All You Need To Know Going Into Trade On July 30

Asian markets are trading with modest gains today after the U.S. Federal Reserve signaled that more stimulus will be provided to boost the economy.

Treasuries were steady while gold edged lower after scaling new peaks. The Australian Dollar is weakening after reports of a surge in Covid-19 cases in Victoria.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,221 as of 7:15 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 and Australia trade with gains while those in South Korea are outperforming after Samsung's earnings surpassed estimates.
• Futures on the Dow Jones are off the day's high and trade lower by 30 points. The index ended 0.6% higher on Wednesday.
• The U.S. Federal Reserve last night kept rates near zero and pledged to use all of its tools to support a recovery from Covid-19.
• Tech giants Apple, Amazon and Alphabet are slated to reported earnings later tonight.
• “The focus now shifts to the FOMC’s September meeting, when investors might expect more action,” Jason Pride of Glenmede told Bloomberg.
• Yield on the 10-year treasuries remained at 0.57%.
• West Texas Intermediate crude was flat at $41.28 per barrel. U.S. crude inventories saw their biggest decline this year, as per reports.

Get your daily fix of the global markets here.

Earnings Fineprint: Bharti Airtel Q1FY21

• Revenue up 1% to Rs 23,938.7 crore
• Net loss widens to Rs 15,933.1 crore from net loss of Rs 5,237 crore
• Ebitda up 2% to Rs 10,407 crore
• Margins at 43.5% from 43%
• ARPU at Rs 157 from Rs 154
• Incremental provision of Rs 10,744.4 crore for AGR dues
• Higher revenue and Ebitda contribution from mobile business helps consolidated Ebitda
• Revenue from India mobile operations up 36% to Rs 17,589 crore
• Airtel Africa revenue down 5% to $851 million
• Net debt at Rs 1,16,541 crore from 1,18,859 crore
• All numbers are consolidated and compared on a quarter-on-quarter basis

Stocks To Watch

• Covid-19 Impact On Eicher Motors: As on date, more than 85% of the dealers have begun operations. Demand for the company's motorcycle is expected to recover further in the upcoming quarters of FY21.
• Union Bank of India: Approves raising Rs 10,300 crore for FY21. The board approved raising Rs 6,800 crore in equity capital and to raise AT-1 and / or tier-2 bonds not exceeding Rs 9,400 crore.
• BPCL: Government extends last date for submission of Expression of Interest up to September 30. The Department of Investment and Public Asset Management (DIPAM) had earlier extended the due date for submitting the EoI to July 31.
• ONGC: Allotted NCDs worth Rs 500 crore on a private placement basis
• Jindal Stainless: Has tied up with Maersk to optimise the flow of containerized exports and imports between Jaipur and Vizag Container Terminal. As per the terms of the contract, Maersk shall facilitate to and fro rail movement of containers between Vizag and Jindal Stainless Logistics Park - a newly commissioned inland container depot located at Jajpur, Odisha.
• Praj Industries: The company along with the Automotive Research Association of India have entered into a Memorandum of Understanding to jointly drive application development of advanced biofuels that will find usage in industry and transportation.
• GMM Pfaudler: Gets approval to sign definitive documents with De Dietrich Process Systems India for the acquisition of their Glass Lined Equipment manufacturing facility in Hyderabad, Telangana.
• NTPC: To raise Rs 1,000 crore on July 31 through private placement of unsecured non-convertible bonds in the nature of debentures.
• HDFC Life Insurance: Allotted NCDs worth Rs 600 crore on a private placement basis.
• InterGlobe Aviation: ICRA has reaffirmed the company’s long-term rating at ICRA A+, with a negative outlook and downgraded the short-term rating from ICRA A1+ to ICRA A1 due to the unprecedented disruptions caused by the Covid-19 pandemic and its consequential impact on the global and domestic demand for air travel.
• REC: To consider raising funds via NCDs on August 7.
• Future Consumer: CARE Ratings downgraded the long-term banking facilities worth Rs 375 crore to ‘CARE BB’ from ‘CARE A-’. All ratings continue to be on credit watch with developing implications due to weakening of the liquidity position of its key customer which is also the flagship entity of the Future Group.
• Covid-19 Impact On Shankara Building Products: Walk-in within retail stores has reduced as home construction plans have been deferred. Enterprise segment has been impacted by end-user demand. Channel segment continues to remain at lower threshold levels and processing business is operating at lower utilisation levels. Expect overall revenue for Q1FY21 to be 54-56% of last year's level.
• Sadhana Nitrochem: Board approved bonus issue of 1 share for every 2 existing equity shares held. Expected date of credit of bonus shares is September 25.
• Hubtown: Statutory auditors have resigned as considering the present Covid-19 situation and delay in receipt of audit emoluments resulting in undue pressure on deploying necessary resources for completing the assignment.
• Mindspace Business Parks REIT IPO: Subscribed 13 times on Day 3. Institutional subscription at 10.65 times. Retail subscription at 15.83 times. Institutional category doesn’t include anchor portion. Issue has been closed.
• Nifty Earnings Today: HDFC, Reliance Industries
• Non-Nifty Earnings Today: Laurus Labs, Dabur, Ajanta Pharma, Cholamandalam, JM Financial, Karur Vysya Bank, Max Financial Services, SRF, Torrent Pharma

Earnings Reported After Market Hours

InterGlobe Aviation Q1FY21

• Revenue down 91.9% to Rs 766.7 crore
• Net loss of Rs 2,844.3 crore from net profit of Rs 1,203.1 crore
• Ebitdar loss of Rs 1,537.7 crore from Ebitdar profit of Rs 2,656.5 crore
• Biggest net loss since listing on weak demand, suspension of flights due to Covid-19
• All numbers are standalone and compared on a year-on-year basis

GMM Pfaudler Q1FY21

• Revenue up 2.7% to Rs 154.4 crore
• Net profit up 8.4% to Rs 91.2 crore
• Ebitda down 1% to Rs 27.3 crore
• Ebitda margin at 17.7% from 18.4%
• All numbers are consolidated and compared on a year-on-year basis

Navin Fluorine Q1FY21

• Revenue down 14.6% to Rs 214.9 crore
• Net profit up 30% to Rs 56 crore
• Ebitda down 12% to Rs 53.7 crore
• Ebitda margin at 25% from 24.3%
• Other income of Rs 36 crore due to interest on refund of income tax contributes to bottomline
• Lower expenses and raw material costs aid margins
• All numbers are consolidated and compared on a year-on-year basis

TVS Motor Q1FY21

• Revenue down 68% to Rs 1,431.7 crore
• Net loss of Rs 139.1 crore from net profit of Rs 142.3 crore
• Ebitda loss of Rs 48.8 crore from Ebitda gain of Rs 356 crore
• All numbers are standalone and compared on a year-on-year basis

CEAT Q1FY21

• Revenue down 36.1% to Rs 1,120.2 crore
• Net loss of Rs 34.8 crore from net profit of Rs 82.6 crore
• Ebitda down 39% to Rs 102 crore
• Ebitda margin at 9.1% from 9.5%
• Exceptional loss of Rs 21.8 crore due to VRS payments and Covid-19 related expenses
• All numbers are consolidated and compared on a year-on-year basis

GSK Pharma Q1FY21

• Revenue down 17.7% to Rs 648.6 crore
• Net profit down 2.3% to Rs 110.8 crore
• Ebitda down 31% to Rs 114.1 crore
• Ebitda margin at 17.6% from 21%
• Other income of Rs 42.7 crore due to refund of income tax contributes to profit
• All numbers are consolidated and compared on a year-on-year basis

Phoenix Mills Q1FY21

• Revenue down 78.1% to Rs 134.7 crore
• Net loss narrows to Rs 42.4 crore from Rs 130.4 crore
• Ebitda down 76% to Rs 70.2 crore
• Ebitda margin at 52.1% from 47.6%
• Lower electricity expenses and employee costs impact margins
• No revenue recorded for the residential segment
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

CLSA On Bharti Airtel

• Buy rating maintained
• Price target of Rs 715
• Expect ARPU to rise to Rs 181 by FY22
• Expect consolidated Ebitda CAGR of 27% in FY20-22
• Factor in AGR risk of Rs 48 per share

CLSA On Maruti Suzuki

• Sell rating maintained
• Price target of Rs 4,700
• Results were significantly below consensus
• Build-in a volume recovery but less optimistic on market share, pricing and margin
• Expect a de-rating for the stock from current levels
• Upside risks include faster-than-expected recovery in PV volumes and market share gains

UBS On Bharti Airtel

• Buy rating maintained
• Price target of Rs 705
• Strong results despite peak impact of Covid-19
• Expect momentum to improve going ahead
• AGR matter an overhang and final outcome a key monitorable
• Will look for commentary on AGR issue, outlook for mobile competition and demand for home broadband and enterprise services

UBS On InterGlobe Aviation

• Buy rating maintained
• Price target of Rs 1,500
• Well positioned to navigate Covid-19 disruption
• Expect further market share gains by its lower-cost position, strong liquidity and high customer satisfaction
• See upside risks to market share as competition may cut back on capacity given their weak financials

JPMorgan On Dr Reddy's

• Neutral Rating maintained
• Price target raised to Rs 3,900 from Rs 3,800
• Gross margins drive earnings beat
• Potential turnaround in WPL portfolio and continued margin momentum is factored in
• Margin profile will have to materially improve for upside from current levels
• Do not see a case of EPS revision
• Valuations leave little scope for disappointment
• Growth momentum is captured in the valuations
• Visibility on margin trajectory beyond 24% in the medium-term to drive next re-rating

Pledged Share Details

• Laurus Labs: Promoter Satyanarayana Chava released pledge of 25 lakh shares on July 28
• GTPL Hathway: Promoter Anirudhsinh Jadeja released pledge of 5.62 lakh shares on July 22

(As Reported On July 29)

Bulk Deals

• Deepak Nitrite: State Street Global Advisors Asia acquired 9.25 lakh shares (0.68%) at Rs 632.36 per share.
• Kilpest: Seven Canyons World Innovators Fund acquired 1.7 lakh shares (2.26%) at Rs 360 per share

Trading Tweaks

• AGM Date: Hero MotoCorp, Dr Reddy’s Labs, HDFC, GE Shipping, Gabriel Industries, Balaji Amines, UCO Bank, Thirumalai Chemicals, Raymond, Orient Electric, Cosmo Films, Dr Lal Pathlabs, Mahindra Logistics, Motilal Oswal Financial Services, Piramal Enterprises, Shankara Building Products, Philip Carbon Black
• Fund Raising: InterGlobe Aviation
• Price Band Revised From 10% To 5%: Yes Bank, Tarmat
• Move Into ASM Framework: PSL
• Move Out Of Short-Term ASM Framework: BF Utilities, Gujarat Fluorochemicals, Gulshan Polyols

Insider Trades

• Welspun India: Promoter Balkrishna Goenka acquired 16.5 lakh shares on July 29
• Mindtree: Promoter Subroto Bagchi sold 4.62 lakh shares between July 27-28

(As Reported On July 29)

Money Market Update

• The currency ended little changed on Thursday but with a positive bias.
• The rupee ended at 74.80 against the U.S. Dollar as compared to Tuesday's close of 74.84.

F&O Cues

• Nifty July futures closed at 11,222; premium of 10 points from 6 points
• Nifty July futures shed 16% and 11.5 lakh shares in Open Interest
• Nifty Rollovers across all series at 58%
• Nifty Bank July futures closed at 22,130; premium of 54 points from 72 points
• Nifty Bank July futures shed 15% and 1.6 lakh shares in Open Interest
• Nifty Bank Rollovers across all series at 50%
• Exit F&O Ban: Canara Bank, IndiaBulls Housing Finance, IndusInd Bank
• Remains In F&O Ban: Vodafone Idea

Nifty Monthly Expiry: July 30

• Maximum Open Interest on Call side at 11,500 strike (50 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (40.7 lakh shares)
• Active Options: 11,200 Put (+22 lakh shares) and 11,700 Call (-15 lakh shares)