Stocks To Watch: BSE, Bajaj Finance, Delta Corp, Federal Bank

  • BSE board approved a buyback of up to 15 lakh shares.
  • BL Kashyap & Sons: StanChart Bank approved one-time settlement scheme.
  • Bajaj Finance to hold 12.6 percent stake in Mobikwik.
  • IMP Powers receives an order from Germany’s Smart Hydro Power GmbH.

Asian equities’ best start to a year since 2006 took a breather Tuesday in the absence of fresh catalysts to spur the rally on. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was a little changed at 10,749.50 as of 7:05 a.m.

Here Are The Stocks To Watch In Tuesday’s Trade

  • Jubilant Life gets environmental clearance for pesticide plant in Gujarat.
  • BSE board approved a buyback of up to 15 lakh shares at Rs 1,100 per share; will spend Rs 166 crore on buyback.
  • Vascon Engineers sold 85 percent of the units of its new residential project Forest Edge on Day 1.
  • Max Ventures approved raising up to Rs 450 crore via rights issue.
  • Kotak Mahindra is mulling divesting its stake in MCX (Moneycontrol).
  • Bharat Bijlee to receive Rs 46.79 crore from MIDC towards acquisition of land situated at Navi Mumbai.
  • RattanIndia Power says joint lenders forum has submitted the S4A Scheme to the overseeing committee.
  • BL Kashyap & Sons: Standard Chartered Bank approved one-time settlement scheme.
  • Bajaj Finance to hold 12.6 percent stake in Mobikwik on a fully diluted basis post conversion of Compulsorily Convertible Preference Shares for a total investment of Rs 225 crore.
  • Seamec bags contract worth $1.26 million from L&T Hydrocarbon for deployment of its vessel.
  • IMP Powers receives order for manufacturing turbines from Germany’s Smart Hydro Power GmbH for a period of 20 years.
  • Zee Music in pact with Amazon Prime to provide music content.

F&O Setup

  • Nifty January futures trading at 10,743, premium of 1.8 points from 5 points
  • January series: Nifty open interest up 4 percent; Bank Nifty open interest up 18 percent.
  • India VIX ended at 14.3, up 4.2 percent.
  • Maximum open interest for January series at 11,000 Call (open interest at 47.9 lakh, up 1 percent).
  • Maximum open interest for January series at 10,500 Put (open interest at 82.2 lakh, up 1 percent).

F&O Ban

  • In ban: Capital First, Dish TV, Fortis, GMR Infrastructure, HDIL, IFCI, Jet Airways, Jindal Steel & Power, Jain Irrigation, JP Associates, Kaveri Seed, Reliance Communications, Reliance Capital, Reliance Power, Wockhardt
  • New in ban: Capital First, IFCI

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

Active Stock Futures

Stocks To Watch: BSE, Bajaj Finance,  Delta Corp, Federal Bank

Bulk Deals

  • Astra Microwave: Dilipkumar Lakhi bought 8.7 lakh shares or 1 percent equity at Rs 123.45 each.
  • Apollo Pipes: Canara HSBC OBC Life Insurance bought 1 lakh shares or 2 percent equity at Rs 680 each.
  • HDIL: Alliance Capital Management sold 26.85 lakh shares or 0.6 percent equity at Rs 66.62 each

Poddar Housing

  • Securities Investment Management Pvt. bought 39,058 shares or 0.6 percent equity at Rs 1,349.25 each.
  • Value Quest India Moat Fund sold 86,549 shares or 1.4 percent equity at Rs 1,350.03 each.

Earnings Reactions To Watch

Federal Bank Q3 (YoY)

  • Net interest income up 20.1 percent at Rs 950 crore.
  • Net profit up 26.2 percent at Rs 260 crore.
  • Gross NPA at 2.52 percent versus 2.39 percent (QoQ).
  • Net NPA at 1.36 percent versus 1.32 percent (QoQ).

ABC Bearings Q3 (YoY)

  • Revenues up 9 percent at Rs 50 crore.
  • Net profit up 38.5 percent at Rs 3.6 crore.
  • EBITDA up 8 percent at Rs 9.1 crore.
  • Margins at 18.2 percent versus 18.3 percent.

India Grid Trust Q3 (QoQ)

  • Revenue down 4 percent at Rs 126.7 crore.
  • Net profit up 13 percent at Rs 68.8 crore.
  • EBITDA down 4 percent at Rs 117.3 crore.

Delta Corp Q3 (YoY)

  • Revenue up 56 percent at Rs 162 crore.
  • Net profit up 347 percent at Rs 44.7 crore.
  • EBITDA up 113 percent at Rs 68.7 crore.
  • Margin at 42.4 percent versus 31 percent.

Zee Learn Q3 (YoY)

  • Revenue up 73 percent at Rs 52 crore.
  • Net profit up 250 percent at Rs 7.7 crore.
  • EBITDA up 89 percent at Rs 18 crore.
  • Margin at 34.6 percent versus 31.7 percent.

Earning To Watch

  • ICICI Lombard General Insurance
  • MCX
  • Reliance Nippon Life Asset Management
  • Agro Tech Foods
  • Den Networks
  • Hatsun Agro Products
  • Jay Bharat Maruti
  • Network 18
  • SH Kelkar
  • TV18

Brokerage Radar

JM Financial on Cochin Shipyard

  • Initiated ‘Buy’ with price target of Rs 700.
  • Indomitable player in the Indian shipyard industry.
  • Large dock size and strategic location place Cochin Shipyard in sweet spot.
  • Investing in both capacity and capability to the pave way for the next leg of growth.
  • Government policies to enable sustained flow of orders.
  • Outpaced peers in a shrinking industry.
  • Defence, inland waterways and O&G to offer next leg of growth.
  • Robust order book provides revenue visibility over next eight years.
  • Expect order inflow momentum to sustain as Navy orders jump three times over the next decade.
  • Healthy cash flows and a negative working capital cycle to keep company debt free.
  • Expect revenue and operating income to grow at a compounded rate of 18 percent over the financial years through March 2020.
  • Expect dividend payout to be 25 percent in coming years.

UBS on Reliance Industries

  • Initiated ‘Sell’ with price target of Rs 870.
  • Reliance Industries’ capex to expand operating income, but deleveraging to be delayed.
  • Refinery-petchem integration to boost returns and reduce cyclicality, but stabilisation to take time.
  • GRMs on upward trajectory, boosted by petcoke gasification benefits.
  • Expect petchem Ebitda to almost double over the financial years through March 2020, and a compounded growth rate in volume of 8 percent over the financial years through March 2022.
  • Expect retail business revenue and operating income to grow at a compounded rate of 22 percent and 24 percent respectively over the financial years through March 2022.
  • Jio's market share to expand, but ARPU could be low.
  • Expect subscriber and ARPU to grow at a compounded rate of 13 percent and 6.5 percent respectively over the financial years through March 2022 and that will support Jio’s growth in revenue and operating income.
  • Expect upstream capex to pick-up and steady telecom capex to continue.
  • Expect operating income and earnings per share to grow at a compounded growth rate of 19.3 percent and 14.1 percent respectively over the financial years through March 2022.
  • Share price factors in all benefits from the refining and petchem projects.

IIFL on Persistent Systems

  • Initiated ‘Add’ with price target of Rs 835.
  • Persistent is in middle of an investment phase.
  • Continuous investments to keep margin expansion under check.
  • Digital to drive growth, Alliance and Accelerite pose upside risks.
  • Expect $ Revenue and earnings per share to grow at a compounded rate of 10.5 percent and 11 percent respectively over the financial years through March 2020.
  • Remain positive on long-term story
  • Believe that investments made are in the right direction.
  • Market is already pricing in significant margin expansion.
  • Valuations fair but rerating may take time.
  • Earnings upgrade cycle may take time to kick in.

JPMorgan on Metals

  • Steel, Zinc and Aluminum are preferred commodities.
  • Positives: Chinese supply rationalisation, improving India demand and strong global demand.
  • Vedanta most attractively positioned in terms of growth.
  • TATA and JSW for domestic steel exposure and Hindalco for aluminum.
  • Remain Underweight on NMDC and NALCO.
  • SAIL offers an interesting option play on India demand recovery.
  • Coal India remains a yield play with limited upside..
  • Vedanta: Raised price target to Rs 415 from Rs 350; Stressed asset acquisition in steel would be positive given attractive economics.
  • Tata Steel: Raised price target to Rs 1,015 from Rs 880.
  • JSW Steel: Raised price target to Rs 325 from Rs 285.
  • Hindaco: Raised price target to Rs 335 from Rs 300; Little volume growth, re-rating to continue.

Credit Suisse on Sadbhav Engineering

  • Maintained ‘Outperform’; raised price target to Rs 480 from Rs 360.
  • Positives: Improving execution, ordering pipeline and traffic.
  • Execution will continue to keep up the momentum in the next financial year.
  • Stronger execution to drive earnings on leverage.
  • NHAI bidding pipeline is much stronger now.
  • Sadbhav still trades at a relatively attractive.

UBS on Info Edge

  • Downgraded to ‘Neutral’ from ‘Buy’; cut price target to Rs 1,370 from Rs 1,500.
  • Believe positive market expectations have already driven the stock higher.
  • Current valuation appears full.
  • Believe market is pricing in an accelerated earnings trajectory for Naukri and undermining risk.
  • Expect 15-16 percent/18-20 Revenue CAGR over near to medium term.
  • Expect increase in advertisement to limit margin expansion.
  • Expect strong delivery and subscription revenue growth at a compounded rate of 50 percent over the financial years through March 2020 for Zomato.
  • Expect a $50-100 million fund-raising by Zomato at a valuation of about $1.5 billion.

Macquarie on ITC

  • Maintained ‘Neutral’ with price target of Rs 304.
  • Cess decision for the next financial year critical for re-rating.
  • No cess increase in fixed cess rate for the next financial year will be best.
  • Cigarette business continue to be under pressure.
  • Expect 1 percent compounded growth rate in cigarette volume for the next two years.
  • Profitability focus important for re-rating of FMCG business.

Centrum on Aarti Drugs

  • Initiated ‘Buy’ with price target of Rs 940.
  • Aarti Drugs is a leading domestic player of APIs.
  • Positives: good growth of existing products, new product launches and over 75 percent utilisation.
  • Aarti Drugs is profit-making, dividend paying company poised for good growth.
  • See strong scope for re-rating.
  • Expect to perform well due growth across geographies and economies of scale.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 14 percent, 15 percent and 19 percent respectively over the financial years through March 2020.
  • To benefit from its presence over the entire pharma value chain.
  • Expect company to generate healthy return ratios in future.
  • Outperform peers’ due to its efficacious presence in the domestic and emerging markets.

Media Reports

  • CCI nod sought: JSW arm, two others to buy pellet maker BRPL (Financial Express).
  • Ruias ready forces for a comeback at Essar Steel; may join hands with Russian bank VTB & SSG Capital to mount bid (Economic Times).
  • Rakesh Jhunjhunwala, Radhakishan Damani team up as race for Binani Cement intensifies; Ultratech, Heidelberg, JSW Group, Dalmia Bharat and Ramco also make offers. Note: Binani Industries is a subsidiary of Binani Cements. (Economic Times)
  • JSW to bid aggressively for stressed assets (Economic Times).
  • SBI to put Rs 382 cr soured education loans on sale (Economic Times).
  • Blackstone in talks to buy commercial property portfolio from L&T for Rs 2.3k crore. (Economic Times).