Stocks To Watch: IndiGo, Reliance Capital, Sun Pharma, SpiceJet, Zee Entertainment

Asian stocks chalked modest gains at the open, while U.S. markets remain shut due to the Memorial Day holiday.

Equity benchmarks in Japan, Australia and South Korea nudged higher after a muted session Monday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed as of 7:35 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.

Stocks To Watch

• Adani Ports & SEZ: Board to consider dividend and buyback on June 4. The total payout amount is expected to increase regular dividend payout.
• Music Broadcast board approved the acquisition of entire stake of Reliance Broadcast Network (Big FM) for Rs 1,050 crore. Initially the company will acquire 24 percent stake in the target company via preferential allotment for Rs 202 crore. As per this transaction, Reliance Capital debt will be reduced by Rs 1,200 crore, as per the company’s exchange filing .
• NTPC is doing due diligence to acquire a 700 MW coal-fired project being developed by Ind-Barath Energy (Utkal) according to an official familiar with the development. The company was approached by state-run Power Finance Corp., the lead lender in the financially stressed project, to explore a possible acquisition. (Bloomberg News)
• Hindustan Aeronautics: Fraud involving misappropriation of funds by a company official in collusion with six contractors has been noticed by the management and amount of Rs 18.8 crore has been provisionally assessed as fraudulent payments made to contractors from December 2013 to September 2018. The company says the matter is under investigation by the CBI.
• NMDC sets iron lump prices at Rs 3,100 per ton and fine prices at Rs 2,860 per ton, with effect from May 25.
• InterGlobe Aviation: Board approved the appointment of Wolfgang Prock-Schauer as President & Chief Operating Officer with effect from May 27.
• V-Mart retails opens a store in Assam.
• Vakrangee partnered with Lendingkart Finance for distribution of business loan through its distribution channels.
• Vascon Engineers received Letter of Intent amounting to Rs 172 crore from Tycoons Avanti Projects LLP for construction of a building.
• Manpasand Beverages cancelled its board meeting scheduled on May 28. Milind Babar resigned from the post of director with effect from May 27, due to press release issued by the GST Department.
• Info Edge (India) acquired Highorbit Careers Pvt. Ltd. (iimjobs.com) for cash consideration of Rs 80.82 crore. The company expects the deal to complete by June 30, 2019.

Earnings To Watch

• Sun Pharmaceutical Industries

Other Earnings To Watch

• SpiceJet
• Pfizer
• Aurobindo Pharma
• Lakshmi Vilas Bank
• Embassy Office Parks REIT
• Punjab National Bank
• NMDC
• Federal-Mogul Goetze
• Info Edge
• Insecticides (India)
• IRB Infrastructure Developers
• Ircon International
• ITI
• Shipping Corporation Of India
• JBF Industries
• Minda Corporation
• Navkar Corporation
• Jayshree Tea & Industries
• JBM Auto
• KDDL
• 3M India
• Adani Transmission
• Hubtown
• Teamlease Services
• Adhunik Industries
• Aegis Logistics
• Amtek Auto
• ANG Lifesciences India
• Asian Granito India
• Aster DM Healthcare
• Bharat Road Network
• DCM Financial Services
• Deccan Cements
• Deep Industries
• Electrotherm
• Galaxy Surfactants
• GATI
• Zydus Wellness
• Gravita India
• Gujarat A lakhalies and Chemicals
• Himadri Speciality Chemical
• Himatsingka Seide
• Hindustan Copper
• Honda Siel Power Products
• Kolte - Patil Developers
• kwality
• Linc Pen & Plastics
• Man Industries
• Manpasand Beverages
• Max Financial Services
• Olectra Greentech
• Orient Refractories
• Reliance Naval and Engineering
• S Chand And Company
• Sadhana Nitrochem
• Shalimar Paints
• Shreyas Shipping & Logistics
• SML Isuzu
• Talwalkars Better Value Fitness
• TCNS Clothing
• State Trading Corporation of India
• Vadilal Enterprises
• Vascon Engineers

Earnings Reaction To Watch

Adani Ports and Special Economic Zone (Q4, YoY)

• Revenue down 3.2 percent to Rs 3,082 crore.
• Net profit up 38.7 percent to Rs 1,285 crore.
• Ebitda flat to Rs 1,932 crore versus Rs 1931 crore.
• Margin at 62.7 percent versus 60.7 percent.
• Exceptional loss of Rs 69 crore due to impairment charges.

Zee Entertainment Enterprises (Q4, YoY)

• Revenue up 17 percent to Rs 2,019.3 crore.
• Net profit up 26.3 percent to Rs 291.7 crore.
• Ebitda down 5.2 percent to Rs 577.7 crore.
• Margin at 28.6 percent versus 35.3 percent.
• Exceptional loss of Rs 21.8 crore and tax reversal of Rs 52.4 crore.

InterGlobe Aviation (Q4, YoY)

• Revenue up 36 percent to Rs 7,883 crore.
• Net Profit up 5 times to Rs 590 crore.
• Ebitda up 90 percent to Rs 2,056 crore.
• Margin at 26.1 percent versus 18.7 percent.
• Yields up 12 percent to Rs 3.7/km versus Rs 3.31/km.

Oil India (Q4, QoQ)

• Revenue down 12.2 percent to Rs 3,086.9 crore.
• Net loss of Rs 208.5 crore versus net profit of Rs 1,233.5 crore.
• Ebitda down 29 percent to Rs 1,079.3 crore.
• Margin at 35 percent versus 43.3 percent.
• Depreciation Expenses up 14 percent to Rs 424.1 crore.
• Exceptional loss of Rs 1026.8 crore due to provisions related to pension payout.

Prestige Estates Project (Q4, YoY)

• Revenue up 7.1 percent to Rs 1.979.3 crore.
• Net profit up 29.9 percent to Rs 139.1 crore.
• Ebitda up 30.8 percent to Rs 487.9 crore.
• Margin at 24.7 percent versus 20.2 percent.
• Facility Management Expenses down 44 percent to Rs 40.9 crore.
• Increase in inventory of Rs 201.4 crore.

Music Broadcast (Q4, YoY)

• Revenue up 7.9 percent to Rs 81.9 crore.
• Net profit up 12.9 percent to Rs 18.4 crore.
• Ebitda up 16.8 percent to Rs 32 crore.
• Margin at 39.1 percent versus 36.1 percent.

Thomas Cook (Q4, YoY)

Numbers Not Comparable Due To Quess Corp Spinoff Adjustment

• Revenue down 47 percent to Rs 1,363.3 crore.
• Net profit down 99.8 percent to Rs 13.5 crore.
• Ebitda loss of Rs 54.6 crore versus Ebitda profit of Rs 7.9 crore.
• Exceptional gain of Rs 5,825.5 crore in base quarter.
• Cost of services up 11 percent to Rs 1,037.5 crore.
• Acquired 70 percent stake in China-based ATC Travel Services to establish inbound business.

Hindustan Aeronautics (Q4, YoY)

• Revenue up 10.8 percent to Rs 10,044.6 crore.
• Net profit up 13.1 percent to Rs 1,177.3 crore.
• Ebitda up 15.5 percent to Rs 2,493.1 crore.
• Margin at 24.8 percent versus 23.8 percent.
• Finance cost up 4.9 times to Rs 13.7 crore.
• Provisions up 32 percent to Rs 758.7 crore.
• Current borrowings up 5.3 times to Rs 4,058 crore.

Abbott India (Q4, YoY)

• Revenue up 15 percent to Rs 906.3 crore.
• Net profit up 13.1 percent to Rs 113.2 crore.
• Ebitda up 43.3 percent to Rs 152.9 crore.
• Margin at 16.9 percent versus 13.5 percent.
• Other income down 50 percent to Rs 29.4 crore.
• Inventory gain of Rs 56.4 crore.

Emami (Q4, YoY)

• Revenue up 3.7 percent to Rs 639.6 crore.
• Net profit down 6.6 percent to Rs 56.2 crore.
• Ebitda down 10.7 percent to Rs 154.7 crore.
• Margin at 24.2 percent versus 28.1 percent.
• RM as percent of sales at 32 percent versus 29 percent.
• Employee expenses up 17 percent to Rs 68.1 crore.

Hotel Leela Ventures (Q4, YoY)

• Revenue up 3.6 percent to Rs 43 crore.
• Net loss to Rs 29.8 crore versus Rs 15.8 crore.
• Ebitda profit at Rs 0.9 crore versus Ebitda loss of Rs 1.14 crore.

Natco Pharma (Q4,YoY)

• Revenue down 40.6 percent to Rs 455.7 crore.
• Net profit down 59.7 percent to Rs 120.8 crore.
• Ebitda down 61.3 percent to Rs 148.3 crore.
• Margin at 32.5 percent versus 49.9 percent.

Shilpa Medicare (Q4, YoY)

• Revenue down 14.9 percent to Rs 199.5 crore.
• Net profit down 22.7 percent to Rs 23.9 crore.
• Ebitda down 21.5 percent to Rs 37.3 crore.
• Margin at 18.7 percent versus 20.3 percent.

Century Plyboards (Q4, YoY)

• Revenue up 7.2 percent to Rs 583.2 crore.
• Net profit down 4.2 percent to Rs 34.2 crore.
• Ebitda down 23.3 percent to Rs 63.7 crore.
• Margin at 10.9 percent versus 15.3 percent.
• Inventory gain of Rs 24.4 crore.

IFB Agro Industries (Q4, YoY)

• Revenue down 3.1 percent to Rs 173.8 crore.
• Net profit down 21.3 percent to Rs 5.9 crore.
• Ebitda loss of Rs 0.3 crore versus Ebitda profit of Rs 12.9 crore.
• Raw materials costs up 25 percent to Rs 1,005.2 crore.

GE Power India (Q4, YoY)

• Revenue down 6 percent to Rs 344.6 crore.
• Net profit down 47.1 percent to Rs 27.3 crore.
• Ebitda down 79.2 percent to Rs 17.3 crore.
• Margin at 5 percent versus 22.7 percent.
• Other income of Rs 56.1 crore.
• Increase in work-in-progress to Rs 158.4 crore in base quarter.

Mold-Tek Packaging (Q4, YoY)

• Revenue up 10.1 percent to Rs 104.2 crore.
• Net profit up 29.4 percent to Rs 8.8 crore.
• Ebitda up 12.1 percent to Rs 18.5 crore.
• Margin at 17.8 percent versus 17.4 percent.

Omaxe (Q4, YoY)

• Revenue down 39 percent to Rs 299.3 crore.
• Net profit down 9.8 percent to Rs 20.3 crore.
• Ebitda down 34.9 percent to Rs 32.3 crore.
• Margin at 10.8 percent versus 10.1 percent.
• Finance cost down 94 percent to Rs 2.5 crore.

Shriram EPC (Q4, YoY)

• Revenue up 3.5 times to Rs 488.7 crore.
• Net profit of Rs 3.2 crore versus net loss of Rs 34.7 crore.
• Ebitda loss of Rs 0.9 crore versus Ebidta loss of Rs 25.9 crore.
• Operational expenses up 4.9 times to Rs 466.4 crore.

NHPC (Q4, YoY)

• Revenue up 71.5 percent to Rs 1,950.3 crore.
• Net profit up 2.5 times to Rs 492.3 crore.
• Ebitda up 2.5 times to Rs 983.1 crore.
• Margin at 50.4 percent versus 34 percent.
• Depreciation expenses up 19 percent to Rs 411.5 crore.
• Deferred tax reversal of Rs 333 crore in base quarter.

Bayer CropScience (Q4, YoY)

• Revenue down 57.1 percent to Rs 128.8 crore.
• Net loss of Rs 79.8 crore versus net loss of Rs 12.9 crore.
• Ebitda loss of Rs 121.8 crore versus Ebitda loss of Rs 12.6 crore.
• Inventory gain of Rs 161.3 crore.
• Employee expenses up 42 percent to Rs 94.8 crore.
• Tax reversal of Rs 40.1 crore on reversal of provision of income tax.
• Declares dividend of Rs 18 per share.

Uflex (Q4, YoY)

• Revenue up 13.5 percent to Rs 2,057.3 crore.
• Net profit down 1.4 percent to Rs 70.1 crore.
• Ebitda up 13 percent to Rs 256.8 crore.
• Margin flat at 12.5 percent.
• Other expenses up 23 percent to Rs 296.7 crore.

Usha Martin (Q4, YoY)

• Revenue up 9.6 percent to Rs 626.7 crore.
• Net profit up 4.2 times to Rs 47.9 crore.
• Ebitda up 70.9 percent to Rs 84.4 crore.
• Margin at 13.5 percent versus 8.6 percent.
• Deferred tax reversal of Rs 237.5 crore.
• Other income of Rs 42.2 crore in base quarter.

Elgi Equipment’s (Q4, YoY)

• Revenue up 14.2 percent to Rs 528 crore.
• Net profit up 31.4 percent to Rs 35.6 crore.
• Ebitda up 34.9 percent at Rs 61.5 crore.
• Margin at 11.6 percent versus 9.9 percent.
• Higher revenue, lower raw material cost aided operating performance.

Eveready Industries (Q4, YoY)

• Revenue down 10.9 percent at Rs 311.7 crore.
• Net profit at Rs 4.04 crore versus net loss of Rs 16.12 crore.
• Ebitda profit at Rs 12 crore versus Ebitda loss of Rs 3.9 crore.
• Lower raw material cost and employee cost lead to operational turnaround.
• Higher other income (11 times higher), reversal of tax also aided bottomline.
• Exceptional cost of Rs 23.3 crore related to workmen separation cost during quarter.

Gujarat Flurochemicals (Q4, YoY)

• Revenue up 38 percent to Rs 1,368.85 crore.
• Net profit to Rs 579 crore versus Rs 54.51 crore.
• Ebitda up 67 percent to Rs 282 crore versus Rs 169 crore.
• Margin at 21 percent versus 17 percent.
• Sharp jump in film exhibition business lead aided topline numbers.
• Tax credit of Rs 435 crore versus Rs 23.9 crore.

Pokarna (Q4, YoY)

• Revenue up 59.6 percent to Rs 144.67 crore.
• Net profit up 2 times to Rs 26.48 crore.
• Ebitda up 2.2 times at Rs 49.88 crore.
• Margin at 34.5 percent versus 24.9 percent.

Som Distilleries & Breweries (Q4, YoY)

• Revenue up three times to Rs 308.3 crore.
• Net profit up 2.4 times to Rs 15.4 crore.
• Ebitda up 2.2 times to Rs 37.7 crore.
• Margin at 12.2 percent versus 16.7 percent.
• RM as percent of sales at 55 percent versus 51 percent.

Mhpasis (Q4, QoQ)

• Revenue up 2.7 percent to Rs 2,025 crore.
• Net profit down 4 percent to Rs 266 crore.
• EBIT up 2.2 percent to Rs 334 crore.
• EBIT Margin at 16.5 percent versus 16.6 percent.

Bulk Deals

Vishal Fabrics

• Veena Investments acquired 2.88 lakh or 0.65 percent equity shares to Rs 296 each.
• LTS Investment Fund sold 2.88 lakh or 0.65 percent equity shares to Rs 296 each.

Pledge Share Details

• Reliance Nippon Life Asset Management promoter Reliance Capital revoked pledge of 5.3 crore shares on May 23.

Trading Tweaks

• 5Paisa Capital ex-date for rights issue at 1:1 at a premium of Rs 70 per share.
• Avadh Sugar & Energy, Mawana Sugars, Reliance Home Finance to move into short term ASM Framework .
• 5Paisa Capital to move out of short term ASM Framework.
• Avadh Sugar & Energy price band revised to 10 percent.

Who’s Meeting Whom

• Castrol India to meet Pari Washington Company Advisors on June 4.
• Eicher Motors to meet Citigroup Global Markets on May 28.
• TCI Express to meet Nalanda Capital, UTI MF and other investors on May 29.
• Blue Star to meet IndiaNivesh Securites and Stewart Investors from May 28-29.
• Magma Fincorp to meet Max Life Insurance, Premji Invest and other investors from May 28-30.
• Mahindra Lifespace Developers to meet BMO Global Asset Management and White Oak Capital from June 4-10.
• Jindal Steel & Power to meet Axis Capital, Morgan Stanley and other investors from May 28-June 12.
• Advanced Enzymes Technologies to meet HDFC AMC, Reliance Capital Trustee and other investors from May 28-29.
• Tata Steel to meet Kotak Securities on May 28.

Insider Trading

• Majesco promoter Sudhakar Ram sold 2 lakh shares on May 24.
• Jindal Stainless promoter Abhuday Jindal acquired 50,000 shares on May 24.
• Mukand promoter group acquired 60,000 shares from May 23-24.
• Mangalore Chemicals & Fertilizers promoter group Adventz Finance acquired 2.5 lakh shares on May 23.

Money Market Update

• The rupee on Monday closed at 69.50/$ compared to Friday’s 69.53/$.

F&O Cues

Futures

Nifty

• Nifty May futures closed trading at 11918.5, discount of 6 points.
• Nifty futures OI across series 4 percent, adds 8.3 lakh shares.

Bank Nifty

• Bank Nifty May futures closed trading at 31595.2, discount of 52 points.
• Bank Nifty OI across all series up 11 percent, adds 2.2 lakh shares.

Rollovers

• Nifty Rollover at 34 percent, Bank Nifty Rollover at 19 percent.

Options

• Nifty PCR at 1.26 Versus 1.23 (across all series).

Nifty Monthly Expiry 30 May

• Max open interest on call side at 12,500 (44 lakh shares) followed by 12,000 (37 lakh shares).
• Max open interest on Put side at 11,000 (38.6 lakh shares) followed by 11,700 (29.9 lakh shares).
• Max open interest addition seen at 11,900P (+9 lakh shares), 11,800P (+8.6 lakh shares).
• Max open interest shedding seen at 11,500P (-4.3 lakh shares), 11,800C (-4 lakh shares).

Stocks In F&O Ban

In Ban:

• Adani Power
• IDBI Bank

New In Ban:

• PC Jewellers

Brokerage Radar

On GAIL India

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 440.
• Gas transmission volume and tariff inline, but margins miss mildly.
• Gas marketing was better than expected despite volatility.
• LPG was a drag due to lower realisations.

UBS

• Maintained ‘Sell’ with a price target of Rs 335.
• Other income saved the day, miss in key segments.
• Expect a negative reaction to the results.
• GAIL is facing challenges for its LPG and petchem business segments due to lower commodity prices.

Deutsche Bank Research

• Maintained ‘Hold’ with a price target of Rs 360.
• Weak petchem and LPG segment performance.
• Gas transmission and trading business report robust profitability.
• Stock factors in the upside from gas volume growth and it trades at a higher multiple.

On Adani Ports

Deutsche Bank Research

• Maintained ‘Hold’ with a price target of Rs 350
• March quarter missed estimate on lower port margins
• Port volumes grew as expected at 19 percent on a yearly basis.
• Ebitda margin contracted due to one-off items like higher incentives to employees and provision for Goa operations.

CLSA

• Maintained ‘Buy’ with a price target of Rs 475.
• Coal drives traffic but hurts margin.
• Capex peaked, free cashflow up 25 percent and big pay-out review ahead.
• Good guidance for 2019-20 on a high base.

On Zee Entertainment

CLSA

• Maintained ‘Buy’; cut price target to Rs 535 from Rs 580.
• Encouraging advertising revenue growth drives beat.
• Ad growth despite TRAI’s tariff order implementation reflects network’s viewership gains.
• Binding agreement for strategic stake sale by July.

Credit Suisse

• Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 390 from Rs 560.
• Decent quarter in a tough environment, but balance sheet concerns surface.
• Expect both ad and subscription could be muted in 2019-20 on TRAI tariff order.
• Slowdown in consumption could result in FMCG holding back on advertising.

More Calls

Macquarie on United Spirits

• Maintained ‘Neutral’ with a price target of Rs 583.
• Liquor revenue contributes 10 percent of total tax revenue in Andhra Pradesh and hence is important.
• Andhra contributes 5-6 percent of United Spirits P&A volumes.
• Near term earnings impact of ban would be less than 1 percent.

CLSA on Tata Motors (Analyst Meet)

• Maintained ‘Sell’ with a price target of Rs 150.
• Strong focus on gaining market share in passenger vehicles.
• An aggressive strategy in EVs.
• CVs: better placed for BS6 emission norms but not too optimistic on scrappage.
• Near-term demand headwinds and regulatory concern.
• Like India business initiatives but concerned about truck cycle and JLR.

Credit Suisse on Reliance Industries

• Maintained ‘Neutral’; cut price target to Rs 1,350 from Rs 1,425.
• Polyester margin declines steeper and earlier than expected.
• Refining trend in Q1FY20 stays muted too.
• Cut FY20/21/22 EPS by 6.5 percent, 4 percent and 4 percent respectively to reflect soft polyester margin trend.

Credit Suisse on Emami

• Maintained ‘Outperform’; cut price target to Rs 435 from Rs 480.
• March quarter review: Weak growth even after adjusting for seasonality.
• Gross margin hit likely to be temporary as input cost spike has reversed.
• Problem areas like Kesh King and Healthcare range seeing recovery.
• Male grooming remains an unsolved problem.

Credit Suisse on Colgate Palmolive

• Maintained ‘Outperform’; cut price target to Rs 1,450 from Rs 1,500.
• Q4: Stabilisation of market share achieved.
• Volume growth steady in the context of the FMCG slowdown.
• Strong plans going into FY20, management hopeful of market share gains from hereon.

Credit Suisse on BHEL

• Maintained ‘Outperform’ with a price target of Rs 100.
• Overall reasonable results with better than expected margins.
• Expected lower provisions drive profitability; working capital slightly better.
• Order inflows lower than expected; strong L1 and prospects.