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.

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.

• 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

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.

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.

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

Fund Flows

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.