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NIFTY analysis with experts, Q2 review of Gas sector, Indian markets advance and move above 10,600…. Market updates for 26/11/18

PurpleTrades - stock market courses > News > NIFTY analysis with experts, Q2 review of Gas sector, Indian markets advance and move above 10,600…. Market updates for 26/11/18

Report by- Sabyasachi Bhattacharya


Gas sector’s Q2 results review; let us check some good buys-

Downstream gas companies reported a mixed performance in Q2 FY19. Indraprastha Gas (IGL) and Mahanagar Gas (MGL) posted a healthy uptick in revenue and profit driven majorly by strong volume growth in the city gas distribution (CGD) segment. However, Gujarat Gas saw some hit on profitability, with limited price uptick during the quarter gone by. Let us review some of the companies in cement sector-

  • Indraprastha Gas- The company reported a 27.4 percent year-on-year (YoY) uptick in topline owing to a 12.9 percent volume uptick. Compressed natural gas (CNG) volumes grew 12.9 percent and piped natural gas (PNG) segment saw a 13.3 percent volume improvement. While higher taxes impacted net profitability, the same was offset by higher other income and lower other expenses. With plans in Delhi to provide concession on CNG conversion costs, the longer term outlook on volumes remains positive. The long standing dispute with Haryana City Gas Distribution (HCGDL) also now stands resolved with the Supreme Court’s approval for IGL to acquire HCGDL. This would enable IGL to expand rapidly in the region.
  • Mahanagar Gas- The 9.5 percent growth in volumes led to a 30 percent revenue growth during the quarter gone by. Both CNG and PNG volumes grew 9.2 percent and 10.2 percent, respectively. Higher gas prices for industrial and commercial segment, a depreciating rupee and higher tariff for GAIL’s pipeline usage resulted in higher raw material and operating cost and moderated benefits of higher realisations. However, the management has taken adequate price hikes, which will help it protect margin going forward. Around 85 percent of MGL’s business is constituted by CNG and domestic PNG, which have a priority allocation of domestic gas from the government. This works in favour of the company and helps in protecting margin. Going forward, the company plans to aggressively expand CNG and PNG segments.
  • Gujarat Gas- Despite a healthy uptick in volume (16.5 percent) and revenue (41 percent), the quarter’s performance remained muted. A sharp surge in natural gas prices and weaker rupee inflated input costs for the company. With more than 70 percent of the business catering to the industrial segment, the company could not access benefits of priority domestic gas allocation. This led to a noticeable impact on profitability with earnings before interest, tax, depreciation and amortisation (EBITDA) and net profit down 20.7 percent and 33 percent, respectively.





Let us take a look at Q2 outlook of different companies-

Source- MoneyControl, Purple Trades Research Department   



Indian Indices move ahead as Nifty closes above 10,600-

Chart source- ChartInk

Indian markets had a bullish day today as both the Indices SENSEX and NIFTY moved forward. Nifty had a GAP-UP opening after which it started to fall down till it reached the next support at 10,490. This support was predicted by our experts at PURPLE TRADES  in the last report published on Thursday. The Index fell throughout the morning and mid lunch session. Then it hit the support during the lunch time, from there it went on to break the 10,500 mark and went above the 10,600 mark easily. To summarize it the shares were off to a flying start on Monday, thanks to a sharp rally among consumption names in the last couple of hours. These, combined with a positive move on the rupee helped the indices end on a strong note. The Nifty closed above 10,600-mark. Recovery in prices of crude oil too failed to have any significant impact on the market, as the commodity traded below USD 60 per barrel. Among sectors, financials, automobiles, consumption, and IT names were in the green, while investors sold metals and pharmaceuticals segments. In the broader markets, Nifty Midcap index underperformed benchmarks, but closed with gains of around 0.2 percent. At the close of market hours, the Sensex was up 373.06 points or 1.07% at 35354.08, while the Nifty ended higher by 101.80 points or 0.97% at 10628.60. The market breadth was negative as 1,080 shares advanced, against a decline of 1,508 shares, while 160 shares were unchanged. Hero MotoCorp, Wipro, and HUL are the top gainers, while ONGC, Sun Pharma, and Yes Bank lost the most. GPT Infraprojects closed 4 percent higher after it bagged an order worth Rs 159.81 crore. Shares of HCL Technologies, Bajaj Finance gained more than 1.2 percent after shares got included in the S&P BSE Sensex. Share price of BEML added 2 percent as the company won an order for metro coaches to Mumbai metro line. Shares of Esab India added 6 percent as company declared an interim dividend of 900 percent. Share price of Paramount Communications locked at 20 percent upper circuit after Elara Capital reduced its stake in the company. Bharti Airtel shares advanced as much as 2 percent after its Africa subsidiary appointed merchant bankers for initial public offering (IPO). Godrej Properties shares gained 3 percent after signing joint venture agreement with Hero Cycles for prime office development in Gurgaon. Axis Bank shares gained 3 percent after global investment firm HSBC upgraded the stock to buy from hold and also raised target price by 24 percent.




Let’s take a look at the performance of major Indices-

Equities in Europe rose even as investors continued to monitor developments around the Brexit deal. Stoxx 600 jumped 1.15 percent. Meanwhile, markets in Asia markets were mixed. The Shanghai composite was down 0.14 percent to close at around 2,575.81 while the Shenzhen composite slipped 0.316 percent to 1,330.92.

Source- MoneyControl, Purple Trades Research Department   



Key Points for Traders to watch out for while trading Nifty tomorrow-

  • 10,600 is a short term support for Nifty.
  • If Nifty breaks 10,600 then it has the potential to go down.
  • 10,650 is a short term resistance for Nifty.
  • If Nifty breaks 10,650 then it has the potential to go up.



Top sectors that moved the market today-                            Data source- Moneycontrol



Top Gainers for today-                                                                                        Data source- Moneycontrol



Top losers for today-                                                               Data source- Moneycontrol


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