Stocks To Watch: ICICI Bank, JSW Steel, Zee Entertainment, ITC, Kotak Mahindra Bank, Adani Power
Asian markets have opened mixed at the start of the final trading week of July. Investors are assessing the simmering U.S.-China tensions against the new outbreaks of Covid-19 emerging in Asia.
The U.S. Dollar continues to extend its slide while Gold futures have risen to a record high.
Markets in Japan re-opened lower after a two-day holiday while those in South Korea edged higher. Markets in Australia are flat.
Futures on the Dow Jones are trading higher by 60 points. The index ended 0.7% lower on Friday.
Earnings After Market Hours
- ICICI Bank: Net Interest Income up 19% while net profit rises 36.3%. Sold 3.96% stake in ICICI Lombard and 1.5% in ICICI Lombard - resulting in net gain of Rs 3,036.3 crore in the standalone results. Advances up 6.5% while deposits rise 21% from last year. Asset quality stable. Loans under moratorium down to 17.5% of total loans by June 30 from 30% in March. Management says will dilute 4% stake in ICICI Securities this year.
- Zee Entertainment: Reports net loss of Rs 766.7 crore. Ebitda loss of Rs 562.5 crore. One-time provision of Rs 343 crore on doubtful recovery of ad, subscription and other assets due to Covid-19. Exceptional loss on account of impairment of goodwill pertaining to digital publishing business at Rs 113.7 crore. Advertising revenue down 15% while subscription revenue up 31%.
- ITC: Net sales down 17.4% while net profit fell 26% from last year. Ebitda margin at 27.8% from 39.7%. FMCG and Agri business revenue see growth while Cigarette, hotels and paperboards revenue see de-growth. Macquarie says Cigarette volumes declined 40% this quarter.
- JSW Steel: Reports net loss of Rs 561 crore. Ebitda down 64% while margins declined to 11.4% from 18.7% last year. All overseas subsidiaries report a loss. Management says have seen modest increase in domestic steel prices in July and expect some more hike in August.
- Ambuja Cements: Revenue down 27% while net profit rises 10% led by tripling of other income compared to last year. Improvement in margins due to lower power, fuel and freight costs and Master Supply Agreement with ACC.
- Coromandel International: Revenue up 50.8% while net profit quadruples to Rs 250.6 crore from last year. Both segments see revenue growth between 49-55%.
- GHCL: Revenue down 50% while net profit declines 84% compared to last year. Inorganic Chemicals revenue down 41% while Home Textiles revenue down 68%. Covid-19 will result in shifting of supply chain from China to India and that will benefit both spinning and home textile. Expect sequential improvement in performance starting Q2FY21.
- Aarti Drugs: Revenue up 34% while net profit more than triples to Rs 85.45 crore. Ebitda up 2.5 times while margins rise to 24.6% from 13.5%
- MCX: Revenue down 14% while net profit up 29% compared to last year. Ebitda margin at 36.4% from 38.9%. Average daily turnover of commodity futures traded on the exchange fell 16% to Rs 23,129 crore.
- Persistent Systems: U.S. Dollar revenue up 3.1% while net profit up 7% as compared to the previous quarter. All segments see a growth in revenue. Share of revenue from BFSI customers up to 31.8% from 27.7% in Q1FY20.
- Supreme Industries: Revenue down 27% while net profit down 57% as compared to last year. Volume and product value de-growth of 19% and 27% respectively during the quarter. Turnover of Value Added Products at Rs 378 crore from Rs 457 crore last year.
Stocks To Watch
- HDFC: HDFC Ergo General Insurance’s Gross written premium down 12% to Rs 1,612.9 crore while net premium up 5% to Rs 1,023.7 crore. Net income grew 84% to Rs 138.4 crore, on a year-on-year basis.
- Adani Power: Shareholders approve proposal to delist the company from the exchanges. For the public institutional shareholders 83.71% of equity shares were voted on, out of which 95.88% voted in favour for delisting the company, while for public non-institutional shareholders 56.27% of shares voted with 98.50% votes in favour of the delisting resolution.
- Escorts: Rakesh Jhunjhunwala reduced stake from to 6.82% from 6.97%. Jhunjhunwala sold 2 lakh shares on July 24.
- Karur Vyasa Bank: Rakesh Jhunjhunwala increases stake to 4.5% from 4.2% as per its shareholding pattern for June quarter.
- Cipla: Gets regulatory approval from the Drug Controller General of India (DGCI) for the launch of Favipiravir in the country under the brand name Ciplenza. The company will commercially launch the drug in the first week of August at Rs 68 per tablet. The drug is an off-patent, oral anti-viral drug that has been shown to hasten clinical recovery in Covid-19 patients with mild to moderate symptoms.
- Coffee Day Enterprises: It has been found in an investigation that its late founder VG Siddhartha routed Rs 2,693 crore out of the company through transactions first revealed in a note found after his suicide last year. VG Siddhartha caused subsidiaries of Coffee Day to pay advances to a firm controlled by his family so that he could buy-back shares held by private equity investors, repay loans and keep up with interest payments on other borrowings, the company said, disclosing the results of a nearly year long investigation. The company will seek to recover the money from Siddhartha’s closely held firm, Mysore Amalgamated Coffee Estates Ltd., as well as Rs 842 crore in outstanding obligations disclosed previously, according to the filing.
- Telcos: As per TRAI's update for the month of April, Reliance Jio added 1.6 million subscribers while Vodafone Idea and Bharti Airtel lost 4.5 million and 5.3 million mobile subscribers respectively.
- Covid-19 Impact On Cadila Healthcare: Branded formulation business is somewhat affected due to the lockdown situation. Remain cautiously optimistic about the next two quarters of FY21. Finding certain near-term and mid-term opportunities including treatment medicines and vaccines.
- Kaveri Seeds: Pabrai Investment Funds reduced stake to 7.24% from 9.48% in the company on July 21.
- Aviation Stocks: Government extends domestic flight restrictions until November 24.
- JSW Steel: Board approved raising up to Rs 10,000 crore via NCDs in the domestic market.
- Bharat Forge: To consider raising funds either through term loan, non-convertible debentures etc. on July 29.
- Goa Carbon: Bilaspur unit has been temporarily shut down for maintenance work from July 24.
- BHEL: CRISIL has re-affirmed the rating on the company's long-term bank facilities at CRISIL AA. The outlook has been revised to negative from stable. Rating on the short-term facilities have been re-affirmed at CRISIL A1+. The revision in outlook reflects moderation of financial risk profile owing to weaker than expected operating performance, elongation in working capital cycle and the continued depletion in net cash levels of the company in FY20.
- InterGlobe Aviation: To consider raising funds on July 30.
- GATI: Allcargo CMD Shashi Kiran Shetty has been appointed as the company's chairman after Kishan Lal Chugh resigned as Chairman and Independent Director citing health issues. Allcargo had acquired 46.8% stake in GATI for Rs 416 crore in April.
- Khadim: ICRA has downgraded long-term rating of bank borrowings to ICRA BBB from ICRA BBB+. The outlook has been retained as negative due to Covid-19 impact and working capital intensity of operations stood high primarily due to an accumulation of the GST receivables and high inventory levels.
- Yes Bank: Partha Pratim Sengupta, resigned as a Non-Executive Director, nominated by State Bank of India from July 24, due to his appointment as MD and CEO of Indian Overseas Bank.
- Religare Enterprises: Proposal for re-classification of promoters and promoters group into public shareholders gets support from shareholders. For the public institutional shareholders 50.42% of equity shares were voted on, out of which 100% voted in favour for re-classification of promoters, while for public non-institutional shareholders it was 45.24% of shares voted with 99.24% votes in favour of the aforementioned resolution. On July 23, company received a communication from Counsel of Shivinder Mohan Singh (One of the Promoters) stating that Shivinder Mohan Singh has withdrawn the request for re-classification from 'Promoters/Promoters Group' to 'Public Category'. Company is committed to disassociate itself from promoters of the company at the earliest to instill the confidence in various stakeholders of Religare group and will also submit the application for re-classification of promoters with the stock exchanges shortly, as per the exchange filing.
- Reliance Home Finance: Defaulted in payment of principle and interest worth Rs 50.38 crore to Bank of India which was due on June 30 and Rs 80.54 crore to Dena Bank (now merged with Bank of Baroda) which was due on June 30.
- Zee Entertainment Enterprises: Entered into a share purchase agreement with Mantena Aviation LLP and its wholly-owned arm Fly-By-Wire International for transfer of equity shares of the subsidiary in two tranches for Rs 27 crore.
- Spencer’s Retail: Sets rights issue price at Rs 75 per share. Rights entitlement ratio at 2 shares for every 15 shares held. Issue opens from August 4 till August 18, with record date set at July 29. Issue price at discount of 13% to Friday’s closing. On February 11, Board approved raising Rs 80 crore via rights issue.
- Mindspace Business Parks REIT: Raised Rs 1,518.75 crore from 54 anchor investors at Rs 275 per share. Issue opens on July 27. Key anchor investors in this allotment were Government of Singapore, Nomura, Fidelity Goup and key domestic investors included HDFC Life Insurance and SBI Life Insurance.
- Infosys: Co-founder SD Shibulal announced that from July 22-24 his family members have sold a portion of (representing approximately 0.20% of the paid-up equity share capital) their holding in the company on the stock exchanges. Proceeds from the partial stake monetization will be utilized for a combination of philanthropic and investment activities, per the exchange filing. A total of 85 lakh shares were sold over the last 3 days, as reported in the exchanges. As per the latest shareholding pattern as on June 30. The Shibulal family cumulatively held 1.88% stake in the company.
- Nifty Earnings Today: Bharti Infratel, Kotak Mahindra Bank, Tech Mahindra
- Non-Nifty Earnings Today: V-Guard, Marico, Escorts, Bharat Electronics, Havells, India Cements, Orient Electric, Tejas Networks, United Spirits
Pledged Share Details
- Emami: Promoters revoked pledge of 43 lakh shares on July 21
- Jindal Steel & Power: Promoter OPJ Trading revoked pledge of 35 lakh shares on July 22
- JSW Energy: Promoter Danta Enterprises revoked pledge of 39 lakh shares on July 23
- Laurus Labs: Promoter Dr. Satyanarayana Chava released pledge of 5 lakh shares on July 22
- Dish TV: Promoter Direct Media Distribution Ventures invoked pledge of 13.2 crore shares on July 24.
- Zee Entertainment Enterprises: Promoter Cyquator Media Services invoked pledge of 61.79 lakh shares between July 15-17
- Zee Learn: Promoter Asian Satellite Broadcast invoked pledge of 1.7 crore shares on July 15
- Zee Media Corporation: Promoter ARM Infra & Utilities invoked pledge of 2.26 crore shares on July 15
(As Reported On July 24)
- Parag Milk Foods: Goldman Sachs sold 11.51 lakh shares (1.37%) at Rs 85.1 per share
- Security & Intelligence Services: Theano sold 12.07 lakh shares (0.82%) at Rs 346.1 per share. Alert: Theano is an investment vehicle of private equity group - CX Partners.
- AGM Date: Indian Hotels, Newgen Software Tech, GSK Pharma, Zensar Tech, Bayer Cropscience, VIP Industries, Punjab National Bank, Union Bank of India, NRB Industrial Bearings
- Fund Raising: Alembic Pharma
- Price Band Revised From 10% To 5%: Pricol
- Price Band Revised From 10% To 20%: Neuland Laboratories
- Price Band Revised From 5% To 10%: Inspirisys Solutions
- Move Out Of ASM Framework: Sterling and Wilson Solar, Satin Creditcare Network, SREI Infrastructure Finance, Take Solutions, INOX Leisure, Shoppers Stop
- Move Out Of Short-Term ASM Framework: Silly Monks Entertainment, Prakash Pipes, Hi-Tech Pipes
- Move Into Short-Term ASM Framework: Heritage Foods, Indo Count Industries
- Nifty July futures end at 11,170; discount widens to 14 points from 8 points
- Nifty July futures shed 6% and 6.2 lakh shares in Open Interest
- Nifty Bank July futures end at 22,611; Premium of 11 points from discount of 78 points
- Nifty Bank July futures shed 9% and 1.4 lakh shares in Open Interest
- Stocks In F&O Ban: Adani Enterprises, BHEL, Glenmark, GMR Infra, Indiabulls Housing Finance, Vodafone Idea, Nalco, RBL Bank, SAIL, Sun TV
Nifty: July 30 Expiry
- Maximum Open Interest on Call side at 11,500 strike
- Maximum Open Interest on Put side at 11,000 strike
- Active Options: 11,000 Put (+5.6 lakh shares) and 11,200 Call (+6.9 lakh shares)