All You Need To Know Going Into Trade On June 22
Mannequins block an entrance to a branch of JD Sports Fashion Plc at the Lakeside shopping centre, operated by Intu Properties Plc, in Thurrock, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

All You Need To Know Going Into Trade On June 22

It has been a flat start to the new trading week for Asian equities. Futures in the U.S. however, have recouped most of their losses on open.

The Aussie has weakened after one Australian state tightened restrictions due to fresh Covid-19 cases. Treasuries and oil prices were little changed.

The Singapore-traded SGX Nifty, an early indicator of the NIfty 50 index's performance in India, fell 1% to 10,138 as of 6:40 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 all that can influence equities in today’s trading session:

  • Benchmarks in Japan, South Korea and Australia have opened lower this morning.
  • Futures in the U.S. have recovered from losses of as much as 1%, despite California reporting record new cases of Covid-19 and infections in Florida rising more than the weekly average.
  • China released details of a proposed National Security Law over the weekend that will give the mainland the right to directly prosecute Hong Kong residents.
  • "Shares remain technically overbought and vulnerable to a further correction or period of consolidation, but we continue to see it as a pause in a rising trend," Shane Oliver of AMP Capital Investors told Bloomberg in an interview.
  • MSCI will be announcing its market classification review for 2020 on Tuesday.
  • The International Monetary Fund will release its new growth projections for 2020 on Wednesday.
  • Yield on the 10-year treasury stood at 0.69%.
  • West Texas Intermediate crude was flat at $39.75 per barrel.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On June 22

Earnings Fineprint: Power Grid Q4FY20

  • Revenue up 5.2% to Rs 9,704 crore
  • Net profit up 4.2% to Rs 3,182 crore
  • Ebitda up 3.6% to Rs 8,072.3 crore
  • Ebitda margin at 83.2% from 84.5%
  • Deferred tax reversal of Rs 6,013 crore in the base quarter
  • Other income up 80% to Rs 705 crore
  • Higher employee expenses keep margins in check
  • Profit before Regulatory deferral account balances down 74% to Rs 2,206.9 crore
  • Transmission segment revenue up 7% to Rs 9,600.4 crore
  • Consultancy and telecom revenue growth flat
  • Approves consolidated one-time rebate of Rs 1,075 crore to discoms of states and Union Territories against the billing of April and May
  • All numbers are standalone and compared on a year-on-year basis

Stocks To Watch

  • HDFC: To raise Rs 14,000 crore through issuance of equity shares or Compulsory Convertible Debentures, non-convertible debentures along with warrants, foreign currency convertible bonds or any other security through QIP or any other permissible mode. Funds are being raised to augment the long-term resources of the company to finance organic or inorganic business opportunities that may arise in financial ervices including housing finance where the subsidiaries operate, to maintain sufficient liquidity and for general corporate purposes.
  • HDFC Bank: Board of Directors approve the issue of Perpetual Debt Instruments (part of additional tier-I capital), tier-II capital bonds and long-term bonds up to a total of Rs 50,000 crore over the next 12 months on a private placement basis subject to shareholder approval at the AGM.
  • Piramal Enterprises: Acquires solid oral dosage drug production facility from G&W Laboratories in Pennsylvania. It has acquired 100% of the total equity for $17.5 million or approximately Rs 123 crore. The acquisition enables the company to handle potent formulations in North America.
  • Info Edge: To consider raising funds via QIP at its board meeting on June 22.
  • Cipla: Launches Cipremi (Remdesivir Lyophilised power for injection 100 mg), the only U.S. FDA approved Emergency Use Authorisation treatment for patients with severe Covid-19 symptoms. Gilead Sciences has extended a voluntary non-exclusive license to Cipla. The company has received approval from the Drug Controller General of India to manufacture and market the generic version of remdesivir.
  • Aarti Industries' Covid-19 Impact: Units currently operating at about 80% capacity. Challenges of supply chain, labour availability posses challenges to manufacturing operations. Over 60% of the revenue comes from end use applications like Agrochemicals, Pharma, Fertilisers and FMCG which is not impacted by the pandemic. See demand contraction in products like polymers and additives, dyes and pigments. Long-term contract execution remains on track. Exports business impacted due to challenges in movement of materials at ports. Suppliers of equipment have been impacted which would delay deliveries from their end. Meeting all financial obligations in time.
  • L&T Technology Services' Covid-19 Impact: Broadbased industry exposure provides growth visibility in at least few segments. Among the five industry segments, we remain positive on growth visibility in telecom and hitech and medical devices segments. Industrial Products, transportation and plant engineering to be impacted in the near-term. Expect low double-digit decline in revenue in U.S. Dollar terms on a sequential basis with a consequent lower Ebit margin. Seeing improvement in deal pipeline from April. Expect revenue to increase sequentially from Q2FY21.
  • KNR Construction's Covid-19 Update: Work on project sites has commenced on sub-optimum levels. Seeing gradual improvement in availability of manpower and material. Unable to gauge with certainty the future impact of the pandemic on future operations.
  • Arvind Fashions: To raise Rs 399.8 crore through the rights issue by issuing 3.99 crore shares at an issue price of Rs 100. The size of the issue has been revised upwards from the earlier Rs 299 crore.
  • Glenmark: Gets manufacturing and marketing approval from India's drug regulator to launch the oral antiviral drug Favipiravir to treat mild to moderate Covid-19 patients in India.
  • Ashok Leyland: Approves issue of listed, secured, redeemable NCDs worth Rs 200 crore on a private placement basis in one or more tranches.
  • Bank of Baroda: Has announced the closure of its overseas subsidiary at Ghana and has surrendered its banking license to the country's banking regulator.
  • Spandana Sphoorty: Approves allottment of 1000 rated, listed, secured, redeemable NCDs of face value of Rs 10 lakh each to Bandhan Bank on a private placement basis.
  • Minda Industries: Issues commercial paper worth Rs 50 crore and is due for maturity on September 17, 2020. The step is in-line with the management's efforts to bring down finance costs.
  • PPAP Automotive: Manufacturing operations at the Tamil Nadu facility closed until June 30, 2020.
  • Hindustan National Glass: Defaults on payment of interest and repayment of principal on loans from banks, financial institutions and unlisted debt securities. Amount of the default was Rs 1,000.98 crore.
  • Deepak Nitrite: ICRA re-affirms the long-term rating of the Line of Credit at AA- and short-term rating at A1+ assigned to the fund-based limits and non-fund based limits of the company. Outlook on the long-term rating has been revised to stable from positive. Re-affirms the rating at A1+ assigned to its commercial paper program.
  • HDFC Life: CRISIL assigns rating on 6,000 unsecured, redeemable NCDs worth up to Rs 600 crore as AAA with a stable outlook.
  • Taj GVK Hotels: ICRA has downgraded thje company's long-term loans worth Rs 165.63 crore to ICRA A from ICRA A+ and the short-term credit facilities worth Rs 30 crore to ICRA A1 from ICRA A1+. The revision in rating is on account of an anticipated sharp decline in revenue and margins for FY21 on account of Covid-19.
  • Dalmia Bharat: Buys back 32,350 shares from the open market. Total shares bought back as on June 19 stood at 53,98,434.
  • Non-Nifty Earnings Today: Aegis Logistics, Apollo Hospitals, Info Edge, Balaji Amine, Skipper, Morepen Labs, Dhanlaxmi Bank

Earnings Reported After Market Hours

LIC Housing Finance Q4FY20

  • Net Interest Income down 8.2% to Rs 1,155 crore
  • Net profit down 39.2% to Rs 421.4 crore
  • Board recommends dividend of Rs 8 per equity share of Rs 2 each for FY20.
  • All numbers are standalone and compared on a year-on-year basis

DFM Foods Q4FY20

  • Revenue down 16.7% to Rs 109.7 crore
  • Net loss of Rs 1.2 crore from net profit of Rs 9.9 crore
  • Ebitda down 88.6% to Rs 2.1 crore
  • Ebitda margin down to 1.9% from 14%
  • All numbers are standalone and compared on a year-on-year basis

ENIL Q4FY20

  • Revenue down 13.6% to Rs 151.8 crore
  • Net loss of Rs 3.23 crore from net profit of Rs 19.3 crore
  • Ebitda down 46.7% to Rs 22.9 crore
  • Ebitda margin down to 15.1% from 24.5%
  • All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

JPMorgan On Power Grid

  • Overweight rating maintained
  • Price target of Rs 217
  • Dividend yield in FY20 at 5.8%
  • Results were an all-round beat
  • Meets FY20 capex target despite Covid-19 disruption
  • Strong operating cash flow performance
  • No impact of Covid-19 in FY20 with capitalisation ahead of estimate

Jefferies On Power Grid

  • Hold rating maintained
  • Price target of Rs 160
  • Lockdown-related rebate to be accounted for in April-May billing cycle
  • Weak growth outlook for transmission bid pipeline business remains a concern
  • Loss of market share to private players another concern

Jefferies On HDFC

  • Buy rating maintained
  • Price target of Rs 2,110
  • Fund raising to aid organic and inorganic growth opportunities
  • Asset quality pressures to be manageable
  • Moratorium loans likely to fall
  • Expect FY21 to be weak given weak topline growth and high provisioning costs
  • Better placed than peers to capitalise on a recovery in FY22

Morgan Stanley On Cadila Healthcare

  • Overweight rating maintained
  • Price target of Rs 300
  • Expect tailwinds for the U.S. market in FY21
  • Expect finalisation of Ph3 clinical trial protocol with the U.S. FDA for Saroglitazar
  • Profit base is getting normalised
  • Injectables likely to drive U.S. business over next three years

IDFC Securities On Glenmark

  • Outperform rating maintained
  • Price target of Rs 536
  • 1 lakh treatment courses for Favipiravir will imply and opportunity worth Rs 60-90 crore
  • Exports is the bigger opportunity as compared to domestics
  • Already getting enquiries from multiple countries
  • Efficacy to be more clearly established once full clinical data is made public

Jefferies On LIC Housing Finance

  • Underperform rating maintained
  • Price target of Rs 225
  • Weak topline in Q4FY20
  • Moratorium broadly in-line with peers
  • Provision buffers are inadequate
  • Expect muted loan growth
  • Asset quality pressure to weigh on earnings
  • Core earnings remain weak
  • Overhang of a potential merger with IDBI Bank

Bulk Deals

  • Bajaj Corp: Equity Intelligence India buys 8.6 lakh shares or 0.6% of the total equity at Rs 146.7 per share
  • Indiabulls Housing Finance: Morgan Stanley Asia buys 45.2 lakh shares or 1.1% of the total equity at Rs 184.8 per share
  • Mindtree: Integrated Core Strategies buys 10.5 lakh shares or 0.6% of the total equity at Rs 918.9 per share while Vanguard Group sold 17 lakh shares or 1% of the total equity at Rs 913.6 per share.

Pledged Share Details

  • Laurus Labs: Axis Finance releases pledge on 4.35% shares
  • DB Corp: ICICI Prudential Mutual Fund releases pledge on 2.17% of the total equity.
  • Tourism Finance Corporation of India: Beacon Trusteeship acquires 9.69% of the total equity by way of encumbrance by way of pledge.
  • Forbes & Company: Promoter Shapoorji Pallonji revoked pledge of 25.83 lakh shares on June 17.

Who’s Meeting Whom

  • Tata Motors: To meet Bernstein and BFAM Partners on June 22 and M&G Investments on June 26.
  • Dr Lal Pathlabs: To meet Aberdeen Standard Investments, Singapore and ICICI Prudential Life on June 22.
  • Manappuram Finance: To meet Ward Ferry on June 22.
  • Crompton Greaves Consumer Electricals: To meet investors via IIFL's first virtual conference between June 23-26.
  • Power Grid: To meet ICICI Securities on June 22.

Insider Trades

  • V-Mart Retail: Promoter Smriti Agarwal sold 19,440 shares on June 18
  • SBI Cards and Payment Services: Promoter SBI Life Insurance acquired 50,000 shares on June 19

Trading Tweaks

  • Exclusion from F&O Contracts: Century Texties, Equitas Holdings, Ujjivan Financial Services from August 28.
  • Price Band Revised From 10% To 5%: Ashima, Bombay Rayon Fashions, Ester Industries, Inox Wind, Shreyas Shipping & Logistics, Usha Martin.
  • Price Band Revised From 20% To 10%: BLB, Igarashi Motors
  • Move Into ASM Framework: Aarti Drugs, Ortin Laboratories, Orient Bell
  • Move Out of ASM Framework: Kaya , Ballarpur Industries, Khadim, Xelpmoc Design And Tech, Mohota Industries, Nagarjuna Fertilizers and Chemicals, Gyscoal Alloys , Andhra Cements, FCS Software Solutions, Hindusthan National Glass & Industries, Reliance Naval and Engineering, Tejas Networks, Jaypee Infratech, HCL Infosystems, MIRC Electronics, Zee Media Corporation, JBF Industries, Future Supply Chain Solutions, Future Retail, Varroc Engineering, Future Enterprises, CG Power and Industrial Solutions, 5Paisa Capital, PNB Housing Finance, Alok Industries.
  • Move Into Short-Term ASM Framework: Hathway Cable & Datacom, Globus Spirits, Shreyas Shipping & Logistics, Ester Industries, Uttam Galva Steels.
  • Move Out Of Short-Term ASM Framework: Shilpa Medicare, Avadh Sugar & Energy, TV18 Broadcast, Dwarikesh Sugar Industries, Sanghi Industries, KDDL.

Money Market Update

  • The rupee ended Friday's trade at 76.18 against the U.S. Dollar as compared to Thursday's close of 76.17.
  • For Friday, the currency was the third worst performer in Asia after the South Korean Won and the Indonesian Rupiah.
  • The rupee posted its second successive weekly loss, ending as the second worst performer behind the South Korean Won on a weekly basis.

F&O Cues

  • Nifty June futures end at 10,235; discount narrows to 9 points from 16 points
  • Nifty June futures add 0.1% and 13,000 shares in Open Interest
  • Nifty Bank June futures end at 21,309; discount widens to 62 points from 42 points
  • Nifty Bank June futures shed 8.7% and 1.7 lakh shares in Open Interest
  • Nifty Put-Call Ratio at 1.56 from 1.59 across all series
  • Enters F&O Ban: NCC
  • Exits F&O Ban: Vodafone Idea
  • Stocks In F&O Ban: Adani Enterprises, BHEL, Escorts, JSPL, Just Dial, NCC, PNB, SAIL

Nifty: June 25 Expiry

  • Maximum Open Interest on Call side at 10,500 Call (34.8 lakh shares)
  • Maximum Open Interest on Put side at 9,000 Put (51.8 lakh shares)
  • Active Options: 10,000 Put (7.7 lakh shares) and 10,600 Call (7.7 lakh shares)

F&O Buzzers & Fund Flows

All You Need To Know Going Into Trade On June 22
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