All You Need To Know Going Into Trade On June 23

Stocks To Watch

• Info Edge: To raise Rs 1,875 crore through issue of equity shares of face value of Rs 10 via a Qualified Institutions Placement (QIP).
• Fitch Ratings: Revises outlook on long-term issuer default ratings of Indian Oil, BPCL, Oil India, GAIL, Power Grid and NTPC to negative from stable. The long-term Issuer Default Rating is re-affirmed at BBB- for all the companies.
• Alkem Laboratories: Board approved closure of operations at its manufacturing facility at the Betalactum block in Daman. The facility contributed 0.8% of the total turnover and mainly catered to the international market and was significantly under-utilized.
• HDFC AMC: Says it is now compliant with minimum public shareholding norms as per SEBI, after the stake sale through an OFS by Standard Life Investments. Promoters currently hold 73.97% stake in the company.
• JTEKT: To introduce constant velocity joint product in Driveline segment.
• 8K Miles Software Services: Launched technology and consultancy services to providers, payers and life science companies across North America.
• Satin Creditcare Network: Approved raising Rs 120 crore via rights issue.
• UTI AMC: Received SEBI nod for Rs 3,000 crore IPO.
• Omaxe: To consider raising funds on June 29.
• Aditya Birla Fashion and Retail: To consider terms of proposed rights issue of Rs 1,000 crore on June 25.
• PNC Infratech: Will not extend share purchase agreement with Cube Highways for 35% stake sale of their venture of the four-laning toll project in Uttar Pradesh.
• Tejas Networks: ICRA has downgraded the long-term rating from ICRA A to ICRA A- and the short-term rating from ICRA A1 to ICRA A2+, for line of credit worth Rs 559.9 crore. The outlook on the long-term rating is stable.
• Non-Nifty Earnings Today: Page Industries, Berger Paints, Alkyl Amines, Aster DM Healthcare, Balrampur Chini, Bank of Baroda, DB Corp, Finolex Industries, GM Breweries, Hatsun Agro, Kolte-Patil, Indian Bank, Phillips Carbon Black.

Earnings Reported After Market Hours

Sudarshan Chemicals Q4FY20

• Revenue up 4.5% to Rs 449.1 crore
• Net profit up 5.8% to Rs 27.3 crore
• Ebitda down 17.6% to Rs 53.9 crore
• Ebitda margin down to 12% from 15.2%
• Higher other expenses impact margins
• Higher taxes in base quarter aid net profit
• Other expenses include forex loss of Rs 6.24 crore this quarter
• Pigment segment revenue down 1% to Rs 402.2 crore
• Other segment revenue up 83% to Rs 46.9 crore
• All numbers are consolidated and compared on a year-on-year basis

Info Edge Q4FY20

• Revenue up 7.8% to Rs 327.6 crore
• Ebitda up 6.4% to Rs 91.8 crore
• Ebitda margin at 28% from 28.4%
• Net profit down 63.7% to Rs 119 crore
• Losses made by associates and JVs impact profit
• Associates and JV shared loss of Rs 136 crore from a profit of Rs 90 crore
• Exceptional loss widens to Rs 183 crore from Rs 159 crore
• All numbers are consolidated and compared on a year-on-year basis

Earnings Expectations: Asian Paints Q4FY20

• Revenue seen 4% lower at Rs 4,812 crore
• Ebitda seen 7% higher at Rs 884 crore
• Ebitda margins seen at 18.4% from 16.4%
• Net profit seen 8% higher at Rs 512 crore
• All estimates are Bloomberg estimates, consolidated and compared on a year-on-year basis

Key Factors At Play For Asian Paints:

• Volume growth for the domestic paints business seen between 0-1%
• Impact on gross margin from price of key raw material and product mix trends
• Pricing and discount trends
• Management commentary on demand outlook
• Performance and outlook on the industrial paints business

Brokerage Radar

BofA Securities On Reliance Industries

• Buy rating maintained
• Price target of Rs 1,940
• Bull-case valuation models FY22 cellular ARPU at Rs 200
• Jio's IPO to act as another catalyst for the stock over time
• Expect Jio's ARPU to stabilise to Rs 250 in the long-term
• Digital ads to be another revenue generation opportunity

CLSA On Cement

• Channel checks suggest cement demand fell only 5-15% in May as compared to a decline of 35-40% year-on-year
• Sharpest recovery seen in Central and East India
• Prices have fallen by Rs 5-10 per bag in most regions. However, blended all-India price remains 4% higher on a quarter-on-quarter basis
• See upside potential to price estimates but await demand clarity before being more constructive
• Most companies or dealers are cautious on near-term demand as current pick-up is likely from pent-up demand
• Expect sustained demand recovery post-monsoons
• Prefered picks are ACC and Ambuja

Nomura On Colgate Palmolive

• Initiate coverage with buy rating
• Price target of Rs 1,620
• Elevated oral hygine consciousness to drive consumer habit changes
• Stepped up innovation and new product launches
• One of the most stable company in a very stable category
• See FY21/22/23 earnings growth of 8%, 15% and 15% respectively

HSBC On LIC Housing Finance

• Hold rating maintained
• Price target cut to Rs 285 from Rs 295
• Earnings missed estimates due to lower NIMs
• Higher opex and higher tax outgo weighed on earnings
• Asset quality and coverage largely stable
• Negligible coverage on non-stage 3 loans is concerning
• Current valuation factors in most negatives

Nomura On Balkrishna Industries

• Buy rating maintained
• Price target of Rs 1,445
• Sales in Europe and U.S. recovered to pre-Covid-19 levels in May and June
• Gaining market share, especially in France due to various past promotional events
• Commodity tailwinds to keep Ebitda margin visibility well over 30% in the near-term
• Capex spends to drop from FY22 and drive stronger free cash flow

Nomura On AIA Engineering

• Maintain Buy; target price of Rs 1900
• AIAE least impacted by COVID-19-related lockdown vs other industrial peers
• Revenue ahead of estimates, led by strong volumes
• Lower realisations led to lower margins
• OCF generation significantly ahead of trend rate
• Increased FY20 dividend payout, guides for lower payout at 20-25% to conserve cash
• Key risks include customers’ bankruptcies and slower-than-expected adoption of chrome grinding media

JPMorgan on ICICI Bank

• Maintain Overweight, target at Rs 390 per share
• Subsidiary stake sale positive to boost capital buffers
• ICICI Bank stock no longer in a deep value zone
• Stock offers reasonable upside if slippage rates normalize back in FY22

JPMorgan on Cement

• India Cement sector has surprised positively on pace of normalisation
• Cement pricing also seen strength across regions
• June is witnessing positive demand growth trends led by rural
• India cement prices are near all-time highs driven by good discipline
• Like ACC as a key ‘value’ pick
• Ultratech Cement is our preferred ‘growth’ pick

Bulk Deals

• ICICI Pru Life Insurance: Government of Singapore acquired 1.64 crore shares (1.14%) at Rs 391.6 per share.
• Glenmark Pharma: HSBC Pooled Investment Fund sold 18.8 lakh shares (0.67%) at Rs 527.7 per share.
• Indostar Capital Finance: Edelweiss Mutual Fund acquired 22.65 lakh shares (2.45%) at Rs 285 per share and Mission Street sold 22.65 lakh shares (2.45%) at Rs 285 per share

Who’s Meeting Whom

• Rico Auto: To meet Nirmal Bang on June 23
• Affle India: To meet ICICI Prudential Mutual Fund and Neuberger Berman between June 23-24
• Indian Energy Exchange: To meet IIFL AMC, Franklin Templeton and other investors between June 23-25.
• CG Consumer Electricals: To meet Falcon Edge Capital on June 25
• Shriram City Union Finance: To meet Hara Global, Fidelity International and Matthews Asia between June 23-26
• Amber Enterprises: To meet Axis Capital on June 23

Trading Tweaks

• Price Band Revised From 10% To 5%: Century Extrusions, HPL Electric & Power, Nahar Poly Films, Premier Explosives, Reliance Infrastructure, Veto Switchgears And Cables.
• Price Band Revised From 20% To 10%: Dhanlaxmi Bank, Suven Pharmaceuticals, Zee Learn
• Move Into ASM Framework: Birla Cable, Adlabs Entertainment, Kisan Mouldings, Jayant Agro Organics, Kwality, Sanwaria Consumer, Reliance Naval & Engineering, Jaypee Infratech, Ballarpur Industries.
• Move Into Short-Term ASM Framework: Inox Wind, Usha Martin, Indian Terrain Fashions, Paisalo Digital, Genus Power Infrastructures, Capacit'e Infraprojects, Muthoot Capital Services, Orient Cement
• Move Out Of Short-Term ASM Framework: Ashapura Minechem, HLE Glascoat, Panacea Biotec, Ramco Systems, Shriram EPC

Insider Trades

• Nesco: Promoter Patel Consultancy acquired 9,500 shares on June 18
• IOL Chemicals and Pharma: Promoter NCVI Enterprises acquired 14.18 lakh shares between June 8-17
• Mangalore Chemicals and Fertilizers: Promoter Adventz Finance acquired 16.15 lakh shares between June 17-18.
• IndusInd Bank: Promoter IndusInd International Holdings acquired 1.39 lakh shares between June 18-19.

(As Reported On June 22)

Money Market Update

• The currency ended stronger on Monday at 76.03 against the U.S. Dollar as compared to Friday's closing of 76.19.
• Rupee ended as the best performing currency in Asia.

F&O Cues

• Nifty June futures closed at 10,288; discount narrows to 9 points from 16 points
• Nifty June futures shed 10% and 9,200 shares in Open Interest
• Nifty Rollovers at 27%
• Nifty Bank June futures closed at 21,697; discount narrows to 11 points from 62 points
• Nifty Bank June futures shed 1.6% and 2.1 lakh shares in Open Interest
• Nifty Bank rollovers at 14.4%
• Nifty Put-Call Ratio at 1.53 from 1.56 across all series
• Enter F&O Ban: Century Textiles, Vodafone Idea
• Exit F&O Ban: Adani Enterprises, BHEL, Just Dial, PNB, SAIL
• Stocks In F&O Ban: Century Textiles, Vodafone Idea, JSPL, NCC

Nifty Monthly Expiry: June 25

• Maximum Open Interest on Call side at 10,500 strike (35.8 lakh shares)
• Maximum Open Interest on Put side at 10,000 strike (46.2 lakh shares)
• Active Options: 10,100 Put (+12.4 lakh shares) and 10,500 Call (+6.2 lakh shares)