Stocks To Watch: RCom, Hindalco, ITC, JSW Steel, Tata Steel

Stocks in Asia followed their American counterparts lower as geopolitical developments and rising benchmark U.S. yields spurred a return of risk aversion. Equities in Japan and Korea were lower after U.S. stocks halted a four-day rally with the steepest slide in almost two weeks. Australian shares bucked the trend.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.7 percent lower at 10,750.50 as of 7:35 a.m.

Stock To Watch In Wednesday’s Trade

• ArcelorMittal transfers Rs 7,000 crore to SBI account to become eligible for Essar Steel bid.
• Reliance Communications admitted to insolvency proceedings by NCLT bench.
• EPC Industries to form joint venture with Israel’s Top Greenhouse.
• Shree Pushkar acquired 40,000 sq mtr land at MIDC, Ratnagiri for expansion purpose.

F&O Cues

• Nifty May Futures closed trading at 10,818.6 with premium of 16.8 points versus 8 points.
• All series-Nifty open interest down 2 percent and Bank Nifty open interest up 2 percent.
• India VIX ended at 13.1, down 7.5 percent
• Max open interest for May series at 11,000, open interest at 63.7 lakh, open interest up 4 percent.
• Max open interest for May series at 10,500, open interest at 60.6 lakh, open interest down 9 percent.

F&O Ban

• In ban: Dewan Housing, Jet Airways, JP Associates, Justdial, PC Jewelers, Wockhardt
• New in ban: PC Jewellers
• Out of ban: IRB Infra

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

Active Stock Futures

Bulk Deals

• Reliance Communications: Sistema Shyam Teleservices sold 1.54 crore shares (0.6 percent) at Rs 12.63 each
• Alok Industries: Catalyst Trusteeship sold 1.05crore shares (0.8 percent) at Rs 1.57 each

Nifty Earnings To Watch

• Hindalco
• ITC
• Tata Steel

Other Earnings To Watch

• AIA Engineering
• Alembic Pharmaceuticals
• Brigade Enterprises
• GSFC
• JK Lakshmi Cement
• JSW Steel
• Jyothy Laboratories
• Muthoot Finance
• NIIT
• Praj Industries
• Prataap Snacks
• PTC India
• Tasty Bite Eatables
• Teamlease Services
• TVS Motor Company
• Welspun India
• Zee Media

Earnings Reaction To Watch

PI Industries (Q4. YoY)

• Revenue up 3 percent at Rs 625 crore.
• Net profit down 22 percent at Rs 105 crore.
• Ebitda down 12 percent at Rs 135 crore.
• Margin at 21.6 percent versus 25.8 percent.

Monsanto India (Q4, YoY)

• Revenue up 10 percent at Rs 157 crore.
• Net profit up 66 percent at Rs 53 crore.
• Ebitda up 50 percent at Rs 54 crore.
• Margin at 34.4 percent from 25.2 percent.

Endurance Technologies (Q4, YoY)

• Revenue up 29 percent at Rs 1,782 crore.
• Net profit up 39 percent at Rs 116 crore.
• Ebitda up 36 percent at Rs 258 crore.
• Margin at 14.5 percent.

Ineos Styrolution India (Q4, YoY)

• Revenue up 29 percent at Rs 510.5 crore.
• Net profit up 7 percent at Rs 32 crore.
• Ebitda up 17 percent at Rs 55.5 crore.
• Margin at 10.9 percent from 12 percent.

Britannia Industries (Q4, YoY)

• Revenue up 13 percent at Rs 2,537.5 crore.
• Net profit up 25 percent at Rs 264 crore.
• Ebitda up 29 percent at Rs 396.5 crore.
• Margin at 15.6 percent from 13.7 percent.

Crompton Greaves Consumer (Q4, YoY)

• Revenue up 8 percent at Rs 1,126 crore.
• Net profit up 32 percent at Rs 103 crore.
• Ebitda up 27 percent at Rs 164 crore.
• Margin at 14.6 percent from 12.3 percent.

Clariant Chemicals (Q4, YoY)

• Revenue down 4 percent at Rs 244 crore.
• Net profit down 75 percent at Rs 2 crore.
• Ebitda down 45 percent at Rs 11 crore.
• Margin at 4.5 percent from 7.9 percent.

Shakti Pumps (Q4, YoY)

• Revenue down 22 percent at Rs 131 crore.
• Net profit down 20 percent at Rs 9.6 crore.
• Ebitda flat at Rs 23 crore.
• Margin at 17.6 percent from 13.8 percent.

JHS Svendgaard Laboratories (Q4, YoY)

• Revenue up 38 percent at Rs 38 crore.
• Net profit down 84 percent at Rs 3 crore.
• Tax credit of Rs 17 crore in base quarter.
• Ebitda up 14 percent at Rs 4 crore.
• Margin at 10.5 percent from 12.7 percent.

Who’s Meeting Whom

• Mahindra Logistics to meet Ask Investments and DSP Blackrock from May 16 – 21.
• Siemens to meet New India Assurance, GIC and Wellington Management Group from May 16 – 18.

Insider Trades

• Apollo Hospitals promoter Indian Hospitals Corp acquired 10,184 shares on May 10.
• Plastiblends India promoter Jyoti Kabra acquired 10,000 shares from May 9 – 10.
• Bodal Chemicals promoter Suresh Patel acquired 2.97lakh shares on May 14.

(As reported on May 15)

Brokerage Radar

CLSA on Lupin

• Maintained ‘Buy’, with a price target of Rs 1,000.
• US business trades at attractive valuation of <2x FY19 sales.
• FY19 is expected to be a challenging year and recovery is expected from March 2019 onwards.
• High single digit price erosion expected in the current financial year.

Credit Suisse on Lupin

• Maintained ‘Neutral’ with a price target of Rs 770
• Weak FY19 outlook for Japan and the U.S., and margins keep us neutral.
• FY19 sales growth guidance is for single digit growth.
• Next key event is likely re-inspection of Goa and Indore plants in December quarter.

Credit Suisse on PNB

• Downgraded to ‘Neutral’ from ‘Outperform’, cur price target to Rs 88 from Rs 188.
• Capital depletion will lead to loan book contraction.
• Could incur losses even in FY19 on residual fraud provisions.
• PNB will likely need a Balance Sheet contraction to conserve capital.

Macquarie on CG Consumer

• Maintained ‘Outperform’, with a price target of Rs 292.
• The key positive takeaway was the operating margins expansion.
• Revenue growth decent but lags peers.
• Need to capitalize with new product offering.

Credit Suisse on CG Consumer

• Maintained ‘Outperform’, with a price target of Rs 315.
• Margin expansion continues to play out, led by lighting.
• Go-to-market changes, potential new category entry are key drivers.