Stocks To Watch: Biocon, IDBI Bank, IndiGo, Pidilite, RCom, UltraTech, Yes Bank

Asian stocks drifted on Thursday as investors awaited fresh developments on U.S.-China trade talks and signals on how deep the global economic slowdown will be. In one of the few significant moves, Australia’s dollar rose after its unemployment rate dropped.

Shares in Tokyo, Seoul and Sydney edged up, while China and Hong Kong opened to modest gains. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.16 percent to 10,858 as of 7:40 a.m.

Short on time? well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.

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

• Moody’s upgraded IDBI Bank’s ratings across various instruments in view of significant capital infusion by LIC. The long-term local and foreign currency ratings has been upgraded by three notches to ‘Ba2’ from ‘B1’.
• Infosys partnered with HPE GreenLake for consumption- based IT models for smart infra investments.
• Bharat Financial Inclusion completed its sixth direct assignment worth Rs 832.3 crore to a public sector bank in financial year 2019.
• MEP Infra’s arm entered into a concession contract with NHAI for HAM project in Maharashtra for Rs 567.8 crore. The appointed date for the project stands at Jan. 21.
• Dena Bank clarified on the news that it is selling prime properties worth Rs 540 crore and the bank initiated the process of the sale of these non-core assets after taking necessary approvals.
• Lakshmi Vilas Bank reappointed Parthasarathi Mukherjee as its Chief Executive Officer and Managing Director of the bank for two years with effect from Jan. 25.
• Apollo Microsytems bags supplied order of Rs 13 crore from Bharat Dynamics.
• Persistent Systems to consider share-buyback proposal on Jan. 27.

Offerings

• Xelpmoc Design & Tech get 45 percent demand for shares offered on first day sale, offer close Jan. 25.

Earnings Reaction To Watch

InterGlobe Aviation (Q3, YoY)

• Revenue up 28 percent to Rs 7,916 crore.
• Net Profit down 75 percent to Rs 191 crore.
• Ebitdar down 19 percent to Rs 1,595 crore.
• Ebitdar Margin at 20.15 percent versus 32 percent.

Bharti Infratel (Q3, QoQ)

• Revenue down 0.2 percent at Rs 3,640 crore.
• Net profit up 8 percent at Rs 648 crore.
• Ebitda up 0.5 percent at Rs 1513 crore.
• Margin at 41.2 percent versus 41.6 percent.

Pidilite Industries (Q3, YoY)

• Revenue up 19.8 percent at Rs 1,848.3 crore.
• Net profit down 8.5 percent at Rs 219.5 crore.
• Ebitda down 9 percent at Rs 336.7 crore.
• Margin at 18.2 percent versus 24 percent.
• Volume growth at 11 percent (standalone)

United Spirits (Q3, YoY)

• Revenue up 10.5 percent at Rs 2,501.2 crore.
• Net profit up 42.8 percent at Rs 192.4 crore.
• Ebitda up 27.8 percent at Rs 348.1 crore.
• Margin at 13.9 percent versus 12 percent.
• Other Income at Rs 61.4 crore versus Rs 23.6 crore.
• Exceptional loss of Rs 20 crore versus exceptional loss of 12.6 crore.

Hathway Cable & Datacom (Q3, YoY)

• Revenue down 2.7 percent at Rs 134.9 crore.
• Net profit down 73.2 percent at Rs 6.4 crore.
• Ebitda down 14.5 percent at Rs 51.4 crore.
• Margin at 38.1 percent versus 43.3 percent.

Navin Fluorine (Q3, YoY)

• Revenue up 2 percent at Rs 226 crore.
• Net profit down 18.7 percent at Rs 38.8 crore.
• Ebitda flat at Rs 52.4 crore.
• Margin at 23.2 percent versus 23.7 percent.
• Other income of Rs 23 crore in base quarter.

Ujjivan Financial Services (Q3, YoY)

• Total interest income up 33.4 percent at Rs 512.6 crore.
• Net interest income up 30.2 percent at Rs 252 crore.
• Net profit up 54 percent at Rs 45.2 crore.
• Net interest margin flat at 11.8 percent.
• Loan book up 31.8 percent at Rs 9,349 crore.

Thirumalai Chemicals (Q3, YoY)

• Revenue down 6.1 percent at Rs 323.6 crore.
• Net profit down 77.9 percent at Rs 11.4 crore.
• Ebitda down 66.8 percent at Rs 26.4 crore.
• Margin at 8.2 percent versus 23.1 percent

JM Financial (Q3, YoY)

• Net Interest Income up 5.6 percent at Rs 519.9 crore.
• Net profit down 12.6 percent at Rs 137.5 crore.
• Other income of Rs 16.4 crore.
• AUM Of mutual fund schemes at Rs 11,364 crore.

Reliance Communications (Q3, QoQ)

• Revenue up 9.5 percent at Rs 1,070 crore.
• Net loss at Rs 238 crore versus net loss at Rs 130 crore.
• Ebitda up 43.1 percent at Rs 146 crore.
• Margin at 13.6 percent versus 10.4 percent.

Sintex Plastics Technology (Q3, YoY)

• Revenue down 16.7 percent at Rs 1,110.4 crore.
• Net profit down 50 percent at Rs 25.9 crore.
• Ebitda down 17.6 percent at Rs 152.3 crore.
• Margin at 13.7 percent versus 13.9 percent.

Everest Industries (Q3, YoY)

• Revenue up 5.5 percent at Rs 307.3 crore.
• Net profit up 22.3 percent at Rs 11.5 crore.
• Ebitda up 13.2 percent at Rs 21.4 crore.
• Margin at 7 percent versus 6.5 percent.

Bulk Deals

• Hathway Cable & Datacom: Norges Bank sold 2.27 crore shares or 2.64 percent equity at Rs 31.65 per share.

Ratnamani Metal Tubes

• Kotak Mahindra MF acquired 6.89 lakh shares or 1.48 percent equity at Rs 780 per share.
• Nalanda India Fund sold 7.5 lakh shares or 1.61 percent equity at Rs 781.65 each.

Insider Trading

• KPIT Technologies ex-date for scheme of amalgamation (spin off).
• Seamec, Vivimed Labs and GTL Infra to move into short term ASM Framework.
• CESC Ventures, Spencer’s Retail ex-date for share listing.

(As reported on Jan. 23)

Trading Tweaks

• KPIT Technologies ex-date for scheme of amalgamation (spin off).
• Seamec, Vivimed Labs and GTL Infra to move into short term ASM Framework.
• CESC Ventures, Spencer’s Retail to list on Jan. 25.

Money Market Update

• The rupee on Wednesday snapped its three-day losing streak and closed at 71.33/$. It closed at 71.44/$ on Tuesday.

F&O Cues

• Nifty January futures closed trading at 10855, premium of 23 points.
• Max OI for January series at 11,000 Call, OI at 43.1 lakh shares.
• Max OI for January series at 10,800 Put, OI at 32.5 lakh shares.

Stocks In F&O Ban

• In ban: Jain Irrigation, Jet Airways, Reliance Capital
• New in ban: Jain Irrigation
• Out of ban: Adani Power

Put-Call Ratio

• Nifty PCR at 1.43 versus 1.53
• Nifty Bank PCR at 0.86 versus 1.13

Brokerage Radar

On Bharti Infratel

CLSA

• Maintained ‘Outperform’ with a price target of Rs 315.
• December quarter results were ahead of estimates; cost controls support margins.
• Rise in rent per operator driving revenue surprise.
• Expect tenancy growth to return.

UBS

• Maintained ‘Buy’ with a price target of Rs 355.
• December quarter beat estimates aided by better rental realisation and exit charge
• Ebitda growth driven both by higher revenues and lower opex.
• Shares are attractively valued.

Ambit

• Maintained ‘Buy’ with a price target of Rs 352.
• Infratel’s results were ahead of our and consensus’ muted expectations.
• Discussion on exit penalties to dominate in the conference call.
• Change of ownership and increased rollouts by incumbents is key catalyst.

On ITC

CLSA

• Maintained ‘Buy’ with a price target of Rs 400.
• Operating performance broadly in line.
• Strong cigarette volume growth; estimate cigarette volume growth at 8 percent.
• Strong FMCG and paperboard but Agri remains a drag.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 376.
• Cigarette volumes growth of 8 percent for December quarter; strong volume recovery is cornerstone of turnaround.
• Believe pressure on cigarette margins will subside going forward.
• Strong performance in rest of the businesses.

On United Spirits

Macquarie

• Maintained ‘Underperform’ with a price target of Rs 511
• Operating income missed due to lower gross margin; consensus downgrades likely.
• Believe pressure on gross margin is due to higher input cost inflation and lower pricing.
• Expect A&P spend to remain high on higher competitive intensity.

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 680.
• December quarter’s first cut: Unexciting operational performance.
• Gross margin moderation on a sequential basis was a negative.
• Margins declined due to higher cost of goods, price reductions and higher trade spend.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 700.
• December quarter review: Strong revenues, but margins disappoint.
• Continue strong volume growth momentum in the 'Prestige and above' segment.
• Flat gross margins, however, disappointed in December quarter.

On InterGlobe Aviation

JPMorgan

• Maintained ‘Underweight’ with a price target of Rs 940.
• Yield improved, but load factor was the offsetting factor in RASK.
• Positive spread, however, below long cycle average levels.
• Management commentary constructive on outlook as well.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 1,311.
• Indigo's profits missed estimate on lower volumes.
• Inflection in the yield trend is a larger positive.
• Risk/reward is attractive at current levels.

SBICAP

• Maintained ‘Buy’ with a price target of Rs 1,234.
• Yield improvement comes at the cost of PLF; no respite from cost pressure.
• December quarter’s performance was weak, but the operating environment is turning benign.
• Tier 2/3 cities and international markets driving growth.

More Calls

CLSA on Oberoi Realty

• Maintained ‘Buy’; hiked price target to Rs 543 from Rs 481.
• Results below estimates on project mix change.
• Lease income a bright spot, capex being stepped up.
• Price target hiked to reflect lower cap rates and discount rates.

CLSA on Tata Motors

• Maintained ‘Sell’ with a price target of Rs 150.
• Tata’s India business value has cyclically peaked.
• Brexit uncertainty rising with no deal thus far and March deadline approaching.
• JLR volumes remain under pressure.

Macquarie on Ujjivan

• Maintained ‘Outperform’; hiked price target to Rs 350 from Rs 290.
• Strong performance across metrics.
• Company did not see a liquidity crunch and foresees no impact from loan waivers.
• No change to EPS; roll forward target to 2020-21.

JPMorgan on Pidilite

• Maintained ‘Neutral’ with a price target of Rs 1,120.
• December quarter review: Earnings miss on sharp margin contraction despite revenue beat.
• Margin delivery weighed down by input cost inflation.
• Margin miss likely drive earnings downgrades, but sequentially expect margins to start moving up.

Emkay on Radico Khaitan

• Maintained ‘Buy’ with a price target of Rs 547.
• Another strong quarter; premiumisation-led margin expansion.
• Positives: strong growth, expansion in operating margins and debt reduction.
• Stock available cheap for a consumer name.