Stocks To Watch: IDBI Bank, IRB Infrastructure, Tata Motors, Infosys 

Indian shares extended declined on Thursday after the central bank held key rates and maintained its neutral monetary policy stance as inflation rebounded.

The S&P BSE Sensex fell 0.63 percent or 205 points to 32,597 and the NSE Nifty 50 Index declined 0.73 percent or 74 points to 10,044.

The losses were broad based as the S&P BSE MidCap Index fell 0.9 percent and the S&P BSE SmallCap Index declined 0.66 percent.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, was little changed at 10,070.50 as of 7:45 a.m.

India can't keep pace with growth in global market capitalisation. https://t.co/uI87lUe4YD pic.twitter.com/gRiThouJmR

December 7, 2017

Here Are The Stocks To Watch Out For In Thursday's Session

• IRB Infra: CBI files charge sheet in Pimpoli land case.
• Quess Corp: Receives NCLT Bengaluru's approval to acquire facility management and catering business of Manipal Integrated services.
• Bank of Maharashtra: Sets one-year MCLR at 8.65 percent from Dec. 7.
• Hatsun Agro: Approves raising Rs 900 crore via rights issue.
• IDBI Bank: To sell 27.99 lakh shares (7 percent) in NSDL.
• Tata Motors: Rolls out first lot of Tigor EVs from Sanand plant.
• DLF: Reopens sales, sells Rs 300 crore flats in Gurgaon in November.
• Infosys: Submits settlement plea with SEBI.
• Claris Life Scienes: Board finds delisting option best for shareholders.

Infosys files settlement plea with Sebi on former CFO's pay, @sajeetkm reports.https://t.co/otDHJpx1Ro pic.twitter.com/SCW9EZQ8cj

December 6, 2017

Bulk Deals

C&C Constructions: Ketan Karani sold 1.94 lakh shares or 0.8 percent stake at Rs 77.67 each.

Weizmann Forex

• Girik wealth advisors bought 70,000 shares or 0.6 percent stake at Rs 1399.52 each.
• Parmatma Power Projects Pvt Ltd sold 79,711 shares or 0.6 percent stake at Rs 1399.52 each.

Corporate Action

• Circuit filter revised to 10 percent: Ansal Properties, Rain Inds, Centrum Cap, LKP Fin, Graphite India, Deccan Gold, OK Play, Liberty Shoes, Goldstone Infra, Pincon Spirits, Adani Transmission.
• Circuit filter revised to 20 percent: Bombay Dyeing, HFCL, 63 Moons, Soril Infra, GNFC, GM Breweries, Shalimar Paints, 8K Miles, MMTC, Hind Copper, Kitex, Castex Technologies, TV Today, Puravankara.

Earnings Reaction To Watch

Pokarna (Q2, YoY)

• Revenues down 9 percent to Rs 85 crore.
• Net profit down 37 percent to Rs 12 crore.
• EBITDA down 27 percent to Rs 27 crore.
• Margins at 31.8 percent from 39.6 percent.

Centum Electronics (Q2, YoY)

• Revenues down 14 percent to Rs 91 crore.
• Net loss of Rs 9 crore from Net profit of Rs 10 crore.
• EBITDA at Rs (6.7 crore) versus Rs 16.6 crore.
• Margins at (7.4 percent) from 15.7 percent.

Arshiya Ltd (Q2, YoY)

• Revenues up 11 percent to Rs 24 crore.
• Net loss of Rs 22.5 crore versus Net loss of Rs 22.6 crore.
• EBITDA up 14 percent to Rs 16.3 crore.
• Margins at 67.9 percent from 66.2 percent.

Ador Welding (Q2, YoY)

• Revenues up 20 percent to Rs 122 crore.
• Net profit up 4 percent to Rs 5.5 crore.
• EBITDA up 8 percent to Rs 10.8 crore.
• Margins at 8.9 percent versus 9.8 percent.

Consumer confidence fell further in November, RBI survey shows.https://t.co/hGtM6e4kOM pic.twitter.com/DOV1RDHbs0

December 6, 2017

Results Today

• BPL
• Fortune Financial
• Haldyn Glass
• Hotel Leela
• Indian Hume Pipe
• Jet Airways
• Multibase
• Venus Remedies

F&O Cues

• Nifty December Futures trading at 10,068, premium of 24.6 points versus 28.7 points.
• December Futures: Nifty open interest up 5 percent; Bank Nifty open interest up 16 percent.
• India VIX closed 0.5 percent higher at 15.
• Max open interest for Dec. series at 10,500 Call (open interest at 66.8 lakh, up 7 percent).
• Max open interest for Dec. series at 10,000 Put (open interest at 80.5 lakh).

F&O Ban

• In ban: Jain Irrigation.

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.

India can't keep pace with growth in global market capitalisation. https://t.co/uI87lUe4YD pic.twitter.com/gRiThouJmR

December 7, 2017

Active Stock Futures

Brokerage Radar

Credit Suisse on Indian Market

• Structural reforms have weakened near-term visibility.
• Weak agricultural income growth to lower broad-based consumption.
• Unclear outlook with low utilisations to keep investment demand weak.
• 2018 less uncertain but growth could still be weak.
• State elections have limited economic impact.
• Changes in market sentiment to drive volatility as 2019 elections approach.
• Market is not relatively expensive, but cuts should resume.
• Expect double-digit earnings per share growth in the next financial year.
• Overweight: Energy and metals, PSU banks and IT.
• Underweights on high price-to-earnings sectors with possible earnings per share cuts: NBFCs, Cement, Discretionary and Staples.
• Outperforms: SBI, ONGC, Tata Steel.
• Underperforms: Bajaj Finance, UltraTech Cement, Dr. Reddy's.

Ventura Securities on Solar Industries

• Initiated ‘Buy' rating with a price target of Rs 1,537, implying a potential upside of 37 percent over 27 months.
• Solar Industries is dominant player in the explosives industry and five times of its nearest peer.
• Infrastructure growth and mining boom to boost demand for explosives.
• Opening up of Indian defense and tapping international markets is positive.
• Expect healthy operating cash flows going ahead.
• Net debt to equity to be maintained at 0.4 times in future
• Expect revenue, operating income and net profit to grow at a compound annual growth rate of 25.3 percent, 27.2 percent and 28.6 percent by March 2020.
• Expect return on equity to expand by 157 basis points to 21.7 percent by March 2020.
• Expect return on capital employed to expand by 357 basis points to 28.7 percent by March 2020.
• Incisive business strategy, enviable financial performance, regulatory compliant and well managed capex compelling case for premium valuation.

Citi on UFO Moviez

• Maintained ‘Buy'; raised price target to Rs 610 from Rs 530.
• Consolidation to enhance in-cinema ad opportunity.
• Merger with Qube to increase geographical strength and client base.
• GST and demonetization impacts are temporary issues and provide buying opportunity.
• Worst is behind and expect better numbers in the second half of the current financial year.

Credit Suisse on Idea Cellular

• Maintained ‘Underperform' with price target of Rs 70.
• Operating income decline eats up most of targeted synergies.
• Vodafone-Idea would still have high leverage at 3.8 times.
• Timelines on merger approvals critical to prevent further market share/EBITDA erosion.
• Idea has not been a participant of massive growth in Indian mobile data market.

Credit Suisse on PI Industries

• Initiated ‘Outperform' rating and price target of Rs 1,150.
• PI strongly positioned in custom synthesis and manufacturing; Orderbook provides visibility.
• PI to have a less than 5 percent market share of global industry in custom synthesis and manufacturing, offering ample opportunity to grow.
• Focus on speciality products in domestic business a key differentiator.
• Expect revenue of custom synthesis and manufacturing business and Domestic business to grow at a compound annual growth rate of 20 percent and 14 percent by March 2020.
• Expect earnings per share to grow at a compound annual growth rate of by March 2020, with better growth for custom synthesis and manufacturing in the second half of the current financial year itself.
• Operating margins should sustain in narrow range.

HSBC on IRB Infra

• Downgraded to ‘Hold' from ‘Buy'; cut price target to Rs 200 from Rs 331.
• CBI filed a charge sheet against IRB, its promoter, its subsidiary, and few other employees in a government land grab case.
• Historically, the stock has reacted very negatively on such news flow.
• Very difficult to predict how the case will progress.
• Expect stock to be under pressure and will not be driven by business fundamentals.
• Downgrade to Hold despite attractive valuations.

Nomura on BSE

• Initiated ‘Neutral' rating with a price target of Rs 1,000; implying a potential upside of 9 percent.
• Monetising/diversifying its franchise but losing the core battle.
• Large part of BSE's business value driven by non-core segment.
• High EBIT growth led by transaction revenues from highly volatile illiquid segment.
• Refrain from giving higher multiple to unsustainable/volatile portion.
• Dependence on investment income reducing; Operational costs stable.
• Expect revenue, EBIT and profit before tax to grow at a compound annual growth rate of 4 percent, 11 percent and 14 percent respectively by March 2020.
• EBIT margin improve to 30 percent by March 2020.

TVS Motor launches its most powerful motorcyle yet.https://t.co/TZpzZnS9Fe pic.twitter.com/5gYtgFFSis

December 6, 2017

Brokerages On RBI Policy

Motilal Oswal

• Expect inflation to rise towards 5 percent by March 2018, primarily on account of low base.
• On the other hand, expect real GVA to rise slower than the RBI's expectations.
• No rate action expected in remaining part of this financial year.

CLSA

• India's credit growth remains massively below what would support a cyclical upswing and inflation is still below the centre of the inflation target.
• Discussion of a cut has more merit given the weakness of growth.
• CPI inflation will rise a little further which implies no change in monetary policy in 2018 either.

Macquarie

• We read the policy statement as neutral.
• Expect the RBI to be on an extended pause with inflation risks contained and growth in a gradual recovery mode.
• With ongoing liquidity tightness to persist into the fiscal year-end, expect market rates to remain under pressure which could potentially hurt financial stocks, particularly NBFCs.
• A rate hike in the next financial year will be premature on expectations of a gradual growth recovery and inflation risks remaining contained.

Nomura

• Believe both growth and inflation are headed higher.
• Expect rates to be on hold through 2018 as the RBI has a sufficient real rate cushion to absorb higher inflation.
• FX strategy: remain constructive on Indian Rupee.
• Rates Strategy: do not expect any further open market operation sales.
• Rates Strategy : Expect bond markets to consolidate around current levels.

Kotak

• The tone of the communique was broadly neutral even as it adequately highlighted the upside risks to inflation.
• Maintain call that the RBI MPC will likely remain on a pause for the rest of FY2018 as inflation continues to inch higher.
• Believe that the focus will start shifting to MPC's possible moves in FY2019 with the rate-cut cycle broadly over, for now.

Key takeaways from the #RBIPolicyhttps://t.co/QVch4OAMn6 pic.twitter.com/jdWVFx7amS

December 6, 2017

Media Reports

• Arun Jaitley signals rethink on Financial Resolution and Deposit Insurance bill (Mint).
• IBA suggests steps to ease financial stress on telecom firms (Mint).
• Honda Cars to hike prices from January (Financial Express).
• Banks seek relief measures for stressed telcos under debt restructuring plan (Economic Times).
• Centrum's PE fund backs The Label Life (Times of India).

GAIL plans to spend Rs 6,000 crore by FY19 end, @bhanvi_1 reports.https://t.co/L5QAn4wNif pic.twitter.com/kB55PMFyTX

December 6, 2017

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