All You Need To Know Going Into Trade On May 19 

Earnings Fineprint: Bharti Airtel Q4FY20

• Revenue up 8.1 percent to Rs 23,723 crore - highest jump in last 30 quarters
• Ebitda up 10.1 percent to Rs 10,202 crore
• Ebitda margins at 43 percent from 42.2 percent
• Net loss widens to Rs 5,237 crore from Rs 1,035 crore
• Exceptional loss of Rs 7,004 crore due to reassessment of regulatory cost related to spectrum charges
• ARPU rises to Rs 154 from Rs 135
• All numbers are consolidated and compared on a year-on-year basis

Key Highlights From Bharti Airtel's Q4:

• Consolidated revenue and Ebitda would have been higher had the company not changed its accounting standards in the DTH business.
• Deferring the revenue earned through onboarding and installation over the life of the customer.
• High license fees and network operating expenses offset some gains
• License fee rose 14.4 percent to Rs 2,020 crore while network operating expenses rose 5 percent to Rs 5,201.5 crore
• India mobile revenue up 16 percent sequentially due to strong 4G subscriber addition, tariff hike and higher usage amid lockdown.
• Total debt stood at Rs 1,17,312 crore from Rs 1,16,008 crore

Brokerages On Bharti Airtel

Morgan Stanley

• Overweight rating maintained
• Price target of Rs 575
• Operational performance was strong overall and in Indian wireless business
• ARPU, overall subscribers and data subscribers were better than estimates
• Provision was the only negative surprise, though it is out of prudence and there is no immediate risk of cash outflow on this yet

UBS

• Buy rating maintained
• Price target of Rs 615
• Solid quarter with strong ARPU growth
• Believe major impact of Covid-19 to be felt in the upcoming quarter
• Commentary on Covid-19 and AGR case important in management call

CLSA

• Buy rating maintained
• Price target of Rs 670
• India mobile revenue ahead of estimates
• Enterprise, home broadband and DTH ramped-up
• Leverage at 2.9 times its Ebitda is comfortable

Stocks To Watch

• Coal India: The government has clarified that it does not intend to privatise the state-run company even as it opens up the sector for commercial mining.
• Vedanta: Board approves the proposed delisting of mining baron Anil Agarwal's flagship Indian unit from the stock exchanges. Agarwal announced the intention to take his company private last week. The proposal will be put to vote among shareholders via a special resolution.
• PVR: Said that it will not play any films that have already been released on streaming platforms. The multiplex operator said it expects to receive permission to re-open cinema halls in a staggered manner by the end of July or early August.
• Tata Consumer Products: Will acquire 50 percent of PepsiCo’s share in NourishCo Beverages Ltd. NourishCo is a 50:50 joint venture between Tata Consumer and PepsiCo India Holdings Pvt. Ltd. This will consequently terminate the joint-venture, making NourishCo a wholly-owned subsidiary of Tata Consumer Products.
• Adani Green Energy: Vistra ITCL (India) Ltd. released 2.67 percent pledged shares of company.
• Future Supply Chain Solutions: CARE Ratings downgraded the credit rating of non-convertible debentures and long-term bank facilities to A- from A+ with negative implications. Proposed commercial paper of the company downgraded to A2+ from A1.
• Aditya Birla Fashion & Retail: To raise Rs 400 crore by issuance of 4,000 redeemable unsecured non-convertible debentures (NCDs) of Rs 10 lakh each, on a private placement basis on or after May 21, 2020.
• Raymond: Board to consider and approve issue of non-convertible debentures worth Rs 100 crore on a private placement basis on May 21, 2020.
• Indiabulls Housing Finance: Redeems NCDs worth Rs 1,500 crore
• Indiabulls Real Estate: Appoints Agarwal Prakash & Co., which audits more than 90 percent of its subsidiaries as a statutory auditor in place of Walker Chandiok & Co. LLP. The move is done to reduce the total audit fee and related expenses substantially by more than 50 percent.
• Punjab National Bank: To pay interest on its 9.05 percent unsecured redeemable, non-convertible Basel-III compliant Tier-II bond of Rs 1,000 crore to all the beneficiaries on June 24, 2020. Payment shall be made for the period of June 24, 2019 to June 23, 2020.
• Apollo Tyres: Board allots non-convertible debentures of Rs 500 crore on a private placement basis.
• Companies That Resumed Operations: Deepak Nitrite's subsidiary Deepak Phenolics, Garware Technical Fibres, Kirloskar Oil Engines
• Bajaj Finance: To report Q4 earnings today
• Non-Nifty Earnings Today: Sanofi India, Tata Power, Ujjivan Small Finance Bank, Embassy Office Parks REIT, GNA Axles, L&T Infotech, NESCO, Transport Corporation of India.

Earnings Reported After Market Hours

Torrent Power Q4FY20

• Revenue up 2 percent to Rs 2,983.5 crore
• Net loss of Rs 274.92 crore from net profit of Rs 24.8 crore
• Provides for impairment loss of Rs 1,000 crore in the current quarter
• Ebitda up 16.5 percent to Rs 827.04 crore
• Ebitda margins expand to 27.72 percent from 24.27 percent
• The dividend of Rs 11.6 declared on February 12, 2020 will be considered as the final dividend.
• All numbers are consolidated and compared on a year-on-year basis

AstraZeneca Pharma Q4FY20

• Revenue up 2.4 percent to Rs 195 crore
• Net profit down 2.5 percent to Rs 9.5 crore
• Ebitda up 132 percent to Rs 14.8 crore
• Ebitda margins expand to 7.6 percent from 3.3 percent
• All numbers are standalone and compared on a year-on-year basis

Delta Corp Q4FY20

• Revenue down 11.4 percent to Rs 180.9 crore
• Net profit down 48.8 percent to Rs 29 crore
• Ebitda down 45.8 percent to Rs 47.6 crore
• Ebitda margin at 26.3 percent from 43 percent
• All numbers are consolidated and compared on a year-on-year basis

GSK Pharma Q4FY20

• Revenue up 3.3 percent to Rs 775.8 crore
• Net profit down 6 percent to Rs 138 crore
• Ebitda up 6.4 percent to Rs 173.6 crore
• Ebitda margin at 22.3 percent from 21.7 percent
• Board recommends a dividend of Rs 40 per share which includes a special dividend of Rs 20 per share
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Centrum On India Cements

• Sell rating maintained
• Price target of Rs 55
• Stake hike by prominent investor triggers valuation spike
• Fundamentals remain weak
• No respite seen on deleveraging
• Weak operating efficiencies, pricing pressure in key markets and higher interest burden to keep earnings under pressure

Morgan Stanley On Dr Lal Pathlabs

• Underweight rating maintained
• Price target of Rs 1,503
• Q4 results were a miss
• Lockdown removal a key to recovery
• Margins may remain weak for the next couple of quarters due to high cost of operations and subdued volumes
• Underweight due to limited pricing power, modest growth and rich valuations

Morgan Stanley On Indraprastha Gas

• Overweight rating maintained
• Price target of Rs 471
• Expect a surge in gas demand from transportation sector if social distancing norms are to be followed
• IGL sells nearly 70 percent of the gas to the transport sector
• IGL has also reopened 54 CNG pump stations in the last week in Delhi and nearby areas

Haitong On Crompton Greaves Consumer Electricals

• Buy rating maintained
• Price target cut to Rs 250 from Rs 330
• Subdued quarter due to fallout of the Covid-19 pandemic
• Company raising funds to deal with any adverse cash flow situation
• Cut earnings estimates for FY21/22 by 26 and 24 percent respectively for lost sales of seasonal products along with deferred demand for each products

Motilal Oswal On ICICI Securities

• Initiate coverage with buy rating
• Price target of Rs 460
• Re-engineering the business model
• Building a diversified franchise
• Focus on ARPU and customer acquisition to lead to superior overall volumes
• Business model is capital light with a dividend payout ratio of nearly 70 percent

Haitong On Dhanuka Agritech

• Initiate coverage with buy rating
• Price target of Rs 570
• Focus on agriculture
• Normal monsoon likely to bring cheer despite Covid-19
• Expect market share gains along with margin protection
• Expect revenue/net profit CAGR of 12 and 15 percent respectively over FY19-22

Bulk Deals

• AU Small Finance Bank: Government of Singapore bought 19.7 lakh shares (0.6 percent equity) Rs 414.6 per share. Promoter Chiranjee Lal Agarwal sold 25 lakh shares (0.8 percent equity) at Rs 414.6 per share.
• Healthcare Global: Buena Vista Fund bought 19.3 lakh shares (2.2 percent equity) at Rs 94.8 per share. First State Investment sold 10.6 lakh shares (1.2 percent equity) at Rs 93.4 per share.

F&O Cues

• Nifty May futures closed at 8,826; premium of 3 points from 0.2 points
• Nifty May futures add 2.6 percent in Open Interest and 1.7 lakh shares
• Nifty Bank May futures closed at 17,531; discount widens to 36 points from 26 points
• Nifty Bank May futures add 7.5 percent in Open Interest and 98,000 shares
• Nifty Put-Call Ratio at 0.95 from 1.11 across all series

Nifty Weekly Expiry: May 21

• Maximum Open Interest on Call side at 9,500 strike (20.9 lakh shares)
• Maximum Open Interest on Put side at 8,500 strike (11.8 lakh shares)
• Active Options: 8,500 Put (+3.5 lakh shares), 9,000 Call (+13.8 lakh shares)

Nifty Monthly Expiry: May 28

• Maximum Open Interest on Call side at 10,000 strike (24.9 lakh shares)
• Maximum Open Interest on Put side at 8,500 strike (20 lakh shares)