Stocks To Watch: Max Hospitals, Precision Camshaft, UltraTech Cement, Jyothy Labs
Indian shares advanced on Friday, paced by gains in consumer shares. A rally in global equities also aided key local indexes, which rebounded from a six-week low on Wednesday and capped their best week in more than a month.
The benchmark S&P BSE Sensex closed 0.9 percent higher at 33,250.30 as 25 of 31 stocks rose. The NSE Nifty 50 Index closed 1 percent higher at 10,265.65.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.2 percent at 10,309.50 as of 6:40 a.m.
Here Are The Stocks To Watch Out For In Monday’s Session
- UltraTech Cement to set up 3.5 mtpa integrated cement plant at Pali, Rajasthan with investment of Rs 1,850 crore.
- Delhi Govt cancels license of Max Hospitals Shalimar Bagh.
- Precision Camshaft to provide corporate guarantee of Rs 149 crore to Bank of Baroda on behalf of subsidiary.
- Sadbhav Infra signs maintenance contract worth Rs 150 crore with subsidiary.
- KDDL to invest Rs 20 crore in Ethos.
- Jyothy Labs to borrow Rs 400 crore and provide corporate guarantee of Rs 60 crore to one of its subsidiary.
- Tata Chemicals receives NCLT nod for sale of Ure and fertilizer business to Yara Fertilizers India.
- Punjab Chemicals to raise Rs 150 crore via equity/debt.
- IL&FS Engineering wins 216 crore pipeline laying contract from GAIL.
- Power Grid has entered into loan agreement with Asian Infrastructure Investment Bank for $100 million.
- Govt to sell 67.50 lakh shares in NBCC at a discounted price of Rs 156.12 via OFS to employee. OFS to remain open from Dec. 28 - Jan. 05.
- Blue Star: SAIF India IV FII Holdings sold 17.4 lakh shares or 1.82 percent equity at Rs 800 each.
- Rama Steel Tubes: Bharti AXA Life Insurance bought 1 lakh shares or 0.6 percent equity at Rs 185 each.
- Indoco Remedies: FS INV ICVI Stewart Investors Asia Pacific Fund sold 10 lakh shares or 1.1 percent equity at Rs 266.04 each.
- Sadbhav Infra: Xander Investment Holding XVII sold 35.89 lakh shares or 1 percent equity at Rs 133.19 each.
- Religare Enterprises: Yes Bank sold 19 lakh shares or 1.1 percent equity at Rs 60.8 each
- Websol Energy System: India Max Investment Fund sold 7.95 lakh shares or 3.2 percent equity at Rs 100.33 each.
- Pincon Spirits: Lively Equipment’s Suppliers sold 2.25 lakh shares or 0.5 percent at Rs 32.41 each.
- Ruchi Soya: Cresta Fund sold 36.91lakh shares or 1.1 percent equity at Rs 19.42 each.
- Swiss Finance Corporation (Mauritius) Ltd sold 16.48 lakh shares or 1.5 percent equity at Rs 13 each.
- UBS Principal Capital Asia bought 16.48 lakh shares or 1.5 percent equity at Rs 13 each.
- Rupee ends at 64.46/$ on Friday versus 64.57/$ on Thursday.
- Future Supply Chain Solutions IPO subscibed 7.6 times on final day.
Who’s Meeting Whom?
- Matrimony to HDFC Mutual Fund, IDFC, Credit Suisse, ICICI Securities and others on Dec. 11 - 12.
- Prabhat Dairy to meet DSP Blackrock MF, Kotak Mutual Fund, Birla MF, SBI Life Insurance and others on Dec. 11.
- Seya Industries to meet Tata Mutual Fund, Axis Mutual Fund, Max Life and others on Dec. 12.
- Tata Motors to meet DSP Merrill Lynch and Credit Suisse on Dec. 12 - 13.
Earnings Reaction To Watch
Omax Auto (Q2 YoY)
- Revenue up 11 percent at Rs 289 crore.
- Net profit up 230 percent at Rs 3.3 crore.
- Ebitda up 43 percent at Rs 14.6 crore.
- Margins at 5.1 percent versus 3.9 percent.
Global Vectra Helicorp (Q2 YoY)
- Revenue up 11 percent at Rs 99 crore.
- Net profit down 20 percent at Rs 3.6 crore.
- Ebitda down 18.5 percent at Rs 15.4 crore.
- Margins at 15.6 percent versus 21.2 percent.
KDDL (Q2 YoY)
- Revenue down 15 percent at Rs 100.7 crore.
- Net profit up 200 percent at Rs 1.5 crore.
- Ebitda up 8.5 percent at Rs 7.05 crore.
- Margins at 7.0 percent versus 5.5 percent.
Aegis Logistics (Q2 YoY)
- Revenue up 84 percent at Rs 1,241 crore.
- Net profit up 108 percent at Rs 52 crore.
- Ebitda up 46 percent at Rs 67 crore.
- Margins at 5.4 percent versus 6.8 percent.
Federal Mogul (Q2 YoY)
- Revenues up 4 percent at Rs 329 crore.
- Net profit up 8 percent at Rs 22.8 crore.
- Ebitda up 1 percent at Rs 50 crore.
- Margins at 15.2 percent versus 15.7 percent.
Kellton Tech Solutions (Q2 YoY)
- Revenue up 21.8 percent at Rs 184 crore.
- Net Profit up 11.1 percent at Rs 14.6 crore.
- Ebitda up 28.8 percent at Rs 26.7 crore.
- Margin at 14.6 percent versus 13.8 percent.
Aurionpro Solutions (Q2 YoY)
- Revenue up 1.9 percent at Rs 168.7 crore.
- Net Profit up 497 percent at Rs 13.7 crore.
- Ebitda up 110 percent at Rs 29.8 crore.
- Margins at 17.7 percent versus 8.6 percent.
Soril Holdings and Ventures (Q2 YoY)
- Revenue down 11.5 percent at Rs 42.7 crore.
- Net loss of Rs 18.8 crore versus net loss of 3.7 crore.
- Ebitda loss of Rs 0.6 crore versus Ebitda profit of Rs 10.2 crore.
- Margins at -1.4 percent versus 21.1 percent.
Sharda Motor Industries (Q2 YoY)
- Revenue up 17.1 percent at Rs 305 crore.
- Net Profit up 62.7 percent at Rs 20.3 crore.
- Ebitda up 5.7 percent at Rs 36.4 crore.
- Margin at 12.0 percent versus 13.2 percent.
IFGL Refractories (Q2 YoY)
- Revenue up 3.3 percent at Rs 199 crore.
- Net Profit down 46.8 percent at Rs 9.4 crore.
- Ebitda down 9.0 percent at Rs 26.8 crore.
- Margin at 13.4 percent versus 15.3 percent.
Earnings To Watch
- Aarvee Denims
- Andrew Yule
- APL Apollo Tubes
- ARSS Infra
- Associated Alcohol
- BF Utilities
- Centrum Capital
- Colgate Palmolive
- Lasa Supergenerics
- Mawana Sugars
- MT Educare
- Nandan Denim
- PBM Polytex
- Repro India
- V2 Retail
- Nifty December Futures trading at 10,291.6, premium of 26 points versus 37 points.
- December Futures: Nifty OI up 3 percent , Bank Nifty OI down 12 percent.
- India VIX at 13.6, down 4.2 percent.
- Max OI for Dec series at 10,500 Call, OI at 56.2 lakhs, OI down 9 percent.
- Max OI for Dec series at 10,000 Put, OI at 86.8 lakh, OI up 1 percent.
- In Ban: HDIL, IRB Infra, Jet Airways, Jain Irrigation, Jaiprakash Associates and JSW Energy.
- New In Ban: Jaiprakash Associates and JSW Energy.
- Out Of Ban: None.
Alert: Only intraday positions can be taken in stocks which are in F&O ban, incase of rollover of these intraday positions there is a penalty.
Active Stock Futures
ICICI Direct on Narayana Hrudayalaya
- Initiated ‘Buy’ with price target of Rs 340.
- Blended model of affordability and high-quality services.
- Government drive on affordability favours company’s cost efficient, affordable model.
- Improvement in case mix to boost average realisation per operating bed.
- NH is well poised to thrive in the domestic healthcare delivery.
- Expect return on capital employed to improve to 19 percent by March 2020, compared to 12.5 percent clocked in the previous financial year.
- Expect revenue and net profit to grow at a compounded rate of 17 percent and 34 percent by March 2020.
Edelweiss Investment on GNA Axles
- Initiated ‘Buy’ with price target of Rs 455.
- Strong presence in exports and domestic market provides competitive edge.
- Cost reduction and new initiative to fuel the rise in topline and bottomline.
- Expect strong growth momentum in North America heavy truck market to drive exports.
- Healthy domestic demand scenario in M&HCV and OH to drive domestic business.
- Positives: healthy order book, focus on productivity improvement and limited capex.
- Triggers: healthy CV and tractor demand, cost reduction measure and plans to enter high realization SUV and LCV segment.
- Bull Case price target of Rs 505.
HSBC on Motherson Sumi
- Maintained ‘Buy’; raised price target to Rs 425 from Rs 376.
- Increased focus on innovation and integration.
- Expect innovation and cross selling to support business growth.
- Remain positive as it is well placed to benefit from increasing role of auto component suppliers.
- Innovative products on camera based technologies positions it for higher long-term growth.
- Recent fund raising to help for multiple acquisitions to achieve its 2020 goal.
Jefferies on Reliance Industries
- Downgraded to ‘Underperform’ from ‘Hold’; raised price target to Rs 790 from Rs 626.
- Ebitda may double to $20 billion by March 2023, much of that appears priced in.
- Expect refining margins to ease from the current fiscal highs.
- Capex to stay elevated led by telecom and E&P.
- Telecom ramp-up may be bumpier as ARPU/subscribers may not rise together.
- Return ratios to remain modest and net debt higher.
- Valuations are rich; Appears to have brushed off risks.
- Stiff hurdle for Reliance to outperform from here on.
Axis Capital on Tech Mahindra
- Maintained ‘Buy’; raised price target to Rs 605 from Rs 550.
- Management betting on integrated digital experience, interconnectivity through IoT, software transformation and network of the future.
- Financial performance bottomed out in the fourth quarter of previous fiscl.
- Expect revenue trajectory to witness slow and steady recovery.
- Margin improvement to drive earnings momentum over next four quarters.
- Expect $ revenue and net profit to grow at a compounded rate of 8 percent and 11 percent respectively by March 2020.
IDFC Securities on Jet Airways
- Maintained ‘Underperformer’; raised price target to Rs 666.
- Better yields on domestic routes.
- Higher fuel cost and lower traffic/yields on Gulf routes.
- Downgraded operating income for the current financial year due to forex loss; Upgraded net profit for the current and the next financial year due to lower finance cost.
- Expect tepid fleet additions to restrict Jet’s growth by March 2019.
- High leverage and cash generation in the current and next financial year to fall short of scheduled debt repayments.
Edelweiss on Jet Airways
- Upgraded to ‘Buy’ from ‘Hold’; Raised price target to Rs 822 from Rs 548.
- Confident on strategic measures initiated by the new CEO to turnaround stressed financials.
- Focusing on sustaining growth via cost rationalisation and balance sheet improvement.
- Renewed focus on domestic market by adding 15 percent fuel‐efficient B737‐Max.
- Enhanced code share to lead to market share gain on international routes.
- Expect operational efficiencies to improve from the next financial year.
Morgan Stanley on Maruti Suzuki
- Maintained ‘Overweight’; raised price target to Rs 10,563 from Rs 9,102.
- Maruti is one of the most profitable car OEMs globally.
- End-market opportunity and superior return on capital employed justify premium valuation.
- Maruti a key beneficiary of coming turn in demand.
- Suzuki-Toyota alliance to help set Maruti up for electric vehicles.
- Expect earnings per share to grow at a compounded rate of 22 percent by March 2020.
- Bull case price target of Rs 14,400.
- Mukesh Ambani drives 45% of India Inc’s capex since FY14 (Business Standard).
- Advertising spends to revive in India in 2018 (Business Standard).
- Airte, Jio in race to provide cloud services to govt (Business Standard).
- Thyssenkrupp makes offer to workers for Tata Steel deal (Financial Express).
- PNB, Indian Bank, Syndicate Bank likely to launch QIPs this month (Mint).
- BoB buys partners stake in mutual fund business; ownership reshuffle was necessary after a French co with stake in SBI MF bought the MF (Economic Times).
- Axis, BoB sell part of Essar loan at a discount; Axis sold $90 mn (~Rs 580 cr) at little less than 60 cents a dollar while Bank of Baroda got 71 cents a dollar (Economic Times).