All You Need To Know Going Into Trade On May 20

Asian equities rose from a five-month low and U.S. equity futures advanced as investors awaited the next chapter in the Sino-American trade dispute.

Stocks in South Korea also rose, with moves more modest in Tokyo. Gains for American equity futures signaled a bounce after the second week of losses for the S&P 500 Index.

Investors will also watch out or the exit polls yesterday, in which the unanimity in forecasts was underscored by four polls forecasting that the NDA will return to power with over 300 of the 542 Lok Sabha seats.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed at jumped 2.08 percent to 11,671.50 as of 7:05 a.m.

Short on time? Well, then listen to this podcast for a quick summary of the article!

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

U.S. Markets Check

• U.S. stocks fell for the first time in four days, with technology shares bearing the brunt of the selling in a market rattled by a barrage of trade-related headlines.

Asian Cues

• Japan’s Topix index rose 0.4 percent.
• South Korea’s Kospi index advanced 0.8 percent.
• Australia’s S&P/ASX 200 Index gained 1.4 percent.
• Futures on the S&P 500 Index rose 0.3 percent.

Commodity Cues

• Crude resumed rally after a one-day blip, up 1.14 percent to $73.03 per barrel.
• West Texas Intermediate crude rose 0.9 percent to $63.33 a barrel.
• Gold was steady at $1,277.09 an ounce.

Indian ADRs

Stocks To Watch

• Cipla received zero observations from the U.S. FDA after a post-approval inspection was undertaken in company’s Indore facility from May 13-17.
• Bharti Airtel said that based on preliminary information, the rights issue has been over-subscribed. The company’s Rights Issue closed for subscription on May 17.
• Spencer’s Retail to acquire 100 percent stake in Nature’s Basket. Stake to be bought from Godrej Industries for Rs 300 crore.
• Jet Airways: Robin Kamark, nominee director of Etihad Airways in the Board resigned with effect from May 16.
• Alkem Laboratories received Form 483 with four observations from the U.S. FDA after inspection of its Baddi plant from May 13-17. The company says it will put together a response with adequate corrective and preventive measures.
• NIIT completed transfer of its entire shareholding in NIIT Technologies to Hulst B.V. in an off-market trade and received the consideration of Rs 2,020.4 crore. Remaining promoters of NIIT Technologies have also transferred their aforesaid shareholding to the purchaser in an off-market trade.
• Sundaram Clayton inaugurated its first overseas facility in USA at a project cost of Rs 630 crore, operations to commence by September.
• Vedanta: President Edgar Lungu said Zambians felt “cheated” by Vedanta’s local copper unit, and the Glencore unit “to some extent,” according to a live broadcast on Facebook. (Bloomberg News)
• Fortis Healthcare’s Mauritius arm entered into an agreement to sell its entire 28.9 percent stake in Medical and Surgical Centre Limited to CIEL. The company will receive MUR 393.6 Million, or around Rs 78.3 crore, based on the completion of the agreement.
• Welspun Enterprises received provisional completion certificate for commencing commercial operation of the Dewas Industrial Water Supply Project with effect from April 30
• Eveready Industries appointed Indranil Roy Chowdhury and Bibhu Ranjan Saha as Joint CFOs with immediate effect in place of Suvamoy Saha, who will continue to remain whole-time director of the company.
• Saregama launched Carvaan Mini in Kannada language.
• PNC Infratech received the final arbitration award of Rs 145.6 crore related to Narela Annuity
• HealthCare Global Enterprises to consider issue of equity shares on preferential basis on May 23.
• TRF to sell 100 percent stake in Dutch Lanka Trailer and 50 percent stake in Tata International DLT for Rs 167.5 crore to CANYON Point Investment Holdings Pte Ltd.
• DHFL: Brickwork downgraded credit rating for various instruments due to limited progress In building up of liquidity, selling/exiting riskier construction finance loans and delay in announcing a strategic investor for DHFL.

Offerings

• MT Educare’s offer-for-sale of 7.7 percent, or 55.7 lakh shares by founder Mahesh Shetty, at minimum price of Rs 76 opens for non-retail investors; sale opens for retail investors May 21.

Earnings To Watch

• Tata Motors
• Bharat Petroleum Corporation

Other Earnings To Watch

• Hindustan Petroleum Corporation
• Jindal Stainless
• HEG
• Phillips Carbon Black
• GlaxoSmithKline Pharmaceuticals
• Astral Poly Technik
• Astron Paper & Board Mill
• Bharat Forge
• Torrent Pharmaceuticals
• United Breweries
• Confidence Petroleum
• Dalmia Bharat Sugar and Industries
• Dhampur Sugar Mills
• HPL Electric & Power
• Kitex Garments
• Lakshmi Machine Works
• Manali Petrochemicals
• Monte Carlo Fashions
• Mukand Engineers
• Mukand
• New Delhi Television
• RattanIndia Power
• SREI Infrastructure Finance
• Triveni Turbine
• TV Today Network
• Anup Engineering
• Shree Pushkar Chemicals & Fertilisers
• Indian Terrain Fashions

Earnings Reaction To Watch

Engineers India (Q4, YoY)

• Revenue up 20.2 percent to Rs 612.6 crore.
• Net profit up 37.7 percent to Rs 94.9 crore.
• Ebitda up 62 percent to Rs 93.3 crore.
• Margin at 15.2 percent versus 11.3 percent.
• Other income up 24 percent to Rs 59.6 crore.
• Deferred tax reversal of Rs 15 crore in base quarter.

Jubilant Lifesciences (Q4, YoY)

• Revenue up 5.9 percent to Rs 2,385.6 crore.
• Net loss of Rs 99.3 crore versus net profit of Rs 154.9 crore.
• Ebitda down 21.8 percent to Rs 358 crore.
• Margin at 15 percent versus 20.3 percent.
• Exceptional loss of Rs 234.8 crore in base quarter.
• Depreciation expenses down 48 percent to Rs 95 crore.
• Other income of Rs 22.9 crore in base quarter.

Sanghi Industries (Q4, YoY)

• Revenue up 8.8 percent to Rs 276 crore.
• Net profit up 41.9 percent to Rs 26.4 crore.
• Ebitda up 11.6 percent to Rs 46.1 crore.
• Margin at 16.7 percent versus 16.3 percent.

Corporation Bank (Q4, YoY)

• Net interest income down 9 percent to Rs 1,183.7 crore.
• Net loss of Rs 6,581.5 crore versus loss of Rs 1,838.4 crore.
• Provisions up 92 percent to Rs 8505.9 crore.
• GNPA at 15.35 percent versus 17.36 percent. (QoQ)
• NNPA at 5.71 percent versus 11.47 percent. (QoQ)

Sobha (Q4, YoY)

• Revenue up 81.6 percent to Rs 1,397.8 crore.
• Net profit up 73.2 percent to Rs 113.3 crore.
• Ebitda up 78.5 percent to Rs 243.5 crore.
• Margin at 17.4 percent versus 17.7 percent.
• Declares dividend of Rs 7 per share.

Khadim India (Q4, YoY)

• Revenue up 5.2 percent to Rs 206.7 crore.
• Net profit down 88.2 percent to Rs 1.2 crore.
• Ebitda down 48.6 percent to Rs 9.2 crore.
• Margin at 4.5 percent versus 9.1 percent.
• RM as percent of sales at 22 percent versus 19 percent.
• Other expenses up 32 percent to Rs 40.5 crore.

Balkrishna Industries (Q4, YoY)

• Revenue up 9.7 percent to Rs 1,351 crore.
• Net profit down 4.6 percent to Rs 184.7 crore.
• Ebitda up 8.3 percent to Rs 320 crore.
• Margin at 23.7 percent versus 24 percent.
• Other income down 52 percent to Rs 40.2 crore.

PI Industries (Q4, YoY)

• Revenue up 28.7 percent to Rs 804.8 crore.
• Net profit up 18 percent to Rs 124.4 crore.
• Ebitda up 27.6 percent to Rs 171.9 crore.
• Margin at 21.4 percent versus 21.5 percent.
• Other expenses up 33 percent to Rs 131.8 crore.

Precision Wires India (Q4, YoY)

• Revenue up 6.5 percent to Rs 446 crore.
• Ebitda up 1.3 percent to Rs 23.1 crore.
• Margin at 5.2 percent versus 5.4 percent.
• Net profit up 26.6 percent to Rs 10.2 crore.

Shree Cement (Q4, YoY)

• Revenue up 17 percent to Rs 3,285 crore.
• Ebitda up 35 percent to Rs 847.8 crore.
• Margin at 25.8 percent versus 22.4 percent.
• Net profit down 20 percent to Rs 321 crore.
• Lower other income, higher depreciation and higher tax expense led to decline in net profit.
• Announced a dividend of Rs 35/share.

Indian Metals & Ferro Alloys (Q4, YoY)

• Revenue down 2.8 percent to Rs 434 crore.
• Ebitda down 50.5 percent to Rs 32.2 crore.
• Margin at 7.4 percent versus 14.7 percent.
• Net loss of Rs 74 crore versus net profit of Rs 4.6 crore.
• Higher cost of material, higher other expenses and exceptional loss impacted
• Exceptional loss of Rs 85 crore related to impairment loss and provisions towards arbitration cost and employee costs
• Auditors have raised concerns related to business continuity of its subsidiaries - Utkal Coal Ltd., lndmet Mining Pte. Ltd., PT Sumber Rahayu lndah, Utkal Power Ltd., Utkal Green Energy Ltd.

APL Apollo Tubes (Q4, YoY)

• Revenue up 37 percent to Rs 1,748 crore.
• Ebitda up 67 percent to Rs 108.3 crore.
• Margin at 6.2 percent versus 5.1 percent.
• Net profit up 98 percent to Rs 47.1 crore.
• Recommended dividend of Rs 14/share.

JK Cement (Q4, YoY)

• Revenue up 13.4 percent to Rs 1,492 crore.
• Ebitda up 53.6 percent to Rs 279.5 crore.
• Margin at 18.7 percent versus 13.8 percent.
• Net profit up 55.5 percent to Rs 150 crore.
• Recommended dividend of Rs 10/share

Rushil Décor (Q4, YoY)

• Revenue down 2 percent to Rs 86.5 crore.
• Ebitda down 51 percent to Rs 8.5 crore.
• Margin at 9.9 percent versus 19.8 percent.
• Net profit down 57.8 percent to Rs 3.8 crore.

Graphite India (Q4, YoY)

• Revenue up 28 percent to Rs 1,693 crore.
• Ebitda up 20 percent to Rs 864 crore.
• Margin at 51 percent versus 54 percent.
• Net profit up 4 percent to Rs 562 crore.
• Exceptional loss of Rs 55 crore related to compensation payable to employees at Bangalore unit due to closure.
• Recommended dividend of Rs 35/share

VRL Logistics (Q4, YoY)

• Revenue up 4.9 percent to Rs 513 crore.
• Ebitda up 35 percent to Rs 60 crore.
• Margin at 11.7 percent versus 9.1 percent.
• Net profit up 71 percent to Rs 20.5 crore.
• Recommended dividend of Rs 2/share

Puravankara (Q4, YoY)

• Revenue up 124 percent to Rs 646 crore.
• Ebitda up 37 percent to Rs 88.3 crore.
• Margin at 20.9 percent versus 20.9 percent.
• Net profit up 58 percent to Rs 38.8 crore.

Thyrocare Technologies (Q4, YoY)

• Revenue up 9 percent to Rs 105.6 crore.
• Ebitda down 7 percent to Rs 34.5 crore.
• Margin at 32.7 percent versus 38.5 percent.
• Net profit down 35 percent to Rs 16.3 crore.

Pledge Share Details

• Max Financial Services promoter group Max Ventures Investment Holdings created pledge of 42,000 shares on May 15.
• Forbes & Co promoter Shapoorji Pallonji created pledge of 19.23 lakh shares on May 16.
• Future Life Fashions promoter Ryka Commercial Ventures created pledge of 3 lakh shares on May 16.
• Apollo Tyres promoters created pledge of 32.7 lakh shares on May 13.
• Apollo Hospitals Enterprises promoter & director Suneet Reddy revoked pledge of 13lk shares and created a pledge of 13 lakh shares on May 14.
• JSW Energy promoter group Indusglobe Multiventures created pledge of 5.92 lakh shares on May 14.
• Mcleod Russel promoter Woodside Parks invoked pledge of 21.42 lalkh shares from April 30-May 3.
• Mindtree created pledge 3.27 crore shares in favour of IDBI Trusteeship Services (non-promoter) on May 2.

Trading Tweaks

• Mahamaya Steel Industries, Cantabil Retail to move out of ASM Framework.
• Morepen Laboratories to move out of short term ASM Framework.
• Arvind Fashions price band revised to 5 percent .

Who’s Meeting Whom

• Pidilite Industries to meet Baron Funds on May 20.
• Mahindra Logistics to meet Reliance MF, White Oak Capital and other investors from May 20-21.

Insider Trading

• Mindtree: Larsen Toubro acquired 13,400 shares on May 17.
• Tanla Solutions promoter D.Tanuja Reddy 8.1 lakh shares from May 15-16.
• Dabur India promoter Ratna Commercial Enterprises acquired 30,000 shares from May 15-16.
• Globus Spirits promoter and director Ajay Kumar Swarup acquired 19,700 shares on May 16.

Money Market Update

• The rupee on Friday snapped its three-day winning streak to close at 70.26/$ versus Thursday’s 70.03/$.

F&O Cues

Futures –May series

Nifty

• Nifty futures closed trading at 11,425.8, premium of 18 points
• Nifty OI up 4 percent, adds 5.7 lakh shares in OI

Bank Nifty

• Bank Nifty futures closed trading at 29,483.4, premium of 33 points.
• Bank Nifty OI down 4 percent sheds 50 lakh shares in OI.

Options

• Nifty PCR at 1.36 Vs 1.34 (across all series)

Nifty Weekly Expiry 23 May

• Max OI on call side at 12,000 (7.2 lakh shares)
• Max OI at Put side at 11,000 (4.5 lakh shares)
• Max OI addition seen at 11,800C (+2.8 lakh shares), 11,300P (+2.7 lakh shares)

Nifty Monthly Expiry 30 May

• Max OI on call side at 12,000 (35lk shares)
• Max OI on Put side at 11,000 (33.4lk shares)
• Max OI addition seen at 11,000P (+4.9lk shares) 12,000C (+4.6lk shares)

Stocks In F&O Ban

• In Ban: Jet Airways

Brokerage Radar

Nomura on Exit Polls

• Exit polls suggest better-than-expected result for NDA, but near-term growth risks remain.
• If NDA returns to power with a majority, then we would expect policy continuity.
• Rural reflation, infrastructure spending, streamlining of the goods and services tax, direct tax reforms and consolidation of public sector banks likely to be key priorities.
• Do not foresee a major reversal of the current (weak) economic conditions in the short-term.
• End of political uncertainty and policy continuity would be a medium-term positive.
• Combined impact of weak global growth and tighter financial conditions due to shadow banking stress are set to moderate growth from 6.6 percent (YoY) in the fourth quarter of 2018 to 6.2-6.3 percent in the first half of 2019 with risks tilted to downside.

Citi on JSW Energy

• Maintained ‘Buy’; cut price target to Rs 85 from Rs 95.
• March quarter was impacted by high fuel costs.
• Strong cash flows continued.
• Improving prospects for PPAs.

Nomura on Bajaj Finserv

• Downgraded to ‘Neutral’ from ‘Buy’; hiked price target to Rs 8,250 from Rs 6,100.
• Strong lending business franchise but valuations getting demanding.
• Widening distribution and customer franchise to aid growth over medium term.
• Insurance – life improving; some hiccups in general business.

Nomura on Balkrishna Industries

• Maintained ‘Neutral’ with a price target of Rs 806.
• March quarter’s operating performance disappoints.
• Management indicated volume growth outlook of 3-5 percent for 2019-20, which is lower than our estimate of 6.5 percent.
• Await clarity on demand outlook across EU and America.

Investec on UPL

• Maintained ‘Buy’; hiked price target to Rs 1,200 from Rs 765.
• Strong organic performance in March quarter; UPL and Arysta, an apt combination.
• Arysta integration done, synergies to follow.
• Combined entity is better equipped to outperform the industry.

Investec on Indian Banks

• Large private banks are in pole position given the uncertain macro.
• Vastly different paths taken by these banks to deliver returns.
• Axis Bank: Upgraded to ‘Buy’ from ‘Sell’; hiked price target to Rs 880 from Rs 690.
• HDFC Bank: Maintained ‘Buy’; hiked price target to Rs 2,800 from Rs 2,245.
• ICICI Bank: Maintained ‘Buy’; hiked price target to Rs 470 from Rs 425.
• Kotak Mahindra Bank: Maintain Buy; Hike TP to Rs 1,650 from Rs 1,560.

On Indian Oil

Deutsche Bank Research

• Maintained ‘Buy’ with a price target of Rs 195.
• March quarter review: Strong fuel retailing franchise offsets weak refining.
• Refining margin was lower despite inventory gains.
• Expect 10 percent Ebitda CAGR over FY19-21 led by multiple factors.

Nomura

• Maintained ‘Neutral’ with a price target of Rs 145.
• March quarter beat on marketing, inventory gains and forex gains.
• Adjusted for inventory gains, refining was weak, but marketing was much stronger.
• Outlook is weak with more refining capacity coming on line and demand outlook is less optimistic.