All You Need To Know Going Into Trade On April 17
A crane stands silhouetted at sunrise on a construction site in South Korea. (Photographer: SeongJoon Cho/Bloomberg)  

All You Need To Know Going Into Trade On April 17

RBI Governor To Address The Media

Asian equities have opened higher on Friday, taking cues from a rise in U.S. benchmarks amid tentative steps to restart the U.S. economy.

Treasury yields have advanced, the U.S. dollar has weakened, oil trades below the $20 per barrel mark while gold prices are declining.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 2.76 percent to 9,202 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’s a look at all that can influence equities in today’s session:

  • Markets in Japan, South Korea and Australia are gaining along with futures on the S&P 500.
  • U.S. markets ended higher on Thursday, albeit in a volatile trading session. The Nasdaq wiped out its losses for 2020.
  • China is due to release GDP, industrial production, retail sales and jobless figures today.
  • The total jobless claims in the U.S. have now risen to 22 million, with more than 5 million filing for unemployment benefits last week.
  • U.S. President Donald Trump laid out guidelines that can allow states and employers to abandon most social distancing practices within four weeks to curb the Covid-19 outbreak.
  • Yields on the 10-year treasury was up four basis points to 0.67 percent.
  • West Texas Intermediate crude was flat at $19.9 per barrel.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On April 17

Earnings Fineprint: TCS Q4

  • I.T. services revenue down 2.5 percent to $5,444 million
  • Revenue flat at Rs 39,946 crore from Rs 39,854 crore
  • EBIT up 0.5 percent to Rs 10,025 crore
  • EBIT Margin at 25.1 percent from 25 percent
  • Net profit down 1 percent to Rs 8,049 crore
  • All numbers are consolidated and compared sequentially

TCS Q4: The Key Factors

  • Strong bookings but outlook weak
  • Total Contract Value at $8.9 billion
  • Expects revenue weakness in the near-term
  • Dealing with client requests on pricing and payments on a case to case basis
  • There will be no retrenchment but salary increments on hold for now

Brokerages On TCS

Investec

  • Hold rating maintained
  • Price target of Rs 1,822
  • Revenue drop led largely by supply-side disruptions
  • Strong order book marred by Covid-19
  • See sharp decline in revenue in Q1FY21
  • Valuations stretched despite uncertainties

Emkay

  • Sell rating maintained
  • Price target cut to Rs 1,520 from Rs 1,560
  • Significant reduction in other costs aided EBIT margin
  • Large deal bookings aid order book
  • Valuations punchy in backdrop of sector-wide challenges

UBS

  • Neutral rating maintained
  • Price target of Rs 1,855
  • Expects peak impact comparable to global financial crisis and anticipates sharp recovery
  • Revenue and margins to return to normalcy in Q3FY21
  • Outlook largely in-line with estimates
  • Stock should remain rangebound

CLSA

  • Buy rating maintained
  • Price target cut to Rs 2,115 from Rs 2,550
  • Revenue growth at 10-year low with weak outlook for FY21
  • Margins may come under pressure in FY21
  • Best positioned to exploit digital adoption at better margins

Stocks To Watch

  • Tata Motors: Fitch ratings downgrades the long-term issuer default rating to B from BB-. The outlook remains negative. The company's consolidated Ebitda generation will drop by nearly 50 percent in FY21 and will remain below FY19 levels even after a recovery in FY22.
  • Oberoi Realty: Repays NCDs worth Rs 125 crore, ahead of its scheduled date of repayment, which is April 23.
  • Aviation Stocks: Ministry of Civil Aviation has asked airlines to refund the full amount for both international and domestic travel without levy of cancellation charges. The clarification says that the refund will be made if the tickets are booked during the lock-down period. (March 25- May 3) for the travel during the same period. The refund will be made within a period of three weeks from the date of request of cancellation.
  • JK Lakshmi Cement: Grinding units at Kalol and Surat have become operational.
  • Mahindra & Mahindra: Renewable energy subsidiary has completed the sale of its arm Divine Solren to CLP India for Rs 124.47 crore.
  • Grindwell Norton: Few of company’s plants have partially become operational, according to its press release.
  • Sudarshan Chemicals: Gets permission to start operations at its manufacturing facilities at Mahad.
  • Suprajit Engineering: Company’s arm Wescon is operating plants in the U.S. and Mexico at 50 percent capacity. European operations are at a standstill but expected to improve from the first week of May. It is also ready to commence manufacturing activities and operations in all its Indian plants including its 100 percent EOU Units and SEZ units after April 20, subject to government directives.
  • India Glycols: Resumed operations at its three plants in Uttar Pradesh and Uttarakhand.
  • Graphite India: Begins partial manufacturing operations at its Graphite electrode plant in Nashik.
  • BEML: L&T Mutual Fund reduced stake to 2.69 percent from 5.11 percent on April 15.

Brokerage Radar

Morgan Stanley On NBFCs

  • Impact of lockdown will be felt on loan growth
  • To a lesser extent, impact will also be on revenues
  • The key impact would be felt on asset quality and credit costs
  • Investors will be looking forward with key focus on liquidity, collection efficiency and growth visibility

Morgan Stanley On Telecom

  • Telcos outperformed in March, benefitting from risk-off environment
  • Relatively less impacted amid Covid-19 pressures
  • Focussing on subscriber benefits and not monetising the current situation

CLSA On Reliance Industries

  • Buy rating maintained
  • Price target cut to Rs 1,500 from Rs 2,100
  • Standalone business weak
  • Jio, retail will see growth in Q4
  • Building in decade-low margins for refining and petrochemical business
  • Retail will take a hit in FY21 but telecom likely to be a relative saviour

Pledged Share Details

  • Satin Creditcare: Promoter Trishashna Holdings released pledge of 12.16 lakh shares on April 15
  • Adani Enterprises: Promoter SB Adani Family Trust revoked pledge of 90 lakh shares on April 15
  • Motherson Sumi: Promoter Samvardhana Motherson International revoked pledge of 3.05 crore shares on April 13
  • Adani Ports and SEZ: Promoter SB Adani Family Trust revoked pledge of 5.4 crore shares on April 15

(As Reported On April 16)

Trading Tweaks

  • GSK Consumer Health Care record date for amalgamation
  • Price Band Revised To 5 Percent From 10 Percent: Allcargo Logistics, Bombay Dyeing, Greaves Cotton, GSFC
  • Price Band Revised To 10 Percent From 20 Percent: Ashoka Buildcon, SMS Lifesciences
  • Move Into ASM Framework: PNB Housing Finance, TRF, Sanwaria Consumer, Zuari Agro
  • Move Into Short-Term ASM Framework: Titagarh Wagons, Trident, Lumax Auto, Hexaware Technologies, HEG, Eris Lifesciences
  • Move Out Of Short-Term ASM Framework: GHCL, JBM Auto, LT Foods, Zee Media, Greenpanel Industries

Money Market Update

  • The rupee ended at an all-time closing low of 76.79 against the U.S. Dollar on Thursday as compared to Wednesday's close of 76.45.

F&O Cues

  • Nifty April futures closed at 9,035.4, premium of 42.6 points versus 5 points
  • Nifty April futures Open Interest up 3 percent and add 2.8 lakh shares
  • Nifty Bank April futures closed at 19,424, premium of 24 points versus discount of 67 points
  • Nifty Bank April futures Open Interest up 5 percent and add 63,000 shares
  • Nifty Put-Call Ratio at 1.39 versus 1.27 across all series

Nifty Weekly Expiry: April 23

  • Maximum Open Interest on Call side at 9,500 strike (6 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (7.8 lakh shares)
  • Open Interest addition seen in 8,000 Put (4.8 lakh shares), 8,500 Put (4 lakh shares) and 9,200 Call (3.9 lakh shares)

Nifty Monthly Expiry: April 30

  • Maximum Open Interest on Call side at 10,000 strike (16.9 lakh shares)
  • Maximum Open Interest on Put side at 8,000 strike (25.2 lakh shares)
All You Need To Know Going Into Trade On April 17
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