Stocks To Watch: Affle India, HCL Tech, HPCL, RIL, Tata Steel, UltraTech Cement

Asian stocks traded mixed and Treasuries edged higher as investors assessed the implications of the latest central bank moves to bolster growth.

Shares were little changed in Tokyo and fell in Sydney. South Korean stocks advanced amid signs of easing tensions with Japan. U.S. futures slipped back. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 10,869 as of 7:30 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 Out For In Today’s Trade

• Reliance Industries: Tiffany & Co. and Reliance Brands Ltd. announced plans to enter the India market through a joint venture. Tiffany plans to open new stores in Delhi in the second half of 2019 and in Mumbai in the second half of 2020, capitalising on its already strong image and brand awareness in this emerging and style conscious luxury market, according to Bloomberg report.
• Wipro awarded five-year strategic IT Contract by ADM Aeroports de Montreal.
• Vedanta: Lusaka High Court Judge Anessi Banda-Bobo dismissed application by Vedanta Resources to stay liquidation of Konkola Copper Mines, state-owned ZNBC radio reports, citing court judgment. The company said that it is reviewing the ruling and will then make decision on its next steps. (Bloomberg News)
• Tata Steel executed memorandum of understanding to sell 70 percent of its stake in its Thailand arm to Synergy Metals and Mining Fund.
• Bank of Baroda: South African Reserve Bank, Prudential Authority, cuts financial penalty from 11 million rand to 400, 000 rand for the Bank’s South African arm.
• Dilip Buildcon: Promoters plan to sell 0.63 percent of total equity or 8.64 lakh shares in the open market to comply with minimum public shareholding norms. After the move, the promoter’s stake will come down from 75.63 percent to 75 percent.
• Phoenix Mills: Board approved amalgamation of hospitality arm with the company.
• NBCC has secured total business of Rs 201.77 crore for the months of June and July.
• Sical Logistics: ICRA revised ratings to ‘BB+’ from ‘BBB+’ for long- and short-loan facilities on account of the unexpected demise of promoter VG Siddhartha leading to constrained financial flexibility and increased refinancing risk for the entire Group.
• Siemens India: Board decides not to pursue sale of Moblity, Rail and Mechanical Drives business to parent.
• Rolta India: Streamcast Group agreed to assist the stressed company and its units in repayment and restructuring of debt.
• Gujarat Alkalies and Chemicals stated that operations of Phosphoric Acid Plant at Dahej Complex has been restored. Operation of other plants are still shut. On Aug. 5, the company stated about the shut down of plants at Dahej Complex on account of heavy rain.
• Dish TV clarified that it was not aware of the news of the company’s merger with Airtel Digital TV.
• Tata Communications: Ministry of Corporate Affairs approved the scheme of arrangement between Hemisphere Properties India and Tata Communication regarding transfer of land for shares.

Offerings/Listing

• Affle India to make stock market debut after IPO gets 86.5 times demand at Rs 745 apiece
• Spandana Sphoorty IPO gets 105 percent demand for shares offered
• Sterling & Wilson Solar IPO gets 32 percent demand on second day sale; offer to close today.

Earnings Reaction To Watch

Tata Steel (Q1, YoY)

• Revenue rose 1.3 percent to Rs 35,947.1 crore. (estimate Rs 37,279.8 crore)
• Net profit fell 64.3 percent to Rs 693.1 crore. (estimate Rs 1,444.6 crore)
• Ebitda fell 15.4 percent to Rs 5,376.8 crore. (estimate Rs 5,657.2 crore)
• Margin stood at 15 percent versus 17.9 percent. (estimate 15.2 percent)

HCL Tech (Q1, QoQ)

• Dollar revenue rose 3.8 percent to $2,364 million (estimate $2,312 million)
• Revenue rose 2.7 percent to Rs 16,427 crore. (estimate Rs 16,154 crore)
• Net profit fell 12.5 percent to Rs 2,230 crore. (estimate Rs 2,378 crore)
• EBIT fell 7.8 percent to Rs 2,748 crore. (estimate Rs 2,882 crore)
• Margin stood at 16.7 percent versus 18.6 percent. (estimate 17.8 percent)
• FY20 revenue guidance to grow between 14 percent to 16 percent in constant currency.
• FY20 EBIT margin guidance between 18.5 percent to 19.5 percent.

HPCL (Q1, QoQ)

• Revenue rose 4.5 percent to Rs 70,988.9 crore. (estimate Rs 70,161 crore)
• Net profit fell 72.7 percent to Rs 811 crore. (estimate Rs 1,003 crore)
• Ebitda fell 68.2 percent to Rs 1643.9 crore (estimate Rs 1,934 crore)
• Margin stood at 2.3 percent versus 7.6 percent. (estimate 2.8 percent)

Petronet LNG (Q1, QoQ)

• Revenue rose 2.7 percent to Rs 86,13.4 crore. (estimate Rs 9,259 crore)
• Net profit rose 27.3 percent to Rs 560.3 crore. (estimate Rs 583 crore)
• Ebitda rose 63.2 percent to Rs 1,023.9 crore. (estimate Rs 891 crore)
• Margin stood at 11.9 percent versus 7.5 percent. (estimate 9.6 percent)
• Total volumes were 10 percent up at 225 trillion BTU versus 205 trillion BTU.
• Higher depreciation and finance cost due to adoption of IND AS 116 reduced net profit by Rs 51.6 crore.

Aurobindo Pharma (Q1, YoY)

• Revenue rose 28.1 percent to Rs 5,444.6 crore. (estimate Rs 5,308 crore)
• Net profit rose 39.5 percent to Rs 635.8 crore. (estimate Rs 624 crore)
• Ebitda rose 47.1 percent to Rs 1,146.4 crore. (estimate Rs 779 crore)
• Margin stood at 21.1 percent versus 18.3 percent. (estimate 19.8 percent)

Adani Gas (Q1, QoQ)

• Revenue fell 3.3 percent to Rs 450.6 crore.
• Net profit rose 4.6 percent to Rs 79.3 crore.
• Ebitda fell 3.4 percent to Rs 134.9 crore.
• Margins stood at 29.9 percent versus 30 percent.
• Depreciation fell 31 percent to Rs 12.6 crore versus Rs 18.2 crore.

Siemens India (Q3 FY19 Standalone, YoY) (Year End-September)

• Revenue rose 4.1 percent to Rs 3,198.4 crore. (estimate Rs 3241.4 crore)
• Net profit rose 21.4 percent to Rs 248.1 crore. (estimate Rs 232.6 crore)
• Ebitda rose 25.4 percent to Rs 353.7 crore. (estimate Rs 337.1 crore)
• Margins stood at 11.1 percent versus 9.2 percent.
• Project Costs fell 9 percent to Rs 646 crore.

KEC International (Q1, YoY)

• Revenue rose 14.6 percent to Rs 2,412.5 crore. (estimate Rs 2342.8 crore)
• Net profit rose 2.1 percent to Rs 88.6 crore. (estimate Rs 93.3 crore)
• Ebitda rose 16.2 percent to Rs 251.3 crore. (estimate Rs 244.1 crore)
• Margin stood at 10.4 percent versus 10.3 percent.
• Other expenses rose 59 percent to Rs 252 crore.

Lemon Tree Hotels (Q1, YoY)

• Revenue rose 11 percent to Rs 140.9 crore.
• Net loss at Rs 1.7 crore versus Net Profit of Rs 2.3 crore.
• Ebitda rose 28.4 percent to Rs 44.7 crore.
• Margin stood at 31.7 percent versus 27.4 percent.
• Finance cost rose 57 percent to Rs 30.9 crore.

Oracle Financial Software Services (Q1, QoQ)

• Revenue rose 4.9 percent to Rs 1,275 crore.
• Net profit rose 15.8 percent to Rs 377.4 crore.
• EBIT rose 16.6 percent to Rs 589.5 crore.
• Margin at 46.2 percent versus 41.6 percent.

Phoenix Mills (Q1, YoY)

• Revenue rose 48.6 percent to Rs 614 crore. (estimate Rs 530 crore)
• Net profit rose 2.2 times to Rs 130.4 crore. (estimate Rs 92.9 crore)
• Ebitda rose 49.3 percent to Rs 291.7 crore. (estimate Rs 249.5 crore)
• Margin stood at 47.5 percent versus 47.3 percent. (estimate 47.1 percent)

Adani Power (Q1, YoY)

• Revenue up 108 percent to Rs 7,805 crore.
• Net loss of Rs 263 crore vs net loss of Rs 825 crore
• Ebitda up 148 percent to Rs 2,684 crore.
• Margin at 34.4 percent versus 28.8 percent.
• Exceptional loss of Rs 1,004 crore in June quarter as amount written off on sale of stake in a company.

Nifty Earnings To Watch

• UltraTech Cement

Other Earnings To Watch

• Page Industries
• Mahanagar Gas
• Procter & Gamble Health
• Godrej Properties
• Great Eastern Shipping
• Emami
• Abbott India
• Advanced Enzyme Technologies
• Akzo Nobel India
• Thermax
• UCO Bank
• Tata Chemicals
• Aurionpro Solutions
• Avadh Sugar & Energy
• City Union Bank
• Coffee Day Enterprises
• Dredging Corporation of India
• Endurance Technologies
• Engineers India
• Fairchem Speciality
• Greaves Cotton
• Gujarat Alkalies and Chemicals
• Gujarat Narmada Valley Fertilizers and Chemicals
• Gujarat Pipavav Port
• Healthcare Global Enterprises
• Hexaware Technologies
• Hind Rectifiers
• Huhtamaki PPL
• Indo Count Industries
• IndoStar Capital Finance
• Ircon International
• Kesoram Industries
• Kirloskar Industries
• Kokuyo Camlin
• Kopran
• LT Foods
• Ludlow Jute & Specialities
• Max India
• Mishra Dhatu Nigam
• Mukand
• Nava Bharat Ventures
• Novartis
• Oil Country Tubular
• Radico Khaitan
• Rail Vikas Nigam
• Rashtriya Chemicals and Fertilizers
• Religare Enterprises
• Southern Petrochemicals
• Tata Investment Corporation
• Wonderla Holidays
• Adani Enterprises
• Adani Transmission
• Capacit'e Infraprojects
• Quick Heal Technologies
• Rupa
• Sanghvi Movers
• Take Solutions
• Texmaco Rail & Engineering

Bulk Deals

Deep Industries

• Antara India Evergreen Fund acquired 2 lakh shares or 0.62 percent equity to Rs 110.63 each.
• Nomura Singapore sold 2 lakh shares or 0.62 percent equity to Rs 110.63 each.

Soril Infra Resources

• Antara India Evergreen Fund acquired 1.92 lakh shares or 0.61 percent equity to Rs 95.38 each.
• Nomura Singapore sold 1.92 lakh shares or 0.61 percent equity to Rs 95.38 each.

Usha Martin

• Antara India Evergreen Fund acquired 16.52 lakh shares or 0.59 percent equity to Rs 26.65 each.
• Nomura Singapore sold 16.52 lakh shares or 0.59 percent equity to Rs 26.65 each.

Trading Tweaks

• Rites ex-date for bonus issue at 1:4.
• Affle (India) to be listed on bourses.
• Camlin Fine Sciences, New Delhi Television to move into short term ASM Framework.
• Tourism Finance Corporation of India, Jubilant Industries Limited to move out of short term ASM Framework.
• Indiabulls Real Estate price band revised to 10 percent.
• Hubtown price band revised to 5 percent.

Who’s Meeting Whom

• Crisil to meet New Horizon and Kotak Mutual Fund from Aug. 9-19.
• PI Industries to meet DSP Blackrock and Asian Market Securities from Aug. 8-20.
• Escorts to meet UTI, Franklin Templeton and other investors from Aug. 16-23.

Insider Trading

• Quess Corp promoter HWIC Asia Fund acquired 28,000 shares on Aug. 7.
• Vodafone Idea promoters acquired 2 crore shares from Aug. 2-5.

Money Market Update

The rupee weakened for the fifth straight day to close at 70.88/$ versus 70.82/$ on Tuesday.

F&O Cues

F&O Cues

August Futures

• Nifty futures closed at 10,874.2, premium of 18.7 points versus 30 points
• Nifty futures open interest down 1 percent, sheds 1.7 lakh shares in open interest
• Bank Nifty futures closed at 27,748.4, premium of 46 points versus 87 points
• Bank Nifty futures open interest up 3 percent, adds 46,000 shares in open interest

Options

• Nifty PCR at 0.97 versus 1.11(across all series)

Nifty Weekly Expiry Aug. 8

• Max open interest on call side at 11,000 (30.3 lakh shares)
• Max open interest on put side at 10,800 (14.5 lakh shares)
• Max open interest addition seen in 11,100C (+9.9 lakh shares), 11,000C (+8.2 lakh shares)
• open interest shedding seen in 10,900P (-3.6 lakh shares), 11,000P (-3 lakh shares)

Nifty Monthly Expiry Aug. 29

• Max open interest on call side at 11,500 (24.4 lakh shares)
• Max open interest on put side at 11,000 (28.9 lakh shares)

Brokerage Radar

CLSA on Adani Ports

• Maintained ‘Buy’ with a price target of Rs 510
• Weak economy sees lower end of guidance and gasification on track
• Committed to its lofty buy-back, which is key to RoE improvement
• Mundra port volume rebounded and rise in share of other ports aids sustainability

On Cipla

Goldman Sachs

• Maintained ‘Neutral’; cut price target to Rs 530 from Rs 550.
• Weak June quarter due to adjustment undertaken in the India trade generic business.
• India business to remain subdued near term.
• Lower our 2021-22 Ebitda estimates lower by up to 5 percent.

Philip Capital

• Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 430 from Rs 510.
• Strong margin performance is not sustainable.
• See a broad-base growth concern across geographies.
• Cut our earnings estimates for the current and the next financial year by 13 percent and 15 percent respectively.

On HCL Tech

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,380.
• Sharp revenue beat led by organic acceleration.
• Margins miss, but 2019-20 guidance maintained.
• Digital strong and will remain a near-term margin deflator.

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 1,340 from Rs 1,380.
• Strong organic growth key positive surprise in June quarter.
• EBIT margin higher than estimate due to higher costs and investments.
• Cut EPS estimates for the current and the next financial year by 3-5.6 percent on account of higher taxes.

On HPCL

UBS

• Maintained ‘Buy’ with a price target of Rs 445.
• Net profit lower on higher than expected inventory loss.
• Expect investors to focus on improving earnings matrix with recovery in marketing earnings.

JPMorgan

• Maintained ‘Underweight’ with a price target of Rs 220.
• Weak quarter, refining disappoints.
• Earnings miss would have been larges if nor for foreign exchange gains.
• Debt declined to clearance of government dues, but expect it to rise due to capex.

On M&M

BofA Securities

• Maintained ‘Buy’; cut price target to Rs 725 from Rs 800.
• Margin beat but volume outlook remains tough.
• Margin improved on better cost control and improved mix.
• Management expects volumes to stabilise in the second half.

CLSA

• Maintained ‘Sell’; cut price target to Rs 495 from Rs 590.
• Weak June quarter results; weakening tractor outlook.
• Sharp fall in legacy SUV volumes eating away the benefits of new launches.
• Rising investments in subsidiary remains a concern.

On Tata Steel

CLSA

• Maintained ‘Sell’; cut price target to Rs 320 from Rs 395.
• Weak quarter; sharp fall in Europe business margins.
• Indian steel demand and prices are under pressure.
• Valuations too expensive despite stock fall.

Goldman Sachs

• Maintained ‘Buy’ with a price target of Rs 500.
• Indian operations ahead; Europe significantly below.
• Expect reducing iron ore and coking coal prices to benefit European operations.