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All You Need To Know Going Into Trade On September 18

Stocks in the news, big brokerage calls of the day, complete trade setup and much more!  

An empty Shek O Beach during Covid-19 in Hong Kong. )Photographer: Roy Liu/Bloomberg)
An empty Shek O Beach during Covid-19 in Hong Kong. )Photographer: Roy Liu/Bloomberg)

Asian markets have opened slightly higher on Friday, on course to post its first weekly gain for the month of September.

The U.S. Dollar has steadied after volatile moves on Thursday, while investors look for further catalysts to the rally.

The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.2% to 11,510 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:

  • Benchmark indices in Japan, South Korea and Australia are gaining at the start of trade.
  • Futures on the Dow Jones are trading lower by 70 points. The index ended 0.5% lower on Thursday.
  • Technology shares led by Apple, Facebook and Microsoft were the top laggards in Thursday's session.
  • Data showed that the number of Americans applying for jobless benefits has resumed a decline.
  • "Monetary policy has its limits, the lack of fiscal policy support leaves significant risks to this recovery,” Matt Miskin of John Hancock Investments said.
  • Natural Gas prices fell the most in two years after a bigger-than expected rise in stockpiles revived concerns of a glut.
  • Yield on the 10-year treasuries stood at 0.68%.
  • West Texas Intermediate crude was little changed at $40.88 per barrel while Gold traded at $1,944.7/Oz.

Get your daily fix of the global markets here.

All You Need To Know Going Into Trade On September 18

Stocks To Watch

  • Dr Reddy's Laboratories: Announces settlement of litigation with Celgene, relating to Revlimid capsules. Celgene has agreed to provide DRL with the license to sell volume-limited amount of the capsule in the U.S. starting March 2022. The company is also allowed to sell the capsule without volume limitation, starting January 31, 2026.
  • TVS Motor: Announced their new distribution partnership with Autotecnica Colombiana SAS - a motorcycle assembler in Colombia. This entity will operate 50 dealerships exclusive to TVS Motor and create dedicated space for the brand in over 600 retail outlets.
  • EIH: Sets rights issue price at Rs 65 per share - a 24.8% discount to Thursday's closing. Rights entitlement ratio at 8 shares for every 85 shares held. Record date set as September 23. The company proposes to issue 5.38 crore rights shares at a face value of Rs 2 per share.
  • Vedanta: Bloomberg news reports that the company has approached SEBI for necessary approvals to start the reverse book building process for delisting. The company’s founder Anil Agrawal is also working with Centricus Asset Management to approach potential investors for the proposed turnaround fund which will buy stakes in government companies being sold of as India’s divestment program. The fund will also target companies undergoing restructuring under the bankruptcy laws.
  • Essel Propack: Bloomberg News reports that the company's promoter Blackstone Group's entity - Epsilon Bico is planning to sell up to 7.26 crore shares or 23% of the total outstanding capital. Floor price for the proposed sale is set at Rs 255 per share, a 6.5% discount to Thursday's closing price. The total stake is valued at Rs 1,850.8 crore. Post the sale, Epsilon Bico's stake to fall to 51.99% from 74.99% earlier.
  • Sterling and Wilson Solar: Signed a 106.71 MW solar power project worth Rs 462 crore in Chile. The order has been received from a global independent power producer and the work is expected to begin by Q4FY21.
  • Kilpest India: Board has approved amalgamation of company’s arm 3B Blackbio Tech with itself. The target company develops molecular diagnostic products. The management’s prime focus is to run and grow the diagnostic business. Pursuant to the scheme of amalgamation 10,74,570 new fully paid up equity shares of Kilpest will be issued to the remaining shareholders of 3B BlackBio, at a swap ratio of 8.33 shares of Kilpest for 1 share in 3B BlackBio.
  • IRCTC: Bloomberg News reports that the government will levy user fee at some railways stations. S
  • Elantas Beck: Signs a Memorandum of Understanding with Talegaon Industrial Parks for acquisition of land situated at Pune for setting up a new greenfield manufacturing facility. The said facility will provide additional capacity to cater to the market demand.
  • Happiest Minds Technologies: Plutus Wealth Management acquired 10 lakh shares at Rs 350 per share.

Brokerage Radar

Macquarie On Dr Reddy's Laboratories

  • Outperform rating maintained
  • Price target of Rs 4,850
  • gRevlimid settlement improves earnings visibility beyond FY22
  • gRevlimid's NPV for DRL works out to Rs 480-500 per share which is not factored in the price target.
  • Clear runway for Dr Reddy's post estimated launch in mid FY23
  • Only dampener has been recent underperformance in domestic business due to its high acute mix
  • Remains top pick in the Pharma space

Credit Suisse On Dr Reddy's Laboratories

  • Outperform rating maintained
  • Price target raised to Rs 5,750 from Rs 5,100
  • Expect significant cashflows from gRevlimid during FY23-26
  • Strong cashflow should help strengthen presence in India & EMs
  • Stock still has multiple catalysts going ahead
  • gRevlimid would contribute in FY23 but near-term earnings momentum is strong
  • API business to structurally benefit from supply de-risking

Macquarie On Bharti Airtel

  • Outperform rating maintained
  • Price target of Rs 700
  • Recent checks indicate possibility of tariff increase in late-2020
  • Africa mobile business has seen little impact from Covid-19
  • Broadband tariff cuts is a small negative - or maybe necessary to increase adoption
  • Broadband remains a conundrum as penetration is low
  • Valuations are fair at the moment post a correction

CLSA On Indian Autos

  • Captive financing arms of Hero, TVS and Ashok Leyland have been important volume growth enablers in the last few years.
  • Potential capital infusion in fincos would not put extra pressure on OEM balance sheets
  • Stress case assumes rising Gross NPAs, declining NIMs and lower AUM growth
  • Building in subsidiary investments of Rs 1,500 crore for Hero, Rs 1,050 crore for TVS and Rs 750 crore for Ashok Leyland in our FY21-23 forecasts
  • Maintain buy rating on Hero MotoCorp; price target raised to Rs 3,640 from Rs 3,575
  • Maintain buy rating on Ashok Leyland; Price target raised to Rs 94 from Rs 80
  • Maintain sell rating on TVS Motor; price target raised to Rs 435 from Rs 418

Morgan Stanley On Indian I.T.

  • HCL Tech's mid-quarter update suggests that revenue growth is likely to surprise on the upside for most companies
  • Demand recovery better than expected
  • Raise revenue estimates for FY21/22, which will aid earnings despite assuming a stronger rupee
  • Raise FY21 and FY22 EPS estimates for largecaps by up to 3.5%
  • Maintain equalweight rating on TCS; price target raised to Rs 2,500 from Rs 2,125
  • Maintain overweight rating on Infosys; price target raised to Rs 1,120 from Rs 950
  • Maintain overweight rating on HCL Tech; price target raised to Rs 900 from Rs 735
  • Maintain overweight rating on Tech Mahindra; price target raised to Rs 920 from Rs 780

Pledged Share Details

  • JSPL: Promoter OPJ Trading released pledge of 24.4 lakh shares on September 14.
  • Apollo Hospitals: Promoter PCR Investments revoked pledge of 10 lakh shares on September 11.
  • Asian Paints: Promoter Sattiva Holding and Trading created pledge of 18.71 lakh shares on September 15.
  • Future Consumer: Promoter Future Capital Investment invoked pledge of 36.6 lakh shares on September 15.

(As Reported On September 17)

Who’s Meeting Whom

  • Endurance Technologies: To meet Wellington Management Singapore on September 18.
  • Dr Lal Pathlabs: To meet Mirae Asset Management on September 18.
  • Mahindra and Mahindra: To meet Fidelity Investments on September 18.
  • Ramco Cements: To meet Axis Mutual Fund and HDFC Mutual Fund on September 18.

Trading Tweaks

  • AGM Date: Dalmia Sugar, Fine Organics, Emami, Heidelberg Cement, Gulf Oil Lubricants, Linde India, Dilip Buildcon, Kajaria Ceramics, Indoco Remedies, Edelweiss Financial Services, BPCL, BHEL, Bharat Dyanamics.
  • Price Band Revision From 10% To 5%: GTL, McDowell Holdings, Skipper, SMS Lifesciences, NGL Fine Chemicals.
  • Move Into ASM Framework: Archit Organosys.
  • Move Into Short Term ASM Framework: Indoco Remedies, Aegis Logistics, Gyscoal Alloys.
  • Move Out Of Short Term ASM Framework: Gujarat Apollo Industries, Music Broadcast, NIIT, Allied Digital Services.

Insider Trades

  • Mindtree: Promoter Subroto Bagchi sold 2.65 lakh shares between September 14-15.
  • Trident: Promoter Trident Capital acquired 11 lakh shares on September 16.
  • Aarti Industries: Promoters sold 48,000 shares between September 14-15.
  • Somany Home Innovation: Promoter Somany Impressa acquired 2.41 lakh shares between September 15-16.

(As Reported On September 17)

Money Market Update

  • The rupee ended weaker on Thursday, closing at 73.66 against the U.S. Dollar as compared to Wednesday's close of 73.53.
  • The currency was the third worst performer in Asia on Thursday.
All You Need To Know Going Into Trade On September 18

F&O Cues

  • Nifty September futures closed at 11,527; premium of 11 points from 7 points
  • Nifty September futures shed 1.5% and 1.7 lakh shares in Open Interest
  • Nifty Bank September futures closed at 22,391; premium of 71 points from 72 points
  • Nifty Bank September futures add 1.5% and 26,100 shares in Open Interest
  • Nifty Put-Call Ratio at 1.08

Nifty Monthly Expiry: Sept 24

  • Maximum Open Interest on Call side at 12,000 strike (34.1 lakh shares)
  • Maximum Open Interest on Put side at 11,500 strike (31.9 lakh shares)
  • Active Options: 10,800 Put (5.54 lakh) and 11,500 Call (9.74 lakh shares)
All You Need To Know Going Into Trade On September 18