Stocks To Watch: RIL, HUL, Tech Mahindra, Marico, IDFC First Bank

U.S. equity futures declined and stocks opened lower in the Asia, indicating the risk-off move that’s hit markets at the start of this month may have further to run. The dollar climbed. S&P 500 futures retreated more than 1.5 percent after global stocks posted a more than 2 percent slide on Friday, while shares in Sydney and Seoul opened lower.

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

• Reliance Industries: To raise Rs 53,125 crore via rights issue at Rs 1,257 per share which is a discount of 14 percent to the closing price on April 30. Rights entitlement ratio will be 1 equity share for every 15 equity shares held by eligible shareholders as on the record date. Promoter and promoter group of the company have confirmed they will subscribe to the full extent of their aggregate rights entitlement. In addition, they will also subscribe to all the unsubscribed shares in the issue. The company will also separate out its oil to chemicals business, via slump sale to Reliance O2C.
• Reliance Nippon Life Insurance: The company has shared an update for FY20 where Total Individual Premium collection rose 4 percent to Rs 4,375 Crore. Embedded Value rose 20.4 percent to Rs 4,314 Crore. Net Profit was up 37.2 percent to Rs 35 crore. 13th Month Persistency stood 77.03 percent while AUMs were Rs 19,837 crore. Growth in embedded value on the back of sustained new business contribution and value of new business, healthy persistency levels and customer retention, better mortality experience, favourable product and asset mix and contained opex ratios.
• State Bank of India: Fitch Ratings downgrades the viability rating by one notch to BB, citing the impact of Covid-19 on operating environment. The agency said that the downgrade reflects the heightened risks that weakening asset quality will post to its less-than-satisfactory loss-absorption buffers.
• ICICI Bank, Axis Bank, Bank Of Baroda: Fitch Ratings downgrades the viability rating by one notch to BB for ICICI and Axis while for Bank of Baroda, it is downgraded to BB-.
• IDFC First Bank: Approves capital raise of Rs 2,000 crore via preferential issue. Shares will be issued to IDFC, ICICI Prudential, HDFC Life, Bajaj Allianz Life and Dayside Investment which belongs to the Warbug Pincus group. IDFC Financial Holding has infused Rs 800 crore as part of the issue. Capital Adequacy Ratio to rise to 15.5 percent while CET-1 ratio will rise to 15.3 percent post the infusion.
• Central Bank of India: Has launched a scheme to assist all borrowing accounts availing fund-based working capital limits. Accounts which are classified as standard assets can avail emergency line of credit up to 10 percent of existing fund-based working capital limits, subject to a maximum of Rs 50 crore. The same is repayable in 18 EMIs with a moratorium of 6 months. This provision of additional credit facility is available to MSME borrowers as well. The scheme is valid up to June 30. Bank has also launched schemes for agricultural borrowers and self-help groups.
• Tata Motors: Fitch Ratings downgrades JLR's long-term issuer default rating and senior unsecured rating to B from B+. Both ratings have been removed from Rating Watch Negative. Outlook on the issuer default rating is negative.
• PNB Housing Finance: CRISIL re-affirms credit rating on borrowings and NCDs at AA and fixed deposits at AA+. Outlook has been revised to negative from stable. Rating on short-term NCDs is reaffirmed at A1+. The outlook reflects the delay in capital raise. The company also faces high risk of slippages in wholesale book due to the Covid-19 linked lockdown, weak economic activity and implications on real estate.
• Coal India: Coal production in April down 10.9 percent to 40.38 million tonnes while offtake falls 25.5 percent to 39.06 million tons.
• NMDC: Iron Ore sales down 49 percent in April to 1.38 million tonnes while production falls 38 percent to 1.8 million tonnes.
• Westlife Development: ICICI Prudential Life Insurance increased its stake to 5.06 percent.
• CG Consumer Electricals: Has resumed operations at its Ahmednagar plant.
• Shriram City: The Board of Directors will meet on May 4 to consider raising funds through debt on a private placement basis for the purpose of business of the company.
• Asian Paints: Has forayed into the hand and surface sanitizer category.
• IIFL Finance: To approve offer document to raise Rs 1,000 crore via NCDs on May 6.
• Prataap Snacks: Has started operations at its Indore plant.
• NACL Industries: Has started operations at its two plants in Andhra Pradesh.
• Polycab: Has started operations at its Nashik plant.
• Indostar Capital Finance: RBI has given nod for allotment of equity shares and compulsorily convertible preference shares to BCP V Multiple Holdings.
• Genus Power Infra: Resumes partial operations at its Haridwar plant.
• NHPC: Board to consider raising debt amounting to Rs 2,000 crore on May 6.
• Gujarat Alkalies & Chemicals: Has started production at its Dahej complex.
• Lakshmi Vilas Bank: RBI has approved extension of tenure of interim CEO and Managing Director, Subramanian Sundar till May 31.
• Sobha: Manufacturing units of the company have started their operations.
• Blue Star: Board approved raising up to Rs 500 crore via NCDs. Company said that it plans to raise Rs 300 crore via issue of NCDs in the near-term to primarily finance working capital and capital expenditure.
• Laurus Labs: Board approved share split of one share into five shares and approved merger of two foreign arms with itself.
• Minda Corporation: Has partially resumed operations at its plants in Madhya Pradesh, Uttarakhand and Maharashtra.
• PNB Gilts: Board passed an enabling resolution for raising of funds through issue of commercial papers for an amount not exceeding up to Rs 1,000 crore.
• Gujarat Gas: India Ratings and Research upgraded company’s long term issuer rating worth Rs 3,200 crore to IND AA+ from IND AA. The outlook is stable.
• Century Enka: Has started operations at its Gujarat plant.
• Motillal Oswal: Case against MCX has been deferred to June, as reported by Bloomberg News.
• SBI Life Insurance: F&O contracts to be introduced with effect from May 4.
• Marico: To report Q4 earnings today.
• Security and Intelligence Services: Revenue rises 13 percent in the fourth quarter to Rs 2,209.7 crore. The company reports a net loss of Rs 3.9 crore due to a deferred tax payment of Rs 92.2 crore this quarter and a deferred tax reversal of Rs 53 crore in the base quarter of Q4FY19.
• Manappuram Finance: To meet GIC Singapore today.

Earnings Fineprint: Reliance Industries, Hindustan Unilever & Tech Mahindra Q4FY20

Reliance Industries: Revenue fall 14.3 percent to Rs 73,596 crore while net profit falls 73.1 percent to Rs 2,580 crore. This was the biggest fall in net profit in at least 13 years. A sharp drop in crude prices led to an inventory loss of Rs 4,245 crore. Gross Refining Margin stood at $8.9 per barrel versus $9.2 per barrel. Reliance Jio reported a 2.3 percent sequential growth in ARPU to Rs 130.6 despite a steep hike in tariffs. A 42 percent drop in finance costs led to Jio's net profit expanding 72.7 percent to Rs 2,331 crore.

Hindustan Unilever: Net sales down 9.4 percent to Rs 9,011 crore which was the lowest in 9 quarters. Ebitda fell 11 percent to Rs 2,065 crore while margins declined to 22.9 percent from 23.3 percent. Beauty and Personal Care revenue fell 13.5 percent to Rs 3,834 crore. Management says it cannot estimate the time of recovery as the lockdown is continuing. It added that while it has not shed any jobs or salary cuts so far, it will have to re-evaluate its options if it goes into a deep recession. It has maintained its positive outlook on the FMCG sector for the medium-long term.

Tech Mahindra: The company's dollar revenue fell 4.3 percent to $1,295 million. Its revenue in rupee terms fell 1.7 percent to Rs 9,490 crore while Ebit margin declined to 7.7 percent from 12.2 percent in the previous quarter. 100 bps contraction in margins was due to provisions which were made in anticipation of losses and costs arising out of the Covid-19 disruption. The management expects recovery in the medium-term and it does not anticipate any further provisioning.

April Auto Sales

• Maruti Suzuki: Reports zero domestic sales. Exports down 93 percent to 632 units.
• Mahindra & Mahindra: Reports zero domestic sales. Exports down 65 percent to 733 units. Tractor sales down 83 percent to 4,772 units.
• Eicher Motors: Reports sales of 91 units. VE Commercial Vehicles sold 85 units.
• Escorts: Total sales down 86.6 percent to 705 units. Exports down 67 percent to 92 units.
• Atul Auto: Sold 23 three-wheeler automobiles.
• SML Isuzu: reported zero sales.

Pledged Share Details

• Strides Pharma Sciences: Promoters released pledge of 4 lakh shares on April 30
• GTPL Hathway: Promoters released pledge of 28 lakh shares on April 29

(As Reported On April 30)

Trading Tweaks

• Price Band Revised To 5 Percent From 10 Percent: Nocil, TCPL Packaging
• Price Band Revised To 10 Percent From 5 Percent: Bharat Road Networks
• Price Band Revised To 20 Percent From No Band: Oil India
• Move Into Short-Term ASM Framework: SMS Pharmaceuticals, Hester Biosciences
• Move Out Of Short-Term ASM Framework: Jay Bharat Maruti, GMM Pfaudler, Alok Industries

F&O Cues

• Nifty May futures end at 9,815; a discount of 30 points as compared to a premium of 4 points
• Nifty May futures add 46 percent in Open Interest and 29 lakh shares
• Nifty Bank May futures end at 20,676; Premium widens to 38 points from 5 points
• Nifty Bank May futures add 34 percent in Open Interest and 2.5 lakh shares
• Nifty Put-Call Ratio at 1.78 Vs 1.61 across all series

Nifty: May 7 Expiry

• Maximum Open Interest on Call side at 10,000 strike (10.9 lakh shares)
• Maximum Open Interest on Put side at 9,500 strike (10.2 lakh shares)
• Open Interest addition seen in 10,000 Call (1.4 lakh shares) and 9,700 Put (7.6 lakh shares)

Nifty: May 28 Expiry

• Maximum Open Interest on Call side at 10,000 strike (9 Lakh Shares)
• Maximum Open Interest on Put side at 9,000 strike (25.2 lakh shares)

F&O Buzzers & Fund Flows