Employees walk past electronic boards displaying stock figures in the atrium of the National Stock Exchange of India Ltd. (NSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On May 28

Asian stocks drifted at the open, with energy shares tumbling after oil posted its biggest drop in about a year. U.S. stocks fell on lighter than normal volume on Friday heading into the long Memorial Day holiday weekend though S&P 500 futures pointed to gains.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.1 percent higher at 10,649 as of 8:40 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 bounced between gains and losses as plummeting oil prices rocked energy shares and investors weighed what U.S. President Donald Trump called North Korea’s “warm and productive” response to his decision to cancel a summit with the nation’s leader Kim Jong-Un.

All You Need To Know Going Into Trade On May 28

Europe Check

European shares posted their first weekly drop since late March as political concerns from Spain to Italy dominated markets.

All You Need To Know Going Into Trade On May 28

Asian Cues

  • Topix index was little changed.
  • S&P/ASX 200 Index fell 0.3 percent.
  • Kospi index rose 0.5 percent.
  • Futures on the S&P 500 advanced 0.4 percent.

Commodities Check

  • West Texas Intermediate crude fell 1 percent to $67.21 a barrel after tumbling 4 percent on Friday.
  • Brent crude traded 0.6 percent lower at $76.02 per barrel.
  • Gold lost 0.4 percent to trade at $1,297.05 an ounce.
  • Aluminium traded 1.1 percent lower at $2,267.50 per MT.

Key Events This Week

  • U.S. markets are closed today for Memorial Day holiday. U.K. markets are closed for the spring bank holiday.
  • European Union foreign ministers meet in Brussels today to discuss developments related to North Korea, Yemen, and the Iran nuclear deal.
  • EU trade chief Cecilia Malmstrom and U.S. Commerce Secretary Wilbur Ross are scheduled to meet on Wednesday in an informal World Trade Organization ministerial in Paris.
  • U.S. employment report for May due on Friday.
  • On Saturday, U.S. Secretary of Commerce Wilbur Ross will travel to Beijing for more talks with Vice Premier Liu He on topics including ZTE Corp. and trade.

Fuel Price Update

Petrol and diesel prices continued to rise for the 15th straight day as state-run oil marketers increased rates in line with crude oil prices.

The price of petrol was hiked by 15 paise today to Rs 86.08 a litre in Mumbai, while diesel was raised by 11 paise to Rs 73.64 a litre, according to data released by Indian Oil Corporation Ltd.

Stories That You Might Have Missed

Stocks To Watch

  • Cadila Healthcare to raise up to Rs 10,000 crore via QIP issue and up to Rs 5,000 crore via issue of FCCBs.
  • Sundaram Finance Holdings to amalgamate Sundaram BPO India with Sundaram Business Services.
  • GIC announced 1:1 bonus issue.
  • Himatsingka Seide subsidiary’s retail division to be demerged from self.
  • DCM Foods approved modernisation of first extrusion line which will add 3,800 MT per annum to its capacity.
  • Dilip Buildcon declared L1 bidder for NHAI project in Karnataka for Rs 1,027 crore.
  • Lakshmi Vilas Bank in talks with banks, PE funds to sell up to 26 percent equity (Economic Times).

Nifty Earnings To Watch

  • L&T
  • NTPC

Other Earnings To Watch

  • Apex Frozen
  • Aurobindo Pharma
  • Bank of India
  • Finolex Cables
  • GNA Axles
  • Mercator
  • NLC India
  • NMDC
  • Oil India

Earnings Reactions To Watch

Sun Pharma (Q4, YoY)

  • Revenue down 2 percent to Rs 6,977 crore.
  • Net profit up 7 percent to Rs 1,309 crore.
  • Ebitda up 9 percent to Rs 1,683 crore.
  • Margin at 24.1 percent versus 21.7 percent.

Tech Mahindra (Q4, QoQ)

  • Revenue up 3.6 percent to Rs 8,054.5 crore.
  • Net profit up 30 percent to Rs 1,222 crore.
  • EBIT up 12.4 percent to Rs 1,113 crore.
  • EBIT margins at 13.8 percent versus 12.7 percent.

Eris Life Sciences (Q4, YoY)

  • Revenue up 16.2 percent to Rs 194 crore.
  • Net profit up 9.3 percent to Rs 57.4 crore.
  • Ebitda up 30.1 percent to Rs 72 crore.
  • Margins at 37.1 percent versus 33.2 percent.

Gujarat Fluorochemicals (Q4, YoY)

  • Revenues down 46.8 percent at Rs 991.7 crore.
  • Net profit of Rs 54.5 crore versus net loss of Rs 122.2 crore.
  • Ebitda down 91.1 percent to Rs 33.3 crore.
  • Margins at 3.4 percent versus 20.1 percent.

Power Mech (Q4, YoY)

  • Revenues up 18.1 percent to Rs 407.8 crore.
  • Net profit up 44 percent to Rs 22.9 crore.
  • Ebitda up 28.8 percent to Rs 51.4 crore.
  • Margins at 12.6 percent versus 11.6 percent.

Jindal Saw (Q4, YoY)

  • Revenue up 35.6 percent to Rs 2,488.8 crore.
  • Net profit up 45.1 percent to Rs 165.4 crore.
  • Ebitda up 13.4 percent to Rs 436 crore.
  • Margins at 17.5 percent versus 21 percent.

SH Kelkar (Q4, YoY)

  • Revenue up 14.8 percent to Rs 282.7 crore.
  • Net profit down 28.1 percent to Rs 19.7 crore.
  • Ebitda up 85.7 percent to Rs 24.7 crore.
  • Margins at 8.7 percent versus 5.4 percent.

TCI Express (Q4, YoY)

  • Revenue up 23.1 percent to Rs 249.3 crore.
  • Net profit up 49.6 percent to Rs 17.8 crore.
  • Ebitda up 51.3 percent to Rs 28.3 crore.
  • Margins at 11.4 percent versus 9.2 percent.

Amber Enterprises (Q4, YoY)

  • Revenue up 12.1 percent to Rs 692 crore.
  • Net profit up 46.9 percent to Rs 33.8 crore.
  • Ebitda up 20.4 percent to Rs 67.9 crore.
  • Margins at 9.8 percent versus 9.1 percent.

PC Jeweler (Q4, YoY)

  • Revenue down 2.4 percent to Rs 2,103 crore.
  • Net profit up 7.4 percent to Rs 118.3 crore.
  • Ebitda up 19.8 percent to Rs 212.1 crore.
  • Margins at 10.2 percent versus 8.2 percent.

Lakshmi Machine Work (Q4, YoY)

  • Revenue up 10.1 percent to Rs 747.3 crore.
  • Net profit down 10.4 percent to Rs 61.2 crore.
  • Ebitda up 17.5 percent to Rs 67.5 crore.
  • Margins at 9 percent versus 8.5 percent.

Bank of Baroda (Q4)

  • Net interest income rose 11.7 percent to Rs 4,002.3 crore (YoY).
  • Net loss of Rs 3,102 crore versus net profit of Rs 154.7 crore (YoY).
  • Provisions at Rs 7,052.5 crore versus Rs 3,155.3 crore (QoQ).
  • Gross NPA at 12.26 percent versus 11.31 percent (QoQ).
  • Net NPA at 5.49 percent versus 4.97 percent (QoQ).

NBCC (Q4, YoY)

  • Revenue dropped 3.4 percent to Rs 2,545.8 crore.
  • Net profit down 16.1 percent to Rs 146 crore.
  • Ebitda down 9 percent to Rs 191.5 crore.
  • Margins at 7.5 percent versus 8 percent.

Saurashtra Cement (Q4, YoY)

  • Revenue up 66.7 percent to Rs 178.5 crore.
  • Net profit up 4.8 times to Rs 26.3 crore.
  • Ebitda down 90.9 percent to Rs 0.7 crore.
  • Margins at 0.4 percent versus 7.2 percent.

Lakshmi Vilas Bank (Q4)

  • NII down 47.1 percent at Rs 120.4 crore (YoY).
  • Net loss at Rs 622.3 crore versus net profit of Rs 52.2 crore (YoY).
  • Provisions at Rs 921.4 crore versus Rs 85.3 crore (QoQ).
  • Gross NPA at 9.98 percent versus 5.66 percent (QoQ).
  • Net NPA at 5.66 percent versus 4.27 percent (QoQ).

Excel Crop Care (Q4, YoY)

  • Revenue down 12 percent to Rs 207.3 crore.
  • Net loss at Rs 0.5 crore versus net profit of Rs 6 crore.
  • Ebitda down 44.2 percent to Rs 4.8 crore.
  • Margins at 2.3 percent versus 3.7 percent.

NALCO (Q4, YoY)

  • Revenue up 12.3 percent at Rs 2,863.2 crore.
  • Net profit down 4 percent at Rs 257 crore.
  • Ebitda up 14.5 percent at Rs 489.67 crore.
  • Margin at 17.1 percent versus 16.7 percent.
All You Need To Know Going Into Trade On May 28

Bulk Deals

Laurus Labs

  • Promoter Satyanarayana Chava bought 6.3 lakh shares at Rs 453.99 each.

Who’s Meeting Whom

  • Voltas to meet Morgan Stanley on May 28.
  • Blue Star to meet Motilal Oswal, Kotak, HSBC, ICICI Securities, Emkay and many others on May 28.

F&O Cues

  • Nifty May Futures closed at 10,602; a discount of 2.6 points versus 8.6 points.
  • May series-Nifty Open Interest down 2 percent and Bank Nifty Open Interest down 9 percent.
  • India VIX ended at 12.6, down 3.8 percent.
  • Maximum Open Interest for May series at 10,800, Open Interest at 52.9 lakh, Open Interest up 7 percent.
  • Maximum Open Interest for May series at 10,500, Open Interest at 67.3 lakh, Open Interest up 22 percent.

F&O Ban

  • In Ban: BEML, DHFL, IDBI, Jet Airways, Jain Irrigation, Just Dial, Reliance Communications
  • New In Ban: IDBI, Just Dial

Alert: Only intraday positions can be taken in stocks which are in F&O ban, in case of rollover of these intraday positions there is a penalty

Put-Call Ratio

  • Nifty PCR at 1.46 versus 1.28
  • Nifty Bank PCR at 1.15 versus 0.96

Active Stock Futures

Insider Trades

  • TTK Prestige promoter TT Jagannathan bought 2,450 shares on May 24.
  • Take Solutions promoter Nadathur Srinivasan Shonbana bought 60,000 shares on May 25.

(As reported on May 25)

Rupee

  • Rupee closed at 67.77 per U.S. dollar on Friday versus 68.35 per U.S. dollar on Thursday.
All You Need To Know Going Into Trade On May 28

Brokerage Radar

Kotak On Page Industries

  • Maintained ‘Sell’; Raised price target to Rs 21,000 from Rs 18,200.
  • Sharp improvement in product mix drove strong growth.
  • Overall volume growth modest.
  • Fundamentals strong, but valuations rich.

Kotak Securities On Cummins India

  • Maintained ‘Reduce’; Cut price target to Rs 680 from Rs 715.
  • Ended 2017-18 on a weak note; outlook suggest no respite.
  • Competition expanding aggressively; full impact yet to play out.
  • FY19-20 likely to be challenging years.

Credit Suisse On Cummins India

  • Maintained ‘Outperform’; cut price target to Rs 850 from Rs 975.
  • Lackluster Q4 results on spike in expenses.
  • Target price cut to factor in lower revenues and margins.
  • Retain rating on sharp underperformance in last two years and likely recovery.

Goldman Sachs On Tech Mahindra

  • Maintained ‘Buy’; raised price target to Rs 880 from Rs 824.
  • Q4 results above expectations on continued margin beat.
  • Entire topline growth led by enterprise business in Q4.
  • 5G remains key structural growth opportunity.

Macquarie On Tech Mahindra

  • Maintained ‘Neutral’ with a price target of Rs 670.
  • Q4 profit above estimates due to forex gains and profit on sale of land.
  • Expect EBIT margin normalisation to continue.
  • Outlook for telecom business remains muted; 5G spend at least a year away.

Deutsche Bank On Sun Pharma

  • Maintained ‘Hold’; cut price target to Rs 431 from Rs 496.
  • Q4 in line; U.S. revenue offset weak India business growth.
  • Specialty launches to drive sentiment near term.
  • Execution in U.S. business remains key monitorable.

HSBC On Sun Pharma

  • Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 510 from Rs 650.
  • Q4 gross margins expand on better product mix and lower costs.
  • Expect operating expenses to increase on account of speciality drugs.
  • Headwinds continue for U.S. generic business.

Edelweiss On Cadila Healthcare

  • Maintained ‘Buy’ with a price target of Rs 510.
  • Strong Q4 led by robust U.S. performance.
  • Generic Tamiflu and exclusive sales of generic Lialda drive U.S.
  • Cadila to deliver strong earnings growth on the back best complex pipeline.

JPMorgan On Cadila Healthcare

  • Maintained ‘Neutral’; cut price target to Rs 400 from Rs 425.
  • Q4 in line; growth aided by U.S. as India was muted.
  • Continued launch momentum crucial for maintaining U.S. revenue base.
  • Gross margins to be at risk in FY19-20 due to erosion in key products.

Edelweiss On Bank of Baroda

  • Maintained ‘Buy’ with a price target of Rs 180.
  • Q4 marred by higher slippages.
  • Loan growth strong with better rated corporate and retail segments.
  • Expect quality growth to gain traction.

Morgan Stanley On Bank of Baroda

  • Maintained ‘Equal-weight’ with a price target of Rs 170.
  • Underlying trends in asset quality improved.
  • Key negative was miss in core pre-provisioning operating profit owing to weak NII.
  • Expect double-digit return on equity by FY20.