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All You Need To Know Going Into Trade On May 14

Stocks in the news, big brokerage calls of the day, complete trade setup and much more!  

Commuters, wearing a protective face masks, walk on the platform at Westminster station in London, U.K. (Photographer: Jason Alden/Bloomberg)
Commuters, wearing a protective face masks, walk on the platform at Westminster station in London, U.K. (Photographer: Jason Alden/Bloomberg)

Asian markets have opened with losses this Thursday morning after a weak session on Wall Street as big-name investors continue to fuel doubts about valuations.

U.S. Federal Reserve Chair Jerome Powell has warned that a lasting downturn can deepen without additional government spending. The Aussie was steady while treasuries held gains.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1.4 percent to 9,269 as of 7:05 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.

Here’s a look at all that can influence equities in today’s session:

  • Markets have opened lower in Japan, South Korea and Australia although losses are shallower than those seen on Wall Street.
  • U.S. Markets fell for the secnod straight day with the S&P 500 falling over 1.7 percent. Futures on the index are currently trading flat.
  • Fed Chair Jerome Powell stopped short of completely ruling out negative interest rates as a tool to stimulate the economy, although he said that such a move was not being considered.
  • Weekly jobless claims data is due in the U.S. later today.
  • Yield on the 10-year treasury fell one basis point to 0.64 percent.
  • West Texas Intermediate crude rose 1.6 percent to $25.69 per barrel.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On May 14

Stocks To Watch

  • Power Finance Corporation, REC: To extend loans up to Rs 90,000 crore to power discoms to pay dues to power generating companies.
  • Maruti Suzuki: Board approved supply of derivative model of Vitara Brezza to Toyota Kirloskar Motor. Board had also approved supply of derivative model of Baleno to Toyota Kirloskar Motor. Company said this will result in incremental sales. The carmaker has also approved acquiring 49.13 percent stake in JJ Impex from Japan’s Sumitomo Corporation for Rs 21.7 crore.
  • CSB Bank: The lender shared its March quarter update where total deposits rose 4.4 percent to Rs 15,790.7 crore. Gross Advances were up 6 percent to Rs 11,558.9 crore. Liquidity coverage ratio stood at 245 percent as compared to 214.8 percent during the same period last year.
  • PNC Infratech: Declared the lowest bidder in NHAI’s HAM project worth Rs 1,412 crore in Uttar Pradesh.
  • Infosys: Announces strategic partnership with NICE Actimize to offer end-to-end financial crime solutions.
  • Future Consumer: To consider proposal of rights issue on May 16.
  • Siemens India: Board has agreed in-principle to sell its mechanical drives business to parent company Siemens AG. The aforementioned segment accounts for 5 percent of the turnover of the company.
  • Future Lifestyle Fashions: CARE Ratings has downgraded its long-term banking facilities and NCDs to CARE A+ from CARE AA-. The outlook has been retained as stable. The downgrade factors in weakening business and financial risk profile due to an extended Covid-19 lockdown. CARE Ratings expects the recovery to be slow and gradual.
  • Mahanagar Gas: Board approved appointment of Manoj Jain, Chairman and Managing Director of GAIL, as chairman of the company from May 6.
  • SeQuent Scientific: TIMF Holdings sold 25.3 lakh shares or 1.02 percent stake in the company at Rs 80 per share while BNP Paribas Arbitrage sold 34.7 lakh shares or 1.4 percent stake in the company at Rs 80 per share.
  • Info Edge: To meet Kim Eng Securities-Maybank on May 14.
  • Apollo Tricoat Tubes: Promoter Saket Agarwal sold 15 lakh shares on May 11.
  • Companies That Resumed Operations: Kirloskar Electric, Kirloskar Pneumatic, Pricol, Finolex Industries, Schaeffler India.
  • Non-Nifty Earnings Today: Escorts, Aavas Financiers, Biocon, Oracle Financial, Manappuram Finance, Tata Consumer, Indian Energy Exchange, Zensar Technologies, TV Today Network, Datamatics Global Services

Earnings Reported After Market Hours

Mphasis Q4FY20

  • Revenue up 3.1 percent to Rs 2,346 crore
  • Ebit up 3.7 percent to Rs 383 crore
  • Ebit margins flat at 16.3 percent from 16.2 percent
  • Net profit up 20.3 percent to Rs 353 crore
  • Other income up 45 percent to Rs 53 crore
  • All numbers are consolidated and compared on a quarter-on-quarter basis

Godrej Consumer Products Q4FY20

  • Revenue down 12.2 percent to Rs 2,153.8 crore
  • Net profit down 75.4 percent to Rs 229.9 crore
  • Deferred tax reversal of Rs 533.5 crore in the base quarter
  • Ebitda down 17.8 percent to Rs 476.6 crore
  • Ebitda margins narrow to 22.1 percent from 23.6 percent
  • India business volumes see a contraction of 15 percent
  • Does not declare dividend in order to conserve cash
  • All numbers are consolidated and compared on a year-on-year basis

Schaeffler India Q1CY20

  • Revenue down 20.8 percent to Rs 928.5 crore
  • Net profit down 26.2 percent to Rs 78.4 crore
  • Ebitda down 25.5 percent to Rs 137.3 crore
  • Ebitda margin narrows to 14.8 percent from 15.7 percent
  • Decline in topline due to deferrd offtake by customers and slowdown in short-cycle business due to Covid-19
  • All numbers are standalone and compared on a year-on-year basis.

Siemens India Q2

  • Revenue down 20.7 percent to Rs 2,837.9 crore
  • Net profit down 38.2 percent to Rs 175.7 crore
  • Ebitda down 42.8 percent to Rs 237.5 crore
  • Ebitda margin at 8.4 percent from 11.6 percent
  • Margins impacted by higher other expenses due to Covid-19
  • All numbers are consolidated and compared on a year-on-year basis

ABB India Q1CY20

  • Revenue down 17.7 percent to Rs 1,522 crore
  • Net profit down 44.4 percent to Rs 64.6 crore
  • Ebitda down 90 percent to Rs 14.5 crore
  • Ebitda margin down to 1 percent from 7.9 percent
  • Higher other expenses due to Covid-19 impacts margins
  • Orders increased by 10 percent with order backlog at Rs 4,444 crore
  • All numbers are standalone and compared on a year-on-year basis

Brokerage Radar

Jefferies On Havells India

  • Buy rating maintained
  • Price target cut to Rs 560 from Rs 660
  • Lockdown extension to impact earnings
  • Earlier estimates factored lockdown of three weeks vs nine weeks
  • Expect sales dip of 55-60 percent in Q1FY21
  • FY21 will be subdued
  • Medium-term levers remain robust

Emkay On Blue Star

  • Downgrade to sell from hold
  • Price target cut to Rs 422 from Rs 491
  • Disappointing performance in Q4 due to disruptions in March
  • Higher opex and provision for doubtful debts add pain to bottom-line
  • Covid-19 to have a higher impact in Q1FY21
  • See high channel inventory and weakness in project business

Morgan Stanley On Tata Power

  • Upgrade to overweight from equalweight
  • Price target cut to Rs 38 from Rs 63
  • Has always been a complex equity story
  • Trades at steep discount to intrinsic value
  • Non-regulated business set to increase
  • See strong earnings recovery in FY22-23
  • Large part of bull case looks plausible with catalysts in the long-term

HSBC On Havells India

  • Buy rating maintained
  • Price target cut to Rs 590 from Rs 700
  • Covid-19 hurts business across segments
  • Short-term outlook is challenging
  • Cut price target to factor in Covid-19 disruptions
  • Like the stock for sector leadership, diversified exposure and margin control

Morgan Stanley On Kotak Mahindra Bank

  • Overweight rating maintained
  • Price target of Rs 1,550
  • Core PPoP growth driven by better NII and cost control
  • Asset quality good
  • Underlying slippages were stable sequentially

Morgan Stanley On Bajaj Finance

  • Overweight rating maintained
  • Price target cut to Rs 2,740 from Rs 2,810
  • Resilience and growth DNA at attractive valuation
  • Expect above-industry RoE in FY21
  • Will be the fastest to bounce back to higher growth
  • Structural asset growth and RoE potential is only expanding amid challenges in the NBFC space

Credit Suisse On Godrej Consumer

  • Outperform rating maintained
  • India business has seen a positive growth in Q1 till date post a weak Q4
  • There is a pick-up in household insecticides as more in-home time and heightened fear of disease are playing out
  • Africa severely impacted and likely to get worse in Q1FY21

Goldman Sachs On Godrej Consumer

  • Neutral rating maintained
  • Price target of Rs 522
  • Q1 trading better after an in-line Q4
  • Management said domestic volume growth was 5 percent in January-February
  • Expect sales growth of 4 percent and volume growth of 3 percent in FY21

Morgan Stanley On Maruti Suzuki

  • Overweight rating maintained
  • Price target of Rs 5,987
  • Q4 was a weak quarter
  • Replacement demand to drive recovery in FY22
  • Valuation multiples sustainable as earnings should turn from a low base

UBS On Maruti Suzuki

  • Buy rating maintained
  • Price target of Rs 5,700
  • Q4 was a soft quarter
  • FY21 demand outlook uncertain
  • Sharp slowdown looks priced in
  • Dealers have a competitive edge
  • Initial trends suggest down-trading

Pledged Share Details

  • Emami: Promoters created pledge of 23.7 lakh shares on May 11.
  • Solara Active Pharma Sciences: Promoter invoked pledge of 50 lakh shares between May 2-7.

(As Reported On May 13)

Trading Tweaks

  • Record Date For Rights Issue: Reliance Industries (Rights at 1:15 at Rs 1,247 per share)
  • Price Band Revised From 20 Percent To 10 Percent: SH Kelkar
  • Move Into Short-Term ASM Framework: Hathway Cable & Datacom, NDTV
  • Move Out Of Short-Term ASM Framework: Apollo Micro Systems, Insecticides India

Money Market Update

  • The rupee ended flat on Wednesday at 75.46 against the U.S. Dollar as compared to Tuesday's close of 75.51. The currency made an intra-day high of 75.26 before giving up gains.

F&O Cues

  • Nifty May futures closed at 9,394; premium narrows to 10 points from 15 points
  • Nifty May futures add 0.9 percent in Open Interest and 67,000 shares
  • Nifty Bank May futures closed at 19,617; discount narrows to 18 points from 22 points discount
  • Nifty Bank May futures shed 16.7 percent in Open Interest and 2.4 lakh shares
  • Nifty Put-Call Ratio at 1.12 from 1.28 across all series
  • Stocks In F&O Ban: Vodafone Idea, BHEL

Nifty Weekly Expiry: May 14

  • Maximum Open Interest on Call side at 9,500 strike (24 lakh shares)
  • Maximum Open Interest on Put side at 9,000 (17 lakh shares)
  • Active Options: 9,300 Put (+4.5 lakh shares), 9,700 Call (+8.4 lakh shares)

Nifty Monthly Expiry: May 28

  • Maximum Open Interest on Call side at 10,000 strike (20.4 lakh shares)
  • Maximum Open Interest on Put side at 9,000 strike (24.3 lakh shares)
All You Need To Know Going Into Trade On May 14