All You Need To Know Going Into Trade On July 19

Asia stocks tracked an advance in U.S. shares as New York Federal Reserve said its President, John Williams, wasn’t sending a specific policy signal for a rate cut.

Japanese and Korean stocks rose, with modest gains in Australia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 11,637.50 as of 6:30 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 going into trade today.

• U.S. stocks rebounded after Federal Reserve Bank of New York President John Williams highlighted the need for swift action should policy makers conclude the economy is in trouble.
• The NYSE FANG+ Index slid on Netflix Inc.’s surprise loss of U.S. customers.
• Stocks rose in Asia as bets increased for a more aggressive policy move at the Federal Reserve later this month.
• Oil climbed but remains on course for biggest weekly decline since May.

For a detailed global markets wrap, click here

Indian ADRs

Earnings Reaction To Watch

L&T Infotech (Q1, Consolidated, QoQ)

• Dollar revenue up 0.8 percent at $356.5 million.
• Revenue flat at Rs 2485 crore.
• Net profit down 6.1 percent at Rs 355.8 crore.
• EBIT down 9.7 percent at Rs 396.9 crore.
• Margin narrows to 16 percent.

ACC (Q2CY19 Standalone, YoY)

• Revenue up 7.8 percent at Rs 4149.72 crore.
• Net profit up 38.6 percent at Rs 451.3 crore.
• Ebitda up 25.3 percent at Rs 781.68 crore.
• Margin widens to 18.8 percent.
• Sales volume at 7.2 mt.
• Ebitda at Rs 1,100 per tonne.

Sterlite Technologies (Q1, Consolidated, YoY)

• Revenue up 63.3 percent at Rs 1432 crore.
• Net profit up 17.1 percent at Rs 141.4 crore.
• Ebitda up 32 percent at Rs 323.4 crore.
• Margin at 22.6 percent.
• Finance costs up 2 times at Rs 68.3 crore.
• Raw material as percent of sales at 49.4 percent.

Hatsun Agro Product (Q1, Standalone, YoY)

• Revenue up 15.2 percent at Rs 1423.2 crore.
• Net profit up 35.1 percent at Rs 51.2 crore.
• Ebitda up 32.5 percent at Rs 162.7 crore.
• Margin at 11.4 percent.
• Tax as percent of PBT at 34.1 percent.

Cyient (Q1, Consolidated, QoQ)

• Revenue down 6.4 percent at Rs 1089 crore.
• Net profit down 49 percent at Rs 90 crore.
• EBIT down 30 percent at Rs 98.8 crore.
• Margin narrows to 9.1 percent.

Rallis India (Q1, Consolidated, YoY)

• Revenue up 8.7 percent at Rs 623.2 crore.
• Net profit up 23.9 percent at Rs 67.8 crore.
• Ebitda up 14 percent at Rs 94.8 crore.
• Margin widens to 15.2 percent.

Sasken Technologies (Q1, Consolidated, QoQ)

• Revenue flat at Rs 134.7 crore.
• Net profit down 15.6 percent at Rs 23.2 crore.
• EBIT down 2.7 percent at Rs 22 crore.
• Margin narrows 16.3 percent.
• Tax expenses up 72 percent at Rs 10.3 crore.

Nifty Earnings To Watch

• Reliance Industries

Other Earnings To Watch

• InterGlobe Aviation
• RBL Bank
• Dabur India
• Dhanuka Agritech
• Bandhan Bank
• Bhageria Industries
• Hindustan Zinc
• ICICI Lombard General Insurance Company
• JM Financial
• L&T Finance Holdings
• L&T Technology Services
• Mahindra CIE Automotive
• Phillips Carbon Black
• Unitech

Stocks To Watch

• InterGlobe Aviation stated that they have received communication from MCA to furnish explanations in relation to complaint received from director and co-founder Rakesh Gangwal.
• Thermax secured orders worth Rs 471 crore from an Indian government power company to set up FGD systems in Jharkhand.
• CCI has approved acquisition of up to 75 percent stake in Reliance Nippon Life Asset Management by Nippon Life Insurance Company.
• KRBL stated in their letter addressed to investors that the company has nothing do with Augusta Westland Helicopter scam and company’s solicitor Gautam Khaitan’s (who was on the board from 2007 to 2013) individual dealings have brought the company’s name into alleged illegal activities.
• Gufic Biosciences has received regulatory approval to manufacture bacteria which will be used in therapeutic and aesthetic procedures. This toxin will be launched in India in collaboration with U.S.-based Prime Bio.
• Vodafone Idea hired Bank of America and Morgan Stanley to help sell its fiber assets which could be valued at Rs 13,000 crore. (Bloomberg News)
• NHPC stalled Subansiri Lower hydropower project has been revised to an estimated Rs 20,850 crore from the original cost of Rs 6,285 crore approved in 2003, Power Minister R.K. Singh informed lawmakers in the Parliament. Construction of the project was challenged in National Green Tribunal, which is yet to give a final order on the matter, Singh said in a written reply. (Bloomberg News)
• Cyient: Board announced merger of Cyient DLM and Cyient Insights into the company.
• Srei Infra and its arm Srei Equipment Finance have withdrawn amalgamation plans of both entities due to developing market conditions in NBFC sector.

Brokerage Radar

On ACC

BofA Securities

• Maintained ‘Neutral’; hiked price target to Rs 1,773 from Rs 1,695.
• June quarter review: beat on higher than industry pricing growth.
• Demand to be muted in 2019; price roll-backs to continue.
• Costs flat; expect marginal benefit from lower coal prices in September quarter.

Citi

• Maintained ‘Buy’ with a price target of Rs 2,175.
• June quarter beat estimates as volumes and pricing were ahead of expectations; Ebitda per tonne at a seven-year high.
• Near-term pullback on volumes and pricing may be temporary.

On Colgate India

BofA Securities

• Maintained ‘Underperform’ with a price target of Rs 1,167.
• June quarter review: Volumes were in-line but operating missed.
• Competitive pressure to remain elevated.
• Long-term growth in question.

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,400.
• June quarter review: In line domestic volumes, but slight market share loss.
• Adoption of IndAS 116 impacted gross profit and Ebitda.
• Management hopes on a pick-up ahead.

Jefferies

• Maintained ‘Hold’ with a price target of Rs 1,365.
• Delivered an in-line June quarter; market share stable.
• Toothpaste category continues to see higher growth at mass and mid-end of portfolio.
• Valuations reasonable relative to the sector and absolute downside looks limited.

More Calls

PhillipCapital on Cyient

• Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 490 from Rs 730.
• Disappointing performance on all counts, future remains bleak.
• Management optimistic about revenue growth returning from June quarter, we remain skeptical.
• Valuations might appear inexpensive, but see little scope of valuations improving from current levels.

Investec on Motherson Sumi

• Maintained ‘Buy’; cut price target to Rs 135 from Rs 273.
• Production ramp-up and rejection rate trending down.
• Post the recent correction, valuation we believe is attractive.
• Current weakness in India PV volumes poses a risk.

Jefferies on ICICI Lombard

• Maintained ‘Buy’ with a price target of Rs 1,260.
• Well positioned to deliver RoEs in excess of 20 percent, which would drive 20 percent book value growth and 24 percent earnings growth over FY19-21.
• Competition & falling yield risks not new, pricing discipline key to profitability.
• Long term motor regulations could lead to sustainable RoE expansion.

Citi on DB Corp

• Maintained ‘Buy’ with a price target of Rs 235
• June quarter was in-line; tepid market conditions impacted revenue growth.
• Expect healthy earnings growth for 2019-20.
• Newsprint tailwind, cost focus in a subdued Ad market 6 percent dividend yield to limit downside.

HSBC on L&T

• Maintained ‘Buy’ with a price target of Rs 1,630.
• June quarter likely to be a mixed bag.
• L&T’s order announcements to exchanges have been weak.
• On the back of robust order backlog and flat Ebitda margin outlook, expect 12 percent earnings growth in June quarter.

Offerings

• Reliance Mutual Fund managed CPSE ETF 5th FFO opens for non-anchor investors.

Bulk Deals

Intellect Design Arena

• Amansa Holdings acquired 19.13 lakh shares (1.45 percent ) at Rs 267 each.

Corporate Actions

• Themis Medicare, Religare Enterprises to move into short term ASM Framework.
• Themis Medicare, Sanwaria Consumer price band revised to 10 percent.

Money Market Update

The Indian rupee is likely to open higher as the dollar continues to lose steam amid growing confidence in markets that the Fed is about to start easing. The implied opening from the forwards suggest that the rupee will start trading at 68.68 per dollar

However, the home currency is headed for a weekly drop as foreigners pull out of equities due to a tax imposed in the budget.

The local legal tender having ended at 68.96 on Thursday. The traders keeping a wary eye on crude oil prices which snapped four days of losses on Friday to trade more than 1 percent higher.

In the bond market, the yields are likely to trade in a range after they rose four basis points on Thursday. The 10-year benchmark bond yield finished at 6.38 percent, but is still down by nearly 50 basis points so far this month, boosted by expectations of further rate cuts and subdued inflation.

F&O Cues

July Futures

• Nifty futures closed at 11,604.3, premium of 7 points versus discount of 11.7 points.
• Nifty futures open interest down 0.3 percent, sheds 51,000 shares in open interest.
• Bank Nifty futures closed at 30,448.6, premium 18 points.
• Bank Nifty futures open interest up 1 percent, adds 11,000 shares in open interest.

Options

• Nifty PCR at 1.25 versus 1.34 (across all series).

Nifty Monthly Expiry 25-July

• Max open interest on call side at 12,000 (34.7 lakh shares).
• Max open interest on put side at 11,300 (26 lakh shares).
• Max open interest addition seen in 11,700C (+12.9 lakh shares), 11,650C (+5.5 lakh shares).

Stocks In F&O Ban

In Ban:

• DHFL
• IDBI Bank
• Reliance Capital
• Reliance Infrastructure
• Tata Elxsi