and Bank nifty OI at highest since 2010.

Strong domestic flows, global equity rally, positive news momentum on index heavy weights (HDFCBank/Reliance/TCS) pushed Nifty higher towards physiological mark of 9,000. Rollovers of Nifty/Bank Nifty stood at 73/60% (2.25cr/27.5lacs shares) as against 3 months average of 69/68%, rollovers in share terms were significantly higher for bank nifty to tune of 37% compared to previous month. Market-wide rolls stood at 82.8 as against 82% in the previous expiry.

FIIs long/short index futures rolls stood at 77/32% as against previous four month average of 66/46%. Total aggregate open interest rolled to March series at 387cr increased by 21% when compared to previous expiry. On options data, March series Nifty index starts at strike 9,000 calls/8500 puts holding the maximum OI to tune of 3.36mn/3.09mn shares. With FED policy event and domestic election outcome due in March volatility likely to inch higher from current levels.

Derivatives Diary

Nifty ending February expiry at 8940 levels, SGX Nifty indicates gap down opening to tune of 30 points on back of weakness in global markets.
Rollovers for Nifty/Bank Nifty stood at 73/60% (2.25cr/27.5lacs shares) as against 73/60% (1.9cr/20lacs shares) previous expiry.
Bank nifty open interest surged significantly at 27.5 lacs shares lead by buoyancy in private banks.
FIIs index futures long/short ratio at 4.83x starting with net long futures positions at 1.8lacs contracts.
Volatility likely to inch higher as markets awaits FED policy and domestic election outcome during the month.

Fixed Income Synopsis

The new 10Y benchmark 6.97% GS 2026, closed 2bps lower at ~6.92% vs previous days close of 6.94% and the 7.59% GS 2026 ended at 7.07%.
The demand at the fixed Repo window was Rs.15bn, while the supply at the fixed Reverse Repo window was registered at Rs.68.97bn. The Call WAR closed at 5.92% vs. previous close of 5.88%.
The benchmark five-year OIS closed the session at 6.72% vs. previous day's close of 6.73%, while the 1-Y OIS closed at 6.42% vs. previous day's close of 6.43%.
The Reserve Bank of Indias Reference Rate for the US Dollar was Rs.66.83 as on February 23, 2017, while the corresponding rate for the previous day, February 22 was Rs.66.96.

Technical Track

Nifty made new 52-week high on Friday but gave a close below previous peak (8969) at 8940. Currently index is trading within the three-digit gann channel i.e. 8860-8910 wherein, multiple gann pressure points are observed. Failure to break above 9010 could see Nifty beginning a corrective move in the form of rangebound consolidation. As per Gann analysis, this week is an anniversary period where index formed a major bottom of 6826 on 29th Feb 2016. According to Gann, anniversary dates more often results in the formation of tops and bottoms (either minor or significant). A year earlier around the same time period (i.e. 4th March 2015), Nifty had made a top of 9119. So after a rally of ~14% from the midpoint i.e. 7894 of entire move of 6825 to 8969, Nifty is hovering close to its all-time high level, wherein multiple supply points are found. So risk reward ratio for creating fresh longs are not favorable.

Commodity & Currency Cues

Goldprices registered a 3 &#2013266109; month high, helped by relatively soft US dollar and rising gold ETF inflows. Holdings in worlds largest gold backed ETF (SPDR) have risen some 5% this month. Short term outlook for the yellow metal hinges on Fed rate expectations. In this context, markets do not expect a rate hike till June policy meeting, which is deemed supportive for the precious pack. This week, markets will be interested in the second estimate of US Q4 GDP growth numbers, expected at 2.1%, slightly higher than the first reading.

In the non-ferrous pack, metal prices have regained some lost ground after a liquidation on Thursday. On copper, there are no signs of any end to the labour strike at Escondida mine in Chile.

Oilfutures are holding ground despite seventh consecutive weekly rise in US oil inventories. Nevertheless, stockpiles at Cushing, Oklahoma (storage hub) registered the biggest weekly drop since October.

Greenback slipped to a two-week low against Yen, with values dipping to below 112 level at one point of time. Meanwhile, trading in Euro and Sterling remains relatively range-bound. On speculative front, CFTC reported that non-commercials/funds increased bullish bets on the dollar for the first time in seven weeks.

Corporate Snippets

Oil and Natural Gas Corp (ONGC)will invest Rs73.27bn in developing four oil and gas projects, including the Ratna field which it had got back from Essar Oil.

ZydusCadilareceived US drug regulator US Food and Drug Administration (USFDA) approval for the groups plans to initiate a Phase-2 clinical trial of Saroglitazar Magnesium (Mg) in patients with Primary Biliary Cholangitis of the liver.

Softbank has denied reports claiming that it was interested in picking up a stake in the Vodafone- Idea Cellular merger.

Jet Airwaysannounced a reciprocal codeshare partnership with Hong Kong Airlines, which will enable Indian fliers to travel seamlessly to New Zealand, Japan, Indonesia, Vietnam and Thailand.

Piramal Enterprises (PEL)has entered into a partnership with Cambridge to provide long term equity capital to residential projects across five metros in the country.

ICICI Bankhas acquired its 814.4mn shares of Jaiprakash Power Ventures Ltd under the strategic debt restructuring plan.

In a big jot to Indian Oil Corp (IOC), The Odisha Government has withdrawn tax incentives given, to the Rs345.55bn Paradip refinery, making the company reconsider its plans to invest another Rs520bn in the State.

Larsen and Toubro Hydrocarbon Engineering, subsidiary of Larsen & Toubro has bagged orders worth Rs11bn from IOC for its Bongaigaon refinery in Assam.

Coal Indiasaid the board of its arm Northern Coalfield has approved a share buyback plan worth Rs12.44bn.

Tata Steelhas received environment clearance (EC) for expansion of its Haldia coke plant in West Bengal by ramping up unit capacity from existing 1.6MTPA to 2.2MTPA, making it the largest standalone coke plant in Asia.

Shoppers Stop has sold almost its entire 5% stake in airport retail venture Nuance Group Fashion & Luxury Duty-Free Private for an undisclosed sum.

Oil and Natural Gas Corporation's (ONGC) board has approved the signing of definitive agreements for buying Gujarat State Petroleum Corp's (GSPC) entire 80% stake in the KG-basin natural gas block for USD1.2bn. (BS)

BhartiAirtelwould buy Telenor (India) Communications, in a deal that will bolster Airtel's footprint with additional spectrum in the 1800MHz band.

Economy Updates

Overseas investors have pumped in over Rs146bn into the Indian capital markets this month so far, enthused by clarity on FPItaxation.

India's foreign exchange reserves declined by USD56.8mn to USD362.73bn in the week to February 17, on account of dip in foreign currency assets (FCAs).

Independent Power Producers can now bid for coal allocated to state government-run coal based power plants.

Indian firms raised over Rs46bn through issuance of shares to institutional investors during 2016, a sharp fall of 76% from the previous year.

Have a Nice Day !!

Global markets seeing profit booking this week after after stellar February rally as caution to prevail @ higher levels.

27. February 2017 Rohit Stock Market Research (0)

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Indian Indices: Asian markets opened weak as strength in the Japanese currency saw exporter stocks open weak which dragged the "Nikkei" index to a 1 month low. Globally the Dow Jones has created history by having the longest streak of consecutive days of rally after 1987.

Nifty hit a new closing high after crossing the previous high of September 2016 of 8968 & hit 8982 on Friday. The 'disbelief' rally has gathered huge momentum & is now seeing any fall as a buying opportunity as investors on the sidelines now join in. For today expect profit booking to creep in as smart money exits the sweetest rally in the month of February seen in recent times.

The BSE Sensex is currently trading at 28873.71, down by 19.26 points or 0.07% after trading in a range of 28812.88 and 28961.83. There were 11 stocks advancing against 19 stocks declining on the index.The broader indices were trading mixed; the BSE Mid cap index was down by 0.03%, while Small cap index was up by 0.24%.

The CNX Nifty is currently trading at 8918.25, down by 21.25 points or 0.24% after trading in a range of 8913.65 and 8951.80. There were 12 stocks advancing against 39 stocks declining on the index.

MARKET INDICATORS			·
*Group ATopGainers*
*Company*	Price (Rs)	% chg
*RDEL*	63.85	7.04
*JPAssociat*	15.73	6.43
*Edelweiss*	142.40	5.48
*GMRInfra*	15.60	4.84
*Group ATopLosers*
*J&K Bank*	74.50	-3.25
*Emamiltd*	1045.15	-3.17
*AxisBank*	512.95	-2.79
*IDBI*	79.60	-2.63

Market Statistics
	BSE	NSE
*Advances*	*1357*	*702*
*Declines*	*1054*	*778*

Technical view: Nifty finds resistance around 8980-9000 with support now coming around 8880.Bank Nifty finds support around 20650 while 21000 acts as strong resistance on the upside.

INDEX PERFORMANCE
*Indices*	*Support*	*Resistanes*
*Sensex*	*28815*	*29050*
*Nifty*	*8915*	*8920*

Trading ideas :KPIT (Buy above Rs 139, for target of Rs 146, SL at Rs 135.5): Stock has broken out from double bottom pattern on the daily charts. It also successfully closed above its both 50 & 100 DMA, with impressive volumes. KPIT looks poised to move towards the two previous peaks made at Rs 146. We advise to Buy KPIT above Rs 139, stop loss at Rs 135.5 and Target of Rs 146.

Derivative Snippets: In the last session, the markets ended on a lackluster note. Nifty 8900PE and 9000CE added fresh short positions and expired worthless.

Short selling in Nifty OTM options was witnessed ahead of a long weekend.

FIIs were net buyers in cash market segment to the tune of Rs 392 crore.

FII’s index future long/short ratio at 4.8x vs 2.0x.

Nifty Movers: The top gainers on Nifty were Reliance Industries up by 5.35%, Hindustan Unilever up by 1.23%, AurobindoPharma up by 0.86%, Infosys up by 0.69% and Bajaj Auto up by 0.60%.

On the flip side, Axis Bank down by 2.93%, Zee Entertainment down by 2.75%, Ambuja Cement down by 2.03%, BhartiInfratel down by 2.01% and Idea Cellular down by 1.96% were the top losers.

Top Sectoral& Stock Screening: The top gaining sectoral indices on the BSE were Telecom up by 4.03%, TECK up by 1.70%, IT up by 1.32%, Consumer Durables up by 1.21% and Realty up by 0.54%, while Power down by 0.40%, Metal down by 0.38%, Utilities down by 0.34%, Auto down by 0.23% and Basic Materials down by 0.19% were the losing indices on BSE.

On the global front: On the global front, Asian shares were trading mostly in red, with Japan’s Nikkei share average fell to 2-1/2 week lows as the yen strengthened and as financial stocks dropped on lower US yields.

On the other hand, Hang Seng increased 3.64 points or 0.02% to 23,969.34 and FTSE Bursa Malaysia KLCI increased 3.68 points or 0.22% to 1,702.03.Taiwan Stock Exchange remained closed on account of trading holiday.

Global Signals: The Asian markets were trading mostly in red; Nikkei 225 decreased 160.3 points or 0.83% to 19,123.24, Jakarta Composite decreased 12.07 points or 0.22% to 5,373.84, Shanghai Composite decreased 8.36 points or 0.26% to 3,245.08 and KOSPI Index decreased 5.48 points or 0.26% to 2,088.64.

On the other hand, Hang Seng increased 3.64 points or 0.02% to 23,969.34 and FTSE Bursa Malaysia KLCI increased 3.68 points or 0.22% to 1,702.03.Taiwan Stock Exchange remained closed on account of trading holiday.

Global markets consolidate after heady rise as investors review economic outlook

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Indian Indices: Asian markets opened mixed with profit booking keeping some indices under pressure while others saw value buying emerge. The US$ saw weakness creep in after 'dovish' comments from the Federal Reserve saw yields soften & currency weaken. All eyes will be on the Japanese 'yen' which could see strength against the $ & the Bank of Korea as rates may be kept unchanged in today's policy meet.

Nifty scaled 8900 & is now poised for the highest expiry close in the last year with Reliance for a change leading from the front. The mid cap & bank indices are already trading @ new all time highs & the Nifty may by next week also attempt to scale higher levels. For today expect high volatility as derivative expiry will see stocks oscillate between gains & losses.

The BSE Sensex is currently trading at 28948.61, up by 83.90 points or 0.29% after trading in a range of 28904.34 and 28972.79. There were 15 stocks advancing against 15 stocks declining on the index.The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index was up by 0.33%.The CNX Nifty is currently trading at 8950.55, up by 23.65 points or 0.26% after trading in a range of 8935.40 and 8957.15. There were 24 stocks advancing against 27 stocks declining on the index.

MARKET INDICATORS			·
*Group ATopGainers*
*Company*	Price (Rs)	% chg
*Amtekauto*	38.65	7.21
*Idea*	119.10	5.91
*J&Kbank*	78.40	4.95
*Rcom*	37.55	5.03
*Group ATopLosers*
*Cesc*	855.45	-2.03
*GSFC*	115.00	-1.67
*Raymond*	564.65	-1.52
*Deltacorp*	134.80	-1.50

Market Statistics
	BSE	NSE
*Advances*	*1357*	*825*
*Declines*	*1054*	*624*

Technical view: Nifty will face resistance around 8968 the previous high touched in September 2016 & finds support around 8870.Bank Nifty will also face resistance @ 21000 & find support @ 20750

INDEX PERFORMANCE
*Indices*	*Support*	*Resistanes*
*Sensex*	*28780*	*29050*
*Nifty*	*8901*	*8986*

Trading ideas :Apollo Hospitals (Buy above Rs 1330, for target of Rs 1370, SL at Rs 1310): Stock has broken out from a rising channel pattern on the daily charts and the price outburst has been accompanied with impressive volumes. Apollo Hospitals is swiftly moving in a higher top higher bottom cycle and has also closed above its 200-DMA placed at Rs 1295. We advise to Buy Apollo Hospitals above Rs 1330, Stop Loss at Rs 1310 and Target of Rs 1370.

Derivative Snippets: In the last session, the markets ended on a lackluster note. Nifty ITM call options witnessed short covering while Nifty 8900PE and 9000CE added fresh short positions, which indicate a muted expiry day trading session. Based on the mentioned data, an expected close for the February F&O expiry would be between 8900-9000 levels.

FIIs were net sellers in cash market segment to the tune of Rs 259.21 crore.

FII’s index future long/short ratio at 2.0x vs 2.2x. Index Put option long/short ratio since January expiry at 0.5x with an addition of ~27K short contracts.

Nifty Movers: The top gainers on Nifty were BhartiAirtel up by 5.35%, Idea Cellular up by 5.06%, TCS up by 1.96%, HCL Tech up by 1.48% and Infosys up by 1.47%.

On the flip side, Grasim Industries down by 1.10%, Eicher Motors down by 1.09%, NTPC down by 1.02%, Tata Steel down by 1.00% and Axis Bank down by 0.90% were the top losers.

Top Sectoral& Stock Screening: The top gaining sectoral indices on the BSE were Telecom up by 4.03%, TECK up by 1.70%, IT up by 1.32%, Consumer Durables up by 1.21% and Realty up by 0.54%, while Power down by 0.40%, Metal down by 0.38%, Utilities down by 0.34%, Auto down by 0.23% and Basic Materials down by 0.19% were the losing indices on BSE.

On the global front: On the global front, Asian shares were trading mostly in red, while the dollar made an uneven recovery from losses suffered after Federal Reserve minutes indicated a cautious approach to raising US interest rates. South Korean shares were flat after the central bank kept interest rates unchanged for an eighth straight month, opting for stability as it monitors uncertainties ranging from an unpredictable North Korea to global policy challenges and a political scandal at home.

Global Signals:The Asian markets were trading mostly in red; Hang Seng decreased 89.27 points or 0.37% to 24,112.69, Nikkei 225 decreased 70.23 points or 0.36% to 19,309.64, Taiwan Weighted decreased 14.43 points or 0.15% to 9,764.35, Shanghai Composite decreased 10.93 points or 0.34% to 3,250.29 and FTSE Bursa Malaysia KLCI decreased 0.05 points or 0% to 1,708.03.On the other hand, KOSPI Index increased 0.09 points to 2,106.70 and Jakarta Composite increased 7.24 points or 0.14% to 5,365.93.

Sensex up 103 pts; Relance zooms 11% tech & HDFC twins drag

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Indian Indices: After hovering near highest point of the day, Indian equity benchmarks pared some gains ahead of F&O expiry but continued to trade in fine fettle in late afternoon session. Positive trend in global markets buoyed investors' sentiments. Traders remained optimistic with Union minister M Venkaiah Naidu’s statement that several views have been presented on demonetisation, it may have caused initial discomfort or loss to public but will reap benefits in longer run. He added that it is like a bitter pill for long term ill. On sectoral front, select banking stocks were trading higher with the Deputy Governor Viral Acharya's statement that in order to decisively deal with the banking system's stressed assets, which have doubled from 2013, the Reserve Bank of India is examining a plan involving two models - a Private Asset Management Company (PAMC) and a National Asset Management Company (NAMC). Some support also come with a private report stating that India’s millennial population is a massive disruptive force and driven by the supportive demographics along with government's policy action, Indian economy is likely to reach $5 trillion by 2025.

The BSE Sensex is currently closed at 28864.71, up by 103.12 points or 0.36% after trading in a range of 28789.30 and 28963.52. There were 12 stocks advancing against 18 stocks declining on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.60%, while Small cap index was down by 0.39%. The CNX Nifty is currently shut up at 8926.90, up by 19.05 points or 0.21% after trading in a range of 8905.25 and 8960.75.

*MARKET INDICATORS*			·
*Top Movers (Group A)*
*Company*	Cmp	% chg
*Gainers*
*Reliance*	1207.65	10.97
*Wabag*	547.65	4.39
*KTKBank*	127.65	4.29
*Justdial*	530.85	4.22
*Losers*
*Marksans*	48.05	-5.32
*Titan*	440.10	-3.75
*GPPL*	156.95	-3.62
*Pageind*	13837.75	-3.62

INDEX PERFORMANCE
*Index*	*Close*	*% Chg*
*Sensex*	*28864.71*	*0.36*
*Nifty*	*8,926.90*	*0.21*

Crporate Front: Weighed down by the development, shares of company declined as much as 3.20 per cent to hit an intra-day low of Rs 1510.00 apiece on the Bombay Stock Exchange. In a similar fashion, stocks of company tanked 2.99 per cent to Rs 1,513.40 apiece on the National Stock Exchange.

Macroeconomic front: In a major push for solar power development in the country, a cabinet panel on Wednesday approved increasing the capacity of solar parks and projects from 20,000 MW to 40,000 MW. "The enhanced capacity would ensure setting up of at least 50 solar parks -- each with a capacity of 500 MW and above -- in various parts of the country," Power and Renewable Energy Minister PiyushGoyal told reporters following a meeting here of the Cabinet Committee on Economic Affairs (CCEA).

On the global front: On global front, European markets were trading in green following firm cues from Wall Street and Asia. Asian markets were trading in green, although gains remained capped due to caution ahead of the Fed's latest meeting minutes due out later in the day. Back home, in scrip specific development, Vijaya Bank traded higher after Small Industries Development Bank of India (SIDBI) signed a Memorandum of Understanding (MoU) with Vijaya Bank for providing concessional finance to micro and small enterprises (MSEs).

Commodity Updates:

*Commodity Prices (MCX):*
*Commodity*	Rs	*% Chang*
*Gold*	*29281.00*	*-0.07*
*Silver*	*42757.00*	*-0.18*
*Crude oil*	*3630.00*	*-1.04*
*Natural Gas*	*170.80*	*-0.99*
*Alluminium*	*125.60*	*0.16*
*Copper*	*403.00*	*-0.56*

Top Sectoral& Stock Screening:The top gaining sectoral indices on the BSE were Energy up by 4.26%, Oil & Gas up by 1.80%, Realty up by 0.34%, Bankex up by 0.31% and Telecom up by 0.18%, while IT down by 1.60%, TECK down by 1.33%, Utilities down by 1.07%, Consumer Durables down by 1.02% and Power down by 1.00% were the top losing indices on BSE.

Top Nifty Movers:The top gainers on Nifty were Reliance Industries up by 9.74%, Axis Bank up by 3.50%, Coal India up by 3.00%, BhartiInfratel up by 2.03% and Tata Motors - DVR up by 1.88%. On the flip side, NTPC down by 2.87%, Infosys down by 2.50%, Grasim Industries down by 2.49%, Power Grid down by 2.40% and TCS down by 2.04% were the top losers.

Global Signals:

Asian markets were trading mostly in green; KOSPI Index increased 3.68 points or 0.17% to 2,106.61, Jakarta Composite increased 6 points or 0.11% to 5,346.99, Shanghai Composite increased 7.89 points or 0.24% to 3,261.22, Taiwan Weighted increased 14.85 points or 0.15% to 9,778.78 and Hang Seng increased 238.33 points or 0.99% to 24,201.96. On the flip side, Nikkei 225 decreased 1.57 points or 0.01% to 19,379.87 and FTSE Bursa Malaysia KLCI decreased 1.5 points or 0.09% to 1,705.05.

All European markets were trading in green; UK’s FTSE 100 increased 23.67 points or 0.33% to 7,298.50, France’s CAC increased 31.54 points or 0.65% to 4,920.30 and Germany’s DAX increased 53.28 points or 0.45% to 12,020.77.

US indices hit fresh new all time highs as better results, stronger $ & rise in commodities fuelled stocks higher.

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Indian Indices: Asian markets opened in the green as overnight US cues prompted buying in equities with Dow Jones scaling another fresh high. The return of risk on trade is seeing stocks & indices touch fresh highs with the Brazilian 'Bovespa' leading from the front. The Index has given returns of over 15% YTD (year to date) & over 66% on a yearly basis.

Nifty scales 8900 for the 1st time in 5 months with Bank Nifty closing @ 20860 which is the highest all time closing high recorded. The left out feeling is seeing huge pent up buying which is keeping indices overbought with any fall being brought into. Oil &gas, banks, auto's& financials are contributing to the gains while IT stocks saw profit booking after a heady rally in the last week.

The BSE Sensex is currently trading at 28611.63, down by 49.95 points or 0.17% after trading in a range of 28603.41 and 28726.10. There were 14 stocks advancing against 16 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.22%, while Small cap index was up by 0.24%.The CNX Nifty is currently trading at 8868.75, down by 10.45 points or 0.12% after trading in a range of 8865.25 and 8897.15. There were 26 stocks advancing against 25 stocks declining on the index.

MARKET INDICATORS			·
*Group ATopGainers*
*Company*	Price (Rs)	% chg
*Reliance*	1168.60	7.38
*Goderejpor*	373.80	5.10
*Rajeshexpo*	522.15	4.37
*KTKbank*	126.25	3.15
*Group ATopLosers*
*Marksans*	48.90	-3.65
*Titan*	443.00	-3.12
*BEL*	1521.00	-2.44
*GPPL*	159.30	-2.18

Market Statistics
	BSE	NSE
*Advances*	*1357*	*771*
*Declines*	*1054*	*717*

Technical view: Nifty will now attempt the previous high of 8968 hit in September 2016 which will act as resistance while support now emerges closer to 8840 which was the earlier resistance. Bank Nifty is in blue sky territory with new highs being seen & will attempt 21200 while support now comes around 20576.

INDEX PERFORMANCE
*Indices*	*Support*	*Resistanes*
*Sensex*	*28638*	*28925*
*Nifty*	*8872*	*8955*

Trading ideas :INDIACEM (Buy above Rs 173, for target of Rs 182, SL at Rs 168): Stock has broken out from a cup and handle pattern, which has aided India Cement resume its prior uptrend. The breakout has been accompanied with impressive volumes. Other oscillators also indicate that the current momentum would extend. We advise to Buy INDIACEM above Rs 173, Stop Loss at Rs 168 and Target of Rs 182.

Derivative Snippets: Markets traded with a positive bias, as the index call option writers continue to cover their short positions for the third straight day. Nifty 8800 CE to 9000 CE strikes witnessed massive short covering.

FIIs were net sellers in cash market segment to the tune of Rs. 1435 crores.

FII’s index future long/short ratio at 2.2x vs 2.5x with an addition of ~22K short contracts.

The Fiscal Responsibility and Budget Management (FRBM) committee has suggested setting up of a fiscal council to oversee and verify the credibility of the government’s Budget numbers and fiscal targets for any given year.

Nifty Movers: The top gainers on Nifty were Reliance Industries up by 7.22%, Axis Bank up by 2.31%, Coal India up by 2.14%, BhartiInfratel up by 2.10% and Bosch up by 1.99%.

On the flip side, Infosys down by 1.78%, NTPC down by 1.25%, TCS down by 1.05%, Tata Steel down by 0.91% and Eicher Motors down by 0.82% were the top losers.

Top Sectoral& Stock Screening: The top gainers on the Sensex were Reliance Industries up by 7.28%, Axis Bank up by 2.19%, Coal India up by 2.05%, BhartiAirtel up by 1.91% and Asian Paints up by 1.81%. On the flip side, Infosys down by 1.59%, NTPC down by 1.16%, TCS down by 0.96%, Tata Steel down by 0.76% and GAIL India down by 0.73% were the top losers.

On the global front: On the global front, Asian shares were trading mostly in green, joining a record-setting night for world markets as investors cheered upbeat factory activity in Europe and solid earnings on Wall Street. China’s home price growth slowed for the fourth straight month as demand cooled further in the biggest cities, signaling government curbs to defuse a bubble in the sector were starting to pay dividends.

Global Signals: The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.76 points or 0.04% to 1,707.31, KOSPI Index increased 3.01 points or 0.14% to 2,105.94, Taiwan Weighted increased 18.19 points or 0.19% to 9,782.12 and Hang Seng increased 207.54 points or 0.87% to 24,171.17.On the other hand, Nikkei 225 decreased 11.38 points or 0.06% to 19,370.06, Jakarta Composite decreased 6.5 points or 0.12% to 5,334.49 and Shanghai Composite decreased 4.4 points or 0.14% to 3,248.93.

Oil Marketing Companies Decent show-Report-Sharetipsinfo

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OMCs reported decent results in Q3 driven by strong volume growth and inventory gains. Core earnings of OMCs adjusted for inventory gains/losses came in at Rs12.7/12.1/7.6/share for BPCL/HPCL/IOCL versus reported EPS of Rs15.7/15.7/8.4.

Marketing margin of BPCL/IOCL improved by 2.3%/2% qoq to Rs4,143/3,860/mt. However, HPCL’s margin contracted qoq by 13.1% to Rs4,058/mt. Total debt declined by 8.3% qoq but interest cost increased by 42% qoq to Rs11.8bn due to capitalization of IOCL’s Paradip refinery which led to increase in interest cost.

Adjusting for refining inventory gain, GRM for Q3FY17 for BPCL/HPCL/IOCL came in at $3.9/4.08/5.1/bbl. Gross UR on kerosene came in at Rs16bn which was entirely compensated by the government and thus there was no burden on OMCs.

After adjusting for one-offs, core earnings of IOCL & BPCL came in-line with our estimates but HPCL missed the mark on this metric as marketing margins disappointed. However, broadly reported earnings of all three OMCs were in-line.

Hence, we expect upgrades to FY17E EPS by 20-25% with FY18 EPS following suit. Also, the OMCs look attractive on a dividend yield basis (c5% on CMP). So, we maintain our buy BUY recommendation on all the three OMCs with IOCL being our most preferred pick.

IOCL outperformed on GRM

GRM for Q3FY17 for BPCL/HPCL/IOCL came in at $5.9/6.4/7.7/bbl which implies an increase of 90% qoq on an average. Increase in GRM was mainly driven by widening of product crack spreads due to tighter demand/supply dynamics in the market and inventory gains across the OMC pack with IOCL achieving the highest GRM.

Blended marketing margin declined

The OMC pack witnessed a decline in marketing margins on a qoq/yoy by 3.5%/9.2% yoy to Rs4,020/mt (avg. of OMCs) as HPCL’s marketing margin fell by 13.1%. Petrol’s marketing margin during YTDFY17 averaged Rs1.54/ltr while diesel’s averaged Rs1.42/ltr.

Interest cost increased qoq

Overall borrowings of all the three OMCs on a qoq basis declined by 8.3% to Rs695bn. However, interest cost increased by 42% qoq to Rs11.8bn mainly due to capitalization of IOCL’s Paradip refinery which led to increase in interest cost

Overall market share increased

For Q3FY17, IOCL lost market share by 44bps to 42.92% and HPCL/BPCL gained market share by 66/6bps to 18.67%/19.65%. Combined market share of the OMC increased by 28bps qoq to 81.2%.

Key takeawaysfrom BPCL’sconcall

Reason for lower GRM in Q3 due to commissioning of Kochi refinery’s new units, the impact (around $1/bbl) of which will be there in Q4FY17 as well. Management has indicated 80% utilisation in FY18 of the incremental 6MT capacity in Kochi refinery. Incremental benefit in terms of GRM on entire 15Mt volume is expected to be around $2/bbl while opex will increase by $0.5/bbl. The FCCU will get commissioned in Q1FY18. Kochi Tax deferral on a sustainable basis is Rs2.5bn. p.a. for 15 years.

Kochi refinery’s GRM stood at $6.1/bbl while the GRM of Mumbai refinery was at $5.75/bbl

during the quarter.

PSU market share in petrol & diesel was c95% & slightly less than 95% respectively.

Loss due to discount of 0.75%on digital payments was about Rs.180-190mn. till Dec.

2016.

Increase in other operating expenditurewas largely on account of higher transportation

expense and no one-off items.

There was a 2% increase in diesel volume growthin 9MFY17 for the oil PSUs. However, due to competition private players have grown at a faster rate versus oil PSUs.

Digital paymentsaccount for around 28% of total marketing sales currently a bulk of which comes from the loyalty program.

9MFY17 capex was Rs120bn.out which Rs60bn. was spent on the Russian acquisition. Capex for FY17 is guided at Rs125bn. excluding the Russian acquisition. FY18 capex is guided at Rs80bn. and for FY19 it is Rs105bn.

FY18 regular maintenance capexshould be Rs30bn., refining capex should be Rs.25bn., marketing capex is Rs7.5bn. & E&P capex is guided at Rs15bn.

Consolidated debt stood at Rs300-320bn. Standalone debt is Rs160bn, BPRL is

Rs140bn. and Bina debt is at Rs40bn. $ denominated debt is 90%+ of the total d

ebt balance. Debt repayment in FY17 is around $300mn. which is due in March 2017 and another $250mn. in Nov.-Dec. FY18.

Scheduled maintenanceof Kochi refinery is scheduled for Oct.-Nov. 2017.

Petchem plant-It is expected to be commissioned by the end of

2018. Out of the total capex budget of Rs46bn., Rs.4.15bn. has already been spent.

Key takeaways from Indian Oil concall

Paradip refinery-It has fully stabilised as of now with all units including secondary units

currently operating. Utilisation was 80% in the last couple of months while the full year

averageutilisation stood at 63%. Product evacuation and pipeline dispatches have also

started. VAT deferment for Paradip would be cRs18bn. on an annual basis. Interest cost

expensed would be around Rs9.5bn. p.a. going forward while depreciation should be

Rs.12bn. p.a. Opex for Paradip refinery is $2/bbl which is in-line with the opex of IOCL’s

other refineries at $1.92/bbl. Going forward, GRM will improve significantly as the Paradip refinery processes 100% high sulphur crude from FY18.

GRM-Core GRM (ex. Paradip& inventory gains) was $5.47/bbl for Q3 ($4.79/bbl in

Q2FY17) while including inventory gains, GRM (ex. Paradip) stood at $7.67/bbl. Core GRM excluding inventory gain was $4.92/bbl in 9MFY17 ($7.95 including inventory gains).

Entry tax-IOCL has been affected in the states of Bihar, UP and Haryana. Most of the

entry tax related cases might go against IOCL. Rs.1,923crores of provision has been

created for entry tax related charges and the management doesn’t expect any such

provisions going forward.

Capex guidance-FY18 capex has been guided at Rs196bn. while FY19 capex has been

guided atRs250bn.

Debt-Total DebtofRs370bn., 70% is in foreign currency and 30% is in INR terms.

Other pointers-1)Market share in MS increased in Q3. 2) Fuel & loss stood at 8.5% in

9MFY17 which is slightly lower compared to the same period last year.

Outlook and Valuation

After adjusting for one-offs, core earnings of IOCL & BPCL came in-line with our estimates but HPCL missed the mark on this metric as marketing margins disappointed. However, broadly reported earnings of all three OMCs were in-line. Hence, we expect upgrades to FY17E EPS by 20-25% with FY18 EPS following suit. Also, the OMCs look attractive on a dividend yield basis (c5% on CMP). So, we maintain our BUY recommendation on all the the OMCs with IOCL being our most preferred pick.

Have a Nice Day !!

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