All You Need To Know Going Into Trade On Feb. 18

U.S. futures and stocks in Asia fell after Apple Inc. said quarterly sales would miss forecasts, illustrating the blow to corporate earnings and economic growth from the deadly coronavirus.

Equities in Tokyo and Seoul opened lower, while there were more modest declines in Sydney. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.28 percent to 12,039.50 as of 6:58 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.

Here’s a quick look at all that could influence equities today

• European equities climbed on Monday following China’s pledges to support its economy in the face of the coronavirus outbreak. Wall Street was shut for a holiday.
• Oil held steady in Asia as China and others in Asia promised economic stimulus to offset the impact of the coronavirus, buoying the outlook for fuel demand.

Get your daily fix of global markets here.

Earnings Reaction To Watch

Huhtamaki PPL (Q4 CY, YoY)

• Revenue rose 9.8 percent to Rs 673.2 crore
• Net profit rose 3.8 times to Rs 68.2 crore
• Ebitda rose 1.7 percent to Rs 66.8 crore
• Margin stood at 9.9 percent versus 10.7 percent
• Margins impacted due to higher raw material costs
• Tax writeback of Rs 32 crore aided profit numbers

Stocks To Watch

• Reliance Industries: TV18 Broadcast, Hathway Cable & Datacom and Den Networks will be merged into Network18 Media & Investments, according to an exchange filing.
• Vodafone Idea: The company decided to pay to the Department of Telecom a portion of the dues calculated based on AGR aggregating to a sum of Rs 2,500 crores on Feb. 17 and a further Rs 1,000 crore before the end of the week.
• Tata Teleservices and Tata Teleservices (Maharashtra) Ltd. made a payment of Rs 2,197 crore to the Department of Telecom towards license fees and spectrum usage charges.
• JSW Energy has signed a share purchase agreement to acquire a 100 percent stake in GMR Kamalaganga Energy for an enterprise value of Rs 5,321 crore. The target company owns a 1,050-megawatt power plant in Odisha.
• DHFL: Lenders to the company have received expressions of interest from 24 bidders under the insolvency process, two people in the know told BloombergQuint on condition of anonymity. The deadline for submitting EoIs ended at midnight on Monday. Bain Capital, Welspun Group, KKR & Co., Asset Reconstruction Company of India Ltd. or Arcil and Oaktree Capital are among those who have submitted bids for the entire DHFL portfolio, the people quoted above said.
• JSW Steel declared preferred bidder for three Odisha iron ore mines, whose combined iron ore resources stand at 1,092 million tonnes.
• Finolex Industries said that due to force majeure declared by company’s major vinyl chloride monomer supplier during March 2020, the operations of the company with respect to its VCM to polyvinyl chloride route will be affected for 30 to 35 days. This would result in a shortage of PVC production of approximately 15,000 MT.
• KPI Global Infra received a letter of intent for an order to execute a solar power project of 900 KW capacity from JPB Fibers.
• NIIT Technologies has set March 12 as the record date for the share buyback.
• Future Lifestyle Fashions to consider raising funds on Feb. 20.

Brokerage Radar

UBS on Ashok Leyland

• Maintained ‘Buy’ with a price target at Rs 106.
• High likelihood of strong FY22 recovery.
• Meaningful dispatches of BS-VI vehicles will only happen from the next quarter.
• Sharp destocking hurt margins in the third quarter.
• Discounts remain high; the company sees a growth 20 percent in the next financial year.
• Management now expects to incur capex of Rs 1,200-1,300 crore in the current financial year.

Nomura on BHEL

• Maintained ‘Reduce’; cut price target to Rs 33 from Rs 48.
• Weak order inflows in 9MFY20, with order inflows in the current financial year is unlikely to exceed Rs 30000 crore, execution is an issue
• Operating cash flow outflow continues.
• Estimate Rs 29000-31000 crore of sales required just to break even at operating cash flow levels.
• BHEL can turn net debt by the next financial year.
• Ebitda margin improvement expected to be slower than expected.

Citi on Zee Entertainment

• Maintained ‘Neutral’; cut price target to Rs 260 from Rs 280.
• Expect a more subdued business outlook in the near term.
• Softer operating trends, margins may dip to below 30 percent.
• Receivables from Dish and Siti a key monitorable.
• Execution is the key to management talking about—Board reconstitution, improving cash flows, changes in treasury investment policies.

On JSW Energy

JPMorgan

• Maintained ‘Overweight’ with a price target at Rs 90.
• Company’s RoE and EPS accretive growth potential is beginning to play out
• Consolidation of Kamalanga would increase company’s Ebitda by 27 percent, EPS by 9 percent, raise net debt to equity slightly to 1.2x versus 0.76x clocked in December quarter.

CLSA

• Maintained ‘Overweight’ with a price target at Rs 85.
• Not terribly cheap buy good things don't come cheap.
• Acquisition lifts capacity by 23 percent.
• Company remains on track to double capacity, re- lever balance sheet with high RoE assets.

Bulk Deals

• APL Apollo Tubes: HDFC MF sold 3 lakh shares (1.21 percent) at Rs 2,000 each.

Trading Tweaks

• Gujarat Borosil record date for amalgamation
• RSWM, RattanIndia Power to move into short term ASM framework
• Oswal Agro Mills to move out of short term ASM framework
• Dynamic Industries, Veto Switchgears, and Cables price band revised to 10 percent
• Duke Offshore, CMI, SPML Infra price band revised to 5 percent

Who’s Meeting Whom

• Prince Pipes & Fittings to meet Kotak MF on Feb. 18
• CCL Products to meet Axis MF on Feb. 18
• Greaves Cotton to meet Kotak MF on Feb. 18
• Mahindra Logistics to meet RWC Partners, Spark Capital and other investors from Feb. 18-20
• Mahanagar Gas to meet Thornburg U.S. on Feb. 18

Insider Trading

• Persistent Systems promoter Rama-Purushottam Foundation sold 25,000 shares on Feb. 13-14
• Godrej Agrovet promoter Godrej Industries acquired 16.1 lakh shares on Feb. 14.

(As Reported On Feb. 17)

Money Market Update

The rupee ended stronger at Rs 71.29 against the dollar on Monday versus Rs 71.37 against the dollar on Friday.

F&O Cues

Futures

• Nifty February futures closed at 12,074.4, premium of 28.6 points
• Nifty February futures open interest down 2.7 percent, sheds 3.4 lakh shares in open interest
• Nifty Bank February futures closed at 30,776.3, premium of 95.6 points
• Nifty Bank futures open interest fell 10 percent, shed 1.3 lakh shares in open interest

Options

• Nifty PCR at 1.14 versus 1.27 (across all series)

Nifty Weekly Expiry: Feb. 20

• Max open interest on call side at 12,200 (34.4 lakh shares)
• Max open interest on put side at 12,000 (13.8 lakh shares)
• Open interest addition seen at 12,100C (+12.4 lakh shares), 12,150C (+11.1 lakh shares)
• Open interest shedding seen at 12,200P (-3.5 lakh shares)

Nifty Monthly Expiry: Feb. 27

• Max open interest on call side at 12,500 (26.2 lakh shares)
• Max open interest on put side at 12,000 (34.1 lakh shares)

Stocks In F&O Ban

• NCC
• Yes Bank