Stocks To Watch: Aurobindo Pharma, Dr. Reddy’s Lab, HUL, Infosys, PC Jeweller, Tata Motors
Asian stocks began the week in a mixed fashion as traders assessed the sustainability of last week’s relief rally ahead of a slew of Chinese economic figures.
Equities in Sydney fell, while shares in South Korea were gained in early trading. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.1 percent higher at 11,039 as of 6:50 a.m.
Here Are The Stocks To Watch Out For In Today’s Trade
- Infosys announced 1:1 bonus issue.
- Indivior won preliminary injunction against generic rival Dr. Reddy’s for Suboxone.
- PC Jeweller withdrew buyback offer as it does not get NOC from bankers.
- Moody’s downgraded credit rating of Tata Motors by one notch due to weaker consolidated credit matrix.
- Just Dial to consider buyback of equity shares on July 20.
- WABCO signed first power steering system export deal in India to supply Tata Motors.
- Vedanta identified as “H1 Qualified Interested Bidder” for GMR Chhattisgarh Energy Ltd by consortium of lenders.
- Cochin Shipyard won shipbuilding contract from Inland water Authority of India worth Rs 102.6 crore.
- HMT transferred remaining seven acres of land at Tumkur to ISRO.
- HDFC MF received SEBI go ahead for IPO (Economic Times).
- BK Birla group company Kesoram may demerge ailing tyre business (Times of India).
- Aurobindo Pharma to acquire Apotex International Inc.’s commercial operations in five European countries for € 74 million.
- Sterlite plant closure to hit 2-3 percent profit of Vedanta group (Business Standard).
- Dalmia Bharat eyes acquisition as Binani Cement fate hangs in balance (Business Standard).
- Jindal Steel & Power has settled dispute with Zee Media. Both the parties have withdrawn the allegations against each other.
- Supreme Court to hear Jaiprakash Associates’ matter today regarding the purpose of considering the issue of the rights of the home buyers and the capability of JAL and JIL to construct the projects.
Data To Watch
- India to report WPI data for June.
Earnings To Watch
- Hindustan Unilever
- Jay Bharat Maruti
- Sintex Plastics Technology
Earnings Reaction To Watch
Infosys (Q1, QoQ)
- Revenue up 6 percent at Rs 2831 crore.
- Net profit down 2 percent at Rs 3612 crore.
- EBIT down 1 percent at Rs 4537 crore.
- Margin at 23.7 percent versus 24.7 percent.
Bajaj Corp (Q1, YoY)
- Revenue up 12 percent at Rs 221 crore.
- Net profit down 2 percent at Rs 54 crore.
- Other Income of Rs 11 crore in base quarter
- EBITDA up 15 percent at Rs 68.5 crore.
- Margin at 31 percent versus 30.2 percent.
BEPL (Q1, YoY)
- Revenue down 10 percent to Rs 202 crore.
- Ebiitda down 7 percent to Rs 27.5 crore.
- Margin at 13.6 percent versus 13.2 percent.
- Net profit down 0.7 percent to Rs 16.8 crore.
- Company dropped its capacity expansion to 137 KTPA plans.
- Aims to achieve 75 percent capacity utilisation for 2018-19 with 100 KTPA plant.
DCB Bank (Q1YoY)
- Net interest income up 17 percent to Rs 273 crore.
- Net profit up 6.6 percent to Rs 69.5 crore.
- GNPA up 8.6 percent to Rs 400.6 crore (QoQ).
- NNPA up 5 percent to Rs 154 crore (QoQ)
- GNPA ratio at 1.86 percent versus 1.79 percent.
- NNPA ratio at 0.72 percent versus 0.72 percent.
CCL Products (Q1, YoY)
- Revenue up 22 percent to Rs 218 crore.
- Ebitda up 26 percent to Rs 42 crore.
- Margin at 19.2 percent versus 18.5 percent.
- Net profit up 17 percent to Rs 24 crore.
- Solara Active Pharma Sciences: Reliance Strategic Investments sold 1.36 lakh shares at Rs 150.24 each.
AU Small Finance Bank
- Kotak MF bought 36.5 lakh shares 1.3 percent equity at Rs 630 each.
- International Finance Corporation sold 1.20 crore shares or 4.2 percent equity at Rs 630 each.
- Jasmine Capital Investments PTE bought 21.96 lakh shares or 1 percent equity at Rs 704.35 each.
- Cinnamon Capital sold 21.96 lakh shares or 1 percent equity at Rs 704.35 each.
- Jasmine Capital Investments PTE bought 39.46 lakh shares or 1.1 percent equity at Rs 262.6 each.
- Cinnamon Capital sold 39.46 lakh shares or 1.1 percent equity at Rs 262.6 each.
Who’s Meeting Whom
- Eris Lifesciences to meet Prabhudas Lilladher on July 16.
- Tata Steel to meet LIC, Goldman Sachs and SBI Life Insurance of July 17 and July 18.
- Omax Autos’ promoter Devashish Mehta sold 15,000 shares on July 10.
- Divi’s Lab’s promoter Madhusudana Rao Divi sold 10,000 shares on July 11.
- Man Infraconstruction’s promoter Vatsal Shah acquired 54,500 shares on July 12.
As reported on July 13
- Rupee ended at 68.53 a dollar on Friday versus 68.57/$ on Thursday.
- Nifty July Futures closed trading at 11,020 premium of one point versus discount of seven points.
- July series-Nifty OI unchanged & Bank Nifty OI down 3 percent.
- India VIX ended flat at 12.3, down 1.2 percent.
- Max OI for July series at 11,000 Call, OI at 33.2 lakh, OI down 13 percent.
- Max OI for July series at 10,600 Put, OI at 50.3 lakh, OI down 2 percent.
- In Ban: Jet Airways
- New in Ban: None
- Out of Ban: None
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.
Stocks Seeing High Open Interest Change
Investec on UPL
- Maintained ‘Buy’; Cut price target to Rs 785 from Rs 1,050.
- Share prices decline on depreciating Brazilian Real and on news around Arysta acquisition.
- Investors concerned regarding the valuation of the potential deal.
- Current price factors in the possible risks from such a deal.
- UPL’s conservative approach to acquisitions in the past provides assurance.
- Lower price target to factor heightened volatility in business environment and multiples of global generic agrochem peers.
Nomura on Dr. Reddy’s
- Maintained ‘Buy’ with a price target of Rs 2,704.
- Preliminary Injunction (PI) in favour of Indivior and against Dr Reddy's.
- Dr. Reddy’s appeal on PI verdict will take 2-6 months.
- PI would adversely impact as competition could intensify for drug.
- Attribute Rs 60 percent share for gSuboxone opportunity in price target.
CLSA on Aurobindo Pharma
- Maintained ‘Underperform’ with a price target of Rs 630.
- Further inorganic expansion in the EU.
- EV to previous fiscal sales multiple appears low but there is limited meaning for sales multiple.
- Deal increases European exposure in total sales to 31 percent.
Brokerages On Infosys
- Maintained ‘Buy’ with a price target of Rs 1,550.
- June quarter’s constant currency revenue growth came in-line with estimate
- Strong growth seen in energy and manufacturing on a yearly basis.
- Though guidance retained, expect better margins.
- Deals and Digital are positives; Concerned on attrition and BFS sector
- Infosys will achieve the lower end of its guidance in 2018-19.
- Maintained ‘Buy’; raised price target to Rs 1,440 from Rs 1,320.
- Margin performance drives upgrades.
- Commentary suggests better growth going forward.
- Weakness in BFSI is likely over.
- Assume marginal narrowing of valuation gap with TCS.
- Maintained ‘Neutral’; raised price target to Rs 1,315 from Rs 1,285.
- Largely inline Q1 revenues and EBIT margins.
- Flattish BFSI and high attrition are key concerns.
- Stock to be supported by sector sentiments, pending capital return and bonus announcement.