Employees pass though a security check at the National Stock Exchange (NSE) in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)  

All You Need To Know Going Into Trade On May 4

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.

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BQ Live

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

Global Cues

  • U.S. stocks rallied back from a four-week low, with major averages bouncing off of key technical levels, but still ended down for the second straight day.

Europe Check

  • European shares fell as the U.S. market extended declines amid earnings releases and the start of trade talks between China and America.
All You Need To Know Going Into Trade On May 4
  • The euro climbed 0.3 percent to $1.1983.
  • The British pound declined less than 0.05 percent to $1.357.
  • Germany’s 10-year yield fell five basis points to 0.53 percent.
  • Britain’s 10-year yield declined seven basis points to 1.39 percent.

Asian Cues

  • Australia’s S&P/ASX 200 Index was flat.
  • South Korea’s Kospi index lost 0.3 percent.
  • Futures on Hong Kong’s Hang Seng slid 0.4 percent.
  • Futures on the S&P 500 Index dropped 0.2 percent. The underlying gauge fell 0.2 percent Thursday.

Here are some key events coming up this week:

  • Nikkei India services and composite PMI for April
  • 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 before the data reports due Friday.
  • Earnings season continues, with Alibaba due on Friday.
  • Reserve Bank of Australia releases its quarterly update of growth and inflation forecasts on Friday.
  • Berkshire Hathaway holds its annual shareholders meeting in Omaha, Nebraska on Saturday.

Commodity Check

  • West Texas Intermediate crude increased 0.1 percent to $68.51 a barrel.
  • Brent crude ended 0.1 percent higher at $73.70 per barrel.
  • Gold was steady at $1,313.07 an ounce.
  • Aluminium halted three-day winning streak; ended 2.5 percent lower at $2,275 per MT.

Indian ADRs

All You Need To Know Going Into Trade On May 4

Stories You Might’ve Missed

Earnings To Watch

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

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 flat at Rs 182 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.

Stocks To Watch

  • Emami board approves 1:1 bonus issue.
  • S&P cuts Bharti Airtel’s rating to BBB-/Negative from BBB-/Stable
  • 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 expects Rs 10,000 crore revenue, Rs 1,000 crore of net profit by FY20.
  • Cera Sanitaryware board approves Rs 100 crore capex for FY19.
  • InterGlobe Aviation says it 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.

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.

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.

Rupee

  • Rupee closed at 66.64/$ on Thursday from 66.66/$ on Wednesday.

F&O Cues

  • 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).

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.

Put-Call Ratio

  • Nifty PCR at 1.50 versus 1.52
  • Nifty Bank PCR at 1.59  versus 1.52

Stocks Seeing High Open Interest Change

All You Need To Know Going Into Trade On May 4

Fund Flows

All You Need To Know Going Into Trade On May 4

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.