All You Need To Know Going Into Trade On August 14

Earnings Fineprint: Hero MotoCorp Q1FY21

• Revenue down 63% to Rs 2,971.5 crore
• Net profit down 95% to Rs 61.3 crore
• Ebitda down 91% to Rs 108 crore
• Ebitda margin at 3.6% from 14.4%
• Exceptional gain of Rs 737.5 crore in the base quarter
• All numbers are standalone and compared on a year-on-year basis

Earnings Fineprint: BPCL Q1FY21

• Revenue down 43.8% to Rs 38,785 crore
• Net profit of Rs 2,076.2 crore from net loss of Rs 1,361 crore
• Ebitda gain of Rs 3,915.8 crore from Ebitda loss of Rs 619 crore
• GRMs at $0.39 per barrel from $0.75 per barrel
• Inventory gain of Rs 567 crore this quarter
• Refinery Throughput down 39% to 5.14 MMT
• Market sales down 30% to 7.53 MMT
• Forex loss of Rs 56.6 crore this quarter
• All numbers are standalone and compared on a quarter-on-quarter basis

Earnings Fineprint: Eicher Motors Q1FY21

• Revenue down 65.6% to Rs 818.2 crore
• Net loss of Rs 55.2 crore from net profit of Rs 451.8 crore
• Ebitda down 99.4% to Rs 3.8 crore
• Ebitda margin at 0.5% from 25.8%
• Net loss is higher than Bloomberg consensus estimate of Rs 2 crore
• All numbers are consolidated and compared on a year-on-year basis

Earnings Fineprint: Tata Steel Q1FY21

• Revenue down 32.4% to Rs 24,288 crore
• Net loss of Rs 4,373.6 crore from net profit of Rs 699.6 crore
• Ebitda down 90.5% to Rs 505.5 crore
• Ebitda margin at 2.1% from 14.9%
• Consolidated operations impacted due to lower level of capacity utilisation across geographies
• Lower steel volumes, adverse product mix weighed on earnings
• Gross debt rises 2% quarter-on-quarter to 1,18,870 crore
• All numbers are consolidated and compared on a year-on-year basis

Stocks To Watch

• Greaves Cotton: Nagesh Basavanhallli has resigned from post of MD and CEO from August 13. He has been appointed as an Additional Director and Vice-Chairman of the company.
• Ahluwalia Contracts: Secured new construction order worth Rs 290 crore from NBCC.
• AGC Networks: Completed the acquisition of Pyrios via its indirect arm Black Box Networks Services for both Australia and New Zealand.
• Vedanta: Promoter Twin Star Holdings increased their stake to 37.11% from 34.44% on August 11 via conversion of American depository shares into equity shares.
• Dishman Carbogen Amcis: Announced investment of 90 million euros for two expansion projects in Switzerland and France. In Switzerland, the project will be initiated in 2021 with construction of a new API manufacturing facility at its Hunzenschwil site. In France, a new, state-of-the-art facility dedicated to custom development and manufacturing of parenteral drug products will be made. Capex to be funded by a mix of debt and cash accruals.
• Jagran Prakashan: Alloted NCDs worth Rs 250 crore on a private placement basis.
• JSPL: Began supply of head hardened rails to Rail Vikas Nigam for the completion of Kolkata Metro's Joka-Esplanade corridor. Company was selected by Rail Vikas Nigam to supply 3,000 MT of head hardened rails for Kolkata Metro rail tracks. So far, JSPL has supplied 1,300 MT of 1080 grade head hardened rails and remaining delivery of 1,700 MT will be made within a week.
• Bank of India: Board approved raising up to Rs 8,000 crore by way preferential issue, QIP among other methods.
• Tata Power: Allotted 49.06 crore shares to Tata Sons at a price of Rs 53 per share aggregating to Rs 2,600 crore
• Gateway Distriparks: Rights issue subscribed 1.24 times. Issue has been closed on August 13.
• Aurobindo Pharma: ANDA for methocarbamol gets U.S. FDA approval.
• Nifty Earnings Today: Hindalco, NTPC
• Non-Nifty Earnings Today: Berger Paints, Bodal Chemicals, Dilip Buildcon, Glenmark, IIFL Wealth, Indian Bank, MRF, Nesco, United Breweries, Voltas, VRL Logistics

Earnings Reported After Market Hours

Shriram Transport Finance Q1FY21

• Net Interest Income down 6.8% to Rs 1,873.7 crore
• Net profit down 49.5% to Rs 320.1 crore
• Higher provisions and impairment of assets impact profit
• Gross Stage 3 and Net Stage 3 assets deteriorate on sequential & year-on-year basis
• July collection at 73% from 71% in June
• Provided Rs 956 crore for Covid-19 this quarter
• All numbers are standalone and compared on a year-on-year basis

Trent Q1FY21

• Revenue down 87.4% to Rs 96.3 crore
• Net loss of Rs 139.5 crore from net profit of Rs 57.9 crore
• Ebitda loss of Rs 119.2 crore from Ebitda gain of Rs 163.9 crore
• All numbers are standalone and compared on a year-on-year basis

3M India Q1FY21

• Revenue down 57% to Rs 346.2 crore
• Net loss of Rs 42.5 crore from net profit of Rs 90.1 crore
• Ebitda loss of Rs 48.4 crore from Ebitda gain of Rs 148.5 crore
• All numbers are consolidated and compared on a year-on-year basis

Prestige Estates Q1FY21

• Revenue down 17.2% to Rs 1,273.7 crore
• Net profit down 98.6% to Rs 1.6 crore
• Ebitda down 16.8% to Rs 439.1 crore
• Ebitda margin at 34.5% from 34.3%
• Exceptional gain of Rs 38 crore in the base quarter
• All numbers are consolidated and compared on a year-on-year basis

Bharat Rasayan Q1FY21

• Revenue down 20.5% to Rs 281.7 crore
• Net profit up 12% to Rs 46.7 crore
• Ebitda down 7.5% to Rs 65.5 crore
• Ebitda margin at 23.3% from 20%
• Lower raw material costs improve margins
• All numbers are standalone and compared on a year-on-year basis

Endurance Technologies Q1FY21

• Revenue down 68.4% to Rs 603.1 crore
• Net loss of Rs 24.9 crore from net profit of Rs 165.6 crore
• Ebitda down 87.5% to Rs 42.8 crore
• Ebitda margin at 7.1% from 17.9%
• All numbers are consolidated and compared on a year-on-year basis

Balkrishna Industries Q1FY21

• Revenue down 21.4% to Rs 942.6 crore
• Net profit down 25.6% to Rs 131.6 crore
• Ebitda down 10.3% to Rs 240.5 crore
• Ebitda margin at 25.5% from 22.4%
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Morgan Stanley On Eicher Motors

• Overweight rating maintained
• Price target of Rs 21,073
• Commentary on outlook was positive
• Production remains a near-term challenge
• Expect gross margins to recovery in Q2FY21
• Royal Enfield has best new model cycle in autos
• Longer-term trend on replacement demand should aid volume recovery

Credit Suisse On Eicher Motors

• Outperform rating maintained
• Price target raised to Rs 25,180 from Rs 22,280
• Production ramp-up and model cycle to be catalysts ahead
• Find valuations attractive vis-a-vis growth
• Pricing in only a 7.5% CAGR in volumes over FY23-30
• Model pipeline remains intact
• Apply a target multiple of 27x June 2022E P/E from the earlier 25x

Antique Stock Broking On Eicher Motors

• Buy rating maintained
• Price target raised to Rs 23,463 from Rs 18,427
• Demand recovery checks point to encouraging trends
• Like Royal Enfield for its brand uniqueness and product heritage
• Twins & Himalayan and international expansion will pay-off in the long-term
• Confident of brand growth trajectory from FY22, barring large-scale economic disruptions
• Raise FY22 volume assumptions by 5%
• Expect revenue / Ebitda / PAT CAGR of 14% / 19% / 19% respectively over FY20-23E

Investec On Eicher Motors

• Sell rating maintained
• Price target cut to Rs 13,600 from Rs 14,100
• Production disruption hampers demand challenge
• Valuation premium as against peers continues
• Cut FY21/22E EPS by 5-7% to factor in weak performance of VECV business

Morgan Stanley On Grasim

• Overweight rating maintained
• Price target of Rs 756
• Standalone business performance was mixed
• Tough business environment justifies a higher weight for bear case
• Risks To Upside: Lower-than-expected decline in cement prices, Increases in prices of VSF substitutes, clarity around capital infusion in group companies
• Risks To Downside: Higher-than-expected capacity addition in VSF, higher-than-expected price cut in cement and lower-than-expected valuation of financial services

Morgan Stanley On Hero MotoCorp

• Underweight rating maintained
• Price target of Rs 2,000
• Tight cost control in a tough quarter
• Not being able to expand share in growing segments like premium bikes and scooters
• Potential share buyback announcement, GST rate cut are risks to upside

HSBC On Indian I.T.

• Remain positive on the sector
• Cloud adoption remains strong
• Reimaging of supply chains, spurred by Covid-19 may drive higher I.T. spending
• Transformation may lead to nearly double-digit revenue growth for FY22-23
• Infosys: Buy rating maintained; price target raised to Rs 1,055 from Rs 970
• HCL Tech: Buy rating maintained; price target raised to Rs 760 from Rs 680
• Wipro: Hold rating maintained; price target raised to Rs 260 from Rs 230
• TCS: Hold rating maintained; price target raised to Rs 2,065 from Rs 1,900

Investec On ICICI Lombard

• Buy rating maintained
• Price target of Rs 1,500
• Likely merger with Bharti-Axa in an all-stock deal
• Merger may increase ICICI Lombard's market share to 8.7%
• Merger to be ~15% EPS accretive depending on cost synergies
• Bharti Axa has strong presence at dealerships

UBS On Shriram Transport Finance

• Buy rating maintained
• Price target of Rs 974.3
• Improvement in liquidity and collections key positive
• Remains preferred pick among NBFCs
• Disbursements likely to improve from Q2FY21
• Expect margin improvement in H2FY21
• See credit costs at 3% in FY21 and at 2.2%/2% in FY22/23E
• Risk-reward favourable given attractive valuations and strong capital ratios

Nomura On Ashok Leyland

• Upgrade to buy from neutral
• Price target raised to Rs 73 from Rs 58
• M&HCV cycle to report sharp recovery over FY22-24
• Cut Ebitda estimates by 73%/31% for FY21-22F
• Risk-reward is favourable
• Key Risks: Weak near-term demand, high capital requirements for Hinduja Leyland Finance
• Margin pressure due to BS-VI costs adds to the risk

Credit Suisse On Thermax

• Underperform rating maintained
• Price target of Rs 650
• Reasonably high valuations for a dragging weak cucle
• Lack of significant track record of pick-up in exports / overseas orders despite capacity investments
• Scale-up of heat transfer based on different feedstock has been mediocre
• Can be risks to margins related to delays as well as large FGD contracts
• Revise estimates lower by 17%/9% for FY21/22

Pledged Share Details

• JSPL: Promoters released pledge of 39 lakh shares between August 6-11
• Ajanta Pharma: Promoter Ravi Agrawal created pledge of 75,000 shares on August 12
• Navin Fluorine: Promoter Mafatlal Impex released pledge of 67,473 shares on August 12
• JSW Energy: Promoter Glebe Trading created pledge of 84 lakh shares on August 11
• Ufo Moviez: Promoter Apollo International revoked pledge of 22.66 lakh shares on August 11
• Laurus Labs: Promoter Satyanarayana Chava revoked pledge of 5.6 lakh shares between August 10-12

(As Reported On August 13)

Who’s Meeting Whom

• Cummins India: To meet DSP Mutual Fund on August 14
• Mahindra Holidays & Resorts: To meet Laburnum Capital, Sundaram Mutual Fund and Emkay Investments between August 14-17.
• Castrol India: To meet Highclere International Investors and Pari Washington Advisors between August 18-20.

Bulk Deals

• DCM Shriram Industries: Asian Markets Securities acquired 1.39 lakh shares (0.80%) at Rs 162.71 per share.
• Satin Creditcare Rights Issue: SBI Emerging Asia Financial Sector Fund sold 9.58 lakh rights shares at Rs 18.65 per rights share.
• Spencer’s Retail Rights Issue: MFS International New Discovery Fund sold 96,463 rights shares at Rs 18.4 per rights share.

Trading Tweaks

• AGM Date: Alkyl Amines, Aster DM Healthcare, EIH, ICICI Bank, JK Cement, La Opala RG, Nesco, Nilkamal, Prism Johnson, Indian Overseas Bank, Century Textiles.
• Fund Raising: Embassy Office Parks REIT.
• Ex-Date For Rights Issue: Minda Industries (rights entitlement at 1:27, premium at Rs 248 per share).
• Price Band Revised From 10% To 5%: Ashiana Housing, Kirloskar Electric, Lemon Tree Hotels, Anuh Pharma.
• Price Band Revised From 20% To 10%: Jubilant Industries, Orissa Minerals Development.
• Move Into ASM Framework: Sanghvi Forging and Engineering, Gokaldas Exports, Vimta Labs.
• Move Into Short Term ASM Framework: IDFC, Monnet Ispat & Energy, Kopran, Aurionpro Solutions, Shalby, INEOS Styrolution, Tarmat.
• Move Out Of Short Term ASM Framework: SMS Lifesciences, PG Electroplast, The Great Eastern Shipping, Firstsource Solutions, Essel Propack.

Insider Trades

• Dabur: Promoter MB Finmart sold 18,530 shares on August 10
• JSW Steel: Promoter JTPM Metal Traders acquired 24.1 lakh shares between August 7-12.
• Jamna Auto Industries: Promoter Pradeep Singh acquired 2.9 lakh shares from August 11-12.
• Panama Petrochem: Promoters acquired 59,935 shares between August 10-12
• Dr Lal PathLabs: Promoter Dr Vandana Lal sold 56,515 shares on August 12

(As Reported On August 13)

Money Market Update

• The currency ended at 74.84 against the U.S. Dollar as compared to Wednesday's close of 74.82.
• Thursday's flat close made rupee the fourth worst performing currency in Asia.

F&O Cues

• Nifty August futures closed at 11,323.5; premium of 23 points from 7 points
• Nifty August futures shed 2.4% and 2.5 lakh shares in Open Interest
• Nifty Bank August futures closed at 22,217; premium of 21 points from 27 points
• Nifty Bank August futures shed 9% and 1.5 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.49
• Enter F&O Ban: Ashok Leyland, BHEL
• Stocks In F&O Ban: Ashok Leyland, Aurobindo, Bata, BHEL, Canara Bank, Century Textiles, Glenmark, Indiabulls Housing, Muthoot Finance, SAIL, Vedanta, Vodafone Idea

Nifty Weekly Expiry: August 20

• Maximum Open Interest on Call side at 12,000 strike (13.9 lakh shares)
• Maximum Open Interest on Put side at 10,400 strike (14 lakh shares)
• Active Options: 10,400 Put (9.2 lakh shares) and 12,000 Call (9.5 lakh shares)

Nifty Monthly Expiry: August 27

• Maximum Open Interest on Call side at 11,500 strike (23.2 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (32.7 lakh shares)