All You Need To Know Going Into Trade On August 20

Stocks To Watch

• State Bank of India: Raised Rs 8,931 crore in tier-II bonds. The bonds with a maturity of 15 years were raised with a coupon rate of 6.8% and credit spread stood at 35.5 basis points over the corresponding government security yield. The total issue was for Rs 10,000 crore with a base issue size of Rs 2,000 crore.
• Titan: Fully hedged with gold on lease and gold bought from stock markets. The company said that the ineffective hedge loss due to mismatch in sales quantity will be reversed subsequently with a corresponding reversal of stock gain accrued in the first quarter of fiscal 2021.
• PNB Housing Finance: Board approved raising Rs 1,800 crore via preferential issue / rights issue.
• IIFL Wealth: Board declares special dividend of Rs 40 per share. Record date set at August 27. Dividend yield at 3.58% as of the closing on Wednesday.
• RBL Bank: Board meeting today to consider issue of raising funds through a preferential issue.
• Aarti Drugs: Board meeting today to consider issue of bonus shares.
• Man Industries: Board meeting on August 22 to consider raising funds through issue of equity shares via preferential issue or QIP.
• NTPC: Said that it would be able to reduce the transportation cost of coal to fuel to its NTPC Kudgi Super thermal power station in Karnataka, to around Rs 200-500 per metric tonnes thereby bringing down the cost of electricity generation, with a newly constructed bridge.
• DLF: Hines JV gets construction loan worth Rs 2,600 crore for its new project from HDFC.
• Zee Learn: Board accepted the resignation of Ajey Kumar as Managing Director from August 18.
• Solara Active Pharma Sciences: Appointed Subhas Anand as the new CFO. Subhas Anand was the ex-CFO and President at PI Industries.
• Chalet Hotels: Rajeev Newar has resigned from the post of CFO, effective August 19.
• Ruchi Soya Industries: Acharya Balkrishna resigned as the company’s Managing Director.
• Cosmo Films: Board has given in-principle approval for company's foray into the pet care business. Pilot launch is expected early next year with an investment of Rs 15 crore over the next 18 months in NCR.
• Yes Bank: Sold its entire stake of 6.34 crore shares (10.12% stake) in CG Power & Industrial Solutions, in various tranches.
• Non-Nifty Earnings Today: Healthcare Global, Indian Overseas Bank, J Kumar Infra, MOIL, Sheela Foam

Earnings Reported After Market Hours

Cosmo Films Q1FY21

• Revenue down 11% to Rs 481.3 crore
• Net profit up 69.1% to Rs 47 crore
• Ebitda up 52.3% to Rs 87.1 crore
• Ebitda margin at 18.1% from 10.6%
• Lower raw material costs aid margins
• All numbers are consolidated and compared on a year-on-year basis

Ruchi Soya Q1FY21

• Revenue down 2.2% to Rs 3,043.1 crore
• Net profit down 12.1% to Rs 12.3 crore
• Ebitda up 3.3 times to Rs 123.5 crore
• EBitda margin at 4.1% from 1.2%
• Lower other expenses aid margins
• All numbers are standalone and compared on a year-on-year basis

Brokerage Radar

CLSA On Indian I.T.

• Re-rating expected to drive incremental returns
• PE expansion to drive the next rally in I.T. stocks
• Accelerated digital/cloud adoption, demonstrated earnings defence, attractive free cash flow yields can drive a re-rating
• Earnings upgrade cycle can moderate due to elevated expectations post Q1 results beat
• Infosys, HCL Tech remain preferred picks
• Find TCS attractive after recent underperformance

Stock Recommendations:

• HCL Tech: Buy rating maintained; price target raised to Rs 850 from Rs 740
• Infosys: Buy rating maintained; price target raised to Rs 1,150 from Rs 1,000
• TCS: Outperform rating maintained; price target raised to Rs 2,550 from Rs 2,260
• Tech Mahindra: Outperform rating maintained; price target raised to Rs 780 from Rs 700
• Wipro: Underperform rating maintained; price target raised to Rs 280 from Rs 215

Jefferies On Tata Power

• Underperform rating maintained
• Price target of Rs 40
• Management outlines plan for 15% revenue & 25% profit CAGR between FY20-25E
• Concern remains that a competitive landscape, capex and subdued coal prices will keep RoE below 10% in the medium-term
• Subdued RoE to cap valuation upside
• Upside case scenario price target: Rs 60
• Upside Risks: Tariff hike at Mundra to contain under recoveries, fund-raising in fast growing renewables portfolio, faster commissioning of under construction projects
• Downside scenario price target: Rs 27
• Downside risks: Coal mining costs rise further, no tariff hike at Mundra

Motilal Oswal On IndiaMART InterMESH

• Initiate coverage with buy rating
• Price target of Rs 3,550
• Leader in B2B classifieds space with positive operating leverage
• Strong moats shield from disruption
• High free cash flow yield and strong balance sheet
• Forecast 9% CAGR in paid suppliers along with 2% ARPU CAGR, implying a 10% revenue CAGR over FY20-23
• Expect 8% margin expansion over FY20-23 on better management of cost structure
• See Ebit, PAT CAGR of 22% and 26% respectively over FY20-23
• Risk Factors: High mortality in supplier base and potential entry of a cash rich global player

CLSA On Vedanta

• Outperform rating maintained
• Price target raised to Rs 133 from Rs 105
• Delisting process on track
• Can offer a price of Rs 128 per share, though the price discovered by a reverse book building and the final delisting price can be different
• Assign a lower multiple to Hindustan Zinc to factor-in partial control and a holding company discount
• Raise FY21-23CL consolidated Ebitda forecast by 9%-21% as we raise our commodity price estimates.

Motilal Oswal On KNR Constructions

• Buy rating maintained
• Price target of Rs 295
• Raise FY21/22E EPS estimates by 28% / 7% after strong performance in Q1
• Forecast revenue / Ebitda / PAT growth of 18% / 12% / 22%
• Strong balance sheet gives it an advantage over peers despite increase in receivables
• Strong order book provides higher revenue visibility
• Receivables from Telangana government need to be monitored

Antique Stock Broking On Muthoot Finance

• Buy rating maintained
• Price target of Rs 1,410
• Growth sees temporary blip due to Covid-19
• Performance of subsidiaries remains muted
• Still provides room for some upside on improved micro and macro business dynamics
• Near-term risks include sudden dip in gold prices, inability of branches to handle customers in the wake of Covid-19
• Long-term risks constitute the recent discriminatory stance taken by the RBI can impact growth and margins

Pledged Share Details

• India Grid Trust: Sponsor Sterlite Power Grid Ventures released pledge of 8.55 crore units on August 14.
• Future Consumer: Promoter Future Capital Investment invoked pledge of 5.04 crore shares between August 17-18.
• JSW Steel: Promoters released pledge of 3.25 crore shares between August 13-14.
• Adani Green Energy: Promoter SB Adani Family Trust created pledge of 41.7 lakh shares on August 18.

(As Reported On August 19)

Who’s Meeting Whom

• MCX: To meet Creador Advisors on August 21.
• BSE: To meet General Atlantic on August 20.

Bulk Deals

• Som Distilleries and Breweries: Vermilion Peak Master Fund sold 6.46 lakh shares (1.99%) at Rs 48.87 per share and Karst Peak Asia Master Fund sold 12.75 lakh shares (3.92%) at Rs 48.88 per share.
• Satin Creditcare Network: Promoter Trishashna Holdings acquired 2.99 lakh rights shares at Rs 19.42 per rights share.

Trading Tweaks

• AGM Date: Tata Steel, Apollo Tyres, Unichem Labs, Tata Communications, Tata Metaliks, Akzo Nobel, Avanti Feeds, IEX, JK Lakshmi Cement, RPG Lifesciences.
• Fund Raising: RBL Bank.
• Bonus: Aarti Drugs.
• Ex-Date For Share Buyback: FDC.
• Price Band Revised From 10% To 5%: Cimmco, Excel Realty & Infra.
• Price Band Revised From 20% To 10%: Hitech Corporation, Man Infraconstruction, Shriram City Union Finance.
• Move Into ASM Framework: Shalimar Paints, CL Educate, Aksh Optifibre.
• Move Into Short Term ASM Framework: Entertainment Network, Aries Agro, Trigyn Technologies,
• Move Out Of Short Term ASM Framework: Polyplex Corporation, Surya Roshni, Datamatics Global Services, KPIT Technologies, Indiabulls Ventures.

Insider Trades

• Meghmani Organics: Promoters acquired 4.12 lakh shares between August 13-14.
• JSW Steel: Promoter JTPM Metal Traders acquired 28 lakh shares between August 13-14.
• Jamna Auto: Promoter Jaideep Jauhar acquired 75,000 shares on August 18.
• KEC International: Promoter Summit Securities acquired 95,000 shares between August 14-17.
• Mindtree: Promoters sold 96,526 shares between August 14-17.

(As Reported On August 19)

Money Market Update

• The rupee ended with marginal losses, ending at 74.82 against the U.S. Dollar as compared to Tuesday's close of 74.76.
• The currency was the second worst performer in Asia on Wednesday.

F&O Cues

• Nifty August futures closed at 11,428; premium remains flat at 20 points
• Nifty August futures shed 6% and 6.5 lakh shares in Open Interest
• Nifty Bank August futures closed at 22,313; premium of 27 points from 29 points
• Nifty Bank August futures shed 6% and 79,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.6
• Enter F&O Ban: Canara Bank, Century Textiles
• Out of F&O Ban: Zee Entertainment
• Stocks In F&O Ban: Adani Enterprises, Aurobindo, Bank of Baroda, BHEL, Canara Bank, Century Textiles, Indiabulls Housing, JSPL, Manappuram Finance, SAIL, Sun TV, Vedanta, Vodafone Idea.

Nifty Weekly Expiry: August 20

• Maximum Open Interest on Call side at 11,500 strike (35.7 lakh shares)
• Maximum Open Interest on Put side at 11,400 strike (28.1 lakh shares)
• Active Options: 11,400 Put (15.2 lakh shares) and 11,500 Call (7.8 lakh shares)

Nifty Monthly Expiry: August 27

• Maximum Open Interest on Call side at 11,500 strike (23.9 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (36 lakh shares)