All You Need To Know Going Into Trade On Feb. 6

Stocks in Asia gained after data showed resilience in the U.S. economy and investors speculated the fallout from the coronavirus could be contained.

Shares opened higher in Tokyo and Sydney and futures rose earlier in Hong Kong, signalling equities in the Asia Pacific could be on course for the third day of gains. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.19 percent to 12,076.50 as of 6:55 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

• Oil extended gains in Asian trade as the potential for an OPEC+ production cut overshadowed an uptick in U.S. crude inventories.
• U.S. equities earlier closed at an all-time high. The S&P 500 Index’s three-day gain topped 3 percent, and the Nasdaq indexes added to records.

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Source: Bloomberg

Earnings Reaction To Watch

DLF (Q3, YoY)

• Revenue down 39.5 percent to Rs 1,342 crore
• Ebitda down 64.3 percent to Rs 237.6 crore
• Margin at 17 percent versus 28.8 percent
• Net profit up 23.5 percent to Rs 414 crore
• Exceptional gains of Rs 231 crore on sale of stake in wholly owned subsidiaries and joint ventures aided net profit.

HPCL (Q3, QoQ)

• Revenue up 16.2 percent to Rs 70,749.6 crore
• Net profit down 29 percent to Rs 747.2 crore
• Ebitda down 19.7 percent to Rs 1,867 crore
• Margin stood at 2.6 percent versus 3.8 percent
• Gross refining margin stood at $1.79 per barrel versus $2.83 per barrel

Gujarat Gas (Q3, QoQ)

• Revenue flat at Rs 2,506.2 crore
• Net profit fell 62 percent to Rs 196.5 crore
• Ebitda flat at Rs 370.6 crore
• Margin stood at 14.8 percent versus 14.8 percent

Cadila Healthcare (Q3, YoY)

• Revenue up 1.7 percent to Rs 3,638.1 crore
• Net profit down 26.8 percent to Rs 373.9 crore
• Ebitda fell 17.5 percent to Rs 693.2 crore
• Margin stood at 19.1 percent versus 23.5 percent

Ajanta Pharma (Q3, YoY)

• Revenue rose 34.2 percent to Rs 651.2 crore
• Net profit rose 60.8 percent to Rs 107.6 crore
• Ebitda rose 73.3 percent to Rs 186 crore
• Margin stood at 28.6 percent versus 22.13 percent

Divi's Laboratories (Q3, YoY)

• Revenue rose 2.7 percent to Rs 1,396.3 crore
• Net profit fell 7.8 percent to Rs 359.1 crore
• Ebitda fell 7.3 percent to Rs 494 crore
• Margin stood at 35.4 percent versus 39.2 percent

Indiabulls Housing Finance (Q3, YoY)

• Net interest income fell 50.9 percent to Rs 614.1 crore
• Net profit fell 43.8 percent to Rs 546.9 crore

Brigade Enterprises (Q3, YoY)

• Revenue fell 19.7 percent to Rs 552.3 crore
• Net profit rose 1 percent to Rs 49.3 crore
• Ebitda fell 11.5 percent to Rs 155.6 crore
• Margin stood at 28.2 percent

Engineers India (Q3, YoY)

• Revenue rose 53.7 percent to Rs 899.2 crore
• Net profit rose 19.4 percent to Rs 111.8 crore
• Ebitda fell 8.7 percent to Rs 89.8 crore
• Margin stood at 10 percent versus 16.8 percent
• Deferred tax reversal of Rs 10 crore in current quarter

Prataap Snacks (Q3, YoY)

• Revenue rose 17 percent to Rs 360.7 crore
• Net profit fell 32.1 percent to Rs 5.5 crore
• Ebitda fell 1.8 percent to Rs 21.8 crore
• Margins stood at 6 percent versus 7.2 percent

MPC Decision Day Guide

India’s Monetary Policy Committee will announce its final review for 2019-20 on Thursday, days after the Union Budget tried to strike a difficult balance between treading a prudent fiscal path and supporting growth.

• The pause will continue for now, according to all 36 economists polled by Bloomberg.
• Most expect the MPC to also hold on to its accommodative stance, although a few believe that a move to a neutral stance cannot be ruled out if the central bank sees inflation pressures spilling over to segments beyond food.

Nifty Earnings To Watch

• Eicher Motors
• Hero MotoCorp
• Sun Pharma

Other Earnings To Watch

• NMDC
• Lupin
• Aarti Drugs
• Aurobindo Pharma
• Bata India
• Metropolis Healthcare
• RITES
• Trent
• United Bank of India
• United Breweries
• Adani Power
• Aditya Birla Fashion and Retail
• Advanced Enzyme Technologies
• Ajmera Realty
• Akzo Nobel
• Alkyl Amines Chemicals
• Birla Cable
• Dalmia Bharat
• E.I.D. Parry
• Endurance Technologies
• Esab India
• GlaxoSmithKline Consumer Healthcare
• GPT Infraprojects
• Gujarat Alkalies and Chemicals
• Gujarat Pipavav Port
• Hind Rectifiers
• Hindustan Construction Company
• ICRA
• IDFC
• Intellect Design Arena
• Johnson Controls
• Hitachi Air Conditioning
• LGB Forge
• LT Foods
• Magadh Sugar & Energy
• Minda Corporation
• Minda Industries
• Monte Carlo Fashions
• MphasiS
• OnMobile Global
• Rane Holdings
• Redington (India)
• Seamec
• Shivalik Rasayan
• Shyam Century Ferrous
• Sintex Industries
• Solara Active Pharma Sciences
• Star Cement
• TD Power Systems
• Usha Martin
• Vikas Proppant & Granite
• Indraprastha Gas
• Khadim India
• UCO Bank
• Federal-Mogul Goetze

Indian ADRs

Stocks To Watch

• Avenue Supermarts’ QIP opened on Feb. 5. The company is looking to raise Rs 3,998.08 crore from the issue of up to 2 crore shares. The SEBI-calculated floor price stands at Rs 1,999.04 per share, which is at a discount of 11 percent of the closing prices.
• ITI has withdrawn its follow-on public offer due to prevailing market conditions.
• Adani Gas expects Total SA deal to be closed in two weeks and the company is also mulling direct LNG imports when sales volume rise, according to Bloomberg report.
• SBI said that it has completed the divestment of its entire 7.41 percemt stake in Equifax Credit Information Services for Rs 68 crore.
• Kotak Mahindra Bank’s arm has completed the divestment of its entire 5.56 percent stake in Equifax Credit Information Services.
• Prestige Estate Projects QIP Issue: Monetary Authority of Singapore allotted 11.2 lakh shares, Nomura Group allotted 26.84 lakh shares, HDFC MF allotted 6.71 lakh shares and BNP Paribas Group allotted 19.11 lakh shares. Allotment Price was at Rs 372.5 per share and the issue aggregated to Rs 462.64 crore.
• Lupin received approval for Leflunomide tablets from the U.S. FDA to market a generic equivalent of Arava Tablets. The drug is used in the treatment of adults with active rheumatoid arthritis.
• CreditAccess Grameen received No-Objection Certificate from RBI for its acquisition of 76.34 percent stake in Madura Micro Finance.
• TCPL Packaging: Board to set up an arm for purpose of setting up and the implementation of the new manufacturing unit in Silvassa which will manufacture innovative films on a recently introduced technology that is being imported by the company from Germany. Initial capex for this project stands at Rs 35 crore.
• VST Tillers Tractors January Sales: Power Tillers Sales up 1 percent at 1971 units versus1950 units. Tractors sales fell 7 percent to 516 units.
• Navkar Corporation received Strategic Alliance Management Contract at lnland Clearance Depot, Valvada, Gujarat, via tender offered by Central Warehousing Corporation for an initial period of five years and further extendable for a period of two years on mutual consent.
• Hindustan Aeronautics signed a memorandum of understanding with Israel’s Elbit Systems for assessing the feasibility of the joint development of a Vertical Take-off and Landing Unmanned Aerial Vehicle for maritime and land-based military operations.
• Sagar Cements January Sales fell 1.59 percent to 315,309 metric tonnes.
• Panacea Biotec completed the transfer of its pharma business to its wholly-owned arm, Panacea Biotec Pharma.
• Matrimony.com acquired 26.1 percent stake in Astro-Vision Future Tech for Rs 6 crore.
• Emami IDBI Trusteeship Services increased stake from 7.38 percent to 11.85 percent in respect of pledge creation, on behalf of debenture holders.
• NRB Industrial Bearings: Ratnakar Mehendale resigned from the post of Chief Financial Officer with effect from Jan. 4. Gulestan Kolah to be the next CFO.

Brokerage Radar

On Cipla

UBS

• Maintained ‘Buy’ with a price target of Rs 555.
• December quarter’s revenue was in line with estimates; margins impacted by inventory overheads.
• Cost focus and portfolio pruning to aid margins.
• See strategic re-alignment of U.S. specialty business; focus on RoCE-accretive assets.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 578
• December quarter results missed estimates; wrong side of quarterly volatility.
• Cipla continues to strengthen its base business, build niche U.S. portfolio and develop specialty pipeline.
• Equal-weight rating on downside risk to growth and full valuation.

More Calls

BofA Securities on SBI Life

• Initiated ‘Buy’ with a price target of Rs 1,116.
• Leading insurer with strong core business.
• Strong track record of steady market share gains.
• VNB margins to improve aided by strong fundamentals.

BofA Securities on ICICI Prudential Life

• Initiated ‘Buy’ with a price target of Rs 565.
• Multiple drivers to support two times VNB growth.
• VNB margin to expand on rising protection contribution, customer broad basing and improving persistency.

BofA Securities on HDFC Life

• Initiated ‘Buy’ with a price target of Rs 667.
• Fundamentals remain resolute.
• Product innovation driving market share gains.
• Improving customer retention with more to catch-up.

UBS on Apollo Tyres

• Maintained ‘Buy’ with a price target of Rs 218.
• December quarter review: Standalone margins improve on benign raw material cost and better mix.
• Targeting high single digit revenue in Europe.
• expect company to be FCF positive from 2021-22.

UBS on HPCL

• Maintained ‘Buy’; cut price target to Rs 375 from Rs 415.
• Robust marketing continue to drive earnings.
• Lowering target price due to refining underperformance.
• Investors likely to appreciate stable earnings from integrated operations.

Emkay on Cadila Healthcare

• Maintained ‘Hold’; hiked price target to Rs 275 from Rs 240.
• Strong U.S. growth drives earnings beat.
• India growth has recovered somewhat over the last two quarters.
• Hike EPS estimates for the current and the next financial year by 6 percent and 4 percent respectively factoring in strong December quarter’s performance.

UBS on Gujarat Gas

• Maintained ‘Sell’ with a price target of Rs 190.
• Morbi volumes continue to drive earnings.
• Company might witness an expansion in margins given lower spot LNG prices.
• Believe that long-term risks to volumes and margins.

Emkay on Divi’s Lab

• Maintained ‘Buy’; hiked price target to Rs 2,154 from Rs 1,880.
• December quarter’s revenue missed estimates, though margins were in line
• Capex cycle almost behind; to see high growth in the next two financial years.
• Divi’s is top pick and continue to like the structural story.

Morgan Stanley on Indiabulls Housing

• Maintained ‘Underweight’ with a price target of Rs 210.
• December quarter results were below estimates driven by lower revenues but offset by lower expenses and provisions.
• Gross Stage 3 ratio moved higher, driven by higher developer delinquencies.
• Liability challenges continue; liquidity position see meaningful reduction on a sequential basis.

Bulk Deals

Westlife Development

• Kuwait Investment Authority Fund acquired 9 lakh shares (0.58 percent) at Rs 425 each
• Sundaram mutual fund acquired 13.67 lakh shares (0.88 percent) at Rs 425 each
• Promoter Makino Holdings sold 46.82 lakh shares (3.01 percent) at Rs 425.07 each

Simplex Infra

• UK Doshi acquired 3.11 lakh shares (0.54 percent) at Rs 49.14 each
• Nissay India Equity sold 16.53 lakh shares (2.89 percent) at Rs 48.81 each

Spandana Sphoorty Financial

• Alberta Teachers Retirement Fund acquired 13.16 lakh shares (2.05 percent) at Rs 1,012.72 each
• JM Financial India Trust II sold 16 lakh shares (2.49 percent) at Rs 1,012 each

Reliance Infra

• Vanguard Energy Fund sold 13.25 lakh shares (0.51 percent) at Rs 19.95 each
• Tourism Finance Corporation of India
• Dovetail India Fund acquired 10.72 lakh shares (1.33 percent) at Rs 67.04 each
• Anjana Projects acquired 7.72 lakh shares (0.96 percent) at Rs 67.03 each
• Promoter Redkite Capital sold 20 lakh shares (2.48 percent) at Rs 67.06 each

Trading Tweaks

• Bajaj Electricals record date for Rights Issue 13:118 (Rights Issue Price At Rs 310 per share)
• Vinati Organics record date for stock split from Rs 2 to Rs 1 (FV)
• Gayatri Projects, Religare Enterprises to move into ASM Framework
• Ujaas Energy, Man Infraconstruction, Prism Medico & Pharmacy to move out of short term ASM Framework

Price Band Revision

From 2% to 5%

• Tuticorin Alkali Chemicals & Fertilisers
• Uniply Décor
• Zenlabs Ethica
• Toyam Industries

From 5% to 10%

• Lakshmi Vilas Bank
• NRB Industrial Bearings
• State Trading Corporation of India
• Mahanagar Telephone Nigam
• Ganesh Benzoplast
• GTL
• HCL Infosystems
• Reliance Infrastructure
• SPML Infra
• TCI Finance
• Industrial Investment Trust
• Orient Beverages
• Mahamaya Steel Industries
• Deepak Spinners
• Hindustan Foods
• Sanwaria Consumer
• Aban Offshore
• Ind-Swift
• Everest Organics
• Ludlow Jute & Specialities
• Vikas EcoTech
• Shriram Asset Management Company
• Duke Offshore
• Mukand Engineers
• Andhra Cements
• Ind-Swift Laboratories
• BF Utilities
• Jaiprakash Associates
• Mcleod Russel India
• Suzlon Energy
• Nitco
• Tanla Solutions
• Camlin Fine Sciences
• Indiabulls Ventures
• RattanIndia Power
• Den Networks
• Eros International Media
• Zee Learn
• PG Electroplast
• JK Agri Genetics
• Shankara Building Products
• Astron Paper & Board Mill
• Karda Constructions
• Jain Irrigation Systems

From 5% to 20%

• ITD Cementation
• Magma Fincorp
• Sterling and Wilson Solar
• Artemis Medicare Services

From 10% to 20%

• Dalmia Bharat Sugar and Industries
• Hindustan Construction Company
• LG Balakrishnan & Bros
• Mukand
• Lyka Labs
• Zuari Global
• Shree Digvijay Cement
• Arshiya
• Mangalam Organics
• Igarashi Motors
• Kilburn Engineering
• Birla Precision Technologies
• Reliance Industrial Infrastructure
• SREI Infrastructure Finance
• NGL Fine Chem
• Alphageo
• Electrotherm
• Patel Engineering
• Eveready Industries
• Pioneer Distilleries
• Filatex Fashions
• Gati
• Dwarikesh Sugar
• Rane (Madras)
• Aurionpro Solutions
• Godawari Power and Ispat
• Edelweiss Financial Services
• Rane Brake Lining
• Sicagen
• Ramky Infrastructure
• Gallantt Ispat
• Genus Paper & Boards
• Tejas Networks
• SMS Lifesciences
• New India Assurance
• 5paisa Capital
• Rajnish Wellness
• Spencers Retail
• Sundaram Brake Linings

From 10% to 5%

• Sundaram Multi Pap
• Tijaria Polypipes
• Suven Life Sciences

From 20% to 10%

• Orissa Minerals Development Company
• Shilpa Medicare

Insider Trading

• Pidilite Industries promoter Harish Parekh sold 50,000 shares from February 3-4
• Music Broadcast promoter Jagran Prakashan acquired 60,000 shares on February 3

(As Reported On Feb. 5)

Money Market Update

The rupee ended marginally stronger at 71.22 against the dollar on Wednesday versus 71.27 against the dollar on Tuesday.

F&O Cues

Index Futures

• Nifty February futures closed at 12.086.3 discount of 2.8 points versus 15 points
• Nifty February futures open interest down 0.2 percent, sheds 28,000 shares in open interest
• Nifty Bank February futures closed at 31,050, premium 48.4 points versus 31.7 points
• Nifty Bank futures open interest up 4 percent, adds 37,700 shares in open interest

Options

Nifty PCR at 1.38 versus 1.24 (across all series)

Nifty Weekly Expiry: Feb 6

• Max open interest on call side at 12,100 (32.3 lakh shares)
• Max open interest on put side at 12,000 (28.9 lakh shares)
• Open interest addition seen at 12,000P (+19.4 lakh shares), 12,050P (+15 lakh shares), 12,100P (+9.9 lakh shares)
• Open interest shedding seen at 12.000C (-13 lakh shares)

Nifty Monthly Expiry: Feb 27

• Max open interest on call side at 12,500 (21.2 lakh shares)
• Max open interest on put side at 12,000 (28.5 lakh shares)