All You Need To Know Going Into Trade On September 8

Stocks To Watch

• Dr Reddy's: Announces the launch of Fulvestrant Injection 250 mg/5ml per single-dose syringe, a therapeutic equivalent generic version of Faslodex injection, approved by the U.S. FDA. The Faslodex brand and generic market had U.S. sales of approximately $407 million for the 12-months ending June 2020 as per the IQVIA.
• Amber Enterprises: Launches QIP issue on Monday. Floor price of Rs 1,798.72 per share is a 2.1% discount to Monday's closing price. As per SEBI regulations, the company may offer a discount of not more than 5% on the floor price. The panel will meet on or after September 10 to decide on the closure of the QIP and the price for sale.
• Bharat Dynamics: The government proposes to sell up to 10% stake or 1.83 crore shares through an Offer for Sale. It also has the option to sell an additional 5% stake or 91.6 lakh shares. The floor price of Rs 330 per share is a 14.2% discount to Monday's close. The government looks to raise up to Rs 907.2 crore from the OFS. On full subscription, the government's stake in the company comes down to 72.75% from the previous 87.75%. The OFS opens for non-retail investors today and for retail investors on September 9.
• ITI: Signs MoU with Ilantus Technologies to deliver solutions to government agencies, defence, PSUs and the banking sector. The company has also received a Letter of Intent from Bharti Airtel for fibre-to-home rollout in eight circles across the country. The work involves laying of optical fibre backbone for providing broadband connectivity throughout the country. The time period to execute the order would be three months.
• EIH: Board approved raising Rs 350 crore via rights issue. Promoters intend to fully subscribe to their rights entitlement and have reserved their right to subscribe to any additional equity shares, amongst themselves, in the event of under-subscription of the said issue.
• Parag Milk Foods: The board has approved issuing secured Non-Convertible Debentures (NCDs) up to Rs 230 crore in tranches from time-to-time on a private placement basis.
• Dhanuka Agritech: Launched two fungicides for grapes farmers.
• Future Lifestyle Fashions: As on date, 95% of the company's stores have re-opened. Sales of Central in August rose 33% compared to July. Brand Factory sales rose 50% compared to July. Plus size fashion retail chain aLL saw sales double in August, as compared to July. Sales were driven by flagship brands like Lee Cooper, Indigo Nation, Scullers and Jealous 21.
• Genus Paper & Boards: Resolution professional for NS Papers has issued a Letter of Intent to the company with regard to the resolution plan submitted for NS Papers. The Letter of Intent has been accepted by the company.
• Indian Overseas Bank: Reduced MCLR rates by 10 basis points across various tenors from September 10. One-month MCLR now at 7.4% while one-year MCLR at 7.55%.
• HCC: Curreunt default as on August 31 stands at Rs 1,481.4 crore. Total financial indebtedness at Rs 10,339.9 crore.
• VIP Industries: Board approved allotment of NCDs worth Rs 50 crore.
• Future Consumer: Has defaulted in payment of principal and interest on NCDs amounting to Rs 22.03 crore due on September 5. The Company has approached the debenture trustees seeking deferment of the said obligations such that 50% of the amount due shall be paid on or before September 30 and the balance 50% to be paid by December 31. The debenture trustees having approached few of the debenture holders to obtain their consent to the aforesaid proposal for deferment, and in order to have clarity on the same, have called for a meeting of the debenture holders on September 9.
• Happiest Minds Technologies: IPO subscribed 2.87 times on Day 1. Institutional subscription at 0.08 times which doesn’t include anchor portion. Non-institutional investor subscription at 0.62 times. Retail subscription at 14.61 times.
• Non-Nifty Earnings Today: CESC, Dishman Carbogen Amcis, Future Consumer, Jindal Stainless, SML Isuzu.

Earnings Reported After Market Hours

Info Edge Q1FY21

• Revenue down 10.5% to Rs 280.1 crore
• Net profit up 24.7% to Rs 83.2 crore
• Ebitda up 3.5% to Rs 104.6 crore
• Ebitda margin at 37.3% from 32.3%
• Billing down 44% to Rs 188.6 crore
• Exceptional loss of Rs 8.2 crore in the base quarter
• Lower advertising costs and other expenses aid margins
• All numbers are standalone and compared on a year-on-year basis

Brokerage Radar

JPMorgan On Escorts

• Initiate coverage with overweight rating
• Price target of Rs 1,450
• Direct play on positive farm fundamentals and strong cyclical bounce-back in tractors
• Kubota tie-up is a significant strategic leap
• Net cash balance sheet, strong board and experienced professional management also help build confidence.
• Find risk-reward favourable despite steep YTD run-up
• Positives: Favourable cycle, scope for market share / margin expansion, synergies from the Kubota alliance over time
• Would keenly watch for clarity on cash usage that would set the direction for the next leg of growth
• Trading near its mid-cycle valuation and see scope for expansion in the near-term

UBS On HDFC Life

• Downgrade to sell from neutral
• Price target raised to Rs 585 from Rs 520
• Downgrade on account of relatively expensive valuation
• Non-linked segment to drive premium growth
• Expect APE growth of 19% over FY21-23
• Demand for ULIPs likely to remain soft
• Growth capital to boost solvency margin
• See absolute VNB to register a 9.5% CAGR over FY20-23
• Valuation premium gap may narrow

Citi On Indian I.T.

• Decent demand outlook, resilient margins and free cash flow trends
• Maintain view that FY22 will see benefit of pent-up demand
• See high single-digit revenue growth for largecaps in FY22E
• Would worry about banking sector outlook in FY22, legacy part may put pressure on growth and excess optimism on FY22 margins
• Would not be concerned about moderate appreciation in the rupee
• Top Picks: Tech Mahindra, Infosys, HCL Technologies
• Wipro remains a tactical buy - have positive Coverage watch open on Wipro
• Key Risks: Deeper and prolonged impact of Covid-19, higher than expected impact in certain verticals, impacting I.T. spends, immigration and sharp gains in the rupee

Stock Picks:

• TCS: Sell rating maintained; price target raised to Rs 2,000 from Rs 1,910
• Infosys: Buy rating maintained; price target raised to Rs 1,050 from Rs 1,000
• Wipro: Buy rating maintained; price target raised to Rs 315 from Rs 260
• HCL Tech: Buy rating maintained; price target raised to Rs 820 from Rs 725
• Tech Mahindra: Buy rating maintained; price target raised to Rs 880 from Rs 840

Axis Capital On Info Edge

• Add rating maintained
• Price target raised to Rs 3,570 from Rs 3,115
• Expect gradual recovery from Q3 led by pick-up in billing
• Investment in start-ups at higher valuation may provide upside
• See runway for growth in recruitment and raise its multiple as traffic attains pre-Covid-19 level in Q3
• Like management policy of incubating new ventures
• See further upside led by reduction in cash burn for new ventures led by Zomato

CLSA On HDFC Bank

• Buy rating maintained
• Price target of Rs 1,450

Takeaways from group call with MD & CEO-designate:

• Management's strategy is to further enhance customer acquisition via multichannels, digitising processes and improving service
• Management said asset quality impact is manageable despite short-term Covid-19 disruption
• Mid-30s cost-to-income ratio possible in the medium-term
• With more than 17% CET, the management is comfortable with the current capitalisation

Jefferies On Crompton Greaves Consumer Electricals

• Initiate coverage with buy rating
• Price target of Rs 340
• Market share in key categories has improved
• Festive season can be near-term demand catalyst in India
• Focused business strategy, sturdy balance sheet and return ratios
• Expect FY21 to be weak due to Covid-19 disruption
• See sales/PAT CAGR of 13%/22% over FY21-23E
• Key Risks: Extended demand slowdown, raw material volatility and pricing pressure
• Upside scenario price target: Rs 500
• Downside scenario price target: Rs 150

Pledged Share Details

• Asian Paints: Promoter Sattva Holding and Trading created pledge of 3.57 lakh shares on September 2.
• Jamna Auto: Promoter Map Auto created pledge of 2.5 lakh shares on September 3.
• Emami: Promoters released pledge of 10 lakh shares between September 3-4.

(As Reported On September 7)

Who’s Meeting Whom

• Pidilite Industries: To meet ICICI Securities on September 8.
• Tata Steel: To meet Citi Research, JP Morgan and Jefferies India between September 9-10.
• Asian Paints: To meet Aberdeen Asset Management on September 8
• Advanced Enzymes Tech: To meet ITI Capital on September 9.

Bulk Deals

• Shree Pushkar Chemicals and Fertilizers: Promoter Gautam Gopikishan Makharia acquired 1.98 lakh shares (0.64%) at Rs 104.18 per share.
• Indiabulls Housing Finance: Franklin Mutual Fund sold 31 lakh shares (0.73%) at Rs 194.04 per share.
• Shriram City Union Finance: Arkaig Acquisition acquired 12.24 lakh shares (1.85%) at Rs 965 per share and Cornalina Acquisition sold 12.24 lakh shares (1.85%) at Rs 965 per share.

Trading Tweaks

• AGM Date: Care Ratings, Galaxy Surfactants, Schneider Electric, Tinplate, Inspirisys Solutions,
• Fund Raising: Motherson Sumi Systems.
• Price Band Revision From 10% To 5%: NHC Foods, HLE Glascoat, Space Incubatrics.
• Move Into ASM Framework: Arihant Superstructures.
• Move Into Short Term ASM Framework: Praxis Home Retail, Jayaswal Neco Industries, Total Transport Systems.
• Move Out Of Short Term ASM Framework: Agro Phos, MPS, Saint Gobain Sekurit.

Insider Trades

• Jamna Auto: Promoter Map Auto acquired 1.78 lakh shares on September 3.
• Mangalore Chemicals and Fertilizers: Promoter Adventz Finance acquired 16 lakh shares on September 4
• Alembic Pharma: promoter Uday Educational Society sold 1.5 lakh shares between September 3-4.

(As Reported On September 7)

Money Market Update

• The currency ended with losses in Monday's session, ending at 73.35 against the U.S. Dollar as compared to Friday's close of 73.14.
• The rupee was the worst performing currency in Asia on Monday.

F&O Cues

• Nifty September futures closed at 11,390; premium of 35 points from 41 points
• Nifty September futures shed 0.1% and 6,000 shares in Open Interest
• Nifty Bank September futures closed at 23,015; premium of 70 points from 72 points
• Nifty Bank September futures shed 6% and 91,000 shares in Open Interest
• Nifty Put-Call Ratio at 1.25

Nifty Weekly Expiry: September 10

• Maximum Open Interest on Call side at 11,600 strike (29.2 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (26.2 lakh shares)
• Active Options: 11,300 Put (6.5 lakh shares) and 11,400 Call (7.2 lakh shares)

Nifty Monthly Expiry: September 24

• Maximum Open Interest on Call side at 11,500 strike (19.8 lakh shares)
• Maximum Open Interest on Put side at 11,000 strike (28.1 lakh shares)