A trader monitors financial data on computer screens on the trading floor at ETX Capital, a broker of contracts-for-difference, in London, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

Stocks To Watch: Bharti Airtel, ICICI Bank, HUL, Indiabulls Housing, Vodafone Idea

The equity markets were roiled after President Donald Trump’s threat to increase tariffs on Chinese imports cast a cloud over talks this week that were expected to finalise a trade deal.

Futures on the S&P 500 Index sank more than 2 percent. Contracts on the FTSE China A50 equity index fell more than 4 percent at the open.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.45 percent to 11,706.50 as of 6:50 a.m.

Short on time? Well, then listen to this podcast for a quick summary of the article!

Here Are The Stocks To Watch Out For In Today’s Trade Today

  • Cadila Healthcare: Received 14 observations on its formulations manufacturing facility in Moraiya, Ahmedabad (Gujarat) from U.S. FDA. The company said that there were no repeat observations or data integrity related observations.
  • Bharti Airtel: Africa unit is said to raise about $1 billion from London listing and target a trading debut in June. The unit is seeking an equity valuation of about $5 billion: Bloomberg
  • Vodafone Idea: Signed a multi-million dollar five-year pact with IBM. The company will deploy Ericsson’s cloud solutions to enhance its existing core network as per the press release of Ericsson.
  • Indiabulls Housing Finance: Board reversed scheme of amalgamation with Lakshmi Vilas Bank and proposed to merge Indiabulls Commercial Credit with Lakshmi Vilas Bank. Indiabulls Commercial Credit is 100 percent subsidiary of Indiabulls Housing Finance. Previous scheme proposed merger of Lakshmi Vilas Bank with Indiabulls Housing Finance. This move was approved board of Lakshmi Vilas Bank, where Indiabulls Housing Finance will hold 90.5 percent stake in Lakshmi Vilas Bank post the merger.
  • Hyderabad Industries: Commenced the final phase production of its Pipe and Fittings at Gujarat Plant. This phase of production will add capacity of 2,916 million tonne per annum.
  • Amber Enterprises: Completed the acquiring 80 percent stake in Sidwal Refrigeration with effect from May 2. The company had acquired 36,000 shares in the target company aggregating to Rs 3.6 crore.
  • Deepak Fertilisers and Petrochemicals: Board to consider terms and conditions in issue of FCCBs on May 8.
  • Apollo Tyres: Central Government approved appointment of Neeraj Kanwar as Managing Director of the company with effect from May 28 till March 202
  • ONGC: Restored operations at its field off India’s east coast after Cyclone ‘Fani’ made landfall without causing any disruption to its offshore installations.
  • Yes Bank: RBI imposed a penalty of Rs 11.25 lakh due to violations in issuance and operation of prepaid instruments.
  • Tata Teleservices: Clarified on the news of Department of Telecommunications calling for guarantees for its merger with Airtel, stating that order was issued by TDSAT in petition filed by Bharti Airtel and the company was not a party to the petition.
  • EID Parry: Board to consider raising Rs 300 crore via NCDs on May 8
  • Canara Bank: ICRA downgraded ratings of AT-I – Basel III from AA to AA- (Stable). ICRA downgrades ratings of AT-II bonds, Basel III from AAA to AA+ (Stable). ICRA downgraded and withdrew ratings of lower Tier-II bonds
  • InvIT- Sterlite Power: InvIT announced the closing of a preference unit issuance worth INR2,514 crore. IndiGrid to Acquire Electricity Transmissions Assets Following KKR Investment. Asset acquisition from Sterlite Power to boost IndiGrid’s AUM to Rs 17,000 crore.
  • DHFL: Board approved fund raising for an amount up to Rs 2,000 crore. To raise funds in one or more tranches. Board has constituted a sub-committee to decide upon fund raising.
  • Tata Steel: The merger between Thyssenkrupp and Tata Steel looks more likely to be blocked by European antitrust regulators unless both companies offer greater concessions, Financial Times reported, citing three people familiar with the matter. Regulators are concerned that the joint venture would give less choice and higher prices for steel used in auto sector and electrical products as well as coated steel used for packaging.
  • Infibeam Avenues: Served termination notice to joint statutory auditor S.R.B.C & CO, LLP on the grounds of sharing company’s unpublished price sensitive information with personal email accounts of their team and third party on multiple occasions leading to breach of trust and loss of faith. M/s Shah & Taparia, chartered accountants will continue to be the statutory auditors.
  • Yes Bank: ICRA downgraded credit rating on various debt instruments of the company citing significant increase in below rated advances and given the deterioration in credit profile of some of its larger borrowers. The rating downgrade also factors in the further weakening in Yes Bank’s core equity (CET-I) capital cushions because of the voluntary provisions and consequent losses in March quarter.

Nifty Results To Watch

  • Bharti Airtel
  • ICICI Bank

Other Results To Watch

  • Mahindra CIE Automotive
  • Marico
  • Bharat Bijlee
  • Navin Fluorine International
  • Firstsource Solutions
  • Thirumalai Chemicals
  • Wockhardt
  • Expleo Solutions
  • Fortis Malar Hospitals
  • Godrej Agrovet
  • Great Eastern Shipping
  • Gujarat Gas
  • Hindustan Composites
  • Pitti Engineering

Earnings Reaction To Watch

HUL (Q4, YoY)

  • Revenue up 9.3 percent to Rs 9,945 crore.
  • Net profit up 13.8 percent to Rs 1,538 crore.
  • Ebitda up 13.2 percent to Rs 2,314 crore.
  • Margin at 23.3 percent versus 22.5 percent.
  • Volume growth at 7 percent.

Also read: Q4 Results: HUL Posts Lowest Volume Growth In Six Quarters

L&T Technology Services (Q4, QoQ)

  • Revenue up 2 percent to Rs 1,343.1 crore.
  • Net profit up 3.2 percent at Rs 191.5 crore.
  • EBIT up 1.4 percent to Rs 220.3 crore.
  • EBIT Margin at 16.4 percent versus 16.5 percent
  • Declared dividend of Rs 13.5 per share

Tata Chemicals (Q4, YoY)

  • Revenue up 8 percent to Rs 2,759.4 crore.
  • Net profit down 65 percent to Rs 408.7 crore.
  • Ebitda up 3.6 percent to Rs 530.9 crore.
  • Margin at 19.2 percent versus 20.1 percent
  • Declared dividend of Rs 12.5 per share
  • Exceptional Gain of Rs 1,266.7 crore in base quarter.

Deepak Nitrite (Q4, YoY)

  • Revenue up 23.7 percent to Rs 485.9 crore.
  • Net profit up 2.8 times to Rs 56.6 crore.
  • Ebitda up 2.2 times to Rs 108.9 crore.
  • Margin at 22.4 percent versus 12.5 percent.
  • Inventory gain of Rs 18.4 crore.

Birla Corporation (Q4, YoY)

  • Revenue up 13.4 percent to Rs 1,872.8 crore.
  • Net profit down 2.2 percent to Rs 128.2 crore.
  • Ebitda up 20 percent to Rs 309.6 crore.
  • Margin at 16.5 percent versus 15.6 percent.
  • Power & Fuel Expenses up 29 percent to Rs 412.3 crore.
  • Board approved raising Rs 150 crore via NCDs
  • Declares dividend of Rs 7.5 per share.

Akzo Nobel (Q4, YoY)

  • Revenue up 0.7 percent to Rs 705.6 crore.
  • Net profit up 52.2 percent to Rs 70.3 crore.
  • Ebitda up 48.2 percent to Rs 103.6 crore.
  • Margin at 14.7 percent versus 10 percent.
  • Employee expenses down 26 percent to Rs 59.9 crore.
  • Declares dividend of Rs 24 per share.

Central Depository Services (Q4, YoY)

  • Revenue up 1 percent to Rs 50.4 crore.
  • Net profit up 30.2 percent to Rs 33.6 crore.
  • Other Income up 51 percent to Rs 17.7 crore.

Cholamandalam Financial Holdings (Q4, YoY)

  • Revenue at Rs 36.45 crore versus Rs 35.59 crore
  • Net Profit at Rs 34.26 crore Versus Rs 33.6 crore

Federal Bank (Q4, YoY)

  • Net Interest Income up 17.49 percent to Rs 1,096.53 crore.
  • Net profit up 163 percent to Rs 381.51 crore.
  • Net NPAs at 1.48 percent versus 1.72 percent (QoQ)
  • Gross NPAs at 2.92 percent versus 3.14 percent (QoQ)
  • Provisions at Rs 178 crore versus Rs 190 crore (QoQ)

NIIT Tech (Q4, QoQ)

  • Revenue up 0.1 percent to Rs 972 crore.
  • Profit up 27.7 percent to Rs 114.4 crore.
  • EBIT at Rs 141.4 crore versus RS 149 crore.
  • EBIT Margin at 14.5 percent versus 15.3 percent.

PTC India Financial Services (Q4, YoY)

  • Revenue up 11.5 percent to Rs 330.81 crore.
  • Net profit at Rs 36.75 crore versus net loss of Rs 264.67 crore.
  • Gross NPA reduced to 6.04 percent versus 6.85 percent (QoQ).
  • Net NPA reduced to 3.12 percent versus 3.29 percent (QoQ).

Bulk Deals

  • ITD Cementation: Franklyn Templeton MF acquired 25 lakh shares or 1.46 percent equity at Rs 122 each
  • Ruchi Soya Industries: JM Financial Products sold 25 lakh or 0.75 percent equity at Rs 8.95 each

Pledge Share Details

  • Sun Pharma promoter group Shanghvi Finance revoked pledge of 36 lakh shares on April 26

(As Reported On May 3)

Trading Tweaks

  • Goldiam International to move into short term ASM Framework
  • Williamson Magor & Company, Roto Pumps price band revised to 10 percent
  • Dilip Buildcon, 63 Moons Technologies price band revised to 5 percent

Insider Trading

  • Mindtree: Larsen Toubro acquired 88,000 shares on May 3
  • Dhanuka Agritech promoters sold 1.02 lakh shares from April 23-May 3

(As reported on May 3)

Money Market Update

  • The Indian rupee was the best Asian currency last week. The domestic unit appreciated 1.15 percent against the U.S. dollar—the most since March 15, 2019—to end at 69.22.

Also read: An FX Volatility Explosion May Be Lurking Around the Corner 

F&O Cues

Futures: May Series

  • Nifty futures closed trading at 11,764.3, premium of 52 points versus 40.7 points
  • Nifty open interest up 0.5 percent, adds 99,000 shares in open interest

Bank Nifty

  • Bank Nifty futures closed trading at 30060.7, premium of 106.6 points versus 90.7 points
  • Bank Nifty open interest up 3 percent, adds 45k,000 shares in open interest

Options

  • Nifty PCR at 1.49 (across all series)

Nifty Weekly Expiry May 9

  • Max open interest concentration at 11,800C (23.5 lakh shares), 11,700P (16.8 lakh shares)
  • Max open interest addition seen at 11,800C (+6.9 lakh shares) and 11,850C (+5 lakh shares)

Nifty Monthly Expiry May 30

  • Max open interest on Put side at 11,000 (22 lakh shares)
  • Max open interest on call side at 12,500 (13.2 lakh shares)
  • Max open interest addition seen at 12,500C (+2.4 lakh shares)

Stocks In F&O Ban

  • Jet Airways

Brokerage Radar

On Hindustan Unilever

Jefferies

  • Maintained ‘Hold’; hiked price target to Rs 1,820 from Rs 1,770.
  • March quarter review: better than peers but not good enough.
  • The 7 percent volume growth on a high base was a positive surprise; pace of margin expansion was tad below.
  • Valuation remains rich given rural demand slowdown and slower pace of margin expansion.

Kotak Securities

  • Maintained ‘Reduce’; cut price target to Rs 1,575 from Rs 1,600.
  • March quarter earnings were below expectations but ahead of peers.
  • Home care shines again, food & refreshment steady, personal care weak.
  • Commentary confirming short-term demand pressures; remain absolute-cautious.

CLSA

  • Maintained ‘Outperform’; cut price target to Rs 1,950 from Rs 2,010.
  • March quarter was slightly below estimates; stellar home care, but weak personal care.
  • Volume growth of 7 percent looks good in the context of peer performance.
  • Marked shift in near-term outlook as growth rates have moderated.

On Federal Bank

Kotak Securities

  • Maintained ‘Buy’; hiked price target to Rs 130 from Rs 115.
  • The best in 16 quarters; solid performance across the board.
  • Loan growth healthy at 18 percent; asset quality showing improving trends.
  • Few more quarters of consistent performance should aid RoA/RoE recovery.

Citi on Federal Bank

  • Maintained ‘Neutral’; hiked price target to Rs 110 from Rs 90.
  • Healthy growth and asset quality.
  • Margin outlook stable; CASA slow.
  • Fee income, gain on sale aid pre-provisioning operating profit growth.

More Calls

  • Morgan Stanley on LIC Housing
  • Maintained ‘Equal-weight’ with a price target of Rs 500.
  • March quarter review: NIM surprised; but sharp rise in NPLs is the key concern.
  • Non-housing loans continue to drive growth which will be viewed negatively.
  • Valuation looks cheap, but growth mix and rising NPLs led to Equal-weight rating.

CLSA on Godrej Consumer

  • Upgraded to ‘Buy’ from ‘Underperform’; maintained price target at Rs 800.
  • March quarter earnings were much below estimates; Upgraded to ‘Buy’ due to fall in stock price.
  • Weak domestic, but international gradually stabilising.
  • Worst seems behind and confident of management’s strategy to revive growth rates.
  • Stock may stay rangebound near term until there is pick-up in growth and earnings.

Citi on L&T Infotech

  • Maintained ‘Buy’; cut price target to Rs 2,010 from Rs 2,050.
  • Weak finish to a strong 2018-19.
  • Expect company to deliver better growth rates in the current financial year.
  • Weakness in top client is a sign of worry.

Citi on United Breweries

  • Maintained ‘Buy’ with a price target of Rs 1,620.
  • Positive read-through on quarterly volumes from Carlsberg conference call.
  • Mid-single digit volume growth impacted by slower March.
  • Volumes strong in Jan and Feb, slowdown in March, April volumes characterised as ‘ok’.