All You Need To Know Going Into Trade On Feb. 6
Asian stocks opened mixed Wednesday as an extension of the post-Christmas advance in U.S. equities overnight failed to give any impetus to a regional trading session hit by Lunar New Year closures.
Japanese shares eked out small gains, while stocks in Sydney were little changed. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.38 percent to 11,002 as of 6:50 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- U.S. stocks rose for a fifth day in muted trading as gains in technology shares outweighed a slump in financials sparked by falling Treasury yields.
- The yield on 10-year Treasuries remained at 2.70 percent.
- Japan’s Topix index was up 0.2 percent.
- Australia’s S&P/ASX 200 Index were flat.
- Futures on the S&P 500 were little changed.
- Brent crude halted a two-day rally, traded 0.15 percent higher at $62.07 per barrel.
- West Texas Intermediate crude added 0.2 percent to $53.79 a barrel.
- Gold was at $1,315.13 an ounce.
London Metal Exchange
- Aluminium ended higher for the second day, up 0.16 percent.
- Nickel halted a five-day rally, ended 1.66 percent lower.
- Tin resumed rally after a one-day blip, ended 0.24 percent.
- Zinc halted a four-day rally, ended 2.14 percent lower.
- Lead halted a four-day rally, ended 1.22 percent lower.
- Copper ended higher for the second day, up 1.05 percent.
Key Events To Watch This Week
- Markets are closed in China, Hong Kong, Korea, Malaysia, Singapore, Taiwan and also in New Zealand.
- Trump delivers a delayed State of the Union address Tuesday evening.
- Central banks in India and the U.K. set rates this week.
Stocks To Watch
- Bharti Airtel clarified that overall debt situation is already comfortable and the planned initiatives will further benefit the debt picture. The board formed a fund-raising committee who will undertake a meeting on Feb. 28.
- Jubilant Lifesciences, Jubilant Industries, Jubilant FoodWorks : Promoter Jubialnt Enpro backtracked its decision to charge corporate brand royalty to companies. The promoter had asked companies to pay 0.25 percent of its consolidated revenue effective from the next financial year as royalty.
- Adani Green Energy’s renewable energy arm commissioned 12 Mwac wind power project in Gujarat. The company’s solar arm also received 390 Mwac of capacity in tenders floated by SECI.
- The Reserve Bank of India imposed a penalty of Rs 20 lakh on Axis Bank for contravention of regulations related to detection of counterfeit notes. The central bank also imposed a penalty of Rs 1 crore on Syndicate Bank for non-compliance with regulations related to fraud classification, risk management.
- HCL Technologies said it will partner with Harris Geospatial Solutions to provide digital solutions to the utility industry.
- Majesco launched billing and payments solutions for the insurance industry.
- Precision Wires stated that out of its expansion project for 8,000 mts/year, 4,000 mts/year worth of capacity has been commissioned and the production has started. The balance project will be completed in the next five months.
- Future Enterprises deferred fund-raising plans.
- Syntex Plastics Technology said that the company was taking positive steps for deleveraging the balance sheet and is also exploring alliance with strategic partner. The company stated that it may monetise certain non-core assets.
- The National Stock Exchange said that Reliance Communications has been excluded from equity derivatives segment. The exchange stated that no fresh contracts shall be introduced after the February expiry.
- PVR terminated its memorandum of understanding with Al-Futtaim for exploring opportunities to jointly develop cinema business in Middle East and North Africa region. The management stated that it has decided against deploying any capital for the afore-mentioned region.
- Bank of Baroda raised its MCLR across various tenors by 10-20 basis points. One month MCLR at 8.4 percent and one year MCLR is now at 8.75 percent.
- Century Plyboards board approved setting up of particle board and MDF unit in Uttar Pradesh.
- NBCC said that it secured total business worth Rs 355.9 crore for January.
- Sagar Cements’ consolidated January Cement sales were up 34.94 percent at 3.2 lakh MT versus 2.37 lakh MT.
Nifty Earnings To Watch
- Adani Ports and Special Economic Zone
- JSW Steel
Other Earnings To Watch
- Adani Power
- Graphite India
- Vodafone Idea
- Ador Fontech
- Alicon Castalloy
- Allahabad Bank
- Arihant Superstructures
- AstraZeneca Pharma
- Bodal Chemicals
- CG Power and Industrial Solutions
- Entertainment Network
- Fortis Malar Hospitals
- Future Consumer
- Gandhi Special Tubes
- Gateway Distriparks
- Himatsingka Seide
- Honda Siel Power Products
- IL&FS Investment Managers
- Indian Hume Pipe
- Indraprastha Gas
- Jindal Stainless
- LKP Finance
- Manappuram Finance
- Mangalore Chemicals & Fertilizers
- Minda Industries
- Muthoot Finance
- Nitin Castings
- Pennar Engineered Building Systems
- Precision Wires
- Prism Johnson
- SH Kelkar and Company
- Sanghi Industries,
- Sharp India
- Shivam Autotech
- Tasty Bite Eatables
- The New India Assurance Company
- Tribhovandas Bhimji Zaveri
- UFO Moviez
- Vardhman Textiles
- Vimta Labs
- Walchandnagar Industries
- Wheels India
- Zydus Wellness
- Centum Electronics
- Bannari Amman Sugars
Earnings Reaction To Watch
HPCL (Q3, QoQ)
- Revenue up 6.8 percent at Rs 72,111.8 crore.
- Net profit down 77.3 percent at Rs 247.6 crore.
- Ebitda down 54.6 percent at Rs 963.2 crore.
- Margin at 1.3 percent versus 3.1 percent.
- Declares interim dividend of Rs 6.5 per share.
- GRMs at $3.72/bbl versus $4.81/bbl.
Aditya Birla Capital (Q3, YoY)
- Net Interest Income up 25.4 percent at Rs 2,684.8 crore.
- Net profit up 40.3 percent at Rs 203.3 crore.
- Other expenses up 45 percent at Rs 606 crore.
- Lending book up 29 percent at Rs 60,129 crore.
- Gross premium of life insurance and health insurance up 39 percent at Rs 1,998 crore.
Tata Chemicals (Q3, YoY)
- Revenue up 10 percent at Rs 2,831.9 crore.
- Net profit down 71.1 percent at Rs 219.5 crore.
- Ebitda up 3.3 percent at Rs 966 crore.
- Margin at 34.1 percent versus 38.8 percent.
- Deferred tax reversal of Rs 250.4 crore in base quarter.
- Exceptional gains of Rs 59.6 crore in base quarter.
- Other income worth Rs 96.1 crore.
IDFC First Bank (Q3, YoY)
- Net interest income up 131.4 percent at Rs 1,145.2 crore.
- Net loss at Rs 1,538 crore versus net profit at Rs 146.1 crore.
- Provisions at Rs 212.5 crore versus Rs 108.6 crore.
- GNPA at 1.97 percent versus 1.63 percent (QoQ)
- NNPA at 0.95 percent versus 0.59 percent (QoQ)
- Exceptional loss of Rs 2,599.3 crore.
Dish TV (Q3, YoY)
- Revenue down 6 percent at Rs 1,517.5 crore.
- Net profit at Rs 161.7 crore versus net loss at Rs 163.7 crore.
- Ebitda up 4 percent at Rs 517.6 crore.
- Margin at 34.1 percent versus 30.8 percent.
- Deferred tax credit reversal of Rs 128.1 crore.
- Other income at Rs 12.1 crore versus Rs 24.2 crore.
- Approves Investment of Rs 3,000 crore in company’s wholly owned arm ‘Dish Infra Services’ via rights issue.
Sobha (Q3, YoY)
- Revenue up 13.9 percent at Rs 787.9 crore.
- Net profit up 30.7 percent at Rs 69.8 crore.
- Ebitda up 15.6 percent at Rs 159 crore.
- Margin at 20.2 percent versus 19.9 percent.
- Other income of Rs 9.9 crore.
DLF (Q3, YoY)
- Revenue up 31 percent at Rs 2,219.3 crore.
- Net profit down 91.8 percent at Rs 335.2 crore.
- Ebitda down 8.7 percent at Rs 640 crore.
- Margin at 28.8 percent versus 41.4 percent.
- Exceptional gain of Rs 8,569.3 crore in base quarter.
Suven Lifesciences (Q3, YoY)
- Revenue down 21.2 percent at Rs 129 crore.
- Net profit down 27.2 percent at Rs 25.2 crore.
- Ebitda down 31.1 percent at Rs 35.5 crore.
- Margin at 27.5 percent versus 31.5 percent
V-Mart Retail (Q3, YoY)
- Revenue up 26.6 percent at Rs 465.8 crore.
- Net profit up 13.6 percent at Rs 41.7 crore.
- Ebitda up 14.5 percent at Rs 73.4 crore.
- Margin at 15.8 percent versus 17.4 percent.
Prataap Snacks (Q3, YoY)
- Revenue up 18.7 percent at Rs 308.2 crore.
- Net profit down 28.9 percent at Rs 8.1 crore.
- Ebitda up 7.5 percent at Rs 77.7 crore.
- Margin at 25.2 percent versus 27.8 percent.
Torrent Power (Q3, YoY)
- Revenue up 18.4 percent at Rs 3,253.5 crore.
- Net profit up 15.6 percent at Rs 237 crore.
- Ebitda down 7.2 percent at Rs 736.4 crore.
- Margin at 22.6 percent versus 28.9 percent.
- Board approved issuing NCDs worth Rs 1,000 crore to raise capital.
Novelis (Hindalco’s subsidiary) (Q3, YoY)
- Sales down 3.2 percent at $3 million.
- Adjusted Ebitda up 5.6 percent at $322 million.
- Net profit down 35.5 percent at $78 million.
- Adjusted Ebitda increased primarily driven by higher shipments, favorable product portfolio mix, favorable metal costs and other cost efficiencies.
- Aleris acquisition continues to progress and is expected to close in the third quarter of calendar year 2019.
Reliance Infrastructure (Q3, YoY)
- Revenue up 0.6 percent at Rs 4,116 crore.
- Ebitda down 19 percent to Rs 691 crore.
- Margin at 16.8 percent versus 20.9 percent.
- Net profit up 8 percent at Rs 325 crore.
- NOCIL RBA Finance and Investment Company acquired 9.57 lakh shares or 0.58 percent equity at Rs 124.94 each.
- Leel Electricals price band revised to 5 percent
- Religare Enterprises, Vipul to move into short term ASM Framework
Who’s Meeting Whom
- Shriram City Union Finance to meet PSP Canada on Feb. 12
- CRISIL to meet Kayne Anderson Rudnick Investment Management on Feb. 15
- South Indian Bank to meet Spark Capital on Feb. 7
- Nirlon promoter group Shital Trading and Interiors sold 48,200 shares between Dec. 17 and Feb. 1
- Siti Networks promoter Arrow Media and Broadband sold 3.92 crore shares on Jan. 28.
(As reported on Feb. 5)
Money Market Update
- The rupee on Tuesday snapped its two-day losing streak and closed at 71.56/$ versus Monday’s closing of 71.81/$.
- Nifty February futures closed trading at 10,952, premium of 18 points.
- Max open interest for Feb series at 11,000 Call, (open interest at 33.5 lakh shares).
- Max open interest for Feb series at 10,700 Put, (open interest at 32.3 lakh shares).
Stocks In F&O Ban
New In Ban
- Jet Airways
- Reliance Capital
- Nifty PCR at 1.68 versus 1.67.
- Nifty Bank PCR unchanged at 1.04.
CLSA on BHEL
- Maintained ‘Sell’; cut price target to Rs 56 from Rs 86.
- Net profit growth driven by one-off interest as margin missed.
- Believe weak order inflow and falling backlog will not inspire market confidence.
- Cut new orders estimates by 10 percent due to delay of thermal project awards by utilities.
CLSA on Jubilant Food
- Maintained ‘Buy’ with a price target of Rs 1,600.
- Royalty to parent made no real sense.
- Reversal came as a relief; promoter ‘intent’ was bigger concern than quantum.
- Believe an increased dividend payout to be a better way.
CLSA on ACC
- Maintained ‘Buy’ with a price target of Rs 1,800.
- Adjusted Ebitda and realisations in-line, but cost ahead.
- Cement volumes were a bit higher; cost higher due to higher cost of manufacture.
- ACC will likely lag the industry in its volume growth in the near term.
CLSA on GAIL
- Maintained ‘Buy’ with a price target of Rs 420.
- Net profit comes ahead driven by strong gas trading.
- Mgmt. commentary indicates confidence on maintaining gas trading profits.
- This year may be a testing time for U.S. LNG contracts.
CLSA on HPCL
- Maintained ‘Sell’; hiked price target to Rs 210 from Rs 150.
- Refining drives a beat in December quarter.
- Raise EPS estimates as we no longer build in lower marketing margin.
- Weak benchmark GRMs and upcoming elections are headwinds.
Sytematix on Balkrishna Industries
- Initiated ‘Sell’ with a price target of Rs 685.
- See weak demand visibility, peak margin and single-digit earnings growth over FY19-21.
- Expect company to sacrifice margins if volume growth decelerates sharply.
- Increasing competitive intensity is a risk to high Ebtida Margin.
Motilal Oswal on Hindalco
- Maintained ‘Buy’ with a price target of Rs 338.
- Novelis: Robust quarter despite some headwinds.
- FCF generation robust despite growth capex.
- Outlook remains robust for Novelis.
On Tech Mahindra
- Maintained ‘Outperform’; hiked price target to Rs 810 from Rs 720.
- Revenue beat led by enterprise and telecom along with strong deal wins.
- Sharp margin surprise and recovery likely complete.
- Hike revenue estimates by 1-3 percent and margin estimates by 75-130 basis points.
- Maintained ‘Buy’; hiked price target to Rs 870 from Rs 850.
- Solid deal wins ensure continued growth traction.
- Streak of margin improvement could be over for now but don’t expect deterioration.
- Structural growth to drive returns.