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All You Need To Know Going Into Trade On August 10
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
10 Aug 2020, 11:43 AM IST 
People wearing protective masks stand in line to use an automated teller machine (ATM) at a a bank on Sabana Grande Boulevard in Caracas, Venezuela. (Photographer: Carlos Becerra/Bloomberg)
Asian markets have opened mixed at the start of the new trading week. Investors are looking forward to this week's expected review of the U.S.-China trade pact.
Gold has dipped while oil prices have advanced after Saudi Arabia's state-controlled producer said that it expects energy demand to pick up going forward.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,210 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.
Let’s take a look at the factors that may influence equities in today’s session:
- Markets in South Korea and Australia are advancing while those in Japan and Singapore are shut due to a holiday.
- Futures on the Dow Jones are trading little changed, similar to the way the index ended in Friday's trading session.
- U.S. President Donald Trump signed four executive orders related to coronavirus economic relief, including unemployment benefits, a temporary payroll tax deferral, eviction protection and student-loan relief.
- The United States surpassed five million Covid-19 infections after adding a million new cases in just over two weeks.
- Yield on the 10-year treasuries rose to 0.56% on Friday while futures are little changed.
- West Texas Intermediate crude rose 1% to $41.66 per barrel while Gold fell 0.4% to $2,027.3/Oz.
Get your daily fix of the global markets here.
Earnings Fineprint: Cipla Q1FY21
- Revenue up 9% to Rs 4,346 crore
- Net profit up 21% to Rs 578 crore
- Ebitda up 16% to Rs 1,049 crore
- Ebitda margin at 24% from 23%
- India business revenue up 16% to Rs 1,608 crore
- North America business revenue down 9% to Rs 1,021 crore
- Emerging Markets revenue up 64% to Rs 457 crore
- Europe revenue up 19% to Rs 240 crore
- API business revenue up 1% to Rs 184 crore
- Trade generics business saw a growth of 46%
- R&D Investments at 4.6% of revenue at Rs 200 crore
- Achieved zero net debt position led by strong collections and improved Ebitda
- All numbers are consolidated and compared on a year-on-year basis
Stocks To Watch
- Reliance Industries: Bloomberg News reports that Saudi Aramco is still working on a deal to buy stake worth $15 billion in the company. Chairman Mukesh Ambani during RIL's AGM had said that the transaction had been delayed due to unforseen circumstances in the energy market and Covid-19. Aramco CEO Amin Nassar said during its earnings call that the discussions with RIL are still on.
- Birla Corporation: To increase grinding cement capacity to 1.54 MTPA from 1.3 MTPS at its Durgapur facility for an investment of Rs 72.6 crore. The company said that there will be a delay in putting up the 3.9 MTPA green-field integrated cement plant, to be commissioned by August 2021.
- Zee Entertainment: Brickwork Ratings has downgraded the company's issuer rating to BWR AA- from BWR AA, with credit watch with negative implications due to decline in profitability and margins in FY21 and a weakening credit profile.
- NBCC: All pending appeals before NCLAT with respect to Jaypee Infratech's resolution plan are to be transferred before the Supreme Court to avoid delay in the execution of the plan. Day to day functions of Jaypee Infratech to be managed by interim resolution professional till further orders.
- IndusInd Bank: Has acquired 7.82% stake in Eveready Industries and 7.5% stake in McLeod Russel India after invoking shares pledged by promoter Williamson Magor. The invocation was done to secure the outstanding dues of Seajuli Developers & Finance.
- Defence Stocks: Defence minister Rajnath Singh says that the Ministry of Defence has prepared a list of 101 items for which there will be an embargo on the imports. Contracts worth nearly 4 lakh crore will be placed upon the domestic industry within the next six to seven years. The list includes Wheeled Armoured Fighting Vehicles (AFVs) with indicative import embargo date of December 2021, of which the army is expected to contract nearly 200 of them at a cost of over Rs 5,000 crore. The embargo on imports is planned to be progressively implemented between 2020 and 2024.
- FDC: Board approved buyback of Rs 21.63 lakh shares or 1.27% of equity at Rs 450 per share. The share buyback aggregates to Rs 97.4 crore. The buyback price is a 34% premium to Friday's closing price.
- REC: Board approved raising Rs 85,000 crore through NCDs, subject to shareholders approval. The board approved revised scheme of amalgamation of its arms REC Transmission Projects with REC Power Distribution.
- DCB Bank: Introduces external benchmark link rate for its home loans at 8.16% per annum from August 10.
- ONGC: Board approved allotment of NCDs worth Rs 1,000 crore
- Amber Enterprises: Board approved raising Rs 500 crore through equity and debt.
- NACL Industries: To consider raissing funds via NCDs on August 12.
- Dilip Buildcon: To consider raising funds via NCDs on August 14.
- IDFC First Bank: Basel III tier-2 debt, infra bonds and NCDs rating re-affirmed at IND AA+/Negative by India Ratings & Research.
- Coal India: Cuts FY21 production target to 650-660 MT: PTI
- Nifty Earnings Today: Power Grid, Shree Cement, Titan
- Non-Nifty Earnings Today: Akzo Nobel, AstraZeneca Pharma, Bank of Baroda, Camlin Fine, Cochin Shipyard, Equitas Holdings, HEG, IPCA Labs, KEC International, Meghmani Organics, TTK Prestige, Ujjivan Financial, V-Mart Retail
Earnings Reported After Market Hours
Amara Raja Batteries Q1FY21
- Revenue down 36.6% to Rs 1,151 crore
- Net profit down 56% to Rs 62.7 crore
- Ebitda down 45.4% to Rs 152.2 crore
- Ebitda margin at 13.2% from 15.4%
- OEM demand was subdued due to lockdown challenges across the country.
- Demand for batteries in the after market recovered sharply
- Industrial business witnessed sharp demand ramp up in UPS and telecom sector
- Exports faced major challenges during the quarter
- All numbers are standalone and compared on a year-on-year basis
Bata India Q1FY21
- Revenue down 84.7% to Rs 135.1 crore
- Net loss of Rs 100.9 crore from net profit of Rs 101 crore
- Ebitda loss of Rs 85.9 crore from Ebitda gain of Rs 243.4 crore
- Witnessed a gradual improvement in business once the lockdown was lifted
- Prevailing uncertainties have dampened the consumer demand for discretionary spends
- Focus on cost controls related to retail stores, factories, rentals & operations and drive efficiencies in its value chain
- All numbers are consolidated and compared on a year-on-year basis
Birla Corporation Q1FY21
- Revenue down 35.1% to Rs 1,222 crore
- Net profit down 53.2% to Rs 65.8 crore
- Ebitda down 39.4% to Rs 233.2 crore
- Ebitda margin at 19.1% from 20.4%
- Ebitda per tonne down 5% to Rs 981
- Realisation per tonne down 0.5% to Rs 4,906
- Volumes down 34% to 2.4 million tonnes
- All numbers are consolidated and compared on a year-on-year basis
Amber Enterprises Q1FY21
- Revenue down 79% to Rs 259.5 crore
- Net loss of Rs 22.4 crore from net profit of Rs 61.2 crore
- Ebitda loss of Rs 5.5 crore from Ebitda gain of Rs 116.4 crore
- RAC business contributed 61% of total revenue
- Components & Mobile Application business contributed 39% of total revenue
- Demand scenario has been improving as lockdown restrictions are eased off
- Reviewing our capex plans for FY21
- All numbers are consolidated and compared on a year-on-year basis
Siemens Q3 Year Ending September
- Revenue down 58.7% to Rs 1,319.5 crore
- Net loss of Rs 4.6 crore from net profit of Rs 24.1 crore
- Ebitda loss of Rs 9.6 crore from Ebitda gain of Rs 353.7 crore
- Gas and Power segment revenue down 52% to Rs 554.6 crore
- Smart Infrastructure revenue down 66% to Rs 309.2 crore
- Mobility segment revenue down 61% to Rs 97 crore
- Digital Industries revenue down 71% to Rs 181.9 crore
- Order backlog of Rs 13,142 crore with more than one-year revenue visibility
- 75% of project sites have reopened and are at utilisation levels between 20% and 70%
- All numbers are standalone and compared on a year-on-year basis
Divi's Laboratories Q1FY21
- Revenue up 48.8% to Rs 1,730.5 crore
- Net profit up 80.6% to Rs 492 crore
- Ebitda up 81% to Rs 700 crore
- Ebitda margin at 40.4% from 33.2%
- Forex gain of Rs 5 crore this quarter as compared to forex loss of Rs 6 crore in base quarter
- Significant part of the capex program has been completed
- All numbers are consolidated and compared on a year-on-year basis
DCB Bank Q1FY21
- Net Interest Income up 0.6% to Rs 306.7 crore
- Net profit down 2.1% to Rs 79.4 crore
- Gross NPA at 2.44% from 2.46% last quarter
- Net NPA at 0.99% from 1.16% last quarter
- Provisions down 29% from the previous quarter to Rs 83.7 crore
- Provision Coverage Ratio at 75.2%
- Additional Covid-19 provisions worth Rs 32 crore this quarter
- Total provision for Covid-19 at Rs 95 crore
- 26% of the loan book under moratorium
Man Infra Q1FY21
- Revenue down 62.4% to Rs 22.8 crore
- Net profit of Rs 2.2 crore from net loss of Rs 5 crore
- Ebitda more than doubles to Rs 13.9 crore
- All numbers are consolidated and compared on a year-on-year basis
TVS Electronics Q1FY21
- Revenue down 53.2% to Rs 29 crore
- Net loss of Rs 9.7 crore from net profit of Rs 2 crore
- Ebitda loss of Rs 6.9 crore from Ebitda profit of Rs 4.1 crore
- All numbers compared on a year-on-year basis
Bajaj Hindusthan Q1FY21
- Revenue down 19.3% to Rs 1,335.2 crore
- Net loss widens to Rs 53 crore from Rs 19.5 crore
- Ebitda down 39% to Rs 66.2 crore
- Ebitda margin at 4.9% from 6.5%
- All numbers are consolidated and compared on a year-on-year basis
Affle India Q1FY21
- Revenue up 20.3% to Rs 89.8 crore
- Net profit up 42.3% to Rs 18.8 crore
- Ebitda up 20.3% to Rs 22.5 crore
- Ebitda margin flat at 25%
- Broad-based growth from both CPCU and non-CPCU business
- CPCU business had 1.7 crore of converted users during the quarter
- India business revenue up 39% to Rs 42.2 crore
- Overseas business revenue flat at Rs 49.6 crore
- All numbers are consolidated and compared on a year-on-year basis
Shilpa Medicare Q1FY21
- Revenue up 38.4% to Rs 222.9 crore
- Net profit up over five times to Rs 86.3 crore
- Ebitda more than doubles to Rs 65.7 crore
- Ebitda margin at 29.5% from 17.9%
- Formulations revenue were higher due to an increase in sales of products
- API revenues higher due to better growth in the oncology business
- Investments in biologics will start showing results in the coming years: Management
- All numbers are consolidated and compared on a year-on-year basis
Brokerage Radar
CLSA On Mahindra & Mahindra
- Buy rating maintained
- Price target raised to Rs 730 from Rs 605
- Tractor margin improves despite a volume decline
- Auto business losses at manageable levels
- Near-term focus on managing supply chain and ramping-up production
- Continued focus on RoE improvement
- Raise FY21-22 core EPS forecast by 11% & 21% respectively
- Key Risks: Delay in recovery of tractor volumes and increase in non-core investments
JPMorgan On Mahindra & Mahindra
- Overweight rating maintained
- Price target raised to Rs 700 from Rs 625
- Walking the talk on capital allocation
- Farm fundamentals are looking up on good crop / monsoons
- Stake sale in the EV business can be an additional catalyst
- Expect U.S. farm business to break-even soon
- Valuations remain accommodative
- Remains preferred pick in the sector
- Localised lockdowns disrupting supply and demand side remains key downside risk
UBS On SRF
- Upgrade to buy from neutral
- Raise price target to Rs 4,800 from Rs 4,300
- H2FY21 looking better as new capacities will aid growth
- Domestic and import markets to drive recovery in H2FY21
- Retainment of specialty chemical guidance a key positive
- Refrigerant gas unit will have growth momentum in H2FY21
- Market not pricing in potential earnings contribution from investments
- Trimming earnings estimates due to Covid-19 impact on technical textiles and other segments
Nomura On Container Corporation
- Downgrade to neutral from buy
- Price target cut to Rs 438 from Rs 565
- Downgrade on lease rental overhang
- Divergence in LLR estimates of the company & railways increase valuation uncertainty for investors
- Estimate overall LLR assessment of railways can potentially be as high as Rs 1,000 crore
- Near-term multiple-based valuation does not reflect potential upside from WDFC-linked volume uptick from FY22
- Delay in WDFC linkage and loss of market share is a key downside risk
Edelweiss On Cipla
- Buy rating maintained
- Price target raised to Rs 845 from Rs 730
- Numbers reiterate our belief that company has all the elements to not only successfully endure the Covid-19 disruption, but also emerge stronger
- Believe cost savings will continue in FY22
- Near-term triggers offer attractive upside
- Key Medium-term triggers: Uptick of gProventil in the albuterol market, exclusivity in API supply for gAtripta, gTruvada and gViread with Teva in FY21
- Specialty pipeline is promising
- Outlook and valuations are attractive
Investec on Emami
- Upgrade to buy from hold
- Price target raised to Rs 312 from Rs 231
- On the cusp of a re-rating due to a number of factors
- Positive recovery rate, margin tailwinds to continue
- Key leadership hires to head the healthcare business and sales plug important gaps
HSBC On Container Corporation of India
- Downgrade to hold from buy
- Price target cut to Rs 480 from Rs 500
- First quarter results were a mixed bag
- Land License Fees a bigger headwind than anticipated
- Current valuations fairly value the outlook
HSBC On Divi's Laboratories
- Hold rating maintained
- Price target raised to Rs 2,755 from Rs 2,135
- Strong beat due to robust sales volume growth and better sales realisations
- Business outlook steady on industry tailwinds
- Recent rally may leave limited upside from current prices
- Key upside risk is benefits from supply of Covid-19 drugs
Morgan Stanley On Cipla
- Overweight rating maintained
- Price target raised to Rs 847 from Rs 486
- Raise FY21/22 EPS estimates by 16.2% and 23.6% respectively
- EPS upgrades reflect U.S. respiratory upside, better cost control, lower taxes and forex tailwinds.
Bulk Deals
- Spencer’s Retail Rights Issue: Habrok India Master sold 1.24 lakh rights shares at Rs 26.53 per share.
- Mindspace Business Parks REIT: Nomura Investment acquired 62.63 lakh units at Rs 302.45 per unit and Capital Income Builder acquired 51.81 lakh units at Rs 303.44 per unit.
- Century Textiles: Morgan Stanley acquired 6.89 lakh shares (0.62%) at Rs 317.45 per share.
Block Deals
- Gateway Distriparks: General Insurance Corporation of India sold 1.96 lakh shares (0.18%) at Rs 12.55 per share.
- Axis Bank: BofA Securities acquired 35 lakh shares (0.12%) at Rs 428.7 per share and UBS Principal Capital sold 35 lakh shares (0.12%) at Rs 428.7 per share.
- Bandhan Bank: BNP Paribas Arbitrage acquired 27.4 lakh shares (0.17%) at Rs 300 per share and Goldman Sachs sold 27.4 lakh shares (0.17%) at Rs 300 per share.
Who’s Meeting Whom
- Granules India: To meet SBI Mutual Fund, Ocean Dial AMC and other investors between August 11-19.
- Tata Motors: To meet First State Investments, Indus Capital (Hong Kong) and Oxbow Capital Management from August 11-14.
- IIFL Finance: To meet Bavaria Industries Group on August 10.
Trading Tweaks
- AGM Date: Honeywell Automation, Oracle Financial Services, Alkem Labs, Astrazeneca Pharma, Camlin Fine Sciences, Canara Bank, Eicher Motors, Equitas Holdings, M&M Finacial Services, Sundaram Brake Linings.
- Fund Raising: InterGlobe Aviation
- Price Band Revised From 10% To 5%: Hindustan Motors
- Move Into ASM Framework: Trident Texofab
- Move Out Of ASM Framework: Speciality Restaurant
Insider Trades
- Max Financial Services: Promoter Max Ventures Investment sold 61 lakh shares on August 5.
- Hatsun Agro Products: Promoter RG Chandramorgan acquired 1.32 lakh shares on August 4.
As Reported On August 7
Money Market Update
- The rupee snapped a three-week gaining streak in today's session, posting marginal losses for the week.
- The currency ended unchanged at 74.93 against the U.S. Dollar, which is the same level at which it ended on Thursday.
- On a weekly basis, the rupee was the second worst performing currency in Asia, behind the Indonesian Rupiah. The rupee fell 0.16% last week.
F&O Cues
- Nifty August futures end at 11,229; premium of 15 points from 12 points
- Nifty August futures add 1.4% and 1.4 lakh shares in Open Interest
- Nifty Bank August futures end at 21,795; premium of 41 points from 27 points
- Nifty Bank August futures add 4.4% and 56,000 shares in Open Interest
- Nifty Put-Call Ratio at 1.56
- Stocks In F&O Ban: Canara Bank, Century Textiles, Vodafone Idea, Vedanta
Nifty: August 13 Expiry
- Maximum Open Interest on Call side at 11,500 strike (23.3 lakh shares)
- Maximum Open Interest on Put side at 11,000 strike (27 lakh shares)
- Active Options: 11,000 Put (11.3 lakh shares) & 11,500 Call (12.4 lakh shares)
Nifty: August 27 Expiry
- Maximum Open Interest on Call side at 11,500 strike (22 lakh shares)
- Maximum Open Interest on Put side at 11,000 strike (30.6 lakh shares)