All You Need To Know Going Into Trade On Feb. 7

Asian stocks were mixed at the open on Friday to cap off what’s been the best week since January 2019.

Japanese stocks were little changed in early trading, while Australian ones dipped. Contracts on the S&P 500 were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.12 percent to 12,115.50 as of 6:49 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

• U.S. stocks continued their relentless push higher even as the economic impact from the deadly coronavirus remains murky. The S&P 500 Index’s four-day rally hit 3.7 percent as major equity benchmarks added to all-time highs.
• Oil advanced for a second day on hopes that OPEC and its allies would further curb oil production as the deadly coronavirus outbreak hits global energy demand.

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Earnings Reaction To Watch

Hero MotoCorp (Q3, YoY)

• Revenue fell 11 percent to Rs 6,996.73 crore
• Net profit rose 14.5 percent to Rs 880.41crore
• Ebitda fell 6 percent to Rs 1,038.97 crore
• Margin stood at 14.8 percent versus 14 percent

Metropolis Healthcare (Q3, YoY)

• Revenue rose 17.1 percent to Rs 222.9 crore
• Net profit rose 34.9 percent to Rs 42.1 crore
• Ebitda rose 29.5 percent to Rs 63.7 crore
• Margin stood at 28.6 percent versus 25.8 percent

NMDC (Q3, YoY)

• Revenue fell 17.6 percent to Rs 3,006.4 crore
• Net profit fell 12.7 percent to Rs 1,376.4 crore
• Ebitda fell 26.1 percent to Rs 1,591.5 crore
• Margin stood at 52.9 percent versus 59 percent

Aurobindo Pharma (Q3, YoY)

• Revenue rose 11.9 percent to Rs 5,895 crore
• Net profit fell 1 percent to Rs 705.5 crore
• Ebitda rose 11.2 percent to Rs 1,208 crore
• Margin stood at 20.5 percent versus 20.6 percent
• U.S. formulations revenue rose 22 percent to Rs 2,969.4 crore
• Europe formulations revenue rose 14.2 percent to Rs 1476.3 crore
• API segment revenue fell 14 percent to Rs 789.8 crore

Indraprastha Gas (Q3, YoY)

• Revenue rose 10.2 percent to Rs 1,664.2 crore
• Net profit rose 43.4 percent to Rs 283.9 crore
• Ebitda rose 22.6 percent to Rs 391.8 crore
• Margin stood at 23.5 percent versus 21.2 percent
• Raw material cost as percent of sales at 51.2 percent
• CNG sales volume rose 9 percent
• PNG sales volume rose 18 percent

Dalmia Bharat (Q3, YoY)

• Revenue rose 11.7 percent to Rs 2,418 crore
• Net profit fell 14.3 percent to Rs 24 crore
• Ebitda rose 11.6 percent to Rs 444 crore
• Margin stood at 18.4 percent versus 18.4 percent
• Profit dragged due to higher other expenses and freight charges

Johnson Controls - Hitachi Air Conditioning (Q4, YoY)

• Revenue flat at Rs 436 crore
• Net profit at Rs 13.4 crore
• Ebitda stood at Rs 32.4 crore
• Operating numbers impacted due to reduction in raw material costs

GSK Consumer Healthcare (Q3, YoY)

• Revenue rose 3.8 percent to Rs 1,158.9 crore
• Net profit rose 25.1 percent at Rs 276.6 crore
• Ebitda rose 14.1 percent to Rs 272.2 crore
• Margin stood at 23.5 percent versus 21.4 percent

Trent (Q3, YoY)

• Revenue rose 45.3 percent to Rs 988.3 crore
• Net profit rose 21.7 percent to Rs 53.9 crore
• Ebitda rose 2.4 times to Rs 167.7 crore
• Margin stood at 17 percent versus 10.4 percent

Bata India (Q3, YoY)

• Revenue rose 6.5 percent to Rs 830.8 crore
• Net profit rose 14.9 percent to Rs 118.3 crore
• Ebitda rose 61.2 percent to Rs 263.8
• Margin stood at 31.8 percent versus 21 percent
• Cost of raw material as a percent of sales at 39.3 percent versus 41.5 percent

MphasiS (Q3, QoQ)

• Revenue rose 5.5 percent to Rs 2,276.7 crore
• Net profit rose 7.5 percent to Rs 293.9 crore
• EBIT rose 6.4 percent to Rs 369.3 crore
• Margin stood at 16.2 percent versus 16.1 percent

United Breweries (Q3, YoY)

• Revenue stood unchanged at Rs 1,454.9 crore
• Net profit fell 2.4 percent to Rs 106.7 crore
• Ebitda fell 10.7 percent to Rs 221.6 crore
• Margin stood at 15.2 percent versus 17.1 percent
• Raw material cost as a percent of sales at 47.1 percent

Nifty Earnings To Watch

• Britannia Industries
• NTPC
• UPL
• Tata Steel

Other Earnings To Watch

• Voltas
• Whirlpool
• Oberoi Realty
• NCC
• Nesco
• NHPC
• INOX Leisure
• Abbott
• ACC
• Alkem Laboratories
• Varun Beverages
• Venky's
• Visaka Industries
• Som Distilleries & Breweries
• Care Finance Holdings
• Symphony
• India Cements
• New India Assurance
• Hi-Tech Gears
• Themis Medicare
• TV Today Network
• JSW Holdings
• Kolte - Patil Developers
• Linc Pen & Plastics
• Madras Fertilizers
• Entertainment Network (India)
• Essel Propack
• Insecticides
• SML Isuzu
• Excel Industries
• India Cements
• Indo Rama Synthetics
• FDC
• Container Corporation of India
• Corporation Bank
• Emami
• Alphageo
• Apex Frozen Foods
• Ashoka Buildcon
• Camlin Fine Sciences
• CARE Ratings
• ADF Foods
• 3i Infotech
• 63 moons technologies
• Cerebra Integrated Technologies
• Elgi Equipments
• Hester Biosciences
• JBF Industries
• Maharashtra Seamless
• Max India
• Max Ventures and Industries
• Nitin Spinners
• Praxis Home Retail
• PSP Projects
• Repco Home Finance
• S H Kelkar and Company
• Sintex Plastics Technology.
• KEC International.
• Procter & Gamble Health
• Mahanagar Gas

Indian ADRs

Stocks To Watch

• Coffee Day Enterprises clarified that its arm Coffee Day Global has mandated Deloitte only for the limited purpose of Vendor Due Diligence with respect to proposed stake sale and not for conducting any forensic audit of the vendors and it has not defaulted on a debt of Rs 489 crore.
• Bharti Airtel: Department of Telecommunications approves the merger of the consumer mobile operations of the Tata group with Bharti Airtel. The approval received after over 2 years of the announcement. In October 2017, the Tata group had announced that it would sell its consumer mobile business to Bharti Airtel on a debt-free, cash-free basis, except for it assuming a fraction of the unpaid spectrum fees that the Tata group owes to the DoT.
• Sundaram Finance completed the sale of its entire 10 percent stake in Equifax for Rs 92 crore to EFX Holdings.
• Adani Enterprises’ arm signed a memorandum of understanding with Airbus to explore opportunities for collaboration in the area of aircraft services for the Indian and South Asian markets.
• Wipro won a multi-year strategic IT deal from Marelli, which is a global Tier-1 automotive technology supplier.
• EID-Parry: The board has approved a capacity expansion of Sugar and Cogeneration at Haliyal Unit at an estimated investment of Rs 99 crore.
• Mahindra & Mahindra: The European Union has cleared Ardour Automotive-Mahindra & Mahindra-Ford Deal.
• BSNL, MTNL won't be closed, efforts being made to revive them said telecom minister Ravi Shankar Prasad.
• Karur Vyasa Bank revised MCLR across various tenors with effect from Feb. 7. One Month-MCLR at 8.4 percent and One-Year MCLR at 9.4 percent.
• IDFC: Board approved the merger of IDFC Alternatives IDFC Trustee Company and IDFC Projects with the company.
• Andhra Petrochemicals: Company’s plant will not be in operation from Feb. 7 due to annual maintenance work.
• Spencer’s Retail to consider raising funds on Feb. 11.

Brokerage Radar

Edelweiss on Lupin

• Maintained ‘Buy’ with a price target of Rs 900.
• Decent revenue growth; margin subdued.
• Cut EPS estimates by 10 percent for the current and the next financial year on muted results, lower Ebitda margin guidance and impact from Kyowa divestment.
• Specialty, respiratory and biosimilar launches key to revival.

Emkay on NMDC

• Maintained ‘Buy’; cut price target to Rs 140 from Rs 145.
• Strong and in-line results.
• Start of 3 MT steel plant in H2FY21 can trigger earnings upside
• Hike EPS estimates for the current and the next wo financial years by 4.3 percent, 7.2 percent and 6 percent respectively on moderating iron ore ASP, higher dividend and lower taxes.

UBS on IGL

• Maintained ‘Sell’; hiked price target to Rs 370 from Rs 340.
• Increase near-term earnings estimates due to expansion in margins.
• Margin to expand from non-pass through of lower domestic gas and spot LNG prices.
• Higher margins and strong volume growth look priced in.

On Sun Pharma

Edelweiss

• Maintained ‘Reduce’ with a price target of Rs 380.
• Strong domestic, lower R&D boost earnings.
• Street is building in FY19–22 EPS CAGR of 20 percent, which is at risk.
• Specialty ramp-up remains the key monitorable.

HSBC

• Maintained ‘Hold’ with a price target of Rs 440.
• December quarter results operationally in line.
• See gradual pickup in global sales of specialty drugs.
• Execution of specialty launches remains key for sustainable earnings growth.

On Hero Moto

Prabhudas Lilladher

• Maintained ‘Accumulate’; hiked price target to Rs 2,769 from Rs 2,740.
• Ebitda margins beat led by lower raw material cost and cost control benefits.
• Margin accretion led by inventory correction to get reverse in the coming quarters.
• Hero managed to pass complete BS-VI cost increase in launches it has done so far.

Morgan Stanley

• Maintained ‘Underweight’ with a price target of Rs 2,143.
• Q3 largely in Line; profit before tax ahead on better gross margins.
• Underweight due to risks from emissions regime change and continuing market share slips.

On Eicher Motors

Edelweiss

• Maintained ‘Buy’; cut price target to Rs 23,417 from Rs 25,019.
• Q3: weak operating performance due to higher raw material costs and other expenses.
• Domestic demand outlook remains subdued till H1FY21.
• Traction on exports front and launch of new platform remain key triggers.
• Cut EPS estimates for the current and the next financial year by 10 percent and 13 percent respectively factoring the delay in new launches, weak demand environment and spike in raw material prices

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 17,052.
• December quarter results were in line.
• Demand pickup remains elusive, but percentage increase in costs from BS VI is lower than peers.
• New platform launch could help demand growth.

Bulk Deals

• Indiabulls Housing Finance: Credit Suisse Singapore sold 40.21 lakh shares (0.95 percent) at Rs 316 each
• Reliance Infrastructure: Vanguard Energy Fund sold 20.89 lakh shares (0.8 percent) at Rs 21.8 each

Hawkins Cookers

• Equity Intelligence India sold 27,480 shares (0.52 percent) Rs 4,584.85 each.

Trading Tweaks

• S.E. Power, GFL to move into short term ASM Framework
• Emami Paper Mills, Alkali Metals, Gujarat Sidhee Cement to move out of short term ASM Framework
• Sumitomo Chemical India price band revised to 20 percent
• Ruchi Soya Industries price band revised to 10 percent

Who’s Meeting Whom

• CG Consumer Electricals to meet Goldman Sachs and Pari Washington from Feb. 25-27
• Sundram Fasteners to meet ICICI Pru MF on Feb. 7
• Cipla to meet Lloyd George Management, Eastspring Investments and other investors from Feb. 7-19

Insider Trading

• Pidilite Industries promoter Rashmikant Parekh sold 77,800 shares from Feb. 4-5.

(As Reported On Feb. 6)

Money Market Update

• The rupee ended at 71.20 against the dollar on Thursday versus 71.22 on Wednesday.

F&O Cues

Index Futures

• Nifty February futures closed at 12,136.3 discount of 1.5 points versus 2.8 points
• Nifty February futures open interest down 0.3 percent, sheds 38,000shares in open interest
• Nifty Bank February futures closed at 31,332.8 premium 28.8 points versus 48.4 points
• Nifty Bank futures open interest up 6 percent, adds 64,000 shares in open interest

Options

• Nifty PCR at 1.48 versus 1.38 (across all series)

Nifty Weekly Expiry: Feb 13

• Max open interest on call side at 12,200 (11.7 lakh shares)
• Max open interest on put side at 12,000 (13.9 lakh shares)
• Open interest addition seen at 12,100P (+9.7 lakh shares), 12,200C (+8.3 lakh shares), 12,100C (+6.8 lakh shares)

Nifty Monthly Expiry: Feb 27

• Max open interest on call side at 12,500 (23.9 lakh shares)
• Max open interest on put side at 12,000 (31 lakh shares)

Stocks In F&O Ban

• Yes Bank