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.

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.