All You Need To Know Going Into Trade On June 1

Stocks To Watch

• Adani Power: To consider proposal for delisting of shares on June 3. Promoter group holds 74.97% stake in the company. Board will consider appointing a merchant banker as well.
• Kotak Mahindra Bank: Invesco Oppenheimer Developing Markets Fund, Canada Pension Plant Investment Board and ICICI Prudential Mutual Fund allotted 8.02%, 7.12% and 6.3% shares respectively post its QIP.
• Dr Reddy's Laboratories: Gets Establishment Inspection Report (EIR) from the U.S. FDA for its API Srikakulam Plant (SEZ) in Andhra Pradesh, indicating that the inspection is closed.
• TCS: Gets SEBI warning letter in relation to a disclosure on a U.S. lawsuit.
• Metropolis Healthcare: The company shared its outlook for the quarter ending June where it mentioned that the revenue in April was down to 40% of the normal trend. It expects the revenue to improve to around 75% by end of June. It is expecting a positive Ebitda in June. Operations have commenced at 50% of the collection network. Reduced fixed and variable costs by more than 20% per month. Foresee no major risk on receivables although there may be some impact from the B2B business. B2C business does not carry the risk of recovery of assets as large part of the business is on cash and carry model.
• HCL Tech: Announced intent to acquire Cisco’s SON technology.
• Sanofi India: Completes the transaction relating to the slump Sale and transfer of the manufacturing facility of the company at Ankleshwar, Gujarat to Zenitava for a total consideration Rs 320.7 crore. Out of this, the company has received a sum of Rs 293.4 crore on May 29. Full transfer of products will be completed by September 2021.
• Dollar Industries: Resumed its e-commerce activities to market and sell its products from May 28.
• M&M Financial Services: To consider raising funds via equity on June 1.
• HUDCO: Board approves allotment of NCDs worth Rs 1,040 crore on a private placement basis.
• Bank of India: Reduced its MCLR by 25 basis points across all tenors. The one-year MCLR is now at 7.7% per annum. The external benchmark lending rate which is linked to RBI’s repo rate has been reduced by 40 basis points to 6.85% per annum. Base rate has also been reduced from 9.40% to 9.00%. The reduction in interest rates will be effective from June 1.
• Kalpataru Power: Buyback opens on June 1. Also, the company will sell its entire 49.72% stake in Jhajjar KT Transco to India Grid Trust for a total enterprise value of about Rs 310 crore. The project comprises of three 400 kV power transmission lines and two 400 kV and sub-stations in state of Haryana.
• Welspun Corp: Redeems NCDs worth Rs 250 crore. The final maturity of these NCDs was in February 2024. The company had outstanding NCDs worth Rs 290 crore across different maturities, before this redemption.
• Manappuram Finance: DSP Mutual Fund increases its holding to 5.03% from 5% after purchasing 2,84,660 shares of the company.
• Yes Bank: Acquires shares worth 24.19% of paid up capital pursuant to invocation of pledge.
• WABCO India: ZF Friedrichshafen AG completes acquisition of CV technology supplier WABCO. WABCO Holdings Inc. shares, previously listed on the NYSE to cease public trading with immediate effect.
• Deepak Fertilisers: ANP, NPK, TAN, IPA and ammonia plants along with its Dahej facility are gradually resuming operations. For Weak Nitric Acid, the downstream industry remains under the lockdown and has impacted its production other than for its captive use.
• DB Corp: Ratings on it fund and non-fund based long-term bank facilities revised to AA+ from AAA.
• GE Shipping: Board approves issue of NCDs worth Rs 1,000 crore via private placement.
• Ramkrishna Forgings: ICRA revises short-term credit rating to A2+ from A1 due to slowdown in domestic M&HCV industry and an anticipated weak outlook in the export market.
• Lemon Tree Hotels: Board approves raising Rs 150 crore either via rights issue, preferential allotment or a QIP. It also considers an issue of Compulsory Convertible Preference Shares (CCPs) worth Rs 300 crore by its material subsidiary Fleur Hotels Pvt. Ltd. to APG Strategic Real Estate Pool.
• Vardhman Textiles: Board approves issue of NCDs worth Rs 195 crore on a private placement basis
• Indian Hotels: Board approves issue of rated, unsecured, listed, redeemable NCDs worth Rs 300 crore to ICICI Bank on a private placement basis.
• Indian Bank: Revises one-year MCLR to 7.5% from 7.8% from June 3
• Punjab National Bank: Revises MCLR across tenors from June 1. One-year MCLR now at 7.6% from 7.75%
• KEI Industries: Expects profitability to be impacted in Q1FY21 due to Covid-19 lockdown. Expects situation to improve from Q2 onwards.
• Non-Nifty Earnings Today: V-Guard Industries, Orient Electric, Srikalahasthi Pipes, Welspun Enterprises.

Companies Sharing Their Covid-19 Update

SRF

• Chemical and packaging films business has restarted with plants operating at reasonable levels.
• Technical textiles business adversely impacted since its largely domestic focussed.
• Exports have remained robust other than logistic issues.
• Expect demand revival for most of its domestic B2B sales if the lockdown eases further going forward.

NHPC

• Completion of two hydro-electric projects has been affected.
• Estimated loss of Rs 119.4 crore likely due to generation loss.
• Exploring power projects in Ladakh.

Bharat Dynamics

• Profitability for the first quarter of FY21 will be affected.
• Expect situation to normalise during the third and fourth quarter.
• Indian Armed forces are the major customers of the company.
• Do not foresee any fall in demand for its products and services.

Century Plyboards

• Operating cashflow was negative due to fixed expenses and marginal realisations during the first six weeks of the lockdown.
• Outbound supply chain marginally affected.
• Overall demand of products has been impacted for the short-term.
• Demand gradually recovering as lockdown eases.

Hindustan Aeronautics

• No major impact on demand side of the business.
• Export business may face delays as there is likely disruption of production at supplier premises and associated delays in supplies.
• Downsizing of defence budget and risk of economic recession may impact future operations.

Hindustan Copper

• Loss of metal in concentrate production so far has been around 3,550 MT so far.
• Delayed loan repayments, taking advantage of the government guidelines.
• 50% total staff attending units and offices on all working days.

V-Mart Retail

• Centralised warehouse in Haryana maintained a minimal level of operations.
• Store closure has adversely affected business operations.
• Revenues, which were growing at over 29% as compared to the previous year until Mid-March have been significantly impacted.
• Have permission to re-open over 70% of the stores.
• Witnessing 40% of normal footfalls in the opened stores for relative operational hours.

Capacite Infra

• Received approval for starting all projects.
• Only 3 projects are located in containment zones.
• Migration of workmen has resulted in a drop of 70% in overall workman strength.
• No sales have been made for the months of April and May.

Voltas

• Peak summer season lost for the industry
• Inventory with channel partners, shorter season period and aggressive pricing may pose a challenge in covering up the lost season sales.
• Demand pattern and behaviour of the consumer might undergo a change.
• Spend towards discretionary products may be withheld.
• Pace of execution at international project sites, job closures, work certification may be adversely impacted, thereby affecting liquidity and working capital.

NCC

• Order book position as of March 2020 is at Rs 25,000 crore.
• Revenue and profitability during the first quarter of FY21 is likely to be lower.
• Consortium of banks have extended Covid-19 loan up to 10% of our fund based working capital limits
• Do not foresee difficulties in meeting our loan, interest and other commitments in FY21, barring an unforeseen situation.

Dollar Industries

• Impact on operations to the extent of 20-30%.
• Profit margin to be impacted due to loss of revenue during the lockdown.

Earnings Reported After Market Hours

Voltas Q4FY20

• Revenue up 1.3% to Rs 2,089.6 crore
• Net profit up 13.7% to Rs 158.7 crore
• Ebitda up 33.1% to Rs 192 crore
• Ebitda margin expands to 9.2% from 7%
• Lower raw material costs aid margins
• UCP segment revenue up 20% to Rs 1,199 crore
• EMP segment revenue down 18% to Rs 804.5 crore
• Performance of air coolers and other consumer products also witnessed good traction
• All numbers are consolidated and compared on a year-on-year basis

Jubilant Lifesciences Q4FY20

• Revenue flat at Rs 2,391.4 crore
• Net profit of Rs 260.5 crore from a net loss of Rs 99.3 crore
• Ebitda up 49.9% to Rs 536.6 crore
• Ebitda margin widens to 22.4% from 15%
• Lower raw material costs and other expenses aid margin expansion
• Exceptional loss of Rs 235 crore in the base quarter
• Pharma segment revenue up 6% to Rs 1,483 crore
• Life Science Ingredients segment revenue down 10% to Rs 823 crore
• All numbers are consolidated and compared on a year-on-year basis

CreditAccess Grameen Q4FY20

• Net Interest Income up 52% to Rs 296 crore
• Pre-provisioning Operating Profit up 18% to Rs 180 crore
• Net profit down 60% to Rs 31 crore
• Assets Under Management (AUM) up 68% to Rs 11,996 crore
• Net Interest Margin flat at 12.1%
• Gross NPA at 1.6% from 0.9% in the previous quarter.
• All numbers, barring the gross NPA are compared on a year-on-year basis

MCX Q4FY20

• Net sales up 22% to Rs 135 crore
• Ebitda up 24% to 70 crore
• Ebitda margin at 52.1% from 51.3%
• Net profit up 8% to Rs 66 crore
• All numbers are consolidated and compared on a year-on-year basis.

Proctor & Gamble Health Q1CY20

• Revenue down 1.3% to Rs 228.1 crore
• Net profit up 14.3% to Rs 46.5 crore
• Ebitda up 17.2% to Rs 58.7 crore
• Ebitda margin improves to 25.7% from 21.7%
• Lower raw material costs and other expenses aid margin expansion
• All numbers are standalone and compared on a year-on-year basis

Rashtriya Chemicals and Fertilisers Q4FY20

• Revenue up 15% to Rs 2,606 crore
• Net profit up 3 times to Rs 142.4 crore
• Ebitda up 2.9 times to Rs 368.4 crore
• Ebitda margin expands to 14.1% from 5.5%
• Lower raw material costs and freight expenses aid margin expansion
• Exceptional loss of Rs 100 crore due to valuation of development right certificate received from MMRDA
• All numbers are consolidated and compared on a year-on-year basis

Dilip Buildcon Q4FY20

• Revenue down 3% to Rs 2,499.7 crore
• Net profit down 47.7% to Rs 115.1 crore
• Ebitda down 9.7% to Rs 412.7 crore
• Ebitda margin at 16.5% from 17.7%
• Higher taxes impact net profit
• Road Bridge segment revenue down 1% to Rs 2,204.5 crore
• Mining segment revenue down 21% to Rs 213.5 crore
• All numbers are standalone and compared on a year-on-year basis

Metropolis Healthcare Q4FY20

• Revenue up 2.5% to Rs 207 crore
• Net profit down 55.1% to Rs 15.5 crore
• Ebitda down 10.1% to Rs 51.4 crore
• Ebitda margin narrows to 24.8% from 28.3%
• Exceptional loss of Rs 17.7 crore due to provisions on disputed trade receivables
• Higher raw material costs and employee expenses impact margins
• All numbers are consolidated and compared on a year-on-year basis

NCC Q4FY20

• Revenue down 35.6% to Rs 2,182 crore
• Net profit down 36.7% to Rs 110.4 crore
• Ebitda down 29.5% to Rs 280.5 crore
• Ebitda margin expands to 12.9% from 11.7%
• All numbers are standalone and compared on a year-on-year basis

Sundaram Finance Q4FY20

• Net Interest Income up 22.6% to Rs 632 crore
• Net profit down 80.6% to Rs 131 crore
• Exceptional gain of Rs 522 crore on account of sale of shares in Royal Sundaram in the base quarter
• Impairment of financial instruments at Rs 116 crore from Rs 42.6 crore last year
• All numbers are consolidated and compared on a year-on-year basis

Equitas Holdings Q4FY20

• Net Interest Income up 29.7% to Rs 468.3 crore
• Net profit down 65.2% to Rs 14.6 crore
• Higher provisions on financial instruments and employee costs impact bottomline
• Statutory Auditors SR Batliboi & Associates resign
• All numbers are consolidated and compared on a year-on-year basis

V-Mart Retail Q4FY20

• Revenue down 3.4% to Rs 332.7 crore
• Net loss widens to Rs 8.4 crore from Rs 1 crore
• Ebitda up 57.6% to Rs 27.9 crore
• Ebitda margin widens to 8.4% from 5.1%
• Ebitda and margins aided by IND-AS 116
• Exceptional loss of Rs 7.3 crore in the base quarter
• Same Store Sales Growth in FY20 saw a contraction of 2.3%
• All numbers are standalone and compared on a year-on-year basis

Shipping Corporation Of India Q4FY20

• Revenue up 30.6% to Rs 1,313.8 crore
• Net profit up 83% to Rs 111.1 crore
• Ebitda up 35.8% to Rs 303.8 crore
• Ebitda margin at 23.1% from 22.2%
• Higher sales in tanker segment aids bottomline
• All numbers are consolidated and compared on a year-on-year basis

Polycab Q4FY20

• Revenue down 13.6% to Rs 2,129 crore
• Net profit up 52.4% to Rs 214 crore
• Ebitda up 23.4% to Rs 300.6 crore
• Ebitda margin widens to 14.1% from 9.9%
• All numbers are consolidated and compared on a year-on-year basis

Lemon Tree Hotels Q4FY20

• Revenue up 17% to Rs 176.1 crore
• Net loss of Rs 17.9 crore from net profit of Rs 32.45 crore
• Ebitda up 30.7% to Rs 63.95 crore
• Ebitda margin at 36.3% from 32.5%
• All numbers are consolidated and compared on a year-on-year basis

Amara Raja Batteries Q4FY20

• Revenue up 1% to Rs 1,581.4 crore
• Net profit up 15.3% to Rs 137.3 crore
• Ebitda up 1% to Rs 243.8 crore
• Ebitda margin flat at 15.4%
• All numbers are consolidated and compared on a year-on-year basis

KEI Industries Q4FY20

• Revenue flat at Rs 1,258.6 crore
• Net profit up 5.2% to Rs 62 crore
• Ebitda down 10.3% to Rs 121.7 crore
• Ebitda margin at 9.7% from 10.8%
• All numbers are consolidated and compared on a year-on-year basis

Affle India Q4FY20

• Revenue up 32.3% to Rs 80 crore
• Net profit up 5.7% to Rs 15.3 crore
• Ebitda flat at Rs 20.1 crore
• Ebitda margin at 25.2% from 33.1%
• All numbers are consolidated and compared on a year-on-year basis

Advanced Enzyme Technologies Q4FY20

• Revenue flat at Rs 110.2 crore
• Net profit down 2.8% to Rs 31.3 crore
• Ebitda down 2.2% to Rs 48.6 crore
• Ebitda margin at 44.1% from 45%
• All numbers are consolidated and compared on a year-on-year basis

IDBI Bank Q4FY20

• Net Interest Income up 46% to Rs 2,356 crore
• Net profit of Rs 135 crore from net loss of Rs 4,918 crore
• Provisions worth Rs 1,511 crore written back, aiding profit
• Provisions down 81% year-on-year to Rs 1,584 crore
• Gross NPA at 27.53% from 28.72% in the previous quarter
• Net NPA at 4.2% from 5.25% in the previous quarter

Amber Enterprises Q4FY20

• Revenue up 10% to Rs 1,315 crore
• Ebitda down 10.6% to Rs 101 crore
• Ebitda margin narrows to 7.7% from 9.5%
• Net profit down 5% to Rs 63 crore
• All numbers are consolidated and compared on a year-on-year basis

Brokerage Radar

Kotak Securities On Wipro

• Reduce rating maintained
• Price target of Rs 195
• Challenging task at hand for the New CEO
• Energising the organisation, enhance and improve sales and marketing functions and make difficult people decisions will be some key priorities.

Kotak Securities On CEAT

• Upgrade to buy from reduce
• Price target cut to Rs 940 from Rs 960
• Q4 results strong
• Sharp expansion in gross margins aids Ebitda
• Market share gains in PV segment and raw material tailwinds to offset demand weakness
• Well-positioned to tide over the crisis
• Valuations are cheap given multiple tailwinds

Morgan Stanley On MCX

• Overweight rating maintained
• Price target of Rs 1,600
• Strong headline beat in Q4
• Core performance slightly below estimates
• High other income, low taxes aid profitability
• Await clarity from management on one-offs as there was a sharp increase in costs

Morgan Stanley On Lupin

• Overweight rating maintained
• Price target raised to Rs 1,016 from Rs 761
• Earnings upcycle ahead after Q4 beat
• Stabilising its cost strucure and improving its balance sheet
• Upcoming New Product Cycle: Levo and Solosec ramp-up, Albuterol, gFostair, bEnbrel, gSpiriva to aid a strong three-year earnings upcycle

Morgan Stanley On Cement

• Post-Covid-19 trends in May 2020 are surprisingly good
• Channel checks indicate a good recovery in volume as well as solid price increases during May
• Rural housing has been the key demand driver
• Price hikes are holding up well so far
• Sustainability of the current trend will be the key to watch

Morgan Stanley On Amara Raja

• Overweight rating maintained
• Price target of Rs 779
• Q4 results in-line with estimates
• Expect earnings to be more resilient as against those of OEMs in FY21
• 70% of Ebitda comes from replacement of lead acid batteries, a segment that should be stable in FY21

IDFC Securities On NCC

• Outperformer rating maintained
• Price target of Rs 41
• Execution impacted by Covid-19
• Profit below estimates
• No guidance for FY21 amid continued uncertainty
• Key Positives: Start of execution of NBCCs order worth Rs 1,560 crore

IDFC Securities On Radico Khaitan

• Outperform rating maintained
• Price target cut to Rs 397 from Rs 420
• Strong volume growth in P&A segment
• Lower gross margins on a sequential basis
• Cut FY21/22 Ebitda estimates by 14% and 3% respectively to factor in lower volumes and gross margins

ICICI Securities On Lupin

• Hold rating maintained
• Price target raised to Rs 860 from Rs 815
• Higher U.S. sales and lower R&D expenses aid Q4 results
• Expect revenue mix to improve going ahead with higher sales in U.S. and India
• Expect revenue/net profit CAGR of 9.8% and 36.1% respectively over FY20-22

ICICI Securities On Metropolis Healthcare

• Downgrade to add from buy
• Price target raised to Rs 1,545 from Rs 1,466
• Growth impacted by Covid-19
• Lower revenue impacted profitability
• Volume growth to remain muted in Q1FY21
• Expect volume growth to improve from Q2FY21
• Aggressive network expansion with B2C focus to aid volumes going ahead

Jefferies On Voltas

• Buy rating maintained
• Price target of Rs 615
• Strong results for AC segment in Q4
• Lower revenue in engineering segment led to profit miss
• Results will be viewed favourably by investors especially in the context of the negative impact of Covid-19 on peers

IIFL On Kotak Mahindra Bank

• Add rating maintained
• Price target raised to Rs 1,490 from Rs 1,430
• QIP to be book value per share accretive and EPS/RoE dilutive
• High capitalisation, strong low-cost deposit franchise, slow credit growth of the recent past and constant focus on risk aversion some key positives
• Safe haven premiums would sustain

Credit Suisse On Container Corporation of India

• Upgrade to outperform from underperform
• Price target raised to Rs 475 from Rs 450
• Upgrade on correction, DFCC, divestment and secular long-term growth
• DFCC can drive nearly 50% upside from current volumes
• Strategic investor can priorities capex, build adjacent businesses

Credit Suisse On Lupin

• Downgrade to neutral from outperform
• Price target raised to Rs 820 from Rs 690
• Downgrade due to rising competition in Levothyroxine and overestimating peak sales of Albuterol inhaler
• Albuterol ramp-up can result in sales of $60 million at best and may disappoint the market
• Raise FY21/22 EPS estimates by 20% each due to lower Solosec spend and lower tax guidance

Credit Suisse On Voltas

• Outperform rating maintained
• Price target cut to Rs 650 from Rs 725
• Results reflect strong earnings power in consumer and order book scale-up in projects
• AC segment reflects earnings power with growth and margins
• Cut EPS estimates for FY21/22 by 9% and 7% respectively to account for impact of longer lockdown

Trading Tweaks

• Move Into Short-Term ASM Framework: Aries Agro, Saksoft
• Move Out Of Short-Term ASM Framework: Biofil Chemicals & Pharmaceuticals, Kellton Tech Solutions
• Move Into ASM Framework: Yes Bank
• Move Out Of ASM Framework: Alembic, Allsec Technologies, Anant Raj, Arvind Fashions, BASF, CARE Ratings, Dalmia Bharat Sugar and Industries, Delta Corp, Den Networks, Entertainment Network, Federal-Mogul Goetze, Gabriel India, Gujarat Fluorochemicals, Gujarat State Fertilizers & Chemicals, Heritage Foods, Himatsingka Seide, Hindustan Oil Exploration, IIFL Finance, Indo Count Industries, Jubilant LifeSciences, Karur Vysya Bank, KPIT Technologies, KRBL, MAS Financial Services, Quess Corp, Ramkrishna Forgings, Raymond, Shree Renuka Sugars, Sobha, Somany Ceramics, Ujjivan Small Finance Bank, Zensar Technologies.

F&O Cues

• Nifty June futures end at 9,494; discount widens to 86 points from 62 points
• Nifty June futures add 3.4% and 3.3 lakh shares in Open Interest
• Nifty Bank futures end at 19,099; premium widens to 200 points from 140 points
• Nifty Bank June futures add 7.5% and 1 lakh shares in Open Interest
• Nifty Put-Call ratio at 1.61 from 1.59 across all series

Nifty: June 4 Expiry

• Maximum Open Interest on Call side at 9,700 strike (13.2 lakh shares)
• Maximum Open Interest on Put side at 9,200 strike (20 lakh shares)
• Active Options: 9,700 Put (6.2 lakh shares) and 9,200 Put (11 lakh shares)

Nifty: June 25 Expiry

• Maximum Open Interest on Call side at 10,000 strike (19.5 lakh shares)
• Maximum Open Interest on Put side at 9,000 strike (24.7 lakh shares)