All You Need To Know Going Into Trade On October 17

Asian stocks extended gains after fresh Wall Street records, while Australian bonds fell with Treasuries amid expectations of U.S. interest rate increases.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, declined 0.20 percent to 10,260 as of 7:08 a.m.

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Here’s a quick look at all that could influence equities on Tuesday.

Global Cues

• The S&P 500 Index rose to a record as gains in oil and copper drove a gauge of commodities to a six-month high.
• Treasuries fell after Federal Reserve Chair Janet Yellen suggested gradual rate increases are warranted despite soft inflation
• The pound broke a five-day winning streak on speculation that Brexit talks could be headed for a breakdown.
• Spain’s IBEX 35 Index declined and the euro weakened amid the stand-off over independence for Catalonia.

Asian Cues

• Japan’s Topix index added 0.4 percent. Australia’s S&P/ASX 200 Index rose 0.5 percent and South Korea’s Kospi index was little changed.
• Contracts on Hong Kong’s Hang Seng Index were flat.
• Futures on the S&P 500 Index were little changed.
• The MSCI Emerging Market Index added 0.5 percent to the highest in six years on Monday.

Here are some key events coming up this week:

• Among Fed speakers lined up this week are Philadelphia Fed President Pat Harker on Tuesday, and New York Fed President Bill Dudley and Dallas Fed President Robert Kaplan on Wednesday.
• U.S. economic data will include a couple of September housing reports. Beginning construction on new homes and sales of previously owned properties will probably show the negative effects of Hurricanes Harvey and Irma on demand and building.
• China releases data for GDP, industrial production and retail sales on Thursday.
• Earnings season gets into full swing with major U.S. financial firms including Morgan Stanley, Goldman Sachs Group Inc. and Blackstone Group LP. posting results.
• Bank of England Governor Mark Carney appears before the U.K. Parliament’s Treasury Committee for the first time since June’s election on Tuesday.

Commodity Cues

• West Texas Intermediate crude was steady at $51.87 a barrel after climbing 0.8 percent in the previous session.
• Gold was at $1,294.28 an ounce after falling 0.6 percent.
• LME copper was little changed at $7,125 a metric ton, close to the highest in more than three years, after it jumped 3.7 percent on Monday.

Indian ADRs

Nifty Results Today

• Axis Bank
• Bajaj Auto
• Wipro

Other Results Today

• ACC
• AB Money
• Atul Ltd.
• Bajaj Holdings
• Blue Dart
• Crisil
• ICICI Lombard
• Nucleus Softare
• Prakash Industries
• RS Software
• Som Distilleries
• Tata Sponge

Results Announced

Oberoi Realty (Q2FY18 YoY)

• Revenue up 20.4 percent to Rs 303.5 crore
• Net profit up 24.6 percent to Rs 104 crore
• EBITDA up 31.6 percent to Rs 164.5 crore
• Margin at 54.2 percent from 49.6 percent

DCB Bank (Q2FY18 YoY)

• Net profit up 21.7 percent to Rs 58.9 crore Vs Rs 48.4 crore
• NII up 30.3 percent to Rs 248 crore Vs Rs 190.3 crore
• Gross NPA at 1.80 percent from 1.74 percent (QoQ)
• Net NPA at 0.90 percent from 0.92 (QoQ)

Sasken Tech (Q2FY18 QoQ)

• Net profit up 8.7 percent to Rs 18.7 crore
• Revenue up 5.9 percent to Rs 125 crore
• EBITDA up 37.8 percent to 18.6 crore
• Margin to 14.9 percent

Hatsun Agro (Q2FY18 YoY)

• Net profit up 17.5 percent to Rs 38 crore
• Revenue up 6.5 percent to Rs 1067 crore
• EBITDA up 15.85 to Rs 105.4 crore
• Margin at 9.9 percent

Delta Corp (Q2FY18 YoY)

• Net profit up 33.5 percent to Rs 43 crore
• Revenue up 8.2 percent to Rs 145 crore
• EBITDA up 14.3 percent to Rs 64.5 crore
• Margin at 44.5 percent

Persistent System (Q2FY18 QoQ)

• Net profit up 10 percent to Rs 82.6 crore
• Revenue up 4.6 percent to Rs 761.2 crore
• EBIT up 19.3 percent at Rs 77.8 crore
• EBIT margin at 10.2 percent

Bajaj Finserv (Q2FY18 YoY)

• Net profit up 13.3 percent to Rs 652 crore
• Revenue up 27.7 percent to Rs 7,561

Stocks To Watch

• Reliance Industries, BP submit revised investment plan for KG-D6 gas finds
• Xl group to acquire a 20 percent minority stake in Mahindra insurance brokers, a subsidiary of Mahindra & Mahindra Financial Services Ltd.
• Five investors including Brookfield, Resurgent Power, India Power, Edelweiss ARC and JSW Energy submit bids for Jaiprakash Power
• DB Realty settles LIC Housing Finance Rs 30.6 crore debt claim (Cogencis)
• Steel Authority of India (SAIL) supplies special grade steel for INS Kiltan
• Pradeep Bakshi to takeover as CEO of Voltas
• V2 Retail to allot 20 lakh shares to India 2020 Fund II Ltd. at Rs 380 each and 10 lakh shares to promoters
• Jain Irrigation redeems foreign currency convertible bonds of $40 million
• HCL Infosystems to consider rights issue on October 20
• Punjab National Bank looks to raise $250-300 million via QIP (Mint)
• GTL Infra to refinance Rs 4,800 crore debt In three months. The company is talks with four global banks. It may sign a deal in next 2-3 months (Business Line)

Corporate Action

• RBI said Elpro International’s FII limit of 24 percent has been breached, no further buying allowed
• Tata Tele Circuit filter revised to 5 percent
• TCPL Packaging shifted to B group
• IIFL Holdings ex-date for demerger of 5Paisa Digital
• Grasim added to BSE 500 Index
• Hind Rectifiers trades ex-rights basis
• Pokarna last trading day before stock split from Rs 10 to Rs 2

Bulk Deals

Aries Agro

• Vijay Kedia bought 2.6 lakh shares or 2 percent equity stake at Rs 199.93 each

IFB Industries

• DSP Blackrock MF sold 4.7 lakh shares or 1.2 percent equity stake at Rs 800.01 each
• Jwalamukhi Investments (Westbridge) buys 6.97 lakh shares or 1.7 percent equity stake at Rs 800 each

Radico Khaitan

• Societe Generale bought 19.45 lakh shares or 1.5 percent equity stake at Rs 203.48 each

India Grid Trust

• Reliance Venture Asset Management sold 25.51 lakh shares at Rs 94.5 each
• Blue Diamond Properties Pvt. Ltd. bought 25.51 lakh shares at Rs 94.5 each

Who’s Meeting Whom?

• Cipla to meet IIFL Private Wealth Management and Invesco Hong Kong on October 17
• NBCC to meet HDFC Mutual Fund on October 17

Insider Trades

• Kotak Mahindra Directo C Jayaram sold 50,000 shares on August 2 in open market
• Vipul promoters created 6 lakh shares as pledge

Rupee

• The rupee continued its stellar rally for the sixth-straight day and ended at more than three- week high of 64.72 a dollar, helped by extremely bullish macro indicators.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty October Futures closed with a premium of 24.9 points at 10,255.9
• October Futures: Nifty open interest up 0.3 percent and Bank Nifty open interest down 6 percent
• India VIX closed higher by 0.4 percent at 11.31
• October series highest Call base at 10,200 (open interest at 32.4 lakh, down 6 percent)
• October series highest Put base at 10,000 (open interest at 70.8 lakh)
• October Call strikes 10,000 10,100, 10,200 saw open interest unwinding
• October Put strikes 10,200, 10,300 saw open interest addition

F&O Ban

In Ban: DHFL, Indiabulls Real Estate, Infibeam, JP Associates, JSW Energy, Reliance Communications, Reliance Capital

Out Of Ban: Bharat Earth Movers

Only intraday positions can be taken in stocks which are in F&O ban. There will be a penalty in case of a rollover.

Put-Call Ratio

• Nifty PCR at 1.67 from 1.63
• Nifty Bank PCR at 1.45 from 1.81

Stocks Seeing High Open Interest Change

• Federal bank saw open interest addition of 20 percent on long side
• IndusInd saw open interest addition of 14 percent on short side
• M&M Fin saw open interest addition of 14 percent on long side
• Colgate saw open interest addition of 13 percent on short side
• Bajaj Finance saw open interest addition of 11 percent on short side
• Berger Paints saw open interest addition of 9 percent on long side
• ICICI Prudential saw open interest addition of 8 percent on short side

Fund Flows

Brokerage Radar

JPMorgan on Bajaj Finance

• Maintain ‘Overweight’ with price target of Rs 1,875
• Earnings miss was largely driven by lower revenues; Asset quality remained stable with a sequential improvement seen in credit costs
• Though risk of short-term correction persist, from long term view this is an entry opportunity as growth profile remains robust
• Bajaj Finance has the capacity to sustain more than 35 percent loan growth over the next 3-5 years, despite the high base

Credit Suisse on Bajaj Finance

• Maintain ‘Underperform’; hiked price target to Rs 1,250 from Rs 1,000
• Loans growing at 38 percent could be a tad disappointing given that the festive season arrived earlier
• Difficult to justify current stock valuations, in light of rising risk profile and high growth
• Growth rates could disappoint given the company’s size, short tenure book and competition in the consumer durables space

Citi on Persistent Systems

• Maintain ‘Sell’; hiked price target to Rs 585 from Rs 575
• Company delivering well in Enterprise business, but concerns on ISV and core IP businesses remain in medium term
• Management says ISV business continues to shrink
• Hiked FY18/19 estimates by 2-3 percent to factor in Q3 results

CLSA on Colgate India

• Maintain ‘Sell’ with a price target of Rs 1,000
• Volume decline of 1 percent was disappointment; Expect market share to drop below 54 percent in toothpaste
• Growth to accelerate in H2FY18 as the base is quite low and price cuts of 8-9 percent to improve competitive position
• Management expects a gradual recovery ahead

Credit Suisse on Colgate India

• Maintain ‘Neutral’; Cut price target to Rs 1,025 from Rs 1,090
• Volume decline despite possible re-stocking paints a gloomy picture, likely to be the weakest among its FMCG peers
• Expectations of a major GST benefit failed to play out; Margin expansion driven by low ad spends
• Earnings to be strong in Q3 due to a very low base of 12 percent volume decline during demonetisation
• Business continues to see a major challenge as market share continues to slip

UBS on Colgate India

• Maintain ‘Buy’ rating with a price target of Rs 1,250
• Steady earnings in troubled times
• Channel checks confirm that post GST price-corrected stocks have just begun to reach consumers
• It means that the volume uplift which was being expected from GST implementation is still to come
• Company's focus on revenue mix improvement shows through the launch of ‘Swarna Vedshakti’

IDFC Securities on Kansai Nerolac

• Maintain ‘Outperformer’; hiked price target to Rs 522 from Rs 483
• Strong volume growth, but gross margin under pressure due to higher input cost & weak pricing
• Given the strong distribution expansion and improving Kansai can continue to drive market share gains
• Expect strong revenue growth coupled with improvement in profitability in auto segment
• Kansai top pick in paints space

IDFC Securities on Sterlite Technologies

• Maintain ‘Outperformer’; hiked price target to Rs 280 from Rs 260
• In line quarter; Strong growth in order book
• Hiked FY18/19 EPS by 3-7 percent; FY20 EPS introduced at Rs 10.5
• IDFC estimates profit of $64 million vs company target of $100 million by FY20
• Company well placed to ride the long-term demand story

KRChoksey on Sterlite Technologies

• Maintain ‘Buy’; hiked price target to Rs 348 from Rs 308
• Expect Revenue and Net Profit to grow at CAGR of 23 percent and 54 percent respectively over FY17-19
• Company well positioned to support laying of optic fiber for transition from 3G to 5G
• Expect company to bag more projects from telecom and internet service providers
• Government’s Digital India initiative to drive further growth for its product portfolio and system integration service for building Smart Cities

HDFC Securities on Strides Shasun

• Initiate ‘Buy’ rating with price target of Rs 1,200; Potential Upside 36 percent
• Strides has a diversified business mix, strong regulatory record, high growth potential and comfortable valuation
• Filing/approval momentum expected to pick-up over the next 15-18 months
• With no major CAPEX and operating leverage to aid margins expect return ratios to reach high-teens by FY20
• Return on invested capital to expand by 500 basis points to 17 percent by FY20; Strong free cash flow generation of $250 million over FY18-20
• Expect Revenue and Net Profit to grow at CAGR of 18 percent and 34 percent respectively over FY17-20
• Australia which contributes 23 percent to topline is expected to grow at CAGR of 13 percent over FY17-20

Morgan Stanley on Federal Bank

• Maintain ‘Equalweight’ with price target of Rs 95
• Q2 showed sequential improvement in asset quality, driven by lower corporate slippages
• Expect broadly stable asset quality and gradual improvement in pre-provision operating profit
• Expect slippages to remain broadly stable; Credit cost to remain under pressure near term given relatively lower coverage levels

Deutsche Bank on Federal Bank

• Maintain ‘Buy’; hiked price target to Rs 135 from Rs 130
• Q2FY18: Asset quality stable; strong loan growth at 25 percent
• Slippages normalize; Capital infusion drives improvement in net interest margin
• Expect lower treasury gains, but core earnings to remain strong

UBS on Federal Bank

• Maintain ‘Buy’ with price target of Rs 140
• Expect long growth of 22-26 percent over FY18-20 with lower asset quality risk
• Expect credit costs of 80/65 basis points in FY18-19
• Management maintains guidance of Net interest margin and Loan growth of 3.25 percent and above 25 percent respectively