Key equity barometers ended near the flat line after a volatile session on Friday. The Nifty ended a tad above the 12,350 level. Main indices were impacted by the Supreme Court verdict on adjusted gross revenue (AGR) dues on the telecom sector. Broader market, however, extended recent uptrend.

The barometer BSE S&P Sensex rose 12.81 points or 0.03% to 41,945.37. The Nifty 50 index lost 3.15 points or 0.03% to 12,352.35.

In the broader market, the S&P BSE Mid-Cap index rose 0.54% while the S&P BSE Small-Cap index gained 0.42%. Both these indices outperformed the Sensex.

The market breadth favored the buyers. On the BSE, 1,331 shares rose and 1,210 shares fell. A total of 175 shares were unchanged.

Numbers to Track:

The yield on 10-year benchmark federal paper rose to 6.62% at 16:30 IST compared with 6.598% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.075, compared with its close of 70.93 during the previous trading session.

In the commodities market, Brent crude for March 2020 settlement rose 38 cents to $65 a barrel. The contract rose 0.97% to settle at $64.62 a barrel during the previous trading session.

Foreign Markets:

Shares in Europe and Asia edged higher on Friday after Wall Street posted more records, with strong corporate earnings and upbeat US economic data adding to optimism after China and the US signed a partial trade deal.

In US, stocks rallied again on Thursday, with all three benchmark indexes closing at new records, following the signing of a trade truce between the US and China on Wednesday and Senate approval of a new trade deal between the US, Mexico and Canada on Thursday.

Buzzing Indian Sectors:

The S&P BSE Telecom index rose 1.49% at 1,159.57. Vodafone Idea (down 25.21%) and Bharti Infratel (down 10.11%) slumped. Telecom major Bharti Airtel jumped 5.47%.

Index major Reliance Industries, which owns Reliance Jio, rose 2.79%. RIL will announce Q3 results today, 17 January.

The Supreme Court on Thursday dismissed pleas filed by Bharti Airtel and Vodafone Idea to review its earlier judgment that had asked telecom operators to pay their outstanding dues to the government. The review petitions were filed to seek relief on interest and penalty payments in connection to the verdict on AGR. The deadline for telecom companies to meet the license fee dues as per the apex court's AGR judgement is 23 January 2020.

According to reports, Vodafone Idea and Bharti Airtel are likely to file curative petitions, besides applying to the court for more time to make the payments, a combined Rs 89,000 crore for the two.

Supreme Court in October 2019 had ruled in favor of the government on the AGR issue. AGR is the basis on which DoT calculates levies payable by operators. Telecom operators are liable to pay around 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT.

Telcos argued that AGR should comprise revenue from telecom services, but DoT insisting that AGR should include all revenue earned by an operator, including that from non-core telecom operations.

The Nifty Bank index fell 0.83% to 31,590.65. Some banks have substantial exposure to the telecom sector and the SC verdict has raised fresh concerns over these lenders' asset quality.

Among private sector banks, IndusInd Bank (down 2.46%), Yes Bank (down 1.75%), Federal Bank (down 1.4%), ICICI Bank (down 1.14%), HDFC Bank (down 0.76%), RBL Bank (down 0.71%) and Kotak Mahindra Bank (down 0.11%) declined.

Among public sector banks, State Bank of India (down 1.62%), Corporation Bank (down 1.23%), United Bank of India (down 1.21%), Punjab & Sind Bank (down 1.2%), Central Bank (down 0.83%), IDBI Bank (down 0.69%), Bank of India (down 0.65%), Indian Bank (down 0.34%), Bank of Baroda (down 0.31%), Union Bank of India (down 0.28%), Allahabad Bank (down 0.27%) and Punjab National Bank (down 0.24%) declined.

Q3 2019 Results:

TCS fell 0.91%. The IT major unveiled Q3 results after trading hours today, 17 January 2020. Consolidated net profit rose 0.95% to Rs 8,118 crore on 2.25% increase in net sales to Rs 39,854 crore in Q3 December 2019 over Q2 September 2019.

TCS reported 0.20% year-on-year rise in profit compared with Rs 8,105 crore net profit reported for the same quarter last year. Revenue for the quarter rose 6.7% compared with Rs 37,338 crore in the year-ago period. The IT firm announced an interim dividend of Rs 5 per share for the quarter.

Commenting on the Q3 performance, Rajesh Gopinathan, chief executive officer and managing director, said: We saw the sectoral trends of the first half of the year continue to play out in the third quarter. Our robust order book during the quarter reflects our ability to pitch innovative technology solutions to address the business needs of different stakeholders in the enterprise, and participate in our customers' enterprise-wide transformation initiatives. This is also helping deepen and broaden our customer relationships, and make the business more resilient.

HCL Technologies rose 0.91%. The IT firm disclosed Q3 results after trading hours today, 17 January 2020. The company reported 16.31% year-on-year (YoY) rise in consolidated profit at Rs 3,037 crore in Q3 December 2019. Revenue increased 15.5% to Rs 18,135 crore during the quarter under review. EBITDA jumped 22.60% to Rs 4,470 crore YoY. EBIT margin stood at 20.20% in Q3FY20 against 19.60% in corresponding quarter period last year.

On a quarter-on-quarter (QoQ) basis, HCL Tech net income rose 14.6% while revenues rose 3.5%. EBITDA rose 8.9% over Q2 September 2019. The board of the IT firm declared an interim dividend of Rs 2 per share.

The company sees revenue growth between 16.5% and 17% in constant currency terms in FY20, while operating margin will be in the range of 19-19.50%.

Rallis India surged 14.16% after consolidated net profit surged 176.52% to Rs 38.05 crore on 27.85% rise in net sales to Rs 533.60 crore in Q3 December 2019 as against Q3 December 2018. Consolidated profit before tax climbed 146.05% to Rs 48.30 crore in Q3 December 2019 over Rs 19.63 crore in Q3 December 2019. The result was announced after trading hours yesterday, 16 January 2020.

Shares of Cyient advanced 0.58%. The IT firm reported a 10.35% rise in its consolidated net profit to Rs 107.60 crore in Q3 December 2019. Revenue from operations declined 4.57% to Rs 1,105.90 crore in Q3 December 2019 as against Q2 September 2019.

Karnataka Bank declined 4.59% to Rs 74.85 after net profit fell 12.3% to Rs 123.14 crore on 11.4% rise in total income to Rs 2,023.68 crore in Q3 December 2019 over Q3 December 2018. PBT (profit before tax) fell 2.2% to Rs 187.09 crore in Q3 December 2019 as against Rs 191.38 crore in Q3 December 2018. The Q3 earnings was declared after market hours yesterday, 16 January 2020.

South Indian Bank fell 1.26% after profit before tax (PBT) fell 5.2% to Rs 122.20 crore in Q3 December 2019 from Rs 128.89 crore in Q3 December 2019. Net profit rose 8% to Rs 90.54 crore in Q3 December 2019 over Q3 December 2018. Tax expenses fell 29.71% to Rs 31.66 during the period under review. Total income rose 13.8% to Rs 2187.73 crore in Q3 December 2019 as compared to Rs 1921.93 crore reported in the corresponding period last fiscal.

Tata Metaliks lost 1.43%. On consolidated basis, the company's net profit rose 7.4% to Rs 21.73 crore on a 1.4% decline in net sales to Rs 321.48 crore in Q3 December 2019 over Q3 December 2018. Profit Before Tax (PBT) stood at Rs 29.40 crore in Q3 2019 as against Rs 28.16 crore in Q3 2018, registering a rise of 4.4% YoY basis.

Stocks in Spotlight:

Piramal Enterprises (PEL) surged 5.18%. The company said its wholly-owned subsidiary, PEL DRG Dutch HoldCo BV, will sell its healthcare insights and analytics business to NYSE-listed Clarivate Analytics Plc for $950 million. The deal includes $900 million on closing and $50 million to be received at the end of 12 months thereon. The transaction is subject to shareholder approval and is expected to be completed by end of next month, PEL said in a release.

Jay Shree Tea & Industries surged 6.41% after the company decided to sell stake in two of its tea estates in Africa. The company has entered into a definitive agreement with Grand Lacs Trading SA, Belgium, to sale stake in Mata and Gisakura tea estates in Rwanda. The sale is expected to be completed by 14 February 2020.

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