Electronic ticker boards indicate the latest stock figures inside the atrium at the National Stock Exchange (NSE) in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On Jan. 19

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.

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DayBreak

Here’s a quick look at all that could influence equities on Friday.

Global Cues

  • Most U.S. equity gauges ended lower, led by weakness in real estate, energy producers and household products makers.
  • The yield on 10-year Treasuries climbed above 2.6 percent for the first time since March, while the dollar failed to hold the previous day’s gain.
  • Investors speculated that Apple Inc. may sell some securities to pay the tax bill it will incur from its planned cash repatriation.

Europe Check

  • European stocks advanced but struggled to stay in the green as the euro shrugged off ECB attempts to talk down the currency earlier this week.
All You Need To Know Going Into Trade On Jan. 19

Asian Cues

  • Japan’s Topix index rose 0.6 percent in Tokyo.
  • Hong Kong’s Hang Seng Index were little changed.
  • Australia’s S&P/ASX 200 Index fluctuated and South Korea’s Kospi index added 0.2 percent.
  • Futures on the S&P 500 rose 0.1 percent after the underlying gauge slipped 0.2 percent Thursday, when the Dow Jones Industrial Average retreated 0.4 percent.

Commodity Cues

  • Gold was little changed at $1,327.25 an ounce.
  • West Texas Intermediate crude fell 0.4 percent to $63.69 a barrel.
  • Brent ended lower at $69.31/barrel, down 0.1 percent.
  • Sugar ended over two-year low at 13.08 cents per barrel; down 2.5 percent.

Shanghai Exchange

  • Steel trades higher for fourth day; up 0.7 percent.
  • Aluminium snaps three-day losing streak; up 0.7 percent.
  • Zinc trades lower for fourth day; down 0.1 percent.
  • Copper snaps five-day losing streak; up 0.1 percent.
  • Rubber trades lower; down 0.1 percent.

Indian ADRs

All You Need To Know Going Into Trade On Jan. 19

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

Earnings Reaction To Watch

HCL Technologies Consolidated Q3 (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.

Stocks To Watch

  • 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.

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.

Trading Tweaks

  • Circuit filter revised to 10 percent: Excel Crop Care and Thirani Projects.
  • Circuit filter revised to 5 percent: Gallant Ispat and Confidence Petroleum.

Who’s Meeting Whom?

  • Vipul to meet investors on Jan. 19.
  • Eris Life to meet Dolat Capital on Jan. 19.
  • Minda Industries to meet investors on Jan. 19.
  • Dishman to meet investors on Jan. 19.

Insider Trades

  • Jindal Hotels promoter bought over 31,000 shares from Jan. 1-17.
  • Fiberweb India promoter sold 45,000 shares from Jan. 15-16.
  • Manugraph India promoter sold 10,000 shares on Jan. 16.

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.

Rupee

  • Rupee closed at 63.86/$ on Thursday from 63.89/$ on Wednesday.

Top Gainers And Losers

All You Need To Know Going Into Trade On Jan. 19

Index Trends

All You Need To Know Going Into Trade On Jan. 19

F&O Cues

  • Nifty January futures trading at 10,810.8, discount of 6.2 points from a premium of 3.3 points.
  • January 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 January series at 11,000 Call (open interest at 62.2 lakh, up 24 percent).
  • Max open interest for January 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. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

  • Nifty PCR at 1.64 from 1.75.
  • Nifty Bank PCR at 1.10 from 1.59.

Stocks Seeing High Open Interest Change

All You Need To Know Going Into Trade On Jan. 19

Fund Flows

All You Need To Know Going Into Trade On Jan. 19

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.