Stocks To Watch: Bank of Baroda, Canara Bank, Just Dial, Kotak Mahindra Bank, ICICI Securities, NBCC, SBI, Unitech, Zee Entertainment  

Asian stocks drifted Tuesday in trading muted by yesterday’s U.S. holiday. Crude oil pared gains related to supply disruptions in Libya and Iraq.

Japanese shares and U.S. futures were little changed as investors awaited a fresh batch of corporate earnings and some key central bank meetings this week. Australian stocks dipped. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.32 percent to 12,233.50 as of 6:58 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.

• Kotak Mahindra Bank cut fiscal year 2020 loan-growth expectations to 12 percent to 13 percent.
• SBI: Government appointed Challa Sreenivasalu Setty as managing director for three years, where the term will be extendable for two years after a performance review. Appointment made on recommendation Banks Board Bureau. Cetty was deputy managing director and headed to stressed asset resolution group at SBI.
• Unitech: The Supreme Court of India has approved the takeover of Unitech by the Central Government. The existing board of directors shall stand superseded. The apex court has approved names proposed by the Central Government to the new Unitech board.
• Telecom Stocks: Telecom companies move to Supreme Court seeking permission to negotiate with the Department of Telecommunications on schedule for payment of Adjusted Gross Revenue dues.
• HG Infra Engineering received appointment date from National Highways Authority of India for its hybrid annuity mode project in Haryana. The company’s bid cost for the aforesaid project stood at Rs 580 crore.
• NBCC received a letter of Acceptance from Central Coalfield for project management services worth Rs 720.32 crore in Jharkhand.
• MOIL: Government holding in the company fell from 56.01 percent to 53.84 percent, due to equity shares tendered in the buyback offer on Jan. 16.
• Balrampur Chini Mills said that an explosion occurred at its distillery unit. The company said it is also taking adequate steps to ensure the functioning at full capacity of the said distillery unit at the earliest, of which 100 KLPD is already functioning and the remaining 60 KLPD capacity is expected to be functional in a phased manner in another 7-10 days. The said accident would not cause any production loss to the company on an annual basis.
• Indiabulls Housing Finance will consider raising funds via debt on Feb. 5.
• IDBI Bank sold 17.9 lakh shares (0.6 percent) of NSE. Bank’s current holding for the Exchange stands 0.21 percent.
• Shivam Autotech said that all workmen of Gurugram plant have resumed their duty in all shifts with effect from Jan. 18.
• JK Agri Genetics will consider raising funds on Jan. 23.

Earnings Reaction To Watch

ICICI Securities (Q3, YoY)

• Revenue rose 4.1 percent to Rs 422.2 crore.
• Net Profit rose 35.6 percent to Rs 137.2 crore.
• Added 94,000 new clients in the current quarter.
• Retail Equities & Allied Business segment revenue rose 5 percent to Rs 228 crore.

KEI Industries (Q3, YoY)

• Revenue rose 20.8 percent to Rs 1,314.2 crore. (Estimate: Rs 1306.5 crore).
• Net profit rose 49.4 percent to Rs 72.3 crore. (Estimate: Rs 66.5 crore).
• Ebitda rose 18.4 percent to Rs 139.3 crore. (Estimate: Rs 134.4 crore).
• Margin stood at 10.6 percent versus 10.8 percent (Estimate: 10.3 percent).

Just Dial (Q3, YoY)

• Revenue rose 3.8 percent to Rs 235.4 crore.
• Net profit rose 8.2 percent to Rs 62 crore.
• Ebitda rose 21.6 percent to Rs 67.1 crore.
• Margin stood at 28.5 percent versus 24.3 percent.

HFCL (Q3, YoY)

• Revenue fell 30.1 percent to Rs 853.5 crore.
• Net profit fell 31.8 percent to Rs 46.1 crore.
• Ebitda fell 25.7 percent to Rs 95.2 crore.
• Margin stood at 11.2 percent versus 10.5 percent.

Can Fin Homes (Q3, YoY)

• Net interest income rose 23.6 percent to Rs 168.1 crore.
• Net profit rose 40.6 percent to Rs 106.6 crore.

Monnet Ispat & Energy (Q3, YoY)

• Revenue rose 18.1 percent to Rs 583.3 crore.
• Net loss was at Rs 140.4 crore versus net loss of Rs 66.4 crore.
• Ebitda loss was at Rs 24.7 crore versus Ebitda profit of Rs 20.4 crore.

Nifty Earnings To Watch

• Zee Entertainment Enterprises

Other Earnings To Watch

• Polycab
• Granules
• Hatsun Agro Product
• Havells
• HDFC Asset Management Company
• ICICI Prudential Life Insurance
• Indiamart Intermesh
• Jay Bharat Maruti
• Kamat Hotels
• Mahindra EPC Irrigation
• Manaksia Aluminium
• Newgen Software Technologies
• Rane (Madras)
• Sasken Technologies
• Snowman Logistics
• Tejas Networks

Default Disclosures

• Kohinoor Foods default on loans from financial institutions and banks stand at Rs 668.63 crore as on Dec. 31. Total financial indebtedness stood at Rs 668.63 crore. The company has already submitted its One-Time Settlement proposal to Financial Institutions.

Top Management Appointments Made For Banks

• Bank of Baroda to appoint Sanjiv Chadha as the Bank’s MD and chief executive officer for a period of three years. Chadha is currently the deputy MD at SBI.
• Canara Bank to appoint Lingam Venkata Prabhakar as MD and CEO till December 2022. Prabhakar is currently the Executive Director at Punjab National Bank.
• Bank of India to appoint Atanu Kumar Das as Bank’s MD and CEO for three years. Das is currently the Bank’s Executive Director. Alert: The Appointments Committee of the Cabinet had approved the aforesaid proposals of the Department of Financial Services.

Trading Tweaks

• Suven Lifesciences ex-date for demerger.
• Uttam Value Steels, GTL Infrastructure, RDB Rasayans, IndoStar Capital Finance, Linc Pen & Plastics, Omax Autos, TIL to move into short term ASM Framework.
• One Point One Solutions, Multibase, Uniply Décor, Toyam Industries to move out of short term ASM Framework.
• Polson price band revised to 10 percent.
• Shreyas Shipping & Logistics price band revised to 5 percent.

Who’s Meeting Whom

• All Cargo Logistics to meet Ashmore Investment Management on Jan. 22

Money Market Update

• The rupee closed at 71.11/$ versus 71.08/$ on Friday.

F&O Cues

Index Futures

• Nifty January futures closed at 12,263.1, premium of 38.6 points versus 32 points.
• Nifty January futures open interest down 3 percent, sheds 4.2 lakh shares in open interest.
• Nifty Bank January futures closed at 31,181.8, premium of 101.2 points versus 133 points.
• Nifty Bank January futures open interest up 17 percent, adds 2 lakh shares in open interest.

Options

• Nifty PCR at 1.13 versus 1.45 (across all series).

Nifty Weekly Expiry: Jan. 23

• Max open interest on call side at 12,400 (29.1 lakh shares).
• Max open interest on put side at 12,300 (14.8 lakh shares).
• Open interest addition seen at 12,300C (+19.5 lakh shares), 12,350C (+11.6 lakh shares).
• Open interest shedding seen at 12,350P (-5.6 lakh shares), 12,300P (-4.9 lakh shares).

Nifty Monthly Expiry: Jan. 30

• Max open interest on call side at 12,500 (31.6 lakh shares).
• Max open interest on put side at 12,000 (33.9 lakh shares).

Brokerage Radar

Haitong on Prince Pipes

• Initiated ‘Buy’ with a price target of Rs 262.
• Best proxy play in plastic pipe sector.
• Major beneficiary of consolidation of PSWR operations.
• Scope for improvement in operating margin by 100-200 basis points by 2021-22.
• Strong re-rating candidate as it is trading at a steep discount to its peers.

PhillipCapital on Johnson Controls-Hitachi

• Initiated ‘Buy’ with a price target of Rs 2,700.
• Strengthening commercial air conditioners with VRF and PAC.
• Strong manufacturing and R&D will help new launches, moving up the value chain and increasing service revenue.
• See robust cash-flow generation while improvement in the returns profile.

UBS on MCX

• Maintained ‘Buy’; hiked price target to Rs 1,650 from Rs 1,200.
• See multiple drivers to support near- and medium-term growth.
• Upside could come from new products and options commissions.
• Institutional participation is likely to be gradual.

On InterGlobe Aviation

HSBC

• Maintained ‘Reduce’; cut price target to Rs 1,250 from Rs 1,305.
• Yield in 2020-21 likely to face pressure as slowing economy could reduce demand.
• Cost headwinds could keep profitability under pressure; cut FY20-21 profit estimates by 30 percent and 28 percent.
• Slowing economy, promoters’ differences, uncertain industry structure are concerns.

Citi

• Maintained ‘Neutral’ with a price target of Rs 1,700.
• Domestic air passenger traffic moderates after a strong November.
• IndiGo’s market share is steady at 47.5 percent.
• Investor focus more on the Extraordinary General Meeting scheduled on Jan. 29

On Kotak Mahindra Bank

PhillipCapital

• Maintained ‘Neutral’ with a price target of Rs 1,660.
• Net profit below estimates on higher operating expenses and provisions.
• Continue to remain cautious in the slowing economy.
• Cut estimates due to lower than expected credit growth.

IDFC Securities

• Maintained ‘Outperform’ with a price target of Rs 1,760.
• Q3: Loan growth decelerates further.
• Kotak has managed its asset quality better than any other bank.
• Slowing growth remains a key monitorable given its rich valuation.

Citi

• Maintained ‘Neutral’ with a price target of Rs 1,860.
• Q3: wholesale drags loan growth; net interest margins higher.
• NPA and credit costs rise from a low base.
• Expect Kotak to maintain its conservative stance in lending given slow economic environment.

On Hindustan Zinc

Citi

• Maintained ‘Neutral’ with a price target of Rs 210.
• Q3 in-line; see volume recovery and cost pressures.
• Downtrend in zinc prices should push the stock down.
• Strong dividend yield is positive.

IDFC Securities

• Maintained ‘Neutral’ with a price target of Rs 212.
• Q3 results: in-line operating profits.
• Cut FY20 Ebitda estimates by 7 percent to factor in lower volumes and prices.
• Volume to boost earnings in 2020-21 but factored in.

On Federal Bank

Kotak Securities

• Maintained ‘Buy’ with a price target of Rs 120.
• Operationally weak; lower provisions and tax rate driving earnings growth.
• Asset quality holds up well and better than peers thus far.
• Improvement of return ratios has been slow.

Edelweiss

• Maintained ‘Buy’ with a price target of Rs 127.
• Better-than-expected net profit led by lower credit cost.
• Slippages elevated due to identified stress pool; expect asset quality volatility to subside.
• Few of quarters of steady performance to reinforce investors’ confidence and drive re-rating.