All You Need To Know Going Into Trade On Oct. 3

Asian stocks declined after a fall in U.S. equities following disappointing American data that increased concerns about a global slowdown.

Japan’s Topix index dropped 1.7 percent at the open, with Australian shares also lower. Stock markets in China and South Korea are closed. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.14 percent to 11,340 as of 7:10 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.

• The S&P 500 on Wednesday suffered its first back-to-back drops of more than 1 percent this year as private payrolls fell short of estimates a day after a manufacturing gauge slumped to the lowest in a decade.
• Oil fell to the lowest level in almost two months after swelling inventories in the world’s biggest economy added to a pessimistic and weakening economic backdrop.

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Indian ADRs

Stocks To Watch

• Yes Bank said that the steep fall in its stock price on Tuesday was owing to the forced sale of 10 crore equity shares, or 3.92 percent of the bank’s share capital, triggered by an invocation of pledge on the equity shares of a large stakeholder. The equity shares were pledged by Kapoor against non-convertible debentures issued by his company Morgan Credits Pvt Ltd, which were invoked by Reliance Nippon Life Asset Management. Besides, the bank’s President Rajat Monga has moved on, CNBC-TV18 reported quoting CEO Ravneet Gill in analysts call.
• Mahindra & Mahindra: Partnered with Ford Motor Company Inc. to develop, market and distribute vehicles in India and other high-growth emerging markets around the world. Mahindra will own a 51 percent controlling stake in the joint venture and Ford will own the remaining 49 percent, the Indian automaker said in an exchange filing.
• Prestige Estates Projects’ arm will jointly invest with DB Realty Group to build Hotel and Convention Centre in Delhi’s Aerocity. The company will invest Rs 355 crore for 50 percent stake in the joint venture. Total investment of Project is Rs 2,000 crore.
• Apollo Pipes: Second quarter sales volume rose 11 percent to 10,306 mtpa. The company said that the growth was driven by a steady contribution from the cPVC HDPE pipe and value-added product segment of Fittings.
• NMDC September production declined 30 percent to 1.64 million tonne. Sales down 18 percent at 1.91 million tonne.
• Power Grid Corporation: Board gave approval for investment for transmission towers at a cost of Rs 94.2 crore and in-principle approval for asset monetization through Infrastructure Investment Trust.
• Hindustan Aeronautics said that labour unions at various locations of the company have given notice of indefinite strike commencing from Oct. 14 in support of their demand for fair and early settlement of wage revision- 2017. The action is under progress to communicate the management's stand on the issue to the Unions and requesting them to call-off the plan for indefinite strike.
• MSTC: Supreme Court allowed company’s application against recovery officer and has permitted the auction of company’s immovable properties. But the Supreme Court directed that confirmation will not take place thereafter without its prior approval. This is in regards to the dispute pending between the company and Standard Chartered Bank with respect to the receivable purchase agreement where Standard Chartered Bank purchased the receivables from the company in relation to the export of gold jewellery.
• CG Power & Industrial Solutions: The Securities Appellate Tribunal has rejected an appeal filed by Gautam Thapar, Avantha Holdings and former officials of the company against an order by the market regulator that barred them from accessing the capital markets. The tribunal rejected the appeal as it “found no merit” in it. It also directed the appellants to approach the Securities and Exchange Board of India to obtain all documents required by them to defend their case, according to a PTI report.
• Talkwalkars Better Value Fitness: Edelweiss Group acquired a 5.55 percent stake in the company by way encumbrances against dues on Sept. 27.
• Metropolis Healthcare acquired four laboratories for providing diagnostic and pathological testing services in Surat for Rs 18 crore.
• RBL Bank on Tuesday said its exposure to the Indiabulls Group is “very tiny”, as the private lender tried to allay fears after its stock tumbled to its lowest since listing. The bank does not have any sectoral issues in its portfolio, Rajeev Ahuja, executive director at RBL Bank, told BloombergQuint in an interaction, adding that the issues related to specific companies are not related to any larger sectoral issues.
• GMR Infra: The Competition Commission of India approved acquisition of shares of GMR Airports by entities of Tata Group, GIC and SSG Capital, subject to compliance of certain modifications.
• Lakshmi Vilas Bank revised Marginal Cost of Funds based Lending Rate with effect from Oct. 1. To link repo rate with floating rate for retail, personal and micro, small and medium enterprises with effect from Oct. 1. One-month MCLR at 9.7 percent and one-year MCLR at 9.95 percent.
• Reliance Naval & Engineering: The National Company Law Tribunal has dismissed Industrial Finance Corporation of India application seeking the company’s admission in IBC.
• Wipro will absorb certain employees of Vara Infotech along with its existing contracts, facilities and assets through a business transfer agreement, as a part of strategic engagement with ICICI Bank.
• Religare Enterprises entered into a consent agreement with Axis Bank where it will pay Rs 170 crore to the Bank in a phased manner. Both parties have agreed to settle the matter amicably.
• Phoenix Mills promoter Atul Ashokkumar Ruia reduced stake from 62.75 percent to 59.16 percent in the company on Sept. 30.
• Infibeam Avenues said on the allotment of 21.45 lakh convertible warrants to TV18 Broadcast, that the holder has not exercised the exercise option, thus the company which received 25 percent of the warrant subscription amount stands forfeited. The warrants were priced at Rs 185.48 each.
• Indian Bank reduced MCLR by 10 basis points across various tenors with effect from Oct. 3. One Month MCLR at 8.05 percent and One Year MCLR at 8.35 percent.
• HDIL: The Ministry of Corporate Affairs is probing books of accounts of the company after its loans brought Punjab and Maharashtra Co-operative Bank down, a senior government official said. The regional office of the Ministry of Corporate Affairs is examining regulatory filings, financial statements and related-party transactions of the debt laden real estate firm, the official said requesting anonymity. The department’s report on the findings of the probe will be submitted to MCA Secretary Injeti Srinivas in about two months, the official said.
• India Infrastructure Trust will consider distribution to unit holders on Oct. 7. Record Date set as Oct. 16.
• TCS: Jurassic Fibre partnered with the company to launch Ultrafast Broadband in South West England.
• Info-Edge invested Rs 6 crore in its wholly owned arm Happily Unmarried.
• Dishman Carbogen Amcis to acquire 100 percent stake in Dishman Biotech for Rs 6 crore. The target company is engaged in the business and manufacturing of Bulk Drugs and Drug Formulations.
• Zee Media Corporation: Acacia Group increased their stake from 6.81 percent to 7.66 percent in the company.
• Sintex Industries defaulted in payment of non-convertible debentures worth Rs 89.5 crore which was due on Sept. 30.
• Dr Lal PathLabs acquired 70 percent stake in Amins Pathology Referral Laboratory for Rs 5.25 crore.
• NRB Industrial Bearings to consider fund raising on Oct. 7.
• Indiabulls Housing clarified that it has no outstanding loans to DLF, Reliance ADAG Group and Americorp Group and the loans given to Vatika group are secured against mortgage of land and property. It added that the loans have been extended to specific project SPVs of Chordia group and are receiving regular repayments, and has never borrowed anything from National Housing Bank.
• IndiGo promoters InterGlobe Enterprises and Rahul Bhatia submit request for arbitration to London Court.
• JSW Steel: Ratings agency CARE reaffirms long term rating to ‘CARE AA’ but revises outlook to Negative from Stable. CARE Ratings said, “The revision in the rating outlook factors in the slowdown in the steel sector which is likely to impact the profitability of the Company. Furthermore, considering the capex and scheduled repayments during the current and the next financial year, the company may have to refinance part of its maturities falling due during this period which is expected to keep the debt levels elevated,” it said.
• Coal India said September coal production fell 23.5 percent (year-on-year) to 30.77 million tonne as against 40.25 million tonne. Shipments fell 20 percent (YoY) to 35.18 million tonne as against 43.98 million tonne.
• Zydus Cadila said Phase II trial of liver-drug meets main goals. The Food and Drug Administration said it continues testing Ranitidine From Multiple Makers, according to its stock exchange filing.
• Aster DM acquired additional 4.98 percent stake in Sri Sainatha Multispeciality Hospital Private Limited. Overall shareholding of the company in class B equity shares of Sri Sainatha Multispecialty Hospital Private Limited increases to 72.41 percent.

September Auto Sales

• Tata Motors September domestic sales fell 50 percent at 32,376 units versus 64,598 units. Total commercial vehicles sales was down 45.4 percent at 28,079 units versus 51,419 units. Total passenger vehicles sales was down 56 percent at 8,097 Units versus 18,429 units.
• Eicher Motors September motorcycles sales fell 17 percent at 59500 units versus 71662 units. Exports were up 2.9 times at 4642 units versus 1597 units.
• Hero MotoCorp September two-wheeler sales down 20 percent at 6,12,204 units versus 7,69,138 units.
• Steel Strips Wheels: September total wheel rim sales declined 19 percent at 11.75 lakh units versus 14.59 lakh units.
• TVS Motor September sales fell 25 percent at 3,15,912 units versus 4,23,939 units.

Catch all the monthly auto sales update here.

Offerings

• IRCTC IPO subscribed 3.25 times on second day of sale. Retail Investors subscribed 6.2 times. Offer ends today.

Brokerage Radar

On Future Consumer

CLSA

• Fairly wide portfolio with foods serving as the backbone, but this is changing.
• Future Consumer is leveraging consumer data for launches, assortments and promotions.
• Expect revenue to rise at 15-20 percent and Ebitda margin to improve to over 8 percent in the next five years
• Company believes debt is likely to peak in the next two years.

Morgan Stanley

• Maintained ‘Equal-weight’; cut price target to Rs 28 from Rs 82.
• Cut FY20/21 EPS estimates to reflect lower revenue growth, weaker absorption of fixed costs and higher interest costs.
• Due to concerns on receivables, lower valuation benchmark.
• FMCG 2.0 platform is progressing well with improving profitability.

More Calls

CLSA on Inox Leisure

• Maintained ‘Buy’; hiked price target to Rs 410 from Rs 402.
• Strong content performance in the second quarter to drive second consecutive year of strong footfalls.
• Advertising growth to take a pause after several quarters of strong growth.
• Jio First Day First Show impact unclear; to be limited in our view.

Investec on Gold Financiers

• Gold finance is stabilising after a volatile past.
• GFCs are deploying excess capital in new growth segments.
• GFCs have proven strengths, but growth prospects are weak.
• Muthoot Finance: Initiated ‘Buy’ with a price target of Rs 770.
• Manappuram Finance: Initiated ‘Hold’ with a price target of Rs 140.
• Muthoot better placed due to competitive advantage, better growth prospects and diversification.

Nomura on M&M

• Maintained ‘Buy’ with a price target of Rs 663.
• Joint venture with Ford expected to bring synergy.
• Potential to improve profitability of Ford’s India business.

Morgan Stanley on OMCs

• Potential divestment of BPCL, if done well, could re-rate the sector.
• BPCL could attract focus from global oil majors.
• Stake sale could raise marketing margin outlook and reduce the overhang of government intervention.
• BPCL: Upgraded to ‘Overweight’ from ‘Equal-weight’; hiked price target to Rs 571 from Rs 427.
• IOCL: Maintained ‘Overweight’; cut price target to Rs 179 from Rs 186.
• HPCL: Maintained ‘Overweight’; hiked price target to Rs 398 from Rs 372.

Morgan Stanley on HUL

• Maintained ‘Equal-weight’; hiked price target to Rs 1,900 from Rs 1,630.
• Synergy benefits from GSK acquisition will drive strong 2020-21 earnings growth.
• A potential rise in price competition is not priced in.
• Hiked price target to factor in lower tax rate and lower revenue growth.

Nomura on Cummins India

• Maintained ‘Neutral’; hiked price target to Rs 643 from Rs 605.
• Increase FY20-22 EPS estimates by 2-6 percent on tax rate reduction.
• Competition/pricing headwinds persist since last decade; outlook still seems weak.
• Pricing pressure has continued since 2014-15 and expect it to persist at least into the next financial year.

CLSA on Telecom

• Cut in JioPhone prices will boost Jio’s October subscriber additions.
• This likely to adversely impact incumbent’s ability to monetise voice subscribers.
• Await subscriber response and the possible extension of this offer.

Citi on Hindustan Zinc

• Maintained ‘Neutral’; cut price target to Rs 215 from Rs 225.
• Cut FY20/22 Ebitda estimates by 5-6 percent on lower volumes and lower lead price estimates.
• Much of the strong mine and refined supply growth is expected in 2020.
• This will weigh further on prices as stocks build physically.

Trading Tweaks

• Indiabulls Ventures, Magma Fincorp, Reliance Capital, Mercator to move into ASM framework.
• Suzlon Energy to move into short term ASM Framework.
• Navkar Corporation, Inox Wind to move out of short term ASM Framework.
• Mirc Electronics price band revised to 10 percent.
• Shankara Building Products, State Trading Corporation of India price band revised to 5 percent.

Who’s Meeting Whom

• Mahindra Logistics to meet Equirus Securities on Oct. 3.
• Eris Lifescience to meet Fundsmith LLP on Oct. 3.

Insider Trading

• Yes Bank promoter Yes Capital sold 5.52 crore shares from Sept. 26-27.
• Anant Raj promoter Amar Sarin acquired 3.4 lakh shares from Sept. 26-27.
• Filatex India promoter Nouvelle Securities acquired 2.5 lakh shares on Sept. 30.
• NIIT Tech promoter Hulst BV sold 87,000 shares from Sept. 27-30.

F&O Cues

Futures

• Nifty October futures closed at 11429.8, premium of 69.9 points.
• Nifty October futures up 5 percent, adds 7.8 lakh shares in open interest.
• Nifty Bank futures closed at 28,874, premium of 149 points.
• Nifty Bank futures across series open interest up 14 percent, adds 1.8 lakh shares in open interest.

Options

• Nifty PCR at 0.96 versus 1.04 (across all series).

Nifty Monthly Expiry: Oct. 3

• Max open interest on call side at 11,600 (29.3 lakh shares).
• Max open interest on put side at 11,000 (11.4 lakh shares).
• open interest addition seen at 11,600C (+6.6 lakh shares), 11,400C (6.2 lakh shares).

Nifty Monthly Expiry: Oct. 31

• Max open interest on call side at 11,500 (20.6 lakh shares)
• Max open interest on put side at 11,000 (20.2 lakh shares)