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All You Need To Know Going Into Trade On May 5

Stocks in the news, big brokerage calls of the day, complete trade setup and much more! 

Cable cars on the Parsenn mountain above Davos, Switzerland. (Photographer: Chris Ratcliffe/Bloomberg)
Cable cars on the Parsenn mountain above Davos, Switzerland. (Photographer: Chris Ratcliffe/Bloomberg)

Cues from the Asia Pacific will remain lacklustre in today's trading session as most equity markets remain shut on account of a holiday.

Futures in the United States are higher after a late-session advance led to a positive close on Wall Street.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 1.4 percent to 9,375 as of 6:55 a.m.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

Here’s a look at all that can influence equities in today’s session:

  • Markets in Australia have opened higher while those in China, Japan and South Korea are shut on account of a holiday. The Reserve Bank of Australia will be announcing its policy decision today.
  • Futures on the S&P 500 trade 0.3 percent higher after the benchmark pared early losses to end higher by 0.4 percent.
  • Hong Kong's assets will be in focus after its economy contracted 8.9 percent in the first quarter as compared to the year-ago period. This was its worst ever quarter.
  • Equities may remain under pressure as tensions between U.S. and China persist and over the uncertainty over the impact of some states in the U.S. beginning to re-open.
  • “We are more focused on what the policy reactions which every government and central bank is taking up and I think that’s a more important driver right now for the economy,” Morgan Stanley's Chetan Ahya told Bloomberg TV in an interview.
  • Yield on the 10-year treasury stood at 0.63 percent.
  • West Texas Intermediate crude rose 5.3 percent to $21.47 per barrel.

Get your daily fix on the global markets here.

All You Need To Know Going Into Trade On May 5

Earnings Fineprint: Marico Q4FY20

  • Revenue falls 7 percent to Rs 1,496 crore
  • Net profit falls 51.4 percent to Rs 194 crore
  • Tax write-back of Rs 188 crore in the base quarter
  • Ebitda down 4.1 percent to Rs 282 crore
  • Ebitda Margin at 18.9 percent from 18.3 percent
  • Lower promotional expenses aid margin expansion
  • Overall volume contraction at 4 percent
  • India volume contraction at 3 percent
  • All numbers are consolidated and compared on a year-on-year basis

Brokerages On Marico

Emkay

  • Hold rating maintained
  • Price target raised to Rs 320 from Rs 310
  • Performance relatively better than peers
  • Strong growth seen in Saffola
  • Gross margins steady despite price cuts
  • Revival in Parachute and VAHO to be slower due to disruption

UBS

  • Buy rating maintained
  • Price target of Rs 360
  • Management confident of grabbing share from unorganised players
  • Domestic performance better than peers
  • Good opportunity to buy a quality stock at a reasonable price

Stocks To Watch

  • Marico: The company in a press release said that said it will take a step back from premiumisation initiatives in the short term. Preparatory work in terms of R&D and proposition building will continue behind the scenes. It has maintained its medium term aspiration of delivering 8-10 percent volume growth and 13-15 percent revenue growth. It also looks to maintain FY21 operating margins at FY20 levels. Company also said that it may maintain a 75-80 percent dividend pay-out ratio for the current fiscal year.
  • Lupin: The company’s U.S. arm has announced positive top-line results from its pivotal Phase 3 clinical trial to assess efficacy and safety of single-dose Solosec which is used to cure trichomoniasis. Company now plans to submit a supplemental New Drug Application for Solosec to the U.S. FDA for the afore-mentioned treatment in the second half of calendar year 2020.
  • ICICI Bank: To consider raising capital via debt on May 9.
  • Colgate-Palmolive: The company has been allowed to resume operations at reduced capacity at all of its manufacturing plants to ensure supply of vital and essential oral health and hygiene products.
  • Nath Bio-Genes: Has received 92 percent of the targeted seed production from the fields. Balance 8 percent expected to be received by May 15. All plants have become fully operational.
  • Ceat: Has partially resumed operations at its plants in Nashik, Nagpur and Halol.
  • Apollo Tyres: Operations at Chennai plant have partially opened. Operations in Kerala, Gujarat and Hungary had already resumed from April 25.
  • Amber Enterprises: Has re-commenced operations at certain units from May 4.
  • Container Corporation of India: Has handed over certain terminals which are built on the land taken on lease from the Railways. The turnover for these terminals stand at Rs 277.5 crore and the company has said that there won’t be any material impact.
  • Automotive Axles: Has resumed its operations at Rudrapur and Mysore from May 4.
  • Kirloskar Oil Engines: The company’s U.S. arm has commenced operations with effect from May 4.
  • Saint-Gobain Sekurit: Chakan plant’s operations will remain suspended till May 17.
  • Graphite India: Has started operations at three plants across West Bengal and Maharashtra. Company’s German arm to operate the specialty and coating operations in their plant.
  • Thermax: Nalanda India Equity Fund increased the stake in the company by 0.83 percent to 5.44 percent on April 29.
  • Bajaj Consumer Care: Has commenced operations at its Himachal Pradesh plant.
  • Magma Fincorp: India Ratings and Research as placed the company’s bank facilities under Rating Watch Negative primarily due to the Covid-19 led lock-down which has a disproportionate impact on its asset quality.
  • Jyothy Labs: Manufacturing plants have partially resumed their activities.
  • Endurance Technologies: All operating arms in Italy except the foundry plant have resumed operations from May 4. Foundry plant expected to resume operations from May 11. All the plants shall gradually be ramping up operations to align with the off-take from their respective OEM customers.
  • Non-Nifty Earnings Today: SBI Life Insurance, Astec LifeSciences, NIIT Technologies, Persistent Systems, Varun Beverages, Tata Coffee, Rallis India, Elantas Beck.
  • Healthcare Global: Scottish Oriental Smaller Companies sold 4.52 lakh shares or 0.51 percent stake at Rs 77.08 per share in a bulk deal.
  • Mindtree: Promoter Subroto Bagchi sold 1.34 lakh shares between April 29-30, as reported on May 4.

Earnings Estimates: Adani Ports & SEZ Q4FY20

  • Revenue seen 6 percent higher at Rs 3,265 crore
  • Ebitda seen 2 percent lower at Rs 1,895 crore
  • Ebitda Margin seen at 58.1 percent from 62.7 percent
  • Net profit seen 31 percent lower at Rs 887 crore
  • All estimates are consolidated and compared on a year-on-year basis
  • Robust cargo offtake of 58 MMT in Q4
  • Newer assets like Katupalli and Ennore aid cargo offtake
  • Forex loss likely this quarter. The company had a forex gain of Rs 109 crore in the base quarter
  • High other income may offset the forex loss impact
  • Volume growth guidance for FY21, Clearance of Krishnapatnam port acquisition some key factors to watch

Pledged Share Details

  • Sun Pharma: Promoter Raksha Valia created pledge of 3 lakh shares on April 30
  • Emami: Promoter Bhanu Vyapaar created pledge of 10 lakh shares on April 28

(As Reported On May 4)

Who’s Meeting Whom

  • Manappuram Finance to meet Edelweiss AMC on May 5
  • Mahindra & Mahindra to meet Aditya Birla Sun Life Insurance on May 5

Trading Tweaks

  • Price Band Revised To 5 Percent From 10 Percent: Tata Communications, Panacea Biotec, Finotex Chemical
  • Move Into ASM Framework: Sanco Industries
  • Move Into Short-Term ASM Framework: India Nippon Electricals
  • Move Out Of Short-Term ASM Framework: TV18 Broadcast, Kalpataru Power Transmission, Alkyl Amines Chemicals, Hinduja Global Solutions, TCPL Packaging, Asahi India Glass, Chalet Hotels, Prince Pipes And Fittings, Aster DM Healthcare, Capacit'e Infraprojects, Shankara Building Products, Max Ventures and Industries, Speciality Restaurants, Kiri Industries, Tanla Solutions, Mahindra Lifespace Developers, Vaibhav Global, Tourism Finance Corporation of India, KEI Industries, Welspun India, Muthoot Capital Services, Surya Roshni, Dhampur Sugar Mills, Balrampur Chini Mills, Aegis Logistics

Money Market Update

  • The currency snapped a four-day gaining streak, ending at 75.73 against the U.S. Dollar as compared to Thursday's close of 75.1. This was the biggest one-day drop for the currency in a month.

F&O Cues

  • Nifty May futures closed at 9,815; a premium of 7 points versus a discount of 30 points
  • Nifty May futures shed 2.8 percent in Open Interest and 2.5 lakh shares
  • Nifty Bank May futures closed at 20,676; Premium widens to 110 points from 38 points
  • Nifty Bank May futures add 31 percent in Open Interest and 3 lakh shares.
  • Nifty Put-Call Ratio at 1.35 versus 1.78 across all series

Nifty: May 7 Expiry

  • Maximum Open Interest on Call side at 10,000 strike (26 lakh shares)
  • Maximum Open Interest on Put side at 9,000 strike (11.6 lakh shares)
  • Active Options: 10,000 Call (+15.2 lakh shares), 9,000 Put (+4 lakh shares)

Nifty: May 28 Expiry

  • Maximum Open Interest on Call side at 9,500 strike (12 lakh shares)
  • Maximum Open Interest on Put side at 9,000 strike (22.9 lakh shares)
All You Need To Know Going Into Trade On May 5