All You Need To Know Going Into Trade On November 9
Fishing vessels on the shore in Hastings, U.K. (Photographer: Luke MacGregor/Bloomberg)

All You Need To Know Going Into Trade On November 9

Asian markets have begun the new trading week with gains, in-continuation with last week's risk-on pattern.

Benchmark indices in Japan, Australia and South Korea are trading with gains this morning.

The U.S. Dollar has extended its losses after Democratic nominee Joe Biden was elected as the 46th President of the United States of America on Saturday.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 1.4% to 12,438 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 currently trading 300 points higher. The index closed with modest losses on Friday.
  • Joe Biden, in his victory speech over the weekend, promised swift action against the pandemic and an orderly transfer of power.
  • With elections out of the way, despite President Trump weighing legal challenges and refusing to concede, the focus is back to Covid-19 cases in the U.S., which rose by more than 1.3 lakh for the third straight day.
  • Brexit trade-deal talks between the U.K. and EU continue in London Monday with several tricky sticking points remaining
  • Yield on the 10-year treasuries remained at 0.82%.
  • West Texas Intermediate crude rose 1.9% to $37.83 per barrel while Gold traded at $1,957.2/Oz, up 0.3%.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On November 9

Earnings Fineprint: Cipla Q2FY21

  • Revenue up 14.6% to Rs 5,038.3 crore
  • Net profit up 41.2% to Rs 665.4 crore
  • Ebitda up 29.4% to Rs 1,176.5 crore
  • Ebitda margin at 23% from 21%
  • India business revenue up 17% to Rs 2,090 crore
  • North America business up 10% to Rs 1,049 crore
  • Emerging Markets business up 5% to Rs 474 crore
  • Europe business up 30% to Rs 247 crore
  • API business up 20% to Rs 189 crore
  • All numbers are consolidated and compared on a year-on-year basis

Earnings Fineprint: ITC Q2FY21

  • Revenue up 1% to Rs 11,976 crore
  • Net profit down 20% to Rs 3,232.4 crore
  • Ebitda down 11% to Rs 4,060.6 crore
  • Ebitda margin at 33.9% from 38.4%
  • FMCG revenue up 3.5% to Rs 8,916.2 crore
  • Hotels business revenue down 80% to Rs 82 crore
  • Agri business revenue up 12.8% to Rs 2,985.2 crore
  • Paperboards, paper & packaging revenue down 7% to Rs 1,458.7 crore
  • All numbers are standalone and compared on a year-on-year basis

Earnings Fineprint: Divi's Laboratories Q2FY21

  • Revenue up 21% to Rs 1,749.3 crore
  • Net profit up 45.6% to Rs 515.6 crore
  • Ebitda up 51% to Rs 741.4 crore
  • Ebitda margin at 42.4% from 33.9%
  • Forex loss of Rs 16 crore this quarter as compared to forex gain of Rs 13 crore last year
  • To undertake new capex worth Rs 400 crore to meet new business opportunities in the custom synthesis projects
  • All numbers are consolidated and compared on a year-on-year basis

Stocks To Watch

  • Dilip Buildcon: Emerges as L-1 bidder for development and operation of Siarmal open cast project in Odisha. The mineable reserve to be exploited over a period of 25 years is 1,091 million metric tons and has a contract value of Rs 37,215.6 crore. The company’s arm has also executed a concession agreement with the National Highways Authority of India for a bid cost of Rs 1,140.5 crore for a four-laning project.
  • Biocon: Biocon Biologics has received capital infusion worth Rs 1,125 crore or $150 million from Goldman Sachs. As per terms of the agreement, Goldman Sachs will be issued optionally convertible debentures at a post money equity valuation of $3.94 billion.
  • Lakshmi Vilas Bank: Says due diligence with Clix Capital continues. Both sides are in the process of a workable and mutually acceptable framework. The Bank's board has also approved the issue of equity shares worth up to Rs 500 crore through a rights issue and ICICI Securities has been appointed the merchant banker for the same.
  • Voltas: Board gives in-principle approval for restructuring B2B business. Domestic projects business relating to MEP/HVAC and water projects and contracts, the Mining & Construction equipment business and Textile Machinery division will be transferred to a 100% wholly-owned subsidiary on a slump sale basis as a going concern.
  • Adani Gas: Has announced a strategic collaboration with Italy-based Snam - Europe's leading gas infrastructure company. The two intend to explore several opportunities in the energy space. A non-binding agreement has been signed between the two companies to create a Joint Venture for setting-up a CNG compressors manufacturing facility in India.
  • Vedanta: Overseas arm extends loans to Vedanta Resources and its subsidiaries. The loan extended to the parent company now stands at $956 million and carries an interest rate of 7%. The loan during Q1FY21 stood at $307 million. The auditors had expressed their inability to comment on whether the loan has been recorded at fair value. The management believes that these balances have been recorded at fair value.
  • NTPC: Unit-2 of 800 MW of Lara Super Thermal Power Station Stage-I has been declared commercially operative with effect from November 7.
  • Care Ratings: Aditya Birla Sun Life Mutual Fund reduced stake to 3.03% from 5.07% on November 4.
  • ICICI Prudential Life Insurance: Board allotted NCDs worth Rs 1,200 crore.
  • Canara Bank: Cuts MCLR between 5-15 basis points across various tenors from November 7. One-month MCLR now at 6.8% while one-year MCLR at 7.35%.
  • ONGC: Board approves selling 125 crore equity shares or 49% stake in OMPL to MRPL, a subsidiary of the company. The proposed restructuring will not result in any change in the shareholding of MRPL.
  • Aban Offshore: Gets notice from NCLT Chennai for a hearing on November 10 in respect of an application filed by one of the financial creditors under insolvency proceedings for a default of Rs 190.3 crore.
  • Non-Nifty Earnings Today: ADF Foods, Dalmia Bharat Sugar, Delta Corp, Equitas Small Finance Bank, Honeywell Automation, IndiaMART InterMESH, JK Cement, Liberty Shoes, Parag Milk Foods, Shankara Building Products, VIP Industries, Venky's, Zuari Agro.

Earnings Reported After Market Hours

Vedanta Q2FY21

  • Revenue down 3.8% to Rs 21,107 crore
  • Net profit down 61.8% to Rs 824 crore
  • Ebitda up 47.7% to Rs 6,531 crore
  • Ebitda margin at 30.9% from 20.1%
  • Lower power, employee and other expenses aid margins
  • Bottomline impacted due to deferred tax reversal of Rs 1,891 crore in the base quarter
  • All numbers are consolidated and compared on a year-on-year basis

Ashok Leyland Q2FY21

  • Revenue down 28% to Rs 2,837 crore
  • Net loss of Rs 147 crore from net profit of Rs 39 crore
  • Ebitda down 65% to Rs 79.4 crore
  • Ebitda margin at 2.8% from 5.8%
  • All numbers are standalone and compared on a year-on-year basis

Tata Consumer Products Q2FY21

  • Revenue up 19% to Rs 2,781.3 crore
  • Net profit up 18% to Rs 234.3 crore
  • Ebitda up 27% to Rs 399.6 crore
  • Ebitda margin at 14.4% from 13.4%
  • All numbers are consolidated and compared on a year-on-year basis

United Breweries Q2FY21

  • Revenue down 43% to Rs 900.6 crore
  • Net profit down 97% to Rs 4 crore
  • Ebitda down 79% to Rs 40.4 crore
  • Ebitda margin at 4.5% from 12.2%
  • All numbers are standalone and compared on a year-on-year basis

Astral Poly Technik Q2FY21

  • Revenue up 10.1% to Rs 747.1 crore
  • Net profit up 5.6% to Rs 86.7 crore
  • Ebitda up 20.7% to Rs 143.6 crore
  • Ebitda margin at 19.2% from 17.5%
  • The company had to pay higher taxes in the current quarter
  • Margins improve due to lower raw material costs and other expenses
  • All numbers are consolidated and compared on a year-on-year basis

Balkrishna Industries Q2FY21

  • Revenue up 47.4% to Rs 1,578.8 crore
  • Net profit up 16.7% to Rs 339.5 crore
  • Ebitda doubles to Rs 536.8 crore
  • Ebitda margin at 34% from 25%
  • Higher sales and lower raw material costs aid margins
  • All numbers are standalone and compared on a year-on-year basis

Ujjivan Small Finance Bank

  • Net Interest Income up 21.1% to Rs 470.1 crore
  • Net profit up 3.6% to Rs 96 crore
  • Gross advances up 8% to Rs 13,890 crore
  • Gross NPA at 0.98% from 0.97% last quarter
  • Net NPA at 0.14% from 0.18% last quarter
  • All numbers are standalone and NII, Net profit and advances compared year-on-year

IPCA Laboratories Q2FY21

  • Revenue up 5.2% to Rs 1,351.1 crore
  • Net profit up 38% to Rs 267 crore
  • Ebitda up 31.7% to Rs 350.1 crore
  • Ebitda margin at 25.9% from 20.7%
  • All numbers are consolidated and compared on a year-on-year basis

Glenmark Pharma Q2FY21

  • Revenue up 4.9% to Rs 2,952.4 crore
  • Net profit down 8.4% to Rs 234 crore
  • Ebitda up 22.7% to Rs 552.8 crore
  • Ebitda margin at 18.7% from 16%
  • All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Jefferies on Indian I.T.

  • Top-5 I.T. firms saw strong revenue recovery in Q2
  • Tight control over costs, drove aggregate margins to 5-year high levels
  • Deal pipeline remains strong management suggests demand outlook will remain robust
  • Over FY21-23, expect 9-19% EPS CAGR for stocks in our coverage universe
  • Maintain our constructive stance on the sector
  • Infosys and Tech Mahindra remain our top picks

Jefferies on Divi’s Lab

  • Upgrade to buy from hold; TP revised to Rs 3,772 from Rs 3,159
  • Reported a 7%/18% beat on EBITDA driven by sustained revenues, higher gross contribution
  • Adjust FY21 revenues upwards but further gains from earlier capex round to be gradual
  • Upgrade FY21E/FY22E EPS by 14%/14% with potential for positive surprises
  • Stock remains expensive, but new custom synthesis capex adds to earnings visibility

Investec Securities on Vedanta

  • Maintain buy; TP revised to Rs 147 from Rs 157
  • VED’s Q2 recorded an ~8% beat on EBITDA
  • VED faces a dilemma on parent’s (VRL) debt maturity which could have CG repercussions
  • focus stays on ICDs vs pay-outs
  • ICDs increase and quashed expectations on pay-outs a negative for VED minority
  • Reduce target multiple on lack of comfort on VRL’s debt maturity

Pledged Share Details

  • Sun Pharma: Promoter Shanghvi Finance created pledge of 26.4 lakh shares on November 2.

(As Reported On November 6)

Bulk Deals

  • Mold-Tek Packaging Rights Issue: Mold Tek Technologies acquired 12,041 shares at Rs 473.54 per share, Verdipapirfondet Odin Emerging Markets sold 20,473 shares at Rs 467.39 per share and Kitara India Group sold 15,297 shares at Rs 466.17 per share.

Who’s Meeting Whom

  • Mahindra Lifespace Developers: To meet Carnelian Capital, Banyan Capital and Antique Broking between November 11-18.
  • Can Fin Homes: To meet DSP Mutual Fund, Fidelity International and other investors between November 9-11.

Trading Tweaks

  • AGM: Asian Granito.
  • Record Date For Buyback: Cosmo Films.
  • Price Band Revised From 5% To 10%: Hathway Cable & Datacom.
  • Price Band Revised From 10% To 5%: Acrysil.
  • Move Out Of ASM Framework: Ramco Systems, V2 Retail, Ganesh Housing Corporation , Mercator, A2Z Infra Engineering, Inspirisys Solutions, Talbros Automotive Components.
  • Move Into Short Term ASM Framework: Care Ratings.
  • Move Out Of Short Term ASM Framework: Lakshmi Automatic Loom Works, Jasch Industries.

Insider Trades

  • HFCL: Promoter MN Ventures acquired 10 lakh shares on November 6.

(As Reported On November 6)

Money Market Update

  • The rupee ended at 74.20 against the U.S. Dollar on Friday as compared to Thursday's close of 74.36.
  • It ended as the worst performing currency in Asia for the week.
All You Need To Know Going Into Trade On November 9

F&O Cues

  • Nifty November futures end at 12,262; discount of 4 points from premium of 32 points.
  • Nifty November futures shed 1% and 1 lakh shares in Open Interest.
  • Nifty Bank November futures end at 26,738; discount of 61 points from 6 points
  • Nifty Bank November futures add 3% and 54,000 shares in Open Interest.
  • Nifty Put-Call Ratio at 1.54
  • Enters F&O Ban: JSPL
  • Stocks In F&O Ban: SAIL, JSPL

Nifty: November 12 Expiry

  • Maximum Open Interest on Call side at 12,500 strike (19.3 lakh shares)
  • Maximum Open Interest on Put side at 12,000 strike (30 lakh shares)
  • Active Options: 12,100 Put (+13 lakh shares) and 12,500 Call (+6.2 lakh shares)

Nifty: November 26 Expiry

  • Maximum Open Interest on Call side at 12,500 strike (17 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (24.8 lakh shares)
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