Stocks To Watch: Bharti Airtel, GMR Infra, GTPL Hathway, HDFC, Infosys, Sterlite Tech, Zee Entertainment  
A bronze bull statue stands at the entrance to the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Stocks To Watch: Bharti Airtel, GMR Infra, GTPL Hathway, HDFC, Infosys, Sterlite Tech, Zee Entertainment  

Stocks in Asia opened modestly higher as investors monitor an easing of geopolitical tension and await the latest reading on the U.S. labour market.

Shares in Japan, South Korea and Australia nudged up. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 12,262.50 as of 7:05 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.

  • Housing Development Finance Corporation has completed the acquisition of majority stake in Apollo Munich Health Insurance for Rs 1,495.81 crore. HDFC bought 50.80 percent stake of Apollo Hospitals Group in Apollo Munich for Rs 1,485.14 crore and 0.36 percent shareholding of employees for Rs 10.67 crore.
  • Sterlite Tech’s arm acquired 12.8 percent stake in Israel’s ASOCS. The target company belongs to the industry of virtualized radio access network.
  • GMR Infra’s arm has formed a joint venture with Hong Kong’s ESR Cayman to develop a 66-acre logistics and industrial park at the Hyderabad airport city. In the joint venture, GMR Group will have 30 percent equity interest while the balance 70 percent will for ESR Cayman.
  • Bharti Airtel’s panel to meet on Jan. 14 to consider QIP issue price.
  • Delta Corp’s arm has received a license to operate a casino in Nepal. The company signed a memorandum of understanding for leasing space at Marriott Hotel in Kathmandu. The operations of casino as expected to commence soon.
  • KNR Constructions will sell Walayar toll unit to Cube Highways at an enterprise value of Rs 529.27 crore.
  • Goa Carbon said that operations of its Bilaspur unit have resumed.
  • Future Supply Chain Solutions appointed Hiroyuki Tanaka as an additional director.
  • TCS expanded partnership with Norway’s Vipps for digital solutions.
  • Biocon, Biocon Biologics and True North Fund executed a share subscription agreement and a shareholder agreement. On Jan. 6, the company stated in its press release that True North Fund would acquire 2.44 percent stake in Biocon Biologics for Rs 536.25 crore.
  • Oriental Bank of Commerce reduced Marginal Cost of Funds based Lending Rate across various tenors with effect from Jan. 10. One-month MCLR at 7.6 percent and One-year MCLR at 8.15 percent.
  • BSE has received a certificate of registration from IRDAI to commence insurance broking business. Exchange plans to launch insurance business by early February.
  • South Indian Bank will consider raising funds via bonds on Jan. 16.

Key Events To Watch

  • The government will release factory output data for November
  • SIAM will announce industrywide sales data for December

Key Supreme Court events today:

  • Supreme Court will hear Tata Sons appeal against a tribunal order reinstating Cyrus Mistry.
  • Citizenship law case hearing.
  • Verdict on pleas challenging curbs in Kashmir.

Earnings Reaction To Watch

GTPL Hathway (Q3, YoY)

  • Revenue rose 2.1 times to Rs 674 crore.
  • Revenue (Ex EPC) rose 41 percent to Rs 449.9 crore.
  • Net profit surged 77.4 percent to Rs 33 crore.
  • Ebitda up 56 percent to Rs 121.7 crore.
  • Margin stood at 18.1 percent versus 24.8 percent.

Nifty Earnings To Watch

Infosys (Q3 Estimates, QoQ)

  • $ revenue seen 1.4 percent higher at $3,254 million.
  • Revenue seen 2.4 percent higher at Rs 23,168 crore.
  • EBIT seen 4.9 percent higher at Rs 5,154 crore.
  • EBIT margin seen at 22.2 percent versus 21.7 percent.
  • Net profit seen 3.9 percent higher at Rs 4,194 crore.

Other Earnings To Watch

  • Steel Strips Wheels

Offerings

  • Computer Age Management seeks SEBI approval for IPO. Issue will have offer for sale of up to 1.22 crore shares.

Default Disclosures

  • Uttam Galva Steels default on loans from financial institutions and banks stand at Rs 397.26 crore as on Dec. 31. Total financial indebtedness at Rs 971.96 crore.
  • Mercator default on loans from financial institutions and banks stand at Rs 904.8 crore as on Dec. 31. Total financial indebtedness at Rs 969 crore.

Pledge Share Details

  • Zee Entertainment Enterprises promoter Essel Media Ventures revoked pledge of 3.32 crore shares (3.45 percent) on Jan. 6 in favour of VTB Capital.
  • Adani Green Energy promoter SB Adani Family Trust revoked pledge of 2 crore shares (1.28 percent) on Jan. 8 in favor of Yes Bank.

Trading Tweaks

  • Capital Trust to move into ASM Framework on Jan. 10.
  • 3i Infotech, FCS Software Solutions to move into short term ASM Framework.
  • AksharChem, Den Networks, MSP Steel & Power, Gayatri Projects to move out of short term ASM Framework.
  • Kakatiya Cement Sugar & Industries price band revised to 10 percent
  • Yes Bank board meeting on fundraising.

Who’s Meeting Whom

  • Tata Steel to meet Macquarie, B&K Securities and Morgan Stanley from Jan. 10-15.
  • Mahindra & Mahindra to meet MFS Investment Management on Jan. 10.

Money Market Update

  • The rupee had its biggest single-day gain since Sept. 18, 2019 to close at 71.21/$ versus 71.71/$ on Wednesday.

F&O Cues

Index Futures

  • Nifty January futures closed at 12,269.75, premium of 53.85 points versus 38.2 points.
  • Nifty January futures open interest up 10 percent, adds 11.6 lakh shares in open interest.
  • Nifty Bank January futures closed at 32,152.65, premium of 60.25 points versus 70.45 points.
  • Nifty Bank January futures open interest down 6 percent, sheds 94,000 shares in open interest.

Options

  • Nifty PCR at 1.58 versus 1.24 (across all series)

Nifty Weekly Expiry: Jan. 16

  • Max open interest on call side at 12,200 (10.2 lakh shares).
  • Max open interest on put side at 12,100 (15.7 lakh shares).
  • Open interest addition seen at 12,100P (+13.7 lakh shares), 12,200P (+12 lakh shares).

Nifty Monthly Expiry: Jan. 30

  • Max open interest on call side at 12,500 (25 lakh shares).
  • Max open interest on put side at 12,000 (44.4 lakh shares).
Stocks To Watch: Bharti Airtel, GMR Infra, GTPL Hathway, HDFC, Infosys, Sterlite Tech, Zee Entertainment  

Brokerage Radar

Morgan Stanley on NBFC

  • 2020 will be a crucial year of consolidation for NBFCs even as they navigate a sluggish economy.
  • Companies with tough 2019 will continue to de-lever, de-risk, and re-model to regain investor confidence.
  • Others are likely to prioritize asset quality over growth.
  • MCX: Maintained ‘Overweight’; hiked price target to Rs 1,600 from Rs 1,365.
  • M&M Financial: Maintained ‘Overweight’; cut price target to Rs 400 from Rs 425.
  • Shriram Transport Finance: Maintained ‘Overweight’ with a price target of Rs 1,365.
  • PNB Housing: Upgraded to ‘Equal-weight’ from ‘Underweight’; maintained price target at Rs 500.
  • HDFC AMC: Downgraded to ‘Equal-weight’ from ‘Overweight’; cut price target to Rs 3,300 from Rs 3,365.
  • Bajaj Finance: Maintained ‘Equal-weight’; hiked price target to Rs 4,250 from Rs 3,700.
  • IndoStar Capital: Maintained ‘Equal-weight’; cut price target to Rs 190 from Rs 230.
  • Aditya Birla Capital: Maintained ‘Equal-weight’; hiked price target to Rs 100 from Rs 80.

Morgan Stanley on Banks

  • Macro recovery in 2020 is likely to be slow, weighing on growth and keeping NPL formation elevated.
  • Reduce earnings estimates and stick to large banks.
  • Mid-size banks will struggle given higher NPLs amid low profitability.
  • Kotak Mahindra Bank: Maintained ‘Overweight’; hiked price target to Rs 1,925 from Rs 1,900.
  • AU Small Finance: Maintained ‘Equal-weight’; hiked price target to Rs 850 from Rs 700.
  • Yes Bank: Maintained ‘Underweight’; cut price target to Rs 25 from Rs 40.

HSBC on Financials

  • Expect 2020 to be better than 2019 for NBFCs, with liquidity challenges getting resolved.
  • Focus shifts to growth, which will improve gradually and asset quality, for which risks are inching up.
  • Continue to prefer Bajaj Finance and HDFC given their strong execution capabilities.
  • HDFC: Maintained ‘Buy’; hiked price target to Rs 2,800 from Rs 2,700.
  • Bajaj Finance: Maintained ‘Buy’ with a price target of Rs 5,100.
  • LIC Housing: Maintained ‘Buy’; hiked price target to Rs 487 from Rs 465.
  • L&T Finance: Maintained ‘Buy’; hiked price target to Rs 148 from Rs 130.
  • M&M Finance: Maintained ‘Buy’; cut price target to Rs 392 from Rs 400.

UBS on Oil & Gas

  • For 2020, we believe OMCs and upstream companies will re-rate.
  • Positives: privatization, strong marketing performance, lower government interventions, recovery in GRM.
  • Gas transmission businesses could recover, with higher availability of domestic gas and LNG.
  • Upgrade GAIL to Buy and Downgrade Gujarat Gas and Mahanagar Gas to Sell.
  • Reiterate Buy ratings on Reliance, the OMCs and ONGC.

HSBC on Cement

  • Another quarter of tepid demand and strong earnings.
  • Volume growth is set to flatten in 2019-20; production discipline and benign costs should support margins.
  • Consensus expectations and valuations for UltraTech and Shree Cement not comforting.
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