All You Need To Know Going Into Trade On April 1

Stocks To Watch

• ONGC, Oil India, Gujarat Gas, IGL, MGL: India cuts gas prices by 26 percent to $2.39/mmBtu from April 1. The new price is the lowest since the government introduced formula-based pricing in November 2014. Prices are below the BQSurvey which indicated the prices to be around $2.48. Lower gas prices are negative for producers like ONGC and Oil India.
• Jubilant Lifesciences: Gets EIR with voluntary action initiated (VAI) status from U.S. FDA for its solid dosage facility in the U.S. The inspection stands successfully closed.
• Indian Overseas Bank: To pass on the repo rate cut to Repo Linked Lending Rate advances which will be at 7.25 percent with effect from April 1. MCLR rates revised with effect from April 10. The one-Year MCLR is now 8.25 percent and Three-Year MCLR is at 8.35 percent.
• Hero MotoCorp: Promoters acquired 2.76 lakh shares, and increased their stake in the company by 0.14 percent to 34.77 percent in the company.
• Punjab National Bank: Revised MCLR across various tenors with effect from April 1. One-Month MCLR at 7.2 percent and One-Year MCLR at 7.75 percent. Base Rate reduced by 15 basis points to 8.9 percent.
• Adani Transmission has circled up a second tranche of $90 million and concluded its maiden U.S. private placement of $400 million for dollar-denominated notes.
• Hindustan Aeronautics: Stated in a press release that it recorded a turnover of over Rs 21,100 crore for the financial year 2020. Revenue growth stood at 7 percent.
• PNB Housing Finance: Catalyst Trusteeship released a pledge of 5.41 crore shares on March 31.
• Spandana Sphoorty Financial: Completed the direct assignment of micro-finance loans worth Rs 490.23 crore on March 30. An amount of Rs 1,261.96 crore has been raised for the March quarter of the financial year 2020.
• Westlife Development: Suresh Lakshminarayanan resigned from the post of CFO.
• GE Power India: Awarded a contract by NTPC to supply Wet Flue Gas Desulfurization (FGD) Systems for a value of Rs 690 crore.
• IDFC: Has completed a transaction for the sale of 30 percent of its stake in its Infra Debt Fund to National Investment and Infrastructure Fund for Rs 256.91 crore.
• Sterling & Wilson Solar: Promoters facilitate the repayment of Rs 500 crore. The total amount to date paid by promoters stands at Rs 1,500 crore.
• South Indian Bank: Reduced its reference rate for external benchmark linked loans from 5.15 percent to 4.4 percent, with effect from April 1.
• Adani Enterprises: Gets a Letter of Award from NHAI for Madhya Pradesh road project for bid of Rs 866.64 crore.

Covid-19 Impact

• Kotak Mahindra Bank: States in a concall that if the lockdown is extended for three months, it will lead to higher slippages and significant problems will emerge with respect to recoveries. It stated that the recovery infrastructure is set up to handle a default rate of up to 5-7 percent. However, in times like these, the rates can shoot up to 10-15 percent.
• SpiceJet: Implements pay for cuts for its employees. Chairman and MD Ajay Singh to take a 30 percent pay cut. Other employees based on a bracket to face 10-30 percent pay cut, across the top and mid-rung levels. Employees in the lowest pay grades will remain unaffected by the decision.
• GM Breweries: Got a licence to manufacture hand sanitizers from Food and Drugs Administration, Maharashtra State, which will be valid from March 31 to June 30. The company will commence the production of hand sanitisers on a commercial basis shortly.
• Orient Electric: For its electric consumer durables - raw material stocks are adequate to ensure production and supply until mid-April. The anticipated scenario will be a cascading effect on the cash flows and business performance for a few months to come, estimation for which is unpredictable at this point in time. The disruption’s impact is expected to continue at least until the first quarter of the fiscal year 2021.
• Minda Industries: Closes its Spanish arm, till further notice.
• Fine Organic Industries: Has resumed its partial operations at it its manufacturing facilities from March 30.

Brokerage Radar

JPMorgan On Hero Motocorp

• Overweight rating maintained
• Price target of Rs 2,200
• BS-IV stock risk lower than market fears
• Liquidity position comfortable
• Fixed costs, capex commitments in the business are modest
• Business continuity planning underway to ensure smooth restart
• Steep decline in commodity costs the sole silver lining

CLSA On Varun Beverages

• Buy rating maintained
• Price target raised to Rs 766 from Rs 750
• See multiple growth levers beyond 2020
• Free cash flow generation pushed by a year due to Covid-19
• Positives: High asset turnover, market share gains in new territories and better contribution from non-carbonated drinks

BofA Securities On Ashok Leyland

• Upgrade to buy from neutral
• Price target cut to Rs 65 from Rs 70
• Upgrade as valuations suggest cyclical bottom
• Outlook remains tough but risk-reward has improved
• CV cycle uptick likely in FY22
• Balance sheet in better shape with focus on LCVs

BofA Securities On Kotak Mahindra Bank

• Management to focus on maintaining asset quality
• SME under stress across industry segments
• Unsecured retail segment likely to witness stress
• Mutual Fund and Insurance business impacted by lockdown
• Savings account has been sticky
• Fixed deposits more sensitive to potential rate cuts

UBS On Auto

• Turn positive on Indian autos post 45 percent correction in Auto Index
• FY21 earnings likely to be lowered sharply
• Solid balance sheets, strong free cash flow will cause the market to overlook near-term disruptions
• Believe that negative impact of BS-VI and potentially sharp macroeconomic slowdown in FY21 are potentially priced in
• Upgrade Hero, Bajaj Auto, Maruti Suzuki and Bosch to Buy from Sell

Bulk Deals

• Indiabulls Housing Finance: Promoter Sameer Gehlaut acquired 24 lakh shares (0.57 percent) at Rs 96.33 per share.
• MCX: Ward Ferry Group acquired 9.02 lakh shares (1.77 percent) at Rs 1,066 per share and East Bridge Capital Master Fund sold 9.06 lakh shares (1.78 percent) at Rs 1,066.08 per share.
• NCC: KBC Eco Fund acquired 40.22 lakh shares (0.67 percent) at Rs 17.87 per share.
• Suprajit Engineering: HDFC MF acquired 30 lakh shares (2.14 percent) at Rs 113.5 per share and National Westminster Bank sold 25 lakh shares (1.79 percent) at Rs 113.5 per share.
• Apollo Pipes: Canara HSBC Orient Bank of Commerce Life Insurance sold 98,989 shares (0.76 percent) at Rs 242 per share.

Who’s Meeting Whom

• Tata Steel to meet PIMCO, CIMB-Principal Asset Management and Lombard Odier on April 1.

Trading Tweaks

• Price Band Revised From 10 Percent To 5 Percent: Globus Spirits, Heritage Foods, JBM Auto, Kiri Industries, Majesco, Shree Renuka Sugars, Zensar Technologies.
• Price Band Revised From 20 Percent To 10 Percent: Caplin Point Laboratories, Sandhar Technologies.
• Move Into Short-Term ASM Framework: Ajanta Pharma, NIIT, Indoco Remedies, Shriram City Union Finance
• Move Out Of Short-Term ASM Framework: Prestige Estates Projects, Aurionpro Solutions, Shoppers Stop

Insider Trading

• Rain Industries: Promoter Anupama Reddy acquired 65,518 shares between March 30-31.
• Olectra Greentech: Promoter MEIL Holdings acquired 6 lakh shares between March 26-27.
• Mahindra CIE Automotive: Promoter PI Autometal acquired 1.18 lakh shares on March 30.
• KPIT Technologies: Promoter SB Ravi Pandit acquired 5.6 lakh shares between March 27-31.

(As Reported On March 31)

Money Market Update

• The currency on Tuesday closed at 75.54 against the U.S. dollar as against Monday's close of 75.42.

F&O Cues

Index Futures

• Nifty April futures closed at 8,620.9, a premium of 23 points versus 9 points.
• Nifty April futures Open Interest down 3 percent, sheds 3.1 lakh shares.
• Nifty Bank April futures closed at 19,135.5, a discount of 8.5 points versus a premium of 17 points.
• Nifty Bank April futures Open Interest fell 2 percent, shed 17,000 shares.

Options

• Nifty Put-Call Ratio at 1.19 versus 1.10 across all series.

Nifty Weekly Expiry: April 1

• Maximum Open Interest on Call side at 9,000 strike (14.5 lakh shares).
• Maximum Open Interest on Put side at 8,000 strike (12.1 lakh shares).
• 8,400 Put (4.7 lakh shares), 9,100 Call (3.5 lakh shares) and 8,300 Put (2.8 lakh shares) see open interest addition.

Nifty Monthly Expiry: April 30

• Maximum Open Interest on Call Side at 10,000 strike (14,400 lakh shares)
• Maximum Open Interest on Put side at 8,000 strike (19,500 lakh shares)

Revisions In Lot Size

• Nifty Bank lot size raised to 25 from 20
• Lot size of 74 stocks increased
• Lot size of 4 stocks decreased
• Changes effective from July series, as per NSE.