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

Asian stocks edged higher as investors mulled updates on the deadly coronavirus outbreak.

Shares saw modest gains in Japan and Australia. U.S. stock futures were steady after the S&P 500 eked out a small advance helped by gains for big tech companies. Markets in mainland China and South Korea are shut, and Hong Kong closes early, for lunar new year holidays.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 12,160 as of 6:50 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 eked out a small advance, dodging the losses that took hold in Europe and Asia, as investors evaluated the risk that a deadly respiratory virus spreading from China could curb global growth.
• Oil is on track for its third straight week of declines as investors remained focused on the risk that China’s coronavirus outbreak may dent demand.

Get your daily fix of global markets here.

Earnings Reaction To Watch

HDFC Life Insurance (Q3, YoY)

• Gross premium rose 14.9 percent to Rs 8,001 crore.
• PAT rose 2 percent to Rs 250 crore.

Biocon (Q3, YoY)

• Revenue rose 13.5 percent to Rs 1,748.1 crore.
• Net profit fell 6.6 percent to Rs 202.8 crore.
• EBITDA rose 16.7 percent to Rs 444.2 crore.
• Margin stood at 25.4 percent vs 24.7 percent.
• Small molecules revenue rose 16 percent to Rs 543.8 crore.
• Biologics revenue rose 31 percent to Rs 588.2 crore.
• Branded Formulations revenue fell 26 percent to Rs 157.3 crore.

Cholamandalam Investment & Finance (Q3, YoY)

• Net Interest Income rose 21.3 percent to Rs 925.3 crore.
• Net profit rose 27.6 percent to Rs 388.5 crore.
• Disbursements fell 2 percent to Rs 747.5 crore.

Zensar Tech (Q3, QoQ)

• Revenue fell 4.8 percent to Rs 1,020.6 crore.
• Net profit fell 50.6 percent to Rs 39.5 crore.
• EBIT fell 74.6 percent to Rs 28.4 crore.
• Margin stood at 2.8 percent vs 10.4 percent.

CDSL (Q3, YoY)

• Revenue rose 17.4 percent to Rs 54.1 crore.
• Net profit fell 26 percent to Rs 20.8 crore.
• Took one-time charge for a non-recurring previous years’ anticipated statutory liability of Rs 10.6 crore.

Nifty Earnings To Watch

• JSW Steel
• UltraTech Cement

Other Earnings To Watch

• Bank of Baroda
• Aavas Financiers
• Prestige Estates Projects
• Sonata Software
• Supreme Industries
• Wendt
• Allsec Technologies
• Atul
• EIH
• Emkay Global Financial Services
• Kirloskar Ferrous
• Onward Technologies Apollo Micro Systems
• Indian Bank
• Mangalam Drugs And Organics

Indian ADRs

Stocks To Watch

• Telcos: Department of Telecommunications has directed officials not to take action against the companies on adjusted gross revenue non-payment, according to Bloomberg report.
• Reliance Jio has paid Rs 195 crore to DoT to clear all AGR dues until Jan. 31, according to a TI report.
• GAIL filed an application with Supreme Court seeking clarification on the provisional assessment orders the company has received from DoT.
• KEI Industries approved QIP Floor Price at Rs 518.14 per share, which is at a discount of 1 percent to the closing prices as on Jan. 23. Company looking to raise Rs 400 crore with a greenshoe option to raise another Rs 100 crore. If the company raises Rs 500 crore at issue price, it will lead to equity dilution of 10.8 percent stake on the expanded equity base.
• Infosys: SEBI may probe whistleblower allegations against the company, according to a Bloomberg report.
• Biocon: Kiran Mazumdar Shaw appointed as the executive chairperson for five years with effect from April 1. Her term as managing director will come to an end on March 31, and she is not seeking re-appointment.
• Olectra Greentech’s arm Evey received letters of award for the deployment of 555 electric buses from 8 city/state transport authorities. The contract period is for 10-12 years.
• PNB Housing Finance said that Punjab National Bank will maintain a minimum shareholding in PNB Housing Finance at 26 percent and will continue to be the promoter of the company.
• HFCL said that its greenfield optical fibre manufacturing facility at Hyderabad has been commissioned and commenced its operations with effect from Jan. 23.
• Muthoot Finance will consider raising funds via non-convertible debentures on Feb. 14.
• Info-Edge has set up an AIF to invest in tech- and tech-enabled entities. The company will invest Rs 100 crore in the fund.
• Century Textiles & Industries: Board to consider raising the capital issue of NCDs for a rose to Rs 400 crore on Jan. 28.
• Coffee Day Enterprises entered into definitive agreement to sell its share broking arm Way2Wealth Securities and its arms to Shriram Capital’s group company.
• Thyrocare Technologies to consider the reappointment of Dr. A Velumani as MD and CEO on Feb. 1.
• Sadhana Nitro Chem to consider share split of 5:1 on Jan. 31.
• CG Power & Industrial Solutions: Public Prosecutor filed for Bankruptcy of company’s two Belgium arms. Hearing for this is fixed on Feb. 3.
• JK Lakshmi Cement will consider raising funds via External Commercial Borrowings on Jan. 28.

Brokerage Radar

On HDFC Standard Life

Nomura

• Maintained ‘Neutral’ with a price target of Rs 600.
• Steady performance continues.
• Some pick up in protection growth.
• Neutral rating is primarily driven by demanding valuations.

UBS

• Maintained ‘Neutral’; hiked price target to Rs 650 from Rs 630.
• A more balanced product mix; margin lower.
• High teen APE growth in Q3; par segment recovers and share of non-par down.
• Non-banca distribution outperforming; product mix shift ongoing.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 580.
• Third quarter’s APE and VNB growth was strong.
• Growth helped by continued strong growth in agency channel and new product launches.
• HDFC Life is one of the best ways to play insurance story; valuation, however, looks expensive.

On Nippon Life India AMC

Nomura

• Maintained ‘Neutral’; hiked price target to Rs 350 from Rs 325.
• In-line core; investment gains drive beat.
• Scale/profitability build-up will be only gradual.
• The faster ramp-up in market share critical for further re-rating.

On PVR

Emkay

• Maintained ‘Hold’; hiked price target to Rs 2,101 from Rs 1,860.
• Operating performance was largely in line with expectations
• Ad revenue growth and F&B gross margins support Ebitda.
• Cut Ebitda estimates by 2 percent and 4 percent for the two financial years respectively on bleak ad revenue outlook and weak regional content performance.

UBS

• Maintained ‘Buy’ with a price target of Rs 2,250.
• Soft quarter has given cyclical nature of the industry.
• Revenue growth constrained by regional content performance.
• Revenue growth constrained by regional content performance.

More Calls

PhillipCapital on Cholamandalam Finance

• Maintained ‘Buy’ with a price target of Rs 370.
• Higher margins drive beat in earnings.
• Asset quality showed marginal deterioration.
• The performance was largely stable in a challenging environment.

IIFL on Varun Beverages

• Maintained ‘Buy’; hiked price target to Rs 915 from Rs 800.
• Likely to benefit from dual tailwinds of high growth and low Capex.
• Improved quality of servicing and increased distribution reach will empower volume growth.
• With leverage on finance and depreciation costs, net profit can grow 25 percent over CY20-22.

IIFL on Shree Cement

• Maintained ‘Sell’ with a price target of Rs 13,800.
• See risk of Ebitda decline for 2020-21, with likely resumption of a fight for market share in the key northern region in the next few months expect.
• Pricing discipline to decline in 2020-21 in the North, given increasing supplies.
• Risk is not priced in for a likely muted FY20-22 Ebitda CAGR of 3 percent.

Trading Tweaks

• Aster DM Healthcare record date for share-buyback.
• Nifty CPSE Index Changes: Stocks to be excluded IOC, PFC. Stocks to be included: Cochin Shipyard, NHPC, NMDC, Power Grid.
• AGC Networks to move into ASM Framework.
• Indiabulls Ventures to move out of short term ASM Framework.

Money Market Update

• The rupee ended at 71.27/$ on Thursday 71.20/$ on Wednesday

F&O Cues

Index Futures

• Nifty January futures closed at 12,201, premium of 20.7 points versus 38 points.
• Nifty January futures open interest down 2 percent, sheds 2.7 lakh shares in open interest.
• Nifty Bank January futures closed at 31,090, premium of 86 points versus 101.4 points.
• Nifty Bank January futures open interest down 14 percent, sheds 2.1 lakh shares in open interest.

Options

• Nifty PCR at 1.26 versus 1.00 (across all series)

Nifty Monthly Expiry: Jan. 30

• Max open interest on call side at 12,500 (35.4 lakh shares).
• Max open interest on put side at 12,000 (41.3 lakh shares).
• Open interest addition seen at 12,100P (+8.1 lakh shares), 12,000P (+5.8 lakh shares).