Investors stand at trading terminals in front of an electronic stock board at a securities brokerage in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)

All You Need To Know Going Into Trade On May 21 

Asian stocks fluctuated early on Monday even as U.S. equity futures jumped in the wake of news that the Sino-American trade war is on hold for now.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent higher at 10,621.50 as of 7:30 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 fell Friday in light trading, the dollar rose and Treasury yields retreated as investors assessed conflicting signals on trade talks between the world’s two largest economies.
All You Need To Know Going Into Trade On May 21 

Europe Check

  • European equities declined as investors assessed a populist coalition proposal in Italy.
All You Need To Know Going Into Trade On May 21 
  • The euro dropped 0.2 percent to $1.1768, hitting the weakest level in five months with its fifth consecutive decline.
  • The British pound declined 0.3 percent to $1.3479.
  • Germany’s 10-year yield decreased one basis point to 0.63 percent.
  • Britain’s 10-year yield declined six basis points to 1.50 percent, the biggest fall in two weeks.

Asian Cues

  • Japan’s Topix index was little changed.
  • Australia’s S&P/ASX 200 Index fell 0.2 percent.
  • Kospi index was down 0.3 percent.
  • S&P 500 futures were up 0.6 percent.
  • S&P 500 closed down 0.3 percent on Friday.

Here are some key events coming up this week:

  • On Monday, Philadelphia Fed President Patrick Harker, Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari speak at various events.
  • Brexit negotiations resume in Brussels Tuesday, and South Korea’s president visits Washington to discuss North Korea
  • Also Tuesday, Facebook founder and CEO Mark Zuckerberg will appear before the European Parliament on his company’s use of personal data.
  • Federal Reserve releases minutes of policy makers’ May 1-2 meeting on Wednesday; U.S. new home sales will also be released as will the euro-area and Japan PMIs.
  • Thursday sees the Bank of England Markets Forum at Bloomberg London. Speakers include BOE Governor Mark Carney and New York Fed President William Dudley.
  • At the St. Petersburg Forum Friday, Presidents Putin and Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News editor-in-chief John Micklethwait.
  • Also Friday, European Union finance ministers discuss the latest on Brexit talks, in Brussels.

Commodities Check

  • West Texas Intermediate crude rose 0.5 percent to $71.62 a barrel Monday.
  • Gold lost 0.2 percent to $1,290.80 an ounce.
  • Copper futures fell 0.1 percent to $6,847.50 a metric ton.
  • Brent crude traded 0.5 percent higher at $78.89 per barrel.
  • Aluminium traded 1.5 percent lower at $2,280.25 per MT.

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Indian ADRs

All You Need To Know Going Into Trade On May 21 

Stocks To Watch

  • Century Textiles to demerge cement division and merges it with UltraTech Cement.
  • Endurance Tech says entitled for Rs 283 crore industrial promotion subsidy.
  • Alembic Pharma gets one Form 483 observation on Karkhadi API unit.
  • Strides Shasun board approved merger of Arrow Remedies and Fargis Medica with self.
  • Indoco Remedies received three observations under Form 483 for API plant at Patalganga.
  • Indiabulls Real Estate to buy back 2.6 crore equity shares (5.45 percent) at Rs 240 each.
  • RBI imposed monetary penalty of Rs 5 crore on South Indian Bank: Bloomberg.
  • Tata steel completed acquisition of 72.65 percent in Bhushan Steel.
  • AU Small Finance Bank to raise Rs 1,000 crore from Temasek via share sale.

Earnings To Watch

  • Aster DM Healthcare
  • Astrazeneca Pharma
  • Colgate
  • DLF
  • Future Retail
  • Just Dial
  • Mahanagar Gas
  • Motilal Oswal Financial Services
  • Petronet LNG
  • Timken India
  • TTK Prestige

Earnings Reaction To Watch

Bajaj Holdings & Investment (Q4, YoY)

  • Revenue up 23 percent at Rs 221 crore.
  • Net profit up 42 percent at Rs 801 crore.
  • Share of profit after tax of associates up 38 percent at Rs 599 crore versus Rs 432.5 crore

Prabhat Dairy (Q4, YoY)

  • Revenue up 7 percent at Rs 405 crore.
  • Net profit at Rs 18 crore versus net loss of Rs 2 crore.
  • Tax credit of Rs 0.3 crore in current quarter versus tax outgo of Rs 14 crore in base quarter.
  • Ebitda up 37 percent at Rs 41 crore.
  • Margins at 10.1 percent versus 8 percent.

Sheela Foam (Q4, YoY)

  • Revenue up 15 percent at Rs 528 crore.
  • Net profit up 88 percent at Rs 32 crore.
  • Ebitda up 121 percent at Rs 53 crore.
  • Margin at 10 percent versus 5.2 percent.

Tata Chemicals (Q4, YoY)

  • Revenue up 2 percent at Rs 2,555 crore.
  • Net profit up 4 times at Rs 1,169 crore.
  • Exceptional gain of Rs 1,267 crore in current quarter from sale of fertilizer business.
  • Ebitda up 8 percent at Rs 512.5 crore.
  • Margin at 20.1 percent versus 18.9 percent.

Asian Granito India (Q4, YoY)

  • Revenue up 18 percent at Rs 392 crore.
  • Net profit up 6 percent at Rs 17 crore.
  • Ebitda up 3 percent at Rs 36 crore.
  • Margin at 9.2 percent versus 10.5 percent

Den Networks (Q4, YoY)

  • Revenue down 1 percent at Rs 315 crore.
  • Net loss of Rs 10 crore versus net loss of Rs 60 crore.
  • Exceptional loss of Rs 31 crore.
  • Ebitda flat at Rs 56 crore.
  • Margin at 17.8 percent versus 17.7 percent.

Inox Wind (Q4, YoY)

  • Revenue down 80 percent at Rs 203 crore.
  • Net profit down 56 percent at Rs 56 crore.
  • Ebitda loss of at Rs 30 crore versus Ebitda profit of Rs 229 crore.
  • Margins at -14.8 percent versus 22.5 percent.

Manappuram Finance (Q4, YoY)

  • Net interest income up 2 percent at Rs 622 crore versus Rs 609 crore.
  • Net profit down 9.5 percent at Rs 182 crore versus Rs 201 crore.

Thermax (Q4, YoY)

  • Revenue down 3 percent at Rs 1443 crore.
  • Net profit at Rs 76 crore; one-time loss of Rs 65 crore in base quarter.
  • Ebitda down 20 percent at Rs 138.5 crore.
  • Margin at 9.6 percent versus 11.6 percent.

Kalyani Steels (Q4, YoY)

  • Revenues up 12 percent at Rs 356 crore.
  • Net profit down 21 percent at Rs 30 crore.
  • Ebitda down 10 percent at Rs 55 crore.
  • Margin at 15.4 percent versus 19.2 percent.

Future Lifestyle Fashions (Q4, YoY)

  • Revenue down 1 percent at Rs 977 crore.
  • Net profit down 64 percent at Rs 26 crore.
  • Exceptional gain of Rs 13 crore and tax credit of Rs 11 crore in base quarter.
  • Ebitda down 5 percent at Rs 88 crore versus Rs 93 crore.
  • Margin at 9.0 percent versus 9.4 percent.

Kitex Garments (Q4, YoY)

  • Revenue down 26 percent at Rs 131 crore.
  • Net profit down 63 percent at Rs 10 crore.
  • Ebitda down 62 percent at Rs 18 crore.
  • Margin at 13.7 percent versus 26.8 percent.

Sobha (Q4 Consolidated, YoY)

  • Revenue up 31.8 percent at Rs 769.6 crore.
  • Net Profit up 39.1 percent at Rs 65.4 crore.
  • EBITDA up 23.8 percent at Rs 136.4 crore.
  • EBITDA margin at 17.7 percent vs 18.9 percent.

New Offerings

  • Indostar Capital Finance to be listed on exchanges today. IPO price at Rs 572.

Bulk Deals

  • Welspun Enterprises: Promoter Balkrishan Goenka Welspun Group Master Trust bought 14.11 lakh shares or 1 percent equity at Rs 178.5 each.
  • Manali Petrochemicals: KIFS Enterprises bought 10 lakh shares or 0.6 percent equity at Rs 44.69 each.
  • Max Ventures: Indgrowth Capital Fund I bought 5.37 lakh shares or 0.7 percent equity at Rs 74.7 each.
  • Kaveri Seeds: Ashoka PTE sold 6.60 lakh shares or 1 percent equity at Rs 500.13 each.

ADF Foods

  • Alpana S Dangi bought 5.75 lakh shares or 2.7 percent equity at Rs 270 each
  • Promoter Bhavesh Ramesh Thakkar HUF sold 5.24 lakh shares or 2.5 percent equity at Rs 270 each

Balrampur Chini Mills

  • California Public Employees' Retirement System bought 12.85 lakh shares or 0.6 percent equity at Rs 62.27 each.
  • Morgan Stanley France SAS sold 11.45 lakh shares or 0.5 percent equity at Rs 62.66 each.

Who’s Meeting Whom

  • PNB Housing Finance to participate in non-deal roadshow organised by Credit Suisse from May 22 – May 24.
  • Newgen Software to participate in non-deal roadshow organized by ICICI Securities from May 21 – 23.
  • Majesco to meet several fund houses from May 21 – June 6.
  • Endurance Tech to meet Wasatch Advisors on May 21.
  • Cholamandalam Investment & Co to meet several fund houses including Axis Capital, Spark Capital and KR Choksey from May 21 – 25.

F&O Cues

  • Nifty May Futures closed trading at 10,597 with premium of 0.6 points versus 13.5 points on Thursday.
  • All series-Nifty open interest up 2 percent and Nifty Bank open interest down 6 percent.
  • India VIX ended at 14.1, up 5.5 percent.
  • Max OI for May series at 11,000, open interest at 58.4 lakh, open interest up 2 percent
  • Max open interest for May series at 10,500, open interest at 53.7 lakh, open interest up 1 percent.

F&O Ban

  • In Ban: Balrampur Chini, Dewan Housing, Jet Airways, JP Associates, PC Jewellers, Reliance Communications, Wockhardt.
  • New In Ban: Balrampur Chini, Reliance Communications.
  • Out Of Ban: Just Dial.

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

All You Need To Know Going Into Trade On May 21 

Put Call Ratio

  • Nifty PCR at 1.35 versus 1.46.
  • Nifty Bank PCR at 0.86 versus 0.66.

Rupee

  • Rupee ends at 68/dollar on Friday versus 67.69/dollar on Thursday.

Fund Flows

All You Need To Know Going Into Trade On May 21 

Brokerage Radar

Macquarie On Strides Shasun

  • Downgraded to ‘Neutral’ and cut target price to Rs 398.
  • Fourth quarter performance was a huge dampener.
  • U.S.-partnered portfolio shrunk significantly from nearly $25 million in the third quarter to $7 million in fourth quarter.
  • Business in Australia is on track and will grow in early double digits in 2018-19.
  • Cut financial year 2018-19’s EPS estimates sharply by 52 percent and by 50 percent for the next financial year to reflect structural issues.

Macquarie On Bajaj Auto

  • Maintained ‘Underperform’ with a target price of Rs 2,800.
  • Downside risk to the street’s expectations for Bajaj Auto’s operating margin.
  • Domestic motorcycle market share is running hard to stand still.
  • Expect Bajaj’s exports to grow 12 percent by March 2019.

Macquarie On Ashok Leyland

  • Maintained ‘Underperform’ with a target price of Rs 113.
  • Volume growth drives margin improvement in the fourth quarter.
  • Decline in the market share of the medium and heavy commercial vehicles segment in the fourth quarter.
  • Commercial vehicles demand likely to remain strong in the ongoing and next financial year.
  • Stock is trading at a 30 percent premium to its historical average valuation.

Nomura On Bajaj Auto

  • Maintained ‘Neutral’ with a target price of Rs 3,252.
  • Domestic two-wheeler performance remains weak due to high competition.
  • Three-wheeler exports benefitted from a recovery in Egypt and new markets.

Nomura On Amara Raja

  • Maintained ‘Buy’ with a target price of Rs 1,046.
  • Fourth quarter results below Nomura’s consensus estimates.
  • Management indicated that telecom demand remained muted.
  • Lead prices have started coming down, which should support margins.
  • Operating margin came at 13.3 percent, below their estimate of 16 percent.

Investec On Bajaj Finserv

  • Maintained ‘Buy’ and raised the target price to Rs 6,510 from Rs 5,615.
  • Turnaround was sustained in life insurance.
  • Life insurance capital utilisation to improve.