All You Need To Know Going Into Trade On July 25

Asian stocks had a muted open Thursday amid a mixed picture for corporate earnings.

Benchmark indexes were little changed as trading got underway in Tokyo, Sydney and Seoul. U.S. futures were flat, while Nasdaq contracts declined. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.22 percent to 11,297 as of 7:10 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.

BQ Live

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

• U.S. stocks pushed higher for a third day as investors looked past weak economic data and mixed corporate results.
• Geopolitical risk remains a concern, after South Korea reported that North Korea launched two projectiles from the eastern part of the Korean Peninsula.
• Central banks remain in focus with the European Central Bank meeting Thursday, where its message will be closely parsed for signs of a September move as poor economic data ramps up pressure to deliver stimulus.
• Elsewhere, oil held losses as economic uncertainty outweighed a drop in U.S. supply.

Catch all the global markets update here.

Earnings Reactions To Watch

Bharti Infratel (Q1, QoQ)

• Revenue up 3.1 percent to Rs 3,712 crore.
• Net profit up 45.9 percent to Rs 887 crore.
• Ebitda up 27 percent to Rs 1,896 crore.
• Margin at 51.1 percent versus 41 percent.
• Numbers aided by Ind AS-116 adoption and one-offs during the quarter.

Quess Corp (Q1, YoY)

• Revenue up 21.7 percent to Rs 2,394.7 crore.
• Net profit up 3.5 percent to Rs 56.3 crore.
• Ebitda up 43.6 percent to Rs 147.2 crore.
• Margin at 6.1 percent versus 5.2 percent.
• Employee expenses up 25 percent to Rs 1,934.2 crore.
• Depreciation up 94 percent and finance cost up 52 percent

PI Industries (Q1, YoY)

• Revenue up 24.5 percent to Rs 754.1 crore.
• Net profit up 23.4 percent to Rs 100.8 crore.
• Ebitda up 28.2 percent to Rs 151.4 crore.
• Margin at 20.1 percent versus 19.5 percent.

Shriram Transport Finance (Q1, YoY)

• Net interest income up 5.2 percent to Rs 1943.7 crore.
• Net profit up 10.7 percent to Rs 634.3 crore.

Oberoi Realty (Q1, YoY)

• Revenue down 32.1 percent to Rs 603.3 crores.
• Net profit down 50.8 percent to Rs 152.1 crore.
• Ebitda down 49 percent to Rs 235.3 crore.
• Margin at 39 percent versus 52 percent.
• Finance cost up 4.9 times to Rs 23.9 crore.

ICICI Prudential Life Insurance (Q1, YoY)

• Gross premium up 14.7 percent to 6329.27 crore.
• Net profit up 1.2 percent to Rs 284.9 crore.
• New business up 26.6 percent to Rs 309 crore
• Value of new business premiums margin at 21 percent.
• 13th month persistency at 84.4 percent.
• 61st month persistency at 57.3 percent.

Syndicate Bank (Q1, YoY)

• Net interest income up 19 percent to Rs 1,792 crore.
• Net loss at Rs 980.4 crore versus net loss of Rs 1,281.4 crore
• Provisions at Rs 2,085.3 crore versus 831.2 crore (QoQ).
• GNPA at 11.76 percent versus 11.37 percent. (QoQ).
• NNPA at to 5.96 percent from 6.16 percent (QoQ).

IDFC First Bank (Q1, YoY)

• Net interest income up 2.3 times at Rs 1248.3 crore.
• Net loss at Rs 611.6 crore versus net profit of Rs 198.9 crore.
• Provisions at Rs 1,280.8 crore versus Rs 655.4 crore (QoQ).
• GNPA at 2.66 percent versus 2.43 percent. (QoQ).
• NNPA at 1.35 percent versus 1.27 percent. (QoQ).

Intellect Design Arena (Q1, QoQ)

• Revenue down 13.3 percent to Rs 342.8 crore.
• Net profit down 92 percent to Rs 3.4 crore.
• EBIT down 82.6 percent to Rs 7.7 crore
• Margin at 2.3 percent versus 11.2 percent.
• Other income of Rs 10 crore and exceptional gain of Rs 5.5 crore in current quarter.

Syngene International (Q1, YoY)

• Revenue up 3.7 percent to Rs 420.9 crore.
• Net profit up 8.8 percent to Rs 72 crore.
• Ebitda up 20.8 percent at Rs 119.5 crore.
• Margin at 28.4 percent from 24.4 percent.
• Employee expenses up 23 percent at Rs 132.2 crore.
• Hyderabad R&D facility to be operational by the second quarter FY20.

Nifty Earnings To Watch

• Bajaj Finance
• Bajaj Finserv
• Tata Motors

Other Earnings To Watch

• Ambuja Cements
• Gruh Finance
• PVR
• Apcotex Industries
• AU Small Finance Bank
• Bank of Baroda
• Bharat Bijlee
• Biocon
• Eimco Elecon (India)
• Foseco India
• Genus Power Infrastructures
• Grindwell Norton
• IFB Industries
• Mold-Tek Technologies
• MphasiS
• Onward Technologies
• Persistent Systems
• Rane Brake Lining
• Taj GVK Hotels & Resorts
• Tata Coffee
• Thirumalai Chemicals
• Central Depository Services
• Greenlam Industries
• Jubilant Industries
• Som Distilleries & Breweries
• Tata Steel BSL
• Westlife Development
• South Indian Bank

Indian ADRs

Stocks To Watch

• Yes Bank: ICRA downgraded long-term ratings across various programs aggregating to Rs 32,911 crore.
• Cox & Kings defaulted on payment of commercial papers worth Rs 174 crore which was due on July 24.
• DHFL defaulted on payment of NCDs worth Rs 8.07 crore which was due on July 23.
• IL&FS: New board has taken steps to address resolution of more than Rs 20,000 crore of debt owed by IL&FS group companies, according to its statement. The board has focused on ensuring the group companies remain a “going concern”.
• BHEL and NTPC signed MoU for forming a JV company to set up a 800 MW Technology Demonstration Plant at NTPC’s existing power plant in Chhattisgarh.
• Vodafone Idea: Commenting on penalty by Digital Communications Commission, the company said that it abides by applicable laws and will explore all options, including seeking legal help to protect the company’s interests. DCC, on Wednesday approved imposing cumulative penalty of Rs 3,050 crore on Bharti Airtel, Vodafone and Idea, now merged as Vodafone Idea Ltd. The penalty on Airtel and Vodafone works out to be about Rs 1,050 crore each; while in case of Idea, it comes to about Rs 950 crore. Vodafone India and Idea Cellular merged their operations in 2018.
• Sandhar Technologies signed a JV with Korea’s Han Shin Corporation for manufacturing and selling electronic parts and accessories for the automotive industries in India.
• Power Finance Corporation Reliance Capital increased their stake by 2.8 percent to 5.15 percent.
• Bharat Electronics: Reliance Capital increased their stake by 2.8 percent to 6.05 percent.
• Rane Madras: Board approved investment up to $30 million in its U.S. arm, which will be in the business of die casting over the next five years.
• Neogen Chemicals received a request for waiver of summons in relation to a suit filed by Neogen Corporation in the U.S. District Court for alleged trademark infringement related to the use of the brand "Neogen" by Neogen Chemicals.
• SpiceJet to remain in focus after Boeing warned it will consider slowing or even temporarily halting production of the 737 Max, the company’s most important jetliner, if a global flying ban drags on longer than anticipated. SpiceJet has ordered 129 Boeing 737 Max and a halt in production might delay their expansion plans. Besides, Boeing has booked $4.9 billion related to estimated potential concessions and other considerations and SpiceJet could have received compensations from Boeing in Q1 for Max groundings.

Brokerage Radar

BofAML on Info Edge

• Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 2,520 from Rs 2,080.
• Real-estate potential under appreciated; expect sustained growth for 2-3 years.
• Upside optionality from Zomato/Policy Bazaar; core recruitment business steady.
• Consider Info Edge as an investment in private tech space in India.
• Stock market valuations do not reflect private market valuations.

UBS on Eicher Motors

• Maintained ‘Sell’; cut price target to Rs 15,800 from Rs 17,500.
• Expect 10 percent domestic volume decline for Royal Enfield in 2019-20.
• Competition is not a concern; dealers are hoping for festive period turnaround.
• Finance availability tightening; Twins demand good but slowing.

On Jubilant FoodWorks

CLSA

• Maintained ‘Buy’; cut price target to Rs 1,400 from Rs 1,500.
• Weak June quarter; same store sales growth slowed to nine-quarter low.
• Menu price hike should help SSSG and gross margins from next quarter.
• Cut FY20-21 EPS estimates by 8-14 percent to factor in IND AS-116, weak June quarter and moderated SSSG.

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 1,474 from Rs 1,636.
• SSSG lower due to slowdown in dine-in and split sales due to new stores.
• Margin hit due to higher employee cost and A&P spend.
• Cut earnings estimates by 7-10 percent on account of IND AS-116 impact.

On Asian Paints

CLSA

• Maintained ‘Sell’; hiked price target to Rs 1,300 from Rs 1,285.
• Outstanding June quarter results; 15% volume growth comes as a big positive surprise.
• Management commentary cautious due to weak macro and deficient rainfall.
• Concerned by the demand environment and believe paint category is vulnerable.

UBS

• Maintained ‘Buy’ with a price target of Rs 1,750.
• Execution and consumer centricity delivers the goods.
• Volume growth at 16-17% was much higher than estimates.
• Deepening distribution, new facilities and expansion in eastern India have contributed.

Macquarie

• Maintained ‘Outperform’; hiked price target to Rs 1,530 from Rs 1,470.
• Volume growth strong at 15 percent in a challenging environment.
• Margins aided by IND AS-116 and lower other expenses.
• Expect Asian Paints to remain aggressive in channel push in near future.

BofA Securities

• Maintained ‘Buy’; hiked price target to Rs 1,650 from Rs 1,550
• June quarter’s volume growth expected at 18-20 percent - much ahead of estimates.
• Strong earnings growth to sustain led by demand growth and benign input costs.
• Strong growth to support premium valuations.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 1,600.
• June quarter review: Earnings beat; Expect 16 percent domestic volume growth.
• Strong volume growth reflects market share gains from unorganised sector.

On Bharti Infratel

UBS

• Maintained ‘Buy’ with a price target at Rs 355.
• Revenue bottoming out, but rate of recovery remains slow.
• June quarter mixed with QoQ improvement in revenue and Ebitda though tenancy addition soft.

BofA Securities

• Maintained ‘Buy’ with a price target of Rs 340
• June quarter review: Small Ebitda beat; positive net adds after six quarters.
• Cumulative number of exits imply no potential fresh exits in June quarter.
• Maintain buy due to its dominant position in tower space.

Bulk Deals

• SBI Life Insurance: Value Line sold 65 lakh shares or 0.65 percent equity at Rs 775.06 each.

Trading Tweaks

• Varun Beverages ex-date for bonus issue at 1:2
• Talwalkers Lifestyles, Talwalkers Healthclubs to move into ASM Framework.
• Ballarpur Industries to move into short term ASM Framework.
• Mukand to move out of Short term ASM Framework .
• Talwalkers Better Value Fitness, Talwalkers Healthclubs price band revised to 5 percent.

Who’s Meeting Whom

• Great Eastern Shipping to meet Central Advisors and Canara HSBC Life from July 25-30.
• MCX to meet Securities Investment Management and Morgan Stanley from July 25-26.

Insider Trading

• Cyient promoters acquired 70,000 shares on July 22.

Money Market Update

Sovereign bonds may stay in a range ahead of the key central meetings. A Bloomberg report that the government may raise up to $10 billion in its first overseas bond sale as early as October, helped yield on the 10-year note to fall three basis points. For today, the dealers see it trading between 6.42-6.47 percent.

In the currency market, implied opening from forwards suggest the Indian rupee may start trading around 68.9554 a dollar. Asian indexes are higher however the closely tracked South Korean won is down 0.2%. Dealers see the pair in a range of 68.70-69.20 a dollar in the day.

F&O Cues

• Nifty July futures closed at 11,277.8, premium of 6.5 points versus 3 points.
• Nifty futures open interest. across series up 3 percent, adds 5.7 lakh shares in open interest.

Nifty

• Bank Nifty July futures closed at 28,976, premium of 24 points versus 66 points.
• Bank Nifty futures open interest across series up 3 percent, adds 51,700 shares in open interest.
• Nifty Rollover at 53 percent, Nifty Bank Rollover at 51 percent.

Options

• Nifty PCR at 0.96 versus 1.05.

Nifty Monthly Expiry July 25

• Max open interest on call side at 11,400 (37.6 lakh shares)
• Max open interest on put side at 11,300 (22.2 lakh shares)
• Max open interest addition seen in 11,300C (+17.3 lakh shares), 11,350C (+9.5 lakh shares)

Stocks In F&O Ban

In Ban

• Dish TV
• IDBI Bank