All You Need To Know Going Into Trade On August 16

Asian stocks extended declines and the yen climbed after technology shares slumped on earnings concerns and copper sank into a bear market, weighing on commodities.

Equities from Sydney to Seoul fell, tracking overnight moves in U.S. benchmarks that were led by the Nasdaq 100 Index. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, declined 0.3 percent to 11,399 as of 7:10 a.m.

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BQ Live

Here's a quick look at all that could influence equities today.

U.S. Market Check

• U.S. stocks had their worst day in seven weeks Wednesday amid a broad decline in global equities as technology shares were roiled by disappointing results from Chinese internet giant Tencent Holdings Ltd. and copper sank into a bear market, weighing on commodities.
• The yield on 10-year Treasuries held at 2.86 percent.

#BQMarketWrap | U.S. stocks tumble as tech, commodities trigger fears.

Read: https://t.co/C0Sm5R5LId pic.twitter.com/u9WPeyNHSn

Europe Market Check

• European equities plunged the most since June as miners extended declines amid a meltdown in metal prices.

Asian Cues

• Japan's Topix index fell 1.7 percent.
• Futures on Hong Kong's Hang Seng Index slid 1.3 percent.
• Australia's S&P/ASX 200 Index lost 0.6 percent.
• South Korea's Kospi index fell 1.3 percent.
• Futures on the S&P 500 Index dipped 0.1 percent. The S&P 500 dropped 0.8 percent and the Nasdaq 100 fell 1.2 percent.
• The MSCI Emerging Market Index fell 1.8 percent, taking its slide since its January high to almost 20 percent.

Key Events To Watch This Week

• Australia jobs data is coming Thursday.
• Earnings are still to come from companies including Maersk and Carlsberg.
• Brexit talks between the EU and the U.K. resume in Brussels Thursday.

Commodity Cues

• The Bloomberg Commodity Index fell 1.9 percent Wednesday to the lowest since July 2017.
• West Texas Intermediate crude slid 0.3 percent to $64.84 a barrel.
• LME copper was up 0.3 percent after sinking 4 percent.
• Gold fell 0.1 percent to $1,173.55 an ounce, having slid more than 3 percent this week.

Indian ADRs

Stocks To Watch

• RBI rejected Kotak Mahindra Bank's plan for dilution of promoter stake.
• Reliance Industries said that one of its units at its Jamnagar refinery has been shut down temporarily.
• Shilpa Medicare to set up arm for North American operations.
• Siyaram Silk Mills commenced production of indigo at Amravati unit.
• Svendgaard Labs approved expansion manufacturing facilities at Kheri.
• Jindal Worldwide board approved stock split of 5:1.
• NCLT approved demerger of Cox & Kings forex division.
• Monsanto India clarified that news of a lawsuit by cancer patient pertains to its U.S. arm.
• Fortis Healthcare holders clear IHH proposal to buy company.
• GMR Infra executed settlement agreement with PE investors for its airport arm.
• Allcargo Logistics in talks to buy controlling stake in Gati (Economic Times).
• Jet Airways seeks to raise Rs 5000 crore to pay debt (Mint).

IPO Watch

• Cipla's Ugandan unit sets IPO price at UGX 256.5 per share.
• Mrs Bectors Food Specialities files with SEBI for IPO.

Earnings To Watch

SP Apparels (Q1, YoY)

• Revenue up 26.7 percent at Rs 190.8 crore.
• Net profit up 13.5 percent at Rs 12.6 crore.
• Ebitda up 51.6 percent at Rs 28.5 crore.
• Margin at 14.9 percent versus 12.5 percent.

Aster DM Healthcare (Q1, YoY)

• Revenue up 14 percent at Rs 1,774.7 crore.
• Net profit at Rs 12.4 crore versus net loss at Rs 76.9 crore.
• Ebitda at Rs 124 crore versus Rs 39.8 crore.
• Margin at 7 percent versus 2.6 percent.

Suven Lifesciences (Q1, YoY)

• Revenue up 36 percent at Rs 191.7 crore.
• Net profit up 31.1 percent at Rs 38.8 crore.
• Ebitda up 28.7 percent at Rs 58.3 crore.
• Margin at 30.4 percent versus 32.1 percent.

Dilip Buildcon (Q1, YoY)

• Revenue up 46.4 percent at Rs 2,436.3 crore.
• Net profit up 107.9 percent at Rs 254.9 crore.
• Ebitda up 44.1 percent at Rs 432.6 crore.
• Margin at 17.8 percent versus 18 percent.

Khadim India (Q1, YoY)

• Revenue up 8.7 percent at Rs 189.6 crore.
• Net profit unchanged at Rs 7.4 crore.
• Ebitda flat at Rs 16.6 crore.
• Margin at 8.8 percent versus 9.6 percent.

Cox & Kings (Q1, YoY)

• Revenue up 14.5 percent at Rs 2183.9 crore.
• Net profit down 56.1 percent at Rs 66.6 crore.
• Ebitda down 20.2 percent at Rs 297.9 crore.
• Margin at 13.6 percent versus 19.6 percent.

Indiabulls Real Estate (Q1, YoY)

• Revenue up 38.5 percent at Rs 810.9 crore.
• Net profit down 5.3 percent at Rs 117.5 crore.
• Ebitda down 23.4 percent at Rs 246.2 crore.
• Margin at 30.4 percent versus 54.9 percent.

Fortis Healthcare (Q1, YoY)

• Revenue down 9.9 percent at Rs 1,042 crore.
• Net loss at Rs 70.7 crore versus net profit at Rs 5.3 crore.
• Ebitda at Rs 8 crore versus Rs 86.1 crore.
• Margin at 0.8 percent versus 7.4 percent.

Bulk Deals

Parsvnath Developers

• Globe Capital Markets acquired 82 lakh shares or 1.88 percent equity at Rs 12.2 each.
• ITF Mauritus sold 82 lakh shares or 1.88 percent equity at Rs 12.2 each.

Who's Meeting Whom

• Shriram Transport Finance to meet Edelweiss Securities on Aug. 16.
• Eris Lifesciences to meet Equirius Securities on Aug. 16.
• TVS Motor company to meet Prince Street Capital Management on Aug. 16.
• Westlife Development to meet investors on Aug. 16-17.
• Himatsingka Seide to meet investors from Aug. 16-17.
• Texmaco Rail & Engineering to meet HDFC Mutual Fund, SBI Mutual Fund and other investors from Aug. 16-17.

Insider Trades

• Bajaj Finance promoter acquired 1 lakh shares from Aug. 10-13.
• Raymond promoter group acquired 20k shares on Aug. 10.
• Jagran Prakashan promoter acquired 3 lakh shares on Aug. 13.

Rupee

• Rupee closed at 69.89/$ on Tuesday from 69.93/$ on Monday.

F&O Cues

• Nifty August futures closed trading at 11,463, premium of 28.3 points versus 25.4 points.
• August Series: Nifty open interest up 1.4 percent; Bank Nifty open interest down 0.6 percent.
• India VIX ended at 13.2, down 0.8 percent.
• Max open interest for August series at 11,500 Call (open interest at 42.1 lakh, down 7 percent).
• Max open interest for August series at 11,000 Put (open interest at 51.3 lakh, up 2 percent).

F&O Ban

In ban: Adani Enterprises, Adani Power, Jet Airways, Punjab National Bank.

Put-Call Ratio

• Nifty PCR at 1.70 versus 1.66
• Nifty Bank PCR at 1.14 versus 0.95

Fund Flows

Brokerage Radar

JPMorgan on Mindtree

• Initiated ‘Neutral' with a price target of Rs 1,050.
• Mindtree has carved a strong positioning for itself in digital services.
• RUN business nicely complementing digital and offering revenue stability.
• Robust mid teen revenue growth and Rupee depreciation to lead to strong earnings growth.
• Assign lower multiple on account of margin volatility and skewed top-client contribution.

IDFC Securities on India Strategy

• June quarter review: Consumption, IT and commodities did well; financials disappointed.
• Overall operationally strong quarter; broad-based in line performance.
• Higher slippages, ageing provisions cause weakness in financials.
• Cut Nifty EPS estimates for the current and the next financial year reduced to Rs 516 and Rs 645 respectively from Rs 549 and Rs 682 respectively.
• Top Nifty Picks: Coal India, NTPC, IndusInd Bank, GAIL, Hero MotoCorp.

Morgan Stanley On MakeMyTrip

• June quarter's operating performance was better than expected.
• Traffic metrics and customer metrics are strong.
• Unit economics in budget hotels are improving.
• Growth in key segments and market share dynamics remain healthy.

JPMorgan On Coal India

• Maintained ‘Buy' with a price target of Rs 330.
• Strong fundamental outlook for near term.
• Well placed in improving domestic coal market.
• Expect dividend payout to remain elevated.
• Technical overhang of a potential stake sale by Government.
• Stock struggle to break out of Rs 260-330 range on concerns of earnings growth beyond 2018-19.

Deutsche Bank On UPL

• Maintained ‘Buy' with a price target of Rs 765.
• Emerging Markets currency volatility is a worry, but risk-reward remains favorable.
• Revenue growth for the current financial year is to recover to 12 percent from 6.5 percent in 2017-18.
• Margins to also expand driven by backward integration.
• Dollar appreciation of 1 percent can reduce post-acquisition EPS by 4 percent.

On Kotak Mahindra Bank

Goldman Sachs

• Maintained ‘Buy' with a price target of Rs 1,506.
• RBI rejection to impact stocks' performance in near-to-medium term.
• Investor focus to shift from fundamental performance to regulatory aspect.
• Continue to remain positive on Kotak's fundamental performance.
• Expect continued growth recovery and improving profitability.

Morgan Stanley

• Maintained ‘Overweight' with a price target of Rs 1,435.
• Slight negative as the overhang of significant equity supply would increase.
• Another potential solution could be sizeable inorganic growth opportunities.
• Probability of equity capital raising appears low to given its good capital position.

Citi

• Maintained ‘Buy' with a price target of Rs 1,565.
• If capital raised then it will further increase an already high Tier 1 and depress RoE for a long period.
• Selling stake in secondary market - not preferred in the past.
• Consider a meaningful acquisition either in the banking space or via one of its subsidiaries.

On Grasim Industries

Morgan Stanley

• Maintained ‘Overweight' with a price target of Rs 1,329.
• June quarter's Ebitda surpassed estimates, driven by strong VSF margins.
• Outlook for VSF business remains constructive.
• Capacity growth in VSF and chemicals should further support earnings.
• While capex will rise, standalone balance sheet remains healthy.

Deutsche Bank

• Maintained ‘Buy' with a price target of Rs 1,380.
• June quarter's standalone result beats estimates on better margins.
• Volume growth to be robust in both VSF and chemicals businesses.
• Strong growth outlook in its core businesses.
• Prefer Grasim over UltraTech given better valuation.

On Sun Pharma

CLSA

• Maintained ‘Buy'; raise price target to Rs 750 from Rs 600.
• June quarter was a strong quarter after the U.S. and India spring a positive surprise.
• Specialty launches in the U.S. on track.
• Regulatory challenges behind and pipeline monetisation underway.
• Believe Sun is well-placed to double its adjusted EPS over the next two years.

Citi

• Maintained ‘Neutral' with a price target of Rs 600.
• June quarter earnings was ahead of estimates largely on strong traction in U.S.
• Low R&D spend drive earnings beat.
• US traction is encouraging, margins could taper a bit.

Macquarie

• Maintained ‘Neutral' with a price target of Rs 522
• June quarter's performance was in line adjusted for lower R&D spend and tax rate.
• Sun is guiding for higher cost largely due to upcoming specialty launches.
• U.S. pricing remains challenging, as competitive intensity is not abating.

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