Stocks To Watch: HDFC, JSW Steel, UPL, Avenue Supermarts, Aarti Industries, IDFC First Bank

Asian markets are rising for the second straight day, shrugging off rising tensions between U.S. and China. Gains are led by markets in Japan as the economy reopens after the Covid-19 lockdown. Markets in Australia and South Korea are advancing as well, though gains there are modest.

Treasuries and the U.S. Dollar are flat while oil prices advance towards the $34 per barrel mark.

Here are the stocks to watch out for in today’s session:

• Bharti Airtel: Bharti Telecom is offering up to 15 crore shares in the company at a floor price of Rs 558 per share, according to the term sheet accessed by Bloomberg. Floor price is at a 5.9% discount to Friday's closing price. JPMorgan India is the sole placing agent for the same.
• ITC: Enters into a share purchase agreement to acquire Sunrise Foods for an undisclosed sum.
• JSW Steel: The company's board has approved raising long-term funds through NCDs with warrants for an amount not exceeding Rs 7,000 crore. It has also approved raising Rs 7,000 crore through a Qualified Institutional Placement. It will also raise long-term funds worth $1 billion in one or more tranches in the international markets through Foreign Currency Convertible Bonds, ADRs, GDRs or warrants or other convertible instruments.
• Eicher Motors: To consider a stock split and fourth quarter results on June 12.
• JSW Steel & Tata Steel: Fitch Ratings has downgraded the Issuer Default Ratings of both the companies to BB- from BB after a portfolio review. The review follows an expectation of decline in steel demand in India for FY21. The agency assumes standalone sales volume for both companies to decline by 6%. It also expects lower Ebitda margins in FY21 due to drop in volumes and weaker steel prices.
• IDFC First Bank: Bloomberg News reports that the top management of the lender will take a voluntary 10% paycut. MD & CEO V Vaidyanathan will take a 30% paycut.
• UPL: The company stated in a conference call that it is in talks with the government on the proposal to ban 27 generic products. It stated that the draft order will not impact exports and 25 out of these 27 products banned are widely accepted. The company believes that most of the products banned will be reversed.
• Kansai Nerolac’s Covid-19 Update: No material production was done in the month of April. The company has started limited operations at its manufacturing units and depots. Dispatches to the company's depots have commenced. The release stated that the supply chain has enough inventory and is fully prepared to meet the demand of the customers in all markets as and when demand arises. It also does not foresee any immediate concern towards completion of its capital projects.
• Jagran Prakashan’s Covid-19 Update: The company stated that it has been operating during the lockdown, adding that it does not have any significant short-term debt which requires to be repaid in FY21. It also said that advertisement revenue has declined by 80-85% and outdoor and event activation business revenue is negligible.
• Acrysil Covid-19 Update: Company has partially started manufacturing operations to meet the backlog of export orders. Plants are currently operating at a production capacity of around 70%. The company expects the business to start improving from quarter ending September 2021.
• Birla Corporation: Manufacturing operations of its jute mills in West Bengal has been disrupted on account of Cyclone AMPHAN. The release stated that it may take up to 3 months to restore normal production levels. Jute segment contributes around 4.5% in terms of revenue for the Kolkata-based company. The board of the company has also approved raising Rs 300 crore via NCDs.
• HFCL: Bags order worth Rs 175 crore from an integrator of data networks for supply of Optic Fibre Cable under the Bharat Net Phase-II program.
• Deepak Fertilisers: To raise up to Rs 180 crore via rights issue. Promoters will also participate in the issue. The company has also forayed into the alcohol-based hand sanitisers space.
• InterGlobe Aviation: To fly more than 200 flights daily until May 31. The airline said that all flights are in accordance with the Covid-19 guidelines issued by various state governments.
• Bosch: To observe 'No-Production Days' at its Gangaikondan plant till May 31.
• Gateway Distriparks: India Ratings has placed the company's long-term issuer rating on 'Rating Watch Negative' with a stable outlook.
• Snowman Logistics: India Ratings revises the company's long-term issuer rating to 'Rating Watch Evolving' from 'Rating Watch Positive.'
• Solar Industries: Suspends operations of its detonator division at its Nagpur facility.
• IFGL Refractories: To begin construction of it's new facility in Andhra Pradesh. The first phase of this project is slated to be completed by the first half of FY21.
• NCC and Just Dial: To be excluded from futures and options segment from July 31.
• IDFC First Bank: Board approved raising Rs 5,000 crore via NCDs
• Great Eastern Shipping: Board to consider raising Rs 1,000 crore via NCDs on a private placement basis on May 30.
• Raymond: To consider raising Rs 200 crore via NCDs on May 27
• Yes Bank: Gets shareholder approval to raise capital through issue of equity shares or other convertible securities
• Trent: The company stated that as a result of the lockdown induced by Covid-19, the revenue from retailing of non-food merchandise has been entirely and adversely impacted. As on date, 70 stores have commenced their operations.
• Aarti Industries: Approved early redemption of NCDs worth Rs 40 crore.
• Manappuram Finance: To meet Morgan Stanley on May 26.
• Indian Energy Exchange: To meet Ward Ferry and New Mark Capital between May 26-28
• Eveready Industries: To resume operations in its battery manufacturing facility in Noida.
• Companies That Resumed Operations: Bharat Forge, CCL Products, Manali Petrochemicals, IFB Industries, Man Infraconstructions, Tide Water Oil, Garden Silk Mills.
• Non-Nifty Earnings Today: Blue Dart, Coromandel International, Deepak Nitrite, Firstsource Solutions, Max Financial Services, Praj Industries, SH Kelkar, Torrent Pharma, VIP Industries, Wonderla Holidays.

Earnings Reported After Market Hours

• HDFC: Net Interest Income up 13% to Rs 3,540 crore while net profit fell 22% to Rs 2,232.5 crore. Gross NPA at 1.99% from 1.36% in the previous quarter.
• JSW Steel: Revenue down 20% while net profit down 84.8% due to exceptional items worth Rs 805 crore. Domestic Ebitda per tonne down 14.9% while sales volumes fell 14% to 3.7 MT.
• UPL: Revenue up 31% while ebitda margin expands to 19.5% from 16.5%. India revenue up 36% while North America revenue up 45%.
• Avenue Supermarts: Revenue up 23.1% while net profit rises 41% from last year aided by higher other income and lower taxes. The company expects declines in its Ebitda due to lower sales, lower gross margins and higher cost of operations.
• Bata India: Revenue down 9% while net profit down 56% to Rs 38 crore. Ebitda margin widens to 22.5% from 14%
• Just Dial: Revenue up 1% while Ebitda margin expands to 31.5% from 25%. Net profit growth of 21% year-on-year to Rs 76 crore.
• IDFC First Bank: Net Interest Income up 40.5% to Rs 1,563.5 crore. Net profit of Rs 71.5 crore from net loss of Rs 218 crore. Gross NPA at 2.6% from 2.83% in Q3FY20 while net NPA at 0.94% from 1.23% sequentially.
• DCB Bank: Net Interest Income up 10.2% to Rs 331.7 crore. Net profit down 28.6% to Rs 68.8 crore. Provisions double sequentially while asset quality deteriorates.
• GMM Pfaudler: Revenue down 5.3% while net profit falls 12.8% from the previous year. The company has approved an expansion plan worth Rs 50 crore. It also expects revenue and profitability to be impacted due to 20 days of lost production in April.
• JSPL: Revenue down 13% to Rs 8,811 crore. Net profit of Rs 406 crore from net loss of Rs 2,146 crore. The company had an exceptional loss of Rs 1,734 crore in the base quarter.
• Astral Poly: Revenue down 19% while net profit declines 18%. Ebitda margin widens to 18% from 15.2%.
• Aarti Industries: Revenue down 6% while net profit falls 12% to Rs 110 crore. Ebitda margin at 20.3% from 22%.
• Thyrocare Technologies: Net loss of Rs 1.6 crore from net profit of Rs 16.33 crore. Exceptional loss of Rs 6.5 crore this quarter. Ebitda margin at 30.5% from 32.6%.

Trading Tweaks

• Moves Into ASM Framework: Indiabulls Ventures
• Move Out Of ASM Framework: Somany Home Innovation, GIC Housing Finance, Paisalo Digital, Intellect Design Arena, SpiceJet, Avadh Sugar & Energy, MPS, Ramco Systems
• Move Out Of Short-Term ASM Framework: Adhunik Industries, Eros International Media

Insider Trading

• Aarti Drugs: Promoters sold 50,000 shares on May 18
• Cyient: Promoter Bodanapu Reddy acquired 1 lakh shares between May 18-22

(As Reported On May 22)

Money Market Update

• The currency weakened on Friday to end at 75.97 against the U.S. Dollar as compared to Thursday's close of 75.62.
• The rupee posted its third straight weekly decline
• On a weekly basis, the rupee was the second worst performing currency among its Emerging Market peers.

F&O Cues

• Nifty May futures end at 9,028; discount narrows to 13 points from 30 points
• Nifty May futures shed 2% and 1.5 lakh shares in Open Interest
• Nifty Bank May futures end at 17,216; discount narrows to 60 points from 90 points
• Nifty Bank May futures add 27% and 3.8 lakh shares in Open Interest
• Nifty Put-Call Ratio at 1.15 from 1.12 across all series

Nifty: May 28 Expiry

• Maximum Open Interest on Call side at 10,000 strike (30.6 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (32.8 lakh shares)
• Active Options: 8,800 Put (+6 lakh shares) and 9,000 Call (+4.5 lakh shares)

Active Stock Futures & Fund Flows