Stocks To Watch: Asian Paints, Axis Bank, Bajaj Finserv, Indiabulls Housing, L&T, RBL Bank

Stocks in Asia were mixed after developments on Brexit sapped risk appetite, dragging U.S. shares lower with Treasury yield.

Shares were little changed in Tokyo and Seoul, and declined in Sydney. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed at 11,626 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:

• Bajaj Finserv: Bajaj Life Insurance signed a corporate agreement with Axis Bank in September quarter.
• Affle India: Filed 14 patents in Singapore and the U.S. The newly filed 4 patents in Singapore power innovations in AI-driven intelligence and automation.
• Linde India: CCI approved divestment of the company’s south region business. Air Water Inc will purchase the surplus land at Chennai and Hyderabad and decommissioned the air separation unit at Hyderabad for Rs 1,380 crore. CCI Has also extended the divestment period of the South Region Divestment Business till Dec. 17.
• Coromandel International: Board approved amalgamation of two wholly owned arms with self.
• IOCL: Issued NCDs aggregating to Rs 3,000 crore to meet its capex requirements.
• Sterling & Wilson Solar: Received a letter of intent for engineering, construction and procurement order for 1.09GW DC Solar Farm in the Middle East, valued at $635 million.
• Jubilant Life Sciences: Unit has received ANDA approval for Clomipramine Hydrochloride Capsules which is used for the treatment of OCDs.
• Hatsun Agro Product: Board approved setting up of ice cream plant in Telangana which is expected to be commissioned by December 2020 and said that the company is in the process of commencing construction activities for setting up greenfield project for producing milk and milk products in Tamil Nadu. A 4LLPD Milk and Milk Products Plant in Maharashtra is expected to be commissioned by February 2020.
• Hotel Leelaventure: Rajan Shah has resigned from the post of CFO and he will move to the Brookfield Group. The company has completed the transactions with Brookfield group for sale of hotel undertakings in Delhi, Bengaluru, Chennai and Udaipur, hotel operations business and 100 percent stake in Leela Palaces and Resorts. The total consideration of Rs. 3,950 crore were received from Brookfield on Oct. 16 and the entire consideration, net of transaction-related costs of Rs. 70 crores were used to repay the banks and financial institutions who were lenders to the Company, in full and final settlement, as a One-time settlement.
• Piramal Enterprises: To consider raising Rs 5,300 crore on Oct. 25.
• BASF India: Karnataka Appellate Tribunal has granted stay on recovery of demand aggregating to Rs 225.7 crore pertaining to the period 2006-10. Earlier, the recovery of the demand pertaining to the period 2010-11 and 2014-15 aggregating to Rs. 98.81 crore had been stalled by the Tribunal. The company said that it will take all necessary legal steps to defend the matter.
• Asian Paints: KBS Anand will be retiring from the post of MD and CEO on March 2020 and Jayesh Merchant to retire from the post of CFO on November 26. Current COO Amit Syngle will become a new MD and CEO with effect from April next years.
• Subros: Production activities have started at its new plant in Ahmedabad based on customer approvals. The production and supply of Automotive Air-Conditioning Systems and Engine Cooling Modules will be ramped up as per customer demand.
• Sharda Cropchem: Ashish Lodha resigned from the post of the CFO, with effect from Oct. 22.
• RITES: Signed MoU with Ghana to promote long term bilateral co-corporation in transport and infrastructure development projects in Ghana.
• Jindal Steel & Power: Promoters hold a 60.4 percent stake in the company, out of which 68.99 percent stake is encumbered.
• Amara Raja Batteries: Received a request letter from Johnson Controls (Mauritius) seeking their de-classification as the promoter of the company.
• J. Kumar Infraprojects: HDFC Mutual Fund increased stake to 7.5 percent from 5.38 percent.

Nifty Earnings To Watch

• Bajaj Auto
• HCL Technologies
• Hero MotoCorp
• JSW Steel
• Larsen & Toubro

Other Earnings To Watch

• HDFC Life Insurance
• Torrent Pharmaceuticals
• Arvind Fashions
• Kajaria Ceramics
• Polycab
• Kirloskar Pneumatic
• Biocon
• NIIT Technologies
• INOX Leisure
• Mahindra CIE Automotive
• Navin Fluorine
• IRB Infrastructure Developers
• Zee Media Corporation
• JK Paper
• JM Financial
• Castrol
• Havells
• Crompton Greaves Consumer Electricals
• Praj Industries
• KPIT Technologies
• PI Industries
• Dishman Carbogen Amcis
• Everest Industries
• Hexaware Technologies
• Shoppers Stop
• Tata Steel Long Products
• Tejas Networks
• Texmaco Infrastructure & Holdings
• Texmaco Rail & Engineering
• IIFL Finance
• Indian Bank
• Orient Paper & Industries
• Aarti Drugs
• Accelya Solutions
• Allsec Technologies
• Apcotex Industries
• Bajaj Holdings & Investment
• Bharat Bijlee
• Genus Power Infrastructures
• GHCL
• NELCO
• Menon Pistons
• Onward Technologies
• PTC India Financial Services
• Rane Engine Valve

Earnings Reaction To Watch

Axis Bank (Q2, YoY)

• Net interest income up 16.6 percent to Rs 6,101.8 crore (Estimate: Rs 6056 crore)
• Net loss at Rs 112.1 crore versus net profit at Rs 789.6 crore (Estimate: Rs 905 crore profit)
• Provisions at Rs 3,518.4 crore versus Rs 2,927.4 crore (Rs 3,814.6 crore QoQ) (Estimate: Rs 5534 crore)
• GNPA at 5.03 percent versus 5.25 percent QoQ
• NNPA at 1.99 percent versus 2.04 percent QoQ
• Tax expense higher by Rs 2,138 crore due to write-down of deferred tax asset pertaining to earlier years.

Asian Paints (Q2, YoY)

• Revenue up 9.4 percent to Rs 5,050.7 crore versus Rs 4,615.5 crore (Estimate: Rs 5,220.5 crore).
• Net profit up 67.5 percent at Rs 823.4 crore versus Rs 491.6 crore (Estimate: Rs 677 crore).
• Ebitda up 13 percent at Rs 954.8 crore versus Rs 844.7 crore (Estimate: Rs 1021 crore).
• Margin at 18.9 percent versus 18.3 percent (Estimate: 19.6 percent).
• Deferred tax reversal of Rs 149.7 crore in current quarter.
• Decorative Business Segment in India registered high double-digit volume growth.
• Declared Dividend of Rs 3.35 per share .

Bajaj Finserv (Q2, YoY)

• Revenue up 46.6 percent to Rs 14,221.9 crore.
• Net profit up 71 percent at Rs 1203.7 crore.

RBL Bank (Q2, YoY)

• Net interest income up 46.5 percent to Rs 868.7 crore (Estimate: Rs 815 crore).
• Net profit down 73.4 percent to Rs 54.3 crore (Estimate: Rs 170 crore).
• Provisions at Rs 533.3 crore versus Rs 139.7 crore (Estimate: Rs 213.2 crore QoQ).
• GNPA at 2.6 percent versus 1.38 percent QoQ.
• NNPA at 1.56 percent versus 0.65 percent QoQ.

ICICI Prudential Life Insurance (Q2, YoY)

• Gross Premium up 6.6 percent to Rs 8,190.8 crore.
• Net income up 1 percent to Rs 301.9 crore.
• 13TH Month Persistency at 82 percent versus 80.7 percent
• H1FY20 VNB Margins at 21 percent versus 17 percent

Indiamart Intermesh (Q2, YoY)

• Revenue up 27.8 percent to Rs 156.6 crore.
• Net profit down 57.4 percent to Rs 8.7 crore.
• Ebitda up 61.3 percent to Rs 36.3 crore.
• Margin at 23.2 percent versus 18.4 percent.
• Tax impact related to change in tax rate and law reduced profits by Rs 31.4 crore.
• Indian supplier forefronts up 6 percent to 5.7 million.
• Registered Buyers up 29 percent to 93 million.
• Paying subscription suppliers up 15 percent to 1,37,000.

Oriental Bank of Commerce (Q2, YoY)

• Net interest income up 14.7 percent to Rs 1,455.5 crore.
• Net profit up 23.8 percent to Rs 125.9 crore.
• Provisions at Rs 1050.3 crore versus Rs 832 crore (Rs 865.5 crore QoQ).
• GNPA at 12.53 percent versus 12.56 percent QoQ.
• NNPA at 5.94 percent versus 5.91 percent QoQ.

Mahindra & Mahindra Financial Services (Q2, YoY)

• Net interest income up 7.4 percent to Rs 1,461.2 crore.
• Net profit down 38.6 percent to Rs 261.5 crore.
• Profit lower by Rs 50 crore due to tax adjustment.
• Value of Asset Financed down 10 percent to Rs 9747 crore.

CEAT (Q2, YoY)

• Revenue down 4.6 percent to Rs 1,691.6 crore.
• Net profit down 30.4 percent to Rs 44 crore.
• Ebitda up 7 percent to Rs 170.4 crore.
• Margin at 10.1 percent versus 9 percent
• Finance cost up two tines, depreciation up 41 percent
• Raw material as percent of sales at 58.9 percent versus 60.1 percent

Syngene International (Q2, YoY)

• Revenue up 11 percent to Rs 464.6 crore.
• Net profit up 63.6 percent to Rs 128.1 crore.
• Ebitda up 2.8 percent to Rs 136 crore.
• Margin at 29.3 percent versus 31.6 percent
• Exceptional gain of Rs 71.3 crore in the current quarter due to an insurance receivable from a claim.

Sharda Cropchem (Q2, YoY)

• Revenue up 4.9 percent at Rs 324.2 crore.
• Net loss at Rs 5.6 crore versus net profit at Rs 16.2 crore.
• Ebitda down 15 percent to Rs 28.8 crore.
• Margin at 8.9 percent versus 11 percent
• Depreciation up 68 percent to Rs 33 crore.
• Other income up 4.9 times to Rs 8.8 crore.
• Raw material as percent of sales at 73 percent versus 69.2 percent.

Bulk Deals

Indiabulls Housing Finance

• AQR Emerging Equities Fund sold 40.15 lakh shares (0.95 percent) at Rs 233.96 each

Zee Media Corporation

• IFCI sold 47.6 lakh shares (1.01 percent) at Rs 5.74 each

Apollo Pipes

• Rohit Rajgopal Dhoot sold 80,000 shares (0.61 percent) at Rs 375.01 each
• Ashish Rameshchandra Kacholia acquired 1 lakh shares (0.76 percent) at Rs 375.01 each

Pledge Share Details

• Bajaj Consumer Care IDBI Trusteeship Services released pledge of 3.49 crore shares from Oct. 18-22
• Adani Ports & SEZ promoter SB Adani Family Trust revoked pledge of 10.6 lakh shares on Oct. 18
• Dish TV promoter Direct Media Distribution Ventures revoked pledge of 8 lakh shares and released pledge of 19.06 lakh shares on Oct. 10

Corporate Actions

• Edelweiss Financial Services, IIFL Securities, Jain Irrigation Systems price band revised to 5 percent
• Hotel Leelaventure to move into short term ASM Framework
• Adani Green Energy, IL&FS Investment Managers, Everest Kanto Cylinder, Texmaco Infrastructure & Holdings, Mangalam Organics to move out of short term ASM Framework

F&O Cues

Futures

• Nifty October futures closed at 11624.3, a premium of 36 points versus 8.2 points
• Nifty October futures up 9 percent, adds 12.6 lakh shares in open interest
• Nifty Bank October futures closed at 29,492.5, premium of 81 points versus 32 points
• Nifty Bank October futures open interest down 3 percent, sheds 41,300 shares in open interest

Options

• Nifty PCR at 1.20 versus 1.43 (across all series)

Nifty Weekly Expiry: Oct 24

• Max open interest on call side at 11,700 (21 lakh shares)
• Max open interest on put side at 11,600 (14.9 lakh shares)
• Open Interest addition has seen at 11,700C (10 lakh shares), 11,800C (7.3 lakh shares)

Nifty Monthly Expiry: Oct 31

• Max open interest on call side at 12,000 (24.2 lakh shares)
• Max open interest on put side at 11,000 (28 lakh shares)

Brokerage Radar

On Asian Paints

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 1,820.
• Q2: earnings miss; low single-digit domestic paints volume growth.
• Automotive and industrial coatings and home improvement business remain challenged.
• Expect the stock to correct on the back of results.

UBS

• Maintained ‘Buy’ with a price target of Rs 2,120.
• No slowdown in sight; decorative volumes grew 15-16 percent in September quarter.
• Margin trajectory disappointing; likely to gain market share.
• Any correction in stock price due to margin miss is buying opportunity.

Credit Suisse

• Maintained ‘Neutral’ with a price target of Rs 1,730.
• Large beat on volume growth; very strong in high double digits.
• Large and widening gap between volume and revenue growth due to mix and discounting.
• Margin expansion lower; profit before tax growth impacted by deprecation of new units.

On Axis Bank

CLSA

• Maintained ‘Buy’ with a price target of Rs 900.
• Slippages stay elevated, albeit mostly from existing stressed loans.
• CASA growth weak; improvement key to asset growth and derisking.
• Trimming earnings estimate on higher tax and provisions.

JPMorgan

• Maintained ‘Neutral’; hiked price target to Rs 790 from Rs 770.
• Operating profit growth remains strong; stress book declines QoQ.
• Slippages need to reduce for stock re-rating.
• NIM guidance increased; fee growth remains tepid.

On Bajaj Finance

Morgan Stanley

• Maintain ‘Equal-weight’ with a price target of Rs 3,700.
• September quarter review: Strong numbers in tough environment.
• Increase in credit cost guidance, slowdown in new customer acquisition will be important to monitor.

JPMorgan

• Maintained ‘Overweight’; hiked price target to Rs 4,500 from Rs 3,800.
• Another strong show on loan growth; fee and liability improvement notable.
• New loan bookings show some signs of softening though the third quarter will be key to watch.

On RBL Bank

Morgan Stanley

• Maintained ‘Underweight’; cut price target to Rs 240 from Rs 400.
• Uncertain asset quality outlook continues.
• September quarter’s net profit was below estimates driven mainly by higher credit costs.
• Cut EPS estimates to factor in higher provisioning and slower growth.

JPMorgan

• Maintained ‘Underweight’; cut price target to Rs 280 from Rs 330.
• Asset quality stress likely to depress near term profitability.
• Sharp rise in credit cost drags profitability.
• Operating profit growth remains solid led by retail.

On Jubilant FoodWorks

UBS

• Maintained ‘Neutral’ with a price target of Rs 1,600.
• SSSG beats estimates; one-offs impact profitability.
• Evolving consumer trends could drive growth in the future.
• Urban consumption is still holding up in India.

Credit Suisse

• Maintained ‘Underperform’; hiked price target to Rs 1,300 from Rs 1,200.
• Q2 Review: Marginal improvement in SSSG despite macro consumption slowdown is a positive surprise.
• Q3 SSSG will be key to watch, as impact of the Cricket World Cup fades out.
• See downside risks to SSSG and margins likely to remain under pressure.

On Kotak Mahindra Bank

UBS

• Maintained ‘Neutral’; hiked price target to Rs 1,750 from Rs 1,720.
• Earnings beat supported by higher NIM and tax benefit.
• Better margins offset slow assets growth.
• Kotak Bank expects better second half and expects credit cost of 60 basis points for the current financial year.

Edelweiss

• Maintained ‘Buy’; hiked price target to Rs 1,847 from Rs 1,632.
• Growth momentum softens, apt in current environment.
• Steady performance amidst uncertainties.
• Marginal rise in asset quality, but nothing concerning.
• Best-among-peers liability franchise continues to impress.