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ICICIdirect Research Posted on 09:34am 24-Nov-2021

Equitas Small Finance Bank has announced its partnership with HDFC Bank...

* Market Outlook

Indian markets are likely to open on a positive note shrugging off mixed global cues tracking traders weighing the risk of tighter monetary policy to curb inflation and worries about growth due to the resurgence of Coronavirus cases in Europe.

 

*  Markets Yesterday

• Domestic markets ended higher on the back of gains in BFSI, metals and oil & gas stocks amid mixed global cues.

• US markets ended mixed tracking losses in technology stocks amid renomination of Jerome Powell for Federal Reserve chair.

 

* Key Developments

• India's crude oil production declined 2.1% YoY to 2.5 MMT in October mainly on account of lower production from PSU operated fields whereas natural gas production increased 24.7% YoY to 3 BCM due to higher output from privately operated fields. Crude oil processed was up 14% YoY to 21 MMT during the same period.

• Securities and Exchange Board of India (Sebi) has postponed the implementation of the 50% cash-margin rule for futures and options (F&O) traders and creditdefault swaps (CDS) segment to February 28, 2022, from the earlier deadline of December 1, 2021. The regulator cited investor interest, market regulation and development as reasons for the deferment, according to moneycontrol.

• The Oil Ministry has said India will release 5 million barrels of crude oil frim its strategic petroleum reserves. This release will happen in parallel and in consultation with other major global energy consumers. Among other countries, the US will release 50 million barrels of oil while other Asian countries have not yet announced details of release.

• Firstsource in its analyst meet, reiterated revenue guidance of 14.5-15.5% for FY22 (including acquisition of StoneHill), downward from earlier guidance of 14-18% (given in Q4FY21), on account of i) slowdown in volumes in collections business as credit card delinquency rates in US are all time low ii) Talent situation in UK and US is very tight due to which, some revenue is being left on the table. The company expects collections business to remain muted for couple of quarters after that it may pick up. The operating margin guidance is maintained at 11.8-12.3%. They acquired Stonehill a few days ago, which is a US based mortgage firm, focused on loan quality control and due diligence and loan origination services to US mortgage industry. It is expected to strengthen Firstsource’s presence in US in mortgage based products. The acquisition took place at 1.3x price to sales.

• Alembic has received USFDA final approval for its ANDA for Formoterol Fumarate Inhalation Solution, 20mcg/2ml per unit-dose vial (RLD: Perforomist Inhalation Solution of Mylan). The drug is indicated for treatment of bronchoconstriction in patients with chronic obstructive pulmonary disease, including chronic bronchitis and emphysema. This ANDA has been co-developed in partnership with Orbicular Pharmaceutical and has an estimated market size of ~ US$310 million (MAT Sep21, IQVIA).

• Cadila has submitted a new drug application (NDA) to the Drug Controller General of India for Desidustat. The drug is indicated for the treatment of anaemia in patients with chronic kidney disease with or without dialysis support.

• IndusInd Bank has said that Shalabh Saxena and Ashish Damani, appointed chief executive officer (CEO) and chief financial officer (CFO) of Spandana Sphoorty Financial (SSFL), cannot be relieved from their services at Bharat Financial Inclusion (BFIL) until a review of certain transactions at the present company is completed, according to Business Standard.

• Ratings agency Moody's has changed Bharti Airtel's outlook to positive from stable on improving operating performance and credit metrics. The positive outlook reflects Airtel's improving operating profile credit metrics, including Moody's expectation of growing free cash flows and liquidity over the next 12-18 months, particularly at the core Indian operations.

• Parle Foods has taken 5-10% price hikes across categories an account of rising input costs. Rise in prices of raw materials like wheat, sugar, edible oils & packaging material are majorly leading the hikes across food segment of FMCG companies. Apparently prices of input materials like edible oil are up 50-60%, whereas wheat & sugar prices are up 8-10% compared to last year.

• Coal India has scheduled a meeting on November 29, 2021 to consider and approve payment of interim Dividend for 2021-22. Furthermore, the company has fixed December 7, 2021 as the record date for the purpose of payment of interim dividend.

• Equitas Small Finance Bank has announced its partnership with HDFC Bank, for a co-branded credit card. Equitas will draw on HDFC Bank's strengths in the credit card market and its substantial reach, according to The Economic Times.

• TCS has informed the stock exchanges that it has expanded its partnership with Swiss Re, one of the global leaders in insurance, re-insurance business. As a part of this initiative, TCS will further develop its future ready, cloud based digital workplace and manage underlying operations.

• Wipro and Telefonica (one of the largest communication service providers in Europe and LatAm) announced an agreement. Under the agreement, Wipro will work with Telefonica to automate associated network operations and thus enable the transition to the cloud for its German and Brazil market.

• NMDC has scheduled a meeting on December 3, 2021, to consider the proposal for declaration of interim dividend for 2021-22.

 

*  Today's Highlight

Results: Siemens.

Events: US GDP QoQ, US initial jobless claims, US personal spending, US crude oil inventories, US new home sales.