A watchmaker wears a loupe magnifying glass as she works on a bridge for the minute wheel for a luxury wristwatch in Glashuette, Germany. (Photographer: Jasper Juinen/Bloomberg)

Stocks To Watch: DHFL, Godrej Industries, Muthoot Finance, SRF, Vodafone Idea

The sell-off that sank U.S. stocks and global commodities spilled into Asia after China retaliated with higher tariffs on a range of American goods.

Tokyo stocks opened down about 2 percent, while shares also fell in Seoul and Sydney. Futures signal weaker equities in Hong Kong and China when markets open there.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.4 percent to 11,138 as of 7:05 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 Moving The Market This Morning

  • SRF signed a definitive agreement to sell its Engineering Plastics business to DSM India for Rs 320 crore. DSM is a Lifesciences and Materials Sciences company.
  • Engineers India signed a contract with Mangol Refinery from providing its PMC Services for construction of Crude Oil Refinery plant in Mongolia.
  • Mercator said that a minority shareholder of its Indonesian arm raised a frivolous claim with respect to shareholding of the said subsidiary company and has already initiated necessary legal steps for the aforesaid dispute.
  • Bajaj Finance plans to consider revision in External Commercial Borrowing Limits on May 16. The current plan shows that around $700 million has been approved by the Board to be raised as ECBs.
  • Avadh Sugar & Energy’s board approved the issue of bonus shares in the ratio of 1:1.
  • Oriental Bank of Commerce’s board approved raising of Rs 3,000 crore via equity.
  • United Bank of India’s board approved raising of Rs 1,500 crore via equity.
  • Borosil Glass Works’ board accepted the resignation of Vikas Runthala as Internal Auditor of the company with effect from May 13.
  • NIIT Technologies completed sale of 88.99 percent stake in its arm ESRI India Technologies to Environment Systems Research Institute (USA).
  • D-Link (India) received show cause notice worth Rs 7.93 crore from the Customs Department. The company said an amount of Rs 4 crore was already paid as advance in June 2018.
  • Aarti Industries to consider issuing of bonus shares on May 21.
  • Delta Corp clarified that neither the company nor its arms received any show-cause notice on alleged evasion of GST. The company said that it is in compliance with GST laws and has not evaded any GST.
  • CRISIL downgraded DHFL’s commercial paper rating to A4+ from A3+ due to more than expected reduction in company’s liquidity.
  • IIFL Holdings to issue one share of IIFL Securities for every share held in IIFL Holdings and one share of IIFL Wealth for every seven shares held in IIFL Holdings. The company is in process to demerge its securities and wealth business. Record date is yet to be announced.

Earnings To Watch

  • Nestle India
  • Zee Media Corporation
  • Asahi Songwon Colors
  • Siemens
  • Speciality Restaurants
  • Union Bank Of India
  • Pidilite Industries
  • Polycab India
  • Cera Sanitaryware
  • UCO Bank
  • Crest Ventures
  • Edelweiss Financial Services
  • Electrosteel Castings
  • Endurance Technologies
  • Fiem Industries
  • PTC India
  • Westlife Development
  • Welspun Investments and Commercials
  • Sequent Scientific
  • Sharda Cropchem
  • Gateway Distriparks
  • Gujarat Intrux
  • Hindustan Oil Exploration Company
  • Welspun Corp,
  • IIFL Holdings
  • Indian Bank
  • IndInfravit Trust
  • Lumax Industries
  • Magadh Sugar & Energy
  • Mangalore Chemicals & Fertilizers
  • Orient Abrasives
  • Seya Industries
  • Gloster
  • Fineotex Chemical

Earnings Reaction To Watch

Vodafone Idea (Q4, QoQ)

  • Revenue up 0.1 percent to Rs 11,775 crore.
  • Net loss at Rs 4,881.9 crore versus net loss of Rs 5,004.6 crore.
  • Ebitda up 57 percent to Rs 1,785.3 crore.
  • Margins at 15.2 percent versus 9.7 percent.
  • Exceptional loss of Rs 1,145.8 crore.
  • ARPU up 16.9 percent to Rs 104 versus Rs 89.

Also read: Q4 Results: Vodafone Idea’s Loss Narrows, Margin Surges On Merger Benefits

Mangalore Refinery & Petrochemicals (Q4, QoQ)

  • Revenue down 15.2 percent to Rs 15,152.5 crore.
  • Net profit of Rs 318.9 crore versus net loss of Rs 257.7 crore.
  • Ebitda profit of Rs 816.1 crore versus Ebidta loss of Rs 94.7 crore.

Godrej Industries (Q4, YoY)

  • Revenue up 48.3 percent to Rs 2971.8 crore.
  • Net profit up 2.1x to Rs 297.4 crore.
  • Ebitda profit of Rs 238.3 crore versus Ebitda loss of Rs 156.8 crore.
  • Exceptional gain of Rs 88.3 crore.
  • Deferred tax of Rs 87.9 crore versus deferred tax reversal of Rs 54.2 crore.
  • Inventory loss of Rs 567.9 crore.
  • Cost of property development down 77 percent to Rs 71 crore.
  • Other income down 50 percent to Rs 169.5 crore.

Muthoot Finance (Q4, YoY)

  • Net Interest Income up 3.4 percent to Rs 1220.8 crore.
  • Net profit up 0.6 percent to Rs 511.5 crore.

Linde India (Q4, YoY) Numbers Not Comparable Due to Ind AS 115 Recognition

  • Revenue down 16.4 percent to Rs 441 crore.
  • Net profit up 15 times to Rs 35.6 crore.
  • Ebitda up 55.2 percent to Rs 112.7 crore.
  • Margin at 25.6 percent versus 13.8 percent.
  • Deferred tax to Rs 6.7 crore versus deferred tax reversal of Rs 0.8 crore.

Honeywell Automation (Q4, YoY)

  • Revenue up 26.6 percent to Rs 810.3 crore.
  • Net profit up 44 percent to Rs 84.1 crore.
  • Ebitda up 55 percent to Rs 124.5 crore.
  • Margin at 15.4 percent versus 12.6 percent.
  • Declares dividend of Rs 45 per share.

Karnataka Bank (Q4, YoY)

  • Net Interest Income down 11.2 percent to Rs 480.9 crore.
  • Net profit up 5.6 times to Rs 61.7 crore.
  • Provisions down 60 percent to Rs 217.7 crore.
  • GNPA at 4.41 percent versus 4.45 percent. (QoQ)
  • NNPA at 2.95 percent versus 3 percent. (QoQ)
  • Declares dividend of Rs 3.5 per share.
  • Board appoints Muralidhar Krishna Rao as CFO from May 13.

Capacit’e Infraprojects (Q4, YoY)

  • Revenue up 30.6 percent to Rs 497.6 crore.
  • Net profit up 15.6 percent to Rs 25.9 crore.
  • Ebitda up 7 percent to Rs 66.9 crore.
  • Margin at 13.4 percent versus 16.4 percent.
  • Construction expenses up 54 percent to Rs 154.6 crore.

Andhra Bank (Q4, YoY)

  • Net Interest Income up 5.9 percent to Rs 1,821.4 crore.
  • Net loss of Rs 1,233.6 crore versus net loss to Rs 2,535.8 crore.
  • Provisions down 58 percent to Rs 2,341.1crore.
  • GNPA at 16.21 percent versus 16.68 percent. (QoQ)
  • NNPA at 5.73 percent versus 6.99 percent. (QoQ)

CCL Products (Q4, YoY)

  • Revenue down 18.3 percent to Rs 262.1 crore.
  • Net profit down 24.6 percent to Rs 35.6 crore.
  • Ebitda down 24.1 percent to Rs 54 crore.
  • Margin at 20.6 percent versus 22.2 percent.

Shemaroo Entertainment (Q4, YoY)

  • Revenue up 11.7 percent to Rs 132.2 crore.
  • Net profit up 11.8 percent to Rs 20.9 crore.
  • Ebitda up 11.4 percent to Rs 41 crore.
  • Margin at 31 percent versus 31.1 percent.

Pioneer Distilleries (Q4, YoY)

  • Revenue down 7.5 percent to Rs 33.5 crore.
  • Net loss of Rs 24.2 crore versus net profit of Rs 20.8 crore.
  • Ebitda loss of Rs 17.2 crore versus Ebitda profit of Rs 0.7crore.
  • Other expenses of Rs 16.9 crore.

Metropolis Healthcare (Q4, YoY)

  • Revenue up 21.1 percent to Rs 200.8 crore.
  • Net profit up 14.2 percent to Rs 34.8 crore.
  • Ebitda up 26.3 percent to Rs 56 crore.
  • Margin at 27.9 percent versus 26.8 percent.

Just Dial (Q4, YoY)

  • Revenue up 16 percent to Rs 232.3 crore.
  • Net profit up 60.5 percent to Rs 62.6 crore.
  • EBIT up 28.3 percent to Rs 58.7 crore.
  • EBIT Margin at 25.3 percent versus 22.8 percent.
  • Other income up 1.9 times to Rs 32.2 crore.

Pledge Share Details

  • Max Financial Services promoter group Max Ventures Investment Holdings created pledge of 2.2 lakh shares from May 9-10.

Trading Tweaks

  • Mercator, Jaiprakash Power Ventures to move into ASM Framework.
  • Williamson Magor & Company to move into short term ASM Framework.
  • CIL Nova Petrochemicals, Goldiam International Limited to move out of short term ASM Framework.
  • Uniply Industries price band revised to 5 percent.

Who’s Meeting Whom

  • Shriram Transport Finance to meet T Rower, Somerset Capital and other investors on May 14.
  • MCX to meet Reliance MF, ValueQuest and other investors from May 14-17.
  • Eicher Motors to meet DSP Investment Managers on May 14.

Insider Trading

  • Zensar Technologies promoter Instant Holding acquired 4,300 shares on May 9.
  • Tanla Solutions promoter D. Tanuja Reddu acquired 1.05 lakh shares on May 10.

Money Market Update

  • The rupee on Monday closed at its lowest since March 1 at 70.53/$ versus Friday’s 69.90/$.

F&O Cues

  • Nifty futures closed trading at 11,181.5, premium of 33 points versus 28 points, open interest unchanged.

Bank Nifty

  • Bank Nifty futures closed trading at 28,773, premium of 113 points veresus 47.6 points.
  • Bank Nifty open interest down 2 percent sheds 27,000 shares in open interest.

Options

  • Nifty PCR at 1.18 Vs 1.29 (across all series).

Nifty Weekly Expiry 16 May

  • Max open interest on call side at 11,300 (22.9 lakh shares).
  • Max open interest at Put side at 11,000 (14 lakh shares).
  • Max open interest addition seen at 11,300 Call (+11.3 lakh shares), 11,200 Call (+9.2 lakh shares).

Nifty Monthly Expiry 30 May

  • Max open interest on call side at 12,000 (22.2 lakh shares).
  • Max open interest on Put side at 11,000 (27.2 lakh shares).

Stocks In F&O Ban

  • Out of ban: Jet Airways

Brokerage Radar

Morgan Stanley on India Insurance

  • Industry premium growth in April 2019 was strong at 19 percent.
  • Private sector premium growth was steady at 18 percent, LIC improved to 19 percent.
  • Expect private sector premium growth to be in mid-teens over next two years.

Citi on Oberoi Realty

  • Maintained ‘Buy’; hiked price target to Rs 628 from Rs 504.
  • Solid end to a strong 2018-19; strong pre-sales in March quarter.
  • March quarter’s P&L growth was good, but margin came lower.
  • Hospitality business steady; pickup in Commerz2.

On ITC

Jefferies

  • Maintained ‘Buy’ with a price target of Rs 360.
  • Q4: broad based show; steady 7.5 percent YoY cigarette volume growth.
  • Like ITC's focus on regaining lost volumes by straddling across price points in cigarettes.
  • Remaining business segments saw strong growth.

Morgan Stanley

  • Maintained ‘Overweight’ with a price target of Rs 320.
  • Q4: Earnings beat; cigarette volume growth of 8 percent.
  • Key positives: acceleration in cigarette volume growth and strong profit delivery other businesses.
  • Next catalyst for ITC stock could be further calibrated price hikes.

On HDFC

CLSA

  • Maintained ‘Buy’; hiked price target to Rs 2,500 from Rs 2,360.
  • Healthy AUM growth, but loan growth weak – should normalise from the current financial year.
  • Steady spread and asset quality.
  • Expect steady rise in core earnings and RoE expansion.

Morgan Stanley

  • Maintained ‘Overweight’ with a price target of Rs 2,290.
  • March quarter review: Steady quarter in a tough environment.
  • Bad loan ratio moderated and total coverage improved.
  • Growth in individual disbursements and AUM was steady.
  • HDFC continued to exercise caution on growing the non-individual book.

On Vodafone Idea

CLSA

  • Maintained ‘Sell’; cut price target to Rs 12.5 from Rs 27.
  • March quarter’s operating income were above estimates; operating metric were weak.
  • Merger synergies boosted the operating income.
  • Big merger synergy savings ahead.

JPMorgan

  • Maintained ‘Underweight’ with a price target of Rs 15.7
  • March quarter marked three extremes – ARPU improvement, subscriber loss & reduction in network cost.
  • Doing a good job in realizing merger synergies in an accelerated manner.