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. 30

Asian stocks traded mixed early on Wednesday as the earnings season rolled on and investors awaited the Federal Reserve’s policy meeting.

Japanese shares were little changed, while Australian equities edged higher.  The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 10,692.50 as of 7:10 a.m.

Short on time? well, then listen to this podcast for a quick summary of the article!

Also read: The Fed Balance-Sheet Contraction May Actually Boost Treasuries

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

U.S. Market Check

  • U.S. equities edged lower as investors weighed the latest corporate earnings and the chances of a trade breakthrough between the world’s biggest economies.
  • The yield on 10-year Treasuries held at 2.71 percent.

Also read: Apple Results Suggest Stability After a Tough End to 2018

Asian Cues

  • Japan’s Topix index nudged lower 0.1 percent.
  • Futures on the S&P 500 Index advanced 0.1 percent and Nasdaq futures climbed 0.6 percent.
  • Hang Seng Index futures rose 0.1 percent earlier.
  • Australia’s S&P/ASX 200 Index advanced 0.4 percent.

Also read: Last Month’s Stock Rout Leads to More Forgiving Investors This Earnings Season

Commodity Cues

  • The Bloomberg Commodity Index increased 0.8 percent.
  • West Texas Intermediate crude gained 2.3 percent to $53.17 a barrel.
  • Brent crude ended 2.32 percent higher at $61.32 per barrel. It fell below $60 a barrel on Monday.
  • Gold climbed 0.6 percent to $1,311.23 an ounce, the highest since May.

Also read: Venezuela Needs to Dilute Its Oil. That’s Going to Become Harder

London Metal Exchange

  • Aluminium ended 1.34 percent higher.
  • Nickel resumed rally after a one-day blip, ended 2.5 percent higher.
  • Tin ended 0.12 percent higher.
  • Lead ended 0.14 percent lower.
  • Copper ended 0.8 percent higher.
  • Zinc halted a four-day rally, ended 0.9 percent lower.

Key Events To Watch This Week

  • Chinese President Xi Jinping’s top economic aide, Vice Premier Liu He, will meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday and Thursday.
  • Wednesday Fed Chairman Jerome Powell holds a news conference after the FOMC rate decision.

Indian ADRs

All You Need To Know Going Into Trade On Jan. 30

Stocks To Watch

  • Yes Bank’s Madhu Kapur Group and Rana Kapoor Group have agreed to nominate one representative director each on the bank's board, subject to the completion of the necessary documentation. The announcement will be made at the next scheduled board meeting in April.
  • L&T proposed to sell up to 30 lakh shares or 2.89 percent of its equity stake in L&T Technology Services, with an option of oversubscribing another 2.49 percent through stock exchange mechanism. This move has been undertaken by L&T to meet the minimum 25% public shareholding norms laid down by SEBI.
  • DHFL said that the CobraPost exposé alleging the company of siphoning over Rs 30,000 crore, was done with a mala fide intention. The company said it is confident of meeting any scrutiny on any aspect of operations.
  • Asian Paints said that the commercial production of its Andhra Pradesh paint factory started from Jan. 29. The initial capacity of this facility is three lakh KL per annum.
  • Coromandel International said that a fire accident occurred in its Gujarat unit which manufactures crop protection chemicals. The company says that it has insurance coverage and the accident won’t have any significant impact on company’s operations.
  • HG Infra Engineering received financial closure from NHAI for HAM project in Gurgaon worth Rs 606 crore.
  • NCLT rejected Essar Steel founders Ruia’s application for settlement. (Bloomberg News)
  • Cyient: Board to consider share buyback proposal on Feb. 01.
  • Coal India to get Rs 1,065 crore cash from three of its wholly owned subsidiaries as they approve buyback.

Also read: Essar Steel: NCLT Rejects Promoter Ruia’s Settlement Bid

Offerings

  • Chalet Hotels IPO get 5 percent demand on first day sale; offer closes on Jan. 31.

Nifty Earnings To Watch

  • Bajaj Auto
  • ICICI Bank
  • Indian Oil Corporation
  • NTPC

Other Earnings To Watch

  • Aavas Financiers
  • Ajanta Pharma
  • Alembic
  • Alkyl Amines Chemicals
  • Ashoka Buildcon
  • Astra Microwave Products
  • Bajaj Holdings & Investment
  • Bharat Electronics
  • Blue Dart Express
  • Castrol
  • Chemfab Alkalis
  • Cholamandalam Investment and Finance
  • Dhampur Sugar Mills
  • Dixon Technologies
  • EIH
  • Genus Paper & Boards
  • GMM Pfaudler
  • Gujarat Pipavav Port
  • Heritage Foods
  • Hexaware Technologies
  • IFB Agro Industries
  • IIFL Holdings
  • International Paper APPM
  • Jindal Stainless (Hisar)
  • JSW Energy
  • Jubilant Foodworks
  • KIOCL
  • Kirloskar Ferrous Industries
  • Kolte - Patil Developers
  • LIC Housing Finance
  • Mahindra Holidays & Resorts
  • Mahindra Logistics
  • Martin Burn
  • Orient Bell
  • Pioneer Distilleries
  • Plastiblends
  • Ratnamani Metals & Tubes
  • Sagar Cements
  • Security and Intelligence Services
  • Tata Communications
  • Torrent Pharmaceuticals
  • TTK Healthcare
  • Vinati Organics
  • Oriental Veneer Products
  • JK Agri Genetics
  • Arvind SmartSpaces

Earnings Reaction To Watch

Hawkins Cookers (Q3, YoY)

  • Revenue up 25.5 percent at Rs 174.7 crore.
  • Net profit flat at Rs 12.5 crore.
  • EBITDA up 3.7 percent at Rs 19.8 crore.
  • Margins at 11.3 percent versus 13.7 percent.

HCL Technologies (Q3, QoQ)

  • Dollar revenue up 4.9 percent at $2.20 billion.
  • Constant currency growth at 5.6 percent.
  • Revenue up 5.6 percent at Rs 15,699 crore.
  • Net profit up 2.8 percent at Rs 2,605 crore.
  • Ebit up 3.9 percent at Rs 3,036 crore.
  • Margin at 19.3 percent versus 19.7 percent.

Also read: Q3 Results: HCL Tech’s Profit Rises Despite Currency Headwinds

Axis Bank (Q3, YoY)

  • Net interest income up 18.4 percent at Rs 5,602.9 crore.
  • Net profit up 2.3 times at Rs 1,680.9 crore.
  • Provisions at Rs 3,054.5 crore versus Rs 2,927.4 crore.
  • GNPA at 5.75 percent versus 5.96 percent (QoQ)
  • NNPA at 2.36 percent versus 2.54 percent (QoQ)

Also read: Q3 Results: Axis Bank’s Profit Jumps More Than Twofold On Other Income

Bajaj Finserv (Q3, YoY)

  • Revenue up 39.2 percent at Rs 11,141.6 crore.
  • Net profit up 16.4 percent at Rs 850.5 crore.

Also read: Q3 Results: Bajaj Finserv’s Profit Rises 16%

Bank of Baroda (Q3, YoY)

  • Net Interest Income up 7.9 percent at Rs 4,743.2 crore.
  • Net profit up 4.2 times at Rs 471.3 crore.
  • Provisions at Rs 3416 crore versus Rs 3,155.3 crore.
  • GNPA at 11.01 percent versus 11.78 percent. (QoQ)
  • NNPA at 4.26 percent versus 4.86 percent. (QoQ)

Bharat Financial Inclusion (Q3, YoY)

  • Net interest income up 9.8 percent at Rs 609.8 crore.
  • Net profit up 23.8 percent at Rs 288.4 crore.
  • AUM at Rs 16,561 crore.
  • Loan disbursements up 45 percent at Rs 6,822 crore.

Granules (Q3, YoY)

  • Revenue up 53.8 percent at Rs 631.8 crore.
  • Net profit up 72.3 percent at Rs 60.3 crore.
  • Ebitda up 53.1 percent at Rs 113.3 crore.
  • Margins at 17.9 percent versus 18 percent.

Crompton Greaves Consumer Electricals (Q3, YoY)

  • Revenue up 9.8 percent at Rs 1,030.3 crore.
  • Net profit up 14.7 percent at Rs 79.7 crore.
  • Ebitda up 8.3 percent at Rs 126.1 crore.
  • Margins at 12.2 percent versus 12.4 percent.
  • Electrical consumer durables segment revenue up 16 percent at Rs 711.5 crore.

Mahanagar Gas (Q3, YoY)

  • Revenue up 29.1 percent at Rs 824.3 crore.
  • Net profit up 19.6 percent at Rs 148.3 crore.
  • Ebitda up 10.3 percent at Rs 239.1 crore.
  • Margins at 29 percent versus 34 percent.
  • Cost of natural gas up 42 percent at Rs 383.6 crore.
  • Volumes at 272.5 SCM million versus 272.3 SCM million (QoQ)
  • Declares dividend of Rs 9.5 per share.

Tata Coffee (Q3, YoY)

  • Revenue up 23.4 percent at Rs 465.4 crore.
  • Net profit down 73.9 percent at Rs 11.2 crore.
  • Ebitda down 26.8 percent at Rs 55.2 crore.
  • Margins at 11.9 percent versus 20 percent.
  • Expenses up 35 percent at Rs 437.1 crore.

KEC International (Q3, YoY)

  • Revenue up 10 percent at Rs 2,646.6 crore.
  • Net profit up 0.5 percent at Rs 112.4 crore.
  • Ebitda up 15.2 percent at Rs 281.4 crore.
  • Margins at 10.6 percent versus 10.2 percent.

Apar Industries (Q3, YoY)

  • Revenue up 41.4 percent at Rs 2,119.1 crore.
  • Net profit down 12.2 percent at Rs 34.7 crore.
  • Ebitda up 19.2 percent at Rs 113.5 crore.
  • Margins at 5.4 percent versus 6.4 percent.

Tata Steel BSL (Q3, YoY)

  • Revenue up 11 percent to Rs 4,889 crore.
  • Ebitda up 65 percent to Rs 1,008 crore.
  • Margin at 20.6 percent versus 13.8 percent.
  • Net loss at Rs 240 crore versus Rs 1,607 crore.

Welspun Enterprises (Q3, YoY)

  • Revenue up 49 percent to Rs 446 crore.
  • Ebitda up four times to Rs 46.3 crore.
  • Margin at 10.4 percent versus 3.9 percent.
  • Net profit up 2.8 times to Rs 43 crore.
  • Exceptional gain of Rs 18 crore on stake sale in Dewa Bhopal Corridor.
  • Lower cost of material, subcontracting charges and other expenses aided Ebitda.
  • Current EPC Order Book at Rs 5,752 crore with HAM portfolio of seven projects.

Bulk Deals

  • Persistent Systems: Saif India IV FII Holdings sold 11.5 lakh shares or 1.44 percent equity at Rs 580 per share.

Trading Tweaks

  • Sadhana Nitrochem ex-date for stock split from Rs 10 to Rs 5 per share.
  • Siti Networks, Zee Learn, SMS Lifesciences to move into short term ASM Framework.
  • Graphite India, Zee Media Corporation price band revised to 10 percent.

Who’s Meeting Whom

  • Siemens to meet HDFC AMC on Jan. 30.
  • Mahindra Logistics to meet Wellington Management on Jan.31.

Insider Trading

  • Raymond promoter group JK Investors acquired 30,000 shares on Jan. 28.
  • Waterbase promoter KCT Management Services acquired 27,000 shares on Jan. 25.
  • Confidence Petroleum promoters acquired 91,000 shares on Jan. 28.
  • Axis Bank promoter United India Assurance sold 1.05 lakh shares and promoter Oriental Insurance sold 15,000 shares between January 23-28.
  • Action Construction Equipment promoter Sorab Agarwal acquired 4.75 lakh shares on Jan. 28.
  • Muthoot Finance promoter George Alexander Muthoot sold 20,000 debentures on Jan. 24.
  • Future Retail promoter Future Corporate Resources acquired 7.9lakh shares on Jan. 28.

Money Market Update

  • The rupee on Tuesday ended at 71.11/$ compared to Monday’s closing of 71.10/$.

F&O Cues

  • Nifty January futures closed trading at 10,668, premium of 16 points.
  • Max open interest for January series at 11,000 Call (open interest at 44.5 lakh shares)
  • Max open interest for January series at 10,500 Put (open interest at 27.0 lakh shares)
All You Need To Know Going Into Trade On Jan. 30

Stocks In F&O Ban

In Ban:

  • Adani Enterprises Ltd.
  • Adani Power
  • Jain Irrigation

New in Ban:

  • Bank Of India
  • DHFL

Put-Call Ratio

  • Nifty PCR at 1.22 versus 1.23.
  • Nifty Bank PCR at 0.77 versus 0.78.
All You Need To Know Going Into Trade On Jan. 30

Brokerage Radar

On HDFC

CLSA

  • Maintained ‘Buy’ with a price target of Rs 2,360.
  • Divergent growth for retail and corporate loans.
  • Top-line and treasury drive earnings beat and asset quality manageable.
  • Maintain HDFC among our top picks across NBFCs.

Macquarie

  • Maintained ‘Outperform’; hiked price target to Rs 2,400 from Rs 2,050.
  • Loan growth slowed down from 17 percent to 15 percent due to corporate book.
  • Minor blip in asset quality driven by non-individual loan book.
  • Not much impact from liquidity crisis in the NBFC sector.

On Axis Bank

CLSA

  • Maintained ‘Buy’; hiked price target to Rs 840 from Rs 800.
  • Strong top-line aids operating profit.
  • Slippage a tad higher but recoveries stronger.
  • Improvement in return on equity and a stable earnings rise will be key to a further rerating.

Prabhudas Lilladher

  • Maintained ‘Accumulate’; hiked price target to Rs 745 from Rs 681.
  • Strong deposit traction; Loan mix was broadly stable.
  • Stress on balance sheet is coming off with incrementally lower intensity of downgrades.
  • Strategy unveiled to lead towards 18 percent return on equities by March 2022.

Macquarie

  • Maintained ‘Neutral’; hiked price target to Rs 620 from Rs 540.
  • December quarter performance was driven by lumpy recoveries and one-offs.
  • Negligible divergences for 2017-18; loan book looks transparent now.
  • Stock has already rallied thus prices in most of the positives.

On HCL Tech

CLSA

  • Maintained ‘Buy’; hiked price target to Rs 1,380 from Rs 1,350.
  • Sharp revenue beat, organic growth rebounds.
  • Margins soft as management continues to trade margins for growth.
  • Buy for rebounding organic growth, IP value and cheap valuations.

Prabhudas Lilladher

  • Maintained ‘Accumulate’; hiked price target to Rs 1,170 from Rs 1,100.
  • Strong Quarter; solid beat on revenues.
  • Dollar revenue growth guidance was downgraded to 7.9-9.9 percent owing to cross currency headwinds.
  • Valuations remain cheap.

On Godrej Consumer

CLSA

  • Maintained ‘Underperform’; cut price target to Rs 800 from Rs 835.
  • Big miss in consolidated December quarter earnings; miss was primarily revenue-led.
  • Just 1 percent volume growth in India; Management is taking measures to revive growth.
  • Cut EPS estimates by 5-7 percent over the next two financial years.
  • We believe that the stock will remain range-bound.

Macquarie

  • Maintained ‘Outperform’; hiked price target to Rs 952 from Rs 907.
  • Expect growth run-rate to improve meaningfully both in India and international.
  • Recovery in HI business hinges on success of Power Activ+ refill.
  • Recent underperformance provides a good entry point.

More Calls

Macquarie on Compton Greaves Consumer

  • Maintained ‘Outperform’ with a price target of Rs 268.
  • Lighting – Better show in margins than revenues.
  • Need clarity on the PPP lighting project.
  • Earnings growth steady; valuation looks attractive.