Market indices displayed at the Tokyo Stock Exchange (Photographer: Akio Kon/Bloomberg)

Stocks To Watch: Adani Ports, Ajanta Pharma, Bharat Electronics, UPL 

Asian equities opened mixed as investors evaluated whether earnings can deliver on high expectations against a backdrop of trade tensions.

Japan’s Topix index ticked higher, while stocks fell in Australia and South Korea. Hong Kong futures pointed to declines for shares there. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,934.50 as of 6:55 a.m.

Here Are The Stocks To Watch Out For In Today’s Trade

  • UPL is said to seek $3 billion loan to buy Ackman-backed Arysta, Bloomberg reported.
  • HDFC Bank: To decide pricing of share allotment to parent HDFC
  • IHH made mandatory open offer to shareholders of Fortis Healthcare.
  • Bharat Electronics signed MoU with Sweden’s SAAB for 3D air surveillance radar.
  • L&T and BEML signed pact to explore domestic and export markets for defence projects and services.
  • Ajanta Pharma clarified DGCA has not taken action against the company.
  • Adani Ports arm to form joint venture with Nyk Auto Logistics for transportation of vehicles using freight trains.
  • Apex Frozen Foods, Avanti Feeds and Waterbase in focus as the U.S. Department of Commerce finalises the antidumping duty rate, on certain frozen warmwater shrimp from India, at 1.35 percent.
  • Maruti Suzuki: Is said to launch new entry-level car in 2020. (Mint)
  • Mukund: Approves merger four units, associate companies with itself.
  • Tata Steel: Is said in talks for up to $3.1 billion overseas loans (Economic Times)

Also read: Bharti Airtel’s Debt Repayment For This Fiscal Is Thrice The Cash It Generates

Earnings To Watch

  • Zee Entertainment
  • 8K Miles
  • Ashok Leyland
  • Federal Bank
  • ICICI Lombard General Insurance
  • Muthoot Capital Services
  • Nucleus Software Exports
  • Rallis India
  • Sintex Industries
  • Tata Sponge Iron

Earnings Reaction To Watch

HUL (Q1, YoY)

  • Revenue up 11.2 percent at Rs 9,487 crore.
  • Net profit up 19.2 percent at Rs 1,529 crore.
  • Ebitda up 20.6 percent at Rs 2,251 crore.
  • Margin at 23.7 percent versus 21.9 percent.

Jay Bharat Maruti (Q1, YoY)

  • Revenue up 34.1 percent at Rs 505.9 crore.
  • Net profit up 32.7 percent at Rs 13.4 crore.
  • Ebitda up 46.2 percent at Rs 42.4 crore.
  • Margin at 8.4 percent versus 7.7 percent.

Sintex Plastics Technology (Q1, YoY)

  • Revenue down 12.2 percent at Rs 1325.2 crore.
  • Net profit down 46.9 percent at Rs 37.5 crore.
  • Ebitda down 29.9 percent at Rs 162.8 crore.
  • Margin at 12.3 percent versus 15.4 percent.

Also Read: Q1 Results: HUL Profit Meets Estimates As Sales Volumes Rise In June Quarter

Bulk Deals

  • PVR: MFS International New Discovery Fund acquired 2.96 lakh shares or 0.63 percent equity at Rs 1191.75 each.

JTEKT

  • Promoter Jtket Corporation sold 1.14 crore shares or 5.75 percent equity at Rs 91.16 each.
  • Reliance Capital acquired 60 lakh shares or 3.02 percent equity at Rs 91.1 each.
  • India Acorn Fund Ltd. acquired 12 lakh shares or 0.60 percent equity at Rs 91.1 each.
  • White Oak India Equity Fund acquired 13.5 lakh shares or 0.68 percent equity at Rs 91.1 each.

KDDL

  • RBS acquired 2.5 lakh shares or 2.3 percent equity at Rs 473 each.
  • Maven India Fund sold 71,000 shares or 0.6 percent equity at Rs 475 each.
  • RC Tritec AG sold 60,000 shares or 0.5 percent equity at Rs 470 each.

Who’s Meeting Whom

  • GPT Infraprojects to meet investors on July 17.
  • Indiabulls Housing Finance to meet investors from July 16-20 in U.K. and Singapore.
  • Mirc Electronics to meet ASK investment, Trust Capital and Florintree Advisors on July 17.
  • Rushil Decor to meet SBI Mutual Fund and Fidelity Investments on July 17.

Insider Trades

  • JSW Steel promoter group acquired 6.16 lakh shares from July 12-13.
  • Singer India promoter sold 1.03 lakh shares from July 12-13.
  • Sadbhav Infrastructure Projects promoter acquired 30,000 shares from July 11-12.

Trading Tweaks

  • Den Networks circuit filter revised to 10 percent.
  • D B Corp ex date to determine buyback eligibility.
  • M.M.Forgings last trading day before ex date for 1:1 bonus.

Rupee

  • Rupee closed at 68.57/$ on Monday from 68.53/$ on Friday. Widening trade deficit along with foreign outflows weighed on the currency.

F&O Cues

  • Nifty July futures closed trading at 10,944 premium of 7 points versus 1 point.
  • July series: Nifty open interest down 3 percent and Bank Nifty open interest down 6 percent.
  • India VIX ended at 12.9, up 5.2 percent.
  • Max open interest for July series at 11,000 Call (open interest at 39.6 lakh, up 19 percent)
  • Max open interest for July series at 10,600 Put (open interest at 47.2 lakh, down 6 percent)

F&O Ban

In ban: Jet Airways

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

Active Stock Futures

Brokerage Radar

HSBC on Finolex Industries

  • Initiated ‘Buy’ with a price target of Rs 750.
  • Policy, capacity and improving margins all flowing through.
  • Expect PVC resin fundamentals to improve.
  • Rise in weightage of more stable pipes business to make margins less volatile.
  • Finolex trades at steep discount, despite similar growth profile and strong balance sheet.

IDFC Securities on GAIL

  • Maintained ‘Outperformer’; hiked price target to Rs 434 from Rs 410.
  • Expect June quarter to see stellar performance.
  • GST inclusion and aggressive bidding in the CGD auction are positive triggers.
  • Petchem expansion to stabilize gradually.
  • Transmission and trading volumes set to grow steadily.
  • Unified tariff approval: every 10 percent hike can boost EPS by 7 percent.
  • Profitability in LPG segment to remain strong over the current and next financial year.

Nomura on proposed Axle Norms

  • Proposed truck axle load relaxation led to sharp correction in Ashok Leyland and Tata Motors.
  • Impact on truck demand depends on execution of proposed norms.
  • If implemented on existing vehicles then demand for new vehicles to be impacted.
  • If implemented on new vehicles then positive for short term demand.

BofA-ML on Proposed Axle Norms

  • Proposed rated load to be increased by 15-25 percent.
  • If implemented on current fleet, then it will impact demand for new trucks.
  • Change in norms to bring down the existing overloading issues.
  • Impact of these norms is difficult to gauge as it depends on state-wise implementation.
  • Uncertainty to remain an overhang for stock prices of Ashok Leyland and Tata Motors.

Edelweiss on Hindustan Unilever

  • Maintained ‘Hold’; raised price target to Rs 1,887 from Rs 1,647.
  • June quarter numbers came inline with estimates.
  • Growth was broad based aided by gradual improvement in demand.
  • Triggers: New launches, performance of Indulekha & Ayush and revival of rural demand.
  • Hold as stock offers limited upside from current levels.

Nomura on Coal India

  • Upgraded to ‘Buy’ from ‘Neutral’; cut price target to Rs 318 from Rs 332.
  • Sanguine earnings outlook and inexpensive valuations turn risk-reward favourable.
  • Higher blended realisation to result in EPS CAGR of 24 percent over the fiscal 2018-2020.
  • Expect 7 percent CAGR in offtake over the financial years till March 2021 with no negative surprises in operating expense.

Credit Suisse On Sun Pharma

  • Maintained ‘Outperform’ with a price target Rs 600.
  • Details of MK-3222 formulary inclusion has started trickling.
  • MK-3222 likely classified as Tier 4 coverage at United.
  • High discount strategy could work for Sun Pharma.
  • Expect Sun to take peak volume share of 4-5 percent in market of $7-8 billion

Motilal Oswal on Hindustan Unilever

  • Maintained ‘Buy’; raised price target to Rs 2,010 from Rs 1,925.
  • Broad-based growth encouraging.
  • Margins impressive despite high ad spend.
  • Offers highest earnings visibility and return ratios in large-cap Indian consumer space.

Macquarie on Indian Metals

  • China remains focused on pollution control.
  • More cities in restricted list means more cuts in steel capacity.
  • No new cuts in aluminium, but cost support may rise.
  • Believe Asian steel margins will remain high on account of high utilisation levels.
  • Favourable terms for EAF capacity addition should keep graphite electrode market tight.
  • Indian metals equities corrected on trade war risks.
  • Remain constructive on steel equities, graphite electrode producers, Hindalco and Coal India.