All You Need To Know Going Into Trade On June 15

Earnings Fineprint: Eicher Motors Q4FY20

• Revenue down 11.7% to Rs 2,208.2 crore
• Net profit down 44.1% to Rs 304.3 crore
• Ebitda down 37% to Rs 432.1 crore
• Ebitda margin narrows to 19.6% from 27.4%
• Volumes fell 20% to 1,74,999 units
• Higher depreciation and other expenses impact profits
• Realisations up 10% to Rs 1,26,544 units due to BS-VI transition
• VECV sales fell 55% during the quarter
• Royal Enfield sales fell 17% to 1,63,083 units
• Sold entire BS-IV inventory in mandated time

Earnings Fineprint: Hindalco Industries Q4FY20

• Revenue down 19.2% to Rs 9,992 crore
• Net profit up 38.1% to Rs 326 crore
• Ebitda up 25.7% to Rs 1,163 crore
• Ebitda margin at 11.6% from 7.4%
• Lower LME prices impacts India operations
• Cost benefits aids operational performance
• Employee expenses down 4%
• Power and fuel expenses down 7.6%
• Other expenses down 11.3%
• All numbers are standalone and compared on a year-on-year basis

Management Commentary From Hindalco:

• All capital expenditure excluding maintenance and essential capex are curtailed for the next year in India and Novelis
• Alumina capacity expansion worth 500 KT at Utkal is on track and is likely to be commissioned in Q4FY21
• Global demand for Flat Rolled Products will remain soft due to Covid-19
• Continue to see traction in Aluminium Flat Rolled Products for the automotive body sheets

Stocks To Watch

• Reliance Industries: TPG to invest Rs 4,546.8 crore in Jio Platforms for a 0.93% stake. Catterton will invest Rs 1,894.5 crore for a 0.39% stake in Jio Platforms. This was the ninth and the tenth investment in the company. Jio platforms has now raised Rs 1,04,326.95 crore so far. Both the investments value the company at an equity valuation of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore.
• Eicher Motors: Board approves sub-division of equity shares from one share of face value of Rs 10 into 10 shares of face value of Re 1 each. Expected date of completion is likely to be 2-3 months after shareholder approval.
• Tyre Stocks: Bloomberg News reports that India has restricted the import of certain types of tyres. Import policy of new pneumatic tyres amended to 'restricted' from 'free' category, according to a statement issued by India's Directorate General of Foreign Trade. Import rules for tyres used by cars, buses, lorries, motor cycles and bicycles have been changed.
• JM Financial: Board approves allotment of 11 crore shares at an issue price of Rs 70 per share. The company has raised Rs 770 crore in the QIP issue which is now closed. Some of the key allottees include Valiant Mauritius Partners, Fidelity Group, ICICI Prudential Mutual Fund, Wells Fargo and Baron Emerging Markets Fund. The issue price is a 6% discount to Friday's closing price.
• IDFC First Bank: Board approves allotment of 86.24 crore shares at Rs 23.29 per share on a preferential basis. IDFC Financial Holding allotted 34.5 crore shares while ICICI Prudential Life Insurance was allotted 25.9 crore shares. Dayside Investment, HDFC Life Insurance and Bajaj Allianz Life Insurance allotted 8.62 crore shares each.
• Dr Reddy's Laboratories: Announces the launch of Colchicine tablets, approved by the U.S. FDA. The product will be launched in the U.S. market.
• Shriram Transport Finance: To consider raising funds on June 15.
• Power Finance Corporation: Clarifies that it executed an MoU on May 27 with the Madhya Pradesh Government, to facilitate the cooperation towards financing hydro-electric power projects and power components of 12 major irrigation projects on the river Narmada. The total cost of these 12 projects is estimated at Rs 22,000 crore. Due dilligence of the projects is yet to be carried out.
• Aavas Financiers: To consider raising funds via NCDs on June 17.
• Cadila Healthcare: Zydus has signed a non-exclusive agreement with Gilead Sciences for the manufacture and distribution of Remdesivir, which has been isued an Emergency Use Authorisation by the U.S. FDA to treat patients suffering from severe symptoms of Covid-19. As part of the non-exclusive agreement, Zydus will receive the manufacturing know-how from Gilead Sciences, to manufacture the API for Remdesivir and the finished product and market it in 127 countries, including India. Under the agreement, the license is royalty free until another pharmaceutical product or vaccine is approved for the treatment or prevention of Covid-19 by the USFDA or EMA or the WHO announcing the end of the public health emergency.
• Lemon Tree Hotels: Executed the necessary documents with APG Strategic Real Estate Pool for issue of compulsory convertible preference shares worth Rs 300 crore.
• Indiabulls Ventures: Allotted 10.76 lakh shares at Rs 550 per share to DF International Private Partners upon conversion of compulsory convertible debentures.
• GMR Infra: GMR Vishakapatnam has signed concession agreement for the development and operations of Bhogapuram Airport for 40 years and extendable by 20 years.
• Bayer CropSciences: Board declares interim dividend of Rs 90 per share for FY20.
• Ramkrishna Forgings: Buys back 5,000 equity shares at 184.22 under the current buyback offer.
• Dilip Buildcon: Issues and allots 1,000 NCDs with a face value of Rs 10 lakh with a coupon rate of 8.75% on a private placement basis.
• Spandana Sphoorty: Approves issuance of 1,000 NCDs aggregating to Rs 1,000 crore on a private placement basis.
• Sun Pharma: Announces long-term insignts into the clinical use of Ilumya in a cross section of people living with moderate-to-severe plaque psoriasis.
• HCC: Defaults on payment of Rs 728 crore worth of interest / repayment of principal on loans from banks / financial institutions and unlisted debt securities.
• Lumax Auto: Puts the acquisition of the auto component busines of OK Play Group on hold due to the Covid-19 situation.
• Capacite Infraprojects: India Ratings revises the company's outlook on bank facilities to negative from stable. It has assigned an IND A-negative rating to its proposed NCDs.
• Tata Motors: Has signed an agreement to purchase the 50% shareholding of Jayem Automotives in JT Special Vehicles Pvt. Ltd. Post this assignment, JTSV will become a wholly-owned subsidiary of the company.
• IDFC: BNP Paribas Arbitrage acquired 1 crore shares or 0.63% stake at Rs 18.45 per share.
• Non-Nifty Earnings Today: Shopper Stop, Pfizer, JK Tyres, IGL, Narayana Hrudayalaya, Ashoka Buildcon, Can Fin Homes, Cholamandalam Financial Holdings, CSB Bank, Meghmani Organics, Intellect Design Arena, Satin Creditcare, Shilpa Medicare

Companies With Covid-19 Impact

Grasim

• Operational and financial impact of the company will be significantly impacted during Q1FY21.
• Lockdown has led to a demand slowdown.
• Difficult to provide an estimate on the full year performance for FY21.

NBCC

• First half of FY21 to be impacted by non-availability of labour.
• Difficult to assess the impact of Covid-19 on the company's operations.
• Able to secure new orders and also carry out construction activities in majority of the project sites.
• Secures total business of Rs 31.89 crore in May.

Castrol India

• Renewed long-term partnership with JCB - the largest off-road vehicle manufacturer in India.
• Readying for a low carbon future.
• Entered into an agreement for EV fluids with OEMs in India, including MG motor and Tata Motors.
• To also supply lubricants to various OEMs for their BS-VI compliant vehicles.

Indo Count Industries

• Orders valued at approximately $11 million could not be executed in the March quarter due to temporary stoppage of operations.
• Orders that could not be executed have been pushed to FY21.
• Retail stores have started opening in a phased manner in June.
• Further visibility on the business would be seen in the next couple of months as the stores start their regular operations.

Mindtree

• Expect high-single digit decline in overall revenue growth in U.S. Dollar terms.
• Margins to hold for the Q1FY21 on a sequential basis.
• Seeing increased demand in segments like communication, media and technology and consumer packaged goods.

Earnings Reported After Market Hours

Grasim Industries Q4FY20

• Revenue down 11.3% to Rs 19,901.5 crore
• Net profit up 31.7% to Rs 1,505.8 crore
• Ebitda down 16.7% to Rs 4,091.4 crore
• Ebitda margin narrows to 20.6% from 21.9%
• All numbers are consolidated and compared on a year-on-year basis

Castrol Q1CY20

• Revenue down 29.5% to Rs 688 crore
• Net profit down 32.3% to Rs 125.2 crore
• Ebitda down 38.9% to Rs 173 crore
• Ebitda margin at 25.1% from 29%
• Overall lubricant industry hit by severe demand and supply disruptions
• All numbers are standalone and compared on a year-on-year basis

Vinati Organics Q4FY20

• Revenue down 18.7% to Rs 245.3 crore
• Net profit down 9.6% to Rs 74.6 crore
• Ebitda down 18.7% to Rs 101.6 crore
• Ebitda margin flat at 41.4%
• All numbers are standalone and compared on a year-on-year basis

BHEL Q4FY20

• Revenue down 51.3% to Rs 5,049.8 crore
• Net loss of Rs 1,532.6 crore from net profit of Rs 680.7 crore
• Ebitda loss of Rs 559.6 crore from Ebitda positive of Rs 1,385.9 crore
• Ebitda margin at -11% from 13.4%
• All numbers are consolidated and compared on a year-on-year basis

Dalmia Bharat Q4FY20

• Revenue down 12.6% to Rs 2,4883 crore
• Net profit down 88.6% to Rs 26 crore
• Ebitda down 16.7% to Rs 488 crore
• Ebitda margin down to 19.7% from 23.6%
• All numbers are consolidated and compared on a year-on-year basis

Earnings Expectations: Tata Motors Q4FY20

• Revenue seen 29% lower at Rs 61,353 crore
• Likely to report net loss of Rs 1,466 crore from net profit of Rs 1,117 crore
• Ebitda seen 49% lower at Rs 4,283 crore
• Ebitda margin seen lower at 7% from 9.8%
• All estimates are consolidated and compared on a year-on-year basis

Key Factors At Play For Tata Motors:

• 47% volume decline in the fourth quarter to impact revenue
• JLR retail sales fell 31% in the fourth quarter
• Inventory pile up due to Covid-19 lockdown to impact margins
• Higher expenses to impact net profit

Brokerage Radar

Morgan Stanley On BHEL

• Underweight rating maintained
• Price target of Rs 18
• One of the weakest quarters in history
• Numbers reflect impact of Covid-19
• Balance sheet remains stretched
• Looking to diversify but has not given explicit guidance
• Migrant labour challenges continue

CLSA On Phoenix Mills

• Buy rating maintained
• Price target raised to Rs 755 from Rs 710
• Initial footfalls encouraging
• Consumption likely to pickup from Q3FY21
• Estimate higher occupancy assumptions and lower cost rates
• Does not plan to slow down on capex

HSBC On Hindalco

• Buy rating maintained
• Price target raised to Rs 220 from Rs 215
• Strong performance from the India business
• Aluminium and Copper division beat consensus expectations
• Outlook on production, costs and capex is comforting

Jefferies On Eicher Motors

• Buy rating maintained
• Price target raised to Rs 20,000 from 17,500
• Weak quarter but good commentary
• Lower margins and higher taxes led to miss
• Demand commentary strong
• Bookings recover to nearly pre-Covid-19 levels
• Well placed to benefit from potentiald demand recovery
• Strong franchise, aggressive product pipeline and big network expansion

HSBC On Biocon

• Buy rating maintained
• Price target raised to Rs 425 from Rs 365
• Get final approval for Semglee
• Discussions on for its 'interchangeable' status
• Gradual progress in biosimilars visible through recent on-time approvals
• Execution remains key to meet FY22 sales target for biosimilars

Pledged Share Details

• JSW Steel: Promoters revoke pledge of 2.02 crore shares between June 9-11.
• Adani Enterprises: Promoter SB Adani Trust revoked pledge of 96 lakh shares on June 11.
• Adani Ports: Promoter SB Adani Trust revoked pledge of 2.02 crore shares on June 11.
• JSW Energy: Promoter JSW Investments revoked pledge of 2.09 crore shares on June 10.
• Adani Transmission: Promoter SB Adani Trust revoked pledge of 95 lakh shares on June 10.
• Parag Milk Foods: Promoter Devendra Shah revoked pledge of 15.5 lakh shares on June 11.

As reported on June 12.

Who’s Meeting Whom

• Granules India: To meet Subhkam Ventures on June 17.
• TCI Express: To meet JPMorgan, Mirae AMC and other investors on June 16.
• Tata Power: To hold a call with LIC on June 16. To meet various investors at B&K Digital Trinity 2020 conference on June 17 and 18.

Trading Tweaks

• Listing Date: Reliance Industries rights shares. 42.24 crore shares partly paid-up at Rs 2.5 per share on a rights basis.
• Record Date For Amalgamation and Spinoff: Max India
• Price Band Revised From 5% To 10%: Shoppers Stop
• Move Into ASM Framework: DHFL, Inspirisys Solutions, HDIL
• Move Out Of ASM Framework: Sadbhav Infrastructure Project, Adani Green Energy, Repco Home Finance, Manali Petrochemicals, OnMobile Global, Future Consumer
• Move Into Short-Term ASM Framework: Ramco Systems, Ashapura Minechem, Panacea Biotec.
• Move Out Of Short-Term ASM Framework: The South Indian Bank, Electrotherm, Tube Investments of India, Marksans Pharma, TCNS Clothing, Prataap Snacks, Tourism Finance Corporation of India.

Insider Trading

• IndusInd Bank: Promoter IndusInd International Holdings acquired 4 lakh shares between June 10-11.
• Kotak Mahindra Bank: Promoter sold 3 lakh shares on June 11.
• Apollo Tyres: Promoter PTL Enterprises acquired 4.6 lakh shares between June 9-11.
• Nesco: Promoter Chandle and Price acquired 19,388 shares between June 9-10.
• Aarti Industries: Promoter Jaya Gogri sold 63,000 shares between June 8-11.
• Birlasoft: Promoter sold 17 lakh shares on June 9.

F&O Cues

• Nifty June futures end at 9,995; discount widens to 18 points from 8 points
• Nifty June futures shed 1.8% and 2 lakh shares in Open Interest
• Nifty Bank June futures end at 20,624; discount widens to 30 points from 16 points
• Nifty Bank June futures add 15% and 2.4 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.46 from 1.02 across all series
• Enters F&O Ban: Vodafone Idea
• Stocks In F&O Ban: Adani Enterprises, BHEL, Vodafone Idea, Just Dial, PVR
• Out Of F&O Ban: Escorts, JSPL

Nifty: June 18 Expiry

• Maximum Open Interest on Call side at 10,000 strike (20.7 lakh shares)
• Maximum Open Interest on Put Side at 9,500 Strike (29.4 lakh shares)
• Active Options: 9,300 Put (9.5 lakh shares) and 10,000 Call (10 lakh shares)

Nifty: June 25 Expiry

• Maximum Open Interest on Call side at 10,000 strike (20.7 lakh shares)
• Maximum Open Interest on Put side at 9,500 strike (29.4 lakh shares)