All You Need To Know Going Into Trade On May 22

Asian stocks nudged higher early Wednesday, tracking an advance in U.S. equities, as investors showed some willingness to buy riskier assets despite the ongoing trade turmoil.

Shares in Japan and South Korea climbed. Australia's main equity index edged back from an 11-year high. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, climbed 0.25 percent to 11,756 as of 7:05 a.m.

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BQ Live

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

U.S. Market Update

• U.S. stocks rebounded on Tuesday as the trade-war driven back-and-forth that has dominated markets this month showed few signs of abating.
• The yield on 10-year Treasuries held at 2.42 percent.

#BQMarketWrap | U.S. stocks bounce back on latest #TradeWar moves.

Read: https://t.co/iSu5eUF5YS pic.twitter.com/dObajXIc6R

Asian Cues

• Japan's Topix index rose 0.5 percent.
• Australia's S&P/ASX 200 Index slid 0.1 percent.
• South Korea's Kospi index climbed 0.2 percent.
• Hang Seng Index futures earlier added 0.1 percent.
• Futures on the S&P 500 Index rose 0.1 percent.

Commodity Cues

• Brent crude declined 0.31 percent to $71.81 per barrel.
• West Texas Intermediate crude fell 0.6 percent to $62.75 a barrel.
• Gold held at $1,275.25 an ounce.

London Metal Exchange

• Copper ended lower for the third day, down 0.55 percent.
• Zinc halted a two-day fall, closed 0.08 percent higher.
• Aluminium ended lower for the third day, down 0.08 percent.
• Nickel halted a two-day fall, ended 0.8 percent higher.
• Lead halted a two-day fall, closed 0.17 percent higher.
• Tin ended 0.13 percent higher.

Indian ADRs

Stocks To Watch

• DHFL: Decided to stop taking fresh deposits and halted premature withdrawals from existing deposit schemes as it tries to manage its tight liquidity position and deal with pressure on credit ratings.
• Hindalco Industries: EU restarts clock on Novelis/Aleris review. Sets Sept. 16 as deadline.
• Bharti Infratel-Indus Towers Merger: Shareholders of Bharti and Vodafone Group appointed Bimal Dayal as CEO and Hemant Ruia as CFO of the merged entity. The merger process is at an advanced stage of completion.
• Vedanta: Declared as preferred bidder for two copper blocks with a combined area of 1585 HA area in Maharashtra. Besides, the company and its Zambian unit Konkola Copper Mines reiterate request for “an immediate and urgent meeting” with President Edgar Lungu, companies say in emailed statement. Company seeks to meet the government “as a matter of urgency to discuss the future of the mines and the impact that the current onerous situation is having on the company, the people of the Copper belt and the Zambian people as a whole”.
• Edelweiss Financial Services: U.S. based insurance firm Arthur J. Gallaghar & Co. to acquire minority stake in company's arm Edelweiss Insurance Brokers.
• HUL: Shareholders to meet on June 29 to approve amalgamation with GSK Consumer Healthcare.
• IDFC First Bank: ICRA downgraded long term rating of the Bank to AA from AA+. The rating downgrade considers IDFC First Bank Ltd.'s weak earnings profile, given the elevated cost-to-income ratio because of the ongoing branch expansion, which has been pressurising the operating profitability, and an increase in credit provisions on account of unanticipated fresh stressed exposures identified by the bank in Q4 FY2019.
• Asian Granito: To sell its 50 percent stake in its JV with Italian based Panaria Group and exit the agreement. The joint venture between both the companies was entered in February 2012. The company says in in last couple of years Indian Market dynamics have changed dramatically in terms of Advanced Production technology and it has upgraded to cater all types of market requirements for domestic as well as in export. The agreement ends with effect from May 21.
• FDC: Board to consider share buyback on May 24.
• Future Supply Chain Solutions: Executed its agreement to acquire 77.15 percent stake in Leanbox for Rs 9.4 crore.
• UFO Moviez: Board approved dissolution of the company's Sri Lankan arm, due to non-operations seen in it.

Offerings

• Adani Green offer-for-sale at minimum price of Rs 43 opens for retail investors; Offer to non-retail gets 1.26 times demand on Day 1.

Nifty Earnings To Watch

• Cipla
• IndusInd Bank

Other Earnings To Watch

• Symphony
• Skipper
• Jindal Saw
• Bank of Baroda
• Canara Bank
• JK Lakshmi Cement
• Caplin Point Laboratories
• Central Bank of India
• ADF Foods
• Redington
• S H Kelkar and Company
• Sagar Cements
• Ramco Cements
• Allcargo Logistics
• Apex Frozen Foods
• Asahi India Glass
• Ashoka Buildcon
• Bajaj Electricals
• Thermax
• Balaji Telefilms
• Century Extrusions
• Cummins India
• Future Consumer
• GE T&D India
• Gujarat State Fertilizers & Chemicals
• Heritage Foods
• IG Petrochemicals
• Indo Count Industries
• ITD Cementation
• Man Infraconstruction
• MOIL
• Munjal Auto Industries
• Orient Bell
• Pennar Engineered Building Systems
• Power Mech Projects
• PPAP Automotive
• Quess Corp
• Ramco Systems
• Rane Brake Lining
• Sastasundar Ventures
• Schneider Electric Infrastructure
• T D Power Systems
• Veto Switchgears And Cables
• Vikas Proppant & Granite
• TCI Express
• Max Ventures and Industries
• India Nippon Electricals

Earnings Reaction To Watch

Tech Mahindra (Q4, QoQ)

• Dollar revenue up 0.6 percent to $1,268 million.
• Revenues down 0.6 percent to Rs 8,892 crore.
• Net profit down 6.6 percent to Rs 1,127 crore.
• EBIT down 5 percent to Rs 1368 crore.
• Margin at 15.4 percent versus 16.1 percent.

DLF (Q4, YoY)

• Revenues up 81.5 percent to Rs 2,500.4 crore.
• Net profit up 76.3 percent to Rs 436.6 crore.
• Ebitda profit at Rs 533.6 crore versus Ebidta loss of Rs 13.8 crore.
• Exceptional Gain of Rs 127 crore versus Rs 196 crore.
• Exceptional Gain due to dilution of stake in another group company.
• Share of profits in JV and associates up 18 percent to Rs 242.9 crore.

Jindal Steel & Power (Q4, YoY)

• Revenues up 18.1 percent to Rs 10,159 crore.
• Net loss at Rs 2,145.8 crore versus net loss of Rs 308.1 crore.
• Ebitda down 13.7 percent to Rs 1,844.8 crore.
• Margin at 18.2 percent versus 24.8 percent.
• Exceptional loss of Rs 1,733.9 crore in current quarter.

Aarti Industries (Q4, YoY)

• Revenue up 17.7 percent to Rs 1,211.4 crore.
• Net profit up 47 percent to Rs 124.5 crore.
• Ebitda up 31.4 percent at Rs 236.9 crore.
• Margin at 19.6 percent versus 17.5 percent.

Bharat Financial Inclusion (Q4, YoY)

• Net Revenue up 46.5 percent to Rs 670.1 crore.
• Net profit up 50.5 percent to Rs 321.2 crore.
• Loan Disbursements up 14 percent at Rs 6,568 crore.

Jamna Auto Industries (Q4, YoY)

• Revenue down 20.3 percent to Rs 542.8 crore.
• Net profit down 28.5 percent at Rs 33.4 crore.
• Ebitda down 22.8 percent at Rs 69 crore.
• Margins at 12.7 percent versus 13.1 percent.

Subros (Q4, YoY)

• Revenue down 6.2 percent to Rs 518.1 crore.
• Net profit down 12.9 percent to Rs 16.2 crore.
• Ebitda down 13.9 percent to Rs 54.9 crore.
• Margin at 10.6 percent versus 11.6 percent.

Eris Lifesciences (Q4, YoY)

• Revenue up 1.2 percent to Rs 214.8 crore.
• Net profit down 3 percent to Rs 54.1 crore.
• Ebitda down 13.5 percent to Rs 62.1 crore.
• Margin at 28.9 percent versus 33.8 percent.

Crompton Greaves Consumer Electricals (Q4, YoY)

• Revenue up 7.2 percent to Rs 1,206.9 crore.
• Net profit up 36.1 percent at Rs 140.5 crore.
• Ebitda up 1.6 percent at Rs 167.1 crore.
• Margin at 13.8 percent versus 14.6 percent.

Prataap Snacks (Q4, YoY)

• Revenue up 11.8 percent to Rs 306.5 crore.
• Net profit up 27.8 percent to Rs 13.8 crore.
• Ebitda up 7.8 percent to Rs 22.2 crore.
• Margins at 7.2 percent vs 7.5 percent.

Somany Ceramics (Q4, YoY)

• Revenues down 4.1 percent to Rs 518.8 crore.
• Net profit down 6.9 percent at Rs 24.1 crore.
• Ebitda up 13.5 percent at Rs 70.5 crore.
• Margin at 13.6 percent vs 11.5 percent.

Cochin Shipyard (Q4, YoY)

• Revenue up 31.1 percent to Rs 787.6 crore.
• Net profit up 6.4 percent to Rs 97.5 crore.
• Ebitda down 4.5 percent to Rs 109.9 crore.
• Margin at 14 percent versus 19.2 percent.

KEI Industries (Q4, YoY)

• Revenues up 22.2 percent to Rs 1258.8 crore.
• Net profit up 20.8 percent to Rs 59.9 crore.
• Ebitda up 36.1 percent to Rs 137.5 crore.
• Margin at 10.9 percent versus 9.8 percent.

Pledge Share Details

• Bombay Burmah Trading Corporation promoter Bombay Dyeing & Manufacturing Co pledged one lakh shares on May 16.
• JSW Steel promoter groups pledged 14.5 lakh shares on May 16.
• Delta Corp promoter Aryanish Finance and Investments pledged 10.5 lakh shares and revoked pledge of 50,000 shares from May 16-17.
• Kesoram Industries promoter Manav Investment and Trading Co pledged 1.02 crore shares on May 17.
• JSW Energy promoter group Indusglobe Multiventures pledged 41.5 lakh shares on May 16.

Trading Tweaks

• Indiabulls Venture, DCM Shriram, Eveready Industries to move into short ASM Framework.
• Neogen Chemicals, Vikas Multicorp price band revised to 20 percent.

Who's Meeting Whom

• Mahindra & Mahindra Financial Services to meet Elara Securities on May 22
• Tata Global Beverages to meet Janchor Partners, Swiss-Asia Management and other investors on May 22
• Thyrocare Technologies to meet Anived Portfolio Managers on May 22

Insider Trading

• Mindtree: L&T acquires 71,800 shares on May 21
• Cyient promoter BVR Mohan Reddy acquired 10,000 shares on May 16
• Tanla Solutions promoter D.Tanuja Reddy acquired 34,000 shares on May 20
• LT Foods promoter group Rahuvesh Holdings acquired 33,000 shares on May 20

Money Market Update

Indian rupee ended at 69.72/$ on Tuesday from 69.74/$ on Monday.

F&O Cues

Futures –May series

Nifty

• Nifty futures closed trading at 11,715, premium of 6 points versus 31 points
• Nifty open interest down 2 percent, sheds 4.1 lakh shares in open interest

Bank Nifty

• Bank Nifty futures closed trading at 30,388.9, premium of 80 points versus 56 points
• Bank Nifty open interest down 5 percent sheds 71,000 shares in open interest

Options

• Nifty PCR at 1.19 versus 1.28 (across all series)

Nifty Weekly Expiry May 23

• Max open interest on call side at 12,000 (14.4 lakh shares)
• Max open interest at Put side at 11,500 (8.8 lakh shares)
• Max open interest addition seen at 12,200 (+4.9 lakh shares), 12,500C (+4.4 lakh shares), 12,000C (+3.8 lakh shares)

Nifty Monthly Expiry May 30

• Max open interest on call side at 12,000 (36 lakh shares)
• Max open interest on Put side at 11,000 (35.9 lakh shares)
• Max open interest addition seen at 12,400C (+6.6 lakh shares), 12,200C (+3.4 lakh shares)

Stocks In F&O Ban

• Adani Power
• IDBI Bank
• Jet Airways
• Reliance Capital

Brokerage Radar

On Tech Mahindra

Motilal Oswal

• Maintained ‘Buy' with a price target of Rs 890.
• March quarter was dragged by enterprise.
• Expect traction to shift from Enterprise to Communications.
• Continue estimating an Ebitda margin band of 18-18.5 percent.

Citi

• Maintained ‘Neutral' with a price target of Rs 790.
• Weak March quarter; EBIT slightly below.
• FY19 CC revenue growth continues to lag peers.
• FY20 growth to be backend given H2 is seasonally strong.

Jefferies

• Maintained ‘Buy' with a price target of Rs 880.
• Q4 Review: Miss in revenue and margin due to one-off charge.
• Overall revenue growth guidance for 2019-20 maintained.
• Risk-reward favorable.

Credit Suisse

• Maintained ‘Outperform'; cut price target to Rs 910 from Rs 950.
• Q4 Review: A mixed bag although telecom business looking up.
• Deal wins in telecom continue to be robust; do not see immediate impact from Huawei ban.
• Cut EPS estimates by 3 percent to factor in Q4 miss.

Deutsche Bank Research

• Maintained ‘Buy' with a pprice target of Rs 833.
• Revenue was in-line while EBIT was below estimates.
• Verticals - Telecom improves, manufacturing remains robust.
• Stock trades at lower valuations which we believe could expand.

More Calls

Jefferies on BPCL

• Maintained ‘Underperform' with a price target of Rs 275.
• Q4 core in-line; Prefer ONGC in policy levered state companies.
• Confidence in BPCL's ability to benefit from IMO eroding with its struggles at Kochi.

Motilal Oswal on Bosch

• Maintained ‘Neutral'; cut price target to Rs 18,200 from Rs 19,556.
• Negative operating leverage dents margins.
• 2019-20 outlook cautious due to BS-VI transition, but growth expected from the second half.
• Cut EPS estimates for the current and the next financial year by 6 percent and 7 percent respectively to factor in the weak demand environment.

HSBC on VRL Logistics

• Maintained ‘Buy' with a price target of Rs 335.
• Earnings growth momentum to continue in 2019-20.
• Company is focusing on volume growth and sees March quarter's margin to be sustainable
• Capex set to moderate sharply in the current financial year.

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