All You Need To Know Going Into Trade On Feb. 8

Asian stocks are set to end the week on a dour note as investors grow anxious that the Trump administration won't reach a trade deal with China before further tariff hikes kick in.

Japanese shares led declines in Asia, where Hong Kong's market will reopen after a three-day holiday. Australian stocks pared losses as the Aussie tumbled toward its worst week since 2016, bolstering the country's export competitiveness.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.46 percent to 11,044 as of 7 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 slid Thursday, as investors grew anxious that the Trump administration won't reach a trade deal with China before a March deadline for escalating the war.
• The yield on 10-year Treasuries dipped to 2.65 percent.

#BQMarketWrap | U.S. stocks fall on pessimism over trade, growth.

Read: https://t.co/OixKa5yTzC pic.twitter.com/KRg6TpOHO1

Asian Cues

• The MSCI Asia Pacific Index fell 0.6 percent.
• Futures on the S&P 500 dipped 0.2 percent.
• Japan's Topix index lost 1.3 percent.
• Australia's S&P/ASX 200 Index was flat, erasing earlier losses.

Commodity Cues

• Brent crude resumed declines after a one-day rally, ended 1.7 percent lower at $61.63 per barrel.
• Gold gained less than 0.1 percent to $1,310.25 an ounce.
• West Texas Intermediate crude slid 0.2 percent to $52.53 a barrel, extending this week's drop.

London Metal Exchange

• Aluminium ended lower for the second day, down 0.68 percent.
• Tin halted a two-day rally, ended 0.24 percent lower.
• Zinc halted a two-day decline, ended 1 percent higher.
• Copper halted a three-day rally, ended 0.53 percent lower.
• Nickel halted a two-day decline, ended 0.46 percent higher.
• Lead ended lower for the third day, down 0.48 percent.

Data Watch

• 10:30 a.m.: Car sales data for month of January.

Indian ADRs

Stocks To Watch

• Raymond clarified that the related party transactions are undertaken in compliance with laws and on an arm's length basis, which has been certified by independent reputed accounting firms.
• Tata Motors JLR'sJanuary sales were down 10.9 percent at 43,733 units. The company said market weakness in China had affected the sales.
• The Reserve Bank of India levied a penalty of Rs 1 crore on the State Bank of India for non-monitoring of the end use of funds in respect of one of its borrowers.
• Varun Beverages approved intent to enter into a binding agreement to acquires franchise rights from SMV Group in Karnataka, Maharashtra and Madhya Pradesh. These rights were previously franchised by PepsiCo to SMV Group.
• Aurobindo Pharma said it was investing Rs 15 crore for a 19.9 percent stake in pharma company ‘Synergies Remedy'. This target company manufactures API and intermediates and the acquisition will be completed by end of February.
• Coffee Day Enterprises approved to sell equity shares held by the company in its arm and promoter in ‘Mindtree'. The company said in its disclosure of the actual sale will be reported to the exchanges as and when it is announced.
• Ceat said that it commissioned the commercial production of Truck Bus Radial Tyres at the expansion phase of Halol plant in Tamil Nadu with effect from Feb. 7.
• Sun Pharma Advanced Research received a demand order (inclusive of penalty) worth Rs 46.04 crore for payment of Service Tax, from Commissioner of GST and Central Excise (Mumbai).
• Shriram EPC received three orders worth Rs 291.6 crore from Jharkhand Government for construction in the water management sector.
• HCG said it will increase its stake from 50.1 percent to 100 percent in its arm BACC Healthcare. This arm operates fertility treatment centers.
• Goa Carbon's January production for Calcined Petroleum Coke at 17,750.3 MT.
• Jet Airways said that four aircraft have been grounded due to non-payment of amounts outstanding to lessors under lease agreements, while three aircrafts which were grounded earlier for engine normalisation are back in commercial operations.
• Pricol said that its new plant in Tamil Nadu will not commence its operations due to change in business strategy of the company in line with customer expectations.
• Fortis Healthcare appointed Dr. Ashutosh Raghuvanshi as the CEO of the company with effect from March 18.

Nifty Earnings To Watch

• Bharat Petroleum Corporation
• Mahindra & Mahindra
• Tata Steel

Other Earnings To Watch

• Abbott
• AIA Engineering
• Amber Enterprises
• Avanti Feeds
• Balkrishna Industries
• Camlin Fine Sciences
• Dr. Lal Path Labs
• Emmbi Industries
• Engineers India
• Excel Crop Care
• Fine Organic Industries
• Garden Reach Shipbuilders & Engineers
• General Insurance Corporation of India
• GOCL Corporation
• Greenply Industries
• Gujarat Gas
• Gujarat State Petronet
• Hercules Hoists
• Himachal Futuristic Communications
• Indo Count Industries
• Ingersoll Rand
• JB Chemicals & Pharmaceuticals
• JK Lakshmi Cement
• KIOCL
• KRBL
• Madras Fertilizers
• Max Ventures and Industries
• Mishra Dhatu Nigam
• NACL Industries
• Nagarjuna Fertilizers and Chemicals
• Nandan Denim
• National Aluminium Company
• NHPC  Nirlon
• Orient Cement  Precot Meridian
• Puravankara
• REC
• Salzer
• Electronics
• SJVN
• SKF India
• SML Isuzu
• Sonata Software
• Sun TV Network
• Sundaram Multi Pap
• TCNS Clothing
• Themis Medicare
• Thermax
• TV Today Network
• V.S.T Tillers Tractors
• VA Tech Wabag
• Varroc Engineering
• Visaka Industries
• West Coast Paper Mills
• Swelect Energy Systems
• Zuari Agro Chemicals
• Zuari Global
• Sudarshan Chemical Industries
• Nitin Spinners
• HIL
• FDC
• DFM Foods.

Earnings Reaction To Watch

Tata Motors (Q3, YoY)

• Revenue up 5 percent at Rs 77,000 crore.
• Net loss of Rs 26,993 crore versus net profit of Rs 1,199 crore.
• Ebitda down 22 percent at Rs 6,039 crore.
• Margin at 7.8 percent versus 10.6 percent.
• JLR impairment costs of Rs 27,838 crore.

Britannia (Q3, YoY)

• Revenue up 10.7 percent at Rs 2,842.4 crore.
• Net profit up 14.1 percent at Rs 300.7 crore.
• Ebitda up 13.4 percent at Rs 451.8 crore.
• Margin at 15.9 percent versus 15.5 percent.

SAIL (Q3, YoY)

• Revenue up 3.3 percent at Rs 15,835.8 crore.
• Net profit at Rs 616.3 crore versus Rs 43.2 crore.
• Ebitda up 79 percent at Rs 2578.2 crore.
• Margin at 16.3 percent versus 9.4 percent.
• Inventory write-off of Rs 2,127.3 crore.

Sandur Manganese & Ores (Q3, YoY)

• Revenue up 28 percent at Rs 194.9 crore.
• Net profit up 76.6 percent at Rs 36.2 crore.
• Ebitda up 68.8 percent at Rs 55.7 crore.
• Margin at 28.6 percent versus 21.7 percent.

Coffee Day Enterprises (Q3, YoY)

• Revenue up 3.2 percent at Rs 996.5 crore.
• Net profit up 3.3 times at Rs 63.5 crore.
• Ebitda down 6.6 percent at Rs 148.6 crore.
• Margin at 14.9 percent versus 16.5 percent.
• Exceptional gain of Rs 73 crore.
• Other income of Rs 33 crore.

Aurobindo Pharma (Q3, YoY)

• Revenue up 21.5 percent at Rs 5,269.7 crore.
• Net profit up 19.7 percent at Rs 712.2 crore.
• Ebitda up 1.7 percent at Rs 1,035.9 crore.
• Margin at 19.7 percent versus 23.5 percent.
• Forex gain of Rs 50.5 crore.

Apex Frozen Foods Q3FY19 (Standalone; YoY)

• Net profit down 40 percent to Rs 11.4 crore
• Revenue down 18 percent to Rs 216 crore
• Ebitda down 40 percent to Rs 18 crore
• Margin at 8.3 percent versus 11.4 percent

Timken (Q3, YoY)

• Revenue up 38.2 percent at Rs 384.9 crore.
• Net profit up 2.9x at Rs 26.4 crore.
• Ebitda up 2.7 times at Rs 55.6 crore.
• Margin at 14.5 percent versus 7.4 percent.

Healthcare Global Enterprises (Q3, YoY)

• Revenue up 20.3 percent at Rs 248.2 crore.
• Net loss of Rs 6 crore versus net profit of Rs 1.2 crore.
• Ebitda up 8 percent at Rs 28.2 crore.
• Margin at 11.4 percent versus 12.7 percent.
• Other income of Rs 5.9 crore.

Sterling Tools (Q3, YoY)

• Revenue up 13.3 percent at Rs 123.3 crore.
• Net profit down 34.1 percent at Rs 8.3 crore.
• Ebitda down 24.9 percent at Rs 17.8 crore.
• Margin at 14.4 percent versus 21.8 percent.
• Expenses up 22 percent at Rs 110.9 crore.

Shipping Corporation of India (Q3, YoY)

• Revenue up 22.2 percent at Rs 1,074.9 crore.
• Net profit up 2.2 times at Rs 180.5 crore.
• Ebitda up 43.4 percent at Rs 271.5 crore.
• Margin at 25.3 percent versus 21.5 percent.
• Other income up 48 percent at Rs 162.4 crore.

Borosil Glassworks (Q3, YoY)

• Revenue up 44.2 percent at Rs 113.6 crore.
• Net profit up 14.8 percent at Rs 14.7 crore.
• Ebitda down 7.9 percent at Rs 11.6 crore.
• Margin at 10.2 percent versus 16 percent.
• Other income up 64 percent at Rs 14.3 crore.

Endurance Technologies (Q3, YoY)

• Revenue up 17.8 percent at Rs 1,812.9 crore.
• Net profit up 23.5 percent at Rs 96.6 crore.
• Ebitda up 11.4 percent at Rs 252.8 crore.
• Margin at 13.9 percent versus 14.8 percent.
• Other Income of Rs 9.3 crore
• Raw material costs up 21 percent at Rs 1,068.9 crore.

Khadim (Q3, YoY)

• Revenue down 13.8 percent at Rs 176.4 crore.
• Net profit down 55.1 percent at Rs 4 crore.
• Ebitda down 39.2 percent at Rs 12.1 crore.
• Margin at 6.9 percent versus 9.7 percent.

Phoenix Mills (Q3, YoY)

• Revenue up 5.7 percent at Rs 440.4 crore.
• Net profit up 8.6 percent at Rs 70.8 crore.
• Ebitda up 7.6 percent at Rs 222.5 crore.
• Margin at 50.5 percent versus 49.6 percent.

Bulk Deals

• Chalet Hotels: DB International Asia sold 19.3 lakh shares at Rs 293.54 each.
• Solara Active Pharma Sciences: BNP Paribas Arbitrage acquired 1.96 lakh shares or 0.8 percent equity at Rs 374.98 each.

Ujjivan Financial Services

• Ardisia Limited acquired 33.65 lakh shares or 2.78 percent equity at Rs 290 each.
• Sequoia Capital India Investments sold 38.38 lakh shares or 3.17 percent equity at Rs 290 each.

L&T Finance sells Reliance Group stocks

• Sold 2 crore shares or 0.7 percent equity in Reliance Communications at Rs 5.14 per share.
• Sold 49 lakh shares or 1.9 percent equity in Reliance Infra at Rs 120.98 per share.
• Sold 77.9 lakh shares or 3.1 percent equity in Reliance Capital at Rs 123.89 each.
• Sold 6.25 crore shares or 2.2 percent equity in Reliance Power at Rs 10.85 each.

Trading Tweaks

• Shanti-Gears record date for share buyback.
• CESC Ventures price band revised to 20 percent.
• Spencer's Retail, Reliance Home Finance price band revised to 10 percent.

Who's Meeting Whom

• Dr Lal PathLabs to meet Central Square Foundation on Feb. 9.

Insider Trading

• Electrosteel Castings promoter group Electrocast Sales acquired 70,300 shares between Feb.4-5.
• Quess Corp promoter Ajit Isaac acquired 20,700 shares between Feb. 5-6.

Money Market Update

• The rupee on Thursday closed at 71.45/$ versus Wednesday's closing of 71.55/$.

F&O Cues

• Nifty February futures closed trading at 11094, premium of 24 points.
• Max open interest for February series at 11,000 Call, (open interest at 30.6 lakh shares)
• Max open interest for February series at 11,000 Put, (open interest at 36.6 lakh shares)

Stocks In Ban

In Ban

• IDBI
• DHFL
• Jet Airways
• Reliance Capital
• Reliance Infrastructure

New in Ban

• Reliance Power

Put-Call Ratio

• Nifty PCR at 1.78 versus 1.82.
• Nifty Bank PCR at 1.12 versus 1.1.

Brokerage Radar

On Tata Motors

CLSA

• Maintained ‘Sell' with a price target of Rs 150.
• Another big miss at JLR, a large asset impairment and weak commentary.
• JLR: a weak demand outlook, a margin guidance cut and Brexit fears.
• Cut FY19-21 EPS estimates by 2-66 percent on lower volumes/margins & lower depreciation for JLR .

Emkay

• Downgraded to ‘Hold' from ‘Buy'; cut price target to Rs 192 from Rs 256.
• JLR faces headwinds such as China slowdown and Brexit uncertainties.
• Cut EPS estimates for the current and the next two financial years by 46 percent, 19 percent and 19 percent respectively due to lower volume/margin in JLR's China operations.
• Despite cost-reduction efforts, free cash flows are expected to remain negative over FY19-21.

UBS

• Maintained ‘Neutral' with a price target of Rs 200.
• December quarter review– China reset weighs on JLR margin; India profitability holds up.
• Impairment supports future EPS but not cash flow.
• Volume growth to remain elusive; company cuts margin guidance.

On RBI Monetary Policy

Nomura

• RBI surprises with a 25 basis point rate cut; Neutral stance provides further policy flexibility.
• RBI continues to sound optimistic, in contrast to our assessment of weak global growth.
• Governor's statement that “there is room to act” clearly suggests this is not a one and done cut.

Antique

• Having front-loaded the rate cut, RBI is most likely to pause in next meeting.
• Next rate cut is likely to be preceded by a change in stance to "accommodative".

On Grasim Industries

CLSA

• Maintained ‘Sell' with a price target of Rs 700.
• Broadly in-line results despite cost pressures in VSF.
• Grasim's participation in Vodafone Idea rights issue will be limited to its shareholding.
• Current capacity overhang of 31 percent is expected to narrow with demand remaining strong.

Morgan Stanley

• Maintained ‘Equal-weight' with a price target of Rs 958.
• Domestic VSF business remains on firm footing with strong demand growth and stable realisation.
• Focus remains on share of value-added product in both businesses and capacity expansion.
• Balance sheet is healthy with net cash of Rs 1,000 crore.

On Cadila Healthcare

CLSA

• Maintained ‘Buy'; cut price target to Rs 400 from Rs 430.
• December quarter results were ahead of estimates.
• Well-identified long-term drivers, execution is the key.
• Cut FY19-21 EPS estimates by 1-8 percent to incorporate Heinz acquisition.

HSBC

• Maintained ‘Buy'; cut price target to Rs 400 from Rs 420.
• Cadila reported highest-ever quarterly U.S. sales with large contribution from gAndroGel.
• Despite high sales base, believe the U.S. outlook remains steady on new launches.
• Expect good execution in U.S., long-term pick-up in India and emerging markets.

More Calls

UBS on Arvind

• Maintained ‘Buy'; cut price target to Rs 120 from Rs 130.
• Unexpected decline in textile; advance material going strong.
• Delays in garmenting facilities are priced in.
• New initiatives are exciting but not sizeable yet.

UBS on Britannia

• Maintained ‘Buy' with a price target of Rs 3,800.
• Good volume growth on a strong base.
• Potential beneficiary of rural upturn.
• Stock continues to have good revenue and earnings growth visibility.

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