All You Need To Know Going Into Trade On May 8
Asian stocks inched higher on Tuesday as traders braced for an announcement from Washington on the nuclear accord with Iran.
The dollar retreated from the strongest level this year and crude pared gains above $70 a barrel. Equity benchmarks in Japan, Australia and South Korea gained. The MSCI Asia Pacific Index rose 0.3 percent.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, remained unchanged at 10,721 as of 6.35 a.m.
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- U.S. stocks edged higher while investors await the inflation data of the country which is due today.
- The dollar retreated from the strongest level this year as the Bloomberg Dollar Spot Index fell 0.2 percent.
- European stocks ended higher on Monday in a quiet session as the U.K. market remained closed for a public holiday, with a renewed dip in the euro fueling expectations that currency headwinds for the region’s exporters are set to ease.
- Topix index rose 0.3 percent as of 9:20 a.m. Tokyo tim
- S&P/ASX 200 Index was up 0.2 percent.
- Hang Seng Index futures gained 0.3 percent.
- Futures on the S&P 500 fell less than 0.1 percent. The S&P 500 closed up 0.35 percent Friday, the Nasdaq Composite Index rose 0.7 percent.
Here are some key events coming up this week:
- Chinese trade data is due Tuesday.
- It’s also the Australian annual budget day on Tuesday.
- Malaysia holds a general election Wednesday.
- Japanese Prime Minister Shinzo Abe hosts South Korean President Moon Jae-in and Chinese Premier Li Keqiang on Wednesday.
- There’s a Bank of England policy decision on Thursday.
- U.S. inflation data for April is due the same day.
- Trump’s Iran-deal deadline is this week.
- Some of the company earnings due include Walt Disney, Petrobras, Marriott, Toyota, Ambev and Deutsche Telekom.
- West Texas Intermediate crude fell 0.9 percent to $70.10 a barrel.
- Gold added 0.2 percent to $1,316.88 an ounce.
- LME copper rose 0.2 percent to $6,842.00 a metric tonne.
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Earnings To Watch
- ABB India
- Aditya Birla Capital
- Godrej Consumer Products
- Jubilant Foodworks
- Kajaria Ceramics
- Phoenix Mills
Earnings Reaction To Watch
Tata Coffee (Q4, YoY)
- Net Profit down 86 percent at Rs 6.5 crore
- Revenue up 9 percent to Rs 440 crore
- EBITDA down 67 percent to Rs 37 crore
- EBITDA Margins at 8.5 percent versus 28.2 percent
ICICI Bank (Q4, YoY)
- Net profit down 50 percent at Rs 1,020 crore
- Provision up 86 percent at Rs 6,626 crore (QoQ)
- GNPA at 8.84 percent versus 7.82 percent (QoQ)
- NPA at 4.77 percent versus 4.20 percent (QoQ)
Pfizer (Q4, YoY)
- Revenue up 19 percent at Rs 520 crore
- Net profit up 42.5 percent at Rs 152.5 crore
- EBITDA up 46 percent at Rs 138 crore
- Margin at 26.5 percent versus 21.6 percent
JK Agri Genetics (Q4, YoY)
- Revenue at Rs 51 crore versus Rs 20 crore
- Net profit of Rs 5.6 crore versus net loss of Rs 6.3 crore
- EBITDA at Rs 10.5 crore versus loss of Rs 7 crore
- Margin at 20.6 percent versus -35 percent
Tata Investment Corporation (Q4, YoY)
- Revenue up 24 percent at Rs 58.3 crore
- Net profit up 22 percent at Rs 42 crore
Talwalkars Better Value Fitness (Q4, YoY)
- Revenue up 18.75 percent at Rs 19 crore
- Net profit up 33 percent at Rs 4 crore
- EBITDA up 30 percent at Rs 13 crore
- Margin at 68.4 percent versus 62.5 percent
Ludlow Jute & Specialties (Q4, YoY)
- Revenue at Rs 99 crore versus Rs 89 crore
- Net profit at Rs 0.3 crore versus Rs 0.7 crore
- EBITDA at Rs 1 crore versus Rs 2.4 crore
- Margin at 1 percent versus 2.7 percent
Trident (Q4, YoY)
- Revenue down 6 percent at Rs 1,185 crore
- Net profit down 49 percent at Rs 51 crore
- EBITDA up 3 percent at Rs 217 crore
- Margin at 18.3 percent versus 16.7 percent
Tube Investments of India (Q4, YoY)
- Revenue up 4 percent at Rs 1,233 crore
- Net profit down 27.5 percent at Rs 37 crore
- EBITDA up 4 percent at Rs 93.5 crore
- Margin unchanged at 7.6 percent
Stocks To Watch
- SEBI holds HDFC Mutual Fund IPO to probe past lapses
- Veto Switchgears receives order worth Rs 25 crore for “Vyoma” range of Modular switches
- Tata Metaliks says operations at Kharagpur plant stopped due to issue with workers’ union
- Cigniti Technologies looks to explore business opportunities in Dubai
- Lupin receives U.S. FDA approval for generic Temovate ointment
- Unichem Laboratories Ltd. receives ANDA approval from U.S. FDA for Valsartan Tablets
- Talwalkars gets in-principle nod from exchanges to list Talwalkars Lifestyles
- FIH Mauritius to buy 6 percent additional stake in Bangalore Airport from Siemens
- BEML: Tata AIG Life Insurance Company bought 2.90 lakh share (0.7 percent) at Rs 1061.76 each
- NIIT Technologies: Ascension Healthcare Master Pension Trust sold 4.10 lakh shares (0.7 percent) at Rs 1028.54 each
(As reported on May 7)
- Deccan Gold Mines promoter Rama Mines (Mauritius) Ltd sold 72,361 shares from April 4–May 4
- Plastiblends india promoter Jyoti Kabra sold 10,000 shares from May 2–3
- Kwality Ltd promoter Sanjay Dhingra acquired 9.13 lakh shares on May 4
Who’s Meeting Whom
- IIFL to meet Morgan Stanley on May 8
- Greaves Cotton to meet several fund houses including Kotak Offshore, Somerset Capital, Amansa Investment advisors Etc on May 8 in Singapore
- Nila Infrastructures to meet investors/analysts on May 8
Rupee closed at 67.14/$ on Monday versus 66.87/$ on Friday
Top Gainers And Losers
- Nifty May futures closed trading at 10,739.8 with premium of 25 versus of 40.5pts
- All series: Nifty open interest up 1 percent & Bank Nifty open interest up 14 percent
- India VIX ended at 13.7, up 3.8 percent
- Max open interest for May series at 11,000 (open interest at 56.9 lakh, down 2 percent)
- Max open interest for May series at 10,500 (open interest at 51.7 lakh, up 8 percent)
- In ban: Balrampur Chini, IRB Infra, Jet Airways, Justdial, Wockhardt
- New in ban: Wockhardt
- Out of ban: PC Jeweller
- Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.
- Nifty PCR at 1.55 versus 1.48
- Nifty Bank PCR at 1.50 versus 1.31
Stocks Seeing High Open Interest Change
On ICICI Bank
- Maintain 'Buy' with a target price of Rs 430.
- While net profit below estimates, operationally the earnings were largely in-line.
- Slippages rose sharply primarily from existing stressed book and Gitanjali Gems.
- Key positive was healthy CASA growth and focus on de-risking.
- Improvement in asset quality key to rerating; ICICI Bank remains top picks.
- Maintain Overweight a target price of Rs 425.
- Core pre-provisioning operating profit ahead of estimates.
- Focus for the quarter was on asset quality.
- Maintain Overweight with target price of Rs 266.
- Reported strong Q4FY18, ahead of estimates.
- Strong growth and margin progression seen.
- Strong underlying volume growth momentum continue.
- Expect pickup in replacement sales and healthier margins in FY19.
- Maintain Buy; Raised target price to Rs 280 from Rs 260.
- Strong Q4 marks improvement in margin trajectory.
- Volumes were likely the main driver of revenue growth.
- Channel checks indicate a strong market share gain.
- Valuation attractive; stock at a discount to Amara Raja.
On Indian Steel
- Domestic steel prices on an uptrend; $10-15 per tonne increase in May 2018.
- Weaker raw material prices to help expand margins in Q1FY19.
- Believe stocks are not factoring in the upside risks.
- Tata Steel offers best risk-reward.
- Major Indian steel producers taken $12-15 per tonne price hike in May 2018.
- With declining raw material prices steel spreads have increased in last three months.
- Rising spreads on the back of increasing demand to help achieve robust profitability.
- JSW Steel is preferred pick in the sector.
IIFL on Jindal Stainless
- Initiate ‘Buy’ with target price of Rs 107.
- Asset sweating to drive volume growth.
- Expect volume/EBITDA/net profit to grow at a CAGR of 11 percent/9 percent/25 percent over FY18-20.
- Improving profitability/cash flows to aid exit from CDR scheme.
- Balance sheet improving; valuations attractive.
Kotak Securities on Motherson Sumi
- Maintain ‘Sell’ with target price of Rs 265.
- EBIT growth is in line with peers - Plastic Omnium, Magna and Faurecia.
- Return ratios are significantly inferior due to lower margins and higher working capital requirements.
- Motherson trades at almost double the valuations despite in-line performance
- Premium to peers not justified.
Nomura on Hexaware
- Maintain Reduce; Raised target price to Rs 350 from Rs 310.
- Q1CY18: Revenue ahead, EBIT Margins missed estimates.
- Hexaware indicating strong traction in Q2/Q3.
- Expect dollar revenue growth of 13.1 percent/10.7 percent and EBIT margins of 14.5-15 percent in FY18/19.