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All You Need To Know Going Into Trade On August 24

Stocks in the news, big brokerage calls of the day, complete trade setup and much more!  

A woman carries a sack of grain received from a state-run distribution store in a village in Tikamgarh district, Madhya Pradesh, India. (Photographer: Dhiraj Singh/Bloomberg)
A woman carries a sack of grain received from a state-run distribution store in a village in Tikamgarh district, Madhya Pradesh, India. (Photographer: Dhiraj Singh/Bloomberg)

Asian markets have begun the new trading week on a muted note, amid diverging global virus trends and as investors await a policy speech by Fed Chair Jerome Powell.

Bonds in New Zealand have risen after the central bank fell short of its quantitative easing buying target.

Treasuries and oil prices were flat while gold has started the new week with declines.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,385 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 look at the factors that may influence equities in today’s session:

  • Markets in Japan and Australia are little changed while those in South Korea are fluctuating as the country considers further curbs to halt a flare-up in Covid-19 cases.
  • Futures on the Dow Jones are trading 50 points higher. The index ended 0.7% higher on Friday, to erase its weekly losses.
  • The Federal Reserve's annual economic policy symposium, held typically at Jackson Hole will begin on August 27 via livestream.
  • Covid-19 cases globally crossed 23 million cases. While infections in the U.S. showed signs of stabilising, concerns were rising in Europe and parts of Asia.
  • Yield on the 10-year treasuries remained flat at 0.63%.
  • West Texas Intermediate crude was also flat at $42.34 per barrel while Gold fell 0.3% to $1,934.93/Oz.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On August 24

Stocks To Watch

  • Indiabulls Housing Finance: The company in a press release has stated that the phase of reduction in loan book and AUM is over. It plans to grow its AUM in FY21 by 12%,. It has executed an agreement for co-origination with a mid-sized private sector bank for MSME loans. Active sources of loans shall begin from September 1. It also aims to grow its balance sheet by 7-8% in FY21.
  • Mindspace Business Parks REIT: Public unit holder BREP Asia SG Pear Holding created an encumbrance of 5.43 crore units amounting to a 9.16% stake in favour of certain overseas financial institutions availed for a credit facility availed by the trust.
  • Tata Power: NCLT Mumbai approves withdrawal of scheme of transfer of certain renewable energy undertakings from the company to its arms Tata Power Renewable Energy, Supa Windfarm, Nivade Windfarm and Tata Power Green Energy on a slump sale basis.
  • ICICI Lombard: Will acquire Bharti AXA General Insurance's non-life insurance operations in a share swap deal for an undisclosed sum. Shareholders of Bharti AXA will receive two shares of ICICI Lombard for every 115 shares held, as per the share swap ratio.
  • A2Z Infra Engineering: Gets work order worth Rs 104 crore for fibre installation from Airtel's group company.
  • Sun Pharma: Gets U.S. FDA approval for Methylphenitdate Hydrochloride.
  • Phoenix Mills: Closes its QIP issue on August 21. The issue price of Rs 605 per share is a 1.03% discount to the floor price and a 13% discount to Friday's closing price
  • Dixon Technologies: The Board of Directors have approved raising of funds by way of issuance of any instrument or security, including equity shares, fully / partly convertible debentures, NCDs, Foreign Currency Convertible Bonds, warrants or any other combination thereof, in one or more tranches for an amount not exceeding Rs 200 crore, subject to necessary approvals.
  • Reliance Industries: Concludess amalgamation and merger amongst its wholly-owned subsidiaries. Reliance Holdings U.S.A has merged with and into Reliance Energy Generation and Distribution. Merged entity - Reliance Energy Generation and Distribution has further merged into Reliance Industries.
  • Granules India: Wholly-owned subsidiary gets U.S. FDA approval for its Abbreviated New Drug Application (ANDA) for Ramelteon Tablets. The drug is used in the treatment of insomnia. The drug had U.S. sales of approximately $33 million for the most recent twelve months ending in June 2020, as per IQVIA.
  • IIFL Finance: To consider and approve allotment of non-convertible debentures on a private placement basis on August 26.
  • Future Enterprises: Brickwork Ratings and Infomerics Valuations revises credit rating on non-convertible bonds and commercial paper to BWR C and IVR A4 respectively on account of weakening of business and financial risk profile on account of an extended lockdown due to Covid-19.
  • Somany Ceramics: The company's manufacturing facility located at Bahadurgarh in Haryana faced a production outage of two days due to water logging as a result of a cloudburst. There is nominal damage to finished goods material and insignificant damanges to plant and machinery.
  • Coffee Day Enterprises: Board appoints former Karnataka High Court judge Justice KL Manjunath to suggest and oversee actions for recovery of dues.
  • Government imposed anti-dumping duty of $137 per metric ton on phosphoric acid from Korea for five years. Punjab Chemicals and Crops Protection, Gujarat Alkalies & Chemicals, Tata Chemicals in focus.
  • Non-Nifty Earnings Today: Ingersoll Rand, Globus Spirits, IRB Infra, LIC Housing, Nocil, Suzlon

Earnings Reported After Market Hours

Union Bank of India Q1FY21

  • Net Interest Income up 2.5 times to Rs 6,524.4 crore
  • Net loss widens to Rs 2,897.8 crore from Rs 2,713 crore
  • Gross NPA at 14.95% from 14.15% last quarter
  • Net NPA at 4.97% from 5.49% last quarter
  • Total provisions at Rs 3,590 crore from Rs 1,531.1 crore
  • Merged with Andhra and Corporation Bank on April 1
  • Covid-19 provisions worth Rs 343.2 crore this quarter, overall provisions at Rs 683 crore
  • All numbers are consolidated and compared on a year-on-year basis

Indiabulls Housing Finance Q1FY21

  • Net Interest Income down 52.2% to Rs 727.6 crore
  • Net profit down 66% to Rs 272.8 crore
  • Gross NPA at 2.2% from 1.8% last quarter
  • Net NPA at 1.63% from 1.4% last quarter
  • Total loan assets down 18% to Rs 92,770 crore
  • All numbers are consolidated and compared on a year-on-year basis

Rossari Biotech Q1FY21

  • Revenue down 14.3% to Rs 109.5 crore
  • Net profit up 9.2% to Rs 15.5 crore
  • Ebitda up 5.8% to Rs 23.7 crore
  • Ebitda margin at 21.6% from 17.5%
  • All numbers are consolidated and compared on a year-on-year basis

Coffee Day Enterprises Q3FY20

  • Revenue down 35.1% to Rs 567.8 crore
  • Net loss of Rs 140.6 crore from net profit of Rs 63.5 crore
  • Ebitda down 96.3% to Rs 4 crore
  • Ebitda margin at 0.7% from 12.4%
  • All numbers are consolidated and compared on a year-on-year basis

Godfrey Phillips Q1FY21

  • Revenue down 49% to Rs 412.1 crore
  • Net profit down 54% to Rs 55.1 crore
  • Ebitda down 69% to Rs 63.3 crore
  • Ebitda margin at 15.4% from 21.1%
  • Cigarettes, Tobacco and related products revenue down 48% to Rs 390.1 crore
  • Retail and Related Products revenue down 25% to Rs 67.5
  • Advertising and Promotion expenses down 79% to Rs 8.6 crore
  • All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Morgan Stanley On Indian Steel

  • Key investor concern is around the sustainability of recent price hikes
  • Expect price hikes to be sticky
  • See potential for profitability to hit previous peaks over coming quarters
  • Expect a fine balance between demand and supply through FY21
  • Believe Q1 formed the bottom of the cycle for profitability
  • Expect a sharp rebound in profitability in Q2
  • Expect profitability to go back to the previous cycle peak by March 2021, implying significant headway for margins
  • Risk-reward remains favourable at current levels
  • Raise FY21 Ebitda forecasts by 13-62% and FY22 Ebitda forecasts by 8-21%

Stock Picks:

  • Tata Steel: Overweight rating maintained; Price target raised to Rs 565 from Rs 435
  • JSPL: Overweight rating maintained; Price target raised to Rs 280 from Rs 215
  • JSW Steel: Equalweight rating maintained; Price target raised to Rs 320 from Rs 232
  • SAIL: Underweight rating maintained; Price target raised to Rs 43 from Rs 30

Investec On Cipla

  • Buy rating maintained
  • Price target raised to Rs 885 from Rs 625
  • Near-term outlook remains steady
  • Building stable cash-flows for the long-term
  • Can witness more competition for its key respiratory products
  • Success for respiratory portfolio in the U.S. supports the near-term
  • Raise FY21E / FY22E estimates by 6% / 13% to reflect better Q1 earnings

Investec On Lupin

  • Sell rating maintained
  • Price target raised to Rs 815 from Rs 665
  • Adjusted EPS lowest in the last decade largely due to metformin recalls in the U.S. and weakness across all businesses barring the API
  • Execution across key items remains the key
  • Cost containment plans, resolution of U.S. FDA isues across five facilities crucial
  • Tweak FY21E / FY22E estimates based on management commentary and outlook for key products

Axis Capital On Oil India

  • Downgrade to add from buy
  • Price target cut to Rs 110 from Rs 120
  • Expect crude prices to rise gradually going ahead
  • FY20-22E total production seen rising at 2% CAGR
  • Assume lower APM gas pricing for H2FY21
  • At 0.4x book value, stock is undervalued
  • Downgrade on delay in production ramp-up

Antique Stock Broking On Indian FMCG

  • Majority companies witnessed improvement in offtake in July
  • Modern Trade, Out of Home channel remain impacted
  • Britannia, Dabur, Emami saw strong offtake while Bajaj Consumer distributors witnessed weakest offtake.
  • Biscuits, followed by health and hygiene products driving sales
  • Upgrade HUL to buy from hold; price target of Rs 2,431
  • Downgrade Asian Paints to hold from buy; price target of Rs 1,874
  • Maintain buy on Emami; price target raised to Rs 392 from Rs 287

Bulk Deals

  • BASF India: Plutus Wealth Management acquired 3.15 lakh shares (0.73%) at Rs 1,584.46 per share.
  • Orient Bell: Equity Intelligence India acquired 80,000 shares (0.56%) at Rs 91.87 per share.
  • Ceat: Jwalamukhi Investment Holdings sold 8.38 lakh shares (2.07%) at Rs 871.24 per share.
  • CG Power & Industrial Solutions: KKR Group sold 1.81 crore shares (2.89%) at Rs 16.95 per share.
  • Sudarshan Chemical Industries: ICICI Prudential Mutual Fund acquired 9.5 lakh shares (1.37%) at Rs 430.05 per share and Rohit Rathi sold 10 lakh shares (1.44%) at Rs 430.16 per share.
  • Future Consumer: Clix Capital Services sold 1.64 crore shares (0.85%) at Rs 10.74 per share.
  • VA Tech Wabag: Environment Agency Active Pension Fund sold 4.03 lakh shares (0.74%) at Rs 207.59 per share.

Pledged Share Details

  • Adani Transmission: Promoter SB Adani Family Trust released pledge of 1.26 crore shares between August 17-18.
  • Adani Enterprises: Promoter SB Adani Family Trust released pledge of 2.48 crore shares on August 19.
  • Zee Learn: Promoter Jayneer Infrapower & Multiventures invoked pledge of 2.1 crore shares on August 12.
  • JSW Steel: Promoters released pledge of 93.5 lakh shares between August 17-18.
  • Adani Green Energy: Promoter Adani Trading Services created pledge of 75 lakh shares on August 20.

As Reported On August 21.

Who’s Meeting Whom

  • Blue Star: To meet SBI Funds Management, Morgan Stanley and other investors between August 24-31.
  • Cipla: To meet Securities Investment Management and Principal Asset Management between August 24-25.
  • Sundram Fasteners: To meet Aditya Birla Capital on August 24.

Trading Tweaks

  • AGM Date: Dollar Industries, Somany Home Innovation, SH Kelkar, Avenue Supermarts, Escorts, Indian Overseas Bank, SML Isuzu.
  • Ex-Date For Share Split: Eicher Motors (From face value of Rs 10 to Rs 1 per share).
  • Record Date For Share Buyback: MPS.
  • Record Date For Demerger: Fairchem Speciality.
  • Price Band Revised From 10% To 5%: Monnet Ispat & Energy, CMI, Williamson Magor.
  • Price Band Revised From 20% To 10%: Butterfly Gandhimathi Appliances, VA Tech Wabag.
  • Move Into ASM Framework: Butterfly Gandhimathi Appliances, Rama Steel Tubes, GVK Power & Infrastructure, HT Media, Indo Rama Synthetics.
  • Move Out Of ASM Framework: 5Paisa Capital, Vikas EcoTech, Shreyas Shipping & Logistics, Vimta Labs, DHFL, Inspirisys Solutions, Nectar Lifesciences, Network18 Media & Investments, Jaiprakash Power Ventures, Zuari Global, Zuari Agro Chemicals.
  • Move Into Short Term ASM Framework: Kabra Extrusion Technik, Dilip Buildcon.
  • Move Out Of Short Term ASM Framework: IDFC, Monnet Ispat & Energy, Kopran, Shalby.

Insider Trades

  • JSW Steel: Promoter JTPM Metal Traders acquired 10.65 lakh shares between August 17-18.
  • Aarti Industries: Promoters sold 1.13 lakh shares between August 18-20.
  • Mindtree: Promoters sold 1.9 lakh shares from August 18-19.

As Reported On August 21.

Money Market Update

  • The rupee ended at 74.84 against the U.S. Dollar as compared to Thursday's close of 75.03.
  • The rupee ended little changed for the week, but with a positive bias.
  • However, for the week, the currency was the fourth worst performer in Asia with most of its peers outperforming.

F&O Cues

  • Nifty August futures closed at 11.383; premium of 11 points from discount of 18 points
  • Nifty August futures shed 1.8% and 1.76 lakh shares in Open Interest
  • Nifty Bank August futures closed at 22,307; premium of 7 points from discount of 84 points
  • Nifty Bank August futures shed 4% and 53,000 shares in Open Interest
  • Nifty Put-Call Ratio at 1.26
  • Enter F&O Ban: BHEL & PNB
  • Exit F&O Ban: Bank of Baroda, Century Textiles, JSPL, Manappuram Finance, Sun TV, Vedanta, Vodafone Idea

Nifty: August 27 Expiry

  • Maximum Open Interest on Call side at 11,500 strike (37 lakh shares)
  • Maximum Open Interest on Put side at 11,000 strike (36.6 lakh shares)
  • Active Options: 11,300 Put (9.9 lakh shares) and 11,300 Call (-7.2 lakh shares)

F&O Buzzers & Fund Flows