All You Need To Know Going Into Trade On May 8 

Asian stocks dropped after the U.S. threat of higher tariffs on imports from China pushed American equities down the most since March. The yen held near a six-week high.

The brunt of equity declines was in Japan, with losses also seen in Australia and South Korea. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell fell 0.5 percent to 11,478 as of 7:25 a.m.

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BQ Live

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

U.S. Markets

• U.S. equities fell by the most since March as investors remained on edge over President Donald Trump’s threat to increase tariffs on billions of dollars of imports from China.

Asian Cues

• Japan’s Topix index fell 1.2 percent as of 9:03 a.m. in Tokyo.
• Australia’s S&P/ASX 200 Index dropped 0.4 percent.
• Hang Seng Index futures earlier declined 1.5 percent.

Commodity Cues

• Brent crude traded higher 0.14 percent to $69.98 per barrel. The Asian crude benchmark ended 1.9 percent lower yesterday.
• West Texas Intermediate added 0.2 percent to $61.54 a barrel, after touching the lowest level in more than five weeks Tuesday.
• Gold was steady at $1,285.20 an ounce.

London Metal Exchange

• Copper ended lower, down 0.90 percent.
• Aluminium ended higher, up 1.14 percent.
• Nickel ended lower, down 1.15 percent.
• Tin ended higher for the second consecutive trading session, up 0.4 percent.
• Lead halted a two-day rally, ended 2.34 percent lower.
• Zinc ended lower, down 2.85 percent.

Indian ADRs

Stocks To Watch

• Alembic Pharma entered into a joint venture contract with SPH Group and Adia to promote and sell pharma products for the Chinese markets. Subsequently, the JV plans to set up a manufacturing facility in China. The pharma company has a 44 percent stake in this arrangement.
• Biocon retained economic interest in global commercialization of Hulio, a biosimilar drug which is licensed by Mylan and will gain a share of profits from global markets.
• Essel Group said Zee Entertainment stake sale at advanced stage. (Bloomberg News)
• BSE board approved a buyback of 67.6 lakh shares, or 13.06 percent of total capital of the company at a price of Rs 680 per share aggregating to Rs 460 crore and appointed Justice Vikramjit Sen as the Chairman.
• IDBI Bank board to consider passing enabling resolution for equity issue on May 13.
• Dewan Housing Finance received the National Housing Bank’s nod to sell entire stake of 9.15 percent in Aadhar Housing Finance to Blackstone’s arm.
• India Grid Trust: Investment Manager approved preferential issue and allots 30 crore units at price of Rs 83.89 per unit aggregating to Rs 2,514 crore, to institutional investors.
• HUL: NCLT ordered meeting of shareholders and unsecured creditors on June 29 to consider and approve the amalgamation of the company and GlaxoSmithKline Consumer Healthcare.
• Mcleod Russel: ICRA revised the long term rating from ‘A’ to ‘BBB-‘
• FDC said that a fire incident occurred in its Maharashtra plant on May 3. The company said production was disrupted for a few hours and there will not be any significant impact on the operations of the company and it also has adequate insurance coverage.
• Bank of Maharashtra revised its MCLR across various tenors with effect from May 7. Base rate remains unchanged at 9.5 percent. One-month rate at 8.25 percent and one-year rate at 8.7 percent.
• Vakrangee announced alliance with Dish TV for distribution of subscription recharge and providing collection services.
• Ingersoll-Rand (India): Gardner Denver Holdings makes an open offer to acquire 82.07 lakh shares (26 percent stake) from public shareholders at Rs 592.02 per share (discount of 1.7% to CMP). Open offer made due to merger agreement between the promoter and Gardner Denver Holdings.

Nifty Earnings To Watch

• Titan

Other Earnings To Watch

• Rain Industries
• Procter & Gamble Hygiene and Health Care
• Alembic Pharmaceuticals
• Axiscades Engineering Technologies
• Tata Communications
• Chennai Petroleum Corporation
• KEC International
• CroreeditAccess Grameen
• Dhanlaxmi Bank
• JMC Projects
• JK Paper
• JSW Holdings
• Dishman Carbogen Amcis
• EID Parry India
• Shree Renuka Sugars
• Emami Paper Mills
• Gillette India
• Indraprastha Medical Corporation
• Kokuyo Camlin
• KSB
• MAS Financial Services
• Saregama India
• Satin Creditcare Network
• Shriram Asset Management
• Shriram Transport Finance
• Srikalahasthi Pipes
• Kopran

Earnings Reaction To Watch

Vedanta (Q4 Consolidated, YoY)

• Revenue down 15 percent to Rs 23,468 crore.
• Net profit down 46 percent to Rs 2,615 crore.
• Ebitda down 20 percent to Rs 6,135 crore.
• Margin at 26.1 percent versus 27.8 percent.
• Exceptional Gain of Rs 2,869 crore in base quarter.

Ceat (Q4 Consolidated, YoY)

• Revenue up 4.4 percent to Rs 1,760.5 crore.
• Net profit down 16.6 percent to Rs 64.3 crore.
• Ebitda down 17.8 percent to Rs 162.4 crore.
• Margin at 9.2 percent versus 11.7 percent.
• RM as percent of sales at 58 percent versus 56 percent.
• Exceptional loss of Rs 40.5 crore versus exceptional loss of Rs 24.6 crore.
• Other income up 4.4 times to Rs 30.6 crore.
• Declares dividend of Rs 12 per share.

ABB India (Q1 Calendar year 2019, YoY)

• Revenue up 18.1 percent to Rs 1,850.3 crore.
• Net profit up 13.4 percent to Rs 116.2 crore.
• Ebitda up 62.6 percent to Rs 145.5 crore.
• Margin at 7.9 percent versus 5.7 percent.
• Finance cost down 87 percent to Rs 2.6 crore.

Essel Propack (Q4 Consolidated, YoY)

• Revenue up 10.4 percent to Rs 693.7 crore.
• Net profit up 17 percent to Rs 52.4 crore.
• Ebitda up 13 percent to Rs 131.5 crore.
• Margin at 19 percent versus 18.5 percent.

BSE (Q4 Consolidated, YoY)

• Revenue down 20 percent to Rs 115.7 crore.
• Net profit down 16.4 percent to Rs 51.9 crore.
• Ebitda loss to Rs 0.1 crore versus Ebitda gain of Rs 34.6 crore.
• Declares dividend of Rs 25 per share.

Brigade Enterprises (Q4 Consolidated, YoY)

• Revenue up 75.3 percent to Rs 760 crore.
• Net profit up 3.3 times to Rs 59.7 crore.
• Ebitda up 59.9 percent to Rs 215.4 crore.
• Margin at 28.3 percent versus 31.1 percent.
• Exceptional loss of Rs 11.5 crore in base quarter.
• Deferred tax payable to Rs 49.1 crore versus deferred tax reversal of Rs 13.2 crore.
• Real-estate segment revenue up 2 times to Rs 593.3 crore.
• Hospitality segment revenue up 37 percent to Rs 89.6 crore.
• Leasing segment revenue up 12 percent to Rs 86.5 crore.

Mahindra Logistics (Q4 Consolidated, YoY)

• Revenue up 13.7 percent to Rs 1,014.7 crore.
• Net profit up 14.4 percent to Rs 23.9 crore.
• Ebitda up 8.2 percent to Rs 40.9 crore.
• Margin at 4 percent versus 4.2 percent.
• Employee expenses up 19 percent to Rs 71.4 crore.

Gujarat Borosil (Q4, YoY)

• Revenue up 13.3 percent to Rs 62.1 crore.
• Net profit down 71 percent to Rs 0.9 crore.
• Ebitda up 11.3 percent to Rs 7.9 crore.
• Margin at 12.7 percent versus 13 percent.
• Exceptional loss of Rs 2 crore in base quarter.
• Deferred tax reversal at Rs 1.8 crore versus Rs 4 crore.

New Listing

• Neogen Chemicals shares to start trading on exchnages after IPO gets oversubscribed 41.2 times at Rs 215 apiece.

Bulk Deals

CG Power & Industrial Solutions

• Bharti SBM Holdings acquired 65.1 lakh shares (1.04 percent) to Rs 36.5 each.

Prime Focus

• Marina IV LP acquired 41.8 lakh shares (1.4 percent) to Rs 60.62 each.
• Standard Chartered Private Equity (Mauritius) sold 41.8 lakh shares (1.4 percent) to Rs 60.62 each.

Pledge Share Details

• Emami promoters created pledge of 44 lakh shares on April 30.
• Jubilant FoodWorks promoter Jubilant Consumer revoked pledge of 39.72 lakh shares from May 2-3.
• Mcleod Russel promoter Woodside Parks invoked pledge of 21.42 lakh shares from April 30-May 3.
• Mercator promoter & director Harish Kumar Mittal invoked pledge of 17.5 lakh shares from April 30-May 3.

Trading Tweaks

• Neogen Chemicals to be listed on the bourses.
• Uniply Industries to move into short term ASM Framework.
• KPIT Technologies price band revised to 20 percent.
• Uniply Industries price band revised to 10 percent.
• Mcleod Russel price band revised to 5 percent.

Who’s Meeting Whom

• MCX to meet SBI MF on May 8.
• Tata Steel to meet Myriad Asset Management on May 15.
• IRB InvIT Fund to meet Birla Sunlife, HDFC Life and other investors on May 8.

Insider Trading

• Mindtree: L&T acquired 14.7 lakh shares on May 7.
• RPG Lifesciences promoter Ektara Enterprises acquired 14,000 shares from May 3-6.

(As reported on May 7)

Money Market Update

• The rupee on Tuesday weakened for the second straight day to close at 69.43/$ versus Monday’s closing of 69.41/$.

F&O Cues

Futures –May series

Nifty

• Nifty futures closed trading at 11,541.9, premium of 44 points versus 58 points.
• Nifty open interest down 1% sheds 1.5 lakh shares in open interest.

Bank Nifty

• Bank Nifty futures closed trading at 29,418.4, premium of 130 points versus 190 points.
• Bank Nifty open interest up 6%, adds 1 lakh shares in open interest.

Options

• Nifty PCR at 1.13 versus 1.30 (across all series).

Nifty Weekly Expiry 9 May

• Max open interest on call side at 11,800 (28.1 lakh shares).
• Max open interest at Put side at 11,500 (12 lakh shares).
• Max open interest addition seen at 11,600 Call (+16.6 lakh shares), 11,550 Call (+9 lakh shares).
• Max open interest shedding seen at 11,600 Put (-5.8 lakh shares), 11,700 Put (-3.4 lakh shares).

Nifty Monthly Expiry 30 May

• Max open interest on call side at 12,000 (15.8 lakh shares).
• Max open interest on Put side at 11,000 (23.2 lakh shares).

Stocks In F&O Ban

• Jet Airways

Brokerage Radar

On Vedanta

CLSA

• Maintained ‘Sell’; cut target price to Rs 135 from Rs 170.
• Q4 Ebitda ahead due to lower aluminium and zinc cost and higher zinc volume.
• Slow volume ramp-up in zinc and oil and increased costs in HZL are concerns.
• Zinc and oil businesses benefiting from recent uptick in commodity prices.
• Concerns on related party transaction and future use of cash to overshadow earnings outlook.

JPMorgan

• Maintained ‘Overweight’ with target price of Rs 300.
• Positive Q4 brings a tough FY19 to an end.
• For FY20, see more positive as key projects coming through.
• Zinc India and Zinc International—volume growth to pick up from here.

Morgan Stanley

• Maintained ‘Equal-weight’ with target price of Rs 176.
• Core EBITDA inline with estimates.
• Management focus remains on growth projects.
• Improved domestic coal availability and bauxite lend improved cost visibility.

JPMorgan on Embassy Office Parks

• Maintained ‘Overweight’ with target price of Rs 360.
• Steady low-risk compounding; Yield+growth offers attractive IRR setup.
• REIT structure can deliver outperformance versus index.
• Expect dividend per share growth of 6 percent over FY20-23.

CLSA on Kansai Nerolac

• Industrial under severe pressure; outlook subdued at least for next two quarters.
• Decorative on good footing; mgmt. confident of double-digit volume growth in FY20.
• Volatility in crude and exchange rates remain a concern.

CLSA on Indian Media

• Zee network gains viewership share in April under new TRAI regime.
• Sun TV share has declined driven by lower share in Tamil.
• Pay channel viewership in rural markets is rising which could drive subscription revenues.
• Near-term ad revenues for broadcasters will likely be impacted, in longer run the new subscription regime will be beneficial.

CLSA on India Oil & Gas

• If current government comes back to power, expect it to take forward some unfinished policies.
• Expect policies to slash LPG subsidies further.
• Big reforms – gas pricing hub, GST and unified tariff – possible in gas sector.
• More PSU M&As, stake sales and excise duty hikes are possible overhangs.
• ONGC, Oil India and Gail are likely gainers from further reform.