All You Need To Know Going Into Trade On October 19

Earnings Fineprint: HDFC Bank Q2FY21

• Net Interest Income up 17% to Rs 15,776 crore
• Net profit up 18% to Rs 7,513 crore
• Gross NPA at 1.08% from 1.36% last quarter
• Net NPA at 0.17% from 0.33% last quarter
• Provisions down 5% from the previous quarter to Rs 3704 crore
• Followed Supreme Court's order in the Gajendra Sharma Vs Union of India case and has not downgraded certain accounts to NPA after August 31
• Had the bank classified these borrower accounts as NPA post August 31, the share of Gross NPA and net NPA would be 1.37% and 0.35% respectively
• Special mention / overdue accounts where moratorium or deferment was announced stood at Rs 15,744 crore as on September 30
• Amount where asset quality benefit extended at Rs 4,639.5 crore as on September 30
• Provisions against accounts taking benefit under moratorium scheme at Rs 620 crore as on September 30
• Net profit and Net Interest Income compared on a year-on-year basis

Stocks To Watch

• Prestige Estates: Signs non-binding Letter of Intent with the Blackstone Group for the sale of certain direct and indirect interest in certain commercial offices, retail and hotel properties, mall management and identified maintenance businesses. Blackstone Group now gets exclusivity in relation to the transactions contemplated in the letter.
• Cadila Healthcare: Zydus Cadila gets final approval from the U.S. FDA for Ursodiol Capsule and a tentative approval for Linagliptin and Metformin Hydrochloride tablets. While Ursodiol is used in the treatment of liver diseases, the latter is used to improve blood sugar levels. Both drugs will be manufactured at the group's formulation manufacturing facility at Ahmedabad.
• JK Tyre: Subsidiary Cavendish Industries recorded sales of Rs 667 crore for the quarter. The Ebitda of Rs 114 crore reflected in an operating margin of 17%, according to the company. The subsidiary recorded its best ever performance on the back of higher capacity utilisation of 84% with significant increase in truck / bus radials and 2-3-wheeler tyre sales.
• Shoppers Stop: Board approves raising Rs 300 crore through a rights issue. It has also appointed Venugopal Nair as the company's MD & CEO from November 6, for a period of three years. Nair is currently the CEO of Westside.
• SRF: The company has raised Rs 750 crore through its QIP issue which was closed on October 16. The issue price for 17.64 lakh shares has been set at Rs 4,250 per share, which is a 4.7% discount to Friday's closing price. Funds like ICICI Prudential, Fidelity Funds, Nippon Life India Trustee have been allotted shares.
• Aurobindo Pharma: Enters into a share purchase agreement to acquire 100% equity share capital of MViyeS Pharma Ventures. MViyeS holds 32.1% stake in Eugia Pharma - a Joint Venture company in which Aurobindo holds 67.82%. Post the acquisition, both Eugia and MViyeS will become 100% subsidiaries of Aurobindo. The acquisition will be done for a consideration of Rs 274.22 crore.
• Dr Reddy's Laboratories: Gets approval to conduct clinical trial for Sputnik V vaccine along with the RDIF.
• DLF: PTI reports that DLF Cyber City Developers (DCCDL) - the company's rental arm has raised debt worth Rs 2,400 crore from State Bank of India to refinance its existing debt and fund future expansion plans.
• IndusInd Bank: RBI imposed monetary penalty of Rs 4.5 crore for non-compliance of various directions and guidelines.
• Mold-Tek Packaging: Board announces details of the rights issue announced in September. The price has been set at Rs 180 per rights share along with six detachable warrants at Rs 184 per warrant. One rights share and six detachable warrants will be issued for every 50 fully paid-up equity shares held in the company. The company will raise Rs 71.3 crore through the rights issue which will open on October 28 and close on November 11. The record date for the same has been set at October 22.
• Angel Broking: To hold board meeting on October 26, to declare an interim dividend.
• Chemcon Specialty Chemicals: CRISIL upgraded long-term rating on company's bank loan facilities of Rs 53 crore to BBB+ from BBB.
• Jet Airways: Lenders accept the plans submitted by Murari Lal Jalan and Florian Fritsch.
• Future Enterprises: Acuite Ratings and Research downgrades commercial papers and NCDs to ACUITE D due to default in interest and repayment.
• Nifty Earnings Today: Britannia, HDFC Life
• Non-Nifty Earnings Today: ACC, Century Textiles, Hatsun Agro, L&T Technology Services, Rallis India, Tata Metaliks.

Earnings Reported After Market Hours

Avenue Supermarts Q2FY21

• Revenue down 11% to Rs 5,306 crore
• Net profit down 38% to Rs 199 crore
• Ebitda down 36.5% to Rs 329 crore
• Ebitda margin at 6.2% from 8.6%
• All numbers compared on a year-on-year basis

IIFL Securities Q2FY21

• Revenue up 16% to Rs 201.9 crore
• Net profit up 2.1 times to Rs 50.9 crore
• Ebitda up 12% to Rs 78.7 crore
• Ebitda margin at 39% from 40.4%
• Financial Products Distribution AUM at Rs 10,200 crore
• DP Assets AUM at Rs 22,900 crore
• Acquired 1.1 lakh new customers during the quarter
• All numbers are consolidated and compared on a year-on-year basis

Tata Communications Q2FY21

• Revenue up 3% to Rs 4,401 crore
• Net profit up 7 times to Rs 384.8 crore
• Ebitda up 39% to Rs 1,157.5 crore
• Ebitda margin at 26.3% from 19.5%
• Higher other income contributes to net profit growth
• Other income at Rs 76.1 crore from Rs 9.5 crore
• Voice Solutions revenue down 13% to Rs 758.9 crore
• Data and Managed services revenue up 8% to Rs 3,542 crore
• Payment solutions revenue down 31% to Rs 58 crore
• Real Estate revenue flat at Rs 44.1 crore
• Exceptional gain of Rs 53.95 crore this quarter
• All numbers are consolidated and compared on a year-on-year basis

Bajaj Consumer Care Q2FY21

• Revenue up 3% to Rs 226.9 crore
• Net profit up 1.6% to Rs 56.9 crore
• Ebitda up 2.3% to Rs 62.4 crore
• Ebitda margin at 27.5% from 27.7%
• Overall sales growth during the quarter at 5%
• Total domestic sales up 4.6% to Rs 214.9 crore
• International business sales up 19.2% to Rs 6.9 crore
• Rural markets demand recovering at a healthy pace
• Urban markets continue to be under stress; demand still below last year levels
• E-commerce business doing consistently well
• Overall hair oil offtake recovered as the lockdown eased
• All numbers are consolidated and compared on a year-on-year basis

Shoppers Stop Q2FY21

• Revenue down 65.7% to Rs 297 crore
• Net loss widens to Rs 97.7 crore from Rs 8.2 crore
• Ebitda loss of Rs 38.2 crore from Ebitda gain of Rs 137.7 crore
• All numbers are consolidated and compared on a year-on-year basis

Oberoi Realty Q2FY21

• Revenue down 36% to Rs 316 crore
• Net profit flat at Rs 138 crore
• Ebitda down 13% to Rs 186 crore
• Ebitda margin at 58.9% from 43.3%
• All numbers are compared on a year-on-year basis

Brokerage Radar

JPMorgan On HDFC Bank

• Overweight rating maintained
• Price target raised to Rs 1,460 from Rs 1,220
• Solid execution during the quarter; loan growth driven by corporate book
• Asset quality likely to deliver a positive surprise despite Covid-19
• Estimated stress in the SME sector has come down to under 3% from 9% last quarter
• Capital, funding, underwriting and growth remain one of the best in the sector
• Raise FY21/22 EPS estimates by 3.5% and 2% respectively

JPMorgan On Avenue Supermarts

• Neutral rating maintained
• Price target cut to Rs 2,150 from Rs 2,200
• Pace of revenue recovery lags expectations owing to non-FMCG business
• Adverse mix, revenue de-leverage weighed on margins
• Will need to establish online presence in densely populated large cities, where customers prefer both convenience and competitive prices
• Lower FY21 EPS by 11% to factor in slower revenue recovery
• See limited downside from current levels given the recent underperformance
• Positive surprise on revenue momentum will be key catalyst for the stock hereafter

Ambit Capital On HCL Technologies

• Buy rating maintained
• Price target raised to Rs 965 from Rs 905
• See U.S. Dollar revenue growth of 1.4%, 10.1% and 7.5% for FY21/FY22/FY23E
• Ebit margin estimates are higher by 10-40 basis points due to Q2 beat
• Expect U.S. Dollar revenue CAGR of 7% over FY23-31E
• Strength in IMS, benefits from cloud, cybersecurity, and likely improvement in ER&D traction positive
• Valuations are reasonable as it trades at a discount of 27%/42% to Infosys/TCS on FY22 P/E
• Reiterate top pick status

Ambit Capital On Federal Bank

• Buy rating maintained
• Price target raised to Rs 72 from Rs 68
• Strong operating trends in the second quarter
• Strong deposit franchise and recent initiatives on fee income should continue to drive robust operating profit growth trends
• Asset quality deterioration should be limited due to high share of secured loans and limited exposure to stressed segments

ICICI Securities On Amber Enterprises

• Buy rating maintained
• Price target raised to Rs 2,600 from Rs 1,635
• Refilling of inventory, addition of new clients to help drive revenues going forward
• Build-in 18% revenue CAGR for FY19-23E led by the RAC division
• Component and mobility business to get a boost from the government's push to increase number of AC coaches in trains
• Improving mix, better operating leverage to drive margins
• Raise revenue, earnings estimates by 13% and 19% respectively for FY22E

Pledged Share Details

• Majesco: Promoter Sudhakar Ram released pledge of 4.5 lakh shares on October 15
• Zee Media: Promoters invoked pledge of 1.1 crore shares between October 13-14.
• JSW Energy: Promoter JSW Investments revoked pledge of 16 lakh shares on October 14.

(As Reported On October 16)

Bulk Deals

• Route Mobile: Theleme Master Funds acquired 7.69 lakh shares (1.35%) at Rs 687.6 per share.

Trading Tweaks

• AGM: IRCTC
• Price Band Revised From 10% To 5%: Alpa Laboratories, Gayatri Projects, Indo Count Industries
• Price Band Revised From 20% To 10%: Central Bank of India
• Move Into ASM Framework: BSL
• Move Out Of ASM Framework: Camlin Fine Sciences, Astec LifeSciences, Bharat Gears, Navin Fluorine, Mahamaya Steel Industries
• Move Into Short Term ASM Framework: Jaiprakash Associates
• Move Out Of Short Term ASM Framework: Thyrocare Technologies, Trejhara Solutions, Rushil Décor, Greenpanel Industries

Money Market Update

• The rupee ended at 73.35 against the U.S. Dollar as compared to Thursday's close of 73.38.
• The currency was the second worst performer in Asia for the week.

F&O Cues

• Nifty October futures closed at 11,769; premium of 7 points from discount of 5 points
• Nifty October futures shed 7.7% and 8.8 lakh shares in Open Interest
• Nifty Bank October futures closed at 23,945; premium of 27 points from discount of 36 points
• Nifty Bank October futures shed 6% and 1 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.35
• Enters F&O Ban: Tata Motors
• Out Of F&O Ban: Mindtree
• Stocks In F&O Ban: Adani Enterprises, BHEL, Canara Bank, Escorts, Indiabulls Housing Finance, JSPL, Punjab National Bank, PVR, SAIL, Tata Motors, Vodafone Idea

Nifty Weekly Expiry: October 22

• Maximum Open Interest on Call side at 12,000 strike (30.4 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (22.7 lakh shares)
• Active Options: 11,700 Put (8.1 lakh shares), 12,200 Call (7.2 lakh 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 (33.8 lakh shares)