Global News
· U.S. stocks closed higher Tuesday, with the Dow industrials rising more than 100 points after the first presidential debate between Democratic candidate Hillary Clinton and Republican contender Donald Trump and a number of stronger-than- expected economic reports. The S&P 500 index rose 13.83 points, or 0.7%, to finish at 2,159.93. The Nasdaq Composite Index finished up 48.22 points, or 0.9%, at 5,305.71. The advance in stocks suggests that U.S. equity markets are betting that Clinton benefited the most from Monday's presidential debate. Stocks are rising on the prospect of a Clinton presidency because the Democrat is viewed as a known quantity while some view Trump as being more unpredictable--a bad thing for stock investors. U.S.-listed shares of Deutsche Bank closed 0.6% higher after the U.S. Justice Department's third highest-ranking official said banks can lower penalties by cooperating with authorities, according to a news report. Oil futures tumbled to settle down 2.7% at $44.67 a barrel after both Iran and Saudi Arabia played down expectations for a deal to freeze or cut oil production at the closely watched informal OPEC meeting on Wednesday. The ICE U.S. Dollar Index , a measure of the buck's strength against a basket of six key rivals, was up 0.2% at 95.47. Stocks in Europe eked out last minute gains as oil's slide dragged on the energy sector. In Asia, shares reversed earlier declines as investors reacted to the U.S. presidential debate, with the Nikkei Stock Average closing up 0.8%. Gold futures settled down 1% at $1,330.40 an ounce.
· U.S. September consumer confidence rose to 104.1, the highest level since August 2007. The Case-Shiller home price index rose 5% for the year in July, while house prices rose 0.6%. The Markit flash services purchasing managers index for September rose to 51.9 in September from 51 in August. (Dow Jones Business News)
· "Germany is in many ways the big winner" of the ECB's policies, said Marcel Fratzscher, president of the Berlin-based economic research institute DIW Berlin. He estimates that Germany saves around EUR40 billion annually on its federal budget from low interest rates compared with higher-rate years. The country expects a budget surplus around EUR30 billion this year. "Without those savings on interest, the government would have a sizable deficit," Mr. Fratzscher said. (Dow Jones Business News)
Stock Watch
Nandan Denim - IC - At inflection point-All set to gain from operating leverage, Buy, TP Rs 219
At the current price of ₹126, Nandan Denim is trading at 8.0x FY17E and 6.1X FY18E Earnings, while in terms of EV/EBITDA it is quoting at 5.2x FY17E and 4.3x FY18 EBITDA respectively. Valuation looks attractive compared to peers like Arvind, Indo Count, Vardhman Textiles and Trident Ltd when compared on parameters like PAT CAGR, ROE and Dividend yield. Post completion of Capex by Q3FY17, Nadan should be able to do ROE of above 20% in a sustained manner and hence we believe 6x FY18E EBITDA is a fair value for the company, which gives us fair value of company's Equity at ₹219. At the fair value of ₹219, stock is valued at 13.9xFY17E PE and 10.6xFY18E PE and offers upside potential of 74%.
Corporate News
· Mahindra & Mahindra, has decided to acquire the European two-wheeler subsidiary company of Mahindra Two Wheelers for euro 26.3 million (about Rs 197 crore).The Mumbai-based company has agreed to acquire 14.9 million equity shares aggregating 100 per cent of share capital of Mahindra Two Wheelers Europe Holdings (MTWL-Europe), a subsidiary of M&M.(BS)
· Tata Motors Finance, the vehicle financing company owned by Tata Motors, will transfer its new vehicle finance business to Sheba Properties, to its fully owned subsidiary.The transfer to Sheba Properties is done for an undisclosed lump sum consideration (arrived at based on an independent valuation exercise), (BS)
· IRB Infrastructure has received letter of award from the National Highways Authority of India (NHAI) for Rs 2100 crore highway project in Rajasthan and Gujarat. The company has received letter of award from NHAI for the project of six laning from Udaipur to Rajasthan/Gujarat border i.e from km 287.4 to 401.2 section of NH 8 in the states of Rajasthan and Gujarat.(BS)
· Tata Motors has forayed into the Bolivian commercial vehicles market through a distribution agreement with Bolivian Auto Motors, a part of the business group Salvatierra. Besides Bolivia, Tata Motors commercial vehicles are also sold in other South American markets such as Chile and Ecuador.(BL)
· Pfizer Ltd has concluded the sale of its four products - Neko Soap, Sloans, Ferradol and Waterbury's Compound to Piramal Enterprises Ltd. In May 2016, Pfizer entered into an agreement with Piramal Enterprises to sell its four products for a total consideration of Rs 110 crores. (BS)
· Suven Life Sciences Ltd has received product patents from India and Japan for the new chemical entities (NCEs) used in the treatment of disorders associated with neurodegenerative diseases. These patents are valid through 2026 and 2032 in India and Japan respectively. (BS)
· Mukta Arts is planning to transfer its entire business of cinema division to its wholly-owned subsidiary Mukta A2 Cinemas. The subsidiary, Mukta A2 Cinemas, will be created on a slump-sale basis through a business transfer agreement between the company and its subsidiary. (BS)
· NIIT has acquired the business of Bangalore-based start-up Perceptron Learning Solutions Private Limited. This acquisition aims to bring together complementary technology platforms and capabilities of NIIT and Perceptron, enabling NIIT to further accelerate its Digital Transformation initiatives – StackRoute, digiNxt, and Training.com. (BS)
· Bharat Petroleum Corporation Ltd (BPCL) will have to invest over ₹3,000 crore over the next year to upgrade its existing refining capacity to meet better fuel standards. (BL)
Technical
· A volatile day was witnessed in the index in yesterday's session.
· The index continued with its downmove but found support at its previous low of 8685.
· The index has immediate resistance at 8765.
· The next resistance above 8765 is at 8800.
· Below 8685, the next support lies at 8540.
· Daily volume was lower than the last 5 days average.
· 20-day MA : 8793 ; 50-day MA : 8683 ; 100-day MA : 8400 ; 200-day MA : 7982
· close on 24.09.2015 : 7868 ; close on 28.09.2015 : 7795
Regards,
Sunidhi Research
Sunidhi Securities & Finance Ltd
Kalpataru Inspire, Unit 1, 8th Floor ,
Opp. Grand Hyatt Hotel,
Santacruz (East), Mumbai 400055
Board: +91-22-66771777
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