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Stocks To Watch: Bharti Airtel, HDFC Bank, ITC, Kotak Mahindra Bank

Here are the stocks to watch out for in Friday’s trade.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Eric Thayer/Bloomberg)  
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Eric Thayer/Bloomberg)  
  • Torrent Pharma acquires U.S.-based generic pharmaceuticals Bio-Pharma Inc.
  • Tata Steel arm prices dollar bonds to raise $1.3 billion (Financial Express).
  • Jindal Hotels promoter bought over 31,000 shares from Jan. 1-17.
  • Newgen Software Technologies IPO closes. The issue was subscribed 8.1 times.

Asian equities headed for a sixth week of gains even as investors face the test of rising yields, with benchmark 10-year Treasuries reaching levels last seen in 2016. The dollar edged lower as the possibility of a government shutdown grew.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.2 percent to 10,831 as of 7:10 a.m.

Here Are The Stocks To Watch Out For In Friday’s Trade

  • RBI hikes foreign investment limit in Healthcare Global to 100 percent from 24 percent earlier.
  • Alembic board to consider buyback of shares on Jan. 23.
  • Biocon enters into a global partnership with Sandoz to develop, manufacture and commercialise multiple biosimilars in immunology and oncology.
  • Savita Oil Technologies to consider share buyback on Jan. 23.
  • Torrent Pharma acquires U.S.-based generic pharmaceuticals Bio-Pharma Inc.
  • Tech Mahindra to acquire 17.5 percent shares of Altiostar on a fully diluted basis.

F&O Setup

  • Nifty Jan. futures trading at 10,810.8, discount of 6.2 points from a premium of 3.3 points
  • Jan. Series: Nifty open interest unchanged; Bank Nifty open interest down 1 percent
  • India VIX ended at 13.9, up 0.7 percent
  • Max open interest for Jan. series at 11,000 Call (open interest at 62.2 lakh, up 24 percent)
  • Max open interest for Jan. series at 10,500 Put (open interest at 70 lakh, down 12 percent)

F&O Ban

  • In ban: Balrampur Chini, Dish TV, DLF, Fortis, GMR Infra, HCC, HDIL, IFCI, India Cement, Jain Irrigation, Kaveri Seed
  • New in ban: DLF
  • Out of ban: Capital First, Jindal Steel, JP Associates, Reliance Power

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 To Futures

Stocks To Watch: Bharti Airtel, HDFC Bank, ITC, Kotak Mahindra Bank

Bulk Deals

Websol Energy System

  • Garnet International bought 1.40 lakh shares or 0.5 percent equity at Rs 130.62 each.

Star Cement

  • SBI MF bought 1.53 crore shares or 3.7 percent equity at Rs 129.97 each.
  • Promoters sold 1.4 crore shares or 3.3 percent equity at an average of Rs 130.05 each.

Arman Financial Services

  • Param Capital bought 3.25 lakh shares or 5.7 percent equity at Rs 255.5 each.
  • Reliance MF sold 3.94 lakh shares or 6.9 percent equity at Rs 255.5 each.

Shah Alloys

  • General Insurance Corp of India sold 1.12 lakh shares or 0.6 percent equity at Rs 18.3 each.
  • United India Insurance sold 1 lakh shares or 0.5 percent equity at Rs 18.25 each.

IPO

  • Newgen Software Technologies IPO closes. The issue was subscribed 8.1 times.
  • Amber Enterprises India IPO continues on day 3. The issue is subscribed 3.6 times.

Earnings Reactions To Watch

HCL Technologies (Q3, Consolidated, QoQ)

  • Maintained revenue guidance of 10.5-12.5 percent for FY18 in constant currency terms.
  • Retains FY18 operating margin guidance at 19.5-20.5 percent.
  • Keeps FY18 dollar sales growth guidance at 12.1-14.1 percent.
  • Net profit down 6 percent at Rs 2,075 crore.
  • Revenue up 3 percent at Rs 12,809 crore.
  • Sales in dollar terms up 3.1 percent at $1,988 million
  • EBIT up 2.4 percent at Rs 2,510 crore.
  • Margin at 19.6 percent versus 19.7 percent.
  • Constant currency financial services operations grew 2.8 percent.

Bharti Airtel Q3 (QoQ)

  • Revenue down 7 percent at Rs 20,319 crore.
  • Ebitda down 6 percent at Rs 7,469 crore.
  • Margin at 36.76 percent from 36.38 percent.
  • Net Profit down 11 percent at Rs 306 crore.
  • ARPU down 15 percent to Rs 123.

Cyient Q3 (QoQ)

  • Revenue up 2 percent at Rs 983 crore.
  • Net profit down 21 percent at Rs 87.8 crore.
  • EBIT down 1 percent at Rs 112 crore.
  • Margin at 11.4 percent from 11.7 percent.

Zensar Technologies Q3 (QoQ)

  • Revenue up 4 percent at Rs 794 crore.
  • Net profit down 6 percent at Rs 59 crore.
  • EBIT up 26.8 percent at Rs 90 crore.
  • Margin at 11.3 percent from 9.3 percent.

Deepak Nitrite Q3 (YoY)

  • Revenue up 22 percent at Rs 371 crore.
  • Net profit up 170 percent at Rs 20 crore.
  • Ebitda up 68 percent at Rs 52 crore.
  • Margin at 14.0 percent from 10.2 percent.

Jubilant Industries Q3 (YoY)

  • Revenue up 4.9 percent at Rs 119 crore.
  • Net loss of Rs 2.2 crore from a net loss of Rs 5.6 crore.
  • Ebitda up 6 percent at Rs 5.3 crore.
  • Margin at 4.5 percent from 4.4 percent.

Kewal Kiran Clothing Q3 (YoY)

  • Revenue flat at Rs 94.4 crore.
  • Net profit up 25 percent at Rs 10.4 crore.
  • Ebitda up 48 percent at Rs 15.8 crore.
  • Margin at 16.7 percent from 11.4 percent.

Nifty Earnings To Watch

  • HDFC Bank
  • ITC
  • Kotak Mahindra Bank
  • Reliance Industries
  • Wipro

Other Earnings To Watch

  • Atul
  • CDSL
  • GNA Axles
  • HDFC Standard Life Insurance
  • ICICI Prudential Life Insurance
  • IDFC Bank
  • Jubilant Foodworks
  • Kansai Nerolac Paints
  • NIIT Technologies
  • PC Jeweller
  • Tata Elxsi

Brokerage Radar

Equirus on Ajanta Pharma

  • Initiated ‘Add’ with price target of Rs 1,648.
  • Company’s relentless growth trajectory likely to pause in the financial years through March 2019.
  • Growth recovery would only be back-ended.
  • Domestic business – on a strong footing.
  • Africa business - IPCA's re-entry should hurt.
  • Asia business - Middle East Asia and Central Asia to remain a drag.
  • US business - Bleak visibility over future launches.
  • Expect revenue to grow at a compounded rate of 10 percent over the financial years through March 2020.
  • Operating margins to contract by 250 basis points over the financial years through March 2020 on higher costs/overheads.
  • With a moderate growth profile, we expect return on equity and return on capital employed to decline by 10 percentage points.

IDFC on Hindustan Zinc

  • Maintained ‘Underperform’; raised price target to Rs 278 from Rs 267.
  • Results could have been better with increase in zinc and lead prices .
  • Higher cost of production offset pricing gain.
  • Volume guidance maintained for the current financial year; positive commentary on zinc market.
  • Cost of production to be 10 percent lower on a quarterly basis in the current quarter.
  • Stock price factors in average zinc price of US$3,300/t in the financial year-ending March 2020.
  • Comfort is dividend yield of 5 percent.

Citi on Yes Bank

  • Maintained ‘Buy’ with price target of Rs 400.
  • Strong growth, but margin and asset quality miss.
  • CASA and fee momentum continue with gains in retail lending franchise.
  • Slippages and credit costs remained relatively elevated.

Morgan Stanley on Yes Bank

  • Maintained ‘Overweight’ with price target of Rs 450.
  • Earnings in the previous quarter missed, driven by lower-than-expected net interest income and higher provisions, partially offset by higher non-interest income.

Emkay on UltraTech Cement

  • Maintained ‘Accumulate’; raised price target to Rs 4,686 from Rs 4,585.
  • Impressive volume growth, pricing pressure drags margins.
  • Volume beats estimates, realisation lags.
  • Management upbeat on volume growth on government initiatives.
  • Company well positioned to generate superior profits.
  • Positives: demand recovery, capacity expansion plans and under-utilized capacities.

Credit Suisse on UltraTech Cement

  • Maintained ‘Underperform’; raised price target to Rs 3,500 from Rs 2,900.
  • Weak results due to lower average selling price and higher costs.
  • Weak ASP trend continues; No meaningful pick-up in January.
  • JPA assets: Brand transition done; Focus on utilisation.
  • Expect high supply pressure in the next financial year.
  • Weak demand impacting pass through of cost increase.
  • Stock already factoring in upside from demand pick-up over the next three years.

HSBC on Hospitals

  • Regulatory overhang continues India.
  • Private players focus on volume growth.
  • Government continues scrutiny on healthcare services costs.
  • Maintain Buy on Apollo and Fortis on long-term growth outlook.

HSBC on Fortis

  • Maintained ‘Buy’; raised price target to Rs 225 from Rs 172.
  • Outlook remains positive for hospital business with scope of margin improvement.
  • Wait on update on SRL demerger progress.
  • Rationalisation & higher focus on retail customers continue to grow margins.
  • Fortis on track to focus on clinical excellence programs and hence improving case mix.

HSBC on Apollo

  • Maintained ‘Buy’ with price target of Rs 1,300.
  • Near-term challenges continue
  • Expect operating leverage-driven gradual recovery to begin in the next financial year.
  • Breakeven at Navi Mumbai expected by first half of the next fiscal year.
  • Tariff hike and rationalisation at Chennai should offset low volume growth.
  • Consolidation to benefit hospital business post capex expansion cycle.

Citi on Adani Ports

  • Maintained ‘Buy’ with price target of Rs 575.
  • Previous quarter was well-rounded and strong.
  • Volume growth was strong and broad based across commodities and ports.
  • Strong volumes led to strong headline numbers.
  • Management guided for increase in free cash flow and increase in dividend payout.
  • Prominent and strong position in Indian port services space.
  • Adani Ports one of the top picks in India infrastructure/logistics.

Goldman Sachs on Infra

  • L&T: Maintained ‘Buy’ and added to conviction List with a price target of Rs 1,600, implying a potential upside of 21 percent from last regular trade.
  • Container Corp: Upgraded to ‘Buy’ with price target of Rs 1,660, implying a potential upside of 17 percent form last regular trade. Improving execution and cash flow to drive re-rating.
  • Adani Ports: Maintained ‘Buy’ with price target of Rs 488, implying a potential upside of 15 percent form last regular trade. Successfully moving to cash generating mode from CAPEX mode.

Macquarie on Hindustan Zinc

  • Maintained ‘Outperform’ with price target of Rs 329.
  • Strong commodity prices drive previous quarter earnings.
  • No risk to current fiscal earnings despite hedge losses and higher costs.
  • Impressive growth pipeline with expansion on track.
  • Hindustan Zinc remains in a sweet spot with a strong volume growth pipeline.

Media Reports

  • Tata Steel arm prices dollar bonds to raise $1.3 billion (Financial Express).
  • NCLT upholds termination of coal mine tender to Monnet Ispat (Financial Express).
  • Galaxy surfactants IPO to open on Jan. 29 ( Price band Fixed At Rs 1470 To Rs 1480 per equity share) (Financial Express).
  • ED to sell Rs 4,000 crore Mallya shares in United Breweries (Economic Times).
  • Bhushan Power & Steel liquidation value doubled (Economic Times).