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All You Need To Know Going Into Trade On September 16
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
16 Sep 2020, 07:46 AM IST 
A visitor passes a closed restaurant inside a shopping mall during a partial lockdown due to the coronavirus in West Jakarta, Indonesia. (Photographer: Rony Zakaria/Bloomberg)
Asian markets are little changed at the start of mid-week trading as investors await a Federal Reserve meeting.
Commentary from the FOMC will be awaited to gauge the extent of central bank support for the economic recovery. Treasuries and the U.S. Dollar edged higher.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.3% to 11,502 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:
- Benchmark indices in Japan and South Korea are little changed while they are trading with a positive bias in Australia.
- Futures on the Dow Jones too are little changed this morning. The index ended nearly unchanged on Tuesday.
- Contracts of the Nasdaq declined after reports suggested that Facebook may face a possible U.S. antitrust lawsuit.
- The Fed is likely to maintain its dovish stance at its policy meeting after earlier saying that it will shift to a more relaxed approach on inflation.
- "It is hard to see a new, strong rally ahead of the U.S. election," Chris Iggo of AXA Investment Managers told Bloomberg.
- The World Trade Organisation said that the U.S. violated international regulations by imposing tariffs on more than $234 billion of Chinese exports.
- Yield on the 10-year treasuries stood at 0.67%.
- West Texas Intermediate crude rose 0.6% to $38.5 per barrel while Gold is little changed at $1,953.6/Oz.
Get your daily fix of the global markets here.
Stocks To Watch
- Piramal Enterprises: Bloomberg News reports that Blackstone Group & Partners Group Holding are the only two remaining bidders vying for a controlling stake in the company's glass unit - Piramal Glass. The company is seeking a valuation of $1 billion for the unit.
- Indiabulls Housing Finance: Board approved allotment of 3.48 crore equity shares to qualified institutional buyers at an issue price of Rs 196.37 per share. Key allottees include HSBC, Tosca Group, Nomura, Think India Opportunities Master Fun, TIMF Holdings and Societe Generale.
- SpiceJet: Continues to maintain market share of 16%. Restructuring aircraft leases and early return of aircraft, thereby having long-term savings impact on costs. Likely return of Boeing 737 Max to service by Q4FY21 to boost operations. The airline also stated that Boeing has offered more compensation than it has recognised.
- Bharti Airtel: Partnered with Sterlite Technologies to build a modern optical fibre network for itself across 10 telecom circles.
- Infosys: Selected by Essential Utilities - one of the largest publicly traded water, wastewater and natural gas providers in the U.S., as a strategic partner to drive its digital transformation.
- InterGlobe Aviation: Civil Aviation Minister Hardeep Singh Puri stated that the company has modified engines in all of its 134 A320/321 aircrafts with Pratt and Whitney turbines.
- Aurobindo Pharma: Announced a collaboration with the Council of Scientific and Industrial Research to develop vaccines against Covid-19. The company will undertake clinical development and commercialisation of the vaccines.
- Hexaware Tech: Board has extended bid closing date for the company’s delisting to September 16.
- IRB Infra: Arm has executed concession agreement with NHAI for an expressway project in Gujarat for a bid cost of Rs 1,724 crore.
- Mangalore Chemicals and Fertilizers: Has shut down its DAP plant on September 15 for planned maintenance. Akshay Poddar has been appointed as the company’s chairman from September 29.
- Som Distilleries and Breweries: ICRA downgraded graded long term-rating to ICRA BBB from ICRA BBB-, with the outlook remaining negative.
- Lakshmi Vilas Bank: Mutual due diligence with Clix group and the bank is completed. On June 15, the Bank had signed preliminary, non-binding letter of intent with Clix Group in relation to the proposed amalgamation of Clix Group with the Bank.
Earnings Reported After Market Hours
SpiceJet Q1FY21
- Revenue down 82.9% to Rs 514.7 crore
- Net loss of Rs 593.4 crore from net profit of Rs 261.7 crore
- Ebitdar loss of Rs 166.5 crore from Ebitdar gain of Rs 684.1 crore
- Currently operating at 47% of pre-Covid-19 schedule post resuming operations
- Cargo revenue up 2.4 times to Rs 165.9 crore
- All numbers are standalone and compared on a year-on-year basis
- All parameters are better than Bloomberg estimates
ITD Cementation Q1FY21
- Revenue down 43.3% to Rs 399.4 crore
- Net loss of Rs 17 crore from net profit of Rs 16.7 crore
- Ebitda down 60.3% to Rs 29.6 crore
- Ebitda margin at 7.4% from 10.6%
- All numbers are consolidated and compared on a year-on-year basis
VA Tech Wabag Q1FY21
- Revenue down 5.6% to Rs 430.9 crore
- Net profit up 96.2% to Rs 5.1 crore
- Ebitda down 22.7% to Rs 29 crore
- Ebitda margin at 6.7% from 8.2%
- Net profit aided by lower taxes in the current quarter
- All numbers are consolidated and compared on a year-on-year basis
Proctor & Gamble Health Q2CY20
- Revenue down 13.9% to Rs 201.2 crore
- Net profit up 10.9% to Rs 48.9 crore
- Ebitda down 2.6% to Rs 53.1 crore
- Ebitda margin at 26.4% from 23.3%
- Lower expenses aid margin expansion
- Net profit aided by tax reversal of Rs 8 crore this quarter
- Final dividend of Rs 230 per share, including one-time special dividend of Rs 188 per share
- All numbers are standalone and compared on a year-on-year basis
Future Enterprises Q1FY21
- Revenue down 87.3% to Rs 179.4 crore
- Net loss widens to Rs 293.8 crore from Rs 10.5 crore
- Ebitda down 96.9% to Rs 12.1 crore
- Ebitda margin at 6.7% from 27.2%
- All numbers are consolidated and compared on a year-on-year basis
Brokerage Radar
CLSA On Vodafone Idea
- Underperform rating maintained
- Price target raised to Rs 12 from Rs 8.4
- Cashflow situation will be tight even after fund raising
- Network investments may be hindered unless ARPU, led by tariff hikes jumps to Rs 250 by FY25
- Forecast ARPU of Rs 175 and a further 6% share loss by FY23
CLSA On Power Sector
- Valuations inexpensive at the start of the cycle
- Start of the power reform in Q2 with a blend of liquidity injections and structural measures
- Fixing weak discom financials, renewable-led growth, de-levered balance sheets, growing profitability and inexpensive valuations are key catalysts to buy mid and small-cap utility stocks
- Buy rating on Tata Power with a price target of Rs 74
- Buy rating on JSW Energy with a price target of Rs 75
- Buy rating on CESC with a price target of Rs 830
- Sell rating on Adani Transmission due to expensive valuations, despite 19% decline this year
JPMorgan On Apollo Hospitals
- Overweight rating maintained
- Price target of Rs 1,950
- Recovery in occupancy aided by pent-up demand
- Momentum in pharmacies to continue before restructuring impact
- Expect return to hospital margin expansion trajectory in FY22
- Completion of SAP restructuring provides value unlocking opportunity over 3-4 years
Goldman Sachs On SpiceJet
- Sell rating maintained
- Price target of Rs 40
- High cargo revenue, strong cost control measures help partially cushion curtailed operations
- Expect net debt levels to rise in FY21
- Ability to continue operations without temporarily reducing scale appears challenging
HSBC On PVR
- Buy rating maintained
- Price target of Rs 1,540
- Efforts to rationalise costs, ensuring liquidity were key highlights of Q1
- Near-term challenges on cinema re-openings should be temporary
- An attractive recovery proxy
- Continue to see multiplexes as an exponential long-term growth ooportunity
- Vaccine announcement has potential to trigger a re-rating
HSBC On Cement
- Sector recorded steepest volume drop but highest Ebitda per tonne in Q1FY21
- Sector demand aided by resilient prices and lower costs
- FY22 demand estimates broadly unchanged
- Rising cost headwinds coupled with ample supply make us cautious
- Maintain reduce rating on Shree Cement and UltraTech, buy rating on Dalmia Bharat and hold rating on ACC and Ambuja
Pledged Share Details
- Solara Active Pharma Sciences: Promoter Pronomz Ventures released pledge of 13.18 lakh shares on September 10.
- Panacea Biotec: Promoters created pledge of 40 lakh shares on September 14.
- Apollo Hospitals Enterprises: Promoter PCR Investments released pledge of 10 lakh shares on September 11.
- JSPL: Promoters released pledge of 27 lakh shares between September 9-10.
- Uflex: Promoter Flex International released pledge of 2.7 lakh shares on September 14
- JSW Steel: Promoters created pledge of 18.8 lakh shares between Sept.9-11
(As Reported On September 15)
Who’s Meeting Whom
- Heidelberg Cement: To meet Plutus Wealth Management on September 16
- Mahanagar Gas: To meet Ventura Securities on September 18.
- Brigade Enterprises: To meet White Oak Capital, Goldman Sachs Investment and other investors between September 16-17.
- IIFL Finance: To meet Bavaria Industries Group on September 16.
- Asian Paints: To meet WCM Investment Management on September 16.
Bulk Deals
- BSE: Deutsche Boerse Group sold 7.87 lakh shares (1.75%) at Rs 554.36 per share and Nippon Mutual Fund acquired 5.47 lakh shares (1.21%) at Rs 554 per share.
- Hexaware Technologies: Societe Generale acquired 15.25 lakh shares (0.51%) at Rs 443.01 per share.
- Shilpa Medicare: Barclays Merchant Bank Singapore sold 4.94 lakh shares (0.61%) at Rs 560.21 per share.
- Stylam Industries: India 2020 Fund acquired 48,666 shares (0.60%) at Rs 638.68 per share.
- Waterbase: Promoter KCT Management Services acquired 3.25 lakh shares (0.78%) at Rs 105 per share.
Block Deals
- Radico Khaitan: Dovetail India Fund acquired 5.45 lakh shares (0.41%) at Rs 435 per share and Clareville Capital Opportunities Master Fund sold 5.45 lakh shares (0.41%) at Rs 435 per share.
Trading Tweaks
- AGM Date: NTPC, ICRA, DB Corp, Relaxo Footwears, VST Tillers Tractors, Deepak Fertilizers and Petrochemicals, Godawari Power and Ispat, Lux Industries, Mahanagar Gas, Man Infra, Metropolis Healthcare, Sundaram Fasteners, Sun TV Network, Pricol.
- Fund Raising: Puravankara.
- Ex-Date For Rights Issue: Deepak Fertilizers and Petrochemicals (rights at 3:20, premium of Rs 123 per share)
- Move Into ASM Framework: Opto Circuits, Gujarat Natural Resources, 8K Miles Software Services.
- Move Into Short Term ASM Framework: GSS Infotech.
- Move Out Of Short Term ASM Framework: TIPS Industries, Crest Ventures, Monnet Ispat & Energy, IFGL Refractories, eClerx Services, SPML Infra.
Insider Trades
- Sequent Scientific: Promoter Tarini Kumar sold 1.57 lakh shares on August 26
- Ceat: Promoters acquired 50,000 shares between September 10-11.
(As Reported On September 15)
Money Market Update
- The rupee ended with losses on Tuesday at 73.65 against the U.S. Dollar as compared to Monday's close of 73.48.
- The rupee was one among the two currencies that weakened against the greenback on Tuesday and ended as the worst performing currency in Asia.
F&O Cues
- Nifty September futures closed at 11,534; premium of 12 points from discount of 6 points
- Nifty September futures add 1.4% and 1.6 lakh shares in Open Interest
- Nifty Bank September futures closed at 22,597; premium of 131 points from 53 points
- Nifty Bank September futures shed 7% and 1.3 lakh shares in Open Interest
- Nifty Put-Call Ratio at 1.35
- Enters F&O Ban: Tata Chemicals, Vodafone Idea
- Stocks In F&O Ban: Adani Enterprises, Bank of Baroda, BHEL, Canara Bank, Escorts, Indiabulls Housing Finance, JSPL, Tata Chemicals, Vedanta, Vodafone Idea
Nifty Weekly Expiry: Sept 17
- Maximum Open Interest on Call side at 11,700 strike (26.2 lakh shares)
- Maximum Open Interest on Put side at 11,000 strike (25.2 lakh shares)
- Active Options: 11,500 Put (9.6 lakh shares) and 11,400 Call (-4.2lakh shares)
Nifty Monthly Expiry: Sept 24
- Maximum Open Interest on Call side at 12,000 strike (24.1 lakh shares)
- Maximum Open Interest on Put side at 11,000 strike (27.2 lakh shares)
