All You Need To Know Going Into Trade On October 15

Asian markets have opened lower today amidst a mixed start to the earnings season and fading stimulus hopes from the U.S. ahead of the elections.

Benchmark indices in Japan and South Korea are declining as are those in Hong Kong. The U.S. Dollar has steadied after an overnight decline.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.25% to 11,991 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.

Let's take a look at the factors that may influence equities in today's session:

• Futures on the Dow Jones are currently trading 60 points lower. The index ended 0.6% lower on Wednesday.
• Australian bond yields and the Aussie dropped while stocks edged higher after the Reserve Bank of Australia governor said that rate cuts were still a possibility.
• The Thai Baht has declined after Thailand declared a state of emergency in Bangkok and cracked down on anti-government protestors.
• Treasury Secretary Steven Mnuchin said that getting a stimulus agreement before the election would be difficult after a call with House speaker Nancy Pelosi.
• Yield on the 10-year treasuries stood at 0.73%.
• West Texas Intermediate crude rose 0.2% to $41.12 per barrel. Gold was little changed at $1,898.9/Oz.

Get your daily fix of the global markets here.

Earnings Fineprint: Infosys Q2FY21

• U.S. Dollar revenue up 6.1% to Rs 3,312 crore
• Revenue up 3.8% to Rs 24,570 crore
• Ebit up 16.1% to Rs 6,228 crore
• Ebit margin at 25.3% from 22.7%
• Net profit up 13.7% to Rs 4,858 crore
• FY21 revenue growth guidance raised to 2-3% in Constant Currency terms from 0-2% earlier
• FY21 operating margin guidance raised to 23-24% in Constant Currency terms from 21-23% earlier
• Constant Currency Growth of 4% - higher than estimate of 2.5%
• Digital revenue at $1,568 million is 47% of the total revenue, year-on-year growth of 25.4% in Constant Currency Terms
• Declares dividend of Rs 12 per share
• All numbers compared on a quarter-on-quarter basis

Stocks To Watch

• Infosys: Sudha Murthy’s term as Chairperson of Infosys Foundation extended till December 31, 2021. Salary hikes and promotions to be given out from January next year.
• NMDC: Government approves demerger of Nagarnar steel plant. Strategic divestment of the demerged entity will take place by selling entire government stake to a strategic buyer. The cost of setting up the Nagarnar steel plant is pegged at Rs 23,140 crore. The demerger is likely to be completed by April 2021.
• Indiabulls Housing Finance: National Housing Bank levies a penalty of Rs 3.5 lakh due to non-disclosure of related party transactions.
• United Spirits: Enters into a definitive agreement to sell its entire shareholding in its non-operative arm Tern distilleries for Rs 30 crore.
• Thomas Cook: CRISIL downgrades ratings on long-term bank facilities to CRISIL A+ from CRISIL AA-. Outlook has been retained as negative. Rating action reflects weakening of the company's business and financial risk profiles owing to the adverse impact of Covid-19 on the travel & tourism industry. Continued travel restrictions will lead to operating losses in FY21 and substantially reduce net free cash.
• Punjab National Bank: India Ratings & Research upgrades long-term issuer rating to IND AAA from IND AA+. The rating watch evolving has been resolved while the outlook is stable.
• Avanti Feeds: Andhra Pradesh Industrial Development Corporation has withdrawn its nominee director Rajat Bhargava from the company's board.
• Non-Nifty Earnings Today: Cyient, Hathway Cable, Mindtree, Rane Brake Lining, South Indian Bank, Trident, Vimta Labs

Earnings Reported After Market Hours

Goa Carbon Q2FY21

• Revenue down 13.3% to Rs 88 crore
• Net loss narrows to Rs 5 crore from Rs 13.8 crore
• Ebitda loss narrows to Rs 2.4 crore from Rs 9.6 crore
• Operating losses narrow due to lower raw material costs and other expenses
• All numbers are standalone and compared on a year-on-year basis

Tata Elxsi Q2FY21

• Revenue up 7.4% to Rs 430.2 crore
• Net profit up 14.5% to Rs 78.9 crore
• Ebitda up 27.4% to Rs 118.1 crore
• Ebitda margin at 27.5% from 23.1%
• Lower employee expenses and revenue growth aid margins
• Software Development segment revenue up 7.7% to Rs 420.5 crore
• System integrations and support revenue down 4% to Rs 9.7 crore
• All numbers are standalone and compared on a quarter-on-quarter basis

Den Networks Q2FY21

• Revenue up 1.6% to Rs 337.7 crore
• Net profit up 2.5 times to Rs 36.8 crore
• Ebitda up 28.9% to Rs 62.5 crore
• Ebitda margin at 18.5% from 14.6%
• Lower content costs and employee expenses aid margins
• Lower taxes aid net profit growth
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Macquarie On Infosys

• Outperform rating maintained
• Price target raised to Rs 1,410 from Rs 1,140
• Raise price target due to revenue growth visibility in the medium-term
• Large deal wins to aid revenue growth acceleration
• Ebit margin to remain in the 23-24% band in FY22-23E
• Raise FY21-23E EPS estimates by ~4.5%
• Out of the top picks in the Indian largecap I.T. space and a marquee buy idea
• Catalysts: Pick-up in deal wins, strong execution on revenue, margins

JPMorgan On Infosys

• Overweight rating maintained
• Price target raised to Rs 1,300 from Rs 1,180
• Continues to display a rare combination of accelerating revenue growth and deal wins with margin execution and cash conversion
• Ability to exploit accelerating DX, cloud migration and AI spending catalysed by Covid-19 along with rising client relevance deserves a re-rating
• Raise FY21-23 earnings estimates by 4-5%
• Benefits from near-term margin defence and long-term growth acceleration
• Remains the top pick in the sector

Credit Suisse On Ashok Leyland

• Upgrade to outperform from neutral
• Price target raised to Rs 95 from Rs 68.7
• Roadblocks for the next CV upcycle are behind
• Strong freight demand in September and seasonality supportive of sequential improvement over the next six months
• See FY23 bottom-up volume estimates for key freight segments ~20%
• Replacement cycle could be strongest for CVs and could supplement growth over FY22-23E
• Raise FY22-23 Ebitda estimates by 17-18%

Emkay On Radico Khaitan

• Buy rating maintained
• Price target raised to Rs 600 from Rs 500
• Volumes have been outperforming the industry
• Has diversified portfolio and accelerated growth
• Cash flow improvement has outpaced growth
• Expect sales / earnings CAGR of 13% and 18% respectively through FY23
• Stronger balance sheet and cash flow improvement to drive re-rating
• Valuations are still close to 10-year mean

Bulk Deals

• Transport Corporation of India: HDFC Mutual Fund acquired 9.8 lakh shares (1.27%) at Rs 228 per share and Canara Robeco Mutual Fund sold 9.92 lakh shares (1.29%) at Rs 228 per share.
• Acrysil: Abakkus Group acquired 18.67 lakh shares (7%) at Rs 101.3 per share and Schock GMBH sold 20.31 lakh shares (7.61%) at Rs 101.35 per share.

Pledged Share Details

• Emami: Promoters released pledge of 63 lakh shares between October 9-13.
• JSW Energy: Promoter Indusglobe Multiventures released pledge of 74.9 lakh shares on October 9.

(As Reported On October 14)

Who’s Meeting Whom

• Bhansali Engineering: To meet Enam Holding, Amsec PMS and other investors on October 15.

Trading Tweaks

• Ex-Date Stock Split: Som Distilleries and Breweries (Face value from Rs 10 to Rs 2 per share)
• Buyback Announcement: Rane Brake Lining.
• Fund Raising: Lakshmi Vilas Bank.
• Price Band Revised From 10% To 5%: Future Supply Chain Solutions.
• IPO Listing: Likhitha Infra.
• Move Into ASM Framework: Sagardeep Alloys, Rasandik Engineering.
• Move Into Short Term ASM Framework: Prabhat Dairy, Saven Tech.
• Move Out Of Short Term ASM Framework: Federal-Mogul Goetze, Alembic, Gujarat Themis Biosyn.

Insider Trades

• HFCL: Promoter MN Ventures acquired 20 lakh shares on October 14.

(As Reported On October 14)

Money Market Update

• The rupee snapped a two-day losing streak, ending with modest gains at 73.3 against the U.S. Dollar as compared to Tuesday's close of 73.36.
• The rupee was the fourth best performing currency in Asia on Wednesday.

F&O Cues

• Nifty October futures closed at 11,973; premium unchanged at 2 points
• Nifty October futures add 1.7% and 1.9 lakh shares in Open Interest
• Nifty Bank October futures closed at 23,945; premium of 70 points from 8 points
• Nifty Bank October futures add 2% and 38,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.54

Nifty Weekly Expiry: October 15

• Maximum Open Interest on Call side at 12,000 strike (35.3 lakh shares)
• Maximum Open Interest on Put side at 11,500 strike (26.9 lakh shares)
• Active Options: 11,300 Put (-7.2 lakh shares) and 12,500 Call (-8.4lakh shares)

Nifty Monthly Expiry: October 29

• Maximum Open Interest on Call side at 12,500 strike (23.4 lakh shares)
• Maximum Open Interest on Put side at 10,500 strike (33.7 lakh shares)