Stocks Radar: Axis Bank, Bharti Airtel, Coffee Day, Dr. Reddy’s, Strides Pharma

Indian equity benchmarks opened higher on Tuesday, led by the gains in ICICI Bank Ltd. and Reliance Industries Ltd. The S&P BSE Sensex rose as much as 0.57 percent to 37,902.53 points and the NSE Nifty 50 gained nearly 0.60 percent to 11,255.50, as of 9:35 a.m.

The market breadth was tilted in favour of buyers. All the 11 sectoral gauges compiled by the National Stock Exchange advanced, led by the 1.81 percent gain in the NSE Nifty Pharma Index.

A look at the stocks in news moving the markets today:

Coffee Day Hits Record Low After Founder Reported Missing

Shares of Coffee Day Enterprises Ltd., which runs Cafe Coffee Day outlets, plunged 20 percent to hit the lower circuit after its founder VG Siddhartha was reported missing. The scrip fell to Rs 153.40 apiece—its lowest ever.

Siddhartha, the son-in-law of former Karnataka Chief Minister SM Krishna, went missing near the Netravati river in Mangaluru on Monday evening.

On reaching Netravati river bridge, Siddhartha asked his driver to drop him off as he wanted to take a walk. However, when there was no sight of him even after an hour, the driver alerted the family, and they in turn informed the authorities, Mangaluru Police Commissioner Sandeep Patil told ANI. The local police is conducting search operations with the help of locals.

The stock trades 54 percent below the Bloomberg consensus one-year price target. The Relative Strength Index on the stock was below 30, indicating it may be ‘Oversold’.

Strides Pharma Jumps On China Foray

Shares of drugmaker Strides Pharma Science Ltd. rose the most in eight months to trade at Rs 387.80 apiece.

Strides Pharma’s arm has formed a joint venture with Sun Moral International Ltd., a wholly owned subsidiary of China-based Sihuan Pharmaceutical Holdings Group Ltd., as it looks to foray into the world’s second-largest pharma market. Strides Pharma, which will hold 49 percent stake in the venture, will license four products immediately to this new company with an option to expand the portfolio subsequently, it said in an exchange filing.

The stock’s trading volume was almost eight times the 20-day average. Strides Pharma trades at 14 times its estimated earnings per share for the coming year, according to Bloomberg data.

Bharti Airtel Jumps On Rating Upgrade

Shares of Sunil Bharti Mittal-led Bharti Airtel Ltd. snapped a two-day decline and rose 2.5 percent to trade at Rs 343 a share.

This came after Bank of America upgraded its recommendation on the stock to ‘Buy’ from ‘Neutral’. The research firm also increased the target price to Rs 400, indicating a potential upside of 19.5 percent from its last close.

Here’s what BofA had to say about the stock:

• Airtel well positioned to capitalise on weakness of Vodafone Idea.
• Airtel’s market share expected to remain stable at 30-31 percent over FY20-24.
• Favourable risk reward with tariff hike adding upside optionality.

The stock trades 12 percent below the Bloomberg consensus one-year target price.

Axis Bank Rises Ahead Of Q1 Results Today

Shares of Axis Bank Ltd. rose as much as 1.1 percent to Rs 728 apiece. The company is scheduled to announce its June quarter results later today.

The stock has gained 27 percent in the past 12 months compared to a 1 percent gain in the Sensex during the period.

Axis Bank Q1 Results Preview (Year-On-Year)

• Net interest income expected to rise 15 percent to Rs 5,965 crore.
• Pre-provision operating profit expected to increase 16 percent to Rs 5,072 crore.
• Profit after tax may rise more than 1.6 times to Rs 1,855 crore.

Dr. Reddy’s Gains After Q1 Results

Shares of Dr. Reddy’s Laboratories Ltd. rose as much as 1.32 percent to Rs 2,689 apiece after its June quarter profit beat estimates—helped by higher other income and improved sales in all key markets.

Meanwhile, Chief Operating Officer Erez Israeli has been named as the chief executive officer of the company, effective Aug. 1. Also, GV Prasad, the current CEO, will be re-designated as co-chairman and managing director, Dr. Reddy’s said in an exchange filing.

The Dr. Reddy’s stock trades at 20 times its estimated earnings per share for the coming year, Bloomberg data showed.

Dr. Reddy’s Q1 Results 2019-20: Key Highlights (Year-on-Year)

• Net profit jumped 45 percent to Rs 663 crore.
• Revenue rose 3 percent over last year to Rs 3,844 crore.
• Sales in India, other emerging markets and Europe jumped 15 percent, 10 percent and 19 percent, respectively.
• Operating profit fell 2.4 percent to Rs 758 crore.
• Operating margin contracted to 19.7 percent from 20.8 percent a year ago.

Other Stocks Reacting To Results Announcement

Strides Pharma (Q1, YoY)

• Stock rose as much as 12.2 percent to Rs 395.80.
• Revenue up 45.1 percent to Rs 685.8 crore.
• Net profit at Rs 2.9 crore versus net loss at Rs 2.6 crore.
• Ebitda up 2.9 times to Rs 123.6 crore.
• Margin at 18 percent versus 9 percent.
• Raw material as percent of sales at 46 percent versus 54.3 percent.
• Finance cost up 2.1 times.

DLF (Q1, YoY)

• Stock fell as much as 1.9 percent to Rs 176.05.
• Revenue down 11.7 percent to Rs 1,331.2 crore.
• Net profit up 2.4 times to Rs 414.7 crore.
• Ebitda down 22.3 percent to Rs 239.7 crore.
• Margin at 18 percent versus 20.5 percent.
• Exceptional gain of Rs 296.5 crore in the current quarter.
• Other income up 40 percent to Rs 209.7 crore.

Bharat Electronics (Q1, YoY)

• Stock rose as much as 5.9 percent to Rs 98.25.
• Revenue flat at Rs 2,124.5 crore.
• Net profit up 11.8 percent to Rs 210.6 crore.
• Ebitda up 11.4 percent to Rs 355.1 crore.
• Margin at 16.7 percent versus 14.9 percent.
• Other income of Rs 25.8 crore in current quarter.

RNAM (Q1, YoY)

• Stock rose as much as 0.13 percent to 227.70.
• Revenue down 17.6 percent to Rs 325.1 crore.
• Net profit up 12.9 percent to Rs 125.4 crore.
• Other expenses down 47 percent to Rs 62.9 crore.
• AUM up 6 percent to Rs 4.3 lakh crore.

Sanofi India (Q2CY19, YoY)

• Stock fell as much as 3.9 percent to Rs 5,885.
• Revenue up 9.4 percent to Rs 747.9 crore.
• Net profit down 2.2 percent to Rs 97.4 crore.
• Ebitda down 4.1 percent at Rs 157.8 crore.
• Margin at 21.1 percent versus 24.1 percent.
• Raw material as percent of sales at 56 percent versus 40 percent.

Muthoot Capital Services (Q1, YoY)

• Stock fell as much as 6.9 percent to Rs 503.70.
• Revenue up 26.2 percent to Rs 143.9 crore.
• Net profit down 22.3 percent to Rs 13.6 crore.
• Other expenses up 49 percent to Rs 22.6 crore.

Shriram City Union Finance (Q1, YoY)

• Stcok fell as much as 2.4 percent to Rs 1,421.
• Net interest income down 1.5 percent to Rs 954.7 crore.
• Net profit up 10 percent to Rs 260 crore.

IFB Agro Industries (Q1, YoY)

• Stock fell as much as 3.9 percent to Rs 317.60.
• Revenue down 19.5 percent to Rs 224.1 crore.
• Net profit down 73.9 percent to Rs 3 crore.
• Ebitda down 73.1 percent to Rs 5 crore.
• Margin at 2.2 percent versus 6.7 percent.
• Spirit segment revenue up 22 percent
• Marine segment revenue down 42 percent.
• Other expenses up 11 percent.

Shalby (Q1, YoY)

• Stock rose as much as 19.9 percent to Rs 100.40.
• Revenue up 13.3 percent to Rs 131.4 crore.
• Net profit up 2 times to Rs 23.6 crore.
• Ebitda up 18.1 percent at Rs 29.3 crore.
• Margin at 22.3 percent versus 21.4 percent.

Cochin Shipyard (Q1, YoY)

• Stock rose as much as 2 percent to Rs 367.50.
• Revenue up 11.6 percent at Rs 735.4 crore.
• Net profit up 12.1 percent to Rs 119.1 crore.
• Ebitda up 22.5 percent at Rs 140.9 crore.
• Margin at 19.2 percent versus 17.5 percent.

Stocks Moving On Heavy Volumes

Sical Logistics

• Stock hit lower circuit of 20 percent at Rs 72.35.
• Trading volume was more than 30 times its 20-day average.

AstraZeneca Pharma

• Stock rose as much as 9 percent t Rs 2,068.
• Trading volume was more than 17 times its 20-day average.

Persistent Systems

• Stock fell as much as 12.4 percent to Rs 468.75.
• Trading volume was almost 17 times its 20-day average

Astec Lifesciences

• Stock fell as much as 7 percent to Rs 352.80.
• Trading volume was more than 11 times its 20-day average.