All You Need To Know Going Into Trade On June 19

Stocks To Watch

• Reliance Industries: Saudi Arabia's The Public Investment fund to invest Rs 11,370 crore in Jio platforms for a 2.32% stake. The investment is made at an equity valuation of Rs 4.91 lakh crore and enterprise valuation of Rs 5.16 lakh crore. Jio platforms has now raised Rs 1,15,693.95 crore from 11 investments made by 10 investors.
• Pharma Stocks: DGFT removes prohibition on export of hydroxychoroquine API and its formulations.
• Cipla: Enters into an agreement with Roche Pharma to provide better access to innovative medicines for patients in India. Cipla will be responsible for marketing and distribution of Roche Pharma’s trademark oncology drugs - Trastuzumab (Herclon), Bevacizumab (Avastin) and Rituximab (Ristova). Roche and Cipla had previously entered into a similar agreement in February 2018 for promotion and distribution of Tocilizumab (Actemra) and other products.
• Tata Motors: Moody's downgrades long-term rating to B1 from Ba3. Outlook on all ratings has been changed to negative from 'ratings under review.' Downgrade reflects the sustained deterioration in the company's credit profile and expectation that it will take longer than previously expected for the credit metrics to return to appropriate levels for Ba3 rating.
• IRB Infra: Achieved financial closure for its Toll-Operate-Transfer project – Mumbai Pune Expressway. Company made the payment of first tranche of Rs 6,500 crore as upfront sub-concession fee to the Maharashtra State Road Development Corporation, out of a total consideration of Rs 8,262 crore. Company had won the concession again in February for the next ten years.
• Adani Green Energy: S&P Global Ratings places preliminary BBB- long-term issue rating on the company's RG2 senior secured notes on 'credit watch with negative implications.' RG2 consists of three operating entities - Wardha Solar, Kodangal Solar Park and Adani Renewable Energy. The rating reflects expectations that lower prices, weakening credit profile of SECI and hedging renewal risks can pressure the debt service coverage ratio.
• Emami: Expands its personal hygiene segment with launch of toilet soap bars and hand washes.
• Bajaj Consumer Care: Board approved appointment of current CEO Jaideep Nandi as the Managing Director from July 1, for a period of five years.
• Gujarat State Fertilizer: To discontinue manufacturing operations of fibre and polymers at its Vadodara unit. It is evaluating various options to utilize the existing land and infrastructure facilities available there including development of logistic park or a suitable project for which a consultant is being appointed.
• Thermax: Board has extended the term of MS Unnikrishnan as MD and CEO till August 31. Ashish Bhandhari will be the new MD & CEO from September 1. The company's international facilities continued operations, albeit at a scaled down pace during the Covid-19 lockdown. Chemical facilities, classified as essential services, resumed production in early April, followed by the progressive reopening of all the other facilities by the end of May.
• Kaya's Covid-19 Impact: Business in UAE resumed in May while clinics in Saudi Arabia and Oman resumed in Mid-May. Operations in India resumed for 12 clinics in Bangalore and Hyderabad on June 1. Expect operations to scale up to 50 clinics by June 18. All clinics likely to be operational by the end of July. Expect clinic revenues to be at 50% levels for Q2 and Q3 of FY21. Operating cash flow was negative during the last two months due to minimal sasles. Kaya Middle East likely to recover faster due to better healthcare facilities in GCC countries.
• Varroc Engineering: To consider raising capital via issue of NCDs on June 25.
• Non-Nifty Earnings Today: LIC Housing Finance, Bajaj Electricals, Novartis, Cadila Healthcare, ENIL, Camlin Fine Sciences, Ramco Cements, Oil India, PNB, Dalmia Bharat Sugar.

Earnings Reported After Market Hours

Bajaj Consumer Care Q4FY20

• Revenue down 28.6% to Rs 175.4 crore
• Net profit down 59.6% to Rs 24.5 crore
• Ebitda down 69.6% to Rs 23.6 crore
• Ebitda margin narrows to 13.5% from 31.3%
• Lower sales and higher other expenses impact margins
• Inventory gain of Rs 14.5 crore this quarter
• Rs 63 crore of sales impacted due to Covid-19
• General trade segment revenue down 29.2% to Rs 144.4 crore
• Modern trade segment revenue down 12% to Rs 16.1 crore
• All numbers are standalone and compared on a year-on-year basis

Brigade Enterprises Q4FY20

• Revenue down 16.3% to Rs 635.9 crore
• Net profit down 95.5% to Rs 2.7 crore
• Ebitda down 37.3% to Rs 135.1 crore
• Ebitda margin down to 21.2% from 28.3%
• Average realization up 14% to Rs 6,176 per square feet
• Total sales value up 25% at Rs 651 crore
• Residential sales up 21% to Rs 563.4 crore
• Commercial sales up 57% to Rs 87.8 crore
• Residential sale volume up 9% to 9.44 lakh square feet
• Commercial sale volumes up 16% to 1.1 lakh square feet
• High sub-contractor costs, land purchases and other expenses impact margins
• Increase in inventory of Rs 313.1 crore this quarter
• Deferred tax reversal of Rs 14.7 crore this quarter

Thermax Q4FY20

• Revenue down 36.2% to Rs 1,323 crore
• Net profit down 69.3% to Rs 39 crore
• Ebitda down 63.2% to Rs 62.8 crore
• Ebitda margin down to 4.75% from 8.2%
• Order booking in FY20 down 2.4% to Rs 5,498 crore
• Energy Segment revenue down 39% to Rs 1,051.2 crore
• Environment segment revenue down 26% to Rs 199.1 crore
• Chemical segment revenue down 6% to Rs 96.3 crore
• All numbers are consolidated and compared on a year-on-year basis

IRB Infra Q4FY20

• Revenue down 18.7% to Rs 1,584.5 crore
• Net profit down 25.3% to Rs 154.8 crore
• Ebitda down 13.8% to Rs 655 crore
• Ebitda margin at 41.3% from 39%
• Exceptional gain of Rs 57.4 crore this quarter
• BoT projects revenue down 34% to Rs 354.5 crore
• Construction segment revenue down 13% to Rs 1,227.1 crore
• Numbers include one month of tolling, operations and maintenance of Mumbai-Pune Expressway concessions and exclude one month contribution of nine assets transferred to IRB Private InvIT
• All numbers are consolidated and compared on a year-on-year basis

CARE Ratings Q4FY20

• Revenue down 26.2% to Rs 66 crore
• Net profit down 58% to Rs 15.3 crore
• Ebitda down 69% to Rs 15.2 crore
• Ebitda margin at 23% from 54.9%
• Other expenses doubled to Rs 23.1 crore this quarter
• Provision of Rs 7 crore on account of trade receivables impacted by Covid-19
• All numbers are consolidated and compared on a year-on-year basis

MOIL Q4FY20

• Revenue down 43% to Rs 248.7 crore
• Net profit down 90.3% to Rs 13.5 crore
• Ebitda down 96% to Rs 6.5 crore
• Ebitda margin at 2.61% from 37.2%
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

CLSA On Embassy Office Parks REIT

• Initiate coverage with outperform rating
• Price target of Rs 414.87
• Strong embedded growth in portfolio
• Net Operating Income (NOI) unlikely to decline in FY21 despite slowing economy
• See NOI CAGR of 11% over next three years
• Leverage headroom, Right to First Offer (ROFO) agreements lends further growth visibility
• Office market likely to remain resilient
• Outlook for rate cycle favourable for REIT valuations
• Any slowdown in I.T. offshoring to India remains a key risk

UBS On Britannia

• Buy rating maintained
• Price target raised to Rs 4,200 from Rs 3,200
• Revenue growth momentum to sustain
• Potential from out-of-home consumption, ICD resolution a trigger for upside
• Raise FY21/22 EPS by 11.7% and 9.6%
• Likely to outperform on volume growth and earnings in the near-term
• ICD issue - if not resolved, a risk to valuations
• Potential stake sale from the owner, ongoing organic capacity expansion may alleviate risk for the stock

Macquarie On Pidilite

• Downgrade to neutral from outperform
• Price target cut to Rs 1,330 from Rs 1,564
• Near-term demand likely to remain muted due to discretionary nature of categories, social distancing related deferrals and low availability of labour
• Building in a revenue decline of 7% in FY21
• No specific commentary on demand recovery levels from management
• Lower VAM prices likely to support margins
• Has levers to cut costs on other assumptions
• Cut FY21/22 earnings estimates by 25% and 16% mainly on lower topline assumptions

Axis Capital On SBI Cards

• Initiate coverage with buy rating
• Price target of Rs 750
• Multiple tailwinds for growth
• SBI parentage provides large captive customer base
• Diversified product portfolio with multiple offerings
• FY21 likely to be a tough year for the company
• Short-term impact likely on business momentum
• Long-term growth story remains intact
• Value the stock at 40 times FY22E Price-to-Earnings

HSBC On Mahindra & Mahindra

• Buy rating maintained
• Price target raised to Rs 570 from Rs 500
• Near-term strength in the tractor business to support re-rating
• Cut in non-core investments a positive
• Cut in core capex disappointing and may not bode well for long-term outlook
• Unclear path to exiting businesses like SsangYong and Genze

Motilal Oswal On Pidilite

• Neutral rating maintained
• Price target of Rs 1,345
• Q4 was a disappointment on all fronts
• April was a washout; sales in May were weak too
• Demand revival highly uncertain in the near-term
• Has alternative source for key raw material in event of disruption in supply from China
• Valuations are expensive

Nomura On Cummins India

• Reduce rating maintained
• Price target cut to Rs 343 from Rs 370
• Margins to remain under pressure over FY21 and FY22
• Cut FY21/22 EPS estimates by 6% and 4% respectively on analysis of cost structure
• Likely to see moderate recovery in sales in FY22
• Unsure if increases in costs can be fully passed on

Macquarie On Indian Metals

• India has historically disappointed on its coal production target
• Participation in commercial coal mining auctions remains key
• Interest in coal auctions over the last 12 months has been limited
• Ramping up coal production to be positive for domestic industries
• Do not see downside risks to Coal India's realisations

Bulk Deals

• HIL: Abakkus Emerging Opportunities Fund acquired 1.3 lakh shares (1.74%) at Rs 1,045.1 per share.
• Apollo Pipes: Promoter Meenakshi Gupta acquired 1 lakh shares (0.76%) at Rs 325 per share.
• Orient Bell: Equity Intelligence acquired 79,435 shares (0.56%) at Rs 77.83 per share.
• Waterbase: Promoter KCT Management Services acquired 2.27 lakh shares (0.55%) at Rs 103.72 per share.

Pledged Share Details

• Uflex: Promoter Anshika Consultants released pledge of 2 lakh shares on June 15
• JSW Steel: Promoter JTPL Metal Traders created pledge of 40 lakh shares on June 15
• JSPL: Promoters revoked pledge of 11.8 lakh shares between June 12-17
• Laurus Labs: Promoters revoked pledge of 46.5 lakh shares on June 17
• Adani Ports & SEZ: Promoter SB Adani Family Trust revoked pledge of 2.07 crore shares on June 17
• Adani Transmission: Promoter SB Adani Family Trust revoked pledge of 12 lakh shares on June 17

(As Reported On June 18)

Trading Tweaks

• Price Band Revised From 10% To 5%: Globus Spirits, Ind-Swift Laboratories, Intellect Design Arena.
• Price Band Revised From 20% To 10%: Nectar Lifesciences, PTC India Financial Services, Sanghi Industries.
• Move Into ASM Framework: Network18 Media & Investments, Jaiprakash Power Ventures, Zuari Global, Zuari Agro Chemicals, Lasa Supergenics, HT Media
• Move Into Short-Term ASM Framework: Visaka Industries, Jubilant Life Sciences, Jindal Worldwide, Intellect Design Arena, Tata Teleservices (Maharashtra).
• Move Out Of Short-Term ASM Framework: Shree Renuka Sugars, SpiceJet, Aavas Financiers, Capacit'e Infraprojects, Sundaram Brake Linings, Apex Frozen Foods, SMS Pharmaceuticals

Insider Trades

• JSW Steel: Promoter JTPL Metal Traders acquired 22 lakh shares between June 15-16
• Supreme Industries: Promoter acquired 13.8 lakh shares on June 17
• Aarti Industries: Promoter Bhavesh Mehta sold 1.05 lakh shares on June 15
• Jindal Stainless: Promoter JSL acquired 57,500 shares on June 17
• Tourism Finance Corporation of India: Promoter Koppara Thomas acquired 4 lakh shares between June 16-18
• IndusInd Bank: Promoter IndusInd International Holdings acquired 2 lakh shares between June 16-17

(As Reported On June 18)

Money Market Update

• The rupee ended little changed on Thursday but gained for the second straight day.
• The currency ended at 76.15 against the U.S. Dollar as compared to Wednesday's close of 76.17.
• Rupee was the fourth worst performing currency in Asia on Thursday.

F&O Cues

• Nifty June futures closed at 10,075; discount narrows to 16 points from 25 points
• Nifty June futures add 6.7% and 6.3 lakh shares in Open Interest
• Nifty Bank June futures closed at 20,893; discount widens to 62 points from 42 points
• Nifty Bank June futures add 20.3% and 3.6 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.59 from 1.23 across all series
• Enters F&O Ban: BHEL, PNB, SAIL
• Stocks In F&O Ban: Adani Enterprises, BHEL, Escorts, Vodafone Idea, JSPL, Just Dial, PNB, SAIL

Nifty Monthly Expiry: June 25

• Maximum Open Interest on Call side at 10,500 strike (26.5 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (44.4 lakh shares)
• Active Options: 9,800 Put (+10.5 lakh shares), 10,400 Call (+4.6 lakh shares)