All You Need To Know Going Into Trade On April 28
Asian markets are mixed at the start of trade on Tuesday morning after Wall Street saw modest gains overnight.
Crude oil prices have extended their losses from Monday amid selling by the biggest oil exchange-traded-fund. Treasuries are steady while the U.S. Dollar remains weak.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.7 percent to 9,333 as of 7:00 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 have opened lower, while those in South Korea are trading with gains. Australian shares continue to remain subdued.
- Futures on the S&P 500 have slipped into the red after the benchmark closed at its highest level since March 10.
- Deutsche Bank surprised on the earnings front but has warned about looming credit defaults.
- The European Commission plans to announce capital-relief measures today in response to the Covid-19 pandemic.
- A vaccine for the Coronavirus can be available as early as this year, according to a coaliation funding nine projects.
- Covid-19 cases have risen in the U.S. at their slowest pace this month while Italy reported lowest new infections in seven weeks.
- Yield on the 10-year treasury stood at 0.66 percent
- West Texas Intermediate Crude stood at $12 per barrel, down 6 percent after Monday's 24 percent fall.
Get your daily fix of the global markets here.
Earnings Fineprint: IndusInd Bank Q4FY20
- Net Interest Income up 44.7 percent compared to last year at Rs 3,231.2 crore
- Net profit down 16.2 percent year-on-year to Rs 301.8 crore
- Gross NPA at 2.45 percent Vs 2.18 percent in Q3FY20
- Net NPA at 0.91 percent Vs 1.05 percent in Q3FY20
- Provisions more than double sequentially to Rs 2,440.3 crore from Rs 1,043.5 crore
- Provisions related to Covid-19 at Rs 260 crore
- Loan growth during the quarter was 11 percent
- Share of retail in loans has risen to 56 percent
- Have fully provided for IL&FS
- SMA-2 book has reduced to 16 basis points
- Overall Provision Coverage Ratio at 63 percent
- Seeing very few clients coming to us for moratorium
- 70 percent of the unsecured portfolio is towards salaried customers
- Gross NPA of Credit Card business at 1.97 percent
- Expect rural economy to bounce back soon
- Corporate book likely to grow 6-8 percent during the year
Brokerages On IndusInd Bank
- Overweight rating maintained
- Price target of Rs 525
- Trends in-line while guidance was positive
- Deposits stable in April 2020 with inflows across retail, corporate and government categories
- Expect FY21 to be tough on both revenue and asset quality
- Hold rating maintained
- Price target of Rs 450
- Revenue momentum better than expected
- Impact of Covid-19 to be felt from Q1FY21
- Next two quarters to bring more clarity on liquidity as well as asset quality
- Asset quality in-line with guidance
- 50 bps credit cost guidance due to Covid-19 seems low
- Buy rating maintained
- Price target of Rs 590
- NII beat aids net profit growth
- Covid-19 may have an 80 basis points impact on Gross NPA
- Asset quality a miss with high corporate and retail slippages
Stocks To Watch
- Reliance Industries: Board meeting on April 30 to consider a proposal to issue equity shares to existing shareholders on a rights basis.
- UPL: Completes the acquisition of Yoloo Bio-Tech. The acquisition was announced on November 14.
- Indiabulls Real Estate: Senior management has decided to take pay cuts up to an average of 50 percent for FY21. Vice-Chairman Narendra Gehlaut to draw Nil salary.
- Just Dial: To consider share buyback at its board meet on April 30.
- Gulf Oil Lubricants: Partially resumes its plant operations at Silvassa. Permission is to supply customers in the essential categories till May 3.
- Triveni Engineering: Gear business plant at Mysuru and few EPC sites of water business have partially resumed operations. Sugar and distillery units have been operating normally throughout the lockdown period.
- LT Foods: Most of the plants are working with lesser and absolutely essential manpower. Modern trade segment has performed exceedingly well in the month of March and April due to a lot of people stocking up and consumers are also giving preference to packaged goods taking into account the safety aspect. Company’s International plants are also functioning in-line with the increasing demand.
- IGSEC Heavy Engineering: Manufacturing plants have partially reopened and construction work has resumed at some of the company’s project sites.
- SH Kelkar: Manufacturing units at Vaishali and Vapi have resumed operations partially.
- Jagran Prakashan: Has allotted NCDs worth Rs 150 crore.
- Everest Industries: Plants in Madhya Pradesh and Gujarat have resumed operations.
- Kirloskar Oil Engines: Resumes operations at its plants in Nashik and Ahmedabad.
- Minda Industries: Resumed operations at Pantnagar and Waluj plants. Manufacturing facilities in Spain have also resumed operations.
- Havells India: Operations in some of the plant locations have started in certain states.
Other Earnings Reported After Market Hours
HDFC Life Q4FY20 & FY20
- Gross Premium up 3 percent to Rs 10,615 crore
- Net profit down 14 percent to Rs 312 crore
- VNB Margins for FY20 at 25.9 percent from 25 percent
- 13th month persistency for FY20 at 88 percent from 84 percent
- AUM growth of 1 percent to Rs 1,27,226 crore
- FY20 APE up 18 percent to Rs 7,407 crore
- APE growth driven by 22 percent rise in protection APE
- All numbers are standalone and compared on a year-on-year basis
Concall Highlights: HDFC Life
- Board gives in-principle approval to raise Rs 600 crore via NCDs
- New business premium impacted by Rs 400-500 crore due to Covid-19
- Total premium hit of Rs 1,100 crore in the last 15 days of March
- Created a reserve of Rs 41 crore towards Covid-19
- Protection mix at 10 percent on a standalone level for individual premium which may rise 200-300 bps in FY21
- Opportunities for consolidation if pain continues for nine months or more
Adani Power Q4FY20
- Revenue down 8.2 percent to Rs 6,172.4 crore
- Net loss of Rs 1,313 crore as compared to a net profit of Rs 634.6 crore
- Other income of Rs 1,356 crore in base quarter
- Ebitda down 66.4 percent to Rs 204.5 crore
- Ebitda margins contract to 3.3 percent from 9 percent
- High other expenses, employee costs impact margins
- Incorporation of two consolidated arms kept depreciation and interest charges higher during the quarter
- All numbers are consolidated and compared on a year-on-year basis
Ambuja Cements Q1CY20
- Revenue down 3.4 percent to Rs 2,827.5 crore
- Net profit down 6.5 percent to Rs 399.1 crore
- Ebitda up 30.2 percent to Rs 603.2 crore
- Ebitda Margin at 21.3 percent from 15.8 percent
- Low power, fuel and logistics costs aid margin expansion
- Sales volume down 10 percent to 5.76 MT
- All numbers are standalone and compared on a year-on-year basis
Morgan Stanley On Ambuja Cements
- Overweight rating maintained
- Price target of Rs 186
- Delivered on all fronts - volume growth, realisations and costs
- Stands out in tough operating environment due to strong execution
- Potential expansion plan, strong balance sheet, reasonable valuations some key positives
Earnings Expectations: Axis Bank Q4FY20
- Likely to set aside higher provisions to address weakness in the non-investment grade exposures.
- Higher provisions will impact profitability compared to last year.
- Q4 may only have a marginal impact of Covid-19 related headwinds.
- Retail segment may have aided loan growth in Q4 after a 15.8 percent growth in the third quarter
- Asset quality may require further close monitoring in a slowing economy.
- New bad loan formation remained elevated in the third quarter.
Source: Bloomberg Intelligence
- Paisalo Digital: Heshika Growth Fund acquired 5.7 lakh shares (2.24 percent) at Rs 161.75 per share and Plutus Terra India Fund sold 5.7 lakh shares (2.24 percent) at Rs 161.75 per share
- RBL Bank: BNP Paribas Arbitrage acquired 60 lakh shares (1.18 percent) at Rs 112.75 per share
Who’s Meeting Whom
- Manappuram Finance to meet Keyrock Capital on April 28
- Affle to meet Nippon India MF on April 28
- Price Band Revised To 5 Percent From 10 Percent: A2Z Infra Engineering, CL Educate, Infibeam Avenues, Prakash Industries
- Price Band Revised To 10 Percent From 20 Percent: Nocil
- Move Into ASM Framework: IFB Agro Industries, Mahindra CIE Automotive, CreditAccess Grameen, GE T&D India, Dish TV, Axiscades Engineering Technologies, Shalimar Paints
- Move Into Short-Term ASM Framework: Nippon Life India Asset Management, Lakshmi Vilas Bank, Indiabulls Real Estate
- Move Out Of Short-Term ASM Framework: Greaves Cotton, Balaji Amines, Ashoka Buildcon, ITD Cementation, NCL Industries, IRB Infrastructure Developers, Dilip Buildcon, PNC Infratech, Firstsource Solutions, AU Small Finance Bank, Music Broadcast
Money Market Update
- The rupee ended stronger at 76.24 against the U.S. Dollar as compared to Friday's close of 76.45. The currency had posted its fourth straight weekly loss on Friday.
- Nifty April futures closed at 9,295; premium narrows to 7 points from 16 points
- Nifty April futures shed 19.5 percent in Open Interest along with 17 lakh shares
- Nifty Bank April futures closed at 19,517, premium of 26 points versus 69 points discount
- Nifty Bank April futures shed 20 percent in Open Interest along with 2.5 lakh shares
- Nifty Put Call Ratio at 1.36 versus 1.34 across all series
Nifty Monthly Expiry: April 30
- Maximum Open Interest on Call side at 9,500 strike (25.6 lakh shares)
- Maximum Open Interest on Put side at 9,000 strike (32.3 lakh shares)
- Open interest addition in 9,200 Put (7.1 lakh shares), 9,500 Put (4 lakh shares)