All You Need To Know Going Into Trade On May 15
Asian stocks were mixed Wednesday as a rebound in U.S. equities failed to lift sentiment that remains fragile after the trade war escalated.
Shares in Japan fluctuated, while they edged higher in Australia and dipped in South Korea, after a number of indicators tallied up to suggest the sell-off in Asia was due for a pause. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.13 percent to 11,246.50 as of 7 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Markets Check
- U.S. stocks rebounded as President Donald Trump moved to reassure markets that he’ll clinch a trade deal with China.
- The yield on 10-year Treasuries remained at 2.41 percent.
- Japan’s Topix index rose 0.1 percent.
- South Korea’s Kospi index dipped 0.1 percent.
- Australia’s S&P/ASX 200 Index rose 0.2 percent.
- Hang Seng Index futures earlier climbed 0.3 percent.
- Futures on the S&P 500 Index dipped 0.1 percent.
- Brent crude fell 0.56 percent to $70.84 a barrel.
- West Texas Intermediate crude climbed 1.1 percent to $61.70 a barrel.
- Gold fell 0.3 percent to $1,297.70 an ounce.
London Metal Exchange
- Copper ended 0.27 percent lower.
- Aluminium ended higher for the fourth consecutive trading session, up 1.96 percent.
- Nickel ended 1.14 percent higher.
- Lead halted a three-day fall, closed 0.98 percent higher.
- Tin ended 2.4 percent higher.
- Zinc ended 1.05 percent higher.
Stocks To Watch
- Jet Airways’ Vinay Dube resigned as the CEO with immediate effect, citing personal reasons.
- NTPC won 100MW of Solar capacities in SECI’s 250MW tender in Maharashtra, at a levelized tariff of Rs 2.91 per unit, applicable for 25 years. This project will be set up by NTPC under EPC mode and will add to the installed capacity of NTPC.
- Vodafone Idea board approved the amalgamation of its arms Vodafone India Digital and Idea Telesystems with the company.
- Dr. Reddy’s said its U.S. arm specifically named as a defendant with respect to five generic drugs for an alleged "overarching conspiracy'' to fix prices and to allocate bids and customers in the U.S. in the sale of generic drugs. The company said it will vigorously defend against these allegations and is in the process of filing response with the District Court of Connecticut, U.S. and does not foresee any material impact on operations.
- Wockhardt clarified on the news that U.S. states have filed lawsuit against generic drug firms stating that they have already made the disclosure in the annual report. The company said a class action was initiated against various pharma companies including Wockhardt. This anti-trust action relates to price hikes of various generic drugs. The pharma company also stated is defending itself against the matter and doesn’t anticipate this matter will have a material impact in the company.
- Glenmark denied all allegations against lawsuit filed by U.S. states against generic drug firms. The company said that it is currently reviewing the second lawsuit and expects to file papers with Federal Court in due course denying the accusations. The pharma company says given the early nature of the matter, it does not anticipate material impact.
- Sun Pharma clarified that the lawsuits made against pharma companies is against Taro and its U.S. arms and the company is not named in the afore-mentioned litigations. The company said that the allegations in lawsuit are without merit and concerned subsidiaries will vigorously defend them, and the matter is not expected to have any material impact on the company’s operations.
- Tata Sons is set to transfer all its branded food businesses to Tata Global Beverages from Tata Chemicals according to people with knowledge of the matter, as India’s biggest conglomerate streamlines its corporate structure. (Bloomberg News)
- Mangalore Chemicals & Fertilizers shut down Ammonia, Urea and ABC plants in Mangalore City with effect from May 14, due depletion of reservoir level at Thumbe dam and delay in pre-monsoon showers. The company said production will resume once the water is available.
- L&T Financial Services: Board approved issue of non-convertible preference shares worth Rs 195 crore.
- NDTV: Delhi High Court grants stay on all tax and penalty demands as well as prosecution for assessment year 2009-10. Board approved acquiring preference shares worth Rs 5.74 crore in Mobikwik.
- Tata Steel: Thyssenkrupp remains open for deals in EU steel after JV with Tata Steel failed, says CEO Guido Kerkhoff. The company sees a stronger result in second half of calendar year 2019 as profit Margin in elevator business improve. (Bloomberg News)
- Datamatics Global Services acquired balance 18.91 percent stake in Datamatics Digital for Rs 10.4 crore.
- Religare Enterprises: Board of directors withdrew the scheme of merger of Religare Commodities with Religare Broking with effect from May 13.
- Fortis Healthcare has informed the Delhi High Court that the SEBI has asked to recover Rs 403 crore from former Ranbaxy Laboratories Ltd promoters Malvinder and Shivinder Singh, who allegedly diverted funds of the company and its subsidiary Fortis Hospital. (Press Trust of India)
- Muthoot Finance to raise Rs 1,000 crore via NCDs.
- India Glycols to consider raising funds via issue of equity on May 21.
- BLS International Services signed agreement with Embassy of Lebanon to provide attestation and legal services in India.
- Future Supply Chain Solutions to sell up to 100 percent stake in its arm Vulcan Express.
Earnings To Watch
- Jubilant FoodWorks
- Aarti Drugs
- Manappuram Finance
- KPIT Technologies
- Torrent Power
- Adani Green Energy
- Petronet LNG
- Aditya Birla Fashion and Retail
- Amara Raja Batteries
- Phoenix Mills
- Apollo Finvest
- Balaji Amines
- Welspun Enterprises
- Wonderla Holidays
- Zuari Agro Chemicals
- Central Bank of India
- Coromandel Engineering
- Karur Vysya Bank
- Kesoram Industries
- Cosmo Films
- Dishman Carbogen Amcis
- Gujarat Pipavav Port
- Gulf Oil Lubricants India
- Himachal Futuristic Communications
- Indo Rama Synthetics
- Jammu & Kashmir Bank
- Magma Fincorp
- Maharashtra Scooters
- Mahindra Holidays & Resorts
- Navneet Education
- Newgen Software Technologies
- PG Electroplast
- SKF India
- Taj GVK Hotels & Resorts
Earnings Reaction To Watch
Nestle India (Q1CY19, YoY)
- Revenue up 8.9 percent to Rs 3,003 crore.
- Net profit up 9.3 percent to Rs 463.3 crore.
- Ebitda up 5.9 percent to Rs 737.8 crore.
- Margin at 24.6 percent versus 25.3 percent.
Pidilite Industries (Q4, YoY)
- Revenue up 10.3 percent to Rs 1,638.9 crore.
- Net profit down 3.7 percent to Rs 235.1 crore.
- Ebitda up 1.8 percent to Rs 278.8 crore.
- Margin at 17 percent versus 18.4 percent.
- Employee costs up 25 percent to Rs 217.1 crore.
- Exceptional loss of Rs 11 crore.
- Declares dividend of Rs 6.5 per share.
Endurance Technologies (Q4, YoY)
- Revenue up 9.5 percent to Rs 1,900.3 crore.
- Net profit up 27.6 percent to Rs 148.6 crore.
- Ebitda up 26.1 percent to Rs 324.5 crore.
- Margin at 17.1 percent versus 14.8 percent
- Declares dividend of Rs 5.5 per share.
Union Bank of India (Q4, YoY)
- Net interest income up 18.6 percent to Rs 2,601.5 crore.
- Net loss of Rs 3,369.2 crore versus net loss of Rs 2,583.4 crore.
- Provisions up 3 percent to Rs 5,783.1 crore.
- GNPA at 14.98 percent versus 15.66 percent. (QoQ)
- NNPA at 6.85 percent versus 8.27 percent (QoQ)
Hindustan Oil Exploration Company (Q4, QoQ)
- Revenue up 8.2 percent to Rs 71.4 crore.
- Net profit up 37.9 percent to Rs 48 crore.
- Ebitda up 19.9 percent to Rs 52.4 crore.
- Margin at 73.4 percent vs 66.2 percent.
IIFL Holdings (Q4, YoY)
- Revenue down 17 percent to Rs 1,411.5 crore.
- Net profit up 20 percent to Rs 274.3 crore.
- Net profit higher due to exceptional gain, lower tax and higher other income.
- Exceptional gain of Rs 104.6 crore from sale of vehicle financing business.
- Other income of Rs 43.8 crore versus other expense of Rs 8.2 crore.
- Tax rate at 22.3 percent versus 30 percent.
- Loan assets under management in the NBFC business stood at Rs 34,904 crore, up 29 percent.
- Wealth assets stood at Rs 1.69 lakh crore, up 28 percent.
- Equity Intelligence India sold 26,800 shares or 0.51 percent equity to Rs 3057.76 each.
- Alert: Equity Intelligence India is promoted by Porinju Veliyath.
- LTS Investment Fund acquired 2 lakh shares or 0.75 percent equity to Rs 247.5 each.
- New Berry Capitals sold 2 lakh shares or 0.75 percent equity to Rs 247.5 each.
Pledge Share Details
- Emami promoter group created pledge of 8.2 lakh shares on May 10.
- Mindtree: Larsen & Toubro acquired 1,168 shares on May 14.
- TTK Prestige ex-date for bonus issue at 1:5.
- Kellton Tech Solutions to move into short term ASM Framework.
- 63 Moons Technologies to move out of short term ASM Framework.
Who’s Meeting Whom
- Titan to meet SPARX Asia Investment Advisors (Hong Kong) on May 15.
- Mahindra Logistics to meet Unifi Capital, Karma Capital Advisors and other investors from May 15-20.
- Dabur India promoters acquired 50,000 shares from May 6-8.
- Tanla Solutions promoter D. Tanuja Reddy acquired 2.9 lakh shares on May 13.
Money Market Update
- The rupee on Tuesday closed at 70.46/$ versus Monday’s 70.53/$.
Futures –May series
- Nifty futures closed trading at 11,241.6, premium of 20 points versus 33 points.
- Nifty open interest down 5 percent, sheds 7.7 lakh shares in open interest.
- Bank Nifty futures closed trading at 28,917, premium of 88 points versus 113 points.
- Bank Nifty open interest down 3 percent sheds 47,000 shares in open interest.
- Nifty PCR at 1.28 versus 1.18 (across all series).
Nifty Weekly Expiry 16 May
- Max open interest on call side at 11,500 (18.9 lakh shares).
- Max open interest on Put side at 11,000 (21.3 lakh shares).
- Max open interest addition seen at 11,000 Put (+7.1 lakh shares), 11,100 Put (+6.9 lakh shares).
- Max shedding seen at 11,300 Call (-5.5 lakh shares).
Nifty Monthly Expiry 30 May
- Max open interest on call side at 12,000 (26.6 lakh shares).
- Max open interest on Put side at 11,000 (26.2 lakh shares).
- Max open interest addition seen at 12,000C (+4.4 lakh shares).
Credit Suisse on Aarti Industries
- Initiated ‘Outperform’ with a price target of Rs 2,000.
- To benefit from the structural upcycle underway in the Indian chemicals industry.
- Strong track record makes it a preferred partner for clients.
- Higher volumes from the several capex initiatives to drive EBIT.
Credit Suisse on PI Industries
- Initiated ‘Outperform’ with a price target of Rs 1,300.
- Order backlog unwinding to be a key driver.
- Increased R&D activity to result into revenue.
- Tailwinds for a key product Pyroxasulfone.
CLSA on Westlife Development
- Maintained ‘Buy’; cut price target to Rs 450 from Rs 550.
- March quarter earnings were slightly ahead on better than expected margins.
- SSSG at 5.6 percent was the key disappointment.
- Cut estimates for the current and the next financial year on growth concerns and lower SSSG.
UBS on SRF
- Maintained ‘Neutral’; hiked price target to Rs 2,760 from Rs 2,560.
- Strong comeback by chemical segment.
- Headwinds in packaging and technical textile segment.
- Increase estimates on better specialty chemical division.
Morgan Stanley on Edelweiss
- Maintained ‘Overweight’ with a price target of Rs 235.
- Net profit was in-line with estimates.
- Credit business – some sequential pickup in asset growth, stable bad loans and likely drop in impairment costs.
- Franchise & advisory businesses – moderation in growth.
On Pidilite Industries
- Maintained ‘Outperform’ with a price target of Rs 1,474.
- Growth moderation in domestic market.
- Gross margin continues to remain under pressure.
- Expect recovery in sales growth in domestic market post elections.
- Maintained ‘Neutral’ with a price target of Rs 1,100.
- Significant earnings miss on weak volume.
- Subdued near-term demand concerns pose significant earnings downside.
- Consumer & Bazaar products registered 4% volume growth & industrial volume declined 1 percent.
On Nestle India
- Maintained ‘Outperform’ with a price target of Rs 11,750.
- March quarter results were below estimates; weak margins.
- Decent domestic revenue growth.
- Gross margins contracted to 6-quarter low signaling input cost pressures.
- Maintained ‘Buy’ with a price target of Rs 12,000.
- March quarter review: In line numbers, not calling a slowdown yet.
- Margin contraction will be taken care of with price hikes.
- Recent stock correction bodes well.