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All You Need To Know Going Into Trade On April 30

Stocks in the news, big brokerage calls of the day, complete trade setup and much more! 

A pedestrian crosses a nearly empty street in Times Square in New York, U.S. (Photographer: Michael Nagle/Bloomberg)
A pedestrian crosses a nearly empty street in Times Square in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Markets across Asia are rising on the final day of the month amid signs of progress in the treatment of Covid-19.

Global equities are poised for their biggest monthly gain since 2009 after posting one of their worst months on record in March.

The U.S. Dollar has held declines for the week while oil futures continue to rebound in a choppy week of trade.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 1.3 percent to 9,681 as of 6:55 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 are up over 2 percent while gains are modest in Australia. Hong Kong and South Korean markets are shut on account of a holiday.
  • The Federal Open Market Committee held interest rates near zero and said that "It may well be the case that the economy will need more support from all of us, if the recovery is to be a robust one."
  • The S&P 500 gained over 2.5 percent overnight to rise to its highest level in seven weeks. Futures on the Nasdaq have advanced after results from Microsoft, Facebook and Tesla lifted sentiment.
  • Gilead Sciences said its experimental drug helped Covid-19 patients recover faster.
  • Data shows the U.S. economy shrank at an annualised pace of 4.8 percent. China will report its manufacturing data today.
  • The Bloomberg Dollar Spot Index fell 0.6 percent while yield on the 10-year treasury stood at 0.62 percent.
  • West Texas Intermediate Crude rose 5.1 percent to $15.83 per barrel.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On April 30

Stocks To Watch

  • M&M Financial Services: Manulife Investment Management (Singapore) acquired 49 percent stake in the company’s two wholly-owned arms Mahindra Asset Management and Mahindra Trustee. Share Agreement was executed on June 21, 2019. Manulife has invested Rs 265 crore in the 51:49 joint venture.
  • Tata Motors: Jaguar Land Rover has restored three-fourth of its budgeted production in China, as reported by Bloomberg News
  • Bajaj Finance: Allotted NCDs worth Rs 200 crore.
  • AU Small Finance Bank: To consider raising funds via share issue on May 2.
  • Axis Bank: Has reappointed Rakesh Makhija as an independent director.
  • Polycab: To consider proposal for investment / acquisition of shares on May 2.
  • Britannia: Has paid Rs 21.7 lakh to SEBI for settlement of non-disclosure case of Ness Wadia’s arrest.
  • Bharti Airtel: Clarified that it has renewed its relationship with Nokia to boost its network capacity and customer experience and the announcement in this regard was made by Nokia only.
  • Varroc Engineering: Ashwani Maheshwari resigned from the post of CEO with effect from April 29.
  • Suven Pharma: Clarified that damages worth Rs 17 crore have been fully insured against the fire which took place at the company’s research and development lab in Jeedimetla. There has been no impact on the operations of the said unit.
  • TD Power Systems: Has partially resumed its operations.
  • Indian Bank: Has reduced MCLR by 30 basis points across various tenors with effect from May 3. One-Month MCLR now at 7.55 percent while one-year MCLR at 7.8 percent.
  • Punjab & Sind Bank : Board to seek shareholders nod raise Rs 500 crore via QIP route on May 5.
  • Non-Nifty Earnings Today: Aditya Birla Money, Laurus Labs, Apollo Tricoat Tubes, SIS India, ABB Power Products.

Earnings Estimates: Reliance Industries Q4FY20

  • Revenue seen 12 percent lower at Rs 75,992 crore
  • Ebitda seen 16.5 percent lower at Rs 10,745 crore
  • Ebitda margin seen contracting to 14.1 percent from 14.9 percent
  • Net profit seen 24 percent lower at Rs 7,303 crore
  • Gross Refining Margins seen 19.6 percent lower at $7.4 per barrel
  • All numbers are BloombergQuint estimates, compared on a standalone and sequential basis

Factors At Play For Reliance Industries

  • Net profit may see the steepest drop in 12 years
  • Refining under pressure due to lower GRMs and lower volumes
  • Retail business may be impacted due to the nationwide lockdown
  • Higher contribution from Jio may partly offset weak refining and petchem margins
  • Update on capex and debt reduction plan, status on Aramco deal among key things to watch

Reliance Industries: Other Key Numbers

  • Retail Ebit seen at Rs 2,310 crore
  • Petchem Ebit seen at Rs 5,560 crore
  • Refining Ebit seen at Rs 3,770 crore
  • Consolidated Revenue seen at Rs 1,40,902 crore
  • Consolidated Ebitda seen at Rs 35,232 crore
  • Consolidated Net Profit seen at Rs 10,315 crore

Earnings Estimates: Reliance Jio Q4FY20

  • Revenue seen 10.2 percent higher at Rs 15,396 crore
  • Ebitda seen 15.5 percent higher at Rs 6,448 crore
  • Ebitda margin may expand to 41.9 percent from 40 percent
  • Net profit seen 40 percent higher at Rs 1,888 crore
  • ARPU seen 5.5 percent higher at Rs 135
  • All numbers are BloombergQuint estimates, standalone and compared on a sequential basis

Key Factors At Play For Reliance Jio:

  • Tariff hike in December 2019 may aid Ebitda
  • Subscriber addition seen slightly lower due to the lockdown
  • Commentary on tariff changes, update on JioPhone subscribers key things to watch

Earnings Expectations: Hindustan Unilever Q4FY20

  • Net sales seen 1.6 percent higher at Rs 10,103 crore
  • Ebitda seen 11.2 percent higher at Rs 2,580 crore
  • Ebitda Margins may expand to 25.5 percent from 23.3 percent
  • Net profit seen 18.4 percent higher at Rs 1,821 crore
  • All numbers are Bloomberg estimates, compared on a standalone and year-on-year basis

Key Factors At Play For HUL:

  • Brokerages see volume growth between -4 to 4 percent
  • Rural growth expected to be half of the urban growth
  • Gross Margins will remain stable on account of benign input costs
  • Homecare products likely to see muted growth

Earnings Expectations: Tech Mahindra Q4FY20

  • Revenue in dollar terms seen 1.3 percent lower at $1,335 million
  • Revenue in rupee terms seen 0.7 percent higher at Rs 9,720 crore
  • Ebit seen 1.9 percent lower at Rs 1,157 crore
  • Ebit margin may marginally contract to 11.9 percent from 12.2 percent
  • Net profit seen 12.6 percent lower at Rs 1,002 crore

Factors At Play For Tech Mahindra:

  • Large deal ramp-up in recent quarters to aid revenue
  • Born, Cerium acquisition to aid inorganic growth
  • Covid-19 likely to impact billing
  • Weak rupee may counter some margin pressure due to transition
  • M&A strategy, capital allocation policy, deal popeline, slowdown in 5G rollout are some of the key things to watch out for

Brokerage Radar

Morgan Stanley On IDFC First Bank

  • Underweight rating maintained
  • Price target of Rs 15
  • At CMP, $200 million raised would lead to 14 percent equity dilution and 4 percent dilution of book value
  • CET1 would be boosted by 140 basis points and RoE will be further hit

Morgan Stanley On Motherson Sumi

  • Overweight rating maintained
  • Price target of Rs 103
  • More than half the global plants are now operational
  • 30 percent of the plants are running at more than 80 percent capacity
  • Expect a sharp earnings recovery in FY22 as volumes normalise

HSBC On UPL

  • Buy rating maintained
  • Price target of Rs 450
  • Bayer's Q1CY20 performance in the crop science segment is reassuring for UPL's Q4FY20
  • Higher sowing expectations, favourable weather and comfortable channel inventory in Brazil augur well for CY20
  • Has markedly outperformed in trying times due to its high-quality and low-priced products

Jefferies On UPL

  • Buy rating maintained
  • Price target of Rs 430
  • Deleveraging will be key catalyst
  • Has corrected on concerns of high leverage
  • Arysta synergies are realised on track
  • See debt reduction by Rs 2,300 crore in FY20
  • Diversified model acts as a strong moat, alleviating climatic and crop risks

Emkay On Hexaware

  • Hold rating maintained
  • Price target cut to Rs 270 from Rs 290
  • Results marginally beat estimates amid muted expectations
  • Strong order intake at $69 million
  • Suspends dividend to conserve cash

Emkay On Car Battery Makers

  • Replacement demand to aid quick recovery for battery industry
  • Expect automotive replacement volumes to grow at 6 percent in FY21 and at 6 percent CAGR over FY20-25
  • Benign lead prices to support gross margins even after notable pass-through
  • Healthy liquidity position, positive free cash flow expected to continue
  • Maintain buy on Exide Industries with price target of Rs 189
  • Maintain buy on Amara Raja for price target of Rs 624

Bulk Deals

  • Cyient: Amansa Holdings acquired 21.1 lakh shares (1.92 percent) at Rs 205 per share and T. Rowe Price sold 30.12 lakh shares (2.74 percent) at Rs 207.02 per share
  • RBL Bank: BNP Paribas Arbitrage acquired 29.79 lakh shares (0.59 percent) at Rs 125.42 per share.

Pledged Share Details

  • Jagran Prakashan: Promoters created pledge of 18.28 lakh shares on April 21
  • Embassy Office Parks REIT: Promoter Embassy Property Developments created pledge of 4.12 crore units on April 29
  • DB Corp: Promoter DB Consolidated created pledge of 37.48 lakh shares on April 29

(As Reported On April 29)

Who’s Meeting Whom

  • Manappuram Finance to meet Hosking Partners, Equirus Capital and TA Associates between April 30-May 5
  • Eicher Motors to meet Kotak MF, Sloana Robinson and other investors between April 30 to May 1

Trading Tweaks

  • Move Into Short-Term ASM Framework: Eros International Media
  • Move Out Of Short-Term ASM Framework: GNA Axles, Shanthi Gears, IFB Industries, Dhanlaxmi Bank, Venky's , Kirloskar Industries, Alphageo, Sundram Fasteners, Tilaknagar Industries, Everest Kanto Cylinder, Veto Switchgears And Cables, NRB Bearing, Suven Pharmaceuticals

Insider Trading

  • Linde India: Promoter BOC Group sold 25,276 shares on April 27
  • Birlasoft: Promoters acquired 2.5 lakh shares on April 27
  • Mahindra CIE Automotive: Promoter Participaciones Internacionales Autometal acquired 84,851 shares on April 27
  • SBI Cards and Payment Services: Promoter SBI Life Insurance sold 15,550 shares between April 9-28

(As Reported On April 29)

Money Market Update

  • The currency ended stronger at 75.67 against the U.S. Dollar on Wednesday as compared to Tuesday's close of 76.18.
  • The rupee was the third best performing currency among Emerging Market peers
  • The currency gained for the third straight day, its best winning streak in a month.

F&O Cues

  • Nifty April futures closed at 9,549; A discount of 4 points from a premium of 18 points
  • Nifty April futures shed 17 percent in Open Interest and 10.7 lakh shares
  • Nifty rollovers at 55 percent
  • Nifty Bank April futures closed at 20,676; Premium widens to 38 points from 5 points
  • Nifty Bank April futures shed 51 percent in Open Interest and 4.3 lakh shares
  • Nifty Bank rollovers at 64 percent
  • Nifty Put-Call Ratio at 1.61 Vs 1.43 across all series

Nifty Monthly Expiry: April 30

  • Maximum Open Interest on Call side at 9,500 (17.4 lakh shares)
  • Maximum Open Interest on Put side at 9,000 (33.7 lakh shares)
  • Open Interest addition in 9,500 Put (13.4 lakh shares), 9600 Call (6.1 lakh shares)
All You Need To Know Going Into Trade On April 30