Stocks To Watch: Aurobindo Pharma, Berger Paints, BPCL, DB Corp, DLF, RIL, SRF

The global stock rally extended into Thursday as investors clung to optimism for a speedy economic recovery from the pandemic. Treasury yields kept Wednesday’s jump and the dollar remained at its weakest since early March. South Korean shares led early gains in Asia, while Japanese stocks opened about 1% higher and U.S. equity futures edged up.

Here are the stocks to watch in trade today:

• Reliance Industries: Rights issue of Rs 53,124.2 crore subscribed 1.59 times cumulating to an overall commitment of over Rs 84,000 crore. The public portion of the Rights issue was subscribed 1.22 times. The allotment of equity shares will happen on or about June 10. The rights shares are expected to be listed on the BSE and NSE on or around June 12.
• GAIL and EESL have signed an accord for tri-generation projects. Tri-generation involves natural gas-fired generators to produce electricity. It’s a 50:50 venture.
• Standard Life Insurance is offering 4 crore share of HDFC Life Insurance shares, in a block trade. Shares are being offered at Rs 490-501.35 per share, which aggregates to $266 million. Price range represents a discount of 0-2.3% to the closing prices on June 3. (Bloomberg News)
• BPCL on Covid-19 impact: Demand of petroleum products down 55% in April compared to last year In May, demand increased 67% on month-on-month basis, but was down around 30% compared to last year. Refineries operated at 63% capacity in April which increased to 77% in May. Managed the crude oil inventory by either deferring or cancelling some crude cargoes and diverting some to strategic petroleum reserves of Government of India.
• VST Tillers and Tractors May Sales: Power Tillers sales up 24% at 1,750 units and Tractors sales up 20% at 633 units.
• DB Corp: CARE Ratings has downgraded long term and short term bank facilities worth Rs 320 crore, from CARE AAA to CARE AA+ with outlook remaining stable. The revision in the rating factors in CARE’s belief that advertisement income (which constituted around 70% of company’s total operating income in financial year 2019) would be to be notably weaker for the first quarter of fiscal year 2021, and same is expected to remain muted for rest of the financial year.
• Jindal Steel and Power: May steel sales up 26% at 7.97 lakh tons, on a consolidated basis, driven by exports.
• Berger Paints on Covid-19 impact: The ramp up of production levels will be done gradually to allow for the inventory build-up since April sales were extremely low. However, from the month of May there were signs of recovery. Company was able to manage the sharp drop in business and consequently lower collections in April by accessing the market for commercial papers at competitive rates. International operations in Poland has been less impacted, while plant in Nepal is yet to resume operations.
• Tata Consumer Products on Covid-19 impact: Almost all the tea packaging units, salt/pulses packing centres and 3P spices units are operational with prescribed operating norms. The finished goods stock holding across depots are at a healthy level. Company has now been able to open about 40% of its Starbucks outlets for the delivery and takeaway business. Internationally, tea and coffee sales to retail customers have increased due to higher in-home consumption, however the out-of-home businesses in the USA and Australia have seen a sharp decline. Sales are getting back to normal levels there could be impact of increased input costs including due to commodity price volatility and supply constraints.
• Oil India clarified on the new out of blowout at Baghjan well, stating that the company is currently engaged in blowout control process and the wells are self-insured.
• Heidelberg Cement on Covid-19 impact: Company is sourcing fly ash from other power plants, as availability has been impacted. Dispatches in the future, company expects some constraints due to the reduced availability of truck drivers. Many dealers are facing a liquidity crunch and want to liquidate their existing inventory before placing any fresh orders. Cement demand may remain sluggish due to the shortage of labour in urban areas. However, areas where government spending would be good, will see better demand.
• JK Cement to consider raising capital via NCDs on June 17.
• Persistent Systems and IBM to accelerate and develop cloud solutions to customers.
• Arvind raised Rs 75 crore via issue of NCDs.
• Mishra Dhatu Nigam on Covid-19 impact: There was a disruption in production activities for 45 days. Subsequently, the normal production activities have resumed with effect from May 20. Achieved sales turnover of Rs 50 crore for the month of May.
• NLC India has raised Rs 1,200 crore by issuing commercial paper.
• Chennai Petrochem: Board has recommended a proposal to Indian Oil Corporation for implementing the 9 MMTPA refinery project at Cauvery basin refinery through a joint venture at an estimated cost of Rs 28,983 crore. Board has given in-principle approval for incorporation of a joint venture with the company and Indian Oil Corporation holding 25% stake each and balance to be held by financial/strategic/public investors. Company will invest up to Rs 2,500 crore in the venture. LPG division of company is working partially, while cylinder manufacturing is working at 10% capacity.
• Shree Renuka Sugars: Board approved proposal of raising funds via external commercial borrowings from its holding company Wilmar Sugar Holdings to refinance company’s existing debt. Board also increased borrowing limit from Rs 6,000 crore to Rs 10,000 crore.

Nifty Earnings

BPCL Q4 (Standalone, QoQ)

• Revenue down 7.7% at Rs 68,991.4 crore (Est Rs 62,435 crore)
• Net loss at Rs 1,361 crore versus Net profit at Rs 1,260.6 crore (Est Net loss at Rs 373 crore)
• Ebidta loss at Rs 618.8 crore versus Ebidta gain at Rs 2,703.4 crore (Est Ebidta gain at Rs 183 crore)
• Sales volume down 8.9% at 11.24 MMT
• One-time loss of Rs 108 crore due to inventory loss

Other Earnings

Aurobindo Pharma Q4 (Consolidated, YoY

• Revenue up 16.4% at Rs 6,158.4 crore (Est Rs 5,938 crore)
• Net profit up 45.2% at Rs 849.8 crore (Est Rs 700 crore)
• Ebidta up 26.6% at Rs 1,342.3 crore (Est Rs 1,200 crore)
• Margins at 21.8% versus 20%
• Deferred tax reversal of Rs 101 crore in current quarter
• Board approved transfer business of Biosimilars to wholly owned arm CuraTeQ for Rs 361.5 crore
• API Sales down 17.6% at Rs 755.6 crore
• Formulations sales up 23.5% at Rs 5,401.2 crore
• In formulations segment USA, Europe, Growth and ARV markets showed topline growth of 20%+
• Slight margin improvement due to lower input cost

Cholamandalam Investment and Finance Q4 (Standalone, YoY)

• Net Interest Income up 13% at Rs 1015.4 crore (Est Rs 1,038 crore)
• Net profit down 85.4% at Rs 42.7 crore (Est Rs 355 crore)
• Board approved raising NCDs up to Rs 30,000 crore, within the overall limits of the borrowing powers of the company.
• One-time provision of Rs 504 crore for Covid-19 impact, resulted in lower bottom line numbers Moratorium is extended for 76% of customers – expected to be leveraged by them for second stage (June-August) also.
• Moratorium not availed from banks or other lenders – cashflow position strong and adequate to cover up to September
• Disbursements down 36% at Rs 5,663 crore
• AUM up 16% at Rs 66,943 crore
• Coverage ratio at 41.5% versus 38% (33% QoQ)
• Capital adequacy ratio at 20.68%

Earnings Today

• DLF
• NIIT
• PI Industries
• SRF

Bulk Deals

• HDFC Life Insurance: Promoter HDFC sold 2.6 crore shares (1.29%) at Rs 490.22 per share
• Neogen Chemicals: Promoters Haridas Kanani and Beena Kanani sold 11.26 lakh shares (4.82%) at Rs 473.53 per share and Malabar India Group acquired 10.47 lakh shares (4.49%) at Rs 473.32 per share.
• SH Kelkar: Kotak Mahinda International acquired 31.52 lakh shares (2.23%) at Rs 62 per share , Fidelity Group sold 34.53 lakh shares (2.44%) at Rs 64.15 per share and HDFC Mutual Fund sold 40 lakh shares (2.83%) at Rs 62.03 per share.

Pledged Share Details

• Zee Learn promoter Asian Satellite Broadcast invoked pledge of 1.76 lakh shares on June 1.

(As Reported On June 3)

Who’s Meeting Whom

• Marico to meet ICICI Pru Life Insurance and Bajaj Allianz Life Insurance on June 4
• Dr Lal Pathlabs to meet Baillie Gifford on June 5.

Trading Tweaks

• Price Band Revised From 10% to 5%: Arvind Fashions, Cholamandalam Financial Holdings, GVK Power & Infrastructure, Marksans Pharma, Prince Pipes And Fittings, Shoppers Stop, TCNS Clothing, Tube Investments of India
• Price Band Revised From 20% to 10%: Chalet Hotels, Electrotherm (India), IL&FS Investment Managers, Nandan Denim, Trident.
• Move Into Short-Term ASM Framework: Genus Paper & Boards

Insider Trading

• Alembic promoter Nirayu acquired 10.48 lakh shares from June 1-2
• Sabhav Infra Project promoter Sadbhav Engineering acquired 3.58 lakh shares on March 31
• Sagar Cements promoter RV Consulting Services acquired 25,000 shares on June 1
• Vaibhav Global promoter Rahim Ullah sold 1 lakh shares on June 1
• Mindtree promoter NS Parthasarathy sold 1.43 lakh shares on June 2

(As Reported On June 3)

F&O Cues

• Nifty June futures closed at 10,036, discount of 25 points versus discount 17 points
• Nifty June futures open interest up 6.2%, adds 6.6 lakh shares in open interest
• Nifty Bank May futures closed at 20,739, discount of 200 points versus discount 64 points
• Nifty Bank May futures open interest down 2%, sheds 32,000 shares in open interest
• India VIX down 0.2% at 30.0
• Nifty Put Call Ratio at 1.58 versus 1.59 across all series

Nifty Weekly Expiry: June 4

• Max open interest on call side at 10,200 strike (21.1 lakh shares)
• Max open interest on put side at 10,000 strike (24.9 lakh shares)
• Active options: 10,000 Put (+18.5 lakh shares), 10,200 Call (+7.9 lakh shares)

Nifty Monthly Expiry: June 25

• Max open interest on call side at 10,500 (13.9 lakh shares)
• Max open interest on put side at 9,000 (32.3 lakh shares)