All You Need To Know Going Into Trade On May 27

Stocks To Watch

• Kotak Mahindra Bank: Board approves opening of QIP on May 26. Floor price of Rs 1,147.75 per share is a 0.47% discount to Tuesday's closing. The bank may, at its discretion, consider offering a discount of not more than 5% on the floor price.
• Reliance Industries: Bloomberg News reports that the company is preparing Jio Platforms for an IPO outside the country, according to people familiar with the matter. The company however has not decided on the listing venue. The offering may happen in the next 12-24 months.
• Titan: The company has shared its Covid-19 update with the exchanges. The release says that it saw virtually no sale from March 17 until the first week of May. The company is gradually re-opening stores and 43% of its stores are currently operational. The company has guided for low visibility on revenue and that customer demand sentiment is pointing to reduced discretionary spends.
• Bharti Airtel: Bharti Telecom said in a press release that it raised over Rs 8,433 crore through accelerated book-build offering of equity shares of the telecom player. Sale proceeds will be fully utilized to repay debt at and make the promoter holding company a ‘debt free.’
• Coal India: Bloomberg News reports that its consultancy arm CMPDIL has been roped in by NTPC to make separate mining plans for Banai and Bhalumuda coal mines in Chhattisgarh with an aim to maximise the extractable reserves by merging operations of the two mines.
• ITI: The company says that it has started manufacturing face shield at its Bengaluru unit. The company is now capable of producing 5 lakh face shileds per month which may be extended to 15 lakh in the coming days.
• Relaxo Footwear’s Covid-19 Update: The overall demand of the products has been impacted, but due to easing of lockdown restrictions, the demand for open slippers has improved.
• Astra Microwave Products: Operating at 75% capacity in all factories.
• Century Plyboards: Extensive damage done to the factory shed and building at Joka factory near Kolkata due to cyclone AMPHAN. The plant production has been partly shut down. Plant is adequately covered under insurance. The overall impact is not expected to be material.
• Welspun Enterprises: To consider raising capital via equity on May 29.
• Non-Nifty Earnings Today: Ujjivan Financial Services, United Spirits, Dabur, KPIT Tech, Tube Investments, Vaibhav Global, Aditya Birla Fashion & Retail, Quess Corp.

Earnings Reported After Market Hours

Deepak Nitrite Q4FY20

• Revenue up 4.7% to Rs 1,055.5 crore
• Net profit up 88.3% to Rs 172.3 crore
• Deferred tax reversal of Rs 22.5 crore this quarter aided profitability
• Ebitda up 35.1% to Rs 262 crore
• Ebitda margin improves to 24.8% from 19.2%
• Lower raw material and power cost aid margins
• Phenolics segment revenue up 2% to Rs 531 crore
• Fine and Speciality segment revenue up 30% to Rs 158 crore
• Performance products segment revenue up 22% to Rs 153.5 crore
• Basic Chemicals segment revenue down 10% to Rs 225.7 crore
• All numbers are consolidated and compared on a year-on-year basis

Max Financial Services Q4FY20

• Revenue down 40.2% to Rs 4,264.1 crore
• Net profit down 96.7% to Rs 6.67 crore
• Ebitda down 31.7% to Rs 137.5 crore
• Ebitda margin at 3.22% from 2.82%
• Gross written premium up 6% to Rs 5,873 crore
• Profit before Tax in the insurance segment down 38% to Rs 154.6 crore
• New Business Margins remain constant at 21.6% for FY 20
• All numbers are consolidated and compared on a year-on-year basis

Coromandel International Q4FY20

• Revenue up 8.7% to Rs 2,869.3 crore
• Net profit up 2.1 times to Rs 234.2 crore
• Ebitda up 50.8% to Rs 390.7 crore
• Ebitda margin at 13.6% from 9.8%
• Lower raw material costs aid margins
• All numbers are consolidated and compared on a year-on-year basis

Torrent Pharma Q4FY20

• Revenue up 4.8% to Rs 1,946 crore
• Net profit at Rs 314 crore from net loss of Rs 152 crore
• Ebitda up 15.9% to Rs 548 crore
• Ebitda margin expands to 28.2% from 25.5%
• Exceptional loss of Rs 357 crore in the base quarter
• Lower raw material and employee costs aid margins
• Synergies from acquired Unichem portfolio, incremental productivity and cost control aid margins
• All numbers are consolidated and compared on a year-on-year basis

VIP Industries Q4FY20

• Revenue down 28.4% to Rs 311.3 crore
• Net profit down 62.5% to Rs 9.5 crore
• Ebitda down 19.7% to Rs 31.8 crore
• Ebitda margins at 10.2% from 9.1%
• Gross margin improvement due to higher procurement from Bangladesh, better share of hard luggage and lower raw material costs
• All numbers are consolidated and compared on a year-on-year basis

SH Kelkar Q4FY20

• Revenue flat at Rs 271 crore
• Net profit down 40.6% to Rs 12 crore
• Ebitda up 25% to Rs 31.5 crore
• Ebitda margin at 11.6% from 9.3%
• Lower raw material costs aid margins
• High taxes this quarter and higher other income in base quarter impacts profit
• All numbers are consolidated and compared on a year-on-year basis

Blue Dart Express Q4FY20

• Revenue down 7.1% to Rs 724.1 crore
• Net loss of Rs 23.8 crore from net profit of Rs 12.9 crore
• Ebitda down 45.1% to Rs 15.7 crore
• Ebitda margin at 2.17% from 3.66%
• Operational numbers impacted due to Ind-AS 116
• All numbers are standalone and compared on a year-on-year basis

Earnings Estimate: Sun Pharma Q4FY20

• Revenue seen 13% higher at Rs 8,072 crore
• Net profit seen 57% higher at Rs 1,002 crore
• Ebitda seen 69% higher at Rs 1,708 crore
• Ebitda margin seen at 21.1% from 14.2%
• Had a one-time impact of Rs 1,090 crore last year due to change in its distribution policy for Aditya Medisales
• All estimates are consolidated and compared on a year-on-year basis

Key Factors At Play For Sun Pharma:

• Taro reports strong revenues but margins take a hit
• New launches like gSensipar, gUloric, gRanexa ER to aid topline
• U.S. sales ex-Taro expected to be at $230 million
• Speciality sales may moderate to $100 - 105 million
• Had guided for 13-15% sales growth in FY20
• Higher R&D costs may impact sequentia margins
• Update on Ilumya/Cequa, update on Halol along with Covid-19 impact some key factors to watch

Brokerage Radar

Jefferies On Astral Poly

• Hold rating maintained
• Price target cut to Rs 900 from Rs 950
• Q4 below estimates due to disruption in March
• Adhesives revamp may accrue profits from hereon
• Cut FY21/22 EPS estimates by 13% and 5% respectively due to lockdown extension, higher plumbing mix and miss in Q4

Emkay On Torrent Pharma

• Sell rating maintained
• Price target raised to Rs 2,038 from Rs 1,932
• Strong growth in India aids Q4 Ebitda beat
• India growth should outpace industry in the near-term
• Demand for chronic drugs to recover from Q2
• Moderate outlook across geographies owing to lack of new approvals in the U.S., supply issues in Germany and weak FY 21 economic outlook in Brazil

Emkay On Max Financial

• Buy rating maintained
• Price target of Rs 600
• Q4 numbers below estimates
• Steep decline in APE growth
• Margin trajectory stable
• Focus remains on gradual revival in growth and completion of Axis deal in due course

Morgan Stanley On Just Dial

• Overweight rating maintained
• Price target of Rs 450
• Operating metrics in Q4 affected by Covid-19
• Cost controls remained strong
• Focus is on lowering cash burn in an uncertain growth environment
• Company expects pent-up demand in coming quarters after lockdown is lifted

Morgan Stanley On JSPL

• Upgrade to overweight from equalweight
• Price target cut to Rs 140 from Rs 195
• Expect resilient performance in an challenging environment
• Strong cash flows should cover interest / part of repayments
• Balance sheet leverage appears manageable

Bulk Deals

• Bharti Airtel: Promoter Bharti Telecom sold 15 crore shares (2.75 percent) at Rs 562.2 per share and Societe Generale acquired 3.53 crore shares (0.65 percent) at Rs 561.1 per share.
• Indian Energy Exchange: Westbridge Crossover Fund sold 18.65 lakh shares (0.62 percent) at Rs 165 per share.

Who’s Meeting Whom

• Escorts: To meet IIFL Wealth Management and SBI Mutual Fund between May 27-28.
• Allcargo Logistics: To meet HSBC MF, Abakkus Asset Managers and other investors on May 28.
• CG Consumer Electricals: To meet Highclere International Investors and Hill Fort Capital on May 28.

Pledged Share Details

• Solara Active Pharma Sciences: Promoter Prafulben Dudhagara invoked pledge of 32,216 shares on May 21.
• Adani Power: Promoters released pledge of 2.37 crore shares between May 20-22.

(As Reported On May 26)

Trading Tweaks

• Price Band Revised From 20% To 10%: TVS Srichakra, Vinyl Chemicals.
• Move Into Short-Term ASM Framework: B.C. Power Controls
• Move Out Of Short-Term ASM Framework: Uniply Decor

Money Market Update

• The rupee began the truncated week with gains, ending at 75.66 against the U.S. Dollar as compared to Friday's close of 75.96.
• The rupee was the second best performing Asian currency after the South Korean Won in Tuesday's trading session.

F&O Cues

• Nifty May futures closed at 9,034; premium of 5 points from a discount of 13 points
• Nifty May futures shed 16% and 11.8 lakh shares in Open Interest
• Nifty Rollovers at 40%
• Nifty Bank May futures closed at 17,445; premium of 5 points from a discount of 60 points
• Nifty Bank May futures shed 18% and 3.2 lakh shares in Open Interest
• Nifty Bank Rollovers at 21%
• Nifty Put Call Ratio at 1.16 from 1.15 across all series

Nifty Monthly Expiry: May 28

• Maximum Open Interest on Call side at 9,200 strike (29.6 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (31.5 lakh shares)
• Active options: 9,100 Call (+5.5 lakh shares), 9,200 Call (+5.5 lakh shares)