Stocks To Watch: DHFL, HDFC, InterGlobe Aviation, ITI, Maruti Suzuki, United Spirits

Asian stocks retreated again on Tuesday as concern over the economic and human impact of China’s deadly coronavirus rattled global markets.

Japanese shares slid, with deeper losses in South Korea and Australia as those markets reopened after holidays. Chinese and Hong Kong markets remain closed. U.S. futures edged higher. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.08 percent to 12,106.50 as of 6:59 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.

• Maruti Suzuki to increase prices up to 4.7 percent across select models due to the increase in input costs, with effect from Jan. 27.
• NTPC: Board gave in principle approval for the acquisition of entire stake of Government of India in NEEPCO and THDC.
• Adani Gas clarified that it has not been charged with Rs 400 crore penalty from Petroleum and Natural Gas Regulatory Board, and the company has responded to the afore-said board with all information to conclude the matter.
• Adani Green Energy’s arm received approval from Maharashtra Electricity Regulatory Commission for award of 700 megawatt Solar-Wind Hybrid Capacity Power Project, which was won via tendering. Project is expected to be commissioned by Q2FY2022 and fixed PPA tariff is set at Rs 3.24 per unit for a period of 25 years.
• Prakash Industries will participate in forthcoming auctions of coal blocks available under commercial mining policy and not proceed further in case of Bhaskarpara coal block as the same is available under captive mining policy. Third quarter steel sales rose 6.4 percent at 2.53 lakh tonne.
• HCL Infosystems will scale down the Enterprise and Consumer Distribution Business over the next few quarters, due to declining business.
• ITI: FPO subscribed 9 percent on day 2 of its offer. Retail book subscribed 50 percent .
• Music Broadcast: Board has recommended a bonus issue of 1 share for every 4 shares held.
• Karnataka Bank: Board recommended a bonus issue of 1 share for every 10 shares held and to issue rose to 15 crore equity issues as QIP issue.
• Cholamandalam Investment & Finance opens QIP issue with floor price set at Rs 322.59 per share , which is at a discount of 2 percent to the closing prices of Jan. 27.
• DHFL said that draft resolution plan by old management is no longer valid and it has withdrawn.
• Ambuja Cements: Life Insurance Corporation of India reduced stake from 6.2 percent to 4.1 percent in the company.
• InterGlobe Aviation: Board approved the appointment of company’s Chief Executive Officer Ronojoy Dutta as a whole-time director with effect from Jan. 27.
• Andhra Bank to consider raising capital via issue of preference shares aggregating to Rs 200 crore to Government of India, on Jan. 30.

Earnings Reaction To Watch

HDFC (Q3, YoY)

• Reported net interest income rose 9 percent to Rs 3,239 crore.
• Calculated net interest income rose 13.6 percent to Rs 2,957.8 crore.
• Net profit rose 3.96 times to Rs 8,372.5 crore (Estimate: Rs 5,855 crore).
• Gross NPAs at 1.36 percent of loan portfolio versus 1.33 percent. QoQ
• Non-performing loans of the individual portfolio stood at 0.75 percent versus 0.73 percent QoQ.
• NPAs in non-individual portfolio stood at 2.91 percent versus 2.87 percent QoQ.

InterGlobe Aviation (Q3, YoY)

• Revenue rose 25.5 percent to Rs 9,932 crore versus Rs 7,916 crore (Estimate: Rs 9,720 crore)
• Net profit rose 2.6 times to Rs 490 crore versus Rs 191 crore (Estimate: Rs 348 crore)
• Ebitdar rose 41.3 percent to Rs 1804 crore versus Rs 1277 crore (Estimate: Rs 1,700 crore)
• Ebitdar Margin at 18.2 percent versus 16.1 percent (Estimate: 17.5 percent)

Navin Fluorine International (Q3, YoY)

• Revenue rose 11.4 percent to Rs 260.5 crore
• Net profit rose 17.6 percent to Rs 45.4 crore
• Ebitda rose 26.2 percent to Rs 65.5 crore
• Margin stood at 25.1 percent versus 22.2 percent

Torrent Pharmaceuticals (Q3, YoY)

• Revenue fell 4.1 percent to Rs 1966 crore.
• Net profit rose 2 percent to Rs 251 crore.
• Ebitda fell 3.7 percent to Rs 540 crore versus Rs 561 crore.
• Margin stood at 27.5 percent versus 27.4 percent

JK Paper (Q3, YoY)

• Revenue fell 5.6 percent to Rs 820.7 crore.
• Net profit rose 15.9 percent to Rs 131.9 crore.
• Ebitda fell 6.1 percent to Rs 230.7 crore.
• Margin stood at 28.1 percent versus 28.3 percent.

United Spirits (Q3, YoY)

• Revenue rose 3 percent to Rs 2,587.6 crore.
• Net profit rose 15.1 percent to Rs 235.3 crore.
• Ebitda rose 19.2 percent to Rs 425.7 crore.
• Margin stood at 16.5 percent versus 14.2 percent.

V2 Retail (Q3, YoY)

• Revenue fell 9.2 percent to Rs 219 crore.
• Net profit fell 11.9 percent to Rs 20.8 crore.
• Ebitda rose 10.1 percent to Rs 33.7 crore.
• Margin stood at 15.4 percent versus 12.7 percent.

IIFL Finance (Q3, YoY)

• Net Interest Income rose 5.5 percent at Rs 515.5 crore.
• Net profit rose 32.2 percent at Rs 153.4 crore.
• Loan AUM in NBFC Business rose 11 percent at Rs 36,015 crore.

Nifty Earnings To Watch

• Maruti Suzuki

Other Earnings To Watch

• Tata Coffee
• Teamlease Services
• Manappuram Finance
• Infibeam Avenues
• Alicon Castalloy
• Acrysil
• Mahindra & Mahindra Financial Services
• Central Bank of India
• Century Textiles & Industries
• CG Power and Industrial Solutions
• Thirumalai Chemicals
• Cummins India
• Spandana Sphoorty Financial
• Honda Siel Power Products
• IFB Industries
• JK Lakshmi Cement
• Inditrade Capital
• Kewal Kiran Clothing
• KRBL
• LKP Finance
• Ludlow Jute & Specialities
• Mastek
• Munjal Showa
• Orient Electric
• Ramco Systems
• Sagar Cements
• Sequent Scientific
• Shree Digvijay Cement
• Shriram Pistons & Rings
• Subros
• Swaraj Engines
• TTK Healthcare
• Tube Investments of India
• VIP Clothing
• WABCO India
• Wonderla Holidays

Pledge Share Details

• Aurobindo Pharma promoter K. Rajeswari revoked pledge of 2 lakh shares on Jan. 23.
• Emami promoter group Diwakar Viniyog revoked pledge of 8.45 lakh shares in Jan. 21.

Trading Tweaks

• Mitsu Chem Plast ex-date for bonus issue at 2:1.
• Indian Card Clothing, Walchandnagar Industries, Kanoria Chemicals & Industries to move into ASM Framework.
• Electrosteel Castings, Everest Kanto Cylinder, Prakash Industries, Manaksia Steels, Monnet Ispat & Energy to move out of short term ASM Framework.
• Oswal Agro Mills, InfoBeans Techno to move into short term ASM Framework
• Genomic Valley Biotech price band revised to 20 percent.
• Sun Retail price band revised to 10 percent.
• Vipul, Hindustan Fluorocarbons price band revised to 5 percent.

Money Market Update

• The rupee closed at 71.44/$ versus 71.33/$ on Friday.

F&O Cues

Index Futures

• Nifty January futures closed at 12,125.7, premium of 6.7 points versus 23.4 points.
• Nifty futures open interest across series up 3 percent, adds 4.5 lakh shares in open interest.
• Nifty Bank January futures closed at 30,879, premium of 41.6 points versus 88.6 points.
• Nifty Bank futures open interest across series up 10 percent, adds 1.6 lakh shares in open interest.
• Rollovers –Nifty at 19 percent, Nifty Bank at 24 percent.

Options

• Nifty PCR at 1.10 versus 1.42 (across all series).

Nifty Monthly Expiry: Jan. 30

• Max open interest on call side at 12,200 (55.1 lakh shares).
• Max open interest on put side at 12,000 (39.9 lakh shares).
• Open interest addition seen at 12,200C (+30 lakh shares), 12,300C (+11 lakh shares).
• Open interest shedding seen at 12,200P (-10 lakh shares), 12,300P (-9.8 lakh shares).

Brokerage Radar

UBS on Auto

• Limited scope for a strong rebound but turning bullish on truck companies.
• Dedicated freight corridor unlikely to de-rail a truck recovery by 2021-22.
• Based on industry tonnage capacity model, likelihood of an industry revival by 2021-22 is high.
• Sharper economic rebound could help drive a potential 20 percent growth in 2020-21 as well.
• Ashok Leyland: Upgraded to ‘Buy’ from ‘Sell’; hiked price target to Rs 106 from Rs 72.
• Tata Motors: Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 285 from Rs 195.

On HDFC

Emkay

• Maintained ‘Buy’; hiked price target to Rs 2,846 from Rs 2,466.
• reported steady quarter with overall loan growth of 13.4 percent on a yearly basis.
• Diversified liability franchise to drive growth.
• Asset quality stable; coverage provides comfort.

Prabhudas Lilladher

• Maintained ‘Accumulate’; hiked price target to Rs 2,612 from Rs 2,568.
• One-offs, healthy net interest margins offset increased specific provisions boosting net profit.
• Healthy business traction; no meaningful slippages.
• Retain accumulate on persisting real estate structural weakness and macro headwinds.

On Dr. Reddy’s Laboratories

UBS

• Maintained ‘Neutral’; hiked price target to Rs 3,450 from Rs 3,300.
• December quarter’s revenue beat across geographies; net loss led by impairment charges.
• Cost control remains a focus area.
• Street less focused on select launches.

Investec

• Maintained ‘Sell’; hiked price target to Rs 3,040 from Rs 2,345.
• Seasonally strong quarter & all-round growth led to Ebitda beat.
• Like efforts to boost non-US markets and also its efficiency-boosting initiatives.
• Few challenges to question growth, margin sustainability and premium valuations too.

On InterGlobe Aviation

UBS

• Maintain Buy; Hike TP to Rs 2150 from Rs 2000
• Q3FY20 – Better yields and load factors drive revenue beat
• Well on track to replace neo engines; aggressive intl. expansion to continue
• Valuations attractive as margins are at cyclical low and earnings could surprise on the upside

SBICAP

• Maintained ‘Hold’; hiked price target to Rs 1,531 from Rs 1,450.
• Healthy PLF growth with an increase in yield lifts profitability.
• Efficient aircraft utilization will drive reduction in non-fuel CASK from 2020-21.
• Amidst higher costs, improvement in pricing key for near-term profitability.