All You Need To Know Going Into Trade On Feb. 24
A jogger wears a pollution mask early morning amidst light smog in New Delhi. The national capital’s air quality dropped to the season’s worst on the morning after Diwali. (Source: PTI)

All You Need To Know Going Into Trade On Feb. 24

U.S. equity futures sank with Asian shares and gold surged after the number of coronavirus cases outside of China increased and concern grew that global economic growth could take a more sustained hit.

S&P 500 Index futures fell about 1.3 percent, with shares in Seoul and Sydney also lower. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.68 percent to 11,953 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.

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

  • Tech companies were particularly hard hit, sending the Nasdaq 100 down almost 2%. The S&P 500 Index posted its first weekly decline since January.
  • Oil fell as the coronavirus outbreak accelerated beyond China, intensifying concerns about the infection’s economic fallout.

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Earnings Reaction To Watch

Ambuja Cement (Q4CY19, YoY)

  • Revenue rose 9.5 percent to Rs 3,135.9 crore
  • Net profit fell 15.4 percent to Rs 454.9 crore
  • Ebitda rose 35.6 percent to Rs 547.5 crore
  • Margin stood at 17.5 percent versus 14.1 percent
  • Operating Ebitda rose due to strong top-line and a decline in power & fuel and logistics costs

Earnings To Watch

  • Linde India

Indian ADRs

All You Need To Know Going Into Trade On Feb. 24

Stocks To Watch

  • Axis Bank, Max Financial Services and its subsidiary Max Life Insurance sign confidentiality and exclusivity arrangement to explore the possibility of Axis Bank to enter into a long-term strategic partnership with Max Life.
  • Bharti Airtel: Chairman Sunil Mittal said that the company is committed to complying with Supreme Court’s ruling on telecom dues and the company will pay the dues before March 17 deadline, according to Bloomberg report.
  • Dr. Reddy’s gets EIR from the U.S. FDA for Duvvada formulations plant at Vizag, indicating closure of the audit. The facility has been classified at Voluntary Action Indicated.
  • AstraZeneca Pharma has launched QTERN tablets in India for the treatment of diabetes.
  • Greenply Industries: CARE Ratings has placed the ratings assigned to the company on credit watch with negative implications for bank facilities worth Rs 378 crore. The rating action follows the approval by the board of directors to extend the corporate guarantee to a foreign loan not exceeding Euro 12.5 million provided to the erstwhile MDF division of the company which has been shifted by way of demerger to Greenpanel industries.
  • IIFL Finance: Board of company’s material arm Infoline Finance completed allotment of $400 million senior secured notes.
  • Dhanlaxmi Bank: RBI approved the appointment of Sunil Gurbaxani as MD & CEO of the Bank for three years.
  • Dixon Technologies promoter Sunil Vachani decreased his stake from 36.27 percent to 34.67 percent in the company on Feb. 20.
  • ACC: Neeraj Akhoury resigned as MD and CEO with effect from February 20. The company said he will continue to be on the Board as non-executive independent director.
  • Reliance Home Finance defaulted in payment of term loan worth Rs 36 crore which was due on Jan. 18. Company has a total financial indebtedness of Rs 11955 crore, out of which Rs 3,890 crore is outstanding borrowings from Banks/Financial Institutions, as on Jan. 31.
  • Aurobindo Pharma: U.S. FDA revokes voluntary action Initiated Status for Unit IV. It says Unit IV is still open and under review, U.S. FDA only had issued a ‘Voluntary Action Initiated’ status on Feb. 18.
  • GMR Infra: Aeroports de Paris agrees to buy a 49 percent stake in India’s GMR Airports for Rs 10,780 crore. The purchase to happen in two steps starting 24.99 percent in the coming days. The second step for 24.01 percent to require approvals from regulators includes RBI. The second step is set to be concluded in the coming months.
  • Bharti Infratel receives FDI Approval from DOT for the merger of Indus Towers on 21st Feb. 2020. The Board of Directors of the Company will meet on Monday i.e. Feb. 24, 2020, to take stock and decide the future course of action.
  • Dilip Buildcon executed an EPC agreement with Airport Authority of India for the project “Construction of new greenfield airport at Hirasar, Rajkot, Gujarat”
  • Strides Pharma: The scheme for Amalgamation amongst Arrow Remedies Pvt Ltd, Fagris Medica Pvt Ltd, Strides emerging markets ltd with Strides Pharma was approved by equity shareholders. The Company shall file a petition with the NCLT, Mumbai Bench for the final sanction of the Scheme.
  • Alkem Laboratories receives two observations under U.S. FDA inspection for its Baddi Facility
  • Indiabulls Ventures completes the transfer of its stockbroking business to its 100% subsidiary Indiabulls Securities Limited with effect from Feb. 21, 2020
  • CRISIL downgrades the ratings of PNB Housing Finance’s long-term debt instruments, NonConvertible debentures, Tier II Bonds and Fixed Deposits to CRISIL AA/Stable from CRISIL AA+/Negative.
  • UPL Corporation Ltd., Mauritius, subsidiary of UPL Ltd has issued U.S. dollars denominated Perpetual Subordinated Capital Securities (Bonds) for the aggregate amount of $400 Million. Proceeds to be used to repay the existing debt.
  • Biocon’s facility in Malaysia receives three observations under the U.S. FDA inspection.
  • Jagran Prakashan bought back 1.49 crore equity shares at an average price of Rs 66.24. The company has deployed Rs 98.96 crore which represents 97.74 percent of the maximum buyback size.
  • Mahindra renewables private limited, a step-down subsidiary of Mahindra and Mahindra to sell the entire stake in three of its wholly-owned subsidiary to CLP India Private Ltd.
  • CARE revised the rating for Prince Pipe’s long term bank facilities to CARE A- from CARE BBB+ and short term bank facilities from CARE A3+ to CARE A2+. The rationale for the rating being improved liquidity witnessed during 9MFY20 marked by elevation in gross cash accruals with expansion in operating profit margins coupled with a reduction in long term debt.

FTSE March 2020 Semi-Annual Review

Global Equity Index Series

  • Large Cap Exclusion: Aurobindo Pharma
  • Mid Cap Inclusion: Aurobindo Pharma, Ashok Leyland, Oracle Financial Services Software, Bata India, Jubilant FoodWorks, Nippon Life India Asset Management, Vodafone Idea, Indiabulls Housing Finance, Yes Bank
  • Mid Cap Exclusion: Adani Transmission, Wockhardt

FTSE All-World

  • Inclusion: Bata India, Jubilant FoodWorks, Nippon Life India Asset Management
  • Exclusion: Adani Transmission, Wockhardt

FTSE ALL-CAP

  • Inclusion: ICICI Securities, Tube Investments of India, J K Cement
  • Exclusion: Adani Transmission, GE T&D, PC Jeweller, Reliance Infra, Jain Irrigation Systems, Reliance Capital, DHFL, HDIL

Brokerage Radar

HSBC on Indusind Bank

  • Maintained ‘Buy’, cut price target to Rs 1,825 from 2,000.
  • Do not expect an outsized deterioration of asset quality.
  • Investment case still intact with healthy buffers.
  • Stabilization of asset quality and CEO transition key catalysts.

On Ambuja Cement

Citi

  • Maintained ‘Buy’, raised price target to Rs 285 from Rs 270.
  • Ebitda ahead of the estimates on better volumes and costs.
  • December quarter was ahead of estimates; reversal of September quarter’s cost pressures.
  • December volumes at 7 percent YoY ahead of ACC's 3 percent YoY growth.

Macquarie

  • Maintained ‘Neutral’ with a price target at Rs 219.
  • In line quarter, realization miss offset by lower costs.
  • Clinker expansion of 3.1 mt and grinding capacity of 1.8 mt remains on track, likely to be commissioned by Dec. 20.

On Max Financial

UBS

  • Maintained ‘Buy’; raised price target to Rs 700 from Rs 640.
  • Seems uncertainty regarding long term partnership is about to be removed.
  • Long term distribution certainty would be a positive.
  • Fund flow to the promoter and deleveraging to remove overhang of promoter pledge.

Nomura

  • Maintained ‘Buy’, raised price target to Rs 700 from Rs 550.
  • Agreement should address investor concerns on long- term distribution tie-up.
  • Max life in partnership with Axis has raised market share from 5 percent in FY08/09 to more than 9 percent now.

Bulk Deals

  • Nath Bio-Genes: Promoter Akash Farms acquired 2 lakh shares (1.06 percent) at Rs 369.99 each
  • Dixon Tech: Promoter Sunil Vachani sold 1.85 lakh shares (1.6 percent) at Rs 4,308.82
  • Max Financial Services: WF Asian Smaller Companies Fund acquired 20 lakh shares (0.74 percent) at Rs 564.34 each

Eris Lifesciences

  • Emerald Investments acquired 9.39 lakh shares (0.68 percent) at Rs 430 each
  • Goldman Sachs Trust sold 9.35 lakh shares (0.68 percent) at Rs 430.03 each

Wheels India

  • IDFC MF acquired 8 lakh shares (3.33 percent) at Rs 557 each
  • Titan Europe sold 9.16 lakh shares (3.81 percent) at Rs 557 each

Trading Tweaks

  • Uniply Industries, Shriram EPC to move out of ASM Framework
  • Sadbhav Infrastructure Project, AksharChem India, Den Networks, Hathway Cable & Datacom to move into short term ASM Framework
  • GTL, Lakshmi Vilas Bank, Swan Energy to move out of short term ASM Framework
  • MSTC price band revised to 10 percent
  • Sanwaria Consumer price band revised to 5 percent

Who’s Meeting Whom

  • Tata Motors to meet SBI MF on Feb. 24

Insider Trading

  • Electrosteel Castings promoter Murari Investment acquired 6.1 lakh shares from Feb. 18-19
  • Zensar Tech promoters acquired 2.7 lakh shares from Feb. 18-19
  • Aarti Industries promoters sold 34,000 shares from Feb. 17-18
  • Sanghi Industries promoter Aditya Singhi and Alok Singhi acquired 13 lakh shares from Feb. 19-20
  • Axis Bank promoter General Insurance Corporation of India sold 2 lakh shares on Feb. 18
  • Sobha promoter Ravi Menon acquired 28,000 shares on Feb. 19

(As Reported On Feb. 20)

Money Market Update

The rupee ended weaker at Rs 71.64 against the dollar on Thursday versus Rs 71.56 against the dollar on Tuesday (Money markets were shut on Wednesday).

F&O Cues

Futures

  • Nifty February futures closed at 12,079, discount of 1.8 points
  • Nifty February futures open interest fell 2.4 percent, sheds 2.7 lakh shares in open interest
  • Nifty Bank February futures closed at 30,938.7, discount of 4 points
  • Nifty Bank futures open interest fell 1.5 percent, shed 15,500 shares in open interest

Options

  • Nifty PCR at 1.39 versus 1.38 (across all series)

Nifty Monthly Expiry: Feb 27

  • Max open interest on call side at 12,200 (34.4 lakh shares)
  • Max open interest on put side at 12,000 (39.9 lakh shares)
  • Open interest addition seen in 12,200C (+13.2 lakh shares), 12,100C (+8.5 lakh shares)

Stocks In F&O Ban

  • Yes Bank
  • NCC
All You Need To Know Going Into Trade On Feb. 24
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