All You Need To Know Going Into Trade On October 12

Stocks To Watch

• Vedanta: The company on Saturday said that the delisting offer is deemed to have failed as per terms of the delisting regulations. The post offer public announcement by the company said that 125.47 crore shares were validly tendered by public shareholders. For successful delisting of shares, 134.12 crore shares needed to have been validly tendered for promoter shareholding to cross 90%. Bids worth 12.31 crore were unconfirmed.
• Federal-Mogul Goetze (India): Promoter IEH FMGI Holdings to sell up to 1.21 crore shares or 21.83% stake through an Offer for Sale (OFS). The floor price of Rs 342 per share is a 21.1% discount to Friday's closing price. The promoter looks to raise Rs 415.4 crore through this OFS. The OFS for non-retail investors opens on October 12 while for retail investors, it opens on October 13.
• Glenmark: The company said that addition of Umifenovir did not demonstrate any additional benefit over Favipiravir alone in moderate Covid-19 patients. Umifenovir did not show superior clinical outcomes when added to Favipiravir treatment. The trial did not meet key end-points.
• Indiabulls Housing Finance: Has sold further portion of its stake in OakNorth Holding - the wholly-owning parent company of OakNorth Bank to Riva Capital Partners for approximately Rs 441 crore. The company has now raised a total of Rs 2,273 crore as fresh equity in September and October through a QIP and stake sales. The sale proceeds will be accretive to the regulatory net worth and CRAR of the company.
• Dr Lal Pathlabs: The company has clarified that the data breach of patients was a result of misconfiguration in one of the company's minor web applications where temporary records were stored for operational purposes. It involved less than 0.5% of the records and the issue has been resolved since. A report on Saturday revealed that data of millions of patients, including Covid-19 test results was exposed. The company has said that the relevant authorities have been informed.
• Shilpa Medicare: Gets U.S. FDA warning letter for its formulations facility in Jadcherla, Telangana. The Company believes that the warning letter will have minimum impact of disruption of supplies and the existing revenues from operations of this facility.
• RITES: Secures consultancy orders for Rs 103 crore. One order includes Project Management Consultancy work for complete planning, design, execution and other services for various buildings at IIT Delhi worth Rs 54 crore. The other is for South Eastern Coalfields for Rs 46 crore and the third pertains to the study of Multi-Modal Integration Planning for the Surat Metro project for Rs 3.24 crore.
• ONGC AGM Takeaways: Chairman Shashi Shankar says that the company expects better price realisations from reforms for new gas production announced by the government this week. He also said that ONGC will reexamine plans to develop some older fields which were not viable earlier. The company expects to complete the merger between MRPL & ONGC Mangalore Petrochemicals (OMPL) by June 2021, post which, MRPL will be merged with HPCL. The company's Director of Finance Subhash Kumar said that ONGC could lose Rs 6,000 crore to Rs 7,000 crore from its gas business after the cut in prices.
• Godrej Properites: NCLT approved amalgamation of Wonder Space Properties with the company.
• Premier Explosives: Gets domestic order for explosives worth Rs 82.8 crore from the Telengana government.
• GE Shipping: The company has signed a contract to buy a secondhand LR2 product carrier. The vessel is expected to join the company's fleet in Q3FY21.
• Liberty Shoes: CARE Ratings downgraded long-term bank facilities worth Rs 165.4 crore to CARE BBB+ from CARE A-. The outlook is revised to stable from negative.
• Karnataka Bank: Reports a fraud amounting to Rs 107.99 crore in the credit facilities extended earlier to Sintex Industries' borrowing account. The account was classified as an NPA in August 2019 and has been fully provided for and will not impact the bank's financials going forward.
• Non-Nifty Earnings Today: GNA Axles, Shalby.

Earnings Reported After Market Hours

Bhansali Engineering Polymers Q2FY21

• Revenue up 10% to Rs 307.8 crore
• Net profit up 75% to Rs 35.3 crore
• Ebitda more than doubles to Rs 46.3 crore
• Ebitda margin at 15.1% from 7.1%
• All numbers are standalone and compared on a year-on-year basis

GTPL Hathway Q2FY21

• Revenue down 7% to Rs 575.6 crore
• Net profit up 43% to Rs 49.9 crore
• Ebitda up 9% to Rs 129.8 crore
• Ebitda margin at 22.6% from 19.3%
• Subscription revenue up 3% to Rs 267.7 crore
• Broadband revenue up 68% to Rs 67 crore
• EPC contract revenue at Rs 78.3 crore
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

CLSA On ITC

• Upgrade to buy from outperform
• Price target of Rs 220
• FMCG segment is set to become a major value driver
• Long-term positives unfolding as revenue diversifies
• Expect FMCG segment to deliver an Ebitda CAGR of ~30% over FY20-23 driven by industry tailwinds, multiple margin levers & falling capex
• Value-accretive acquisitions and improving capital allocation will provide support
• Valuations are compelling with about 5% free cash flow yield, 6% dividend yield
• Possible sale of government's stake and negative regulatory newsflow can be risks

BofA Securities On IndiaMART InterMESH

• Initiate coverage with neutral rating
• Price target of Rs 5,420
• See sustained room for growth as tailwinds from Covid would help in faster digitalisation of SMEs
• See 20% revenue CAGR over FY21-24
• Positive operational leverage is likely to drive margin improvement
• Rich valuations are pricing in the growth story
• Risk-reward is currently balanced
• Upside Risks: Faster scale-up of payments, SaaS business and structural benefits in margins as cost control sustains
• Downside Risk: Loss of market share, slower than expected recovery impacting overall business

Emkay On Zee Entertainment

• Downgrade to hold from buy
• Price target cut to Rs 200 from Rs 272
• Siti Networks' bank loan default has come as a surprise as this comes within 40 days of timely payment of receivables being assured
• To take a balance sheet hit of Rs 200 crore as company will have to honor the corporate guarantees
• Siti default will put a dampener on investor interest in Zee
• Delay in ad revenue recovery and balance sheet improvement should also keep valuations in check

Nomura On AIA Engineering

• Buy rating maintained
• Price target of Rs 1,830
• Final settlement of Magotteaux litigation with no impact on cashflows a positive
• Key overhang on the stock now removed
• Structural story remains intact
• Has shown higher resilience to lockdown
• Has higher earnings visibility as compared to peers

Antique Stock Broking On Varun Beverages

• Initiating coverage with buy rating
• Price target of Rs 900
• Long runway for growth in a large and fast moving industry
• Expanded its turf through value accretive inorganic acquisitions
• Healthy product offerings in juice and dairy beverages to open new avenues of growth
• Should post strong recovery in CY21 after being impacted due to Covid-19
• Should get re-rated as capacity utilisation improves in less seasonal territories.
• Key Risks: High exposure to seasonal variations, changing consumer preferences

Citi On Vedanta

• Buy rating maintained
• Price target cut to Rs 130 from Rs 150
• Clarity needed on when tendered shares will be available for sale
• Expect stock to correct in the near-term
• Funds for delisting to be unwound
• Balance sheet and minority shareholders to add to downward pressure

CLSA On Vedanta

• Outperform rating maintained
• Price target cut to Rs 118 from Rs 133
• Focus likely to remain on debt concern at parent entity
• There is lack of clarity on what happens next due to high leverage
• Concerns over capital allocation to overshadow operational performance
• Stock price performance hinges on next steps by promoter, management

Pledged Share Details

• Sun TV: Promoter released pledge of 4.64 lakh shares on October 5.
• GNA Axles: Promoter Jasvinder Singh created pledge of 3 lakh shares on September 29.
• Dish TV: Promoter World Crest Advisors invoked pledge of 35.24 lakh shares on September 30.
• Eveready Industries: Promoter Williamson Financial Services invoked pledge of 17 lakh shares on October 7.

(As Reported On October 9)

Who’s Meeting Whom

• Eicher Motors: To meet Zaaba Capital, Carmignac and other investors between October 12-16.
• Caplin Point Labs: To meet Franklin Templeton Mutual Fund on October 12.

Bulk Deals

• Majesco: Unifi Wealth Management acquired 2.13 lakh shares (0.74%) at Rs 871.35 per share.
• Ahluwalia Contracts: FDS Mauritius sold 4.84 lakh shares (0.72%) at Rs 233 per share.
• Magma Fincorp: Goldman Sachs India sold 53.95 lakh shares (2%) at Rs 33.08 per share.

Trading Tweaks

• AGM: Power Mech Projects.
• Listing: UTI AMC, Mazagon Dock Shipbuilders.
• Price Band Revised From 20% To 10%: Bal Pharma.
• Move Into ASM Framework: IndiaMART InterMESH, Solara Active Pharma Sciences.
• Move Out Of ASM Framework: Yes Bank, Paisalo Digital, Krebs Biochemicals, Bafna Pharmaceuticals, Arshiya, Madhucon Projects.
• Move Into Short Term ASM Framework: Uttam Galva Steels, Ujaas Energy, Aarti Drugs.
• Move Out Of Short Term ASM Framework: Ausom Enterprise, Manali Petrochemicals, Adani Green Energy.

Money Market Update

• The rupee gained for the third straight day on Friday, ending at 73.13 against the U.S. Dollar as compared to Thursday's close of 73.24.
• For the week, the rupee ended flat, as the third worst performing currency in Asia.

F&O Cues

• Nifty October futures end at 11,948; premium of 34 points from discount of 8 points
• Nifty October futures add 3.4% and 3.72 lakh shares in Open Interest
• Nifty Bank October futures end at 23,951; premium of 105 points from discount of 21 points
• Nifty Bank October futures add 7.9% and 1.17 lakh shares in Open Interest
• Stocks In F&O Ban: Adani Enterprises, BHEL, JSPL, Vedanta, Vodafone Idea

Nifty: October 15 Expiry

• Maximum Open Interest on Call side at 12,500 strike (32.6 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (27.1 lakh shares)
• Active Options: 12,500 Call (+11.3 lakh shares) and 11,000 Put (+14.4 lakh shares)

Nifty: October 29 Expiry

• Maximum Open Interest on Call side at 12,500 strike (20.75 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (24 lakh shares)