Stocks To Watch: Vedanta, IRB Infrastructure, J Kumar Infraprojects

Asian stocks began trade on a mixed note as investors awaited the monthly U.S. jobs report, and as a rally off the lows in U.S. equities wasn’t enough to send the S&P 500 into positive territory.

Australian stocks were little changed, while South Korean equities slipped. With Japan closed for a public holiday, no equities will trade in Tokyo and Treasuries will remain shut until the London session.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.3 percent lower at 10,671.50 as of 7 a.m.

Here Are The Stocks To Watch In Friday's Trading:

• Emami board approves 1:1 bonus issue
• JSW Energy increased capex aim for electric vehicles to Rs 6,500 crore
• Fortis Healthcare says board to meet on May 10 to consider various bids/proposals received by the company
• J Kumar Infraprojects wins order worth Rs 445 crore for Pune metro
• Vedanta India capex guidance $1.5 billion for FY19
• IRB Infra sees Rs 10,000 crore revenue, Rs 1,000 crore of net profit by FY20
• Cera Sanitaryware board approves Rs 100 crore capex for FY19
• Indigo says has not received any communication from SEBI
• BASF India approves proposal to transfer paper wet-end and water chemicals business to Solenis
• Thirumalai Chemicals board approves 10:1 stock split
• Tata Motors to sell its defense and aerospace portfolio to Tata Advanced Systems Limited (TASL) (a wholly-owned subsidiary of Tata Sons Limited) to unlock their full potential.

F&O Setup

• Nifty May Futures closed trading at 10,706.5 with premium of 26.9 versus 29.4 points
• All series: Nifty open interest unchanged, Bank Nifty open interest up 2 percent
• India VIX at 12.9, up 1.1 percent
• Max open interest for May series at 11,000 (open interest at 59.7 lakh, open interest down 1 percent)
• Max open interest for May series shifts to 10,500 (open interest at 45 lakh, open interest down 1 percent)

Bulk Deals

• Uniinfo Telecom Service: Systematix Shares and Stocks (India) Limited bought 60,000 shares at Rs 52.9 each.

Fortis Healthcare

• York Asian Opportunities Investments Master Fund, L.P. bought 95 lakh shares (1.8 percent) at Rs 157 each.
• York Asian Strategic Metric Master, L.P bought 1.57 crore shares (3 percent) at Rs 157 each.
• York Multi-Strategy Master Fund, L.P. bought 29.60 lakh shares (0.6 percent) at Rs 157 each.
• UBS Principal Capital Asia Ltd sold 2.82 crore shares (5.4 percent) at Rs 157 each.

F&O Ban

• In ban: PC Jeweller, IRB Infra, Just Dial, Jet Airways
• New in ban: Just Dial, Jet Airways

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

Trading Tweaks

• Pioneer Distilleries circuit filter revised to 5 percent.
• Jaypee Infratech shifted to T group.
• Prism Cement Ltd.’s name changed to Prism Johnson Ltd.
• Pudumjee Industries Ltd.’s name changed to 3P Land Holdings Ltd.

Insider Trades

• KM Sugar Mills promoters sold 45,000 shares on May 2.
• Vishal Fabrics promoter Vedprakash Chiripal acquired 41,250 shares from April 20 – 30.

Earnings Reactions To Watch

Vedanta (Q4, YoY)

• Revenue up 22.7 percent at Rs 27,630 crore
• Net Profit up 81.41 percent at Rs 4,802 crore
• EBITDA up 6.6 percent at Rs 7,837 crore
• Margin at 28 percent vs 33 percent

L&T Finance Holdings (Q4, YoY)

• Income from operations up 27 percent to Rs 2,748 crore
• Net Profit grew 28.6 percent to Rs 406 crore
• Gross NPA at 4.80 percent vs 5.49 percent (QoQ)
• Net NPA at 2.34 percent vs 2.87 percent (QoQ)

JSW Energy (Q4, YoY)

• Revenue down 4.7 percent at Rs 1,775 crore
• Net loss of Rs 483 crore vs net profit of Rs 23.7 crore
• One-time loss of Rs 418 crore
• EBITDA down 28.2 percent at Rs 421.4 crore
• Margin at 23.7 percent vs 31.5 percent

Thirumalai Chemicals (Q4, YoY)

• Revenue up 8 percent at Rs 331 crore
• Net profit up 110.5 percent at Rs 40 crore vs Rs 19 crore
• EBITDA up 56 percent at Rs 70 crore
• Margin at 21.1 percent vs 14.7 percent

Orient Cement (Q4, YoY)

• Revenue up 4 percent at Rs 620 crore
• Net profit down 21 percent at Rs 13 crore
• Tax crore of Rs 2 crore in base quarter
• EBITDA down 3 percent at Rs 74 crore
• Margin at 11.9 percent vs 12.7 percent

Trent (Q4, YoY)

• Revenue up 18 percent at Rs 529 crore
• Net profit down 52 percent at Rs 12 crore
• Exceptional gain of Rs 25 crore in base quarter
• EBITDA up 82 percent at Rs 25.5 crore
• Margin at 4.8 percent vs 3.1 percent

Nucleus Software (Q4, QoQ)

• Revenue up 5 percent at Rs 111 crore
• Net profit down 6 percent at Rs 17 crore
• EBIT down 18 percent at Rs 14 crore
• Margin at 12.6 percent vs 16.0 percent

Castrol India (Q1, YoY)

• Revenue up 5 percent at Rs 927 crore
• Net profit up 11 percent at Rs 100 crore
• EBITDA up 4 percent at Rs 274 crore
• Margin at 29.6 percent vs 29.8 percent

Hexaware Technologies (Q4, QoQ)

• Revenue up 4.3 percent at Rs 1,049 crore
• Net profit up 11 percent at Rs 134 crore
• EBITDA up 2 percent at Rs 147 crore
• Margin at 14 percent vs 14.3 percent

HCC (Q4, YoY)

• Revenue up 6 percent at Rs 1,443 crore
• Net profit down 5 percent at Rs 20 crore
• EBITDA down 28 percent at Rs 160 crore
• Margin at 11.1 percent vs 16.5 percent

Earnings To Watch

• Ambuja Cements
• Bank Of Maharashtra
• BSE
• Capital First
• Godrej Properties
• Indo Count Industries
• NIIT Technologies
• PVR
• Wockhardt

Brokerage Radar

Citi on Adani Ports

• Maintained ‘Buy’ with a price target of Rs 575.
• Healthy underlying numbers despite impact on coal volumes.
• Consistent improvement in balance sheet, cash flow and Capex.
• Outlook remains strong; Valuations are attractive.

JP Morgan on Adani Ports

• Maintained ‘Overweight’ with a price target of Rs 440.
• Higher interest and tax rate led to an in-line net profit.
• SEZ income surprises; 2017-18 was record year for SEZ income.
• Company to continue to focus on net debt reduction.
• Free cash flow to increase to Rs 1,750 - 2,000 crore in the current financial year.

Citi on L&T Finance

• Maintained ‘Buy’ with a price target of Rs 235.
• Operationally strong quarter.
• Strong AUM growth, fee income and improved asset quality led March quarter.
• AUM growth led by rural and housing sectors.

Deutsche Bank on Castrol India

• Maintained ‘Buy’ with a price target of Rs 235.
• March quarter was below estimates due to lower than expected volume growth and gross margins.
• Long-term volume growth outlook remains robust.
• Expect robust margins going forward.

Deutsche Bank on MRF

• Maintained ‘Buy’ with a price target of Rs 89,000.
• Operational miss in March quarter due to higher raw material cost.
• Volume growth continues to witness an uptick.
• Recent price hikes to offset increase in commodity costs.
• Expect truck tyre companies to take adequate prices hikes in the current financial year.
• Expect healthy volume growth and high capacity utilisation.

Kotak Securities on MRF

• Downgraded to ‘Reduce’ from Add; maintained price target at Rs 77,000.
• March quarter’s Ebitda was below estimates due to weaker customer mix and higher other expenses.
• Price hikes to help sustain margins at 18-19 percent.
• Expect 10 percent compounded growth rate in revenue over the fiscal 2018-2021.
• Like company’s strong execution track-record and brand-positioning.
• Believe the stock is trading at fair valuation.

Credit Suisse on Pidilite

• Downgraded to ‘Neutral’ from ‘Outperform’; raised price target to Rs 1,050 from Rs 1,000.
• Near-term margins to hurt on high crude inflation.
• Pricing power comes with a lag of 4-6 months.
• Margins near all-time highs; management has guided for a lower range.
• Run up in stock now makes it expensive versus peers.

Edelweiss on Emami

• Maintained ‘Buy’; cut price target to Rs 1,244 from Rs 1,328.
• March quarter’s net profit below estimates owing to one-time MAT credit reversal.
• Core products stable; Kesh King improving.
• Cut earnings per share estimates by 15 percent and 9 percent for the current and the next financial year respectively, to factor in slower off take and heightened ad spends.
• Expect revenue growth to improve led by rural recovery.

Credit Suisse on Emami

• Maintained ‘Outperform’; cut price target to Rs 1,230 from Rs 1,260.
• March quarter was below estimates as margins fell sharply due to a spike in ad spends.
• Some recovery in growth is visible.
• Drags like Kesh King, international and OTC are improving.
• Cut current and next financial year’s estimates by 10 percent to build in increase in ad spends.

Morgan Stanley on Hexaware Tech

• Maintained ‘Underweight’ with a price target of Rs 325.
• Robust quarter of revenue growth; Margins softer than expectation.
• Hexaware’s full-year outlook could turn out to be conservative.
• Focus on maintaining margins while gaining market share.
• Believe the stock is already more than pricing in potential upside.

Morgan Stanley on Edelweiss

• Maintained ‘Overweight’ with a price target of Rs 340.
• Consolidated net profit above estimates.
• Asset quality stable, with GNPL ratio at 1.75 percent.

Credit Suisse on PNB Housing

• March quarter remained fastest growing HFC with healthy asset quality.
• Company to invest in geographic expansion and infrastructure.
• Cut earnings per share estimates for the current and the next financial year by 5 percent and 7 percent respectively on heightened opex investments.
• PNB Housing remains one of the players with highest earnings growth visibility.

CLSA on Vedanta

• Maintained ‘Buy’; cut price target to Rs 390 from Rs 410
• March quarter’s Ebitda was ahead of estimates led by higher volumes and commodity prices.
• Strong volume growth in zinc, oil and aluminium businesses.
• Rising costs in aluminium and zinc hurting though.
• Expect strong compounded growth rate of 17 percent and 24 percent for Ebitda and earnings per share respectively in the fiscal 2019-2020.