Stocks To Watch: Bajaj Finance, Bajaj Finserv, Escorts, Godrej Consumer

Asian stocks saw mixed trading Wednesday after a rebound on Wall Street, with investors continuing to mull the economic dangers from the spreading coronavirus.

Futures on Hong Kong’s Hang Seng dropped more than 3 percent as markets reopened Wednesday, with the city’s stocks having to catch up with the global slide since last week. Equity benchmarks rose in South Korea and Australia, and were little changed in Japan. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.2 percent to 12,094.50 as of 7:10 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.

• Thirumalai Chemicals’ update on various projects: Construction of the project in Dahej is progressing as per schedule; Phthalic Anhydride Revamp Project has been completed and is in stable operation; The company has formed a Netherlands arm TCL Global BV and will commence business activities from the next fiscal; The U.S. arm is in the final stage of evaluating its food ingredients project and is close to finalising the necessary approvals and funding.
• Ricoh India’s Insolvency: Bombay High Court has dismissed a petition filed by Kotak Investment Advisors. Kotak Investment Advisors had challenged the National Company Law Tribunal’s approval of Ricoh India's resolution plan submitted by Kalpraj Dharamshi and Rekha Jhunjhunwala. (Bombay High Court Order)
• Tata Coffee: Board approved the sale of up to 1.6 lakh shares (0.06 percent) held by the company in Tata Chemicals, through the secondary market.
• Ircon International to consider share split on Feb. 11.
• Cochin Shipyard launched a 1,200-person cum 1,000-tonne cargo vessel.
• Wonderla Holidays said that the proposed Chennai project in process of getting approvals from Tamil Nadu Single Window Guidance Bureau. Board approved a proposal to set up an amusement park in Odisha.
• KEI Industries allocated 1 crore shares at Rs 500 per share which is at a discount of 3.5 percent to its floor price of Rs 518.14 per share. QIP Issue has been closed on Jan. 28.
• HFCL will acquire 47.9 percent stake in Bigcat Wireless for Rs 22.5 crore. The target company shall carry out the development of advanced wireless communication products including 4G and 5G wireless products and HFCL shall have the right to manufacture and sell these products and also own intellectual property rights of certain products.
• KPI Global Infra received an order for executing solar power project of 950 kilowatt from Sailaxmi Tex.

Earnings Reaction To Watch

Tata Coffee (Q3, YoY)

• Revenue rose 7.7 percent to Rs 501.4 crore.
• Net profit rose 2.2 times to Rs 24.9 crore.
• Ebitda rose 54.2 percent at Rs 85.1 crore.
• Margin stood at 17 percent versus 11.9 percent.

Mahindra & Mahindra Financial Services (Q3, YoY)

• Calculated Net Interest Income rose 9.8 percent to Rs 1,580.7 crore
• Net profit rose 18.2 percent to Rs 471.6 crore
• AUM rose 16 percent to Rs 75,884 crore
• Value of Assets Financed fell 2 percent to Rs 1,3218.2 crore
• Impairment Costs rose 72 percent to Rs 420.2 crore

Wonderla Holidays (Q3, YoY)

• Revenue fell 8 percent to Rs 70 crore.
• Net profit rose 44.8 percent to Rs 21 crore.
• Ebitda fell 16.1 percent to Rs 25 crore.
• Margin stood at 35.7 percent versus 39.2 percent.

JK Lakshmi Cement (Q3, YoY)

• Revenues rose 7.5 percent to Rs 1,005 crore.
• Net profit rose 3.3 times to Rs 49.2 crore.
• Ebitda rose 54.6 percent to Rs 152 crore.
• Margin stood at 15.1 percent versus 10.5 percent.

Tube Investments of India (Q3, YoY)

• Revenue fell 25.4 percent to Rs 1087.4 crore.
• Net profit rose 31.8 percent to Rs 82 crore.
• Ebitda fell 10 percent to Rs 132 crore.
• Margin stood at 12.1 percent versus 10.1 percent.

Spandana Sphoorty Financial (Q3, YoY)

• Net interest income rose 43 percent to Rs 233 crore.
• Revenue rose 20.2 percent to Rs 350 crore.
• Net profit rose 39.4 percent to Rs 129.5 crore.
• AUM rose 40 percent to Rs 5,879 crore.
• Loan Disbursements rose 63 percent to Rs 1,971 crore.

Cummins India (Q3, YoY)

• Revenue fell 3.8 percent to Rs 1,456.4 crore.
• Net profit rose 1.2 percent to Rs 199.9 crore.
• Ebitda fell 5 percent to Rs 216.5 crore.
• Margin stood at 14.9 percent versus 15.1 percent.

Thirumalai Chemicals (Q3, YoY)

• Revenue fell 24.4 percent to Rs 244.8 crore.
• Net loss at Rs 1.3 crore versus Net Profit at Rs 11.4 crore.
• Ebitda fell 45.1 percent to Rs 14.5 crore.
• Margin stood at 5.9 percent versus 8.2 percent.

Nifty Earnings To Watch

• Bajaj Finance
• Bajaj Finserv

Other Earnings To Watch

• Tata Power
• IDFC First Bank
• NIIT Technologies
• Nilkamal
• Orient Cement
• Pidilite Industries
• Trident
• Vaibhav Global
• Pokarna
• PTC Industries
• Quess Corp
• Escorts
• Jubilant Foodworks
• Crompton Greaves Consumer Electricals
• Dixon Technologies
• Accelya Solutions
• Godrej Consumer Products
• KPIT Technologies
• Meghmani Organics
• Nava Bharat Ventures
• Ramco Cements
• Transport Corporation of India
• Kaya
• Ramco Industries
• Security and Intelligence Services
• Sundram Fasteners
• Taj GVK Hotels & Resorts
• Shriram Asset Management
• Greenlam Industries
• Aptech
• Bharat Gears
• Birla Corporation
• Chemfab Alkalis
• Cholamandalam Financial Holdings
• Foseco
• GOCL Corporation
• Garware Polyester
• Maithan Alloys
• MPS
• TCI Developers

Pledge Share Details

• Uflex promoters released pledge of 25.8 lakh shares on Jan. 27.
• Sadbhav Infra Projects promoter Sadbhav Engineering created pledge of 90 lakh shares on Jan. 24.
• Emami promoters created pledge of 2 crore shares on Jan. 23.
• Jindal Steel & Power promoter OPJ Trading revoked pledge of 20 lakh shares on Jan. 28.

Trading Tweaks

• Bal Pharma, BLB, Morarjee Textiles to move into ASM Framework.
• GFL, GVK Power & Infrastructure, Sundaram Multi Pap to move into short term ASM Framework.
• Alpa Laboratories, RDB Rasayans, Gulshan Polyols, Hindustan Composites, Linc Pen & Plastics, Omax Autos, Uttam Value Steels, Swelect Energy Systems to move out of short term ASM Framework.
• Paisalo Digital price band revised to 10 percent.

Money Market Update

• The rupee closed at 71.34/$ versus 71.44/$ on Monday.

F&O Cues

Index Futures

• Nifty January futures closed at 12,068, premium of 12.2 points versus 6.7 points.
• Nifty futures open interest across series up 1 percent, adds 82,000 shares in open interest.
• Nifty Bank January futures closed at 30,771.6, premium of 10.2 points versus 41.6 points.
• Nifty Bank futures open interest across series up 3 percent, adds 54,000 shares in open interest.
• Rollovers –Nifty at 29 percent, Nifty Bank at 32 percent.

Options

• Nifty PCR at 0.99 versus 1.10 (across all series).

Nifty Monthly Expiry: Jan. 30

• Max open interest on call side at 12,200 (56.1 lakh shares).
• Max open interest on put side at 12,000 (34 lakh shares).
• Open interest addition seen at 12,100C (+21.3 lakh shares), 12,150C (+7.7 lakh shares).
• Open interest shedding seen at 12,200P (-6.7 lakh shares), 12,000P (-5.7 lakh shares).

Brokerage Radar

Edelweiss on Tata Motors

• Upgraded to ‘Buy’ from ‘Hold’; hiked price target to Rs 245 from Rs 140.
• JLR: free cash flow generation on track, but not at cost of capex.
• India: Course correction underway; macro revival catalyst awaited.
• Management’s tight seat belts on costs, capex and tech-invests should provide some safety.

Macquarie on Reliance Industries

• Downgraded to ‘Underperform’ from ‘Neutral’; maintained price target at Rs 1,300.
• Believe several bullish factors have already been captured in.
• Chemicals segment earnings likely peaked in 2018-19.
• Could be tactial buyers around Rs 1,200.

On Maruti Suzuki

UBS

• Maintained ‘Sell’ with a price target of Rs 6,200.
• December quarter was a miss on higher discounts; 2020-21 outlook remains challenging.
• Rural outlook strong; pre-buy not possible in diesel.
• Expect market share gains and margin expansion in 2020-21 not possible.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 8,205.
• Operating leverage helped margins rise on a sequential basis.
• With discounts at an all-time high, the business has enough levers to increase earnings as demand turns.
• BS-VI transition is the key thing to watch in the near term.

Citi

• Maintained ‘Buy’; cut price target to Rs 8,100 from Rs 8,400.
• Quarterly profit slightly ahead; revenue lower due to high discounts.
• See optimism in rural demand recovery in the first quarter of the next financial year.
• Petrol proportion to increase as January would be last month of diesel vehicle production.

Kotak Securities

• Maintained ‘Sell’ with a price target of Rs 5,800.
• December quarter reported weak Ebitda led by weaker mix and higher discounting; cut FY21-22 EPS estimates by 7-8 percent.
• Expect volume growth to pick up from FY21E onwards led by recovery in rural volumes.
• Increase in competitive intensity in compact SUV segment and expensive valuations drive Sell rating.

Edelweiss

• Maintained ‘Reduce’; cut price target to Rs 5,852 from Rs 6,009.
• December quarter review: revenue and Ebitda disappoint.
• Market share and/or profitability remain at risk due to muted new product cycle.
• Cut 2020-21 EPS estimates by 5 percent to factor in weak demand and adverse commodity outlook.

On M&M Financial

Morgan Stanley

• Maintained ‘Overweight’; hiked price target to Rs 425 from Rs 400.
• Key positives: contained NPA formation, stronger NIM and thereby pre-provisioning operating profit.
• Management highlighted asset quality and cost control as key near-term priorities.
• We find near-term risk reward attractive.

Emkay

• Maintained ‘Buy’ with a price target at Rs 394.
• December quarter’s net profit was higher than expected due to reduction in cost of funds.
• Weak rural demand; increasing dependency on new portfolios.
• GNPL high; asset-quality trends weak.