All You Need To Know Going Into Trade On November 2
Traffic passes in front of the Chhatrapati Shivaji Terminus (CST) train station in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On November 2

Global equities have posted back to back months of losses amid concerns that growth will be hampered further by lockdown measures in Europe.

Asian markets have opened mixed this morning. Benchmark indices in Japan are seeing gains while those in Australia are fluctuating.

Today marks the start of a very important week for global equities, with the U.S. Presidential Elections, as well as the Federal Reserve Policy meeting.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.3% to 11,678 as of 6:50 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.

Let’s take a look at the factors that may influence equities in today’s session:

  • Futures on the Dow Jones are trading 140 points lower currently. The index posted losses of 0.6% on Friday.
  • Democratic nominee Joe Biden continues to lead President Donald Trump in the polls. Virus cases in the U.S. showed signs of slowing on Sunday.
  • The pound slipped as restrictions in the U.K., aimed at controlling the virus overshadowed progress in Brexit.
  • "We see the potential for a sharp rise in volatility around these events and all in the context of a still deteriorating Covid-19 situation across much of U.S., Europe and elsewhere," Simon Ballard, chief economist at First Abu Dhabi Bank told Bloomberg.
  • Yield on the 10-year treasuries fell to 0.85%.
  • West Texas Intermediate crude fell 5.3% to $33.89 per barrel.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On November 2

Earnings Fineprint: Reliance Industries Q2FY21

  • Revenue down 24% to Rs 1,16,195 crore
  • Net profit down 7% to Rs 10,602 crore
  • Ebitda down 16.2% to Rs 18,945 crore
  • Ebitda margin at 16% from 14.4%
  • Gross Refining Margin at $5.7 per barrel from $9.4 per barrel
  • Petrochemical business revenue down 23% to Rs 29,665 crore
  • Refining business revenue down 36% to Rs 62,154 crore
  • Oil & Gas revenue down 55% to Rs 355 crore
  • Retail revenue down 5% to Rs 39,199 crore
  • Digital services revenue up 36% to Rs 22,679 crore
  • All numbers are consolidated and compared on a year-on-year basis

Reliance Jio Q2FY21

  • Revenue up 5.5% to Rs 17,481 crore
  • Net profit up 13.2% to Rs 2,844 crore
  • Ebitda up 10% to Rs 7,701 crore
  • Ebitda margin at 43.6% from 42.3%
  • ARPU at Rs 145 from Rs 140.3
  • All numbers are standalone and compared on a quarter-on-quarter basis

Also read: RIL Q2 Results: Profit, Revenue Fall Despite Telecom, Retail Cushion

Earnings Fineprint: ICICI Bank Q2FY21

  • Net Interest Income up 16% to Rs 9,366 crore
  • Net profit at Rs 4,251 crore from Rs 655 crore
  • Gross NPA at 5.17% from 5.46% last quarter
  • Net NPA at 1% from 1.23% last quarter
  • Provisions down 61% from the last quarter to Rs 2,995.3 crore
  • Highest ever quarterly profit for the bank
  • On classifying certain accounts as NPAs, which the lender did not, in accordance with the Supreme Court guidelines, the Gross and Net NPA would have been 5.36% and 1.12% respectively
  • Provisions worth Rs 497 crore towards accounts which may come for restructuring
  • Total Covid-19 provisions worth Rs 8,772 crore
  • Provisions Coverage Ratio at 80%
  • Advances up 6% to Rs 6.52 lakh crore
  • Outstanding deposits up 20% to Rs 8.33 lakh crore
  • Board also sought to reappoint Sandeep Bakshi as MD & CEO till October 2023.
  • Net Profit and NII compared on a year-on-year basis

Earnings Fineprint: IndusInd Bank Q2FY21

  • Net Interest Income up 12.7% to Rs 3,278 crore
  • Net profit down 53% to Rs 663 crore
  • Gross NPA at 2.21% from 2.5% last quarter
  • Net NPA at 0.52% from 0.86% last quarter
  • Provisions down 13% from the previous quarter to Rs 1,964 crore. However, they are nearly triple from the same period last year
  • On classification of certain accounts as NPAs, which the bank did not do so, in accordance with the Supreme Court guidelines, the Gross and Net NPA would have been 2.32% and 0.61% respectively
  • Additional Covid-19 provisions worth Rs 952 crore this quarter
  • Total Covid-19 provisions now at Rs 2,155 crore
  • Total amount of loans which have taken asset quality benefits under the RBI's term loan moratorium at Rs 4,419.8 crore
  • Collection Efficiency currently at 94.7%
  • Advances up 2% to Rs 2.01 lakh crore
  • Deposits up 10% to Rs 2.28 lakh crore
  • Net Profit and NII compared on a year-on-year basis

Earnings Fineprint: UPL Q2FY21

  • Revenue up 14% to Rs 8,939 crore
  • Net profit up 2.8 times to Rs 463 crore
  • Ebitda up 17.5% to Rs 1,808 crore
  • Ebitda margin at 20.2% from 19.7%
  • Latin America Business revenue up 12% to Rs 4,233 crore
  • Europe business revenue up 6% to Rs 1,022 crore
  • North America business revenue up 9% to Rs 773 crore
  • India business revenue up 18% to Rs 1,409 crore
  • Rest of the World revenue up 27% to Rs 1,503 crore
  • Maintains full year guidance of 6-8% revenue growth in revenue and 10-12% growth in Ebitda respectively
  • Net debt at Rs 23,841 crore, higher by Rs 1,781 crore as compared to March 31, 2020 mainly due to an increase in working capital of Rs 2,915 crore, in-line with seasonality of the business.
  • Committed to reducing net debt in H2FY21
  • All numbers are consolidated and compared on a year-on-year basis

Stocks To Watch

  • Axis Bank: Has revised its stake acquisition agreement with Max Financial. Post advise from the Reserve Bank of India, Axis Bank and its subsidiaries - Axis Capital and Axis Securities have agreed to enter into revised agreements with Max Financial to acquire up to 19% of the total equity. Axis Bank, under the revised agreement will acquire up to 9% stake while Axis Capital and Axis Securities will together acquire up to 3% of the share capital of Max Life. In addition, Axis entities will have the right to acquire and additional stake of up to 7% of the equity share capital of Max Life in one or more tranches.
  • Coal India: Production for the month of October up 18.7% to 46.8 MT. Offtake up 25% from last year to 50.5 MT.
  • Future Retail: Has informed the exchanges that Amazon has asked for Rs 1,431 crore plus interest as damages, being the amount invested by it into Future Coupons.
  • Sun Pharma: Announced five-year sustained efficacy and safety results for Ilumya in patients with moderate-to-severe plaque psoriasis.
  • FDC: Launched stronger version of its Favipiravir brands used to treat mild to moderate cases of Covid-19.
  • Escorts: CRISIL has reaffirmed its rating on the company's long-term bank facilities at CRISIL AA-, while the outlook is revised to positive from stable. The rating on short-term facilities and commercial paper program has been reaffirmed at CRISIL A1+.
  • Aarti Industries: CRISIL upgraded long-term ratings of the company to CRISIL AA from CRISIL AA-. The outlook has been revised to stable from positive.
  • Embassy Office Park REIT: Included in the S&P Global Property Index and S&P Global REIT index.
  • V-Mart Retail: Opened seven new stores in Bihar, Rajasthan, Assam and Uttar Pradesh, while it has closed two stores in West Bengal.
  • United Breweries: Clarified that it has not received any communication from the Official Liquidator, Karnataka, regarding the winding up of United Breweries (Holdings) - one of the promoter sharehoders. Mcdowell Holdings had granted a loan to UBHL and had also provided third party security through pledge of shares of United Breweries held by it as investments, in respect of loans availed by UBHL from Yes Bank. Over a period of time, the total outstanding dues from UBHL to Mcdowell Holdings reached Rs 329.52 crore. Mcdowell has filed a claim of a similar amount as a creditor of UBHL with the official liquidator.
  • Atul Auto: Has increased its stake in Khushbu Auto Finance from 30% to 100% for a cash consideration of Rs 44.57 crore.
  • Wheels India: Has started production at its newly commissioned cast aluminium wheel plant at Thervoy Kandigai in Tamil Nadu..
  • Zee Media: Board gave in-principle approval for raising Rs 300 crore via NCDs and issue of 15.5 crore compulsorily convertible preference shares worth Rs 90 crore to Miloeux Media & Entertainment.
  • Cochin Shipyard: Madhu Nair’s tenure as chairman and managing director of the company has been extended till January 2026.
  • Grasim Industries: Entered into a definitive agreement with Lubrizon Advanced Material to manufacture and supply Chlorinated Polyvinil Chloride (CPVC) resin in India. Initial production for the same is expected in April 2022. The company will be constructing a 1 lakh MT plant in Gujarat. Lubrizol will invest in the project in two phases to set up the CPVC plant at Grasim's Vilayat unit. Grasim will provide land, materials and utilities and will receive commercial charges over and above costs, in lieu of managing operations.
  • Siti Networks: Defaulted on principal worth Rs 64 crore and interest worth Rs 13 crore due to HDFC, IDBI Bank, SCB, RBL Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank.
  • PNB Housing Finance: The National Housing Bank has imposed a penalty of Rs 1.9 crore, plus 18% GST for non-compliance with certain regulations. The company will proceed to pay the penalty under protest with an option to resort to appropriate measures.
  • Punjab National Bank: Overnight MCLR cut by 15 basis points to 6.65% while one-month MCLR cut by 10 basis points to 6.7%.
  • Eicher Motors: Closes the business transfer agreement between Volvo Group India and VECV, post the receipt of all regulatory approvals.
  • Reliance Capital: Bondholders are seeking expression of interest by December 1 from bidders that may seek to purchase stakes in certain subsidiaries and investments.
  • Motilal Oswal Financial Services: Motilal Oswal has been re-appointed as chief executive officer and managing director till January 2026.
  • Nifty Earnings Today: HDFC, NTPC
  • Non-Nifty Earnings Today: Zee Entertainment, Bandhan Bank, Cadila Healthcare, Embassy Office Parks REIT, Escorts, KEI Industries, Narayana Hrudayalaya, Punjab National Bank, Ramco Cements, Whirlpool of India, Wockhardt, Wonderla Holidays.

Earnings Reported After Market Hours

Deepak Nitrite Q2FY21

  • Revenue down 1.6% to Rs 987.3 crore
  • Net profit up 13.2% to Rs 170.2 crore
  • Ebitda up 10.2% to Rs 275.9 crore
  • Ebitda margin at 27.9% from 25%
  • Basic Chemicals revenue down 30% to Rs 165.8 crore
  • Fine and Specialty Chemicals revenue up 52% to Rs 210 crore
  • Performance Products revenue down 72% to Rs 72.9 crore
  • Phenolics revenue up 26% to Rs 545.8 crore
  • Company continues to broaden its range of products, as well as invest into value addition
  • All numbers are consolidated and compared on a year-on-year basis

DLF Q2FY21

  • Revenue down 6.2% to Rs 1,609.8 crore
  • Net profit down 47.9% to Rs 232.1 crore
  • Ebitda up 32.2% to Rs 463.1 crore
  • Ebitda margin at 28.8% from 20.4%
  • Exceptional loss of Rs 96 crore in the current quarter and exceptional gain of Rs 143.6 crore in the base quarter have impacted net profit
  • Lower other expenses aid margin expansion
  • All numbers are consolidated and compared on a year-on-year basis

Just Dial Q2FY21

  • Revenue down 31% to Rs 167.5 crore
  • Net profit down 39% to Rs 47.3 crore
  • Ebitda down 34% to Rs 44.7 crore
  • Ebitda margin at 26.7% from 27.7%
  • Total unique visitors during the quarter down 19% year-on-year to 130.6 million
  • Total active listings up 8.6% year-on-year to 30 million
  • Total ratings and reviews up 11% year-on-year to Rs 111.9 million
  • Active paid campaigns down 15.2% year-on-year to 4,48,600
  • 81% of unique visitors came from mobile
  • All numbers are consolidated and compared on a year-on-year basis

Rain Industries Q3CY20

  • Revenue down 14% to Rs 2,566 crore
  • Net profit up 18% to Rs 118 crore
  • Ebitda up 62% to Rs 527 crore
  • Ebitda margin at 20.5% from 10.9%
  • Carbon segment revenue down 11% to Rs 1,876.8 crore
  • Advanced Material segment revenue down 34% to Rs 587 crore
  • Cement segment revenue up 21% to Rs 286.6 crore
  • Carbon segment revenue declined due to lower volumes and realisations due to lower commoditity prices, sale to non-traditional market and price pressure from asian markets
  • Cement segment performance improved due to better sales realisations
  • All numbers are consolidated and compared on a year-on-year basis

IFB Industries Q2FY21

  • Revenue down 28% to Rs 715 crore
  • Net profit of Rs 32 crore from Net loss of Rs 10.9 crore
  • Ebitda up 66% to Rs 82.1 crore
  • Ebitda margin at 11.5% from 5%
  • Home Appliances revenue down 41% to Rs 588.6 crore
  • Engineering revenue down 19% to Rs 119.6 crore
  • Enters into an agreement with Bagga Group and others to acquire the remaining 48.88% stake in Trishan Metals for a total consideratio of Rs 14.3 crore
  • All numbers are standalone and compared on a year-on-year basis

Sheela Foam Q2FY21

  • Revenue up 22% to Rs 607.8 crore
  • Net profit up 19% to Rs 69.8 crore
  • Ebitda up 51% to Rs 106.4 crore
  • Ebitda margin at 17.5% from 14.2%
  • India business revenue up 3% to Rs 424 crore
  • Overseas business revenue more than doubles to Rs 183.8 crore
  • Average price per kg of TDI was Rs 140 in Q2 as compared to Rs 124 in Q1 and Rs 133 last year
  • Present price of TDI is Rs 230 per kg
  • Price of Polyol has also seen an increase. Current price at Rs 230 per kg as compared to an average price of Rs 119 per kg in Q2
  • All numbers are consolidated and compared on a year-on-year basis

DCB Bank Q2FY21

  • Net Interest Income up 7% to Rs 333.9 crore
  • Net profit down 10% to Rs 82.3 crore
  • Gross NPA at 2.27% from 2.44% last quarter
  • Net NPA at 0.83% from 0.99% last quarter
  • Provisions up 35% from the previous quarter to Rs 113.1 crore. They have nearly tripled year-on-year
  • Covid-19 provisions this quarter at Rs 48 crore
  • Overall Covid-19 provisions at Rs 143 crore
  • Had the bank classified certain accounts as NPAs, which it did not, in compliance with the Supreme Court guidelines, the Gross and Net NPA would have been 2.39% and 0.92% respectively
  • Net profit and Net Interest Income compared on a year-on-year basis

Relaxo Footwear Q2FY21

  • Revenue down 7% to Rs 576 crore
  • Net profit up 6% to Rs 75 crore
  • Ebitda up 21% to Rs 127 crore
  • Ebitda margin at 22% from 16.8%
  • Revenue impacted in the quarter due to Covid-19 disruptions
  • Saving in raw material costs and special focus on administrative expenses aided margins
  • Higher other income due to lease rent waiver / reduction
  • Cautious about recent rising trend of raw material prices
  • Comfortable liquidity position with zero net debt
  • All numbers are standalone and compared on a year-on-year basis

IDFC First Bank Q2FY21

  • Net Interest Income up 22% to Rs 1,659.7 crore
  • Net profit of Rs 101.4 crore from net loss of Rs 680.5 crore
  • Gross NPA of 1.62% from 1.99% quarter
  • Net NPA of 0.43% from 0.51% last quarter
  • Provisions down 72% from the previous quarter to Rs 215.8 crore
  • Had the bank classified certain accounts as NPA, which it did not, in accordance with the Supreme Court guidelines, the Gross and Net NPA would have been 1.87% and 0.6% respectively
  • Additional provisions worth Rs 1,400 crore for Covid-19
  • NIMs at 4.57% from 3.43% last year
  • Capital Adequacy Ratio at 14.7% with tier-1 CAR at 14.3%
  • Liquidity Coverage Ratio at 138%
  • Reversed provisions worth Rs 811 crore out of the existing provision of Rs 1,622 crore on exposure to a large telecom player, based on improved prospects of the company and used to create provisions for additional Covid-19 contingency
  • Net profit and NII compared on a year-on-year basis

October Auto Sales

  • Maruti Suzuki: Overall sales up 18.9% to 1,82,448 units. Exports up 4.7% to 9,586 units.
  • Escorts: Overall sales up 2.3% to 13,664 units. Exports up 51.7% to 484 units.
  • Mahindra & Mahindra: Overall PV sales up 1% to 18,622 units. Exports down 25% to 2,021 units. Farm equipment sale up 2% to 46,558 units. Farm equipment exports up 23% to 970 units.
  • Eicher Motors: VECV sales up 11.9% to 4,200 units. Royal Enfield sales down 7% to 66,891 units. Exports down 9% to 4,033 units.
  • Hero MotoCorp: Overall sales up 35% to 8,06,848 units. Highest ever sales in any single month.

Brokerage Radar

JPMorgan On IndusInd Bank

  • Upgrade to neutral from underweight
  • Price target raised to Rs 650 from Rs 475
  • Collection efficiency in vehicle finance improves
  • Provisioning in H2FY21 to remain elevated to cover up for added risks in the portfolio
  • Risks in the near-term emanate from exposure to telecom (1.7%) and real estate (8%)
  • Revise FY21/22 earnings estimates by 66% and 4% respectively
  • Capital raise, improvement in deposits and collection efficiency has removed tail risks

Macquarie On IndusInd Bank

  • Outperform rating maintained
  • Price target raised to Rs 749 from Rs 618
  • Strong collection efficiency and good buffers
  • Granualarisation of deposit base is encouraging
  • Well capitalised and strong operating profit to provide for bad assets
  • Several margin levers exist
  • Current valuations are cheap

BofA Securities On Reliance Industries

  • Buy rating maintained
  • Price target of Rs 2,355
  • Strong growth in petchem, retail and Jio
  • Management indicates that business activity is near pre-Covid levels
  • Benefits of lower interest costs will be reflected in the coming quarters
  • Retain buy rating on favourable risk reward

JPMorgan On Reliance Industries

  • Neutral rating maintained
  • Price target of Rs 2,060
  • Retail, petchem strong; refining weak
  • Jio subscriber addition a miss
  • Beyond a near-term stock bounce, earnings outlook weak
  • Needs a large telecom tariff hike
  • Most of the newsflow is behind us
  • Any delay in closing future deal will impact fair value by 5%

Macquarie On Reliance Industries

  • Underperform rating maintained
  • Price target of Rs 1,320
  • Today's price sees flawless execution on multi-pronged growth aspirations
  • Remain cautious as we still see no economic moat
  • Expect 20% growth in EPS but remains 23% below consensus
  • Continue to see meaningful execution challenges and no moat, particularly in retail
  • Trading at blue-sky valuations

Bulk Deals

  • Zee: Sprucegrove International Pooled Fund acquired 82 lakh shares (0.85%) at Rs 184.73 per share.
  • Majesco: Promoter Sundar Radhakrishnan sold 2.5 lakh shares (0.84%) at Rs 920.07 per share.

Trading Tweaks

  • Price Band Revised From 20% To 10%: Angel Broking.
  • IPO Listing: Equitas Small Finance Bank.
  • Move Into ASM Framework: Nitin Spinners.
  • Move Out Of ASM Framework: GVK Power & Infrastructure, Ansal Housing, Vascon Engineers, Premier Explosives, Omax Autos, Kakatiya Cement Sugar & Industries, Affle (India).
  • Move Into Short Term ASM Framework: Tera Software, HBL Power Systems.
  • Move Out Of Short Term ASM Framework: DHFL.

Insider Trades

  • HFCL: Promoter MN Ventures acquired 10 lakh shares on October 30.

(As Reported On October 30)

F&O Cues

  • Nifty November futures end at 11,640; discount of 2 points from 1 point
  • Nifty November futures add 10% and 9.8 lakh shares in Open Interest
  • Nifty Bank November futures end at 23,940; premium of 39 points from 18 points
  • Nifty Bank November futures add 9% and 1.5 lakh shares in Open Interest
  • Nifty Put-Call Ratio at 1.58

Nifty: November 5 Expiry

  • Maximum Open Interest on Call side at 12,500 strike (23.6 lakh shares)
  • Maximum Open Interest on Put side at 11,600 strike (15.4 lakh shares)
  • Active Options: 11,000 Put (+6.1 lakh shares) and 12,500 Call (+11.3 lakh shares)

Nifty: November 26 Expiry

  • Maximum Open Interest on Call side at 12,000 strike (15.7 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (21.2 lakh shares)
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