All You Need To Know Going Into Trade On Feb. 12

Asian stocks traded higher Tuesday with the biggest advance seen in Japan after the yen weakened.

Despite a rise in Tokyo as traders returned from a holiday, markets remained hostage to the next crucial round of trade talks. Equities ticked higher in Sydney and Seoul, while futures pointed to a weaker start in China and Hong Kong.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.22 percent to 10,906.50 as of 7:30 a.m.

Short on time? well, then listen to this podcast for a quick summary of ALl You Need To Know before the opening bell podcast.

BQLive

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

U.S. Market Check

• U.S. equities were mixed and trading volume was muted at the start of a week that could be pivotal for global trade, while lawmakers in Washington continue to negotiate a contentious spending bill.
• The yield on 10-year Treasuries was steady at 2.65 percent.

#BQMarketWrap | U.S. stocks start week of trade talks on muted note.

Read: https://t.co/zKUCXFHIj3 pic.twitter.com/Ui2YRoVtcN

Asian Cues

• Japan's Topix index jumped 1 percent as of 9:14 a.m. in Tokyo.
• Australia's S&P/ASX 200 Index rose 0.3 percent.
• Hong Kong's Hang Seng Index futures fell 0.1 percent.
• S&P 500 futures ticked higher.
• The MSCI Asia Pacific Index rose 0.3 percent.

Commodity Cues

• Brent crude ended 0.95 percent lower at $61.51 per barrel.
• West Texas Intermediate crude rose 0.2 percent to $52.50 a barrel.
• Gold was stable at $1,307.25 an ounce.

London Metal Exchange

• Aluminium ended lower for the fourth day, down 0.05 percent.
• Tin ended 0.12 percent lower.
• Zinc ended lower for the second day, down 2.22 percent.
• Copper ended lower for the third day, down 0.97 percent.
• Nickel ended lower for the second day, down 0.64 percent.
• Lead ended 1.66 percent lower.

Indian ADRs

Key Data/Events To Watch This Week

• 5:30 p.m.: India January Consumer Price Inflation YoY; Bloomberg estimates at 2.54 percent (prior 2.19 percent).
• 5:30 p.m.: India December industrial production YoY; Bloomberg estimates at 1.5 percent (prior 0.5 percent).
• Chinese Vice Premier Liu He expected to join U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in high-level trade talks Thursday and Friday
• Sweden's Riksbank is expected to keep interest rates at minus 0.25 percent on Wednesday after the first increase in more than seven years in December.
• Data Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December.
• If no deal is reached on the U.S-Mexico border wall, parts of the federal U.S. government may shut down again later this week when stopgap government funding expires.

Stocks To Watch

• Axis Bank: Specified Undertaking of Unit Trust of India (SUUTI) plans to sell 1.98 percent stake on Feb.12, with an option to sell additional 1.02 percent stake in the Bank. Floor price of the offer is set at Rs 689.52 per share, with total aggregate consideration of Rs 3500 crore. Offer to open for retail investors on Feb. 13.
• Bank of America is said to have bid for part of SBI's $2.2 billion loans to Essar.
• Dr Reddy's Laboratories: Indivior lost bid to stay mandate in the company's Suboxone Case. The Appeals court has denied Indivior's request that would have further delayed Dr. Reddy's from selling a generic version of Suboxone Film. Previously, U.S. Court of Appeals had overturned order that blocked Dr. Reddy's from selling copy of opioid addiction treatment. The mandate sending case to trial court to dissolve order goes into effect from Feb. 11.
• Max Financial Services: Group said that Analjit Singh will become Chairman of Max India and Max Life with effect from April 1. As per the transition plan, Rahul Khosla will become Group Advisor from his current post of Group President. The company said that Rahul Khosla will demit his role as Chairman of Max Healthcare once regulatory approvals for the transaction with KKR-Radiant are received. This position will then be filled by KKR Radiant.
• Persistent Systems appointed Christopher O' Conner as CEO Designate. The company said that he will join the company via U.S. arm with effect from Feb. 25.
• Tata Steel BSL: Board approved issuing Non-Convertible Preference Shares up to Rs 12,000 crore to Tata Steel and/or issue Optionally Convertible Preference Shares up to Rs 12,000 crore.
• KNR Constructions to sell entire shareholding in its SPV with Cube Highways and Infra for Rs 34.46 crore
• Alembic Pharma's JV (with Orbicular) received two observations from the U.S. FDA inspection at its Gujarat's formulation manufacturing facility.
• Indian Overseas Bank: RBI levied penalty of Rs 1.5 crore on the bank due to non-monitoring of end use of funds and delay in reporting of fraud in respect of one of its borrowers.
• IFCI increased benchmark rates for short term loans by 10 basis points to 9.3 percent. Benchmark rates for long term loans remains unchanged at 10.75 percent.
• Arshiya's two arms to acquired warehouses in Uttar Pradesh for Rs 118 crore.
• JK Tyres: Board to consider issuing preference share issue to promoter group on Feb. 14.
• Edelweiss Financial Services: Allianz Management to invest $200 million in the company's Private Debt Platform.
• Max Ventures & Industries' arm Max Learning to be restructured as to serve as a real estate service vertical of the company.
• Gulf Oil Lubricants announced association with Mahindra Logistics for supply chain solutions.

Media Reports

• PNB to sell stake in housing finance arm to GA and Varde (Economic Times)

Nifty Earnings To Watch

• Coal India
• Hindalco Industries
• Sun Pharmaceutical

Other Earnings To Watch

• HEG
• HeidelbergCement
• JK Paper
• Linc Pen & Plastics
• Lux Industries
• Man Industries
• Manali Petrochemicals
• Manpasand Beverages
• Matrimony.com
• MIRC Electronics
• Mishtann Foods
• Mukand
• Natco Pharma
• NCC
• NLC India
• Oil India
• Olectra Greentech
• Prestige Estates Projects
• Punjab & Sind Bank
• Redington
• Religare Enterprises
• RITES
• Sadbhav Infrastructure Project
• Shakti Pumps
• Som Distilleries & Breweries
• Transport Corporation of India
• Waterbase
• ADF Foods
• Aksh Optifibre
• Amrutanjan Health Care
• Asahi India Glass
• Asian Granito India
• Automotive Axles
• Balaji Telefilms
• Bata India
• Bharat Road Network
• Birla Cable
• CG Power and Industrial Solutions
• CIL Nova Petrochemicals
• Container Corporation of India
• CRISIL
• Dhanuka Agritech
• Dollar Industries
• GE Power India
• Goodricke Group
• GTPL Hathway
• Gujarat State Financial Corporation
• Hind Rectifiers
• Hotel Leela Venture
• Indian Hotels
• IOL Chemicals and Pharmaceuticals
• J.Kumar Infraprojects
• Jain Irrigation Systems
• JHS Svendgaard Laboratories
• Karur Vysya Bank
• Kesoram Industries
• Pennar Industries
• Vadilal Industries

Earnings Reaction To Watch

HAL (Q3, YoY)

• Revenue up 3.4 percent to Rs 4,425.3 crore.
• Net profit down 17 percent to Rs 455.2 crore.
• Ebitda up 9.5 percent to Rs 890.4 crore.
• Margin at 20.1 percent versus 19 percent.

Astral Poly Technik (Q3, YoY)

• Revenue up 23.7 percent to Rs 633.7 crore.
• Net profit up 13.8 percent to Rs 52.7 crore.
• Ebitda up 27.3 percent to Rs 93.7 crore.
• Margin at 14.8 percent versus 14.4 percent.

JBM Auto (Q3, YoY)

• Revenue up 8.5 percent to Rs 429.9 crore.
• Net profit up 19.2 percent to Rs 18 crore.
• Ebitda up 5.6 percent to Rs 70.2 crore.
• Margin at 16.3 percent versus 16.8 percent.

PI Industries (Q3, YoY)

• Revenue up 31.6 percent to Rs 707.5 crore.
• Net profit up 33.1 percent to Rs 107.3 crore.
• Ebitda up 41.9 percent to Rs 148.6 crore.
• Margin at 21 percent versus 19.5 percent.

Triveni Turbine (Q3, YoY)

• Revenue up 27.6 percent to Rs 211.3 crore.
• Net profit up 17.5 percent to Rs 22.8 crore.
• Ebitda up 7.8 percent to Rs 35.8 crore.
• Margin at 16.9 percent versus 20 percent.

Corporation Bank (Q3, YoY)

• Net Interest Income up 3.1 percent to Rs 1303 crore.
• Net profit at Rs 60.5 crore versus net Loss to Rs 1240.5 crore.
• Provisions at Rs 842.3 crore (QoQ).
• GNPA at 17.36 percent versus 17.46 percent (QoQ).
• NNPA at 11.47 percent versus 11.65 percent (QoQ).

Gujarat Narmada Valley Fertilizers and Chemicals (Q3, YoY)

• Revenue down 23.4 percent to Rs 1219.2 crore.
• Net profit down 27.3 percent to Rs 165.7 crore.
• Ebitda down 81.3 percent to Rs 80 crore.
• Margin at 6.6 percent versus 26.9 percent.

Andhra Bank (Q3, YoY)

• Net Interest Income up 1.6 percent to Rs 1698.3 crore.
• Net loss of Rs 578.6 crore versus net loss of Rs 532 crore.
• Provisions at Rs 1790.2 crore (QoQ).
• GNPA at 16.68 percent versus 16.36 percent (QoQ).
• NNPA at 6.99 percent versus 7.49 percent (QoQ).

Reliance Home Finance (Q3, YoY)

• Revenue up 26 percent to Rs 514 crore.
• Net profit up 37.5 percent to Rs 55 crore.
• AUM up 24 percent to Rs 18,288 crore.
• Capital Adequacy Ratio at 18.8 percent.
• GNPA at 0.9 percent as on December 2018.

CARE Ratings (Q3, YoY)

• Revenue down 6 percent to Rs 73 crore.
• EBIT down 22.6 percent to Rs 35.3 crore.
• EBIT Margin at 48.4 percent versus 58.6 percent.
• Net profit down 18.5 percent to Rs 30.6 crore.
• Other income up 84 percent to Rs 8.8 crore.

Bulk Deals

• Reliance Infra: Regime De Retraite D Hydro-Quebec sold 13.4 lakh shares or 0.52 percent equity at Rs 118.34 each.
• Bliss GVS Pharma: Polus Global Fund sold 42 lakh shares or 4.07 percent equity at Rs 145.01 each.

Who's Meeting Whom

• Hero MotoCorp to meet Wellington Management and Nippon Life Insurance (Singapore) from Feb. 12-15.
• Symphony to meet Janus Henderson Investors and Mondrian Investment Partners from Feb. 22-25.
• Endurance Technologies to meet Nomura on Feb. 13.
• KEC International to meet Edelweiss Securities and IIFL Securities from Feb. 13-15.
• Eicher Motors to meet Wellington Management, Ward Ferry Management and other investors from Feb. 12-13.
• Ramco Cements to meet Abu Dhabi Investment Authority, Burgundy AMC and other investors from Feb. 12-15.
• TCI Express to meet Aditya Birla Sun Life AMC, IIFL and other investors on Feb. 13.

Insider Trading

• Bajaj Finance promoter group Bajaj Allianz Life Insurance acquired 1lk shares on Feb. 6.
• Sequent Scientific Promoter Sajitha Pillai acquired 35,800 shares from Oct. 9-10 (2018).
• DCM Shriram Industries promoter groups acquired 17,000 shares on Feb. 8.

Trading Tweaks

• Ajanta Pharma record-date for share buyback.
• Religare Enterprises, Vipul, Binani Industries, Reliance Home Finance, Reliance Naval & Engineering, Leel Electricals to move into short term ASM Framework.
• IG Petrochemicals price band revised to 10 percent.

Money Market Update

• Rupee closed at 71.18/$ on Monday from 71.31/$ on Friday.

F&O Cues

• Nifty February futures closed trading at 10909, premium of 21 points.
• Max open interest for February series at 11,100 Call (open interest at 9.7 lakh shares).
• Max open interest for February series at 10,800 Put (open interest at 6.3 lakh shares).

Stocks In F&O Ban

• In ban: Adani Enterprises, IDBI, DHFL, Jet Airways, Reliance Capital, Reliance Power.
• Out of ban: Reliance Infrastructure.

Put Call Ratio

• Nifty PCR at 1.47 versus 1.59.

Brokerage Radar

On Eicher Motors

CLSA

• Maintained ‘Outperform'; hiked price target to Rs 23,900 from Rs 22,300.
• Weak volumes, but commendable margin resilience at Royal Enfield.
• Volume growth under pressure; new 650cc bike seeing decent initial response.
• Remain believers in RE's long-term growth potential.

Macquarie

• Maintained ‘Outperform' with a price target of Rs 24,000.
• Royal Enfield sales impacted by large price increases.
• Expect Royal Enfield sales growth to pick-up.
• Structural demand drivers remain intact.

Jefferies

• Maintained ‘Buy'; cut price target to Rs 23,700 from Rs 27,100
• December quarter review: Sharp increase in realization drives positive surprise.
• Cut revenue/EBITDA estimates for FY19-21 by 2-10 percent.
• Despite near-term headwinds see strong medium to long-term prospects.

On Motherson Sumi

CLSA

• Maintained ‘Outperform'; cut price target to Rs 150 from Rs 180.
• Weak Indian auto demand hurting standalone business.
• SMRP to benefit from ramp-up of new plants but demand concern in Europe too.
• Cut FY19-21 EPS estimates by 6-10 percent to factor in lower topline growth and margins in India.

Macquarie

• Maintained ‘Outperform' with a price target of Rs 185.
• India business weaker, while international business performed better.
• Debt reduction aided by working capital reduction.
• Well aligned to growth drivers in industry.

More Calls

UBS on Thermax

• Maintained ‘Sell' with a price target of Rs 815.
• Earnings missed estimates driven by big margin miss and lower revenue.
• Execution remains strong, but orders to stagnate over medium term.
• See no industrial capex cycle recovery over the medium term.

UBS on Apollo Hospitals

• Maintained ‘Buy' with a price target of Rs 1,590.
• Operationally good December quarter though pledging an interim pain.
• Liquidation of promoter stake in Apollo Munich to aid in reduction of pledge.
• Ayushman Bharat - limited impact on corporate hospitals.

SBICAP on SpiceJet

• Maintained ‘Buy' with a price target of Rs 109.
• Rising cost offsets strong revenue growth.
• Trading PLF for yield; Upfront cash incentives aided revenue.
• Return of pricing discipline and cost-reduction measures to drive improvement.

Deutsche Bank Research on General Insurance Corp

• Maintained ‘Hold'; cut price target to Rs 300 from Rs 375.
• Growth weakens, Combined Ratio eases; high tax rate impacts profitability.
• Combined ratio for Fire and Agri rises on a sequential basis; other key segments see lower combined ratio.

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