All You Need To Know Going Into Trade On October 23  
A worker walks through Terminal 2 of the Chhatrapati Shivaji International Airport, in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

All You Need To Know Going Into Trade On October 23  

Asian markets are mixed at the start of the final trading day of the week. Investors are gearing up for the final presidential debate between President Donald Trump and Democrat nominee Joe Biden.

Benchmark indices in Japan and South Korea are edging higher, while those in Australia are declining.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 11,888 as of 7:05 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 little changed. The index ended 0.5% higher on Thursday.
  • White House speaker Nancy Pelosi signaled optimism on a deal with the administration, while opposition remains in the republican-controlled senate.
  • Covid-19 infections in Germany have risen to a record while Spain's health minister said that the spread is 'out of control' in certain parts of the country.
  • Hospitalisations related to the virus have reached a two-month high in the U.S.
  • West Texas Intermediate crude down 0.2% at $40.55 per barrel while Gold was little changed at $1,904.4/Oz.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On October 23  

Stocks To Watch

  • Tata Steel: Bloomberg reports that Swedish Steelmaker SSAB AB is exploring a combination with Tata Steel's European business, as a back-up plan to a deal with Thyssenkrupp AG, amid industry consolidation. The Swedish company, which has a market value of around 28 billion Swedish kronor ($3.2 billion), would gain control of Tata Steel’s European business if they pursued such a deal, sources said.
  • Music Broadcast: Board recommends issuance of 1 bonus non-convertible, non-cumulative redeemable preference share for every 10 equity shares held by non-promoter shareholders. Issue price is Rs 100 per share translating to the total issue size of Rs 89.69 crore.
  • Tech Mahindra: Company’s wholly owned subsidiary Tech Mahindra (Americas), Inc. has agreed to acquire 6.03% equity shares in VitalTech Holdings, Inc. The target entity, headquartered in Texas, is engaged in the business of cloud-based Telehealth and remote patient monitoring platform development and services. Turnover for the financial year ended December 31, 2019 was $0.396 million.
  • HDFC AMC: Appoints KPMG as the internal auditor of the company with immediate effect on resignation of company's Internal audit head - Gautam Chandra. Chandra is moving into another role within the company
  • Kirloskar Brothers: Company says that no fraud was found in the SEBI order against promoters Sanjay Kirloskar and Pratima Kirloskar. The transactions were between private parties with parity of information and no loss was caused to minority shareholders and the public.
  • Nifty Earnings Today: JSW Steel, Tech Mahindra, Nestle India
  • Non-Nifty Earnings Today: Aarti Drugs, Yes Bank, Atul, Heidelberg Cement, ICICI Lombard, Persistent Systems, Sudarshan Chemicals, IDBI Bank

Earnings Reported After Market Hours

Ambuja Cements Q3CY20

  • Revenue up 9% to Rs 2,852.5 crore
  • Net profit up 88% to Rs 440.5 crore
  • Ebitda up 55% to Rs 680.3 crore
  • Ebitda margin at 23.9% from 16.8%
  • Volume growth of 8% supported by positive pricing
  • Ebitda per tonne up 43% to Rs 1,200
  • Power and fuel costs down by Rs 125 per tonne year-on-year
  • Re-negotiation of contracts and logistic efficiencies mitigated diesel price rise
  • Raw material costs fell due to reduction in rate of fly and gypsum through new usage norms
  • Declares interim dividend of Rs 17 per share
  • All numbers are consolidated and compared on a year-on-year basis

Biocon Q2FY21

  • Revenue up 11.3% to Rs 1,744.8 crore
  • Net profit down 22.5% to Rs 174.3 crore
  • Ebitda down 2.8% to Rs 391.4 crore
  • Ebitda margin at 22.4% from 25.7%
  • All numbers are consolidated and compared on a year-on-year basis

Coforge Q2FY21

  • Revenue up 9.1% to Rs 1,153.7 crore
  • Net profit up 51% to Rs 120.7 crore
  • Ebitda up 17.2% to Rs 198.6 crore
  • Ebitda margin at 17.2% from 16%
  • U.S. Dollar revenue growth of 10.7%
  • Constant currency growth at 8.1%
  • Order book executable over next 12 months expands 21% to $489 million
  • Insurance business growth of 13.6% and contributes 34% to overall revenue
  • BFS business growth of 8.5% and contributed 17% to overall revenue
  • Travel vertical recorded growth of 6% and contributed 19% to overall revenue
  • Americas business growth at 11.9% and contributed 48% to the revenue mix
  • EMEA business growth of 7.3% and contributed 36% to the revenue mix
  • All numbers are consolidated and compared on a quarter-on-quarter basis

HDFC AMC Q2FY21

  • Revenue down 8% to Rs 456 crore
  • Net profit down 8% to Rs 338 crore
  • Closing AUM as on September 30 at Rs 3,54,400 crore
  • Market share based on Closing AUM at 13.2%
  • All numbers are compared on a year-on-year basis

Alembic Pharma Q2FY21

  • Revenue up 17% to Rs 1,457 crore
  • Net profit up 35% to Rs 333.4 crore
  • Ebitda up 28% to Rs 443.4 crore
  • Ebitda margin at 30.4% from 27.8%
  • International business formulations sales up 21% to Rs 779 crore
  • U.S. generics up 8% to Rs 582 crore
  • Ex-U.S. international formulations up 84% to Rs 197 crore
  • India formulations business up 6% to Rs 415 crore
  • API business growth of 29% to Rs 263 crore
  • Six ANDA approvals received during the quarter
  • All numbers are consolidated and compared on a year-on-year basis

Crompton Greaves Consumer Electricals Q2FY21

  • Revenue up 12.8% to Rs 1,213.9 crore
  • Net profit up 27.8% to Rs 141.7 crore
  • Ebitda up 48% to Rs 191.2 crore
  • Ebitda margin at 15.8% from 12%
  • Continue to leverage strong presence in modern trade and e-commerce
  • One-third of the growth in the quarter contributed by alternate channels
  • Healthy growth momentum witnessed in all businesses and across product categories
  • Cash collection continues to remain buoyant
  • Domestic pumps business grew 13% from last year
  • Lighting business Ebit margins back to double digits
  • All numbers are consolidated and compared on a year-on-year basis

Hexaware Technologies Q3CY20

  • U.S. Dollar revenue up 2.9% to $214.1 million
  • Revenue up 1.1% to Rs 1,585.9 crore
  • Net profit up 6.7% to Rs 162.7 crore
  • Ebit up 6% to Rs 220 crore
  • Constant currency growth in U.S. Dollar terms at 1.5%
  • Total Contract Value in the quarter at $154 million
  • Strong traction with AMAZE platform
  • Travel and Transportation business up 11.7%
  • Healthcare and Insurance business up 6%
  • All numbers are consolidated and compared on a quarter-on-quarter basis

Bharti Infratel Q2FY21

  • Revenue up 5.4% to Rs 3,695 crore
  • Ebitda up 2.8% to Rs 1,817 crore
  • Ebitda margin at 49.2% from 50.4%
  • Net profit up 4.1% to Rs 732 crore
  • All numbers are consolidated and compared on a quarter-on-quarter basis

Brokerage Radar

BofA Securities On Ambuja Cements

  • Buy rating maintained
  • Price target raised to Rs 260 from Rs 251
  • Strong uptick in volumes, MSA Saving target healthy
  • Cost optimisation initiatives progressing well
  • Rural / semi-urban areas drive volume uptick
  • Capacity expansion plans in Rajasthan on track for completion by Q2CY21
  • Raise CY20-22 Ebitda estimates in sync with an improving volume growth outlook

Macquarie On Ambuja Cements

  • Outperform rating maintained
  • Price target raised to Rs 300 from Rs 243
  • Delivering on volumes and cost efficiency
  • Ramp-up of MSA with ACC remains key operational focus
  • Free cash flows should improve as capex peaks in CY21
  • Raise CY20 and CY21 standalone Ebitda estimates by 14%
  • Catalysts: Continued delivery on cost, ramp-up of new capacity in CY21 and industry price trend

Citi On Asian Paints

  • Neutral rating maintained
  • Price target raised to Rs 2,140 from Rs 2,110
  • Cost controls drive profit beat
  • Strengthening its decor play with forays in lightings, furnishings, and furniture
  • Raise earnings estimates by 1-6% driven mainly by lower overheads
  • Need to track Covid-19 situation but business prospects fairly steady
  • Valuations limit upside post recent outperformance

CLSA On Asian Paints

  • Outperform rating maintained
  • Price target raised to Rs 2,285 from Rs 2,200
  • Focus on sustaining double-digit momentum critical
  • Well placed to capitalise on tailwinds and sustain volume-led growth in the medium-term
  • Raise revenue estimates by 3-5% but largely maintain earnings estimates over FY21-23
  • Remains preferred pick in the discretionary space

UBS On Bajaj Auto

  • Buy rating maintained
  • Price target raised to Rs 3,500 from Rs 3,400
  • Gaining market share in most of the top 30 export markets
  • Raise FY22/23 EPS estimates by 1% and 3% respectively on better export volumes and margins
  • Building in a cautious outlook for domestic two and three-wheeler volumes
  • Valuations remain attractive

HSBC On Bajaj Auto

  • Buy rating maintained
  • Price target of Rs 3,500
  • Delivered sixth quarter of Ebitda beat as compared to consensus forecast
  • Domestic outlook commentary a tad cautious
  • Improved domestic two-wheeler mix, bottoming out of three-wheeler sales and strong export outlook improves earnings defensiveness
  • Improvement in finance availability can further accelerate the recovery
  • Relative valuations look undemanding

CLSA On Bharti Infratel

  • Buy rating maintained
  • Price target of Rs 265
  • Net tenancy additions near three-year high
  • Q2 results were ahead of estimates
  • See dividend yield as sustainable with limited capex and strong cash generation
  • Tower uncertainties are now behind
  • Merger with Indus Towers will be a positive

Bulk Deals

  • Cochin Shipyard: Radhakishan Damani buys 6.9 lakh shares or 0.5% of total equity at Rs 394.14 per share.
  • Welspun Corp: Wisdomtree Emerging Markets Smallcap Dividend Fund buys 21.6 lakh shares or 0.8% equity at Rs 115.2 per share.
  • Sanghi Industries: Government Pension Fund Global sold 20.2 lakh shares or 0.8% equity at Rs 25.77 per share.

Trading Tweaks

  • Price Band Revised From 10% To 5%: KIOCL Limited, Shrenik Limited, Tejas Networks Limited, Websol Energy System Limited
  • Price Band Revised From 20% To 10%: Jump Networks Limited
  • Move Into ASM Framework: Oriental Aromatics Limited, Ballarpur Industries Ltd, Raj Oil Mills Ltd
  • Move Into Short Term ASM Framework: Greenpanel Industries Ltd, Sambhaav Media Limited, Dewan Housing Finance Corporation Ltd
  • Move Out Of Short Term ASM Framework: Prabhat Dairy Ltd, Cigniti Technologies Ltd

Money Market Update

  • The rupee posted modest gains on Thursday, snapping a three-day losing streak to end at 73.54 against the U.S. Dollar as compared to Wednesday's close of 73.59.
  • The currency was the best performer in Asia on Thursday.
All You Need To Know Going Into Trade On October 23  

F&O Cues

  • Nifty October futures closed at 11,899; premium of 3 points from discount of 9 points
  • Nifty October futures shed 3.5% and 3.8 lakh shares in Open Interest
  • Nifty Bank October futures closed at 24,553; premium of 69 points from 68 points
  • Nifty Bank October futures shed 1% and 12,000 shares in Open Interest
  • Nifty Put-Call Ratio at 1.26
  • Out Of F&O Ban: Indiabulls Housing Finance, Bata
  • Stocks In F&O Ban: BHEL, Canara Bank, Mindtree, Nalco, Punjab National Bank

Nifty Monthly Expiry: October 29

  • Maximum Open Interest on Call side at 12,500 strike (35.8 lakh shares)
  • Maximum Open Interest on Put side at 10,500 strike (40 lakh shares)
  • Active Options: 12,500 Put (9.7 lakh shares) and 10,500 Call (6.6 lakh shares)
All You Need To Know Going Into Trade On October 23  
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