India Morning Report: IT’s missing pizzazz, Auro Pharma strikes Cymbalta gold

Courtesy: BioSpectrum Asia

While the markets renew interest on Friday to get ready for the battle of wits at 6100-6150 levels, Banknifty has moved into gear with good boy PNB ceding its additional upside from 550 levels and SBI continuing down near cracking below 1500. Private Banks see Kotak going down too with Marico and Godrej losing the barely viable Western(Maha/Goa) branding attempts , consumers rejecting being shortchanged as a way of life. That leaves both ICICI Bank andHDFC Bank with YES and probably Axis but for its NPA woes. Aurobindo Pharma’s wins were mostly likely for the gains in Cymbalta and that’s a big molecule to crack.

The Foreign investors however bite into its market pie despite a 10% indicated gain at the open. Jubilant Life is also returning 3% at the open. In Banks, as desired by the broader markets BOB and BOI have also been shucked out, though the turn of events has apparently got Ashwini and proprietary traders’ older generations into a tizzy in the markets proactively readying themselves for a blood bath monday

Bullish picks in YES Bank, ITC  and Bharti continue to plough open interest as short interest is extinguished in droves before a new bite. Shorts were down 10% in REC even as PFC stole the limelight with great scores , unfortunately pushing the Powergrid story to the back. The Power and other infrastructure stories thus remain orphaned by the impracticality of raising larger equity or single entity debt for the mega project financing requirements of India Inc and specialist Finance like IDFC instead gets more important not less.

PNB remains a buy, Axis will probably continue down with BOI, BOB and grandpa SBI. The correction in Power Finance is probably understandable after the big gains overnight. Ambit Capital again agrees with us on the rate cuts remaining in RGR’s coat pockets to conjure due braking for the inflation express.

Bajaj Auto is back again but pairs would require new designs probably mixing Tata Motors into the trade as Hero exits a long term bear view on the stock. The Bajaj Auto story as pioneer however, much awaited by shortchanged Western region industry, is definitely back with a bang along with banks, with performers in banks waiting to be rewarding after marginalising of the Foreign banks in the Business and Consumer sectors

MNC Pharma will probably get into this rally for more than spectator gallery participation. The Infotech trade is unlikely to be back though opportunity for shorts in the sector or on the flip side for cadgy immature ET reporting in print is probably extinguished (opportunity)

Spectrum auctions, unlike reported yesterday have indeed turned out to be an exercise in budget restraint , bidding well for the Indian Telecom sector as Vodafone returns as a 100% owned business. Total Bids have still brought in the desired INR 500 Bln per budget targets and it was a big ask to have completed successfully with the prudence now reflecting in Telco strategies necessitating the delays in the process where Government was on the verge of bankrupting telcos with its greed.

The Gas companies will be on the good side whatever happens on Monday and some bad boys like Jet Airways have probably bottomed out while midcaps like Talwalkars, Prestige, LL and Page continue without breaking even as Pizzas break speed with Pizza Hut taking back 30% growth on completion of capex spends in new restaurants.

Thomas Cook and Sterling remain a bad story post merger with lots of work to do including printing restated financials, probably still required once the combined operations on board. The IT clawback is a temporary mirage and the sector should be avoirobably hiring plans will be postponed again as the Visa sanctions come back owith immigration reforms on tap in the US

If indeed Bear on Monday , one should retreat into Auto and stay invested in quality stocks identified here over the last year

In other unlisted business, Twitter results serve as warning to those assuming bigger volume pies from the SMAC crowd, the social space inherently low value except for big advertisers and Corporate Business with Facebook and Linkedin

Look ahead to a grand theater attraction as Disney’s Frozen takes the world by storm and ESPN after global success proceeds with better redefinition in India as well. Time for someone to get another update from Aubon pain and the QSR ilk?

The rupee is trading consecutively improved levels at 62.30 and yields are still hoping to cross 9% apparently though if we start angling for ECB debt we could score tighter spreads and renewed growth could indeed be aan easy story again for India Inc

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