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

Dr. Reddy’s, Chartered Logistics, Deccan Gold Mines, Goldstone Infra are among stocks to watch out for on Tuesday. 

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)
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)
  • 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).