Stocks To Watch: ICICI Bank, M&M, Tata Motors, Marico

Indian stock market will trade in a special one-hour session on Sunday, where investors make ceremonial purchases to win the favour of the goddess of wealth.

The centuries-old tradition of seeking the blessings of Lakshmi has taken on an added purpose this year as investors pray the recent government steps revives growth and solidifies the recovery in equities that’s taken the $2 trillion market

Read these to get up to speed:

• The stocks analysts are betting on for Samvat 2076.
• How India’s stock market fared in Samvat 2075.
• Investors should go back to basics in Samvat 2076, say these two wealth managers.
• Lessons learnt in Samvat 2075.
• Three veteran analysts’ top stock picks for Samvat 2076.

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

• Tata Motors: The company’s board approved fund raising through debt and equity, the filing said, adding the company would make a preferential issue of equity shares and warrants worth Rs 6,500 crore to holding company Tata Sons. The group’s voting rights in Tata Motors would increase to 45.71 percent after the exercise. “The company will use proceeds from the preferential issue to promoters to retire domestic debt,” PB Balaji, group chief financial officer, told BloombergQuint.
• The boards of Reliance Industries and its wholly owned subsidiary Reliance Jio Infocomm Ltd., in separate meetings today, approved the creation of a new digital platform holding company as well as a debt restructuring. The move will make Reliance Jio a virtually net debt free company by March 31, 2020, said a statement issued by RIL, India’s most valuable company by market capitalisation.
• Mahindra & Mahindra’s subsidiary Mahindra Two Wheelers Europe will fully acquire France-based Peugeot Motorcycles for an undisclosed amount.
• Sadbhav Infra Projects: September quarter’s toll revenue was flat at Rs 267.9 crore.
• Lemon Tree Hotels: Unit’s board approved acquisition of 100 percent stake in Berggruen Hotels and issuance of convertible preference shares for an amount not exceeding Rs 421 crore to APG Strategic Real Estate Pool NV and Lemon Tree Hotels.
• Jubilant Life Sciences: Board approved demerger of the Life Science Ingredients Business and Pharma Business. Life Science ingredients business to be listed separately and amalgamation of promoter shareholding companies into the company to simplify the holding structure. Company to sale India Branded Pharma Business to wholly owned arm Jubilant Generics for Rs 128.5 crore.
• HPCL conferred Maharatna status from Indian Government.
• SBI Life Insurance: IRDA issued an advisory and imposed penalty of Rs 4 lakhs after the regulatory body conducted onsite inspection of the company.
• ICICI Bank initiated the process of transfer of its entire stake GST Network to various state governments.
• NTPC entered in a JV and Shareholders Agreement with Ceylon Electricity Board for development of 300MW LNG Power Project.
• Excel Industries has completed the acquisition of the chemical manufacturing unit of NetMatrix Crop Care in Andhra Pradesh.
• Edelweiss Financial Services: Arthur Gallaghar has acquired minority stake in the company’s arm Edelweiss Insurance Brokers.
• Ashiana Housing launched the first phase of its residential project in Jamshedpur. The project has a total saleable area of 6.72 lakh square feet. The company has also opened Jaipur project for expression of interest from customers, with booking to be launched from Dec. 5.
• Tata Power’s joint venture will acquire two power plants at Kalinagar for Rs 920 crore from Tata Steel. The JV has also signed tolling agreements with Tata Steel for supply of power from the afore-mentioned power plants.
• Engineers India has won order from HPCL regarding LPG cavern project at Mangaluru for Rs 83 crore and EPC order worth Rs 185 crore from Numaligarh Refinery.
• Wonderla Holidays to commence construction of an amusement park in Chennai soon. Project was put on hold for some time, but now the Tamil Nadu Government has agreed to give exemption to the company from levy of entertainment tax for a period of 5 years commencing from Nov. 1.
• Manpasand Beverages: ROC approved extension of holding AGM till Nov. 30.
• Astec LifeSciences received grant of patent in respect of invention of a method for production of cyclopropane derivatives for a period of 20 years from the date of filing for patent, i.e. April 2014.

Earnings Reaction To Watch

Tata Motors (Q2, YoY)

• Revenue down 9.1 percent to Rs 65,432 crore (Estimate: Rs 64,150 crore)
• Net loss at Rs 216.5 crore versus net loss at Rs 1,049 crore (Estimate: Net loss at Rs 1,635 crore)
• Ebitda up 15 percent to Rs 7046 crore (Estimate: Rs 5,015 crore)
• Margin at 10.8 percent versus 8.5 percent (Estimate: 7.8 percent)
• JLR sales up 8 percent to GBP 6.08 billion
• JLR Ebitda margin at 13.8 percent and EBIT margin at 4.8 percent

• ICICI Bank (Q2, YoY)
• Net interest income up 25.5 percent to Rs 8,057.4 crore (Estimate: Rs 7,863 crore)
• Net profit down 27.9 percent to 654.96 crore (Estimate: Rs 1380 crore)
• Provisions down 28.3 percent to Rs 2,506.8 crore (QoQ)
• GNPA at 6.37 percent versus 6.49 percent (QoQ)
• Deferred tax adjustment of Rs 3,020 crore in the quarter impacted profit.
• Adjusted net profit up 293 percent to Rs 3,575 crore

Marico (Q2, YoY)

• Revenue flat at Rs 1,829 crore versus Rs 1,837 crore (Estimate: Rs 1,947 crore)
• Net profit up 16.5 percent to Rs 247 crore (Estimate: Rs 253 crore)
• Ebitda up 15.7 percent to Rs 353 crore (Estimate: Rs 358 crore)
• Margin at 19.3 percent versus 16.6 percent (Estimate: 18.3 percent)
• Raw material as percent of sales at 50.4 percent versus 56 percent
• Volume growth at 3 percent, India volume growth at 1 percent

HDFC AMC (Q2, YoY)

• Revenue up 3.7 percent to Rs 498 crore
• Net profit up 78.8 percent to Rs 368.2 crore
• Total AUM up 25 percent to Rs 3,66,200 crore
• Company to exercise lower tax rate structure
• IND AS 116 impact impacted bottom line numbers

Tata Coffee (Q2, YoY)

• Revenue up 5.6 percent to Rs 481.3 crore
• Net profit flat at Rs 25.5 crore
• Ebitda up 35.4 percent to Rs 79.5 crore
• Margin at 16.5 percent versus 12.9 percent
• Exceptional gain of Rs 14.7 crore in the base quarter

SH Kelkar (Q2, YoY)

• Revenue down 1.8 percent to Rs 279.3 crore
• Net profit down 47.2 percent to Rs 15 crore
• Ebitda up 1.3 percent to Rs 38.2 crore
• Margin at 13.7 percent versus 13.3 percent

Jubilant Life Sciences (Q2, YoY)

• Revenue flat at Rs 2,265.9 crore
• Net profit up 18.5 percent to Rs 249.4 crore
• Ebitda up 4 percent to Rs 468.3 crore
• Margin at 20.7 percent versus 19.8 percent
• Tax writeback of Rs 50 crore in the current quarter

NRB Bearings (Q2, YoY)

• Revenue down 25.4 percent to Rs 193 crore
• Net profit down 82.2 percent to Rs 6.1 crore
• Ebitda down 62.7 percent to Rs 20.5 crore
• Margin at 10.6 percent versus 21.2 percent

Shriram City Union Finance (Q2, YoY)

• Net interest income down 8.4 percent to Rs 924.9 crore.
• Net profit up 19 percent to Rs 303.3 crore.

Reliance Capital (Q2, YoY)

• Revenue down 4.6 percent to Rs 5,063 crore
• Net loss at Rs 51 crore versus net profit at Rs 280 crore

Pfizer (Q2, YoY)

• Revenue up 9.1 percent to Rs 567.1 crore
• Net profit up 61 percent to Rs 154.3 crore
• Ebitda up 26.5 percent to Rs 164.2 crore
• Margin at 28.9 percent versus 24.9 percent

Securities and Intelligence Services (Q2, YoY)

• Revenue up 23.6 percent to Rs 2,088.55 crore
• Net profit up 73.9 percent to Rs 76.16 crore
• Ebitda up 57.8 percent to Rs 123.4 crore
• Margin at 5.9 percent versus 4.6 percent

Bulk Deals

• Indiabulls Housing Finance: California State Teachers Retirement System sold 30.81 lakh shares (0.73 percent equity) at Rs 191.03 each.
• Kirloskar Ferrous Industries: HDFC MF acquired 10 lakh shares or 0.73 percent at Rs 60.22 each

Insider Trading

• Mindtree promoter Kamran Ozair sold 1.2 lakh shares from Oct. 23-24.

(As reported on Oct. 25)

Money Market Update

• Rupee ended at 70.88 a dollar on Friday versus 71.03 per dollar on Thursday.

F&O Cues

Futures

• Nifty October futures closed at 11608.9, premium of 25 points versus 28.5 points.
• Nifty October futures down 3 percent, sheds 4.9 lakh shares in OI
• Nifty Bank October futures closed at 29,431.8, premium of 35.9 points versus 72.6 points
• Nifty Bank October futures OI down 25 percent, sheds 3.2 lakh shares in OI

Options

• Nifty PCR at 1.21 versus 1.25 (across all series)

Nifty Monthly Expiry: Oct. 31

• Max OI on call side at 12,000 (34.7 lakh shares)
• Max OI on put side at 11,000 (28.9 lakh shares)
• OI addition seen at 11,550C (+4 lakh shares), 11,500P (4 lakh shares)

Brokerage Radar

On Tata Motors

Kotak

• Maintained ‘Buy’; hiked price target to Rs 200 from Rs 190.
• Significant improvement in JLR; margins likely to sustain.
• Tough quarter for standalone business but CV business to rebound in H2FY20.
• Increase FY20-22 consolidated EBITDA estimates by 2-16 percent.

Ambit

• Maintained ‘Sell’; hiked price target to Rs 125 from Rs 90.
• Don’t read too much into JLR margins.
• Believe it will be too early to turn positive due to one quarter of strong performance.
• Yet to see any green shoots of sustainable strong profitable growth for JLR.

On SBI

Citi

• Maintained ‘Buy’; cut price target to Rs 375 from Rs 400.
• Q2FY20 – Strong NIM, lower slippages.
• Higher coverage; retail continue to drive growth.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 330.
• Profit before tax miss was driven by higher provisions.
• Asset quality - lower slippages; elevated credit costs but higher coverage.

On ICICI Bank

Ambit

• Maintained ‘Buy’ with a price target of Rs 526.
• NIM and asset quality continue to improve.
• Robust deposit growth/loan growth improving NIMs.
• Increased fee/treasury income; opex rise.

Edelweiss

• Maintained ‘Buy’ with a price target of Rs 592.
• All-round strong performance.
• Right focus to help sustain 20%-plus PPoP growth.
• Stress wanes; transitioning towards normalised credit cost.