Stocks Radar: Yes Bank, Jubilant Industries, Bharti Airtel, ICICI Bank

Indian equity benchmarks extended decline on Friday, following the Asian stocks, and are poised for their seventh weekly losses in eight. The S&P BSE Sensex and the NSE Nifty 50 Index fell nearly 0.5 percent to trade at 33,523.04 and 10,066.55, respectively, as of 11:30 a.m.

The market breadth was tilted in favour of sellers. Nine of the 11 sectoral gauges fell, led by a 1.6 percent fall in the NSE Nifty IT Index. The NSE Nifty PSU Bank Index bucked the trend with a 0.65 percent gain.

Here Are The Stocks Moving The Market This Morning

Yes Bank Drops The Most In A Month After Q2 Results

Shares of the private lender fell the most in a month after the company’s profit for the quarter ended September missed estimates. The stock slumped 15 percent to Rs 168.60—the most since Sept. 28.

Net profit of the lender fell 4 percent year-on-year to Rs 965 crore, according to its exchange filing. That’s lower than the Rs 1,280 crore estimated by analysts tracked by Bloomberg.

Other Highlights (Year-On-Year)

• Net interest income rose 27 percent to Rs 2,407 crore.
• Provisions grew 50 percent to Rs 940 crore.
• Gross NPA stood at 1.60 percent against 1.31 percent in the preceding quarter.
• Net NPA stood at 0.84 percent compared with 0.59 percent in the April-June period.

Yet, brokerages maintained their stance on the stock. Here’s what they have to say about Yes Bank:

CLSA

• Maintains ‘Buy’ and cuts price target to Rs 300 from Rs 450, implying a potential upside of 51 percent from the last regular trade.
• Earnings missed estimates on higher provisioning.
• Cuts earnings estimate to build-in higher credit costs and slower top line.
• Succession clarity is key; capital will force consolidation in near term.

Macquarie

• Maintains ‘Outperform’ and cuts price target to Rs 310 from Rs 416—a potential upside of 56 percent from the last regular trade.
• Gross NPA rose led by lumpy slippages.
• Cuts estimates largely due to slower growth and increase in credit costs.
• Rules out chances of near-term capital raise.

Bharti Airtel Gains After Posting Surprise Profit

Shares of the telecom operator rose nearly 2.2 percent to Rs 302 apiece.

Bharti Airtel reported a surprise net profit in the September quarter aided by a one-time deferred tax gain without which it would’ve suffered a loss. Net profit rose to Rs 119 crore from Rs 97 crore in the preceding quarter, according to its exchange filing. Analyst estimates compiled by BloombergQuint had pegged a net loss of Rs 990 crore.

Other Highlights (Quarter-On-Quarter)

• Revenue rose 2 percent to Rs 20,423 crore.
• Ebitda fell 7 percent to Rs 6,244 crore.
• Margin stood at 30.6 percent against 33.5 percent.
• India ARPU stood at Rs 101 versus Rs 105.

Here’s what Credit Suisse has to say about Bharti Airtel:

• Maintains ‘Neutral’ with a price target of Rs 400, implying a potential upside of 35 percent from the last regular trade.
• Sees a further slide in India business metrics.
• Deferred tax benefits helped return to profit.
• Sees an upside risk to capital expenditure, which does not bode well for leverage.

The stock trades at 98 times its 12-months earning per share, Bloomberg data showed.

Other Stocks Reacting To Earnings Announcements

Shriram City Union Finance (Year-on-Year)

• Stock fluctuated between gains and losses to trade at Rs 1,524.60 a share.
• Net interest income up 17 percent to Rs 1,020 crore.
• Net profit up 6 percent to Rs 249 crore.

Biocon (YoY)

• Stock advanced 4.3 percent to Rs 644.80 apiece.
• Revenue up 36 percent to Rs 1,321 crore.
• Net profit rose to Rs 355 crore.
• Ebitda up 86 percent at Rs 340 crore.
• Margin stood at 25.7 percent versus 18.9 percent.
• Exceptional gain of Rs 189 crore.

Raymond (YoY)

• Stock rose 7.5 percent to Rs 664.80 apiece.
• Revenue up 16 percent at Rs 1,848 crore.
• Net profit up 5 percent at Rs 63 crore.
• Ebitda up 35 percent at Rs 186 crore.
• Margin stood at 10.1 percent against 8.6 percent.

Equitas, Ujjivan Slump After RBI Clarification

Shares of small finance banks tumbled in early trade after the Reserve Bank of India asked such lenders to list their banking units separately. Equitas Holdings Ltd. plunged as much as 23.2 percent to Rs 98.50 apiece, while Ujjivan Financial Services declined 18.4 percent to Rs 179.60.

The RBI clarified that promoters of small finance banks must list their banking units separately within three years of operation in line with the regulator’s licensing requirements.

Trading volume for Ujjivan was close to 33 times its 20-day average, Bloomberg data showed.

Indiabulls Stocks Extend Decline

Shares of Indiabulls group companies continued to decline on Friday. Indiabulls Housing Finance and Indiabulls Ventures fell for the second and sixth straight sessions to Rs 645.25 and Rs 370 apiece, respectively. Indiabulls Real Estate fell as much as 4.8 percent to Rs 70.15 apiece.

Jubilant Industries Jumps After It Approves Issue Of 18 Lakh Shares

Shares of the specialty chemicals maker gained nearly 6 percent to Rs 99.75 apiece.

Jubilant Industries will offer up to 18 lakh equity shares and up to 13 lakh convertible warrants to the promoters on a preferential basis, according to its exchange filing.

The stock declined 57.3 percent so far this year compared with a 1.9 percent advance in the Sensex, according to Bloomberg data.

Shalimar Paints Falls For Fifth Straight Session

Shares of the paint maker fell as much as 4.4 percent to Rs 81 apiece.

The company plans to issue 3.37 crore equity shares via rights issue at Rs 64.50 apiece, according to its exchange notification. The rights entitlement ratio is fixed at 3:2.

The stock’s trading volume is 4.3 times its 20-day average, Bloomberg data showed.

ICICI Bank Falls Ahead Of Earnings Announcement

Shares of the private lender fell as much as 1.5 percent to Rs 315.10 apiece. ICICI Bank is scheduled to announce its September quarter results today.

Earnings Preview (YoY)

• Net interest income expected to rise 8 percent to Rs 6,163 crore.
• Net profit expected to fall 54 percent to Rs 950 crore.
• Other income to decline sequentially due to muted treasury gains.
• Gross slippages to moderate from FY18 levels, but remain high.
• Credit cost to remain high due to ramp up in provision coverage ratio, ageing of existing NPAs and provision towards below-investment grade exposure.

The stock is 16 percent blow the Bloomberg consensus one-day target price.

Stocks Buzzing Ahead Of Earnings:

ITC Preview (YoY)

• Stock swung between gains and losses to trade at Rs 285.40 apiece.
• Net sales to rise 4 percent to Rs 10,722 crore.
• Ebitda expected to increase 9.5 percent to Rs 4,118 crore.
• Margin seen at 38.4 percent versus 36.5 percent.
• Profit seen 9.1 percent higher at Rs 2,879 crore.

Dr. Reddy’s Labs Preview (YoY)

• Stock fluctuated between gains and losses to trade at Rs 2,398 apiece.
• Revenue seen 7 percent higher at Rs 3,783 crore.
• Net profit expected to rise 21 percent to Rs 345 crore.
• Ebitda likely to increase 8 percent to Rs 732 crore.
• Margin seen at 19.3 percent versus 19.0 percent.