Oranges are prepared for processing into orange juice concentrate August 26, 2004 at a Citrovita plant in Brazil. (Photographer: Jean Pierre Pingoud/Bloomberg News).

All You Need To Know Going Into Trade On April 22

Stocks in Asia traded mixed Monday as the Easter holiday weekend continued in many countries. Japanese stocks retreated and their Korean counterparts fluctuated, while U.S. futures were little changed.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,802.50 as of 6:55 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 edged higher ahead of the holiday weekend as gains in industrial stocks slightly outweighed weakness in health-care and energy shares.
  • The yield on 10-year Treasuries was little changed at 2.56 percent.

Asian Cues

  • Japan’s Topix Index fell 0.4 percent as of 9:08 a.m. Tokyo time.
  • Kospi Index rose 0.1 percent.
  • S&P 500 futures were little changed.
  • FTSE China A50 shares rose 0.1 percent.

Commodity Cues

  • Brent crude traded 0.86 percent higher at $72.59 per barrel.
  • West Texas crude gained 0.8 percent to $64.51 a barrel.

Also read: U.S. to Eliminate Iran Oil Waivers After May 2 Expiration

London Metal Exchange

  • Aluminium snapped its two-day blip, rose 0.92 percent.
  • Copper ended a two-day rally, ended 1.22 percent lower.
  • Lead ended 0.26 percent lower.
  • Tin ended lower for the fourth straight day, down 0.69 percent.
  • Zinc ended 1.86 percent lower.
  • Nickel ended lower for the fourth straight day. down 1.71 percent.

Also read: This World-Beating Stock Could Just Be Everyone's Cup of Cocoa

Key Events/Data To Watch

  • The Bank of Japan, Bank of Canada, Bank of Russia, Sweden’s Riksbank and Bank of Indonesia set monetary policy
  • Germany’s IFO data is released Wednesday
  • Japan’s Shinzo Abe meets leaders of the European Union Thursday before flying to the U.S. for a summit with President Donald Trump
  • The initial print on first-quarter U.S. GDP Friday will be closely watched for clues as to how the economy responded to the government shutdown and fallout from to the fourth-quarter market rout

Indian ADRs

All You Need To Know Going Into Trade On April 22

Also read: Q4 Results: Reliance Industries Still Grapples With Mounting Debt

Stocks To Watch

  • Dr Reddy’s Laboratories said the U.S. FDA classified inspection in Andhra Pradesh’s formulations plant as Voluntary Action Initiated. On Jan. 15, U.S. FDA had issued form 483 with four observations for this plant in its audit.
  • Wipro clarified on the cyber-attack news stating that remedial steps to contain the incident and mitigate any potential effects of the incident had been taken and this incident does not impact the company’s ongoing critical operations.
  • Bharti Airtel’s rights issue up to Rs 25,000 crore to open on May 3 till May 17. Board also approved the Letter of Offer to be filed with exchanges. Record date for the issue is set April 24.
  • Asian Granito entered the sanitaryware segment with 160 SKUs in products including Wash Basins, Water Closets, Urinals, etc. The company will invest Rs 8 crore for expansion in this segment and the expects this business to have a turnover of Rs 80-100 crore over the next 4-5 years. The commercial launch is expected to be done by June across India.
  • Godrej Properties clarified that Pune based developer Gera Development claimed misuse of its registered trademark by one of the company’s project. The Godrej company said in its press release that they are contesting this case before the court. Also, the company may consider raising funds by issue of securities on April 30.
  • GlaxoSmithKline Consumer Healthcare board to consider and (if thought fit) approve the scheme of amalgamation with Hindustan Unilever and self on June 1.
  • Mercator arm sought to defer debt owed to some creditors till it’s able to recover money owed to it and pending the outcome of proceeding with ONGC. Company’s members and unsecured creditors to meet on May 21.
  • Borosil Glassworks made additional investment of Rs 5 crore its arm ‘Klasspack’.
  • Finolex family dispute escalated amid several counter-allegations (Economic Times)
  • Coal India to ask power plants to cut coal imports (DNA Money)
  • ITC sought hike on wood imports to 10 percent. (Business Line)
  • Adani Power withdrew offer to acquire KSK Mahanadi (Business Standard)
  • Skootr took a 22,000 sq. ft office space on lease from DLF (Financial Express)
  • Sugar Technologists Association sought hike in MSP to Rs 3600 per quintal (Financial Express)
  • Airtel Payments Bank launched two-wheeler insurance in partnership with Bharti Axa General Insurance.
  • VK Power & Infra arm signed an agreement with Abu Dhabi Investment Authority and National Investment & Infrastructure Fun for investment in new shares in the Group’s airports holding company equating to a 49 percent stake. Company says it has initiated a process to identify and select preferred investors to raise capital to reduce or refinance debt obligations of up to Rs 5,750 crore.
  • InterGlobe Aviation clarified that the company is undergoing a DGCA audit along with the annual main base audit. The company says it has received number of show cause notices and has responded accordingly.
  • SBI to examine status on long-term fund-raising plan up to $2.5 billion for financial year 2020 on April 24.
  • JSW Steel said it will appeal against NCLT order on Vardhman Industries, since important reliefs sought by the company have not been granted. The company says in its press release that it has raised $500 million by allotment of fixed rate senior unsecured notes, which will be listed on Singapore Exchange Securities Trading.
  • Exide Industries entered into an agreement with three SPVs to acquire a minimum of 26 percent stake in each the entities.
  • Polyplex Corporation’s Thailand arm received civil monetary penalty order from regulatory authorities in connection with alleged trading violations. The penalty amounts to around Rs 12.2 crore. (Alert: Company has a market cap of Rs 1762 crore)
  • SREI Infra Finance arm and Bank of Baroda announced a strategic alliance to offer joint loans for infra equipment under a co-lending arrangement (Press release)
  • DHFL: Crisil downgraded commercial papers worth Rs 850 crore from ‘A2+’ to ‘A3+’, with a rating watch of negative implications. The rating agency says continued low visibility in raising funds and liquidity levels have remain subdued due to earlier expectations.
  • Eclerx Services board to consider final terms and conditions of buy-back on April 26.
  • Axis Bank issues five-year senior fixed rate green bonds aggregating to $40 million under its notes program.
  • Jet Airways: Rajshree Pathy confirmed her resignation as Independent Director.
  • Tata Sponge Iron to change name to Tata Steel Long Products.
  • Cyient launched digital health care solutions for the Indian market in collaboration with Xynteo
  • CCI approved L&T’s deal with Schneider and Macritchie, subject to compliance of certain modifications (Twitter).
  • Dhanuka Agritech promoters to sell 0.26 percent in the open market to meet promoter shareholding SEBI norms from April 20 to May 7.
  • CCI approved acquisition by PGLH (of Delaware Inc.) of 50 percent shareholding in each of DHFL Pramerica Asset Managers and DHFL Pramerica Trustees and sole control over DHFL Pramerica Mutual Fund (Twitter).
  • ICRA downgraded IL&FS Wind Energy NCD rating to ‘D’ from ‘C-’ (Bloomberg News)
  • Adani Enterprises Wholly owned subsidiary – Adani Defence Systems and Technologies Ltd. – acquired control of Alpha Design Technologies Pvt. Ltd. which is involved in aerospace and defence activities. The acquired entity had a turnover of Rs 218 crore in FY18.
  • Shilpa Medicare Received U.S. FDA approval for Busulfan Injection which is used in the treatment of patients with chronic myelogenous leukemia. The US market for this drug in Q4CY18 was close to $ 32.8 million.
  • Reliance Capital Brickwork Ratings and CARE Ratings downgrade its rating to A+ and A for long-term debt programme, market linked debentures and subordinated debt. The rating agencies stated this action is primarily due to extension of timeline for progress of planned divestments in various companies.
  • Reliance Home Finance Brickwork Ratings and CARE Ratings downgrade its rating to A+ and BBB+ on long-term debt programme, market linked debentures, subordinated debt and non-convertible debentures. Downgrade due to change in parent company – Reliance Capital – rating.

Also read: Five Reasons Why Tata Motors Stock Has Surged 50% Since Posting Biggest Loss

Earnings Reaction To Watch

Reliance Industries (Q4 Standalone, QoQ)

  • Revenue seen down 16.5 percent to Rs 83,597 crore.
  • Ebitda down 5.5 percent to Rs 13,704 crore.
  • Ebitda margin at 16.4 percent versus 14.5 percent.
  • Net profit down 4.2 percent to Rs 8,556.
  • Declares a dividend of Rs 6.5 per share.
  • GRM down 7 percent to $8.2/bbl versus $8.8/bbl.

Reliance Jio (Q4 QoQ)

  • Revenue up 7 percent at Rs 11,106 crore.
  • Ebitda seen 6.8 percent up at Rs 4,326 crore.
  • Ebitda margin flat at 39 percent.
  • Net profit up 1.1 percent at Rs 840 crore.
  • ARPU seen 3 percent down to Rs 126 versus Rs 130

ICICI Lombard General Insurance (Q4, YoY)

  • Gross direct premium up 19.1 percent at Rs 34,85c crore.
  • Net income up 7.5 percent at Rs 228 crore.
  • Solvency ratio at 2.24 times versus 2.05 times.
  • Declares dividend of Rs 3.5 per share.

Jay Bharat Maruti (Q4, YoY)

  • Revenues flat at Rs 480 crore.
  • Net profit down 38.7 percent at Rs 11.1 crore.
  • Ebitda down 7.5 percent at Rs 44.5 crore.
  • Margin at 9.3 percent versus 10 percent.
  • Decrease in inventory of Rs 15.4 crore.
  • Finance Cost up 46 percent at Rs 9.8 crore.
  • Declares dividend of Rs 2.5 per share.

Alicon Castalloy (Q4 Consolidated, YoY)

  • Revenues up 5.3 percent at Rs 313.4 crore.
  • Net profit up 24.2 percent at Rs 15.9 crore.
  • Ebitda up 1.9 percent at Rs 37.1 crore.
  • Margin at 11.8 percent versus 12.2 percent.
  • Declares dividend of Rs 5 per share. .

Tata Coffee (Q4 Consolidated, YoY)

  • Revenue from operation up 5 percent at Rs 460 crore.
  • Ebitda up 69 percent at Rs 62.3 crore.
  • Ebitda margins at 13.6 percent versus 8.4 percent.
  • PAT up 63 percent at Rs 10.5 crore.
  • Other income down 52 percent at Rs 3.9 crore.
  • Declares dividend of 1.5 per share for FY19.

Pledge Share Details

  • Zee Entertainment Enterprises promoter Cyquator Media Services revoked pledge of 39.64 lakh shares from Feb. 26 to March 30.
  • Gati promoter group Manish Agarwal Benefit Trust invoked pledge of 7.6 lakh shares on April 12.
  • Mcnally Bharat Engineering promoter EMC invoked pledge of 15.65 lakh shares from Feb. 22-28.
  • Max Financial Services promoter group Max Ventures Investment Holdings created pledge of 4.25 lakh shares on April 15.
  • Adani Ports & SEZ promoter group Gautam Adani and Rajesh Adani revoked pledge of 2.39 crore shares on April 15.

Bulk Deals

Ajanta Pharma

  • Kotak Mahindra sold 5.06 lakh shares (0.58 percent) at Rs 1033 each.

Dewan Housing Finance Corp

  • Robecco sold 25.17 lakh shares (0.8 percent) at Rs 160.76 each.

Jet Airways

  • Birla Mutual Fund sold 7.6 lakh shares (0.67 percent) at Rs 173.14 each.

Trading Tweaks

  • KPIT Technologies (formerly KPIT Engineering) to list on bourses.
  • 8K Miles Software Services to move into short term ASM Framework
  • Lakshmi Vilas Bank to move out of short term ASM Framework
  • Spicejet, Electrotherm , Essar Shipping price band revised to 10 percent.

Who’s Meeting Whom

  • Balaji Telefilms to meet Alchemy Capital, Regal Fund and other investors on April 22
  • Info Edge to meet Maybank and ICBC from May 9-10

Insider Trading

  • Zee Entertainment Enterprises promoter Cyquator Media Services sold 53.17 lakh shares from Feb. 13 to March 29 and promoter Essel Corporate LLP sold 23.17 lakh shares from March 13-25.

Money Market Update

  • The rupee on Thursday snapped its three-day losing streak to close at at 69.35/$ versus 69.61/$ on Tuesday.

Also read: History Suggests Indian Rupee Set for Post-Election Hangover

F&O Cues

April Futures

  • Nifty open interest up 1 percent, adds 1.2 lakh shares in open interest.
  • Bank Nifty open interest down 8 percent sheds 1.5 lakh shares.
  • Nifty futures premium 18.3 points Vs 37 points, closed trading at 11,771.
  • Bank Nifty futures premium at 42.9 points versus 74.2 points, closed trading at 30,226.3.

Options

  • Nifty PCR at 1.57 versus 1.82 (across all series).

Nifty Options Expiry 25 April

  • Max open interest at 12,000 Call (31.6 lakh shares), 11,000 put (28.5 lakh shares) & 11,500 Put (28.4 lakh shares)
  • Open interest addition seen for call strikes 11,800 (+6.9 lakh shares),12,000 (+6.8 lakh shares), 11,900 (+5.2 lakh)

Stocks In Ban

In Ban:

  • IDBI
  • Idea
  • PC Jewellers
  • Reliance Capital*

Out of Ban:

  • Jet Airways
  • Reliance Power

New in ban*

Brokerage Radar

Spark Capital on DCB Bank

  • Downgrade to ‘Sell’ from ‘Reduce’; hiked target price to Rs 179 from Rs 167.
  • See a prolonged period of sub-optimal return metrics.
  • Reduce FY20 growth estimate to 19 percent vs 25 percent led by slowdown in overall retail portfolios.
  • Expect bank to raise funds in H2FY20 to support growth trajectory.

Spark Capital on RBL Bank

  • Upgrade to ‘Add’ from ‘Reduce’; hiked target price to Rs 707 from Rs 524.
  • Expect RBL to post industry leading loan growth.
  • Positives: shift to higher yielding retail book, higher CA growth & pricing power.
  • Do not expect any major asset quality issues.

IDBI Capital on Reliance Industries

  • Downgrade to ‘Hold’ from ‘Buy’; hiked target price to Rs 1400 from Rs 1326.
  • Downgrade due to price appreciation and limited upside; hiked target to reflect FY21 estimates.
  • Expect higher opex due to demerger which will be offset by lower depreciation and interest.

Nomura on Reliance Industries

  • Maintained ‘Buy’ with target price of Rs 1400.
  • In-line but weak Q4; Transfer of Jio assets to increase cost from Q1 of FY20.
  • Ramp-up of petcoke gasification over next few months and IMO regulations positive.
  • Pace of growth in both Retail and Jio remains quite strong.

Motilal Oswal on Reliance Industries

  • Maintained ‘Neutral’ with target price of Rs 1431.
  • Better petrochem offsets poor refining performance.
  • Jio growth slows down; equity value reduced by 10 percent due to higher debt.
  • No thoughts on ARPU increase; focus to grow subscribers.

CLSA on ICICI Lombard

  • Maintained ‘Buy’; hiked target price to Rs 1310 from Rs 1040.
  • Q4: better operating results dragged down by corporate costs.
  • Few headwinds and network expansion and PSU consolidation are tailwinds.
  • Hike EPS estimates for FY20-21 by 1-2 percent on healthy premium growth and underwriting profits.

Nomura on Max Financial

  • Maintained Buy; hiked target price to Rs 550 from Rs 492.
  • Continuing to deliver well; business mix also better now.
  • Axis Bank tie-up: negative outcome factored in.
  • Maintain Buy on inexpensive valuations.

Emkay on HDFC Bank

  • Maintain Buy with target price of Rs 2750.
  • Strong Q4 led by loan growth and margins; Asset quality remains stable.
  • Expect RoA/RoE of 1.9 percent/17-18 percent over FY20/21 led by superior margins and operating leverage.

BOBCAPS on HDFC Bank

  • Downgrade to ‘Add’ from ‘Buy’; maintained target price of Rs 2510
  • Wholesale business drives loan growth.
  • Management remains cautious on agri portfolio.
  • Downgrade on slowing retail growth and concerns around agri-asset quality.