All You Need To Know Going Into Trade On October 16

Stocks To Watch

• AstraZeneca Pharma: To launch Calquence in India on October 21. Company had received import and market permission from Drugs Controller General of India on March 12. The drug is used to treat various types of blood cancer.
• Hindustan Zinc: Board to consider interim dividend in a board meeting on October 20.
• Tech Mahindra: Executes JV with Sumitomo Corporation to provide engineering services to the automotive sector. The proposed JV shall have both partners holding 50% stake each. Each party will initially subscribe to 2,000 ordinary shares and contribute 100 million Yen each towards the stated capital.
• UPL: KPMG has resigned as the auditor with effect from October 8 for company’s material arm in Mauritius - UPL Corporation.
• Sun Pharma: Clarified on the news of SEBI probe of its ex-board member Ashwin Dani, saying that it has not received any information or notice either from SEBI or anyone regarding the matter.
• Bharti Airtel: Competition Commission of India approves completion of first closing of the company's arm Nxtra Data to the Carlyle group. The company on July 1 had announced that the Carlyle Group will acquire 25% stake in the company's data centre business at a valuation of $1.2 billion.
• Persistent Systems: To acquire entire business of U.S.-based Capiot Software for $6.34 million. Additional incentive-based payments for the next three years amount to another 6 million. The acquisition is subject to customary closing conditions and is likely to be completed within 2-4 weeks.
• Mindtree: Has appointed Dayapatra Nevatia, Chief Operating Officer as Executive Director (Additional Director) of the company till October 2025.
• Nifty Earnings Today: HCL Technologies
• Non-Nifty Earnings Today: Bajaj Consumer Care, Federal Bank, Phillips Carbon Black, IIFL Securities, Shoppers Stop, Tata Communications, Tinplate, Uniply Industries, Shakti Pumps

Earnings Reported After Market Hours

Hathway Cable & Datacom Q2FY21

• Revenue down 2.5% to Rs 431.2 crore
• Net profit of Rs 52.2 crore from net loss of Rs 2.6 crore
• Ebitda up 14.7% to Rs 120.4 crore
• Ebitda margin at 27.9% from 23.8%
• Broadband business revenue up 10% to Rs 153.3 crore
• Cable TV business revenue down 8.2% to Rs 277.9 crore
• Lower other expenses aid margin expansion
• Lower finance costs, depreciation helped return to profit
• All numbers are consolidated and compared on a year-on-year basis

Mindtree Q2FY21

• U.S. Dollar revenue up 3.1% to $261 million
• Revenue up 1% to Rs 1,926 crore
• Net profit up 19.1% to Rs 253.7 crore
• Ebit up 11.6% to Rs 321.5 crore
• Ebit margin at 16.7% from 15.1%
• Constant Currency Growth of 2.1%
• Declares interim dividend of Rs 7.5 per share
• All numbers are consolidated and compared on a quarter-on-quarter basis

Cyient Q2FY21

• U.S. Dollar revenue up 3.4% to $135 million
• Revenue up 1.2% to Rs 1,003.3 crore
• Net profit up 3% to Rs 83.9 crore
• Ebit up 2.5 times to Rs 99.7 crore
• Ebit margin at 9.9% from 4%
• Lower employee costs aid margin expansion
• Other income of Rs 68.4 crore in the base quarter
• Constant Currency Revenue growth of 1.3%
• All numbers are consolidated and compared on a quarter-on-quarter basis

Brokerage Radar

Citi On Mindtree

• Sell rating maintained
• Price target raised to Rs 1,195 from Rs 1,150
• Q2 results were largely in-line with estimates
• Raise FY21E/FY22E/FY23E EPS estimates by 7%, 4% and 4% respectively given higher margin trajectory
• Weaker trends Vs large cap players, particularly given headcount decline
• Top client exposure continues to be a risk
• Any pressure on top client can lead to de-rating
• Sustaining margins at current levels will be difficult given wage hikes across the sector

UBS On Mindtree

• Sell rating maintained
• Price target of Rs 805
• Continues to target profitable growth in H2FY21
• Softening trends in top customer likely to raise concerns
• Top customer has significant contribution to revenue
• Softer contract values are likely to add to investor concerns on revenue outlook

Morgan Stanley On Cyient

• Underweight rating maintained
• Price target of Rs 350
• Q2 turned out to be better than expectations
• Demand environment, client budgets remain uncertain in key A&D vertical
• Increasing contribution of low-margin DLM business may keep overall margins in check
• DLM business can do better than the services vertical going forward
• Margin headwinds in Q3 likely to normalise by Q4
• One-year forward P/E close to long-term average

HSBC On Kajaria Ceramics

• Buy rating maintained
• Price target raised to Rs 620 from Rs 450
• India capitalising on China's loss of market share
• Limited benefits for organised palyers given low export share
• Concerns outweigh benefits
• Expect a modest Q2 as demand recovers slowly
• Cut FY21-23E EPS estimates by 3-7% to build-in a slower sales recovery
• Higher price target due to removal of Covid-19 led additional risk premium

Emkay On Mumbai Real Estate Players

• Mumbai market stands out among other metros despite high inventory due to upcoming infra upgradation, stable demand and slowing new launches
• Mumbai's inventory overhang may drop to 32 months by FY23 from 44 months
• Improving affordability and market share gains for large organised developers are structural positives
• Initiate coverage on Oberoi Realty with buy rating and a price target of Rs 483
• Initiate coverage on Sunteck Realty with a buy rating and a price target of Rs 393

Pledged Share Details

• Ajanta Pharma: Promoter Ravi Agrawal created pledge of 9.5 lakh shares on October 15.
• Jamna Auto: Promoters revoked pledge of 6.5 lakh shares on October 13.
• GMR Infra: Promoter GMR Enterprises released pledge of 26 crore shares from October 14-15.

(As Reported On October 15)

Who’s Meeting Whom

• Asian Granito: To meet Aditya Birla Money on October 16.

Trading Tweaks

• Record Date Stock Split: Som Distilleries and Breweries (Face value from Rs 10 to Rs 2 per share)
• Fund Raising: SRF
• Price Band Revised From 10% To 5%: Aarti Drugs.
• Move Into ASM Framework: Nucleus Software Exports, Birlasoft, Persistent Systems, Adani Green Energy, Gayatri Projects, Jet Airways, Bafna Pharmaceuticals.
• Move Into Short Term ASM Framework: Abans Enteprises.
• Move Out Of Short Term ASM Framework: GSS Infotech, Srikalahasthi Pipes.

Money Market Update

• The rupee ended with losses on Thursday, ending at 73.38 against the U.S. Dollar as compared to Wednesday's close of 73.3.

F&O Cues

• Nifty October futures closed at 11,675; discount of 5 points from premium of 2 points
• Nifty October futures add 0.7% and 74,000 shares in Open Interest
• Nifty Bank October futures closed at 23,945; discount of 36 points from premium of 70 points
• Nifty Bank October futures shed 6% and 98,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.36

Nifty Weekly Expiry: October 22

• Maximum Open Interest on Call side at 12,500 strike (26.6 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (15 lakh shares)
• Active Options: 11,000 Put (8.2 lakh shares) and 12,500 Call (22.1lakh shares)

Nifty Monthly Expiry: October 29

• Maximum Open Interest on Call side at 12,500 strike (24 lakh shares)
• Maximum Open Interest on Put side at 10,500 strike (33.7 lakh shares)