A financial trader monitors data on computer screens on the trading floor. (Photographer: Jasper Juinen/Bloomberg)

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.

Also read: Davos Doesn’t Think There’s Going to Be a Global Recession

Asian Cues

  • 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.

Also read: 'Doom Loop' of Debt Threatens to Drag Down Australian Dollar

Commodity Cues

  • 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.

Also read: Oil Slips as China Warns of `Serious Challenges' to Global Order

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.

Indian ADRs

All You Need To Know Going Into Trade On Jan. 24 

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.

Offerings

  • 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
  • Biocon
  • Century Enka
  • Colgate Palmolive
  • Hatsun Agro Product
  • ICRA
  • Garware Polyester
  • indal Saw
  • Jyothy Laboratories
  • Kokuyo Camlin
  • KRBL
  • MphasiS
  • NIIT
  • Onward Technologies
  • Pfizer
  • PNB Housing Finance
  • PVR
  • Quess Corp
  • Reliance Power
  • Sharda Cropchem
  • Sintex Industries
  • Sterlite Technologies
  • Supreme Industries
  • Tijaria Polypipes
  • Zee Media Corporation
  • Ion Exchange
  • Nelco
  • 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.

Also read: Q3 Results: IndiGo Returns To Profit On Other Income, Forex Gain

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.

Also read: Q3 Results: Bharti Infratel’s Profit Beats Estimates On Exit Fee, Lower Costs

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.

Bulk Deals

  • 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.

Insider Trading

  • 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.

Trading Tweaks

  • 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.

F&O Cues

  • 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

Put-Call Ratio

  • Nifty PCR at 1.43 versus 1.53
  • Nifty Bank PCR at 0.86 versus 1.13
All You Need To Know Going Into Trade On Jan. 24 

Brokerage Radar

On Bharti Infratel

CLSA

  • 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.

UBS

  • 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.

Ambit

  • 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.

On ITC

CLSA

  • 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.

Macquarie

  • 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

Macquarie

  • 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.

JPMorgan

  • 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.

Morgan Stanley

  • 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

JPMorgan

  • 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.

Morgan Stanley

  • 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.

SBICAP

  • 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.

More Calls

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.