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All You Need To Know Going Into Trade On October 22
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
22 Oct 2020, 07:45 AM IST 
A waitress carries a fried breakfast at The Moon Under Water pub, operated by J D Wetherspoon Plc, on Leicester Square in London, U.K. (Photographer: Simon Dawson/Bloomberg)
Asian markets have opened lower along with U.S. Futures this morning. American Intelligence officials said that Russia and Iran have attempted to interfere in next month's presidential election.
Benchmark indices in Japan and Australia are declining. A U.S. stimulus package is unlikely to become a law before the election is adding to the volatility.
Treasuries were steady after closing at the highest level since June while oil prices declined.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,925 as of 6:55 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 trading lower by 160 points. The index ended 0.4% lower on Wednesday, after a volatile session.
- House speaker Nancy Pelosi said that she has 'a prospect for an agreement' with the Treasury Secretary, but it may not come together in time before the elections.
- The final presidential debate between U.S. President Donald Trump and Democratic candidate Joe Biden will take place today.
- “We still think the recovery will proceed and in three to six months you’re going to see that sequentially improving narrative and that’s going to help earnings growth going forward,” Anna Han on Wells Fargo Securities told Bloomberg.
- Yield on the 10-year treasuries stood at 0.81%.
- West Texas Intermediate crude fell 0.3% to $39.94 per barrel. Oil prices fell 4% overnight, after an industry report pointed to a surprise rise in American crude stockpiles.
Get your daily fix of the global markets here.
Stocks To Watch
- Bajaj Finserv: Revenue up 5.8% to Rs 15,052 crore. Net profit down 18.1% to Rs 986 crore. Net profit declines due to higher provisions at its lending arm, Bajaj Finance. Reported unrealised mark-to-market gains of Rs 306 crore from its insurance business. New Business Premium for life insurance business up 11% to Rs 1,372 crore.
- Vedanta: To hold board meeting on October 24 to consider and approve a first interim dividend on equity shares, if any for FY21.
- Nestle India: The company's parent Nestle SA in its post earnings release on Wednesday said that the India business saw strong mid single-digit growth during the quarter with good momentum seen in Maggi, Nescafe and Kitkat. The parent expects full-year organic sales growth of around 3%. It also expects underlying trading operating profit margin to improve.
- GMM Pfaudler: Board approves creation of pledge over entire 54% shareholding proposed to be held by the company and Mavag AG in GMM International, as part of the Pfaudler acquisition. It expects to close the acquisition by the end of the year.
- Mangalore Refinery & Petrochemicals: To consider raising Rs 5,000 crore via NCDs.
- Federal Bank: Rakesh Jhunjhunwala has reduced stake to 2.71% from 3.18%, as per the latest shareholding pattern. He has sold 1 crore shares during the quarter.
- KPI Global Infra: Signs new long term PPA with China Steel Corporation, Dahej for sale of 1.50 MW solar power for a period of 20 years under the Independent Power Producer business vertical.
- Indian Energy Exchange: Board has approved further investment of Rs 47.6 crore in its wholly-owned arm Indian Gas exchange so as to increase its paid-up share capital and comply with PNGRB norms.
- Hindustan Copper: To consider raising funds via Qualified Institutional Placement to the extent of 15% of existing paid-up equity capital in one or more tranches on October 29.
- Kirloskar Brothers: SEBI has imposed a penalty of Rs 31 crore on the company's promoters and others for indulging in insider trading and committing fraud with the public shareholders of Kirloskar Industries. These entities have also been barred from the capital markets between 3-6 months.
- Majesco: Amansa Holdings reduced stake to 6.46% from 7.35% on October 19.
- Great Eastern Shipping: To consider raising up to Rs 150 crore via issue of NCDs on October 26.
- Equitas Small Finance Bank IPO: Overall subscription of 0.68 times on the second day. QIB subscription at 0.05 times, non-institutional subscription at 0.05 times and retail subscription at 1.44 times.
- Nifty Earnings Today: Asian Paints, Bajaj Auto
- Non-Nifty Earnings Today: Biocon, Sterlite Tech, Ambuja Cements, Bharti Infratel, Coforge, Crompton Greaves Consumer, HDFC AMC, Hexaware.
Earnings Reported After Market Hours
GMM Pfaudler Q2FY21
- Revenue up 21.8% to Rs 186.3 crore
- Net profit up 29.3% to Rs 26.9 crore
- Ebitda up 29.1% to Rs 39.5 crore
- Ebitda margin at 21.2% from 20%
- Glass-line equipments revenue up 11% to Rs 936.3 crore
- Heavy Engineering revenue down 25% to Rs 151.3 crore
- Proprietary products revenue up 59% to Rs 775 crore
- Declares dividend of Re 1 per share
- All numbers are consolidated and compared on a year-on-year basis
Sagar Cements Q2FY21
- Revenue up 23% to Rs 325.9 crore
- Net profit up over ten times to Rs 50.1 crore
- Ebitda up 148% to Rs 104.7 crore
- Ebitda margin at 32.1% from 15.9%
- Net Realisations up 21% to Rs 4,513 per tonne
- Ebitda per tonne up 143% to Rs 1,451
- Sales volume up 2% to 7.2 lakh MT
- Plants operated at 48% during the quarter
- Material cost per tonne down to Rs 619 from Rs 720 last year
- Pet coke prices are softening from Q2FY20 onwards
- All numbers are consolidated and compared on a year-on-year basis
Tejas Networks Q2FY21
- Revenue up 26% to Rs 110 crore
- Net profit of Rs 4.5 crore from net loss of Rs 4.4 crore
- Ebitda up 48% to Rs 9.2 crore
- Ebitda margin at 8.4% from 7.1%
- Continue to see good order inflow; order book now at Rs 599 crore
- International revenue up 64.2% during the first six months of FY21, led by growth in Africa and South-East Asia.
- Continue to remain a debt-free company
- Expect further improvement in financial performance in H2FY21
Brokerage Radar
Jefferies On Indian Energy Exchange
- Buy rating maintained
- Price target raised to Rs 235 from Rs 210
- New products contribute 15% of Q2 volumes
- Transaction fees overhang to remain till FY21-end
- Pristine balance sheet a clear upside in the current environment
Jefferies On Newgen Software
- Buy rating maintained
- Price target raised to Rs 310 from Rs 250
- Strong results driven by margins
- Healthy growth in annuity-based revenue
- Sharp margin expansion unlikely to sustain
- Decision making on large deals remains slow
- Raise FY21-23 estimates by 1-20% to factor in Q2 results
- See 18% revenue CAGR over FY21-23
Credit Suisse On Colgate-Palmolive
- Outperform rating maintained
- Price target raised to Rs 1,650 from Rs 1,600
- Steady growth, strong margin expansion and positive outlook
- Premium innovations aid market share gains
- Expect strong earnings growth in H2FY21
- Gross margin expansion likely to continue
HSBC On Colgate-Palmolive
- Buy rating maintained
- Price target raised to Rs 1,660 from Rs 1,630
- Sales growth signifies return to normalcy
- Sharp gross margin expansion led to earnings beat
- Earnings outlook strong even if gross margins normalise
- Valuations are appealing
Pledged Share Details
- Adani Transmission: Promoter SB Adani Family Trust created pledge of 44 lakh shares on October 20.
(As Reported On October 21)
Bulk Deals
- Greenply Industries: Plutus Wealth Management acquired 92.5 lakh shares (7.54%) at Rs 75 per share. Jwalamukhi Investment Holdings sold 75.25 lakh shares (6.14%) at Rs 75 per share and Westbridge Crossover Fund sold 36.4 lakh shares (2.97%) at Rs 75.03 per share.
- Repco Home Finance: DSP Core Fund sold 3.51 lakh shares (0.56%) at Rs 197.38 per share.
Trading Tweaks
- AGM: SAIL, MEP Infra Developers, Mastek.
- Record Date Rights Issue: Mold-Tek Packaging (Rights issue at 1:50)
- Price Band Revised From 10% To 5%: DHFL, Bal Pharma, Kilitch Drugs, Shakti Pumps.
- Move Into ASM Framework: Future Enterprises, Bhansali Engineering Polymers, SMS Pharmaceuticals.
- Move Into Short Term ASM Framework: Borosil Renewables.
- Move Out Of Short Term ASM Framework: IZMO, Kwality, GTL.
Money Market Update
- The rupee ended lower on Wednesday at 73.59 against the U.S. Dollar as compared to Tuesday's close of 73.47.
- It was the worst performing currency in Asia on Wednesday.
F&O Cues
- Nifty October futures closed at 11,929; discount of 9 points from 2 points
- Nifty October futures shed 1% and 82,000 shares in Open Interest
- Nifty Bank October futures closed at 24,703; premium of 68 points from 36 points
- Nifty Bank October futures shed 1% and 12,000 shares in Open Interest
- Nifty Put-Call Ratio at 1.39
Nifty Weekly Expiry: October 22
- Maximum Open Interest on Call side at 12,000 strike (36.6 lakh shares)
- Maximum Open Interest on Put side at 11,800 strike (29 lakh shares)
- Active Options: 12,200 Put (9.8 lakh shares) and 11,200 Call (-6.2 lakh shares)
Nifty Monthly Expiry: October 29
- Maximum Open Interest on Call side at 12,500 strike (26.2 lakh shares)
- Maximum Open Interest on Put side at 10,500 strike (33.4 lakh shares)
