Stocks To Watch: Canara Bank, Equitas Holdings, Essel Group Stocks, RIL

Asian stocks saw modest gains on lower volumes Monday, as traders weighed further stimulus from China amid weak economic data.

Equities edged higher in Japan and South Korea, and were little changed in Australia. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.19 percent to 10,980.50 as of 7:05 am.

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.

• Equitas Holdings: The Reserve Bank of India on Friday denied an extension of the deadline to Equitas Small Finance Bank for its listing on the bourses. As per the RBI’s licensing requirements, the deadline for listing the bank was Sept. 4. As a punitive measure, RBI said that the bank is not permitted to open new branches till further notice and froze the remuneration of managing director and chief executive officer of the bank stands frozen at the existing level till further notice.
• Essel Group stocks In focus as the Group paid lenders over a third of the amount due by September-end in the first tranche, according to a person aware of the development. The Zee group promoters, which sold a stake in flagship Zee Entertainment Ltd. a month ago, repaid nearly Rs 4,450 crore to lenders including mutual funds and non-bank finance companies, the person said on the condition of anonymity as the information is not public yet.
• Canara Bank sought expression of interest from bidders to sell its entire stake of 30 percent in Can Fin Homes. Besides, the lender revised MCLR across various tenors with effect from Sept. 7. One Month MCLR at 8.2 percent and one year MCLR at 8.4 percent.
• Balmer & Lawrie: Board to consider bonus share issue on Sept. 17.
• NBCC has submitted its willingness to take over the responsibility of preparing a revised plan to take over incomplete assets to the Supreme Court. Next date of hearing for the proposed revised plan is Oct. 17.
• Reliance Industries and BP Plc aim to commence gas production from KG-D6 basin in April-June 2020. Consortium seeks bids for selling 5 million metric standard cubic meter per day of gas on long-term basis. The bidding would be conducted on Oct. 10 to sign gas sale pact within 15 days from closure of bidding process.
• J&K Bank stated that annual shareholders meet has been postponed to Sept. 26
• Somany Ceramics said that a cheque of Rs 26 crore issued in the favour of the company by company’s stock-broker Mentor Financial Services has bounced owing to insufficient funds. The company has issued demand notices for repayment to mentor, its directors and its authorised signatory as per requirements of the applicable law. In view of continued default by Mentor Financial Services, its directors and its authorised signatory, the company has now filed a criminal complaint with Haryana Police Station against the aforementioned parties.
• Varun Beverages Varun Beverages on Saturday said it has raised Rs 900 crore ($125 million) through qualified institutional placement. The company sold 1.47 crore shares at an average price of Rs 612 apiece in the sale that opened Sept. 3 and closed Sept. 6. Varun Beverages plans to use the proceeds for investments in units, repaying debts and for acquisitions, if any, according to the terms of the deal, reported by Bloomberg.
• ITD Cementation stated that it has stopped its tunnel boring machine operations temporarily for the construction of East-West Corridor of Kolkata Metro as water has entered tunnels while tunneling.
• Suzlon Energy: IDBI Bank withdrew its nominee director in the company.
• IL&FS Investment Management Services stated that finalisation of financial results have been delayed and company is not in position to submit financial results for financial year 2018 and quarter ended June 2019.
• DHFL defaulted in payment of non-convertible debentures interest worth Rs 20.24 crore.
• Coffee Day Enterprises said that it is unaware of stake sale plans by the owners to raise fund. Besides, the company has appointed IDFC Securities as advisor for identifying strategic option for stake sale, refinancing of existing debt and raising additional facilities to repay debt on behalf of the group.
• Amtek Auto: ROC approved extension of holding AGM up to Nov. 30.
• Shilpa Medicare received two observations for formulation plant in Telangana by the U.S. FDA. The company also said that there were no repeat observations or data integrity related observations.

Trading Tweaks

• Reliance Communications, Zenlabs Ethica to move into ASM Framework.
• Jain Irrigation Systems , Reliance Power, Suzlon Energy Sadhana Nitro Chem to move out of ASM Framework.
• Eros International Media , Bajaj Hindusthan Sugar to move into short term ASM Framework.
• Reliance Communications, NR Agarwal Industries to move out of short term ASM Framework.
• Jaypee Infratech, Essar Shipping price band revised to 5 percent.

Insider Trading

• GFL promoter Inox Leasing and Finance acquired 56,000 shares on Sept. 4.
• Cadila Healthcare promoter Zydus Family Trust acquired 2.7 lakh shares on Sept. 4.
• Meghmani Organics promoters acquired 72,000 shares from Sept. 3-4.

Money Market Update

• The rupee strengthened for the third straight day to close at 71.73/$ on Friday versus 71.84/$ on Thursday.

F&O Cues

September Futures

• Nifty Sep futures closed at 10,973.6, premium of 27.4 points versus 33.7 points.
• Nifty futures OI down 2 percent, sheds 3.5 lakh shares in open interest.
• Bank Nifty September futures closed at 27,306, premium of 58 points versus 74 points.
• Bank Nifty futures open interest down 3 percent, sheds 56,800 shares in open interest.

Options

• Nifty PCR at 1.30 versus 1.24 (across all series)

Nifty Weekly Expiry: Sep 12

• Max OI on call side at 11,000 (18.6 lakh shares)
• Max OI on put side at 10,900 (20.9lk shares)
• OI addition seen at 10,900P (+11 lakh shares), 10,850P (+6.1 lakh shares)
• OI shedding seen at 10900C (-2.2 lakh shares), 10,800C (-1 lakh shares)

Nifty Monthly Expiry: Sep 26

• Max OI on call side at 11,500 (21.7 lakh shares)
• Max OI on put side at 10,800 (32.7 lakh shares)

Brokerage Radar

CLSA on L&T

• Maintained ‘Buy’ with a price target of Rs 1,730.
• Loss-making businesses wiped out 14 percent of its 2018-19 consolidated net profit.
• Begun well on divesting assets but a delay in buyback is a drag.
• Loss reduction is a key catalyst for L&T’s robust consolidated EPS growth.

ICICI Securities on RBL Bank

• Maintained ‘Buy’; cut price target to Rs 536 from Rs 725.
• Stock fallen due to the lingering concerns of asset quality and growth.
• Cut credit growth for the current and the next financial year given the systemic slowdown .
• Long-term story remains intact.

Citi on Dr Lal Pathlabs

• Maintained ‘Buy’; hiked price target to Rs 1,475 from Rs 1,430.
• Focus on gaining share, steady margins.
• Seeding new clusters for growth; wellness initiative gaining traction.
• Looking for inorganic opportunities.

Emkay on Torrent Pharma

• Downgraded to ‘Sell’ from ‘Hold’; cut price target to Rs 1,582 from Rs 1,620.
• Recent outperformance leaves little room for error.
• India growth key to sustain premium valuations; US likely to see muted growth.
• Given that Unichem synergies are now largely in base, expect margins to peak out in medium term.

Jefferies on Coal India

• Maintained ‘Buy’; cut price target to Rs 260 from Rs 275.
• Fundamental impact of allowing commercial coal mining will be limited in next 3-5 years.
• Expect softer e-auction prices, but higher mix will partly offset this.
• See deep value and solid dividend yield potential.

Equirus on PI Industries

• Initiated ‘Long’ with a price target of Rs 1,890.
• Multiple products in pipeline to drive export business.
• Domestic business revenue growth to be driven by various products already in PI’s portfolio.
• Revenue growth would drive profit CAGR of 27 percent over FY19-22, more than doubling PI’s profit.
• Valuation premium to sustain.

Investec on Equitas Holdings

• Maintained ‘Buy’ with a price target of Rs 190
• Worst case priced in; RBI denial to have no fundamental impact
• If SEBI does not approve structure, Equitas SFB will do IPO, which will bring down price target to Rs 140-150.
• Equitas SFB operational performance remains strong.