Employees walk past electronic ticker boards that indicate the latest stock figures inside the atrium at the National Stock Exchange (NSE) in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Stocks To Watch: Asian Paints, Dr. Reddy’s, JK Paper, L&T Infotech 

  • Dr. Reddy’s Bachupally formulations plant 3 gets U.S.FDA EIR.
  • Asian Paints acquires remaining 49 percent stake in Sleek from Ahuja Family for Rs 50 crore.
  • L&T Infotech completes acquisition of 100 percent stake in banking solution provider Syncordis SA.
  • Natco Pharma QIP opens at a floor price fixed at Rs 937.63 per share.

Indian equity benchmarks rose for third day in a row led by gains in ITC, HDFC, TCS and State Bank of India.

The S&P BSE Sensex rose 0.62 percent or 205 points to 33,455.79 and the NSE Nifty 50 Index advanced 0.55 percent or 57 points to 10,322.25.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.13 percent at 10,359.50 as of 6:30 a.m.

Here Are The Stocks To Watch Out For In Tuesday’s Session

  • Dr. Reddy’s Bachupally formulations plant 3 gets U.S.FDA EIR.
  • GNA Axles started commercial production from its two newly installed Automated Machining Lines at its unit in Punjab.
  • Asian Paints acquired remaining 49 percent stake in Sleek from Ahuja Family for Rs 50 crore.
  • Xpro India sold land located in Kolkata for Rs 21 crore.
  • Tata Teleservices total number of subscribers in November, down 4.1 percent at 70.74 lakh versus. 73.78 lakh in October.
  • L&T Infotech completes acquisition of 100 percent stake in banking solution provider Syncordis SA.
  • Natco Pharma QIP opens at a floor price fixed at Rs 937.63 per share.
  • Canara Bank floats request for proposal to select bankers to raise equity through a QIP.
  • Supreme Court to hear matter of ban on pet coke and furnace oil on Dec. 13.

Bulk Deals

  • JK Paper: Societe de Promotion et de Participation Pour la Coopération sold 21.58 lakh shares or 1.2 percent stake at Rs 136 each.
  • Radico Khaitan: Societe Generale sold 14.88 lakh shares or 1.1 percent stake at Rs 270.05 each.

NBCC

  • Morgan Stanley France SAS sold 73.31 lakh shares or 0.8 percent stake at Rs 260.4 each.
  • Societe Generale bought 73.31 lakh shares or 0.8 percent stake at Rs 260.4 each.

SREI Infra

  • Morgan Stanley France SAS sold 28.24 lakh shares or 0.6 percent stake at Rs 100.65 each.
  • Societe Generale bought 28.24 lakh shares or 0.6 percent stake at Rs 100.65 each.

F&O Setup

  • Nifty December Futures trading at 10,346, premium of 24.4 points versus 26 points.
  • December Futures: Nifty open interest up 1 percent; Bank Nifty open interest up 2 percent.
  • India VIX at 14.1, up 3.5 percent.
  • Max open interest for Dec. series at 10,500 Call (open interest at 53.2 lakh, down 5 percent).
  • Max open interest for Dec. series at 10,000 Put (open interest at 85.4 lakh, down 2 percent).

F&O Ban

  • In ban: Fortis, HDIL, IRB Infra, Jet Airways, Jain Irrigation, JP Associates and JSW Energy.
  • New in ban: Fortis.

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.

Active Stock Futures

Stocks To Watch:  Asian Paints, Dr. Reddy’s, JK Paper, L&T Infotech 

Earnings Reaction To Watch

Repro India (Q2, YoY)

  • Revenue down 7 percent at Rs 69.55 crore.
  • Net profit down 86 percent at Rs 2.5 crore.
  • EBITDA loss at Rs 2.1 crore.
  • Margin at -3 percent versus 10.9 percent.

Arss Infra Projects (Q2, YoY)

  • Revenue down 59 percent at Rs 51 crore.
  • Net loss of Rs 28 crore versus loss of Rs 56 crore.
  • EBITDA loss at Rs 16 crore versus loss of Rs 37 crore.
  • Margin at -31.4 percent versus -29.6 percent.

Lasa Supergenerics (Q2, QoQ)

  • Revenue up 9 percent at Rs 64.5 crore.
  • Net profit up 24 percent at Rs 8.7 crore.
  • EBITDA down 14 percent at Rs 12.5 crore.
  • Margin at 19.4 percent versus 24.6 percent.

Mawana Sugar (Q2, YoY)

  • Revenue down 9.6 percent at Rs 175 crore.
  • Net loss of Rs 11 crore versus loss of Rs 9.5 crore.
  • EBITDA loss at Rs 10 crore.
  • Margin at -5.7 percent versus 0.5 percent.

Andrew Yule (Q2, YoY)

  • Revenue down 28.6 percent at Rs 95 crore.
  • Net profit up 31 percent at Rs 21.7 crore.
  • EBITDA down 28 percent at Rs 13.1 crore.
  • Margin at 13.8 percent versus 13.7 percent.

Nandan Denim (Q2, YoY)

  • Revenue up 37 percent at Rs 415 crore.
  • Net profit down 0.6 percent at Rs 16.1 crore.
  • EBITDA up 27 percent at Rs 63 crore.
  • Margin at 15.2 percent versus 16.3 percent.

V2 Retail (Q2, YoY)

  • Revenue up 33.5 percent at Rs 137.5 crore.
  • Net profit up 285 percent at Rs 5 crore.
  • EBITDA up 46.3 percent at Rs 9.8 crore.
  • Margin at 7.1 percent versus 6.5 percent.

Associated Alcohol and Breweries (Q2, YoY)

  • Revenue up 4.9 percent at Rs 64 crore.
  • Net profit at Rs 3.6 crore.
  • EBITDA up 14.3 percent at Rs 8 crore.
  • Margin at 12.5 percent versus 11.5 percent.

Earnings To Watch

  • Axiscades Engineering Tech
  • Chartered Logistics
  • Deccan Gold Mines
  • Goldstone Infra
  • Gujarat Apollo
  • Lincoln Pharma
  • Nitesh Estates
  • Poddar Housing
  • Simbhaoli Sugars
  • Speciality Restaurants
  • Talwalkars Better Value Fitness

Brokerage Radar

Credit Suisse on Zee Entertainment

  • Maintained ‘Outperform’ with price target of Rs 610.
  • Expect strong report in the second half; positive growth outlook on advertising and subscription.
  • Cut in GST rates to support advertising in the next financial year.
  • Phase 3 digitisation benefits should start benefiting Zee in the next financial year.
  • OTT launch another near-term trigger.
  • Like both the near and medium-term story at Zee.

Goldman Sachs on Motherson Sumi

  • Upgraded to ‘Buy’ from ‘Neutral’; Raised price target to Rs 430 from Rs 318.
  • Best positioned among our India autos coverage.
  • Wiring Harness - Largely insulated from electric vehicles; positively exposed to AVs.
  • Polymer Parts - Integral to premiumization, light-weighting and safety; EV/AV positive.
  • Rear View Mirrors - Digital mirrors are closer than they appear and more profitable
  • Raise revenue estimates for the next three financial years by 5 percent, 9 percent and 8 percent respectively.
  • Raise operating income estimates for for the next three financial years by 5 percent, 17 percent and 21 percent respectively.
  • Positives: global structural trends of premiumisation, light-weighting, modularisation and vendor consolidation.

Jefferies on Indian Energy Exchange

  • Initiated ‘Buy’ with price target of Rs 1,950.
  • IEX has a headstart in the power exchange market.
  • IEX to gain market share from less transparent bilateral traders.
  • Transparency to drive rise in exchange volume share.
  • Medium term power oversupply provides an additional safety net.
  • Expect volumes and net profit to grow at compounded rate of 14 percent by March 2020.
  • Pricing, a concern area, but within CERC trader limits.
  • High dividend payout ratio is a key positive; To keep return on equities more than 40 percent.
  • Bull Case price target of Rs 2,247.

Edelweiss on Asian Granito

  • Initiated ‘Buy’ with price target of Rs 720.
  • Well placed to leverage its vast distribution network and strong brand equity.
  • Prudently shifting focus to high-margin retail segment.
  • Rising utilisation and focus on premium products to propel bottom line.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 14 percent, 21 percent and 40 percent respectively by March 2020.
  • Expect return on capital employed to expand to 20 percent by March 2020, compared to 12 percent clocked in the previous financial year.
  • AGL entails strong re-rating potential on improvement in retail mix.

Edelweiss on Century Plyboards

  • Initiated ‘Buy’ with price target of Rs 442.
  • Only integrated player with presence across wood panel industry.
  • Capacity in place to tackle burgeoning opportunities.
  • Lower raw material cost to spur margin.
  • Company in last stage of capex and is well-positioned to reap benefit of anticipated demand.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 20 percent, 24 percent and 28 percent respectively by March 2020.
  • Strong compounding play in domestic wood panel industry.
  • Positive: Favourable GST rate, shift to organised players and government’s focus on housing.

Edelweiss on Greenlam Industries

  • Initiated ‘Buy’ with price target of Rs 1,477.
  • Leader to rake in GST benefits; Well leveraged to expand product basket.
  • Expect veneer business to turnaround by the next financial year.
  • Capex through, time to reap benefits.
  • Financial leverage to propel bottom-line growth.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 12 percent, 21 percent and 35 percent respectively by March 2020.
  • Expect healthy growth in existing segments and turnaround in newer segments.
  • Strong re-rating potential.

Edelweiss on Greenply Industries

  • Initiated ‘Buy’ with price target of Rs 395.
  • Expect pick up in real estate market, demand shift to organised players to propel growth.
  • MDF capacity augmentation: Potent revenue booster.
  • Plywood business perking up; high outsourcing to bolster revenue.
  • Tripling capacity to drive growth and to keep margins under pressure.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 20 percent, 22 percent and 21 percent by March 2020.
  • Aggressive capex phase by March 2019, to keep return on capital employed under pressure.
  • Triggers: start of MDF capacity and pick up in plywood demand.

Media Reports

  • Private Equity firms sounded out for sale of controlling stake in Kurlon (Economic Times).
  • ATC eyeing more tower assets in India (Economic Times).
  • Sugar barons suspect foul play in recent 13% price fall (Economic Times).
  • IndiaNivesh to raise Rs 900 crore for stresses company (Economic Times).
  • NCLT went against SC order: Unitech (Financial Express).
  • DLF Uber tie up for subsidised Mall visit rates (Financial Express).
  • Fund raising via debt placement rises 32% to Rs 51,000 crore in november (Financial Express).
  • Colgate Palmolive to pay Rs 4 per Share as Dividend (Financial Express).