Sensex, Nifty set new records on Tuesday. Sensex crossed the psychological level of 43,000 to hit a lifetime high of 43,277.65, while Nifty closed at 12,631, gaining nearly 170 points.
The Indian equity benchmark indices, Sensex and Nifty rallied for the seventh consecutive day to end at record levels on Tuesday led by gains in banking stocks amid strong global cues. Sensex surged 680.22 points or 1.60 percent to 43,277.65 while the Nifty settled at 12,631.10, up 170.05 points or 1.36 percent. Nifty Bank surges 1,072 points to 28,606 and Midcap Index 51 points to 18,008.
GAIL’s net profit rose 16.5 percent to Rs 1,240 crore from Rs 1,064 crore while revenue fell 24.4 percent to Rs 13,643 crore from Rs 18,040 crore, YoY. EBITDA decreased 14.4 percent to Rs 1,338 crore from Rs 1,536 crore while EBITDA margin expanded by 110 bps to 9.8 percent from 8.7 percent, YoY.
Prestige Estates signed a term sheet with Blackstone for the sale of certain offices, and retail and hospitality projects valued at an EV of Rs 91.6 billion (in-line with our valuation estimate of Rs 93.6 billion).
Proceeds from the divestment could be used to fund growth and also lower its high leverage (currently net debt-to-equity of 1.5x), a key investor concern. We expect gearing to fall from 1.5x to <1x and for interest coverage to improve from 1.5x to c.5x. A stronger balance sheet may lead to a stock rerating. Accordingly, we maintain our Rs 315 target price and Buy rating.