All You Need To Know Going Into Trade On Jan. 31
Stocks in Asia followed their U.S. and emerging-market counterparts higher as the Federal Reserve signaled it is putting further interest-rate increases on hold, sending the dollar lower with Treasury yields.
Japanese shares led regional gains, indicating a strong end to a stellar month for equities in Asia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.6 percent to 10,699.20 as of 7:10 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. stocks surged and the dollar tumbled after the Federal Reserve signalled a stark dovish turn in its latest policy statement.
- The yield on 10-year Treasuries held at 2.68 percent.
- The MSCI Asia Pacific Index gained 1 percent.
- Nasdaq futures added 0.2 percent.
- Japan’s Nikkei 225 advanced 1.5 percent.
- Australia’s S&P/ASX 200 Index gained 0.2 percent.
- The MSCI Emerging Market Index earlier rose 0.7 percent to a four-month high.
- Hang Seng Index futures earlier climbed 0.1 percent.
- West Texas Intermediate crude rose 0.5 percent to $54.48 a barrel.
- Brent crude extended gains for the second day, ended 0.5 percent higher at $61.65 a barrel.
- Gold held at $1,320.34 an ounce.
London Metal Exchange
- Aluminium ended 0.9 percent higher.
- Nickel ended 1.9 percent higher.
- Tin ended higher for the second day, up 0.48 percent.
- Lead halted a two-day decline, ended 0.7 percent higher.
- Zinc resumed rally after a one-day blip, ended 1.13 percent higher.
Key Data To Watch
- 4:30pm: India fiscal deficit for April-December period.
- 5:30pm: India revised annual GDP estimate for FY18 YoY (prior 7.2 percent).
- 5:30pm: Eight Infrastructure Industries Index for December (Prior +3.5 percent).
Stocks To Watch
- ICICI Bank enquiry committee headed by former Supreme Court judge BN Srikrishna found Chanda Kochhar was in violation of bank’s code of conduct for conflict of interest. Bank will seek claw back of all bonuses paid to her from April 2009 until March 2018. (Read the full statement by Chanda Kochhar here).
- Qatar Investment Authority to infuse $200 million in Bharti Airtel’s Africa unit. The investment authority will own less than 4 percent stake in African unit.
- Castrol’s board approved proposal for capacity expansion of its Gujarat’s production facility from 100 million litres to 140 million litres with an investment of Rs 138 crore.
- Jet Airways clarified that the company had not grounded a single aircraft due to any grounding notice by GECAS. Temporary grounding of four planes for repairs and technical reasons have been reported while a single aircraft was grounded due to termination of lease contract.
- Dredging Corporation of India lost appeal against Mercator by England Court, where the tribunal had passed an order to pay Rs 56.3 crore to Mercator which was only 25 percent of what the company had claimed for arbitration settlement.
- Zydus Wellness completed 100 percent acquisition of stake in Heinz India for Rs 4,667.4 crore.
- Tata Metaliks received environmental clearance from Forest Ministry to increase hot metal production from 0.5 MTPA to 0.75 MTPA and ductile iron pipe production from 0.3 MTPA to 0.5 MTPA and castings of 0.1 MTPA at the company's existing facility located in West Bengal.
- Hathway Cable and Datacom allotted 90.9 crore shares at a price of Rs 32.35 per share aggregating to Rs 2,940 crore to Reliance’s Jio and its arms, which has triggered the open offer where Reliance’s four arms will offer 46 crore equity shares to the public, representing 26 percent of voting share capital at Rs 32.35 per share, aggregating to Rs 1,488.8 crore.
- Container Corporation of India signed a memorandum of understanding with Russia based JSC Logistics for exploring logistics opportunities in Russia, India and international corridors.
- Hero MotoCorp set up technological centre in Germany. This centre will operate in tandem with the company’s global R&D hub in Rajasthan.
- Future Enterprises said it was considering raising funds on Feb. 5.
- Torrent Pharma board approved issuing NCDs worth Rs 5,000 crore.
- Chalet Hotels IPO gets 28 percent demand on second day sale; offer closes today.
Nifty Earnings To Watch
- Bharti Airtel
- Hero MotoCorp
- United Phosphorus Ltd.
- Power Grid Corporation of India
Other Earning To Watch
- Accelya Kale Solutions
- Aegis Logistic
- Apollo Micro Systems
- Ballarpur Industries
- Chambal Fertilizers & Chemicals
- CL Educate
- CreditAccess Grameen
- Dena Bank
- eClerx Services
- Essar Shipping
- GTL Infrastructure
- Gujarat Alkalies and Chemicals
- IFB Industries
- Jamna Auto Industries
- JBF Industries
- JMC Projects
- Jubilant Industries
- Laurus Labs
- LGB Forge
- Mafatlal Industries
- Magma Fincorp
- Mold-Tek Packaging
- Narayana Hrudayalaya
- Oriental Carbon & Chemicals
- Petronet LNG
- Selan Exploration Technology
- Solar Industries
- Solara Active Pharma Sciences
- Srikalahasthi Pipes
- Sundaram Finance
- TD Power Systems
- V-Guard Industries
- Uniphos Enterprises
- Menon Bearings
- Enkei Wheels
- EIH Associated Hotels
- Datamatics Global Services
Earnings Reaction To Watch
ICICI Bank (Q3, YoY)
- Net interest income up 20.5 percent at Rs 6,875.2 crore.
- Net profit down 2.75 percent at Rs 1,604.9 crore.
- Provisions at Rs 4,244.2 crore versus Rs 3,569.2 crore.
- GNPA at 7.75 percent versus 8.54 percent (QoQ)
- NNPA at 2.58 percent versus 3.65 percent (QoQ)
NTPC (Q3 Standalone, YoY)
- Revenue up 16.1 percent at Rs 2,4120.4 crore.
- Net profit up 1 percent at Rs 2,385.4 crore.
- Ebitda up 24.7 percent at Rs 6,579.9 crore.
- Margin at 27.3 percent versus 25.4 percent.
- Board recommends bonus issue in the ratio of 1:5.
Hexaware Technologies (Q4CY18, QoQ)
- Revenue up 3.5 percent at Rs 1,252 crore.
- Net profit down 28 percent at Rs 123 crore.
- EBIT down 6.4 percent at Rs 175 crore.
- EBIT margin at 14 percent versus 15.5 percent.
BEL (Q3 Standalone, YoY)
- Revenue up 8.4 percent at Rs 2.716.5 crore.
- Net profit up 67.6 percent at Rs 507.6 crore.
- Ebitda up 72.5 percent at Rs 768.1 crore.
- Margin at 28.3 percent versus 17.8 percent.
Ajanta Pharma (Q3, YoY)
- Revenue down 17.4 percent at Rs 485.1 crore.
- Net profit down 54.6 percent at Rs 66.9 crore.
- Ebitda down 45.7 percent at Rs 107.3 crore.
- Margin at 22.1 percent versus 33.6 percent.
- Export down 27 percent at Rs 304 crore.
Dixon Technologies (Q3, YoY)
- Revenue up 16.7 percent at Rs 794 crore.
- Net profit up 15.8 percent at Rs 17.6 crore.
- Ebitda up 36.2 percent at Rs 39.1 crore.
- Margin at 4.9 percent versus 4.2 percent.
Torrent Pharma (Q3)
- Revenue up 40 percent at Rs 2,051 crore.
- Net profit up 4.2 times at Rs 246 crore.
- Ebitda up 56 percent at Rs 561 crore.
- Margin at 27.3 percent versus 24.5 percent.
- Declares dividend of Rs 13 per share.
LIC Housing Finance (Q3, YoY)
- Net interest income up 42 percent at Rs 1,084.3 crore.
- Net profit up 25.5 percent at Rs 596.3 crore.
Castrol (Q4CY18, YoY)
- Revenue up 6.5 percent at Rs 1,033.4 crore.
- Net profit up 40.9 percent at Rs 211.9 crore.
- Ebitda up 3.5 percent at Rs 317.4 crore.
- Margin at 30.7 percent versus 31.6 percent.
Tata Communications (Q3, QoQ) (Adjusted For Incomes Not Pertaining To Q3)
- Revenue up 2.7 percent at Rs 4,179.5 crore.
- Net profit at Rs 173 crore vs Rs 1.65 crore
- Ebitda down 21.6 percent at Rs 493.8 crore.
- Margin at 11.8 percent versus 15.5 percent.
- Other Income up 2.2 times at Rs 19.2 crore.
- Deferred Tax Credit reversal of Rs 29.6 crore in Q3
- Company recorded a revenue of Rs 90 crore and recovery of cost worth Rs 259 crore in Q3 due to favourable court ruling.
Geojit Financial Services
- Copthall Mauritius Investment acquired 22.5 lakh shares or 0.95 percent equity at Rs 35.5 each.
- HSBC Global Investment Funds sold 24.8 lakh shares or 1.04 percent equity at Rs 35.59 each.
- R System International ex-date for share buyback.
- Leel Electricals price band revised to 10 percent.
- Tanla Solutions price band revised to 5 percent.
- Deepak Fertilisers and Petrochemicals promoter group Robust Marketing Services acquired 50,000 shares on Jan. 25.
- Kitex Garments promoter Sabu Jacob acquired 1.12 lakh shares on Jan. 28.
- Action Construction Equipment promoter Mona Agarwal acquired 5 lakh shares on Jan. 28.
- Cox & Kings promoter Liz Traders and Agents acquired 45,800 shares on Jan. 28.
- Fineotex Chemical promoters sold 8 lakh shares between Jan. 28-29.
Money Market Update
- The rupee on Wednesday ended at 71.12/$ versus Tuesday’s closing of 71.11/$.
- Nifty January futures closed trading at 10,642, discount of 9 points.
- Max open interest for January series at 10,800 Call, (open interest at 41.1 lakh shares).
- Max open interest for January series at 10,500 Put, (open interest at 26.4 lakh shares).
Stocks In F&O Ban
- Adani Enterprises Ltd
- Adani Power
- Bank Of India
Out Of Ban:
- Jain Irrigation
- Nifty PCR at 1.21 versus 1.22.
- Nifty Bank PCR at 0.96 versus 0.77.
Macquarie on Hexaware
- Maintained ‘Outperform’; cut price target to Rs 440 from Rs 500
- Good execution in December quarter despite furloughs
- Deal wins sets stage for revenue acceleration in 2019.
- Cut 2019 and 2020 EPS estimates by 4 percent and 2.5 percent respectively due to lower margins and reduce target multiple.
- Maintained ‘Buy’ with a price target of Rs 180.
- Marked improvement in operations and availability.
- Management guided for a much better December quarter on lower under-recoveries.
- Enough steam left in its lofty December quarter project starts.
- Maintained ‘Outperform’ with a price target of Rs 186.
- Adjusted net profit miss expectation.
- May miss commissioning target; equity base set to rise.
- Mgmt. expects to reduce under-recoveries which would be higher than earlier guidance.
On ICICI Bank
- Maintained ‘Buy’; hiked price target to Rs 470 from Rs 450.
- Lower slippages and rise in coverage increase visibility of earnings turnaround.
- December quarter’s topline included some one-offs; CASA growth key to market-share gains.
- Watch out for investigations on conflict of interest.
- Maintained ‘Buy’; hiked price target to Rs 525 from Rs 510.
- Provisioning catchup is done, implying normalised earnings from the first quarter of the next financial year.
- Core profit was strong; Top pick in Asian banks.
- Enquiry report on ex-CEO's conflict has no implications on bank's published numbers.
- Maintained ‘Outperform’; hiked price target to Rs 460 from Rs 416.
- Strong asset quality performance, other operational parameters are stable.
- Current price implies market is not assigning any value to subsidiaries.
- ICICI is preferred play on normalisation of credit costs theme as Axis Bank has already run up.
On Bajaj Auto
- Maintained ‘Sell’; cut price target to Rs 2,225 from Rs 2,450.
- 3W and export growth likely to taper; pressures in domestic two wheelers.
- Gaining share in domestic two wheelers but at cost of margins.
- Regulatory changes in the next financial year will push up two wheeler prices and impact demand/margins.
- Maintain Underperform with price target of Rs 2,200
- Realisations and profitability miss expectations
- See significant cost headwinds over next 2 years due to safety regulations and BS-VI emission norms
- Despite discounting led market share gains, continue to see structural challenges
- Maintained ‘Buy’; cut price target to Rs 3,200 from Rs 3,485.
- Operational miss due to increase in cost, higher exports and lower rupee realisation.
- Believe Bajaj’s aggression should help raise EPS growth from April.
- Africa & Asia to drive double digit growth in exports in the next financial year.
On Jubilant Food
- Maintained ‘Buy’ with a price target of Rs 1,600.
- Strong SSSG with a seven-year high margin.
- Worst of the man power issue has passed.
- Aggressive competition from food aggregators is the key risk.
- Maintained ‘Neutral’ with a price target of Rs 1,475.
- Strong SSSG; base getting tougher moving ahead.
- Believe going forward SSSG could be comparatively muted.
- Competitors are increasing prices; Domino’s pizza available at a discount.
On Indian Oil Corp
- Maintained ‘Neutral’ with a price target of Rs 140.
- Net income was about breakeven due to significant inventory losses and weak refining environment.
- Inventory losses in refining and marketing hurts performance.
- Risk of subsidies or marketing margin cuts is not relevant in current crude environment.
- Maintained ‘Buy’; cut price target to Rs 170 from Rs 180.
- Strong core earnings amid heavy inventory losses.
- Macro commodity outlook is cloudy due to weak GRMs and oil price/currency volatility.
- Marketing pricing power should be steady after elections .
- Maintained ‘Buy’; cut price target to Rs 184 from Rs 199.
- Core GRM strong but marketing and petchem margin subdued.
- Lower GRM assumption but raise marketing margin assumption.
- Trading at attractive valuation.