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All You Need To Know Going Into Trade On Oct. 15

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

Men sit on a motorcycle while drinking tea in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
Men sit on a motorcycle while drinking tea in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Asian stocks rose, with the biggest gains in Japan, as investors continued to mull trade negotiations after China said it wanted more talks before signing a deal.

Japan’s shares jumped as they opened after a holiday in a catch-up move to positive U.S.-China trade progress Friday. Australian and Korean shares were little changed. S&P 500 Index futures edged higher. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.19 percent to 11,357 as of 7:15 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 all that could influence equities today.

  • Oil dropped the most in two weeks amid concern that the recent U.S.-China trade talks won’t lead to a deal.
  • U.S. equities declined as investors mulled the implications of the partial trade deal reached last week between the world’s two largest economies.
  • The pound spiked briefly on Tuesday after a U.K. Telegraph report that a Brexit deal appears to be taking shape.

Get your daily fix of global markets here.

Earnings Reaction To Watch

Hindustan Unilever (Q2, YoY)

  • Revenue rose 6.7 percent to Rs 9,852 crore.
  • Net profit rose 21.2 percent to Rs 1,848 crore.
  • Ebitda rose 21 percent to Rs 2,443 crore.
  • Margin stood at 24.8 percent versus 21.9 percent.
  • Volume growth stood at 5 percent.
  • Declared dividend of Rs 11 per share.
Opinion
Q2 Results: HUL Profit Meets Estimates Even As Volume Growth Remains Flat

GTPL Hathway (Q2, YoY)

  • Revenue rose 94.9 percent to Rs 609 crore.
  • Revenue (Ex EPC) rose 41 percent to Rs 447 crore.
  • Net profit rose 97.9 percent to Rs 28.9 crore.
  • Ebitda rose 40.6 percent to Rs 119.8 crore.
  • Margin stood at 19.7 percent versus 27.3 percent.

Delta Corp (Q2, YoY)

  • Revenue flat at Rs 200.8 crore versus Rs 201.1 crore. (Adjusted with GST and Intragrorose Transactions).
  • Net profit rose 22.7 percent to Rs 59 crore.
  • EBITDA rose 3.4 percent to Rs 81.3 crore.
  • Margin stood at 40.5 percent versus 39.1 percent.

Nifty Earnings To Watch

  • Wipro

Other Earnings To Watch

  • ACC
  • Karnataka Bank
  • MCX, TV18 Broadcast
  • SBI Life Insurance
  • Network18 Media & Investments
  • Reliance Industrial Infrastructure
  • Apollo Tricoat Tubes
  • Alicon Castalloy
  • Z.F.Steering Gear
  • Paisalo Digital

Indian ADRs

All You Need To Know Going Into Trade On Oct. 15

Stocks To Watch

  • HDFC has reduced Retail Prime Lending Rate by 10 basis points. Lending rate on adjustable rate home loans reduced by 10 basis points. New rates with effect from Oct. 15. New Rates will now range between 8.25 percent to 8.65 percent.
  • Zee Entertainment Enterprises: VTB Capital acquired the right to direct disposal of 10.71 percent stake in the company held by promoter Essel Media Ventures, if required. VTB Capital also stated that it would willingly cease all enforcement action and release encumbrances upon repayment of outstanding amounts under the loan facility.
  • Indiabulls Housing Finance: Board intends to go for a buyback of shares and will take final decision in this regard after receiving concurrence from market regulator Securities and Exchange Board of India.
  • HDIL: Enforcement Directorate seized and identified movable and immovable assets worth more than Rs 38,30 crore owned by the company, its Directors / Promoters, PMC Bank officials and others related entities in the PMC Bank fraud case.
  • Indian Oil Corporation: ExxonMobil announced its LNG collaborations in India. The company has allied with Indian Oil to explore growth opportunities in the country. Collaboration to explore ways to accelerate India’s access to cost-effective natural gas.
  • HPCL is facing rising freight rates on term and spot purchases due to sanctions on China’s COSCO Shipping, Bloomberg reported quoting an unidentified HPCL official. The Freight hikes have mainly impacted company’s purchases through VLCC and Suezmax carriers. The rates have almost doubled since the sanctions were announced, the official said that if freight rates keep increasing and product cracks doesn’t improve, GRMs would get impacted.
  • JSW Energy’s resolution plan for Ind-Barath Utka which owns 700 MW under-construction thermal power plant in Odisha gets approved by committee of creditors. Transaction is subject to necessary regulatory approvals including those from National Company Law Tribunal.
  • Yes Bank stated that they have sold 5.1 crore shares or 6.77 percent equity of Fortis Healthcare in various tranches from June 30 till Oct. 14.
  • Adani Transmission signed agreement and completed the acquisition of SPV WRSS XXI (A) Transco, incorporated by REC Transmission Projects Company. Adani Transmission had won this project through a Tariff Based Competitive Bidding process, and received the Letter of Intent in July 2019 and the company will build own, operate and maintain the transmission project in the state of Gujarat for a period of 35 years.
  • Lemon Tree Hotels has launched 142 room Hotel in Kolkata.
  • ONGC: Exxon Mobil and the company will identify areas for deep water exploration in east and west coast of India, Bloomberg reported quoting Oil Minister Dharmendra Pradhan. Oil and Natural Gas Corporation and Exxon Mobil will also identify areas in open acreage for submission of expression of interest, and joint bidding for future auction rounds, the report added.
  • Technocraft Industries has started production of Melange Yarn at Murbad and started trial production of cotton yarn at its new unit at Amaravati.
  • Canara Bank said that’s its two employee unions will be on strike on Oct. 22.
  • Andhra Bank decreased its MCLR and Repo Linked Rates across various tenors. One-month Marginal Cost of Funds based Lending Rate at 7.85 percent and one-year MCLR at 8.3 percent with effect from Oct. 15. The Repo Linked Rate would be reduced from 8.35 percent to 8.1 percent with effect from Nov. 1.
  • Syndicate Bank: The Reserve Bank of India imposed penalty of Rs 75 lakh on account of delay in fraud reporting and upfront disbursal of housing loans in cases of incomplete/ under-construction/green field housing projects.
  • Union Bank of India has set issue price at Rs 70.9 per share for 166 crore shares aggregating to Rs 11,768 crore, which will be issued to the government. Post the capital infusion program, government’s stake will rise from 74.27 percent to 86.75 percent.
  • Lakshmi Vilas Bank: RBI imposed penalty of Rs 1 crore due to violation of RBI Income Recognition and Asset Classification norms.

New Listing

  • Karnataka-based Vishwaraj Sugar Industries to make its stock market debut after its Rs 60-crore IPO was subscribed 1.12 times, according to NSE data.

Data Watch

  • India to report September trade balance data.

Brokerage Radar

JPMorgan on DLF

  • Ultima project sellout raises likelihood of guidance beat in 2019-20.
  • Free cash flow has started to turn and should improve over next two quarters.
  • Corporate structure is cleaner now.
  • Stock underperforming despite lower capital rates and improving sales.

CLSA on Indiabulls Housing

  • Maintained ‘Buy’; cut price target to Rs 350 from Rs 670.
  • Liquid balance sheet lends confidence.
  • Next 15 days key with repayment of masala bonds, board meet on buyback and court hearings.
  • Low group leverage; low valuation comfort, but a rebound could take time.

On HUL

CLSA

  • Maintained ‘Outperform’; hiked price target to Rs 2,250 from Rs 2,135.
  • September quarter was ahead of estimates led by higher margins; volume growth a shade better.
  • Strong margin gains seen in home care and personal care.
  • Demand outlook is a bit challenging with different states showing different trends.

Edelweiss

  • Maintained ‘Buy’ with a price target of Rs 2,250.
  • Robust growth in tough quarter; margin expansion impressive.
  • With good monsoons and direct transfers to farmer volume growth to be aided.
  • Delay in merger approval was the only negative during the quarter.

Macquarie

  • Maintained ‘Outperform’; hiked price target to Rs 2,383 from Rs 2,041.
  • Q2: strong margin expansion despite higher Ad spends; could be best operational numbers in FMCG.
  • Ecosystem suitable for market share gains; rural growth can turnaround.
  • Biggest surprise in earnings has been margin levers, which is still not exhausted.

UBS

  • Maintained ‘Neutral’ with a price target of Rs 2,150.
  • Price cuts and depressed demand environment results into lower revenue outlook.
  • Risk reward unattractive at present valuations.

JPMorgan

  • Maintained ‘Neutral’ with a price target of Rs 2,120.
  • In-line operating performance; does well in tough environment.
  • Good margin delivery aided by benign commodity cost, improved mix and cost savings.
  • Subdued near term demand outlook; sequential deceleration in rural demand.

BofAML

  • Maintained ‘Buy’ with a price target of Rs 2,250.
  • Strong show continues despite challenges.
  • Weak demand, but benign costs and less competition help.
  • Resilient EPS growth to support premium valuations.

Trading Tweaks

  • Satia Industries ex-date for share split from Rs 10 to Rs 5 per share.
  • FCS Software Solutions, Wendt, Arshiya, Reliance Home Finance, Kwality to move into short term ASM Framework.
  • Bajaj Hindusthan Sugar, Gyscoal Alloys to move out of short term ASM Framework.
  • Reliance Infrastructure price band revised to 10 percent.

Who’s Meeting Whom

  • Eicher Motors to meet Westwood Global Investments on Oct. 15
  • Great Eastern Shipping to meet Ambit Capital on Oct. 15

Money Market Update

  • The rupee closed at 71.23/$ versus 71.02/$ on Friday.

F&O Cues

Futures

  • Nifty October futures closed at 11,336.3, discount of 5 points versus 7 points premium.
  • Nifty Oct futures up 0.1 percent, sheds 3.9 lakh shares in OI.
  • Nifty Bank futures closed at 28,910.
  • Nifty Bank October futures OI up 0.25 percent, adds 15,000 shares in OI.

Options

  • Nifty PCR at 1.17 versus 1.13 (across all series)

Nifty Weekly Expiry: Oct 17

  • Max OI on call side at 11,400 (16.7 lakh shares)
  • Max OI on put side at 11,300 (14 lakh shares)
  • OI addition seen at 11450C (+3.2 lakh shares), 11,600C (+3.2 lakh shares), 11,300P (+3.4 lakh shares)

Nifty Monthly Expiry: Oct 31

  • Max OI on call side at 12,000 (24.6 lakh shares)
  • Max OI on put side at 11,000 (30.5 lakh shares)
All You Need To Know Going Into Trade On Oct. 15