All You Need To Know Going Into Trade On April 15

Asian stocks began the week on a mostly positive note after earnings and Chinese economic data eased concerns about a slowdown in global growth Friday.

Japanese shares posted the largest gain early Monday, with equities in South Korea also higher and Australia opening flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.13 percent to 11,676 as of 7 a.m.

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BQ Live

Here’s a quick look at all that could influence equities today.

U.S Market Check

• U.S. stocks rose amid solid bank earnings and a major deal in the energy sector.
• The yield on 10-year Treasuries held at 2.56 percent.

Asian Cues

• Japan’s Topix index rose 1.5 percent.
• South Korea’s Kospi index advanced 0.5 percent.
• Australia’s S&P/ASX 200 Index rose 0.1 percent.
• S&P 500 futures were little changed.

Commodity Cues

• Brent crude traded 0.36 percent lower at $71.29 per barrel.
• West Texas Intermediate crude slipped 0.5 percent to $63.56 a barrel.
• Gold was steady at $1,290.35.

London Metal Exchange

• Aluminium halted a two-day fall, ended 0.16 percent higher.
• Copper halted a two-day fall, ended 1.19 percent higher.
• Lead ended lower for the fourth day, ended 0.1 percent higher.
• Tin halted a two-day fall, ended 0.24 percent higher.
• Nickel resumed gains after a one-day blip, ended 0.35 percent higher.

Key Events/Data To Watch This Week

• The Reserve Bank of Australia releases the minutes of its latest rate-decision meeting Tuesday.

• Wednesday brings China GDP, industrial production and retail sales data.
• Stock markets will be closed for Easter holidays in countries including the U.S., U.K. and Germany on Friday.
• April 15: India wholesale price inflation for March YoY
• April 15: India trade export-import data for March
• Wipro Ltd., Tata Steel Ltd., Reliance Industries Ltd. and HDFC Bank Ltd. will be reporting their quarterly results this week.

Indian ADRs

Stocks To Watch

• Dr. Reddy's Laboratories: Entered into a definitive agreement to acquire a portfolio of 42 approved, non-marketed Abbreviated New Drug Applications (ANDAs) in the U.S. The portfolio includes more than 30 generic injectable products. These products will require to be technology transferred and could be launched within the next one to two years. The value of total addressable market for these products in the U.S. is approximately $645 million in 2018.
• McLeod Russel India: Wholly owned subsidiary to sell remaining 50 percent stake in Pfunda Tea Company to Rwanda Tea Investments for $7.87 million (Rs 54.5 crore).
• Adani Power: India’s power regulator has allowed Adani Power’s Mundra thermal power unit to pass on higher cost of imported coal that had made the project unviable. The Mundra unit will be allowed increase the variable component of tariff to pass through the cost of fuel up to $110 per metric tonne, according to the order by Central Electricity Regulatory Commission. This increase will be offset by reduction in fixed cost by 20 paise/kilowatt for billionaire Gautam Adani-owned group company. The order pertains to just 2,000 megawatt capacity, of the total 4,620 MW plant, that is covered under the power purchase agreement between Adani Power and Gujarat Urja Vikas Nigam Ltd., the Gujarat state electricity board.
• Jet Airways: SBICAP Trustee has acquired 5.19 percent stake, or 58.96 lakh shares in the company after a pledge of shares via encumbrance on April 11. The company has also extended its international operations’ suspension till April 15, according to a PTI report. India’s Aviation Secretary said that Jet Airways will not to compromise on safety at any cost. The airline says it will fly six-seven planes on April 13 and about 40 domestic flight each day from April 13-15, according to a Bloomberg report.
• Dixon Technologies has acquired a 50 percent stake in Padget Electronics for Rs 27 crore. The target company is into manufacturing of mobile phones. Dixon Technologies said this acquisition is a strategic investment decision and that it plans to accelerate growth in this business segment.
• Lakshmi Vilas Bank: The company’s board deferred discussions on raising capital via additional tier 1 bonds but approved allotment of up to 1.68 crore shares. Also, Care Ratings revised ratings on certain Lakshmi Vilas Bank bonds downwards on “credit watch with negative implications”
• Dilip Buildcon arm’s HAM project in Maharashtra received financial closure on April 11.
• NIIT Tech: Tentative schedule of open offer released.
• Bharti Airtel clarifies that current in-principle approval of Department of Telecommunications for merger of Tata Tele unit with the company is subject to fulfillment of conditions.
• Apollo Tricoat Tube makes preferential allotment of 23 lakh shares aggregating to Rs 20.7 crore to promoter group Rahul Gupta.
• APL Apollo Tubes is set to acquire a production unit of Shankara Building Products’ arm in Hyderabad for Rs 70 crore. The plant has a production of 2 lakh tonnes per annum for steel and pipes. Shares and warrants worth Rs 92 crore have been allotted to promoter APL Infrastructure.
• Cosmo Films launched CPP High Barrier Films, which is used as a packaging application for eatables.
• GMM Pfaudler executed a definitive agreement for acquisition of the Industrial Mixing Solutions Division of Sudarshan Chemical Industries for Rs 29 crore.
• Eris Lifesciences says it has pre-paid the entire loan facility obtained from Axis Bank. The agreement for these loan facilities were entered on November 2017.
• Coffee Day Enterprises pledged 20 percent of its shares in Mindtree to IDBI Trusteeship.

New Listing

• Metropolis Healthcare shares to start trading on exchanges after IPO gets 5.83 times demand at Rs 880 per share.

Earnings To Watch

• Hathway Cable
• Network18 media
• Tata Metiliks
• TV18 Broadcast

Earnings Reaction To Watch

Infosys Q4 (QoQ)

• Revenue up 0.6 percent to Rs 21,539 crore
• Dollar revenue up 2.4 percent to $3,060 million
• Net profit (adjusted) up 2.2 percent to Rs 4,078 crore
• EBIT down 4.4 percent to Rs 4,618 crore
• EBIT margin at 21.4 percent versus 22.6 percent
• Revenue growth guidance: 7.5 percent to 9.5 percent for FY20 in constant currency terms
• Operating margins guidance: 21 percent to 23 percent for FY20
• Declares dividend of Rs 10.5 per share

TCS Q4 (QoQ)

• Dollar revenue up 2.8 percent to $5,397 million
• Revenue up 1.8 percent to Rs 38,010 crore
• Net profit up 0.3 percent to Rs 8,126 crore
• EBIT down 0.2 percent to Rs 9,537 crore
• EBIT margin at 25.1 percent versus 25.6 percent
• Declares dividend of Rs 18 per share

GTPL Hathway Q4 (YoY)

• Revenue up 14.9 percent to Rs 322.4 crore
• Net loss at Rs 27.7 crore versus Net profit at Rs 13.7 crore
• Ebitda up 5 percent to Rs 77.3 crore
• Margin at 24 percent versus 26.2 percent
• Exceptional loss of Rs 64.9 crore due impairment of receivables because of new regulatory framework made by TRAI
• Other Income up 3.6 times to Rs 26.3 crore

Pledge Share Details (As Reported on April 12)

• Bajaj Consumer Care’s promoter Bajaj Resources revoked pledge of 81.34 lakh shares on April 10.
• Adani Enterprises’ promoter group Gautam Adani revoked pledge of 11 lakh shares on March 29-April 10.
• Adani Ports & SEZ’s promoter Gautam Adani revoked pledge of 4 lakh shares on April 10.
• Zee Learn’s promoters Jayneer Infrapower and Multiventures revoked pledge of 25.84 lakh shares from March 29-30
• Future Retail’s promoter Future Corporate Resources revoked pledge of 5.63 lakh shares and created pledge of 16.25 lakh shares from March 29-April 1.
• Gati’s promoter groups invoked 25.15 lakh shares on April 2.

Insider Trading (As reported on April 12)

• Dynamatic Technologies promoter Udayant Malhoutra sold 90,000 shares from March 27-28.
• Crest Ventures promoter Fine Estates acquired 30,000 shares on April 10

Rupee

• The rupee snapped a three-day winning streak Friday, as forex traders weighed rising crude oil prices.

• Besides, as forex dealers said, there was concern in the market after reports surfaced that the Supreme Court Friday restrained Arcelor Mittal from acquiring Essar Steel, which in turn might impact dollar inflows considering the Essar Steel acquisition was worth nearly $7 billion.

Source: PTI

April Futures

• Nifty OI down 2 percent sheds 2.4 lakh shares in OI
• Bank Nifty OI up 8 percent adds 1.4 lakh shares
• Nifty futures premium at 60.4 points versus 72 points, closed trading at 11,703.8
• Bank Nifty futures premium at 124.5 points versus 159 points, closed trading at 30,063
• Options
• Nifty PCR at 1.54 versus 1.24 (across all series)

Nifty Weekly Expiry (April 18)

• Max OI at 11,600-Put (15.5 lakh shares) 11,700-Call (14 lakh shares), 11,500-Put (10 lakh shares)
• OI addition seen for 11,600-Put (8.1 lakh shares) & 11,500-Put (4.3 lakh shares)
• Nifty Monthly Expiry
• Max OI at 11000-Put (30 lakh shares) and 12,000-Call (29.5 lakh shares), 11,500-Put (29 lakh shares)
• OI addition seen for 11,500-Put (2.4 lakh shares), 11,700-Put (1.1 lakh shares)

Stocks In F&O Ban

• In Ban: Dewan Housing, DLF, IDBI, Jet Airways, Reliance Power, Wockhardt
• Out of Ban: PC Jeweller

Brokerage Radar

On Infosys

Investec

• Downgraded to ‘Hold’ From ‘Buy’; cut price target to Rs 750 from Rs 784.
• Q4 performance largely driven by large deal ramp up.
• Weak exit margin and cut in margin guidance leads to 4.9 percent and 4.2 percent EPS cut for te current and the next financial year respectively.
• Revenue growth guidance of 7.5-9.5 percent appears conservative.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 810 from Rs 770.
• Margin recovery will happen earliest in 2020-21.
• Expect PE Ratio gap between TCS and INFO to rise to 20 percent.
• Cut FY20-21 EPS by 1-3 percent; Target price raised as rolled over.

On TCS

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 2,363 from Rs 2,291.
• Broad-based growth overall and finally, double-digit growth in BFSI.
• Margin defence despite currency has been solid.
• TCS is our top pick in the large cap Indian IT space (along with HCL Tech).

Investec

• Maintained ‘Hold’ with a price target of Rs 1,930.
• Inline quarter; margins steady ex-one off.
• Improving deal wins indicate strong H1FY20; macro begs caution for the second half.
• Weakening margins and headwinds to revenue growth aren’t a great combination for returns.

More Calls

• Goldman Sachs on Fortis Healthcare
• Reinstated ‘Neutral’ with a price target of Rs 130.
• Expect lower utilization at key hospitals and slower offtake at SRL.
• Expect to see improvements in cost control in next 1-2 years.
• Open offer and ongoing audit remain an overhang.

Citi on IGL

• Maintained ‘Buy’; hiked price target to Rs 365 from Rs 350.
• Double digit volume growth should sustain in 2019-20.
• Gurgaon: Deal closure taking longer than expected.
• Margin comfort remains.

Equirus on Shankara Building

• Maintained ‘Add’ with a price target of Rs 403.
• Asset sale to improve liquidity and reduce working capital.
• Sale of asset looks distress as it is at lower valuation than peers.
• Total debt to come down to Rs 300 crore from Rs 420 crore.