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Stocks To Watch: Adani Ports, Allahabad Bank, HDFC, SBI, TCS

Here are the stocks to watch in today’s trade.

The Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
The Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Stocks declined in the wake of escalating Middle East tensions as Asian financial markets return to full strength following New Year holidays.

Japanese, Australian and South Korean equities fell, and U.S. futures slipped. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.2 percent to 12,221.50 as of 7 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.

Here are the stocks to watch in today’s trade.

  • Adani Ports will buy a 75 percent stake in the all-weather deep-water port in Andhra Pradesh at an enterprise value Rs 13,572 crore, according to its filing with stock exchanges. The deal is EPS (earnings per share) accretive from day one with a payback period of four years, the company said, adding that it will be funded by internal accruals and cash. The acquisition fits well with Adani Ports’ strategy to increase its footprint in Andhra Pradesh and nearly double its cargo throughput to 400 million metric tonnes by the financial year 2024-25 via expansion and acquisitions.
  • Titan said it witnessed “reasonable growth in the festive season”, with retail sales picking up at the start of the three-month period owing to the wedding season—between November and January. It indicated a 11 percent growth in jewellery sales in the period, in line with the company’s revised projections for the second half of 2019-20.
  • Sobha informed the exchanges that it sold nearly 10.66 lakh square feet of real estate in December quarter—a 17 percent increase over the previous year—netting nearly Rs 726.1 crore in sales value. Of this, Sobha’s share was around Rs 607.5 crore. That’s because the company developed some projects in coordination with other realtors. The average realisation, however, fell nearly 11 percent to Rs 6,811 per sq. ft, the company said. It expects the metric to improve in the future on the back of good traction in its luxury and super-luxury projects.
  • Dixon Technologies Dixon Technologies will partner with Samsung for manufacturing of LED TVs.The LED TV segment contributes about 40 percent of the total revenue, of which, 65 percent is contributed by Xiaomi.
  • HDFC reduced the benchmark lending rate by 0.05 percent, a move that will bring down interest rate for existing as well new borrowers. The New rates will now range between 8.20 percent and 9 percent, and the change will benefit all existing customers, it said.
  • Allahabad Bank Government infused Rs 2,153 crore capital.
  • Indian Overseas Bank Government infused Rs 4,360 crore capital.
  • SBI: SBI Cards and Payments to raise capital via issue of commercial papers worth Rs 400 crore on a private placement basis.
  • Birlasoft: Rajeev Gupta resigned from chief financial officer’s post with effect from March 31.
  • Gayatri Highways said that amount of defaults from financial institutions stood at Rs 45.69 crore on Dec. 31, while the total financial indebtedness stood at Rs 102.76 crore.
  • Bank of Baroda will consider raising capital via issue of debt on Jan. 8.
  • Texmaco Rail & Engineering: NCLT disposed of an application filed by Veekay General against the company’s arm, pursuant to a settlement.
  • Supreme Infra will consider settlement procedure with creditors on Jan. 10.
  • TCS filed an appeal with the Supreme Court on Jan. 3, in the TCS versus Cyrus Investments Pvt Ltd. & Ors case. This was against National Company Law Appellate Tribunal Judgment directing reinstatement of Cyrus Mistry as a director of the company for rest of the tenure
  • Ashoka Buildcon executed a concession agreement with National Highways Authority of India for a four-laning project of National Highway-161 in Telangana. This was under Bharatmala Pariyojna on Hybrid Annuity Model.
  • J Kumar Infraprojects: India Ratings affirmed long term issuer rating at ‘IND A+’ resolving the Rating Watch Negative and giving a stable outlook.
  • Future Retail: Board approved raising of $500 million senior secured USD-denominated notes. This is to meet the capital expenditure for the acquisition of in-store infrastructure retail assets.
  • Syndicate Bank notified on the proposed strike on Jan. 8. In the event the strike materializes, the functioning of the branches /offices may be impacted.
  • Divi’s Laboratories: Board approved re-designation of Kiran Divi as whole-time director and chief executive officer.
  • Adani Transmission: Adani Electricity Mumbai, a wholly-owned subsidiary company of the company incorporated a new subsidiary company namely, Adani Electricity Mumbai Infra Ltd. on Jan. 3. AEMIL will be providing transmission, distribution and other infrastructure-related services. It is yet to commence the operations.
  • Reliance Capital disclosed Rs 18,766 crore worth of long-term and short-term debt as on December 2019.
  • NCC: Board approved the merger of two wholly-owned subsidiaries—Vaidehi Avenues Limited and Aster Rail Private Ltd. with the company.
  • PNB Gilts: Reliance Home Finance defaults on Rs 25 crore worth of non-convertible debentures held by the company.
  • Jump Networks to launch its first ‘ JUMPNET public Wi-Fi service’ in Sindhudurg, Maharashtra starting Jan. 4.
  • IRB Infra received NOC from NHAI to transfer 9 BOT assets to IRB Infrastructure Trust and for GIC investment for 49 percent stake in trust. The company has received a certificate of registration from SEBI for the trust while 98 percent of lenders have also given their approval for the deal.

December Auto Sales

  • Force Motors Domestic Sales up 53 percent at 2517 units vs 1650 units

Pledge Share Details

  • JSW Energy promoters revoked pledge of 73.5 lakh shares from Dec. 27-31.

Trading Tweaks

  • Simplex Infrastructures to move into ASM Framework.
  • Lakshmi Vilas Bank to move out of ASM Framework.
  • Indiabulls Real Estate, LGB Forge, Sharda Cropchem, SORIL Infra Resources, Everest Kanto Cylinder, Manaksia Steels, Prakash Industries to move into short term ASM Framework.
  • Simplex Infrastructures, Mercator, Oil Country Tubular, Rama Steel Tubes, Optiemus Infracom to move out of short term ASM Framework.
  • ABB India price band revised to 20 percent.
  • Gallantt Ispat price band revised to 10 percent.
  • Dishman Carbogen Amcis, Vakrangee, Monnet Ispat & Energy price band revised to 5 percent.

Who’s Meeting Whom

  • Tata Motors to meet Edelweiss Securities and Fidelity Management from Jan. 6-7.
  • Mahindra Logistics to meet GoDigit General Insurance on Jan. 6.

Insider Trading

  • KRBL promoters acquired 45,000 shares on Dec. 31.
  • Electrosteel Castings promoter GK Sons acquired 1.45 lakh shares on Dec. 31.
  • Grasim Industries promoter Pilani Investment acquired 4.4 lakh shares on Dec. 31.
  • Anant Raj promoter Amar Sarin acquired 3.8 lakh shares from Dec. 30-31.
  • Laurus Labs promoter Raju Kalidindi sold 1.67 lakh shares from Dec. 30-31.

Money Market Update

  • The rupee fell to a one-month low to close at 71.80/$ versus 71.37/$ on Thursday.

F&O Cues

Index Futures

  • Nifty January futures closed at 12,256.4, premium of 29.8 points versus 57 points.
  • Nifty January futures open interest down 4.5 percent, sheds 5.6 lakh shares in open interest.
  • Nifty Bank January futures closed at 32161.2, premium of 92 points versus 135 points.
  • Nifty Bank January futures open interest down 3.3 percent, sheds 43,000 shares in open interest.

Options

  • Nifty PCR at 1.36 versus 1.46 (across all series).

Nifty Weekly Expiry: Jan. 9

  • Max open interest on call side at 12,300 (22 lakh shares).
  • Max open interest on put side at 12,200 (19.3 lakh shares).
  • Open interest addition seen at 12,250C (+7.1 lakh shares), 12,200C (+5.5 lakh shares), 12,100P (+4.2 lakh shares).

Nifty Monthly Expiry: Jan. 30

  • Max open interest on call side at 12,500 (23.9 lakh shares).
  • Max open interest on put side at 12,000 (39.8 lakh shares).
Stocks To Watch: Adani Ports, Allahabad Bank, HDFC,  SBI, TCS

Brokerage Radar

On Adani Ports

IDFC Securities

  • Maintained ‘Buy’ with a price target of Rs 466.
  • The acquisition is in line with a strategy to grow port volume through organically/inorganically.
  • Believe acquisition is attractively valued considering getting presence in Andhra Pradesh, scaling up of the new port to 100 MTPA and opportunity to improve the operational efficiency of the ports.

CLSA

  • Maintained ‘Buy’ with a price target of Rs 485.
  • Made largest port M&A at an attractive valuation to solidify its hold over eastern India coast.
  • M&A is likely to improve earnings quality and yield on this acquisition is likely to be 11.4 percent in 2020-21.
  • Strategic asset to deliver 14 percent growth in port Ebitda over FY19-21.

Morgan Stanley

  • Maintained ‘Overweight’ with a price target of Rs 433.
  • Establishes a presence in Andhra Pradesh.
  • Acquisition to complement coastal movement from Dhamra.

Edelweiss

  • Maintained ‘Buy’ with a price target of Rs 450.
  • KPCL acquisition to fast-track 400MT cargo volume target.
  • The acquisition is putting capital to work in a depressed environment.
  • KPCL’s volume success hinges on diversification from coal volumes.

Centrum

  • Strong cash generation gives an ability to aggregate high-quality assets at reasonable valuations.
  • Acquisition of KPCL gives Adani Ports a sizeable and scalable presence in Andhra Pradesh.

More Calls

Jefferies on Auto

  • Divergent growth across segments in December and third quarter.
  • The flattish trend in passenger vehicle continues; sharp double-digit decline in a two-wheeler.
  • The sharp decline in MHCVs continues; LCVs flattish.
  • Strong growth in a three-wheeler, partly helped by a low base.
  • The flattish trend in tractors led by M&M.

UBS on L&T

  • Upgraded to ‘Buy’ from ‘Sell’; hiked price target to Rs 1,600 from Rs 1,401.
  • Leader likely to become stronger; well placed to benefit from changing landscape.
  • Change in investment composition trend could accelerate.
  • View any weakness driven by near-term misses as buying opportunity.
  • Key risk: growth stagnation resulting in fiscal pressure depressing infrastructure investments.

Axis Capital on Apollo Hospitals

  • Maintained ‘Buy’; hiked price target to Rs 1,760 from Rs 1,680.
  • See strong visibility of sales-per-Ebitda growth.
  • The superior clinical outcome led by its Center of Excellence—a key differentiator.
  • Moderating capex coupled with better financials to improve RoCE, FCF.
  • Value unlocking in health insurance and front-end pharmacy business to reduce pledge and net debt.

Edelweiss on Bharat Forge

  • Upgraded to ‘Buy’ from ‘Sell’; hiked price target to Rs 625 from Rs 355.
  • The shift to platforms-based model enhances revenue visibility.
  • Exports are approaching bottom levels.
  • Track record of identifying and scaling up high-value add products to drive returns.

UBS on PVR

  • Maintained ‘Buy’; hiked price target to Rs 2,250 from Rs 1,950.
  • Multiple levers adding to exhibitors' strength and bargaining power.
  • Solid screen addition pipeline; ticket price increase likely.
  • Risk from OTT platforms and Jio much lower than priced in by the market.