Stocks To Watch: Cipla, JSPL, Max India, SPARC, Tata Steel, Tech Mahindra, Titan  

Stocks in Asia traded mixed as investors weighed signs of improvement in a gauge of the American services sector against conflicting news flow on the U.S.-China trade discussions.

Equities were little changed in Japan and Australia, while shares in South Korea edged up. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.12 percent to 11,952 as of 6:40 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.

• Tech Mahindra to acquire strategy agency Born Group for $95 million. The transaction is expected to be closed by Nov. 15.
• Sun Pharma Advanced Research signed pact to grant a unit of China Medical System Holdings an exclusive license to develop and sell multiple products in Mainland China, Hong Kong, Macao and Taiwan. The licensing deal covers Xelpros, Elepsia, Taclantis and two eye drops. The initial term of the agreement will be 20 years from the date of first commercial sale of each product in the territory which may be further extended. According to the agreement, the Indian drug maker is eligible to receive upfront payment, milestone payments and royalty on net sales of the products.
• Hero MotoCorp: Board approved investment of Rs 450 crore in its associate company Hero FinCorp via private placement of shares.
• Zee Entertainment Enterprises: Board has approved in principle, the reappointment Punit Goenka as Managing Director and Chief Executive Officer of the company till January 2025.
• Bank of Baroda has revised MCLR across various tenors with effect from November 7. One-month MCLR at 7.85 percent and one-year MCLR at 8.3 percent.
• Motherson Sumi: Moody's has affirmed "Baa3 rating" and has revised outlook to 'Negative' from 'Stable' for the company. “The negative outlook principally reflects the weak performance of Motherson's greenfield operations as well as slowing global auto sales, and concerns around timely recovery in auto sector,” it said.
• Vedanta: Vedanta Resources long-term rating was downgraded by S&P to ‘B’ from ‘B+’ and outlook changed to Stable from Negative, according to Bloomberg report.
• Max India: Shareholders approved the merger of healthcare assets of Max India into Max Healthcare and demerger of residual businesses of Max India into Advaita, a wholly owned subsidiary of Max India. Merger expected to be completed by end of fiscal year 2020. Transaction will result in 2 listed companies – Max Healthcare and a new ‘Max India’ entity.
• J&K Bank applied to the Securities Exchange Board of India for grant of extension for the quarterly results in the stipulated timeline of 45 days along with the waiver of penalty for delay in the submission of reviewed financial results till Dec. 15. The bank has approached RBI through State Level Banker’s Committee for a special dispensation addressing the issue of temporary asset impairment due to prevailing situation in J&K since Aug. 5. Proposal in under consideration at the Reserve Bank of India.
• PI Industries’ arm executed a share purchase agreement to 100 percent stake in Isagro (Asia)Agrochemicals for Rs 345 crore. Long stop date for this transaction is chosen as Jan. 31 next year.
• Jubilant Life Sciences: India Rating and Research placed rating as Rating Watch Evolving for facilities worth Rs 2535 crore post the Board’s approval for re-organisation of the businesses of the Company by demerger of Life Science Ingredients business.
• Allcargo Logistics said that the scheme of merger of Allcargo Shipping with the company has been made effective on and from November 5. The National Company Law Tribunal had approved this scheme on Sept. 27.
• Piramal Enterprises: NCLT Mumbai has approved amalgamation of Piramal Phytocare with the company itself.
• Piramal Phytocare: Ankit Kotak has resigned from the post of Chief Financial Officer with effect from Nov. 5.
• Future Consumer said that 46.29 percent stake is held by the promoters out of which 78.39 percent stake are encumbered shares.
• Future Retail said that 47.02 percent stake is held by the promoters out of which 72.63 percent stake are encumbered shares.
• CG Power and Industrial Solutions’ arm had bagged $24 million order from Indonesian state utility PT PLN Indonesia (Persero) for Power Transformers.
• Mahindra Lifespace Developers’ JV with HDFC Real Estate Fund has executed a deed for acquisition of land parcel in Mumbai Metropolitan Region in Thane having residential development potential of up to 0.84 million sq.feet.
• Aditya Birla Fashion and Retail: Board to consider raising funds via non-convertible debentures up to Rs 500 crore, on or after Nov. 8.
• Kaveri Seed record date for share buyback set as Nov. 22.
• Quess Corp has completed the acquisition of 30 percent stake in GSFS.
• Force Motors October Sales down 3 percent at 2,133 units versus 2,202 units .
• VST Tillers Tractors October Sales: Power Tillers up 6 percent at 1,104 units versus 1,046 units. Tractors up 3 percent at 857 units versus 833 units.
• Godrej Industries to consider raising capital via issue of debt securities on Nov. 12.
• Sagar Cements October Sale down 24.7 percent at 2,50,515 MT versus 2,79,553 MT.

Earnings Reaction To Watch

Titan (Q2, YoY)

• Revenue rose 0.7 percent to Rs 4,435 crore.
• Net profit rose 1.9 percent at Rs 320 crore.
• Ebitda rose 10 percent at Rs 513 crore.
• Ebitda margin stood at 11.6 percent versus 10.6 percent.
• Jewellery growth guidance cut from 20 percent to 11-13 percent.

Tech Mahindra (Q2, QoQ)

• Revenue rose 4.8 percent to Rs 9,069.9 crore.
• Net profit rose 17.2 percent to Rs 1,123.9 crore.
• EBIT rose 16.8 percent to Rs 1,159.4 crore.
• Margin stood at 12.8 percent versus 11.5 percent.

Jindal Steel & Power (Q2, YoY)

• Revenue fell 10.4 percent to Rs 8,939.5 crore.
• Net loss stood at Rs 300.5 crore versus net Profit of Rs 343.7 crore.
• Ebitda fell 25.6 percent at Rs 1,641.6 crore.
• Margin stood at 18.4 percent versus 22.1 percent.

Ajanta Pharma (Q2, YoY)

• Revenue rose 18.1 percent to Rs 6,42.8 crore.
• Net profit fell 7.2 percent to Rs 1,16.4 crore.
• Ebitda rose 6.9 percent to Rs 177.6 crore.
• Margin stood at 27.6 percent versus 30.5 percent.

Gujarat Gas (Q2, YoY)

• Revenue rose 27.9 percent to Rs 2,513 crore.
• Net profit rose 12 times to Rs 517.3 crore.
• Ebitda rose 2.3 times to Rs 370.7 crore.
• Margin stood at 14.8 percent versus 8.2 percent.

Divi's Laboratories (Q2, YoY)

• Revenue rose 9.2 percent to Rs 1,445.6 crore.
• Net profit fell 11.6 percent to Rs 356.8 crore.
• Ebitda fell 5.9 percent to Rs 490.6 crore.
• Margin stood at 33.9 percent versus 39.4 percent.
• Other Income fell 42 percent to Rs 47 crore.

Torrent Power (Q2, YoY)

• Revenue rose 11.5 percent to Rs 3,842 crore.
• Net profit rose 83 percent to Rs 754.4 crore.
• Ebitda rose 6.9 percent to Rs 1055 crore.
• Margin stood at 27.5 percent versus 28.6 percent.
• Deferred Tax Reversal of Rs 318.3 crore in current quarter.

Cholamandalam Investment (Q2, YoY)

• Net Interest Income rose 17 percent to Rs 864.3 crore.
• Net Profit rose 1 percent to Rs 307 crore.

Nifty Earnings To Watch

• Cipla
• Tata Steel

Other Earnings To Watch

• Indiabulls Housing Finance
• Lupin
• V-Guard Industries
• Voltas
• Somany Ceramics
• Bosch
• Brigade Enterprises
• BSE
• Canara Bank
• Emami
• Alkyl Amines Chemicals
• Avadh Sugar & Energy
• Bajaj Electricals
• Corporation Bank
• EID Parry India
• Prataap Snacks
• Radico Khaitan
• Emami
• Taj GVK Hotels & Resorts
• Exide Industries
• Religare Enterprises
• Firstsource Solutions
• Fortis Healthcare
• Godrej Consumer Products
• Gujarat Borosil
• Hester Biosciences
• Hindustan Oil Exploration
• Honda Siel Power Products
• Kalpataru Power Transmission
• Linc Pen & Plastics
• Manappuram Finance
• MAS Financial Services
• Minda Corporation
• Munjal Showa
• Nitco
• Prakash Industries
• Schneider Electric
• Shipping Corporation Of India
• Siti Networks
• Take Solutions
•   Triveni Turbine
• UFO Moviez
• KDDL

Pledge Share Details

• Future Consumer promoter Future Capital Investment released pledge of 2.9 crore shares from Oct. 2-Nov. 4.
• Adani Green Energy promoter SB Adani Family Trust released pledge of 21.48 crore shares on Nov. 4.
• Coffee Day Enterprises promoter VG Siddhartha invoked pledge of 67 lakh shares on Oct. 22.

Trading Tweaks

• Uniply Industries, Apollo Micro Systems, HCL Infosystems to move into short term ASM Framework.
• Astron Paper & Board Mill, Kridhan Infra to move into ASM Framework.
• Birla Cable price band revised to 10 percent.

Who’s Meeting Whom

• Supreme Industries to meet Birla AMC, Impax and other investors on Nov. 7.
• ACC to meet Franklin Templeton Investment on Nov. 6.
• PI Industries to meet Axis Capital, William Blair and other investors from Nov. 6-25.
• Escorts to meet Somerset Capital, Lucky Securities and other investors from Nov. 6-19.

Insider Trading

• Ultratech Cement promoter Aditya Marketing & Manufacturing sold 45,000 shares from Oct. 30-31.

Money Market Update

• The rupee closed at 70.69/$ versus 70.76/$ on Monday.

F&O Cues

Index Futures

• Nifty November futures closed at 11956, premium of 38.8 points.
• Nifty November Futures open interest up 3 percent, adds 4.2 lakh shares in open interest.
• Nifty Bank November futures closed at 30,294, premium of 74.3 points versus 62.9 points.
• Nifty Bank November futures series open interest up 6 percent, adds 60.6k shares in open interest.

Options

• Nifty PCR at 1.34 versus 1.43 (across all series).

Nifty Weekly Expiry: Nov. 7

• Max open interest on call side at 12,000 (30.4 lakh shares).
• Max open interest on put side at 11,900 (22 lakh shares).
• open interest addition seen at 11,700P (+6.9 lakh shares), 12,000C (+5.8 lakh shares).

Nifty Monthly Expiry: Nov. 28

• Max open interest on call side at 12,000 (18.3 lakh shares).
• Max open interest on put side at 11,600 (19.1 lakh shares).

Brokerage Radar

BofAML on ABB India

• Maintained ‘Underperform’; hiked price target to Rs 1,187 from Rs 1,088.
• Portfolio realignment to improve earnings quality.
• Earnings quality high with improving working capital.
• Cut CY19 and CY20 EPS estimates by 46 percent 42 percent respectively to factor in sale of power grid business.

JPMorgan on M&M

• Upgraded to ‘Overweight’ from ‘Neutral’; hiked price target to Rs 700 from Rs 600.
• Farm business outlook improving.
• UV headwinds and capital allocation concerns valid but well discounted.
• Expect valuation multiple to improve; listed subsidiaries have been supportive.

Macquarie on Gujarat Gas

• Maintained ‘Outperform’ with a price target of Rs 210.
• September quarter’s strong volume growth continues.
• Sequential moderation in margins was in-line with expectations.
• Continue to see highest structural volume growth potential for Gujarat Gas.

Credit Suisse on Punjab National Bank

• Maintained ‘Underperform’; cut price target to Rs 55 from Rs 65.
• Weak operating performance has led to book value erosion.
• Stock price keeping pace with book value decline.
• Due to large dilution and continued asset quality pressure, cut FY21 EPS estimates by 40 percent.

Credit Suisse on Dabur

• Maintained ‘Outperform’; hiked price target to Rs 535 from Rs 490.
• Q2: in-line quarter; juices drag down volume growth.
• Remain positive over the medium term due to the transformation.
• Benign input costs and improving international business could help margin expansion in the second half.

CLSA on Godrej Properties

• Maintained ‘Buy’; hiked price target to Rs 1,200 from Rs 1,100.
• Earnings below estimates as project deliveries fell short, partly on weather impact.
• Strong sales growth driving market share gains.
• Project additions likely to accelerate in the second half.

SBICAP on Balkrishna Industries

• Initiated ‘Buy’ with a price target of Rs 1,050.
• Differentiated franchise; well positioned for recovery.
• Embarked on significant capex cycle to strengthen its franchise.
• See potential for double digit volume growth over medium term.
• Expect volume, revenue, Ebitda and EPS to grow at a CAGR of 9 percent, 12 percent. 19 percent and 21 percent respectively over FY20-22.

On Titan

CLSA

• Downgraded to ‘Sell’ from ‘Underperform’; cut price target to Rs 1,025 from Rs 1,350.
• Q2 net income sharply below estimates.
• Jewellery: weak growth and modest margins.
• Watches: modest growth, but EBIT declined.

UBS

• Maintained ‘Buy’; cut price target to Rs 1,525 from Rs 1,600.
• Muted consumer sentiment and sharp inflation in gold prices hurt demand.
• Long term drivers intact – poised to grow market share.
• Believe any stock price correction post Q2 results is further opportunity to buy.

On Tech Mahindra

PhillipCapital

• Maintained ‘Sell’; hiked price target to Rs 600 from Rs 575.
• Strong results; But remains a structurally weak story.
• Topline growth boosted by enterprise segment while margins expanded due to lower SG&A.
• Tech Mahindra in an operationally precarious state, with low growth, high attrition, high utilisation and fewer levers for margins.

Morgan Stanley

• Maintained ‘Overweight’; hiked price target to Rs 850 from Rs 765.
• September quarter’s revenue growth better due to stronger growth in enterprise business.
• With strong order bookings and healthy pipeline, mgmt. confident of improving growth prospects.
• Valuations supportive and recent acquisition of BORN Group to drive up dollar revenue.