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

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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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BQ Live

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.

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

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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

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.
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