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Stocks To Watch: DHFL, HDFC Bank, Kotak Mahindra Bank, RIL, United Spirits, Strides Pharma

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

Men watch a display in front of the Bombay Stock Exchange in Mumbai. (Photographer: Prashanth Vishwanathan/Bloomberg News)  
Men watch a display in front of the Bombay Stock Exchange in Mumbai. (Photographer: Prashanth Vishwanathan/Bloomberg News)  

Stocks in Asia kicked off the week on a cautious note as traders dialled back expectations on the size of Federal Reserve easing later this month.

Japanese and Australian shares dipped after soaring Friday, while South Korean equities were little changed. Futures on the S&P 500 Index were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 11,395 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

  • Tata Steel stated that that it is in the process of raising $600 million for refinancing and it is not in talks with anyone for European operations. (Bloomberg News)
  • Reliance Industries: Brookfield to acquire stake in Tower Infrastructure Trust - Reliance Jio lnfratel Private Limited – for Rs 25,215 crore. Proceeds from the investment by Brookfield will be used to repay certain existing financial liabilities and for acquiring 49 percent of equity share capital currently held by Reliance Industries.
  • Jet Airways’ lenders approved resolution to raise interim finance and key terms for the eligibility criteria for the prospective resolution applicants.
  • IOL Chemicals & Pharma stated that they have made a prepayment of Rs 15.39 crore due to banks on July 19 and a totally prepaid Rs 84.18 crore of loans to reduce debt of the company.
  • Cox & Kings: Brickwork Ratings revised ratings of NCDs worth Rs 50 crore to BWR D from BWR C, due to delay in servicing of debt obligations.
  • Grasim Industries: Board of Aditya Birla Idea Payments Bank has approved the voluntary winding up of the company, as unanticipated developments in business landscape has made the economic model unviable.
  • Gruh Finance: Board approved to increase total shareholding of all registered FPIs/FIIs from 24 percent to 40 percent.
  • Genus Power Infra clarified that the news of the company coming under the scanner of IT Department is baseless and false.
  • Edelweiss Financial Services: CRISIL has re-affirmed the credit rating of 'CRISIL A1+' assigned to the short term borrowing programmes of the company.
  • Strides Pharma: Announced successful completion of US FDA inspection at its flagship facility in Bangalore.
  • CG Power: Bagged contract for a 400 MW wind farm in Saudi Arabia.
  • Cipla: U.S. FDA inspection at the company’s facility in Virgonagar, Bangalore ended with 7 observations.
  • Vodafone Idea: Approved the voluntary winding up of the associate company Aditya Birla Idea Payments Bank Limited. This  decision has been taken due to unanticipated developments in the business landscape that have made the economic model unviable.
  • Dr Reddy’s: Announced closure of the transaction with Upsher-Smith Laboratories, LLC.
  • Godawari Power and Ispat: CARE revised the ratings on its long term bank facility to BBB+ and reaffirmed the short term bank facility to CARE A3+.
  • Reliance Communications: Mr Rakesh Gupta has been appointed as the company secretary and compliance officer of the Company with effect from 20 July, pursuant to the resignation of Mr Prakash Shenoy.
Opinion
Small-Cap Misery Seen Ending in India Thanks to Rate Cuts

Air Passenger Data For June 2019

  • Industry passenger growth at 6 percent—the highest in last five months
  • SpiceJet’s passenger growth at 37 percent—the highest in last 38 months
  • InterGlobe Aviation’s passenger growth at 23.6 percent
  • SpiceJet’s market share at 15.6 percent, near five year high
  • IndiGo’s market share at 48.1 percent, fell from its peak of 50 percent

Brokerage Radar

Goldman Sachs on HDFC Bank

  • Maintained 'Buy' with target price of Rs 2,879.
  • Strong beat on core pre-provisioning operating profit.
  • Well placed to cope with cyclical headwinds.
  • Expect premium valuations to sustain.

Reliance Industries

BofAML

  • Maintained 'Buy'; Hiked to Rs 1,560 from Rs 1,515.
  • Q1 beat across division; hike FY21/22 EPS estimates by 2-3 percent.
  • Retail revenue growth continued to surprise despite seasonally slow quarter.
  • Expect clarity on FTTH launch date in AGM.

UBS

  • Maintained 'Buy' with target price of Rs 1,500.
  • Reliance performs in tough environment yet again.
  • Timing of tower InvIT positive for deleveraging.
  • Reliance has maintained an upbeat outlook on expansion in refining margins.

Credit Suisse

  • Maintained ‘Neutral’ with target of Rs 1,350.
  • Sharp decline in Jio ARPU and core retail growth moderates.
  • Ebitda beat largely driven by Jio’s accounting related beat due to IND AS 116 adoption.
  • Petrochemical margin suppressed as both polyester and polymers are weak.

IDFC Securities on Hindustan Zinc

  • Upgraded to 'Neutral' from 'Underperformer'; hiked target price to Rs 216 from Rs 212.
  • Q1- in line operating profits; lower volumes, higher cost hits Ebitda.
  • Captive power generation was affected due to water scarcity which has been subsided now.
  • Expect Ebitda to increase at 4 percent compounded annual growth rate over FY19-21; higher volumes to offset impact of lower prices.

UBS on InterGlobe Aviation

  • Maintained 'Buy' with target price of Rs 2,000.
  • Q1FY20 – Strong beat across all metrics.
  • Yield expansion ahead of expectation, but caution on Q2 yields.
  • Yields improvement and aggressive international expansion remain key focus.

On Dabur

Jefferies

  • Maintained 'Buy'; Hike target price to Rs 480 from Rs 460.
  • Q1FY20 review: Strong show amidst slowdown.
  • Quarterly volatility may persist given macro consumption headwinds and high competitive intensity.
  • Buy on improving execution, increased focus on volume led market share gains and new product launches.

Citi

  • Maintained 'Buy'; hiked target price to Rs 485 from Rs 455.
  • Solid all-round beat; great start to FY20.
  • Positive traction to a no of strategies aid growth.
  • Despite solid Q1, management retains full year guidance of mid-to-high single digit volume growth.

Citi on L&T Infotech

  • Maintained 'Buy'; Cut target price to Rs 1,825 from Rs 1,865.
  • Inline Q1; Client specific issues key to monitor.
  • Large deal win trend continues to provide visibility on better revenue growth trajectory.
  • Valuations at premium to other midcaps justified given consistent execution.

Nifty Earnings Reactions To Watch

HDFC Bank (Q1, YOY)

  • Net Interest Income rose 22.9 percent to Rs 13,294.3 crore.
  • Net Profit up 21 percent to Rs 5,568.16 crore.
  • Provisions up 60.4 percent to Rs 2613.7 crore (Rs 1889.2 cr QoQ)
  • GNPA at 1.4 percent versus 1.36 percent (QoQ)
  • NNPA at 0.43 percent versus 0.39 percent (QoQ)
Opinion
Q1 Results: HDFC Bank’s Profit Jumps Even As Provisions Rise

Reliance Industries (Q1, QoQ)

  • Revenue up 5.6 percent to Rs 88,263 crore.
  • Net profit up 5.6 percent to Rs 9,036 crore.
  • Ebitda down 0.5 percent to Rs 13,640 crore.
  • Ebitda margin at 15.5 percent versus 16.4 percent.
  • Gross Revenue Margin down 1.2 percent to $8.1 a barrel.
Opinion
Q1 Results: Reliance Industries’ Profit Rises, Margin Narrows On Petrochemical Woes

Reliance Jio (Q1, QoQ)

  • Revenue up 5 percent to Rs 11,679 crore.
  • Net profit up 6 percent at Rs 891 crore
  • Ebitda up 8 percent to Rs 4670 crore vs Rs 4326 crore (Est Rs 3683cr)
  • Ebitda margins at 40 percent versus 39 percent.
  • ARPU down 3 percent to Rs 122.
Opinion
Q1 Results: Reliance Jio Posts Surprise Profit Growth Even As ARPU Declines

Other Earnings Reaction To Watch

InterGlobe Aviation (Q1, YoY)

  • Revenue up 45 percent at Rs 9,420 crore.
  • Net profit up 43 times at Rs 1,203 crore.
  • Ebitdar up 3.3 times at Rs 2,656 crore.
  • Ebitdar margin at 28.2 percent versus 12.2 percent.

L&T Finance Holdings (Q1, YoY)

  • Net Interest Income up 20.1 percent to Rs 1,389.9 crore.
  • Net profit up 7.5 percent to Rs 578.8 crore.
  • Lending Book up 16 percent to Rs 99,904 crore.

Mahindra CIE Automotive (Q1, YoY)

  • Revenue up 3 percent at Rs 2,141.9 crore.
  • Net profit down 9.1 percent to Rs 126.2 crore.
  • Ebitda down 7.3 percent to Rs 261.5 crore.
  • Margin at 12.2 percent versus 13.6 percent.
  • Depreciation up 13 percent to Rs 84.4 crore.

L&T Technology Services (Q1, YoY)

  • Revenue up 17 percent at Rs 1,347.5 crore.
  • Net profit up 3.2 percent to Rs 203.9 crore.
  • Ebitda up 39.1 percent to Rs 272.7 crore.
  • Margins at 20.2 percent versus 17 percent.
  • Depreciation up 65 percent to Rs 42.8 crore.

ICICI Lombard General Insurance (Q1, YoY)

  • Gross written premium down by 7.7 percent to Rs 3,560.7 crore.
  • Net profit up 7.1 percent at Rs 309.8 crore.
  • Combined ratio at 100.4 percent vs 98.8 percent.
  • Solvency ratio at 2.20 versus 2.04.

Avanti Feeds (Q1, YOY)

  • Revenue up 5.1 percent to Rs 1,093.5 crore.
  • Net profit up 12.7 percent to Rs 101.5 crore.
  • Ebitda up 3.6 percent to Rs 136.8 crore.
  • Margins at 12.5 percent versus 12.7 percent.

Kirloskar Pneumatic (Q1, YOY)

  • Revenue up 34.4 percent to Rs 180.1 crore.
  • Net profit up 70.4 percent to Rs 3.5 crore.
  • Ebitda up 177.9 percent to Rs 9.7 crore.
  • Margins at 5.4 percent versus 2.6 percent.

Amara Raja Batteries (Q1, YOY)

  • Revenue up 2 percent to Rs 1,814.9 crore.
  • Net profit up 24.7 percent to Rs 140.9 crore.
  • Ebitda up 26.8 percent to Rs 279.2 crore.
  • Margins at 15.4 percent versus 12.4 percent.

Future Lifestyle Fashions (Q1, YOY)

  • Revenue up 16.8 percent to Rs 1,540.3 crore.
  • Net profit down 6.8 percent to Rs 24.54 crore.
  • Ebitda up 133.2 percent to Rs 262.64 crore.
  • Margin at 17.1 percent versus 8.5 percent.

Nifty Earnings To Watch

  • Kotak Mahindra Bank

Other Earnings To Watch

  • Dewan Housing Finance Corporation (Q4)
  • Can Fin Homes
  • Just Dial
  • TVS Motor
  • GlaxoSmithKline Pharmaceuticals
  • Hindustan Media Ventures
  • ICICI Securities
  • Coromandel International
  • Allsec Technologies
  • Apollo Tricoat Tubes
  • Aptech
  • Lakshmi Machine Works
  • Mastek
  • Oriental Bank of Commerce
  • Srikalahasthi Pipes
  • United Spirits
  • Wendt
  • Kirloskar Ferrous
  • Jiya Eco-Products

Trading Tweaks

  • Sanwaria Consumer ,Talwalkars Better Value Fitness , Talwalkars Healthclubs to move into short term ASM Framework.
  • Excel Realty N Infra, KRBL to move out of short term ASM Framework.
  • NRB Industrial Bearings to move into ASM Framework.
  • Kridhan Infra, Mercator to move out of ASM Framework.
  • Talwalkars Better Value Fitness, Talwalkars Healthclubs price band revised to 10 percent.

Bulk Deals

  • DHFL: California Public Employees Retirement System acquired 41.5 lakh shares (1.32 percent) at Rs 53.6 each.
  • Reliance Infra: California Public Employees Retirement System sold 33.05 lakh shares (1.27 percent) at Rs 44.89 each.
  • Sangam: ICICI Prudential sold 18.2 lakh shares (4.62 percent) at Rs 45 each.

Who’s Meeting Whom

  • MCX to meet ICICI Prudential MF. UTI MF and other investors from July 22-25.

Money Market Update

  • The rupee on Friday closed at 68.80/$ versus Monday’s closing of 68.96/$.

F&O Cues

Futures

  • Nifty futures closed at 11,421.8, premium of 3 points versus 7 points.
  • Nifty futures open interest down 3 percent, sheds 4.8 lakh shares in open interest.
  • Bank Nifty futures closed at 29781.3, premium 11 points versus 18 points.
  • Bank Nifty futures open interest down 12 percent, sheds 2 lakh shares in open interest.

Options

Nifty PCR at 1.04 versus 1.24(across all series)

Nifty Monthly Expiry 25-July

  • Max open interest on call side at 11,600 (35.1 lakh shares)
  • Max open interest on put side at 11,300 (30.4 lakh shares)
  • Max open interest addition seen in 11,500C (+24 lakh shares), 11,600C (+17.5 lakh shares), 11,400P(+7.6 lakh shares)

Stocks In Ban

In ban:

  • DHFL
  • IDBI Bank
  • Reliance Capital
  • Reliance Infra

Out Of Ban

  • Tata Elxsi