All You Need To Know Going Into Trade On June 5

Stocks To Watch

• Reliance Industries: Abu Dhabi-based sovereign investor Mubadala Investment Company to invest Rs 9,094 crore in Jio Platforms. Investment to translate into 1.85% stake in Jio platforms. Deal values the company at Rs 4.9 lakh crore and an Enterprise Value of Rs 5.16 lakh crore. This is the 6th major investment in Jio Platforms in six weeks.
• Power Grid: The Department of Telecommunications in a revised assessment order has asked the company to pay Rs 13,613.66 crore as a license fee. The order is related to NLD license fees for FY07 and FY10 and includes interest, penalty along with interest on penalty.
• Lupin: The European Commission has granted marketing authorisation to the company and Mylan for Nepexto - a biosimilar to etanercept. The drug is used in the treatment of various forms of arthritis. The approval follows the adoption of a positive opinion by the Committee of Medicinal Products for Human Use (CHMP) in March this year. The said drug had global sales of $9.6 billion globally for the 12 months ending December 2019, according to IQVIA.
• UPL: S&P Global Ratings revises its outlook to negative from stable. Long-term issuer credit rating affirmed at BBB-. Negative outlook reflects a one-in-three likelihood that the parent's ratio of funds from operations to debt will not maintain its trajectory towards 25% by FY22.
• NIIT: The company's board has approved divesting its schools learning business to a strategic or financial partner through sale of its holding in its wholly-owned arm MindChampion Learning Systems or in any appropriate manner. The move will enable the company to conserve cash resources as well as focus on two larger business of Corporate Learning and Skills & Careers.
• RITES: The company’s arm, Railway Energy Management has secured its largest mandate from the Indian Railways for handling, tendering, installation, supervision and managing power supply from 3 GW solar power plants to be set-up on vacant Indian Railways land. Besides Bid Management fee in the beginning, the company would earn long-term revenue through supply management from these installations which may amount to approximately Rs 20 crore per year during the life of the project. Entire installation is expected to be completed by financial year 2022-23.
• Suprajit Engineering: DSP Global Services increased stake to 5.59% from 4.85% on June 2.
• HCL Tech: To transfer its software offerings to Google Cloud as part of expanding its strategic partnership with Google.
• Gulf Oil Lubricant: Board approved re-appointment of Ravi Chawla as Managing Director & Chief Executive Officer till June 2023.
• Safari Industries: Board approved raising shareholding limit for foreign investors from 24% to 49%.
• Nifty Earnings Today: SBI, L&T
• Non-Nifty Earnings Today: Alkem Laboratories, Gujarat Gas, Aditya Birla Capital, Exide Industries, Jyothy Labs and Saregama.

Companies Sharing Covid-19 Updates

Ultratech Cement

• Currently dispatching cement from all locations.
• Majority of the demand currently from retail markets.
• Capex plan for FY21 cut to around 1,000 crore.
• Work on the 2.2 million tonne grinding unit in Cuttack which was scheduled for commissioning in March 2021 has slowed down.
• Brownfield capacity expansion at West Bengal and Bihar grinding units and the Bicharpur coal block is coming to an end and it should get commissioned by March 2021.

Allcargo Logistics

• Significant disruption in the equipment business.
• MTO and CFS segment which comprise of 90% of the total revenue remained unaffected during the lockdown period.
• Demand has picked up in May.

APL Apollo Tubes

• Do not expect any long-term impact of the lockdown.
• There would be some impact on revenue and profitability in Q1FY21.
• Focusing on faster receivables and reduction in debt.

TD Power Systems

• Expect sales to recover substantially towards the end of the first half of calendar year 2020.
• Do not see any material impact on business since majority of it comes from exports.
• Do not see any material impact on demand from the  international business in the short-term.
• May have to resort to third shift full operations in order to meet the targets.
• Domestic sales will be impacted for the next two financial years.

Can Fin Homes

• Have not opted for moratorium offered by lenders.
• Collection of EMIs has been postponed in some accounts.
• Loan Disbursements were not done in April.

Mahindra Logistics

• Revenue in Q1FY21 can be as low as 50-60% compared to a normal quarter.
• Likely to see some impact on the receivable cycle.

Earnings Reported After Market Hours

DLF Q4FY20

• Revenue down 32.2% to Rs 1,694.2 crore
• Net loss of Rs 1,858 crore from a net profit of Rs 436.2 crore
• Ebitda down 40.6% to Rs 316.7 crore
• Ebitda margin narrows to 18.7% from 21.3%
• Exceptional loss of Rs 330.7 crore in the current quarter.
• Exceptional provision of Rs 272 crore due to Covid-19
• Reversal of net deferred tax asset of Rs 1,916 crore due to adoption of new tax rate
• All numbers are consolidated and compared on a year-on-year basis

SRF Q4FY20

• Revenue down 4.1% to Rs 1,857.8 crore
• Net profit down 2.7% to Rs 185.8 crore
• Ebitda up 3.8% to Rs 388.4 crore
• Ebitda margin at 20.9% from 19.3%
• Higher fuel, employee and other expenses impact bottomline
• Low raw material costs aid margin expansion
• Technical Textiles segment revenue down 22% to Rs 316.8 crore
• Chemical segment revenue up 5% to Rs 881.9 crore
• Packaging Films segment revenue down 3% to Rs 601.5 crore
• Demand for specialty chemicals remained robust
• Fluorochemical business adversely impacted as the automobile sector continued to remain under stress
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Ambit On SRF

• Buy rating maintained
• Price target of Rs 4,000
• Results in-line with estimates
• Margins in chemicals business declined due to Covid-19 impact
• Packaging Films margin offsets revenue decline
• Technical textiles business remains under pressure

CLSA On Aurobindo Pharma

• Buy rating maintained
• Price target raised to Rs 920 from Rs 790
• Strong performance drives big Ebitda and profit beat
• Healthy growth momentum in U.S. and Europe
• Raise FY21/22 EPS estimates by 8-10% on improving margins and lower interest costs

Morgan Stanley On Lupin

• Overweight rating maintained
• Price target of Rs 1,016
• Product cycle story shaping up with bEnbrel approval
• Estimate European Union market size of $1.3 billion for etarnecept
• Assuming further price drop of 15-20% and 15-20% market share, Lupin/Mylan can potentially generate $150-200 million in sales
• Profits will be shared equally between Lupin and Mylan
• Biocon has a roughly 1/3rd profit share agreement with Mylan

UBS On DLF

• Buy rating maintained
• Price target of Rs 195
• Headline loss in Q4 but operational performance largely on expected lines
• Residential business in Q4 impacted by lockdown in late March
• Malls continue to remain under lockdown and they have supported retailers

Bulk Deals

• PVR: Sylebra Capital Partners Master Fund acquired 3.24 lakh shares (0.63%) at Rs 1,027.65 per share
• RBL Bank: BNP Paribas Arbitrage sold 36.84 lakh shares (0.72%) at Rs 125.86 per share
• SH Kelkar: Fidelity Group sold 8.11 lakh shares (0.57%) at Rs 65.24 per share
• HDFC Life Insurance: Promoter Standard Life sold 4 crore shares (1.98%) at Rs 496.4 per share and Capital World Growth and Income Fund acquired 1.16 crore shares (0.57%) at Rs 496.4 per share. Other buyers included Nomura Funds, American Fund Insurance, Societe General, Morgan Stanley, Vanguard, Fidelity Group.

Who’s Meeting Whom

• CG Consumer Electricals: To meet Birla Sunlife AMC, Kotak Mutual Fund and other investors between June 5-11
• Manappuram Finance: To meet TA Associates and Ward Ferry between June 5-10
• KEI Industries: To meet Philip Capital on June 5
• TVS Motor: To meet Credit Suisse on June 5

Trading Tweaks

• Move Into ASM Framework: Dixon Technologies, Speciality Restaurants, RattanIndia Infrastructure
• Move Into Short-Term ASM Framework: Electrotherm , Cholamandalam Financial Holdings, Tube Investments, Trident, Marksans Pharma, TCNS Clothing, Borosil Renewables, Prataap Snacks, TFCI, Skipper. Arvind Fashion.
• Move Out Of Short-Term ASM Framework: Affle, Infibeam Avenues.

Insider Trading

• Apollo Tyres: Promoter PTL Enterprises acquired 5.1 lakh shares between June 1-2
• Nesco: Promoter Chandler and Price acquired 26,885 shares between June 1-2
• Aarti Industries: Promoter sold 99,000 shares between June 1-2

(As Reported On June 4)

F&O Cues

• Nifty June futures closed at 10,018; discount narrows to 12 points from 25 points
• Nifty June futures shed 3.6% and 3.8 lakh shares in Open Interest
• Nifty Bank June futures closed at 20,780; discount narrows to 10 points from 200 points
• Nifty Bank June futures shed 8% and 1.1 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.37 from 1.58 across all series

Nifty Weekly Expiry: June 11

• Maximum Open Interest on Call side at 10,500 strike (13.2 lakh shares)
• Maximum Open Interest on Put side at 9,500 strike (11.7 lakh shares)
• Active Options: 9,800 Put (+5.3 lakh shares) and 10,200 Call (+6.2 lakh shares)

Nifty Monthly Expiry: June 25

• Maximum Open Interest on Call side at 11,000 strike (16.7 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (33 lakh shares)