Investors stand at trading terminals in front of an electronic stock board at a securities brokerage in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)

All You Need To Know Going Into Trade On April 30

Asian stocks were off to a muted start, with Japan and China closed for holidays, as investors weighed the ongoing earnings season against signs of slowing economic growth.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.2 percent to 10,745.50 as of 7:05 a.m.

BQ Live

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

Global Cues

  • Most U.S. stocks edged higher as the debate continued over whether better-than-forecast corporate earnings are enough to offset signs the economy may be cooling.
  • The yield on 10-year Treasuries fell two basis points to 2.96 percent.
All You Need To Know Going Into Trade On April 30

Europe Check

  • European stocks hold steady as traders assess an onslaught of profit updates and a historic meeting between the leaders of North and South Korea.
All You Need To Know Going Into Trade On April 30
  • The euro gained 0.2 percent to $1.2131.
  • The British pound fell 1 percent to $1.3782.
  • Germany’s 10-year yield dipped two basis points to 0.57 percent.
  • Britain’s 10-year yield fell six basis points to 1.44 percent.

Asian Cues

  • The Kospi index gained 0.4 percent.
  • Australia’s S&P/ASX 200 Index rose 0.3 percent.
  • Futures on Hong Kong’s Hang Seng Index climbed 0.4 percent.
  • S&P 500 futures were up 0.1 percent.
  • The MSCI Asia Pacific Index gained 0.1 percent.

Here are some key events coming up this week:

  • The Federal Open Market Committee begins a two-day meeting on Tuesday. Fed policy makers will probably keep their target rate for overnight bank lending in a range of 1.5 percent to 1.75 percent, economists forecast.
  • It’s Golden Week in Japan, with public holidays Monday, Thursday and Friday. China is shut Monday and Tuesday.
  • The Reserve Bank of Australia’s monetary policy decision is out Tuesday. The central bank is expected to keep rates on hold, as they’ve been for more than 1 1/2 years.
  • The European Commission presents its spring economic forecasts, which include projections for growth, inflation, debt and deficit, and unveils its proposal for the EU’s seven-year budget framework on Wednesday.
  • China manufacturing and services purchasing-manager indexes are due, starting Monday.
  • Payroll gains in the U.S. probably picked up in April, with the unemployment rate forecast to drop to 4 percent, according to surveys of economists.
  • Earnings season continues, with Apple Inc. headlining. Other high profile results include Pfizer Inc., Merck & Co., Cigna Corp., HSBC Holdings Inc., BNP Paribas SA, Standard Chartered Plc, Tesla Inc., BP Plc, McDonald’s Corp. and Adidas AG.

Commodity Cues

  • West Texas Intermediate crude lost 0.1 percent to $68.02 a barrel.
  • Gold rose 0.1 percent to $1,324.85 an ounce.

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Indian ADRs

All You Need To Know Going Into Trade On April 30

Nifty Earnings To Watch

  • HDFC
  • Kotak Mahindra Bank

Other Earnings To Watch

  • Ceat
  • Container Corp
  • DHFL
  • Hindustan Zinc
  • Prakash Industries
  • Som Distilleries

Earnings Reactions To Watch

Reliance Industries Q4 (QoQ)

  • Revenue up 15 percent at Rs 84,037 crore.
  • Net profit up 3 percent at Rs 8,697 crore.
  • Ebitda down 2 percent at Rs 13,425 crore.
  • Margin at 16 percent versus 18.8 percent
  • Jio ARPU at Rs 137.1.

Also read: Reliance Industries Profit Misses Estimate In March Quarter

UPL Q4 (YoY)

  • Net profit down 1 percent at Rs 736 crore.
  • Revenue up 7 percent at Rs 5,691 crore.
  • Ebitda up 8 percent at Rs 1,218 crore.
  • Margin at 21.4 percent versus 21.1 percent.

Shree Cement Q4 (YoY)

  • Revenue up 15.3 percent at Rs 2,811 crore.
  • Net profit up 31 percent at Rs 399 crore.
  • Ebitda up 11.5 percent at Rs 629 crore.
  • Margin at 22.4 percent versus 23 percent.

Equitas Q4 (YoY)

  • Net Interest Income up 15 percent at Rs 279 crore.
  • Net profit up 400 percent at Rs 35 crore.

IDFC Q4 (YoY)

  • Net Interest Income down 7 percent at Rs 743.5 crore.
  • Net profit down 99 percent at Rs 1.6 crore.

RBL Bank Q4 (YoY)

  • NII up 42 percent at Rs 500 crore.
  • Net Profit up 37 percent at Rs 178 crore.
  • Provisions at Rs 113 crore versus Rs 82.3 crore (QoQ).
  • Gross NPA at 1.40 percent versus 1.56 percent (QoQ).
  • Net NPA at 0.78 percent versus 0.97 percent (QoQ).

Idea Q4 (QoQ)

  • Net loss at Rs 962 crore versus net loss of Rs 1,285 crore.
  • Revenue down 6 percent at Rs 6,137 crore.
  • Ebitda up 18 percent at Rs 1,447 crore.
  • Margin at 23.6 percent versus Rs 18.8 percent.
  • Other Income up six times to Rs 250 crore.

Also read: Idea Cellular Q4: Net Loss Narrows On Higher Margins, Other Income

Shoppers Stop Q4 (YoY)

  • Revenue down 7 percent at Rs 850 crore.
  • Net profit of Rs 21 crore versus net loss of Rs 36 crore.
  • Ebitda flat at Rs 52 crore.
  • Margins at 6.1 percent versus 5.7 percent.

NELCO Q4 (YoY)

  • Revenue up 5 percent at Rs 39 crore.
  • Net profit up 300 percent at Rs 4 crore.
  • Ebitda up 100 percent at Rs 8 crore.
  • Margins at 20.5 percent versus 10.8 percent.

Merck Q4 (YoY)

  • Revenue up 27 percent at Rs 301 crore.
  • Ebitda up 84 percent at Rs 42 crore.
  • Margin at 13.8 percent versus 9.9 percent.
  • Net profit up 53 percent at Rs 22.7 crore.
  • Exceptional gain of Rs 6.5 crore related to sale of office property in Mumbai in March quarter.

LG Balakrishnan Q4 (YoY)

  • Revenue up 12 percent at Rs 342.5 crore.
  • Ebitda up 20 percent at Rs 49 crore.
  • Margin at 14 percent versus 13.5 percent.
  • Net profit up 4 percent to Rs 22.7 crore.

MCX Q4 (YoY)

  • Revenue up 13 percent at Rs 70.6 crore.
  • Ebitda up 77 percent at Rs 23 crore.
  • Margin at 32.5 percent versus 20.7 percent.
  • Net Profit up 56.5 percent at Rs 34.2 crore.
  • Tax expenses lower at 24.7 percent versus 32.7 percent.
  • Other expenses down 19 percent at Rs 13.6 crore.

Greenply Q4 (YoY)

  • Revenue down 21.5 percent at Rs 339 crore.
  • Ebitda down 3 percent to Rs 54 crore.
  • Margin at 16 percent versus 12.9 percent.
  • Net profit up 10 percent at Rs 34.3 crore.

Can Fin Homes Q4 (YoY)

  • Revenue from operations up 10.7 percent at Rs 399 crore.
  • Net profit up 6.5 percent to Rs 75.5 crore.
  • Gross NPA at 0.43 percent versus 0.46 percent (QoQ).

Stocks To Watch

  • Aditya Ghosh resigned as president and whole-time director of InterGlobe Aviation.
  • Fortis board to consider all binding bids received on May 1.
  • Axis Bank board approves increasing borrowing limit to upto Rs 2 lakh crore.
  • Indian Oil to invest Rs 4,221 crore in Paradip petrochem plant.
  • Wockhardt to consider fund raising in May 4 meeting.
  • Jagran Prakashan to buyback upto 1.5 crore shares or 4.82 percent equity at a price of Rs 195.
  • Nitesh Estates says arbitral tribunal awarded Rs 42.50 crore to subsidiary in a land dispute.
  • RBI says restriction on Tata Chemicals’ share purchase withdrawn. Foreign share holding in Tata Chemicals below threshold.
  • Dilip Buildcon says it executed concession agreement with NHAI for orders worth Rs 917 crore.
  • PC Jeweller to consider buyback on May 25.

Who’s Meeting Whom

  • M&M to meet Wellington Management on April 30.

Insider Trades

  • VIP Industries promoter DGP Enterprises acquired 14,100 shares on April 23.
  • Jindal Drilling promoter Jindal pipes acquired 1 lakh shares on April 23.

Trading Tweaks

  • Pioneer Distilleries Ltd.’s circuit filter revised to 10 percent.
  • 5Paisa Capital Limited, Kingfa Science & Technology (India) Limited, Vimta Labs last trading day under T group

Rupee

  • Rupee ended at 66.66/$ on Friday versus 66.76/$ on Thursday.

F&O Cues

  • Nifty May Futures closed trading at 10,723.8 with a premium of 31.8 points versus 14.7 points.
  • All series-Nifty OI up 4 percent, Bank Nifty OI up 19 percent.
  • India VIX ended at 12.01, down 0.17 percent.
  • Max OI for May series at 11,000, OI at 51 lakh, OI up 16 percent.
  • Max OI for May series shifts to 10,500, OI at 37.6 lakh, OI up 23 percent.

Put-Call Ratio

  • Nifty PCR at 1.51 versus 1.48.
  • Nifty Bank PCR at 1.64 versus 1.25.

Stocks Seeing High Open Interest Change

All You Need To Know Going Into Trade On April 30

Fund Flows

All You Need To Know Going Into Trade On April 30

Brokerage Radar

Deutsche Bank on Reliance Industries

  • Maintained ‘Buy’; hiked price target to Rs 1,180 from Rs 1,150
  • March quarter reported strong earnings, led by a robust performance from petchem business.
  • Lower throughput, lower GRMs and rupee appreciation impact refining business.
  • Jio: Tariff competition impacts APRU; Jio to maintain focus on net adds.
  • Expect Jio revenue ramp-up and contribution from core sector projects.

Edelweiss on Reliance Industries

  • Maintained ‘Buy’; hiked price target to Rs 1,201 from Rs 1,174
  • Reported in-line quarterly results during January-March period on consolidated basis.
  • Retail and petchem delivered stellar performances led by volume-led growth.
  • Refining: GRM lower than estimate; New projects to revive earnings.
  • Expect Jio to be cost competitive and gain market share.

Motilal Oswal on Reliance Industries

  • Maintained ‘Buy’ with a price target of Rs 1,150.
  • Standalone operating income below estimates due to lower throughput.
  • Net profit benefiting from higher other income and lower depreciation.
  • Petchem drives standalone profitability.
  • Robust volume growth and healthy deltas benefit petchem.
  • Jio: Moderate growth pulled down by ARPU cuts.

Kotak on Maruti

  • Maintained ‘Add’; cut price target to Rs 9,700 from Rs 10,000.
  • Higher other expenses and increase in variable pay lead to slight miss.
  • Cut operating income for the current and next financial year by 2-3 percent due to reduction in margin assumptions.
  • Believe Maruti’s capacity will be booked for next three years.
  • Expect volume to grow at 11 percent compounded over the next three years.

JP Morgan on Maruti

  • Maintained ‘Overweight’ with a price target of Rs 10,200.
  • March quarter net income was below expectations on lower EBIT margins.
  • Higher commodity costs and Gujarat scale-up are headwinds to margins in the current financial year.
  • Volume growth to be in double digits despite capacity constraints.
  • Expect 12 percent volume growth for the current and next financial year.

CLSA on Maruti

  • Maintained ‘Buy’ with a price target of Rs 11,300
  • Good growth but margin miss in March quarter.
  • Demand outlook remains strong.
  • Cost pressures exists but Maruti has levers to offset.
  • Cut earnings per share estimates for the current and the next financial year by 3 percent to factor in slightly lower margins.

CLSA on UPL

  • Maintained ‘Buy’; cut price target to Rs 940 from Rs 960.
  • Weak quarterly results with modest revenue growth across key markets.
  • Revenue guidance for the current financial year of 10-12 percent; potential tailwind from stronger pricing.
  • UPL to benefit from improving industry dynamics in 2018.
  • Cut earnings per share for the current and the next financial year by 6-8 percent, owing to margin cut on increase in input prices.

Investec on UPL

  • Maintained ‘Buy’; hiked price target to Rs 1,050 from Rs 975
  • March quarter was Operationally in-line.
  • Performance in the U.S. is encouraging.
  • Control on working capital and reduced gearing are major positives.
  • Expect 13 percent compounded growth rate in earnings per share over the fiscal 2018-2020 with Return on equity of 22 percent.

Nomura on Shriram Transport

  • Maintained ‘Buy’; hiked price target to Rs 1,900 from Rs 1,750.
  • March quarter reported operationally strong performance.
  • Higher credit cost/coverage a small negative but conservative.
  • Cyclically growth trends very strong; Asset quality trends to improve.
  • Expect Shriram to deliver return on equities of 18-19 percent in the current and next financial year.

Morgan Stanley on Shriram Transport

  • Maintained ‘Overweight’ with a price target of Rs 1,600
  • March quarter reported good underlying numbers.
  • Net profit impacted by one-off gains from sale of stake.
  • Net profit ex-one-off gains missed due to additional provisions.
  • Pre-provisioning operating profit growth strong at 24 percent.

HSBC on SBI Life

  • Maintained ‘Buy’; hiked price target to Rs 840 from Rs 835.
  • Reported good set of March 2018 full year results.
  • SBI Life reported better persistency in all but the 61st month.
  • Expect SBI Life to continue to gain market share.
  • Focusing on more profitable products such as credit life.

JPMorgan on InterGlobe Aviation

  • Maintained ‘Overweight’ with a price target of Rs 1,690.
  • Aditya Ghosh to step down from the company.
  • Believe operational disruption at IndiGo will be minimal.
  • Await more details/clarification from the company.

Kotak Securities on Cummins India

  • Maintained ‘Reduce’; cut price target to Rs 715 from Rs 855.
  • Absence of drivers of bottom-line beyond market growth.
  • Target multiple lowered due to multiple factors.
  • Do not see any positive triggers to increase the multiple.
  • Factors:- weak exports, margin pressure, competition and lack of clarity on business scope of unlisted sister concerns.