All You Need To Know Going Into Trade On July 27

Asian markets have opened mixed at the start of the final trading week of July. Investors are assessing the simmering U.S.-China tensions against the new outbreaks of Covid-19 emerging in Asia.

The U.S. Dollar continues to extend its slide while Gold futures have risen to a record high.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.3% to 11,202 as of 6:55 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.

Let’s take a look at the factors that may influence equities in today’s session:

• Markets in Japan re-opened lower after a two-day holiday while those in South Korea edged higher. Markets in Australia are flat.
• Futures on the Dow Jones are trading higher by 60 points. The index ended 0.7% lower on Friday.
• The U.S. Federal Reserve will meet this week amid expectations for more policy accommodation going ahead.
• Key companies like Apple, Amazon, Alphabet, Chevron, Rio Tinto, Samsung, Barclays, Credit Suisse will be reporting earnings this week.
• The U.S. will be reporting its second quarter GDP data on Thursday.
• Yield on the 10-year treasuries remained at 0.59%.
• West Texas Intermediate crude fell 0.3% to $41.16 per barrel.

Get your daily fix of the global markets here.

Earnings Fineprint: ICICI Bank Q1FY21

• Net Interest Income up 19.9% to Rs 9,279 crore
• Net profit up 36.3% to Rs 2,600 crore
• Provisions up 27% to Rs 7,594 crore sequentially
• Gross NPA at 5.46% from 5.53% in the previous quarter
• Net NPA at 1.23% from 1.41% in the previous quarter
• Made additional Covid-19 related provisions worth Rs 5,550 crore this quarter
• Total provisions against Covid-19 now at Rs 8,275 crore
• Sold 3.96% stake in ICICI Lombard and 1.5% in ICICI Lombard - resulting in net gain of Rs 3,036.3 crore in the standalone results
• Advances up 6.5% to Rs 6.31 lakh crore
• Deposits up 21% to Rs 8 lakh crore
• Slippages worth Rs 1,160 crore this quarter
• Recoveries and upgrades at Rs 757 crore this quarter
• NIMs at 3.69% from 3.87% last quarter
• Loans under moratorium down to 17.5% of total loans by June 30 from 30% in March
• Board approved fund raising of Rs 15,000 crore which is pending regulatory and shareholder approval
• Sanctioned 5,000 crore under emergency credit guarantee scheme of the government out of which Rs 3,800 crore have been disbursed
• Will dilute 4% stake in ICICI Securities this year

Earnings Fineprint: Zee Entertainment Q4FY20

• Revenue down 3.4% to Rs 1,951.1 crore
• Net loss of Rs 766.7 crore from net profit of Rs 291.7 crore
• Ebitda loss of Rs 562.5 crore from Ebitda gain of Rs 577.7 crore
• Higher operational cost and exceptional items impact profit
• Operational costs up 48% to Rs 1,304.6 crore
• Cost increase led by higher movie amortisation, new channel and investments in Zee5
• One-time accelerated amortisation of inventory of Rs 259.8 crore
• One-time provision of Rs 343 crore on doubtful recovery of ad, subscription and other assets due to Covid-19
• Exceptional loss on account of impairment of goodwill pertaining to digital publishing business at Rs 113.7 crore
• Advertising revenue down 15% to Rs 1,039 crore due to weak macro environment, conversion from free to air to pay and market share loss in certain markets
• Subscription revenue up 31% to Rs 741.4 crore driven by implementation of new tariff order and growth in Zee5's subscription revenue
• All numbers are consolidated and compared on a year-on-year basis

Earnings Fineprint: ITC Q1FY21

• Net sales down 17.4% to Rs 9,501 crore
• Net profit down 26% to Rs 2,343 crore
• Ebitda down 42% to Rs 2,646 crore
• Ebitda margin at 27.8% from 39.7%
• Cigarette segment revenue down 29.1% to Rs 3,853 crore; margins down to 61.1% from 70.8%
• FMCG - other segment revenue up 10.3% to Rs 3,375 crore; margins at 3.7% from 2.5%
• Hotels segment revenue down 94.4% to Rs 22 crore; margins negative from 2.6%
• Agri business revenue up 3.7% to Rs 3,746 crore; margins at 4.8% from 5.6%
• Paperboards revenue down 32.8% to Rs 1,026 crore; margins at 15.6% from 21.6%
• All numbers are standalone and compared on a year-on-year basis

Earnings Fineprint: JSW Steel Q1FY21

• Net loss of Rs 561 crore from net profit of Rs 1,028 crore
• Revenue down 41% to Rs 11,782 crore
• Ebitda down 64% to Rs 1,341 crore
• Ebitda margin down to 11.4% from 18.7% last year
• Output down 30% to 2.96 million tonnes
• JSW Steel Coated Products reports net loss of Rs 31 crore
• U.S. Plate and Pipe Mill reports Ebitda loss of $11.4 million
• JSW Steel U.S.A, Ohio reports Ebitda loss of $12.54 million
• JSW Steek (Italy) reported Ebitda loss of 7 million Euros
• Facilities operated at an average capacity utilisation of 80% in May and June
• Domestic steel prices declined in May and June
• Have seen modest increase in domestic steel prices in July and expect some more hike in August
• Coking Coal cost to come down $20-25 for September quarter sequentially
• China's infrastructure demand is a great opportunity for Indian steel industry
• All numbers are consolidated and compared on a year-on-year basis

Stocks To Watch

• HDFC: HDFC Ergo General Insurance’s Gross written premium down 12% to Rs 1,612.9 crore while net premium up 5% to Rs 1,023.7 crore. Net income grew 84% to Rs 138.4 crore, on a year-on-year basis.
• Adani Power: Shareholders approve proposal to delist the company from the exchanges. For the public institutional shareholders 83.71% of equity shares were voted on, out of which 95.88% voted in favour for delisting the company, while for public non-institutional shareholders 56.27% of shares voted with 98.50% votes in favour of the delisting resolution.
• Escorts: Rakesh Jhunjhunwala reduced stake from to 6.82% from 6.97%. Jhunjhunwala sold 2 lakh shares on July 24.
• Karur Vyasa Bank: Rakesh Jhunjhunwala increases stake to 4.5% from 4.2% as per its shareholding pattern for June quarter.
• Cipla: Gets regulatory approval from the Drug Controller General of India (DGCI) for the launch of Favipiravir in the country under the brand name Ciplenza. The company will commercially launch the drug in the first week of August at Rs 68 per tablet. The drug is an off-patent, oral anti-viral drug that has been shown to hasten clinical recovery in Covid-19 patients with mild to moderate symptoms.
• Coffee Day Enterprises: It has been found in an investigation that its late founder VG Siddhartha routed Rs 2,693 crore out of the company through transactions first revealed in a note found after his suicide last year. VG Siddhartha caused subsidiaries of Coffee Day to pay advances to a firm controlled by his family so that he could buy-back shares held by private equity investors, repay loans and keep up with interest payments on other borrowings, the company said, disclosing the results of a nearly year long investigation. The company will seek to recover the money from Siddhartha’s closely held firm, Mysore Amalgamated Coffee Estates Ltd., as well as Rs 842 crore in outstanding obligations disclosed previously, according to the filing.
• Telcos: As per TRAI's update for the month of April, Reliance Jio added 1.6 million subscribers while Vodafone Idea and Bharti Airtel lost 4.5 million and 5.3 million mobile subscribers respectively.
• Covid-19 Impact On Cadila Healthcare: Branded formulation business is somewhat affected due to the lockdown situation. Remain cautiously optimistic about the next two quarters of FY21. Finding certain near-term and mid-term opportunities including treatment medicines and vaccines.
• Kaveri Seeds: Pabrai Investment Funds reduced stake to 7.24% from 9.48% in the company on July 21.
• Aviation Stocks: Government extends domestic flight restrictions until November 24.
• JSW Steel: Board approved raising up to Rs 10,000 crore via NCDs in the domestic market.
• Bharat Forge: To consider raising funds either through term loan, non-convertible debentures etc. on July 29.
• Goa Carbon: Bilaspur unit has been temporarily shut down for maintenance work from July 24.
• BHEL: CRISIL has re-affirmed the rating on the company's long-term bank facilities at CRISIL AA. The outlook has been revised to negative from stable. Rating on the short-term facilities have been re-affirmed at CRISIL A1+. The revision in outlook reflects moderation of financial risk profile owing to weaker than expected operating performance, elongation in working capital cycle and the continued depletion in net cash levels of the company in FY20.
• InterGlobe Aviation: To consider raising funds on July 30.
• GATI: Allcargo CMD Shashi Kiran Shetty has been appointed as the company's chairman after Kishan Lal Chugh resigned as Chairman and Independent Director citing health issues. Allcargo had acquired 46.8% stake in GATI for Rs 416 crore in April.
• Khadim: ICRA has downgraded long-term rating of bank borrowings to ICRA BBB from ICRA BBB+. The outlook has been retained as negative due to Covid-19 impact and working capital intensity of operations stood high primarily due to an accumulation of the GST receivables and high inventory levels.
• Yes Bank: Partha Pratim Sengupta, resigned as a Non-Executive Director, nominated by State Bank of India from July 24, due to his appointment as MD and CEO of Indian Overseas Bank.
• Religare Enterprises: Proposal for re-classification of promoters and promoters group into public shareholders gets support from shareholders. For the public institutional shareholders 50.42% of equity shares were voted on, out of which 100% voted in favour for re-classification of promoters, while for public non-institutional shareholders it was 45.24% of shares voted with 99.24% votes in favour of the aforementioned resolution. On July 23, company received a communication from Counsel of Shivinder Mohan Singh (One of the Promoters) stating that Shivinder Mohan Singh has withdrawn the request for re-classification from 'Promoters/Promoters Group' to 'Public Category'. Company is committed to disassociate itself from promoters of the company at the earliest to instill the confidence in various stakeholders of Religare group and will also submit the application for re-classification of promoters with the stock exchanges shortly, as per the exchange filing.
• Reliance Home Finance: Defaulted in payment of principle and interest worth Rs 50.38 crore to Bank of India which was due on June 30 and Rs 80.54 crore to Dena Bank (now merged with Bank of Baroda) which was due on June 30.
• Zee Entertainment Enterprises: Entered into a share purchase agreement with Mantena Aviation LLP and its wholly-owned arm Fly-By-Wire International for transfer of equity shares of the subsidiary in two tranches for Rs 27 crore.
• Spencer’s Retail: Sets rights issue price at Rs 75 per share. Rights entitlement ratio at 2 shares for every 15 shares held. Issue opens from August 4 till August 18, with record date set at July 29. Issue price at discount of 13% to Friday’s closing. On February 11, Board approved raising Rs 80 crore via rights issue.
• Mindspace Business Parks REIT: Raised Rs 1,518.75 crore from 54 anchor investors at Rs 275 per share. Issue opens on July 27. Key anchor investors in this allotment were Government of Singapore, Nomura, Fidelity Goup and key domestic investors included HDFC Life Insurance and SBI Life Insurance.
• Infosys: Co-founder SD Shibulal announced that from July 22-24 his family members have sold a portion of (representing approximately 0.20% of the paid-up equity share capital) their holding in the company on the stock exchanges. Proceeds from the partial stake monetization will be utilized for a combination of philanthropic and investment activities, per the exchange filing. A total of 85 lakh shares were sold over the last 3 days, as reported in the exchanges. As per the latest shareholding pattern as on June 30. The Shibulal family cumulatively held 1.88% stake in the company.
• Nifty Earnings Today: Bharti Infratel, Kotak Mahindra Bank, Tech Mahindra
• Non-Nifty Earnings Today: V-Guard, Marico, Escorts, Bharat Electronics, Havells, India Cements, Orient Electric, Tejas Networks, United Spirits

Earnings Reported After Market Hours

Ambuja Cements Q2CY20

• Revenue down 27% to Rs 2,176.8 crore
• Net profit up 10% to Rs 453.4 crore
• Ebitda down 14.8% to Rs 595.3 crore
• Ebitda margin at 27.3% from 23.4%
• Improvement in margins due to lower power, fuel and freight costs
• Master Supply Agreement with ACC contributes to margin expansion
• Sales volumes at 4.19 MT from 5.82 MT
• Higher other income contributes to net profit
• Other income more than triples to Rs 192.1 crore
• All numbers are consolidated and compared on a year-on-year basis

Coromandel International Q1FY21

• Revenue up 50.8% to Rs 3,213.2 crore
• Net profit up 4 times to Rs 250.6 crore
• Ebitda up 2.1 times at Rs 412.4 crore
• Ebitda margin at 12.8% from 9.2%
• Nutrient and other allied businesses revenue up 49% to Rs 2,807.2 crore
• Crop Protection business revenue up 55% to Rs 420.2 crore
• Expect good traction in the upcoming Kharif season
• Will strive to ensure availability and meet market demand
• All numbers are consolidated and compared on a year-on-year basis

GHCL Q1FY21

• Revenue down 50% to Rs 436 crore
• Net profit down 84% to Rs 17 crore
• Ebitda down 63% to Rs 80 crore
• Ebitda margin at 18.3% from 24.9%
• Inorganic Chemicals revenue down 41% to Rs 345 crore
• Home Textiles revenue down 68% to Rs 91 crore
• Covid-19 has affected overall business activities of the company, resulting in lower operating activity
• Covid-19 will result in shifting of supply chain from China to India and that will benefit both spinning and home textile.
• Expect sequential improvement in performance starting Q2FY21
• Hopeful that utilisation levels will improve by another 10-15% across verticals
• All numbers are standalone and compared on a year-on-year basis

Aarti Drugs Q1FY21

• Revenue up 34% to Rs 544.7 crore
• Net profit more than triples to Rs 85.45 crore
• Ebitda up 2.5 times to Rs 134.1 crore
• Ebitda margin at 24.6% from 13.5%
• All numbers are consolidated and compared on a year-on-year basis

MCX Q1FY21

• Revenue down 14% to Rs 73 crore
• Net profit up 29% to Rs 56.4 crore
• Ebitda down 20% to Rs 26.5 crore
• Ebitda margin at 36.4% from 38.9%
• Higher other income aids net profit
• Other income up 92% to Rs 49.7 crore
• Average daily turnover of commodity futures traded on the exchange fell 16% to Rs 23,129 crore
• Market share in commodity derivatives space rose to 96.7% from 91.6% during the same period last year
• All numbers are consolidated and compared on a year-on-year basis

Persistent Systems Q1FY21

• U.S. Dollar revenue up 3.1% to $131 million
• Revenue up 7% to Rs 991.3 crore
• Net profit up 7% to Rs 90 crore
• Ebit up 19% to Rs 101 crore
• Ebit margin at 10.2% from 9.2%
• BFSI revenue up 9% to Rs 315.3 crore
• Healthcare and Life Sciences revenue up 10% to Rs 177.6 crore
• Technology companies and Emerging verticals revenue up 4% to Rs 480.3 crore
• Share of top five customers down to 40.8% from 44.6% in Q1FY20
• Share of revenue from BFSI customers up to 31.8% from 27.7% in Q1FY20
• All numbers are consolidated and compared on a quarter-on-quarter basis

Supreme Industries Q1FY21

• Revenue down 27% to Rs 1,053.9 crore
• Net profit down 57% to Rs 55.1 crore
• Ebitda down 30% to Rs 117.1 crore
• Ebitda margin at 11.1% from 11.6%
• Plastics Piping Products revenue down 15% to Rs 764.6 crore
• Industrial Products revenue down 63% to Rs 70.5 crore
• Packaging Products revenue down 23% to Rs 187.6 crore
• Consumer Products revenue down 71% to Rs 28 crore
• Volume and product value de-growth of 19% and 27% respectively during the quarter
• Turnover of Value Added Products at Rs 378 crore from Rs 457 crore last year
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Citi On Ambuja Cements

• Buy rating maintained
• Price target raised to Rs 255 from Rs 235
• Low cement volumes offset in part by higher realisations and lower costs
• Incorporate CY20 price rise at ~1% as against flat earlier
• Additional 3.1 MT of clinker and 1.8 MT of cement is expected by early CY21
• Full benefit of the MSA to reflect in CY21
• Cost focus remains the key
• Ebitda per tonne likely to be resilient in CY20
• Recent management changes in Ambuja are positive for the group

HSBC On Ambuja Cements

• Hold rating maintained
• Price target raised to Rs 205 from Rs 185
• Ebitda ahead of estimates due to better-than-expected cost performance
• Ebitda per tonne hit an all-time high of Rs 1,421 despite steep drop in volumes
• Raise CY20E Ebitda estimates by 19% and CY21E and CY22E estimates by 12% each

JPMorgan On Asian Paints

• Overweight rating maintained
• Price target of Rs 1,900
• Better-than-expected revenue recovery in the quarter
• Underlying demand momentum to be ahead of expectations
• Strong market share focus with agile on-ground execution
• Demand to drive ~5% EPS upgrade for FY21
• Expanding revenue base through successful scale-up of new segments like waterproofing
• Expanding margins and moderating capex to drive improvement in Free-Cash Flows and return ratios

Motilal Oswal On ICICI Bank

• Buy rating maintained
• Price target of Rs 475
• Steady quarter amid a tough macro environment
• Prudently used higher treasury / stake sale gains for higher provisions
• Higher liquidity and slowdown in credit demand impacted NIMs
• Despite decline, moratorium book is higher than peers
• BB and below pool may increase as moratorium period ends
• Structural competitive advantage with cost of deposits being lowest among private players
• Expect credit costs to remain elevated at 3.2%/2% for FY21/22E

UBS On JSW Steel

• Buy rating maintained
• Price target of Rs 250
• Tough business environment improving gradually
• Decline in volumes and realisations in a challenging quarter
• Maintained positive cash flow from operations despite net loss
• Decrease FY21 earnings estimates by 12%
• Factoring in continued underperformance of overseas assets
• Exports may moderate with recovery in domestic demand
• Keep EV/Ebitda multiple unchanged at 6.5 times

Investec On JSW Steel

• Hold rating maintained
• Price target of Rs 193
• Better than expected operating performance on cost measures and lower overseas losses
• Iron Ore cost curve may head lower as output from auctioned mines increases
• Balance sheet overhang persists due to IBC assets

HSBC On JSW Steel

• Reduce rating maintained
• Price target of Rs 150
• Few near-term positives emerge but are already priced-in
• Outlook not encouraging due to sharp contraction in domestic demand
• Higher than expected steel prices, demand are upside risks to rating
• Balance sheet continues to deteriorate
• Valuations are stretched at 7.4 times FY22E EV/Ebitda and 20 times PE

Macquarie On ITC

• Outperform rating maintained
• Price target of Rs 232
• FMCG business can take a big stride forward
• Cigarette volumes declined 40% year-on-year during the quarter
• Building in 16% decline in volumes for the cigarette business in FY21
• Expect 10% Ebitda margin for FMCG business in FY22
• Focus on premiumisation, cost saving initiatives to margins over next two years
• High dividend yield and higher earnings growth profile
• See re-rating potential in the stock

Edelweiss On Zee Entertainment

• Buy rating maintained
• Price target of Rs 225
• Sluggish environment impacts advertising revenue
• Expect FY21 to be a challenging year
• Confidence in the company's long-term prospects is bolstered by - strong pan India viewership, wide bouquet of channels and entry into new markets
• Continue to prefer broadcasters over other media businesses

Pledged Share Details

• Emami: Promoters revoked pledge of 43 lakh shares on July 21
• Jindal Steel & Power: Promoter OPJ Trading revoked pledge of 35 lakh shares on July 22
• JSW Energy: Promoter Danta Enterprises revoked pledge of 39 lakh shares on July 23
• Laurus Labs: Promoter Dr. Satyanarayana Chava released pledge of 5 lakh shares on July 22
• Dish TV: Promoter Direct Media Distribution Ventures invoked pledge of 13.2 crore shares on July 24.
• Zee Entertainment Enterprises: Promoter Cyquator Media Services invoked pledge of 61.79 lakh shares between July 15-17
• Zee Learn: Promoter Asian Satellite Broadcast invoked pledge of 1.7 crore shares on July 15
• Zee Media Corporation: Promoter ARM Infra & Utilities invoked pledge of 2.26 crore shares on July 15

(As Reported On July 24)

Bulk Deals

• Parag Milk Foods: Goldman Sachs sold 11.51 lakh shares (1.37%) at Rs 85.1 per share
• Security & Intelligence Services: Theano sold 12.07 lakh shares (0.82%) at Rs 346.1 per share. Alert: Theano is an investment vehicle of private equity group - CX Partners.

Trading Tweaks

• AGM Date: Indian Hotels, Newgen Software Tech, GSK Pharma, Zensar Tech, Bayer Cropscience, VIP Industries, Punjab National Bank, Union Bank of India, NRB Industrial Bearings
• Fund Raising: Alembic Pharma
• Price Band Revised From 10% To 5%: Pricol
• Price Band Revised From 10% To 20%: Neuland Laboratories
• Price Band Revised From 5% To 10%: Inspirisys Solutions
• Move Out Of ASM Framework: Sterling and Wilson Solar, Satin Creditcare Network, SREI Infrastructure Finance, Take Solutions, INOX Leisure, Shoppers Stop
• Move Out Of Short-Term ASM Framework: Silly Monks Entertainment, Prakash Pipes, Hi-Tech Pipes
• Move Into Short-Term ASM Framework: Heritage Foods, Indo Count Industries

Money Market Update

• The currency ended Friday's session at 74.83 against the U.S. Dollar as compared to Thursday's close of 74.77. It was the second straight week of gains for the currency.

F&O Cues

• Nifty July futures end at 11,170; discount widens to 14 points from 8 points
• Nifty July futures shed 6% and 6.2 lakh shares in Open Interest
• Nifty Bank July futures end at 22,611; Premium of 11 points from discount of 78 points
• Nifty Bank July futures shed 9% and 1.4 lakh shares in Open Interest
• Stocks In F&O Ban: Adani Enterprises, BHEL, Glenmark, GMR Infra, Indiabulls Housing Finance, Vodafone Idea, Nalco, RBL Bank, SAIL, Sun TV

Nifty: July 30 Expiry

• Maximum Open Interest on Call side at 11,500 strike
• Maximum Open Interest on Put side at 11,000 strike
• Active Options: 11,000 Put (+5.6 lakh shares) and 11,200 Call (+6.9 lakh shares)

F&O Buzzers & Fund Flow Data