All You Need To Know Going Into Trade On June 30

Earnings Fineprint: Tata Steel Q4FY20

• Revenue down 20.4% to Rs 33,769 crore
• Ebitda down 38.1% to Rs 4,646.9 crore
• Ebitda margin down to 13.7% from 17.7%
• Net loss of Rs 1,095.7 crore from net profit of Rs 2,430.9 crore
• Lower sales, high employee benefit expenses along with other expenses impact operational performance
• Employee benefit expenses as % of sales a 14.4% from 11.3%
• Other expenses as % of sales rose to 38% from 30.3%
• Net loss due to exceptional item of Rs 3,405.8 crore
• Exceptional item includes provision for impairment of non-current assets of Rs 3,141 crore
• All numbers are consolidated and compared on a year-on-year basis

Tata Steel's Standalone Business

• Revenue down 25.7% to Rs 14,211 crore
• Net loss of Rs 436.8 crore from net profit of Rs 2,491.1 crore
• Ebitda down 26.2% to Rs 3,648.7 crore
• Ebitda margin at 25.6% from 25.8%
• Exceptional expense of Rs 2,009 crore this quarter
• Provision for impairment of investments / doubtful advances worth Rs 1,142.1 crore

Stocks To Watch

• Axis Bank: To consider raising funds on July 2 through issue of equity shares, depository receipts, convertible seurities linked to equity shares through a QIP among other methods.
• Minda Industries: Board approved raising Rs 250 crore via rights issue and Rs 300 crore via NCDs.
• SBI Cards and Payments Service: Allotted NCDs worth Rs 400 crore on a private placement basis.
• Tata Power: To consider raising funds on July 2.
• Bharti Airtel: Bloomberg News reports that its arm Nxtra Data seeks to raise $200 million from the Carlyle Group.
• Talbros Automotive Components: Gets aggregate orders worth Rs 234 crore including JVs and subsidiaries. These orders are to be executed over a period of five years starting H2FY21 and are to be completed by FY26.
• Quess Corp: Board approves merger of four wholly-owned arms with the company.
• CG Power's Covid-19 Impact: Significant impact seen in April & May. Cash flows may remain affected due to low sales and it may be challenging to meet operating costs. Putting all efforts to scale up operations to 50% of capacity utilisation.
• IRB Infra: Allotted NCDs worth Rs 200 crore on a private placement basis.
• Sical Logistics: Defaulted in payment of NCDs interest worth Rs 5.5 crore which was due on June 29, due to the prevailing pandemic and insufficient cashflows.
• CreditAccess Grameen: Allotted NCDs worth Rs 145 crore on a private placement basis and completed direct assignment of Rs 222.5 crore. During the current fiscal company has raised Rs 989.5 crore in the form of term loan / facilities under special liquidity scheme of RBI.
• Other Non-Nifty Earnings Today: IRCON International, RITES, MIDHANI, Deepak Fertilisers, Godfrey Phillips, Dish TV, Allcargo Logistics, Goa Carbon, Liberty Shoes, NBCC, National Fertilisers, Steel Strips Wheels, Healthcare Global.

Earnings Reported After Market Hours

Raymond Q4FY20

• Revenue down 29.3% to Rs 1,278.7 crore
• Net loss of Rs 68.3 crore from net profit of Rs 67.5 crore
• Ebitda loss of Rs 6.7 crore from ebitda gain of Rs 167 crore
• Inventory gain of Rs 180 crore in the current quarter
• Tax adjustments cushion net loss
• Barring real estate, all segments see de-growth in revenue
• Channel stock correction in branded apparel segment impacts topline
• Covid-19 results in topline impact of Rs 414 crore and Ebitda impact of Rs 134 crore
• All numbers are consolidated and compared on a year-on-year basis

Force Motors Q4FY20

• Revenue down 38.4% to Rs 653.8 crore
• Net profit down 83.4% to Rs 6.1 crore
• Ebitda up 1.5% to Rs 74.1 crore
• Ebitda margin at 11.3% from 6.9%
• Exceptional loss of Rs 19.5 crore this quarter
• Other income of Rs 29.2 crore in base quarter
• Lower raw material costs and employee expenses aid margins
• All numbers are consolidated and compared on a year-on-year basis

Nocil Q4FY20

• Revenue down 12% to Rs 212.7 crore
• Net profit down 39.5% to Rs 21.9 crore
• Ebitda down 38.8% to Rs 36.7 crore
• Ebitda margin at 17.3% from 24.8%
• Higher input costs impact margins
• All numbers are consolidated and compared on a year-on-year basis

Bharat Dynamics Q4FY20

• Revenue up 63.7% to Rs 1,435.4 crore
• Net profit up 2.5 times to Rs 309.7 crore
• Ebitda up 2.4 times to Rs 404.8 crore
• Ebitda margin at 28.2% from 13.7%
• All numbers are consolidated and compared on a year-on-year basis

Associated Alcohols & Breweries Q4FY20

• Revenue up 11.5% to Rs 135.8 crore
• Net profit up 88.1% to Rs 10.7 crore
• Ebitda up 55.1% to Rs 16.5 crore
• Ebitda margin at 12.1% from 8.7%
• All numbers are consolidated and compared on a year-on-year basis

Earnings Estimates: ONGC Q4FY20

• Revenue seen 13.3% lower at Rs 20,557 crore
• Net profit seen 37.8% lower at Rs 2,581 crore
• Ebitda seen 24% lower at Rs 9,348 crore
• Ebitda margin seen at 45.5% from 51.9%
• Net realisations seen at $51 per barrel from $58.24 per barrel
• All estimates are standalone and compared on a sequential basis

Factors At Play For ONGC:

• Ebitda likely to be lower due to lower crude realisation and lower value added products.
• Gas prices were steady on a sequential basis
• Overall crude sales volumes may fall 4% to 5.6 MT
• Lower crude prices and gas production to impact topline

Earnings Estimates: Vodafone Idea Q4FY20

• Revenue seen 5% higher at Rs 11,692 crore
• Ebitda seen 13% higher at Rs 3,859 crore
• Ebitda margin seen at 33% from 30.8%
• Net loss may narrow to Rs 4,610 crore from Rs 6,439 crore
• ARPU seen 10% higher at Rs 120
• All estimates are consolidated and compared on a sequential basis

Brokerage Radar

HSBC On Reliance Industries

• Buy rating maintained
• Price target raised to Rs 1,880 from Rs 1,590
• Balance sheet strengthened ahead of next phase
• Integration of digital, retail and financial services to make consumer business a formidable player
• Retail business is set to take off, likely to be worth $50 billion
• Will once again become a cash generating machine
• Adjust estimates to account for new capital infusion, stake sale in Jio Platforms and higher expectations for retail business
• Increase the valuation for retail and telecom business
• Sustained weakness in refining and petrochemical business a downside risk

CLSA On Sobha

• Downgrade to outperform from buy
• Price target cut to Rs 252 from Rs 276
• Turn cautious on near-term demand based on sales cancellations
• Management says customer enquiries back to pre-Covid-19 levels
• Sales likely to revive only once site visits normalise
• Cut pre-sales estimates by 18% and 6% respectively for FY21 and FY22
• Generated cashflow surplus in Q4FY20
• Expects to lower debt further in FY21

CLSA On Bharat Forge

• Underperform rating maintained
• Price target raised to Rs 325 from Rs 300
• Lockdown-related revenue loss drives earnings miss in Q4FY20
• Expect macro challenges to continue for major end-markets
• Deleveraging cycle to continue and may generate free cash flow of Rs 450 crore
• New customer wins and product additions in oil & gas, aerospace segment should lead to a strong recovery over the next three years
• Synchronised global downturn in FY22 is a key downside risk.
• Upside risks include market-share gains from smaller companies with weaker balance sheet

Macquarie On Emami

• Outperform rating maintained
• Price target of Rs 252
• Higher rural contribution may lead to faster recovery
• Strong new products pipeline can contribute 3-4% of FY21 revenue
• Accelerated cost savings, benign raw material costs can boost margins in FY21
• Cut FY21 and FY22 EPS estimates by 15% and 13% respectively
• Reduced promoter pledges post cement business deal to drive re-rating
• Increase target multiple to 20 times from 16 times on higher certainty of cement deal
• Multiples going back to 2014-17 levels possible on higher earnings growth

UBS On Dr Lal Pathlabs

• Buy rating maintained
• Price target raised to Rs 1,870 from Rs 1,800
• Increasing costs, lack of insurance coverage for hospitalisation and high lifestyle-based diseases to drive consumerisation of healthcare
• Covid-19 may dampen near-term earnings
• Medium to long-term outlook has improved based on increased healthcare awareness
• Competition from aggregators likely to increase
• Raise price target based on high long-term earnings growth rate

JPMorgan On Tata Steel

• Overweight rating maintained
• Price target of Rs 440
• Strong operational results despite headline loss
• Ebitda of European business a positive
• Net debt being flat another positive
• Management told Bloomberg that while Utilisations stood at 50% in April, they aim to ramp-up to 100% by July

Motilal Oswal On Dabur

• Upgrade to buy from neutral
• Price target of Rs 535
• Most exciting investment opportunities in the consumption space
• See potential earnings growth of 15-20% CAGR over next 4-5 years
• Looking beyond near-term valuations is essential
• Undergoing gradual but evident transformation in its topline
• Rural dependence, higher non-discretionary items in portfolio aids high visibility

Bulk Deals

• Astron Paper And Board: Promoter Kiritbhai Patel acquired 10 lakh shares (2.15%) at Rs 41 per share
• Laurus Labs: Bluewater Investment sold 1.25 crore shares (11.68%) at Rs 506.07 per share. BNP Paribas acquired 15 lakh shares (1.4%) at Rs 504.25 per share, Government Pension Fund Global acquired 9.41 lakh shares (0.88%) at Rs 504 per share and MK Ventures acquired 7.58 lakh shares (0.71%) at Rs 504.89 per share. MK Ventures is promoted by Madhusudan Kela.
• Wheels India: Promoters sold 23 lakh shares (9.56%) at Rs 427.6 per share. IDFC Mutual Fund acquired 2.34 lakh shares (0.97%), HDFC Mutual Fund acquired 9.91 lakh shares (4.12%), India Motors Parts and Accessories acquired 5.14 lakh shares (2.14%) and Royal Sundaram Alliance Insurance acquired 5.61 lakh shares (2.33%), at Rs 427.6 per share, respectively.

Pledged Share Details

• Manappuram Finance: Promoter V Nandkumar released pledge of 15 lakh shares on June 29.
• Jindal Stainless: Promoter Hexa Securities created pledge of 49.27 lakh shares on June 29.
• DB Corp: Promoter released pledge of 21 lakh shares between June 24 -26.
• JSW Steel: Promoter JTPM Metal Traders created pledge of 16 lakh shares on June 24
• Jindal Stainless: promoters created pledge of 7 crore shares on June 24

(As Reported On June 29)

Who’s Meeting Whom

• Endurance Technologies: To meet Paragon Partners on June 30
• Bharat Forge: To meet Nippon India Mutual Fund, UTI Mutual Fund and other investors on June 30
• Tata Consumer Products: To meet USS Investment Management on July 1
• Cipla: To meet SBI Life Insurance on June 30

Trading Tweaks

• Price Band Revised From 10% To 5%: Elgi Rubber, Tilaknagar Industries.
• Move Into ASM Framework: Transformers And Rectifiers, Alok Industries, Adhunik Industries, Jindal Photo.
• Move Into Short-Term ASM Framework: Future Supply Chain Solutions, Future Retail, Future Enterprises, Hilton Metal Forging, Kilpest.
• Move Out Of Short-Term ASM Framework: Globus Spirits, Elecon Engineering, Diamines and Chemicals.

Insider Trades

• Great Eastern Shipping: Promoters acquired 8 lakh shares between June 25-26
• Jamna Auto: Promoter Map Auto acquired 4.79 lakh shares between June 25-26
• Quess Corp: Promoter Ajit Isaac acquired 1.11 lakh shares on June 26
• Varun Beverages: Promoters sold 26 lakh shares on June 26

(As Reported On June 29)

Money Market Update

• The rupee ended with gains for the third straight day on Monday.
• The currency ended at 75.58 against the U.S. Dollar as compared to Friday's close of 75.64.

F&O Cues

• Nifty July futures closed at 10,256; discount narrows to 57 points from 65 points
• Nifty July futures shed 1.8% and 2.1 lakh shares in Open Interest
• Nifty Bank July futures closed at 21,235; discount of 124 points from 130 points
• Nifty Bank July futures shed 2.5% and 30,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.30 from 1.33 across all series

Nifty Monthly Expiry: July 2

• Maximum Open Interest on Call side at 10,500 strike (26.4 lakh shares)
• Maximum Open Interest on Put side at 10,000 strike (23.9 lakh shares)
• Active Options: 10,100 Put (+10.2 lakh shares) and 10,300 Call (+5.4 lakh shares)

Nifty Monthly Expiry: July 30

• Maximum Open Interest on Call side at 11,500 strike (19.8 lakh shares)
• Maximum Open Interest on Put side at 10,000 strike (20.6 lakh shares)