Stocks To Watch: Bharti Airtel, Biocon, ICICI Bank, Reliance Industries, Hindalco
Asian stocks edged higher on Friday and headed for the strongest week since early June following a series of steps by China shifting to stimulus mode.
Japanese equities climbed for a fourth day, despite a drop of more than 5 percent in Nomura Holdings Inc. following a profit slide. Intensifying speculation about tweaks to the Bank of Japan’s stimulus programme saw 10-year yields triple this week, and they traded at 0.1 percent for a second day.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent higher at 11,245 as of 7:23 a.m.
Short on time? Well, then listen to this podcast for all you need to know before the opening bell.
Here Are The Stocks To Watch Out For In Today’s Trade
- Hindalco’s Novelis to buy Aleris in $2.6 billion deal with assumption of debt.
- Adani Ports signs a long-term regasification pact with GAIL for Dhamra LNG terminal.
- IFB Industries to acquire industrial laundry equipment biz of Ramsons Garment for Rs 35 crore.
- HPCL unlikely to buy Iran oil until India gets waiver from U.S. (Bloomberg)
- Petronet LNG CEO expects BPCL Kochi plant to boost gas purchase. (Bloomberg)
- HDFC Asset Management IPO gets demand for 5.52 times shares offered on second day sale; offer closes today.
Nifty Earnings To Watch
- HCL Technologies
- ICICI Bank
- Reliance Industries
Other Earnings To Watch
- Alembic Pharmaceuticals
- Bank of Baroda
- Coromandel International
- Equitas Holdings
- Heritage Foods
- IL&FS Transportation
- Indian Overseas Bank
- Johnson Controls-Hitachi
- JSW Energy
- Jubilant Life
- Mahindra & Mahindra Financial Services
- Phillips Carbon
- Prestige Estates Projects
- Prism Johnson
- Shoppers Stop
- Welspun India
Earnings Reaction To Watch
Petronet LNG (Q1, QoQ)
- Revenue up 6.2 percent to Rs 9169 crore
- Net profit up 12.2 percent to Rs 587 crore
- Ebitda up 13.6 percent to Rs 934 crore
- Margin at 10.2 percent versus 9.5 percent
Essel Propack (Q1, YoY)
- Revenue up 13.3 percent at Rs 635.4 crore versus Rs 560.8 crore
- Net profit up 20.4 percent at Rs 41.3 crore versus Rs 34.3 crore
- Ebitda up 9.5 percent at Rs 111.6 crore versus Rs 101.9 crore
- Margin at 17.6 percent versus 18.2 percent
Tata Metaliks (Q1, YoY)
- Revenue up 21.8 percent at Rs 467.5 crore.
- Net profit down 1 percent at Rs 30.6 crore.
- Ebitda up 32.8 percent at Rs 66 crore.
- Margin at 14.1 percent versus 12.9 percent.
Quess Corp (Q1, YoY)
- Revenue up 51.7 percent at Rs 1,968.4 crore.
- Net profit up 19 percent at Rs 54.4 crore.
- Ebitda up 36.1 percent at Rs 102.5 crore.
- Margin at 5.2 percent versus 5.8 percent.
WABCO India (Q1, YoY)
- Revenue up 42.2 percent at Rs 747.3 crore.
- Net profit up 38 percent at Rs 74.8 crore.
- Ebitda up 26.2 percent at Rs 99.7 crore.
- Margin at 13.3 percent versus 15 percent.
ITC (Q1, YoY)
- Revenue up 8 percent at Rs 10,707 crore.
- Net profit up 10 percent at Rs 2,819 crore.
- Ebitda up 12 percent at Rs 4,202.5 crore.
- Margin at 39.3 percent versus 37.6 percent.
Container Corporation of India (Q1, YoY)
- Revenue up 7 percent at Rs 1,568 crore.
- Net profit up 2 percent at Rs 252 crore.
- Ebitda up 16 percent at Rs 390 crore.
- Margin at 24.9 percent versus 23 percent.
Jubilant Industries (Q1, YoY)
- Revenue up 17 percent at Rs 133 crore.
- Net loss of Rs 1 crore versus net loss of Rs 2 crore.
- Ebitda unchanged at Rs 7 crore.
- Margin at 5.3 percent versus 6.1 percent.
Biocon (Q1, YoY)
- Revenue up 21.2 percent at Rs 1,123.8 crore.
- Net profit up 47.2 percent at Rs 119.7 crore.
- Ebitda up 23.8 percent at Rs 237.8 crore.
- Margin at 21.2 percent versus 20.7 percent.
Bharti Airtel (Q1, QoQ)
- Revenue up 2.3 percent at Rs 20,080 crore.
- Net profit up 17 percent at Rs 97 crore.
- Ebitda down 3 percent at Rs 6,726 crore.
- Margin at 33.5 percent versus 35.3 percent.
- ARPU at Rs 105 versus Rs 116.
Cholamandalam Investment (Q1, YoY)
- Net interest income up 20 percent at Rs 795 crore.
- Net profit up 36 percent at Rs 285 crore.
- AUM up 30 percent at Rs 46,663 crore.
Lakshmi Vilas Bank (Q1, YoY)
- Net interest income down 40 percent at Rs 130 crore.
- Net loss of Rs 124 crore versus net Profit of Rs 66 crore.
- Provision down 82 percent at Rs 161.5 crore (QoQ)
- GNPA at 10.73 percent versus 9.98 percent.
- NPA at 5.96 percent versus 5.66 percent.
Tata Coffee (Q1, YoY)
- Revenue up 14.9 percent at Rs 422.2 crore.
- Net profit down 37.4 percent at Rs 21.6 crore.
- Ebitda down 16.81 percent at Rs 66.3 crore.
- Margin at 15.7 percent versus 21.7 percent.
Tinplate Company of India (Q1, YoY)
- Revenue at Rs 568.6 crore versus Rs 236.5 crore.
- Net profit at Rs 9.5 crore versus Rs 14.1 crore.
- Ebitda at Rs 25.5 crore versus Rs 32 crore.
- Margin at 4.4 percent versus 13.5 percent.
Welspun Corp: Insight Solutions sold 2.15 crore shares (8.1 percent) at Rs 112 each (average)
- White Oak India Equity Fund bought 1.54 lakh shares (0.7 percent) at Rs 700 each.
- India Acorn Fund Ltd bought 1.31 lakh shares (0.6 percent) at Rs 700 each.
- Tano India Private Equity Fund II sold 4.10 lakh shares (1.8 percent) at Rs 700.03 each.
GMR Infra: Albula Investment Fund sold 3.02crore shares (0.5 percent) at Rs 18.01 each.
Shriram Transport Finance Co.: Association De Bienfaisance bought 12.14 lakh shares (0.5 percent) at Rs 1,379.36 each.
Just Dial: Acadian Emerging Markets Small Cap Equity Fund Llc bought 3.47 lakh shares (0.5 percent) at Rs 565.52 each.
Who’s Meeting Whom
- Inox Leisure to meet Infina Finance on July 27.
- Tata Metaliks to meet Centrum Broking on July 27.
- Crompton Greaves Consumer Electrics to meet Amansa Holdings Pvt on July 27.
- Rupee closed at 68.67/$ on Thursday from 68.79/$ on Wednesday
- Nifty August futures closed trading at 11,201.3 premium of 34 points versus 31points.
- Across series: Nifty open interest up 2 percent; Bank Nifty open interest up 31 percent.
- Rollover: Nifty at 74 percent, Bank Nifty at 78 percent.
- India VIX ended at 12.02, down 1.5 percent.
- Max open interest for Aug series at 11,500 Call (open interest at 23.9 lakh, up 20 percent)
- Max open interest for Aug series at 11,000 Put (open interest at 32.4 lakh, up 29 percent)
Active Stock Futures
Credit Suisse On Maruti Suzuki
- Maintained ‘Neutral’; target price raised to Rs 10,300 from Rs 9,800.
- Q1 revenue and Ebitda in line; net profit below estimates due to lower other income.
- Maruti has chosen not to take any price hikes.
- Gross margins contracted on adverse commodity prices.
- Maruti continues to focus on increasing market share further.
- Given premium valuations, expect stock to time-correct for now.
Credit Suisse On Yes Bank
- Maintained ‘Neutral’ with target price of Rs 395.
- Loan growth remains strong driven by retail segment.
- Asset quality stable with net slippage at 0.6 percent.
- Capital is needed to maintain current pace of growth.
Brokerages On Bharti Airtel
- Maintained ‘Buy’ with target price of Rs 480.
- Q1FY19: Inline Ebitda; Small profit due to tax credits.
- Steady improvement in Africa continues.
- Company continue to focus on cost-control and gain market share.
- Maintained ‘Buy’ with target price of Rs 520.
- Q1FY19: Respectable performance amidst a tough environment.
- Africa momentum remains strong with revenue growth and margin improvement.
- Bharti Airtel has managed to hold its market share better than peers.
Brokerages On ITC
- Maintained ‘Overweight’ with target price of Rs 335.
- 1QFY19 earnings were ahead of our estimates; Good start to FY19.
- Cigarette: Good performance; volume growth surprises positively.
- Other FMCG: Impressive revenue growth and profitability gains.
- Paper division: Good margin delivery.
- Agri division: Adverse mix weighs on Ebit.
- Hotel division: Good Q1.
- Maintained ‘Buy’ with target price of Rs 350.
- Overall performance creditable as it comes on a normalised base.
- Delivered positive cigarette volume of 2 percent (YoY).
- Positive volume growth is sustainable and could improve from here on.
- Other FMCG business grew despite a high base.
- Maintained ‘Outperform’; target price raised to Rs 360 from Rs 350.
- Cigarette business seeing a revival, potential re-rating could start playing out.
- Cigarette volumes likely to have grown 1-2 percent which is a significant improvement.
- Q1 net profit ahead of estimates; Ebitda growth highest in nine quarters.
Brokerages On Colgate-Palmolive
- Maintained ‘Neutral’; target price cut to Rs 1,150 from Rs 1,225.
- Volume and market share trends weaken further.
- Delivered very strong Ebitda margin driven by gross margins.
- Since GST rate cuts, there has been steep jump in margins.
- Colgate is still struggling in naturals.
- Maintained ‘Overweight’ with target price of Rs 1,400.
- Q1 a mixed bag: Revenue growth remains unexciting, earnings beat led by margins.
- Market share trends were soft.
- Expect gradual volume growth revival in coming quarters.
- Healthy FCF generation, return ratios and an improved dividend payout to support stock.
UBS on Petronet LNG
- Maintained ‘Buy’ with target price of Rs 245.
- Q1 net profit ahead of estimates driven by higher than expected re-gas margins.
- Higher re-gas tariffs and operational efficiencies from higher volumes drove margins.
- Positive sentiments should be driven by delay in commissioning of Mundra re-gas terminal.
- Expect stock to react positively.
UBS on Quess Corp
- Maintained ‘Buy’; target price cut to Rs 1,345 from Rs 1,360.
- Revenue growth remained strong.
- Margins impacted by mix of factors.
- Positive on strategic investments.
- Near term profitability to be adversely impacted due to investments.
JPMorgan on Shriram Transport
- Maintained ‘Overweight’ with target price of Rs 1,700.
- Net profit driven by loan growth and sharply reduced credit cost.
- IND-AS accounting shift beneficial to both EPS & BPS.
- Loan growth at 22 percent running above forecast.
- Increase in axle load norms to improve earnings of core customers.
JPMorgan On Container Corporation
- Maintained ‘Overweight’ with target price of Rs 875.
- Operating performance continues to improve in Q1.
- Margin improvement continues as rail freight expense remained flat.
- Lead distance continues to weigh on top-line performance.
- Expect 14 percent earnings CAGR over FY18-20 driven by margin improvement.
JPMorgan On Crompton Consumer
- Maintained ‘Overweight’ with target price of Rs 300.
- Q1 numbers ahead of estimates, good start to the year.
- Good delivery by ECD segment; Lighting hits a blip on negligible government business.
- Go-To-Market roll-out, fast LED replacement and scale-up of new categories to drive healthy revenue growth over the next 2-3 years.
- Success of new product launches and market share gains key positives.
Brokerages On Dr. Reddy’s Labs
- Maintained ‘Neutral’ with target price of Rs 2,270.
- Strong headline number but likely to normalise.
- Slight delay in expected launch timelines of gNuvaring & gCopaxone.
- Near term prospects dependent on gSuboxone, gNuvaring, gCopaxone.
- Maintained ‘Underperform’ with target price of Rs 1,865.
- Suboxone, lower R&D, low tax lead to beat in results.
- Nuvaring further delayed; more competition expected in key products in FY19.
- Suboxone sales was $17-18 million while base business U.S. sales declined 2 percent (QoQ).
- Maintained ‘Neutral’ target price cut to Rs 2,200 from Rs 2,270.
- Pushback the expected launch time of Suboxone by another quarter to 4QFY19.
- Maintained ‘Neutral’ with target price of Rs 2,480.
- Delays to key launches likely to drive consensus downgrades.
- First quarter aided by gSuboxone and a lower tax expense.
- See reduced opportunities for niche products in pipeline.
- Base business continued to saw pricing erosion led by gDacogen and gToprol XL.