Stocks which have moved the most with respect to volumes are YES Bank, Vodafone Idea, GRUH Finance, Tata Motors, Bank of Baroda, SAIL, Vedanta, JSPL, Adani Power, SBI, Tata Steel, DLF and PNB among others

Indian stock market is trading flat with Sensex shedding 45 points at 37,023 marks while the Nifty is down 15 points and is trading at 10,932 level.

The S&P BSE Metal index is up a percent led by Hindalco Industries, Tata Steel, Jindal Steel & Power, NALCO, Hindustan Zinc, JSW Steel and Vedanta.

Nifty FMCG added half a percent, the top gainers include United Spirits, Tata Global Beverage, ITC, Jubilant Foodworks, Colgate Palmolive, Dabur India and Emami.

IT stocks are trading on a negative note led by Tech Mahindra, Mindtree, HCL Tech, Infosys, Birlasoft and Tata Elxsi.

From the media space, the top losers are DEN Networks, Sun Tv Network, Dish TV, UFO Moviez and PVR.

India VIX is up 0.37 percent and is trading at 16.49.

The top Nifty50 gainers include Hindalco, Vedanta, Tata Steel, GAIL India and JSW Steel while the top losers are Indiabulls Housing Finance, YES Bank, Bharti Infratel, Tech Mahindra and HCL Tech.

The top gainers from the BSE include CreditAccess Grameen, Adani Green Energy, Bombay Burmah, NLC India, Delta Corp, NALCO, Hindalco Industries, Jubilant Life, CESC and Adani Enterprises among others.

The most active stocks are YES Bank, Indiabulls Housing Finance, Reliance Industries, HDFC and State Bank of India.

Among the Nifty50 names, 20 stocks advanced while 30 declined.

98 stocks hit new 52- week low on BSE including Godrej Industries among others while Bata India, Petronet LNG and HDFC AMC hit a 52-week high.

Stocks which have moved the most with respect to volumes are YES Bank, Vodafone Idea, GRUH Finance, Tata Motors, Bank of Baroda, SAIL, Vedanta, JSPL, Adani Power, SBI, Tata Steel, DLF and PNB among others.

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The share touched its 52-week high Rs 280.05 and 52-week low Rs 150 on 21 November 2018 and 08 August 2019, respectively

The shares price of Premier Explosives surged 8.5 percent intraday on August 30 after the company received a license from the chief controller of explosives.

The company has received the license from the chief controller of explosives, Nagpur to manufacture solid propellant at its factory situated at Katepally, near Hyderabad, the company said in a BSE release.

This new license will enable the company to manufacture solid propellants of larger size at our greenfield project.

Premier Explosives was quoting at Rs 172.70, up to Rs 9.45, or 5.79 percent on the BSE.

The share touched its 52-week high Rs 280.05 and its 52-week low Rs 150 on 21 November 2018 and 08 August 2019, respectively.

Currently, it is trading 38.33 percent below its 52-week high and 15.13 percent above its 52-week low.

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A Reuters report has said that Hindalco Industries-owned Novelis has agreed to sell its Aleris’ Belgian plant

Shares of Hindalco Industries jumped almost 4 percent on August 30 after media reports said that the company-owned Novelis was set to secure European Union antitrust approval for its $2.6-billion bid for Aleris.

Novelis, which is US-based but owned by India’s Hindalco Industries, agreed to sell Aleris’ Belgian plant to address the European Commission's worries that the deal could reduce competition and lead to higher prices, hitting carmakers, in particular, news agency Reuters quoted sources as saying.

Novelis, a world leader in aluminium rolled products and aluminium recycling, is seeking to diversify into aerospace, automotive, beverage can and construction industries.

For the June quarter, Hindalco Industries reported a 29 percent year-on-year fall in consolidated profit. Novelis adjusted EBITDA (as per US GAAP) increased 11 percent year-on-year (YoY) to $372 million and adjusted EBITDA per ton climbed 7 percent to $448 in Q1.

Novelis' net income excluding special items stood at $145 million, a 26 percent YoY rise.

Shares of Hindalco Industries were trading 3.67 percent higher at Rs 186.40 on BSE  

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The construction of this project is to be completed in 36 months 

Shares of PNC Infratech advanced 4 percent intraday on August 30 after the company bagged an order worth Rs 1,062 crore.

The company has been declared the lowest bidder for NHAI’s project of construction of 31.7 km long four-lane bypass connecting NH-56 and terminating near Behta Village Road under NHDP Phase-VII on EPC mode for a quoted price of Rs 1062 crore, as per BSE filing.

The construction of this project is to be completed in 36 months.

The share touched its 52-week high Rs 214.85 and 52-week low Rs 122.70 on 19 August 2019 and 01 October 2018, respectively.

Currently, it is trading 16.2 percent below its 52-week high and 46.74 percent above its 52-week low. The share price rose 40 percent in the last 6 months.

PNC Infratech was quoting at Rs 180.30, up to Rs 3.55, or 2.01 percent

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HDFC has been gradually paring stake in Gruh to meet RBI conditions for Bandhan Bank merger

Shares of Gruh Finance jumped nearly 8 percent in early trade on August 30 after media reports suggested that HDFC is planning to sell 9.2 percent stake in Gruh Finance

The Economic Times, quoting sources, reported that "HDFC will raise Rs 1,678 crore by selling 9.2 percent in Gruh Finance and the sale of 67.4 million shares is expected to happen at a floor price of Rs 243 to Rs 249 per share in the open market on August 30."

HDFC has been gradually paring stake in Gruh to meet RBI conditions for Bandhan Bank merger. The housing finance company has sold over 10 percent in Gruh Finance.

The RBI had in March granted its approval for the proposed scheme of amalgamation between Gruh Finance and Bandhan Bank.

shares of Gruh were quoting at Rs 262.30, up 5.11 percent while HDFC was up 0.43 percent at Rs 2,137.60 on BSE.

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The Index maintenance sub-committee of NSE indices decided to include Nestle India in the Nifty as a part of its periodic review

Shares of Indiabulls Housing Finance cracked almost 8 percent, while those of Nestle India climbed 3 percent on the NSE on August 29.

The food and beverage giant is to replace Indiabulls Housing Finance on the Nifty50 index from September 27, the NSE said in its circulars on August 28.

The index maintenance sub-committee of NSE indices decided to include Nestle India in the Nifty 50 as a part of its periodic review.

Nestle has increased investor wealth nearly 23-fold over the last 10 years, while Indiabulls Housing Finance has lost 64 percent in the last year.

Shares of Indiabulls Housing Finance were trading 5.72 percent down at Rs 431.10 at 1045 IST, while those of Nestle India was 1.63 percent up at Rs 12,721.70 on the NSE.

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Shares of private sector lender RBL Bank Ltd covered some losses in early trade on Thursday after buying at lower levels. At present, the stock is trading at 324.20, up more than 3% on the NSE

The stock took a beating on Wednesday, following speculation of insider trading. However, the bank later clarified that market transactions of shares by employees was a "routine activity". In a statement to the exchanges, RBL Bank said market transactions by employees was a routine activity with regular exercise of ESOPs (employee stock ownership plans) and sale of equity shares thereafter.

According to some analysts, while one is seeing investor interest in the stock at these levels, shares of the bank are unlikely to regain their lost charm in a hurry. It should be noted that the RBL Bank stock hit a 52-week high of 716.40 on the NSE in May this year. But its fall from glory was swift with the stock tanking to a 52-week low of 286.10 on 28 August.

The cut got steeper after the bank’s management recently indicated that its asset quality could be under pressure in the coming quarters. In the June quarter, RBL Bank reported a 41% jump in net profit against the year-ago, aided by a healthy 48% growth in core income. Although its gross bad loan ratio for the June quarter was steady, slippages increased. What also soured investors’ sentiment towards the stock was the lender’s exposure to Coffee Day Enterprise, whose founder V.G. Siddhartha recently passed away.

Meanwhile, post-June-quarter earnings, a slew of brokerages expressed concerns on the bank's exposure to a few stressed corporate accounts. Worried over higher slippages and consequent provisions, some of them reduced their earnings estimates for fiscal years 2020 and 2021.

In a report published on 27 August, brokerage house Emkay Global Financial Services Ltd said that expected the stock to remain under pressure until the bank recognized its corporate stress pool, and resumed its otherwise high return on assets trajectory.

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Shares of Britannia Industries Ltd have surged as much as 13% in the past five trading sessions. This comes at a time when the Nifty FMCG index has risen by about 1.5%

  

To begin with, the stock had corrected sharply after the company’s disappointing June quarter performance and rather tepid management commentary. On 21 August, the stock had closed at a 52-week low.

Analysts said this is only a recovery in the stock from its lows and that the short-term outlook continues to remain muted, given the demand slowdown. Domestic volume growth had dropped to an eight-quarter low of 3% in the June quarter.

Having said that, Britannia’s investors may well have other worries. “The pessimism in Britannia’s stock really began around the time when it disclosed that an additional part of its treasury surplus had been lent to promoter-group companies as inter-corporate deposits (ICDs carry 10% p.a. interest)," said analysts from JM Financial Institutional Securities Ltd in a report on 26 August.

According to Britannia, its ICDs have dropped to under ₹500 crore from about  690 crores at the end of March.

JM Financial points out, “Given several debt-related issues that surfaced amongst Indian corporates in the recent past, such an issue remains a sore point in a company with an otherwise solid business opportunity."

And, as pointed out earlier, it’s not like Britannia has impressed on the financial performance front. The June quarter results don’t inspire confidence. Consolidated revenues increased by 6% over the same period last year, the weakest in the past many quarters.

“Given the slowdown in its core category and Britannia’s recent entry into new categories, earnings trajectory will remain weak," said analysts at Jefferies India Pvt. Ltd after the company’s June quarter results.

Notwithstanding the recent share price appreciation, the Britannia stock is still down by about 12% so far in FY20. In comparison, the Nifty FMCG index has shed 5%.

Still, Britannia’s valuations at about 50 times estimated earnings for FY20 are not exactly cheap. Unless demand revives meaningfully, the scope for expansion in valuations appears capped

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The story at Wipro Ltd in recent years has been a series of false starts

 

Even as revenue growth for its larger peers, Tata Consultancy Services Ltd (TCS) and Infosys Ltd, accelerated, Wipro lagged. But one metric where the company is scoring is cash conversion

The proportion of Ebitda (earnings before interest, tax, depreciation and amortization) that converted into operating cash flow stood at 98% in the fiscal year 2019, the highest among large IT companies. Wipro maintains this lead with cash flows to Ebitda staying at 95% in the 12 months ended June 2019, showed analysis by Nomura Financial Advisory and Securities (India) Pvt. Ltd.

Wipro’s growth in operating cash flow and free cash flow exceeded Ebitda growth in 12 months to June. Free cash flow adjusts for capital expenditure as well, apart from cash operating expenses.

Importantly, this is not a recent phenomenon. Cash flow growth is far superior at the company even using three-year annual average growth rates. “Over the last three years, cash conversion has been stable for Infosys/TCS, deteriorated at HCL Technologies Ltd and improved for Wipro," analysts at Nomura India said in a note.

What explains the variation in performance is better receivables management. Comparatively, the receivables position increased at other large IT companies, with Infosys seeing material deterioration in recent quarters.

The variation in growth rates may be part of the reason. Constant currency revenue growth year-on-year remains in mid-single digits at Wipro, while its larger peers are growing in double digits. “Typically, a growth-focused company may give some leeway to customers on payment terms," said an analyst on condition of anonymity. Even so, as the analyst added, Wipro is doing a decent job in getting money quickly from customers.

Of course, all of this is but a silver lining on the dark cloud of poor growth. Most analysts remain sceptical about Wipro’s growth outlook. The September quarter revenue growth guidance indicates no major improvement. The pressure on legacy business is more pronounced at Wipro than at other large companies, showed analysis by HDFC Securities Institutional Research.

This is reflected in the valuation discount vis-à-vis other large peers. “TCS and Infosys trade at premium valuations due to revenue predictability and stable performance," Kotak Institutional Equities said in the June quarter results review note, referring to the valuation gap in IT stocks. For Wipro’s returns to pick up, revenue growth will have to inch up as well.

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Beverage major Coca-Cola has entered India's niche but potentially high-volume non-alcoholic malt drinks market in a big way with its global brand Barbican

The company, which launched a pilot project six months back, focuses on the youth. "We introduced Barbican, non-alcoholic malt-based beverages, in select Indian markets," a senior company official told IANS. 

As part of the pilot, Barbican is imported and available at around 3,000 select outlets across metropolitan cities.

The recent foray is part of Coca-Cola's plan to introduce more healthier options in the F&B segment in India.

The launch became possible after Coca-Cola acquired 50 per cent stake in Middle East-based Aujan Industries' beverages division. 

At present, the company offers a range of beverages, including Coca-Cola, Diet Coke, Thums Up, Fanta, Limca and Sprite.

Anheuser-Busch InBev, Heineken and Kingfisher have already entered this market segment to target the vast untapped market of non-alcohol drinkers in India.

A non-alcoholic malt drink is a high energy beverage, brewed in the same fashion as beer or ale.

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The bank expects to raise capital from its majority shareholders--Life insurance corporation of India  and the government of India before September 30, 2019, to meet the shortfall

Shares of IDBI Bank plunged 10 percent intraday on August 28 after global rating agency S&P placed it on Credit Watch saying that it is uncertain whether the lender will be able to meet capital requirements.

The stock corrected more than 56 percent in the last year amid asset quality worries and weak earnings. It was quoting at Rs 26.75, down Rs 2.70, or 9.17 percent on the BSE at 1020 hours IST.

On August 27, S&P Global Ratings placed its 'BB' long-term and 'B' short-term foreign currency issuer credit ratings on IDBI Bank on Credit Watch with negative implications.

"We also placed our issue ratings on the bank's senior unsecured debt on CreditWatch with negative implications," the rating agency said.

S&P further said it placed the ratings on CreditWatch to reflect the uncertainty regarding IDBI's ability to meet its regulatory capital requirement over the next few months.

The bank expects to raise capital from its majority shareholders--Life insurance corporation of India (which owns 51 percent stake) and the government of India (46 percent stake) before September 30, 2019, to meet the shortfall.

"..but the quantum and timing of the capital infusion are uncertain, in our view," S&P said.

The bank reported a net loss of Rs 3,801 crore (widened from Rs 2,410 crore YoY) in the first quarter of fiscal 2019-20 due to high provisioning costs which eroded bank's capital below the regulatory minimum for a banking license.

"This is the second instance over the past two years that the bank has breached the regulatory minimum, and it was not in line with our expectation," the rating agency said.

Excluding the capital conservation buffer (CCB), Indian banks are required to hold a minimum 7 percent Tier-1 capital ratio and a 9 percent ratio of total capital to risk-weighted assets (CRAR). IDBI's Tier-1 capital ratio is 6.14 percent and CRAR is 8.14 percent as of June 30, 2019.

S&P believes the breach could be temporary because IDBI is in the process of raising capital from its majority shareholders. The bank would require participation from other shareholders because LIC's stake cannot extend 51 percent, according to local regulations, it said.

The agency further said raising capital from the market will be particularly challenging, given IDBI's weak valuations. It believes the bank is dependent on the Indian government and LIC for such capital to correct the breach.

S&P aims to resolve the CreditWatch in the next three months once it has clarity on the bank's plan and the timeline for shoring up its capital base, such that it maintains a sufficient buffer above the regulatory minimum.

The government announced the recapitalisation of Rs 70,000 crore for PSU banks.

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The HUL top management gave a hint in July, during the conference call with investors, that the company might go for a price-cut

Shares of Hindustan Unilever (HUL) declined 2 percent on BSE on August 28 amid reports that the company cut prices of some of its soaps by as much as 30 percent in a bid to cope with weak demands amid tough competition.

In July, the largest consumer goods company in the country reduced prices of Lifebuoy, Lux and Dove soaps in order to counter weak demands and tough competition, the daily newspaper Mint reported.

On the other hand, the company increased prices of face-washes for brands such as Fair & Lovely, Ponds, Pears and Dove between 4-14 percent, Mint reported referring to an August 27 report by Kotak Institutional Equities.

Moneycontrol could not independently verify the news.

The HUL top management gave a hint in July, during the conference call with investors, that the company might go for a price-cut as it expected weak commodity prices to continue.

Shares of HUL traded at Rs 1,829.50, down Rs 32.05 or 1.72 percent on BSE around 0955 hours IST.

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Berger Paints with a stop loss of Rs 362 and a target of Rs 380 and Petronet LNG with a stop loss of Rs 251 and a target of Rs 275

The market gained for the third consecutive session with the Nifty closing above 11,100 levels on August 27, driven by banking & financials, auto, FMCG and metal stocks. Positive global cues and RBI's decision to transfer Rs 1.76 lakh crore to the government, aided sentiment.

The BSE Sensex climbed 147.15 points to 37,641.27 while the Nifty 50 rose 47.50 points to 11,105.40 and formed a Doji kind of candle on the daily charts, which generally signals indecisiveness among the bulls and bears.

The gains in broader markets were higher than benchmarks as the Nifty Midcap rose 0.74 percent and Smallcap index was up 1.8 percent.

According to the pivot charts, key support level is placed at 11,055.93, followed by 11,006.57. If the index starts moving upward, key resistance levels to watch out for are 11,148.23 and 11,191.17.

Nifty Bank closed at 28,126.15, up 0.63 percent on August 27. The important pivot level, which will act as crucial support for the index, is placed at 27,965.44, followed by 27,804.67. On the upside, key resistance levels are placed at 28,282.34 and 28,438.47.

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Credit Suisse cut FY20/FY21 EPS estimates by 10/14 percent and factored in lower US sales & profits in estimates.

Shares of Cipla fell more than 2 percent intraday on August 26 after global brokerage Credit Suisse maintained neutral call on the stock, but cut-price target by nearly 14 percent.

The research firm slashed price target to Rs 445 from Rs 515 per share earlier saying high competition in generic Voltaren gel could be a key risk in the near term.

The Voltaren is used to treat joint pain in the hands, wrists, elbows, knees and feet.

Credit Suisse cut FY20/FY21 EPS estimates by 10/14 percent and factored in lower US sales & profits in estimates. It also factored in recovery in trade generic from Q3FY20. Any delay is a risk, it said.

India Rx business growth has been below peers, it added.

The stock was quoting at Rs 463.35, down Rs 2.55, or 0.55 percent on the BSE  

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The company will provide the response and corrective action plan within the 15 working days to address the USFDA observation

The share price of Unichem Laboratories declined more than 3 percent intraday on August 26 after the company received one observation from USFDA

The United States Food and Drug Administration (USFDA) conducted an inspection at the company's Ghaziabad formulation facility between August 19, 2019, to August 23, 2019.

The inspection was a routine GMP surveillance and at the end of the inspection, the facility received one observation which is not a repeat observation and is procedural in nature.

The company will provide the response and corrective action plan within the next 15 working days to address the USFDA observation, it added.

Unichem Laboratories was quoting at Rs 170.15, down Rs 2.50, or 1.45 percent on the BSE.

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Till August 23 close, the BSE Metal index was down 28.33 percent year-to-date against the rise of 1.75 percent in the benchmark Sensex

Most metal stocks tumbled on August 26, causing their sectoral index on BSE to suffer a loss of almost 5 percent.

The metal pack witnessed a fresh wave of selling after the China-US trade war escalated, weighing further on global growth.

On August 23, the US President Donald Trump announced an additional duty on ~$550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of the US goods, Reuters reported.

Back home, the poor health of the auto sector has weighed on the metal stocks as the auto sector is a major consumer of metals such as steel and aluminium.

"If fewer cars are manufactured, the demand of metal takes a hit," said Sameer Kalra, Founder of Target Investing.

Auto manufacturing has taken a hit due to a slump in demand in the light of liquidity squeeze in the NBFCs and banks.

Besides, high leverages of metal players have also dented the growth prospects of these companies.

"Metal companies have high leverage so the cash flow is also getting hurt," Kalra added.

Around 1025 hours, the BSE Metal index was 4.07 percent down at 8,140, with all components in the red.

Tata Steel was down over 5 percent at that time, followed by JSW Steel (down 5 percent), Vedanta (down 4 percent), Hindalco (down 3.78 percent) and SAIL (down 3.51 percent).

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The share touched its 52-week high Rs 206.54 and 52-week low Rs 101 on 24 August 2018 and 22 July 2019, respectively

Shares of Cupid gained 6.6 percent in the early trade on August 26 after the company won order worth Rs 4.95 crore. The company got an order worth Rs 4.95 crore from UNFPA to supply male condoms to Angola, as per a BSE release.

"We are excited to receive this valuable order," said Omprakash Garg, CMD, Cupid. Cupid was quoting at Rs 131.15, up to Rs 4.65, or 3.68 percent.

The share touched its 52-week high Rs 206.54 and 52-week low Rs 101 on 24 August 2018 and 22 July 2019, respectively.

Currently, it is trading 36.38 percent below its 52-week high and 30.1 percent above its 52-week low.

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C. Sivasankaran who has been nailed by the Serious Fraud Investigation Office (SFIO) in the IL&FS loan fraud is ironically the original complainant in the Aircel-Maxis in which former Finance Minister P Chidambaram is one of the accused along with the other UPA Minister Dayanidhi Maran

Sivasankaran in his complaint with the CBI in 2011 had alleged that the then telecom minister Dayanidhi Maran coerced him to sell his stake in Aircel which he had founded.

He also alleged that Maran and his industrialist brother Kalanithi received kickbacks in the form of Maxis group's investments (through the Astro network) in Sun TV Network, which is owned by the Maran family.

In case Sivasankaran provides more evidence to establish his claim against Marans, it will also mount trouble for Congress leader Chidambaram. The former Finance Minister was named in the charge sheet filed by the CBI in the Aircel-Maxis case on July 19 last year.

The CBI is probing how Chidambaram as Finance Minister in 2006 granted the Foreign Investment Promotion Board (FIPB) approval to a foreign firm when only the Cabinet Committee on Economic Affairs (CCEA) was empowered to do it. 

As per the rules then, the Finance Minister was allowed to approve foreign investment of only up to Rs 600 crore with investments going beyond this required the clearance of the CCEA. The allegation against Chidambaram is it the approval was given by him deliberately to allow foreign investment of Rs 3,560 crore.

Enforcement Directorate (ED) has concluded that the amount in the proposal was deliberately shown as Rs 180 crore instead of the actual inflow of Rs 3,560 crore.

While the trial continues in that case, the SFIO has found the Chennai-based entrepreneur Sivasankaran to have defrauded IL&FS using his close connection with top management of the now-infamous infrastructure financing major. The corporate fraud investigating agency found Sivasankan to have given dud shares of Tata Teleservices as collateral to keep raising more money from IFIN, a group firm of IL&FS group.

As per the SFIO probe, Sivasankaran was given loans without adequate collateral and when they turned stressed asset, the top brass of the ILFS group connived with him to cause a wrongful loss to the company. The investigation revealed that Sivasankaran was a close friend of Ravi Parthasarathy and Hari Shankaran - the chairman and vice chairman of IL&FS respectively.

The ED in the money-laundering case involving IL&FS has made Sivasankaran as one of the accused. During the probe, it found that loans and refinancing advanced to SIVA Group companies were extended in spite of being at financial stress and were fully in connivance with members of Committee of Directors (CoD) namely Ravi Parthasarathy, Hari Sankaran, Milind Patel and Ramesh C. Bawa.

"New loans were sanctioned with a view to settling the earlier loan and new loans were thus created remained outstanding. Since at the time of refinancing no proper collateral security was taken and refinancing was done on the basis of earlier collateral and even on the basis of a personal guarantee of the promoters of the said Groups," the ED charge sheet noted.

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The 16% fall in the shares of NTPC Ltd over the past one year has been disappointing. Not just because valuations are undemanding—with the shares trading close to their book value. The company’s fixed return earning regulated equity base has been steadily growing and is projected to grow faster

Capacity additions are projected to accelerate to 5 gigawatts (GW) per year from FY20 against the average annual addition of less than 3GW in the last two years. As a consequence, NTPC’s regulated equity is estimated to expand 15% annually from FY20 over the next three fiscal years.

The capacity ramp-up will boost the company’s finances. FY20 will mark the beginning of the reversal of the capital work in progress (CWIP) ratio. The ratio as a percentage of property, plant and equipment, and CWIP is estimated to fall from 42% in FY19 to 36% in FY20 and 24% in FY21, projects NTPC. The fall in the ratio will enhance return on equity as the equity blocked in CWIP would start generating returns.

Still, the Street is not convinced. The NTPC stock continued to fall on Thursday inching closer to its 52-week low. Why? Lack of commensurate growth in earnings. Operating earnings grew just 5% in FY19 despite a notable expansion in the installed capacity base and regulated equity.

Worse, reported profit grew just 1% last quarter and adjusted earnings lagged Street estimates by a wide margin. “Street was almost certain that 1QFY20 would mark a turnaround for NTPC with most past issues having been suitably resolved. However, 1QFY20 results sprung a surprise with higher losses on account of usage of carpet coal (low-value coal)—management highlighted the same as a one-off, and we hope that it does not recur, such that earnings profile is reflective of underlying capacity addition," said analysts at Kotak Institutional Equities in a note.

Second is the overhang of the government share sale. There is a fear that the Centre may sell hydropower producer SJVN Ltd to NTPC, similar to Oil and Natural Gas Corp. Ltd’s purchase of Hindustan Petroleum Corp. Ltd, and the Power Finance Corp. Ltd-REC Ltd deal.

Such a transaction will enhance NTPC’s regulated equity base. But it can scuttle its dividend payouts in the short term, warns an analyst. SJVN has a market capitalization of 9,500 crores. If NTPC has to buy a majority stake exhausting its close to 3,000 crore cash reserves, then its ability to maintain current dividends can be impacted, says the analyst on condition of anonymity.

Perhaps clarity from the government will help. NTPC has been one of the consistent dividend payers. In FY19, the dividend yield was more than 5%.

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The transaction is subject to customary closing conditions and has been approved by the board of directors of Lupin

Shares of Lupin gained after the drugmaker announced an agreement to sell its Japanese injectables business to neo-ALA Co. Ltd, a wholly-owned subsidiary of Abu Dhabi-based Neopharma group.

Through its Japanese subsidiary, Kyowa, the company had entered into a definitive agreement for the sale of its injectables business and related assets in Japan to neo ALA Co. Ltd, the drug major said in a press release.

"The divestiture of our injectables business in Japan is a step towards streamlining our Japan operations and bringing a sharper focus on building a hybrid (Brand/ generics) pharma model in Japan," Fabrice Egros, president Lupin APAC and representative director of Kyowa, said.

The plant, which is in Atsugi, has been engaged in sales and contract manufacturing of injectable products, the release said.

Lupin has agreed to sell all the issued and outstanding share capital in Kyowa Criticare Co. Ltd to neo-ALA Co.

The transaction is subject to customary closing conditions and has been approved by Lupin’s board of directors.

Lupin was quoting at Rs 738.75, up to Rs 3.55, or 0.48 percent on the BSE.

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