All You Need To Know Going Into Trade On July 16

Asian stocks were mixed and U.S. equity futures fell early Friday after concerns about the economic growth outlook came to the fore.

Japanese and Australian shares fluctuated while South Korea retreated. U.S. contracts slipped after energy and technology sectors led Wall Street lower, including a decline in growth favorites like Amazon.com Inc. Moderna Inc. rallied in extended trading on an announcement that the vaccine maker is set to join the S&P 500.

The Singapore-traded SGX Nifty, an early indicator of India's Nifty 50 Index’s performance, was little changed at 15,918 as of 7 a.m.

Federal Reserve Chair Jerome Powell overnight defended the central bank’s accommodative stance in the face of uncomfortably high inflation. Officials expect a transient surge in price pressures amid the reopening from the pandemic, but some others fear stickier inflation that could hurt the economic outlook. The 10-year Treasury yield is set for a third weekly retreat.

Crude oil headed for the biggest weekly decline since mid-March, hurt by virus flareups in some parts of the world and amid uncertainty over an OPEC+ deal to boost supply.

Earnings Post Market Hours

Wipro (Q1FY22, Consolidated, QoQ)

• Net profit up 8.7% at Rs 3,232 crore vs Rs 2,974 crore

• Revenue up 12.4% at Rs 18,252 crore vs Rs 16,245 crore

• Ebitda up 1.6% at Rs 3,472 crore vs Rs 3,417 crore

• IT services Ebit declined 320 basis points sequentially on account of integration of low margin Capco business and several senior leadership hires during the quarter to 17.8%

• Company guided Q2FY22 sequential growth to be in the range of 5% - 7%

• Thierry Delaporte, chief executive officer and managing director said that despite the “severe onslaught” of the pandemic, Wipro delivered its best-ever quarter, with secular growth across all sectors.

Angel Broking (Q1FY22, Consolidated, QoQ)

• Revenue up 13.2% at Rs 462.6 crore vs Rs 408.6 crore

• Profit after tax up 19% at Rs 121.3 crore vs Rs 102 crore

• Company witnessed gross client addition of 12 lakh in Q1 as compared to 9.6 lakh clients in Q4FY21

Tata Steel Long Products (Q1FY22, Consolidated, QoQ)

• Revenue up 9% at Rs 1,687.6 crore vs Rs 1,546.7 crore

• Profit down 2.4% at Rs 331.6 crore vs Rs 339.8 crore

• The company said the scheme of amalgamation with Tata Metaliks is pending.

L&T Infotech (Q1FY22, Consolidated, QoQ)

• Revenue up 5.9% at Rs 3,462.5 crore vs Rs 3,269.4 crore

• Net profit down 9% at Rs 496.8 crore vs Rs 545.7 crore

• Special dividend of Rs 10 per share to commemorate the completion of 5 years of listing on the stock exchanges in India

Tata Elxsi (Q1FY22, Consolidated, QoQ)

• Revenues from operations up 7.7 at Rs 558.3 crore vs Rs 518.4 crore

• Profit before tax fell 4.7% at Rs 153.9 crore vs Rs 161.6 crore

• Profit after tax fell 1.6% at Rs 113.4 crore vs Rs 115.2 crore

• Ebitda margin fell from 32.4% to 26.9%

Stocks To Watch

Firstsource: Released its annual report. The company ended FY21 with revenue from operations up 24% to Rs 5,078 crore. Operating margins hit 11.8 and profit after tax was Rs 361.7 crore. Chairman Sanjiv Goenka said FY2021 has created a “solid foundation” for sustained progress and the forecast for the coming year includes significant recovery in the healthcare business as well as sustained growth in banking and the communications, media and tech sector.

Bandhan Bank: Advances rise 8% YoY to Rs 80,130 crore as of June 30, total deposits rise 28% YoY at Rs 77,340 crore

Indian Oil Corp.: Paradip Refinery hit by glitches, partial shutdown planned

Tata Motors: To consider Rs 500 crore bond issue on July 20

Pidilite: Appointed Sudhanshu Vats as Deputy Managing Director.

Reliance Industries, Justdial: Clarified that it won’t comment on Justdial acquisition reports. “The company evaluates various opportunities on an ongoing basis,” RIL said.

Xelpmoc Design and Tech: Issued 7.2 lakh shares for a sum of Rs 27 crores to Newport Asia Advisors Fund, Newport Asia Growth & Income Fund, Newport Asia Institutional Fund and Newport Asia Partners Fund

NMDC: Proposed to offer up to 89 lakh shares to the eligible employees of the company at a price Rs 165.50 per share in an offer for sale from July 16 to July 18.

BEML: Incorporated a wholly-owned subsidiary named BEML Land Assets Limited based on the concurrence given by the Ministry of Defence, Department of Investment and Public Asset Management and NITI Aayog for demerger of surplus land and assets of the company as part of strategic disinvestment process undertaken by the government.

Havells India: CARE Ratings has reaffirmed AAA rating to the company’s long-term bank facilities. It has reaffirmed the A1+ rating to its short-term bank facilities and commercial paper.

Mindspace Business Parks REIT: Crisil has assigned the following ratings to the bank’s instruments:

• Long term Principal Protected Market Linked Debentures upto Rs 500 crore: AAAr/Stable 2

• Long term Principal Protected Market Linked Debentures upto Rs 375 crore: AAAr/Stable 3

• Non-Convertible Debentures upto Rs 200 crore: AAA/Stable

• Non-Convertible Debentures upto Rs 300 crore: AAA/Stable

• Corporate Credit Rating: AAA/Stable

• Commercial Papers upto Rs. 250 Crores: A1+

Reliance Power: Made preferential allotment of 59.5 crore shares and 73 crore warrants at a value of Rs 10 per share convertible into equivalent number of equity shares to promoter Reliance Infrastructure.

Gati: Transferred its 69.79% equity holding in Gati Kausar to Mandala Capital on July 14, 2021. With this, Gati Kausar has ceased to be the company’s Subsidiary and also the company stands to have reduced its debt at a consolidated level by around Rs 105 crore.

Sona Comstar: Partnered with Israel's IRP Nexus Group, a leading provider of cutting-edge electric powertrain solutions for e-mobility and iCreate (International Centre for Entrepreneurship and Technology) to invent a new powertrain, manufacture it and market it globally.

UPL: Released its annual report. Ended FY21 with revenue up 8% year-on-year at Rs 38,694 crore and profit up 32% at Rs 3,692 crore. Global CEO Jai Shroff said the company’s growth and margins are more satisfying because they were achieved in an environment that had the added challenges of high inflation and currency fluctuations that adversely impacted us. “We have been able to strengthen our Ebitda margin by 130 bps, a reflection of our growing contribution from value-added products and cost synergies arising out of the Arysta acquisition,” he said.

Earnings To Watch: Den Networks, GNA Axles, HDFC Asset Management Company, Justdial, L&T Financial Holdings

IPO Watch

• Zomato's Rs 9,375 crore-issue was subscribed 5.07 times on day 2.

• Tatva Chintan Pharma Chemicals' Rs 500-crore IPO to open today. The price band has been set at Rs 1,073-1,083 apiece.

• Chemspec Chemicals seeks SEBI approval for Rs 700 crore IPO

Pledge Share Details

• The Ramco Cements: Promoter group Rajapalayam Mills created a pledge of 18 lakh shares on July 13.

• Steel Strips Wheels: Promoter Dheeraj revoked a share of 58,000 shares on July 14.

Who’s Meeting Whom

• Deepak Fertilisers and Petrochemicals: To meet Capital World - Hong Kong, ICICI Prudential AMC, Convergent Finance and Birla Sun Life Insurance separately on July 16.

• Max India: To meet WealthMills Securities on July 16.

Trading Tweaks

• Record Date Final Dividend: Birlasoft, Tata Consultancy Services, Newgen Software Technologies, Bharat Forge

• Price Band Revised From 10% To 5%: Gokaldas Exports, Weizmann

• Price Band Revised From 20% to 10%: Dolat Investments, Indbank Merchant Banking Services, Kaya, Paramount Communications, Steel Strips Wheels

• Move Into Short-Term ASM Framework: SP Apparels, South West Pinnacle Exploration, Weizmann, Gayatri Projects

• Move Into Long-Term ASM Framework: Indbank Merchant Banking Services, Aditya Birla Money, Shyam Century Ferrous, Rama Steel Tubes, Happiest Minds Technologies, Goodluck India, Kitex Garments, Aries Agro, Steel Strips Wheels, Poddar Housing and Development

• Move Out Of Short-Term ASM Framework: Sadbhav Infrastructure Project, LG Balakrishnan & Bros, Jain Irrigation Systems, Mold-Tek Technologies

Money Market Update

India’s shorter sovereign bonds are expected to gain after the government said it will keep its fiscal first-half borrowing plan unchanged. Traders are expected to bid at a Rs 32,000-crore ($4.3 billion) auction on Friday.

• India’s federal government has released Rs 75,000 crore from its own borrowings to compensate states for a shortfall in tax revenues due to pandemic-induced lockdowns

  • The amount has been funded via borrowings from 5-year bonds totaling Rs 68,500 crore and 2-year debt amounting to Rs 6,500 crore, the government said Thursday. The borrowings were done at a weighted average yield of 5.6% and 4.25% for the respective tenors, it said.

• RBI said it will buy Rs 20,000 crore of government bonds on July 22 as part of its government securities acquisition program

  • RBI to buy 6.18% 2024 bond, 6.97% 2026, 8.60% 2028 bond and 6.79% 2029 debt

• USD/INR down 0.1% at 74.5462 on Thursday

  • Implied opening from forwards suggests spot may start trading around 74.58

• Yield on 5.63% 2026 bond steady at 5.69% on Thursday; 5.22% 2025 yield steady at 5.52%; new 6.1% 2031 bond yield up 1bp at 6.12%

• RBI to hold Rs 2 lakh crore of 14-day reverse repo auction Friday

• June trade deficit at $9.37b, est. -$9.4b: government statement

• India’s current spike in inflation is driven by “adverse supply shocks” caused by the pandemic and is expected to ease in the final three months of 2021, the RBI said Thursday

  • The easing will occur once monsoon-sown crops arrive in the markets, the RBI said in its monthly bulletin
    

F&O Cues

• Nifty July futures ended at 15,940, a premium of 15.8 points

• Nifty July futures added 2.56% and 4,875 shares in Open Interest

• Nifty Bank July futures ended at 36,010, a premium of 102.35 points

• Nifty Bank July futures added 3.26% and 2,479 shares in Open Interest

• Securities that continue to be in the ban list: Granules India, Vodafone Idea, Nalco, NMDC, PNB, SAIL, Sun TV Indiabulls Housing Finance