All You Need To Know Going Into Trade On Oct. 30

Stocks in Asia were mixed early on Wednesday, with markets in a holding pattern awaiting the Federal Reserve’s policy decision.

Shares in Tokyo rose modestly, continuing a rally that’s pushed the country’s index up to the highest since December. Seoul opened flat, while equities in Sydney dipped. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 11,816.50 as of 6:55 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 a quick look at all that could influence equities today.

• U.S. stocks ended a lackluster session lower as trade headlines and a spate of corporate earnings weighed on shares ahead of tomorrow’s expected rate cut by the Federal Reserve.
• Oil extended losses into a third day after an industry report showed stockpiles rising at a key U.S. oil storage hub.

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Earnings Reaction To Watch

Petronet LNG (Q2, QoQ)

• Revenue up 8.7 percent to Rs 9,361.2 crore (Estimate: Rs 9,026.9 crore)
• Net profit up 2 times to Rs 1,103.1 crore (Estimate: Rs 630.2 crore)
• Ebitda up 13.3 percent to Rs 1,160.4 crore (Estimate: Rs 1,039 crore)
• Margin at 12.4 percent versus 11.9 percent (Estimate 11.5 percent)

SKF India (Q2, YoY)

• Revenue down 2.5 percent to Rs 747.2 crore
• Net profit flat at Rs 84.6 crore
• Ebitda down 22.6 percent to Rs 95 crore
• Margins at 12.7 percent versus 16 percent

Tata Metaliks (Q2, YoY)

• Revenue down 6.6 percent to Rs 511.4 crore
• Net profit down 50.7 percent to Rs 23.4 crore
• Ebitda down 52 percent to Rs 41.1 crore
• Margins at 8 percent versus 15.7 percent

Earnings To Watch

• Graphite India
• Phillips Carbon Black
• Tata Chemicals
• Tata Global Beverages
• Balaji Amines
• JK Tyre & Industries
• Caplin Point Laboratories
• Chemfab Alkalis
• Container Corporation of India
• CreditAccess Grameen
• Fortis Malar Hospitals
• Heritage Foods
• IFB Industries
• Indoco Remedies
• International Paper APPM
• Jaiprakash Power Ventures
• Lakshmi Machine Works
• Mangalam Organics
• MPS
• Nava Bharat Ventures
• OnMobile Global
• PTC India
• Quess Corp
• Ramco Industries
• Ramco Systems
• RPG Life Sciences
• Shriram Asset Management
• Sonata Software
• The Ramco Cements
• United Bank of India
• Welspun Enterprises
• Mishra Dhatu Nigam

Indian ADRs

Stocks To Watch

• Bharti Airtel Q2 Update: Domestic mobile business revenue up 1.1 percent to Rs 10,981 crore, compared to the estimate of Rs 10,808 crore. mobile average revenue per user down 0.8 percent to Rs 128, compared to the estimate of Rs 127. Customer base declined to Rs 27.9 crore versus 28.1 crore, while 4G customer base in crore eased to Rs 10.3 crore versus 9.5 crore
• InterGlobe Aviation has placed an order for 300 A320 Neo family aircraft. This order takes IndiGo’s A320 Neo family aircraft orders to 730.
• PVR: Board approved issue price for 29.08 lakh shares for its QIP issue at Rs 1,719.05 per share, which is at a discount of 5 percent on the floor price at Rs 1,809.53 each.
• HDFC Life Insurance: Standard Life looking to sell up to 7.58 crore shares or 3.76 percent stake in HDFC Life Insurance. Standard Life has offered the company’s share at a price band of Rs 562-575 per share and it seeks about $600 million or Rs 4,260 crore in the placement of HDFC Life Insurance’s shares. There is an option to sell an additional $200 million of shares. The price range represents a discount of 5.9 percent to 8 percent from the last close.
• Lemon Tree Hotels has launched its first hotel under the new brand Aurika Hotel 7 Resorts in Udaipur.
• Bandhan Bank: RBI imposed a penalty of Rs 1 crore on shareholding norms as per RBI licensing guidelines.
• Lakshmi Machine Works said that it has commenced the assembly of machine tools at the Coimbatore plant for Japan’s DMG Mori. This activity will not involve any added capital expenditure.
• Central Bank: Committee approved issuing preferential capital worth Rs 3,353 crore to the Government of India.
• Jindal Stainless promoters hold 68.1 percent stake in the company, out of which 34.51 percent of the total equity stake is encumbered as a pledge.
• Saregama India: NCLAT has dismissed a plea filed by the company to initiate insolvency proceedings against Chennai-based Home Movie Makers observing that it is not a financial creditor under the Insolvency and Bankruptcy Code.

Brokerage Radar

Citi on Indian Hospitals

• Investment Phase Ending, RoCE Improvement to Drive Re-rating.
• Apollo Hospitals: Maintained ‘Buy’; hiked price target to Rs 1,970 from Rs 1,760.
• Apollo: Rising occupancy across units to drive revenue/margins; see scope for debt reduction.
• Narayana Hrudayalaya: Initiated ‘Buy’ with a price target of Rs 350.
• NH: with pick-up in occupancy at new hospitals, margins, RoCE and balance sheet leverage to improve.
• Healthcare Global: Initiated ‘Buy’ with a price target of Rs 170.
• HCG: expect rising occupancy across the network to help offset losses from new hospitals.

Morgan Stanley on Bharti Airtel

• Maintained ‘Equal-weight’ with a price target of Rs 360.
• Indian wireless business revenue slightly better than expected; ARPU was positive surprise.
• 4G customer additions were in line with recent trends.
• Homes business was under pressure; enterprise business revenue was lower; DTH business surprised positively.

Jefferies on Supreme Industries

• Maintained ‘Buy’ with a price target of Rs 1,480.
• Q2FY20: Stellar execution in pipes; one-offs drag packaging & industrial.
• Multiple government initiatives could boost demand for plastic pipes.

Citi on Hindustan Zinc

• Maintained ‘Neutral’; cut price target to Rs 210 from Rs 215.
• Q2 in-line; Mined metal production fell as lower grades offset higher ore production.
• Higher electricity duty on captive power partly offset impact of lower fuel prices.
• Expect Zinc LME to fall.

On Petronet LNG

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 341.
• Q2 beats handsomely; beat driven by significantly faster ramp up of Dahej terminal.
• Higher regas volumes implies much faster ramp up than expected as Indian gas demand benefits from cheaper imported gas.

Emkay

• Maintained ‘Buy’ with a price target of Rs 300.
• Ebtida beat on healthy volumes and a seasonal jump in margin.
• Implied marketing margin jumped to over $2/mmBtu on seasonality and low spot LNG prices.

On InterGlobe Aviation

UBS

• Maintained ‘Buy’ with a price target of Rs 2,000.
• Expect 20 percent capacity CAGR over next five years.
• Replacement of ‘ceo’ with ‘neo’ will lead to better fuel efficiency and reduced maintenance costs.
• Addition of A321XLR will further enhance its ability to cater for new international routes.

Citi

• Maintained ‘Neutral’ with a price target of Rs 1,700.
• Recurrence of engine issues in ‘neos’ does not augur well especially in seasonally strong third quarter.
• IndiGo should be able to manage spare engines for most.
• Clear long term solution to the ‘neos’ is critical for smooth operations.

Bulk Deals

Lakshmi Vilas Bank

• Capri Global acquired 75 lakh shares or 2.23 percent equity at Rs 14.6 each.
• Motilal Oswal AMC sold 43 lakh shares or 1.28 percent equity at Rs 14.54 each.

Trading Tweaks

• GTL Infrastructure, GVK Power & Infrastructure to move out of short term ASM Framework
• Coastal Corporation, Ganesh Benzoplast to move into short term ASM Framework
• Shree Digvijay Cement, Paramount Communications price band revised to 10

Who’s Meeting Whom

• MCX to meet Motilal Oswal AMC and Moody’s Analytics on Oct. 30

Insider Trading

• Mindtree promoter Kamran Ozair sold 6,300 shares on Oct. 25
• Apollo Tricoat Tubes promoter Saket Agarwal sold 3 lakh shares on Oct. 24

Money Market Update:

• The rupee strengthened marginally to 70.84/$ on Tuesday versus 70.88/$ on Friday

F&O Cues

Futures

• Nifty October futures closed at 11,795.4, a premium of 8.6 points versus a discount of 2 points
• Nifty futures across series up 4 percent, adds 7.2 lakh shares in open interest
• Nifty Bank October futures closed at 29,900.4, a premium of 27 points versus a discount of 19 points
• Nifty Bank futures across series open interest down 0.3 percent, sheds 4,400 shares in open interest
• Rollover: Nifty 30 percent, Nifty Bank 37 percent

Options

• Nifty put-call ratio at 1.48 versus 1.22 (across all series)

Nifty Monthly Expiry: Oct 31

• Max open interest on call side at 12,000 (30 lakh shares)
• Max open interest on put side at 11,700 (31 lakh shares)
• Open interest addition seen at 11,700P (+24.7 lakh shares), 11,800P (+12,800 shares), 11.750P (10 lakh shares)