All You Need To Know Going Into Trade On Aug. 2

Stocks slid at the open in Asia Friday, and U.S. futures dropped, after President Donald Trump announced a new round of tariff hikes on Chinese imports.

Japanese benchmarks fell more than 1.5 percent and Korean stocks dropped more than 1 percent in early trading, while Australian equities saw a more modest retreat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.48 percent to 10,963.50 as of 7 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.

BQ Live

Here’s a quick look at all that could influence equities today

• Trump’s tariff salvo roiled financial markets.
• The ten-year Treasury yields plunged to the lowest since 2016 as U.S. President Donald Trump said he would slap a 10 percent tariff on $300 billion in Chinese imports, and as traders slashed their inflation outlook.
• Oil held the steepest one-day drop in more than four years. While the Brent crude edged higher early Friday, prices are still far from recovering the 7.9 percent slump on Thursday, the most since February 2015.
• Asian stocks declined along with U.S. futures.

Catch all the global markets update here.

Earnings Reaction To Watch

Bharti Airtel (Q1, QoQ)

• Revenue up 0.7 percent to Rs 20,738 crore.
• Net loss at Rs 2,866 crore versus net profit of Rs 107 crore.
• Ebitda up 25 percent to Rs 8,289 crore.
• margin at 40 percent versus 32.2 percent.
• ARPU at Rs 129 versus Rs 123.

Tata Power (Q1, YoY)

• Revenue up 6.2 percent to Rs 7,766.7 crore.
• Net profit down 90.9 percent to Rs 151.3 crore versus Rs 1,670.9 crore.
• Ebitda up 29.9 percent to Rs 2302.1 crore.
• Margin at 29.6 percent versus 24.2 percent.
• Net profit before exceptional items at Rs 254 crore versus Rs 252 crore.
• Other Income up 20 percent to Rs 108 crore.
• exceptional gain of Rs 1,897 crore in the base quarter due to gain on sale of investment in associates.

Prestige Estates Project (Q1, YoY)

• Revenue up 83.8 percent to Rs 1,538.7 crore.
• Net profit down 5.2 percent to Rs 115.3 crore versus Rs 121.6 crore.
• Ebitda up 2.1 times to Rs 527.7 crore.
• Margin at 34.3 percent versus 30.6 percent.
• Land cost of Rs 467.9 crore recognized in base quarter.
• Depreciation up 2.8 times to Rs 163.2 crore.
• Exceptional gain of Rs 38 crore versus Rs 89.4 crore.

GSK Consumer Healthcare (Q1, YoY)

• Revenue up 7.9 percent to Rs 1,194.3 crore.
• Net profit up 23.8 percent to Rs 248.1 crore versus Rs 200.4 crore.
• Ebitda up 21.8 percent to Rs 280.4.
• Margin at 23.5 percent versus 20.8 percent .

Raymond (Q1, YoY)

• Revenue up 14.7 percent to Rs 1,435.1 crore.
• Net loss at Rs 14.9 crore versus net profit of Rs 0.02 crore.
• Ebitda up 58.9 percent to Rs 109.5 crore.
• Margin at 7.6 percent versus 5.5 percent.
• Depreciation up 74 percent to Rs 81.3 crore.
• Finance cost up 40 percent to Rs 73.6 crore.
• Property development cost of Rs 57.5 crore in current quarter impacted bottomline numbers.

JK Tyre & Industries (Q1, YoY)

• Revenue up 5.6 percent to Rs 2,575.4 crore.
• Net profit down 73.6 percent to Rs 16.9 crore versus Rs 64.1 crore.
• Ebitda down 26.4 percent to Rs 239.6 crore versus Rs 325.5 crore.
• Margins at 9.3 percent versus 13.3 percent.
• RM as percent of sales at 66.6 percent versus 59.9 percent.

Nifty Earnings To Watch

• HDFC
• ITC
• State Bank of India
• Power Grid Corporation

Other Earnings To Watch

• Ujjivan Financial Services
• Nestle India
• INOX Leisure
• Laurus Labs
• Somany Ceramics
• Deepak Nitrite
• Dhampur Sugar Mills
• Exide Industries
• Bata India
• BEML
• Birla Corporation
• BSE
• V-Mart Retail
• Xpro India
• Camlin Fine Sciences
• Capri Global Capital
• ACRYSIL
• Aditya Birla Capital
• Alphageo
• Andhra Bank
• Elgi Equipments
• Filatex India
• Firstsource Solutions
• Godrej Agrovet
• Gujarat State Petronet
• Insecticides
• Kaya
• National Fertilizers
• Parag Milk Foods
• Rico Auto Industries
• Shriram Asset Management
• Sical Logistics
• Surya Roshni
• TCPL Packaging
• Union Bank of India
• Astral Poly Technik
• eClerx Services
• Elgi Equipments
• Equitas Holdings
• Fortis Malar Hospitals Limited
• GATI
• HUDCO
• IRB Infrastructure Developers
• Lumax Industries
• McDowell Holdings
• Tata Communications

Brokerage Radar

On Godrej Consumer

CLSA

• Downgraded to ‘Underperform’ from ‘Buy’; cut price target to Rs 645 from Rs 800.
• Downgrading due to another earnings miss.
• Believe business may need time to stabilise and pick-up.
• Cut EPS estimates by 3-4 percent for FY20-21.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 762.
• June quarter’s operational performance broadly in line.
• Believe turnaround in India HI and Africa business is possible in 2019-20.
• Valuations factoring no significant turnaround.

On Marico

CLSA

• Maintained ‘Buy’; hiked price target to Rs 475 from Rs 465.
• Strong start to 2019-20 led by smart margin gains.
• Good Parachute, moderate VAHO and weak Saffola.
• Hike earnings estimates on higher margin expectations.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 412.
• Net profit was ahead of estimates on higher margins.
• Like the strategy of using a deflationary input cost environment to step-up investments.
• Marico is one of the top picks in consumer sector.

On Bharti Airtel

BofA Securities

• Maintained ‘Buy’ with a price target of Rs 400.
• June quarter review: once again good India cellular revenue growth.
• Divergence versus Vodafone Idea visible.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 360.
• Indian wireless performance in line.
• 4G subscriber addition momentum was robust.
• Adjusted Ebitda of homes and business was better.

Citi

• Maintained ‘Buy’ with a price target of Rs 405.
• June quarter was operationally ahead; India mobile performance robust.
• Bharti’s superior execution is clearly driving an improvement in India mobile operations.

More Calls

Citi on Tata Power

• Maintained ‘Buy’ with a price target of Rs 76.
• June quarter review: Decent; net debt increased quarter-on-quarter and remains a monitorable.
• Adoption of IND AS-116 impact net profit negatively, though not very materially.

Nomura on Apollo Tyres

• Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 170 from Rs 247.
• June quarter was in line; demand outlook worsens.
• Sharp original equipment decline mars outlook despite healthy growth in replacement.

Indian ADRs

Stocks To Watch

• Talwalkars Better Value Fitness defaulted in the payment of term loan’s interest aggregating to Rs 94 lakh which was due on July 31.
• Talwalkars Healthclubs defaulted in payment of loan interest worth Rs 2.5 crore which was due on July 31.
• Coal India’s July production fell 5.1 percent to 38.5 million tonnes. July offtake declined 2.9 percent to 46.82 million tonnes.
• Power Grid Corporation of India was declared successful bidder to establish two transmission projects in Gujarat, Rajasthan, Haryana and Delhi.
• Dishman Carbogen Amcis’ manufacturing site in Switzerland received zero form 483 observations from the U.S. FDA’s pre-approval inspection. This facility develops and manufactures highly potent compounds.
• Adani Transmission received two Letter of Intent for Centre Sector Transmission projects in Rajasthan and Gujarat. On a combined basis both projects add 772 ckt kilometers of transmission lines and a 3,000 MVA transformation capacity.
• Dewan Housing Finance defaulted on two NCDs interest worth Rs 35 lakh which were due on July 31 and Aug. 1.
• Bank of India: RBI levied penalty of Rs 1.5 crore on the bank for non-compliance with the RBI guidelines on frauds in Rotomac Group case.
• Allahabad Bank: RBI levied penalty of Rs 2 crore on the bank for non-compliance of rules.
• Oriental Bank of Commerce RBI levied penalty of Rs 1 crore on the bank.
• JK Tyres & Industries’ board approved acquiring 26 percent stake in Treel Mobility Solution for Rs 6 crore. The company stated that the acquisition will help in synergizing the sensors business with Tyre business as a value-added product offering to its customers.
• Tata Motors to cut prices of its Electronic Vehicle segment by up to Rs 80,000 from August, according to Bloomberg report.
• Quess Corp promoter company HWIC Asia Fund acquired 2.56 lakh shares on July 31.
• NALCO entered into a JV with Hindustan Copper and Mineral Exploration Corporation to develop strategic minerals overseas for supply to India for meeting domestic requirements and for sale to any other countries for commercial use.
• PSP Projects received project orders worth Rs 86.2 crore for institutional projects. The company has received work orders worth Rs 848.85 crore so far in the current financial year.
• Lakshmi Vilas Bank said that it has no exposure to Coffee Day Group.
• Vodafone Idea founder group IGH Holdings increased stake to 1.3 percent in the company.
• Dhunseri Tea and Industries entered into binding agreement with Tata Global Beverages for the sale of its branded business. In April, both parties had entered into a non-binding term sheet for the same transaction.
• SRF has signed a sale agreement of its engineering plastics business to DSM India with effect from Aug. 1.
• Bajaj Electricals: CARE Ratings downgraded credit rating of commercial paper worth Rs 500 crore from A1+ to A1 due to moderation in liquidity profile marked by large accumulation of receivables under engineering procurement commissioning division.

July Auto Sales

• Eicher Motors sales down 22 percent to 54,185 units versus 69,063 units.
• Tata Motors sales fell 34 percent year-on-year to 32,938 units

Bulk Deals

• Reliance Infra: KBC Equity Fund acquired 34.17 lakh shares or 1.32 percent equity at Rs 50.05 each.
• Lakshmi Vilas Bank: Eriska Investment Fund sold 20 lakh shares (0.63 percent) at Rs 46.33 each.

Trading Tweaks

• Jain Irrigation Systems to move into ASM Framework.
• Lakshmi Vilas Bank price band revised to 5 percent.

Stocks Moving Into Short-Term ASM Framework

• GTPL Hathway
• Orient Green Power
• Rane Engine Valve
• Sical Logistics
• GE T&D India
• Healthcare Global Enterprises
• JBM Auto
• LG Balakrishnan & Bros
• Bajaj Electricals
• ITD Cementation
• Muthoot Capital Services
• Magma Fincorp
• Balaji Amines
• Sasken Technologies
• Sadbhav Engineering
• Astec Lifesciences
• Gravita India
• Lakshmi Vilas Bank
• Future Consumer
• Navkar Corporation
• Shankara Building Products
• Avadh Sugar & Energy
• Khadim India
• Spencer's Retail
• Yuken India
• Coffee Day Enterprises

Stocks Moving Out Of Short-Term ASM Framework

• Jindal Worldwide
• Arshiya
• Pokarna
• HT Media
• LT Foods
• S Chand And Company
• Hubtown

Insider Trading

• Astec Lifesciences promoter Chitralekha Ashok Hiremath acquired 40,000 shares on July 29.

Money Market Update

Confusion over India’s plans for a $10 billion overseas bond sale is getting worse with each passing day, frustrating sovereign bond investors.

An official told reporters that the government hasn’t yet decided whether it will issue an offshore bond this fiscal year.

Yesterday, yield on the benchmark 10-year government debt rose five basis points to 6.42 percent. The yields are down 10 basis points this week, headed for a fourth week of decline in five.

In the currency market, the Indian rupee is likely to open weaker today in line with emerging Asian peers after trade spat between U.S. and China worsened.

However, a sharp slide overnight in prices of Brent crude, India’s biggest import, may provide some cushion. The implied opening from forwards suggest rupee may start trading at 69.22 to the dollar.