All You Need To Know Going Into Trade On August 9

Asian stocks traded mixed at the start of the session as China hit back against the Trump administration's latest tariffs and tensions ratcheted up between the U.S. and Russia.

Shares in Japan and South Korea fell, while equities in Australia nudged higher. Futures pointed to a lower open for stocks in Hong Kong and China.  The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, was little changed at 11,474 as of 7:20 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 halted a four-day advance as trade tensions ratcheted higher and America slapped sanctions on Russia.
• The yield on 10-year Treasuries nudged lower to 2.95 percent.

#BQMarketWrap | U.S. stocks halted a four-day advance as trade tensions ratcheted higher.

Read: https://t.co/OpTyWeoopg pic.twitter.com/tCvuAYkvKU

August 9, 2018

European Market Check

• European stocks fell as trade tensions simmered once more and disappointing earnings hit a few large health-care companies.

Asian Cues

• Japan's Topix index fell 0.6 percent.
• Australia's S&P/ASX 200 Index rose 0.1 percent.
• South Korea's Kospi index slipped 0.2 percent.
• Futures on the FTSE China A50 Index lost 0.1 percent.
• Futures on Hong Kong's Hang Seng Index declined 0.2 percent.
• S&P 500 Index futures were little changed.

Here are the key events to watch out for this week:

• Samsung Electronics is set to unveil its next Galaxy Note smartphone on Thursday.
• U.S. consumer prices probably rose in July from June, consistent with a pickup in inflation that's projected to keep the Federal Reserve on a path of gradual interest-rate increases, economists forecast before Friday's release.

Commodity Cues

• West Texas Intermediate crude slid 0.2 percent to $66.82 a barrel, after slumping 3.2 percent.
• Brent crude traded 0.1 percent higher at $72.34 a barrel.
• Gold was little changed at $1,214.02 an ounce.

Shanghai Exchange

• Steel snapped four-day winning streak; down 0.5 percent.
• Aluminium traded higher; up 2.2 percent.
• Zinc traded higher for second day; up 0.3 percent.
• Copper traded lower; down 0.3 percent.
• Rubber snapped three-day winning streak; down 0.1 percent.

Nifty Earnings To Watch

• Eicher Motors

Other Earnings To Watch

• 3M India
• Aegis Logistics
• AIA Engineering
• Apar Industries
• Aurobindo Pharma
• Bajaj Electricals
• Bharat Forge
• Cera Sanitary
• CLariant Chemicals
• Coffee Day
• Cummins India
• Deepak Fertilisers
• Eris Lifesciences
• Engineers India
• Godrej Agrovet
• Gujarat Narmada Valley
• Gujarat Pipavav
• Himatsingka Seide
• Hindustan Copper
• HSIL
• ICRA
• Indian Energy Exchange
• Ingersoll Rand India
• IPCA Labs
• ITD Cementation
• Jet Airways
• J Kumar Infraprojects
• Jindal Steel & Power
• Kaveri Seed
• KEI Industries
• Mahindra Holidays
• MRF
• Page Industries
• PNB Housing
• PSP Projects
• SH Kelkar & Co.
• Subros
• Swan Energy
• Tata Communications
• TV Today Network
• United Bank of India
• VA Tech Wabaq
• Varun Beverages
• Whirlpool India
• Zensar Technologies

Earnings Reactions To Watch

NALCO (Q1, YoY)

• Revenue up 64.9 percent at Rs 2,973.3 crore.
• Net profit at Rs 687.1 crore versus Rs 128.9 crore.
• Ebitda at Rs 1,011.1 crore versus Rs 227.5 crore .
• Margin at 34 percent versus 12.6 percent.

Siemens (Q3, YoY)

• Revenue up 15.9 percent at Rs 3,073 crore.
• Net profit up 25.5 percent at Rs 204.4 crore.
• Ebitda up 33.4 percent at Rs 302.3 crore.
• Margin at 9.8 percent versus 8.5 percent.

Trent (Q1, YoY)

• Revenue up 19.5 percent at Rs 590.6 crore.
• Net profit up 0.5 percent at Rs 38.4 crore.
• Ebitda up 21.2 percent at Rs 71 crore.
• Margin at 12 percent versus 11.9 percent.

Phoenix Mills (Q1, YoY)

• Revenue up 4.4 percent at Rs 413.2 crore.
• Net profit up 40.1 percent at Rs 59.7 crore.
• Ebitda up 11 percent at Rs 195.4 crore.
• Margin at 47.3 percent versus 44.5 percent.

BPCL (Q1, QoQ)

• Revenue up 9.9 percent at Rs 7,1697 crore.
• Net profit down 14.2 percent at Rs 2,293 crore.
• Ebitda up 4.1 percent at Rs 3,875 crore.
• Margin at 5.4 percent versus 5.7 percent.

HPCL (Q1, QoQ)

• Revenue up 11.2 percent at Rs 67,628.8 crore.
• Net profit down 1.6 percent at Rs 1,719.2 crore.
• Ebitda up 9.2 percent at Rs 3,190.6 crore.
• Margin at 4.7 percent versus 4.8 percent.

Indian Bank (Q1, YoY)

• Net Interest Income up 23.8 percent at Rs 1807 crore.
• Net profit down 43.8 percent at Rs 209.3 crore.
• Provisions at Rs 456.6 crore versus Rs 1,772 crore (QoQ)
• GNPA at 7.2 percent versus 7.37 percent (QoQ)
• NNPA at 3.79 percent versus 3.81 percent (QoQ)

Sadbhav Infrastructure Project (Q1, YoY)

• Revenue up 58.8 percent at Rs 797.6 crore.
• Net loss at Rs 65.6 crore versus net loss at Rs 116.1 crore.
• Ebitda up 25.5 percent at Rs 283.5 crore.
• Margin at 35.5 percent versus 45 percent.

Blue Star (Q1, YoY)

• Revenue flat at Rs 1,507.8 crore.
• Net profit up 20.2 percent at Rs 91.6 crore.
• Exceptional gain of Rs 15 crore in current quarter.
• Ebitda up 23.7 percent at Rs 136.7 crore.
• Margin at 9.1 percent versus 7.3 percent.

Thermax (Q1, YoY)

• Revenue up 18.8 percent at Rs 1,035.3 crore.
• Net profit up 20.7 percent at Rs 49 crore.
• Ebitda down 3.9 percent at Rs 69.4 crore.
• Margin at 6.7 percent versus 8.3 percent.

Quick Heal Technologies (Q1, YoY)

• Revenue up 78 percent at Rs 52.8 crore.
• Net profit at Rs 6.4 crore versus loss of Rs 11.8 crore.
• Ebitda up at Rs 9.3 crore versus loss of Rs 15.8 crore.
• Margins at 17.6 percent.

Stocks To Watch

• HPCL plans Rs 8,400 crore capex in 2018-19; to setup unit in UAE to expand Africa and Middle East market.
• Apollo Pipes board proposed issuance of 9.5 lakh shares to promoters.
• Pidilite Industries plans to invest $500,000 in U.S. arm.
• PNB in talks with Income Tax, Excise departments to sell erstwhile headquarters. (PTI)

Offerings

• CreditAccess Grameen IPO gets 25 percent demand for shares offered on first day sale, offer close on Aug. 10.

Bulk Deals

• Selan Exploration: Dolly Khanna bought 1.04 lakh shares or 0.6 percent equity at Rs 244.03 each.
• Sunteck Realty: DSP Blackrock MF bought 9.50 lakh shares or 0.6 percent equity at Rs 415.5 each.
• Vindhya Telelinks Ltd.: Aequitas Investment Consultancy bought 1.59 lakh shares or 1.3 percent equity at Rs 1333.28 each.

Indian ADRs

Who's Meeting Whom

• Mahindra and Mahindra Financial services to meet investors on Aug. 09.
• Wipro to meet investors on Aug. 09.

Insider Trades

• Chambal Fertilizers promoter acquired 37,000 shares on Aug. 07.
• Nocil promoter Navin Fluorine International Limited sold 2 lakh shares from Aug. 3-6.

Money Market Update

• Rupee closed at 68.69/$ on Wednesday from 68.68/$ on Tuesday.

F&O Cues

• Nifty August futures closed trading at 11,467.6 premium of 17.6 points versus 29 points.
• August series: Nifty open interest up 3 percent; Bank Nifty open interest down 2 percent.
• India VIX ended at 12.5, up 0.3 percent.
• Max open interest for August series at 11,500 Call (Open interest at 36.4 lakh, down 5 percent)
• Max open interest for Aug series at 11,000 Put (Open interest at 52.4 lakh, up 3 percent)

F&O Ban

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

Put-Call Ratio

• Nifty PCR at 1.76 versus 1.67
• Nifty Bank PCR at 1.62 versus 1.37

Active Stock Futures

Fund Flows

Brokerage Radar

Nomura on ACC

• Upgraded to ‘Buy' from ‘Neutral'; raised price target to Rs 1,900 from Rs 1,890.
• After correction, valuations are no longer demanding.
• Cycle uptrend has begun; Earnings recovery on track.
• Volume upside limited, but may surprise on realisations/costs.

Nomura on Ambuja

• Upgraded to ‘Buy' from ‘Neutral'; cut price target to Rs 295 from Rs 300.
• Post-correction valuations attractive.
• As demand growth continues, earnings outlook looks better.
• New capacity improves volume outlook.
• See synergy benefits to improve after master supply agreement.

Deutsche Bank on Siemens India

• Maintained ‘Hold'; cut price target to Rs 1,070 from Rs 1,150.
• Reported a solid net profit growth, but flat on order inflows.
• Thesis of good revenue growth but weak orders is playing out.
• Expect single-digit revenue growth in 2018-19.

IDFC Securities on Strides Shasun

• Maintained ‘Outperform' with a price target of Rs 613.
• Q1 positives: Higher U.S. and institutional business.
• Management expects pick up in U.S. business from October onwards
• Remain positive given strong position in Australia and growth potential in the U.S.

UBS on SRF

• Maintained ‘Buy' with a price target of Rs 2,500.
• Riding on packaging film and guiding strong.
• Packaging strong due to higher realization, currency tailwinds, volume uptick and inventory gains.
• Management maintained strong growth guidance for specialty chemical.

Brokerages On BPCL

SBICAP

• Maintained ‘Buy' with a price target of Rs 526.
• June quarter's net profit above estimates purely driven by higher than expected inventory gains.
• Refining core performance was weak with lower core GRM and higher opex.
• Marketing inventory gain was higher than expected.
• Temporary pause in price hike doesn't change structural deregulation story.

Nomura

• Maintained ‘Buy' with a price target of Rs 555.
• Large inventory gains was a key reason for the beat.
• Strong marketing margins adjusted for inventory gains.
• Near-term focus will likely remain on retail prices of diesel/petrol.
• Continue to believe OMCs should be able to pass on cost increases.

Brokerages On HPCL

JPMorgan

• Maintained ‘Underweight'; cut price target to Rs 260 from Rs 295.
• Large inventory gains drove earnings beat.
• Underlying refining sharply weaker.
• HPCL's older refineries means not ideally positioned for IMO.
• Remain underweight given confluence of headwinds.

Nomura

• Maintained ‘Buy' with a price target of Rs 415.
• Large inventory gains was a key reason for the beat.
• Marketing apart from inventory gains remained strong.
• Near-term focus will likely remain on retail prices of diesel/petrol.
• Continue to believe OMCs should be able to pass on cost increases.

Brokerages On Cipla

CLSA

• Maintained ‘Buy'; raised price target to Rs 760 from Rs 650.
• Operationally in-line, Net profit beat on higher other income.
• US ramp-up weak but should pick up in the second half of the current financial year.
• Expect margin expansion to continue as U.S. sales ramp up.

Morgan Stanley

• Maintained ‘Overweight' with a price target of Rs 716.
• June quarter came in line; steady improvement under way.
• Top-line growth to be driven across geographic segments.
• U.S. Margins are poised to improve.
• Complex launches, cost control and better revenue mix to aid.
• Reasonable valuations keep us overweight.

Brokerages On Lupin

Credit Suisse

• Downgraded to ‘Underperform' from ‘Neutral'; cut price target to Rs 715 from Rs 770
• Sharp erosion in U.S. sales; price erosion to accelerate with increasing approvals.
• June quarter had no one-offs in U.S.; Current weak base is the new normal.
• Expect earnings to remain subdued for the next two quarters.

JPMorgan

• Maintained ‘Neutral' with a price target of Rs 760.
• Lower U.S. revenues leads to margin miss.
• Margins weak despite lower R&D and other expenses.
• Erosion in US business and margin reset is concerning.
• Few catalysts for earnings recovery in the near term.

Brokerages On Sobha

CLSA

• Maintained ‘Buy' with a price target of Rs 764.
• June quarter results were steady amidst major accounting change.
• Non-Bengaluru presales drive performance; Expect acceleration ahead.
• Contracting business is seeing good growth.
• Accounting changes drive financial adjustments.

Deutsche Bank

• Maintained ‘Buy' with a price target of Rs 550.
• Started new fiscal with steady operational and financial performance.
• New launch momentum accelerated over the quarter.
• See improved performance in contract and manufacturing units.

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