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Stocks To Watch: Adani Ports, HCL Tech, M&M, Indiabulls Housing Finance, Tata Steel

Here are the stocks to watch in today’s trade.

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)
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 in Asia opened mixed despite U.S. shares clawing back some of Monday’s rout, with traders remaining cautious in the face of deepening trade tensions.

Japanese shares saw modest declines, while Korean equities edged higher. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.51 percent to 10,924.50 as of 7:20 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

  • IRB Infra Developers said it will sell stake in its road business to the Government of Singapore for Rs 4,400 crore. The company will transfer nine of its build–operate–transfer assets into a private Infrastructure Investment Trust in, which IRB will hold a 51 percent controlling stake.
  • Reliance and BP said it will form a new joint venture that will include a retail service station network and aviation fuels business across India. Fuel retailing outlets to increase to 5,500 outlets. Castrol’s lubricants will available across this venture’s network.
  • Tata Steel terminated the agreement to sell its equity stake in its Thailand arm, as HBIS Group could not procure approvals from the country’s government. Company will begin engagement with other investors in continuation of its strategy to find a partner for the South-East Asian business.
  • Avenue Supermarts: Promoter Radhakishan Damani will divest up to 1 percent stake, or 62.3 lakh shares of the company. Sale of shares to start from Aug. 8 and end on Sept. 14. Sale has been undertaken in the open market to comply with minimum public share-holding guidelines. After this, the promoter stake to come down from 81.2 percent to 80.2 percent.
  • Hindalco: Novelis expected to complete the $2.6-billion acquisition of Aleris in the quarter ending December against its earlier target of three months ending September.
  • DHFL defaulted on payment of three non-convertible debentures principal and interest aggregating to Rs 43.3 crore, which were due on Aug. 6.
  • NLC India: Board has decided not to pursue the setting up of pilot plant for its Coldry-Matmor integrated project on research and development collaborative mode as agreed between company, NMDC and ECT Australia. The MoU was signed on May 30, 2018.
  • Jet Airways Second meeting of creditors have passed all resolutions including the resolution for the approval of Evaluation Matrix and Request for Resolution Plan was passed by the committee with requisite majority.
  • REC: Board approved sale of four special purpose vehicles. Out of these, two transmission projects will be sold to Power Grid Corporation and Sterlite Grid and Adani Power will receive one project each.
  • Karur Vyasa Bank revised its MCLR across various tenors with effect from Aug. 1. one-month MCLR at 8.45 percent and one-year MCLR at 9.55 percent.
  • Vodafone Idea: CRISIL downgraded NCDs worth Rs 3,500 crore to ‘CRISIL A’  from ‘CRISIL A+’, with outlook remaining negative.
  • Cox & Kings defaulted on payment of commercial papers worth Rs 5 crore, which were due on Aug. 6.
  • AIA Engineering: Claims of Magotteaux (patent infringement and damages) against the company and Bhadresh K Shah has been dismissed as Tribunal passed an award deciding that it does not have jurisdiction to hear the dispute.
  • Hubtown clarified that the income tax department has initiated proceedings of search and seizure against the company and officials on July 30.
  • Sagar Cement July sales were up 25 percent to 274,822 MT versus 218,748 MT.
  • Alphageo stated the company has not received any further statements from the IT department on the search conducted by the two independent directors have also resigned.

Tokyo-based Mitsubishi UFJ Financial Group acquired minority stakes in multiple Indian companies including Tata Global Beverages, Dr Reddy’s, Marico and Godrej Consumer. This follows MUFG’s acquisition of global investment entities such as UK-based First State Investments, which held shares in the Indian companies.

Opinion
NSE, SGX Get Regulatory Approval To Trade Through Gujarat Finance Hub

Policy Day Guide

  • India’s Monetary Policy Committee is set to cut interest rates for a fourth consecutive time on Wednesday.
  • Thirty six economists polled by Bloomberg expect the MPC to cut the repo rate by 25 basis points to 5.50 percent—the lowest in nearly a decade.
  • The 100 basis points in rate cuts announced this year also marks the steepest reduction in interest rates in recent years, with the exception of the period following the global financial crisis. In June, the MPC cut rates by 25 basis points to 5.75 percent.

Read to get up to speed:

Catch all the news on monetary policy here.

Opinion
India’s Finance Minister Seeks ‘Significant’ Rate Cuts from RBI

Earnings Reaction To Watch

Indiabulls Housing Finance (Q1, YoY)

  • Net revenue fell 12 percent to Rs 1,522 crore. (estimate Rs 1,544 crore)
  • Net interest income fell 12.7 percent to Rs 1,475 crore.
  • Net Income fell 24 percent to Rs 801 crore. (estimate Rs 998 crore)
  • Gross NPAs at 1.47 percent versus 0.88 percent (QoQ)
  • Net NPAs at 1.1 percent versus 0.69 percent (QoQ)
Opinion
Q1 Results: Indiabulls Housing Finance’s Profit Falls, Bad Loans Rise

IRB Infra Developers (Q1, YoY)

  • Revenue rose 15.3 percent to Rs 1,773 crore. (estimate Rs 1,844 crore)
  • Net profit fell 17.4 percent to Rs 206.6 crore. (estimate Rs 211 crore)
  • Ebitda rose 14.6 percent to Rs 855.3 crore. (estimate Rs 768 crore)
  • Margin at 48.2 percent versus 48.5 percent.
  • Finance cost jumped 46 percent to Rs 362.2 crore.

Novelis (Q1, YoY) (Hindalco’s Arm)

  • Net sale fell 5.6 percent to $2,925 million.
  • Net Income fell 7.3 percent to $127 million.
  • Net income (adjusted) rose 26.1 percent to $145 million.
  • Adjusted Ebidta rose 11.4 percent to $372 million.

Zensar Tech (Q1, QoQ)

  • EBIT was down due to higher other income in base quarter.
  • Revenue rose 1.3 percent to Rs 1,071 crore. (estimate Rs 1,074.3 crore)
  • Net profit fell 9.9 percent to Rs 74.5 crore. (estimate Rs 82.1 crore)
  • EBIT fell 2.7 percent to Rs 91.2 crore. (estimate Rs 101 crore)
  • Margin at 8.5 percent versus 8.9 percent.
  • Other income slumped 42 percent to Rs 14.6 crore.

Lakshmi Vilas Bank (Q1, YoY)

  • Net interest income fell 5.1 percent to Rs 123.6 crore.
  • Net loss stood at Rs 237.3 crore versus Net loss of Rs 123.9 crore.
  • Provisions were at Rs 211.7 crore versus Rs 161.5 crore. (Rs 478.8 crore QoQ)
  • GNPA at 17.3 percent versus 15.3 percent (QoQ)
  • NNPA at 8.3 percent versus 8.49 percent (QoQ)

JK Lakshmi Cement (Q1, YoY)

  • Revenue rose 12.8 percent at Rs 1,041.9 crore. (estimate Rs 976 crore)
  • Net profit was up 2.9 times at Rs 39.4 crore. (estimate Rs 65 crore)
  • Ebitda jumped 81 percent to Rs 169.8 crore. (estimate Rs 164 crore)
  • Margin at 16.3 percent versus 10.2 percent. (estimate 16.8 percent)
  • Transportation and forwarding expenses down 13 percent at Rs 213 crore.
  • Exceptional loss of Rs 30 crore.

Nilkamal (Q1, YoY)

  • Revenue fell 8.3 percent to Rs 536.5 crore.
  • Net profit fell 7.7 percent to Rs 31 crore.
  • Ebitda rose 24.4 percent to Rs 70.8 crore.
  • Margin at 13.2 percent from 9.7 percent.
  • Tax as percent of PBT was at 34 percent versus 24 percent.
  • Depreciation jumped 66 percent to Rs 21.2 crore.
  • Finance cost surged 84 percent to Rs 5.9 crore.

Metropolis Healthcare (Q1, YoY)

  • Revenue increased 15.6 percent to Rs 203.3 crore.
  • Net profit rose 11.7 percent to Rs 26.8 crore.
  • Ebitda rose 24.1 percent to Rs 55.1 crore.
  • Margins stood at 27.1 percent versus 25.2 percent.
  • Exceptional loss of Rs 6.9 crore in the current quarter due provision for impairment in investment of securities in IL&FS and certain old reconciled balances.

Nifty Earnings To Watch

  • Adani Ports & SEZ
  • Cipla
  • HCL Technologies
  • Mahindra & Mahindra
  • Tata Steel

Other Earnings To Watch

  • Adani Gas
  • Adani Green Energy
  • Adani Power
  • Allcargo Logistics
  • Aster DM Healthcare
  • AstraZeneca Pharma
  • Aurobindo Pharma
  • Bajaj Electricals
  • Balrampur Chini Mills
  • Birlasoft
  • Cummins
  • Dollar Industries
  • GOCL Corporation
  • Goodricke Group
  • Gravita India
  • Hindustan Petroleum Corporation
  • Honda Siel Power Products
  • India Cements
  • J.Kumar Infraprojects
  • KEC International
  • Lemon Tree Hotels
  • Lupin
  • Maharashtra Seamless
  • Matrimony.Com
  • Navkar Corporation
  • Oracle Financial Services Software
  • Petronet LNG
  • Phoenix Mills
  • Punjab & Sind Bank ,Ramco Industries
  • Ramco Cements
  • Ramco Systems
  • Siemens
  • Signet Industries, Precision Wires
  • Sonata Software
  • Sudarshan Chemical Industries
  • Sundram Fasteners
  • Tata Teleservices (Maharashtra)
  • Themis Medicare
  • Voltas
  • Welspun Corp

Bulk Deals

  • Essel Propack: Clareville Capital India Master Fund sold 89 lakh shares (2.82 percent) at Rs 125.4 each.
  • PVR: Artisan Developing World Fund sold 5.3 lakh shares (1.13 percent) at Rs 1428.77 each.

Trading Tweaks

  • GFL record-date for demerger
  • Jagran Prakashan to move into short term ASM Framework
  • Simplex Infrastructures, Tejas Networks to move out of short term ASM Framework

Price Band revision (5%)

  • 5Paisa Capital
  • 8K Miles Software Services
  • Adlabs Entertainment
  • Aban Offshore
  • Andhra Cements
  • Ashapura Minechem
  • Binani Industries
  • Camlin Fine Sciences
  • Cox & Kings Financial Service
  • Coffee Day Enterprises
  • Cox & Kings
  • D B Realty
  • Eveready Industries
  • Excel Realty N Infra
  • GFL
  • Gujarat NRE Coke
  • Indiabulls Integrated Services
  • Igarashi Motors India
  • IL&FS Engineering and Construction Company
  • IL&FS Transportation Networks
  • Jet Airways
  • Jain Irrigation Systems
  • Kalyani Forge
  • Kridhan Infra
  • Kwality
  • Lakshmi Vilas Bank
  • Manpasand Beverages
  • Mcleod Russel
  • Mercator
  • MT Educare
  • Reliance Communications
  • Religare Enterprises
  • Reliance Naval and Engineering
  • Som Distilleries & Breweries
  • Sical Logistics
  • Talwalkars Better Value Fitness
  • Talwalkars Healthclubs
  • Tanla Solutions
  • Themis Medicare
  • Tata Teleservices (Maharashtra)
  • Eros International Media

Price Band revision (10%)

  • 63 Moons Technologies
  • Alphageo
  • Avadh Sugar & Energy
  • CARE Ratings
  • Gammon Infrastructure Projects
  • GATI
  • GTPL Hathway
  • Hubtown
  • IL&FS Investment Managers
  • Jubilant Industries
  • Linc Pen & Plastics
  • Mangalam Drugs And Organics
  • Nagarjuna Oil Refinery
  • NRB Industrial Bearings
  • Reliance Home Finance
  • Tejas Networks
  • Tourism Finance Corporation of India
  • Williamson Magor & Company
  • Unitech
  • Patel Engineering

Who’s Meeting Whom

  • Finolex Industries to meet Goldman Sachs Securities on Aug. 7.
  • Shriram City Union Finance to meet TA Associates on Aug. 22.

Insider Trading

  • Shoppers Stop promoter Ravi Raheja acquired 1.3 lakh shares on Aug. 5.

Money Market Update

The rupee weakened for the fourth straight session to close at 70.82/$ Vs 70.73/$ on Monday.

F&O Cues

August Futures

  • Nifty futures closed at 10,978.6, premium of 30 points versus 34 points
  • Nifty futures open interest down 6 percent, sheds 11 lakh shares in open interest
  • Bank Nifty futures closed at 28,109.7, premium of 87 points versus 147.7 points
  • Bank Nifty futures open interest down 7 percent, sheds 1.4 lakh shares in open interest

Options

  • Nifty PCR at 1.11 versus 1.01 (across all series).

Nifty Weekly Expiry Aug. 8

  • Max open interest on call side at 11,200 (26.7 lakh shares).
  • Max open interest on put side at 10,800 (17.4 lakh shares).
  • Max open interest addition seen in 10,700P (+5.3 lakh shares), 10,900P (+5.2 lakh shares).
  • open interest shedding seen in 10,900C (-7.2 lakh shares), 10,800C (-3 lakhs hares).

Nifty Monthly Expiry Aug. 29

  • Max open interest on call side at 11,000 (22.2 lakh shares).
  • Max open interest on put side at 11,000 (30 lakh shares).

Brokerage Radar

CLSA on Indiabulls Housing

  • Maintained 'Buy'; cut target price to Rs 670 from Rs 920.
  • Tight funding and a push to unwind corporate loans drags down topline.
  • Corporate NPLs rise, but a recovery in NPLs partly offset this.
  • Cut earnings estimates by 30 percent due to weaker topline.

CLSA on IRB Infra

  • Maintained 'Buy'; cut target price to Rs 225 from Rs 250.
  • Landmark GIC deal proves asset value; deal to delver balance sheet and fund new wins.
  • Q1: EPC Ebitda higher as execution picks up and toll collection mixed.
  • Believe stock offers deep value.

CLSA on Max Financial

  • Maintained 'Buy' with target price of Rs 550.
  • Healthy premium growth but proprietary channel drags.
  • Agency channel performance was weak and need to improve.
  • Clarity on bancassurance tie-up could drive re-rating.

Nomura on Minda Industries

  • Maintained 'Buy' with target price of Rs 454.
  • Results largely in line.
  • Sharp decline in the original equipment manufacturer segment remains a near-term headwind.
  • Await clarity on ramp up of new business segments, performance of key subsidiaries and demand outlook.
  • Aggressive expectations make risk reward unfavorable.

BofA Securities on Hindalco

  • Maintained 'Buy'; hiked target price to Rs 295 from Rs 290.
  • Novelis profitability at record high.
  • Strong quarter on higher volumes and profitability expansion.
  • Multiple levers to support earnings growth.

On Titan

CLSA

  • Maintained 'Outperform'; cut target price to Rs 1,150 from Rs 1,225.
  • Miss in June quarter results already priced in post pre-quarter release.
  • Jewellery – weak growth, modest margin.
  • Better than expected margins in watches.

UBS

  • Maintained 'Buy' with target price of Rs 1,600.
  • Steady growth in tough environment.
  • Management expects recovery in second half of 2019-20.
  • Expect market share gains to continue.

BofA Securities

  • Maintained 'Buy'; cut target price to Rs 1,320 from Rs 1,360.
  • June quarter results were slightly below expectations buy expect strong second half in 2019-20.
  • Structural growth drivers intact.
  • Cut estimates by 2-3 percent to factor in near-term demand weakness.

On Pidilite Industries

UBS

  • Maintained 'Buy' with target price of Rs 1,425.
  • Sequential recovery a respite; overall results inline.
  • Industrial products recover; mgmt. commentary key.

BofA Securities

  • Maintained 'Underperform' with target price of Rs 1,080.
  • June quarter results review: in line operating performance.
  • Aggressive expectations make risk reward unfavourable.