All You Need To Know Going Into Trade On May 15

Stocks To Watch

• Aurobindo Pharma: Promoter PV Ramprasad Reddy, his wife P Suneela Rani, and three other entities have settled an alleged insider trading case with markets regulator SEBI after paying over Rs 22 crore towards settlement charges.
• Unichem Laboratories: Gets Establishment Inspection Report from U.S. FDA on May 13 for its API facility in Roha.
• Hindustan Aeronautics, Bharat Dynamics, Walchand Nagar Industries, BEML: India seeks warplanes as $15 billion global order stalls. (Bloomberg News)
• HDFC: Seeks to raise Rs 5,000 crore via NCDs.
• Manappuram Finance: Board has approved increasing the overall borrowing limit to Rs 30,000 crore from Rs 25,000 crore.
• Aavas Financiers: Board approved raising Rs 3,500 crore via debt.
• IRCON International: Signs a Memorandum of Understanding with state-owned Russian Railways Company to explore opportunities for joint development of railways and other infrastructure projects in Asia, Africa and Latin America.
• Equitas Holdings: In its FY20 update, Equitas Small Finance Bank has reported a 31 percent growth in advances and a 25.7 percent rise in deposits compared to the previous year. Net Interest Income grew 13 percent while net profit rose 16 percent. Gross NPA stood at 2.72 percent from 2.53 percent while Net NPA was at 1.66 percent as compared to 1.44 percent last year.
• Future Retail: CARE Ratings downgrades credit rating on various long-term instruments to CARE A- from CARE A+ while those on short-term instruments are downgraded to CARE A2+ from CARE A1+ due to weakening of business and financial risk profile on account of an extended lockdown due to Covid-19.
• Cummins India: Amundi Funds acquired 17.87 lakh shares (0.64 percent) at Rs 348.82 per share.
• Adani Ports & SEZ: Promoter Flourishing Trade & Investment acquired 18 lakh shares on May 12
• Intellect Design Arena: Launches its financial solutions on IBM’s public cloud.
• Torrent Pharma: Issues NCDs worth Rs 200 crore.
• Companies That Resumed Operations: Jubilant Industries, Star Cement, Kirloskar Ferrous, DCM Shriram, Khadim, Orient Electric, Supreme Industries.
• Non-Nifty Earnings Today: Tata Chemicals, Aarti Drugs, Crompton Consumer, Huhtamaki PPL, L&T Technology Services, M&M Financial, Nippon Life AMC, IIFL Securities, L&T Finance Holdings.

Earnings Reported After Market Hours

Biocon Q4FY20

• Revenue up 3.4 percent to Rs 1,581 crore
• Ebitda down 21 percent to Rs 319 crore
• Ebitda margins narrow to 20.2 percent from 26.4 percent
• Net profit down 42.3 percent to Rs 123 crore
• Higher employee cost, other expenses and cost of co-development with partners impact financials
• All numbers are consolidated and compared on a year-on-year basis

Manappuram Finance Q4FY20

• Revenue up 40 percent to Rs 1,605.3 crore
• Net Interet Income up 33.3 percent to Rs 1,024.5 crore
• Net profit up 43.7 percent to Rs 395 crore
• Net gain on fair value changes at Rs 125.9 crore this quarter
• All numbers are consolidated and compared on a year-on-year basis

Indiabulls Real Estate Q4FY20

• Revenue down 93.6 percent to Rs 116.3 crore
• Net loss of Rs 109.7 crore from net profit of Rs 108.6 crore
• Ebitda loss of Rs 79.9 crore from Ebitda gain of Rs 165.8 crore
• Deferred tax payment of Rs 143.4 in the base quarter
• One of the group's arm has recorded cancellation of multiple units in one of its projects due to non-payment of dues pertaining to those units
• All numbers are consolidated and compared on a year-on-year basis

Mahindra Lifespaces Q4FY20

• Revenue down 56.7 percent to Rs 101.4 crore
• Net loss of Rs 224.7 crore from net profit of Rs 32 crore
• Ebitda loss of Rs 51.4 crore from Ebitda gain of Rs 8.2 crore
• Exceptional loss of Rs 134.6 crore due to one-time provision for JV residential project in NCR
• All numbers are consolidated and compared on a year-on-year basis

Tata Consumer Products Q4FY20

• Revenue up 35.5 percent to Rs 2,405 crore
• Net loss of Rs 76.5 crore from net profit of Rs 22.9 crore
• Ebitda up 76.9 percent to Rs 308.3 crore
• Ebitda margins widen to 12.8 percent from 9.8 percent
• Exceptional loss of Rs 223 crore due to impairment of goodwill pertaining to Australia business, tea business in the U.S. and the Covid-19 impact
• Numbers exclude impact of merger of India Foods
• Numbers not comparable as it includes results from consumer products of Tata Chemicals as well

Aavas Financiers Q4FY20

• Net Interest Income up 3.8 percent to Rs 137 crore
• Net profit up 9.9 percent to Rs 59.7 crore
• FY20 AUM up 31 percent to Rs 7,796 crore
• All numbers are consolidated and compared on a year-on-year basis

Zensar Technologies Q4FY20

• Revenue in dollar terms down 1.9 percent to $140.6 million
• Revenue in rupee terms flat at Rs 1,017.8 crore
• Net profit up 75.9 percent to Rs 69.5 crore
• Ebitda up 2 times to Rs 141.6 crore
• Ebitda margins rise to 13.9 percent from 6.8 percent
• Low other expenses and sub-contracting costs aid margins
• All numbers are consolidated and compared on a quarter-on-quarter basis

Earnings Estimates: Cipla Q4FY20

• Revenue seen 3 percent lower at Rs 4,336 crore
• Net profit seen flat at Rs 368 crore
• Ebitda seen 20 percent lower at Rs 765 crore
• Ebitda margin seen narrowing to 17.6 percent from 21.8 percent
• All estimates are consolidated and compared on a year-on-year basis

Key Factors At Play For Cipla:

• High base in the previous year due to Sensipar sales
• U.S. sales likely to be at $125 million
• Lack of new approvals to keep revenues muted
• India sales to be impacted due to lockdown
• Commentary on gProventil to be watched for
• Q4 margins typically the lowest due to lower India sales

Brokerage Radar

Morgan Stanley On Mphasis

• Overweight rating maintained
• Price target raised to Rs 950 from Rs 850
• Management optimistic about demand environment
• Provided revenue visibility on DXC and expect stable margins in FY21
• Overweight on possible growth traction from Q2, stable margins and low valuations

Haitong On Mphasis

• Buy rating maintained
• Price target cut to Rs 985 from Rs 1,115
• Strong deal wins in Q4 should buffer Covid-19 headwind
• Core growth remains good
• Cut FY21/22 diluted EPS estimates by 12.2/11.8 percent to factor in uncertain demand environment

Emkay On Escorts

• Buy rating maintained
• Price target raised to Rs 898 from Rs 815
• Margin beat owing to better product mix, softer commodity prices and cost-reduction efforts
• Expect to sustain market share in domestic tractors going ahead

Morgan Stanley On M&M

• Overweight rating maintained
• Price target of Rs 437
• Escorts earnings positive for tractor industry
• 65 percent of the showrooms are open
• Expect production to normalise by July
• Financing environment seems healthy as banks are keen to lend to agriculture sector
• Strong winter crop, high procurement from government and labour shortage should support tractor demand

Jefferies On ABB India

• Buy rating maintained
• Price target cut to Rs 1,000 from Rs 1,070
• Q1CY20 margins weak given product mix and higher expected credit losses
• Cut CY20 EPS estimates sharply to account for 3-6 weeks of incremental lockdown impact
• Believe rising exports and gradual normalisation of operations should drive upside

Morgan Stanley On Tata Power

• Overweight rating maintained
• Price target of Rs 38
• Liquidity package to SEB would imply lower receivables
• Lower receivables imply lower working capital debt and interest
• Lower receivables imply 10 percent EPS accretion or Rs 0.27 per share

Jefferies On Adani Ports

• Buy rating maintained
• Price target of Rs 315
• Major ports overall cargo down 21 percent year-on-year in April 2020
• Container cargo has shown the highest decline at 34 percent year-on-year
• Expect 30 percent volume decline in Q1FY21
• April data is encouraging and gives comfort of limited downside to Q1 estimates

Trading Tweaks

• Price Band Revised From 20 Percent To 10 Percent: Shree Digvijay Cement
• Move Into ASM Framework: Mangalam Organics
• Move Out Of Short-Term ASM Framework: Healthcare Global Enterprises, Navneet Education, Seamec, IG Petrochemicals, Dishman Carbogen Amcis, Indoco Remedies.

F&O Cues

• Nifty May futures closed at 9,144; premium narrows to 1 point from 10 points
• Nifty May futures add 0.7 percent in Open Interest and 55,000 shares
• Nifty Bank May futures closed at 19,039, discount widens to 31 points from 18 points
• Nifty Bank May futures shed 2.8 percent in Open Interest and 34,000 shares
• Nifty Put Call Ratio at 0.89 from 1.12 across all series
• Remains In F&O Ban: Vodafone Idea
• Out Of F&O Ban: BHEL

Nifty Weekly Expiry: May 21

• Maximum Open Interest on Call side at 9,500 strike (12.5 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (7.5 lakh shares)
• Active Options: 9,000 Put (+3.6 lakh shares), 9,500 Call (+8.5 lakh shares)

Nifty Monthly Expiry: May 28

• Maximum Open Interest on Call side at 10,000 strike (22.5 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (24.8 lakh shares)