All You Need To Know Going Into Trade On March 20

Asian stocks traded mixed early Wednesday as investors held back from making big changes prior to the Federal Reserve’s policy decision.

Shares in Japan, South Korea and Australia edged lower. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,567.50 as of 7:20 a.m.

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BQ Live

Here’s a quick look at all that could influence equities today.

U.S Market Check

• A rally in equities sputtered out after a report that U.S. and Chinese negotiators remain at odds on aspects of their current trade talks.
• The yield on 10-year Treasuries remained at 2.61 percent.

Asian Cues

• Japan’s Topix index slipped 0.1 percent.
• South Korea’s Kospi dipped 0.1 percent.
• Australia’s S&P/ASX 200 Index fell 0.2 percent.
• Hang Seng Index futures earlier added 0.1 percent.
• Futures of S&P 500 Index closed flat Tuesday.

Commodity Cues

• Brent crude traded 0.07 percent lower at $67.56 per barrel.
• West Texas Intermediate crude fell 0.1 percent to $58.97 a barrel.
• Gold fell 0.1 percent $1,305.60 an ounce.

Key Events To Watch This Week

• Company earnings this week include Tencent, Hermes, Tiffany, Micron, Nike and PetroChina.
• On Wednesday, the Fed is expected to hold interest rates steady, announce plans for the end of asset roll-off from its balance sheet, and lower projections for the number of interest-rate hikes this year.
• Central banks in the U.K., Thailand, the Philippines and Indonesia are all scheduled for policy meetings.
• Euro-zone purchasing manager survey numbers on Friday will give an indication of the health of the region’s industrial and service sectors.

Stocks To Watch

• Jet Airways grounded additional six aircraft due to non-payment of amounts outstanding to lessors, SBI is said to have started looking for other potential buyers for Jet Airways as meeting with Etihad meeting remained inconclusive, rwo people aware of the matter told BloombergQuint.
• DLF arm announced second joint-venture with Hines for developing high-end commercial project in Gurugram. The arm will hold 67 percent stake while Hines will hold the remaining stake. The investment by the joint-venture partners will be around Rs 1900 crore over 11.76 acres of land owned by the JV company.
• Bodal Chemicals completed the expansion of Dyestuff plant by 6,000 MTPA. After the said Expansion, the total capacity of Dyestuff plants of the company stands at 35,000 MTPA, excluding Liquid Dye Stuff. The company also stated in its press release that it has completed facility for production of Thionyl Chloride Plant for 36,000 MTPA.
• Muthoot Capital Services completed securitization of Rs 236.36 crores on March 15. With this transaction, the company has so far raised Rs 749.2 crores through securitization during financial year 2019.
• Rallis India received letter from pollution control board directing the company to suspend its operations at one of its unit in Gujarat caused by a flash fire during transfer operations. The company also stated there was no environmental and material impact to the plant and the annual shut down of the unit is also being advanced from April 1 as planned earlier to mitigate any financial impact.
• ONGC said it will consider interim dividend on March 23. Record date set on March 27.
• Aarti Drugs board of directors approved a share buyback of 2.82 lakh shares or 1.2 percent of the total equity shares at Rs 900 per share aggregating to Rs 25.38 crores. March 29 has been set as the record date.
• Jubilant Life secondary offering of 3.5 million shares: terms (Bloomberg News)
• Coffee Day Enterprise board said it will consider raising capital via NCDs up to Rs 200 crores on March 22.
• Cox & Kings opened its first hotel in Hungary with 184 rooms.
• Maruti Suzuki said it will raise prices for EECO model from Rs 400 to Rs 23,000 across variants as additional features get added in the product.
• Colgate Palmolive India said it will consider dividend on March 29. Record date set as April 8.
• V-Mart Retail opened a new store in Assam.
• Newgen Software Technologies receives patent for its invention- Integrated and Automatic Generation of Carbon Credits. This digital solution will enable organizations to manage carbon credits.
• IDBI Bank board approved continuation in office by fresh appointment of Rakesh Sharma as Additional Director and MD, CEO of the bank for three years with effect from March 19. The board also approved rupee bond borrowing limit of Rs 4,000 crore for financial year 2020.
• Fortis Healthcare board approved the appointment of Dr Ashutosh Raghuvanshi as MD and the CEO of the company with immediate effect for a period of three years.
• Rushil Décor said that there was a fire accident in its Karnataka factory on March 18. The company says that assets damaged by the fire are adequately covered by insurance.
• Reliance Communication clarified that NCLAT did not pass any orders on the use of tax refunds for payment to Ericsson, but the matter has become infructuous in view of the full payment to Ericsson yesterday as per separate intimation already sent to stock exchanges.

Offerings

• MSTC IPO subscribed 1.18 times after BRLM extended offer period till March 20 and revised price-band to Rs 120-128 per share.
• Embassy Office Parks REIT IPO gets 47 percent demand on the second day; offer closes today.

Bulk Deals

Usha Martin

• Antara India Evergreen Fund acquired 17.15 lakh shares or 0.6 percent equity at Rs 35.35 each.
• Societe Generale sold 17.15 lakh shares or 0.6 percent equity at Rs 35.35 each.

Torrent Power

• Gujarat State Financial Services acquired 4.68 crore shares or 9.8 percent equity at Rs 260.85 each.
• Gujarat State Investments sold 4.68 crore shares or 9.8 percent equity at Rs 260.85 each.

Pledge Share Details

• Sun Pharma promoter group Shanghvi Finance creates a pledge of 40 lakh shares in March 15.
• Granules India promoters revoke 1.4 crore shares on March 15.

(As reported on March 19)

Trading Tweaks

• NTPC record date for bonus share at 1:5.
• Advanced Enzymes Technologies, Dilip Buildcon, Coromandel Engineering, Khadim India to move into short term ASM Framework..

Who’s Meeting Whom

• KEI Industries to meet Motilal Oswal Financial Services on March 25.
• Tata Steel to meet B&K Securities on March 20.
• MT Educare to meet Khambatta Securities on March 20.

Insider Trading

• Info Edge promoter and director Sanjeev Bikhchandani sold 25,000 shares on March 18
• Bajaj Auto promoter Bajaj Holdings and Investment acquired 2.3 lakh shares from March 15-19
• Talwalkers Better Value Fitness promoter Better Value Leasing and Finance acquired 2.15 lakh shares on March 18

F&O Cues

• Nifty March Futures closed trading at 11571, premium of 38 points.
• Max open interest for March 28 series at 11,500 Call, (open interest at 26 lakh shares)
• Max open interest for March 28 series at 11,000 Put, (open interest at 38.1 lakh shares)

Stocks In F&O Ban

• Adani Enterprises
• BEML
• IDBI Bank
• Just Dial
• Jet Airways
• Reliance Power
• Reliance Capital

Put-Call Ratio

• Nifty PCR at 1.77 versus 1.66.

Brokerage Radar

Morgan Stanley on Oil and Gas

• Transport fuel demand grew 4 percent despite slowing auto demand and challenges in aviation sector.
• Industrial fuel demand grew 5 percent despite competition from lower LNG prices.
• Fuel prices remain in sweet spot supporting demand growth.

Citi on UltraTech

• Maintained ‘Buy’ with a price target of Rs 4,450.
• Cement industry in sweet spot with improving demand, rising prices and falling costs.
• Management expects Ebitda margin to revert to the highs of the first quarter of current financial year.
• Focus area: profitable market share, deleveraging, efficiency gains and use of alternative fuels.

HSBC on Hero MotoCorp

• Maintained ‘Buy’; cut price target to Rs 3,500 from Rs 4,000.
• Volumes are likely to remain volatile led by high inventory channel and regulatory changes.
• Cut EPS estimates by 5 percent and 7 percent led by lower volume and margin estimates.
• Valuation remains undemanding and downside limited.

CLSA on Jubilant Food

• Maintained ‘Buy’ with a price target of Rs 1,600.
• Channel checks indicate that Domino’s has introduced 10 new pizzas ahead of sporting events.
• Focus is also on reducing delivery time; some stores targeting 20 mins.
• Efficiency and cost savings too continue; expect strong of above 25 percent EPS CAGR over FY20-21.

HDFC Securities on Broking Industry

• Market share moving towards discount brokers.
• Among traditional brokers Axis securities has done better than peers.
• Cash delivery business will become intensely more competitive.
• Motilal Oswal: Maintained ‘Neutral’ with a price target of Rs 611.
• ICICI Securities: Maintained ’Neutral’ with a price target of Rs 298.

HDFC Securities on Subros

• Maintained ‘Buy’ with a price target of Rs 309.
• Increased commitment by Denso ensures that Subros will benefit from technology shifts.
• Relationship scope will be confined to the thermal products domain.
• Mgmt. intends to deleverage the balance sheet further.

ICICI Direct on Hikal

• Initiated ‘Buy’ with a price target of Rs 200.
• Expertise in APIs to drive pharma growth..
• Crop protection growth to piggyback on client relationship
• Expect revenue, Ebitda and net profit to grow at a compounded annual growth rate of 15 percent, 18 percent and 30 percent respectively.
• Compelling risk-reward proposition considering future growth prospects.

Motilal Oswal on Torrent Power

• Initiated ‘Buy’ with a price target of Rs 315.
• Strong Positioning and healthy balance sheet provide strong base for growth.
• Volatility in earnings to reduce on accrual accounting in distribution.
• Expect Ebitda and net profit to grow at a compounded annual growth rate of 12 percent over FY19-21.
• Growth driven by regulated electricity and franchisee-based distribution business.

Motilal Oswal on Mindtree

• Downgraded to ‘Neutral’ from ‘Buy’; maintained price target at Rs 1,000.
• A distraction Mindtree could have done without.
• Turn of events may be unsettling for some employees/clients.
• Development may consume a substantial bandwidth of the founders.

On L&T

Nomura

• Maintained ‘Buy’ with a price target of Rs 1,670.
• Mindtree acquisition to add value; See EPS gains from FY21.
• Acquisition rules out large near-term dividend.
• Client/senior management attrition is the major risk.

Investec

• Maintained ‘Buy’ with a price target of Rs 1,805.
• Unclear about potential synergies that can be extracted.
• Raises concern on potential employee attrition and distrust at Mindtree.
• Makes us wonder on how L&T intends to utilise its cash over the next few years.