People watch the electornic stock ticker in front of the BSE (Photographer: Scott Eells/Bloomberg)

Stocks To Watch: Cipla, Grasim, HPCL, Jet Airways, Tata Motors

Summary
  • Minda Industries board approves 2:1 bonus issue.
  • Gravita India enters into contract with Amara Raja Batteries.
  • Nifty earnings today: Grasim, Tata Motors

Asian stocks fluctuated at the open on Wednesday as investors weighed renewed geopolitical tensions against easing trade strains.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,529 as of 7:30 a.m.

Stocks To Watch In Wednesday’s Trade

  • CCI approves acquisition of Monsanto by Bayer AG, subject to compliance of certain modifications.
  • Minda industries board approves 2:1 bonus Issue.
  • Majesco gets contract from Gibraltar BSN Life for distribution management solution.
  • Gravita India enters into contract with Amara Raja Batteries to collect/purchase lead acid battery scrap and supply pure lead, alloys in return.

Fuel Price Update

State-run oil marketers hiked petrol and diesel prices for the tenth day in a row.

The price of petrol was hiked by 29 paise today to Rs 84.9 a litre in Mumbai and diesel was raised by 28 paise to Rs 72.76 a litre, according to data released by Indian Oil Corporation Ltd.

F&O Cues

  • Nifty May futures close trade at 10553, premium of 16 points versus 22 points earlier
  • Max Call open interest at 10,800 strike; open interest at 64.8 lakh shares
  • Max Put open interest at 10,500 strike; open interest at 52.4 lakh shares

F&O Ban

  • In ban: BEML, DHFL, Jet Airways, Justdial, RCom
  • New in ban: BEML
  • Out of ban: Balrampur Chini, PC Jewellers, Wockhardt

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

Bulk Deals

Strides Shasun

  • BNP Paribas Arbitrage bought 4.85Lakh shares (0.5 percent) at Rs 365.25 each.
  • Brookdale Mauritius International Limited bought 10 lakh shares (1.1 percent) at Rs 375.27 each.

Nifty Earnings To Watch

  • Grasim
  • Tata Motors

Other Earnings To Watch

  • Apollo Pipes
  • Bajaj Electricals
  • Bayer Cropscience
  • CESC
  • IGL
  • Jet Airways
  • Kolte-Patil Developers
  • KPIT Technologies
  • Larsen & Toubro Infotech
  • Motherson Sumi Systems
  • Natco Pharma
  • Repco Home Finance

Earnings Reactions To Watch

Bata India (Q4, YoY)

  • Revenue up 7 percent at Rs 632 crore.
  • Net profit up 44 percent at Rs 52 crore.
  • Ebitda up 43 percent at Rs 82 crore.
  • Margin at 13 percent.

Future Consumer (Q4, YoY)

  • Revenue up 51 percent at Rs 807 crore.
  • Net loss of Rs 4 crore.
  • Ebitda at Rs 17 crore from Rs 2 crore.
  • Margin at 2.1 percent.

L&T Technology Services (Q4, YoY)

  • Revenue up 30 percent at Rs 1,055 crore.
  • Net profit up 66 percent at Rs 159 crore.
  • Other income of Rs 75.5 crore in current quarter.
  • Ebitda up 21.5 percent at Rs 164 crore.
  • Margin at 15.5 percent.

Minda Industries (Q4, YoY)

  • Revenue up 53 percent at Rs 1,371 crore.
  • Net profit up 122 percent at Rs 140 crore.
  • Profit higher due to exceptional gain of Rs 38 crore in current quarter.
  • Ebitda up 62 percent at Rs 170 crore.
  • Margin at 12.4 percent.

Music Broadcast (Q4, YoY)

  • Revenue up 13.4 percent at Rs 76 crore.
  • Net profit up 3.55 times at Rs 16 crore.
  • Ebitda up 54 percent at Rs 27 crore.
  • Margin at 35.5 percent.

HPCL (Q4, QoQ)

  • Revenue up 6 percent at Rs 60,810 crore.
  • Net profit down 10 percent at Rs 1,748 crore.
  • EBITDA down 8 percent at Rs 2,923 crore.
  • Margin at 4.8 percent.
  • FY18 GRM at $7.40/barrel versus $6.20/barrel (YoY).

Healthcare Global Enterprises (Q4, YoY)

  • Revenue up 22 percent at Rs 222 crore.
  • Net profit down 57 percent at Rs 3 crore.
  • Ebitda up 7 percent at Rs 32 crore.
  • Margin at 14.4 percent.

TV Today Network (Q4, YoY)

  • Revenue up 2 percent at Rs 181 crore.
  • Net profit down 11 percent at Rs 33 crore.
  • Ebitda up 8 percent at Rs 52 crore.
  • Margin at 28.7 percent.

Cipla (Q4, YoY)

  • Revenue up 3 percent at Rs 3,698 crore.
  • Net profit of Rs 179 crore.
  • Ebitda up 10 percent at Rs 557 crore.
  • Margin at 15.1 percent.

Igarashi Motors India (Q4, YoY)

  • Revenue down 19 percent at Rs 106 crore.
  • Net profit down 13 percent at Rs 16.5 crore.
  • Ebitda down 7 percent at Rs 27 crore.
  • Margin at 25.5 percent.

Sonata Software (Q4, QoQ)

  • Revenue down 18 percent at Rs 626 crore.
  • Net profit up 10 percent at Rs 54 crore.
  • Other income of Rs 12 crore in current quarter.
  • Ebit flat at Rs 61 crore.
  • Margin at 9.7 percent.

Brokerage Calls On SBI

Credit Suisse

  • Maintained ‘Underperform’; cut price target to Rs 322 from Rs 381.
  • Residual stress contracting, but further capital required.
  • Gross NPAs have likely peaked at 10.9 percent this quarter.
  • Cut FY19 EPS by 3 percent and FY20 EPS by 20 percent on higher provisions.

Bank of America Merrill Lynch

  • Maintained ‘Buy’ with a price target Rs 380.
  • Recognition now behind; recovery and loan growth to drive sharp rebound.
  • March-quarter weakness led by new NPL norms, treasury losses.
  • SBI is the key beneficiary of asset quality cycle.

Other Brokerage Calls

CLSA On HPCL

  • Maintained ‘Sell’ with a price target of Rs 300
  • Core Ebitda and net profit above estimates but Ebit misses.
  • Macro risks in election-heavy 2018-19 to keep buyers away.

CLSA On Bharat Forge

  • Maintained ‘Buy’ with a price target Rs 915.
  • Solid Q4 performance while growth outlook remains strong.
  • New orders to provide a boost over the next 2-3 years.
  • 27 times FY19 PE is not cheap but justified given the strong outlook.

Credit Suisse On Bharat Forge

  • Maintained ‘Neutral’, cut price target to Rs 750 from Rs 780.
  • A decent quarter but below estimates due to sluggish India non-autos.
  • Continued strong performance in the India CV and PV businesses.
  • Strong momentum in the exports business, but growth rates to slow as base gets tougher.

Bank of America Merrill Lynch On Dr. Reddy’s Laboratories

  • Cut price target to Rs 2,388 from Rs 2,573.
  • Q4 miss on most fronts but overall thesis intact.
  • Complex generics catalysts are near but binary.
  • Have moved generic Copaxone to 2HFY20 and generic NuvaRing to 1HFY20

CLSA On Dr. Reddy’s Laboratories

  • Maintained ‘Outperform’; cut price target to Rs 2,260 from Rs 2,720.
  • Q4 results impacted by shift in channel purchasing pattern in Russia.
  • Nuvaring launch delayed by another six months to 4QFY19.
  • Believe earnings have bottomed in growth markets like India and Russia.

CLSA On Cipla

  • Maintained ‘Buy’; cut price target to Rs 650 from Rs 750.
  • Q4 results weak despite adjusting for one-time items.
  • U.S. growth impacted by supply issues but will revive in Q2FY19.
  • Muted Ebitda margin expansion in FY19, but expect pick-up in FY20.

Macquarie On Cipla

  • Maintained ‘Outperform’ with a price target of Rs 636.
  • Ebitda margins were impacted by seasonally weak sales mix in India.
  • Cipla remains our preferred large-cap pharma pick.
  • Management optimistic about 2018-19; U.S. business on growth track.
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