All You Need To Know Going Into Trade On April 24
Asian stocks saw modest gains Wednesday after their U.S. counterparts closed at record highs on the back of better-than-forecast earnings.
Shares pushed slightly higher in Japan, South Korea and Australia, with futures in Hong Kong also in the green. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.20 percent higher at 11,616 as of 7:10 a.m.
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Here’s a quick look at all that could influence equities today.
U.S Market Check
- U.S. stock gauges closed at record highs on the back of better-than-forecast earnings while the dollar strengthened and Treasury yields dipped.
- The yield on 10-year Treasuries was steady at 2.57 percent.
- The MSCI Asia Pacific rose 0.1 percent as of 9:10 a.m. Tokyo time.
- The Topix Index climbed 0.2 percent.
- The S&P/ASX 200 Index rose 0.4 percent.
- The Kospi Index rose 0.1 percent.
- Brent crude fell 0.46 percent to $74.17 per barrel.
- West Texas oil fell 0.6 percent to $65.93 a barrel.
- Gold declined 0.1 percent to $1,271.70 an ounce.
London Metal Exchange
- Aluminium ended 0.05 percent lower.
- Copper ended lower for the second day, down 1.07 percent.
- Tin ended lower for the fifth day, down 1.85 percent.
- Lead ended lower for the second day, down 1.24 percent.
- Nickel ended lower for the fifth session in a row, down 2.22 percent.
- Zinc ended lower for the second day, down 0.69 percent.
Stocks To Watch
- Lupin: U.S. FDA classified inspection of company’s Indore Unit 2 Facility as Official Action Initiated. The regulatory body stated that this facility may be subject to regulatory or administrative action and that it may withhold approval of any pending applications or supplements in which this facility is listed. The inspection was conducted by U.S. FDA in the month of January.
- Tata Global Beverages entered into a non-binding term sheet to acquire the branded tea business of Dhunseri Tea & Industries for an aggregate consideration of up to Rs 101 crore. This branded tea business of the target company is carried out under brands ‘Lalghoda’ and ‘Kalaghoda’ in Rajasthan.
- HDFC received the Reserve Bank of India’s nod to acquire up to 9.9 percent stake in Bandhan Bank upon the effective date of the scheme for the amalgamation of its arm Gruh Finance into Bandhan Bank. The Corporation says that the scheme remains subject to approvals from NCLT and shareholders and creditors of both the entities.
- Embassy Office Parks REIT: Board approved raising Rs 3,650 crore via NCDs in two tranches.
- Sasken Technologies: Board approved buyback of 20 lakh shares, representing 11.7 percent of the equity shares of the company at Rs 850 per share aggregating to Rs 170 crore. The buyback price is at a premium of 20 percent as compared to the market prices. Company is sitting on a cash balance of Rs 14.7 crore and Rs 81.1 crore worth of current assets, as on March 31.
- Tata Power arm sold 32MW operating wind assets in Maharashtra. The company said the parties are currently executing conditions for the agreement. The power from these assets are currently tied up with Tata Power Company (Distribution) under a long-term power purchase agreement.
- Allahabad Bank increased its authorized capital from Rs 3,000 crore to Rs 8,000 crore.
- NBCC signs agreement with Mauritius Government for consultancy on construction of three public buildings. These projects are being funded by Exim Bank of India and the cost of these projects stand at $44 million.
- Future Retail received initial warrant subscription price of Rs 500 crore equivalent to 25 percent of the warrant issue price. Board has allotted four crore equity warrants at Rs 505 per share to promoter group Future Coupons on a preferential basis. The company says that the allotment has been made post the approval of Competition Commission of India.
- Dilip Buildcon arm received appointed date (April 22) by NHAI for HAM project in Maharashtra. The project had received financial closure on March 26 and the project stands at Rs 1029.4 crore.
- UCO Bank increases its authorized capital from Rs 6,000 crore to Rs 10,000 crore. Allots 175 crore shares at Rs 19.01 per share to Government of India against capital contribution of Rs 3,330 crore received by the Bank on Feb. 21.
- India Tribunal reserved order on JSW’s offer for Bhushan Power. (Bloomberg News)
- Maruti Suzuki launched New Alto. The company says that the product comes with BSVI compliant engine.
- Birla Corporation to consider raising capital via NCDs on May 3.
Nifty Earnings To Watch
- Bharti Infratel
- Indiabulls Housing Finance
- UltraTech Cement
Other Earnings To Watch
- Hexaware Technologies
- ICICI Prudential Life Insurance Company
- Mahindra & Mahindra Financial Services
- Muthoot Capital Services
- Shriram City Union Financs
- Tata Elxsi
- Agro Tech Foods
- Prakash Industries
- Syngene International
Earnings Reaction To Watch
ACC (Q1CY19 Standalone, YoY)
- Revenue up 8.1 percent to Rs 3919.1 crore.
- Net profit up 38.1 percent to Rs 338.4 crore.
- Ebitda up 8.1 percent to Rs 531 crore.
- Margins flat at 13.5 percent versus 13.8 percent.
- Other Income up 3.3 times to Rs 152.5 crore.
- Realisations/tonne up 2.5 percent to Rs 5133.
- Ebitda/tonne up 2.3 percent to Rs 708.
ICICI Securities (Q4 Consolidated, YoY)
- Revenue down 20.1 percent to Rs 408.1 crore.
- Net profit down 19.6 percent to Rs 121.5 crore.
- Broking and commission revenue down 19 percent to Rs 383.4 crore.
- Declares dividend of Rs 5.7 per share.
Sterlite Tech (Q4 Consolidated, YoY)
- Revenue up 111.6 percent to Rs 1791.2 crore.
- Net profit up 47 percent to Rs 165.2 crore.
- Ebitda up 43 percent to Rs 315.1 crore.
- Margin at 17.6 percent versus 26 percent.
- Board approves raising capital NCD issue worth Rs 1000 crore.
- Declares dividend of Rs 3.5 per share.
Tata Global Beverages (Q4 Consolidated, YoY)
- Revenue up 4 percent to Rs 1,755.5 crore.
- Net profit down 61.5 percent to Rs 22.9 crore.
- Ebitda up 6 percent to Rs 154.3 crore.
- Margin at 8.8 percent versus 8.6 percent.
- Tax Expense of Rs 58.8 crore.
- Exceptional loss of Rs 8.4 crore.
- Declares dividend of Rs 2.5 per share.
- Tea segment revenue up 6 percent to Rs 1251 crore.
- Coffee segment revenue down 2 percent to Rs 282 crore.
Sasken Technologies (Q4 Consolidated, QoQ)
- Revenue up 11.6 percent to Rs 135.5 crore.
- Net profit up 51.9 percent to Rs 27.5 crore.
- Ebit up 2.1 times to Rs 22.6 crore.
- Margin at 16.7 percent versus 9.1 percent.
- Declares dividend of Rs 7.5 per share.
Nucleus Software Technologies (Q4 Consolidated, QoQ)
- Revenue up 3.3 percent to Rs 127 crore.
- Net profit down 17.4 percent to Rs 17.1 crore.
- Ebit down 2.9 percent at Rs 20 crore.
- Margin at 15.7 percent versus 16.8 percent.
- Declares Dividend of Rs 9 per share.
SORIL Infra Resources (Q4 Consolidated, YoY)
- Revenue down 7.9 percent to Rs 45.6 crore.
- Net profit down 47.2 percent to Rs 4.7 crore.
- Ebitda down 41.8 percent to Rs 6.4 crore.
- Margin at 14 percent versus 22.2 percent.
Indiabulls Integrated Services (Q4 Consolidated, YoY)
- Revenue down 50.7 percent to Rs 50.4 crore.
- Net profit up 57.9 percent to Rs 71.2 crore.
- Other income of Rs 115.7 crore.
Indiabulls Real Estate (Q4, Consolidated; YoY)
- Revenue down 43 percent to Rs 1821.5 crore.
- Ebitda down 94 percent to Rs 165.8 crore.
- Ebitda margin at 9.1 percent vs 82.7 percent.
- Net profit down 95 percent to Rs 108.6 crore.
Coromandel International (Q4 Consolidated, YoY)
- Revenue up 9.4 percent to Rs 2638.1 crore.
- Net profit up 23.2 percent to Rs 110.4 crore.
- Ebitda up 40 percent to Rs 258.8 crore.
- Margins at 9.8 percent versus 7.7 percent.
- Declares dividend of Rs 3.5 per share.
- Inventory loss of Rs 72.7 crore.
- RM as percent of sales 67 percent versus 61 percent.
- Neogen Chemicals IPO opens today. Issue priced at Rs 212-215 per share. It raised Rs 39.70 crore from seven anchor investors.
Pledge Share Details
- Future Retail promoter Future Corporate Resources revoked pledge of 66.63 lakh shares on April 18.
- Mercator promoter and director Harish Kumar Mittal invoked pledge of 50.15 lakh shares from April 15-22.
- Bharti Airtel record date for rights issue of equity shares (19:67 at premium of Rs 215 per share).
- Prakash Industries record date for spin off.
Stocks Moving Into Short-Term ASM Framework
- 5Paisa Capital
- Parsvnath Developers
- Vishal Fabrics
- Gravity India
Who’s Meeting Whom
- Tata Steel to meet Tiger Global on April 26.
Money Market Update
- The rupee on Tuesday closed at 69.63/$ versus Monday’s 69.67/$.
Futures Across All Series
- Nifty open interest up 5 percent, adds 8.8 lakh shares in open interest
- Bank Nifty open interest up 5 percent, adds 1 lakh shares in open interest
- Nifty Rollover 42 percent, Bank Nifty Rollover 42 percent
- Nifty PCR at 1.30 versus 1.34 (across all series).
Nifty Options Expiry 25 April
- Max open interest at 11,700 Call (52.6 lakh shares), 12,000 Call (37.5 lakh shares) & 11,800 Call ,11,500 Put (+27.6 lakh shares).
- Open interest addition seen for call strikes 11,700 (+11 lakh shares), 16,000 Call (+9.4 lakh shares), 11,650 (+5.3 lakh shares).
- Open interest addition seen for Put strikes 11,500 (+3.1 lakh shares), 11,600 (+2 lakh shares).
Stocks In Ban
- Adani Power
- Jet Airways
- PC Jewellers
- Reliance Power*
Out of Ban
- Reliance Capital
*New in Ban
Brokerages On ACC
- Maintained ‘Buy’ with target price of Rs 2,000.
- Failed to impress with a miss in Q1 results.
- Volumes inline, but miss on cost and realisation.
- Management is fairly optimistic on cement demand outlook.
- Maintained ‘Neutral’ with target price of Rs 1,700.
- Operating earnings miss on adverse sales mix and higher costs.
- Miss seems more due to company specific challenges.
- Any price correction in other cement companies to offer buying opportunity.
CLSA on ICICI Securities
- Maintained ‘Buy’; Cut target price to Rs 310 from Rs 360.
- Weak core profits; lower earnings estimates.
- Revenue sharing with ICICI Bank can lift growth at higher cost.
- Uptick in capital market activity and client mining key to growth.
Morgan Stanley on Tata Global Beverages
- Maintained ‘Underweight’ with target price of Rs 165.
- Q4 overall Ebitda below estimates due to decline in domestic tea business
- Strong volume growth and international business were positive
- Volume growth of 12 percent is the highest in 5 years
BofAML on CG Consumer Electricals
- Initiated ‘Buy’ with target price of Rs 267.
- Well placed in lighting and fans; expect 12 percent revenue growth for next 3 years.
- Cost cutting initiatives and supplier consolidation to improve EBIT margins by 100 basis points.
- Current valuation attractive given 20 percent EPS compounded annual growth rate over FY19-21 and 36 percent return on equity.
Equirus Securities on Sterlite Tech
- Maintained ‘Long’; Cut target price to Rs 340 from Rs 350.
- Pressure on optic fibre realisations to continue in near term.
- Services business ramping up much faster than expected.
- Lower valuation multiple to factor moderation in earnings growth.
Investec on Lupin
- Maintained ‘Sell’ with target price of Rs 690
- More FDA action as Pithampur gets OAI; all eyes on Goa classification now.
- Both Goa/Pithampur Unit-2 are critical plants; see no impact on estimates.
- Worry more about product pipeline and slower ramp up in Solosec.
Jefferies on NTPC
- Maintained ‘Buy’; Cut target price to Rs 160 from Rs 171.
- See twin benefits of operational improvement and capacity addition in next 5 years.
- Potential earnings upside of 5-6 percent from power demand driven PLF recovery.
- Favourable regulation largely offset impact of delayed capacity addition.
Morgan Stanley on Oil Retailers
- Retail fuel prices remained largely unchanged, despite 10 percent rise in oil prices.
- Believe OMC marketing margins are similar to earlier state election periods.
- OMCs will recover losses over time, recent sanctions on Iran remain a headwind.