All You Need To Know Going Into Trade On Aug. 14
Asian stocks climbed after the Trump administration de-escalated its trade war with China, providing relief to risk assets that had been under pressure earlier in the week.
Shares in Japan opened about 1 percent higher after the S&P 500 Index had its biggest intraday gain in more than two months. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.37 percent to 10,960.50 as of 6:50 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 quick look at all that could influence equities today.
- U.S. stocks halted a two-day slide. The S&P 500 Index jumped as much as 2 percent. Apple surged more than 4 percent to pace gains among hardware makers.
- President Donald Trump delayed the imposition of new tariffs on a wide variety of consumer products including toys and laptops until December.
- Oil jumped the most this year. Brent crude advanced 4 percent yesterday.
- Silver prices on Tuesday soared Rs 2,000 to touch an all-time high mark of Rs 45,000 per kg, while gold declined by Rs 100 to Rs 38,370 per 10 gram in the national capital, PTI reported quoting All India Sarafa Association.
- Elsewhere, Hong Kong’s airport resumed normal operations after a chaotic night of protest. President Donald Trump warned of Chinese troops massing on the border.
- After consistently rising since January, India’s retail inflation saw a moderate dip this year due to weak demand conditions in the economy.
Earnings Reaction To Watch
ONGC (Q1, QoQ)
- Revenue fell 0.86 percent to Rs 26,554.7 crore. (estimate Rs 27,397 crore)
- Net profit rose 46 percent to Rs 5,904.3 crore. (estimate Rs 6,006 crore)
- Ebitda rose 22.2 percent to Rs 15,111.9 crore. (estimate Rs 14,029 crore)
- Margin at 56.9 percent versus 46.2 percent. (estimate 51.2 percent)
- Other expenses fell 31 percent to Rs 3,973.3 crore.
- Net realisation at $66.3/bbl versus $61.93/bbl.
Coal India (Q1, YoY)
- Revenue rose 3.6 percent to Rs 24,939 crore. (estimate Rs 24,843.9 crore)
- Net profit rose 22.3 percent to Rs 4,629.7 crore. (estimate Rs 4,261 crore)
- Ebitda rose 17 percent to Rs 6,612.5 crore. (estimate Rs 6,213.2 crore)
- Margin at 26.5 percent versus 23.5 percent. (estimate 25 percent)
NALCO (Q1, YoY)
- Revenue fell 29.9 percent to Rs 2,084.1 crore. (estimate Rs 2,329 crore)
- Net profit fell 85.7 percent to Rs 98 crore. (estimate Rs 2,24 crore)
- Ebitda fell 78.8 percent to Rs 214.1 crore. (estimate Rs 394 crore)
- Margin at 10.3 percent versus 34 percent.
- Exceptional gain of Rs 91 crore in the base quarter.
NMDC (Q1, YoY)
- Revenue rose 34.8 percent to Rs 3,263.7 crore. (estimate Rs 3,216 crore)
- Net profit rose 20.9 percent to Rs 1,179.3 crore. (estimate Rs 1,213.5 crore)
- Ebitda rose 31.1 percent to Rs 1,866.8 crore. (estimate Rs 1,784.5 crore)
- Margin at 57.2 percent versus 58.8 percent.
Glenmark Pharma (Q1, YoY)
- Revenue rose 7.3 percent to Rs 2,322.9 crore. (estimate Rs 2,394 crore)
- Net profit fell 53.1 percent to Rs 109.2 crore. (estimate Rs 187.6 crore)
- Ebitda fell 1.4 percent to Rs 341.9 crore. (estimate Rs 389.1 crore)
- Margin at 14.7 percent versus 16 percent.
- Other income of Rs 138 crore in the base quarter.
Power Finance Corporation (Q1, YoY)
- Net interest income rose 3.7 percent to Rs 2,165.4 crore.
- Net profit was flat at Rs 1,383 crore versus Rs 1,384 crore.
Rain Industries (Q2CY19, YoY)
- Revenue fell 12.2 percent to Rs 3,341.6 crore.
- Net profit fell 51.7 percent to Rs 146.8 crore.
- Ebitda fell 39.5 percent to Rs 420 crore.
- Margin at 12.6 percent versus 18.3 percent.
Manappuram Finance (Q1, YoY)
- Net interest income rose 23 percent to Rs 764 crore.
- Net Income rose 36 percent to Rs 272 crore.
Apollo Hospital Enterprises (Q1, YoY)
- Revenue rose 16.3 percent to Rs 2,571.9 crore.
- Net profit rose 68.7 percent to Rs 57.2 crore.
- Ebitda rose 56.4 percent to Rs 363.7 crore.
- Margin at 14.1 percent versus 10.5 percent.
Reliance Infra (Q1, YoY)
- Revenue rose 1.7 percent to Rs 5,466.7 crore.
- Net profit rose 19.6 percent to Rs 299.2 crore.
- Ebitda rose 13 percent to Rs 635.6 crore.
- Margin at 11.6 percent versus 10.5 percent.
United Breweries (Q1, YoY)
- Revenue rose 9.8 percent to Rs 2,049.7 crore.
- Net profit fell 25.9 percent to Rs 164.6 crore.
- Ebitda fell 17.9 percent to Rs 329 crore.
- Margin at 16.1 percent versus 21.5 percent.
- Employee expenses rose 15 percent to Rs 124.3 crore.
Nifty Earnings To Watch
Other Earnings To Watch
- Jindal Steel & Power
- Brigade Enterprises
- CESC Ventures
- IDBI Bank
- Deepak Fertilizers and Petrochemicals
- Indiabulls Real Estate
- Indraprastha Gas
- Greenply Industries
- Edelweiss Financial Services
- GMR Infrastructure
- Eveready Industries
- Finolex Cables
- Jain Irrigation Systems
- Ashiana Housing
- Sadbhav Engineering
- Astra Microwave Products
- Gateway Distriparks
- MIRC Electronics
- Ahluwalia Contracts
- Apollo Micro Systems
- General Insurance Corporation of India
- Automotive Axles
- Avon Lifesciences
- Bajaj Healthcare
- Bharat Rasayan
- Bharat Wire Ropes
- Fiem Industries
- Galaxy Surfactants
- General Insurance Corporation of India
- Himadri Speciality Chemical
- Housing Development and Infrastructure ,
- IIFL Finance
- India Tourism Development Corporation
- Indiabulls Integrated Services
- Johnson Controls - Hitachi Air Conditioning India
- Kitex Garments
- KNR Constructions
- Kohinoor Foods
- Kridhan Infra
- Mahanagar Telephone Nigam
- Mcleod Russel India
- MT Educare
- Orient Paper & Industries
- Reliance Capital
- Repco Home Finance
- SML Isuzu
- SORIL Infra Resources
- Spencer's Retail
- Suven Life Sciences
- Suzlon Energy
- Talwalkars Healthclubs
- Titagarh Wagons
- Veto Switchgears And Cables ,
- Williamson Magor & Company
- Zee Learn
- Zuari Global
Citi on Sobha
- Maintained ‘Buy’; hiked price target to Rs 640 from Rs 625.
- Decent June quarter pre-sales; Strong P&L performance.
- Net debt inched up and cash flow was weak.
- Despite a challenging environment, Sobha continues to deliver.
Morgan Stanley on Life Insurance
- July 2019 – Strong premium growth for private sector at 22 percent on a yearly basis.
- Overall industry premium growth in July 2019 was 17 percent YoY versus 13 percent YoY last month.
- Expect private sector premium growth to be in the mid-teens over the next two years.
- Maintained ‘Buy’; cut price target to Rs 240 from Rs 285.
- Miss on net profit due to one-offs, but core Ebitda in line with estimates.
- Cut price target to factor in lower oil and gas prices.
- Stock trading at compelling valuation and offers 8 percent dividend yield.
- Maintained ‘Overweight’ with a price target of Rs 210.
- Earnings beat as higher crude prices help offset lower output.
- Skeptics on stock continue to highlight potential subsidy risk.
- Decline in crude production offset by increase in gas production.
- Maintained ‘Buy’; cut price target to Rs 185 from Rs 190.
- Earnings miss estimate on lower oil revenues and higher survey-dry well costs.
- Maintain Buy on cheap valuations, but remain underweight due to lack of triggers and significant divestment risks.
- Maintained ‘Buy’; cut price target to Rs 220 from Rs 240.
- June quarter review: Realisations beat expectations, while production growth yet to catch up.
- Expect investors to react positively to the results as Ebitda was higher.
- Concern of subsidy burden on upstream companies has subsided.
- Maintained ‘Buy’; cut price target to Rs 197 from Rs 209.
- Lower lifting and exploration costs power earnings surge.
- Gas production remains robust; oil continues to trend lower.
- Cut price target to factor in lower gas prices.
On Coal India
- Maintained ‘Buy’; cut price target to Rs 290 from Rs 302.
- Operating performance inline with consensus.
- Volumes impacted by weak operational disruptions.
- E-auctions volumes to rebound.
- Maintained ‘Buy’; cut price target to Rs 275 from Rs 320.
- June quarter was slightly below estimates.
- Cut FY20-22 Ebitda estimates by 7-9 percent on lower volumes and e-auction prices.
- Risk reward is favourable with attractive dividend yields.
- Maintained ‘Neutral’ with a price target of Rs 255.
- Earnings beat as lower opex offset decline in e-auction prices.
- E-auction prices to moderate as coal supply continues to increase.
- Stable earnings, attractive dividend yields and net cash balance could surprise on upside.
On Sun Pharma
- Maintained ‘Hold’ with a price target of Rs 400.
- June quarter was largely in-line at operating levels; net profit beat on lower interest, depreciation and tax expenses.
- Cost pressure to continue in view of ongoing spend for specialty drugs in the U.S.
- Execution of specialty launches remain key for sustainable earnings growth.
- Maintained ‘Buy’ with a price target of Rs 536.
- Reduced finance cost and lower tax rate led to the earnings beat.
- Transition of distribution in domestic formulation business affected growth.
- Maintained ‘Buy’ with a price target of Rs 490.
- June quarter’s revenue tad higher than estimates; net profit boosted by lower tax rate.
- Monetisation of the innovative pipeline to quicken pace in the second half of the current financial year.
- Adverse outcome in ongoing investigation on drug price collusion or income tax dispute in India could add to downside pressure.
Stocks To Watch
- GAIL: Petroleum & Natural Gas Regulatory Board said that it has increased tariff for the company’s Dabhol-Bangalore pipeline by 11 percent. The new price will be effective from Sept. 1.
- HDFC Life Insurance: Standard Life said it is seeking $350 million from a sale of shares in the insurance company, according to terms for the deal obtained by Bloomberg. Standard Life is offering the HDFC Life shares at Rs 477.8 to Rs 493.4 each according to the terms and shareholder has an option to boost the deal size by $100 million, Bloomberg reported.
- IL&FS Engineering and Construction received an arbitration award in favour of joint venture with Gayatri Projects for the Nagaland Road Project for Rs 914.3 crore. “After completion of the court process, the realised award amount shall be shared between the partners in proportion of the work done,” the company said.
- Infosys to deliver digital solutions to Toyota Material Handling North America.
- Corporation Bank revised MCLR across various tenors with effect from Aug. 15. One-month MCLR at 8.2 percent and one-year MCLR at 8.7 percent.
- Wipro launched AI solutions powered by Inter processors, which will help enterprises in the energy and utilities and healthcare markets.
- Axis Bank: Aditya Birla Health Insurance inked bancassurance partnership with the bank, to offer health insurance solutions.
- Force Motors to observe block closure at its two plants in Maharashtra and Madhya Pradesh from Aug. 14-18 due the flood situation in Maharashtra.
- Godrej Industries: Board approved de-merger of wholly owned arm Ensemble Holdings & Finance from the company.
- Glenmark Pharma forecasts revenue growth of 10-15 percent for the current financial year. The company plans to bring minority investor in Glenmark Life Sciences and to divest other non-core global assets.
- Wheels India expects to start production of cast aluminium wheels for export markets from a new plant near Chennai coming up at an investment of around Rs 140 crore, Wheels India Chairman S Ram said at the 60th annual general meeting, PTI reported.
- Sintex Industries: Board is evaluating to shift manufacturing facilities of structured fabrics from its existing location at Kalol to its Yarn division at Amreli. In view of this, the manufacturing operations of structured fabrics at Kalol is being gradually discontinued effective from July 1. The land and factory building of its Kalol plant will be disposed of after obtaining requisite approvals including from lenders, the proceeds of which, shall be utilised for repayment of borrowings.
- Mishra Dhatu Nigam: HDFC MF increased its stake in the company from 4.92 percent to 5.03 percent.
- United Bank of India reduced MCLR across various tenors with effect from Aug. 15. One-month MCLR at 8.15 percent and one-year MCLR at 8.55 percent.
- Allahabad Bank reduced MCLR by 15 to 20 basis points across various tenors with effect from Aug. 14. One-month MCLR at 7.95 percent and one-year MCLR at 8.4 percent.
- Persistent Systems has completed the closing conditions related to acquisition of selected assets from Above Solutions India and its affiliates.
- JSW Energy received shareholders approval to raise $750 million from international bond sale.
- India trade data for July
- India July Wholesale Inflation.
- Khadim: Promoter Siddhartha Royburman acquired 1 lakh shares (0.56 percent) at Rs 194.98 each.
- Gulf Oil Lubricants: Smallcap World Fund sold 2.64 lakh shares (0.53 percent) at Rs 815.88 each.
- Sudarshan Chemical Industries: Amansa Holdings acquired 6.25 lakh shares (0.9 percent) at Rs 325 each.
- Gandhi Special Tubes ex-date for share buyback.
- Andhra Cements to move into ASM Framework.
- Hubtown, IFB Agro Industries, Nandan Denim , Rolta India, Solara Active Pharma.
- Sciences to move into short term ASM Framework.
- Solara Active Pharma Sciences price band revised to 10 percent.
Who’s Meeting Whom
- Rallis India to meet Quantum Securities, Investec Securities and N Square Capital on Aug. 19.
- Crompton Greaves Electricals to meet Fiera Capital on Aug. 20.
- Sudarshan Chemicals Industries to meet Capital Investment Research Services on Aug. 14.
- Shriram City Union Finance to meet Essel MF on Aug. 14.
- Music Broadcast promoter Jagran Prakashan acquired 2.34 lakh shares on Aug. 9.
Money Market Update
Sovereign bonds may gain after data showed the consumer price inflation grew at a pace slower than expectations. CPI rose 3.15 percent in July, lower than 3.18 percent in June. A number below RBI’s medium-term target of 4 percent supports optimism that the central bank continue with its easing interest rates.
The yield on the 10-year note climbed three basis points in the last session to 6.52 percent. For today it may trade in a range of 6.45-6.55 percent in the day.
In the currency market, implied opening from forwards suggest the pair may start trading around 70.9173 a dollar. A rally in Asian stocks is helping emerging market currencies. Dealers see the pair trading in a range of 70.20-71.20 a dollar in the day.
- Nifty futures closed at 10,925, discount of 0.65 points versus premium of 13 points.
- Nifty futures open interest down 1 percent, sheds 2 lakh shares in open interest.
- Bank Nifty futures closed at 27,737.8, premium of 8.7 points versus 42 points.
- Bank Nifty futures open interest up 7 percent, adds 1.1 lakh shares in open interest.
- Nifty PCR at 0.96 versus 1.24 (across all series).
Nifty Weekly Expiry Aug. 14
- Max open interest on call side at 11,200 (28.5 lakh shares).
- Max open interest on put side at 10,900 (12.2 lakh shares).
- Max open interest addition seen in 11,100C (+16.6 lakh shares), 11,000C (+14.9 lakh shares).
- open interest shedding seen at 11,000P (-8 lakh shares), 10,050P (-4.9 lakh shares).
Nifty Monthly Expiry Aug 29
- Max open interest on call side at 11,000 (25.6 lakh shares).
- Max open interest on put side at 11,000 (33.8 lakh shares).