Monitors indicating stock prices are reflected in a glass panel at a brokerage firm in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On April 18 

Asian stocks were mixed Thursday after the latest batch of corporate earnings did little to boost their U.S. counterparts.

Shares in Japan and South Korea drifted, while those in Australia eked out gains. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 11,852.50 as of 7:10 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 fell to a one-week low as the drop in health-care providers extended amid concern about policy changes and the latest batch of corporate earnings did little to boost confidence in the economy.
  • The yield on 10-year Treasuries was little changed at 2.59 percent after hitting the highest in more than four weeks.

Also read: U.S., China Aim for Early-May Announcement on Trade Deal

Asian Cues

  • Japan’s Topix index was little changed.
  • South Korea’s Kospi was flat,
  • Australia’s S&P/ASX 200 Index added 0.2 percent.

Also read: Japan’s Deflation Mindset Could Be Contagious

Commodity Cues

  • Brent crude fell 0.14 percent to $71.52 per barrel.
  • West Texas Intermediate crude fell 0.1 percent to $63.68 a barrel.
  • Gold was steady at $1,274.56 an ounce.

Also read: Namaste, Oil Drillers: Yoga Mats Debut at Texas Industry Meeting

London Metal Exchange

  • Aluminium ended 0.3 percent lower.
  • Copper extended gains for the second consecutive trading session, closed 0.9 percent higher.
  • Lead ended 1.35 percent higher.
  • Tin extended declines for the third consecutive trading session, closed 0.46 percent lower.
  • Nickel fell for the third consecutive trading session, ended 0.46 percent lower.
  • Zinc halted a two-day fall, ended 0.34 percent higher.

Also read: Venezuela Sells $400 Million in Gold Amid Sanctions, Sources Say

Key Events/Data To Watch This Week

  • Earnings season rolls on this week, with reports due from American Express, Honeywell, Alcoa and Taiwan Semiconductor among others.
  • A swathe of financial markets will close across the Western world for the Good Friday holiday, including in the U.S., U.K. and Germany.

Indian ADRs

All You Need To Know Going Into Trade On April 18 

Stocks To Watch

  • Mindtree will pay a total dividend of Rs 27 per share. The board approved an interim dividend of Rs 3 per share, and also proposed a final dividend of Rs 4 and a special dividend of Rs 20 apiece, subject to shareholder approval.
  • Jet Airways India Ltd. suspended operations after it failed to secure a bailout. The company took a decision to halt flights on a “temporary” basis from Thursday, it said in a statement late Wednesday, when the last service was scheduled to take place.
  • Wipro to buyback 32.31 crore shares, or 5.35 percent equity at a price of Rs 325 per share aggregating to Rs 10,500 crore. The buyback is at a premium of 16 percent from the last regular trade.
  • Cipla’s South African arm signed an agreement to acquire 30 percent stake in Brandmed for ZAR 65 million and milestone payment to be paid over a period of three years. Deal is expected to close by May 31. (Alert: ZAR 65mn equals Rs 32.1 crore)
  • Bandhan Bank said Competition Commission of India approved the merger scheme of the bank with Gruh Finance.
  • DBS Bank to be excluded from Second Schedule of the Reserve Bank of India Act, 1934. (Source: RBI).
  • Chalet Hotels: Board said the IPO proceeds have been fully utilized with objects in the Offer Document.
  • Somany Ceramics CEO Tuljaram Maheshwari resigned from his post with effect from April 16 due to personal reasons.
  • Indo Rama Synthetics appointed Umesh Agarwal as Chief Commercial and Financial Officer with effect from April 16.
  • United Bank of India reduced MCLR by five basis points across various tenors. One-year MCLR at 8.8 percent and one month MCLR at 8.1 percent.
  • HT Media increased its stake to 51 percent in Next Media Works, by holding 3.41 crore shares in the target company.
  • Embassy Office Parks REIT to consider issuing NCDs on April 23.
  • InterGlobe Aviation added 18 flights from Mumbai and Delhi, bookings to open with effect from April 16. (Source: Press Release).
  • Sasken Technologies to consider share buyback on April 23.
  • Food & Inns record date for bonus share issue set on May 2.
  • Star Cement said that it has received Rs 174.5 crore towards its Freight Subsidy claims from the Central Government.
  • JM Financial arm to open its NCD issue up to Rs 1,000 crore on April 22.
  • RattanIndia Power appointed Hasmukhlal Darji as CFO with effect from April 15.
  • Reliance Industries: Mitsui O.S.K. Lines Ltd. to acquire strategic stake in six group companies (each owning a Very Large Ethane Carrier) of the company.
  • Hindalco: Subsidiary Novelis to supply aluminum sheets for Toyota RAV4.
  • Ashoka Builcon: received an order worth Rs 443.23 crore from RVNL with a completion period of 36 months.
  • Adani Enterprises: Rakesh Suryakant Shah, the CFO of the company has filed his resignation.
  • Quess Corp: Company’s subsidiary CBSL to acquire Allsec Technologies. Company to buy promoter stake (35.35 percent) at Rs 320. Company to acquire First Carlyle Ventures stake (26 percent) at Rs 250. Company to also make an open offer at Rs 320 per share. Share prices of Allsec Tech trading at Rs 300.5 per share. The company will invest Rs 403 crore in CBSL (subsidiary of Quess) by subscribing to equity shares and compulsorily convertible debentures

Also read: Reliance to Weigh Refinery Unit Stake Sale to Aramco, Adnoc

Nifty Earnings To Watch

  • Reliance Industries

Also read: Q4 Earnings: Reliance Industries’ Profit To Fall First Time In 17 Quarters

Other Earnings To Watch

  • ICICI Lombard General Insurance
  • Jay Bharat Maruti
  • RBL Bank
  • Tata Sponge Iron
  • DCB Bank
  • Majestic Auto
  • Uttam Galva Steels
  • Spacenet Enterprises

Also read: All You Need To Know Going Into Fourth-Quarter Earnings Season

Earnings Reaction To Watch

Wipro (Q4, QoQ)

  • Revenue up 0.7 percent to Rs 15,161 crore.
  • Net profit down 1.1 percent to Rs 2,483.5 crore.
  • Ebitda down 2.7 percent to Rs 2,700.7 crore.
  • Margin at 17.8 percent versus 18.4 percent.
  • Board approves buyback of 5.35 percent equity to Rs 325 per share.

Den Networks (Q4, YoY)

  • Revenue down 13.3 percent to Rs 273.1 crore.
  • Net loss at Rs 186.4 crore versus net loss of Rs 10.8 crore.
  • Ebitda down 34.3 percent to Rs 37.4 crore.
  • Margins at 13.7 percent versus 18.1 percent.
  • Other income of Rs 28 crore.
  • Exceptional Loss of Rs 211.1 crore.
  • Cable distribution network revenue down 14 percent to Rs 255.1 crore.
  • Broadband segment revenue up 8 percent to Rs 18 crore.

Mindtree (Q4, QoQ)

  • Revenue rose 2.9 percent to Rs 1,839.4 crore.
  • Net profit was up 3.7 percent to Rs 198 crore.
  • Ebit down 2.1 percent to Rs 237 crore.
  • Margin at 12.9 percent versus 13.6 percent.
  • Approves interim dividend of Rs 3 per share. It also proposed a final dividend of Rs 4 and a special dividend of Rs 20 apiece, subject to shareholder approval.

Crisil (Q4, YoY)

  • Total Income at Rs 422.88 crore versus Rs 427.57 crore.
  • Net profit at Rs 76. 64 crore versus Rs 82.21 crore.

Tata Steel BSL (Q4, YoY)

  • Revenue up 22.7 percent to Rs 5,517.5 crore.
  • Ebitda up 3 percent to Rs 786 crore.
  • Margin at 14.2 percent versus 17 percent.

Bulk Deals

  • Reliance Capital: Axis Trustee Services sold 30.02 lakh shares or 1.19 percent equity at Rs 177.94 each.

International Conveyors: Elara India Opportunities Fund sold 3.4 lakh shares or 0.5 percent equity at Rs 29.75 each (Alert: Company has market cap of Rs 204 crore)

Shree Digvijay Cement

  • Kuber India Fund acquired 17.5 lakh shares or 1.24 percent equity at Rs 17.64 each.
  • True North Fund acquired 7.7 crore shares or 54.62 percent equity at Rs 15.45 each.
  • Votorantim Cimentos S.A. sold 10.6 crore shares or 75 percent equity at Rs 15.55 each. (Votorantim Cimentos has sold entire 75 percent stake in the company now).

(Alert: Company has market cap of Rs 249 crore)

Block Deal

Lakshmi Vilas Bank

  • Subham Capital acquired 11.7 lakh shares or 0.37 percent equity at Rs 89 each.
  • Paharpur Cooling Towers sold 11.7 lakh shares or 0.37 percent equity at Rs 89 each.

Pledge Share Details

  • Future Enterprises Promoter Group Central Departmental Stores revoked pledge of 6.5 lakh shares on April 12.
  • Future Consumer Promoter Future Capital Investment created pledge of 2.5 crore shares on April 11.
  • JSW Energy Promoter Group Virtuous Tradecorp revoked pledge of 1.65 lakh shares on January 15.
  • Fortis Malar Hospitals Promoter Fortis Hospitals revoked pledge of 1.17 crore shares on March 29.

(As reported on April 16)

Trading Tweaks

  • Balrampur Chini Mills record date for share buyback.
  • 63 Moons Technologies price band revised to 10 percent.
  • 8K Miles Software Services price band revised to 5 percent.

Stocks Moving Into ASM Framework

  • Indo Count Industries
  • Arvind Fashions
  • Lakshmi Vilas Bank
  • Tanla Solutions
  • Foods & Inns

Who’s Meeting Whom

  • Linc Pen & Plastics to meet Mount Intra Finance on April 18.

Money Market Update

  • The rupee on Tuesday weakened for the third straight session to close at 69.61/$ versus Monday’s closing of 69.42/$. Money market operations were closed Wednesday.

F&O Cues

April Futures

  • Nifty open interest up 1 percent, adds 1.9 lakh shares in open interest.
  • Bank Nifty open interest up 5 percent adds 1 lakh shares.
  • Nifty futures premium unchanged at 37 points, closed trading at 11,824.4.
  • Bank Nifty futures premium at 74.2 points versus 83 points, closed trading at 30,605.5.

Options

  • Nifty PCR at 1.82 versus 1.61 (across all series).

Nifty Weekly Expiry (April 18)

  • Max open interest at 11,600 put (16.7 lakh shares) 11,700 put (15.1 lakh shares).
  • Open interest addition seen for 11,750 put (10.9 lakh shares), 11,800 put (8.2 lakh shares).
  • Open interest shedding seen for call strike 11,700 (-11.4 lakh shares).

Nifty Monthly Expiry

  • Max open interest at 11,500 put (28.7 lakh shares), 12,000 call (24.8 lakh shares) and 11,7000 put (22.9 lakh shares).
  • Open interest addition seen for put strikes 11,800 (+12.4 lakh shares) & 11,700 put (+5.7 lakh shares).
  • Open interest shedding seen for call strikes 11,700, 11,800.

Stocks In F&O Ban

In Ban:

  • IDBI
  • Idea
  • Jet Airways
  • PC Jewellers
  • Reliance Power
  • Idea*

Out of Ban:

  • Dewan Housing Finance Ltd.
  • Wockhardt

*New in ban

All You Need To Know Going Into Trade On April 18 

Brokerage Radar

On Wipro

Investec on Wipro

  • Maintained ‘Hold’ with a price target of Rs 265.
  • Reported a weaker than expected March quarter with lower revenue and margins.
  • Weak revenue growth guidance for the first quarter to weigh on remaining 9MFY20.
  • EBIT margin expected to improve in 2019-20, but already priced in.
  • Buyback to keep stock elevated in the near term.

Morgan Stanley on Wipro

  • Maintained ‘Underweight’; hiked price target to Rs 255 from Rs 225
  • March saw weaker IT services revenue but better EBIT.
  • Margin improvement was a key highlight in 2018-19.
  • Expect second half of the current financial year’s growth to be better than the first half.

More Calls

Investec on Eicher Motors

  • Maintained ‘Buy’; cut price target to Rs 22,550 from Rs 24,750.
  • Expect volume momentum for RE to sequentially improve from April
  • Expect temporary market share loss because of higher non-ABS inventory.
  • Expect Eicher’s volume growth return to double digits from April 2021.
  • Cut EPS for the next two financial years by 8 percent and 11 percent respectively to factor in lower volume and margin.

CIMB on Indian Steel

  • Global rally in steel prices is starting to wane now.
  • In absence of global support steel prices set to soften further.
  • Steel price decline is imminent as channel filling is over and global demand not picked up.

CIMB on Ambuja Cements

  • Maintained ‘Add’; hiked price target to Rs 254 from Rs 246.
  • Expansion on track; Volume growth to drive earnings.
  • Expect company to report 7.7 percent sales volume CAGR in CY18-21.
  • Balance sheet to remain strong; fundamentals to support valuations.

Edelweiss on Healthcare

  • Ind AS 116 likely impact profitability, liabilities and valuations of hospital companies.
  • HCG will see the maximum impact, capital employed to increase by 30 percent and Ebitda by 50 percent.
  • Apollo Hospitals’ capital employed will rise 30 percent and Ebitda will jump about 40 percent.
  • Diagnostic companies – No major impact.

Investec on Mindtree

  • Downgraded to ‘Hold’ from ‘Buy’; hiked price target to Rs 1,012 from Rs 950.
  • Mindtree guided mid-teen revenue growth and 120 basis points margins expansion for 2019-20.
  • This is likely to leave investors wanting more in L&T’s open offer.
  • Will L&T increase the open offer price or stay with what it already has is what one needs to consider for a BUY call at this stage.

HSBC on Reliance Industries

  • Maintained ‘Buy’ with a price target of Rs 1,500.
  • A possible stake sale could partly de-risk RIL’s energy business and accelerate deleveraging plans.
  • If a potential deal is being discussed, it may be a logical step for RIL long-term.
  • Deal valuations look broadly in line.

Morgan Stanley on JSPL

  • Maintained ‘Buy’ with a price target of Rs 188
  • March quarter reposed a solid production ramp-up; gives us comfort for 2019-20 volume estimate
  • Expect realization to decline sequentially in March quarter.
  • Strong volume to support operating leverage and Ebitda in March quarter.