All You Need To Know Going Into Trade On May 15

Stocks in Asia opened mixed with 10-year Treasury yields hitting the 3 percent mark again as investors assessed the outlook for trade relations and tensions in the Middle East.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 10,804 as of 6:50 a.m.

All eyes will be on the outcome of the Karnataka assembly elections. At least four of five exit poll surveys showed the Bharatiya Janata Party in pole position but short of a full majority of 113 seats. (Here are 10 things to watch)

Short on time? Well, then listen to this podcast for a quick summary of the article!

U.S. Market Check

• U.S. stocks ended the day little changed in light trading as investors assess the outlook for trade relations and tensions in the Middle East.
• Treasury yields hovered around 3 percent and the dollar steadied after rising against a basket of major peers.

Europe Check

• European stocks closed little changed after paring earlier declines as the euro strengthened on prospects of faster monetary tightening.

Asian Cues

• The Topix index rose 0.1 percent as of 9:06 a.m. in Tokyo.
• S&P/ASX 200 Index fell 0.1 percent.
• Kospi index was little changed.
• Hang Seng Index futures fell 0.1 percent.
• S&P 500 futures fell less than 0.05 percent. The S&P 500 rose 0.1 percent.
• The MSCI Asia Pacific Index fell 0.1 percent.

Here are some key events coming up this week:

• India April trade balance, estimate $15 billion deficit, prior $13.7 billion deficit
• The Reserve Bank of Australia releases minutes for its May policy meeting.
• China plans to send Vice Premier Liu He to Washington for more trade talks.
• European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K.
• China releases data including industrial production and retail sales figures Tuesday.
• U.K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union.
• U.S. retail sales, industrial production are due this week.
• Vodafone Group, Home Depot, Credit Agricole, Tencent, Cisco Systems, Burberry Group, Walmart, Vivendi, AstraZeneca, Deere, Fujifilm, Noble Group, and Campbell Soup are among the companies releasing earnings this week.

Commodities Check

• West Texas Intermediate crude gained 0.1 percent to $71.03 a barrel.
• Gold was steady at $1,313.93 an ounce.
• LME copper fell 0.2 percent to $6,870 a metric ton.

Indian ADRs

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Stocks To Watch

• Manipal-TPG revises offer for Fortis Healthcare to Rs 180 per share
• RBI imposes further restrictions under PCA on Allahabad Bank
• JK Paper approves setting up additional capacity upto 2 lakh tonnes per annum of packaging board, pulping facilities up to 1.6 lakh tonne per annum, and utilities in Gujarat for Rs 1,450 crore
• Kaveri Seeds to consider share buyback on May 24
• Adlabs Entertainment to consider issue of securities to QIB on May 17
• Shalimar paints to consider rights issue on May 23
• Delhi High Court agrees to hear plea filed by Daiichi and a strategic investor to stop Fortis sale

Nifty Earnings To Watch

• Lupin

Other Earnings To Watch

• Britannia Industries
• Crompton Greaves Consumer Electricals
• Dhanlaxmi Bank
• Endurance Technologies
• Karnataka Bank
• MRPL
• Punjab National Bank
• PI Industries
• Reliance Communications
• Snowman Logistics
• Syndicate Bank

Earnings Reaction To Watch

HUL (Q4, YoY)

• Revenue up 11 percent at Rs 9,097 crore
• Net profit up 14 percent at Rs 1,351 crore
• Ebitda up 24 percent at Rs 2,048 crore
• Margin at 22.5 percent versus 20.1 percent

Dr. Lal PathLabs (Q4, YoY)

• Revenue up 21 percent at Rs 267 crore
• Net profit up 25 percent at Rs 40 crore
• Ebitda up 28 percent at Rs 64 crore
• Margin at 24 percent versus 22.7 percent

Bombay Dyeing (Q4, YoY)

• Revenue up 44 percent at Rs 758 crore
• Net profit at Rs 11 crore versus net loss of Rs 62.5 crore
• Ebitda at Rs 229.5 crore versus Rs 109.5 crore
• Margin at 30.3 percent versus 20.8 percent

Polaris Consulting (Q4, QoQ)

• Revenue up 6 percent at Rs 721 crore
• Net profit up 25.5 percent at Rs 69 crore
• Ebit up 23 percent at Rs 97 crore
• Margin at 13.5 percent versus 11.6 percent

KEC International (Q4, YoY)

• Revenue up 29 percent at Rs 3,664 crore
• Net profit up 35 percent at Rs 196 crore
• Ebitda up 23 percent at Rs 370.5 crore
• Margin at 10.1 percent versus 10.6 percent

Balaji Amines (Q4, YoY)

• Revenue up 33 percent at Rs 257 crore
• Net profit up 83 percent at Rs 33 crore
• Ebitda up 22 percent at Rs 47 crore
• Margin at 18.3 percent versus 19.9 percent

JK Paper (Q4, YoY)

• Revenue up 8 percent at Rs 752 crore
• Net profit up 32 percent at Rs 74 crore
• Ebitda up 17 percent at Rs 167 crore
• Margin at 22.2 percent versus 20.4 percent

Honeywell Automation (Q4, YoY)

• Revenue up 8 percent at Rs 640 crore
• Net profit at Rs 58 crore versus Rs 22 crore
• Ebitda up 11 percent at Rs 80 crore
• Margin at 12.5 percent versus 12.2 percent

Cupid (Q4, YoY)

• Revenue down 4 percent at Rs 17.65 crore
• Net profit at Rs 2.7 crore versus Rs 4.9 crore
• Ebitda at Rs 3.85 crore versus Rs 7.9 crore
• Margin at 21.8 percent versus 42.9 percent

MSCI India Index

Additions

• Avenue Supermarts
• InterGlobe Aviation
• Pidilite Industries
• Power Grid Corp. of India

Deletions

• ACC
• IDFC Bank
• Power Finance Corp.
• Tata Motors A
• Vakrangee

Bulk Deals

Mphasis

• First State Asian Equity Plus Fund bought 24.39 lakh shares (1.3 percent) at Rs 960 each
• Nomura Funds Ireland plc. India Equity Fund bought 11.20 lakh shares (0.6 percent) at Rs 961.1 each
• Oppenheimer International Small Company Fund bought 28.11 lakh shares (1.5 percent) at Rs 960 each
• Nomura India Stock Mother Fund bought 15.20 lakh shares (0.8 percent) at Rs 961.1 each
• Promoter Marble II Pte Ltd sold 1.54crore shares (8 percent) at Rs 960.09 each

Who’s Meeting Whom

• DCM Shriram to meet Laburnum Capital on May 15
• MCX to meet ULJK Financial Services on May 15

Insider Trades

• Waterbase promoter Karam Chand Thapar & Bros. (Coal Sales) Ltd acquired 25,032 shares on May 10
• Bodal chemicals promoter Ankit S Patel acquired 3.14 lakh shares on May 11
• Kwality Ltd promoter Sanjay Dhingra acquired 5.96 lakh shares on May 11

Rupee

Rupee closed at 67.52/$ on Monday from 67.33/$ on Friday

Top/Worst Performers This Month

F&O Cues

• Nifty May Futures closed trading at 10,814.7 with premium of 8 points versus 13.6 points
• All series: Nifty open interest down 2 percent
• India VIX ended at 14.2, up 2 percent
• Max open interest for May series at 11,000 (open interest at 61.4 lakh, up 3 percent)
• Max open interest for May series at 10,500 (open interest at 66.7 lakh, up 6 percent)

F&O Ban

• In ban: Dewan Housing, IRB Infra, Jet Airways, JP Associates. Just Dial, Wockhardt
• New in ban: JP Associates, Just Dial
• Out of ban: Balrampur Chini
• 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

Put-Call Ratio

• Nifty PCR at 1.64 versus 1.65
• Nifty Bank PCR at 1.10 versus 1.05

Fund Flows

Brokerage Radar

Brokerages On HUL

CLSA

• Maintain Outperform, raise target price to Rs 1,650 from Rs 1,575
• Hindustan Unilever's 11 percent volume growth is best in class
• Management commentary is fairly positive, with a decisive pick-up in rural growth
• Rural has improved but need to wait a few more quarters to establish the trend

Credit Suisse

• Maintain Outperform, raise target price to Rs 1,675 from Rs 1,530
• Strong pick-up in volume growth trend while margins expand despite jump in ad spend
• Volume growth at 11 percent marks a significant acceleration in trend on base of 4 percent
• Management still looks to expand operating margins in FY19 despite crude driven inflation

Morgan Stanley

• Maintain Underweight, raise target price to Rs 1,260 from Rs 1,120,
• Q4 suggests worst in terms of volume growth for the industry may be over
• Estimate around 9 percent volume growth in FY19
• HUL stocks trades at 30 percent premium to last 12-year average price to earnings ratio

CLSA On Dr Lal Pathlabs

• Maintain Buy, target price at Rs 1,320
• Kolkata lab operationalisation to keep volume growth healthy
• Competitive scenario stabilising but management expects consolidation
• Dr Lal's second half performance has been strong after some weakness in first half