Stocks To Watch: Cadila Healthcare, Dr. Reddy’s, IDFC, Maruti Suzuki, Vedanta, Vodafone Idea
A man uses a smartphone to photograph the BSE building in Mumbai, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Stocks To Watch: Cadila Healthcare, Dr. Reddy’s, IDFC, Maruti Suzuki, Vedanta, Vodafone Idea

Asian stocks dipped at the start of an event-filled week that features the resumption of U.S.-China trade talks, an expected Federal Reserve interest-rate cut, further corporate-earnings releases and the monthly American payrolls report.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, little changed at 11,319 as of 7:30 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 Out For In Today’s Trade

  • Maruti Suzuki announces sale of over 61,000 units of Next Gen Ertiga, since its launch in November 2018. This is a 60 percent growth compared to the same months in the previous year. The company achieved over 8,000 units average monthly sales in the last four months.
  • Cadila Healthcare received a Form 483 with zero observations from the U.S.FDA, for its API manufacturing facility at Ankleshwar.
  • Sheela Foam: Board approved acquisition of Spain-based company Interplasp SL for €42 million. The target company is engaged in manufacturing and marketing of polyurethane foam for bedding.
  • Manpasand Beverages: Three members of the management were granted bail by the Gujarat High Court on July 25. They were taken on judicial custody on May 24.
  • Granules India received a Form 483 with one observation from the U.S. FDA, for its API manufacturing facility at Hyderabad. The company stated that this observation was procedural in nature.
  • IDFC has decided that it will not proceed with selling its entire stake in IDFC Securities to the Chatterjee Group. The corporation stated that it will continue to look at others option to sell its securities business.
  • Welspun Corp: Srinivasan Krishnan resigned from post of chief executive officer with effect from July 31, due to personal reasons.
  • NHPC: Resolution Plan submitted by the company for its Lanco Testa Hydro Project has been approved by Hyderabad’s NCLT bench.
  • Dhanuka Agritech: Catalyst Trusteeship acquired a 30 percent stake in the company via pledge of shares given by the company’s promoter Triveni Trust.
  • Future Lifestyles Fashion: Board approved issuance of 64.8 lakh equity shares at Rs 461 per share, aggregating to Rs 300 crore via preferential basis to AION Capital Partners.
  • Uflex has entered into an agreement to sell 82 percent stake of its arm Utech Developers to Montage Enterprises for Rs 125.05 crore.
  • Supreme Petrochem to shut down its gas-based captive power plant at its Nagothane factory.
  • Allahabad Bank: Board to meet on July 31 to consider raising Rs 4,000 crore via various modes of financing.
  • KPIT Technologies: Board approved merger of arm Impact Automotive Solutions with the company.
  • GTPL Hathway: Viren Thakker resigned from his post as chief financial officer with effect from July 31.
  • Power Mech Projects: Andhra Pradesh government cancelled an order worth Rs 572 crore given to the company. The company stated that since no construction activity had commenced, there is no implications on its financials.

Also read: BQ Survey | Cement Prices Fall For Second Straight Month

Earnings Reactions To Watch

Vedanta Q1 (YoY, Consolidtoed): In-line

  • Revenue down 3.7 percent to Rs 21,374 crore (Est Rs 20917 crore)
  • Net profit down 11.9 percent to Rs 1,351 crore (Est Rs 1333.5 crore)
  • Ebitda down 16 percent to Rs 5,198 crore versus Rs 6,190 crore (Est Rs 5,521.8 crore)
  • Margin at 24.3 percent versus 27.9 percent (Est 26.4 percent)

Also read: Q1 Results: Vedanta Profit Falls Further On Lower Commodity Prices, Copper Plant Shutdown

Vodafone Idea Q1 (QoQ, Consolidtoed): Weak

  • Revenue down 4.3 percent to Rs 11,269.9 crore (Est Rs 11,741 crore)
  • Net loss at Rs 4,873.9 crore versus Net loss of Rs 4,881.9 crore (Est Net loss to Rs 3,557 crore)
  • Ebitda up 2 times to Rs 3,650 crore (Est Rs 1,925 crore)
  • Margin at 32.4 percent versus 15.2 percent (Est 16.4 percent)
  • Depreciation up 31 percent, finance cost up 26 percent
  • ARPU up 3.9 percent to Rs 108 versus Rs 104

Also read: Q1 Results: Vodafone Idea’s Core Operating Profit Turns Negative

ICICI Bank Q1 (YoY)

  • NII up 27 percent to Rs 7,737.43 crore
  • PPoP stood at Rs 6288.46 crore up 8 percent (YoY), 1 percent (QoQ)
  • PAT at Rs 1908.03 versus loss of Rs 119.55 crore
  • Gross NPAs at 6.49 percent versus 6.70 percent (QoQ)
  • Net NPAs at 1.77 percent versus 2.06 percent (QoQ)

Also read: Q1 Results: ICICI Bank Profit Meets Estimates; Asset Quality Improves

Teamlease Services Q1 (YoY)

  • Revenue up 22.5 percent to Rs 1,251.2 crore (Est Rs 1,227.7 crore)
  • Net profit down 13.8 percent to Rs 18.8 crore (Est Rs 27.7 crore)
  • Ebitda up 9.9 percent to Rs 22.2 crore (Est Rs 27.8 crore)
  • Margin at 1.8 percent versus 2 percent (Est 2.3 percent)

ABB Q2 CY19 (YoY)

  • Revenue up 3.6 percent to Rs 1,725.8 crore
  • Net profit up 27.6 percent to Rs 130.4 crore
  • Ebitda up 38.6 percent to Rs 123.9 crore versus Rs 89.4 crore
  • Margin at 7.2 percent versus 5.4 percent
  • Employee Expenses down 6 percent, subcontracting expenses down 14 percent aid margin expansion

Music Broadcast Q1 (YoY)

  • Revenue down 7.8 percent to Rs 69.8 crore (Est Rs 78.7 crore)
  • Net profit down 37.8 percent to Rs 8.4 crore (Est Rs 14.5 crore)
  • Ebitda down 14.2 percent to Rs 22.4 (Est Rs 27.4 crore)
  • Margin at 32.1 percent versus 34.5 percent (Est 34.8 percent)

Polycab Q1 (YoY)

  • Revenue up 14.9 percent to Rs 1933 crore
  • Net profit up 75.7 percent to Rs 135.3 crore
  • Ebitda up 19.2 percent to Rs 205.3 crore
  • Margin at 10.6 percent versus 10.2 percent
  • Other Income of Rs 52 crore in current quarter

KPIT Technologies Q1, QoQ)

  • Revenue up 1 percent to Rs 505.8 crore
  • Net profit at Rs 31 crore versus Rs 30.9 crore
  • Ebitda up 7.3 percent to Rs 40.9 crore
  • Margin at 8.1 percent versus 7.6 percent
  • Exceptional Loss of Rs 24.2 crore in base quarter

Havells Q1 (YoY)

  • Net sales up 4.5 percent to Rs 2,711.97 crore
  • PAT down 17 percent to Rs 174 crore
  • Ebitda down 14 percent to Rs 276 crore
  • Margin at 10.2 percent versus 12.4 percent

MOIL Q1 (YoY)

  • Net sales down 11 percent to Rs 280 crore
  • PAT down 20 percent to Rs 90.67 crore
  • Ebitdadown 14 percent to 159.45 crore
  • Margin at 57 percent versus 58.8 percent

Nifty Earnings To Watch

  • Dr. Reddy's Laboratories

Other Earnings To Watch

  • Vodafone Idea
  • ABB India
  • Atul
  • Bajaj Holdings & Investment
  • Balaji Amines
  • DIC India
  • Elecon Engineering Company
  • Empire industries
  • Gic Housing Finance
  • KPIT Technologies
  • Mahindra Lifespace Developers
  • Oriental Carbon & Chemicals
  • Plastiblends India
  • VST Industries
  • Indraprastha Medical Corporation
  • Aarti Drugs
  • Astec LifeSciences
  • Confidence Petroleum
  • Force Motors
  • Jubilant Life Sciences
  • Kalyani Forge
  • Mangalam Drugs And Organics
  • Music Broadcast
  • Polycab
  • Punjab National Bank
  • Puravankara
  • Supreme Petrochem
  • Teamlease Services
  • Usha Martin

Also read: Three Things That Hurt Mid-Sized IT Firms In First Quarter

Brokerage Radar

On ICICI Bank

IDFC Securities

  • Maintained ‘Outperform’; hiked target price to Rs 525 from Rs 475.
  • Solid quarter with net profit and revenue higher than expected.
  • Strong domestic loan growth, stable margins and improvement in asset quality are key drivers.
  • Expect sharp turnaround in earnings due to multiple factors.

Axis Capital

  • Maintained ‘Buy’ with target price of Rs 500.
  • Strong all-round performance; Preferred pick in banking space.
  • Business model has stabilized with calibrated business approach and focus on building retail franchise.
  • Asset quality has come well under control and mgmt. maintained credit cost guidance.

Nomura on Indian Autos

  • Higher registration fees to hurt demand.
  • There may be an initial rush to buy vehicles to avoid this cost, though.
  • All stocks in the sector may react negatively as there were hopes of revival measures.

On Maruti Suzuki

Kotak Securities

  • Maintained ‘Reduce’ and cut target price to Rs 5,200 from Rs 6,000.
  • Q1 Ebitda higher than estimates led by lower other expenses and higher ASP.
  • Volume trajectory to remain challenging in FY20.
  • Cut earnings estimates by 10-18 percent over FY20-22, mainly driven by 6-9 percent cut in volume estimates.

Nomura

  • Maintained ‘Neutral’ and cut target price to Rs 6,290 from Rs 6,717.
  • Demand conditions remain tough, regulatory costs adding to margin pressure.
  • Company gave no volume guidance given the severe slowdown in the sector and no signs of improvement.
  • Lower our volume growth estimates to -3 percent to 9 percent for FY20-21.

On Bajaj Auto

Nomura

  • Maintained ‘Neutral’ and cut target price to Rs 2,836 from Rs 2,901.
  • Margin headwinds remain from adverse mix and regulatory cost pressures.
  • Lower Ebitda margin by 70/90 basis points for FY20-21 leading to earnings per share estimate cut by 4-6 percent.
  • M&M is the only ‘Buy’-rated stock among OEMS, due to undemanding valuations.

Kotak Securities

  • Maintained ‘Reduce’ and cut target price to Rs 2,500 from Rs 2,700.
  • Ebitda above expectations due to higher net realizations.
  • Domestic motorcycle industry to remain under pressure.
  • Selling price flattish on sequential basis as price hike was offset by weaker product mix.

Kotak Securities on PI Industries

  • Maintained ‘Add’ and cut target price to Rs 1,150 from Rs 1,165.
  • Sustained strong growth in CSM exports offsets weakness in domestic business.
  • Management confident on exports, domestic recovery and new projects.
  • Expect PI Industries to benefit from sustained momentum in the CSM services business.

JSW Steel

Kotak Securities

  • Maintained ‘Reduce’ and cut target price to Rs 225 from Rs 255.
  • Weak volumes in the first quarter impact standalone earnings with mounting losses at overseas business.
  • Cost-saving projects to aid margins in FY20; expansion to drive growth in FY21.
  • Rising leverage is a concern and acquisition of Bhushan Power and Steel would further increase leverage.

Edelweiss

  • Maintained ‘Hold’and cut target price to Rs 285 from Rs 316.
  • Ebitda missed expectations despite better-than-expected domestic performance.
  • Revising FY20/21 EBITDA by 4 percent each, taking cognizance of prevailing soft prices.
  • Over leveraging concerns remain.

Edelweiss on Vedanta

  • Maintained ‘Hold’ with target price of Rs 175.
  • Ebitda missed estimates mainly due to O&G and Zinc-International.
  • Despite impending operating leverage benefits in key divisions, believe the upside. potential is capped owing to subdued commodity prices.

PhillipCapital on Vedanta

  • Maintained ‘Buy’ with target price of Rs 165.
  • Robust volume growth is the only silver lining.
  • Ebitda marginally lower due to subdued performance of Aluminium and Zinc International.
  • Zinc and Oil/gas businesses are expected to report robust volumes growth in next couple of years.

CLSA on Vodafone Idea

  • Maintained ‘Sell’and cut target price to Rs 7 from Rs 12.5.
  • Q1 results disappointed with miss on revenues, Ebitda and net profit.
  • Operating metrics remain weak.
  • Uncomfortable leverage and cash burn.

CLSA on Persistent Systems

  • Maintained ‘Sell’ and cut target price to Rs 520 from Rs 620.
  • Mixed revenue performance with digital and accelerite segments down but services, and alliance segments seeing growth.
  • Don’t see scope for expansion expansion.
  • Value trap till business rediscovers sources of differentiation.

CLSA on Biocon

  • Maintained ‘Sell’ and cut target price to Rs 220 from Rs 235.
  • Biologics segment grew modestly despite new launches in Europe and a ramp-up in U.S.
  • Slow ramp-up in biologics could lead to further earnings disappointment.
  • Investment phase to continue.

Bulk Deals

Tejas Networks

  • HDFC Mutual Fund acquired 30 lakh shares (3.26 percent) at Rs 84 each
  • Emerging Markets Stock Common Trust Fund sold 4.82 lakh shares (0.52 percent) at Rs 84.32 each
  • Columbia Emerging Markets Fund sold 25.15 lakh shares (2.74 percent) at Rs 84.32 each

Trading Tweaks

  • BSE record date for share buyback
  • Tejas Network price band revised to 10 percent

Insider Trading

  • Axis Bank promoter LIC sold 21 lakh shares from July 16-25
  • Mindtree promoter Kamran Ozair sold 60,000 shares on July 24

New Offerings

  • Affle India IPO at Rs 740-745/share opens for sale; closes July 31
  • Around 27.7 shares allotted to 15 anchor investors.

Also read: Affle India IPO: Here’s All You Need To Know

F&O Cues

August Futures

  • Nifty August futures closed at 11,327, premium of 43 points versus 49 points.
  • Nifty Aug futures across open interest down 1.5 percent, sheds 2.6 lakh shares in open interest.
  • Bank Nifty August futures closed at 29,465, premium of 140 points versus 158 points.

Options

  • Nifty PCR at 1.36 (across all series)

Nifty Weekly Expiry 1-Aug

  • Max open interest on call side at 11,400 (18.5 lakh shares)
  • Max open interest on put side at 11,200 (21.5 lakh shares)
  • Max open interest addition seen in 11,200P (+11.5 lakh shares), 11,100P (+5.8 lakh shares), 11,300C (+4.8 lakh shares)

Nifty Monthly Expiry 29 -Aug

  • Max open interest on call side at 12,000 (13.9 lakh shares)
  • Max open interest on put side at 11,000 (29 lakh shares)
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