All You Need To Know Going Into Trade On Nov. 15
Asian stocks opened mixed after U.S. equities declined and Treasuries stabilised following gains amid a renewed bout of risk aversion in American markets.
Japan equities fell, while Australia’s market was little changed. Futures were higher in China and Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 10,613 as of 7:35 a.m.
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Here’s a quick look at all that could influence equities today.
U.S Market Check
- U.S. stocks fell for a fifth straight day as investors remained on edge over trade, political turmoil and economic growth.
- The yield on 10-year Treasuries held at 3.12 percent.
Europe Market Check
- European stocks fell amid concerns over economic growth and an ongoing standoff between the European Union and Italy.
- Japan’s Topix index fell 0.6 percent.
- FTSE A50 Index futures rose 0.5 percent.
- Australia’s S&P/ASX 200 Index rose 0.1 percent.
- Futures on Hong Kong’s Hang Seng Index advanced 0.9 percent.
- S&P 500 futures dipped.
- West Texas Intermediate crude fell 0.5 percent to $55.96 a barrel.
- Brent crude traded a little changed at $66.18 per barrel.
- Gold traded at $1,210.55 an ounce.
- Natural gas futures surged 16 percent.
London Metal Exchange:
- Alumimium snapped a three-day decline, up 0.4 percent.
- Copper traded higher for the second day, up 0.3 percent.
- Zinc snapped a two-day decline, up 0.5 percent.
- Nickel traded lower for the fifth day, down 0.3 percent.
- Lead snapped a three-day decline, up 0.2 percent.
- Tin traded higher for the third day, up 0.2 percent.
Stocks To Watch
- Apollo Hospitals Enterprise board approved to demerge front-end retail pharmacy segment into a standalone pharmacy segment called Apollo Pharmacies. The company will be wholly owned subsidiary of Apollo Medicals Pvt, which will be held by Apollo Hospital Enterprise, Jhelum Investment Fund 1, Hemendra Kothari and ENAM Securities. The slump sale consideration will be worth Rs 527.8 crore and the transfer will be effective from Apr. 01.
- NHPC Board approved share buy-back of 21.4 crore shares, representing 2.09 percent of equity capital at Rs 28 per share aggregating to Rs 600 crore. The record date set for buy-back is Nov. 30.
- Alkem Laboratories received no observations on Form 483, as the U.S. FDA completed the inspection at the company’s Bioequivalence Facility at Taloja, Maharashtra.
- BQ Exclusive: ING Group seeks to to sell its entire 3.7 percent stake in Kotak Mahindra Bank via block deals, according to two people familiar with the matter. Their stake is valued at $1 billion at current market price. When contacted, the Dutch group said it's not its policy to comment on market rumours or speculation.
- Sundaram Finance and Netherlands based Ageas Insurance along other with Indian shareholders signed an agreement, where by the Dutch company will acquire 40 percent stake in Royal Sundaram General Insurance for Rs 1,520 crore, Sundaram Finance proposes to divest 25.9 percent of its stake in insurance arm bringing down its holding from 75.9 percent to 50 percent for Rs 984.2 crore.
- Oil India said it was considering a share buy-back and issuance of debt securities on Nov. 19.
- IOL Chemicals & Pharma board approved enhancing of Metformin Unit for Rs 2.7 crore and completion of Clopidogrel Bisulphate and Fenofibrate for Rs 19.26 crore.
- Vodafone Idea’s board is said to be evaluating to raise Rs 25,000 crore via various options. Vodafone group would contribute Rs 11,000 crore and Aditya Birla Group would contribute Rs 7,250 crore in the capital raising scheme.
- Gujarat Fluorochemicals board approved a proposal to demerge chemical business of the company. The consideration for the resulting company will be 1:1.
- Kabra Extrusiontechnik announced the extension of its partnership with its German counterpart Battenfeld Cincinnati beyond 2026.
- TATA Power’s joint venture ‘Resurgent Power’ signed a share purchase agreement to acquire 75 percent stake and 27 crore preference shares in Prayagraj Power Generation for Rs 6,000 crore. In the Joint Venture, Tata Power arm owns 26 percent stake while the balance stake is held by ICICI Bank and other global investors.
- Yes Bank’s Non-Executive (Independent) Chairman Ashok Chawla resigned from the Bank’s board with immediate effect, mentioning that during the current transition period that the bank needed a chairman who could give more time and dedication. Uttam Prakash Agarwal has been appointed as an additional director and designated as chairman of audit committee. The bank also acquired 12.99 percent stake in Valecha Engineering and 30 percent stake in Valecha Investments, pursuant to invocation of pledge on the said equity shares subsequent to default by promoter group companies in credit facility provided by the bank.
- Dhanuka Agritech approved a buy-back of 13.12 percent of equity share capital at Rs 550 per share, aggregating to Rs 82.5 crore.
- Grasim and Hindalco in focus as Vodafone Idea looks to raise Rs 7,250 crore from Aditya Birla Group. Grasim and Hindalco own 11.55 percent and 2.61 percent stake in Vodafone Idea.
- India October trade balance, estimate $16 billion deficit, prior $14 billion deficit
- India October exports YoY, prior -2.2 percent.
- India October imports YoY, prior 10.5 percent.
Earnings To Watch
- SREI Infrastructure Finance
- Capri Global Capital
Earnings Reactions To Watch
Grasim (Q2, YoY)
- Revenue up 23.8 percent at Rs 16,795 crore.
- Net loss at Rs 1,446 crore versus net profit at Rs 524.9 crore.
- Ebitda up 1 percent at Rs 2,552.9 crore.
- Margin at 15.2 percent versus 18.6 percent.
- Exceptional loss of Rs 2,276.8 crore in current quarter.
Vodafone Idea (Q2, Consolidated)
- Revenue at Rs 7,664 crore.
- Net loss at Rs 4,974 crore.
- Ebitda at Rs 461 crore.
- Margin at 6 percent.
- Average revenue per user at Rs 88.
(Vodafone Idea reported its first quarterly earnings as merged entity and hence the results are not comparable)
Also read: Vodafone Idea Plans To Raise Rs 25,000 Crore
Ujjivan Financial Services (Q2, YoY)
- Net interest income up 33.8 percent at Rs 261.2 crore.
- Net Profit at Rs 44.3 crore versus net loss at Rs 12 crore.
- NIM at 12 percent versus 10.6 percent.
- Loan book up 24.7 percent at Rs 8,317 crore.
- GNPA at 1.9 percent versus 2.7 percent (QoQ).
- NNPA at 0.3 percent versus 0.3 percent (QoQ).
Thermax (Q2, YoY)
- Revenue up 38.2 percent at Rs 1,427.6 crore.
- Net profit up 30.2 percent at Rs 74.5 crore.
- Ebitda up 15.7 percent at Rs 110 crore.
- Margin at 7.7 percent versus 9.2 percent.
Future Retail (Q2, YoY)
- Revenue up 9.4 percent at Rs 4,928.5 crore.
- Net profit up 14.3 percent at Rs 175.1 crore.
- Ebitda up 17.2 percent at Rs 247.6 crore.
- Margin at 5 percent versus 4.7 percent.
Apollo Hospitals (Q2, YoY)
- Revenue up 15.3 percent at Rs 2,090.1 crore.
- Net profit up 11.4 percent at Rs 79 crore.
- Ebitda up 16.5 percent at Rs 257.8 crore.
- Margin at 12.3 percent versus 12.2 percent.
Indian Hotels (Q2, YoY)
- Revenue up 13.2 percent at Rs 964.5 crore.
- Net Loss at Rs 5.2 crore versus net loss at Rs 57.7 crore.
- Ebitda up 81.7 percent at Rs 99.2 crore.
- Margin at 10.3 percent versus 6.4 percent.
- Exceptional loss of Rs 45.3 crore in current quarter.
Infibeam Avenues (Q2, YoY)
- Revenue up 47 percent at Rs 134.8 crore.
- Ebitda gain at Rs 9.7 crore versus loss of Rs 3 crore.
- Ebitda Margin at 7.2 percent.
- Loss of Rs 4.5 crore versus loss of Rs 13.8 crore.
- Payment gateway charges surge 45 percent to Rs 107 crore.
United Breweries (Q2, Standalone YoY)
- Revenue up 19.2 percent at Rs 1,526 crore.
- Net profit up 74.6 percent at Rs 164 crore.
- Ebitda up 43.4 percent at Rs 318 crore.
- Operating margin at 20.8 percent versus 17.3 percent.
- Volume growth at 17 percent for the quarter.
- Greaves Cotton promoter Karun Carpets acquired 2.1 lakh shares between Nov. 9-12.
- IDFC Bank promoter IDFC Financial Holding acquired 6 lakh shares on Nov. 14.
(As reported on Nov. 14)
- Linde India, Vardhman Polytex and BC Power Controls price band revised to 10 percent.
Additions in ASM Framework:
- 8K Miles Software Services
- A2Z Infra Engineering
- Adlabs Entertainment
- Ashapura Intimates Fashion
- Celestial Biolabs
- Excel Industries
- Gayatri Highways
- Godawari Power And Ispat
- Gravita India
- GTN Industries
- Intrasoft Technologies
- KSK Energy Ventures
- Lasa Supergenerics
- Optiemus Infracom
- Rolta India
- Indiabulls Integrated Services
- Sanco Industries
- S.E. Power
- SKIL Infrastructure
- SORIL Infra
- Tree House Education & Accessories
- Visesh Infotecnics
- GPT Infraprojects
- Assam Company
- Tijaria Polypipes
- Empee Distilleries
Money Market Update
- Rupee on Wednesday closed at 72.31/$ versus 72.67/$ on Tuesday.
- Nifty November futures closed trading at 10,605, premium of 29 points.
- Nifty November open interest down 1.3 percent; Nifty Bank November open interest up 6 percent.
- Max open interest for November series at 11,000 call option (open interest at 34.4 lakh shares)
- Max open interest for November series at 10,200 put option (open interest at 31.9 lakh shares)
Stocks In F&O Ban
- Adani Power
- Jet Airways
Put Call Ratio
- Nifty PCR at 1.57 from 1.60
- Nifty Bank PCR at 1.20 from 1.14
- Maintained ‘Outperform’ with a price target of Rs 1,050.
- September quarter’s Ebitda was below due to higher-than-expected model launch costs
- Management says industry tractor growth more likely to be closer to 12 percent.
- New utility vehicle models key for M&M market share reversal.
- Maintained ‘Buy’ with a price target of Rs 1,020.
- Soft but in line September quarter results; Marazzo seeing good initial response.
- Slight moderation in tractor growth outlook but overall commentary sanguine.
- Decent earnings growth outlook and an attractive valuation.
On Glenmark Pharma
- Maintained ‘Buy’; cut price target to Rs 790 from Rs 840.
- September quarter results were above estimates; U.S. sales higher led by recent launches.
- Watch out for balance-sheet improvement in the second half of the current financial year.
- Cut FY20-21 EPS estimates to factor lower India sales and higher R&D spend.
- Maintained ‘Buy’ with a price target of Rs 825.
- September quarter was a steady quarter, with some pick-up in the U.S. sales.
- Expect strong second half, driven by higher seasonal sales in emerging markets, pick-up in API sales and increased contribution from new launches in the U.S..
BofAML on Grasim
- Maintained ‘Buy’; cut price target to Rs 1,248 from Rs 1,405.
- September quarter’s Ebitda was in line; Standalone VSF and chemicals business strong.
- Higher input costs drag VSF profit; caustic realisation low.
- VSF business capacity expansion on track; to be commissioned by March 2021.
BofAML on Vodafone Idea
- Maintained ‘Underperform’ with a price target of Rs 40
- September quarter Review: Revenue miss; very weak Ebitda.
- Vodafone Idea vulnerable to market share loss.
- Expect more clarity on integration of merged entity and synergy benefits.
Deutsche Bank Research on NHPC
- Maintained ‘Buy’ with a price target of Rs 34.
- September quarter Review: Beat on better cost controls.
- Buyback much smaller, but will be ROE accretive.
- Regulations remain an overhang.
CLSA on Apollo Hospital
- Maintained ‘Buy’ with a price target of Rs 1,500.
- In line revenues, Ebitda and net profit ahead of estimates.
- Existing hospital growth tepid, but margins strong.
- Apollo announces segregation of front-end SAP business.
CLSA on Max Financial
- Maintained ‘Buy’; cut price target to Rs 550 from Rs 700.
- Healthy premium and new business growth; investments may drag near-term margins.
- Extension in tie-up with Axis and smooth management transition is key.
- EV cut marginally for higher dividend and non-operating variances.
UBS on Motherson Sumi
- Maintained ‘Buy’; cut price target to Rs 230 from Rs 253.
- Disappointing quarter; profitability below expectations at Samvardhana Motherson Peguform and India.
- Management confident on growth, but near term uncertainty has increased.
- Cut price target on lower valuation multiple given weaker outlook for EU and China.
Deutsche Bank Research on GAIL
- Maintained ‘Hold’ with a price target of Rs 395.
- Near-term risk to gas trading profitability.
- Sharp increase in the U.S. gas price to dent GAIL's gas trading segment.
- Believe stock factors in upside from gas volume growth.
Deutsche Bank Research on Thermax
- Maintained ‘Buy’ with a price target of Rs 1,320.
- Strong execution in September quarter.
- Industrials growth trend confirmed; strong energy and environment.
- Stock valuation looks attractive on correction post weak results in last two quarters.