All You Need To Know Going Into Trade On August 17
A pedestrian wearing a protective mask walks along a deserted Marine Drive in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On August 17

Asian markets have begun the new trading week on the negative note as investors fret over the timing of a stimulus package in the U.S. and souring trade relations between the world's two largest economies.

Gold continues to build on last week's decline along with the U.S. Dollar while oil prices are higher.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.7% to 11,253 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.

Let's take a look at the factors that may influence equities in today's session:

  • Markets in Japan and Australia have opened lower while those in South Korea are shut for a holiday.
  • Futures on the Dow Jones are trading higher by 90 points. The index ended little changed on Friday.
  • U.S. and China postponed talks planned for over the weekend, aimed at reviewing progress at the six-month mark of their phase-one trade agreement.
  • Minutes of the most recent Federal Reserve policy meeting are due to be released on Wednesday and may yield clues about whether officials plan to introduce new language in September.
  • Yield on the 10-year treasuries remained at 0.71%.
  • West Texas Intermediate crude rose 0.6% to $42.25 per barrel while Gold fell 0.5% to $1,935.6/Oz.

Get your daily fix of the global markets here.

Also read: India’s MPC Runs The Risk Of Failing The Three-Strikes Rule

All You Need To Know Going Into Trade On August 17

Stocks To Watch

  • ICICI Bank: Approves allottment of 41.89 crore shares of Rs 2 each to qualified institutional buyers at an issue price of Rs 358 per share. The lender has raised Rs 15,000 crore from the QIP issue. The issue price is a 1.9% premium to the floor price and a 1.5% discount to Friday's closing price. Monetary Authority of Singapore, Morgan Stanley Investment Management Inc. and Societe Generale have been allotted over 5% of the equity shares in the issue.
  • Infosys: Notified stock exchanges of inadvertent trading by the portfolio management services of Bela Parikh, spouse of company's independent director Bobby Parikh. 2,754 shares were bought during the open trading window period without the knowledge of Bobby Parikh and without obtaining pre-clearance of trade. The Audit Committee has determined that there was a violation of the company’s policy and PIT Regulations and has therefore imposed a penalty of Rs 2 lakh on Bobby Parikh.
  • India Grid Trust: Sponsor Sterlite Power sold 14.7% stake in India Grid Trust to Institutional and HNI investors at a unit price of 98 per unit aggregating to Rs 840 crore. Buyers include Danske Invest India Fund, Societe Generale, Morgan Stanley Asia and Larsen & Toubro.
  • IDFC First Bank: Clarifies that there has been no discussion regarding a reverse merger with IDFC at any level. The bank also said that any report suggesting that such an application will be made by the end of September 2020 is purely speculative in nature.
  • SJVN: Received 100 MW solar project in Gujarat for Rs 2.8 per unit. Cost of construction for this project is pegged at Rs 450 crore. The project is expected to generate 244 MU / year and power purchase agreement shall be signed between GUVNL and SJVN for 25 years. Plant is expected to be commissioned by March 2022.
  • Lupin: Presents phase 3 data for Solosec, demonstrating significant response rate in female patients with Trichomoniasis. Single-dose treatment resulted in a highly statistically significant response rate or microbiological cure in 92-95% of patients versus as compared to 1.5-1.7% in placebo.
  • PNC Infratech: Resolution Professional for Gwalior Bypass Project (corporate debtor), on behalf of the committee of creditors, has issued a letter of intent with regard to the resolution plan submitted for Gwalior Bypass Project, which is undergoing corporate insolvency resolution process and the said letter of intent has been accepted by the company.
  • GVK Power & Infra: Price Waterhouse Chartered Accountants have proposed to resign as statutory auditors as they await information for the fiscal 2020 and in recent events in relation to company’s arm Mumbai International Airport.
  • PNB Housing Finance: To consider raising funds on August 19.
  • Embassy Office Parks REIT: Board approved raising Rs 2,000 crore via NCDs.
  • Dilip Buildcon: Board approved raising Rs 2,000 crore via issue of shares and to raise up to Rs 1,000 crore each via NCDs and commercial papers.
  • JSPL: SBICAP Trustee increased their stake to 8.47% from 4.23% on August 12 via sale through non-disposal undertaking.
  • Aegis Logistics: Supreme Court has passed the order that the company will deposit Rs 142.2 crore in an escrow account for an air pollution case in Mumbai. Company will appeal to the Supreme Court.
  • Wipro: Completed the acquisition of Brazil’s I.T. solution company - IVIA Serviços de lnformitica.
  • Welspun Speciality Solutions: Received order worth Rs 19.5 crore for stainless steel pipes and tubes.
  • Gati: Received a special notice under the Companies Act, 2013 from Allcargo Logistics Ltd. – the company’s promoter and shareholder representing 46.86% of the company’s voting capital, for considering and passing Resolution for the removal of Mahendra Kumar Agarwal - the company’s MD & CEO.
  • Future Lifestyle: CARE Ratings downgrades the rating on its long-term bank facilities and NCDs to BBB from A+ while the short-term bank facilities were downgraded to A3 from A1.
  • Future Enterprises: Acuite Ratings & Research has placed its credit facilities on watch negative on account of significant rise in liquidity pressures faced by the company or group due to Covid-19 and material disruptions in its operations.
  • Future Retail: Commercial Paper downgraded to A4+ from A2 while rating on proposed NCDs revised to BB from BBB+.
  • HT Media: Wholly-owned subsidiary HT Global Education has struck off the name from registrar of companies as it could not commence any business activity since its incorporation.
  • NTPC: Has developed infrastructure at its Rihand project in Uttar Pradesh to transport fly ash in bulk to cement plants, located at distance, at a cheaper cost. The development is in line with NTPC's commitment towards 100% utilization of fly ash from power plants, as per the press release.
  • Non-Nifty Earnings Today: Can Fin Homes, Lux Industries, Orient Papers, Petronet LNG, Suven Pharma

Earnings Reported After Market Hours

Berger Paints Q1FY21

  • Revenue down 45.8% to Rs 930.8 crore
  • Net profit down 91.3% to Rs 15.4 crore
  • Ebitda down 69.8% to Rs 92.2 crore
  • Ebitda margin at 9.9% from 17.8%
  • All numbers are consolidated and compared on a year-on-year basis

Sun TV Q1FY21

  • Revenue down 44.9% to Rs 611.5 crore
  • Net profit down 33.4% to Rs 257.4 crore
  • Ebitda down 41.1% to Rs 409.1 crore
  • Ebitda margin at 66.9% from 62.6%
  • Lower operating expenses and recording of operating expenses in base quarter aid margins
  • Subscription revenue up 18% to Rs 442.2 crore
  • All numbers are consolidated and compared on a year-on-year basis

Dilip Buildcon Q1FY21

  • Revenue down 13.8% to Rs 2,099.9 crore
  • Net profit down 73.6% to Rs 27.1 crore
  • Ebitda down 9.1% to Rs 461.1 crore
  • Ebitda margin at 22% from 20.8%
  • Recorded orders worth Rs 10,732 crore across four sectors and five states
  • Total order book at Rs 26,115 crore
  • 37% of the order book from state government while 63% from central government
  • All numbers are consolidated and compared on a year-on-year basis

Fortis Healthcare Q1FY21

  • Revenue down 46.8% to Rs 606 crore
  • Net loss of Rs 178.9 crore from net profit of Rs 67.8 crore
  • Ebitda loss of Rs 103.2 crore from Ebitda gain of Rs 142.3 crore
  • All numbers are consolidated and compared on a year-on-year basis

Glenmark Pharma Q1FY21

  • Revenue up 1% to Rs 2,344.8 crore
  • Net profit more than doubles to Rs 254 crore
  • Other income rises to Rs 58.5 crore from Rs 1.7 crore
  • Ebitda up 39.8% to Rs 478 crore
  • Ebitda margin at 20.4% from 14.7%
  • Lower cost of raw material and other expenses aid margin improvement
  • India business revenue up 3.7% to Rs 779.8 crore
  • Europe business revenue up 12.8% to Rs 273.8 crore
  • U.S. business revenue up 1.6% to Rs 742.6 crore
  • API business revenue up 1.8% to Rs 234.8 crore
  • RoW business revenue fell 18% to Rs 212 crore

United Breweries Q1FY21

  • Revenue down 75.3% to Rs 506.9 crore
  • Net loss of Rs 114.3 crore from net profit of Rs 164.5 crore
  • Ebitda loss of Rs 95.6 crore from Ebitda gain of Rs 328.9 crore
  • All numbers are standalone and compared on a year-on-year basis

Brokerage Radar

CLSA On Sterlite Technologies

  • Initiate coverage with buy rating
  • Price target of Rs 185
  • Strong order book and has rapidly transitioned from manufacturing to digital networks services
  • Management targets to double FY20 revenue by FY23
  • Management focused on top 20 clients in India and overseas
  • See revenue / Ebitda CAGR of 28% / 35% respectively over FY21-23CL.
  • Growth prospects and valuations are compelling

UBS On Tata Motors

  • Downgrade to sell from buy
  • Price target of Rs 100
  • Volume challenges likely to blunt cost-cutting effort
  • Expect JLR's net debt to rise to 2.5 billion pounds in FY21
  • India business will need further equity infusion of Rs 6,000 - 7,000 croreto bring down debt and interest costs
  • JLR's China underperformance limits likelihood of a recovery
  • High global dealer inventory to remain an overhang for wholesale volume in FY21

CLSA On Sun TV

  • Buy rating maintained
  • Price target of Rs 490
  • Q1 results were a positive surprise
  • Strong growth in subscription revenue
  • Advertising revenue back to 75% of pre-Covid levels
  • Forecast a low earnings hit from Covid-19 in FY21 and growth returning in FY22CL
  • Dividend yield of 4% may have an upside with higher cash levels

CLSA On Prestige Estates

  • Buy rating maintained
  • Price target raised to Rs 280 from Rs 240
  • Management expects strong H2FY21 driven by new launches
  • Increase pre-sales estimates by 10% for FY21
  • Office segment resilient while retail & hospitality subdued
  • Debt rose due to cashflow deficit, continued capex and land payments
  • Stake sale in annuity business may allay debt concerns

Investec On Endurance Technologies

  • Buy rating maintained
  • Price target raised to Rs 1,030 from Rs 700
  • Cost cutting measures offset weak revenue
  • Orders in braking business is encouraging and may boost growth
  • Good track record, product & client expansion, capital allocation should help navigate the current uncertainty
  • Increase target PE multiple to 25x from 18x

Investec On Balkrishna Industries

  • Hold rating maintained
  • Price target of Rs 1,275
  • Earnings were below estimates
  • Higher indexation due to agri, replacement and exports
  • Remain upbeat on long-term prospects
  • Valuations cap near-term upside

Who’s Meeting Whom

  • GE Shipping: To meet B&K Securities on August 19.
  • Cummins India: To meet ICICI Prudential AMC on August 17.
  • Tata Motors: To meet CI Investment, Franklin Templeton and other investors between August 17-20.
  • Cipla: To meet Axis Capital, Investec Securities and other investors between August 17-20.
  • Mahindra Logistics: To meet Ashmore Investment, JP Morgan and Axis Capital from August 19-25.

Bulk Deals

  • PTC Industries: Mona Russel Mehta acquired 4.5 lakh shares (8.59%) at Rs 453.01 per share, Pragati India Fund sold 7.86 lakh shares (15%) at Rs 453.74 per share. Vikas Khemani acquired 27,000 shares (0.52%) at Rs 533.46 per share and Porinju Veliyath acquired 27,000 shares (0.52%) at Rs 469.5 per share.
  • CG Power & Industrial Solutions: KKR Group sold 4.37 crore shares (6.97%) at Rs 13.54 per share, L&T Finance sold 1 crore shares (1.60%) at Rs 13.53 per share and Vistra ITCL sold 51 lakh shares (0.81%) at Rs 13.22 per share.
  • Heidelberg Cement: Plutus Wealth Management (U.K.) acquired 14.85 lakh shares (0.66%) at Rs 191.72 per share.
  • Satin Creditcare Network Rights Issue: Promoter Trishashna Holdings & Investments acquired 3.95 lakh rights shares at Rs 23.5 per rights share and UTI MF sold 1.09 lakh rights shares at Rs 26.06 per rights share.

Trading Tweaks

  • AGM Date: Birla Corp, Cummins India, Clariant Chemicals, Delta Corp, IDBI Bank, SRF, Apar Industries.
  • Fund Raising: Britannia Industries .
  • Record Date For Rights Issue: Minda Industries (rights entitlement at 1:27, premium at Rs 248 per share).
  • Price Band Revised From 10% To 5%: Dynamatic Technologies, Nitco.
  • Price Band Revised From 20% To 10%: eClerx Services, Elgi Equipments.
  • Move Into ASM Framework: PPAP Automotive, Zenith Exports.
  • Move Out Of ASM Framework: Ind-Swift Laboratories, Orient Green Power, Walchandnagar Industries, Aban Offshore, Setco Automotive, Goa Carbon, Rane Engine Valve, Hubtown, Suzlon Energy, Axiscades Engineering Technologies, Tokyo Plast.
  • Move Into Short Term ASM Framework: Ashiana Housing, eClerx Services, Kirloskar Electric, Elgi Equipments, Omax Autos, Lemon Tree Hotels, MPS.
  • Move Out Of Short Term ASM Framework: Zenith Exports.

Money Market Update

  • The currency ended at 74.90 against the U.S. Dollar as compared to Thursday's close of 74.84.
  • On a weekly basis, the rupee was little changed and the fifth best performing currency in Asia.
All You Need To Know Going Into Trade On August 17

F&O Cues

  • Nifty August futures closed at 11,186; premium of 8 points from 23 points
  • Nifty August futures shed 1.9% and 1.9 lakh shares in Open Interest.
  • Nifty Bank August futures closed at 21,660; discount of 10 points from premium of 21 points
  • Nifty Bank August futures add 3% and 41,000 shares in Open Interest
  • Nifty Put-Call Ratio at 1.48
  • Enters F&O Ban: Manappuram Finance
  • Out Of F&O Ban: Canara Bank, Century Textiles, Indiabulls Housing, Muthoot Finance
  • Stocks In F&O Ban: Ashok Leyland, Aurobindo, Bata, BHEL, Glenmark, Glenmark, Manappuram Finance, SAIL, Vedanta, Manappuram Finance

Nifty: August 20 Expiry

  • Maximum Open Interest on Call side at 11,300 strike (27.2 lakh shares)
  • Maximum Open Interest on Put side at 11,000 strike (20 lakh shares)
  • Active Options: 11,000 Put (10.1 lakh shares) and 11,300 Call (15.1 lakh shares)

Nifty: August 27 Expiry

  • Maximum Open Interest on Call side at 11,500 strike (22.5 lakh shares)
  • Maximum Open Interest on Put side at 11,000 strike (33.7 lakh shares)

F&O Buzzers & Fund Flows

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