Indian shares slipped on Thursday, led by declines in financials and metals, as fears of an impending global recession and worsening Sino-U.S. trade relations marred investor sentiment

The broader NSE Nifty fell 0.46% to 10,994.55 as of 0354 GMT, while the benchmark BSE Sensex inched down 0.44% to 37,293.80.

Meanwhile, stocks in regional markets across Asia struggled to recover with MSCI's broadest index of Asia-Pacific shares outside Japan trading flat.

Domestic investors also remained cautious ahead of GDP data for the April-June quarter due on Friday.

"Sentiment is a fair worry, consumer and business sentiment has to change," said Sunil Sharma, chief investment officer at Sanctum Wealth Management in Mumbai.

"The outcome of the trade war is also uncertain."

The weather office on Wednesday said monsoon rains in India were below average for the first time in five weeks in the week through Wednesday, further dampening spirits.

Monsoon rains are key to farm output and economic growth as the agricultural sector accounts for about 15% of India's $2.5 trillion economies.

Indian markets are likely to see some volatility ahead of August derivative contracts' expiry.

Shares of Indiabulls Housing Finance Ltd slipped as much as 7.97%, the stock will not be included on the Nifty 50 NSE Nifty from Sept. 27.

The Nifty metals index inched 0.82% lower, with all 14 constituents trading in the red.

Only 10 of the 50 stocks on the NSE blue-chip index were trading in positive territory.

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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 share price down 31 percent in last 1 year

Shares of Sun Pharmaceutical Industries rose 4 percent on August 29, a day after reports of the Securities and Exchange Board of India (SEBI) clearing the company of charges of irregularities emerged.

A preliminary probe by the market regulator found no merit in allegations of violation of securities laws, levelled by a whistleblower, against the pharmaceutical major, Business Standard quoted two persons as saying.

SEBI had sought answers to alleged diversion of Rs 42,000 crore through the company’s key distributor and subsidiary, Aditya Medisales and the pharma major’s 2004 fundraising through foreign currency convertible bonds, the report said.

Sun Pharmaceutical Industries was quoting at Rs 422.80, up to Rs 10.05, or 2.43 percent, on the BSE.

The share touched its 52-week high of Rs 678.80 on September 6, 2018, and a 52-week low of Rs 350.40 on May 13, 2019.

It is trading 37.61 percent below its 52-week high and 20.86 percent above its 52-week low.

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The share touched its 52-week high Rs 3,302.55 and 52-week low Rs 1,651.80 on 31 August 2018 and 07 August 2019, respectively

Shares of Piramal Enterprises slipped more than 3 percent intraday on August 29 after the company deferred the issue of non-convertible debentures (NCDs).

The administrative committee has decided to defer the issue of privately placed NCDs aggregating up to Rs 3,000 crore (including an option to retain over-subscription of up to Rs 2,500 crore), to a future date, the company said in a release.

Piramal Enterprises was quoting at Rs 1,855.00, down Rs 40.35, or 2.13 percent on the BSE.

The share touched its 52-week high Rs 3,302.55 and its 52-week low Rs 1,651.80 on 31 August 2018 and 07 August 2019, respectively.

Currently, it is trading 43.18 percent below its 52-week high and 13.61 percent above its 52-week low.

The share price declined 39 percent in the last year.

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Industry watchers say the move is positive for the sector and will benefit sugarcane producers

Most sugar stocks opened August 29 session with healthy gains, a day after Union Cabinet approved export subsidy for exporting 60 lakh metric tonne of sugar.

Giving a big relief to the sugar industry, the Cabinet on August 28 gave its nod to a Rs 6,268 crore subsidy for export of 6 million tonnes of sugar during the 2019-20 marketing year starting October. The move is aimed at liquidating surplus domestic stock and help mills in clearing huge sugarcane arrears to farmers.

Industry watchers say the move is positive for the sector and will benefit sugarcane producers.

“The cabinet announcement for export subsidy support for sugar stocks comes as a breather for the stagnant sugar industry. We hope the benefits percolate down to farmers in the form of pending payments. However, much needs to be done to revive the industry," said Ajay Kakra, Leader - food and agriculture, PwC India.

Around 0925 hours, shares of Dharani Sugars & Chemicals (up 9.24 percent), Mawana Sugars (up 4.92 percent), Shree Renuka Sugars (up 4.57 percent) and Sakthi Sugars (up 4.05 percent) were trading with strong gains on BSE.

Shares of Uttam Sugar Mills (up 3.77 percent), Bajaj Hindusthan Sugar(up 3.69 percent), Balrampur Chini (up 3.32 percent), Magadh Sugar (up 3.03 percent), Avadh Sugar (up 3.03 percent), Dhampur Sugar Mills (up 2.14 percent), Dalmia Bharat Sugar (up 2.75 per cent), Dhampur Sugar Mills (up 2.44 percent) and Ugar Sugar Works (up 1.44 percent) also climbed higher.

Equity benchmarks Sensex and Nifty were in the negative territory in the light of weak Asian cues as worries over the US-China trade war and looming recession kept investors away from equities.

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Nestle's revenues have grown 22 percent and net profit increased by 73 percent

Shares of Nestle India, the food and beverages company well-known in the Indian market for its Maggi brand of instant noodles, jumped nearly 23-fold in the last 10 years due to its consistent performance and market share in key products.

Despite a six-month ban on Maggi in 2015 for high monosodium glutamate (MSG) and lead content, Nestle India regained strength and rallied 149 percent from lows of Rs 5,011 per share hit in March 2016.

Over the last two years, from CY2016 to CY2018, Nestle's revenues have grown 22 percent and net profit has jumped 73 percent.

In 2015, Nestle's profit and topline declined 52 percent and 17 percent year-on-year (YoY), respectively following the Maggi ban. Albeit on a low base, the company's profit has grown a whopping 185 percent on a 38 percent rise in revenue from 2015 to 2018. Nestle follows the January-December financial year.

In the recent quarter ended June 2019, its profit and revenue grew around 11 percent each compared to the same period last year while the bottom line and topline growth in the first half of current year was 10 percent each YoY.

"Nestle has delivered 10 straight quarters of volume and mix-led growth on the back of consistent innovation and renovation, though environment continued to be challenging with headwinds in commodity prices and softer demand conditions," Suresh Narayanan, Chairman and Managing Director said.

The consistent performance has helped Nestle India grab a spot on the Nifty 50, the benchmark index of National Stock Exchange, with effect from September 27.

After a stupendous rally and addition into the Nifty 50, the question is whether it still deserves investor attention? Analysts Moneycontrol spoke to are optimistic about the company's growth prospects.

"Going forward, we expect Nestle's revenues to remain buoyant owing to the continued focus on innovating and renovating its brands, new launches in nutrition segment and emphasis on expanding penetration through expansion in the distribution cycle," Vineeta Sharma, Head of Research, Narnolia Financial Advisors said.

The change in product mix and judicious pricing is expected to cushion the declining margin in the wake of higher input prices.

"We continue to maintain a positive view of Nestle. After inclusion in Nifty, liquidity too will drive the stock price as the weight of consumer staples will increase from 8.5 percent to around 10 percent. Our 12-month target for the company is Rs 13,742," she added.

Prashanth Tape, AVP Research at Mehta Equities also said overall outlook remains optimistic on Nestle's growth despite a slowdown across various sectors in the economy.

He feels fast-moving consumer goods (FMCG) companies have emerged as a safe haven for investors and stay a safe bet in slowdown season, with steady and stable growth in revenues and profits.

"With respect to including Nestle into Nifty index we shoulder it as a better low volatility counter which can be considered upon fulfilling the eligibility criteria for inclusion of stocks in Nifty indices as per NSE revision Methodology," he said.

He is positive on Nestle's long-term growth prospects and advises investors to add at current levels for long term portfolio because he believes Nestle would continue to strengthen its presence by increasing market share, expanding distribution reach in the rural and urban areas, premiumizing and launching innovative products, steady capacity addition, and improved product mix.

On the technical front also, Romesh Tiwari, Head of Research, CapitalAim said the stock is moving from strength to strength and with this momentum, it is likely to touch 12,950 levels.

"I will advise traders to continue to hold on this stock with a stop-loss of 11,964 but no new buying at this stage. Investors should wait for the 11,500 level to buy in Nestle for the short term," he added.

Initially, in August, Nestle said it would soon commence construction of its newest, and ninth factory in India, at Sanand, Gujarat

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The board approved raising of funds by way of issuance of equity shares or such other eligible security for an aggregate amount not exceeding Rs 1,000 crore

Shares of Lakshmi Vilas Bank were locked at 5 percent lower circuit on August 29 after the managing director and chief executive officer of the company resigned.

Parthasarathi Mukherjee, managing director & chief executive officer of the bank has submitted his resignation, owing to personal reasons. The letter was placed before the board in the meeting held on August 28 and the board has accepted the same, as per company release.

There were pending sell orders of 6,303 shares, with no buyers available.

The company board in its meeting approved the increase in the authorized share capital of the bank from Rs 500 crore to Rs 650 crore.

The board also approved raising of funds by way of issuance of equity shares or such other eligible security for an aggregate amount not exceeding Rs1,000 crore and raising of funds by way of issuance of bonds, NCDs for an aggregate amount not exceeding Rs 500 crore.

The bank has also approved the notice of the ensuing 92nd annual general meeting of the Bank to be held on September 27, 2019, and the same will be issued to the shareholders of the Bank.

Lakshmi Vilas Bank was quoting at Rs 38.75, down Rs 2 on the BSE.

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A breakout on either side of the band will give a clear indication of the further trend

The Nifty witnessed a V-shaped reversal rally but the gains were capped at 11,150 levels on August 28. On the lower side, as per the change of polarity principle, the short-term moving average -- 20-day EMA -- for the index is currently working as a key reversal point.

Last hour buying on August 28 pushed the price above its important physiological mark of 11,000, which has squeezed the body of the candle with a slightly longer wick on its lower side.

The level of 11,150 is further supported by the Fibonacci ratio on the daily interval for the benchmark index. Currently, the Nifty pack is trading between its 50 (11,200) and 100-EMA (10,800) band on the weekly timeline.

On the Options front, maximum Put open interest (OI) is placed at 11,000 strike. The maximum change in Call OI is seen at 11,100, followed by 11,200 strikes.

The next immediate support for the Nifty is placed at 10,800 levels, while resistance is observed at 11,200 levels. Now, a breakout on either side of the band will give a clear indication of the further trend.

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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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Nestle India with stop loss at Rs 12100 and target of Rs 13200 and Tata Consultancy Services with stop loss at Rs 2200 and target of Rs 2300

The market closed in the red after four straight sessions on August 28 due to profit booking and fears of a global recession. Banks, auto, metals and pharma stocks pulled the market down while IT outperformed, rising over a percent.

The BSE Sensex was down 189.43 points at 37,451.84 while the Nifty 50 fell 59.30 points to 11,046.10 ahead of the expiry of August futures & options contracts, forming a bearish candle on daily charts.

But, the expected decline is unlikely to damage the recent uptrend status of the Nifty, he said, adding important supports to be watched are around 10,900-10,850 levels, where one may expect a reliable upside bounce from the lows.

The broader markets were also caught in a bear trap with the Nifty Midcap index falling 1 percent and Smallcap index losing 0.65 percent.

According to the pivot charts, key support level is placed at 10,979.3, followed by 10,912.5. If the index starts moving upward, key resistance levels to watch out for are 11,121.3 and 11,196.5.

Nifty Bank closed at 27,804.30, down 1.14 percent on August 28. The important pivot level, which will act as crucial support for the index, is placed at 27,594.13, followed by 27,383.96. On the upside, key resistance levels are placed at 28,055.03 and 28,305.77.

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Vedanta Ltd on Tuesday said it has collaborated with government think-tank Niti Aayog to help improve the quality of life of the people of Kalahandi district of Odisha. NITI Aayog and Vedanta will work together to assist the district by reviewing and co-creating strategic action plans to improve lives of local communities through interventions in health and nutrition, education, financial inclusion, skill development and basic infrastructure related aspects as defined in aspirational districts mandate under the overall development policies of the state government, the company said in a statement.

"Vedanta Ltd signed a Statement of Intent (SoI) yesterday with NITI Aayog to help improve the quality of life of the citizens of Kalahandi district, Odisha, through their CSR fund as part of Aspirational Districts' initiative," the company said.

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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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Drugmaker Strides Pharma Science Ltd on Tuesday said its US-based subsidiary has acquired the soft gel capsule manufacturing facility of Micelle BioPharma in Florida for $500,000 (Rs 3.6 crore)

"The US Food and Drug Administration (USFDA) approved facility will make soft gel capsule (SGC) suite for formulations with containment needs," said the city-based company in a statement here.

The company said it would invest $1 million (Rs 7.2 crore) to build capabilities and add more dosage formats.

The buyout will make the company have 8 formulation sites worldwide, catering to both regulated and emerging markets.

The Florida plant in the US will augment the installed capacity here and be an alternative site to support the company's growth plans.

"The US plant will meet the enhanced capacity needs for soft gels and offer an alternate site to our Bengaluru plant," said the statement.

The company's plant on the southern outskirts of Bengaluru has an annual SGC capacity of 2 billion.

The company has two production sites in Bengaluru and one each in Puducherry and Chennai in India, while the overseas facilities are located in Singapore, Milan, Nairobi and Florida.

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The top Nifty50 gainers include Tata Motors, Tech Mahindra, HCL Tech, Britannia Industries and Infosys while the top losers are YES Bank, ONGC, JSW Steel, Indiabulls Housing Finance and Tata Steel

Benchmark indices have slipped into the red with Sensex down 82 points at 37,558 marks while the Nifty shed 23 points and is trading at 11,082 level.

Metal stocks are under pressure with the index down over a percent dragged by SAIL and JSW Steel down over 2 percent each followed by Tata Steel, Jindal Steel & Power, Hindalco Industries and NALCO.

Bank Nifty shed half a percent, the top losers being RBL Bank which is down over 4 percent followed by YES Bank, IDFC First Bank, HDFC Bank, Bank of Baroda and Kotak Mahindra Bank.

However, Nifty Media added a percent led by Hathway Cable and DEN Networks which jumped 4-6 percent each followed by Network18, Jagran Prakashan, UFO Moviez and TV18 Broadcast.

IT stocks are also buzzing led by Infosys, Tata Elxsi and Tech Mahindra.

India VIX is down 1.19 percent and is trading at 15.82.

Gautam Shah of JM Financial told CNBC-TV18 that the market has gone through a lot of pain in the last few weeks and 12 percent decline from all-time highs is not a big fall.

He believes this is the most unsynchronised bear market so far.

"Nifty appeared very oversold at 10,600 levels and bearish momentum has been arrested for the time being," he said.

The top Nifty50 gainers include Tata Motors, Tech Mahindra, HCL Tech, Britannia Industries and Infosys while the top losers are YES Bank, ONGC, JSW Steel, Indiabulls Housing Finance and Tata Steel.

The most active stocks are YES Bank, Indiabulls Housing Finance, Tata Motors, HDFC Bank and IndusInd Bank.

Among the Nifty50 names, 19 stocks advanced while 31 declined.

112 stocks hit new 52- week low on BSE including Cox & Kings, Reliance Naval and Unitech among others. Stocks to hit 52-week high are Tata Global Beverages, Apollo Hospitals, MCX India, NIIT Tech, Nestle India and Bata India among others.

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An interest payment default of Rs 9.42 crore occurred on secured NCDs (5 years tenure) and of Rs 4.71 crore on 10 years NCDs, the company said

After three successive sessions of gains, shares of Dewan Housing Finance Corporation (DHFL) tumbled 5 percent on BSE on August 28, a day after the company said it defaulted to the tune of Rs 14.13 crore towards interest payments on bonds.

An interest payment default of Rs 9.42 crore occurred on secured NCDs (5-year tenure) and of Rs 4.71 crore on 10-year NCDs, the company said in a regulatory filing.

Separately, the housing finance company said it planned to raise funds through equity share sale or other means as part of the debt resolution plan.

The company's board will to meet on August 30, when the proposal would be tabled, the firm said in another regulatory filing.

The fund mop-up can also be through any other permissible mode or a combination of prospectus or placement document or letter of offer or any other permissible offer, it added.

Shares of DHFL were trading 1.96 percent down at Rs 47.50 at 1115 IST.

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