Stocks To Watch: Automakers, DHFL, Eveready, Reliance Infra, Reliance Home Finance

Stocks in Asia climbed along with U.S. equity futures and the yuan after the American and Chinese presidents reached a truce in the trade war and agreed to resume talks.

Futures on the S&P 500 climbed as much as 1.1 percent before the strength of the risk-on trade eased as Monday trading continued. Japanese shares also jumped, though South Korea’s benchmark saw limited gains.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.35 percent to 11,879.50 as of 6:50 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

Here Are The Stocks To Watch Out For In Today’s Trade

• Eveready Industries: Price Waterhouse resigned as statutory auditor on June 28 citing its inability to analyse the impact of financial support extended by the battery maker to its promoter group entities. Board also entered into agreement with Madhu Jayanti International to sell assets worth Rs 6 crore relating to packed tea product business.
• Reliance Infra: Brickwork Ratings downgraded rating on Reliance Infra’s bank loan facilities worth Rs 1,151 crore to D from C, citing deterioration in credit risk profile and weakening of the financial/debt servicing profile owing to substantial losses reported during FY19.
• Reliance Home Finance failed to repay the principal obligations on its non-convertible debentures held by Reliance Mutual Fund, worth Rs 400 crore. The non-banking lender paid the interest due on the debentures but failed to honour principal repayment obligations, Reliance Mutual Fund said in a statement.
• Reliance Capital: Deferred declaration of results
• Adani Power: Board approved the proposal for the acquisition of insolvent firms Korba West Power Company and GMR Chhattisgarh Energy, in a move that would pave the way for the Gautam Adani-led group flagship to expand capacity.
• Mahanagar Gas: Increased CNG and PNG prices by Rs 0.32/kg and Rs 0.23/standard cubic meter to Rs 51.99/Kg and Rs 31.79/SCM respectively. The hike in gas prices is to pass on the increase in pipeline tariffs.
• Mahanagar Gas, Indraprastha Gas, Gujarat Gas: PNGRB has introduced a concept paper in order to facilitate competition in geographical areas where marketing exclusivity has already expired for city gas distributors. PNGRB has invited comments on the same from public within the 21 days, i.e., July 19. PNGRB will conduct an open house to discuss the comments on July 25. Marketing exclusivity has already expired in Delhi for IGL, Mumbai and Thane for MGL and in eight areas for Gujarat Gas.
• Anant Raj entered into a joint venture with Birla Estates for development of two residential projects in Haryana. Anant Raj will invest Rs 380 crore as its share in the the 50:50 JV.
• Dhanlaxmi Bank revised overnight MCLR to 8.6 percent and one-year MCLR to 9.9 percent. These rates will be effective from July 1.
• Lakshmi Vilas Bank revised one-month MCLR to 9.8% and one-year MCLR to 10 percent. These rates will be effective from July 1.
• JK Tyre & Industries: Care Rating downgraded commercial paper worth Rs 300 crore to CARE A1 from CARE A1+ citing lower than expected cash accruals leading to low coverage and return ratios and slower than expected deleveraging in the consolidated level.
• Shriram City Union Finance: MD and CEO D Ramachandra resigned from his post on June 30, to pursue other activities in different companies actively and due to time constraints.
• Inox Leisure commenced commercial operations of multiplex theatre in Hyderabad.
• NMDC said the termination of contract with BHEL will not have any material impact on operations.
• NDTV received orders from IT department to pay penalty of Rs 74.4 lakh. The company stated in the press release that these penalties have been levied without any basis and they are in the process of preparing appeals.
• Indian Oil: Minor fire accident occurred in Haldia plant on June 28. The fire has been put out, with no casualties and the incident had no impact on operations and supply. (Bloomberg News)
• Oil India has invited offers for enhancing production on revenue sharing basis from two of its marginal fields.
• Sadbhav Engineering’s arm Rohtak-Hissar Tollway has paid outstanding debt to lenders amounting to Rs 6.5 crore and cleared its pending dues. The arm’s credit rating was downgraded to D by Care Ratings on June 27.
• Balkrishna Industries said that it has commenced the trial production of Phase 1 of Carbon Black project with capacity of 60,000 MT per annum in Gujarat.
• Aavas Financiers has increased AFL lending rate by 25 basis points with effect from July 1.
• Godrej Properties board declared the closure of QIP issue on June 28. Sets issue price at Rs 928 per share to be allotted to eligible institutional buyers.
• SBI has approved allotment of bonds worth Rs 5,000 crore.
• Jet Airways: Employee consortium and Adi Group announced partnership for acquisition of 75 percent stake in the company through NCLT process.
• ONGC invited offers seeking partners for oil and gas production from its 64 marginal fields.
• Fortis Healthcare: Religare Finvest barred from divesting assets without SEBI nod.
• IFCI: ICRA downgraded long-term loan facilities to BBB from BBB+ with outlook remaining negative. The rating downgrade factors in the continued weakening of IFCI’s capital position because of slippages and a deteriorating operating profile.
• MTNL: Telecom ministry to move Cabinet note on BSNL, MTNL revival, an official told Bloomberg News.
• Kalpataru Power Transmission secured new orders worth Rs 975 crore.
• SSJVN signed a MoU with North Eastern Electrical Power Corporation for joint development of power projects.
• UPL’s arm completed the acquisition of 100 percent stake in Costa Rica’s Industrias Bioquim, which is engaged in the business of inorganic agricultural pesticides. Deal was announced on November 21, 2018.
• Amber Enterprises board extended timeline for acquiring balance stake of 51 percent in Ever Electronics by August 31. This was undertaken due to a request placed by promoters of the target company to complete the conditions of the deal. Amber Enterprises holds 19 percent stake as of now.
• IOL Chemicals and Pharma made pre-payment of term loan of Rs 21.17 crore due to banks in addition to regular payment schedule. The company stated that it had made aggregate loan prepayment of Rs 68.79 crore till date.
• Essel Group’s two infra arms get CARE C(CE) rating from CARE Ratings with outlook remaining negative and issuer not cooperating.
• NMDC: Lump ore and fines prices remain unchanged at Rs 3,100 and Rs 2,860 per tonne respectively.
• ABC India: Received an order of Rs 137.70 crore from BHEL for multimodal transportation of export project cargo from India to the MSTPP Rampal Project in Bangladesh.

Key Events/Data To Watch This Week

• July 1: Automakers to report sales data for June
• July 1: India Manufacturing PMI data for June
• July 3: Indian Services and Composite PMI for June
• July 4: India’s economic survey
• July 5: Finance Minister Nirmala Sitharaman to present Union Budget for 2019-20
• Boris Johnson and Jeremy Hunt campaign through the week as grassroots Conservative Party members decide who’ll be Britain’s next prime minister.
• OPEC+, a wider coalition that includes Russia, meets in Vienna Tuesday. Energy ministers from Saudi Arabia and Russia are likely to speak at the press conference following the meeting.
• U.S. celebrates the Independence Day holiday on Thursday.
• The U.S. jobs report is due Friday and is projected to show nonfarm payrolls rose by 160,000 in June, rebounding from a reading of 75,000 the month prior. The June employment situation report is also projected to show the unemployment rate held at 3.6 percent.

Bulk Deals

• NIIT Technologies: Hulst BV acquired 3.32 lakh shares or 0.54 percent equity at Rs 1,341.31 each.
• JK Paper: Promoter JK Credit & Finance sold 13 lakh shares or 1.84 percent equity at Rs 122.35 each.
• Reliance Infra: New York State Common Retirement Fund sold 14.2 lakh shares or 0.55 percent equity at Rs 57.59 each.

Infibeam Avenues

• Maybank Kim Eng Securities acquired 76.5 lakh shares or 1.15 percent equity at Rs 44.52 each.
• Promoters Infinium Communication and Infinity Drive sold 1 crore shares or 1.5 percent equity at Rs 44.65 each.

Power Finance Corporation

• Windacre Partnership Master Fund acquired 5.59 crore shares or 2.12 percent equity at Rs 135 each.
• Morgan Stanley France sold 4.86 crore shares or 1.84 percent equity at Rs 135 each.

Who’s Meeting Whom

• Tata Steel to meet Bajaj Allianz Life Insurance and Capital Research on July 1.
• Torrent Power to meet Emkay Global on July 1.
• Finolex Industries to meet Anvil Share & Stock Broking and Sundaram MF from July 1-2
• Amber Enterprises to meet SBI Caps Securities on July 2.

Pledge Share Details

• Zee Entertainment Enterprises promoter Cyquator Media Services released pledge of 4.6 lakh shares, invoked pledge of 51.47 lakh shares and revoked pledge of 25.25 lakh shares between June 20-27.
• Sical Logistics promoter Tanglin Retail Realty Developments created pledge of 5.18 lakh shares on June 19.
• Jamna Auto promoter Map Auto released pledge of 5 lakh shares on June 27.
• Aurobindo Pharma promoter Nityananda Reddy created pledge of 4.25 lakh shares on June 27.
• JSW Steel promoters created pledge of 1.23 crore shares from June 25-27.
• Apollo Hospitals Enterprise promoter and director Suneeta Reddy created pledge of 2.5 lakh shares on June 26.
• Emami promoter groups created pledge of 30.8 lakh shares from June 24-25.
• Hubtown promoter Falguni Shah invoked pledge of 2.5 lakh shares on June 27.
• Infibeam Avenues promoter Infinium Auto Mall released pledge of 10 lakh shares on June 28.
• DB Corp promoter DB Consolidated released pledge of 12.05 lakh shares on June 28.
• Cox & Kings promoter Liz Traders and Agents invoked pledge of 9.16 lakh shares on June 28.
• Sadbav Engineering promoter Shantaben Patel released pledge of 27.5 lakh shares on June 28.
• Emami promoters release pledge on 5.1 percent of their holding.
• Apollo Hospitals promoters pledge additional 0.87 percent of their holding.

Insider Trades

• Info Edge Promoter and Director Sanjeev Bikhchandani sold 37,000 shares from June 26-27.
• MEP Infra Developers promoter group Anuya Mhaiskar acquired 1.27 lakh shares on June 26.
• Century Plyboards promoters acquired 1.44 lakh shares on June 26.

Money Market Update

The rupee strengthened for the 2nd week and reached its highest since April 11 this year to Rs. 69.02 against the dollar from Rs. 69.07.

F&O Cues

Futures

• Nifty July futures closed at 11,841.5, premium of 52 points compared to 67 points earlier.
• Nifty futures Open Interest up 1 percent, adds 94,000 shares in OI
• Bank Nifty futures closed at 31,267, premium of 162 points vs 103 points
• Bank Nifty futures across series OI down 3%, sheds 54,000 shares in OI

Options

• Nifty PCR at 1.28 versus 1.51 (across all series)

Nifty Weekly Expiry (July 4)

• Max OI on call side at 12,000 (24.2 lakh shares)
• Max OI on put side at 11,700 (13.2 lakh shares)
• OI addition seen at 11,900C (+15 lakh shares), 12,000C (+9.6 lakh shares)

Nifty Monthly Expiry (July 25)

• Max OI on call side at 12,000 (14.4 lakh shares)
• Max OI on put side at 11,500 (15.4 lakh shares)

Stocks In F&O Ban

• In ban: DHFL
• New in ban: DHFL

Brokerage Radar

CLSA on Havells India

• Maintained ‘Outperform’; hiked price target to Rs 840 from Rs 780.
• Expect aggressive distribution push.
• Llyod – progressing well despite 2018-19 headwinds.
• Sharp increase in R&D budget.

CLSA on HDFC Bank

• Maintained ‘Buy’; hiked price target to Rs 2,930 from Rs 2,850.
• Risk appetite is peaking; Net interest margins may be overstated a bit.
• Focusing on its deposit franchise and technology.
• Rising staff churn ahead of potential CEO succession raises risk.

Nomura on Bank of Baroda

• Maintained ‘Buy’ with a price target of Rs 165.
• Consolidated net worth write-off of Rs 7,000 crore on expected lines.
• Key merger related risks: asset quality, PPOP drag and NBFC exposure.
• Prefer corporate banks in financials space – SBI remains our top pick.

Nomura on IndusInd Bank

• Maintained ‘Buy’ with a price target of Rs 1,775.
• Negatives priced in; current multiples reasonable for 19 percent RoE.
• Past high multiples unlikely to return soon.
• Market concerns: asset quality, corporate fee income and liability bulkiness.

Motilal Oswal on City Gas Distribution

• IGL: Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 327 from Rs 360
• Mahanagar Gas: Maintained ‘Neutral’; cut price target to Rs 889 from Rs 1,007
• Gujarat Gas: Maintained ‘Neutral’ with a price target of Rs 151.
• Downgrade IGL on regulatory risk and the risk to long-term volume growth.
• New concept paper to eventually challenge the monopolistic nature of the business.