All You Need To Know Going Into Trade On May 11
Asian stocks opened higher after their U.S. counterparts rallied amid relief the latest reading on American inflation suggested less need for the Federal Reserve to accelerate monetary tightening.
Equity benchmarks advanced in Japan and South Korea, and futures on Hong Kong shares rose before the open there. The MSCI Emerging Markets Index is heading for its best week since March thanks to easing investor concern that higher U.S. yields and a stronger dollar would spur broad contagion.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.46 percent to 10,780 as of 7:00 a.m.
Here’s a quick look at all that could influence equities today.
- U.S. stocks rallied to a seven-week high while the dollar sank and 10-year Treasury yields dropped further below 3 percent after a weak inflation reading signaled the Federal Reserve won’t need to step up the pace of interest-rate increases.
- The S&P 500 Index crossed above its 100-day moving average and breaking out of the downward-sloping trendline that’s been in place since late January.
- Japan’s Topix index rose 0.6 percent as of 9:21 a.m. in Tokyo.
- Australia’s S&P/ASX 200 was up 0.3 percent.
- Hang Seng futures rose 0.9 percent.
- Futures on the S&P 500 were little changed after the underlying gauge closed up 0.9 percent.
- The Kospi advanced 0.5 percent.
Here are some key events coming up this week:
- Hong Kong releases GDP data Friday.
- India reports on industrial production.
- The University of Michigan gauge of consumer sentiment is due.
- 5:30 pm: India March factory output date, estimate 6.1 percent , prior 7.1 percent.
- West Texas Intermediate crude was up 2.5 percent for the week at $71.50 a barrel
- Gold was flat on Friday at $1,321.18 an ounce
- LME copper traded at $6,919 a metric ton
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Earnings To Watch
- Aarti Industries
- Aditya Birla Fashion
- Allahabad Bank
- Canara Bank
- Dena Bank
- Graphite India
- Havells India
- Oracle Financial Services Software
- Rain Industries
- Sun TV Network
- Tata Global Beverages
Earnings Reaction To Watch
Titan Co (Q4, YoY)
- Net sales up 11.7 percent at Rs 3916 crore
- Ebitda up 67 percent at Rs 454 crore
- Ebitda margin at 11.6 percent
- Net profit up 40.5 percent at Rs 282 crore
- Exceptional loss of Rs 80.7 crore
Nestle India (Q1, YoY)
- Net sales up 10.6 percent at Rs 2757 crore
- Ebitda up 34.6 percent at Rs 697 crore
- Ebitda margin at 25.3 percent
- Net profit up 38 percent at Rs 424 crore
Mphasis Q4 (QoQ)
- Revenue up 5 percent at Rs 1744.5 crore
- Net profit up 11 percent at Rs 238 crore
- Ebit up 14 percent at Rs 292.5 crore
- Margin at 16.8 percent
Ujjivan Financial (Q4, YoY)
- NII up 64.5 percent at Rs 211 crore
- Net profit grew 235 percent to Rs 64.9 crore
- Proisions at Rs 34.7 crore
- GNPA at 3.60 percent from 4.24 percent (QoQ)
- NNPA at 0.7 percent from 1.0 percent (QoQ)
Shankara Building (Q4, YoY)
- Revenue up 27 percent at Rs 761 crore
- Net profit up 16 percent at Rs 22 crore
- Ebitda up 20 percent at Rs 54 crore
- Margin at 7.1 percent
Apollo Tyres (Q4, YoY)
- Revenue up 21 percent at Rs 4031 crore
- Net profit up 10 percent at Rs 250 crore
- EBITDA up 39 percent at Rs 515 crore
- Margin at 12.8 percent
Bharat Bijlee (Q4, YoY)
- Revenue down 2 percent at Rs 223 crore
- Net profit up 600 percent at Rs 49 crore
- Ebitda up 26 percent at Rs 12 crore
- Margin at 5.4 percent
- Exceptional gain of Rs 47 crore in current quarter
Asian Paints (Q4, YoY)
- Revenue up 14.7 percent at Rs 4483 crore
- Net profit up 4.1 percent at Rs 481 crore
- Ebitda up 18.5 percent at Rs 839 crore
- Margin at 18.7 percent
Zee Entertainment (Q4, YoY)
- Revenue up 13 percent at Rs 1725 crore
- Net profit down 85 percent at Rs 231 crore
- Ebitda up 8 percent at Rs 505 crore
- Margin at 29.3 percent
Chennai Petroleum (Q4, YoY)
- Revenue up 43 percent at Rs 9788 crore
- Net profit up 4 percent at Rs 178 crore
- Other income of Rs 81 crore in base quarter
- Ebitda up 41 percent at Rs 355 crore
- Margin at 3.6 percent
Akzo Nobel (Q4, YoY)
- Revenue up 10 percent at Rs 700 crore
- Net profit up 226 percent at Rs 238 crore
- Ebitda down 6 percent at Rs 70 crore
- Margin at 10 percent
- One-time profit from sale of chemicals business worth Rs 186 crore in current quarter
Union Bank of India (Q4, YoY)
- NII down 8.1 percent at Rs 2,193 crore
- Net loss of Rs 2,583 crore
- Provisions at Rs 5638 crore from Rs 2521 crore (QoQ)
- GNPA at 15.73 percent
- NNPA at 8.42 percent
Adani Enterprises (Q4, YoY)
- Revenue down 13.5 percent at Rs 10234 crore
- Net profit down 15 percent at Rs Rs 188 crore
- EBITDA flat at Rs 656 crore
- Margin at 6.4 percent vs 5.5 percent
Laurus Labs (Q4, YoY)
- Revenue up 18.5 percent at Rs 560 crore
- Net profit down 37 percent at Rs 45 crore
- Ebitda up 1.5 percent at Rs 117 crore
- Margin at 20.8 percent
RSWM (Q4, YoY)
- Revenue down 7.5 percent at Rs 761 crore
- Net profit down 52 percent at Rs 14 crore
- EBITDA unchanged at Rs 70.5 crore
- Margin at 9.3 percent
Stocks To Watch
- PC Jeweller board approves buyback of 1.2 crore shares not exceeding Rs 424 crore at a price of Rs 350 each.
- Reliance Jio announces new postpaid plan starting Rs 199 per month.
- Pennar Industries receives multiple orders worth Rs 492 crore.
- Shree Pushkar Chemicals and Fertilizers board approves preferential allotment of equity to promoter group.
- Sharon Bio-Medicine gets Maharashtra Pollution Control Board approval to operate Taloja API plant.
- Siemens India: CEO says getting many orders for captive power projects.
- Infibeam: Nomura Singapore bought 30 lakh shares (0.6 percent) at Rs 167.75 each
- Amansa Holdings bought 32.75 lakh shares (1.4 percent) at Rs 166 each
- GS Asia Growth Fund bought 20.14 lakh shares (0.8 percent) at Rs 166 each
- HDFC Standard Life Insurance bought 15.26 lakh shares (0.6 percent) at Rs 166.48 each
- Reliance Capital MF bought 39.15 lakh shares (1.7 percent) at Rs 166 each
- KKR Mauritius Direct Investments sold 36.74 lakh shares (1.6 percent) at Rs 166.04 each
- Zend Mauritius VC Investments sold 92.76 lakh shares (3.9 percent) at Rs 166 each
- IndoStar Capital Finance IPO continues on day 3. Issue subscribed 0.69 times on day 2.
Who’s Meeting Whom
- UPL to meet Macquarie Capital Securities on May 11
- Info Edge to meet IIFL from May 14 - 16
- Omax Autos promoter Warun Mehta sold 10,000 shares on May 9
- Adani Power promoter Pan Asia Trade and Investment acquired 60 lakh shares on May 9
- Ashoka Buildcon promoter Ashok Katariya acquired 21,677 on May 8
(As reported on May 10)
- Rupee closed at 67.32/$ on Thursday versus 67.28/$ on Wednesday
Top Gainers And Losers
- Nifty May Futures closed trading at 10,725 with premium of 8 points versus 27.6 points.
- All series-Nifty open interest down 1 percent and Bank Nifty open interest down 7 percent.
- India VIX ended at 14.4, up 1 percent.
- Max open interest for May series at 11,000, open interest at 58.2 lakh, open interest up 8 percent.
- Max open interest for May series at 10,500, open interest at 54.6 lakh, open interest down 4 percent.
- In ban: Balrampur Chini, Dewan Housing, IRB Infrastructure, Jet Airways, Justdial, Wockhardt, PC Jeweller
- Only intraday positions can be taken in stocks under F&O ban. There is a penalty in case of a rollover of these positions.
Active Stock Futures
- Nifty PCR at 1.56 versus 1.61
- Nifty Bank PCR at 1.0 versus 1.56
Credit Suisse on Asian Paints
- Upgrade to Neutral from Underperform raise target price to Rs 1,220 from Rs 1,100.
- On a high base of around 14 percent volume growth in Q4FY17, the company grew around 10 percent in Q4.
- Upgrade stock on improved visibility on both volumes and margins.
Credit Suisse on Titan
- Maintain Neutral, raise target price to Rs 930 from Rs 850.
- Strong margin expansion, but revenue growth is now normalising.
- Like Titan for potential for market share gains in jewellery and high quality management.
- Valuations are stretched and leave no room for upside.
CLSA on Titan
- Maintain Outperform, raise target price to Rs 1,050 from Rs 950.
- Jewellery Ebit growth of 60 percent marks a great finish to FY18.
- Management reiterated its commitment to grow jewellery revenues 2.5 times in five years.
- Performance of watches and eyewear was muted.
CLSA on Nestle
- Maintain Outperform, raise target price to Rs 10,200 from Rs 9,750
- Nestle India started 2018 on strong footing with notable margin gains
- Margin uptick on low commodity prices, particularly milk and milk solids
- 53x one-year forward PE should sustain in the context of over 20 percent EPS CAGR
CLSA on Union Bank
- Maintain Buy, target price at Rs 125
- Results worse than expectations due to higher provisions and weaker topline
- Downgrade of stressed loans push-up NPLs
- Topline weak but moderation in loan growth a needed strategy
CLSA on Zee Entertainment
- Maintain Buy, raise target price to Rs 705 from Rs 696.
- Management highlighted that revival in ad revenues is sustaining and broad-based.
- Forecast Zee to deliver a 22 percent earnings CAGR over FY18 - 21.
BofAML on Zee Entertainment
- Maintain Underperform, target price of Rs 545.
- Tax was higher due to demerger and foreign subsidiaries paying dividend.
- Management sees faster than industry growth rate which is 11-12 percent.
- Management is looking to maintain over 30 percent EBITDA margin going forward.
- Maintain our Underperform rating as we find valuations high.
Morgan Stanley on Mphasis
- Maintain Overweight, target price Rs 920.
- Strong Q4FY18 results and constructive outlook for FY19.
- Strong growth was led by the HP/DXC channel and Direct Core.
- Direct core, HP/DXC channel are expected to grow above the industry average.
- The company raised its margin outlook to 15-17 percent from 14-16 percent.
Credit Suisse on Sun Pharma
- Maintain Outperform, target price of Rs 640.
- Sun's partner Cipher reported a sharp decline in Absorica royalty.
- Absorica sales expected to be muted this quarter.
- Absorica sales decline should be partly offset by Sumatriptan and Coreg CR.
Morgan Stanley on Asian Paints
- Maintain Overweight, target price Rs 1.400.
- Volume growth for the domestic business was around 10 percent.
- Earnings missed estimates but recovery in domestic volume growth positive.
- Well placed to benefit from ongoing acceleration in discretionary consumption growth.
- Industrial paints, home improvement, and international business did well.