All You Need To Know Going Into Trade On April 9

Asian stocks were mixed Tuesday after the threat of new tariffs on European goods from President Donald Trump damped risk appetite.

Japanese shares slipped and were little changed in Korea and Australia. S&P 500 Index futures were flat after the benchmark eked out a gain in thin volumes Monday, rising to just over a percent from its all-time high.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, rose 0.08 percent to 11,692.50 as of 6:55 a.m.

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U.S Market Check

Stocks edged higher, with the S&P 500 extending its longest rally since 2017 to eight days, as investors awaited signs of progress in the trade war with China ahead of the latest corporate earnings season.

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April 9, 2019

Asian Cues

• Japan's Topix index fell 0.4 percent.
• Australia's S&P/ASX 200 Index was little changed as was South Korea's Kospi index.
• Hong Kong's Hang Seng Index futures rose 0.2 percent.
• Futures on the S&P 500 were flat.

Commodity Cues

• Brent crude extended gains for the fourth consecutive trading session, traded 0.1 percent higher at $71.18 a barrel.
• West Texas Intermediate crude rose 0.3 percent to $64.59 a barrel, the highest in five months. It rose 2.1 percent Monday.
• Gold was little changed at $1,296.92 an ounce.

London Metal Exchange

• Aluminium ended lower for the third consecutive trading session, ended 1 percent lower.
• Copper halted a two-day fall, ended 1.16 percent higher.
• Lead halted a two-day decline, ended 0.28 percent higher.
• Tin ended lower for the fifth consecutive trading session, down 0.83 percent.
• Zinc ended 0.55 percent lower.
• Nickel ended a two-day fall, closed 0.85 percent higher.

Key Data/Events To Watch This Week

• U.S. banks begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo.
• Israel votes in an election Tuesday.
• The annual Spring Meetings of the World Bank Group and the IMF begin in Washington Tuesday.
• The ECB will probably leave its key interest rates unchanged Wednesday. Investors will be looking for further details on TLTRO.

Indian ADRs

Stocks To Watch

• Linde India: SEBI appointed an independent chartered accountant firm to determine the fair price of equity shares of Linde India for the purpose of open offer. This is after the company had seen at least couple of failed open offer made by an acquirer The BOC Group.
• Sun Pharmaceutical Industries said its wholly owned subsidiary Sun Pharma Distributors Ltd. will commence distributing its formulation products in India from this month in a phased manner on the same terms as was with Aditya Medisales Ltd. This phased transition is expected to be fully completed by the first quarter of 2019-20.
• Panacea Biotec: Piramal Enterprises and Bain Capital backed India Resurgence Fund to invest Rs 992 crore in the company. The company said investment proceeds will be used for one-time settlement with existing lenders, general working capital and growth requirements of the company. The fund will acquire 10.4 percent stake in the company.
• DLF bulk deal: Government of Singapore (GIC) sold 3.8 percent stake in the company worth Rs 1,300 crore. It reduced its stake from 4.11 percent to 0.3 percent, as per exchanges. Societe General acquired 1.17 percent stake. Lee Kok Sun, Chief Investment Officer at GIC Real Estate said that it will strengthen its partnership with DLF to tap investment opportunities in India. DLF CEO, Ashok Tyagi also stated that GIC's current investment in DLF is worth $1.8 billion and the latest sale is possibly due to portfolio churning. (Bloomberg News)
• Coffee Day Enterprises: Japan based-Impact HD to invest up to $15 million for 49 percent stake in the company's arm Coffee Day Consultancy Services.
• Fortis Healthcare has started looking for buyers to purchase its 27.8 percent stake in Singapore based arm RHT Health Trust. The company has also stated that these decisions are preliminary in nature and no proposal has been received. Board appoints Vivek Kumar Goyal as CFO with effect from April 8.
• Indian Overseas Bank decreased its MCLR by 5 basis points across various tenors. One-year MCLR at 8.7 percent and three-year MCLR at 8.9 percent.
• Quess Corp said that its staffing business has added 23,000 associates with effect from April 1. Post the complete execution of these contracts, the Staffing business shall have an associate strength of over 2.15 lakh employees and this active deal conversion is expected to benefit he company across its core operating and financial metrics, as stated in the press release.
• Indo-Rama Synthetics: Board appointed Maganti Narayan Sudhindra Rao as CEO for three years with effect from April 8.
• Asian Paints: Fire broke out in Andhra Pradesh manufacturing facility. The company says manufacturing operations have been affected and this event will not have any impact on the operations.
• Majesco's U.S. arm appointed Wayne Locke as new CFO.
• 5paisa Capital to consider raising capital via NCDs on April 16.
• Voltas signed a distribution agreement with Japanese based textiles machines manufacturer ‘Shima Seiki' for sales and marketing of the latter's products in India.
• Yes Bank: Board to consider raising capital via debt on April 26
• InterGlobe Aviation: IndiGo strengthened Mumbai as a key travel hub with three new international and 20 additional domestic flights. With effect from April 15, the airline will also introduce 20 additional domestic flights from Mumbai connecting different cities across India.
• Prabhat Telecom entered into a distribution agreement with Hong Kong based ‘Xmi' for distributing telecom accessories as manufactured products in 12 states in India to specific retailers on Non-Exclusive Basis.
• Usha Martin: Rohit Nanda resigned as the CFO with effect from April 9. Board has appointed Anirban Sanyal as the new CFO.
• Wockhardt clarified on the news of its plans to demerge its formulations business stating that it won't comment on market rumours or speculations.
• Karda Constructions: Commenced construction of residential and commercial project in Nashik. Expected sale proceeds form this project will be around Rs 21.19 crore and the project will be completed by November 2022. (Alert: Company has a market cap of Rs 233 crore)

Offerings

• Polycab over-subscribed 1.94 times.

Earnings Reaction To Watch

Delta Corp (Q4 YoY)

• Revenues up 19.1 percent at Rs 204.3 crore.
• Net profit up 25.2 percent at Rs 56.7 crore.
• Ebitda up 30.6 percent at Rs 88 crore.
• Margins at 43.1 percent versus 39.3 percent.
• Gaming Operations Revenues up 21 percent at Rs 198 crore.
• Licensing Fees up 2.5 times at Rs 24.2 crore.
• Exceptional Gain of Rs 4.3 crore.

Earnings To Watch

• Bajaj Consumer Care

Bulk Deals

• HPL Electric & Power: EQ India Fund acquired 3.27 lakh shares or 0.51 percent equity at Rs 60.22 each.

DLF

• Societe Generale acquired 2.09 crore shares or 1.17 percent equity at Rs 191 each.
• Government of Singapore sold 6.8 crore shares or 3.81 percent equity at Rs 191.01 each .(aggregated to Rs 1,300 crore).
• GIC has reduced its stake from 4.11 percent to 0.3 percent, as per the exchanges.

Religare Enterprises

• LAKHP Merchant Financing acquired 60 lakh shares or 2.77 percent equity at Rs 31 each.
• India Horizon Fund sold 60 lakh shares or 2.77 percent equity at Rs 31 each.

Pledge Share Details

• Sun Pharma promoter group Shanghvi Finance created pledge of 2.13 crore shares on April 4.
• Zee Media Corporation promoter 25FPS Media created pledge of 2.37 crore shares from March 29-30.
• Dish TV promoter Direct Media Distribution Ventures created pledge of 33.8 lakh shares and released pledge of 18 lakh shares from March 29-30.
• Astra Microwave Products promoter B Malla Reddy invoked pledge of 10,200 shares on April 3.

Trading Tweaks

• Bajaj Healthcare ex-date for bonus issue at 1:1.
• HT Media ex-date for demerger.
• IVRCL, CESC Ventures to move into short term ASM Framework.

Who's Meeting Whom

• Finolex Industries to meet B&K Securities on April 9.
• Gateway Distriparks to meet Reliance Nippon Life Asset Management on April 9.
• Rushil Décor to meet SBI MF, DHFL Pramerica MF and other investors on April 9.
• Balrampur Chini Mills to meet UTI MF on April 9.

Insider Trading

• Dish TV India promoter Direct Media Distribution Ventures sold 18 lakh shares from March 29-30.

Money Market Update

• The rupee on Monday weakened for the third straight session to its lowest since March 12 to end at 69.68/$ versus Friday's 69.23/$.

F&O Cues

April Futures

• Nifty open interest down 1 percent sheds 1.7 lakh shares in open interest.
• Bank Nifty open interest up 2 percent, adds 36,000 shares in open interest.
• Nifty futures premium at 70.4 points versus 94.8 points, closed trading at 11,674.9.
• Bank Nifty futures premium at 165.56 versus 231.9 points, closed trading at 30,010.9.

Options

• Nifty PCR at 1.38 versus 1.61 (across all series).

Nifty Weekly Expiry (April 11)

• Max open interest at 11,700 Call (21.6 lakh shares), 11,800 Call (17.2 lakh shares) and 11,600 Put (12.6 lakh shares).
• Open interest addition seen at 11,700 Call strike, adds 10.7 lakh shares in open interest.
• Open interest shedding seen at 11,600 Put strike, sheds 6.4 lakh shares in open interest.

Nifty Monthly Expiry

• Max open interest at 12000 Call (27.8 lakh shares) and 11,000 Price (27.1 lakh shares).
• Max open interest addition seen at 12,000 Call (+4.5 lakh shares) and 11,700 Call (+2.3 lakh shares).

Stocks In F&O Ban

In Ban:

• Adani Power
• DLF*
• IDBI
• Jet Airways
• PC Jeweller*
• Reliance Power
• Wockhardt*

Out of Ban:

• Dewan Housing

*New in ban.

Brokerage Radar

CLSA on Asian Paints

• Downgraded to ‘Sell' From ‘Outperform'; cut price target to Rs 1,400 from Rs 1,565.
• Rising concerns on macro and weak consumer sentiments.
• Crude oil prices have risen sharply increasing concerns on margins.
• Stock trading at significant premium to its own history.

UBS on ONGC

• Maintained ‘Buy' with a price target of Rs 240.
• ONGC due for rerating as clarity on subsidy sharing mechanism imminent.
• Improving visibility on higher gas output as key projects near completion.
• Domestic gas price hike with increasing output to improve gas revenue mix.

Nomura on Va Tech Wabag

• Maintained ‘Buy'; cut price target to Rs 520 from Rs 761.
• Stock weak due to miss on order inflows/execution and rise in debtor.
• Namami Gange scheme to provide Rs 8400 crore worth opportunities in 2019-20
• Stuck receivables to partly be resolved by end of the current financial year and fully by March 2021.

HSBC on Vedanta

• Maintained ‘Hold'; hiked price target to Rs 205 from Rs 200.
• Ramp-up at Gamsberg progressing well.
• Gamsberg phase 2 could add another 200 KT.
• Raise estimates on better than expected ramp-up at Gamsberg.

Nomura on HCL Tech

• Maintained ‘Buy' with a price target of Rs 1,235.
• Strong deal wins to propel growth for 2019-20.
• Expect guidance of 7-9 percent and 14-16 percent CC organic and overall revenue growth respectively.
• Valuation attractive and at discount to peers despite similar or better EPS growth.

Morgan Stanley on OMCs

• Oil marketers have slowed down fuel adjustments, but still raised prices to reflect the move in oil.
• Unlike past OMCs continue to show healthy margins on petrol.
• Petrol fuel margins remained healthy, diesel margins declined in recent past.

Edelweiss on Jet Airways

• Downgraded to ‘Reduce' from ‘Hold'; cut price target to Rs 177 from Rs 229.
• 3/4th fleet grounded, flight cancellations dent franchise and slots are being relinquished.
• Expect dismal March quarter due to cut in capacity.
• Soaring yields aid industry; switch over to IndiGo/SpiceJet.

HSBC on Container Corp

• Maintained ‘Reduce'; hiked price target to Rs 450 from Rs 448.
• Growth story overappreciated and partly misunderstood.
• Volume growth has slowed; recovery outlook is not strong.
• Competitive intensity is set to increase; Return ratios expected to remain low.

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