All You Need To Know Going Into Trade On February 17
Global equities witnessed a pullback in mid-week trading as treasury yields surged to the highest in a year. Yield on the benchmark 10-year treasuries touched 1.33% - the highest since February 2020.
Benchmark indices in Japan, South Korea and Australia are trading with losses this morning. Chinese equities will resume trading tomorrow after a week-long holiday.
Oil prices remained around the $60 per barrel mark as Bloomberg reported that adverse weather conditions impacted production by as much as 2 million barrels per day.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.6% to 15,241 as of 7:45 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.
Let’s take a look at the factors that may influence equities in today’s session:
- Futures on the Dow Jones are trading 50 points lower. The index closed with modest gains overnight.
- “The market is fairly frothy here from a sentiment perspective,” Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., said on Bloomberg TV. “You have to put a move higher in yields that goes out of the comfort zone as a potential risk associated with that.”
- The U.S. Dollar has strengthened against most of its major peers.
- Citigroup Inc. forecasts that Copper prices will rally to $10,000 per tonne in the next 6-12 months on better-than-expected recovery in demand.
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Nestle India Q4CY20 (Consolidated, YoY)
- Revenue up 9% at Rs 3,432.6 crore Vs Rs 3,149.3 crore (Bloomberg Estimate: Rs 3,510.2 crore)
- Ebitda up 12% at Rs 777 crore Vs Rs 694.1 crore (Bloomberg Estimate: Rs 848.4 crore)
- Ebitda Margin at 22.6% Vs 22% (Bloomberg Estimate: 24.2%)
- Net profit up 2% at Rs 483.3 crore Vs Rs 472.6 crore (Bloomberg Estimate: Rs 563.4 crore)
Stocks To Watch
- IndusInd Bank: Promoter IndusInd International Holdings completed its capital raise through a rights issue which was oversubscribed. IIHL has also decided to monetise some of the other mature, non-core investments, to support the redemption of the warrants. The funds from this divestment and the rights issue will be remitted on or before February 18, as permitted by SEBI. In a separate filing, promoters IndusInd Ltd. and IndusInd International Holding had pledge 5.64% stake in the bank with Catalyst Trusteeship. Catalyst Trusteeship is acting as security trustee on behalf of lenders.
- UltraTech Cement: Finance Committee of the Board of Directors approves allotment of unconditional, unsubordinated and unsecured U.S. Dollar denominated notes worth $400 million or Rs 2,900 crore due on February 16, 2031. The notes will have a coupon rate of 2.8% per annum, payable semi-annually starting August 16, 2021. The notes will be listed on the Singapore Exchange Securities Trading Ltd.
- Adani Ports & SEZ: Has completed the acquisition of Dighi Port for Rs 705 crore and would invest over Rs 10,000 crore in developing it as an alternate gateway to JNPT. This would enable the company to service customers in Maharashtra which includes the highly industrial areas in the Mumbai and Pune regions.
- Ashok Leyland: Has invested a total amount of Rs 18.66 crore constituting 26% of the paid-up share capital of Prathama Solarconnect Energy.
- Bajaj Electricals: ICRA has upgraded the rating of long-term Line of Credit from A- to A and the rating of short-term Line of Credit from A2+ to A1. Similarly the rating agency has upgraded the credit rating of Non-convertible debentures from A- to A.
- Future Consumer: Has defaulted on payment of principal of Rs 11.76 crore and interest of Rs 5.58 crore due on unlisted NCDs issued by the company. The total financial indebtedness of the listed entity including short-term and long-term debt stands at Rs 526 crore.
- Heritage Foods: Heritage Novandie Foods, a 50:50 joint venture company between Heritage Foods and Novandie, France has started the commercial production on February 16, 2021 and launched French Yoghurt brand Mamie Yova in India.
- ICICI Bank: Has entered into an agreement to acquire 9.65% stake in Thillais Analytical Solutions - a fintech startup operating a neo-banking platform called Vanghee. The stake will be purchased for a cash consideration of Rs 1.1 crore. The lender will also invest a sum of Rs 4.93 crore in Tap Smart Data Information Services, post which, it will hold 5.4% stake in the fintech company.
- Infosys: Infosys McCamish Systems, a U.S.-based subsidiary of Infosys BPM, has bought the business and underwriting platform of STEP Solutions Group LLC to ease the complexity of all types of insurance products such as Life, Annuity, and Health, for individuals and groups across North America. STEP Solutions Group LLC is an affiliate of the Dillon Kane Group LLC, based in Chicago.
- Mahindra Lifespace Developers: Has announced the inauguration of the Yanmar Group facility at ORIGINS, Chennai. ORIGINS, Chennai is an industrial park developed in a joint venture between a subsidiary of MLDL and Sumitomo Corporation of Japan. With a built-up area of 23,708 sq. mts, the Yanmar Group facility has an annual production capacity of 80,000 engines and will cater to domestic and export markets.
- Page Industries: Vedji Ticku has resigned as the Chief Executive Officer and Executive Director of the company. The resignation will be effective from close of business hours on May 31, 2021.
- TVS Srichakra: Has signed a Memorandum of Understanding with the Government of Tamil Nadu to facilitate planned capital expenditure program of Rs 1,000 crore announced on December 8, 2020.
- L&T Finance Holdings: Has closed its rights issue and has raised over Rs 2,998 crore. The rights issue was oversubscribed by approximately 15%. The allotment of shares will take place next week and shares will be listed on BSE and NSE on or by February 26.
CLSA On Nestle India
- Maintains outperform rating
- Price target cut to Rs 19,000 from Rs 19,400
- Weak earnings reflect lower yield and higher taxes
- Higher marketing spends and staff costs absorbed gross margin benefits
- Focused approach expected to drive demand; capacity augmentation critical
- Cut CY21-22 EPS estimates by 2% on lower yield effect and likely higher A&P spends
HSBC On Nestle India
- Maintains buy rating
- Price target of Rs 20,000
- Domestic sales growth of 10.1% was impressive
- Growth is now consistently broad-based, pointing to clear acceleration in categories like milk and nutrition
- Innovation-led health and wellness focus is the key long-term appeal
- Current price builds in long-term earnings growth of 12.6%, which we see as undemanding
UBS On JSW Energy
- Maintains buy rating
- Price target raised to Rs 87 from Rs 68
- Risk reducing in the existing portfolio
- Near-term earnings visibility has improved with almost 80% of the existing capacity now covered with PPAs
- Focus on renewables capacity addition is a key medium-term positive
- Street is not pricing in the lowered risk in the existing portfolio
- Higher PPA proportion drives 6% raise in FY22/23 EPS estimates
Emkay On Varun Beverages
- Maintains buy rating
- Price target raised to Rs 1,030 from Rs 875
- Faster growth revival in volumes
- Margins can throw up a potential surprise
- Forecast Ebitda/EPS CAGR of 14%/28% over CY19-22E
- Faster-than-expected recovery and improved earnings growth visibility drives multiple revision
Pledge Share Details
- JSW Steel: Promoter JSW Holdings revoked pledge of 2.14 crore shares on February 10.
- Max Financial Services: Promoter Max Ventures Investment Holdings revoked pledge of 4.65 lakh shares on February 12.
- DB Corp: Promoter DB Consolidated revoked pledge of 20 lakh shares on February 15.
- Solara Active Pharma Sciences: Promoter Pronomz Ventures LLP created a pledge of 6.03 lakh shares on February 12.
As Reported On February 16.
- Mayur Uniquoters: IDFC Tax Advantage ELSS Fund bought 2.25 lakh shares (0.50%) at Rs 422.5 per share. Standard Chartered Classic Equity Fund bought 2.25 lakh shares (0.50%) at Rs 422.5 per share. IDFC Dynamic Equity Fund bought 2.25 lakh shares (0.50%) at Rs 422.5 per share. IDFC Small And Midcap Equity bought 2.25 lakh shares (0.50%) at Rs 422.5 per share. Kotak Funds-India Midcap Fund sold 9.50 lakh shares (2.10%) at Rs 422.52 per share.
- APL Apollo Tubes: Promoter APL Infrastructure sold 30 lakh shares (2.40%) at Rs 965.15 per share. Smallcap World Fund Inc bought 8.59 lakh shares (0.69%) at Rs 965 per share.
Who’s Meeting Whom
- UltraTech Cement: To meet BNP Asset Management Asia on February 17.
- Price Band Revised From 10% To 5%: Jaiprakash Power Ventures, Optiemus Infracom, Yaarii Digital Integrated Services
- Price Band Revised From 20% To 10%: Goldiam International, Goldiam International, OnMobile Global
- Ex-Date Rights Issue: Authum Investment & Infrastructure, Patel Integrated Logistics
- Ex-Date Bonus Issue: ASM Technologies
- Ex-Date Income Distribution: Mindspace Business Parks REIT
- Ex-Date EGM: PDS Multinational Fashions
- Ex-Date Interim Dividend: Sun TV Network, Firstsource Solutions, MRF, BPCL, Indian Railway Finance Corporation, Kalpataru Power Transmission, The Sandesh, Polyplex Corporation, Page Industries, ONGC, BEML, AVT Natural Products, Akzo Nobel India, Amrutanjan Health Care, Computer Age Management Services, CARE Ratings, ESAB India, Everest Organics, Garden Reach Shipbuilders & Engineers, Hinduja Global Solutions, Indian Metals & Ferro Alloys, Jamna Auto Industries, Metropolis Healthcare, MOIL, NLC India, Page Industries, Polyplex Corporation, Rashtriya Chemicals & Fertilizers, Rishiroop, Shivalik Bimetal Controls, Suven Pharmaceuticals, SVP Global Ventures, Vidhi Specialty Food Ingredients
- Record Date Interim Dividend: Nilkamal, Acrysil, Share India Securities, TCI Express, GPT Infraprojects, Gulf Oil Lubricants India, Torrent Power
- Move Into ASM Framework: Olectra Greentech
- Move Into Short-term ASM Framework: Mayur Uniquoters, Likhitha Infrastructure, Goldiam International, Kirloskar Industries, Shakti Pumps (India), Shriram City Union Finance, HG Infra Engineering
- Move Out Of Short-term ASM Framework: PNG Gilts, NCC, Intellect Design Arena, Olectra Greentech
- Spandana Sphoorty Financial: Promoter Padmaja Gangireddy acquired 10,000 shares on February 15.
- Adani Green Energy: Promoter Harmonia Trade and Investment acquired 25 lakh shares on February 15.
- Godrej Agrovet: Promoter Godrej Industries acquired 13,548 shares on February 11.
- Asian Granito India: Promoter Kamleshbhai Patel acquired 25,000 shares on February 15.
- JK Cement: Promoter Kalpana Singhania sold 15,000 shares between February 11-12.
- Aarti Industries: Promoter Jaya Gogri sold 2,700 shares on February 12.
- Kotak Mahindra Bank: Promoter Janak Desai sold 4,000 shares on February 16.
As Reported On February 16.
Money Market Update
- The currency ended at 72.69 against the U.S. Dollar, as compared to Monday's close of 72.68.
- Nifty February futures end at 15,332; premium of 19 points
- Nifty February futures shed 1% and 1,439 shares in Open Interest
- Nifty Bank February futures end at 37,245; premium of 147 points
- Nifty Bank February futures shed 13.7% and 10,803 shares in Open Interest
- Nifty Put-Call Ratio at 1.38
- Out of F&O Ban: BHEL
- Stocks In F&O Ban: SAIL