Stocks To Watch: BPCL, Indiabulls Housing Finance, Power Grid, Sun Pharma, Tata Steel, UPL, Yes Bank
Stocks in Asia were mixed Thursday after reports that the signing of a partial U.S.-China trade deal may be delayed until next month.
Equities in Japan opened flat and South Korean stocks slipped, while shares in Sydney rose modestly. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.13 percent to 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 in today’s trade.
- Yes Bank: Moody's Investors Service has placed the Bank’s foreign currency issuer rating of ‘Ba3’ under review for downgrade. Moody's estimates that Yes Bank's total pool of stressed assets is at 12 percent of loans and investments as of Sept 30 2019. The ratings agency also stated that review for the downgrade is due to the Bank’s weak financial performance for the September quarter and bank’s capital raising announcement of $1.2 billion from a financial investor on Oct. 31.
- The National Company Law Tribunal Mumbai has approved merger of GSK Consumer Healthcare and Hindustan Unilever Ltd.
- Realty Stocks, SBI: Finance Minister Nirmala Sitharaman announced that the Union Cabinet has approved setting up a dedicated fund for funding affordable and middle-income housing projects that are stalled. The special window will be structured as an alternative investment fund which will pool all investments, where the government will put Rs 10,000 crore. Institutions like State Bank of India and Life Insurance Corporation among others will make further contributions. The corpus, for now, will be Rs 25,000 crore.
- Infosys said that it has received letters from NSE, BSE, National Financial Reporting Authority and Registrar Of Companies (Karnataka) in relation to the anonymous whistleblower complaints.
- Adani Group: Bombay High Court has denied interim relief to Adani Group in the Mumbai Airport stake sale dispute. Group had moved the high court seeking directions against Bidvest to restrain it from transferring shares to GVK group and sought directions from the high court for extension of the long stop date to Feb. 7, 2020. (Source: High Court Proceedings)
- Power Transmission Stocks: India’s electricity distribution utilities will gain from more shorter-term purchase contracts, PK Pujari, Chairperson at the Central Electricity Regulatory Commission said at a conference in New Delhi. The share of long-term contracts in India’s electricity market will fall to 50-60 percent in 5-6 years, compared with 92 percent now, he added. (BN)
- Indiabulls Housing Finance: Board approved issue of redeemable non-convertible debentures of up to Rs 10,000 crore and also approved the issue of NCDs along with warrants via qualified institutional placement up to $1 billion.
- Thomas Cook: The NCLT Mumbai sanctioned the amalgamation amongst TC Forex Services, TC Travel Services, SOTC, Travel Corporation, Quess Corp Limited and the company and their respective shareholders.
- Zee Entertainment Enterprises: GIC increases stake from 4.94 percent to 5.28 percent on Nov. 4.
- Max Financial Services said that the company, Mitsui Sumitomo Insurance and Max Life Insurance have mutually agreed to terminate the deal plan and the company will continue the existing JV arrangement with Max Life Insurance.
- Prakash Industries has emerged the highest bidder for Bhaskarpara Coal Mine in Chhattisgarh. The company stated that the mine has an extractable reserve of 24.06 million tonne and its coal is highly suitable for use in the company’s Integrated Steel plant at Champa (Chhattisgarh). This will substantially enhance the operating margins of the company.
- JB Chemicals & Pharma to consider share buy back on Nov. 12.
- Canara Bank revised MCLR across various tenors with effect from Nov. 7. One-month MCLR at 8.15 percent and one-year MCLR at 8.35 percent. Repo-Rate Linked Rate for retail loans and micro, small and medium enterprises at 8.05 percent.
- Philips Carbon Black said that’s its Netherland arm has been liquidated in accordance with local laws of Netherlands. An intimation to this effect will also be sent to the Reserve Bank of India.
- UCO Bank: Shareholders approved the proposal to issue 126 crore shares at Rs 16.89 per share aggregating to Rs 2,130 crore on preferential basis to the Government of India.
- MSTC: Larsen & Toubro has appointed the company as the selling agent for sale of scrap articles.
Earning Reactions To Watch
Tata Steel (Q2, YoY)
- Revenue fell 15.4 percent to Rs 34,579.2 crore.
- Net profit rose 15.9 percent to Rs 41,44.7 crore.
- Ebitda fell 56.6 percent to Rs 3,819.6 crore.
- Margin stood at 11 percent versus 21.5 percent.
Indiabulls Housing Finance (Q2, YoY)
- Net interest income fell 26.3 percent to Rs 1252.38 crore.
- Net profit fell 32 percent to Rs 709.52 crore.
- Impairment of financial instruments Rs 237 crore versus Rs 40 crore.
- Gross non-performing assets at 1.51 percent versus 1.47 percent Quarter-on-Quarter.
- Net NPAs at 1.07 percent versus 1.1 percent QoQ.
Brigade Enterprises (Q2, YoY)
- Revenue fell 11 percent to Rs 735.3 crore.
- Net profit fell 45.2 percent to Rs 37.4 crore.
- Ebitda fell 13 percent to Rs 190.3 crore.
- Margin stood at 25.9 percent versus 26.5 percent.
Voltas (Q2, YoY)
- Revenue flat to Rs 1,421.9 crore.
- Net profit rose 2.8 percent to Rs 106.4 crore.
- Ebitda fell 2.5 percent to Rs 105.9 crore.
- Margin at 7.4 percent versus 7.6 percent.
- Other income rose 57 percent to Rs 72.6 crore.
- Employee expenses fell 9 percent to Rs 157.6 crore.
V-Guard Industries (Q2, YoY)
- Revenue rose 3.6 percent to Rs 619.3 crore.
- Net profit rose 50 percent to Rs 57.3 crore.
- Ebitda rose 55.3 percent to Rs 77.5 crore.
- Margin stood at 12.5 percent versus 8.4 percent.
- Employee expenses fell 11 percent to Rs 45 crore versus Rs 50.6 crore due to write back of ESOPS.
Fortis Healthcare (Q2, YoY)
- Revenue rose 6.3 percent to Rs 1,212.2 crore.
- Net profit at Rs 111 crore versus net loss of Rs 166.7 crore.
- Ebitda rose 2.9 times to Rs 184.5 crore versus Rs 64.1 crore.
- Margin stood at 15.2 percent versus 5.6 percent.
- Finance cost fell 42 percent to Rs 49.2 crore.
BSE (Q2, YoY)
- Revenue fell 5.5 percent to Rs 108.9 crore.
- Net profit fell 20 percent to Rs 36.7 crore.
- Ebitda loss at Rs 12.4 crore versus ebitda Gain at Rs 6.6 crore.
- Investment income rose 7 percent to Rs 45.1 crore versus Rs 42.2 crore.
- Employee expenses rose 14 percent to Rs 39.2 crore.
Manappuram Finance (Q2, YoY)
- Net interest income rose 21.6 percent to Rs 819.6 crore.
- Net profit rose 81.9 percent to Rs 404.1 crore.
- Board approves establishment of term note program to raise rose to $750 million.
Max Financial Services (Q2, YoY)
- Revenue rose 8 percent to Rs 4,658.9 crore.
- Net profit fell 49.1 percent to Rs 42.1 crore.
- New business premiums rose 22 percent to Rs 1,730 crore versus Rs 1,420 crore. (H1 FY20 versus H1 FY19)
- New Business Margin at 21 percent versus 20.4 percent. (H1 FY20 versus H1 FY19)
Prataap Snacks (Q2, YoY)
- Revenue rose 35.1 percent to Rs 388 crore.
- Net profit rose 6.2 percent to Rs 12 crore.
- Ebitda rose 44.7 percent at Rs 31.1 crore versus Rs 21.5 crore.
- Margin stood at 8 percent versus 7.5 percent.
MAS Financial Services (Q2, YoY)
- Net interest income rose 10.6 percent to Rs 98.2 crore.
- Net profit rose 34.8 percent to Rs 47.3 crore.
Nifty Earnings To Watch
- Bharat Petroleum Corporation
- Power Grid Corporation of India
- Sun Pharmaceutical Industries
Other Earnings To Watch
- Hindustan Petroleum Corporation
- Indraprastha Gas
- Procter & Gamble Health
- GlaxoSmithKline Consumer Healthcare
- Healthcare Global Enterprises
- Adani Transmission
- Aditya Birla Capital
- UCO Bank
- United Breweries
- Thyrocare Technologies
- Thomas Cook
- Amber Enterprises
- IPCA Laboratories
- Amrutanjan Health Care
- Andhra Bank, Apar Industries
- BASF India
- Century Enka
- City Union Bank
- Dwarikesh Sugar Industries
- Engineers India
- Eris Lifesciences
- Esab India
- Gabriel India
- GMM Pfaudler
- GOCL Corporation
- Gujarat Alkalies and Chemicals
- IndoStar Capital Finance
- Kesoram Industries
- LT Foods
- Magadh Sugar & Energy
- Max India
- Orient Green Power Company
- Panama Petrochem
- Pitti Engineering
- Plastiblends India
- Responsive Industries
- Solar Industries India
- Som Distilleries & Breweries
- Speciality Restaurants
- TTK Healthcare
- Uniphos Enterprises
- VIP Industries
- NRB Industrial Bearings
Pledge Share Details
- Ajanta Pharma promoter Ravi Agrawal Trust created a pledge of 8.9 lakh shares on Nov. 4.
- Sintex Industries promoters created pledge of 2.9 crore shares on Oct. 31.
- Future Retail promoter Future Corporate Resources created pledge of 28.7 lakh shares on Nov. 4.
- Indiabulls Integrated Services, SORIL Infra Resources, SPML Infra, GVK Power & Infrastructure to move into short term ASM Framework.
- Arshiya, Ganesh Benzoplast to move out of short term ASM Framework.
- KSK Energy Ventures, Hilton Metal Forging, Orissa Minerals Development price band revised to 10 percent.
- LKP Securities, Reliance Power price band revised to 5 percent.
Who’s Meeting Whom
- Welspun India to meet JM Financial Institutional Securities on Nov. 7
- Torrent Power to meet IDFC Securities on Nov. 7
- Mahanagar Gas to meet RARE Infrastructure on Nov. 14
- Mahindra Logistics to meet Hermes Investment Management, First Pacific Advisors and other investors from Nov. 7-15
- Shriram City Union Finance to meet Julius Baer Wealth Advisors and Ward Ferry Management from Nov. 7-8
- Zensar Technologies promoter group RPG Ventures acquired 42,000 shares on Nov. 4
- Mold-Tek Packaging promoters sold 70,000 shares from Oct. 30-Nov. 5
Money Market Update
- The rupee closed at 70.98/$ versus 70.69/$ on Tuesday.
- Nifty November futures closed at 12,008, premium of 42 points versus 38.8 points.
- Nifty November Futures open interest up 4 percent, adds 6.4 lakh shares in open interest.
- Nifty Bank November futures closed at 30,682.6, premium of 73 points versus 74.3 points.
- Nifty Bank November futures series open interest up 19 percent, adds 2.1 lakh shares in open interest.
- Nifty PCR at 1.44 versus 1.34 (across all series).
Nifty Weekly Expiry: Nov. 7
- Max open interest on call side at 12,000 (25.7 lakh shares).
- Max open interest on put side at 11,900 (25.1 lakh shares).
- open interest addition seen at 11,950P (+10 lakh shares), 12,000P (+7.1 lakh shares), 12.050 (+6.5 lakh shares).
Nifty Monthly Expiry: Nov. 28
- Max open interest on call side at 12,000 (17.9 lakh shares).
- Max open interest on put side at 11,600 (19 lakh shares).
Goldman Sachs on Indian Media
- Zee Entertainment: Maintained ‘Neutral’; cut price target to Rs 347 from Rs 479.
- Dish TV: Maintained ‘Neutral’; cut price target to Rs 22 from Rs 29.
- Stocks continue to see overhang due to pledged shares at promoter level.
- Zee: growth outlook strong, but balance sheet has seen worsening trend.
Nomura on Exide
- Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 222 from Rs 203.
- Q2 was broadly inline; steady growth to continue.
- Expect the lead price hike to be passed on.
- Attractive valuations make risk-reward favourable.
CLSA on Godrej Consumer
- Upgraded to ‘Buy’ from ‘Underperform’; hiked rice target to Rs 900 from Rs 700.
- Q2 results broadly in line.
- Growth focus evident; a step in the right direction.
- Launches were the key focus on the call.
- Maintained ‘Sell; raised target to Rs 690 from Rs 650.
- Maintain sell on stock as see no meaningful recovery yet.
- Revenue growth remains sluggish while margins remain under pressure.
- Cut FY20E-22 EPS by 7-8 percent to reflect weaker than expected base business margins.
- Believe valuations remain rich and maintain our Sell rating.
- Maintained ‘Buy’ with a price target at Rs 885.
- Potential sale of Japan business could be materially EPS accretive.
- Higher R&D and personnel costs impact core operating margins.
- Potential boost to US from levothyroxine while lingering regulatory concerns.
- Maintained ‘Buy’; raised price target to Rs 560 from Rs 500.
- Strong show; Near-term triggers offer attractive upside.
- Clocked margins of 21% despite price erosion in gSensipar.
- Strong branded business offsets reduction in gSensipar.
- Launch of albuterol and exclusivity in Atripta, Truvada & Viread key triggers.
- Maintained ‘Buy’; raised price target to Rs 490 from Rs 460.
- Q2 beat as India business rebounds following the distribution in the first quarter.
- Raise 2020E-22 EPS estimates by 5-8 percent as factor in better topline trends.
On Tata Steel
- Maintained ‘Buy’ with a price target of Rs 443.
- Standalone in line, losses in other businesses drive miss.
- Expect more clarity from the company on these losses.
- Earlier guidance of net debt reduction looks unlikely in current margin scenario.
- Maintained ‘Overweight’ with a price target of Rs 575.
- Standalone operations’ Ebitda beat driven by lower-than-expected decline selling price per tonne.
- TATA BSL impacted by lower prices and higher exports, which should reverse into H2.
- Expect a neutral to positive stock price reaction, given that TATA did not miss estimates.