Stocks To Watch: Sun Pharma, TCS, Page Industries, Ruchi Soya

Asian stocks traded mixed Wednesday following a lackluster session in the U.S. as investors turned their attention to the major central bank meetings this week after shrugging off Tuesday’s North Korea summit.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,822 as of 7:50 a.m.

Stocks To Watch In Wednesday’s Trade

• Sun Pharma receives Establishment Inspection Report from U.S. FDA for Halol facility. (Here’s what it means)
• Tata Consultancy Services’s board to consider buyback proposal at June 15 meeting.
• Page Industries says license pact with Jockey extended until December 2040.
• Premier resumes operations at Pune plant following workers’ unrest.
• Alok Industries says NCLT asks resolution professional to present resolution plan to lenders.
• Bharat Forge acquires 35.26 percent stake in U.K.’s Tevva Motors for £10 million.
• Nitin Spinners says committee to meet on June 15 to approve issue price for preferential allotment.
• Adani Wilmar identified as highest bidders for Ruchi Soya.
• Federal Bank agrees to acquire 19.98 percent in Equirus Capital.
• Yes Bank reappointed Rana Kapoor CEO for further period of three years effective Sept. 1.
• PNB board meeting on June 15 to consider proposal for issuance of upto 10 crore equity shares to its employee under ESOPs.

F&O Setup

• Nifty June Futures closed trading at 10,839 discount of 3.7 points versus 1 points
• June series-Nifty open interest up 2 percent & Bank Nifty open interest up 3.3 percent
• India VIX ended 12.7, down 3.4 percent
• Max open interest for June series at 11,000 Call, open interest at 38.3 lakh, open interest down 3 percent
• Max open interest for June series at 10600 Put, open interest at 50.6 lakh, open interest up 2 percent

F&O Ban

• In ban: Dewan Housing, Balrampur Chini, Jet Airways, Just Dial
• New in ban: Just Dial
• Out of ban: None

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

Active Stock Futures

Corporate Actions

• Pincon Lifestyle and Kapil Raj Finance shifted out of ASM.
• Usha Martin circuit filter revised to 10 percent.
• Caplin Point Laboratories circuit filter revised to 5 percent.
• L.G. Balakrishnan & Bros. Ltd. last trading day before ex-bonus.

Who’s Meeting Whom Today

• PI Industries to meet ICICI Prudential Mutual Fund on June 13.
• Advanced Enzymes to meet Baron Funds, Dalton Investments and other investors from June 13 – 15.
• Eris Lifesciences to meet Baring Private Equity Partners on June 13.

Insider Trades

• Centrum Capital promoter BG Advisory Services LLP acquired 10,000 shares on June 8.
• Panama Petrochem promoter acquired 24,624 shares from June 7 – 11.
• Nandan denim promoter Vedprakash Chiripal acquired 50,000 shares on June 7.
• Intellect design arena promoter Polaris Banyan Holding acquired 1 lakh shares from June 8 – 11.

Economic Data

• May CPI at 4.87 percent versus 4.58 percent (MoM); Est 4.90 percent.
• April IIP at 4.9 percent versus 4.4 percent (MoM); Est 5.70 percent.

Money Market Check

• Rupee closed at 67.49/$ on Tuesday versus 67.43/$ on Monday.

Bulk Deals

• Uttam Galva Steels: Asia Investment Corporation (Mauritius) Ltd sold 10 lakh shares or 0.7 percent equity at Rs 11.45 each.

KSK Energy Ventures

• Mentor Capital bought 30 lakh shares or 0.7 percent equity at Rs 2.48 each.
• Oriental Bank of Commerce sold 23.23 lakh shares or 0.5 percent equity at Rs 2.38 each.
• Societe Generale sold 52.35 lakh shares or 1.2 percent equity at Rs 2.46 each.

Brokerage Radar

Macquarie on KEC International

• Initiated ‘Outperform’ and a price target of Rs 454.
• Play on railway electrification opportunity in India.
• Power T&D to witness stable growth.
• RoE of +20 percent to sustain; Leverage to come down further.
• Expect revenue and net profit to compound at 13 percent and 21 percent over the fiscal 2018-2021.
• Multiple catalysts in place, deserves premium.

IDFC Securities on Sun Pharma

• Maintained ‘Outperform’ with a price target of Rs 574.
• Receipt of Halol EIR is major positive development for Sun’s U.S. business.
• EIR underlines that the phase of FDA compliance related challenges is largely behind.
• Growth trajectory of speciality portfolio will remain key monitorable.
• Sun is clearly best placed amongst large domestic peers.

Morgan Stanley on Sun Pharma

• Maintained ‘Underweight’ with a price target of Rs 448.
• Halol clearance on expected lines.
• New ANDA approvals held back for last three years should commence.
• Sun should be able to gradually increase sales for the current portfolio.

Citi on Maruti

• Maintained ‘Buy’ with a price target of Rs 10, 700.
• Agree with management assessment of double-digit volume growth for 2018-19.
• Share gains in PV cars have more than offset the slippage in UVs.
• Well balanced growth, in both rural and urban with strong dealer network.

Citi on Reliance Industries

• Maintained ‘Buy’; raised price target to Rs 1,180 from Rs 1, 150.
• Period of consolidation YTD provides an attractive entry point.
• Higher crude has improved economics of petcoke gasification to benefit.
• Next telco event to watch out is FTTH & enterprise launch.
• Top large-cap pick in Indian oil & gas space.

Goldman Sachs on IT Sector

• Reduce EPS estimates for HCL Tech given challenges in IMS.
• Maintain Buy on Tech Mahindra, Mphasis and Infosys; Sell on Wipro.
• 5G remains a key structural growth opportunity yet to be priced in for Tech Mahindra.
• Infosys is trading at a sharp discount to TCS, despite having similar growth profile.
• Positive stance on Mphasis reflects strong deal momentum in direct channel.
• Weak execution, client losses and challenges in healthcare not in valuation.

Nomura on NTPC

• Maintained ‘Buy’ with a price target of Rs 200.
• Plant load factor of thermal capacity was 73.7 percent in May-2018, down 170 basis point on a monthly basis and 120 basis points on a yearly basis.
• PLF dragged lower largely due to accident-triggered outage and planned outages.
• 15.7GW capacity across eight plants had less than a week’s coal inventory in May.

HSBC on ICICI Lombard

• Maintained ‘Reduce’ with a price target of Rs 620.
• Multi-year policies could result in reserving risks.
• Impact of hike in compensation limits likely to be muted.
• Biggest upside risk is passage of Motor Vehicles bill.

IDFC Securities on Hikal

• Hybrid business model provides competitive advantage.
• Pharma: healthy volumes drive growth.
• Agrochemicals - new product launches to drive growth.
• Management expects margins to improve and FCF to turn positive.

Morgan Stanley on TCS

• Maintained ‘Overweight’; raised price target to Rs 2,010 from Rs 1,825.
• Positives: strong global growth, US economy doing well, digital adoption and rupee depreciating.
• Expect margins can move toward 26-28 percent.
• Raised EPS estimates by 4-5 percent to factor gains from rupee depreciation.
• Valuation should reflect superior profile.