Stocks To Watch: Avenue Supermarts, Edelweiss Financial, HCC, ICICI Bank, Infosys, Yes Bank
A monitor shows stocks rallying while a trader talks on a phone on the trading floor of the Motilal Oswal Financial Services Ltd. office in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

Stocks To Watch: Avenue Supermarts, Edelweiss Financial, HCC, ICICI Bank, Infosys, Yes Bank

Asian stocks were mixed Monday after a decline in U.S. shares following Friday’s lacklustre employment report.

Shares slipped in Australia and were little changed in South Korea. Futures in Hong Kong pointed higher while Japanese markets were closed for a holiday. U.S. futures inched upward. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.19 percent to 12,314.50 as of 6:50 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.

  • Infosys: Audit Committee has found no evidence of financial impropriety or executive misconduct in the independent investigation into allegations contained in whistleblower complaints company disclosed on Oct. 21.
  • Yes Bank: Board to look at allegations raised by Uttam Prakash Agarwal in his resignation letter Bank has received Agarwal’s letter. RBI had directed the bank to review Agarwal's fit and proper status and the Board had sought opinions of eminent jurists on Agarwal's fit and proper status.
  • Edelweiss confirmed receiving communication from Enforcement Directorate to appear and provide about the Group’s dealing with company called Capstone Forex. Group said that none of its companies has any transaction with Capstone Forex and denied baseless allegations contained in the news items which are apparently attributed to unidentified sources.
  • Reliance Industries: Delhi High Court sought Centre’s reply on plea to recall orders asking the company to file affidavit on its assets. (PTI)
  • ICICI Bank: Enforcement Directorate attached flat, land, seized cash, plant & machinery located in Tamil Nadu and Maharashtra totalling to Rs 78.15 crores in possession of Chanda Kochhar, Deepak Kochhar and the companies controlled by Deepak Kochhar, under PMLA.
  • HCC: Lenders have initiated a debt/asset carve out of about Rs 2,100 crore to a third-party controlled SPV along with certain arbitration awards and claims. Company stated that pursuant to the debt-carve out, the company’s balance sheet will be deleveraged with no debt servicing obligations expected for the next 33 months. Carve out will be in nature of slump sale and lenders aim to close the aforementioned transaction buy March 31.
  • Tata Steel’s Netherlands arm has executed agreements for the refinancing of its bank debt and has raised term loan facilities of 1.75 billion euros from 19 banks. This represents a reduction of 500 million euros versus the external debt outstanding in Tata Steel Europe as of March 2019.
  • South Indian Bank to consider raising funds via debt on Jan. 16.
  • Cholamandalam Investment & Finance issued non-convertible debentures worth Rs 400 crore to CDC Group.
  • Tata Chemicals: NCLT Mumbai has sanctioned the scheme of demerger of the firm’s consumer products business to Tata Global Beverages. On Jan. 8, even NCLT Kolkata has sanctioned this scheme.
  • Bank of Baroda reduced One Month MCLR by 5 basis points to 7.6% with effect from Jan. 12.
  • HUDCO said that one of its borrowing agencies with principal outstanding of Rs 726.35 crore has cleared its dues on Jan. 9 and now is out of NPA. On Dec. 4, it was reported that company’s two borrowing agencies had defaulted in repayment of their dues.
  • JSW Energy said that the company has been allotted shares worth Rs 351.77 crore by Jaiprakash Power Ventures. The action is a part of restructuring agreement in the which Jai Prakash Power Ventures owed Rs 751.77 crore to the company.
  • Allcargo Logistics allotted Rs 160 crore worth of non-convertible debentures to HSBC.
  • Reliance Capital said that its trustee IDBI Trusteeship Services has an application before NCLT, claiming payment of overdue amount of Rs 2850.8 crore.
  • Lupin: U.S. FDA completes inspection of Lupin’s Nagpur facility that was carried out between Jan.6-10, 2020. The inspection closed with two 483 observations.

Earnings Reaction To Watch

Infosys (Q3, QoQ)

  • $ Revenue up 1 percent to $3,243 million. (Estimate: $3,254 million)
  • Revenue up 2 percent to Rs 23,092 crore. (Estimate: Rs 23,168 crore)
  • Net profit up 10.9 percent to Rs 4,457 crore. (Estimate: Rs 4,194 crore)
  • EBIT rose 3.1 percent to Rs 5,064 crore. (Estimate: Rs 5,154 crore)
  • Margin at 21.9 percent. (Estimate: 22.2 percent)
  • Revised guidance is 10-10.5 percent in constant currency.
  • Maintained 2019-20 operating margin guidance range of 21-23 percent.

Also read: Infosys Q3 Results: Profit Beats Estimates, Revenue Growth Guidance Raised

Steel Strips Wheels(Q3, YoY)

  • Revenue down 28.8 percent to Rs 343.6 crore.
  • Net profit down 67.9 percent to Rs 6.3 crore.
  • Ebitda down 30.8 percent to Rs 42.7 crore.
  • Margins at 12.4 percent versus 12.8 percent.

Avenue Supermarts (Q3, YoY)

  • Revenue rose 24 percent Rs 6,815 crore.
  • Net profit rose 55 percent to 384.01 crore.
  • Ebitda up 32 percent Rs 602.84 crore.
  • Ebitda margin at 8.84 percent versus 8.34 percent.
  • Net profit aided by reduction in tax by Rs 41 crore.

Earnings To Watch

  • Delta Corp
  • Tata Elxsi

Bulk Deals

  • Sadbhav Infra Projects: Nomura Group sold 1.34 crore shares (3.8 percent) at Rs 38.98 each
  • Reliance Infra: IndusInd Bank sold 15.21 lakh shares (0.59 percent) at Rs 24.9 each.

Pledge Shares Detail

Adani Enterprises promoter Adani Tradeline created pledge of 91 lakh shares on Dec. 9.

Trading Tweaks

  • Reliance Infrastructure, Astron Paper & Board Mill to move out of ASM Framework.
  • Indowind Energy, Karda Constructions, Talwalkars Better Value Fitness, Multibase to move into short term ASM Framework.
  • IG Petrochemicals, GP Petroleums, Rollatainers, Bharat Wire Ropes to move out of short term ASM Framework.
  • Jindal Poly Films price band revised to 20 percent.
  • Jubilant Industries price band revised to 5 percent.

Who’s Meeting Whom

  • Mahindra Lifespace Developers to meet ICICI Pru MF on Jan. 13
  • Godawari Power & Ispat to meet Nippon MF, BNP Paribas and other investors on Jan. 13
  • Magma Fincorp to meet Sundaram MF and Creador on Jan. 13

Money Market Update

  • The rupee ended at 70.93/$ versus 71.21/$ on Thursday.

F&O Cues

Futures

  • Nifty January futures closed at 12,290, premium of 33.2 points versus 53.85 points.
  • Nifty January futures OI up 1 percent, adds 1.1 lakh shares in OI.
  • Nifty Bank January futures closed at 32,122.7, premium of 25.3 points versus 60.25 points.
  • Nifty Bank January futures OI down 10 percent, sheds 1.6 lakh shares in OI
  • Options
  • Nifty PCR at 1.54 versus 1.58 (across all series)

Nifty Weekly Expiry: Jan. 16

  • Max OI on call side at 12,300 (15.2 lakh shares)
  • Max OI on put side at 12,200 (17.4 lakh shares)
  • OI addition seen at 12,300C (+5.8 lakh shares), 12,500C (+5.8 lakh shares), 12,250P (+4.7 lakh shares)

Nifty Monthly Expiry: Jan 30

  • Max OI on call side at 12,500 (26 lakh shares)
  • Max OI on put side at 12,000 (44.2 lakh shares)

Stocks In F&O Ban

  • Yes Bank
Stocks To Watch: Avenue Supermarts, Edelweiss Financial, HCC, ICICI Bank, Infosys, Yes Bank

Brokerage Radar

On Infosys

Citi Research

  • Maintained ‘Buy’; hiked price target to Rs 865 from Rs 830.
  • Results: Slow December quarter; guidance and investigation outcome positive.
  • Continues to execute well and deal wins provide visibility.
  • Expect Infosys to continue to grow faster than other large peers.

BofAML

  • Maintained ‘Buy’ with a price target of Rs 825
  • December quarter was inline; revised 2019-20 guidance ahead of expectations
  • Buy on payoff from investments and margin recovery.

More Calls

UBS on Bajaj Finance

  • Initiated ‘Neutral’ with a price target of Rs 4,600.
  • Expect customer growth and cross-selling to drive FY19-24 loan CAGR of 30 percent.
  • Fee income growing faster than loans; operating leverage to aid EPS growth.
  • Expect credit cost to normalise at 1.7 percent over FY21-22; GNPLs to rise marginally to 1.8 percent in FY20-22.

UBS on L&T Finance

  • Initiated ‘Buy’ with a price target of Rs 165.
  • Risks on infrastructure projects have come-off; execution key for real estate.
  • Lower competitive intensity and new initiatives to support loan growth.
  • Easing liquidity to reduce the cost of funds; counter-cyclical provisions to limit credit costs.

CLSA on Reliance Industries

  • Maintained ‘Buy’ with a price target of Rs 2,010.
  • The largest but still fastest-growing player across telecom and retail.
  • Big earnings kicker to drive EPS up 27 percent in FY21 and 160 basis points jump in RoE.
  • 2020 should show a grand plan in action.

JPMorgan on Avenue Supermarts

  • Maintained ‘Neutral’; hiked price target to Rs 1,960 from Rs 1,750.
  • December quarter was inline; pace of store additions picks up.
  • Remains key beneficiary of rising share of organised retail chains.
  • Expensive valuation leave limited scope for near-term outperformance.
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