All You Need To Know Going Into Trade On August 13
Stocks slipped in Asia with the euro and emerging-market currencies, with Treasuries and the yen nudging higher, as turmoil in Turkey that’s sparked wider concern of potential market contagion triggered action from banking regulators.
Japanese stocks and U.S. equity futures fell, with trading set to be dominated by events in Turkey. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.4 percent to Rs 11,387.50 as of 6:55 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- Stocks sold off around the world, with U.S. equities erasing what would’ve been a sixth weekly gain as Turkey’s economic crisis deepened.
- The dollar capped its best week since June as the lira sank to a record.
Also read: Tesla’s Amazing. Tesla’s Horrible.
European Market Check
- European shares fell the most in a month as financial turmoil in Turkey spurred fears of contagion.
- Japan’s Topix index slid 1.1 percent.
- South Korea’s Kospi index lost 0.6 percent.
- Futures on Hong Kong’s Hang Seng Index dropped 0.7 percent.
- Australia’s S&P/ASX 200 Index sank 0.3 percent.
- Futures on the S&P 500 Index were down 0.2 percent. The underlying gauge fell 0.7 percent Friday.
Here are the key events to watch out for this week:
- China release industrial production, fixed-asset investment and retail sales data Tuesday.
- Earnings are due this week from companies including India’s Tata Steel, Maersk, Home Depot, China Unicom, Tencent, Cisco, Walmart, and Carlsberg.
- Brexit talks between the EU and the U.K. resume in Brussels Thursday. The EU is signaling it wants to make September a decisive month in the divorce negotiations, while U.K. Prime Minister Theresa May favors a late-fall deadline.
- Australian central bank Governor Philip Lowe testifies before Economics Committee on Friday.
- West Texas Intermediate crude increased 0.2 percent to $67.77 a barrel.
- Gold futures was steady at $1,209.87 an ounce.
- Steel traded lower; down 0.8 percent.
- Aluminium traded higher; up 0.1 percent.
- Zinc traded lower for second day; down 1.3 percent.
- Copper snapped three-day winning streak; down 0.2 percent.
- Rubber traded lower; down 0.7 percent.
Stocks To Watch
- HDFC Bank: Paresh Sukthankar, deputy MD and founding member resigned.
- Ashok Leyland subsidiary Optare bagged Electric Double Decker order.
- NBCC has received an order worth Rs 150 crore for construction of CBSE HQ.
- Universal Cables signed pact with NKT, Germany for 400kV Extra high voltage XLPE underground cable.
- Cipla: Gets final approval for generic Reyataz; partners with MSN Laboratories for marketing and distribution of generic Xeloda.
- Hinduja Global Solutions arm bagged a new two-year contract from Money Advice Service.
- Welspun Corp bagged pipe supply order worth $51 million.
- Jet Airways plans $400 million stake sale to PEs; approaches have been made to Blackstone, TPG, Indigo Capital Partners (Economic Times).
- Future Retail may soon join hands with a foreign investor; Group said to be in talks with Amazon (Economic Times).
Data To Watch
- 5:30 p.m. - India to report July CPI data for July (Est.: 4.47 percent YoY)
Nifty Earnings To Watch
- Tata Steel
Other Earnings To Watch
- Abbott India
- Apex Frozen Foods
- Ashoka Buildcon
- AstraZeneca Pharma
- Cadila Healthcare
- CARE Ratings
- Cochin Shipyard
- Dewan Housing
- Dredging Corp. of India
- Finolex Cables
- Godrej Industries
- Greaves Cotton
- Himadri Speciality Chemical
- Hindustan Aeronautics
- IL&FS Transportation
- India Tourism Development
- Jai Corp
- Jain Irrigation
- Oil India
- Oracle Financial
- Repco Home Finance
- Sadbhav Engineering
- Shilpa Medicare
- Sonata Software
- Sunteck Realty
- Tata Chemicals
- Vardhman Textiles
Earnings Reaction To Watch
Sun TV Network (Q1, YoY)
- Revenue up 42.5 percent at Rs 1,120.4 crore.
- Net profit up 62.6 percent at Rs 409.2 crore.
- Ebitda up 63.9 percent at Rs 734.8 crore.
- Margin at 65.6 percent versus 57 percent.
Sheela Foam (Q1, YoY)
- Revenue up 19.6 percent at Rs 502 crore.
- Net profit up 15.6 percent at Rs 32.6 crore.
- Ebitda up 13 percent at Rs 50.5 crore.
- Margin at 10.1 percent versus 10.7 percent.
Lux Industries (Q1, YoY)
- Revenue up 6.5 percent at Rs 262.3 crore.
- Net profit up 19.7 percent at Rs 18.8 crore.
- Ebitda up 15.4 percent at Rs 37.4 crore.
- Margin at 14.3 percent versus 13.2 percent.
Endurance Technologies (Q1, YoY)
- Revenue up 23.6 percent at Rs 1,860.4 crore.
- Net profit up 29.1 percent at Rs 124.6 crore.
- Ebitda up 26.9 percent at Rs 271.4 crore.
- Margin at 14.6 percent versus 14.2 percent.
Puravankara (Q1, YoY)
- Revenue up 13 percent at Rs 382 crore.
- Net profit up 32.5 percent at Rs 26.5 crore.
- Ebitda up 15 percent at Rs 95 crore.
- Margin at 24.9 percent versus 24.4 percent.
Thyrocare Technologies (Q1, YoY)
- Revenue up 10.7 percent at Rs 97.2 crore.
- Net profit up 6.4 percent at Rs 23.4 crore.
- Ebitda up 13.2 percent at Rs 41.3 crore.
- Margin at 42.5 percent versus 41.6 percent.
Ambika Cotton Mills (Q1, YoY)
- Revenue up 18.4 percent at Rs 163.1 crore.
- Net profit up 16.6 percent at Rs 16.8 crore.
- Ebitda up 18.8 percent at Rs 32.3 crore.
- Margin flat at a 19.8 percent.
IFGL Refractories (Q1, YoY)
- Revenue up 19.8 percent at Rs 236.9 crore.
- Net profit up 38.4 percent at Rs 15.5 crore.
- Ebitda up 20.7 percent at Rs 29.7 crore.
- Margin at 12.5 percent versus 12.4 percent.
Corporation Bank (Q1, YoY)
- Net interest income up 51 percent at Rs 1,564.2 crore.
- Net profit at Rs 84.9 crore.
- Provisions at Rs 1,612 crore (QoQ).
- GNPA at 17.44 percent versus 17.35 percent (QoQ).
- NNPA at 11.46 percent versus 11.74 percent (QoQ).
IOCL (Q1, YoY)
- Revenue up 10.3 percent to Rs 1.29 lakh crore.
- Ebitda up 14.1 percent to Rs 12,576 crore.
- Margin at 9.7 percent versus 9.4 percent.
- Net profit up 31 percent at Rs 6,831 crore.
Union Bank of India (Q1, YoY)
- Net interest income rose 17 percent to Rs 2,626.2 crore.
- Net profit up 11.1 percent at Rs 129.5 crore.
- Provisions at Rs 1,803 crore versus Rs 5,638 crore (QoQ).
- Gross NPA at 16 percent versus 15.73 percent (QoQ).
- Net NPA At 8.70 percent versus 8.42 percent (QoQ).
PC Jeweller (Q1, YoY)
- Revenue up 14.6 percent at Rs 2,423.2 crore.
- Net profit up 4.5 percent at Rs 141.9 crore.
- Ebitda up 5.5 percent at Rs 248.4 crore.
- Margin at 10.3 percent versus 11.1 percent.
Matrimony (Q1, YoY)
- Revenue up 6.8 percent at Rs 89.5 crore.
- Net profit up 4.7 percent at Rs 15.6 crore.
- Ebitda up 7.1 percent at Rs 21.1 crore.
- Margin at 23.6 percent versus 23.5 percent.
Uflex (Q1, YoY)
- Revenue up 17.4 percent at Rs 1,904.9 crore.
- Net profit up 1.1 percent at Rs 94.1 crore.
- Ebitda up 6.9 percent at Rs 247.8 crore.
- Margin at 13 percent versus 14.3 percent.
Coal India (Q1, YoY)
- Revenue up by 22.8 percent to Rs 22,598 crore.
- Net profit up 61 percent at Rs 3,784.3 crore.
- Ebitda up 62.8 percent to Rs 5,732.5 crore.
- Margin at 23.63 percent versus 18.4 percent.
NHPC (Q1, YoY)
- Revenue down 8.5 percent at Rs 2,129 crore.
- Net profit down 14.5 percent at Rs 737.6 crore.
- Ebitda down 7 percent at Rs 1,290.5 crore.
- Margin at 60.6 percent versus 59.6 percent.
Glenmark Pharmaceuticals (Q1, YoY)
- Revenue down 8 percent at Rs 2,166 crore.
- Net profit down 30 percent at Rs 233 crore.
- Ebitda down 40 percent at Rs 347 crore.
- Margins at 16.0 percent versus 24.5 percent.
Balaji Telefilms (Q1, YoY)
- Revenue down 14.7 percent at Rs 123.4 crore.
- Net loss at Rs 27 crore versus net loss at Rs 23.2 crore.
- Ebitda loss at Rs 28 crore versus Ebidta loss at Rs 14.9 crore.
Andhra Bank (Q1, YoY)
- Net interest income up 1.3 percent at Rs 1,460.1 crore.
- Net loss at Rs 539.8 crore versus net profit at Rs 40.4 crore.
- Provisions at Rs 1,707.5 crore versus Rs 5,429.3 crore (QoQ).
- GNPA at 16.69 percent versus 17.09 percent (QoQ).
- NNPA at 7.96 percent versus 8.48 percent (QoQ).
DLF (Q1, YoY)
- Revenue down 26 percent at Rs 1,507 crore.
- Net profit up 56 percent at Rs 173 crore.
- Share of profit in associates and JV at Rs 241.5 crore in current quarter.
- Ebitda down 66 percent at Rs 307.5 crore.
- Finance cost down 61 percent at Rs 497.5 crore.
- Margin at 20.4 percent versus 44.1 percent.
- Matrimony.Com: Smaller Cap World Fund Inc. sold 3.43 lakh shares or 1.5 percent equity at Rs 666.98 each.
- Laurus Labs: Promoter Nagarani Chava bought 5.70 lakh shares or 0.5 percent equity at Rs 444.99 each.
AU Small Finance Bank
- Redwood Investment Ltd. sold 2.40 crore shares or 8.3 percent equity at Rs 638 each.
- Ourea Holdings Limited sold 28.79 lakh shares or 1 percent equity at Rs 638 each.
- Nomura India Investment Fund Mother Fund bought 1.14 crore shares or 4 percent equity at Rs 638 each.
- Kotak Mahindra Mutual Fund bought 23.50 lakh shares or 0.8 percent equity at Rs 638 each.
- CreditAccess Grameen IPO subscribed 2.2 times on final day.
- Nihilent Ltd. files for IPO; seeks to sell Rs 250 crore.
Who’s Meeting Whom
- Graphite India to meet investors from Aug. 13-14.
- Mahindra Logistics to meet Edelweiss Securities on Aug. 13.
- Mahanagar Gas to meet investors from Aug. 13-17.
- Sharda Cropchem to meet investors on Aug 13.
- JSW Steel promoter acquired 5.50 lakh shares from Aug. 7-8.
- Raymond promoter acquired 25,000 shares from Aug. 8-9.
- NOCIL promoter Mafatlal Industries sold 31,000 shares from Aug. 8-9.
- Ultramarine & Pigments acquired 78,200 shares on Aug. 10.
- Srikalahasthi Pipes promoters acquired 28,200 shares from Aug 8-9.
- Menon Bearings promoters acquired 46,000 shares on Aug. 8.
- Manpasand Beverages promoter acquired 10,000 shares on Aug 9.
(As reported on Aug.10)
Money Market Update
- Rupee ended at 68.84 per dollar versus 68.68 per dollar On Thursday.
- Nifty August futures ended at 11,439.2, with a premium of 9.7 points versus 16.8 points.
- August series- Nifty open interest (OI) up 0.6 percent and Bank Nifty OI down 5.4 percent.
- India VIX ended at 12.8, up 1.3 percent.
- Max OI for August series call at 11,500 strike price call option, OI at 41.5 lakh shares, up 12 percent.
- Max OI for August series put at 11,000 strike price put option, OI at 50.7 lakh shares, down 3 percent.
- In ban: Adani Enterprises, Adani Power, Jet Airways and Punjab National Bank
- New in ban: Jet Airways
- Out of ban: None
- Nifty PCR at 1.75 versus 1.79.
- Nifty Bank PCR at 1.13 versus 1.38.
Active Stock Futures
CLSA on IPCA
- Maintained ‘Sell’; raised price target to Rs 600 from Rs 560
- Strong revenue, but weak margins in June quarter.
- Sales and margin guidance for the current financial year is achievable.
- Delay in resolution of U.S. sites not factored in current valuations.
Kotak on Union Bank
- Maintained ‘Add’; cut price target to Rs 120 from Rs 130.
- Drop in credit cost and improvement in NIM drive earnings.
- Lot more positive commentary; Likely to reflect in next few quarters.
- Earnings growth trends are likely to be volatile in the medium term.
Macquarie on NCC
- Maintained ‘Buy’ with a price target of Rs 177.
- Handsome beat all round.
- Current order book gives strong revenue visibility.
- Await revenue and margin guidance details.
Deutsche Bank on Aditya Birla Capital
- Maintained ‘Buy’; cut price target to Rs 190 from Rs 195.
- Growth mixed even as margins improve.
- Life Insurance continues to see strong improvement.
- NBFC, AMC growth slows but margins rally.
- One of the strong plays on India's financialisation and formalisation themes.
BofAML on Indian Oil Corp
- Maintained ‘Buy’ with a price target of Rs 210.
- June quarter was supported by massive inventory gains.
- Strong headline marketing Ebitda.
- Significant increase in core run rate needed.
- ONGC stake sale overhang receding; sale by Government of India could still happen in the current financial year.
IDBI Capital on PVR
- Maintained ‘Buy’ with a price target of Rs 1,406.
- PVR to acquire of SPI Cinemas to strengthens presence in Southern market.
- PVR has paid premium valuation, but EV/screen similar to DT Cinemas acquisition.
- SPI’s operating metrics and operating margin TDA margin better than that of PVR.
- Recent deals with Bookmyshow and PayTM to support internal accruals.
- PVR’s FY18 EPS to increase by 2.3 percent post deal.
- Maintained ‘Neutral’ with a price target of Rs 281.
- June quarter review: Loss again, but hope refuses to die.
- Key negative was large slippages outside the watchlist and weak loan growth.
- Sanctity of stressed asset guidance a big question mark.
- Key positive was improvement in the provision coverage ratio.
- Maintained ‘Buy’; raised price target to Rs 365 from Rs 330.
- High MTM and credit provisioning impact earnings.
- Slippages still elevated, but strong recoveries aid NPL reduction.
- Expect earnings recovery from the current quarter.
- Maintained ‘Buy’ with a price target of Rs 370.
- Several one-offs across various segments; High investment provisions drive loss.
- Much-awaited recovery in NPLs has begun to take shape.
- All conditions in place for re-rating as NPLs on positive downward trajectory.
On Coal India
- Maintained ‘Buy’ with a price target of Rs 335.
- Ebitda and net profit inline with estimates.
- Profitability rises despite sales mix deterioration.
- Strong volume outlook on power growth and restocking.
- Coal India’ coal is cheaper and preferred source vs imports.
- Maintained ‘Neutral’; cut price target to Rs 290 from Rs 293.
- Net profit miss largely driven by lower revenues and higher employee costs.
- FSA volumes higher due to higher coal supply to power plants, leading to lower e-auction sales.
- Maintain Neutral as risk-reward for the stock to be balanced.
- Maintained ‘Buy’ with a price target of Rs 280.
- June quarter’s operating performance in line.
- Higher realisation reduced by higher transfer prices for alumina.
- Improving product mix to drive earnings.
- Maintained ‘Overweight’ with a price target of Rs 355.
- Combined with Utkal, a strong quarter.
- Copper volume down but strong by-product aid; volume ramp up to improve further.
- Remains well placed across the chain with attractive valuations.
On GAIL (India)
- Maintained ‘Neutral’; raised price target to Rs 360 from Rs 330.
- Strong crude drove record marketing Ebitda.
- Petchem recovery a positive; key disappointment was in LPG segment.
- Potential near-term catalyst is tariff hikes.
- Maintained ‘Buy’; raised price target to Rs 435 from Rs 405.
- June quarter beat on all fronts.
- U.S. LNG drives sharply higher gas trading profits and lower opex.
- All segments outperform other than gas transmission.
- Gas in GST, tariff hike, curb on petcoke use and more city gas wins are triggers in the second half of the current financial year.
On Sun TV
- Maintained ‘Buy’ with a price target of Rs 1,200; implying a potential upside of 45 percent from the last regular trade.
- Earnings beat on IPL.
- Ad revenue growth remains strong; dependence on TN cluster has declined.
- Subscription revenue growth trend – full benefits from Arasu yet to come in.
- Sun TV intends to increase the payout going ahead.
- Maintained ‘Outperform’; cut price target to Rs 979 from Rs 1,124.
- June quarter beat on all fronts.
- Strong IPL performance; promoters capping their salary at 2017-18 levels.
- Cut estimates to factor in entry in new markets and launch of flanking channels.
- Maintained ‘Hold’; raised price target to Rs 500 from Rs 490.
- Strong outcome in a tough environment.
- Projects business strong.
- Worst not over for cooling business; expect margin decline.
- Cooling business valuations look high, but at discount to peers.
- Maintained ‘Sell’; raised price target to Rs 480 from Rs 460.
- Weak June quarter: AC disappoint; hope shifts to festive season.
- AC market shift on faster move towards inverter ACs.
- With AC business trading at high valuation, stock not ready for any negative surprises.
On Indraprastha Gas
- Maintained ‘Buy’ with a price target of Rs 320.
- Strong June quarter results driven by robust volume growth.
- Fuel oil ban in NCR to revive PNG growth.
- Margins to improve on price hike taken in May.
- Maintain Buy.
- Miss on margins offset by much stronger volume growth.
- Strong growth across segments; Industrial/commercial segment surprises.
- Margins to improve further after recent out-of-turn hike in end-May’18.
- Brokerages On Aurobindo Pharma
- Maintained ‘Neutral’ with a price target of Rs 640.
- Strong on revenues; one-off provisions impact profitability.
- Strong pipeline for 2018-19 positions Aurobindo for growth.
- Believe Aurobindo is well positioned to gain volumes in the U.S.
- Maintained ‘Underperform’; raised price target to Rs 640 from Rs 630.
- June quarter’s net profit missed estimate due to weak margins.
- Margins impacted by provisioning for product recalls and higher input costs.
- U.S. still has high base challenge.
On Dr Lal PathLabs
- Maintained ‘Buy’ with a price target of Rs 1,320.
- In-line sales; 50 basis points beat on Ebitda margin.
- Third-consecutive quarter of above 25 percent volume growth.
- Competitive intensity remains stable.
- Volumes likely to continue moving from unorganised to organised.
- Maintained ‘Reduce’; raised price target to Rs 900 from Rs 865.
- Strong start to the year; increased focus on wellness and bundled packages encouraging.
- Believe structural trends remain favourable.
- Rich valuations adequately price in growth narrative.