All You Need To Know Going Into Trade On Feb. 9

Asian stocks fell Friday following a plunge in their U.S. counterparts as the dread that gripped equity markets earlier in the week re-emerged, amid concern rising interest rates will drag down economic growth.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell nearly 2 percent to 10,364 as of 7:00 a.m.

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DayBreak

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

Global Cues

• The dread that gripped equity markets earlier in the week re-emerged Thursday as U.S. stocks plunged into a correction on concern that rising interest rates will drag down economic growth.
• Selling accelerated in the final hour of trading as major indexes breached round-number milestones they blew past just weeks ago.

• Pressure again came from the Treasury market, where another weak auction put gave bond bears ammunition, sending the 10-year yield to the highest in four years.
• Equity investors took bond signal to mean interest rates will push higher, denting earnings and consumer-spending power.
• For a market that hadn’t fallen 3 percent from any high in more than a year, the week’s action was enough to rattle even the biggest equity bulls.
• Volatility spread across assets. The Cboe Volatility Index was more than double its level a week ago.

Europe Check

A one-day rebound in European equities proved to be short-lived as a widening selloff in the U.S. amid rate concern pushed the gauge lower for the eighth time in nine days.

Asian Cues

• ASX 200 futures fell 2.3 percent
• Nikkei 225 futures in fell 3 percent
• Kospi futures declined 2 percent.
• The MSCI Emerging Markets Index fell 0.9 percent.

Here is the key event scheduled for this week:

• The Bank of Russia is set to hold a rates decision Friday, with most economists forecasting a cut.

Commodity Cues

• West Texas Intermediate crude futures were down 1 percent at $61.15 a barrel.
• Gold fell less than 0.05 percent to $1,317.19 an ounce.
• Copper fell 0.5 percent to $6,845 per metric tonne.

Indian ADRs

Nifty Earnings To Watch

• BPCL
• HPCL
• M&M
• ONGC
• SBI
• Tata Steel

Other Earnings To Watch

• Bank of Baroda
• Bata India
• Central Bank Of India
• Dredging Corporation Of India
• India Cements
• Mahanagar Gas
• Marico
• Max Financial
• MOIL
• National Aluminium Company
• Oil India
• Sobha
• Sun TV
• Syndicate Bank

Earnings Reaction To Watch

Transport Corporation of India Q3 (YoY)

• Revenue up 24 percent at Rs 555 crore.
• Net profit up 65 percent at Rs 28 crore.
• Ebitda up 40 percent at Rs 53 crore.
• Margin at 9.5 percent versus 8.4 percent.

Talwalkars Better Value Fitness Q3 (YoY)

• Revenue up 10 percent at Rs 55 crore.
• Net profit up 24 percent at Rs 6.3 crore.
• Ebitda up 10 percent at Rs 25 crore.
• Margin at 45.2 percent versus 45.2 percent.

Coffee Day Enterprise Q3 (YoY)

• Revenue up 27 percent at Rs 965 crore.
• Net profit up 91 percent at Rs 22 crore.
• Ebitda up 11 percent at Rs 156 crore.
• Margin at 16.1 percent versus 18.5 percent.

Reliance Capital Q3 (YoY)

• Revenue up 20 percent at Rs 4,749 crore.
• Net profit up 51 percent at Rs 315 crore.

TV Today Network Q3 (YoY)

• Revenue up 23 percent at Rs 174 crore.
• Net profit up 36 percent at Rs 35.7 crore.
• Ebitda up 37 percent at Rs 57 crore.
• Margin at 32.9 percent versus 29.7 percent.

Deepak Fertilizers and Petrochemicals Q3 (YoY)

• Revenue up 50 percent at Rs 1,641 crore.
• Net profit up 11 percent at Rs 56.5 crore.
• Ebitda up 6.5 percent at Rs 145 crore.
• Margin at 8.9 percent versus 13.3 percent.

SKF India Q3 (YoY)

• Revenue down 2 percent at Rs 700.5 crore.
• Net profit up 32 percent at Rs 86.2 crore.
• Ebitda up 38 percent at Rs 123 crore.
• Margin at 17.6 percent versus 13.4 percent.

SAIL Q3 (YoY)

• Revenue up 21 percent at Rs 15,324 crore.
• Net profit at Rs 43.2 crore versus net loss of Rs 794.8 crore.
• Ebitda at Rs 1,440 crore versus loss of Rs 42.8 crore.
• Margin at 9.4 percent versus -0.4 percent.

Tata Communication Q3 (QoQ)

• Revenue down 2.4 percent at Rs 4,115 crore.
• Net profit at Rs 10.1 crore versus net loss of Rs 250 crore.
• Ebitda up 8.5 percent at Rs 613 crore.
• Margin at 14.9 percent versus 13.4 percent.

Future Consumer Q3 (YoY)

• Revenue up 42 percent at Rs 784 crore.
• Net loss at Rs 3.1 crore versus loss of Rs 11.3 crore.
• Ebitda at Rs 16.5 crore versus Rs 3.2 crore.
• Margin at 2.1 percent versus 0.6 percent.

Trent Q3 (YoY)

• Revenue up 20 percent at Rs 521 crore.
• Net profit up 2 percent at Rs 38 crore.
• Ebitda up 42 percent at Rs 68.6 crore.
• Margin at 13.2 percent versus 11.2 percent.

Parag Milk Foods Q3 (YoY)

• Revenue up 16 percent at Rs 519 crore.
• Net profit at Rs 25 crore versus loss of Rs 41 crore.
• Ebitda at Rs 59 crore versus loss of Rs 18 crore.
• Margin at 11.3 percent versus -4.1 percent.

Brigade Enterprise Q3 (YoY)

• Revenue down 24 percent at Rs 424 crore.
• Net profit up 61 percent at Rs 48.9 crore.
• Ebitda up 22 percent at Rs 159 crore.
• Margin at 37.6 percent versus 23.2 percent.

Glenmark Pharma Q3 (YoY)

• Revenue down 13 percent at Rs 2,204 crore
• Net profit down 78 percent at Rs 105 crore
• Ebitda up down 58 percent at Rs 322 crore
• Margin at 14.6 percent versus 30.2 percent

Petronet LNG Q3 (YoY)

• Revenue down 0.2 percent to Rs 7,757 crore.
• Net Profit down 10 percent to Rs 529 crore.
• Ebitda down 6 percent to Rs 847 crore.
• Margin at 10.9 percent versus 11.6 percent.

Manappuram Finance Q3 (YoY)

• Revenue down 6 percent at Rs 742 crore.
• Net profit down 9 percent at Rs 173 crore.
• Net interest income up 4 percent at Rs 546 crore.

Eros International Q3 (YoY)

• Revenue down 42 percent at Rs 194 crore.
• Net profit down 36 percent at Rs 65 crore.
• Ebitda down 30 percent at Rs 92 crore.
• Margin at 47.4 percent versus 39.6 percent.

Dhanlaxmi Bank Q3 (YoY)

• Net interest income up 9 percent at Rs 83.7 crore.
• Net loss of Rs 21.7 crore versus loss of Rs 8.2 crore.
• Gross NPA at 6.96 percent versus 6.11 percent (QoQ).
• Net NPA at 4.08 percent versus 3.67 percent (QoQ).

Torrent Pharma Q3 (YoY)

• Revenue up 2.4 percent at Rs 1,477 crore.
• Net profit down 75 percent at Rs 58 crore.
• Ebitda up 14 percent at Rs 359 crore.
• Margin at 24.3 percent versus 21.9 percent.

ABB India Q4 (YoY)

• Revenue up 11 percent at Rs 2,779 crore.
• Net profit up 5.3 percent at Rs 171.5 crore.
• Ebitda up 1 percent at Rs 293 crore.
• Margin at 10.5 percent versus 11.6 percent.

Andhra Bank Q3 (YoY)

• Net interest income up 37.3 percent at Rs 1,672 crore.
• Net loss of Rs 532 crore versus profit of Rs 57 crore.
• Gross NPA at 14.26 percent versus 13.27 percent (QoQ).
• Net NPA at 7.72 percent versus 7.55 percent (QoQ).

Stocks To Watch

• Vedanta to close all mining operations in Goa from March 16.
• Indraprastha Gas got authorization for Karnal CGD Network.
• Mcnally Bharat Engineering board to consider fund raising on Feb. 13.
• Marathon Nextgen board approved stock split.
• SQS India BFSI shut down Australian branch office.
• Axis Bank sold 20 lakh shares of NSDL at Rs 825 each for Rs 165 crore.
• Eros International divested its entire 51 percent stake in wholly owned subsidiary Ayngaran International to a British citizen.
• Canara Bank to raise up to Rs 1,000 crore via QIP, rights, preferential issue of shares.
• Indiabulls Realty Board meet on Feb. 14 to consider restructuring of business.
• Malvinder Mohan Singh and Shivinder Mohan Singh have tendered their resignation from the directorship of Fortis Healthcare.

Bulk Deals

• Galaxy Surfactants: SBI Mutual Fund bought 2.53 lakh shares or 0.7 percent equity at Rs 1,704.5 each.

Triveni Turbine

• Reliance Capital MF bought 1.52 crore shares or 4.6 percent equity at Rs 126 each.
• Amansa Holding sold 1.53 crore shares or 4.7 percent equity at Rs 126 each.

Corporate Action

• Pidilite Industries ex date for determining buyback eligibility.
• Indiabulls Ventures trades ex-rights.
• Claris Lifesciences last trading day before acquisition window for takeover/buyback/delisting.
• Gujarat NRE Coke last trading day before suspension in trading.

Who’s Meeting Whom

• Tata Steel to meet Capital World Investors on Feb. 12.
• Info Edge to meet investors from Feb. 9-27.
• Sintex Plastics to meet investors from Feb. 9-22.

Insider Trades

• Kewal Kiran promoter bought 2,000 shares on Jan. 31-Feb. 5.
• Nocil promoter sold 1 lakh shares on Feb. 5.

Rupee

• Rupee closed at 64.26/$ on Thursday from 64.29/$ on Wednesday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty February futures trade at 10,572, discount of 3.7 points from 10 points.
• February series: Nifty open interest down 4 percent; Bank Nifty open interest down 3 percent.
• India VIX ended at 17.7, down 8.7 percent.
• Max open interest for February series at 11,100 call strike (open interest at 57.9 lakh, up 4 percent).
• Max open interest for February series at 10,500 put (open interest at 58.8 lakh, up 19 percent).

F&O Ban

• In ban: Fortis Healthcare, GMR Infrastructure, HDIL, Jain Irrigation.
• Now new stocks in or out of ban list.

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

Put-Call Ratio

• Nifty PCR at 1.09 from 1.00.
• Nifty Bank PCR at 0.87 from 0.70.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

JPMorgan on India Stressed Asset Auction

• JSW emerges as the highest bidder in Monnet and Bhushan Steel.
• Vedanta highest bidder in Electrosteel Steel.
• Tata is among the lower bids so far.
• JSW seems best placed so far; Bids in partnership with PE firms reduce balance sheet risk.
• Bids so far have been in line with expectations of 50-70 percent haircut on total claims.

Credit Suisse on ACC

• Maintained ‘Neutral’ with price target of Rs 1,300.
• Strong volumes but weak realisations.
• Volume mainly driven by a low base quarter of demonetization.
• Higher than expected raw material and freight cost was a negative surprise.
• Demand continues to be soft with low prices in January 2018.

Deutsche Bank on Bharat Forge

• Maintained ‘Buy’ with price target of Rs 830.
• December quarter showed strong revenue growth across all segments.
• Previous quarter results strengthened revenue growth trajectory conviction.
• Continue to see recovery in business drivers.
• Expect revenue and earnings per share to compound at 14 percent and 28 percent over the financial years through March 2020.

Credit Suisse on Bharat Forge

• Maintained ‘Neutral’; raised price target to Rs 780 from Rs 730.
• December quarter’s revenue, operating profit and net profit beat estimates.
• Second strong quarter for the domestic business.
• Robust growth in exports continues.
• Execution of new order wins worth $100 million would ramp-up over the next two years.
• December quarter was strong, but the base gets tougher from current quarter.
• Prefer Motherson over Bharat Forge as the latter is a highly cyclical business.

Macquarie on ACC

• Maintained ‘Neutral’ with price target of Rs 1,840.
• December quarter’s volume growth at the expense of prices.
• Capacity to constrain volume growth.
• Expect ACC to return to 3-4 percent per annum volume growth in 2018 and 2019.
• ACEM-ACC merger final step is still awaited.
• Expect operating income and earnings per share to compound at 23 percent and 40 percent respectively in the next two years.

Credit Suisse on Cadila Healthcare

• Maintained ‘Neutral’ with price target of Rs 465.
• December quarter was a negative surprise on margin.
• Operating profit miss of 13 percent due to weak margins.
• U.S. sales decline sequentially driven by Lialda.
• India business for Cadila was strong.

Deutsche Bank on Cadila Healthcare

• Maintained ‘Buy’; cut price target to Rs 487 from Rs 506.
• December quarter’s earnings growth was driven by higher gTamiflu sales.
• U.S. and India businesses drive strong performance.
• Expect increase in other operating expenses to cap operating margin growth.

Morgan Stanley on Coffee Day Enterprises

• Maintained ‘Overweight’ with price target of Rs 310.
• December quarter was a steady quarter.
• Café SSSG of 7 percent - key positive for the quarter.
• Loss of input tax credit and muted menu price hikes affected profitability.

Morgan Stanley on Tata Communications

• Maintained ‘Overweight’ with price target of Rs 753.
• December quarter showed strong data performance.
• Margins improved via cost optimisation initiatives.
• Performance was driven by new customer wins and increased revenue from existing customers.
• Growth services are on track.
• Management commentary on developments with Tata Teleservices is key to watch.

Morgan Stanley on Petronet LNG

• December quarters volumes were strong, supporting core earnings.
• LNG prices have started to fall steadily; Expect strong demand.
• Kochi terminal to drive upside for the next fiscal.
• Triggers: steady progress on underutilised Kochi terminal and clarity on growth projects.
• Market not discounting full growth potential; Valuation looks attractive.

Morgan Stanley on Future Consumer

• Maintained ‘Overweight’ with price target of Rs 95.
• December quarter showed strong revenue growth and operating leverage.
• Overall revenue growth driven by fruits and vegetables, FMCG, and staples.
• Scale-driven efficiencies, better fixed-cost absorption, and product mix improvement to drive margins.

Morgan Stanley on SAIL

• Maintained ‘Underweight’ with price target of Rs 61.
• December quarter was a good quarter; Sustainability is key.
• Better-than-expected realization - key positive surprise.
• EBITDA/ton beat driven by lower-than-expected per ton employee cost.

Morgan Stanley on Dalmia Bharat

• Maintained ‘Overweight’ with price target of Rs 3,189.
• December quarter was a strong quarter; Focus on expansion and growth.
• Dalmia Bharat will continue to deliver industry-leading volume growth.
• Cost focus should further support operating income progression and cash flow.
• Deleveraging is underway as well.