Stocks To Watch: Axis Bank, Idea Cellular, HDFC Bank, Tata Motors
Asian stocks opened lower Tuesday after the biggest technology shares led a retreat in U.S. stocks amid signs of investor fatigue with the sector.
Equity indexes fell in Japan and South Korea, while futures signaled a softer open in Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade at 11,336.50 as of 7:35 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
- HDFC Bank QIP opens with a floor price at Rs 2179.13 per share. To raise about $2.3 billion through sale of shares, ADRs
- Texmaco Rail and Engineering arm signs MoU for upgrading 150 armor vehicles.
- Hindustan Aeronautics now making 11 light combat planes for Air Force.
- Dr. Reddy's request to sell generic Suboxon rejected.
- Bharti Airtel’s Ugandan unit to absorb rival K2’s subscribers.
Economic Data To Watch
- India to report fiscal deficit data for April-June quarter and eight infrastructure industries data for June.
Nifty Earnings To Watch
- Power Grid
- Tata Motors
Other Earnings To Watch
- Ajanta Pharma
- Astral Poly Technik
- Bank Of India
- Bharat Electronics
- Blue Dart Express
- Castrol India
- Dabur India
- DCM Shriram
- Jagran Prakashan
- Mahanagar Gas
- Redington India
- Triveni Tribune
- Supreme Industries
- V-Guard Industries
Earnings Reaction To Watch
Axis Bank (Q1, YoY)
- Net interest income up 12 percent at Rs 5167 crore.
- Net profit down 46 percent at Rs 701 crore.
- Provisions down 54 percent at Rs 3338 crore.
- GNPA at 6.52 percent versus 6.77 percent (QoQ)
- NPA at 3.09 percent versus 3.40 percent (QoQ)
Avenue Supermarts (Q1, YoY)
- Revenue up 27 percent at Rs 4559 crore.
- Net profit up 43 percent at Rs 251 crore.
- Ebitda up 39 percent at Rs 422 crore.
- Margin at 9.3 percent versus 8.4 percent.
IDFC Bank (Q1, YoY)
- NII grew 26.3 percent to Rs 490 crore.
- Net profit down 58 percent at 181 crore.
- Provisions at Rs 34 crore versus Rs 242 crore (QoQ)
- GNPA at 3.24 percent versus 3.31 percent.
- NNPA at 1.63 percent versus 1.69 percent.
Oberoi Realty (Q1, YoY)
- Revenue at Rs 888 crore versus Rs 261 crore.
- Net profit at Rs 309 crore versus Rs 91 crore.
- Ebitda at Rs 462 crore versus Rs 136 crore.
- Margin at 52.0 percent versus 52.1 percent.
Texmaco Rail and Engineering (Q1, YoY)
- Revenue up 44.4 percent at Rs 322.6 crore.
- Net profit at Rs 6.5 crore versus net loss at Rs 8.7 crore .
- Ebitda at Rs 23.4 crore versus Ebitda loss of Rs 4.8 crore.
Tech Mahindra (Q1, QoQ)
- Dollar revenue down 1.6 percent at $1224 million.
- Income from operations up 2.8 percent at Rs 8277 crore.
- Ebit down 3.3 percent at Rs 1077 crore.
- Ebit margins at 13 percent versus 13.8 percent.
- Profit down 27 percent at Rs 899 crore.
GSPL (Q1, YoY)
- Revenue up 32 percent at Rs 391 crore.
- Net profit down 5 percent at Rs 144.5 crore.
- Ebitda up 25 percent at Rs 344 crore.
- Margin at 87 percent versus 93.2 percent.
Mahindra Lifespace Developers (Q1, YoY)
- Revenue up 13 percent at Rs 154 crore.
- Net profit up 93 percent at Rs 27 crore.
- Other Income up 69 percent at Rs 22 crore.
- Ebitda up 3 percent at Rs 16.5 crore.
- Margin at 10.7 percent versus 11.8 percent.
Sharda Cropchem (Q1, YoY)
- Revenue up 34 percent at Rs 457 crore.
- Net profit down 21 percent at Rs 34 crore.
- Other income down 77 percent at Rs 3.5 crore.
- Ebitda up 15 percent at Rs 71 crore.
- Margin at 15.5 percent versus 18 percent.
Gujarat Gas (Q1, QoQ)
- Revenue up 2 percent at Rs 1765.5 crore.
- Net profit up 83 percent at Rs 121 crore.
- Ebitda up 12 percent at Rs 249.5 crore.
- Margin at 14.1 percent versus 12.9 percent.
InterGlobe Aviation (Q1, YoY)
- Revenue up 13 percent to Rs 6,512 crore.
- Net Profit down 97 percent to Rs 28 crore.
- Ebitdar down 47 percent to Rs 1,031 crore.
- Ebitdar margin at 15.8 percent versus 33.9 percent.
Idea Cellular (Q1, QoQ)
- Revenue down 4 percent to Rs 5,889 crore.
- Ebitda down 54 percent to Rs 659 crore.
- Ebitda margin at 11.2 percent versus 23.6 percent.
- Net Profit of Rs 257 crore versus loss of Rs 962 crore.
- ARPU at Rs 100.
IDFC (Q1, YoY)
- Revenue down 11.6 percent at Rs 14.5 crore.
- Net profit down 18.9 percent at Rs 3 crore.
Jaiprakash Associates (Q1, YoY)
- Revenue down 32.1 percent at Rs 1,690.8 crore.
- Net loss at Rs 285 crore.
- Ebitda down 75.4 percent at Rs 186.4 crore.
- Margin at 11 percent versus 30.5 percent.
- Morgan Stanley Asia (Singapore) Pte bought 2.28 lakh shares (0.9 percent) at Rs 51.45 each.
- Quantum (M) Limited sold 2.28 lakh shares (0.9 percent) at Rs 51.45 each.
TCNS Clothing: Steinberg India Emerging Opportunities Fund Ltd bought 3.27 lakh shares at Rs 655.06 each.
Talwa lakhars Lifestyles: Smaller Cap World Fund Inc sold 2.25 lakh shares (0.7 percent) at Rs 138.5 each.
Who’s Meeting Whom
- Balarampur Chini Mills to meet Sundaram Asset Management on August 2.
- Tata Steel to meet HDFC Mutual Funds, DSP Black Rock and other investors on July 31.
- Chambal Fertilizers promoter acquired 1.41 lakh shares on July 27.
- Infibeam promoter acquired 63,725 shares on July 26.
- Andhra Petrochemicals placed under ASM framework.
- Adani Green Energy circuit filter revised to 5 percent.
Rupee closed at 68.68/$ from 68.66/$ on Friday
- Nifty August futures closed trading at 11,338.5 premium of 19 points versus 28 points.
- August series: Nifty open interest up 4 percent; Bank Nifty open interest up 7 percent.
- India VIX ended at 12.5, up 2.2 percent.
- Max open interest for August series at 11,500 Call (open interest at 28 lakh, up 2 percent)
- Max open interest for August series at 11,000 Put (open interest at 41.4 lakh, up 8 percent)
Active Stock Futures
JP Morgan on Avenue Supermarts
- Maintained ‘Underweight’; raised price target to Rs 1,175 from Rs 1,050.
- Good operating performance was reported in June quarter.
- Lower interest costs further boosted net profit growth.
- Raise earnings estimates on the back of higher revenue growth assumptions.
- Valuations expensive; Already factor in optimism.
Credit Suisse on Escorts
- Maintained ‘Outperform’; raised price target to Rs 1,230 from Rs 1,170.
- June quarter results were operationally better than expected.
- Tractor margins on adverse product mix, higher commodity costs and one-off provisioning.
- Outlook on both CE and railways is encouraging.
- Continue to prefer Escorts as top mid-cap pick.
BoFAML on Titan
- Maintained ‘Buy’ with a price target of Rs 1,080.
- Correction offers particularly attractive entry levels.
- Well-established brands to offer continuous outperformance across segments.
- Operating leverage and asset light growth to aid margins.
- Expect 28 percent EPS CAGR to back premium valuation.
Brokerages On HDFC
- Maintained ‘Overweight’ with a price target of Rs 2,300.
- Stable performance with 18 percent loan growth.
- Spreads and asset quality remain well controlled.
- Best play to capture property upcycle which could start in 2018.
- Maintained ‘Outperform’; raised price target to Rs 2,350 from Rs 2,250.
- NII growth was robust led by strong AUM growth.
- Asset quality remained stable; Credit costs dropped on transition to IND-AS.
- Stock trading at attractive valuations given loan growth and sustained profitability.
Brokerages On Axis Bank
- Maintained ‘Buy’; raised price target to Rs 690 from Rs 650.
- Top-line ahead: Retail continues to lead.
- June quarter’s net profit ahead of estimates led by better NII and NPL recoveries.
- Slippages moderates, but stress still rises.
- De-risking underway; Expect RoE of 15 percent from April 2020.
- Maintained ‘Add’ with a price target of Rs 600.
- Net Interest Margin was reasonably stronger than expected.
- Decline in NPLs is quite meaningful.
- Higher upgrades, write-off and lower slippages led to decline.
- Need clarification on movement of sub-investment grade portfolio.
Brokerages On Tech Mahindra
- Upgraded to ‘Underperform’ from ‘Sell’; raised price target to Rs 650 from Rs 635.
- Revenue beat led by enterprise as telecom stays soft.
- Margin recovery comes to a halt.
- Need to watch for growth recovery.
- See limited earnings growth potential and margin upside.
- Maintained ‘Neutral’; raised price target to Rs 700 from Rs 670
- June quarter results were mixed bag with miss on revenue and small beat at EBIT margin.
- Telecom business continues to be a drag.
- 5G-related spend is still some time away.
- Raise EPS estimates to factor in weaker rupee.
- Maintained ‘Buy’ with a price target of Rs 786.
- June quarter’s revenue and EBIT were ahead of estimates.
- Decline in revenues in telecom segment has been sharper than expected.
- Expect EBIT Margin performance to improve through 2018-19.
- Expect long awaited improvement in telecom appears to be finally here.
Brokerages On InterGlobe Aviation
- Downgraded to ‘Neutral’ from ‘Overweight’; cut price target to Rs 900 from Rs 1,150.
- June quarter earnings impacted on all fronts.
- Expect industry to either take up pricing or cut back on capacity addition.
- Lower pricing due to competitive intensity to pressure the stock near term.
- Sufficient levers to improve its cost base over medium to long term.
- Maintained ‘Sell’; cut price target to Rs 940 from Rs 1,040.
- June quarter’s net profit declines significantly on high fuel and other expenses.
- Continue to expect 2018-19 yield growth to be weak.
- Maintenance spend to remain high going forward in the near term.
- Cut our EPS estimates for the current and the next financial year by 34 percent and 5 percent respectively.
Brokerages On Godrej Consumer
- Maintained ‘Outperform’; raised price target to Rs 1,465 from Rs 1,285.
- Strong turnaround in HI business leading to operational beat in June quarter.
- India volume growth at 14 percent was ahead of estimate.
- Believe growth momentum in HI business will continue.
- Godrej Consumer remains our top pick.
- Maintained ‘Outperform’; raised price target to Rs 1,425 from Rs 1,150.
- June quarter’s consolidated Ebitda was ahead of estimates.
- Strong domestic growth with healthy margins.
- Management commentary was fairly positive on growth.
- 2018-19 could be busiest year (new launches) for India business.
Brokerages On Shree Cement
- Maintained ‘Outperform’ with a price target of Rs 21,500.
- Adjusted June quarter’s Ebitda was in line; Margins recovery ahead.
- Strong volumes partially offsets costs.
- Capacity growth to drive market share gain in FY19-20.
- Cost headwinds persists but peaking out.
- Volume growth to remain ahead of industry on timely expansion.
- Maintained ‘Buy’ with a price target of Rs 22,900.
- June quarter was a miss driven by higher costs, MTM loss.
- Blended realisation was marginally lower than expected.
- Continue to believe that cement sector is on cusp of an upturn.
- Volume growth will likely get better.
Brokerages On Idea Cellular
- Downgraded to ‘Sell’ from ‘Buy’; cut price target to Rs 51 from Rs 70.
- June quarter’s revenue was in-line, but Ebitda came below estimates.
- Operating metrics were also weak.
- Merged Co. funded, but gearing still out of hand.
- Expect net debt to be 6.6 times Ebitda by March 2021, will still remain uncomfortable.
- Maintained ‘Reduce’ with a price target of Rs 75.
- June quarter’s earnings were weaker then expected.
- Also much weaker than Bharti’s on most operating metrics.
- Equity infusion, a meaningful one, could be needed sooner than expected.