Stocks To Watch: Aurobindo Pharma, BPCL, Britannia, HUL, ICICI Bank, Infosys, InterGlobe Aviation, ONGC, HPCL, RIL, TCS

Asian stocks extended a global stock rally Wednesday as investors continued to bet on a quick economic recovery from the coronavirus pandemic. The dollar slipped again. Japanese shares led gains on yen weakness overnight, and stocks in Australia and South Korea also climbed.

Here are the stocks to watch in trade today:

• Reliance Industries: Abu Dhabi’s Mubadala Investment is nearing a deal to invest about $1 billion into Jio Platforms. An announcement could come as soon as this week. Company is also in discussions with Abu Dhabi Investment Authority & Saudi Arabia’s The Public Investment Fund. (Bloomberg News)
• Hindustan Unilever on Covid-19 impact: Fractured supply lines and demand decline has been felt from mid-March. Able to gradually improve the operations to 70% in the month of April and have now been able to ramp-up production to 80-90% of normative levels. All factories and all warehouses except one in Assam are open. All suppliers in India are operating. Out of home businesses comprising of ice creams, foods solutions and consumer durables business of water have been most severely impacted by the lockdown. Seeing heightened consumer focus on health, hygiene, and nutritional needs. The pandemic has imposed incremental operating costs on the business. While there will be some impact on profitability in the short term; however, it is difficult to assess the exact quantum at this stage. To provide a detailed update to the markets in the month of July on the GSK Consumer Healthcare merger and the synergy benefits.
• ICICI Bank has reduced interest rates by 25 basis points in savings bank account with effect from June 4. For balance below Rs 50 lakh it is 3% per annum. While for Rs 50 lakh and above it is 3.75%.
• Colgate Palmolive on Covid-19 impact: Business operations on an annual basis may not be material. Resumed operations at all of its manufacturing plants. Company does not foresee any specific challenge in terms of its capital, financial resources or profitability. Has not borrowed any loans and is in a comfortable liquidity position to meet its commitment.
• Moody's Investors Service has downgraded the long-term issuer ratings of ONGC, HPCL, Oil India, IOCL, BPCL, Petronet LNG, TCS and Infosys.The outlooks on all these ratings is negative. The outlook for Reliance has been revised to negative from stable while the outlook for UPL and Genpact remain stable. Rating actions follow the downgrade of India's sovereign rating to Baa3 negative from Baa2 on June 1.
• Lupin received U.S. FDA approval for its Meloxicam capsules, to market generic equivalent of Vivlodex capsules of U.S. based Zyla Life Sciences, which are used for treatment of osteoarthritis pain.
• Jubilant Lifesciences allotted NCDs worth Rs 100 crore.
• Pharma Stocks: Government has approved emergency use of Remdesivir. (Press Information Bureau)
• Balaji Amines on Covid-19 impact: Company kept all the plants partially running despite the lockdown as it is a supplier to essential industry of pharmaceuticals and healthcare. Paying its lenders as per due date and has not availed any moratorium. The proposed new project of Unit IV which is coming up in 90 acres at MIDC, Chincholi is under progress and there are some Long delivery suppliers of Equipments, have intimated that they may require some extended time for delivery. This may impact the timelines of trial production.
• Polycab: Gandharv Tongia, CFO of the company stated to Bloomberg Quint in a telephonic interaction that company’s cable and wire segment’s market shares grew, while the industry witnessed de-growth of 14 percent in March. Covid-19 impacted top-line numbers by Rs 600 crore and the company is cautious on domestic-growth for the next couple of quarters. FMEG segment capex will continue, but intensity will go down and EPC segment is expected to grow due to increased demand of optical fibre segment. Cash flow and working capital impacted because of additional credit period to dealers, while inventory days has come down from 120 to 100 in last 12-18 months. No significant exposure to China, company has alternative arrangements with domestic suppliers.
• Syngene International has entered into collaboration with HiMedia Laboratories to manufacture and distribute its ELISA kits. HiMedia will manufacture the kits at its facility in Mumbai and distribute it across India. This test identifies the presence of SARS-COV-2 antibodies in blood samples and confirms if a patient has been exposed to the coronavirus. It has a capacity to test samples together in a single run and generates results within 3 hours.
• Quick Heal Tech on Covid-19 impact: Normalancy expected to return in 6-9 months. The resources will get stretched due increased requirement of working capital and huge impact on profitability for the company this year. Demand for the products on ecommerce platforms has marginally increased. Supply chain has been impacted and company is facing lot of challenges in supplying products to channel partners which is directly impacting revenues.
• Transport Corporation of India: Board approved raising Rs 200 crore via NCDs.
• DB Corp on Covid-19 impact: With reduced economic activity, advertising revenue for has been impacted. Advertisement revenue likely to pick up due relaxations seen in non-metro areas as they are the major markets for the company.
• Havells on Covid-19 impact: Lockdown has caused significant loss of production and sales in the month of March and April. Recovery in revenues in the last few weeks has been encouraging especially in the non-metro towns.
• Jubilant Foodworks on Covid-19 impact: Company would be launching contactless dine-in as soon as dine-in is permitted. Dine-in has remained shut all through April and May. However, company is seeing some encouraging signs in delivery, especially in the smaller towns, as many of stores are now back to their pre- COVID19 delivery sales

Nifty Earnings

Britannia Q4 (Consolidated, YoY)

• Revenue up 2.5% at Rs 2,868 crore (Est Rs 2,817 crore)
• Net profit up 26.3% at Rs 375 crore (Est Rs 323 crore)
• Ebidta up 3.9% at Rs 454.5 crore (Est Rs 446 crore)
• Margins at 15.8% versus 15.6% (Est 15.8%)
• Gross margins down 150 basis points at 39.7%
• Raw material costs down 1.2% at Rs 1,363 crore
• Raw material costs to revenues at 47.5% versus 49.3%
• Declared interim dividend of Rs 35 per share

Other Earnings

InterGlobe Aviation Q4 (Standalone, YoY)

• Revenue up 5.3% to Rs 8,299 crore (Est Rs 7,540 crore) -slowest revenue growth since listing
• Net loss at Rs 873 crore versus Net profit at Rs 590 crore (Est Net loss at Rs 992 crore)
• Ebitdar loss at Rs 13 crore versus Ebitdar profit at Rs 2,056 crore
• Deferred tax credit of Rs 420 crore lowered net loss
• Net loss before tax at Rs 1,293 crore versus Net profit before tax at Rs 617 crore
• Lower passenger growth, lower passenger load factors, higher costs due to lockdown, rupee depreciation and higher maintenance cost weighed on numbers
• Foreign exchange loss of Rs 1,014 crore in current quarter

Granules India Q4 (Consolidated, YoY)

• Revenue down 2.18% at Rs 599.9 crore (Est Rs 682 crore)
• Net profit up 44.2% at Rs 92.3 crore (Est Rs 70 crore)
• Ebidta up 2.6 % at Rs 100 crore (Est Rs 128 crore)
• Margins at 16.7% versus 15.9%
• Other Income of Rs 22.5 crore in current quarter
• Margins improve due to lower raw material costs
• Exceptional gain of Rs 59.8 crore due to divestment of it entire stake in JV Granules Omnichem
• Revenue impacted due to restriction imposed on Paracetamol API, PFl and ED
• Restriction removed for PFI and FD on April and API by end of May

Sun Pharma Advanced Research Q4 (Standalone, YoY)

• Revenue down 73.2% at Rs 22.7 crore
• Net loss at Rs 99.5 crore versus Net loss at Rs 9.4 crore
• Ebidta loss at Rs 98.4 crore versus Ebidta loss at Rs 12 crore

Earnings Today

• BPCL
• Aurobindo Pharma
• Cholamandalam Investment and Finance

Resumption Of Operations

• Minda Corp
• Himadri Specialty Chemical

Bulk Deals

• Kotak Mahindra Bank: Promoter Uday Kotak sold 5.6 crore shares (2.83%) at Rs 1,240 per share. Key buyers in this deal are University of California Endowment Fund, Societe General, Norges Bank, Fidelity Group, JP Morgan Securities, Oppenheimer Fund and amongst domestic institutions are SBI MF, ICICI Pru Life Insurance, Axis MF, HDFC Life Insurance etc.
• Just Dial: BNP Paribas Arbitrage acquired 3.57 lakh shares (0.55%) at Rs 407.44 per share.
• ADF Foods: Abakkus Emerging Opportunities Fund acquired 5 lakh shares (2.5%) at Rs 274 per share and Authum Investment and Infra sold 4.59 lakh shares (2.3%) at Rs 274 per share.
• Coromandel: Promoter EID Parry sold 58.5 lakh shares (2%) at Rs 629.19 per share.

Who’s Meeting Whom

• SH Kelkar to meet Quest Investment Advisors, Abbakus AMC and other investors on June 4.
• M&M Financial Services to meet Franklin Templeton, Nomura and other investors from June 3-15

Trading Tweaks

• Closing Date: Reliance Industries rights issue
• Price Band Revised From 10% to 5%: Entertainment Network, Tourism Finance Corporation of India
• Price Band Revised From 20% to 10%: Arvind, Genus Paper & Boards, IDBI Bank, IFCI, Shoppers Stop
• Move Into Short-Term ASM Framework: Swaraj Engines, Hindustan Motors.
• Move Into ASM Framework: JBF Industries, GTL Infrastructure, Andhra Cements

Insider Trading

• Aarti Drugs promoter Safechem Enterprises sold 10,000 shares on May 26
• Apollo Pipes promoter Meenakshi Gupta acquired 50,022 shares from May 7-June 1
• SH Kelkar promoter Kedar Vaze acquired 12.8 lakh shares from May 29-June 1

(As Reported On June 2)

F&O Cues

• Nifty June futures closed at 9,963, discount of 17 points versus discount 35 points
• Nifty June futures open interest up 7.3%, adds 7.3 lakh shares in open interest
• Nifty Bank May futures closed at 20,466, discount of 65 points versus discount 64 points
• Nifty Bank May futures open interest up 10%, adds 1.4 lakh shares in open interest
• India VIX down 2% at 30.1
• Nifty Put Call Ratio at 1.59 versus 1.53 across all series

Nifty Weekly Expiry: June 4

• Max open interest on call side at 10,000 strike (24.3 lakh shares)
• Max open interest on put side at 9,800 strike (21.2 lakh shares)
• Active options: 9,900 Put (+10 lakh shares), 9,800 Put (+10 lakh shares)

Nifty Monthly Expiry: June 25

• Max open interest on call side at 10,000 strike (18.4 lakh shares)
• Max open interest on put side at 9,000 strike (29.3 lakh shares)