Stocks To Watch: Aurobindo Pharma, HUL, Reliance Industries, L&T Tech, Wipro

Stocks in Asia gained Friday, building on the recent rally in risk assets, amid optimism for progress in U.S.-China trade talks that earlier lifted U.S. equities and Treasury yields.

Shares in Japan, Australia and South Korea rose and futures pointed to gains in Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.54 percent to 10,979 as of 7:05 a.m.

Short on time? well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

Here Are The Stocks To Watch In Trade On Thursday

• Aurobindo Pharma’s U.S. arm entered into an agreement to acquire seven marketed oncology injectable products, intellectual property and commercial infrastructure from Spectrum Pharma.
• Sundram Fasteners said that its plant located at Mahindra World City’s SEZ unit in Tamil Nadu had started its commercial production from Jan. 16.
• Bajaj Holdings & Investments received the Supreme Court’s nod to acquire 27 percent stake in Maharashtra Scooters. The company will acquire 30.85 lakh shares from the scooter company’s promoter Western Maharashtra Development Corporation.
• Rallis Industries board approved the merger of its wholly owned arm Metahelix Life Sciences with self.
• IL&FS Transportation said that its tunnel contract in Jammu Kashmir was terminated by NHIDCL with effect from Jan. 15.
• Great Eastern Shipping contracted to sell its large gas carrier and will be delivered to new buyer in the first half of financial year 2020.
• Cyient said it will consider a share buyback on a later date.
• Axis Bank clarified on news relating to Hawala Scam stating accounts have been opened after complying with KYC norms and the bank does not have any credit exposure to the said entity. The bank also stated that it was working closely with the authorities on this issue.
• Hindalco clarified that the company had stopped its mining operation at Durgamandi Mines since March 17 last year, as per the show-cause notice received from the Ministry of Environment Forest and Climate Change. This closure will not have material impact in the operations, as state in the press release.
• UCO Bank board approved the issue of equity shares on a preferential basis worth Rs 3,076 crore to the government of India and raising of Rs 1,000 crore via equity through qualified institutional placement.

Nifty Earnings To Watch

• Wipro

Other Earnings To Watch

• Atul
• Dhanlaxmi Bank
• ICICI Lombard General Insurance
• Kajaria Ceramics
• Larsen & Toubro Infotech
• MPS
• MT Educare
• Muthoot Capital Services
• NIIT Technologies
• SBI Life Insurance Company
• Zee Learn
• TGV Sraac
• Ugro Capital

Earnings Reaction To Watch

Reliance Industries (Q3, QoQ)

• Revenue up 4 percent to Rs 1,00,096 crore.
• Net profit up 0.8 percent to Rs 8928 crore.
• Ebitda down 2.6 percent to Rs 14507 crore.
• Ebitda Margins at 14.5 percent versus 15.5 percent.
• GRM down 7.4 percent to $8.8/bbl versus $9.5/bbl.

Reliance Jio (Q3, QoQ)

• Revenue up 12 percent to Rs 10,383 crore.
• Net profit up 22 percent to Rs 831 crore.
• Ebitda up 13.4 percent to Rs 4,052 crore.
• Ebitda Margins at 39 percent versus 38.7 percent.
• ARPU down 1.5 percent to Rs 130.

Hindustan Unilever (Q3, YoY)

• Revenue up 11.3 percent at Rs 9,558 crore.
• Net profit up 8.9 percent at Rs 1,444 crore.
• Ebitda up 21.8 percent at Rs 2046 crore.
• Margins at 21.4 percent versus 19.6 percent.
• Volume growth at 10 percent.

L&T Technology Services (Q3, YoY)

• Revenue up 35.9 percent at Rs 1,316.9 crore.
• Net profit up 47 percent at Rs 185.6 crore.
• Ebitda up 63 percent at Rs 241.7 crore.
• Margins at 18.4 percent versus 15.3 percent.

Cyient (Q3, QoQ)

• Revenue flat at Rs 1188 crore.
• Net profit down 27 percent at Rs 92.3 crore.
• EBIT up 11.1 percent at Rs 137.7 crore.
• Margins at 11.6 percent versus 10.4 percent.
• Other income of Rs 56.9 crore in base quarter.

AU Small Finance Bank (Q3, YoY)

• Net Interest Income up 38.9 percent at Rs 347.9 crore.
• Net profit up 20.8 percent at Rs 95.3 crore.
• Provisions at Rs 32.5 crore.
• GNPA at 2.09 percent versus 2.03 percent.
• NNPA at 1.31 percent versus 1.28 percent.

Rallis India (Q3, YoY)

• Revenue up 7 percent at Rs 417.4 crore.
• Net profit down 44.6 percent at Rs 13.9 crore.
• Ebitda down 26.7 percent at Rs 27.7 crore.
• Margins at 6.6 percent versus 9.7 percent.
• Materials Cost up 43 percent at Rs 281.6 crore.

Bulk Deals

GIC Housing Finance

• FID Funds Aian acquired 7 lakh shares or 1.30 percent equity at Rs 267.49 each.
• Fidelity Asian Values acquired 7.24 lakh shares or 1.35 percent equity at Rs 267.49 each.
• Fidelity Funds acquired 7 lakh shares or 1.30 percent equity at Rs 267.49 each.

Trading Tweaks

• NMDC record date for share buyback.
• TCS record date for payment of interim dividend at Rs 4 per share.

Insider Trading

• Waterbase promoter KCT Management Services acquired 47 shares between Jan. 10-14
• Eros International Media promoter Eros Worldwide acquired 50,000 shares on Jan. 17.
• Satin Creditcare Network promoter Trishashna Holdings acquired 56,000 shares on Jan 15.
• Aster DM Healthcare promoter and director Dr Azad Moopen acquired 12,000 shares on Jan. 16.

(As reported on Jan. 17)

Who’s Meeting Whom

• Deepak Fertilisers and Petrochemicals to meet investors on Jan. 18.

Money Market Update

• Rupee on Thursday snapped its four-day losing streak and closed at 71.04/$ versus Wednesday’s closing of 71.24/$.

F&O Cues

• Nifty January futures closed trading at 10,926, premium of 20 points.
• Max open interest for January series at 11,000 strike value call (open interest at 37.9 lakh shares)
• Max open interest for January series at 10,500 strike value put (open interest at 38.3 lakh shares)

Stocks In F&O Ban

• Adani Power
• Jet Airways

Put-Call Ratio

• Nifty PCR at 1.52 versus 1.54.
• Nifty Bank PCR at 1.09 versus 0.99.

Brokerage Radar

CLSA on L&T Technology

• Maintained ‘Buy’ with a price target of Rs 2,100.
• December quarter review: Stellar growth, margins beat and strong outlook.
• Large deals ramping-up, pipeline healthy & mining strong but one client issue.
• See more scope margin improvement; increase estimates by 30-40 basis points.

On HUL

CLSA

• Maintained ‘Outperform’ with a price target of Rs 2,010.
• Overall earnings in-line with our forecasts.
• Volume growth of 10 percent is commendable.
• Tougher base from hereon – execution is strength.

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 2,059 from Rs 2,086.
• Like focus on driving higher penetration in categories which are leading superior volume growth.
• Cut earnings estimate by 1-2 percent on lower pricing and other income assumptions.
• Demand environment stable with rural demand at 1.3 times of urban.

UBS

• Maintained ‘Neutral’ with a price target of Rs 1,800.
• December quarter review: Good volume growth, but profit miss.
• Management cautioned about one-off costs post completion of GSK acquisition.
• See EPS upgrades post Horlicks deal, still valuating impact on stock valuations.

On RIL

UBS

• Maintained ‘Sell’ with a price target of Rs 1,070.
• Petchem better than expectations; other income driven beat.
• Expect investors to look positively at increasing contribution from RIL's consumer businesses, robust performance in petchem and GRM.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,315.
• Petchem was the key positive surprise, while refining, Jio, and retail were in line.
• Expect RIL’s refining margins to strengthen to $15, $20 and $18 in the next three financial years respectively.
• See upside risk to consensus’ earnings estimates.

Edelweiss

• Maintained ‘Buy’ with a price target of Rs 1,415.
• Consumer and petchem shine; lower opex offsets lower GRM.
• Demerger of non-core telecom assets could prove to be a game changer.
• Multiple triggers: petcoke gasifier on schedule for March 2019 and an imminent FTTH roll out.

Prabhudas Lilladher

• Maintained ‘Accumulate’ with a price target of Rs 1,238.
• Stellar petrochemicals performance make up for weak refining earnings.
• RIL with high complexity well placed to capitalise benefits of IMO 2020.
• Maintain rating as we await clarity on petcoke commercialisation.