Electronic ticker boards indicate the latest stock figures inside the atrium at the National Stock Exchange (NSE) in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On Budget Day

Asian equities kicked off February by recovering from a three day end-of-January selloff amid renewed optimism in economic growth and the expansion of corporate earnings.

Finance Minister, Arun Jaitley will present the Union Budget for the financial year 2018-19 today in parliament, amid concern the government may deepen the country’s budget deficit. (For BloombergQuint’s live coverage of the budget click right here)

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.2 percent to 11,086 as of 7:15 a.m.

Short on time? Well, then listen to this podcast for a quick summary of the article!

DayBreak

Here’s a quick look at all that could influence equities on Thursday.

Global Cues

  • Treasury yields touched almost four-year highs and U.S. stocks managed to hold onto late gains after Federal Reserve officials set the stage for an rate increase in March by adding emphasis to their plan for more hikes while leaving borrowing costs unchanged.
  • After being whipsawed by the Fed announcement, the S&P 500 Index closed higher for the first time in three days, rounding out the best start to the year for the U.S. benchmark since 1997.
  • The yield on the 10-year U.S. note rose to as much as 2.75 percent, the highest since April 2014. It has climbed higher earlier the Treasury raised the amount of long-term bonds it will sell this quarter with the budget deficit worsening.
  • The dollar briefly rallied before retracing losses.

Europe Check

  • European equities continued to experience the pullback seen since the start of the week, with the Stoxx Europe 600 Index declining for a third day.
All You Need To Know Going Into Trade On Budget Day

Asian Cues

  • Japan’s Topix index added 0.9 percent.
  • Australia’s S&P/ASX 200 Index rose 0.7 percent.
  • South Korea’s Kospi index added 0.3 percent.
  • Futures on Hong Kong’s Hang Seng Index slipped 0.3 percent.
  • Futures on the S&P 500 Index added 0.2 percent.

Here are some of the other key events scheduled for this week:

  • U.S. employers probably added more jobs in January than a month earlier, economists forecast before the Friday report.
  • Technology earnings continue with Alibaba Group Holding Ltd., Apple Inc., Alphabet Inc. and Amazon.com Inc.
  • India’s budget is due along with CPI readings in South Korea, Indonesia and Thailand.

Commodity Cues

  • West Texas Intermediate crude gained 0.3 percent to $64.89 a barrel.
  • Brent snapped two-day losing streak; ends higher at $68.9 per barrel up 0.5 percent.
  • Spot Gold trades higher for second day at $1,345.9 an ounce; up 0.06 percent.
  • Sugar snapped four-day winning streak; ended 3.5 percent lower at 13.23 cents per pound.

Shanghai Exchange

  • Steel snaps four-day losing streak; up 0.8 percent.
  • Aluminium trades lower for fifth day; down 0.8 percent.
  • Zinc trades higher; up 0.4 percent.
  • Copper trades lower for fourth day; down 0.3 percent.
  • Rubber snaps four-day losing streak; up 0.2 percent.

Indian ADRs

All You Need To Know Going Into Trade On Budget Day

Nifty Earnings To Watch

  • Bajaj Finance
  • Power Grid Corporation of India

Other Earnings To Watch

  • Akzo Nobel India
  • Ashok Leyland
  • Bajaj Finserv
  • Ceat
  • Cera Sanitaryware
  • Cummins India
  • Essel Propack
  • Khadim India
  • Matrimony.com
  • MRF
  • Titan
  • Zee Media

Earnings Reaction To Watch

All You Need To Know Going Into Trade On Budget Day

L&T Q3 (YoY)

  • Revenue up 10 percent at Rs 28,747 crore.
  • Net profit up 53 percent at Rs 1490 crore.
  • EBITDA up 25 percent at Rs 3143 crore.
  • Margin at 10.9 percent versus 9.6 percent.

Coromandel International Q3 (YoY)

  • Revenue up 21 percent at Rs 2,695 crore.
  • Net profit up 54 percent at Rs 172 crore.
  • EBITDA up 34 percent at Rs 318.5 crore.
  • Margin at 11.8 percent versus 10.6 percent.

Reliance Infra Q3 (YoY)

  • Revenue up 2 percent at Rs 5861 crore.
  • Net profit down 20 percent at Rs 301 crore.
  • EBITDA up 70 percent at Rs 1,365.5 crore.
  • Margin at 23.3 percent versus 14 percent.

HEG Q3 (YoY)

  • Revenue up 248 percent at Rs 843 crore.
  • Net profit of Rs 342 crore versus net loss of Rs 3.5 crore.
  • EBITDA up at Rs 558 crore versus Rs 29 crore.
  • Margin at 66.2 percent versus 12 percent.

J&K Bank Q3 (YoY)

  • Net Interest Income up 34 percent at Rs 780 crore.
  • Net profit of Rs 72.5 crore versus net loss of Rs 498.5 crore.
  • Provisions up 3 percent at Rs 250 crore (QoQ).
  • GNPA at 10.08 percent versus 10.87 percent (QoQ).
  • Net NPA at 4.29 percent versus 4.76 percent (QoQ).

HCC Q3 (YoY)

  • Revenue up 30 percent at Rs 1,231 crore.
  • Net profit up at Rs 31.3 crore.
  • EBITDA up 1.2 percent at Rs 164 crore.
  • Margin at 13.3 percent versus 17.2 percent.

Hindustan Copper Q3 (YoY)

  • Revenue up 85 percent at Rs 440 crore.
  • Net profit up 12 percent at Rs 18.9 crore.
  • EBITDA up 12 percent at Rs 70.5 crore.
  • Margin at 16 percent versus 26.5 percent.

Astec Lifesciences Q3 (YoY)

  • Revenue up 22.5 percent at Rs 74 crore.
  • Net profit at Rs 7.2 crore versus Rs 0.7 crore.
  • Exceptional gain of Rs 4 crore versus exceptional loss of Rs 3 crore.
  • EBITDA up 24 percent at Rs 13.6 crore.
  • Margin at 18.4 percent versus 18.2 percent.

Vimta Labs Q3 (YoY)

  • Revenue up 25 percent at Rs 47.5 crore.
  • Net profit up at Rs 6 crore.
  • EBITDA up at Rs 13.5 crore.
  • Margin at 28.4 percent versus 18.4 percent.

IIFL Holdings Q3 (YoY)

  • Revenue up 30 percent at Rs 1,612 crore.
  • Net profit up 32 percent at Rs 236 crore.
  • EBITDA up 30 percent at Rs 1,086 crore.
  • Margin flat at 67.4 percent.

Vedanta Q3 (YoY)

  • Revenue up 25.5 percent at Rs 24,361 crore.
  • Net profit down 4 percent at Rs 2,053 crore.
  • EBITDA up 15 percent at Rs 6,763 crore.
  • Margin at 27.8 percent versus 30.2 percent.

VRL Logistics Q3 (YoY)

  • Revenue up 8 percent at Rs 489 crore.
  • Net profit up 14 percent at Rs 25 crore.
  • EBITDA up 3 percent at Rs 61.5 crore.
  • Margin at 12.6 percent versus 13.2 percent.

IDBI Bank Q3 (YoY)

  • Net Interest Income up 105 percent at Rs 1,665 crore.
  • Net loss of Rs 1,524 crore versus net loss of Rs 2,255 crore.
  • Provisions up 27.5 percent at Rs 3,650 crore (QoQ).
  • GNPA at 24.72 percent versus 24.98 percent (QoQ).
  • Net NPA at 16.02 percent versus 16.06 percent (QoQ).

JK Lakshmi Cement Q3 (YoY)

  • Revenue up 25 percent at Rs 837 crore.
  • Net profit up 13 percent at Rs 8.6 crore.
  • EBITDA up 13 percent at Rs 94 crore.
  • Margin at 11.2 percent versus 12.4 percent.

Shoppers Stop Q3 (YoY)

  • Revenue down 5 percent at Rs 963 crore.
  • Net profit down 16 percent at Rs 16 crore.
  • EBITDA up 16 percent at Rs 79 crore.
  • Margin at 8.2 percent versus 6.7 percent.

ICICI Bank Q3 (YoY)

  • Net Interest Income up 6 percent at Rs 5,705 crore.
  • Net profit down 32 percent at Rs 1,650 crore.
  • Provisions down 21 percent at Rs 3,570 crore.
  • GNPA at 7.82 percent versus 7.87 percent.
  • Net NPA at 4.20 percent versus 4.43 percent.

NTPC Q3 (YoY)

  • Revenue up 7.1 percent at Rs 20,774.4 crore.
  • Net profit down 4.4 percent at Rs 2,360.8 crore.
  • EBITDA up 0.5 percent at Rs 5,277 crore.
  • Margin at 25.4 percent versus 27.1 percent.

Dhampur Sugar Q3 (YoY)

  • Revenue up 16 percent at Rs 778 crore.
  • Net profit up 23 percent at Rs 64 crore.
  • EBITDA down 13 percent at Rs 115.5 crore.
  • Margin at 14.8 percent versus 19.9 percent.

GE Power Q3 (YoY)

  • Revenue down 54.5 percent at Rs 365 crore.
  • Net loss of Rs 42 crore versus net profit of Rs 12 crore.
  • EBITDA down 84.5 percent at Rs 27 crore.
  • Margin at 7.4 percent versus 21.7 percent.

Equitas Q3 (YoY)

  • Net Interest Income down 1.1 percent at Rs 268 crore.
  • Net loss of Rs 30 crore versus net profit of Rs 45 crore.

Narayana Hrudayalaya Q3 (YoY)

  • Revenue up 22 percent at Rs 554 crore.
  • Net profit down 18 percent at Rs 14 crore.
  • EBITDA flat at Rs 52 crore.
  • Margin at 9.4 percent versus 11.4 percent.

International Paper APPM Q3 (YoY)

  • Revenue up 3 percent at Rs 328 crore.
  • Net profit down 4.5 percent at Rs 21 crore.
  • EBITDA down 2 percent at Rs 55.5 crore.
  • Margin at 16.9 percent versus 17.7 percent.

IFB Agro Q3 (YoY)

  • Revenue down 4.5 percent at Rs 189 crore.
  • Net profit down 42 percent at Rs 5.3 crore.
  • EBITDA down 8 percent at Rs 12 crore.
  • Margin at 6.3 percent versus 6.6 percent.

Munjal Showa Q3 (YoY)

  • Revenue up 7 percent at Rs 352 crore.
  • Net profit down 23 percent at Rs 11.2 crore.
  • EBITDA down 1.5 percent at Rs 19.1 crore.
  • Margin at 5.4 percent versus 5.9 percent.

National Fertilizers Q3 (YoY)

  • Revenue up 13 percent at Rs 2,841 crore.
  • Net profit down 28 percent at Rs 52.5 crore.
  • EBITDA down 32.5 percent at Rs 113 crore.
  • Margin at 4 percent versus 6.7 percent.

Stocks To Watch

  • Amtek Auto says NCLT granted extension of 90 days for insolvency proceedings.
  • Jindal Stainless to raise Rs 1,200 crore via issue of securities.
  • Wipro completed acquisition of minority stake in Harte Hanks.
  • Phillips Carbon Board approves 5:1 stock split. To raise Rs 500 crore via equity and debt.
  • TV18 increases stake in Viacom18 to 51 percent for a cash consideration of $20 million
  • Hindustan copper to raise Rs 1,400 crore via QIP.
  • Time Technoplast to set up a new production facility in Sharjah, UAE.
  • NOCIL to expand its rubber chemicals production unit in Navi Mumbai, Dahej for Rs 87 crore.
  • Indiabulls Ventures to raise Rs 2,000 crore via. rights issue. To issue 8.33 crore equity shares at Rs 240 per share.
  • SBI to divest 22 lakh shares (4.4 percent) stake in Clearing Corporation of India.
  • Fortis Healthcare says no impact on company from Delhi High Court order on Daiichi plea.
  • Sunteck Realty steps into affordable segment with a potential development of 100 acres Mumbai.
  • Lakshmi Vilas Bank sets 1-year MCLR at 9.2 percent from Feb. 1.
  • HCL Infosystems approved sale of CARE business division to HCL Computing Products on a slump sale basis for Rs 30 crore.
  • IIFL to demerge and list as three separate business – wealth, capital markets and NBFC.
  • Arcelor Mittal, Posco likely to bid more aggressively for Bhushan Steel (Financial Express).

Bulk Deals

  • Apollo Micro Systems: BOI AXA Mid Cap Equity & Debt Fund bought 1.51 lakh shares at Rs 331.06 each.
  • Punjab Alkalies & Chemicals: IDBI Bank sold 2.23 lakh shares or 0.8 percent equity at Rs 22.25 each.

Ester Industries

  • KIFS Enterprises bought 5 lakh shares or 0.6 percent equity at Rs 73.35 each.
  • Garnet International sold 10.81 lakh shares or 1.3 percent equity at an average of Rs 73.6 each.

Quess Corp

  • Sundaram Mutual Fund - Sundaram Select Mid Cap bought 15.35 lakh shares or 1.1 percent equity at Rs 950 each.
  • Ramdas Pai sold 18.63 lakh shares or 1.3 percent equity at Rs 950.05 each.
  • Vasanthi Pai sold 31.58 lakh shares or 2.2 percent equity at Rs 950.44 each.

Havells

  • SBI MF bought 45.20 lakh shares or 0.7 percent equity at Rs 517 each.
  • Promoter Surjit Kumar Gupta sold 40 lakh shares or 0.6 percent equity at Rs 517.58 each.
  • Promoter Vinod Gupta sold 85 lakh shares or 1.4 percent equity at Rs 518.07 each.

Corporate Action

  • Nandan Denim NRI investment limit increased to 24 percent from 10 percent.
  • Ester Industries and Paisalo Digital circuit filter revised to 5 percent.

Who’s Meeting Whom?

  • TVS Motors to meet Capital World and Blackrock on Feb. 5-6.
  • Crompton Greaves Consumer to meet Goldman Sachs on Feb. 1 and Birla Sun Life on Feb. 15.
  • Pidilite to meet ICICI Securities and Edelweiss from Feb. 5-7.
  • PSP Projects to meet Motilal Oswal on Feb. 12-13.

Insider Trades

  • Raymond promoter JK Investors (Bombay) acquired 54,212 shares from Jan. 29-30.
  • Gujarat Apollo industries promoter Dhruv Patel sold 20,000 shares on Jan. 30.
  • NRB Bearings promoter Trilochan Santsingh Sahney sold 4.12 lakh shares from Jan. 11-19.
  • KCP sugar promoter Durgamba Investments acquire 8,500 shares on Jan. 29.
  • Vishal fabrics promoter Vedprakash Chiripal acquired 1.05 lakh shares on Jan. 30 ; Promoter Deepak Ciripal sold 40,000 shares on Jan. 29.

Rupee

  • Rupee closed at 63.59/$ on Wednesday from 63.61/$ On Tuesday.

Top Gainers And Losers

All You Need To Know Going Into Trade On Budget Day

Index Trends

All You Need To Know Going Into Trade On Budget Day

F&O Cues

  • Nifty February futures trade at 11,055, premium of 27.7 points from 23 points.
  • February series: Nifty open interest down 4 percent, Bank Nifty open interest down 4 percent.
  • India VIX ended at 15.9, down 2.9 percent.
  • Max open interest for February series at 11,500 call strike (open interest at 41 lakh, up 38 percent).
  • Max open interest for February series at 10,500 Put (open interest at 58.2 lakh, up 8 percent).

F&O Ban

  • In ban: JP Associates, Wockhardt, Fortis Healthcare, Jain Irrigation.
  • New in ban: Fortis Healthcare, Jain Irrigation.

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.

Put-Call Ratio

  • Nifty PCR at 1.29 from 1.37.
  • Nifty Bank PCR at 0.95 from 1.01.

Stocks Seeing High Open Interest Change

All You Need To Know Going Into Trade On Budget Day

Fund Flows

All You Need To Know Going Into Trade On Budget Day

Brokerage Radar

Credit Suisse on L&T

  • Maintained ‘Outperform’; raised price target to Rs 1,700 from Rs 1,425.
  • December quarter results were very strong result; Domestic firing can be an inflexion point.
  • Strong order inflows, driven by domestic market.
  • Domestic execution picks up.
  • Better cyclical scenario can compound upside.

CLSA on L&T

  • Maintained ‘Buy’; raised price target to Rs 1,680 from Rs 1,565
  • All round beat in December quarter.
  • Across the board surprise; Orders and execution bounce, along with infra.
  • L&T hit a historical order inflow high in December quarter.
  • Hydro-carbon: emerging star business of L&T
  • Turn in power IPP & conservative accounting, also drive beat.
  • Working capital rise on GST & lower advances; To normalize.
  • L&T is a good proxy for domestic CAPEX.

Credit Suisse on Vedanta

  • Maintained ‘Outperform’; raised price target to Rs 395 from Rs 345.
  • December quarter was largely in line.
  • Aluminium business faces cost inflation; To normalise in next fiscal.
  • Cairn production to ramp-up in current quarter.
  • Incorporate higher crude forecasts in next fiscal and increase in volumes.
  • Ex-Hindustan Zinc stub to drive upside in the stock.
  • Expect strong global growth and LME prices.

CLSA on Vedanta

  • Maintained ‘Buy’ with price target of Rs 422.
  • December quarter was Ebitda in-line with estimates but net profit misses.
  • Benefitting from rising commodity prices but costs under pressure.
  • Expect operating income and earnings per share to compound at a rate of 21 percent and 37 percent respectively over the next two financial years.
  • Across board volume growth and higher commodity prices to drive profits.
  • Stock trading at reasonable valuations.

Credit Suisse on ICICI Bank

  • Maintained ‘Outperform’; raised price target to Rs 405 from Rs 347.
  • December quarter’s slippage from unknown stress moderates.
  • Operating performance remains tepid.
  • Strong capital position; Attractive valuation.
  • Expect NII growth to track asset growth.
  • ICICI Bank remains the best-capitalised corporate lender.
  • Expect gains from stake-sale of ICICI Sec to cushion profitability.

Morgan Stanley on ICICI Bank

  • Maintained ‘Overweight’ with price target of Rs 480.
  • Reported slight beat on core pre-provisioning operating profit.
  • Opex partially offset by lower revenues.
  • Lower than expected slippages, improved coverage.

JPMorgan on JSW Steel

  • Maintained ‘Overweight’ with price target of Rs 325.
  • Highest-ever sales, Ebitda and net profit as steel environment remains very strong.
  • Record quarter as steel spreads widen.
  • Plunge in Chinese steel exports benefitted in previous quarter.
  • Stressed asset acquisition would be very positive for the company.

Credit Suisse on JSW Steel

  • Maintained ‘Outperform’; raised price target to Rs 350 from Rs 300.
  • December quarter showed strong results, with improving prospects.
  • Better outlook in coming quarters.
  • JSW confirmed prices have gone up 5-6 percent in January.
  • JSW believes that iron ore availability in India is expected to improve.

JPMorgan on Dabur India

  • Maintained ‘Overweight’ with price target of Rs 365.
  • December quarter results were in-line.
  • Margins aided by revenue mix, lower promotions and benign raw material.
  • Enhanced focus on rural/innovation to rebuild topline.
  • Pricing growth could come through in April-June period.
  • Management cautioned about the disruptive impact of E-Way Bill.

Credit Suisse on Dabur India

  • Maintained ‘Neutral’; raised price tarrget to Rs 365 from Rs 350.
  • December quarter was steady recovery in domestic volumes; International pressures continue.
  • Volume growth recovers on a low base; two-Year volume to compound at 3.6 percent.
  • Toothpaste continues its strong momentum.
  • Juices facing competitive pressure; May have to give away margins.
  • Overall demand commentary muted; Company to focus on market share.
  • International business weak, but outlook is better.
  • Expect growth to moderate in current quarter.

Bofa ML on PVR

  • Maintained ‘Buy’ with price target of Rs 1,592.
  • December quarter’ revenue was inline; Ebitda beat due to GST benefits.
  • Expenses are down yoy due to input claims under GST.
  • Average Ticket Price and Food & Beverage spends per head rose 12 percent (YoY).
  • Padmaavat benefits pushed to current quarter.
  • Multiplex companies to continue to benefit from secular demand for movies in India.

Edelweiss on PVR

  • Maintained ‘Buy’ with price target of Rs 1,596.
  • December quarter’s revenue in line; Operating income exceeded estimate.
  • Footfalls stumble on lackluster content line up.
  • PVR eyeing 60-70 screen additions in next fiscal
  • Confident of clocking 18-20 percent YoY ad growth in current fiscal.
  • Screen expansion and movie line up will be key monitorables.
  • Expect PVR to be key beneficiary of anticipated uptick in urban consumption.

Goldman Sachs on Kajaria

  • Maintained ‘Buy’; cut price target to Rs 770 from Rs 825.
  • December quarter’s operating results below estimates led by lower ASPs.
  • Margin pressures likely to sustain in near term.
  • Volume growth to be supported by industry shift towards organised players.
  • Kajaria outperformed Somany.

Credit Suisse on Kajaria Ceramics

  • Maintained ‘Neutral’; cut price target to Rs 650 from Rs 675.
  • December quarter showed pick-up in growth but pressure on margins.
  • Near-term demand pick-up does not seem imminent.
  • Good medium-term story but lacks near-term triggers.
  • Earnings per share cut by 9-10 percent over the financial years through March 2020.

Deutsche Bank on NTPC

  • Maintained ‘Buy’ with price target of Rs 213.
  • Earnings miss on one-off costs and lack of coal.
  • Latter can be partially re-couped in current quarter
  • Like to give the company another quarter with benefit of doubt.
  • Expect 15 percent regulated equity and net profit compounding at 16 percent through the financial years till March 2020.

Credit Suisse on Arvind

  • Maintained ‘Outperform’ with price target of Rs 540.
  • Brand & Retail slows down but profitability improves further.
  • Textiles improved; Arvind revised slightly up its current fiscal growth outlook.
  • Anup Engineering has attractive financials.
  • Demerger should eventually unlock value.

Credit Suisse on Escorts

  • Maintained ‘Outperform’; raised price target to Rs 1,040 from Rs 900.
  • December quarter was another strong quarter; Stay bullish on strong earnings growth.
  • Escorts growing faster on market share gains in tractor.
  • Outlook on railways and construction business is very encouraging .
  • Escorts remains top mid-cap pick.
  • Expect further margins improvement.