Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

All You Need To Know Going Into Trade On Jan. 22

Asian stocks saw muted trading early Tuesday as investors weighed the latest batch of headlines on global growth and trade, without any direction offered from American markets that were shut for a holiday Monday.

Shares were flat in Japan and dipped in Australia after stocks in Europe slipped on Monday. Contracts on the S&P 500 Index declined. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade at 10,955.50 as of 6:55 a.m.

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

U.S. Market Check

U.S. equity futures and European stocks slipped on Monday while Asian markets posted modest gains as investors weighed the latest batch of competing headlines on global growth and trade.

With American markets shut for a holiday, there seemed to be little to inspire either contracts on the S&P 500 Index or the Stoxx Europe 600 Index, with the latter paring the worst of an early drop but still ending slightly down. The ten-year Treasury yields dipped 1 basis point to 2.77 percent.

Also read: Hedge Fund Billionaire Griffin Buys $122 Million London Home

Asian Cues

  • Japan’s Topix Index was little changed.
  • S&P/ASX 200 fell 0.2 percent.
  • Futures on the S&P 500 Index sank 0.4 percent.

Also read: China’s Xi Warns Party of ‘Serious Dangers’ as Risks Mount

Commodity Cues

  • West Texas Intermediate crude climbed 0.2 percent to $53.90 a barrel.
  • Brent crude ended a little changed at $62.74 a barrel.
  • Gold fell 0.1 percent to $1,280.31 an ounce.

Also read: Nigeria's $15 Billion Oil Refinery Is on Track, Dangote Says

London Metal Exchange

  • Aluminium ended 0.96 percent lower.
  • Tin ended lower for the second day, up 0.12 percent.
  • Nickel ended 0.17 percent lower.
  • Copper halted a four-day rally, down 1.17 percent.
  • Lead ended higher for the second day, up 0.75 percent.
  • Zinc ended higher for the fourth day, up 0.31 percent.

Key Events To Watch This Week

  • Earnings season is in full swing: Johnson & Johnson, IBM, UBS, United Technologies, Texas Instruments, and Ford are among companies posting results this week.
  • The World Economic Forum, the annual gathering of global leaders in politics, business and culture, opens in Davos, Switzerland on Tuesday.
  • There are monetary-policy decisions for the Bank of Japan (Wednesday), the Bank of Korea and the European Central Bank (both Thursday).

Also read: Davos 2019: Sanjiv Bajaj Thinks The NBFC Crisis Is Over But Things Will Take Time To Tidy Up

Stocks To Watch

  • IDBI Bank’s board approved to reinitiate divestment process of the bank’s stake in IDBI Federal Insurance.
  • Sanwaria Consumer board approved raising $100 million via equity shares on a preferential basis by various methods including ADRs/GDRs and share warrants.
  • Power Grid Corporation appointed director Ravi Singh as CMD with effect from Jan. 21 till a regular appointment is made for the post after outgoing CMD S. Jha gets released by Power Ministry post his appointment as the member of Central Electricity Regulatory Commission.
  • Canara Bank said that it started inviting bids to offload its equity stake in NSDL, NSDL e-Governance Infra and Small Industries Development Bank of India.
  • UFO Moviez: National Company Law Tribunal dismissed amalgamation scheme of the company with Qube Cinemas and other three entities. The company said it that it is currently under the process of exploring its options resultant to the order passed by NCLT.

Also read: L&T To Decide On Buyback Rejection After Announcing Q3 Earnings On Friday

Nifty Earnings To Watch

  • Asian Paints

Also read: All You Need To Know Going Into The Third Quarter Earnings Season

Other Earnings To Watch

  • Agro Tech Foods
  • Alembic Pharmaceuticals
  • Aurionpro Solutions
  • Cupid
  • Confidence Petroleum
  • Havells
  • HDFC Standard Life Insurance
  • ICICI Prudential Life Insurance
  • Kirloskar Industries
  • Oberoi Realty
  • Reliance Nippon Life Asset Management
  • Sadhana Nitrochem
  • Shree Cement
  • TVS Motor
  • Genus Power Infrastructures
  • Dolat Investments
  • Rane (Madras)
  • Syngene International

Also read: Davos 2019: India’s World-Beating Growth Run To Continue, IMF Says

Earnings Reaction To Watch

HDFC AMC (Q3,YoY)

  • Revenue up 2 percent at Rs 477.1 crore.
  • Net profit up 24.7 percent at Rs 243.3 crore.
  • EBIT up 21.3 percent at Rs 312.5 crore.
  • Margin at 65.5 percent versus 55.1 percent
  • Other Income up 2.1 times at Rs 55.9 crore.
  • Total AUM up 12 percent at Rs 3,29,100 crore (QoQ)
  • Actively Managed Equity AUM up 4 percent at Rs 1,53,500 crore (QoQ)

Zensar Technologies (Q3, QoQ)

  • Dollar Revenue up 4 percent at $143.7 million.
  • Revenue up 6.9 percent at Rs 1,035.6 crore.
  • Net profit down 40.8 percent at Rs 55.3 crore.
  • EBIT down 16.6 percent at Rs 75.8 crore,
  • Margin at 7.3 percent versus 9.4 percent.
  • Other Income of Rs 41.3 crore in base quarter.

L&T Finance Holdings (Q3 Consolidated, YoY)

  • Net interest income up 55.1 percent at Rs 503.4 crore.
  • Net profit up 80.8 percent at Rs 579.9 crore.
  • Other Income of Rs 272.4crore
  • NIMs plus fees at 6.79 percent versus 5.62 percent.
  • Lending business book up 23 percent at Rs 93,708 crore.

Coromandel International (Q3 Consolidated, YoY)

  • Revenue up 11.5 percent at Rs 3,049.5 crore.
  • Net profit down 14.5 percent at Rs 154.3 crore.
  • Ebitda down 7.2 percent at Rs 303.9 crore.
  • Margin at 10 percent versus 12 percent.
  • Other Expenses up 51 percent at Rs 245.7 crore.

IRB Invit Fund (Q3, YoY)

  • Revenue up 2 percent at Rs 306.2 crore.
  • Net profit down 18.6 percent at Rs 52.2 crore.
  • Ebitda down 10.7 percent at Rs 87.2 crore.
  • Margin at 28.5 percent versus 32.5 percent.
  • Project management expenses up 80 percent at Rs 34.8 crore.
  • Trust declares distribution of Rs 3.1 per unit held.

Bhageria Industries (Q3, YoY)

  • Revenue up 23.6 percent at Rs 112 crore.
  • Net profit up 7.1 percent at Rs 15.1 crore.
  • Ebitda flat at Rs 25.7 crore.
  • Margin at 22.9 percent versus 28.7 percent.
  • Raw materials as percent of sales at 64 percent versus 54 percent.
  • Declares dividend of Rs 3.75 per share

Pondy Oxides & Chemicals (Q3, YoY)

  • Revenue up 7.2 percent at Rs 255.2 crore.
  • Net profit up 40 percent at Rs 11.2 crore.
  • Ebitda up 30.3 percent at Rs 20.2 crore.
  • Margin at 7.9 percent versus 6.5 percent

Sundaram Finance Holdings (Q3, YoY)

  • Revenue up 80.4 percent at Rs 25.8 crore.
  • Net profit up 54.5 percent at Rs 17.3 crore.

Sasken Technologies (Q3, QoQ)

  • Revenue up 7.3 percent at Rs 121.4 crore.
  • Net profit up 7.1 percent at Rs 18.1 crore.
  • EBIT down 6 percent at Rs 11 crore.
  • Margin at 9.1 percent versus 10.3 percent
  • Revenue from top five consumers at 52.2 percent.

Just Dial (Q3 Standalone, YoY)

  • Revenue up 15.2 percent at Rs 226.8 crore.
  • Net profit up 2 times at Rs 57.3 crore.
  • Ebitda up 18.7 percent at Rs 55.2 crore.
  • Margin at 24.3 percent versus 23.6 percent.
  • Other income of Rs 34.1 crore.

Bulk Deals

  • EID Parry: Ardhya Investors sold 9.83 lakh shares or 0.56 percent equity at Rs 200.09 each.

New Offerings

  • Xelpmoc Design to Sell Shares at Rs 62-66 each in IPO starting Jan 23.

Trading Tweaks

  • KG Denim, IOC buyback period opens till Feb. 4.
  • Excel Industries price band revised to 5 percent.

Who’s Meeting Whom

  • Balaji Telefilms to meet Sundaram MF and MK Ventures from Jan. 22-23.
  • Mishra Dhatu Nigam to meet HDFC MF on Jan. 25.

Insider Trading

  • Oriental Hotels promoter and director Dodla Varada Reddy acquired 73,500 shares from Sep. 21-28 (2018).
  • Satin Credit Network promoter Trishashna Holdings acquired 1.91 lakh shares between Jan. 11-18.
  • Aster DM Healthcare promoter Dr. Azad Moopen acquired 60,000 shares between Jan. 17-18.

(As reported on Jan. 21)

Money Market Update

  • The rupee on Monday weakened for the second straight day to close at 71.28/$ against Friday’s closing of 71.19/$.

F&O Cues

  • Nifty January futures closed trading at 10902, premium of 60 points.
  • Max open interest for January series at 11,000 call (open interest at 32.6 lakh shares.
  • Max open interest for January series at 10,700 put (open interest at 36.3 lakh shares)
All You Need To Know Going Into Trade On Jan. 22

Stocks In F&O Ban

  • Adani Power
  • Jet Airways

Put-Call Ratio

  • Nifty PCR at 1.59 versus 1.56.
  • Nifty Bank PCR at 1.18 versus 1.14.
All You Need To Know Going Into Trade On Jan. 22

Brokerage Radar

On Kotak Mahindra Bank

CLSA

  • Maintained ‘Buy’ with a price target of Rs 1,500.
  • Stronger CASA franchise aids bank’s earnings.
  • Asset quality trends were stable along with improved coverage.
  • Believe the bank can deliver healthy 21 percent earnings CAGR over FY18-21.

Macquarie

  • Maintained ‘Outperform’; hiked price target to Rs 1,450 from Rs 1,325.
  • In-line numbers and a stable quarter; sound balance sheet.
  • Key Highlights: stable asset quality and CASA ratio, decent loan growth and improving margins.
  • Loan growth driven by CVs, personal loans and corporate banking.

Edelweiss

  • Maintained ‘Buy’; hiked price target to Rs 1,446 from Rs 1,413.
  • Growth momentum sustains; visibility improves.
  • Asset quality steady despite uncertainties.
  • Liability franchise continues to impress, best among peers.

On Union Bank

CLSA

  • Maintained ‘Buy’ with a price target of Rs 105.
  • Slippage stays elevated due to stress in corporate and SME portfolios.
  • Slower loan growth will help preserve capital and CASA franchise.
  • Earnings to normalise from 2019-20 onwards.

Edelweiss

  • Maintained ‘Hold’; cut price target to Rs 90 from Rs 110.
  • Business momentum continues to be soft.
  • Asset quality steady, outlook cautious.
  • Believe dilution risks and structural challenges would persists.

On Hindustan Zinc

Macquarie

  • Maintained ‘Underperform’; cut price target to Rs 230 from Rs 240.
  • December quarter was in line, but project delays suggest lower volume growth
  • Commodity prices to remain unfavourable.
  • Premium valuations difficult to justify given attractive alternates.

Edelweiss

  • Maintained ‘Buy’ with a price target of Rs 312.
  • Performance in line; volume uptick imminent.
  • Dividend yield of 7 percent looks sustainable.
  • Likely to hit mined metal capacity of 1.2 MTPA by September.

More Calls

Macquarie on Nestle

  • Initiated ‘Outperform’ with a price target of Rs 12,994.
  • Best way to play packaged goods space.
  • Market-share wins in core categories have led to strong volume growth.
  • Premium valuations to sustain on strong earnings, ROE.

CLSA on Ashok Leyland

  • Maintained ‘Sell’; cut price target to Rs 75 from Rs 85.
  • Truck industry likely to enter into a downturn after five years of up-cycle.
  • New axle load norms hurting industry mix too; scrappage policy unlikely.
  • Competition likely to intensify; Stock expensive for a looming downturn.

Motilal Oswal on MRPL

  • Upgraded to ‘Buy’ from ‘Neutral’; maintained price target at Rs 86.
  • Expect better refining margins.
  • Upgraded to ‘Buy’ on higher margins and attractive valuations.
  • Post expansion, MRPL’s GRMs to be at a premium of $2-3/bbl over Singapore complex GRM.

Macquarie on Just Dial

  • Maintained ‘Neutral’ with a price target of Rs 500.
  • December quarter’s performance mixed with improved top-line growth but lower than expected operating margin.
  • Huge jump in other income led to net profit doubling.
  • Paid campaigns see impressive traction; realisations were flat on a sequential basis.