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MOSL: Morning India (6/November/19): 1. Bulls & Bears (India Valuations Handbook); 2. Fuel or Engines; 3. HCL Technologies; 4. Titan Company; 5. Dabur India; 6. Tech Mahindra; 7. Divi's Labs; 8. P&G Hygiene

MOrning India (6/November/19): 1. Bulls & Bears (India Valuations Handbook); 2. Fuel or Engines; 3. HCL Technologies; 4. Titan Company; 5. Dabur India; 6. Tech Mahindra; 7. Divi's Labs; 8. P&G Hygiene

Today’s top research theme

Bulls & Bears: India Valuations Handbook - Nifty sparkles in Oct’19 amid robust FII flows

• The Nifty closed higher (at 11,877, up 3.5% MoM) for the second consecutive month in Oct'19 on the back of improved global cues, hopes of further policy actions and a good festive season. Further, series of policy changes by the government and the RBI helped revive sentiment. While FIIs continued their buying streak in Oct'19 (inflows doubled from USD1b in Sep'19 to USD2.1b in Oct'19), DII inflows remained subdued at USD0.7b.
• Mid-caps outperformed the Nifty by 1.4% in Oct'19, underscoring the sentiment change. However, on a 12-month basis, mid-cap returns (-2.2%) lagged that of the Nifty (14.4%). The Nifty Midcap100 P/E ratio corrected from 19.8x in Oct'18 to 17.9x currently. Also, the mid-cap discount to the Nifty stood at 5% in Oct'19.
• Auto (+13%), PSU Banks (+13%), NBFCs (+8%), Oil (+7%) and Healthcare (+6%) featured among the top gainers for Oct'19; Technology (-2%) was the only negative performing sector in the month.

Piping hot news

AGR issue: Reliance Jio may have to pay RCom’s Rs 13,000 crore dues

Reliance Jio may have to shoulder the burden of around Rs 13,000 crore of past dues relating to licence fee and spectrum usage charge owed by Reliance Communications (RCom) as a fallout of the Supreme Court verdict in the adjusted gross revenue (AGR) matter. RCom, owned by Anil Ambani, owes past dues of around Rs 20,000 crore (Rs 16,456 crore licence fee and Rs 3,533 crore SUC) to the Department of Telecom (DoT). But since the company has filed for bankruptcy, DoT will have to claim the amount in the insolvency court as an operational creditor and may have to take a huge haircut, if at all any payment eventually materialises.