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All You Need To Know Going Into Trade On June 26
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
26 Jun 2020, 09:11 AM IST 
An employee wearing a protective mask cleans a plexiglass barrier before reopening at a Bloomingdale’s Inc. store in New York, U.S. (Photographer: Jeenah Moon/Bloomberg)
Asian markets have opened higher on the final trading day of the week after a late surge on Wall Street. Investors are weighing prospects of additional stimulus over rising Covid-19 cases in the U.S.
The U.S. Dollar is edging higher while treasuries are steady.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.6% to 10,297 as of 7:00 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 can influence equities in today’s session:
- Markets in South Korea are outperforming in the Asia Pacific this morning with gains of over 1%. Benchmarks in Japan and Australia are advancing as well.
- Futures on the Dow Jones are little changed after the benchmark ended 1.2% higher on Thursday, courtesy a final hour surge.
- Initial jobless claims in the U.S. topped estimates at nearly 1.5 million.
- Markets in China remain shut on account of a holiday.
- "It’s amazing, the market doesn’t care about fundamentals or earnings at this point, they care about the pandemic and the pandemic only," Sandy Villere of Villers & Co. told Bloomberg TV in an interview.
- Yield on the 10-year treasury stood at 0.69%.
- West Texas Intermediate crude rose 0.8% to $39.04 per barrel. Oil prices rose after Russia slashed exports of its flagship crude Urals to the lowest in at least 10 years.
Get your daily fix of the global markets here.
Stocks To Watch
- Vedanta: Vedanta: Shareholders approve the delisting plan. 93.34% votes polled in favour of the motion. 85% of the public institution shareholders and 74.7% of public non-institution shareholders voted in favour of the motion.
- Dewan Housing Finance: CBI files chargesheet against Kapil and Dheeraj Wadhavan, Belief Realtors, RKW Developers, DOIT Urban Ventures, Roshni and Rana Kapoor in the city sessions court, Mumbai on allegations of fraud against Yes Bank.
- Apollo Tyres: Commissions its seventh facility globally - a greenfield plant in Andhra Pradesh. Phase - I will involve an investment of close to Rs 3,800 crore. Capacity will be gradually ramped-up in 12-18 months as demand improves. Plant will have a capacity to produce 15,000 passenger car tyres and 3,000 truck-bus radials per day by 2022.
- Reliance Industries: Fitch Ratings upgrades long-term currency issuer default rating to BBB+ from BBB with a stable outlook. Long-term foreign currency issuer default rating affirmed at BBB- with a stable outlook. Upgrade of local-currency IDR driven by expectation of improvement in the company's financial profile with net debt reductions courtesy stake sale in Jio platforms. Forecast positive free cash flow during FY21. Net-debt/Ebitda may fall to 0.6 times in FY21 from 2.3 times in FY20.
- BHEL, Bharat Bijlee, Voltamp Transformers: Bloomberg News reports that India’s Renewable Energy Ministry has proposed a basic customs duty of 25% on solar modules starting July 30 and 40% from April 1, 2022. Duty on solar cells has been proposed at 15% from July 30 and 25% from April 2022. Import tax on solar inverters should be 20% from July 30 and remain so throughout, according to the ministry’s proposal. Proposals need finance ministry’s approval for coming into effect.
- Surya Roshni: Board approves expansion program by installation of a second 3 LPE coating line at its existing steel pipe unit at Anjar in Gujarat. The share of high value added pipes to further increase post the additional coating line.
- Sumitomo Chemicals India: Promoter to sell 49.91 lakh shares or 1% of the total equity through an Offer for Sale with an option to sell an additional 49.91 lakh shares. Floor price for the same has been set at Rs 265 per share, which is a 10% discount to Thursday's closing price. Trade date for non-retail investors is June 26 while for retail investors is June 29.
- IRCTC's Covid-19 Impact: Adverse impact seen in the catering segment in Q1FY21. 13 out of the 14 rail neer plants have resumed production. Expect normalisation in H2FY21.
- Andhra Papers: Offer-for-sale for non-retail segment received 3.34 times demand at an indicative price of Rs 192.48 per share.
- Ashok Leyland: Has allotted NCDs worth Rs 200 crore on a private placement basis.
- Somany Ceramics: Board approved raising Rs 50 crore via NCDs
- Varroc Engineering: Board approved raising Rs 500 crore via NCDs
- ABB Power Grids: Signs MoU with National Institute of Technology, Telangana for co-operation to drive smart electric grid technology education, skill development and research activity.
- PNC Infratech: Gets Letter of Award from NHAI for a HAM project in Uttar Pradesh at a bid cost of Rs 1,412 crore.
- Camlin Fine Sciences: Board approves raising Rs 180 crore from infinity holdings and its affiliated entities. Convergent Finance to act as an investment advisor. Structured as a subscription to equity warrants priced based on the prevailing market price, the investment will result in nearly 22.65% ownership stake on a fully diuted basis. Purpose of the fund raise will be to consolidate and acquire the entire stake of its JV partners in the company's subsidiaries in Mexico and China.
- HFCL: Promoter MN Ventures released pledge of 6.14 crore shares (4.78% equity stake) in favour of Yes Bank on June 25. These shares were pledged by the company with Yes Bank as a collateral security for the performance bank guarantee of Rs 58.36 crore availed by the company.
- SMS Pharma: Promoters withdraw plans to buy 82 lakh shares on an inter-se-transfer basis.
- Nifty Earnings Today: Coal India, ITC
- Non-Nifty Earnings Today: GATI, Sun TV, IRCTC, Kajaria Ceramics, Glenmark, APL Apollo Tubes, NALCO, Emami, HUDCO, ITI, Ramkrishna Forgings, UCO Bank.
Earnings Reported After Market Hours
Ashok Leyland Q4FY20
- Revenue down 56.6% to Rs 3,838.5 crore
- Net loss of Rs 57.3 crore from net profit of Rs 653 crore
- Ebitda down 81.4% to Rs 183 crore
- Ebitda margin down to 4.8% from 11.1%
- Exceptional loss of Rs 68.7 crore this quarter
- Tax credit reversal of Rs 44.5 crore this quarter
- All numbers are standalone and compared on a year-on-year basis
Apollo Hospitals Q4FY20
- Revenue up 18.7% to Rs 2,572.2 crore
- Net profit up 2.7 times to Rs 205.6 crore
- Ebitda up 31.1% to Rs 348.4 crore
- Ebitda margin at 13.5% from 12.3%
- Exceptional gain of Rs 164.4 crore this quarter consists of gain in sale of investments in Apollo Health Insurance
- Margins impacted by IND-AS 116
- Healthcare services revenue up 6% to Rs 1,213.8 crore
- Pharmacy revenue up 33% to Rs 1,358.5 crore
- All numbers are standalone and compared on a year-on-year basis
V2 Retail Q4FY20
- Revenue down 21% to Rs 129.2 crore
- Net loss of Rs 11.6 crore from Net profit of Rs 4.2 crore
- Ebitda down 29% to Rs 3.05 crore
- Ebitda margin down to 2.4% from 2.6%
- Same Store Sales Growth declines 18% this quarter. Was at a positive 3% up to March 15, 2020.
- Opened one new store during the quarter
- Closed two non-profitable stores in Q1FY21
- Numbers are standalone and compared on a year-on-year basis
Container Corporation of India Q4FY20
- Revenue down 14% to Rs 1,568.6 crore
- Net profit down 16% to Rs 294.4 crore
- Ebitda up 2% to Rs 474.3 crore
- Ebitda margin at 30.2% from 25.5%
- Lower expenses aid margin performance
- Provided Rs 20.58 crore towards impairment of investment in a wholly-owned subsidiary
- No income recognised on account of SEIS benefits
- Final dividend of Rs 2.85 per share
- All numbers are standalone and compared on a year-on-year basis
Engineers India Q4FY20
- Revenue up 39% to Rs 853.8 crore
- Net profit up 37% to Rs 129.7 crore
- Ebitda up 18% to Rs 111.1 crore
- Ebitda margin down to 13% from 15.3%
- Consultancy & Engineering projects revenue up 14% to Rs 401.6 crore
- Turnkey projects revenue up 73% to Rs 452.1 crore
- Final Dividend of Rs 1.55 per share
- No significant long-term impact on business due to Covid-19
- All numbers are standalone and compared on a year-on-year basis
Earnings Estimates: ITC Q4FY20
- Net sales seen 3.1% lower at Rs 11,832 crore
- Ebitda seen 6.2% lower at Rs 4,287 crore
- Ebitda margin at 36.2% from 37.5%
- Net profit seen 0.8% higher at Rs 3,511 crore
- All estimates are standalone and compared on a year-on-year basis
Key Factors At Play For ITC:
- Cigarette volumes likely to decline (Company does not report volume growth)
- FMCG business may see 2-5% decline in sales
- Hotel business revenue may decline 23-25%
- Agri and paperboards business also likely to see weakness
- Loss in production likely to pressurise margins
Brokerage Radar
HSBC On HDFC Bank
- Buy rating maintained
- Price target raised to Rs 1,350 from Rs 1,312
- Falling risk weighted assets intensity along with better profitability
- Diverse loan book supports growth outperformance
- Expect FY22-23 loan CAGR of 16% and average RoE of 17%
- Orderly transition to a new CEO in October 2020 is a key potential catalyst
SBICAP Securities On Reliance Industries
- Buy rating maintained
- Price target raised to Rs 2,000
- Expect strong growth momentum in telecom and retail
- Aramco deal may add $15 billion to valuations or possibly even more
- Further re-rating expected for Jio Platforms
Bulk Deals
- Mangalam Cement: Promoter Vidula Consultancy acquired 2.5 lakh shares (0.94%) at Rs 190.01 per share and Origin Engineers sold 1.5 lakh shares (0.56%) at Rs 190 per share
- Tourism Finance Corporation: Dovetail India Fund sold 10.23 lakh shares (1.27%) at Rs 35.5 per share.
Pledged Share Details
- Eveready Industries: Promoter Williamson Financial Services invoked pledge of 6.03 lakh shares on June 25
- Dish TV: Promoter Direct Media Distribution invoked pledge of 1.12 crore shares on June 23.
(As Reported On June 25)
Who’s Meeting Whom
- Dixon Technologies: To meet SBI Mutual Fund, Amansa and other investors between June 26-July 1
- Can Fin Homes: To meet Invesco, Aditya Birla Sun Life Mutual Fund and other investors on June 26
Trading Tweaks
- Price Band Revised From No Band To 20%: Adani Power
- Price Band Revised From 10% To 5%: Adhunik Industries, Surya Roshni, Texmo Pipes and Products, SPML Infra
- Price Band Revised From 20% To 10%: 5Paisa Capital, Shree Rama Newsprint, Transformers and Rectifiers, Xpro India
- Move Into ASM Framework: Infibeam Avenues, Precot Meridian, Xpro India, Ganesh Housing Corporation, Shree Rama Newsprint, Easun Reyrolle, SEL Manufacturing.
- Move Into Short-Term ASM Framework: Ashiana Housing, Jindal Stainless (Hisar), Asahi Songwon Colors , Suven Life Sciences, Electrosteel Castings, Asian Granito, Future Consumer.
- Move Out Of Short-Term ASM Framework: Morepen Laboratories, Hi-Tech Pipes, Adroit Infotech
Insider Trades
- Jamna Auto: Promoter Map Auto acquired 5 lakh shares between June 22-24
- Ashiana Housing: Promoters acquired 1.9 lakh shares on June 11
- Filatex India: Promoter Gunjan Bhageria acquired 1.13 lakh shares on June 23
- Cyient: Promoter Sucharitha Bodanapu acquired 55,575 shares between June 22-24
- NIIT Tech: Promoter Hulst BV sold 12.36 lakh shares on June 22
- IIFL: Promoter Ardent Impex sold 2.5 lakh shares on June 25
- Dixon Technologies: promoter Geeta Vaswani sold 3,255 shares between June 19-23
(As Reported On June 25)
Money Market Update
- The rupee ended little changed but with gains on Thursday.
- The currency ended at 75.67 against the U.S. Dollar as compared to Wednesday's close of 75.72.
- Rupee ended as the second best performer in Asia on Thursday.
F&O Cues
- Nifty July futures closed at 10,231; discount of 57 points
- Nifty July futures add 54% and 40.3 lakh shares in Open Interest
- Nifty Bank July futures closed at 21,416; discount of 80 points
- Nifty Bank July futures add 58% and 5.2 lakh shares in Open Interest
- Nifty Put-Call Ratio at 1.27 from 1.29 across all series
Nifty Monthly Expiry: July 30
- Maximum Open Interest on Call side at 11,500 strike (18 lakh shares)
- Maximum Open Interest on Put side at 9,000 strike (20 lakh shares)
- Active Options: 10,000 Put (+18.6 lakh shares), 11,500 Call (+5.5 lakh shares)