All You Need To Know Going Into Trade On May 16
Asian equities traded mixed. The yen climbed and sovereign bond yields dropped as weak U.S. consumer data added to concerns about escalating trade tensions and their impact on the global economy.
Japanese stocks fell, while shares showed modest gains in South Korea and Australia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.15 percent to 11,178.50 as of 6:45 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Markets Check
- U.S. stocks rebounded for second day on signs the Trump administration is working toward easing tensions with trade partners.
- The yield on 10-year Treasuries held at 2.37 percent.
- Japan’s Topix index slid 0.3 percent.
- S&P 500 Index futures dipped 0.1 percent.
- Australia’s S&P/ASX 200 Index rose 0.1 percent.
- South Korea’s Kospi added 0.1 percent.
- Hang Seng futures earlier slipped 0.4 percent.
- Brent crude traded higher for the third day, up 0.49 percent to $72.12 percent.
- West Texas Intermediate crude rose 0.2 percent to $62.17 a barrel.
- Gold was steady $1,296.34 an ounce.
Stocks To Watch
- The Tata Group will bring its consumer businesses under one unit as the salt-to-software conglomerate continues restructuring to streamline its operations. Tata Chemicals Ltd. will demerge its food business to Tata Global Beverages Ltd. Shareholders will get 114 shares of Tata Global for every 100 held in Tata Chemicals.
- Nava Bharat Ventures: Zambian arm realised over 70 percent of total amounts billed since synchronization of the power plant with the grid and debt of the arm has reduced by 25 percent as on March 31.
- Rushil Décor: India Ratings downgraded the company’s long-term issuer rating to IND ‘BBB’ from IND ‘A-‘, with a negative outlook.
- Goa Carbon April production up 18 percent at 16,865.5MT versus 14,347.2MT
- Union Bank: Board approved capital plan for the Bank for financial year 2020. To raise total capital funds up to Rs 6,000 crore in form of equity or tier-1 bonds and raise equity capital up to Rs 6,000 crore.
- Zuari Agro Chemicals said that one of its two Granulation plant will be shut down till further intimation. This after the evaluation of market conditions and inventory position.
- Himachal Futuristic: Acquired Raddef Pvt. Ltd. for Rs 90,000. HFCL to make further investments worth Rs 20 crore in this acquired unit. HFCL also looking to increase its optical fiber cable capacity by 35 lakh kilometre. In the light of softening of fiber demand, it has put on hold its greenfield project in Telangana.
- Balaji Amines received consent to operate by Pollution Control Board for expansion of existing products and addition of four new products at its Maharashtra Unit at MIDC Chincholi.
- IFB Industries completed the transaction of acquisition of Industrial Laundry Equipment business from Ramsons Group.
Nifty Earnings To Watch
- Bajaj Finance
- Bajaj Finserv
- Hindalco Industries
Other Earnings To Watch
- JSW Energy
- Jubilant Industries
- JK Tyre & Industries
- Johnson Controls
- Action Construction Equipment
- Arvind Fashions
- Bank of India
- Gabriel India
- Blue Dart Express
- Chambal Fertilizers & Chemicals
- DB Corp
- Minda Industries
- Dhampur Sugar Mills
- Ingersoll Rand
- Kirloskar Industries
- Kirloskar Brothers Limited LT Foods
- Neuland Laboratories
- Praj Industries
- Saven Technologies
- Shree Renuka Sugars
- Solara Active Pharma Sciences
- Take Solutions
- Tasty Bite Eatables
- Walchandnagar Industries
- Ador Welding
- Grauer & Weil
- Kirloskar Brothers
- Universal Cables
- Vindhya Telelinks
- Igarashi Motors
- INEOS Styrolution
- Clariant Chemicals
Earning Reaction To Watch
Waterbase Q4FY19 (YoY)
- Revenue down 22 percent to Rs 51.2 crore.
- Ebitda down 59 percent to Rs 3.2 crore.
- Margin at 6.3 percent versus 12 percent.
- Net profit down 42 percent to Rs 1.5 crore.
- Delay in farming season due to extended winter led to this fall in sales.
- Management is projecting the shrimp production to de-grow in the current financial year as fear of non-remunerative prices may result in farmers lowering their production levels.
Himachal Futuristic Communications (Q4, YoY)
- Revenue up 16.1 percent to Rs 1,095 crore.
- Net profit down 12.4 percent to Rs 51.5 crore.
- Ebitda down 13.7 percent to Rs 65 crore.
- Margin at 6 percent versus 8 percent.
Petronet LNG (Q4, QoQ)
- Revenue down 17 percent to Rs 8,383.2 crore.
- Net profit down 22.1 percent to Rs 440.2 crore.
- Ebitda down 26 percent to Rs 627.2 crore.
- Margin at 7.5 percent versus 8.4 percent.
- Other income up 71 percent to Rs 151.4 crore.
- Declares dividend of Rs 4.5 per share.
Kesoram Industries (Q4, YoY)
- Revenue up 5.2 percent to Rs 1,036.6 crore.
- Net profit at Rs 20.8 crore versus net loss of Rs 158.2 crore.
- Ebitda profit at Rs 121.7 crore versus Ebitda loss of Rs 38.2 crore.
- Raw material costs down 26 percent to Rs 182 crore.
Manappuram Finance (Q4, YoY)
- Net interest income up 16.6 percent to Rs 697.9 crore.
- Net profit up 43.3 percent to Rs 256.9 crore.
- Board approves to explore entry into micro insurance and to acquire 100 percent stake in Manappuram Asset Finance.
KPIT Technologies (Q4, QoQ)*
- Revenue up 3.6 times to Rs 501.3 crore.
- Net profit up 25.4 percent to Rs 30.1 crore.
- Ebitda up 2.1 times to Rs 61.6 crore.
- Margin at 12.3 percent versus 21.5 percent.
- Exceptional loss of Rs 34.3 crore.
- Employee expenses up 7.6 times to Rs 315.1 crore.
- Other income of Rs 35.5 crore.
*Numbers not comparable since company went for demerger.
Torrent Power (Q4, YoY)
- Revenue up 4.1 percent to Rs 2,924.8 crore.
- Net profit down 88.9 percent to Rs 24 crore.
- Ebitda up 2.8 percent to Rs 709.9 crore.
- Margin at 24.3 percent versus 24.6 percent.
- Other income down 60 percent to Rs 39.9 crore.
- Employee benefit expense up 20 percent to Rs 154.6 crore.
- Fuel costs up 7 percent to Rs 897.2 crore.
- Declares dividend of Rs 5 per share.
Phoenix Mills (Q4, YoY)
- Revenue up 65.6 percent to Rs 723.2 crore.
- Net profit up 2.5 times to Rs 228.4 crore.
- Ebitda up 74.3 percent to Rs 377.2 crore.
- Margin at 52.2 percent versus 49.6 percent.
- Exceptional gain of Rs 48.1 crore.
- Increase in inventory to Rs 123.6 crore.
- Other Income up 2.3 times to Rs 32.9 crore.
Gulf Oil Lubricants (Q4, YoY)
- Revenue up 16.8 percent to Rs 436.2 crore.
- Net profit up 15 percent to Rs 47.6 crore.
- Ebitda up 18.1 percent to Rs 74.3 crore.
- Margin at 17 percent versus 16.8 percent.
- Board declares dividend of Rs 7 per share.
Jammu & Kashmir Bank (Q4, YoY)
- Net interest income up 42 percent to Rs 931.3 crore.
- Net profit up 7.6 times to Rs 214.8 crore.
- Provisions to Rs 378 crore versus Rs 251.1 crore.
- GNPA at 8.97 percent versus 9.94 percent. (QoQ)
- NNPA at 4.89 percent versus 4.69 percent. (QoQ)
SKF India (Q4, YoY)
- Revenue up 6.4 percent to Rs 748.4 crore.
- Net profit up 14.8 percent to Rs 82.2 crore.
- Ebitda up 4.6 percent to Rs 111 crore.
- Margin at 14.8 percent versus 15.1 percent.
- Inventory gain of Rs 43 crore in base quarter.
- Other income up 55 percent to Rs 29.2 crore.
- Board names Anurag Bhagania as CFO and Gopal Subramanyam as Chairman.
Magma Fincorp (Q4, YoY)
- Net interest income up 10.1 percent to Rs 290.8 crore.
- Net profit up 6.6 percent to Rs 85.3 crore.
Majesco (Q4, QoQ)
- Revenue up 2.7 percent to Rs 261.5 crore.
- Net profit down 42.3 percent to Rs 8.6 crore.
- EBIT down 43.1 percent to Rs 12 crore.
- Margin at 4.6 percent versus 8.3 percent.
- Other expenses up 30 percent to Rs 67.5 crore.
- Deferred tax reversal of Rs 8.2 crore.
Mahindra Holidays & Resorts (Q4, YoY)
- Revenue down 19.5 percent to Rs 238.3 crore.
- Net profit down 62.7 percent to Rs 14.4 crore.
- Ebitda down 66 percent to Rs 21.2 crore.
- Margin at 8.9 percent versus 21.1 percent.
- Other income up 41 percent to Rs 13.8 crore.
- Current tax reversal of Rs 27.3 crore.
- Board re-appoints Kavinder Singh as MD and CEO till November 2024.
Pledge Share Details
- Future Retail promoter Future Corporate Resources revoked pledge of 4 lakh hares on May 13.
- Future Enterprises promoter group Central Departmental Stores revoked pledge of 1.75 lakh shares on May 13.
- Apollo Tyres promoters pledged 31.15 lakh shares on May 13.
- TTK Prestige record date for bonus issue at 1:5.
- Uniply Industries to move out of short term ASM Framework.
- Williamson Magor & Company to move into ASM Framework.
Who’s Meeting Whom
- Eicher Motors to meet Myriad Asset Management on May 16
- IDFC First Bank to meet Wellington Management, APG Asset Management and Hamon Asset Management on May 16
- Dabur India promoters acquired 45,000 shares from May 13-14.
- Indian Acroreylics promoter and director Dheeraj Garg acquired 3.1 lakh shares from May 13-14.
Money Market Update
- The rupee strengthened for the second straight day to close at 70.34/$ versus Tuesday’s closing of 70.46/$.
Futures –May series
- Nifty futures closed trading at 11,177.4, premium of 20.4 points
- Nifty open interest down 3 percent, sheds 5.2 lakh shares in open interest
- Bank Nifty futures closed trading at 28,666.8, premium of 50.8 points versus 88 points
- Bank Nifty open interest down 1 percent sheds 7,900 shares in open interest
- Nifty PCR at 1.13 versus 1.28 (across all series)
Nifty Weekly Expiry 16 May
- Max open interest on call side at 11,300 (33.6 lakh shares)
- Max open interest at Put side at 11,000 (18.2 lakh shares)
- Max open interest addition seen at 11,300 Put (+16.3 lakh shares), 11,200 Call (+8.2 lakh shares)
- Max shedding seen at 12,000 Call (-3.6 lakh shares), 11,200 Put (-3.4 lakh shares)
Nifty Monthly Expiry 30 May
- Max open interest on call side at 12,000 (30.1 lakh shares)
- Max open interest on Put side at 11,000 (28.7 lakh shares)
- Max open interest addition seen at 12,000 Call (+3.4 lakh shares), 11,000 Put (+2.4 lakh shares)
- Maintained ‘Buy’ with a price target of Rs 970.
- March quarter’s earnings were in line with estimates.
- India business improving; Japan to remain subdued with price cuts.
- Expect stronger earnings pick up from the second half onwards.
- Maintained ‘Underperform’; cut price target to Rs 705 from Rs 716.
- Not out of the woods yet.
- FY20/21 US build up largely contingent on three products.
- Lowering EPS estimates on additional regulatory woes, slower EM sales and higher tax.
- Maintained ‘Underperform’; cut price target to Rs 650 from Rs 680.
- Weak quarter led by margin miss.
- US strong, other geographies disappoint.
- Cut EPS estimates by 20 ercent and 10 percent for the current and the next financial year respectively given the challenges in U.S. and weak R&D execution
On Jubilant FoodWorks
- Maintained ‘Buy’; cut price target to Rs 1,500 from Rs 1,600.
- March quarter’s Ebitda missed estimates, but net profit was ahead.
- SSSG moderates, but margin ahead.
- Slowing SSSG forces to cut EPS estimates.
- Maintained ‘Buy’; cut price target to Rs 1,450 from Rs 1,475.
- March quarter review: operationally strong number.
- Do not rule out near-term pressure on SSSG due to higher base and competition.
- Management sounded confident on both growth and margins.
CLSA on Motherson Sumi
- Maintained ‘Outperform’; cut price target to Rs 135 from Rs 150.
- Weak European auto demand hurting; subdued commentary from global players.
- Auto demand environment weak in India too.
- Cut EPS estimates for the current ad the next financial year by 15-16 percent; valuations turning more palatable.
Morgan Stanley on Tata Global Beverages
- Maintained ‘Underweight’ with a price target of Rs 165.
- Tata Global’s consumer product business is valued at Rs 5,800 crore.
- Expect Tata Global to use cash flows from Tata Salt business to invest in new consumer categories.
- Any potential re-rating dependent on synergy benefits, success in new markets and on margins.
Jefferies on Sun Pharma
- Maintained ‘Buy’; hiked price target to Rs 540 from Rs 535.
- Positive trends in US doc survey for Ilumya; Survey suggests $300 million peak sales likely.
- Cequa could be good niche due better efficacy and faster onset.
- Remain positive as we expect recovery in business, better specialty traction and supportive valuations.
Citi on Endurance Technologies
- Maintained ‘Neutral’; cut price target to Rs 1,210 from Rs 1,240.
- March quarter review: Healthy margins amid weak demand.
- EU business: Revenue growth surprises positively.
- Cut earnings by 2-3 percent over FY20/21 as we grow more conservative on demand trends.
Jefferies on Newgen Software
- Maintained ‘Buy’; cut price target to Rs 372 from Rs 375.
- Disappointing revenue growth in March quarter
- Weak performance in India, Middle East; strong in the U.S., APAC in 2018-19.
- Cut EPS estimates by 5-11 percent on slightly weaker growth & margin over FY20-21.