A cashier examines Indian rupee banknotes at the Mayuresh Watches and Traders watch and mobile phone store in the Byculla area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)  

All You Need To Know Going Into Trade On May 17

Most stocks in Asia advanced on Thursday after solid American economic data buoyed U.S. shares and sent 10-year treasury yields. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded flat at 10,769 as of 6:50 a.m.

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

U.S. Market Check

  • U.S. stocks advanced and 10-year Treasury yields pushed toward 3.1 percent as retailer results and solid economic data boosted confidence in the American economy.

Europe Check

  • European shares climbed, led by miners, as the prospect of a populist Italian government weighed on local stocks and the euro.
  • The pound got a boost from a Telegraph report that the U.K. will tell the European Union that it is prepared to stay in the customs union beyond 2021.
All You Need To Know Going Into Trade On May 17

Asian Cues

  • Topix index gained 0.4 percent as of 9:06 a.m. in Tokyo.
  • S&P/ASX 200 Index rose 0.1 percent.
  • Kospi index added 0.4 percent.
  • Hang Seng Index futures climbed 0.8 percent.
  • S&P 500 Index futures were up less than 0.1 percent. The S&P 500 rose 0.4 percent.

Here are some key events coming up this week:

  • Indonesian assets will be in focus Thursday as the central bank meets.
  • Malaysian first-quarter GDP growth is expected to slow to 5.6 percent year-on-year, but remain comfortably above the 10-year average.
  • Australian jobs are due Thursday.
  • New Zealand’s budget is due Thursday.

Commodities Check

  • West Texas Intermediate crude added 0.3 percent to $71.72 a barrel.
  • Brent crude traded 0.003 percent higher at $79.30 a barrel.
  • Aluminium traded 0.3 percent higher $2,349 per MT.
  • Gold was steady at $1,291.56 an ounce, near the weakest in 20 weeks.
  • LME copper rose 0.3 percent to $6,849 a metric ton.

Indian ADRs

All You Need To Know Going Into Trade On May 17

Stories You Might’ve Missed

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  • Here’s how scrapping Malaysian consumption tax will play out.
  • Stock market’s lifeboat may be sinking.
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  • Which motorcycle should you buy? A guide to new bikes.

Stocks To Watch

  • Divi’s Labs says U.S. FDA completes inspection of unit 1 at Telangana with no observations under Form 483.
  • Transport Corporation to hive off cold chain unit.

Nifty Earnings To Watch

  • Bajaj Finance
  • Bajaj Finserv

Other Earnings To Watch

  • Alembic
  • Balkrishna Industries
  • Central Bank Of India
  • Coffee Day Enterprises
  • Escorts
  • JK Tyre & Industries
  • Kei Industries
  • McDowell Holdings
  • SRF
  • Taj Gvk Hotels & Resorts
  • Voltas
  • Wabco India

Earnings Reaction To Watch

Tata Steel (Q4, YoY)

  • Revenue up 7 percent at Rs 36,132 crore.
  • Net profit of Rs 10,187 crore from a net loss of Rs 725 crore.
  • Ebitda down 7.5 percent at Rs 6,499 crore.
  • Margin at 18 percent versus 20.7 percent.

JSW Steel (Q4, YoY)

  • Revenue up 25 percent at Rs 20,817 crore.
  • Net profit at Rs 2,996 crore from Rs 1,014 crore.
  • Ebitda up 67 percent at Rs 5,290 crore.
  • Margin at 25.4 percent versus 19 percent.

Prataap Snacks (Q4, YoY)

  • Revenue up 30 percent at Rs 279.5 crore.
  • Net profit down 13 percent at Rs 10 crore.
  • Ebitda up 75 percent at Rs 21 crore.
  • Margin at 7.5 percent versus 5.6 percent.

Manali Petrochemical (Q4, YoY)

  • Revenue up 26 percent at Rs 190 crore.
  • Net profit at Rs 27 crore from Rs 7 crore.
  • Ebitda at Rs 44 crore from Rs 11 crore.
  • Margin at 23.2 percent versus 7.3 percent.

JK Lakshmi Cement (Q4, YoY)

  • Revenue up 11 percent at Rs 897 crore.
  • Net profit up 62 percent at Rs 34 crore.
  • Ebitda up 40 percent at Rs 101 crore.
  • Margin at 11.3 percent versus 8.9 percent.

Gujarat State Fertilizers (Q4, YoY)

  • Revenue up 33 percent at Rs 2,055 crore.
  • Net profit down 17 percent at Rs 156 crore.
  • Ebitda up 97 percent at Rs 227 crore.
  • Margin at 11 percent versus 7.5 percent.

Birla Corp (Q4, YoY)

  • Revenue up 16 percent at Rs 1,651 crore.
  • Net profit up 30 percent at Rs 131 crore.
  • Ebitda up 7 percent at Rs 252 crore.
  • Margin at 15.3 percent versus 16.7 percent.

Muthoot Finance (Q4, YoY)

  • Revenue from operations down 9.3 percent at Rs 1,551 crore.
  • Net profit up 40 percent at Rs 451 crore.
  • Other income at Rs 57 crore versus Rs 3.6 crore.
  • Provisions and write-offs at Rs 59.6 crore.

Tasty Bite Eatables (Q4, YoY)

  • Revenue up 12 percent at Rs 79 crore.
  • Net profit down 5.5 percent at Rs 7.8 crore.
  • Ebitda up 3 percent at Rs 15 crore.
  • Margin at 19 percent versus 20.6 percent.

Praj Industries (Q4, YoY)

  • Revenue down 9 percent at Rs 274.5 crore.
  • Net profit up 17 percent at Rs 27 crore.
  • Ebitda down 18 percent at Rs 31 crore.
  • Margin at 11.3 percent versus 12.6 percent.

Dishman Carbogen Amcis (Q4, YoY)

  • Revenue down 15 percent at Rs 451.5 crore.
  • Net profit up 19 percent at Rs 51 crore.
  • Ebitda down 17 percent at Rs 121 crore.
  • Margin at 26.8 percent versus 27.3 percent.

Zee Media (Q4, YoY)

  • Revenue up 33 percent at Rs 180 crore.
  • Net profit down 44 percent at Rs 2.5 crore.
  • Ebitda down 43 percent at Rs 20 crore.
  • Margin at 11.1 percent versus 25.9 percent.

Bulk Deals

  • Syngene International: Promoter Biocon sold 15.56 lakh shares or 0.8 percent equity at Rs 612.1 each.
  • Shree Renuka Sugars: Promoter Khandepar Investments Pvt Ltd. sold 3.16 crore shares or 1.6 percent equity at Rs 15.5 each.
  • Reliance Communication: Sistema Shyam Teleservices sold 2.76 crore shares or 1 percent equity at Rs 10.57 each.

Saksoft Ltd

  • Promoter SAK Industries bought 94,400 shares or 0.9 percent equity at Rs 240 each.
  • Ajit Thomas sold 1 lakh shares or 1 percent equity at Rs 240 each.

Uttam Galva Steel

  • Neera Gupta bought 10 lakh shares or 0.7 percent equity at Rs 12.95 each.
  • Lydia Construction Pvt Ltd bought 7.25 lakh shares or 0.5 percent equity at Rs 13.24 each.

Who’s Meeting Whom

  • Pidilite to meet Rondure Global Advisors and Grandeur Peak Global Advisors on May 28.
  • Concor to meet Edelweissfin Investment, B&K Securities, HSBC Securities and others from May 23 to June 8.
  • Dr Lal to meet Select Equity Group and Wasatch Advisors from May 22-25.

Insider Trades

  • Donear Industries promoter Rahul Agarwal acquired 12,168 shares on May 15.
  • Rico Auto Industries promoter Shivani Kapur sold 40,000 shares on May 9.
  • Meghmani Organics promoter Popatbhai Meghjibhai Patel acquired 45,000 shares on May 8.
  • Ashoka Buildcon promoter Ashok Katariya acquired 74,498 shares from May 14–15.

(As reported on May 16)

Rupee

  • Rupee closed at 67.80/$ on Wednesday from 68.11/$ on Tuesday.

Trading Tweaks

  • Rain Industries and Ruchi Soya circuit filter revised to 10 percent.
  • Smartlink Network Systems ex-date to determine buyback eligibility.

F&O Cues

  • Nifty May Futures closed trading at 10,761 with premium of 20 points versus 16.8 points.
  • All series-Nifty open interest down 2 percent and Bank Nifty open interest down 6 percent.
  • India VIX ended at 13.4, up 2 percent.
  • Max open interest for May series at 11,000, open interest at 60.9 lakh, open interest down 4 percent.
  • Max open interest for May series at 10,500, open interest at 55.3 lakh, open interest down 9 percent.

F&O Ban

  • In ban: Dewan Housing, Jet Airways, JP Associates, Justdial, PC Jewelers, Wockhardt, PC Jewellers.
  • New in ban: Reliance Communications
  • 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.

Active Stock Futures

Put-Call Ratio

  • Nifty PCR at 1.51 versus 1.59
  • Nifty Bank PCR at 0.79 versus 1.03

Fund Flows

All You Need To Know Going Into Trade On May 17

Brokerage Radar

Investec on Pharma

  • Aurobindo Pharma and Cipla: Initiate coverage with a ‘Buy’ rating and price target of Rs 760 and 660 respectively.
  • Sun Pharma, Lupin and Dr. Reddy’s: Initiate coverage with a ‘Sell’ rating and a price target of Rs 435, 665 and 2,030 respectively.
  • Remain cautious on the sector as challenges in U.S. will persist.
  • Prefer stocks not too reliant on large US products with stable base earnings.

Edelweiss on ITC

  • Maintained ‘Hold’ with a price target of Rs 320.
  • Margins shine; recovery in cigarette volumes underway.
  • Cigarette volumes fell 1‐2 percent on a yearly basis on a flat base.

Morgan Stanley on ITC

  • Maintained ‘Overweight’ with a price target of Rs 320.
  • Cigarette volume decline of 2.5 percent was broadly inline.
  • Key positive is the cigarette EBIT growth of 7.6 percent.
  • Overweight rating is premised on the expectation of a steady cigarette tax policy.

Credit Suisse on TVS Motor Co.

  • Maintained ‘Underperform’; cut price target to Rs 490 from Rs 510.
  • Good execution on products, but double-digit margins seem to be a pipe dream.
  • Management now refused to give any guidance on achieving double-digit margins.
  • Raw Materials, competition key headwinds in near term.

Macquarie on TVS Motor Co.

  • Maintained ‘Underperform’; cut price target to Rs 575 from Rs 540.
  • Margin improvement remains elusive.
  • Think the valuation for TVSL is expensive at 25x FY20E PER.