All You Need To Know Going Into Trade On July 2

Stocks To Watch

• ABB Power & Product Systems: Hitachi and ABB announce the formation of Hitachi ABB Power Grids Ltd., after completion of all required procedures as planned. Hitachi has 80.1% stake in the new JV. The agreement for the same was signed in December 2018. The alliance with Hitachi will facilitate expansion opportunities into areas such as mobility, smart cities, industry, energy storage and enable access to Japan, the third largest economy in the world.
• Covid-19 Impact On India Cements: Operations resumed in phases from April. Dispatches resumed on a lower scale from April 15. Very difficult to predict economic growth in the immediate two quarters given resumption of lockdown in certain parts of Tamil Nadu. Availed the first moratorium offered by the RBI and has requested lenders to extend the second moratorium.
• Dixon Technologies: Forays into manufacturing set top boxes. Total investment in the same to be Rs 40-50 lakh. The company expects a revenue of Rs 100-150 crore from the same in FY21.
• Eveready Industries: Core categories of batteries and flashlights witnessing healthy demand due to sharp decrease in dumped imports from China and disruptions caused to the unorganised market due to non-availability of supplies. The situation in the battery segment may improve further once full implementation of BIS Standards comes into force. Existing Vice Chairman Aditya Khaitan named as Chairman of the company.
• NMDC: Sets lump iron ore prices at Rs 2,450 per tonne and iron ore fines at Rs 2,160 per tonne from June 30. June sales of iron ore down 7% to 2.48 million tons.
• Polycab: Incorporated a wholly-owned arm in Australia.
• JSW Energy: CARE Ratings removes 'credit watch with negative implications' on the company's long-term and short-term bank facilities and debt instruments. Outlook has been revised to stable. Rating on these instruments are CARE AA- and CARE A1+ respectively.
• IIFL Finance: Has filed a draft shelf prospectus to raise NCDs worth Rs 5,000 crore from the public.
• Coal India: Coal production in June down 12.8% to 39.2 million tonnes and coal offtake down 15% to 41.61 million tonnes.
• Reporting Earnings Today: Maharashtra Scooters

June Auto Sales

TVS Motor

• Overall sales down 33.2% to 1,98,387 units
• Two-wheeler sales down 32.5% to 1,91,076 units
• Motorcycle sales down 35.7% to 84,401 units
• Scooter sales down 33.6% to 84,401 units
• Exports down 24% to 53,123 units
• Three-wheeler sales down 46.4% to 7,311 units

Tata Motors

• Overall sales down 82% to 25,047 units
• Domestic sales down 82% to 23,845 units
• Total Commercial Vehicle sales down 90% to 10,476 units
• Commercial Vehicle Exports down 78% to 1,202 units
• M&HCV sales down 92% to 2,117 units
• Total Passenger Vehicle sales down 61% to 14,571 units

Ashok Leyland

• Overall sales down 81% to 2,394 units
• M&HCV Truck sales down 90% to 632 units
• M&HCV Bus sales down 94% to 123 units
• LCV sales down 63% to 1,639 units

Earnings Reported After Market Hours

Eveready Industries Q4FY20

• Revenue down 32.4% to 224.1 crore
• Net profit up 13 times to Rs 63.1 crore
• Ebitda up 2.1 times to Rs 28.4 crore
• Ebitda margin at 12.7% from 4%
• Lower other expenses, employee and raw material costs aid margins
• Exceptional gain of Rs 62 crore on profit from sale of Hyderabad land boosts profit
• Raw material costs as a percentage of sales at 55.7% from 67.5%
• Gross margins at 40.9% from 34.1%
• Lighting and appliances segment adversely impacted
• Discontinuance of the packet tea segment decreased revenue by Rs 40.4 crore
• Impact on Covid-19 on revenue was Rs 60 crore this quarter

Brokerage Radar

CLSA On Marico

• Downgrade to underperform from outperform
• Price target of Rs 350
• Management's near-term guidance is reasonable
• Returning to 13-15% growth in the medium term will demand on execution of portfolio diversification.
• See sales CAGR of 7% and earnings CAGR over 11% over FY20-22
• Hair oil segment likely to be stressed in near to medium-term
• Near-term headwinds likely to keep valuations in check
• See no room for upside

Macquarie On Bharti Airtel

• Initiate coverage with outperform rating
• Price target of Rs 700
• Value stock at 11 times FY22E EV/Ebitda
• Mobile ARPU can increase to Rs 180 in FY22 and Rs 220 in FY25
• Ebit likely to increase dramatically
• Expect capex intensity to decline to 17% from 30% in FY23-24
• RoE, RoIC levels can reach 15% in FY23-24E
• ARPU price war in India or Africa, government regulations or litigations, macro slowdown some key risks

JPMorgan On Bajaj Finance

• Neutral rating maintained
• Price target raised to Rs 2,400 from Rs 2,000
• Scope for higher cross sell into existing consumer base significant
• Potential to transform into a formidable digital lender with strong offline presence
• Balance sheet is conservatively provisioned
• Credit costs have scope for downside surprise
• ALM gap in significant surplus in near-term maturities

HSBC On JSPL

• Buy rating maintained
• Price target raised to Rs 240 from Rs 190
• Potential divestment should bring FY22 net debt by nearly 27% and reduce interest outgo
• Volume growth continues to surprise positively
• Net debt/Ebitda would fall to 2.8 times on accelerated deleveraging
• Raise ebitda estimates by 12-14% to incorporate higher volumes in FY21-22e
• Volume outperformance along with focus on deleveraging sets it apart from peers

Jefferies On Telecom

• Maintain buy rating on Bharti Airtel
• Revenue growth, higher margin and market share gain for Bharti
• Outperforming on key operating metrics
• Marked divergence in subscriber and APRU trends
• Topline growth driving margins and Ebitda growth

Motilal Oswal On HDFC

• Buy rating maintained
• Price target of Rs 2,150
• Well-placed to capture market share
• Stable growth across time periods
• Long-term opportunities intact
• Lower credit costs with proactive NPL recognition
• Provisions exceed NPLs; buffer adequate for ~10% of the loans
• Key beneficiary of current risk aversion
• Clear outperformer among HFCs, valuations are attractive

Pledged Share Details

• Dish TV: Promoter Direct Media Distribution Ventures invoked pledge of 1.66 crore shares on April 13
• Eveready Industries: Promoter Williamson Magor invoked pledge of 32 lakh shares on March 6
• Asian Paints: Promoters released pledge of 27 lakh shares between June 26-29

(As Reported On July 1)

Bulk Deals

• Anup Engineering: HDFC Mutual Fund acquired 83,513 shares (0.82%) at Rs 380.1 per share.
• Somany Ceramics: Aditya Birla Sun Life Insurance sold 2.27 lakh shares (0.54%) at Rs 117.8 per share.

Who’s Meeting Whom

• Prince Pipes and Fittings: To meet Phillip Capital on July 2
• Mahanagar Gas: To meet Vontobel AMC on July 6

Trading Tweaks

• Ex-Date for Share Buyback: Amrit Corp, Balrampur Chini Mills, Just Dial.
• Ex-Date for Stock Split: Karda Construction (from Rs 10 to Rs 2).
• Price Band Revised From 10% To 5%: Genus Paper & Boards, Tijaria Polypipes, Xpro India.
• Move Into ASM Framework: Neuland Laboratories, Genesys International Corporation.
• Move Into Short-Term ASM Framework: Gallantt Ispat, Omaxe, Shankara Building Products.
• Move Out Of Short-Term ASM Framework: Williamson Magor, Oswal Agro Mills, Suven Pharmaceuticals, Godrej Industries, Orient Beverages.

Insider Trades

• Cyient: Promoters acquired 2.64 lakh shares between June 26-29
• Adani Ports and SEZ: Promoter Flourishing Trade acquired 7.2 lakh shares on June 30
• Dr Lal Pathlabs: Promoter Dr Vandana Lal sold 57,584 shares between June 29-30
• Quess Corp: Promoter Ajit Isaac acquired 90,000 shares on June 30
• PSP Projects: Promoter Prahladbhai Patel acquired 60,000 shares between June 26-30

(As Reported On July 1)

Money Market Update

• The rupee ended little changed on Wednesday but with a negative bias, snapping a four-day gaining streak.
• The currency ended at 75.59 against the U.S. Dollar as compared to Tuesday's close of 75.51.
• Rupee ended as the third worst performing currency in Asia, behind the Thai Baht and the Indonesian Rupiah.

F&O Cues

• Nifty July futures closed at 10,408; discount narrows to 22 points from 60 points
• Nifty July futures shed 6.7% and 7.7 lakh shares in Open Interest
• Nifty Bank July futures closed at 21,930; discount narrows to 48 points from 156 points
• Nifty Bank July futures add 7.7% and 97,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.43 from 1.2 across all series
• Stocks In F&O Ban: Vodafone Idea, Glenmark

Nifty Monthly Expiry: July 2

• Maximum Open Interest on Call side at 10,600 strike (5.6 lakh shares)
• Maximum Open Interest on Put side at 10,300 strike (16.7 lakh shares)
• Active Options: 10,100 Put (+8.5 lakh shares) and 10,400 Call (+10.2 lakh shares)

Nifty Monthly Expiry: July 30

• Maximum Open Interest on Call side at 11,000 strike (20.5 lakh shares)
• Maximum Open Interest on Put side at 10,000 strike (27.3 lakh shares)