Stocks To Watch: HCL Tech, Hero MotoCorp, RCom, Torrent Power

Asian stocks edged lower at the open Thursday as investors assessed commentary from the Federal Reserve that reaffirmed the U.S. economy is strong enough to warrant another interest-rate increase by the end of this year.

Equity benchmarks dipped in Japan and were little changed in Australia and South Korea, while futures signalled gains for stocks in Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent higher at 11,074 as of 7:30 a.m.

Short on time? Well, then listen to this podcast for a quick summary before the opening bell.

Offerings

• The date for Garden Reach Shipbuilders and Engineers’ initial public offering has been extended until Oct. 1 after the issue received 0.67 times subscription during the three-day bid period. The price band of the failed issue, first for a state-run company, has been revised lower to Rs 118-114 per share.
• Aavas Financiers IPO day 3. Issue subscribed 0.29 times on day 2.

Bulk Deals

• Dewan Housing Finance Corporation: BNP Paribas acquired 51.5 lakh shares (1.64 percent) at Rs 297.87 each.
• Astra Microwave Products: HDFC MF sold 34.9 lakh shares or 4.03 percent equity at Rs 85 each.

Apollo Hospitals Enterprise

• Oppehheimer sold 14 lakh shares or 1.01 percent equity at Rs 1,044.23 each.
• Wellington acquired 9.5 lakh shares or 0.68 percent equity at Rs 1,044.23 each.

AGMs To Watch

• Apollo Hospitals
• BEML
• Coffee Day Enterprises
• Gujarat Gas
• Hindustan Copper
• Jubliant Foodworks
• Motilal Oswal Financial
• MOIL
• NHPC
• PVR
• Thomas Cook India

Who’s Meeting Whom

• Great Eastern Shipping to meet SBI Capital Securities and Centrum Capital Securities on Sept. 27
• Deepak Fertilisers & Petrochemicals to meet L & T Mutual Fund, ASK Investment Managers and other investors on Sept. 27.

Insider Trades

• Chambal Fertilisers & Chemicals promoter acquired 77,500 shares from Sept. 24-25.
• UPL promoter acquired 88,700 shares on Sept. 24.
• Mannapuram Finance promoter and director VP Nandakumar acquired 15 lakh shares from Sept. 11-21.
• KEC International promoter acquired 40,000 shares from Sept. 24-25.
• Infibeam Avenues promoter group acquired 13.4 lakh shares on Sept. 21.

(As reported on Sept. 26)

F&O Cues

• Nifty September futures closed trading at 11,062 at premium of 8 points versus 20 points.
• September series-Nifty open interest down 16 percent; Bank Nifty open interest down 20.5 percent.
• Nifty Rollovers at 43 percent; Nifty Bank Rollovers at 36 percent.
• India VIX ended at 17.1, up 2.4 percent.
• Max open interest for September series at 11,200 strike value call option (open interest at 36.2 lakh, open interest up 45 percent)
• Max open interest for September series at 11,000 strike value put option (open interest at 38.7 lakh, open interest up 4 percent)

Put-Call Ratio

• Nifty PCR at 1.09 versus 1.13.
• Nifty Bank PCR at 0.74 versus 0.7 .

Stocks In F&O Ban

• In ban: Adani Power, Jet Airways, PNB
• Out of ban: DHFL

Brokerage Radar

Brokerages On Custom Duty Hike

CLSA

• Government hiked custom duty rates on AC, refrigerators, washing machines.
• Havells currently imports 70 percent Lloyds requirement but has option to shift to domestic manufacturing.
• Voltas’s JV with Arcelik would be hurt as appliances are 100 percent imported.
• Voltas Beko’s domestic factory will likely take a year to start.

Goldman Sachs

• Hike in custom duty rates are negative for Voltas and Havells India.
• Crompton Consumer best placed as none of its product categories have been impacted.
• Expect industry to collectively pass this custom duty hike.
• Price hike could be with a lag and impact margins in the near to medium term.

Brokerages On Titan

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 1,250, implying a potential upside of 54 percent from the last regular trade.
• No change in import duty on Gold to lift overhang on Titan.
• Hike in rate or jewellery pieces is marginally positive as it reduces competitiveness.
• Expect Titan to react positively.

BofAML

• Maintained ‘Buy’ with a price target of Rs 1,080, implying a potential upside of 33 percent from the last regular trade.
• Stock corrected on market concerns about the current financial year’s growth guidance and gold import regulation.
• Believe concerns are overdone and expect Titan to post robust jewelry growth in 2018-19.
• Stock is currently pricing in 10-year EBIT CAGR of just 19 percent despite strong growth prospects.

More Brokerage Calls

Credit Suisse on Consumer Staples

• Margin performance depends on revenue growth as it will provide operating leverage
• Margin Negative: increasing commodity inflation and GST tailwinds getting anniversarise from the third quarter.
• Marico best placed in entire consumer pack as Copra prices trending down.
• Britannia seems most susceptible to rising input costs.

Morgan Stanley on Havells India

• Maintained ‘Equalweight’ with a price target of Rs 712, implying a potential upside of 10 percent from the last regular trade.
• Increase in duty on consumer durables will hurt earnings in the second half.
• Likely commissioning of AC plant by Mar-19 will moderate the impact in the next financial year.
• Medium-term outlook for consumer durables is intact.

Goldman Sachs on Asian Paints

• Upgraded to ‘Buy’ from ‘Neutral’; raised price target to Rs 1,550 from Rs 1,407, implying a potential upside of 21 percent from the last regular trade.
• Capacity expansion to offer significant competitive advantages and better returns.
• Dominant position to help navigate a more turbulent input cost environment.
• Government initiatives starting to bear fruits in home building.
• Optionality from other home improvement categories.

HSBC on SpiceJet

• Maintained ‘Hold’; cut price target to Rs 70 from Rs 100, implying a potential upside of 1 percent from the last regular trade.
• Indian aviation is set for a poor second quarter – generally the weakest.
• Freight business broadly neutral for profitability since the scale has been small.
• Expect positive momentum after December as high fuel prices will start to be built into the base.