Stocks To Watch: Swaraj Engines, CG Power, AIA Engineering, Lyka Labs

Indian equity benchmarks closed little changed after fluctuating intraday on low trading volume. An advance in software exporters countered a decline in telecom stocks.

The S&P BSE Sensex was little changed at 33,588 and the NSE Nifty 50 Index was also little changed at 10,348.75.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 10,368 as of 6:50 a.m.

Here Are The Stocks To Watch:

• Cox & Kings owned Meininger to open a hotel in Dresden, Germany.
• Camlin Fine Sciences to allot 1.72 crore equity shares at Rs 87 each via QIP.
• Skipper to enter into a JV for drip irrigation business with MetzerPlas Cooperative Agriculture Organization of Israel.
• Swaraj Engines to consider buyback on Nov. 28.
• RBI allows ARCs to hold more than 26 percent stake in defaulting companies.
• Government to launch third auction of wind power capacity on Friday.
• CG Power and Industrial Solutions bagged Rs 111 crore order from Indian Railways.

F&O Setup

• Nifty November futures closed at 10,366.6 with a premium of 18 points from 15.9 points
• November contracts: Nifty open interest down 3 percent; Bank Nifty open interest up 2 percent
• India VIX at 13.8, down 1.2 percent
• Max open interest for November series at 10,500 Call (open interest at 62.9 lakh, open interest up 3 percent)
• Max open interest for November series at 10,300 Put (open interest at 60.2 lakh, up 11 percent)

F&O Ban

• In ban: DHFL, DLF, Fortis Healthcare,  HDIL, Infibeam, Jet Airways, Jain Irrigation, JP Associates, JSW Energy, Just Dial, Reliance Communication, TV18 Broadcast and Wockhardt.
• New in ban: Fortis Healthcare and Jet Airways.
• Out of ban: Indocount.

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty

Active Stock Futures

Bulk Deals

• AIA Engineering: Jwalamukhi Investment Holdings sold 12.11 lakh shares or 1.3 percent equity stake at Rs 1446.05 each.
• MT Educare: Visa Capital bought 2.50 lakh shares or 0.6 percent equity stake at Rs 68.05 each.
• Garware Wall Ropes: Hober Mallow Trust bought 1.62 lakh shares or 0.7 percent equity stake at Rs 913.73 each.

Syngene:

• Gaoling Fund LP bought 15 lakh shares or 0.8 percent equity stake at Rs 515 each.
• Steadview Capital Mauritius sold 19.50 lakh shares or 1 percent equity stake at Rs 516.92 each.

Steel Strips Wheels:

• Promoter DHG Marketing bought 1.29 lakh shares or 0.8 percent equity stake at Rs 811.76 each.
• GS Global Corp sold 1.24 lakh shares or 0.8 percent equity stake at Rs 754.19 each.

Earnings Reactions To Watch

Kesar Terminals (Q2, YoY)

• Revenue down 7 percent at Rs 10.5 crore.
• Net profit down 18 percent at Rs 4.1 crore.
• EBITDA down 23 percent at Rs 5.3 crore.
• Margins at 50.5 percent from 61.1 percent.

Star Paper Mills (Q2, YoY)

• Revenue down 3.4 percent at Rs 81.3 crore.
• Net profit down 6.4 percent at Rs 14.7 crore.
• EBITDA down 3.7 percent at Rs 18.4 crore.
• Margins at 22.6 percent from 22.7 percent.

Earnings To Watch

• Bharat Bijlee
• Career Point
• Kingfa Science
• Lyka Labs
• Rane Brake
• Saksoft

Brokerage Radar

CIMB on Hindustan Zinc

• Initiated with Reduce Rating and price target of Rs 251; implying a potential downside of 20 percent from yesterday’s close.
• Zinc demand-supply balance could turn to surplus in 2018
• Zinc fundamentals weakening now; Given the surplus prices could lower
• Hindustan Zinc’s operating income to decelerate in the next financial year as volume growth is offset by price decline.
• Expect metal production CAGR of 8 percent till March 2020, driving operating income of 6 percent and 4 percent in the next two financial years each.
• Expect company to remain in net cash position in over the financial years till march 2020; Dividend per share to remain elevated.

Motilal Oswal on Bata India

• Downgraded to ‘Sell’ from ‘Buy’; maintained price target at Rs Rs 578; implying a potential downside of 23 percent from yesterday’s close.
• Downgraded on rich valuations.
• With GST netted off from the topline, we expect similar growth of 6 percent year-on-year in the second half of the current financial year.
• Premiumization to support margin expansion of 70 basis points and 100 basis points in the currentand next financial year each.
• Store expansion plan on track, but expect muted same store sales growth.
• Revenue estimates cut by 4 percent and 6 percent for the current and the next financial years each, to factor in weak first half.
• Expect revenue and net profit to grow at a compound annual growth rate of 9 percent and 19 percent respectively, till March 2019.

HSBC on Gujarat Pipavav Ports

• Upgraded to ‘Hold’ from ‘Reduce’; hiked price target to Rs 144 from Rs 120.
• Maersk Line revises two of its services that would raise Pipavav’s annual container throughput by 15 percent.
• Raise earnings estimates over financial years till March 2019 by 4-16 percent, driven by higher throughput from the additional service.
• Long term challenge remains with PSA’s new terminal in Nhava Sheva coming by the end of 2017.
• Continue to prefer Adani Ports and SEZ.

UBS on Motherson Sumi

• Maintained ‘Buy’; hiked price target to Rs 405 from Rs 370.
• Expect strong earnings growth trajectory over next three years.
• Positives: ramp up of new facilities and continued margin expansion in international business.
• SMP has been investing in automation to increase productivity; PKC is well placed to grow.
• Mirrors business gaining share and rising value.
• Global business to continue to trade at higher end of the space.

Jefferies on Info Edge

• Downgraded to ‘Hold’ from ‘Buy’; hiked price target to Rs 1,150 from Rs 1,118.
• Downgrade as risk-reward unfavourable.
• Target price hiked to factor in higher value for Zomato.
• Prospects for Zomato have improved over the last 12 months, helped by strong momentum in online ordering and lower cash burn.
• Current stock price already reflects recoveries in Naukri and 99acres.
• Investors should wait for better entry points.

Citi on India Grid Trust

• Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 102 from Rs 97.
• Acquisition of three power transmission asset to be accretive from distribution per unit and internal rate of return point.
• Target price hiked to factor in change in earnings per share and cost of equity.
• India Grid Trust increased its distribution period unit guidance by 4 percent for the next financial years.

Deutsche Bank on Life Insurance Companies

• Task force on direct taxes - may impact life insurance industry.
• Tax rehaul at a very preliminary stage now.
• Since the change is large, this may remain a slight overhang, until clarity emerges.
• Meaningful impact on embedded value and value of new business likely if tax rates raised.

Citi on Changes to Insolvency Code

• Some government banks have been anxious about allowing existing promoters to bid.
• Changes made could also mean that in some cases there could be low recoveries or resolution process could get extended due to lack of bidders.

Media Reports

• Home buyers not to get financial creditors status (Financial Express).
• Videocon resolves with banks to stay out of NCLT (Financial Express)
• Demonetisation and higher cost bleed small finance banks (Mint).
• Jewellery stocks shine brighter (Mint).
• Digital ad spends set to rise in India (Mint).
• Airtel, Rel Jio to vie for RCom’s spectrum (Economic Times).
• Thomas Cook’s OFS for Quess Corp oversubscribed five times (Economic Times).