Stocks To Watch: Escorts, HEG, Syndicate Bank, United Breweries

U.S. stock futures declined with equities in Asia amid a potential escalation of tensions between Washington and Beijing, and after signs China’s economy remains under pressure.

Futures on the S&P 500 Index dropped 0.8 percent and shares fell in Australia, Japan and South Korea, building on a weak Friday session when U.S. equities sank more than 2 percent. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1.06 percent to 10,625 as of 6:55 a.m.

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Here Are The Stocks To Watch Out For In Today’s Trade

• United Breweries’ CFO and Director Steven Bosch resigned from the company with effect from Jan. 01 2019.
• Escorts transferred existing RT Crane business to its JV company with Japan-based Tadano for Rs 35 crore, on a slump sale basis.
• Eid Parry operational details for November: Sugar sold at 0.31 LMT and alcohol sold at 48LL.
• HEG said in its investor presentation that there could be a window of opprtunity to export graphite electrodes to China till 2022 as new electrode capacities in China would take longer time to come up than steel capacity.
• Syndicate Bank reduced MCLR by five basis points across the six-month and one-year tenure instruments with effect from Dec. 10. Six-month MCLR at 8.70 percent and one-year MCLR at 8.75 percent.

Media Reports

• Suzlon said to be in talks to offload up to 49 percent in service unit. (The Economic Times)

Earnings Reactions To Watch

IFCI (Q2, YoY)

• Net interest income at Rs -15.9 crore versus Rs 223.5 crore.
• Net loss at Rs 16.6 crore versus net loss of Rs 293.7 crore.
• Other Income of Rs 296.8 crore in the current quarter.

Data To Watch

• 10:30 am: India car sales data from month of November

Offerings

• RattanIndia Infrastructure offer-for-sale for retail investors

Who’s Meeting Whom

• Shopper’s Stop to meet First State Stewart Asia, Axis Capital and other investors from Dec. 11-12.
• PPAP Automotive to meet Ambit Capital on Dec. 10.
• IIFL Holdings to meet Southern East Management on Dec. 10.
• Globus Spirits to meet LIC Mutual Fund, ICICI Pru AMC and other investors on Dec. 10.
• Shriram City Union Finance to meet TenCore Partners, Dolat Capital Makets and other investors from Dec. 10-13.

Insider Trades

• Electrosteel Castings promoter acquired 80k shares from Nov. 30 to Dec. 05.
• JM Financial promoter and director Vishal Kampani acquired 50,000 shares on Dec. 05.
• Axis Bank promoter LIC sold 30.4 lakh shares from Dec. 04-06.
• Lemon Tree Hotels promoter group Sparrow Buildwell acquired 31,200 shares from Dec. 05-06.

Money Market Update

• Rupee ended at 70.81 a dollar on Friday versus 70.90 a dollar on Thursday.

F&O Cues

• Nifty December futures closed trading at 10735, premium of 41 points
• Max OI for December series at 11,000 Call, OI at 37.1 lakh shares.
• Max OI for December series at 10,500 Put, OI at 35.4 lakh shares.

Put-Call Ratio

• Nifty PCR at 1.47 from 1.44.
• Nifty Bank PCR at 1.26 from 0.98.

Brokerage Radar

Nomura on Exit Polls

• Exit polls give BJP cold sweat; Set to lose Rajasthan; MP and Chhattisgarh remain nail biters.
• Generally state election outcomes have been known to be a poor leading indicator of general elections.
• BJP’s drubbing to mean that farm unrest is real; increase in MSP haven’t yielded political dividends.

Deutsche Bank Research on REC-PFC Deal

• Limited benefits for combined entity; no material change for REC.
• See negative impact on capital adequacy, credit rating and funding cost for PFC.
• Buyout at premium will be negative for PFC shareholders.

Deutsche Bank Research on Consumer Durables

• Next year's outlook positively guided; September quarter was impacted by high-base, excess inventory and weak season.
• Positive outlook on domestic projects business with 2-5 year upcycle.
• Election to have limited one-quarter impact on project business.
• Voltbek raised capex to Rs 1000 crore to fund expansion in Tier II/III cities.

Morgan Stanley on Cement

• Industry hiked prices in November, but channel checks show reversals in price trends in December
• Prices flattish QoQ in North, Central and East and a marginal drop in West and South in September quarter.
• Cost decline should support margins sequentially and on a yearly basis.

HSBC on Suzlon Energy

• Maintained ‘Buy’; cut price target to Rs 9.5 from Rs 14.
• Recovery post transition pain has been slower and shallower than expected.
• Slower execution issues are being addressed; strong order book lends two years growth visibility.
• Cut price target to factor in lower industry volumes.

Axis Capital on RBL Bank

• Maintained ‘Buy’; hiked price target to Rs 660 from Rs 575.
• Reiterate long-term outlook and belief in execution capability of the bank.
• Bank is significantly investing in future and has capability to leapfrog into league of big banks.
• Expect RBL to scale up materially on more share of high-yielding business, granular and diversified loan book, pan-India presence and room for operating leverage.