Stocks To Watch: Bajaj Auto, Bajaj Finserv, Bank Of Baroda, Maruti Suzuki, Tata Motors, Vedanta  

Asian stocks retreated Friday after their U.S. counterparts fell from record highs amid a torrent of corporate results.

Stocks fell in Japan and South Korea after the S&P 500 retreated from an all-time high. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.19 percent to 11,251 as of 7:15 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

• Tata Motors clarified that it has no formal engagement with Fitch Rating. The ratings downgrade has been unsolicited and hence the company has no comments to offer.
• Tata Steel acquired 2.6 crore shares of Tata Sponge Iron at Rs 500 each via the rights issue aggregating to Rs 1,292.2 crore. The company increased its stake from 54.5 percent to 75.91 percent in Tata Sponge Iron.
• Bajaj Hindusthan Sugar: CARE Ratings downgraded long-term and short-term loan facilities worth Rs 7,556.2 crore to default. Ratings revised to ‘CARE D’ (issuer not co-operating).
• Cox & Kings clarified that Bombay High Court has allowed the company to withdraw petition filed by company itself against IATA.
• Punjab National Bank board approved raising capital up to Rs 5,000 crore via QIP/FPO/rights issue.
• Indiabulls Housing Finance board proposed Sameer Gehlaut to become the Non-Executive Chairman of the amalgamated bank. Gagan Banga shall continue to be the managing director and chief executive officer in the amalgamated bank.
• Future Enterprises’ Chief Financial Officer Dinesh Maheshwari has been released on bail on July 24. The Directorate of Revenue Intelligence had arrested Maheshwari on July 13 for allegedly being the “main person responsible” for customs duty evasion to the tune of Rs 14.58 crore by the company.
• Amara Raja Batteries Nalanda India Equity Fund increased its stake from 7.23 percent to 9.3 percent in the company.
• Shriram Transport Finance World Bank’s arm IFC to infuse $200 million in the company to primarily fund purchases of commercial vehicles and support micro, small, and medium enterprises.
• Techno Electric & Engineering secured order worth Rs 369 crore from Damodar Valley Corporation to set up a gas system.
• Speciality Restaurant entered into JV with Homage Ventures to setup and operate a restaurant in London.
• TRF Board approved to sell 100 percent stake in its Singapore arm for GBP 3.6 million to England based company Ensco.
• Trident: Dun & Bradstreet assigned 5A1 (strong) rating to the company.

Earnings Reactions To Watch

Tata Motors (Q1, YoY)

• Consolidated loss widens to Rs 3,680 crore from Rs 1,862.7 crore.
• JLR margin came in at 4.2 percent below estimate of 5.2 percent.
• Management confident of 3-4 percent margins for JLR.
• High fixed costs on plant shutdowns behind JLR's loss.
• Net debt higher by Rs 6,000 crore due to change in accounting standard.

JLR

• Revenue down 3 percent to GBP 5.07 billion.
• JLR margin at 4.2 percent versus 6.2 percent.
• JLR wholesales down 10 percent to 1.18 lakh units.

Bajaj Finance (Q1, YoY)

• Marginal rise in gross and net NPA (QoQ).
• Loan loss and provisions rise 35 percent sequentially.
• Under-writing practices strengthened in some segments.
• 15-18 percent drop in disbursements in digital product financing, SME & B2C business.
• Long-term AUM growth guidance of 25-27 percent.

Bank of Baroda (Q1, YoY)

• Net interest income up 2.61 percent to Rs 6,496 crore (estimate Rs 6,393 crore).
• Net profit at Rs 710 crore versus net loss of Rs 49 crore.
• Provisions at Rs 3,168.4 crore.
• GNPA at 10.28 percent versus 10.02 percent (QoQ)
• NNPA at 3.95 percent versus 3.65 percent (QoQ)

*Adjusted figures after aggregating numbers of Dena Bank, Vijaya Bank and Bank of Baroda.

PVR (Q1, YoY)

• Revenue up 26.4 percent to Rs 880.4 crore.
• Net profit down 69 percent to Rs 16.2 crore.
• Ebitda up two times to Rs 278.6 crore.
• Margin at 31.6 percent versus 19.7 percent.

Persistent Systems (Q1, QoQ)

• Revenues flat at Rs 832.1 crore.
• Net profit down 2.4 percent to Rs 82.5 crore.
• EBIT down 3.7 percent to Rs 79.8 crore.
• Margin at 9.6 percent versus 10 percent.

Mphasis (Q1, QoQ)

• Revenue up 1.9 percent to Rs 2,062.6 crore.
• Net profit down 0.5 percent to Rs 264.7 crore versus Rs 266.1 crore.
• EBIT down 4.8 percent to Rs 299.5 crore.
• Margin at 14.5 percent versus 15.5 percent.

Westlife Development (Q1, YoY)

• Revenues up 11.7 percent to Rs 382 crore.
• Net loss of Rs 1.1 crore versus profit of Rs 9 crore.
• Ebitda up 47 percent to Rs 49 crore.
• Margin at 12.8 percent versus 9.7 percent.
• Same store sales growth at 6.7 percent.

Biocon (Q1, YoY)

• Revenue up 30.4 percent to Rs 1,465.9 crore.
• Net profit up 72.3 percent to Rs 206.3 crore.
• Ebitda up 84 percent to Rs 437.5 crore.
• Margin at 29.8 percent versus 21.2 percent
• Raw material as percent of revenue at 29 percent.

Gruh Finance (Q1, YoY)

• Net interest income down 1.9 percent to Rs 171.6 crore versus Rs 175 crore.
• Net profit flat at Rs 115.6 crore versus Rs 115.1 crore.

Tata Coffee (Q1, YoY)

• Revenue up 10.5 percent to Rs 466.7 crore.
• Net profit up 2.3 percent to Rs 22.1 crore.
• Ebitda up 18.9 percent to Rs 78.8 crore.
• Margin at 16.9 percent versus 15.7 percent.

South Indian Bank (Q1, YoY)

• Net interest income up 8.4 percent to Rs 535.7 crore.
• Net profit up 3.2 times to Rs 73.3 crore.
• Provisions at Rs 205 crore versus Rs 231.5 crore. (Rs 219.2 crore QoQ)
• GNPA at 4.96 percent versus 4.92 percent. (QoQ)
• NNPA at 3.41 percent versus 3.45 percent. (QoQ)
• Other income up 25 percent.

AU Small Finance Bank (Q1, YoY)

• Net interest income up 38.1 percent to Rs 395.6 crore.
• Net profit up 2.5 times to Rs 190.3 crore.
• Provisions at Rs 31.5 crore versus Rs 35.1 crore. (Rs 39.2 crore QoQ)
• GNPA at 2.08 percent versus 2.04 percent. (QoQ)
• NNPA at 1.25 percent versus 1.29 percent. (QoQ)

Nifty Earnings To Watch

• Bajaj Auto
• Maruti Suzuki India
• JSW Steel
• Vedanta

Other Earnings To Watch

• Vodafone Idea
• ABB India
• Atul
• Bajaj Holdings & Investment
• Balaji Amines
• DIC India
• Elecon Engineering Company
• Empire industries
• Gic Housing Finance
• KPIT Technologies
• Mahindra Lifespace Developers
• Oriental Carbon & Chemicals
• Plastiblends India
• VST Industries
• Indraprastha Medical Corporation
• Aarti Drugs
• Astec LifeSciences
• Confidence Petroleum
• Force Motors
• Jubilant Life Sciences
• Kalyani Forge
• Mangalam Drugs And Organics
• Music Broadcast
• Polycab
• Punjab National Bank
• Puravankara
• Supreme Petrochem
• Teamlease Services
• Usha Martin

Brokerage Radar

Morgan Stanley on Oberoi Realty

• Maintained ‘Overweight’ with a price target of Rs 633.
• June quarter numbers were beat; Strong presales momentum.
• Revenue driven by steady execution in residential segment and stable revenues from rental portfolio.
• Quality brand name, strong balance sheet, and strong sales velocity drive Overweight rating.

Jefferies on V-Guard Industries

• Maintained ‘Buy’; hiked price target to Rs 270 from Rs 260.
• June quarter review: A good quarter, yet again.
• Steady ad-spend and price hikes taken in March quarter aided margin traction.

Nomura on Bajaj Finserv

• Maintained ‘Neutral’ with a price target of Rs 8,250.
• In-line performance; outlook weakens.
• Asset quality trends showing early warning signs.
• Lending business performance was satisfactory.

On Bank of Baroda

Nomura

• Maintained ‘Buy’; cut price target to Rs 145 from Rs 165.
• Merger having some near-term impact on pre-provisioning operating profit.
• Asset quality: No big scale kitchen sinking but problems not over yet.
• High NBFC/HFC exposure remains key risk remains but valuations undemanding.

Axis Capital

• Maintained ‘Add’; cut price target to Rs 125 from Rs 140.
• Bad assets pipeline remains a worry.
• Believe merger has delayed the recovery process for BoB.
• Management guidance for 15 peceny on loan and 10 percent on deposit growth in 2019-20 is difficult to achieve.

On Ambuja

Nomura

• Maintained ‘Neutral’ with a price target of Rs 240.
• June quarter review: miss; volumes much weaker, but realisations higher.
• Compared to subsidiary ACC, the volume decline for Ambuja was steep.
• Construction activity still not picked up and will likely remain weak in the third quarter.

HSBC

• Maintained ‘Hold’ with a price target of Rs 223.
• June quarter results were ahead of estimates entirely driven by higher cement prices.
• Ebitda per tonnet hit a seven-year high, volumes contracted sharply for first time in 10 quarters.
• Expect prices to decline in the second half due to weak demand.

On Tata Motors

PhillipCapital

• Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 161 from Rs 237.
• Despite slight recovery and improvement in china market, volume outlook remains hazy.
• Cost‐cutting aided profitability, but going forward higher variable marketing spends will be a drag.
• See downside risk to mgmt. guidance of 3‐4 percent EBIT margins due to Brexit and uncertain demand environment.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 192
• June quarter results missed estimates as JLR margin dipped and negative cash flow drove net debt higher.
• Maintained guidance on 2019-20 margins, albeit now at the lower end of the guided range.
• Valuation is cheap, still await signs of a volume turnaround.

Bulk Deals

• Reliance Infra: KBC Equity Fund acquired 33 lakh shares (1.27 percent) at Rs 47.43 each.
• Shriram Transport Finance: New World Fund sold 15.1 lakh shares (0.67 percent) at Rs 978.68 each.

Trading Tweaks

• BSE ex-date for share buyback.
• Ballarpur Industries, Indiabulls Integrated Services, Ruchi Soya Industries, Talwalkars Better Value Fitness to move into ASM Framework.
• Greenply Industries price band revised to 20 percent.

Insider Trading

• Hubtown promoter Rushank Shah acquired 19,800 shares on July 24.

F&O Cues

Futures

• Nifty August futures closed at 11,301, premium of 49 points.
• Nifty futures open interest across series up 11 percent, adds 23.8 lakh shares in open interest.
• Bank Nifty August futures closed at 29,201, premium of 158 points.
• Bank Nifty futures open interest across series down 7 percent, sheds 1,400 shares in open interest.
• Nifty Rollover at 73.7 percent, Nifty Bank Rollover at 76.5 percent.

Nifty Weekly Expiry

• Max open interest on call side at 11,400 (14.7 lakh shares).
• Max open interest on put side at 11,200 (11.9 lakh shares).
• Max open interest addition seen in 11,200P (+5 lakh shares), 11,250P (+4.9 lakh shares), 11,500C (+4.7 lakh shares).