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Stocks To Watch: Cipla, Grasim, JSW Steel, Page Industries, Radico Khaitan

Here are the stocks to watch  out for in trade today! 

People look toward a screen and an electronic ticker board outside the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
People look toward a screen and an electronic ticker board outside the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Stocks in Asia sank early Friday, on track for a third week of losses, as deepening trade tensions between the U.S. and China curb the growth outlook and drag sovereign bond yields to multi-year lows.

Japan’s Topix index dropped 1 percent at the open, while Australia and South Korea saw smaller losses. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.54 percent to 11,741.50 as of 7 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

  • Adani Enterprises: Decisions on whether to approve two outstanding management plans for Adani’s proposed Carmichael coal mine are due by June 13, ABC News reports citing comments from Queensland Premier Annastacia Palaszczuk.
  • Reliance Nippon Life Asset Management’s promoter Reliance Capital plans to cumulatively sell 8.66 percent stake in the company aggregating to Rs 1,155 crore. The promoter will sell up to 5.3 crore shares at a floor price of Rs 218 apiece—a discount of about 7.6 percent to current market price—through an offer-for-sale, according to an exchange filing.
  • Ruchi Soya Industries: CARE Rating downgraded long-term bank facility worth Rs 9,915.2 crore as ‘CARE D’. The reason behind this downgrade is that the issuer has not been co-operating. The company is under provisions of IBC by order of NCLT with effect from December 2017.
  • Zuari Agro Chemicals: ICRA downgraded both short term and long term funds worth Rs 4,215 crore to ‘D’. Rating Agency said the downgrade is on account of the company's cash credit account remaining over utilised for more than 30 days owing to devolvement of a series of Letters of credit beginning April and continuing in May, and liquidity position of the company deteriorated materially due to significant cash losses and delay in subsidy receipts from government of India during April-May.
  • Radico Khaitan: Pollution Control Board revoked the closure directions on the company’s Uttar Pradesh plant. The directions for closure were received on Feb. 21 on environmental issues concerning liquid discharge. The company also stated in their press release that the Pollution Control Board has directed the company to restrict its capacity of molasses plant for country liquor from 200 KLD to 77 KL until June 30 and an additional environmental compensation of Rs 1.18 crore. These moves will not impact IMFL manufacturing operations and for country liquor manufacturing, the impact will be minimal, it said.
  • Cipla signed an agreement to acquire 26 percent stake in AMP Solar Power Systems for Rs 12.9 crore. The commercial operation of the target company will start from May 2020.
  • Omax Autos entered into an asset purchase agreement with Hema Engineering Industries.
  • Zensar Technologies partnered with South African based insurance company Sanam to provide digital solutions.
  • Greaves Cotton modified its share buyback plan. The board approved to buyback 5.32 percent of share capital at Rs 175 per share aggregating to Rs 227.5 crore.
  • MOIL inked an MoU with Ministry of Steel for financial year 2020. Production target of 14.75 lakh tons of manganese ore and capex target of Rs 210 crore set.

Earnings To Watch

  • Grasim Industries
  • JSW Steel

Other Earnings To Watch

  • REC
  • Page Industries
  • Coffee Day Enterprises
  • Dish TV India
  • Dixon Technologies (India)
  • Indraprastha Gas
  • Advanced Enzyme Technologies
  • Amber Enterprises
  • Ashok Leyland
  • AstraZeneca Pharma
  • Bata India
  • Birlasoft
  • Butterfly Gandhimathi Appliances
  • Varroc Engineering
  • Camlin Fine Sciences
  • Excel Industries
  • FDC
  • GIC Housing Finance
  • Goodricke Group
  • GVK Power & Infrastructure
  • HeidelbergCement India
  • Housing & Urban Development Corporation
  • IDFC
  • Jai Corp
  • Jindal Stainless (Hisar)
  • Liberty Shoes
  • Mawana Sugars
  • Meghmani Organics
  • Nagarjuna Fertilizers and Chemicals
  • Nagarjuna Oil Refinery
  • NCC
  • OnMobile Global
  • Panama Petrochem
  • PNC Infratech
  • Ponni Sugars (Erode)
  • Punjab & Sind Bank
  • Transport Corporation of India
  • TCI Developers
  • Unichem Laboratories
  • Zuari Global
  • Sudarshan Chemical Industries
  • Responsive Industries
  • Nesco
  • Empire Industries
  • Fortis Healthcare
  • Narayana Hrudayalaya
  • Welspun India
  • Whirlpool

Earnings Reaction To Watch

Sun TV Network (Q4, YoY)

  • Revenue up 23.9 percent to Rs 889 crore.
  • Net profit down 2.4 percent to Rs 283 crore.
  • Ebitda up 16.3 percent to Rs 608.1 crore.
  • Margin at 68.4 percent versus 72.9 percent.
  • Depreciation up 2 times to Rs 242 crore.
  • Other Expenses up 52 percent to Rs 70 crore.

Eclerx Services (Q4, YoY)

  • Revenue up 1.1 percent to Rs 365.1 crore.
  • Net profit down 7.8 percent to Rs 59 crore.
  • Ebitda down 0.7 percent to Rs 80.8 crore.
  • Margin at 22.1 percent versus 22.5 percent.
  • Other income down 40 percent to Rs 9.6 crore.

Novartis India (Q4 , YoY)

  • Revenue down 11.9 percent to Rs 110.4 crore.
  • Net profit down 26.4 percent to Rs 19.5 crore.
  • Ebitda profit at Rs 19.9 crore versus Ebitda loss of Rs 22 crore.
  • Other income down 88 percent to Rs 13.4 crore.

HealthCare Global Enterprises (Q4, YoY)

  • Revenue up 16.7 percent to Rs 257.1 crore.
  • Net loss of Rs 8.7 crore versus net profit of Rs 2.6 crore.
  • Ebitda up 3.3 percent to Rs 31.4 crore.
  • Margin at 12.2 percent versus 13.8 percent.
  • Medical items purchase expenses up 24 percent to Rs 56.8 crore.
  • Board approves issuing preference shares worth Rs 20.2 crore to U.S. based investor Dr. Kunnathu Geevarghese.

General Insurance Corporation of India (Q4, YoY)

  • Revenue down 27.1 percent to Rs 6,092 crore.
  • Net Premium written down 21 percent to Rs 5,774.8 crore.
  • Net profit down 19.7 percent to Rs 603.4 crore.
  • Board declared dividend of Rs 6.75 per share.

Eros International Media (Q4, YoY)

  • Revenue down 5.9 percent to Rs 224.6 crore.
  • Net profit up 14.6 percent to Rs 69.7 crore.
  • Ebitda down 31.5 percent to Rs 61.9 crore.
  • Margin at 27.6 percent versus 37.9 percent.
  • Other Income up 2 times to Rs 38.6 crore.
  • Film rights costs up 11 percent to Rs 88.7 crore.
  • Deferred tax reversal of Rs 26.7 crore.

Bulk Deals

Reliance Capital: Stichting Depositary APG Emerging Markets Equity Pool acquired 13.88 lakh shares or 0.55 percent equity at Rs 134.21 each.

Pledge Share Details

  • Max Financial Services promoter group Max Ventures Investment Holdings created pledge of 60,000 shares on May 20.
  • Future Lifestyle Fashions promoter Ryka Commercial Ventures created pledge of 21.5 lakh shares on May 22.
  • Chambal Fertiliser & Chemicals promoter Zuari Global created pledge of 2.5 crore shares on May 21.
  • Aurobindo Pharma promoter group M Sumanth Kumar Reddy created pledge of 2.5 lakh shares on May 20.
  • Wockhardt promoter Themisto Trustee created pledge of 1.5 lakh shares on May 20.

(As reported on May 23)

Trading Tweaks

  • UFO Moviez to move into short term ASM Framework.

Who’s Meeting Whom

  • India Energy Exchange to meet Amansa Capital, Abu Dhabi Investment Authority and Paradice Investment Management from May 29-June 16.
  • Mahindra Logistics to meet Enam Holdings and Matthews India Fund from May 28-30.
  • Eicher Motors to meet Neuberger Berman on May 24.
  • MCX to meet Banyan Tree Advisors on May 24.
  • Shriram City Union Finance to meet Wellington Management on May 29.

Insider Trading

  • Mindtree: Larsen & Toubro acquired 4.5 lakh shares on May 23.
  • Adani Green Energy promoters sold 8.75 crore shares from May 21-22.
  • Subex promoter group Sudeesh Yezhuvath sold 2.02 lakh shares from May 21-22.
  • Zensar Technologies promoter Instant Holding acquired 33,000 shares from May 21-22.
  • Waterbase promoter group KCT Management Services acquired 36,400 shares on May 20.
  • LT Foods promoter group Raghuvesh Holdings acquired 70,000 shares from May 22-23.

Money Market Update

  • The rupee on Thursday snapped its three-day winning streak to close at 70.02/$ versus Wednesday’s 69.67/$.

F&O Cues

Futures –May series

  • Nifty futures closed trading at 11,692.4, premium of 35 points versus 43 points
  • Nifty open interest down 2 percent, sheds 3.2 lakh shares in open interest

Bank Nifty

  • Bank Nifty futures closed trading at 30,477.9, premium of 69 points versus 79 points
  • Bank Nifty open interest up 8 percent adds 1.1 lakh shares in open interest

Options

  • Nifty PCR at 1.05 versus 1.12 (across all series)

Nifty Monthly Expiry 30 May

  • Max open interest on call side at 12,500 (57.2 lakh shares) followed by 12,000 (47.7 lakh shares)
  • Max open interest on Put side at 11,000 (38.2 lakh shares) followed by 11,500 (22.3 lakh shares)
  • Max open interest addition seen at 12,500C (+18.9 lakh shares), 12,000P (+9.9 lakh shares)

Stocks In F&O Ban

In Ban:

  • Adani Power
  • IDBI Bank

Out Of Ban:

  • Reliance Capital

Brokerage Radar

On Election 2019 Results

CLSA

  • Absolute majority for BJP would reduce the need for competitive populism.
  • Some near-term pro-farmer announcements would be likely.
  • Expect further push to affordable housing.
  • Mid caps should be back in favour as domestic flows are expected to improve.
  • Potential policy rate cut and market-friendly ministerial council would be next trigger.
  • U.S.-China trade war and rich valuations to cap market returns to single digit.

Macquarie

  • Verdict reduces risk of populism significantly, but unlikely to see major departure from existing policies.
  • India stand to gain flows with global trade worries.
  • Focus would move monetary policy to the front in the near term followed by budget.
  • Recommend shifting from defensives and large caps to high beta domestic sectors and mid caps.
  • Positive on Private Banks/Industrials/Real Estate; Negative on Consumption and NBFCs.

HSBC

  • Near term growth could inch up as election uncertainties fade.
  • But rise in potential growth to depend on whether reforms to augment capital and labour are undertaken.
  • Expect short-term gains on currency but long-term strains.
  • On rates, we remain cautious on duration.
  • Government could focus on fiscal reforms, raising the investment cycle, continuing with banking sector clean-up, easing land acquisition, streamlining labour regulation and continuing efforts to raise rural income.

UBS

  • Policy choice and reform narrative key to markets moving forward.
  • Stimulating growth faces fiscal challenges; public capex may disappoint ahead.
  • Base case is Nifty at 12,000 by Dec 2019; Upside/downside scenarios are 13,000/10,500.
  • Overweight on Private Banks, Property, Oil & Gas, Consumer Discretionary and Auto-4W.
  • Most Preferred:- Asian Paints, Axis Bank, BPCL, Britannia Industries, Cipla, Federal Bank, Godrej Properties, ICICI Bank, Infosys, ITC, Maruti Suzuki, NTPC, Petronet LNG, Reliance Industries, SBI.

On Sun TV

Macquarie

  • Maintained ‘Outperform’; cut price target to Rs 700 from Rs 725.
  • Tariff order impacts March quarter’s top line
  • Tariff order impact to normalize by the September.
  • Increased churn from Arasu augurs well; Telco deals with Sun Nxt should drive subscription growth.

CLSA

  • Maintained ‘Buy’; cut price target to Rs 730 from Rs 770.
  • Weak March quarter performance hit by TRAI’s new regime.
  • OTT/SunNXT ramping up well and is awaiting agreement with Jio.
  • Valuations are inexpensive.
Opinion
The Market Winners and Losers From India's Elections