All You Need To Know Going Into Trade On May 10

Asian stocks edged higher in early trading today after a positive session on Wall Street, while oil extended its climb past $71 a barrel, a level it breached for the first time since 2014.

U.S. Treasury yields retreated after topping 3 percent. Equity benchmarks rose in Japan, Australia and South Korea, while futures in Hong Kong were little changed.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 10,767 as of 7:05 a.m.

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

Global Cues

• U.S. stocks advanced, led by energy shares, with West Texas oil rising after an unexpected drop in stockpiles and President Donald Trump’s withdrawal from the Iran nuclear deal.
• The dollar steadied while a $25 billion auction of 10-year U.S. notes came just short of carrying a 3 percent coupon for the first time in almost seven years.

Europe Check

• European shares advanced for a fourth day in the longest streak since mid-March as energy companies got a lift from higher crude prices.

Asian Cues

• Topix index rose 0.2 percent as of 9:23 a.m. in Tokyo.
• S&P/ASX 200 gained 0.4 percent.
• Kospi index climbed 0.6 percent.
• Hang Seng Index futures were little changed.
• S&P 500 futures were little changed. S&P 500 closed up 1 percent.

Here are some key events coming up this week:

• 10:30 am: India car sales data for April.
• The Bank of England decides on policy Thursday.
• U.S. inflation data for April are also due.

Commodities Check

• West Texas Intermediate crude added to a 3 percent surge on Wednesday, advancing 0.5 percent to $71.49 a barrel.
• Gold fell less than 0.1 percent to $1,311.92 ounce.
• LME copper rose 0.1 percent to $6,818.00 a metric ton, after gaining 1 percent.

Indian ADRs

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Nifty Earnings To Watch

• Asian Paints
• Titan
• Zee Entertainment

Other Earnings

• Adani Enterprises
• Adani Transmission
• Apollo Tyres
• Chennai Petroleum Corporation
• Indian Bank
• Mphasis
• Nestle India

• Shankara Building Products
• Tata Communications
• TV Today Network
• Ujjivan Financial Services
• Union Bank Of India
• Welspun Enterprises

Earnings Reaction To Watch

JSPL (Q4, YoY)

• Revenue up 37 percent at Rs 8599 crore
• Net loss of Rs 308 crore from net loss of Rs 49.5 crore
• Ebitda up 38 percent at Rs 2,136.5 crore
• Margin at 24.8 percent from 24.7 percent
• One-time exceptional expense of Rs 437.6 crore

Eicher Motors (Q4, YoY)

• Revenue up 33.9 percent at Rs 2528 crore
• Ebitda up 36.3 percent at Rs 797.2 crore
• Net Profit up 0.5 percent at Rs 461.5 crore
• Margin at 31.5 percent from 31 percent

Sharda Cropchem (Q4, YoY)

• Revenue up 29 percent at Rs 769 crore
• Net Profit up 14.5 percent at Rs 113 crore
• Ebitda up 21 percent at Rs 197 crore
• Margin at 25.7 percent from 27.3 percent

Kokuyo Camlin (Q4, YoY)

• Revenue flat at Rs 190 crore
• Net profit up 2x at Rs 5.7 crore
• Ebitda up 51.4 percent at Rs 16.5 crore
• Margin at 8.7 percent from 5.8 percent

Navin Fluorine International (Q4, YoY)

• Revenue up 5 percent at Rs 208 crore
• Net profit up 5 percent at Rs 39 crore
• Ebitda up 25 percent at Rs 46.1 crore
• Margin at 22.2 percent from 18.7 percent

SIS (Q4, YoY)

• Revenue up 29 percent at Rs 1592 crore
• Net profit down 36 percent at Rs 36 crore
• Tax credit of Rs 23 crore in base quarter
• Ebitda up 32 percent at Rs 86 crore
• Margin at 5.4 percent from 5.3 percent

Oriental Hotels (Q4, YoY)

• Revenue up 5 percent at Rs 98 crore
• Net profit down 14 percent at Rs 6 crore from Rs 7 crore
• Ebitda unchanged at Rs 20 crore
• Margin at 20.4 percent from 21.5 percent

Federal Bank (Q4, YoY)

• Net Interest Income up 11 percent at Rs 933 crore
• Net profit down 44 percent at Rs 145 crore
• Provisions up 129 percent at Rs 371.5 crore from Rs 162 crore (QoQ)
• GNPA at 3.0 percent
• NPA at 1.69 percent

Linde India (Q4, YoY)

• Revenue up 2.5 percent at Rs 528 crore
• Net profit up 100 percent at Rs 2 crore
• Ebitda down 67 percent at Rs 3 crore
• Margin at 0.6 percent from 1.7 percent
• Profit higher on account of tax credit

Sintex Plastics Technology (Q4, QoQ)

• Revenue down 3 percent at Rs 1293 crore
• Net loss of Rs 12 crore from net profit of Rs 52 crore
• Ebitda down 36 percent at Rs 118 crore
• Margin at 9.1 percent from 13.9 percent

Dhampur sugar (Q4, YoY)

• Revenue up 22 percent at Rs 921 crore
• Net loss of Rs 36 crore from net profit of Rs 108.5 crore
• Ebitda loss at Rs 17 crore from Rs 176 crore
• Margin at -1.8 percent from 23.4 percent

Stocks To Watch

• Fortis board will meet today to decide on various bids/proposals
• Ashoka Buildcon says Arbitral Tribunal awards SPV additional 1,384 toll days. Besides, the company to receive Rs 37.71 crore as compensation for toll loss.
• Reliance Infra to consider rights issue, QIP proposals on May 14.
• Federal Bank CEO says IDBI Federal Life deal expected to be final by July.
• Welspun Enterprises emerges as L1 for road project in Tamil Nadu at Bid price of Rs 1,837 crore.
• Cipla partners with Mannkind for exclusive marketing, distribution of Afrezza in India.
• PNC Infratech gets Rs 33.7 crore bonus annuity from Raebareli unit.
• Star cement receives Rs 200 crore towards subsidies claim.
• Tata Metaliks says main production unit including Blast furnace expected to be back on stream by May 17.
• KKR Infuses Rs 1250 crore in Sintex Plastics Technology Subsidiary, SBAPL via structured finance.
• Hikal Ltd board approves 1:2 bonus issue.
• Avanti Feeds board approves 1:2 bonus issue.

Bulk Deals

• Nath Bio-Gene: Birla Sun Life MF bought 1.06 lakh shares (0.6 percent) at Rs 560 each
• Gitanjali Gems: Morgan Stanley France SAS sold 37.80 lakh shares (3.2 percent) at Rs 3.45 each
• Shree Renuka Sugars: Murkumbi Investments Pvt Ltd sold 2.61cr shares (1.4 percent) at Rs 15.5 each

KSB Pumps

• Old Bridge Capital Management bought 3.80 lakh shares (1.1 percent) at Rs 830 each
• Vantage Equity Fund bought 4 lakh shares (1.1 percent) at Rs 830 each
• DSP Blackrock Small Cap Fund sold 4.61 lakh shares (1.3 percent) at Rs 830 each

Trading Tweaks

• Sunil Hitech Engineers Ltd. placed under added surveillance by BSE
• Deccan Gold Mines shifted to XT group from T group

IPO

• IndoStar Capital Finance continues on day 2. Issue subscribed 0.4 times on day 1

Who’s Meeting Whom

• Bodal Chemicals to meet ICICI Pru on May 10.
• Syngene to meet several fund houses including HDFC MF, Motilal Oswal etc from May 18 – June 29.
• Godawari Power & Ispat to meet several fund houses including Morgan Stanley, Maybank AM, Ostrum AM etc on May 10.

Insider Trades

• Kwality Ltd promoter Sanjay Dhingra acquired 4.50 lakh shares on May 7
• Mold-Tek Packaging promoter Lakshmi Pattabhi sold 50,000 shares on May 9
• Adani Power promoter Pan Asia Trade and Investment Pvt. Ltd acquired 55 lakh shares on May 8

(As reported on May 9)

Rupee

• Rupee closed at 67.28/$ on Wednesday versus 67.08/$ On Tuesday

Top Gainers And Losers

F&O Cues

• Nifty May Futures closed trading at 10,769 with premium of 27.6 points versus 17.2 points
• All series-Nifty open interest up 2 percent & Bank Nifty open interest up 3 percent
• India VIX ended at 14.2, up 1.5 percent
• Max open interest for May series at 11,000, open interest at 53.7 lakh, open interest down 6 percent
• Max open interest for May series at 10,500, open interest at 56.7 lakh, open interest up 3 percent

F&O Ban

• In ban: Balrampur Chini, Dewan Housing, IRB Infrastructure, Jet Airways, Justdial, Wockhardt
• New in ban: PC Jeweller
• Out of ban: None

Only intraday positions can be taken in stocks under F&O ban. There is a penalty in case of a rollover of these positions.

Put-Call Ratio

Nifty PCR at 1.61 versus 1.56
Nifty Bank PCR at 1.56 versus 1.59

Fund Flows

Brokerage Radar

On Eicher Motors

CLSA

• Maintain ‘Buy’ with target price Rs 39,300
• Management was positive on the RE demand outlook on conference call
• Next phase of capacity expansion corroborates healthy demand outlook

Deutsche Bank

• Maintain ‘Buy’ raises target price to Rs 34,500 from Rs 34,000
• Volume growth momentum should continue in FY19
• Forecast RE volume CAGR (FY18-20 at 15 percent which should drive EPS CAGR of 23 percent)
• Management highlighted that volume growth had started to again pick up in the larger markets

CLSA on Arvind

• Maintain ‘Buy’, raises target price to Rs 557 from Rs 524
• Focus shifts to proposed demerger post strong beat led by the B&R business
• B&R cashflows addressed investor concerns on Arvind’s ability to fund its own growth
• Profitability of B&R at an inflexion point while strong capacity expansion ahead for Textiles

Deutsche Bank on Federal Bank

• Maintain ‘Buy’ cuts target price to Rs 120 from Rs 130
• Cleaning up impacts earnings but core trends are also a shade weaker
• Operating metrics were also weak leading to weak NII growth

Credit Suisse on Persistent Systems

• Maintain ‘Outperform’ with target price of Rs 960
• Growth and margin expansion story intact; valuations attractive
• Management indicates Q4 revenue miss in IBM alliance unit was not structural
• Better momentum in services, ample scope for growth in digital

Nomura on Lupin

• Maintain ‘Buy’ with target price of Rs 1,078
• Japan Enbrel biosimilar filing is a positive
• Estimate global sales of $8.3 billion at the manufacturer level
• Would use any falls from here as an opportunity to accumulate

Deutsche Bank on ABB India

• Maintain ‘Hold’ cuts target price to Rs 1,210 from Rs 1,230
• Risk of slippage to single digit growth
• Stock trades at a high valuation despite weak growth prospects