Stocks To Watch: Fortis Healthcare, HCL Infosystems, PNB, Reliance Power

Asian stocks started March on a weak footing after U.S. shares tumbled in afternoon trading Wednesday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.8 percent to 10,437 as of 7:10 a.m.

Indian equity benchmarks ended lower for the second day, and closed February with the biggest monthly decline in two years. The S&P BSE Sensex Index closed 0.6 percent lower at 34,150.12. The benchmark fell nearly 5 percent this month, the biggest monthly decline since February 2016.

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

• Auto companies will report February sales numbers.
• Fortis Healthcare : Auditor raises three red flags. Lenders invoked more shares; founders’ stake reduced to 0.7 percent from 3 percent.
• CBI Arrests PNB’s Internal Chief Auditor as part of its probe into the Nirav Modi fraud
• Reliance Power approved raising of up to Rs 2,000 crore via QIP to cut debt.
• HCL Infosystems arm to sell HCL MEA FZE share to Axis Investment for 4.12 million UAE dirhams.
• SH Kelkar says fragrance industry will pass on the increased impact of volatile raw material prices to customers.
• Idea Cellular will launch VoLTE services in select markets starting March 1.
• NR Agarwal Industries mulls setting up a new 500 TD Kraft paper unit.
• MOIL increases prices of products from March 1.
• Dynamatic Technologies board approved plan for demerger of auto division.
• Xpro India to sell/transfer Pithampur unit to JKM Ventures for Rs 14 crore.

F&O Setup

• Nifty March futures closed at 10,519, premium of 26.6 points versus 10 points on Tuesday.
• All series: Nifty open interest up 1 percent, Bank Nifty OI up 1 percent.
• India VIX ended at 13.8, down 0.8 percent.
• Maximum open interest for March series at 10,700 call strike (OI at 36.8 lakh, up 13 percent).
• Maximum open interest for March series at 10,400 put (OI at 37.2 lakh, up 4 percent).

F&O Ban

In ban: Fortis Healthcare, JP Associates, Oriental Bank of Commerce

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

Active Stock Futures

Bulk Deal

• Rama Steel Tubes: TCG Fund Fund sold 87,468 shares or 0.5 percent equity at Rs 195 each.
• Supreme Infra: Discord Exim Pvt. sold 2.81 lakh shares or 1.1 percent equity at Rs 63.3 each.
• Videocon Industries: IFCI sold 20.66 lakh shares or 0.7 percent equity at Rs 14.84 each.
• Punjab Alkalies & Chemicals: IDBI Bank sold 9.65 lakh shares or 3.6 percent equity at Rs 25.35 each.
• Sintercom India: KIFS Enterprises bought 1.52 lakh shares at Rs 72.16 shares.

Earnings Reactions To Watch

Jai Balaji Industries Q3 (YoY)

• Revenue up 56 percent at Rs 579 crore.
• Net loss of Rs 68 crore versus net loss of Rs 53 crore.
• Ebitda loss of Rs 37 crore from a loss of Rs 21 crore.
• Margin at -6.4 percent from -5.6 percent.

Fortis Healthcare Q2 (YoY)

• Net loss at Rs 45.7 crore versus net profit of Rs 31.4 crore.
• Revenue remained flat at Rs 1,197 crore.
• Ebitda up 7.6 percent to Rs 106.5 crore.
• Margin at 8.9 percent versus 8.3 percent.
• Exceptional loss of Rs 46 crore due to closure of hospital facility.

Fortis Healthcare Q3 (YoY)

• Net loss at Rs 36.8 crore versus net profit of Rs 442 crore.
• Revenue down 1 percent at Rs 1,120.7 crore.
• Ebitda down 54 percent at Rs 51.6 crore.
• Margin at 4.6 percent versus 10 percent.

Brokerage Radar

JPMorgan on BPCL

• Maintained ‘Overweight’ with price target of Rs 540.
• Bharat Oman Refinery stake sale would be sentiment positive.
• Could be a potential Rs 15 per share upside.
• Stake sale would partially monetise investments made by BPCL into BORL.
• Entry of new investor into BORL and price discovery would be positive for BPCL.

BoFAML on Steel

• Domestic steel price recovery has more legs.
• Expect one more price hike in March.
• Rising steel spreads to support further expansion in profitability in current quarter.
• Tata Steel and JSW Steel are preferred picks.
• SAIL should benefit as well, but concerned on high valuations.
• Margin expansion for Tata Steel to be higher on account of raw material integration.
• Rising utilization, demand uptick to support local spreads.
• Every 1 percent rise in steel prices, rise operating income and Tata Steel, JSW and SAIL by 2 percent, 3 percent and 8 percent respectively for the next fiscal. Raise net profit estimates 4 percent, 6 percent and 34 percent respectively.

Edelweiss on City Gas Distribution

• City gas distribution purview doubled; more geographical areas than ever.
• Long term positive: PNGRB quorum achieved, reforms to accelerate.
• Marketing exclusivity has been raised from five to eight years.
• Indraprastha Gas, Mahanagar Gas and Gujarat Gas will pursue high-potential areas.
• IGL, MGL and GGL better poised to leverage their expertise and strong balance sheets.
• Pecking Order: Gujarat Gas > Indraprastha Gas > Mahanagar Gas.