Stocks To Watch: Bharti Infratel, HUL, Sun Pharma, Zee Entertainment

Asian stocks pulled back from record highs, following declines seen in their U.S. counterparts and as the yen strengthened to a four-month high against the dollar.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,712.50 as of 7:05 a.m.

Here Are The Stocks To Watch Out For in Wednesday’s Trade

• Sun Pharma gets a license to sell the generic version of Linzess in U.S. from Feb. 1, 2031 after settling patent litigation.
• Symphony’s wall mounted air cooler patented in South Africa; launched 2 new product ranges.
• SAL Steel announces closure of corporate insolvency process.
• GAIL, Gazprom sign pact for re-negotiated long-term LNG sale.
• Texmaco Rail considering setting up logistics hub and food park in West Bengal.
• Pioneer Distilleries’ workers at its Nanded, Maharashtra manufacturing plant go on strike.

F&O Setup

• Nifty January Futures trading at 10,709.5, premium of 9.5 points from 1.8 points
• January Series: Nifty open interest up 1 percent; Bank Nifty open interest down 8 percent
• India VIX ended at 14.08, down 1.5 percent
• Max open interest for January series at 11,000 Call (open interest at 52.2 lakh, up 9 percent)
• Max open interest for January series at 10,500 Put (open interest at 75 lakh, down 9 percent)

F&O Ban

• In ban: Balrampur Chini, Capital First, Dish TV, Fortis, HCC, IFCI, India Cement, Jet Airways, Jindal Steel, Jain Irrigation, JP Associates, Kaveri Seed, Reliance Communications, Reliance Power, Wockhardt
• New in ban: Balrampur Chini, India Cements, HCC
• Out of ban: GMR Infra, HDIL, Reliance Capital

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.

Active Stock Futures

Bulk Deals

• Punjab Alkalies & Chemicals: IDBI Banks sold 2.61 lakh shares or 1 percent equity at Rs 35.5 each.
• Prozone Intu: Promoter Nigam Patel Family Trust sold 9 lakh shares or 0.6 percent equity at Rs 67.25 each.

Bharti Airtel

• SRS Partners (Cayman) LLC bought 3.86 crore shares or 1 percent equity at Rs 499.1 each.
• Merrill Lynch Markets Singapore PTE sold 3.86 crore shares or 1 percent equity at Rs 499.1 each.

Nifty Earnings To Watch

• Bharti Infratel
• Hindustan Unilever
• Zee Entertainment

Other Earnings To Watch

• Adani Power
• Adani Transmission
• DCB Bank
• Jubilant Life Sciences
• Jyothy Laboratories
• Mindtree
• Srei Infrastructure Finance
• Sterlite Technologies
• Tata Sponge Iron
• Thirumalai Chemicals

Earnings Reactions To Watch

Jay Bharat Maruti Q3 (YoY)

• Revenue up 13 percent at Rs 435 crore
• Revenue up 13 percent at Rs 435 crore.
• EBITDA up 11 percent at Rs 36.6 crore.
• Margin at 8.4 percent from 8.5 percent.

Hatsun Agro Products Q3 (YoY)

• Revenue up 7 percent at Rs 1,013 crore
• Revenue up 7 percent at Rs 1,013 crore.
• EBITDA down 6 percent at Rs 87 crore.
• Margin at 8.6 percent from 9.8 percent.

Agro Tech Foods (YoY)

• Revenue up 3 percent at Rs 214.55 crore.
• Net profit up 15 percent at Rs 9 crore.
• EBITDA up 4 percent at Rs 17.85 crore.
• Margin at 8.3 percent from 8.25 percent.

Brokerage Radar

KR Choksey on ABB India

• Initiated ‘Buy’ with price target of Rs 1,823.
• Higher government spending on power ABB offers strong growth prospects.
• ABB’s Power Grids segment to support financial performance over medium to long term.
• Triggers: National Solar Mission, EVs in India and Railway modernisation and electrification.
• Expect order flow, revenue and net profit to grow at a compounded rate of 25 percent, 23 percent and 42.2 percent respectively over the years till 2019.
• Robust execution to support strong top-line growth.
• Increase in localization of manufacturing projects to lower operational cost.
• Higher return ratios to help company demand higher valuations.

Daiwa Capital Markets on Crompton Greaves Consumer

• Initiated ‘Outperform’ with price target of Rs 300.
• India’s electrical industry to see double-digit growth over the next five years.
• Crompton is well positioned to seize these opportunities.
• Impressive franchise, strong management pedigree and growth outlook.
• Focus on distribution, branding and segments to support sales growth.
• Company has multiple levers for growth.
• Positives: premiumisation, entry into new categories, brand building, and expanding distribution.
• Expect revenue and earnings per share to grow at a compounded rate of 17 percent and 25 percent respectively over the financial years through March 2020.
• Valuations not cheap, but strong sales and profits to support.
• Bull case price target of Rs 340.

Motilal Oswal on Laurus Labs

• Initiated ‘Buy’ with a price target of Rs 651.
• In a sweet spot to get business in regulated market due to cost efficiency and consistent compliance.
• Formulations business in take-off mode.
• Positive on forward integration to formulation in regulated markets.
• Expect U.S. sales to multiply as company targets 30 ANDA filings over three years.
• Expect revenue, operating income and net profit to grow at a compounded rate of 17 percent, 20 percent and 28 percent respectively over the financial years till March 2020.
• Addition of formulations and healthy momentum in API business to lead growth.
• Volume growth to drive ARV and Hep-C base business.
• Interest outgo to reduce; Capex to continue to support growth.
• Return ratios to improve on higher asset utilization.
• Bull case price target of Rs 769: Expect revenue and net profit to grow at a compounded rate of 20 percent and 35 percent respectively over the financial years till March 2020.

Credit Suisse on Godrej Agrovet

• Initiated ‘Neutral’ with price target of Rs 630.
• Godrej Agrovet is a diversified agri-business with strong pedigree.
• Indian agricultural value chain offers business opportunities.
• Brand and corporate pedigree a key advantage, diversification hedges risks.
• Expect earnings to grow at a compounded rate of 18 percent over the financial years through March 2020.
• Good long-term potential, but valuations leave little upside.
• Key earnings driver will be crop protection which will see new launches and exports growth.
• Animal feed will be a drag as it is facing headwinds.
• New product introductions a key lever for growth may come in from March 2019.
• Dairy margins will bounce back in the second half of the current financial year, likely to see gradual margin expansion from thereon.
• Poultry to see much faster growth if Godrej management takes over control of JV.
• Bull case price target of Rs 725.

Morgan Stanley on FMCG

• Top pick shifts from Titan to Jubilant Foodworks.
• Favorable demand trends and high visibility of margin expansion offer a clear runway for earnings growth.
• Jubilant Foodworks: Maintained ‘Overweight’; raised price target to Rs 2,400 from Rs 1,900.
• Future Retail: Maintained ‘Overweight’; raised price target to Rs 715 from Rs 660.
• Titan Company: Maintained ‘Overweight’; raised price target to Rs 1,050 from Rs 920.
• United Spirits: Downgraded to ‘Equal-weight’ from ‘Overweight’; raised price target to Rs 4,000 from Rs 2,900.

CLSA on ICICI Lombard

• Maintained ‘Buy’; raised price target to Rs 970 from Rs 820.
• Healthy premium growth with sub-100 percent combined ratio; Rates a concern.
• Competitive intensity & pricing environment improving; Regulations supportive.
• New third-party motor law may be passed in upcoming budget session; Significant positive.
• Expect earnings to grow at a compounded rate of 24 percent over the financial years till March 2020, led by healthy growth in premiums.

CLSA on GAIL

• Maintained ‘Sell’ with a price target of Rs 405.
• Supplies from Gazprom to expand Gail’s long-term LNG headache.
• This is a negative surprise, as popular belief was that Gail would avoid this contract.
• An oversupplied global LNG market will make it challenging to place these long-term volumes.
• Stock is ignoring risks of large long-term U.S. LNG portfolio.

Media Reports

• Ace Investor (Rakesh Jhunjhunwala), tech czar (Azim Premji’s Premji Invest) in race for Star Health & Allied Insurance (Times of India).
• Piramal Finance likes hospitality, plans more bets. (Piramal Enterprises) (Economic Times).