All You Need To Know Going Into Trade On Jan. 24
Asian stocks showed little movement Thursday as investors continued to debate the outlook for economic growth amid a raft of earnings.
Shares posted modest losses in Tokyo, and were little changed in Sydney and Seoul. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.25 percent to 10,868 as of 7:10 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- Stocks closed higher Wednesday after whipsawing investors through the day amid the ongoing debate over the outlook for global growth.
- The yield on 10-year Treasuries held at 2.74 percent.
- Japan’s Topix index fell 0.4 percent.
- Futures on the S&P 500 dipped 0.2 percent.
- Hang Seng futures dropped 0.1 percent.
- South Korea’s Kospi rose 0.2 percent.
- Brent crude ended lower for the second day, down 0.59 percent to $61.14 per barrel.
- West Texas Intermediate crude fell 0.7 percent to $52.41 a barrel.
- Gold was little changed at $1,283.36 an ounce.
London Metal Exchange
- Aluminium ended 1.38 percent lower.
- Nickel halted a two-day decline, up 0.99 percent.
- Tin ended 1.35 percent higher.
- Lead ended higher for the fourth day, up 0.35 percent.
- Zinc ended 1.71 percent higher.
- Copper ended a two-day decline, up 0.28 percent.
Key Events To Watch This Week
- The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.
- There are monetary-policy decisions for the Bank of Korea and the European Central Bank, both Thursday.
Stocks To Watch
- Moody’s upgraded IDBI Bank’s ratings across various instruments in view of significant capital infusion by LIC. The long-term local and foreign currency ratings has been upgraded by three notches to ‘Ba2’ from ‘B1’.
- Infosys partnered with HPE GreenLake for consumption- based IT models for smart infra investments.
- Bharat Financial Inclusion completed its sixth direct assignment worth Rs 832.3 crore to a public sector bank in financial year 2019.
- MEP Infra’s arm entered into a concession contract with NHAI for HAM project in Maharashtra for Rs 567.8 crore. The appointed date for the project stands at Jan. 21.
- Dena Bank clarified on the news that it is selling prime properties worth Rs 540 crore and the bank initiated the process of the sale of these non-core assets after taking necessary approvals.
- Lakshmi Vilas Bank reappointed Parthasarathi Mukherjee as its Chief Executive Officer and Managing Director of the bank for two years with effect from Jan. 25.
- Apollo Microsytems bags supplied order of Rs 13 crore from Bharat Dynamics.
- Persistent Systems to consider share-buyback proposal on Jan. 27.
- Xelpmoc Design & Tech get 45 percent demand for shares offered on first day sale, offer close Jan. 25.
Nifty Earnings To Watch
- Yes Bank
- UltraTech Cement
Other Earnings To Watch
- Bharat Bijlee
- Century Enka
- Colgate Palmolive
- Hatsun Agro Product
- Garware Polyester
- indal Saw
- Jyothy Laboratories
- Kokuyo Camlin
- Onward Technologies
- PNB Housing Finance
- Quess Corp
- Reliance Power
- Sharda Cropchem
- Sintex Industries
- Sterlite Technologies
- Supreme Industries
- Tijaria Polypipes
- Zee Media Corporation
- Ion Exchange
- Newgen Software Technologies
- Poddar Pigments
- Pudumjee Paper Products
- Punjab Chemicals & Crop Protection
- VST Industries
Earnings Reaction To Watch
InterGlobe Aviation (Q3, YoY)
- Revenue up 28 percent to Rs 7,916 crore.
- Net Profit down 75 percent to Rs 191 crore.
- Ebitdar down 19 percent to Rs 1,595 crore.
- Ebitdar Margin at 20.15 percent versus 32 percent.
Bharti Infratel (Q3, QoQ)
- Revenue down 0.2 percent at Rs 3,640 crore.
- Net profit up 8 percent at Rs 648 crore.
- Ebitda up 0.5 percent at Rs 1513 crore.
- Margin at 41.2 percent versus 41.6 percent.
Pidilite Industries (Q3, YoY)
- Revenue up 19.8 percent at Rs 1,848.3 crore.
- Net profit down 8.5 percent at Rs 219.5 crore.
- Ebitda down 9 percent at Rs 336.7 crore.
- Margin at 18.2 percent versus 24 percent.
- Volume growth at 11 percent (standalone)
United Spirits (Q3, YoY)
- Revenue up 10.5 percent at Rs 2,501.2 crore.
- Net profit up 42.8 percent at Rs 192.4 crore.
- Ebitda up 27.8 percent at Rs 348.1 crore.
- Margin at 13.9 percent versus 12 percent.
- Other Income at Rs 61.4 crore versus Rs 23.6 crore.
- Exceptional loss of Rs 20 crore versus exceptional loss of 12.6 crore.
Hathway Cable & Datacom (Q3, YoY)
- Revenue down 2.7 percent at Rs 134.9 crore.
- Net profit down 73.2 percent at Rs 6.4 crore.
- Ebitda down 14.5 percent at Rs 51.4 crore.
- Margin at 38.1 percent versus 43.3 percent.
Navin Fluorine (Q3, YoY)
- Revenue up 2 percent at Rs 226 crore.
- Net profit down 18.7 percent at Rs 38.8 crore.
- Ebitda flat at Rs 52.4 crore.
- Margin at 23.2 percent versus 23.7 percent.
- Other income of Rs 23 crore in base quarter.
Ujjivan Financial Services (Q3, YoY)
- Total interest income up 33.4 percent at Rs 512.6 crore.
- Net interest income up 30.2 percent at Rs 252 crore.
- Net profit up 54 percent at Rs 45.2 crore.
- Net interest margin flat at 11.8 percent.
- Loan Book up 31.8 percent at Rs 9,349 crore.
Thirumalai Chemicals (Q3, YoY)
- Revenue down 6.1 percent at Rs 323.6 crore.
- Net profit down 77.9 percent at Rs 11.4 crore.
- Ebitda down 66.8 percent at Rs 26.4 crore.
- Margin at 8.2 percent versus 23.1 percent
JM Financial (Q3, YoY)
- Net Interest Income up 5.6 percent at Rs 519.9 crore.
- Net profit down 12.6 percent at Rs 137.5 crore.
- Other income of Rs 16.4 crore.
- AUM Of mutual fund schemes at Rs 11,364 crore.
Reliance Communications (Q3, QoQ)
- Revenue up 9.5 percent at Rs 1,070 crore.
- Net loss at Rs 238 crore versus net loss at Rs 130 crore.
- Ebitda up 43.1 percent at Rs 146 crore.
- Margin at 13.6 percent versus 10.4 percent.
Sintex Plastics Technology (Q3, YoY)
- Revenue down 16.7 percent at Rs 1,110.4 crore.
- Net profit down 50 percent at Rs 25.9 crore.
- Ebitda down 17.6 percent at Rs 152.3 crore.
- Margin at 13.7 percent versus 13.9 percent.
Everest Industries (Q3, YoY)
- Revenue up 5.5 percent at Rs 307.3 crore.
- Net profit up 22.3 percent at Rs 11.5 crore.
- Ebitda up 13.2 percent at Rs 21.4 crore.
- Margin at 7 percent versus 6.5 percent.
- Hathway Cable & Datacom: Norges Bank sold 2.27 crore shares or 2.64 percent equity at Rs 31.65 per share.
Ratnamani Metal Tubes
- Kotak Mahindra MF acquired 6.89 lakh shares or 1.48 percent equity at Rs 780 per share.
- Nalanda India Fund sold 7.5 lakh shares or 1.61 percent equity at Rs 781.65 each.
- Gulshan Polyols promoter Aditi Pasari acquired 15,300 shares betwen Dec. 19 to Jan. 18.
- BC Power Controls promoter group Bon Lon Steels sold 2.5 lakh shares between Jan. 8-18.
- KPIT Technologies ex-date for scheme of amalgamation (spin off).
- Seamec, Vivimed Labs and GTL Infra to move into short term ASM Framework.
- CESC Ventures, Spencer’s Retail ex-date for share listing.
(As reported on Jan. 23)
Money Market Update
- The rupee on Wednesday snapped its three-day losing streak and closed at 71.33/$. It closed at 71.44/$ on Tuesday.
- Nifty January futures closed trading at 10855, premium of 23 points.
- Max OI for January series at 11,000 Call, OI at 43.1 lakh shares.
- Max OI for January series at 10,800 Put, OI at 32.5 lakh shares.
Stocks In F&O Ban
- In ban: Jain Irrigation, Jet Airways, Reliance Capital
- New in ban: Jain Irrigation
- Out of ban: Adani Power
- Nifty PCR at 1.43 versus 1.53
- Nifty Bank PCR at 0.86 versus 1.13
On Bharti Infratel
- Maintained ‘Outperform’ with a price target of Rs 315.
- December quarter results were ahead of estimates; cost controls support margins.
- Rise in rent per operator driving revenue surprise.
- Expect tenancy growth to return.
- Maintained ‘Buy’ with a price target of Rs 355.
- December quarter beat estimates aided by better rental realisation and exit charge
- Ebitda growth driven both by higher revenues and lower opex.
- Shares are attractively valued.
- Maintained ‘Buy’ with a price target of Rs 352.
- Infratel’s results were ahead of our and consensus’ muted expectations.
- Discussion on exit penalties to dominate in the conference call.
- Change of ownership and increased rollouts by incumbents is key catalyst.
- Maintained ‘Buy’ with a price target of Rs 400.
- Operating performance broadly in line.
- Strong cigarette volume growth; estimate cigarette volume growth at 8 percent.
- Strong FMCG and paperboard but Agri remains a drag.
- Maintained ‘Outperform’ with a price target of Rs 376.
- Cigarette volumes growth of 8 percent for December quarter; strong volume recovery is cornerstone of turnaround.
- Believe pressure on cigarette margins will subside going forward.
- Strong performance in rest of the businesses.
On United Spirits
- Maintained ‘Underperform’ with a price target of Rs 511
- Operating income missed due to lower gross margin; consensus downgrades likely.
- Believe pressure on gross margin is due to higher input cost inflation and lower pricing.
- Expect A&P spend to remain high on higher competitive intensity.
- Maintained ‘Overweight’ with a price target of Rs 680.
- December quarter’s first cut: Unexciting operational performance.
- Gross margin moderation on a sequential basis was a negative.
- Margins declined due to higher cost of goods, price reductions and higher trade spend.
- Maintained ‘Overweight’ with a price target of Rs 700.
- December quarter review: Strong revenues, but margins disappoint.
- Continue strong volume growth momentum in the 'Prestige and above' segment.
- Flat gross margins, however, disappointed in December quarter.
On InterGlobe Aviation
- Maintained ‘Underweight’ with a price target of Rs 940.
- Yield improved, but load factor was the offsetting factor in RASK.
- Positive spread, however, below long cycle average levels.
- Management commentary constructive on outlook as well.
- Maintained ‘Overweight’ with a price target of Rs 1,311.
- Indigo's profits missed estimate on lower volumes.
- Inflection in the yield trend is a larger positive.
- Risk/reward is attractive at current levels.
- Maintained ‘Buy’ with a price target of Rs 1,234.
- Yield improvement comes at the cost of PLF; no respite from cost pressure.
- December quarter’s performance was weak, but the operating environment is turning benign.
- Tier 2/3 cities and international markets driving growth.
CLSA on Oberoi Realty
- Maintained ‘Buy’; hiked price target to Rs 543 from Rs 481.
- Results below estimates on project mix change.
- Lease income a bright spot, capex being stepped up.
- Price target hiked to reflect lower cap rates and discount rates.
CLSA on Tata Motors
- Maintained ‘Sell’ with a price target of Rs 150.
- Tata’s India business value has cyclically peaked.
- Brexit uncertainty rising with no deal thus far and March deadline approaching.
- JLR volumes remain under pressure.
Macquarie on Ujjivan
- Maintained ‘Outperform’; hiked price target to Rs 350 from Rs 290.
- Strong performance across metrics.
- Company did not see a liquidity crunch and foresees no impact from loan waivers.
- No change to EPS; roll forward target to 2020-21.
JPMorgan on Pidilite
- Maintained ‘Neutral’ with a price target of Rs 1,120.
- December quarter review: Earnings miss on sharp margin contraction despite revenue beat.
- Margin delivery weighed down by input cost inflation.
- Margin miss likely drive earnings downgrades, but sequentially expect margins to start moving up.
Emkay on Radico Khaitan
- Maintained ‘Buy’ with a price target of Rs 547.
- Another strong quarter; premiumization-led margin expansion.
- Positives: strong growth, expansion in operating margins and debt reduction.
- Stock available cheap for a consumer name.